1,825 private tech companies exited in 2013. Of these, only 1.04% were for more than $1 billion. Interestingly, the majority of exits (66%) had not raised institutional capital prior. On the back of an acqui-hiring binge, Yahoo was the year's most active acquirer. SV Angel and Accel Partners were the top investors among VC-backed liquidity events.
2013 saw 1,761 private tech companies acquired globally and 64 tech firms go public. Private tech exits hit a four-quarter high in Q4 2013 at 534 M&A deals and 23 IPOs. The 2nd half of the year saw a surge in activity with 46% more private tech M&A transactions and 63% more IPOs.
Unicorns are rare – Just 1% of private tech companies exited for $1B+
Whether you call them unicorns or black swans, exiting for more than a billion dollars is hard. How hard?
Just 1.04% of the 1825 tech exits last year were in the billion dollar club. 2013 saw just 19 private tech companies go public or be acquired at a $1B+ valuation. Of exits with disclosed valuations, 45% were for less than $50M. 72% of exits were for <$200M. In fact, to meet the value of the single WhatsApp acquisition made by Facebook, one would have to acquire 78% (or 250) of the companies with disclosed M&A exit valuations in 2013.
2/3 of tech firms did not raise institutional capital prior to exit
Perhaps surprisingly, 66% of tech companies that exited in 2013 had not raised institutional capital (VC, PE, growth equity) prior to exit.
Mobile dominates China exit share
Of the top 5 countries for private tech M&A and IPO activity, China saw the highest share of mobile firms being acquired as the result of significant activity in the mobile gaming space.
Nearly half of VC-backed companies raised <$10M prior to exit
Of the firms that raised prior venture capital funding, 46% of tech acquisition transactions went to companies that took less than $10M. But with the total funding needed prior to an IPO on the rise, 2013 saw 29 firms raise upward of $100M prior to exit.
SV Angel saw the most VC-backed tech exits in 2013
The Valley micro-VC saw the highest number of portfolio tech exits in 2013, followed by Accel Partners, Lightspeed Venture Partners and Index Ventures. Note: Tech categories in the investor and acquirer league tables include internet, mobile, software, computer hardware and electronics (chips, semis)
Eating the young – 2013’s top early-stage tech acquirers
Yahoo is the top acquirer of tech companies who raised a Series A or less of financing. Twitter also acquired a host of early-stage tech firms prior to its November IPO. Dropbox was the lone private company acquirer in the ranking.
