An initial public offering may be the desired outcome for the founders of many private companies. But in a stock market that hasn’t been particularly kind in the past year to a few startups that have made public debuts, a well-priced exit via acquisition could be more appealing to investors.
The past year saw corporate acquisitions of startups such as video-gaming company Scopely, video-messaging service Loom, medical-device maker Relievant Medsystems, B2B intelligence leader Clearbit, and analytics platform Heap.
Video-gaming company Scopely
In April, Scopely agreed to be purchased by Savvy Games Group for $4.9 billion. In a press release announcing the acquisition, Savvy Games, which is wholly owned by Saudi Arabia’s public investment fund, cited Scopely’s track record of developing and publishing a wide range of successful video games, particularly on mobile apps. Scopely created gaming franchises such as “Star Trek,” “Fleet Command,” “Stumble Guys,” and “Scrabble.”
Under the terms of the agreement, Los Angeles-based Scopely has continued to run as an autonomous operating company side by side with other Savvy brands. Founded in 2011, Los Angeles-based Scopely reportedly had a $3.3 billion valuation in October 2020 after it raised $340 billion in a funding round, according to Variety. The publication also reported that Scopely’s valuation rose to $5.4 billion in October 2021 after its acquisition of Sony’s GSM Games unit for $1 billion, so Savvy’s acquisition price represented a modest decline in valuation.
Video-messaging service Loom
In October, Loom, an innovative video messaging platform, agreed to be purchased for $975 million by Atlassian (NASDAQ: TEAM), a leading publicly-traded provider of corporate team collaboration and productivity software. As in the case with Scopely, the purchase price represents a discount from $1.53 billion that San Francisco-based Loom was valued at in May 2021 when it announced a $130 million Series C funding round. Loom has managed to amass more than 25 million users and was honored by Fast Company as one of the world’s 50 most innovative companies in 2023.
Medical-device maker Relievant Medsystems
In September, Minneapolis-based Relievant Medsystems was acquired by medical- device colossus Boston Scientific (NYSE: BSX) for an upfront cash payment of $850 million and additional payments in coming years which are dependent on Relievant’s sales performance, according to a press release announcing the deal. Relievant is primarily known for developing the Intracept nerve ablation system for treating chronic back pain.
B2B intelligence provider Clearbit
Last month, Clearbit, a leading B2B data provider, agreed to be purchased by Hubspot (NYSE: HUBS), a customer relationship management company, for an undisclosed sum. In announcing the deal, Hubspot said that Clearbit will allow it to bring rich third- party company data into its system of record, “making HubSpot the central source of truth for go-to-market professionals.”
Analytics platform Heap
According to the release, the purchase represents ContentSquare’s largest acquisition to date, and will allow the company, which was founded in 2013, to deliver “an all-in-one analytics platform that will serve as an advanced alternative to traditional analytics.”