North East: M&A Technology Sector Snapshot – Jan-23 to Mar-23

Welcome to the ninth edition of the North East: M&A Technology Sector Snapshot – a joint production from Ryecroft Glenton and Mercia Asset Management PLC.

We publish a snapshot each quarter to provide information on national themes in the UK tech sector, as well as focusing on developments closer to home, in the North East.

The snapshot provides an insight into key industry trends, current market data, news, and an overview of recent transactions. In this issue, the deal round-up covers the three months from January 2023 to March 2023.   

Each quarter we shine the spotlight on a specific sub-sector within the technology industry. This quarter we take a different approach, taking a closer look at Artificial Intelligence (“AI“), which is not a sub sector but a technology that applies across the whole technology sector.

Artificial Intelligence is the simulation of human intelligence processes by machines, essentially computer systems.  Specific applications of AI include expert systems, natural language processing, speech recognition and machine vision.  As the hype around AI has accelerated vendors have been scrambling to promote how their products and services use it.  Often, what is referred to as AI is simply a component of the technology, such as machine learning.  AI requires a foundation of specialised hardware and software for writing and training machine learning algorithms.

The UK tech market continues to be very active with 768 deals recorded between January 2023 to March 2023, with approximately 34% relating to an acquisition or a sale, and circa 49% relating to a funding round. Business/Productivity Software is the most active tech sub-sector for M&A in Q1 23 and London continues to lead the way geographically, with 360 deals completed in the quarter.

Source – MarketIQ

View our other North East: M&A Technology Sector Snapshots here.