Tech M&A Has Been Awfully Slow Lately

I know August is supposed to be a slow month for venture-backed M&A activity. Still, I never expected it would be this slow.

Yet data seems to confirm what the paucity of acquisition-related headlines led me to suspect: Almost no one is buying venture-backed technology companies, all of a sudden. And most transactions that are happening don’t look like the kind that will inspire much VC bragging.

Since the beginning of the month, there’s been just one newly-announced acquisition of a venture-backed Internet or tech company with a disclosed value of more than $100 million, according to Thomson Reuters data. That was sports site Bleacher Report, backed by Crosslink Capital, Oak Investment Partners and SoftTech VC. Turner Broadcasting announced on Aug. 6 that it will buy the company for $175 million.

The next-biggest?  Possibly Venmo, a provider of mobile payment services, which sold to Braintree Payment Solutions  for a  reported $26 million. Though that’s not a big-ticket price tag by venture standards, it should be a pretty good return for backers Founder Collective, Lerer Ventures and RRE Ventures, which put about $1.2 million into the Philadelphia-based company.

Beyond that, there were a handful of deals valued at $5 million or less, plus about 50 private technology companies, many of them venture-backed, which sold for undisclosed sums.

Oftentimes, those undisclosed deals really do represent large exits for VCs. But the August list didn’t provide a whole lot of likely suspects, as most of the acquirers were not companies known for their deep pockets. One of the few exceptions was General Dynamics. The aerospace and defense company announced it will buy Fidelis Security Systems, a provider of security software backed by Ascent Venture Partners and Point Judith Capital, for an undisclosed sum.

What do these M&A numbers portend for venture returns? Really, I haven’t a clue. If this was September, it would be a worrisome sign. But as it’s August, there’s a good chance the steady roll of M&A transactions will pick up again when dealmakers return from Labor Day. Or, at least let’s hope that’s the case.

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