Will H2 2024 Bring More Startup M and A Deals

Will the second half of 2024 be packed with startup M&A?

It's looking more likely.

Let's start with the data. Chart below shows the number of companies on Carta acquired in the first half of each year (2020-2024).

So 309 total acquisitions so far in 2024, a gentle 6% increase from H1 2023. Not major, but something.

Also Q2 was better than Q1 this year for M&A, and Q3 has started off at a higher pace as well...positive signals.

But which companies get acquired?

Bottom half of the chart breaks out the companies by funding round at the time of acquisition. A couple interesting points:

• Pre-seed companies made up only 18% of total acquired companies so far in 2024, a much lower percentage than last year.

• Over half of startup M&A happens to companies in the Seed to Series A range.

• Later stage M&A holding steady at about a quarter of all transactions.

Sadly I don't have data on the quality of these deals - so I can't say with any certainty if the founders and employees made out well. My instinct is that the vast majority of the pre-seed deals are acquihires and the later stage ones may be more impactful monetarily.

The general buzz around many VC-backed companies is that they are more open to being acquired than they were previously (and certainly some venture investors are looking for ways to show some returns to LPs in this difficult fundraising environment).

So it could be this is the beginning of an H2 full of M&A...or perhaps the animal spirits will hold off until 2025.

We'll keep an eye on it 🙏

If you're a VC looking data on exits - and fund performance generally - we have a major report coming out on Friday. Give me a shout in the comments to be added to our waitlist for the release!

#startups #M&A #founders #venturecapital