Virtual Data Room (VDR) market accounted to US$ 1.08 Bn in 2018 and is expected to grow at a CAGR of 14.5% during the forecast period 2019 – 2027, to account to US$ 3.66 Bn by 2027
VDR users often bemoan about the time needed to display on-screen the critical documents stored in a VDR. In this spirit, a VDR is often considered inferior to a PDR. It has been perceived that the average display speed for pages displayed online in a VDR is approximately between two and five seconds, and in some cases, higher. In a PDR, where one has to turn pages physically, the comparable display speed is less than half a second. Online data display speed is dependent on server performance and may vary depending on the distance of the user from the server. However, the physical review of documents is much faster than an online review. To bring a VDR server closer to its users or relying on edge computing, the display of pages in a VDR can be quickly addressed. Thus, increasing the general display function of a VDR offer an infinite opportunity for the virtual data room market.
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Rise of technology abetting the adoption of VDR for due diligence
M&A activities, whether auction processes, acquisitions, or mergers, are employing technology to enhance the success rate of deals and increase productivity. A virtual data room (VDR) has arisen as a due diligence tool that is technology-based and whose intention is to promote the use and access of a data room in M&A activities/transactions. For all the M&A activity, due diligence is obligatory. Due diligence helps in assisting an acquiring company in determining their assessment of the target company’s risk, potential target combination benefit, and strategic fit. In assisting the buyer to answer the pointers as mentioned earlier, information related to a target company is made available in a data room during the due diligence stage of a transaction. Thus, the data room is an integral part of the due diligence process. Hence, the advancements in technology supporting the adoption of VDR platform for due diligence. During the forecast period of 2019 to 2027, this increased adoption is expected to fuel the growth of global virtual data room market.
Strategic Insights
Market Initiatives was observed as the most adopted strategy in global virtual data room market. Few of the recent market initiatives are listed below;
2019: Firmex announced that VERTU capital has partnered with BDC Capital and the Firmex executive management team to acquire Firmex.
2018: Intralinks has presented a new user interface for their alternative investments portal which facilitates General Partners to more systematically and rapidly manage the fundraising, investor, and reporting communications to their clients.
2017: Storj Labs, a decentralized cloud storage service has partner with CapLinked to host confidential business transactions and documents by using blockchain. CapLinked users has established sharing data, virtual data rooms, and are working on multi-company projects to select the option for storing their files in decentralized platform of Storj’s.
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