Global Virtual Data Room Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Virtual Data Room Market Overview

The market growth for virtual data rooms can be determined by the rising cases of security breaches in the physical handling of critical documentation. The heightened demand for virtual data room for highly secured solutions for the exchange of confidential documents and information among businesses is driving the growth of virtual data room market. Furthermore, the online database allows admins to monitor access to the data room, thus ensuring confidentiality. In addition to this, the virtual data room further allows users to access data with the speed of a click, ensuring fast operations.

Features of a virtual data room like Q&A sections, notes and bookmarks, and multiple-factor authentication solutions are significantly contributing to the market growth. Moreover, rapid digitisation and the emergence of new business models are promoting M&A activities leading to an invigorated demand for secure, on-demand, and cost-effective medium for data transmission and storage, thereby furthering the market growth of virtual data rooms.

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Virtual Data Room Market Trends

Growing Adoption of Cloud-Based VR Solutions

The integration of cloud storage solutions into Virtual Data Rooms (VDRs) is on the rise, fuelled by the demand for remote access and secure document sharing. The cloud storage sector is expected to experience substantial growth, which is favourably influencing the VDR sector by providing flexible, scalable, and cost-effective data management options, and contributing to the virtual data room market revenue.

By the year 2025, it is expected that data stored in the cloud will reach 100 zettabytes, representing around 50% of the total data produced globally. This trend underscores the rising dependence on cloud storage solutions for both corporate and individual purposes, as organisations strive to manage the surging quantities of data in a secure and efficient manner. In 2022, enterprises allocated USD 225 billion towards cloud infrastructure, indicating a notable rise compared to earlier years. This increase shows the growing need for cloud-based networking, storage, and database services. These factors are expected to boost the integration of VDRs in cloud storage too.

Use of AI and Automation

AI is readily utilised to streamline document management processes within VDRs. AI-driven features like automated document categorisation, redaction, and data extraction aid companies in reducing manual workload and focusing on strategic tasks. This is becoming particularly useful for mergers and acquisitions due diligence and legal processes and enhancing virtual data room market value.

In 2023, there was a significant decrease in private investment in artificial intelligence, however funding for generative AI saw a remarkable increase. The sector attracted USD 25.2 billion in investment last year, nearly nine times the amount it received in 2022 and about 30 times more than the funding in 2019. AI is also offering economic benefits across various sectors. In the manufacturing sector, it is estimated that AI could contribute up to USD 3.78 trillion by 2035 through improvements in automation and process optimisation. Similarly, sectors like healthcare and financial services are seeing substantial opportunities for AI to enhance operational efficiency, reduce costs, and increase revenue, which can effectively aid VDR's growth.

Industry News

September 2024

Bloomberg announced the launch of a new Virtual Data Room (VDR) platform, allowing customers to access Bloomberg's extensive Bulk Data License datasets before subscribing.

September 2024

The shortlisted bidders for IDBI Bank in India are anticipated to gain entry to the bank's virtual data room, allowing them to better understand the bank's operations and providing a chance to raise any questions they might have.

Opportunities in Virtual Data Room Market

An article called ‘How Can Providers Avoid Data Breaches’ highlights the importance of healthcare data, the stringent regulations in place to protect it, and the need for the healthcare sector to reevaluate its dependence on outdated systems, many of which lack vendor support or are difficult to update, providing lucrative virtual data room market opportunities.

The sensitivity of healthcare data and the related security risks have been issues for a long time. The use of virtual data rooms (VDRs) has gained significant popularity in healthcare as these secure, centralised cloud-based platforms allow authorised users to store, manage, share, collaborate on, and transmit highly sensitive and confidential documents. Major companies in the life sciences, biotechnology, and pharmaceutical fields have recognised the benefits of VDRs. They are leveraging these systems to improve collaboration among researchers, analysts, academic partners, patients, and regulatory agencies, including the US. Food and Drug Administration (FDA), while ensuring compliance with regulations throughout the research and development process.

Virtual Data Room Market Restraints

The setup and maintenance of a virtual data room can be very costly, especially for small and medium-sized enterprises (SMEs). The financial burden associated with software purchases, data storage, and security measures often surpasses the budgetary limits of smaller organisations, limiting their ability to adopt VDRs. Many companies face challenges when trying to integrate VDR solutions with their existing data management systems that can impact virtual data room demand. The process of transferring and synchronising sensitive information from traditional storage methods to either cloud-based or on-premises VDRs can be complex, increasing operational challenges.

Although VDRs come with robust security features, concerns remain about the potential for data breaches and unauthorised access. Industrial sectors that manage highly sensitive information, such as finance, healthcare, and legal services, tend to be particularly cautious. A breach in these sectors could result in severe financial and reputational damage.

