KUALA LUMPUR (September 6): America’s four most valuable companies, namely Apple, Amazon, Google and Microsoft, are not buying into start-ups much despite their respective deep coffers.
In a recent report, Crunchbase – which tracks global business trends, investments and news from start-ups to the Fortune 1000 – said so far this year the “Big Four” have only made five acquisitions of private companies financed by venture capital. , according to Crunchbase data.
He said of these, none were known and only one had a disclosed purchase price.
That indicates the others were smaller deals by tech giant standards, he said.
Crunchbase said the biggest startup purchase came in January, when Google bought New York-based security and response automation provider Siemplify for US$500 million (RM2.25 billion). ). Founded in 2015, Siemplify previously raised US$58 million in venture capital funding.
In addition to this offer:
- Amazon bought GlowRoad, an India-based reseller that had previously raised more than US$30 million, and Veeqo, a UK provider of e-commerce fulfillment tools that had raised more than US$9 million.
- Microsoft has purchased Minit, a Slovakia-based process mining tools provider that previously raised around US$10 million.
- Apple has acquired Credit Kudos, a UK provider of credit measurement tools that previously raised around US$9 million.
Crunchbase said that considering the Big Four have over $300 billion in cash and a collective market capitalization of over $6 trillion, their merger and acquisition (M&A) activity in 2022 seems obviously weak.
That said, he added that they are not the only ones holding back from buying.
According to data from Crunchbase, M&A activity involving venture capital (VC)-backed startups has declined since last year.
In 2021, there were over 3,000 M&A deals globally involving the purchase of a venture capital-backed company.
In the middle of the third quarter of this year, just under 1,600 start-ups found a companion in the market.
The declines are more dramatic in the United States. Last year, just under 1,700 VC-backed startups were purchased, per Crunchbase. This year, there were only 745 such transactions.
The slowdown in trading comes as valuations of public and private tech companies trend lower.
So while starter price tags may seem like a bargain compared to a year ago, potential buyers are also down, according to the report.