STL Partners’ report reveals nearly US$8 billion invested in edge computing since 2020, with a shift towards mature, scale-up investments and significant growth in later-stage VC funding, marking industry resilience and investor confidence.

LONDON, ENGLAND, January 18, 2024 /24-7PressRelease/ — STL Partners, a leading analyst firm in technology and market leader in edge computing insights, today released their latest report, “Analysing Edge Computing M&A Trends”. This study provides a detailed analysis of the investment landscape and market evolution in edge computing over the last four years.

Key findings:

• Nearly US$8 billion has been invested in the edge ecosystem since 2020
• Investments have predominantly targeted edge software companies, with US$3 billion invested, followed closely by edge data centre operators with US$2.3 billion
• Venture capital has been the primary investment source, totalling US$4.1 billion over the four-year period
• The edge investments market is maturing. In 2020, 39% of venture capital investments in edge were pre-Series A. By 2023, this number dropped to 20% being pre-Series A
• The two largest disclosed investments in edge to date were recorded in 2023 – the US$790 million private credit secured by AtlasEdge from investors led by ING Bank and the US$500 million private equity investment by I Squared Capital to establish nLighten

“Edge computing investments were resilient to the general cooling in the technology markets that were experienced in 2023. This resilience is a testament to the sector’s unique value proposition and its critical role in the future of digital infrastructure. Our report highlights the robustness of edge computing as an investment area, with a shift towards more mature, scale-up investments. These trends not only signify the growing maturity of the market but also underscore the confidence investors have in the potential of edge technology,” said Tilly Gilbert, Director and Edge Practice Lead at STL Partners.

Growth in Later-Stage VC Funding

A significant trend identified in the report is the notable increase in later-stage VC funding within the edge computing sector. This shift marks a maturation in the market, with investors showing confidence in established edge companies. In 2023, the proportion of later-stage investments hit 80%, reflecting a transition from funding early-stage startups to scaling up more mature enterprises. This trend suggests a robust and healthy ecosystem.

Biggest Investments to Date Recorded in 2023

The report also sheds light on the value and volume of transactions in edge computing over the past four years. While the initial years saw a diverse range of investments with a mix of smaller, speculative bets and larger, strategic investments, the trend shifted noticeably by 2023. The sector began attracting larger, more substantial investments, indicative of growing market confidence and recognition of edge computing’s long-term value. 2023 saw the two largest disclosed deals in the industry, signaling an increasing interest in high-potential edge computing ventures and sending a positive signal for investors as we enter 2024.

About the Report’s Methodology

STL compiled the data set from publicly available information, investor resources and our proprietary edge insights service. Please get in touch if you would like to discuss access to the underlying data.

STL Partners is a leading research and consulting firm that focuses on the telecoms industry and adjacent markets, by supporting telcos and their partners innovate, grow and stay ahead of the competition. STL’s Edge Insights Service provides a combination of tools to support telecoms operators and technology companies in developing their edge computing strategies.

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