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Enterprise Software Startups are on the Acquisition Radar of Tech Giants

Acquisition Radar of Tech Giants

Let’s take it in a chronological order, Microsoft made a lavish takeover of LinkedIn to enter into the direct content driven business, next to watch for was Oracle’s billion dollar acquisition of NetSuite namely to say the passive content-centric acquisition forbye Google has been the Baptist  altogether.

To square the strategic acquisitions algorithms of the enterprise giant’s – the latest reported SalesForce acquisition of Quip is cherry on the cake.

In enterprise vernacular, the enterprise productivity segment is regaining the momentum. As enterprise software has been long-siloed because of its one-side use and aged integration processes, the digital transformation and ‘smart’ wave are making these software’s tools cross-functional, real-time collaboration, and communicative at their core.

Enterprise software giants across different verticals are moving in the direction of end-to-end solutions in an attempt to own more of the work flow — Salesforce’s acquisition of Quip is said to only create an aggressive vie. For enterprise software startups, it’s indicative of more mergers and acquisitions to come reports TechCrunch.

Enterprise software spending is on an upward trend, and is expected to reach $326 billion this year; meanwhile, startups and investors have taken notice. There are currently 1,425 active startups in the space — as listed by CrunchBase — and there’s been an influx of venture funding. According to PitchBook, venture funding of enterprise productivity startups has more than doubled, from $4.75 billion in 2012 to $11.46 billion last year. This year, these software startups have already raised $6.26 billion to date, and the median deal size is up 25 percent compared to 2015, reflecting current market demand and investor appetite.

In an environment where the biggest technology leaders are looking to startups for new innovation and transformation, there will likely be a coming spike in M&A activity. A historical analysis of CrunchBase data reveals an ongoing trend: enterprise software startups are seven times more likely to get acquired than they are to shut down, while only 4 percent make it to an IPO.


Niloy Banerjee

A generic movie-buff, passionate and professional with print journalism, serving editorial verticals on Technical and B2B segments, crude rover and writer on business happenings, spare time playing physical and digital forms of games; a love with philosophy is perennial as trying to archive pebbles from the ocean of literature. Lastly, a connoisseur in making and eating palatable cuisines.

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