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Startups acquisitions of other startups has slowed down this year


Startups acquiring other startups has been going on for a while, but the whole process seems to be slowing down significantly

17th Oct., 2016, Red Newswire/-

If you’ve been following the enterprise happenings for a while, you’ll know very well that the phenomenon of a startup acquiring another one (via CB Insights) is not new. We’ve seen many well set up startups and even infant companies swallow up others in the last couple of years. And while this development was quite trendy last year and the year before that, it seems as if the whole process is receding a bit now.

There are many reasons for this practice. The major ones include companies attempting to expand their user base, trying to move into new markets, increasing the size of the enterprise, acquire or absorb new technology and such. This trend saw a huge acceleration last year with 736 acquisitions made in this sector. This number is twice that of the number of deals made in 2013. The year 2014 wasn’t so bad either. It saw a 24 percent increase over the previous year.

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This year, though, the number seems to be down a bit. As of September 2016, just a little above 440 startup to startup acquisitions took place. While that may be a good number, it’s still below the estimated value. The reason for this decline, experts believe, is due to a general slowing of funding with companies having less cash on hand to make these acquisitions. It could also be because companies are being smart and waiting for good enough deals to go shopping for other startups.

There have already been transactions worth over $100 million already this year. Analysts have stated that if the trend restores, the number of transactions could also significantly raise. The biggest deals of this year include Bitstrips and Vurb (acquired by Snapchat), Hayneedle (acquired by, and Otto (acquired by Uber for $680 million).

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Talking about the maximum acquisitions made by companies, Dropbox is leading the charge with 23 other private companies including the likes of ClementineUmano and CloudOn this year. Second comes Infor, a software company targeting mid-sized enterprises with 17 acquisitions. Rocket Internet-backed Foodpanda and Delivery Hero have also been busy, gulping down 25 food-based startups together.

Picture credit: TechStory