I think it took maybe three days after I roasted our rather dry M&A season for the news cycle to prove me wrong. This week we saw Naver acquire Poshmark, Duolingo buy its first company, Spotify acquire content moderation tech company Kinzen, and, um, Twitter got closer and closer to striking a deal with Musk.
When we see high-profile acquisitions happen in close proximity, the human response is to think that there’s a trend forming. Eh. I’d rather ask questions: Poshmark’s acquisition is at somewhat of a discount, so what does that tell us about the state of marketplace startups and their valuations? Duolingo is finally becoming an acquisition-friendly company; what does that tell us about their priorities and expansion efforts? How does Spotify’s acquisition play a role, if any, in its recent layoffs and shuttering of some original podcasts? Musk is readying to buy Twitter, after saying he wants to buy Twitter, but that’s somehow news because, wait, does anyone know what’s going on?
Bloomberg tells me that I’m not entirely wrong for thinking things have slowed down. M&A in the United States has fallen for the past five quarters. The same report says that “roughly $212 billion worth of deals were announced in the past three months, the lightest period since the second quarter of 2020.” At the same time, tech is a bright spot. Despite the fact that deals are slowing, the tech sector’s total deal value is up 39% year over year, Bloomberg data claims. It’s the big ones weighing out, such as Adobe’s $20 billion acquisition of Figma.
I’m always here to provide nuance, especially after an especially eventful week. Do let me know what you’re thinking about by tweeting at me or responding to this post. If you missed last week’s newsletter, read it here: “Welcome to spooky season in startups.”
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