How Indian Private Equity Firms Can Boost Value Creation Through Tech Due Diligence

How Indian Private Equity Firms Can Boost Value Creation Through Tech Due Diligence

SUMMARY

The year 2021 was a record year for private equity (PE), with deal volume exceeding $1 Tn for the first time

To provide a meaningful analysis of a startup, the output of technology diligence should be linked to the output of commercial and financial diligence

PE firms should be armed with an innovative technology due diligence process that validates the investment thesis through a digital lens

The year 2021 was a record year for private equity (PE), with deal volume exceeding $1 Tn for the first time. This is nearly double the amount from the previous year. The majority of private equity firms prefer technology companies or companies with a tech-enabled business model to non-technology companies.  

Value creation has always been central to achieving higher returns on private equity investments. The value creation approach for technology or technology-enabled companies goes beyond EBITDA improvement through cost-cutting measures. During each such tech investment, the PE firm examines the potential of value creation based on multiple touchpoints. 

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