Slow times for startup exits are looking like a thing of the past.
The past two weeks have brought a flurry of big-ticket M&A deals and IPO filings. The action culminated today with Google’s announcement of a planned $32 billion acquisition of cloud security unicorn Wiz.
If consummated, Google’s purchase would represent the largest acquisition of a private, venture-backed U.S. company ever, and by a long shot. The next-closest deal, per Crunchbase data, was Meta’s 2014 acquisition of WhatsApp for $19 billion.
Of course, there’s no guarantee Google’s purchase will in fact close. The former frontrunner for the largest startup M&A deal — Adobe’s planned $20 billion purchase of design platform Figma — fell through in late 2023 following pushback from U.S. and EU regulators.
The Wiz acquisition should also draw considerable scrutiny. However, it may help that Google is known for making its money in areas other than cybersecurity, which may alleviate some antitrust concerns. We’ll see.
Unicorn acquisitions and IPOs on tap
Notably, the planned Wiz purchase comes amid a period of stepped-up activity for unicorn M&A and IPOs.
On Friday, buy now, pay later platform Klarna filed for its much-awaited IPO. The Stockholm-based company is reportedly seeking a valuation in the $15 billion range.
A few days earlier, Hinge Health, provider of an online platform offering therapy for joint and muscle health, filed another big offering. The San Francisco-based company, which did not disclose a target IPO valuation, was valued at $6.2 billion in late 2021.
It’s also been a busy couple of weeks for large startup acquisitions.
Last week, we saw two multibillion-dollar tech deals. In the largest, mobile gaming company Scopely announced it is acquiring Pokémon Go maker Niantic’s games business in a deal valued at $3.5 billion.
The second-largest deal involved Moveworks, provider of an enterprise AI assistant platform. ServiceNow announced that it is acquiring the company for $2.85 billion in cash and stock.
This week got off to a brisk start as well, with PepsiCo saying Monday that it is buying probiotic soda maker Poppi in a $1.95 billion transaction. The Austin, Texas-based beverage brand previously raised over $50 million in venture funding.
Big picture = big deals
The spate of big purchases and IPO filings is a welcome change from the sluggish exit pace of earlier this year and late last year.
True, there’s still a huge pipeline of heavily funded unicorns that remain private. This includes some like Stripe and SpaceX that are well-known for resisting calls to go public, as well as a whole lot of others that could be viable exit candidates. And as Google’s bid for Wiz demonstrates, asking prices may be far from cheap.
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Illustration: Dom Guzman
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