2023 Outlook Report (Union Square Advisors)

Summary

• Union Square Advisors has advised on more than 160 transactions exceeding $115 billion in total transaction value since its founding in 2007.p.4
• Technology M&A volume reached $526B in 2022, representing a 49% Y/Y decline from over $1 trillion in 2021.p.8
• Technology private placement volume fell 56% Y/Y to $64B in 2022.p.9
• Tech IPO volume dropped 98% to $1.1B across just six transactions in 2022.p.9
• Digitized B2B payments now exceed $120 trillion globally as businesses modernize financial workflows.p.14
• The private credit market priced $116 billion in volume in 2022, outperforming institutional market activity.p.25
• Venture capital funds hold $290 billion in dry powder, including $162 billion reserved for new investments.p.26

Key insights

1. Enterprise technology vendors are actively pursuing consolidation to deliver full-featured platforms rather than point solutions.p.6
2. Sellers and buyers face a significant valuation gap as public markdowns clash with historic private funding expectations.p.8
3. To bridge valuation gaps in volatile markets, M&A deal parties are increasingly using earnouts, stock currency, seller paper, and rollover equity.p.11
4. A McKinsey survey revealed that less than half of senior supply chain executives understood tier-one supplier locations and key risks, while only 2% knew those of tier-three suppliers.p.14
5. Government regulations such as the EU Corporate Sustainability Due Diligence Directive are accelerating corporate adoption of Know Your Supplier solutions.p.18
6. Implementation of the FIDO2 WebAuthn framework by Apple and Google is driving convergence toward passwordless authentication.p.22
7. Private credit lended $116 billion in 2022 as borrowers sought certainty of close amidst institutional market dislocation.p.25
8. Venture capital funds are utilizing dry powder to buy stock in public companies post-IPO.p.27