Khosla Ventures has had the most soft landings courtesy of Yahoo. In total, 37 startups have been acquired or acqui-hired in the Marissa Mayer era. Yahoo is acquiring early with only 8 being companies past the Series A stage.
From the not-breaking-news file: Yahoo has been on an M&A streak in the Marissa Mayer era – or more accurately an acqui-hire streak. In fact, since Mayer took over as Yahoo’s CEO in July 2012, the firm has made 37 acquisitions (primarily acqui-hires), primarily for coveted mobile engineering talent. The latest talent acquisition came last week when Yahoo announced it would be adding the team behind mobile assistant app Donna. As has become typical in acqui-hires, the app was shut down.
Given Yahoo’s prolific M&A pace, we dug into CB Insights data to understand the stage & funding characteristics of Yahoo’s acquisitions and to see if there were any VCs that Yahoo tends to favor when it comes to its acqui-hire activity.
Of the 37 acquisitions and acqui-hires since Mayer joined Yahoo, 34 have come since the start of 2013, 13 of which have come in the last four months highlighting the company’s insatiable appetite for technical talent. Of the 23 that received financing, Yahoo-acquired startups raised $253M in aggregate disclosed funding across 51 deals prior to being acquired by Yahoo. Tumblr’s $1.1B acquisition was the largest since Mayer took the CEO helm, netting a windfall for investors including Spark Capital and Union Square Ventures. But Tumblr was an exception in terms of funding raised and value relative to most of Yahoo’s M&A activities.
Since Mayer’s reign, Yahoo has proved to be probably the most active “Series A Crunch” acquirers. In fact, 15 of Yahoo’s investor-backed acquisitions came immediately after the seed/angel stage including Stamped, MileWise and GoPollGo. Just eight reached the Series A stage or higher. On average, Yahoo startups with funding raised just 2.2 rounds prior to acquisition. The average time between first funding and acquisition was 26.5 months.
Peeling back Yahoo’s investor-backed acquisitions by funding amount, we see that the large majority raised fewer than $5M prior to exit. The aforementioned Tumblr was the most well-funded of the bunch and it’s $125M in total funding was nearly equal to the total funding across all other investor-backed Yahoo acquisitions including Xobni, Qwiki and IQ Engines.
Geographically, 78% of Yahoo’s U.S.-based acquisitions in Mayer’s time were based in California. 13% of acquisitions were in New York including Stamped and MileWise. 6% went to Washington area firms – Propeld and SPARQ.
As we’ve previously noted, there are several investors who have backed multiple startups acquired by Yahoo. Khosla Ventures has seen the most portfolio companies get the proverbial soft landing with Mayer’s Yahoo – it’s four acquired startups include Xobni, Incredible Labs (makers of the Donna app recently acquired), Snip.it and RockMelt (none of which were able to get past the Series B stage). Below is a list of the venture capital investors that have backed two or more startups acquired by Yahoo since July 2012.
- Khosla Ventures
- Andreessen Horowitz
- True Ventures
- Spark Capital
- Google Ventures
- First Round Capital
- RRE Ventures
- SV Angel