Early-stage investors viewed mergers and acquisitions in 2024 as a fast track to liquidity. But even though Crunchbase data shows that deal volume for venture-backed companies is likely up year over year, it remains slow compared to previous years.
This is despite the fact that public markets have been historically slow and private company valuations have fallen, which should make acquisitions more attractive to buyers.
Interestingly, some of the largest M&A deals this year have been led by private equity firms – rather than public companies that typically top the acquisition rankings.
In total, mergers and acquisitions by venture capital-backed companies have reached $67 billion so far this year across more than 1,300 deals, according to Crunchbase data. (It should be noted, however, that only about 16% of transactions analyzed since 2019 have a price associated with them. The majority of transaction prices are not disclosed.)
These numbers are not far off from total M&A activity in 2023, where it stood at $72 billion across more than 1,700 deals.
Still, 2024 is lower than the output values of previous years.
While M&A and public market exits remain slow, secondary financings are gaining popularity, returning some capital to investors.
PE tracks
Biotechnology is the sector that generated the most acquisitions above $1 billion in 2024. For software companies acquired for $1 billion or more, private equity acquired the majority this year until now.
In previous years, public companies typically topped the charts for the largest deals.
Notable deals this year include those based in New York Apollo”s proposed acquisition of a London-based parcel delivery company Evri for nearly $3.5 billion, and based in London Hg$3 billion acquisition of legal and compliance tech startup Audit commissionbased in Cerritos, California.
With all the venture capital funding in the biotech sector, it’s no surprise that one of the largest deals was Merck‘Acquisition of New York-based Eye Disease Therapy Company Eyebiotech.
Active buyers
The most active acquirer in venture-backed startups in 2024 so far has been the Swedish private equity firm. EQTwith seven deals disclosed for venture-backed companies in the real estate, data, security and logistics sectors, according to Crunchbase data.
The public cloud services company has also been active this year. Sales force 1semiconductor company Nvidiasecurity company Cloud FlareAnd Autodeska developer of 3D design software for construction. For these acquirers, sectors included cloud management, AI tools, security and asset management, and content development platforms. In the health sector Stryker was actively acquiring medical device, health monitoring and ligament construction companies.
A private company was also on the list of the most active buyers: a virtual environment company based in Connecticut. Infinite realitywhich has acquired companies in gaming, Web3 and entertainment.
Magnificent Seven
Among the so-called Magnificent Seven of the biggest tech companies, Microsoft, Alphabet, Amazon, Apple And Meta were less active acquirers in 2023 and 2024, according to Crunchbase data.
Nvidia was more active, while Tesla is not an active acquirer, according to Crunchbase data.
Googlethe $23 billion acquisition of Ace would have been the biggest deal this year, but the cybersecurity startup retreated supply in July, partly due to the regulatory environment.
And artificial intelligence startups Inflection AI, Character.ai And AI enthusiast having been acquired by Microsoft, Alphabet and Amazon respectively, 2024 is shaping up to be a blockbuster year for startup mergers and acquisitions. Instead, companies have opted for licensing deals to compensate venture capitalists, and in many cases, startups’ AI teams have joined public cloud companies.
Methodology
For this M&A analysis, we include companies that have raised seed, early-stage, and late-stage venture capital. The data does not include publicly traded companies that were subsequently acquired.
Please note that all financing values are quoted in US dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date financing rounds, acquisitions, IPOs and other financial events are reported. Even though these events were added to Crunchbase long after the event was announced, currency transactions are converted at the historical spot price.
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Illustration: Dom Guzman
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