The extremes of the entrepreneurial spectrum can be described as those who are deeply passionate about a single mission, and those who are serial entrepreneurs. This latter group is viewed as having less personal connection to any individual business idea, simply seeking interesting “white space” in the market, and may even start their company with the sole intention of selling it to an industry leader.
Wherever you reside on the spectrum, building a company that is sellable is key – because If it’s sellable, it’s also investable. Even the most emotionally attached founder understands that being acquired is a victory. If you haven’t considered acquisitions as a part of your exit strategy, 2019 is the time work on this.
Let these noteworthy acquisitions from 2018 serve as inspiration for your own strategic planning and check out the resources listed at the end of this blog to accelerate your thinking.
According to Deloitte’s annual mergers and acquisitions survey, 2018 was tracking to be the biggest year for quantity of transactions and overall deal size over the past 40 years. These were the six largest transactions announced in 2018:
- Tech behemoth IBM acquired RedHat for $34 billion. RedHat provides open source enterprise software and is set to be the first Linux company to hit a billion dollars per quarter.
- In July, chip-maker Broadcom acquired CA Technologies – an enterprise software company – for $18.9 billion. Earlier in the year, Broadcom’s $117 billion bid for rival Qualcomm was blocked due to security concerns.
- Startup unicorn Qualtrics had planned to go public, but SAP paid the Utah-based company $8 billion cash instead. Qualtrics is a survey and analytics provider.
- Microsoft acquired GitHub – a software development platform – for $7.5 billion in stock. The move aligns with Microsoft’s cloud-first reorganization and will help them court developers.
- Industry leader Salesforce acquired Mulesoft – a software company that helps companies stitch together various cloud services – in a $6.5 billion cash and stock deal. Salesforce plans to use the products to help sync customer data across apps and services.
- Another legacy brand, Adobe, took in established marketing software company Marketo for $4.75 billion. Adobe hopes to use Marketo’s product for direct-to-consumer marketing on the Adobe Experience Cloud platform.
Companies founded by women and people of color
There is a lot of work to do to close investment gaps for women and founders of color, and the same is true in the acquisitions arena. Here are some notable companies founded by women and POC were acquired in 2018.
- Twilio acquired Sendgrid for $2 billion – one of the largest acquisitions of the year. Founded by developers of color, Sendgrid is an email delivery service that will integrate into Twilio’s communication platform to create an all-in-one platform for business growth.
- Female-founded parental leave management company LeaveLogic was acquired by benefits solutions giant Unum. LeaveLogic will continue to operate independently, providing centralized dashboards to customers like Apptio and DoorDash.
- Proctor & Gamble acquired Walker & Company, a brand that centers the needs of people of color with their brands Bevel (shaving products) and Form (haircare). Founder Tristan Walker will remain CEO.
- Female-founded predictive hiring provider Koru was acquired by Capp & Co. Limited. The global leader in strength-based talent assessment will expand their offerings with Koru’s platform and Koru7™ Impact Skills assessment.
Artificial intelligence companies
- Datafox, whose mission is to eliminate grunt work for business professionals, was acquired by Oracle. DataFox uses AI to capture insights and allow knowledge workers to skip straight to strategic decision-making.
- Salesforce is looking to combine their sales and marketing software with the power of the Marketing Cloud by acquiring Datorama for $800 million. The cloud AI company’s dashboards for insights and reporting help businesses adapt and optimize their marketing strategy.
Other cloud-based companies
- The largest US newspaper publisher, Gannett, acquired WordStream – a cloud-based SaaS marketing company – for $150 million. WordStream helps businesses manage ad spend and maximize their online advertising budget.
- Siemens bought Mendix for $730 million to accelerate their research and development. Mendix provides tools for building, testing, deploying, and iterating applications, which will help Siemens create new products more seamlessly.
- Known for providing secure electronic signature transactions, DocuSign spent $220 million cash on SpringCM, which will help them modernize their Systems of Agreement.
Learn more about startup acquisitions:
Startup Acquisition: How to Attract Potential Buyers
7 Things to do Before You Sell Your Startup Business
6 Reasons Acquisitions Derail – and How to Get Them Back on Track
Questions or Comments? Reach out to EGFS
Follow Us: @EarlyGrowthFS
5 Tips to Help You Plan for a Successful New Year in Business
Scale faster in 2019 with a sound marketing budget
Future of Work: Robot Chefs