The European tech ecosystem has been holding its breath for a surge of acquisitions.
Given the tougher fundraising environment and macroeconomic outlook, founders and investors say more startups will look for an early exit. And bigger fish will be hunting for deals.
As a case in point, VC Speedinvest told Sifted in December it had grown its internal M&A team to find exit opportunities for its portfolio.
Now, there’s some data to show that more acquisitions may be materialising. January was a record month for acquisitions and buyouts involving European startups — with a total of 378 deals reported, according to Sifted Intelligence analysis and Dealroom.
The top three countries for deals by the HQ of the acquired startup were the UK (117), France (51) and Germany (44) — all records for those countries.
Notable acquisitions include the purchase of B2B soonicorn InstaDeep by BioNTech for £362m, the purchase of Trouva by Re.Store following the collapse of its previous owner Made.com, and the buying of 3D mapping startup FATMAP by Strava.
A contrast with fundraising
The surge in M&A activity stood in stark contrast to the quiet funding activity in January. According to Dealroom, the number of fundraises in January was slightly less than half the volume of the same month last year.
Companies raised a total of €4.9bn in the month — the lowest for the month of January since 2019.
That said, average round size has grown significantly — though this could adjust down slightly as smaller, earlier-stage deals are announced with reporting lag. The average round size in January 2023 was €8.2m versus €3.7m just three years ago.