Virtual Data Room (VDR) Market by Application, Deployment, and Geography - Forecast and Analysis 2023-2027

Virtual Data Room Market Forecast 2023-2027

The Global Virtual Data Room Market size is forecast to increase by USD 793.32 million at a CAGR of 7.68% between 2022 and 2027. The market experiences growth propelled by key factors shaping the business landscape. With a rise in continuous monitoring of compliance-related documents, organizations seek secure and efficient solutions for data management. Additionally, the increased generation of data underscores the need for robust VDR platforms to handle vast amounts of information. Moreover, the growing adoption of M&A deals drives demand for virtual data rooms, facilitating seamless collaboration and due diligence processes. This dynamic market landscape underscores its pivotal role in enhancing data security and efficiency in the global business environment. This market research and growth report also includes an in-depth analysis of drivers, market trends and analysis , and challenges. Furthermore, market research and growth report includes historic market data from 2017 to 2021.

What will be the size of the Market During the Forecast Period?

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In recent years, businesses have grappled with various challenges related to data management, from accidental destruction to security concerns. As organizations increasingly prioritize cost reduction and efficiency, traditional methods like physical storage and printing have become less viable. The emergence of this market addresses these challenges by offering secure and efficient solutions for data storage, sharing, and collaboration. By leveraging advanced software and server technologies, VDRs enable authorized users to access critical information remotely, minimizing the cost of travel and enhancing security. With a growing emphasis on secure data sharing and the facilitation of business deals, these services have become indispensable tools for modern enterprises.

Market Segmentation

In the M&As and IPOs segment of the market, the demand for efficient document management solutions is paramount. Virtual data rooms (VDRs) replace traditional physical data rooms, offering secure and convenient platforms for storing, sharing, and distributing company documentation. VDR software and services streamline the due diligence process, providing a reliable source for parties involved in mergers, acquisitions, joint ventures, and IPOs to access and review documents seamlessly. With advanced digital solutions, businesses can manage their document storage and distribution effectively, reducing reliance on printing and physical document handling. They facilitate collaboration and data sharing among stakeholders, ensuring confidentiality and security throughout the transaction process. By centralizing document management, VDRs enhance transparency and efficiency, enabling smoother M&A transactions and IPO processes while mitigating risks associated with document handling and distribution.

By Application

The market share growth by the M&As and IPOs segment will be significant during the forecast period. As more businesses adopt software to secure M&A deals and Initial Public Offering (IPO) due diligence-related data, this segment accounted for a sizeable market share. On-premises and cloud-based software are both used for mergers and acquisitions and initial public offerings. The BFSI, telecommunications, and healthcare industries are increasingly using software to preserve certain confidential documents during the M&A process, which is what is driving the segment's growth.

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The M&As and IPOs segment was valued at USD 710.39 million in 2017 and continued to grow until 2021. The use of VDRs for storing sensitive information has increased as a result of the rising number of M&A transactions for various industries. For instance, the banking and financial services industry has accounted for the highest M&A transactions (in terms of value) since 1985, according to the Institute for Mergers, Acquisitions, and Alliances (IMAA). Some of the biggest M&A activities in the last two years include the purchase of First Horizon Corporation by Toronto-Dominion Bank Group, a Canadian institution, for USD 13.4 billion in February 2022, and the purchase of MSP Recovery for USD 32.6 billion by US-based Lionheart Acquisition Corporation II in July 2021. Therefore, a rise in the number of M&As and IPOs will fuel segment growth. Some of the key players in this market include Citrix Systems, Inc., Intralinks, Inc., FIRMEX, iDeals Solutions, and Dealroom. co. Due to the high level of vendor parity, the market is very competitive. Additionally, the segment is anticipated to experience increased competition as more new startups enter the market. Hence such factors will fuel the  market growth during the forecast period. 

Key Regions

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North America is estimated to contribute 48% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The growth of the regional market is anticipated to be driven by increasing investments from banking, financial service, and insurance (BFSI), telecommunication, healthcare, real estate, and other industries in managing legal compliance. In 2020, the US accounted for the majority of M&A transactions worldwide. Companies are investing heavily in VDR due to the rise in M&A activity in North America, particularly in the US. Similarly, businesses in nations like Canada and Mexico are also investing in various virtual data storage facilities to lower the cost of physical resources. All these factors will influence the regional market growth during the forecast period. 

Market Dynamics and Customer Landscape

In the past few years, the market has seen significant growth driven by the need for secure document storage and distribution, facilitating merger or acquisition activities, joint ventures, and shared data among authorized users, while also addressing concerns such as accidental destruction and cost reduction, replacing physical storage with server-based solutions and enabling efficient data sharing to support various business deals and minimize the cost of travel. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The rise in continuous monitoring of compliance-related documents is notably driving VDR market growth. Big data, mobile technologies, and the media reveal unethical business practices and expose illegal transactions. Organizations around the world are worried about managing compliance policies to get rid of compliance-related problems. They are implementing a number of strict rules and regulations as well as activities to maintain a compliant culture after realizing the effects of a compliance breach. As a result, a lot of organizations are involved in compliance management activities that are in conjunction with corporate ethics and governance.

