The Automation sector, including Robotic Process Automation (RPA), is in the midst of a profound transformation, ushering in new opportunities for innovation and specialisation. This blog analyses the potential risks and opportunities in this dynamic landscape, focusing on the strategic importance of mergers and acquisitions.

In today’s digital-first business environment, where technology is ubiquitous and continuous adaptation and innovation are paramount, automation has transcended from a mere technological edge to an operational necessity. The COVID-19 pandemic, far from being an isolated event, has accelerated this shift, compelling businesses to adopt automation with unprecedented speed and urgency. In the post-pandemic era, the adoption of RPA has surged by 50%, with a growing contingent of businesses coming to realise that automation is a foundational component for maintaining operational continuity and efficiency.

From 2020 to 2022, M&A activity within the Automation space showed a resilient growth trajectory despite a global tech downturn that took hold during the latter half of 2022. Despite a slight moderation in deal-making activity this year, the sector continues to outperform the broader tech market, declining by around 15% compared to the 40% decline seen in the wider tech sector. This divergence underlines the sector’s resilience and strategic importance as a non-negotiable cornerstone of future business operations.

The current state of play: key trends in automation

Significant trends are reshaping the automation sector and influencing the strategies of incumbents and emerging players alike. Sector innovators who understand these trends will be best positioned to thrive during this transformative phase.

RPA incumbents are adapting

Established RPA players UiPath, Automation Anywhere, and Blue Prism are leveraging their industry experience and market dominance to navigate the rapidly evolving landscape by transforming from point-solution providers to strategic partners in digital transformation, innovating their products and services to meet the market’s evolving needs.

Expanding beyond their traditional RPA offerings, they are venturing into adjacent areas like process discovery and analytics while incorporating AI and machine learning capabilities to enhance automation efficiency and create more intelligent and adaptable robots. Additionally, these companies are also seeking acquisition opportunities of start-ups and emerging players with innovative technologies that complement their existing offerings to fast-track innovation and solidify their market positions.

Market commoditisation & diversification

 As the RPA market continues to mature, standardisation of basic features of automation tools has made it challenging for vendors to differentiate themselves solely based on their products alone. This has given rise to a certain level of commoditisation, compelling vendors to compete on factors extending beyond basic features like pricing and specialisation.

To set themselves apart, many vendors have introduced more competitive pricing strategies to attract a wider customer base, shifting to subscription-based pricing models, offering better value and simplified budgeting for RPA expenses.

In addition, there has been a surge in specialised automation solutions tailored for specific industry verticals and business processes. These niche solutions have emerged in various sectors, such as healthcare, finance, and manufacturing, enabling vendors to provide added value and foster innovation.

From tools to outcomes

Another critical trend across the automation sector is the shift from a tool-centric to an outcome-centric approach. Instead of focusing on the features of their automation tools, sellers are now focused on the impact that automation can have on their customers’ businesses, such as cost reduction, improved efficiency, and enhanced customer satisfaction.

The outcome-centric approach in RPA aligns closely with businesses’ strategic goals, moving beyond task automation to process optimization and measurable results. By prioritising outcomes, RPA vendors help their customers achieve their strategic goals and improve their bottom line. This shift also enhances the appeal of RPA vendors as acquisition targets, as potential acquirers seek partners that align with their strategic objectives, making them an ideal fit for acquisition.

Risks & mitigation strategies for sector innovators

Key risks

Data Security

Data security is a paramount concern for sector innovators in an environment marked by increasingly stringent regulations, such as GDPR. Automation tools routinely handle large volumes of data, much of which can be sensitive or confidential. This context underscores the critical importance of adhering to data protection regulations at both the national and international levels. Non-compliance or inadequate safeguards for sensitive information not only subject vendors to regulatory penalties but also present a substantial risk to their reputation and customer trust.

Market saturation

In the maturing RPA market, many players are competing for their slice of the market. While this competitive atmosphere fuels innovation, it can also pose valuation complexities for prospective acquirers. The abundance of competitors can make it challenging to assess a company’s true worth, potentially resulting in overvaluation. In such a saturated market, identifying acquisition targets that offer genuine value and align with strategic objectives becomes more intricate, elevating the risk of suboptimal investments.

Technological obsolescence

The automation sector is marked by swift technological progress. What’s considered cutting-edge today may quickly become obsolete, rendering automation solutions ineffective. This risk underscores the need for innovators to stay on the leading edge of technological developments to prevent investments in solutions that could become outdated before providing a return on investment. Staying ahead of the curve, foreseeing technological shifts, and adapting are vital strategies to mitigate this risk.

Cultural and operational alignment

Mergers and acquisitions are common in the automation sector but introduce challenges in aligning cultures and operational processes. Ineffectively addressing these issues can disrupt the integration process, resulting in inefficiencies and cultural conflicts, hindering anticipated synergies and benefits from the M&A. Managing cultural and operational alignment is a significant risk to address.

Strategic misalignment

Strategic misalignment poses a key risk, especially in acquisitions. Acquiring companies that do not align with the acquiring entity’s long-term goals can lead to a lack of synergy and reduced benefits from the investment. Mitigating this risk requires thorough due diligence and a deep assessment of alignment between the acquired company’s goals and the acquirer’s broader strategic objectives.

Mitigation strategies


The automation sector is distinguished by its resilience. Companies within the industry have demonstrated a remarkable capacity to adjust to shifting circumstances in recent years, rendering them appealing targets for acquisition despite the risks. This adaptability is instrumental in surmounting challenges like evolving regulations and technological transitions. To ensure adaptability and resilience into the future, sector innovators should implement agile workflows and a scalable infrastructure. They should also establish effective change management practices and strategic partnerships and engage in proactive compliance adherence.

