Some venture prognosticators predicted 2023 would see a boom in M&A as interested buyers snapped up quality startups at bargain prices.
We'll count that as a mild miss.
574 Carta cap table companies were acquired in 2023 - not a bad figure by any means, but certainly no leap forward from prior years.
While the headlines were full of regulatory kerfuffle around Activision, Figma, and other major purchases, the most active part of the M&A market was for companies with under 25 employees (as it has been for many years). Interesting to see the shift towards even smaller companies as a total share of acquired startups this past year.
Unfortunately we don't have data on the quality of these exits for either the founders or the employees in question. I'd suspect that many of the buys last year fell into the "acqui-hire" category where the primary reason behind the acquisition is getting good talent in the door.
Wouldn't be surprised if M&A picks up in the latter half of 2024 as valuations remain stable and interest rates tick down over time - but not betting big on it.
If you're a founder considering this sort of strategic exit, give our startup guide to M&A a read - full of useful details to inform your decision.
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Peter Walker
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