BOSTON, April 28, 2022
Progress Partners, a full-service merchant bank providing mergers & acquisitions (M&A) and capital raise advisory services in addition to early-stage capital, released a whitepaper analysis of its inaugural Progress Partners Innovation Survey. Designed to shed light on the effect of unprecedented market forces on the digital future and provide insight into future market dynamics, the findings confirm innovation’s role as a primary growth driver. It also reveals a sorely underused path to innovation: M&A activity.
To gain insight into how the pandemic continues to impact deal-making, determine where corporate and institutional investors might deploy capital and preview the strategic initiatives driving future innovation, Progress Partners surveyed over 210 corporate leaders and investors in late 2021. About half of the respondents were from privately-held, small-to-midsized companies. Of the investors surveyed, more than 65% represent firms that invest via private equity or venture capital.
- The primary finding revealed 9 in 10 companies view customers and technology as the main drivers of innovation.
- When investors were asked about senior management communication regarding innovation, they said 62% of corporate leaders make a compelling case for innovation, but a quarter lack a plan to achieve it. And when portfolio companies did have an innovation strategy in place, another 62% stated that they plan to tackle innovation in-house and/or organically.
- The challenges of this approach were made clear by investors who cited talent gaps as the biggest issue for their portfolio companies. With a tight labor market and persistent talent gap, companies may find it difficult to reach their innovation goals organically or via in-house efforts. With strategic M&A, businesses can bring new talent and capabilities onboard relatively quickly.
Further, most respondents agreed the sectors poised to benefit the most from innovation and technological advancement over the next two years would be the healthcare (76%), finance & insurance (59%) and automotive (57%) sectors. As older, more established and highly regulated industries, they’re ripe for disruption and innovation.
“This is a wake-up call for companies that need to ‘make something happen’ to achieve innovation goals, and M&A activity is one of the answers,” said Progress Partners Founder and Senior Managing Director Nick MacShane. “A growth strategy is made up of many parts, but these findings illustrate that M&A is a clear innovation driver. We’re grateful to everyone who participated in the survey, and we look forward to adding to the body of knowledge about how investors and businesses are using innovation to create growth.”
The firms surveyed represented nearly a dozen industry categories, including technology, advertising and marketing technology, media & entertainment, enterprise software, finance or capital markets, retail & e-commerce, healthcare, automotive, and consumer products. This cross-section enabled the survey to capture c-suite sentiment about the investment and business landscape across multiple disciplines.
To find out more about Progress Partners, please visit www.progresspartners.com. Download a copy of the Progress Partners Innovation Survey report at progresspartners.com/2022-progress-partners-innovation-survey.
Progress Partners is a full-service merchant bank providing M&A, capital raise, advisory and strategic growth expertise for emerging technology and media companies since 2002. As part of the next category of investment banking, Progress Partners are genuine experts who work with entrepreneurial leaders to realize superior value. Securities offered by Applied Capital, LLC, member of FINRA and SIPC. For more information about Progress Partners’ exemplary services in investment banking, advisory and venture capital, please visit progresspartners.com.
