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Innovation Via Acquisition

M&A3.0

If we build it, will they come?  This phrase seems to be present in the tech world these days.  Are some of the largest tech companies innovating themselves or are they acquiring startups to do it for them?

CB Insights took a look at the top 10 most highly-valued U.S. based venture-backed companies, and charted which ones acquire the most startups.

M&A1.0M&A2.0Taking a look at the charts above, the highest valued startup, Uber, isn’t necessarily making strategic acquisitions to grow.  However, organic growth as opposed to acquisitions may be a function of the company’s business model.

As noted in the data CB Insights collected, many of the acquisitions were not based on purchasing a startup’s technology.  Instead it was considered an acqui-hire — a talent or manpower acquisition.

Regardless why a company is purchased by a larger one, as an investor it is encouraging to see the steady pace of the acquisition market — this tells us, there continues to be a place in the innovation ecosystem for early stage, startups.