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.
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.
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.