by Brenon Daly
For tech M&A, 2019 not only wrapped up a decade, it also ended an era. As we look ahead, it’s becoming increasingly clear that business in the 2020s won’t just be a continuation of the 2010s. To help you navigate the changes, 451 Research has just published its signature 2020 Tech M&A Outlook: Introduction, covering what we see shaping the multibillion-dollar market in the coming years.
And right now, there are some significant shifts in the tech M&A market, wherever you happen to be working. As we highlight in the full report, these once-in-a-generation transitions include:
Longtime corporate acquirers aren’t doing deals like they once did. The decidedly middle-aged mainstays had dominated the tech M&A market since virtually the industry’s first print. But now, the Baby Boom-era vendors are being nudged aside by faster-moving and bigger-buying companies born in the past 20 years or so. Our report looks at which Millennials are driving the trend, and which we think are the next to join M&A’s big leagues.
Broad-market M&A valuations have soared to record levels, roughly doubling over the past decade. And yet, in the all-important matter of pricing, not everything is heading up and to the right. We chart the trends in several key markets, including a historic decoupling of valuations between strategic and financial buyers.
In venture capital, the past decade was dominated by attention to ‘unicorns,’ a term that was coined by a VC in 2013 to describe startups valued at $1bn+. By last year, however, unicorns didn’t look very special. Both acquirers and investors had become increasingly skeptical of money-burning startups. The ‘growth at any cost’ business models that had fueled the 2010s looked unsustainable in the new decade, a change that will have huge implications for startup fundraising as well as exits.
Again, our 2020 Tech M&A Outlook: Introduction is now available to 451 Research clients. Think of it as a guidebook for the changing landscape of the industry.