Megabuyte CEOBarometer podcast with Ian Spence Megabuyte

March was a busy month for public company results, painting a solid picture overall.  Nonetheless, there were notable exceptions as share prices and public company valuations remained stagnant. Looking at deal flow, a superficial analysis of the data suggests that activity levels in March mirrored those of January and February – and were notably lower than the levels achieved in Q1 2023. While this observation holds true, it overlooks some crucial underlying trends, the most striking of which is the significant surge in private equity activity, with deals up 2.5 times from March 2023. Similarly, although M&A deal statistics were generally lacklustre, this masks some really interesting M&A activity in the software sector, particularly in fintech. Venture capital fundraising rebounded after an exceptionally poor February, with fintech deals also playing a significant role.
Skip to:
News Analysis 04m 55s
Capital Markets 12m 47s
Private Equity 15m 07s
Venture & Growth Capital 20m 25s
M&A 23m 59s

February in the UK tech sector continued to prove the notion that downturns are sudden and universal whereas recoveries are slow and patchy.
While some companies report improved trading, others are still finding it hard going, especially those focused on the financial services sector. Share prices were weak in the UK but much stronger in the US, evidencing an emerging (and worrying) trend that the UK is not benefiting from the AI bounce. Deal volumes remain subdued, with similar trends to the previous month with solid private equity numbers, ongoing weakness in M&A volumes, especially in ICT services, and essentially no fundraising activity in the capital markets. Meanwhile, February was a record low month for VC fundraising as later-stage deals completely evaporated but there is increasing evidence of an underlying recovery giving confidence for improved deal flow as we move through the year.
Skip to:
News Analysis 05m 05s
Capital Markets 11m 44s
Private Equity 17m 49s
Venture & Growth Capital 21m 56s
M&A 24m 26s

It has been a rather subdued start to the year in most parts of the UK tech sector, but the overall picture does seem to be improving.
Trading news, of which there has been plenty, is broadly positive with the emphasis very much on utilising operational leverage to build back to the Rule of 40. Share prices on both sides of the Atlantic consolidated recent gains, but UK stock market corporate activity is still at rock-bottom. Once again, private equity activity was robust with SBOs leading the way, while VC and M&A activity continued the stable trends established in the last few months of 2023.
While it remains a bumpy ride, the recovery does seem slowly to be gathering momentum.
Skip to:
News Analysis 04m 54s
Capital Markets 09m 47s
Private Equity 13m 41s
Venture & Growth Capital 19m 41s
M&A 23m 56s

As we kick off 2024, this month’s Megabuyte CEOBarometer follows a slightly different format.
In addition to reviewing all of the key share price and corporate activity trends for 2023, this month’s show is all about looking forward to the coming year and beyond. We present on our 10 key predictions for 2024, exploring tech demand trends, valuation dynamics, and the outlook for corporate activity. Focused on actionable insights, we also share five key recommendations for tech company Boards looking to capitalise on these trends.
So what of 2023? While the recovery was slower than expected to get going, the signs were there towards the end of the year, with stronger share prices and increased secondary buyout activity coming through.  As we look forward to 2024, we expect those signs of recovery to gather momentum, but there will undoubtedly still be bumps along the way given a patchy macro-economic recovery, ongoing geo-political uncertainly and continuing high interest rates.
So what will equip UK tech companies to successfully navigate those choppy waters as we head into the second half of the decade?  Our view is that it is those companies with progressive Chapter 2 and AI strategies that stand to take the lion’s share of the growth and attract premium valuations.
Skip to:
2023 Year in Review 01m 53s
     - Share Prices 01m 53s
     - Deal Activity 05m 18s
2024 Key Trends 12m 40s
5 Key Recommendations for Boards 28m 46s

In this month's podcast:
Finally, there's some positive news to discuss regarding UK tech share prices, as they surged by 11% in November, hinting at the first signs that investors anticipate brighter prospects ahead. Let's hope that this upturn proves to be sustainable this time. Unfortunately, that's where the positive developments for this month largely conclude. Trading conditions remain challenging, and indications from FDM and Kainos updates suggest a continued deterioration.
Moreover, activity in capital markets, mergers and acquisitions, as well as venture capital, was notably feeble in November, with only private equity activity remaining robust. This was particularly evident in secondary buyouts, most notably observed in the case of Civica, which have been scarce lately as investors await confirmation of the new norms for valuations.
Looking ahead to 2024, the data suggests that the year will be a mirror image of 2023, starting off poorly but gradually improving.
For a comprehensive overview of our annual predictions, make sure you tune in to January’s CEOBarometer podcast.

In this month's podcast:
After a brief summer uptick, the UK tech sector faced a Q4 setback, grappling with tough trading conditions, escalating costs, and, in some cases, excessive leverage. October's 5% drop in tech sector share prices pushed valuations to a decade low, dimming the optimism sparked earlier in the year. Capital investments from venture capitalists hit a five-year low, and apart from public takeovers, M&A activities stagnated. While the private equity market offered some relief, deal flow remained below last year's levels. Despite the prevailing gloom, history reminds us that in moments of despair, recovery often begins to take shape, hinting at brighter prospects ahead.