Investors in emerging companies have been focusing on M&A in 2024 as a quick way to secure liquidity. However, while deal value for venture-backed companies is likely to increase year-over-year, it remains sluggish compared to previous years, according to data from Crunchbase.
That’s despite historically weak public markets and depressed valuations for private companies, making acquisitions more attractive to buyers.
Interestingly, some of this year’s biggest M&A deals are being led by private equity firms rather than the public companies that typically top the acquisition leaderboards.
Venture-backed M&A has reached $67 billion in more than 1,300 deals so far this year, according to data from Crunchbase. (However, it is worth noting that only about 16% of the trades analyzed since 2019 have an associated price; the vast majority of trade prices are not disclosed.)
These numbers are not far off from the total M&A activity in 2023, which was $72 billion across more than 1,700 deals.
Still, exit values in 2024 are lower than in previous years.
Although M&A and exits from public markets are still slow, secondary finance is becoming more popular and returning some capital to investors.
PE lead
Biotechnology was the sector with the most acquisitions of $1 billion or more in 2024. Private equity has acquired the majority of software companies acquired for $1 billion or more so far this year.
In previous years, it was common for public companies to top the leaderboards for the largest deals.
Significant deals this year include New York-based Apollo’s planned acquisition of London-based package delivery company Every for nearly $3.5 billion and London-based Hg’s planned acquisition of Cerritos, California-based Legal – Includes $3 billion acquisition of compliance technology startup Auditboard.
With so much venture capital in biotech, it’s no wonder one of the biggest deals was Merck’s acquisition of New York-based eye disease treatment company iBiotech.
active acquirer
So far in 2024, Swedish private equity firm EQT has been the most active acquirer of venture-backed startups, with seven venture-backed deals in real estate, data, security and logistics, according to data from Crunchbase. The items have been published.
Public cloud service company Salesforce1, semiconductor company Nvidia, security company Cloudflare, and construction 3D design software developer Autodesk were also active this year. For these acquirers, sectors include cloud management, AI tools, security and asset management, and content development platforms. In healthcare, Stryker was active in acquiring medical equipment, health monitoring, and ligament construction companies.
The list of more active acquirers also includes one private company. Infinite Reality, a Connecticut-based virtual environment company, acquires gaming, Web3, and entertainment companies.
Magnificent Seven
Of the so-called Big 7 tech companies, Microsoft, Alphabet, Amazon, Apple and Meta were least active in acquisitions in 2023 and 2024, according to data from Crunchbase.
Nvidia has been more aggressive, while Tesla has been a less aggressive acquirer, according to Crunchbase data.
Google’s $23 billion acquisition of Wiz was supposed to be the biggest deal of the year, but the cybersecurity startup withdrew its offer in July, citing the regulatory environment in part.
And if artificial intelligence startups Inflection AI, Character.ai, and Adept AI are acquired by Microsoft, Alphabet, and Amazon, respectively, 2024 will be a blockbuster year for startup M&A. Instead, the companies went down the licensing path as a way to pay venture investors, often bringing the startup’s AI team onto the public cloud company.
methodology
This M&A analysis includes companies that have raised seed, early and late stage venture capital. The data does not include publicly traded companies that were subsequently acquired.
Please note that all funding amounts are expressed in U.S. dollars unless otherwise stated. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date the financing round, acquisition, IPO, or other financial event is reported. Foreign currency transactions are converted at historical spot prices, even if events are added to Crunchbase long after they are announced.
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Illustration: Dom Guzman
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