ESV Times | Monthly Newsletter | June 2025

The Great Consolidation: Why 2025 Will Be the Year of M&A in IT Industry in India.

There’s a shift underway in India’s IT sector — not a buzz, not a trend, but a wave. One that’s gathering momentum quietly and quickly. 2025 is not just poised to see more mergers and acquisitions; it’s shaping up to be the year of consolidation — and for many companies, that could mean the difference between staying relevant and being left behind.

We’re in a market where standing still feels like moving backward. Margins are under pressure. Clients are getting more demanding. Talent costs are unpredictable. Organic growth is plateauing earlier than expected.

And let’s be honest — despite great work, many IT companies are hitting structural ceilings. They’ve built solid delivery engines, hired great people, and earned customer trust. But growth? It’s getting harder.

Enter M&A — not as a last resort, but as a deliberate growth lever.

M&A is no longer just a play for large enterprises or global rollups. It’s becoming the go-to move for mid-market Indian IT companies who are asking deeper questions:

• Can we expand capabilities without spending years building them?
• Can we get access to better geographies, better talent, or better clients — fast?
• Can we stay founder-led, but unlock scale and sophistication?

When done right, M&A helps you skip stages. It lets you jump the growth curve instead of climbing it one quarter at a time.

We’re already seeing the outlines of this new era:

• Product-heavy firms looking to bolt on services teams for implementation and support.
• Cloud-focused players acquiring niche security or data engineering firms to round out offerings.
• Regional companies acquiring outside their core geography to serve global clients better.
• Founders open to merging with like-minded peers to build a more competitive combined entity.

And this is just the beginning.
Sectors like Microsoft Dynamics, Salesforce, AI/ML services, and vertical SaaS are already heating up, and the smart money is flowing toward acquisition-driven growth.

Let’s be clear — M&A is not easy. It takes clarity, preparation, and alignment. It’s about more than numbers. It’s about cultural fit, strategic direction, and shared ambition.

The best M&A outcomes don’t start in a boardroom. They start with a conversation — usually between two founders or leadership teams who believe that together, they can build something better than what they could alone.

And that’s where the right partner in the process becomes critical.

You don’t need someone to just find you a buyer or a target. You need someone who understands what you’ve built, what matters to you, and what the right outcome looks like — not just on paper, but in reality.

2025 is the year when clarity and speed will define the winners.
Those who move early will have more choices — stronger partners, smarter structures, and better-aligned deals. Those who wait may find themselves reacting to the market, not shaping it.

The M&A landscape is shifting — and with it, the playbook for ambitious IT companies. Whether you’re considering your first acquisition, evaluating exit opportunities, or just exploring what’s possible, now is the time to be intentional.

The path forward may not be obvious — but you don’t have to walk it alone.

At Ecosystem Ventures, we’ve partnered with founders navigating this exact inflection point — helping them think clearly, act strategically, and close the right deals with confidence. If M&A is part of your 2025 story, we’re here to help shape it with you.

Regards

Abhishek Sanghvi

Ecotone

Our founder, Abhishek Sanghvi, was recently featured in JIIF’s upcoming Coffee Table Book — an initiative highlighting investors and entrepreneurs shaping India’s evolving startup ecosystem.

In this thoughtful interview, conducted by Ms. Devanshi Dwivedi as part of JIIF’s 8th Foundation Day series, he shares his journey from global strategy consulting to purpose-led investing, lessons from early setbacks, and what he looks for in founders beyond the pitch.

Link