Over 700 private e-commerce companies have exited since 2012, and M&A and IPO activity saw annual increases each year from 2013 to 2015.
While just one e-commerce company has held an IPO so far this year, several well-funded companies exited through acquisitions in 2016. Some of these M&A exits were not good outcomes for the startups involved. This includes Gilt Groupe’s acquisition by Hudson’s Bay Company for just $250M, when Gilt had previously reached a valuation of $1B in 2011.
Another poor exit occurred last year, when Fab.com was acquired for a reported $15M in a down exit by design and manufacturing company PCH (Fab had previously been valued at $875M).
There have been large M&A exits as well on a global level. In just the last quarter, Spain-based Privalia was acquired by France-based Vente Privee for $560M. Alibaba Group paid $1B for Lazada in a deal that valued the Thailand-based company at $1.5B.
Annual e-commerce exit trends
Annual e-commerce exits reached their highest point to date in 2015 with 192 M&A deals and 10 IPOs in that year.
This year to-date, the e-commerce sector globally saw just one IPO, for Australia-based Redbubble.com, an e-commerce platform for independent artists (the company now trades on the Australia Securities Exchange). In contrast, M&A activity is on track to outpace last year’s, with over 100 M&A exits in 2016 to-date. The current run-rate would imply a full-year total of over 200 M&A exits in 2016.
Quarterly e-commerce exit trends
Q1’15 was the peak quarter for e-commerce exits, with nearly 60 M&A deals and 2 IPOs. Q1’16 ranks second and marked the third quarter in a row with an increase in M&A activity. M&A activity decreased in Q2’16, but remained above 40 deals for the eighth-consecutive quarter.
The largest M&A deal in Q2’16 was for the already-mentioned Lazada, a Bangkok-based e-commerce platform. Alibaba Group paid $500M for new shares and another $500M on the secondary market to acquire the company, in Alibaba’s largest overseas deal to date. The deal valued Lazada at $1.5B.
Most well-funded VC-backed companies before exit
Based on disclosed funding, JD.com was the most well-funded VC-backed e-commerce exit in our time-frame. It is followed by Meituan, which was merged into new Chinese internet conglomerate China Internet Plus Holding, followed by Thailand-based Lazada, which we previously mentioned. Rounding out the top five are Wayfair, which launched its IPO in 2014, and Fab.com, which was acquired in the previously-mentioned down exit by design and manufacturing company PCH.
| Rank | Company | Exit | Exit Date | Pre-Exit Disclosed Funding ($M) |
|---|---|---|---|---|
| 1 | JD.com | IPO | 5/22/2014 | $2,815 |
| 2 | Meituan | M&A | 10/8/2015 | $1,062 |
| 3 | Lazada | M&A | 4/12/2016 | $763 |
| 4 | Wayfair | IPO | 10/2/2014 | $358 |
| 5 | Fab.com | M&A | 3/3/2015 | $334 |
Top VC-backed e-commerce exits by valuation
Based on valuation at time of exit, Alibaba ranked first as most highly valued VC-backed e-commerce exit in our time frame. These seven companies all exited at valuations over $2B+.
| Rank | Company | Exit | Exit Date | Valuation | Select Pre-Exit Investors |
|---|---|---|---|---|---|
| 1 | Alibaba Group | IPO | 9/19/2014 | $167.6B | Kleiner Perkins Caufield & Byers, Sequoia Capital China, Insight Venture Partners, GGV Capital |
| 2 | JD.Com | IPO | 5/1/2014 | $28.6B | Kleiner Perkins Caufield & Byers, Sequoia Capital China, Walmart, Tencent |
| 3 | Zalando | IPO | 10/1/2014 | $6.8B | Summit Partners, Holtzbrinck Ventures, Kinnevik |
| 4 | Zulily | IPO | 11/1/2013 | $5.04B | Andreessen Horowitz, Maveron, August Capital |
| 5 | Jumei International Holdings | IPO | 5/1/2014 | $3.25B | Sequoia Capital China, Ventech China |
| 6 | Wayfair | IPO | 10/1/2014 | $2.4B | Spark Capital, Battery Ventures |
| 7 | Avito | Corporate Majority (Naspers) | 10/1/2015 | $2.7B | Accel Partners, Northzone Ventures |
*Note: This analysis excludes second exits of companies that had previously exited between 2008 – present.
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