- Private equity firms have become major players in the startup market.
- Last year, 20% of all startups that had a successful exit — meaning they either went public or were acquired — were bought in a private equity-related deal.
- Startups still see lots more money from IPOs and corporate acquisitions than from private equity deals, but PE firms are spending increasing amounts.
- The top 10 biggest private equity purchases of startups are listed below.
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The vast majority of startups don’t go public. They get acquired — assuming they don’t go out of business first.
Traditionally, the acquirers of venture-backed startups have been other, independent companies in the same industry, whether they are established players or other startups. But more and more startups these days are being acquired by private equity firms.
Last year, about 20% of all startups that had a successful exit — meaning they were either acquired or went public — were purchased either directly by a private equity firm or by a company that was owned by one, according to PitchBook. That was up from just 5% in 2003.
Startup backers still see lots more money from the public markets and corporate buyers than they do from private equity firms. But the amounts that PE firms are spending on startups is steadily increasing and in some cases has gotten quite large.
Last year, such firms spent $6.3 billion buying up startups — up from $690 million seven years earlier. And three private equity buyouts over the three years topped $1 billion.
Here, according to PitchBook, are the 10 largest private equity purchases of startups over the last three years:
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