From Oculus to WhatsApp to NaturalMotion, 2014 has seen a number of large VC-backed acquisitions. So we wondered, what would venture capital be without a certain small group of tech acquirers and who are those acquirers?
Specifically, we used CB Insights data to analyze VC-backed tech M&A transactions over $500 million that have occurred since the recession (2008 – June 12, 2014). Of these deals, only 7 acquirers were involved in multiple deals. Google was the most acquisitive, scooping up Waze, AdMob, ITA Software, and most recently Nest Labs. Note: For a real-time list of all of Google’s acquisitions, see our Google acquisitions tracker here.
On a deal basis, the low number of multi-deal acquirers shows the diversity of large acquirers within the tech space, as 69% of these large exits were one-off acquisitions, while 31% were from acquirers with multiple $500M+ acquisitions.
While the pure deal numbers show a diverse range of acquirers, looking at the data on a valuation basis does not paint the same picture. Of the over $78B in VC-backed tech M&A post-recession, the top 3 acquirers (Facebook, Cisco, Google) accounted for 44% of the value of those M&A deals. Acquirers with multiple acquisitions accounted for 53% on a total valuation basis. Facebook was the largest contributor, behind their $19B acquisition of WhatsApp in February, along with its acquisitions of Oculus VR and Instagram. Although the WhatsApp deal may seem to skew the data (or be an outlier), the data point is important because venture capital is a business that is all about outliers (aka unicorns aka black swans).
Just as Facebook, Cisco, and Google created tons of value for their investors with their exits, they have played a key role in the tech ecosystem by being where the bulk of non-IPO home runs come from for tech VCs.
Notes:
- We defined M&A exits as all first exits for a company (so no public on public).
- Valuations were calculated using the upper bound if a range was available on CB Insights.
- Apple’s acquisition of Beats was not included as they previously had a corporate majority investment from HTC in 2011.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity