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Bucking the Trend: Financial Acquisitions Mount
As financial buyers grow more comfortable with tech, particularly companies with recurring revenue, they’re increasingly stepping in to purchase those startups. Financial buyers also are filling a void – buying companies that may be unable to attract soaring venture rounds.
US VC-Backed M&A: Strategic vs. Financial Activity |
Financial Acquisitions: % of Total M&A Activity |
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800 |
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40% |
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Strategic Acquisitions |
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700 |
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Financial Acquisitions |
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35% |
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600 |
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30% |
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500 |
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25% |
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400 |
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20% |
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300 |
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15% |
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200 |
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10% |
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100 |
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5% |
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0 |
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0% |
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2010 |
2012 |
2014 |
2016 |
2018 |
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2010 |
2012 |
2014 |
2016 |
2018 |
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Source: PitchBook and SVB analysis. |
State of the Markets: Second Quarter 2019 |
17 |
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US Tech Looks To International Opportunities
The innovation economy’s best and brightest are putting their abundant capital to work abroad, with 20% of their acquisitions taking place outside of the US. On the back of a strong dollar, their capital is going even further for expansion overseas.
International Acquisitions by US Tech Unicorns
25
Rest of World
Asia
Europe
20
15
10
5
0
2010 |
2013 |
2016 |
2019 |
Notable Int’l Acquisitions by US Tech Decacorns
UAE |
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United Kingdom |
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$3.1B Acquisition |
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$72M Acquisition |
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March 2019 |
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Oct.2018 |
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Canada |
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Demark |
France |
United Kingdom |
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$300M Acq. |
Acquisition |
Acquisition |
Acquisition |
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Feb. 2017 |
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Jan. 2019 |
Dec. 2018 |
Nov. 2017 |
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Singapore |
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China |
Spain |
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Israel |
$500M Acq. |
$400M Acq. |
Acquisition |
Acquisition |
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Aug. 2017 |
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Apr. 2018 |
Nov. 2017 |
Aug. 2017 |
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Israel |
Italy |
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Canada |
Serbia |
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Switzerland |
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UK |
Finland |
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Source: PitchBook, company websites and SVB analysis. |
State of the Markets: Second Quarter 2019 |
18 |
vk.com/id446425943
Regulations: Potential New Hurdles for Exits
State of the Markets: Second Quarter 2019 |
19 |
vk.com/id446425943
Tech Giants Spend Big but Now Face Scrutiny
The Big 5 US tech giants have gone unchecked despite their growing influence. Now, as they outspend the entire tech venture ecosystem in R&D dollars alone, they are facing increasing political scrutiny. Are their innovations a true benefit to society?
R&D Expenditure by Big 5 US Tech Companies vs. US Tech Venture Capital Invested
$100B
$80B
$60B
$40B
$20B
$0B
V e n t u r e
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2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
Source: PitchBook, S&P Capital IQ and SVB analysis. |
State of the Markets: Second Quarter 2019 |
20 |