M&A In Emerging Tech On Pace For Record Deal Value

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Corporate interest in emerging tech is largely holding steady. Strategic acquirers have completed 644 deals in the space so far this year, per the PitchBook Platform, on track for about 925 takeovers by the end of the year. That figure would be the third-highest of the decade. And the cost of acquiring the next big thing has more than kept pace.

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At some $86 billion in deal value, 2017 has already surpassed 2015's total of $83 billion and is on track to hurtle past last year's all-time high of $96.6 billion. And considering the difference in deal quantity, that's saying something. With 1,263 completed M&A transactions in emerging tech—which we define here as 3D printing, adtech, agtech, AI & machine learning, autonomous cars, cybersecurity, edtech, fintech, healthtech, IoT, robotics & drones, and VR/AR—2015 represents the most active year for corporate acquirers since at least 2007.

Corporate M&A activity in emerging tech

Last week ended with a few notable deals that illustrate the diversity of potential targets in emerging tech. Here's a rundown:

Fast Forward Labs

Cloudera disclosed last week that it has acquired Fast Forward Labs, a research startup focused on machine learning and applied AI that advises large enterprises on how to utilize those tools. The deal introduces a new revenue stream to Cloudera's top line, a nice addition after the provider of a cloud-based platform for machine learning and analytics already generated $89.8 million in revenue during its fiscal 2Q, an increase of 39% YoY. The deal is Cloudera's sixth M&A move to date, per PitchBook data, and its first since picking up cloud-based data analytics platform Sense Enterprise in March 2016.


Volvo has agreed to acquire Luxe, the provider of a premium valet and concierge service, in a deal with multiple possible motivations. On the one hand, the deal is something of an acqui-hire, bringing Luxe's key data scientists, developers and engineers into Volvo's existing digital organization in Silicon Valley. On the other, it will bring relevant new tech to Volvo's existing products, adding routing, logistics planning and arrival-time-prediction algorithms to the company's offerings. Luxe's last private valuation of $160 million came on the back of a $50 million Series B last March in a round led by Hertz. Luxe had raised more $75 million in venture funding since 2014.

New Home Feed

Zillow has announced it will purchase New Home Feed, the operator of a platform for managing real estate that allows home builders to input, manage and syndicate their own listings. The move represents a play for a greater share of the new home listings market by making it easier for Zillow's builder-partners to manage data from new construction projects and market properties to prospective buyers. The acquisition is Zillow's first since announcing the $13 million purchase of Naked Apartments in February 2016. The company's 2015 takeover of fellow real estate listing platform Trulia in a $2.5 billion all-stock deal is far and away Zillow's most significant M&A move to date, according to PitchBook data.

Want more? Check out the top 6 acquirers of emerging tech.

Article by Adam Putz, PitchBook

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