Market Dynamics

The introduction of strict data privacy regulations like GDPR and HIPAA has resulted in an increased need for Virtual Data Rooms (VDRs) that feature advanced security protocols. These protocols include end-to-end encryption, multi-factor authentication, and detailed audit trails, ensuring that sensitive data is managed in compliance with legal standards. For instance, the General Data Protection Regulation (GDPR) is among the most stringent data privacy laws globally. It mandates that organisations handle the data of European Union citizens with a high level of security and transparency. Non-compliance can result in significant fines, potentially amounting to 4% of a company's total global annual revenue which can fuel the virtual data room demand growth. The stringent rules regarding data processing, consent acquisition, and breach notification under GDPR require organisations to adopt secure solutions, like Virtual Data Rooms (VDRs), to ensure compliance.

Additionally, VDRs are evolving from standalone systems to integral parts of larger business ecosystems. They are increasingly being integrated with Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and electronic signature solutions, which improve business operations and foster better collaboration across different departments.

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Virtual Data Room Industry Segmentation

Global Virtual Data Room Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Virtual data rooms are innovative, online software intended for the secure sharing and storage of documents during various operations. A VDR allows multiple parties to share an encrypted web connection.

On the basis of type, the market can be divided into:

• Software
• Services

Based on organisation size, the market can be divided into:

• Small and Medium Scale Organisations
• Large Organisations

The market, based on business function, can be categorised into:

• Legal and Compliance
• Financial Management
• Intellectual Property Management
• Sales and Marketing
• Others

On the basis of end-user industry, the virtual data room market can be divided into:

• BFSI
• IT and Telecommunication
• Healthcare
• Government and Legal Services
• Others

The EMR report looks into the regional markets of virtual data room like North America, Latin America, the Asia Pacific, Europe, and the Middle East and Africa.

Virtual Data Room Market Share

By Type Insights

The software segment accounts for a major virtual data room market share owing to the growing demand for cloud-based, secure document management systems in various fields such as finance, legal, and healthcare. These solutions are widely adopted because they enable secure management and sharing of documents during crucial processes like mergers and acquisitions, fundraising, and legal proceedings, among others.

By Organisation Size Insights

The global market for virtual data rooms is projected to be driven by its deployment in small and medium scale enterprises around the world. The emergence of new start-up programmes aided by innovative product and service ideas funded by governments or investors is fuelling the demand of virtual data room market in small organisations. A virtual data room significantly aids in cutting costs related to stapling, printing, copying, and storing, as a result of which, the staff can employ their time into business operations and boost productivity.

In addition, the biggest advantage of a virtual data room in a small-scale enterprise is the transparency offered by the software. With authorised access to the company’s records, investors can make an informed decision based on business operations and applications of the invested money. Thus, these factors are contributing to the market growth of virtual data rooms in small and medium enterprises.

By Business Function Insights

Virtual Data Rooms (VDRs) are widely used in legal due diligence for mergers and acquisitions, litigation, and regulatory compliance. Legal professionals and corporate legal departments leverage VDRs to securely manage sensitive legal documents, ensuring adherence to data protection laws.

As per the virtual data room industry analysis, VDRs also plays a crucial role in financial transactions such as M&A, capital raising, initial public offerings (IPOs), and audits. Financial institutions, investment banks, and private equity firms rely heavily on VDRs to securely store, manage, and share financial information during these important transactions.

By End-user Industry Insights

The BFSI sector occupies a major market share due to its reliance on secure data sharing and management for transactions like mergers and acquisitions, due diligence, capital raising, and financial audits. The financial sector needs stringent security features to protect sensitive data and facilitate large-scale financial transactions across multiple parties, which VDRs are designed to handle efficiently.

Government and legal services also represent a significant portion of the VDR market. These sectors rely on VDRs for legal compliance, litigation support, and secure document sharing during regulatory processes.

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Virtual Data Room Market Regional Analysis

North America Virtual Data Room Market Growth

The United States has remained a major player in the mergers and acquisitions landscape, which is a primary use case for virtual data rooms (VDRs). In 2023, the USA accounted for a substantial share of global M and A transactions, leading to an increased demand for secure and efficient data storage solutions.

As per the virtual data room market dynamics and trends, legislation like the California Consumer Privacy Act (CCPA) and the Health Insurance Portability and Accountability Act (HIPAA) requires the implementation of highly secure data-sharing platforms. As a result, companies rely on VDRs to ensure compliance with these rigorous privacy regulations.

