The 8 Biggest Startup Acquisitions of 2017
From Chewy to Shazam, these young technology companies took the road less IPO’d.
PHOTO CREDIT: Getty Images
'What kind of exit do you want?' It's a question the founder of every tech startup will hear over and over again, almost from day one. The exit is when all that hard-earned equity turns into liquid dollars (an event which any venture capitalists involved also appreciate). Sometimes it comes in the form of an IPO -- and other times the founders aren't looking to cash out at all.
The third option is an acquisition: Being purchased by a larger company. Those deals can be huge and send waves of excitement through the rest of the industry. In 2017, these eight startups went out with the biggest bangs. Here they are in order from least to most expensive:
8) Shazam, acquired by Apple for around $400 million
Apple's purported $400 million acquisition of Shazam, an app for identifying songs, broke in December. Shazam never figured out how to be a blazing business, but it is a tool that many consumers are familiar with. Apple is likely to integrate Shazam's functionalities into iOS, and certainly will leverage its new asset to boost Apple Music. Will this impact Apple's competition with Spotify? The answer to that is a shrug at this point.
7) Trello, acquired by Atlassian for $425 million
Workplace software company Atlassian announced its acquisition of project management app Trello in January. Atlassian's preexisting suite of products included HipChat, a Slack competitor, and Jira, a project management tool for developers. Atlassian's niche is clearly software that helps people organize their teams and coordinate more productively, so Trello was a no-brainer. That's what they call synergy, kids.
6) NuTonomy, acquired by Delphi for $450 million
"Automotive supplier Delphi has acquired Boston-based self-driving startup nuTonomy for $450 million," Recode reported in October, proclaiming this "a significant deal, not just in price, but because it's one of the first of its kind." Because nuTonomy joined an automotive supplier rather than purveyor of the finished product, it will be able to serve multiple car manufacturers and thus capture larger market share. Or at least that's the bet Delphi is making.
5) Shipt, acquired by Target for $550 million
Target buying grocery delivery service Shipt was another late-breaking 2017 eye-popper, with the news coming out in December. As when WalMart bought Jet.com and Ikea bought TaskRabbit, Target wants to reach millennials (especially the affluent ones) where they are. Traditional retailers have been struggling under the weight of Amazon and the rest of ecommerce; purchasing innovative models is a bid to stay in consumers' pockets. Or rather, get the money out of consumers' pockets. Whichever.
4) Moat, acquired by Oracle for $850 million
In April, Oracle beefed up its adtech portfolio by spending almost $1 billion on transparency and tracking company Moat. If you're an advertiser, you want to know where your ads are showing up -- ideally where you specified that they should. For example, Moat works with Google and Facebook to check on this, aiming to give brand managers peace of mind.
3) Musical.ly, acquired by Beijing Bytedance Technology Co. for up to $1 billion
Social media app Musical.ly, which showcases short lip-syncing video clips created by users, is a sensation among tweenagers. Its hold on the young audience who are enthralled with Musical.ly's stable of influencers is not unlike early Snapchat (before the post-IPO slump). The Wall Street Journal reported in November that "Bytedance, best known for its personalized news app Toutiao in China, made the acquisition to find ways to coordinate content between the two platforms, and help its effort to expand overseas."
2) AppDynamics, acquired by Cisco for $3.7 billion
Cisco snapped up AppDynamics in January, right before the startup was about to debut on the public markets. Scads of IPO-watchers were startled by the application monitoring company's sudden reversal. On top of making a big move at the last minute, Cisco paid almost twice as much as IPO investors would have. Cisco is generally regarded as a hardware company, and presumably acquiring AppDynamics was a way for the legacy venture to expand its hardware presence. In October, Cisco added machine learning startup Perspica to support AppDynamics.
1) Chewy, acquired by PetSmart for $3.35 billion
In June, one seller of all things pet-related bought another seller of all things pet-related. Chewy is an online one-stop shop for Fido and Mittens' various needs, and PetSmart obviously acquired the startup in order to cement a digital foothold. "The deal is a huge one by any standard -- bigger than Walmart's $3.3 billion deal for Jet.com last year -- and especially for a retail company like PetSmart, which was itself valued at only $8.7 billion when private equity investors took it over in 2015," ecommerce reporter Jason Del Rey wrote at the time.