Most tech startups acquired in 2012 had no VC funding

Summary:Startups may be keen to chase venture capital investment, but almost three quarters of tech companies bought out last year did so with out VC help.

Attracting venture capital is one indicator that a startup has potential, but the vast majority of privately owned firms acquired last year had never picked up any institutional investors, according to a report.

A total of 2,277 private tech companies from around the globe were acquired last year, according to a new report by researcher CB Insights.

A "big surprise," according to the company, is that 76 percent of these firms had not raised venture capital or private equity. This, it said, suggests a lot of tech companies are able to sustain themselves on profits and other sources, such as angel financing.

The value of most of the acquisitions was never disclosed by the buyer. However, 331 of the buyouts were made public, and totalled $46.8 billion during the year.

Over 50 percent of the companies were acquired for less than $50 million, and 80 percent of the startups sold in 2012 went for less than $200 million. Just eight were valued at $1 billion or over.

Google and Facebook were the most active acquirers during 2012, with a total of 12 acquisitions apiece for the year. Google and Cisco were the most frequent to disclose the value of their acquisitions.

Not surprisingly, most acquisitions were of Californian companies. The 455 that happened in the state in 2012 was more than double that of any other state in the US and the whole of the UK, which was the second-largest international market for private tech company acquisitions, with 156 recorded for the year.

The UK edged out New York's 138 acquisitions for the year. Meanwhile, the 100 acquisitions in Canada made it the second-largest international market, behind the UK (and excluding the US).

Topics: Start-Ups


Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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