When Unicorns Go Shopping, M&A Is A Domestic Affair
22 March 2019 1:34 PM GMT
As soon as a startup accepts venture backing, its fate is sealed. It will get big or die trying. Along the way, it might make sense for a rapidly-growing startup to acquire other businesses as it builds toward massive scale.
- We also found a trend that suggests more recently founded unicorns are acquiring smaller startups earlier on in their own venture’s lifecycle, as compared to older unicorns.
- We’ll look at whether unicorns are more likely to acquire companies domestically (e.g. from the same country) or internationally (e.g. companies headquartered in a different country).
- The data indicates that unicorns outside the U.S. tend to follow the same general pattern: most of the companies they acquire are headquartered in the same country.
- However, while biased in favor of buying domestic, international unicorns are comparatively more likely to acquire abroad.
- At A Time International expansion makes sense when the market at home becomes saturated, or in a highly competitive market where an advantage is conferred to the first mover.