PROMOTING THE COMMUNITY
Technology Industry Trends, Opportunities, and Challenges in 2022 March 14, 2022
Continuing Innovation Technology transformation of legacy sectors continues to drive innovation and opportunity. Disruption spans multiple industries including: • Retail • Financial services and payment processing (Fintech) • Health care • Logistics • E-commerce Future Opportunities and Challenges Five items to consider as you assess your organization’s operations in coming years include: • Labor and inflation • Funding • Start-up growth • Technology • Taxes
Trends that impacted technology companies in 2021 are likely to pose challenges and opportunities to the industry in the coming years. Learn more about the state of the market and how you can position your company for success. Major Trends Impacting Technology Companies Three major trends that will continue to affect businesses into 2022 include: • Increased transactions • Rising valuations and funding • Continued innovation Increased Transactions Merger and acquisition (M&A) activity continues at a fast pace. The 2021 increase could be due to pent-up demand related to COVID-19’s impact on 2020, or it may be the result of a widespread desire to close transactions prior to the tax-regulation changes of 2022; possibly, it’s a combination of both. New software companies are facing fewer barriers given the ability to license infrastructure and related pay- as-you-go services. A continued proliferation of new businesses and companies could have the ability to boot- strap for longer periods of time, which would drive Series A funding rounds higher. Rising Valuations and Funding Valuations and funding continue to rise at a fast pace, with a record number of venture capital, private equity transactions, and overall funding in 2021. These trends are expected to continue given the capital available and desire to fund innovation. While it could seem natural to expect a decline in M&A activity in 2022 and 2023, funds to support such transaction volume remain available, so transactions are likely to remain steady for the foreseeable future.
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The Business Review | April 2022
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