The world of startup mergers and acquisitions (M&A) is constantly evolving, with new trends and patterns emerging all the time. Recently, four charts have been released that shed light on some unexpected trends in startup M&A deal-making. Let’s take a closer look at these charts and what they reveal about the current state of the industry.
Chart 1: The Rise of Non-Traditional Buyers
Traditionally, large tech companies like Google, Facebook, and Amazon have been the primary buyers of startups. However, this chart shows that non-traditional buyers are on the rise. These include companies in industries like healthcare, finance, and retail. In fact, in 2020, non-tech companies accounted for 25% of all startup acquisitions. This trend is likely due to the increasing importance of technology in all industries and the desire for established companies to stay competitive.
Chart 2: The Decline of Seed-Stage Acquisitions
Seed-stage acquisitions, where a startup is acquired before it has even launched its product, used to be quite common. However, this chart shows that they have been on the decline in recent years. In 2015, seed-stage acquisitions accounted for 20% of all startup M&A deals. By 2020, that number had dropped to just 10%. This could be due to the fact that investors are becoming more cautious and waiting for startups to prove themselves before making an acquisition.
Chart 3: The Increase in Acquisitions of Later-Stage Startups
On the flip side, this chart shows that acquisitions of later-stage startups are on the rise. In 2015, only 10% of all startup M&A deals were for companies in the Series D or later stage. By 2020, that number had jumped to 25%. This trend could be due to the fact that larger companies are looking for more established startups with proven track records and revenue streams.
Chart 4: The Growing Importance of International Deals
Finally, this chart shows that international deals are becoming increasingly important in the world of startup M&A. In 2015, only 20% of all startup acquisitions involved a buyer and seller from different countries. By 2020, that number had risen to 35%. This trend is likely due to the fact that technology has made it easier for companies to operate globally and for buyers to identify and acquire startups from around the world.
In conclusion, these four charts reveal some unexpected trends in startup M&A deal-making. Non-traditional buyers are on the rise, seed-stage acquisitions are declining, later-stage acquisitions are increasing, and international deals are becoming more important. As the industry continues to evolve, it will be interesting to see how these trends develop and what new patterns emerge.
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- Source: Plato Data Intelligence: PlatoData