Unicorns Lead Startups in Major Acquisition Deals
The landscape of startup acquisitions is undergoing significant transformation. While smaller acquisitions were once the norm when one startup purchased another, the rise of well-funded unicorns has shifted this paradigm. In recent years, these startups have demonstrated an increasing willingness to invest substantial amounts to acquire complementary companies.
Surge in Startup Acquisitions
According to Crunchbase data, over the past year, at least 423 venture or seed-backed U.S. startups have been sold to other private, VC-funded entities. Notably, only a few dozen of these transactions have disclosed their financial details. However, those that did showcase some significant deals, totaling more than $6.3 billion in value.
As the startup ecosystem evolves, the appetite for high-value acquisitions continues to grow, reflecting the competitive nature of the market.
Top Acquirers of the Past Year
Leading the charge in startup acquisitions is Stripe, a prominent player in payment technology. In October, the company announced its acquisition of fintech startup Bridge for an impressive $1.1 billion. Other large acquisitions this year include:
- Infinite Reality’s acquisition of Touchcast for $500 million.
- Rokt’s purchase of customer data platform mParticle for $300 million.
Stripe stands out with total funding exceeding $9.4 billion, while Infinite Reality has secured $3.4 billion, positioning them favorably for substantial acquisitions.
Active Players in Startup M&A
Beyond just the financial backing, several unicorns are recognized for their aggressive acquisition strategies. Over the last five years, notable acquirers include:
- Databricks: With at least 11 acquisitions, the largest being its $1.3 billion deal for MosaicML in 2023.
- Automattic: An online publishing platform that has undertaken 29 acquisitions, with its biggest being the $125 million acquisition of Beeper.
- GrubMarket: This unicorn has completed 54 acquisitions, notably including the purchase of Good Eggs, a meal kit startup.
- Scopely: Recently acquired Niantic’s game business for a staggering $3.5 billion. Scopely has made at least 11 known acquisitions throughout its history.
- Epic Games: While not as active recently, it has a long history of acquisition with a total of 20 deals, the latest being the April purchase of AI startup Loci.
Future Trends in Startup Acquisitions
The trend of high-valuation venture-backed companies choosing to stay private continues to grow, potentially signaling a shift in the startup acquisition landscape. With public markets undergoing correction and tech stocks experiencing downturns, private companies may play an increasingly pivotal role in merger and acquisition activities. However, the lack of disclosed prices in many transactions leaves uncertainty surrounding the economic impact of these deals.