Mergers & acquisitions on rise as startups diversify into newer spaces
- IBEF
- July 27, 2022
With funding under pressure and the resulting impact on valuations, larger firms are seeking mergers and acquisitions (M&A) to expand into different markets and boost capacity. This pattern was repeated in the first half of 2022. (January-June). According to Tracxn data, overall acquisitions stood at 169 as of July 26, with an average purchase price of US$ 90.2 million. A huge increase from the first half of 2021, when 115 purchases fetched an average of US$ 180 million. There were 244 purchases between January-December 2021, with an average transaction price of US$ 227 million.
Another factor for increased M&A activity is fewer initial public offerings (IPO), with tech equities falling in India and abroad. According to Mr. Karan Mohla, Partner at B Capital, a venture capital firm co-founded by Eduardo Mr. Luiz Saverin, Facebook co-founder, while the capital markets were good in 2021, there might be a lot of M&A activity this year in the startup ecosystem as firms search for inorganic ways to develop.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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