Technology: The Heart of Future Dealmaking

In this series, we discuss the future of dealmaking, how the advent of technology has changed its landscape and how digital infrastructure has made building a business more feasible. Sanjay Kukreja, Partner and Chief Investment Officer - ChrysCapital, believes that the new tech space has an overwhelming environment of greed and fear in the market, with greed being a key emotion being played out. Tech is a winner-takes-all environment and so, there are a lot more mistakes being made. Thus, one has to have a heightened sense of caution when jumping into such a market because people are seduced by the possible scalability their organizations could have and the potential excess returns it could generate. He also believes that with the advent of technology, profitability has also emerged. Lalit Kumar, Partner - JSA, says that while capital has been mounting, money is also being burned and even though companies are facing losses, they are going public and having successful IPOs. He hopes that tech companies continue to flourish in this new age. He also mentions how diligence has moved from physical documenting to virtual data, but this document flow is still good, even in a virtual data room. Trisheet Chatterjee, Partner - JSA, states that when there are discussions in cross-border deals, there is a lot of promise before diligence takes place. Target companies are looked at in the principal stage between promoters and investors, however, there is a huge mismatch realized during the period of diligence. According to him, one of the biggest problems faced in the tech world in India is the protection of intellectual property (IP). IP, which is the backbone of any company, is taken very seriously abroad but is not given the same importance in India. There is a lack of knowledge of how to deal with them and how to protect them and even courts and regulators do not know how to robustly enforce IPs.