April 20, 2024
Virtual Data Room Market

Virtual Data Room Market Propelled by Growth in Mergers and Acquisitions

The virtual data room (VDR) is a cloud-based online repository that enables companies to securely store and share confidential business information such as financial reports, legal documents, intellectual property files and other important records with external parties such as investors, buyers, and suppliers during mergers and acquisitions (M&As). VDR facilitates collaboration and protects sensitive data through role-based access, revision tracking, auditing capabilities, and user authentication. The global virtual data room market is estimated to be valued at US$ 5 billion in 2023 and is expected to exhibit a CAGR of 22% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends: Mergers and acquisitions (M&As) continue to surge with the valuation of M&A deals reaching record highs in 2022. According to Refinitiv data, the total disclosed value of M&A deals globally increased by 62% to $5 trillion in 2022 from the last year. As M&A process involves exchange of confidential information between buyers and sellers, virtual data rooms have become an integral part of the deal-making process. They provide a centralized, controlled, and secure environment to manage diligence and conduct thorough due diligence virtually. Thus, the growth in M&As is expected to drive significant demand for virtual data rooms over the forecast period.

SWOT Analysis
Strength: Virtual data rooms provide a centralized and secure platform for sharing confidential documents and conducting due diligence remotely. They help businesses reduce legal and security risks involved in sharing sensitive data.

Weakness: VDRs require additional investments and operational costs. Companies may lack in-house expertise to set up and manage these platforms on their own.

Opportunity: The COVID-19 pandemic has accelerated digital transformation trends and the need for secure remote collaboration tools. Many businesses are adopting virtual data rooms for facilitating work-from-home arrangements.

Threats: Existing file sharing platforms continue to add security features, threatening the competitive edge of specialized VDR providers. Cyber threats remain a constant challenge for maintaining data privacy and integrity on online platforms.

Key Takeaways

The global Virtual Data Room market size is expected to witness high growth between 2024-2031.

North America currently dominates the market, aided by rapid digitalization of businesses across sectors in the US and Canada. Increased virtual/remote deal-making activities are further fueling regional VDR adoption.
Europe holds the second largest market share owing to strong presence of key VDR vendors catering to transaction services demanded from companies operating across different industries. Growing awareness about benefits of cloud-based secure collaboration tools is also supporting market expansion across UK, Germany and other major countries.

Key players operating in the Virtual Data Room market are Ansarada, Brainloop, Citrix, CapLinked, Donnelley Financial Solutions, Drooms, EthosData, Firmex, Ideals Solutions, Intralinks, and Merrill. These companies are focusing on developing innovative software features and integration capabilities to assist clients with a wide range of information management needs remotely. They are also investing in cloud infrastructure and cybersecurity protocols to ensure highest protection of confidential organizational and client data.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraaged AI tools to mine information and compile it