August 13, 2021

European startups flex their acquisition muscles with €1bn splurge

More European tech companies are using acquisition as a growth strategy.

Eleanor Warnock

5 min read

More private European tech companies are acquiring smaller startups armed with abundant fundraising and ambitions to grow larger while still private. 

According to Dealroom data, 13 VC-backed European tech companies have made at least two acquisitions so far this year, compared to only eight in 2020. 

The total value of the announced acquisitions by VC-backed private companies in Europe so far in 2021 comes to over €1bn, propelled by the $600m acquisition of US company SparkPost by MessageBird. That’s more than 10x the amount in 2020, according to Dealroom data. 


“Conversations (about M&A) happen much more frequently,” says Davor Hebel, managing partner and head of Europe at VC Eight Roads. “It’s about building a clear market leader and having entrepreneurs and management teams that can actually handle” the transactions.

VCs say that the rise in acquisitions is a sign of growing sophistication among the region’s entrepreneurs. Founders and CFOs say it’s also easier to acquire given the huge amounts of capital available to startups, giving European tech companies the ability to stay private longer and develop a strategy for growth through acquisition. 

As of August 11, the most acquisitive VC-backed private European tech companies in 2021 were Hopin (5 acquisitions), SaltPay (4), Klarna (4), MessageBird (3), Kahoot! (3, although two were made after the company went fully public in March) and Glovo (3). 

Why startups are buying

European startups and scaleups say they have various reasons for acquiring other companies, including gaining share in other markets, acquiring new offerings or acquiring talent, in particular software developers. 

“An important aspect for an acquisition strategy is to define what you aim to achieve and how this fits within your overall company strategy. This might sound simple, but it’s key in order to be effective in decision-making around an acquisition and its deal structure,” says Milda Jasaitė, M&A director at Vinted. 

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An important aspect for an acquisition strategy is to define what you aim to achieve and how this fits within your overall company strategy.

The secondhand fashion unicorn has made several acquisitions, including competitors Chicfy in Spain and United Wardrobe in the Netherlands. Jasaitė says that while the company’s “growth is mainly organic, we’re absolutely open to growth through M&A when the opportunity is right.” 

For British flower delivery startup Bloom & Wild, acquisitions have been a way to accelerate expansion into major European markets and acquire new product offerings. The company acquired Dutch rival Bloomon and French rival Bergamotte this year — the company’s first acquisitions. Bergamotte, for example, had a strong plant business, and the deal will more than double Bloom & Wild’s plant revenue. 

“Part of our pitch for our Series D funding was that we were looking at M&A as part of our strategy alongside organic growth in order to expand into more markets and strengthen our position in some markets where we were already present like Germany,” says chief executive Aron Gelbard. 

Avi Meir, the CEO and cofounder of Spanish startup TravelPerk, says that the pandemic was the impetus to start acquisitions. 

Since mid-2020, the company has acquired three companies. The first, Albatross, is an API for travel restriction information that TravelPerk is now also selling as a white-label product. The other two are travel companies NexTravel in the US and Click Travel in the UK.


Meir says that the acquisitions were less about gaining geographic “territory” and more about “product and offerings”. Click, for example, gave TravelPerk more expertise about serving public entities and integrations to UK rail. 

Startups still need to build expertise

For European startups who have never done acquisitions before, developing an M&A strategy can be daunting. This is where founders say being VC-backed can be helpful as they can lean on the expertise of investors and their investors’ networks. 

In the case of TravelPerk, Meir says the company was lucky to be able to tap the expertise of one investor with significant experience in M&A: Delivery Hero cofounder Niklas Östberg. Delivery Hero has acquired dozens of companies from the United Arab Emirates to South Korea. Meir says TravelPerk also used an external M&A company and advice from other investors, but now wants to build in-house capabilities. 

“If it becomes core, we need to build it in-house,” he says. “Our intention is not to do a one-off, it’s rather to build a playbook and use (acquisitions) as a new growth engine to supplement our organic growth engine.”

Eight Roads’s Hebel says he is also often tapped for M&A advice. What founders often want from him and his colleagues is “thinking through how things can go wrong and being able to think through some of those risks — the culture, the execution, the distraction and ultimately is it worth it.”

Bloom & Wild, on the other hand, focused on building a team before hunting for purchases. The company hired a VP of business development, Camille Fitoussi, in 2020 to work on M&A and hired several former consultants to her team to do most commercial due diligence in-house. 

“I think you get to a better outcome if you’ve got that knowledge of the business internally,” says Gelbard. 

Life after acquisition

The other tricky question for companies can be how to integrate the acquired company, including staff and executives.

Felix Leuschner, who sold his car subscription service Drover to online car retailed Cazoo in 2020, says that his focus was to make sure everyone at Drover had the chance to work in the combined business, allowing that it was “fair” that not everyone wanted to stay. He is now group business development director at Cazoo working on the French and German side of the business. 

“My company had raised $30m in funding and we got past Series B but never got to one level beyond that,” he says. “I’m now part of the executive team of a $7bn company. That’s an incredible journey and allows me to work at a different level.” 

I’m now part of the executive team of a $7bn company. That’s an incredible journey and allows me to work at a different level.

TravelPerk’s Meir says that part of getting integration right is making sure that the culture of acquisition targets aligns with TravelPerk. In all three of the company’s acquisitions, he says they interviewed the founders and senior management “like a job interview”. 

Then, integration is about “no rush,” he says. “The teams don’t want us to rush it, the customers don’t want us to rush it.”

But European startups and scaleups aren’t the only ones on the hunt for attractive acquisition opportunities in the region. US private tech companies are also increasingly interested, as seen just this week by Gopuff’s acquisition of 10-minute grocery Dija. European players will have to move fast to keep up. 

Eleanor Warnock

Eleanor Warnock is Sifted’s deputy editor and cohost of Startup Europe — The Sifted Podcast.