Q2 2023 insights into Digital Services.

Oliver Schweitzer and Ravi Ghedia, Executive Directors at GP Bullhound, said: “We have seen various trends shaping the Digital Services landscape in Q2. Low-code solutions are reducing pressure on developers, turning non-technical users into ‘citizen developers’; continuous development in visual effects is revolutionising how brands think about digital marketing; a growing push towards composable platforms is seeing increased fundraising and M&A activity across composable tech providers and firms specialised in composable strategy and implementation. On the dealmaking side, Q2 deal volumes reduced to in line with Q2 2020, but agency group activity remained high with WPP, Publicis and Dentsu being very active.”

Low-code continuing to democratise development

• Low-code solutions have reduced development friction, making non-technical users “citizen developers”
• The global low-code development technologies market is set to be worth ~$32bn by 2024, growing strongly at a CAGR of 20%
• By 2026 developers outside formal IT departments could account for at least 80% of the user base for low-code development tools

Continuous development in virtual effects is pioneering innovation in digital

• Visual effects (VFX), once considered an exclusive art only available for big-budget Hollywood productions, is increasingly becoming a necessity within digital marketing
• VFX has continued to grow in popularity with the current market size at $9.95bn in 2022, and likely to grow at a CAGR of 10.4% to reach over $18.02bn by 2028.
• It is likely that the advertising segment of this spend will grow even faster at a CAGR closer to 15% per annum

Composable reshaping Digital Experiences

• Customer experience expectations are rapidly changing in a digital-first environment with traditional monolithic platforms rapidly supplemented with highly-flexible best-of-breed composable platforms
• 2023 has seen M&A activity in the sector, including the acquisition of Unstack by Elastic Path, the acquisition of Gatsby by Netlify, and on the services side, the acquisition of Corra by Publicis Sapient
• The composable application market size is estimated at $5.2bn in 2023 and likely to reach $11.8bn by 2028, at a CAGR of 17.5%

Enquiries
For enquiries, please contact:
Oliver Schweitzer, Executive Director (US), at oliver.schweitzer@gpbullhound.com
Ravi Ghedia, Director (Europe), at ravi.ghedia@gpbullhound.com

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 14 offices spanning Europe, the US and Asia.