Just call it deal mania: A look at this year’s booming market for M&A, IPOs, SPACs and VC
Another day, another deal.
That’s sometimes how it feels around the GeekWire newsroom as we track the latest venture rounds, private equity buyouts, acquisitions, IPOs, SPACs and every other transaction.
This year has felt especially busy, in part because it is just that: BUSY. Around the virtual GeekWire newsroom, also known as Slack, we’ve just started dubbing this the era of “deal mania.”
Consider this: On GeekWire’s Pacific Northwest “Deal Tracker” — check out this fabulous resource here — we’ve recorded 55 acquisitions, SPACs, IPOs and private equity buyouts so far this year.
It started Jan. 5 when Nintendo gobbled up Vancouver, B.C.-based Next Level Games and just kept steamrolling through yesterday when Bellevue, Wash.-based cloud migration company BitTitan announced it was being bought by Idera.
Of those 55 deals, 39 were acquisitions; nine were IPOs; four were SPACs; and three were private equity buyouts.
This sort of deal action is causing craziness over on our GeekWire 200 list of the top privately-held technology companies in the region, since we remove companies once they’ve participated in one of the transactions listed above. That means high ranking companies such as Zipwhip, Extrahop, Auth0, Moz, Leafly and Rover have all been removed — the most churn we’ve seen since the list launched nearly a decade ago.
At GeekWire, we also keep a separate list of Pacific Northwest venture capital financings, and that number now stands at 282. That means — since Oct. 28 is the 301st day of the year — we’ve seen nearly one venture deal per day. And the unprecedented activity just continues, with Seattle-based Rad Power Bikes announcing a massive $154 million funding round this morning.
I’m sure with a couple days left in this work week, more deals are on the way.
No wonder the venture capitalists, lawyers and investment bankers that service this business are bleary-eyed. It’s hard to get any sleep when deals are flowing at this incredible pace.
Just ask Craig Sherman, an attorney at WSGR in Seattle who structures various financing deals for startup companies. He said this is the busiest he’s been since the dot-com boom of the late 1990s.
“There are immense amounts of capital desperate for a home, and that’s driving activity at every stage, particularly large, later stage deals,” Sherman told GeekWire, presumably on a short break from working on one of those deals.
Interestingly, the longtime corporate securities attorney said deal flow may actually be driven in part by investors trapped at home.
“If you can’t go on vacation, and you can’t travel for business, you may as well stay in the home office and do deals,” he said.
On a recent episode of the GeekWire podcast, Seattle venture capitalist Jason Stoffer noted that many industry watchers have worried about an overheating market for at least five years. But Stoffer, for one, thinks there’s a fundamental economic shift which is driving deal activity.
“People are looking at their personal portfolios and saying: ‘do I really want it sitting in U.S. dollars, or do I want to own real assets? And, if I am going to own assets, I might as well own assets with growth potential,'” said Stoffer, a partner at Seattle-based Maveron. “So, I think what you are seeing is just this massive share shift towards private and newly public technology companies.”
That trend is playing out globally. Reuters recently reported that global mergers and acquisitions volume hit $4.33 trillion during the first nine months of the year, an all time record that eclipsed the last all-time high of $4.1 trillion in 2007.
Venture capital dollars also are flowing at record levels — more than $450 billion during the first three quarters, according to CB Insights.
SPACs, the special purpose acquisition corporations that were the darlings of the financial world earlier in the year, also are on track for a record-breaking tally with 499 so far this year. That’s more than double the amount of the full year in 2020, and compares to just 59 SPACs in 2019, according to SPACInsider.
And, finally, the IPO market remains robust with EY reporting that global public offerings in the third quarter reached a 20-year high.
There were 547 IPOs in the third quarter alone representing $106.3 billion in transaction volume, and the year-to-date haul now stands at $330 billion.
So, take all of this together — $4.3 trillion of acquisitions; $450 billion of venture capital outlays; $330 billion of IPO proceeds; $138 billion in SPACs transactions — and you are left with one thing: “deal mania.”