Companies have realized that maintaining compliance is a process that creates a risk-mitigation system to prevent instances of compliance violations. In order to protect themselves from being impacted by a data breach, end users who do not consider themselves to be data companies are expressing interest in VDRs. Hence, such practices are expected to increase the demand. Therefore, all these factors will fuel the market growth during the forecast period.

Significant  Market Trends

AI usage is an emerging trend in the market growth. Through VDR, AI can be incorporated into real estate industry processes. Real estate transactions are made more efficient and functionally rich with the use of VDRs, which also help manage assets over their entire lifecycle. Within a virtual data room, AI can be used to streamline routine tasks that are repetitive but essential and time-sensitive. It can change how real estate professionals work by streamlining and enhancing the effectiveness of the processes involved in due diligence, sales, and investment management. When conducting transactions, real estate professionals, including attorneys, can gain a competitive edge by using a powered by AI. 

One of the top providers of VDRs with AI technology is Drooms. An AI from Drooms has benefits like automatic allocation, automatic naming, and simple document translation. Due to the rapid adoption of AI in virtual data rooms, other Companies will also be compelled to implement similar cutting-edge technology in their VDRs. Hence, such factors will increase the demand for AI-based virtual data, which in turn, drive the growth of the global market growth and trends during the forecast period.

Major Market Challenge

The availability of substitutes is a major challenge impeding VDR market growth. Even though the adoption of VDRs is expanding globally, it is still in its infant stage. This is due to the lack of awareness and presence of traditional physical data rooms for M&A and due diligence. Due to their reliance on paper-based systems and lack of technological sophistication, many organizations in developing nations still favor traditional data rooms over virtual data rooms.

Additionally, not all industries can benefit from using vVDRs. For example, some governments might decide to keep using physical data rooms for the exchange of extremely private information. The negative effects of potential data breaches outweigh the advantages of virtual data rooms. If another party gained access to some classified information, the consequences of such events could be disastrous. The use of physical data rooms over VDRs will be preferred in those circumstances.  Therefore, such practices may negatively impact the growth of the market during the forecast period.

Customer Landscape

The Market forecasting includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Global Market Customer Landscape

Who are the Major VDR Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Ansarada Group Ltd. - The company offers AI-Powered virtual-data rooms and deal-making services. The key offerings of the company include virtual-data rooms such as Ansarada virtual-data room.

This market analysis and report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:

• AvePoint, Inc.
• CapLinked Inc.
• Citrix Systems Inc.
• Confiex Data-Room Pvt. Ltd.
• ContractZen Oy
• datasite LLC
• Digify Inc.
• Diligent Corp.
• Drooms GmbH
• EthosData Ltd.
• FirmRoom Inc.
• FORDATA sp.z o.o
• iDeals group of companies
• IFCI Ltd.
• Quant LegalTech Pvt. Ltd.

Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The market offers secure and reliable solutions for managing sensitive corporate information during financial transactions and other critical processes. With technological advancements, virtual data room software ensures data integrity, authenticity, and accessibility while mitigating cyber threats and security breaches. It serves as a secure online repository for various application areas, including customer data, legal data, and transactional data, addressing trust issues among parties involved. These digital solutions provide complete control over data exchange processes, featuring digital rights management and secure document sharing capabilities. As organizations increasingly prioritize data security, virtual data room services play a vital role in safeguarding intellectual property and ensuring data consistency across different parties and applications

The market also offers secure and reliable solutions, serving as common repositories for organizations to manage critical and sensitive enterprise data. With the rise of cyberattacks and online transactions, VDRs provide secure online repositories to safeguard intellectual data and ensure data authenticity and accessibility. These platforms address potential attacks and online security concerns, offering complete information protection and privacy. These offerings include data convergence, scalability, and integration, meeting the demands of data protection laws. The services segment encompasses professional services, ensuring reliable sources for organizations to manage employee data and comply with privacy regulations. Additionally, some platforms leverage blockchain technology for enhanced security and data protection.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Application Outlook 
  • M&As and IPOs
  • Enterprise activities
  • Document warehousing

• Deployment Outlook 
  • On-premise
  • Cloud-based

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Scope
Report Coverage	Details
Page number	157
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 7.68%
Market growth 2023-2027	USD 793.32 million
Market structure	Fragmented
YoY growth 2022-2023(%)	6.89
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 48%
Key countries	US, China, Japan, UK, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Ansarada Group Ltd., AvePoint, Inc., CapLinked Inc., Citrix Systems Inc., Confiex Data-Room Pvt. Ltd., ContractZen Oy, datasite LLC, Digify Inc., Diligent Corp., Drooms GmbH, EthosData Ltd., FirmRoom Inc., FORDATA sp.z o.o, iDeals group of companies, IFCI Ltd., Quant LegalTech Pvt. Ltd., SecureDocs Inc., SS and C Technologies Holdings Inc., Thomson Reuters Corp., and Yanka Industries, Inc.,
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about Companies
• Comprehensive analysis of factors that will challenge the growth of market Companies

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