PITCHBOOK - Dealmakers and investors agree that by the end of this year or early next year, M&A activity will increase significantly. Larger startups are looking to buy smaller companies with complementary products. These acquisitions aim to create a bigger platform and grow revenue by cross-selling and create a business large enough to be an IPO candidate. Public companies more recently have a lower acquisition appetite than before because their valuations are down significantly. A survey from The Conference Board found CEOs expect the economy to deteriorate further by the end of the year and valuations to drop. A sale to a private equity firm is seldom a great financial outcome for VCs, however dealmakers expect a surge in these transactions.
by Marina Temkin
See full article at Pitchbook
See extended summary at Internet Dating Investment blog
Mark Brooks: Match Group's cost of capital is higher now, so IMHO they will rest on their laurels and make the most of what they have until the trajectory of the market looks more clear. Other buyers will be bargain hunting, but mindful of the poor outlook for IPO'ing a consolidated dating group. VC money is a little dry. Angels rule. If you're in the market for funding, let me know, and I'd be happy to share a comprehensive list of investors that we've built over the years, and just updated current thru April. FYI, Courtland Brooks works with startups through $500m+ revenue dating companies.
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