Olya Klüppel (ESO Capital Group), Mathias Wahrenberger (Burda Digital), Gunther Thies (STP Informationstechnologie) and Christopher Brackmann (Bridgepoint), together with moderator David Evans (Alvarez & Marsal), discussed current trends affecting transactions in the technology, media and telecommunications (TMT) sector.
The panel began with a discussion of the practical challenges and opportunities for software businesses moving from traditional licence models to software as a service. The increased proportion of recurring revenues makes businesses that have successfully started this transition attractive to private equity investors and other finance providers, which in turn drives increasing valuation multiples in this space. The panellists agreed that a private equity investor could facilitate such a revenue model transition by providing the financing to make the switch as quick as possible. Alternative funding sources are also available, however.
Whilst the change in revenue model is important from a funding perspective, there are many additional benefits to be gained by harnessing technology and the power of “big data” to create new incremental revenue streams, the panel noted.
The discussion then turned to the value of brands and unique content in today’s digital environment. The exploitation of technology is opening up new markets and new methods to monetise attractive content.
The discussion concluded with consideration of how new joint ventures are emerging between European media companies and their US counterparts, providing local knowledge of consumers’ preferences in order to better exploit international content.