Anirudh Saligrama
While the year 2015 saw huge rounds of funding by investors in start-up sector, the year 2016 saw a huge number is merger and acquisition (M&A) in start-up sector. The year 2016 kick-started with the acquisition of CommonFloor by Quikr. Further the year saw several other major acquisition’s including the latest one with Flipkart’s Myntra acquiring Rocket Internet’s Jabong.
The highest number of deals were witnessed by domestic market start-up’s based out in Delhi-NCR region, followed by Bangalore (26) and Mumbai (16) deals with a total of 29 deals.
The year 2016 saw a huge trends of M&A in star-up sectors with a total of 123 deals and overall deal size of $534.9 million (disclosed value).
According to reports by Xeler8, the firm quoted on their website which stated “While the number of acquisitions and their size are both going up in India, the resulting combined entities would be able to cater the large needs of Indian population by expanding their reach in the market and even globally if they want.”
Xeler8 recently published a survey upon M&A’s in start-up sector and the results included that the outbound and inbound deals constituted 11 deals (9 per cent) and 12 deals (10 per cent) respectively while covering markets form countries like US, UK, Dubai, Canada among others. The domestic market displayed a big size of consolidation with about 100 M&As so far.
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Few of acquisitions that surfaced the news widely includes Mindtree acquiring Magnet 360, Tech Mahindra acquiring Bio Agency and Dabur acquiring Discaria. The large scale company acquisition’s includes, Myntra acquiring Jabong, Quikr acquiring CommonFloor, Titan Industries acquiring CaratLane, Yatra acquiring Mgaadi among others. Few star-up’s also acquired more than 1 start-up’s in order to scale up their growth. One such example includes Quikr acquiring online real-estate portal – CommonFloor and job portal – Hiree.
Some start-up’s also closed its operations after the merger, such as TinyOwl after being acquired by RoadRunnr ( now launched a platform – Runnr), Momoe after being acquired by Shopclues among others.
As per Xeler8 reports, several start-up’s M&A activity were related to securing their future and to keep their operations ever more strong with a healthier business environment. While some relate the M&A activity to scale up their growth and include few more additions to their work model.