Strategic M&A

In the realm of acquisitions, there is a notable shift towards long-term strategic objectives, emphasising a departure from short-term technological advantages. This strategic realignment aims to mitigate several significant risks associated with acquisitions. When the acquisition process is in harmony with a broader strategic vision, the probability of seamless integration and enhanced value creation is substantially heightened.

Sector Innovators 

Sector innovators are adopting various market strategies, with some targeting specific niches while others offering versatile solutions to a broader range of applications. Specialisation is considered a key advantage to avoid commoditisation.

Bryter, headquartered in Berlin, has developed a no-code automation platform that enables professionals within the legal, compliance, and procurement domains across consulting firms, banks, and corporations to automate their workflows, build applications, and digitise their contract processes. The company serves an impressive roster of tier-one corporations, including Deloitte, PwC, and Deutsche Bank, aiding them in automating diverse tasks such as customer onboarding, contract reviews, and risk assessment. In June 2020, Bryter secured $16 million in Series A funding, co-led by Accel and Dawn Capital.[1] Subsequently, in early 2021, the company conducted a Series B funding round, raising an impressive $66 million, with Tiger Global taking the lead.[2]

Dublin-based Tines is a powerful cybersecurity automation platform that empowers security teams of all sizes to streamline mission-critical workflows, strengthen security resilience, and speed up incident response by automating routine tasks within their security programs. In 2022, the company secured a significant $55 million investment in an extended Series B funding round led by Felicis Ventures, bringing its total funding to $96 million.[3]

Nearby in the UK, Speechmatics has developed a speech automation technology that provides accurate transcription and translation services in over 45 languages. The company’s cutting-edge speech API solution harnesses the power of AI models, trained on a vast dataset of diverse human speech, to understand human-level speech. The solution is used by various customers, including contact centres, media, healthcare, governments, and enterprises, to improve customer service and transcribe and translate content in real-time. In June 2022, the company raised $62 million in a Series B funding round. The investment will enable Speechmatics to continue its market expansion across the US and Asia-Pacific, improve its infrastructure, and make further R&D investments.[4]

Partnerize is an innovative end-to-end partner automation platform designed to drive business growth by automating the tasks associated with partner management. The platform offers a wide range of capabilities, including partner recruitment, tracking, and performance management, serving brands across diverse industries, including travel, retail, and finance. In January 2020, the company raised a $50 million growth financing round led by Accel-KKR, including an expanded debt facility with Silicon Valley Bank.[5]

Anywhere365 is a dialogue management and cloud contact centre platform for omnichannel communications built native to Microsoft Teams, Skype for Business, and Office 365. The company’s Dialogue Cloud platform intelligently routes customers to the best agent, knowledge worker, or employee, eliminating unnecessary dialogues and ensuring first contact resolution of their inquiries. It’s used by thousands of enterprises, including Shell, Emirates, Credit Suisse, and DHL, to improve their customer service and engagement, lower IT and infrastructure costs, and increase productivity. Anywhere365 has raised €60 million to date.[6]

Based in Tallinn, Estonia, Katana has built an ERP platform for small and medium-sized manufacturers, a market underserved by legacy ERP software providers such as SAP, which primarily cater to larger enterprises. The platform is versatile, catering to numerous functions within a company, spanning marketing, risk management, supply chain management, and others. In October 2022, Katana secured a $35 million Series B round led by VC firm Northzone, bringing the company’s total funding to $51 million.[7]

Market leaders and the M&A landscape

In the rapidly evolving Automation sector, particularly in RPA, players like UiPath, Automation Anywhere, and Blue Prism are emerging as prominent candidates for acquisitions. UiPath, a trailblazer in intelligent automation, has exhibited a strong interest in integrating AI and machine learning into its solutions. Automation Anywhere, renowned for its user-friendly interfaces and robust security measures, has strategically enhanced its engineering capabilities by acquiring personnel from Cathyos Labs.

Blue Prism, on the other hand, has expanded its cloud offerings and enhanced its customer experience through acquisitions like Thoughtonomy. These moves, marked by their strategic alignment and focus on long-term value creation, underscore the transition of these companies from conventional technology providers to enablers of digital transformation and leave them well-positioned to lead the next wave of M&A activities in the sector.

Navigating the road ahead

In the ever-evolving automation sector, the coming years promise a landscape shaped by heightened demand for automation solutions, fostering both fierce competition and rising customer expectations. In response, both established players and start-ups must embrace innovation and specialisation to deliver products with increased tangible value. Moreover, the near future is likely to witness a surge in M&A activities, creating fresh growth opportunities for leading RPA firms.

To optimise the chances for favourable outcomes, companies looking to be acquired should take proactive steps and employ the following strategic approaches:

Carve out a specialised niche: To avoid commoditisation in the maturing automation market, seek out a unique corner of the market and deliver a specialised solution. Doing so not only shields you from market saturation but also enables you to command premium valuations during acquisition negotiations.

Provide outcome-driven solutions: Instead of merely offering tools, prioritise the provision of holistic solutions that drive broader and more impactful business outcomes. Acquirers show a willingness to pay a premium for this value-added approach.

Prioritise data security & compliance: Robust data security and compliance measures enhance your attractiveness to potential acquirers concerned about risk mitigation. By emphasising these aspects, you solidify your position in the acquisition landscape.

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