$8 billion invested in edge since 2020

This article summarises the key findings of the report, “Analysing Edge Computing M&A Trends,” which provides a comprehensive overview of the edge investments market over the last four years. Despite a slowdown in broader technology markets in 2023, investments in edge computing have shown remarkable resilience. This resilience underscores the sector’s strategic significance and its potential for continued growth.

Tough market conditions but signs of maturity

This report reflects what many will know: 2022 and 2023 were tough years for investors, with high interest rates and uncertain market conditions contributing to a fall in deals, and the edge market was no exception. The upwards trend in edge investments from 2020 took a hit however, what we see from 2023 is evidence of an increase in the size of the deals done in the edge computing market.

Source: STL Partners’ Edge computing investments tracker

The report sheds light on 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. The sector began attracting larger, more substantial investments, indicative of growing market confidence and recognition of edge computing’s long-term value. 2023 saw the two largest investments in the industry:

  • $790 million private credit secured by AtlasEdge from investors led by ING Bank
  • $500 million private equity investment by I Squared Capital to establish nLighten

Plus, Morgan Stanley Infrastructure Partners announced a $836m acquisition of Altice’s edge data centre spin-off – UltraEdge, to close in 2024. These transactions signal an increasing interest in high-potential edge computing ventures and send a positive signal for investors as we enter 2024.

Looking ahead, the edge computing market is poised for sustained growth. With the maturation of the market, investments are expected to stabilise, focusing more on scaling established enterprises. The increasing demand for edge services across various sectors underscores the critical role of edge computing in enabling real-time data processing and analytics, essential for driving technological innovation and economic growth.

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Venture capital has dominated so far, but this is changing

The report reveals the dominance of venture capital in edge investments. With total investment of $4.1 billion in the past four years, venture capital firms have played a pivotal role in shaping the edge computing landscape. Most notably, edge software companies have emerged as the primary beneficiaries, attracting $3 billion in investments, closely followed by edge data centre operators (Facility) with $2.3 billion.

Source: STL Partners’ Edge computing investments tracker

That being said, the report also highlights a significant trend in the type of venture capital funding. In 2020, 39% of venture capital investments in edge were pre-Series A (accelerator/incubator, pre-seed, seed, angel). By 2023 this figure had dropped to 20%, with 80% of investments in later-stage venture rounds, marking a transition from funding early-stage startups to scaling up more mature enterprises. This shift is indicative of a maturing market, where investors are placing confidence in established edge companies, reflecting a robust and healthy ecosystem.

In 2023 we began to see serious investment in edge from private equity for the first time – as reflected by the increase in deal size. This was predominantly in edge data centres (Facility), with the most notable example being iSquared Capital’s investment via nLighten in several European edge data centre platforms. This reflects optimism in the market about demand for the edge, and we therefore expect this trend to continue in 2023. Deals in 2024 may be beyond core data centre markets in Europe (Frankfurt, London, Amsterdam, etc.) as existing players such as AtlasEdge have done, in order to secure better value.

STL Partners’ work in edge and M&A

STL Partners has been tracking investment in edge services across a range of segments and investment types since 2020. This tool, available to our Edge Insights Services subscribers, provides a holistic view of the investment activity in this market, describing the investment trends and providing insight into the trajectory of the market.

This data enables us to pinpoint potential assets for finance firms through a heatmap of activity that identifies layers in the value chain, and specific companies, that are attracting attention. It could also be an important resource for edge companies seeking investment by enabling them to identify key financial players in their segment of the edge market.

STL Partners offers a range of advisory services within M&A to both investors and enterprises. To find out more please visit our website.

Anna Boyle


Anna Boyle

Senior Consultant

Anna Boyle is a Senior Consultant at STL Partners. She has supported Tier-1 telecoms operators with their edge computing and 5G strategies. Anna sits in STL’s Edge Practice covering topics including the global edge computing market, investment trends and adoption of enterprise and consumer edge computing applications.

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