Microsoft’s purchase of GitHub lifts VC-backed acquisition activity in year

Venture M&A numbers spiked in 2018, in part thanks to Microsoft’s acquisition of GitHub for $7.5 billion.

It ranks as the largest VC-backed acquisition of the year, ahead of Celgene‘s $7 billion purchase of Impact Biomedicines.

For the full year, 396 VC-backed companies were acquired, with 91 disclosing terms for a combined total of more than $47 billion, according to preliminary data from Thomson Reuters.

The number of deals declined but the overall amount rose 32 percent from a year earlier. In 2017, 498 venture-funded companies were bought, with 199 disclosing financial details for a total of $35.5 billion in proceeds.

The average disclosed deal in 2018 rose 72 percent in 2018, to nearly $517 million from $300 million a year earlier. The number of billion-dollar M&A deals increased to nine from seven.

In addition to GitHub and Impact Biosciences, other notable deals in 2018 include Cisco purchasing Duo Security for $2.35 billion; Japanese HR giant Recruit Holdings buying Glassdoor — which was rumored to be near going public — for $1.2 billion; and Autodesk acquiring Plangrid for $875 million.

Boston Scientific was an active acquirer in 2018, buying five companies. Purchases include Augmenix, which develops radiation-oncology products to treat prostate cancer, in a cash and performance-based deal worth $600 million.

BSX also bought Nxthera for more than $400 million, nVision Medical for $275 million, Securus Medical Group for $50 million and EMcision International for an undisclosed price.

One firm to benefit from Boston Scientific’s buying spree is early-stage healthcare and life-sciences investor Catalyst Health Ventures of Braintree, Massachusetts.

The firm was an early backer of Augmenix and nVision and the portfolio exits preceded its effort to raise $100 million for its fourth fund, according to a regulatory filing in October.

Other active acquirers in 2018 included Microsoft, which purchased four VC-backed companies. Oracle and WeWork each acquired three startups. A number of companies, among them Apple, Chegg, Grubhub, Salesforce, Splunk and Workday, each scooped up at least two venture-backed companies,

GV was the beneficiary of 14 of its portfolio companies exiting through M&A in 2018, according to the preliminary data. Exits include Duo Security; Flatiron Health, which Roche bought for $1.9 billion; and SCVNGR, which Grubhub paid $390 million to buy.

First Round Capital exited 12 companies through M&A, followed by Bessemer Venture Partners and Kleiner Perkins each seeing liquidity from 11 and New Enterprise Associates selling 10 companies in the year.

To download the full version of the spreadsheet below with additional data, click here: VC-backed M&A (2018)

Top VC-backed M&A

Company  Years to exit Acquirer
Value ($M) Total funding raised to date ($M)
GitHub Inc 6.2 Microsoft Corp $7,500.00 $350.50
Impact Biomedicines Inc 0.3 Celgene Corp $7,000.00 $22.50
Wuchang Shipbuilding Industry Group Co Ltd 0.5 China Shipbuilding Industry Co Ltd $3,548.57 $686.17
Duo Security Inc 8.1 Cisco Systems Inc $2,350.00 $119.55
Flatiron Health Inc 5.4 Roche Holdings AG $1,900.00 $313.00
X.Commerce Inc Adobe Systems Inc $1,680.00 n/a
Adaptive Insights Inc 13.4 Workday Inc $1,550.00 $174.09
Glassdoor Inc 10.2 RGF OHR USA Merger Sub Inc $1,200.00 $195.60
Syntimmune Inc 4.0 Alexion Pharmaceuticals Inc $1,200.00 $76.00
CanniMed Therapeutics Inc Aurora Cannabis Inc $890.43 $42.04