Global tech M&A deal volume falls to its lowest level since 2020's Covid lockdowns as risk-off strategic acquirers pull back.
Global tech M&A deal activity slowed in Q2’23, falling 6% quarter-over-quarter (QoQ) to 1,877 deals — its lowest level in nearly 3 years. Aggregate valuation across these deals rebounded slightly to $1.1T, though this is still well below the highs seen in 2021 and 2022.
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The US M&A market remained tepid, with US-based tech M&A transactions falling 9% QoQ and trailing Europe for the sixth quarter in a row. That said, US target companies are still attracting larger valuations: 41% of the M&A targets valued at $100M+ in Q2 are headquartered in the US.
Other Q2’23 tech M&A highlights include:
- Though still below 2021 highs, the number of M&A targets valued at $1B+ rose to 21 in Q2, up from 14 the prior quarter. Billion-dollar deals comprise just 1% of all M&A activity.
- After 2 quarters in decline, the median valuation for M&A targets rebounded in Q2, nearly doubling to $45M.
- Buyers paid more per employee in Q2’23 than in the previous quarter, with the median valuation per employee rising to $700K, up $120K QoQ.
- In Q2, companies acquired for $100M+ had a median headcount of 359 people — the highest in 10 quarters.
- For institutionally backed targets (i.e., those previously backed by VCs, PE, etc.), M&A valuations in Q2 were 1.4x the last round’s valuation — a notable rebound after 2 depressed quarters.
- Big tech M&A activity hit an 18-quarter low, with just 1 deal in Q2, reflecting the more challenging regulatory (anti-trust) climate that big tech players are facing.
- Cross-border M&A deal activity fell 9% QoQ but remained above historical levels, driven by higher volumes between countries in Europe, as well as between Europe and the US.
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