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Explaining why TMT M&A deals at highest level since 2006

Over the weekend the FT wrote that the value of TMT M&A deals in Q1 was $174bn, the highest level since 2006 and up 65% on the year ago period.

The market is hot right now. No doubt about it. The $174bn includes a bunch of cable deals that aren’t relevant for the startup [...]

The key to Whatsapp’s success? Focus on product

 

When I talk about our approach to investing I often say that the next generation of successful companies will be most notable for their amazing products. That contrasts with previous eras where great sales and marketing capabilities and great engineering were often more important than product (think about the great enterprise software [...]

Google has only made four $1bn+ acquisitions

Following Google’s acquisition of Nest last week Venturebeat published the following list of Google’s top ten acquisitions by value:

Motorola Mobility – $12.5 billion, 2012 Nest Labs – $3.2 billion, 2014 DoubleClick – $3.1 billion, 2007 YouTube – $1.7 billion, 2006 Waze – $966 million, 2013 AdMob – $750 million, 2009 ITA Software – $700 [...]

Some lessons on startup financing from Tren Griffin and Nassim Taleb

Nassim Taleb is one of the most visionary thinkers in modern finance. His books Black Swan and Fooled by Randomness are must reads for anyone in the investment business. Tren Griffin writes a good blog about investing, and this post is inspired by his article A dozen things I’ve learned from Nassim Taleb about optionality/investing. Thanks [...]

Non-tech companies are making more acquisitions

Techcrunch has an article up today about the increasing number of tech acquisitions by non-tech companies. Recent examples include:

Monsanto’s acquisition of Climate Corporation for $1.1bn United Health Group’s acquisition of Humedica for ‘hundreds of millions of dollars’ Under Armour’s acquisition of MapMyFitness for $150m Staples’ acquisition of Runa First Data’s acquisition of Clover [...]

Europe’s growing share of $1bn startups

Aileen Lee of early stage fund Cowboy ventures wrote a post for Techcrunch yesterday looking at the characteristics of 39 startups founded since 2003 that are worth over $1bn. She calls them ‘Unicorns’. There has been a lot of discussion since. Most notably Dave McLure who Tweeted that “The future of venture capital is [...]

Twitter’s sensible IPO strategy

NOTE: I wrote the post below a couple of weeks back but failed to hit the publish button. That was before Twitter filed their S1 with a valuation of c$15bn. Whilst that’s not an outrageous increase from $10.5bn from what we know of Twitter’s finances it seems pretty spicy from a multiples perspective – [...]

LinkedIn and Facebook – two very different approaches to going public

I just read How LinkedIn became a Wall Street juggernaut on Techcrunch. The article lists four things, three of which relate to being a great company (multiple growth vectors, a product that gets better as it gets bigger, deep competitive advantage). The fourth describes how their approach to the market, which was to under [...]

Roll up, Roll up – European tech companies undervalued

Ben Rooney has an article up today on the Wall Street Journal reporting that European tech companies are valued on lower multiples than US businesses in M&A transactions:

The amount paid for a company as a multiple of earnings before interest, taxes, depreciation and amortization, or Ebitda, for U.S.-based companies rose from 11 times [...]

Q3 M&A–volume flat, average value falling fast

Ernst and Young’s latest quarterly Global Technology M&A Update found that the number of announced deals is pretty much flat year on year and compared with the last quarter, but the average value of those deals fell sharply to $185m. That’s 43% down on Q3 2011 and 12% down on Q2 2012. There were [...]