India’s IT companies and consultancies were built on the global trend toward outsourcing tech and back-office tasks overseas.

Today, these IT giants have grown to become some of India’s most valuable firms, employing hundreds of thousands of workers. But these companies are now being threatened by the shifts toward new technologies, including cloud computing, big data, automation, and the Internet of Things (IoT).

As India’s IT companies shift their strategies to seek new lines of business and markets, they’re upping their M&A and investment activity, in an attempt to absorb innovation and close the gap so as not to be left behind.

In research published on 27 October 2017, CB Insights used data to outline the private market moves being made by the companies considered to be India’s top IT companies by market cap: Tata Consultancy Services, Infosys, Wipro, HCL Technologies, Tech Mahindra, Larsen & Toubro Infotech, Mphasis, and Mindtree.

(Although Oracle Financial Services is headquartered in Mumbai, it has been excluded from the list because it is a subsidiary of California-based Oracle Corporation, CB Insights said in its brief.)

What industries are India’s IT companies interested in?

Automation and Cloud: Many of the IT startups being targeted for investment and M&A promise to increase the acquirer’s capacity in cutting-edge technology like automation and cloud.

One example is Austria-based software testing company Tricentis, which was backed by Wipro Ventures in its $165 million series B round in the first quarer of 2017. Tricentis automates changes in testing scripts.

Another US-based company, Drivestream, specializes in moving business processes onto the cloud. In Q1 of 2015, Wipro Ventures participated in a $5 million series A round to the company.

Data management: This was another popular theme for deals. Datawave, a company that automates large-scale data projects, was acquired in the third quarter of 2017 by HCL Technologies.

Internet of Things: Companies working on the IoT were also targeted for investment. In Q1’16, Wipro Ventures participated in a $4 million series A to Altizon Systems, which focuses on industrial IoT devices and device management.

Wipro’s investments also include two rounds to Axeda (since acquired by Massachusetts-based PTC), which similarly helps manage IoT products on a cloud-based platform, but for healthcare, insurance, and related applications.

Cybersecurity: Wipro Ventures has participated in two separate rounds to US-based EmailAge, which runs an email-based tool to verify the validity of financial transactions. The first investment came in Q1’16, when Wipro invested $1.9 million in a second tranche of Series A funding, while the second came in Q3’17, when the company participated in a $10 million series B.

The “other” category below includes investments into tangential industries, like customer relationship management software and marketing companies.

Top acquirers among Indian IT companies

Every Indian IT player in the list compiled by CB Insights has made at least one acquisition of a private company, with HCL Technologies and Wipro leading the way at 5 tech acquisitions each since 2012.

By market cap, HCL Technologies is the fourth most valuable IT company in India. Headquartered in Noida, HCL Technologies was spun off as an independent company in 1991.

HCL was most active in 2015, when it acquired 3 startups: US-based TrygTech, which connects IoT devices with business intelligence, in Q3’15; Indian engineering services firm Concept to Silicon Systems in Q4’15; and American customer relationship management company PowerObjects, also in Q4’15.

The company’s most recent acquisition came in Q3’17, when it bought UK-based Datawave, a startup focused on helping clients automate and manage their data.

While HCL spread its bets across multiple industries, Wipro’s five acquisitions have been more homogenous, with the company mostly acquiring startups operating in the IT services industry. (By market capitalization, the firm is considered India’s third largest IT company.)

Wipro was also most active in 2015, acquiring two companies in Q4 of that year: German IT services company Cellent and US-based VITEOS, which has created a business processing technology for the alternative investment management industry.

Wipro’s most recent acquisition was in Q1’17, when it bought Brazil’s InfoServer Informatica for $8.7 million.

India’s most valuable IT company, Tata Consultancy Services, has acquired just one company: French IT services firm Alti in Q2’13.

Top investors among Indian IT companies

Across the board, India’s IT companies tend to acquire rather than invest in companies. However, two of India’s largest IT players, Wipro and Infosys, have been relatively active investors. Both have even raised their own corporate venture capital arms for investing.

The most active investor among the IT crowd is Wipro, which, along with its $100 million venture capital arm Wipro Ventures, has closed 18 deals since 2012. It has invested in Israeli fund TLV Partners, and New York-based Work-Bench, which focuses on enterprise software.

Wipro’s bets include its rounds to IoT platform Axeda (mentioned above). In 2017 Wipro Ventures has participated in multiple deals, including a first-time investment into Californian cybersecurity startup Demisto and a follow-on round to Israel-based cybersecurity company IntSights.

This article excerpt first appears at cbinsights.com and has been edited for tone and length.