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Edge computing market matures with $8 billion invested since 2020, STL Partners reports

Edge computing market matures with $8 billion invested since 2020, STL Partners reports

Since 2020, the global technology landscape has witnessed a substantial influx of investments, with $8 billion directed towards the development and expansion of edge computing, according to STL Partners’ latest report. The financial commitment underscores the growing recognition of edge computing as a transformative force in the digital realm.

The report, titled “Analyzing Edge Computing M&A Trends“, also notes that investments have predominantly targeted edge software companies, with $3 billion invested, followed closely by edge data center operators with $2.3 billion.

“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,” says Tilly Gilbert, director and edge practice lead at STL Partners.

“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.”

The funds injected into edge computing have fueled advancements in hardware, software, and infrastructure, facilitating the creation of more efficient and responsive systems. These developments have far-reaching implications across various sectors, including healthcare, manufacturing, finance, and telecommunications.

According to the report, Venture Capital has been the primary source of the investment into edge computing, totalling $4.1 billion over the four-year period. In 2020, 39% of venture capital investments in edge were pre-Series A. By 2023 this number had dropped to 20% being pre-Series A.

The two largest disclosed investments in edge computing to date were recorded in 2023 – the  $790 million private credit secured by AtlasEdge from investors led by ING Bank and the $500 million private equity investment by I Squared Capital to establish nLighten.

The report also unveils 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, STL notes.

The sector began attracting larger investments, indicative of growing market confidence and recognition of edge computing’s long-term value.

Read more:

MobiledgeX acquisition shows hope for edge ecosystem nurturers: STL Partners

STL Partners says telecom edge data centers to grow 107% by 2025, driven by hyperscaler partnerships

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