Thursday, January 31, 2013

Instagram? Yammer?

Instagram? Yammer? Small and bootstrapped led tech M&A



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CB Insights graph of most active tech M&A companies
CB Insights
Facebook, Google and Cisco did the most tech acquisitions of private companies last year.
Senior Technology Reporter- Silicon Valley Business Journal
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Big deals like Facebook's buyout of Instagram and Microsoft's purchase of Yammer grabbed the tech M&A headlines in 2012, but they weren't representative of most of last year's sales.
About three-quarters of the private sales of tech companies last year involved startups that never raised investment money, according to a new report by CB Insights.
Billion-dollar deals made up only 2.5 percent of all private tech M&A and more than half involved less than $50 million.
"That really surprised us," CB Insights CEO Anand Sanwal told me, offering a couple of possible reasons that he said need more study.
One is that many deals last year involved B2B or enterprise companies that were able to grow from their profits and didn't need to raise money before they were acquired.
Another is that some started out as service companies (another name for consultants) that started to make a product that drew the attention of an acquirer.
"We are going to dig deeper and try to figure this out but those are two possible explanations," Sanwal said.
Check out the accompanying slideshow for more from the report. Here are some highlights:
— Google and Facebook tied for the most acquisitions, with 12 each. Cisco Systems was No. 3 with 11.
— California alone accounted for more acquisitions than the next five states combined.
— The top three industries were Web and mobile commerce, 173 deals; advertising, sales and marketing, 131; and online news and information, 88.
— The median amount of money raised by companies that were sold was $16.6 million and the median amount paid to buy them was $73.5 million.
Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.

Related links:

Menlo Park, Mountain View, Mergers and Acquisitions, Venture capital

Industries:

Technology

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