Europe Virtual Data Room Market Outlook

The General Data Protection Regulation (GDPR) is one of the most stringent data privacy regulations worldwide, thereby increasing the demand for secure data-sharing solutions. Companies conducting business within the European Union are required to implement Virtual Data Rooms (VDRs) to meet GDPR compliance when managing sensitive information which can boost virtual data room industry revenue. Additionally, several European countries are significantly investing in digital transformation initiatives, which further propels the utilisation of secure data management platforms such as VDRs. The Digital Strategy put forth by the European Commission underscores the importance of secure data flows, which is in harmony with the adoption of VDRs.

Asia Pacific Virtual Data Room Market Drivers

Countries like China, India, and Japan are seeing a notable increase in foreign direct investments (FDIs) and mergers and acquisitions activities. Virtual Data Rooms (VDRs) are essential for securely managing these complex financial transactions. The region is undergoing a surge in digitalisation and cloud adoption, with businesses in sectors such as finance, manufacturing, and telecommunications leveraging VDRs to securely manage data during audits, fundraising, and strategic partnerships and boost the growth of the virtual data room industry.

In response to data privacy regulations like India's Personal Data Protection Bill and China's Cybersecurity Law, companies are increasingly turning to VDRs to ensure compliance while handling both personal and corporate data.

Middle East and Africa Virtual Data Room Market Overview

Countries in the Gulf Cooperation Council (GCC), including the UAE and Saudi Arabia, are witnessing rapid growth in the financial and legal sectors, with significant foreign investments and M&A deals that require secure data management solutions, positively impacting the virtual data room demand forecast. The region is also seeing the introduction of stricter data privacy laws, particularly in countries like South Africa, where the Protection of Personal Information Act (POPIA) mandates secure data management, which boosts the demand for virtual data rooms.

Latin America Virtual Data Room Market Dynamics

Latin American countries, particularly Brazil and Mexico, are seeing rising merger and acquisition activity, particularly in energy, infrastructure, and telecommunications. VDRs play a key role in managing data throughout these transactions. The introduction of new data privacy laws in countries like Brazil (LGPD) is pushing companies to adopt secure data management solutions such as VDRs to comply with these regulations.

Innovative Startups in Virtual Data Room Market

Startups are making security more accessible by offering affordable VDR solutions with military-grade encryption. Several startups focus on intuitive, drag-and-drop interfaces, real-time notifications, and mobile-friendly platforms to improve user experience, making it easier for non-technical users to manage documents. Some VDR startups in the virtual data room market also specialise in secure document management solutions for medical records and clinical trial data.

SecureDocs

SecureDocs is a simple, fast, and affordable virtual data room solution focused on corporate fundraising and IPOs. The platform emphasises ease of use while maintaining robust security features, including two-factor authentication, audit logs, and watermarking. It is used by a range of end-use sectors from healthcare to manufacturing, among others.

CapLinked

CapLinked is a cloud-based platform providing secure document sharing and management solutions, primarily for M and A transactions, capital raises, and due diligence. The platform is known for its user-friendly interface and high-level security, with features such as enterprise-grade encryption, customisable permissions, and real-time activity tracking.

Competitive Landscape

The report presents a detailed analysis of the following key players in the global virtual data room market, looking into their capacity, market share, and latest developments like capacity expansions, plant turnabouts and mergers and acquisitions. Many VDR providers are upgrading their security protocols to ensure robust data protection.  End-to-end encryption and multi-factor authentication are now standard features for many VDRs, ensuring that sensitive documents remain confidential. Blockchain technology is also introduced by some companies for immutable document storage and auditing.

Key Industry Players

Vault Rooms, Inc.

Vault Rooms is a cloud-based virtual data room (VDR) provider specialising in facilitating secure document management for mergers and acquisitions, banking, legal services, and private equity.

Pandesa Corporation

ShareVault, originally founded as Pandesa Corporation, offers virtual data rooms and secure document-sharing services for due diligence, mergers and acquisitions, capital raising, and other sensitive business processes. It provides bank-grade security, integrating with various third-party platforms like Dropbox, DocuSign, and Microsoft 365 to facilitate seamless document sharing.

Drooms GmbH

Drooms is a European-based leader in virtual data room technology, primarily serving industries like real estate, legal, and finance. It offers data rooms for asset management, and other sensitive business operations, with a focus on secure document handling and AI-driven features.

Other major players in the virtual data room market are Citrix Systems, Inc., and EthosData., among others.

The comprehensive report looks at the micro and macro aspects of the industry. The EMR report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of the Porter’s Five Forces Model.

Recent Developments

October 2023

Egnyte, a file-based collaboration platform, announced a secure Virtual Data Room (VDR) service aimed at the sharing of sensitive documents with external parties. This initiative aims to eliminate the reliance on file transfer services similar to MOVEit.

August 2021

Virtual Power Systems, a startup specialising in technology that automates dynamic power distribution within data centres, announced the discovery of an opportunity to broaden its market to include cryptocurrency mining facilities.