In 2012, Facebook publicly announced it would be embarking on a transformation into a “mobile first” company. The shift by the social networking giant has been clearly evident in its creation of new standalone apps and, as spotlighted in a big way this week, its M&A activity.
In fact, prior to Facebook’s $19 billion acquisition of Sequoia Capital-backed messaging service WhatsApp this week, the company had already completed 51 acquisitions or “acqui-hires” since 2007 – 43% of which were for mobile software technologies or the teams behind them. The company was an active acquirer pre-IPO with 30 coming before it’s public offering in May 2012.
We analyzed CB Insights exit data to understand the stage & funding characteristics of Facebook’s M&A and to also see if there were any VCs that Facebook is cozier with (spoiler: Sequoia). The data below.
Facebook M&A History
Of the 26 acquisitions that received financing, Facebook-acquired startups raised $202M in aggregate disclosed funding across 43 deals prior to being acquired. Not surprisingly, the two most well-funded companies were also Facebook’s most expensive deals, by a landslide. Instagram raised $57.5M while WhatsApp took $60M (both counted Sequoia Capital as a lead investor).
Facebook M&A By Last Funding Round
Like Yahoo in the Marissa Mayer era, the majority of Facebook’s acquisitions have been for early-stage or bootstrapped companies. Of its 26 acquisitions with funding, 73% last raised either a Series A or angel/seed round. Besides Instagram and WhatsApp, other Facebook-acquired companies that did reach the Series B stage prior to acquisition include Israel-based mobile data firm Onavo, social mapping firm Gowalla and facial recognition startup Face.com.
Facebook M&A By Funding Amount
Over 60% of Facebook’s investor-backed acquisitions by funding amount raised fewer than $5M. WhatsApp and Instagram together raised more funding than all of other Facebook’s acquired companies.
Facebook M&A By Geography
85% of Facebook’s acquisitions to date have been for U.S.-based companies. And within the U.S., California-headquartered companies dominate, followed by NY at 12%. Among the foreign acquisitions by Facebook were India-based monitoring & testing startup Little Eye Labs, and UK-based Lightbox, Snaptu and Monoidics.
Facebook M&A – The Investors
Interestingly, while Sequoia was a backer of both of Facebook acquisitions (Instagram, WhatsApp), the notable venture firm has also seen three other portfolio companies get acquired by Facebook including Snaptu, Parakey and Karma Science. SV Angel has seen the highest amount of its startups acquired by Facebook at six including mobile BaaS Parse, Gowalla and recently acquired Branch Media.
Interestingly, Accel Partners, an early backer of Facebook, hasn’t had as much as success in getting Facebook to acquire its portfolio companies.
Below is a list of the venture capital investors that have backed two or more startups acquired by Facebook.
- SV Angel
- Sequoia Capital
- Lowercase Capital
- Lerer Ventures
- Felicis Ventures
- RRE Ventures
- Greylock Partners
- Benchmark Capital
- Thrive Capital
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