Why Do Startup Acquisitions Make Headlines?

The talk of startup acquisition is not a numbers game, for keeping a numerical record does not usually interest neither the entrepreneurs nor the venture capitalists.

Startup Acquisition happens when a buyer seeks something unique and interesting in another enterprise and then makes a formal offer to acquire it. Almost all organizations around the world adopt this proven method to improve and enhance what’s lacking within their own establishment, be it good staff management, or a facial recognition software, or even a search engine built around a specific niche.

When the focus shifts to India, the e-commerce rises up to become the mascot for an entire wave of startup aura. The startup scenario in India is a fairly new one. While the previous year 2015 saw a hike in several startup enterprises, the soon to be over 2016, was a major startup acquisition year for Indian startup ecosystem. Not only did many budding entrepreneurs had a lot to learn this year, India also suffered its first and long predicted startup bubble burst.

Major Startup Acquisition Of 2016:

The year has also been under focus for the major startup acquisitions, such as Flipkart-owned Myntra who snatched Jabong from under the grasp of Snapdeal, for a mere $70 million. Or, take the instance of Indian fashion retail online portals that plunged higher this year when the fashion discovery and marketplace platform Voonik startup acquisition occurred with 5 startups.

Voonik’s 2016 Startup Acquisition:

• February: Getsy– Men’s Fashion
• June: Picksilk– Silk saree marketplace
• June: Zohraa– Occasion wear brand
• June: Styl– Salon booking
• September: Dekkoh– Search engine

Other major acquisitions included:

• February: Oyo Rooms acquired Zo Rooms, which was a Hotel Aggregator.
• May: Snapdeal acquired Targeting Mantra, which was a Predictive Marketing Technology firm.
• July: ShopClues acquired Momoe, which was a Mobile Payments company.
• October: FirstCry acquired Babyoye, an online baby products seller & Makemytrip acquired Ibibo, a major online travel ticketing platform.

Among the list of multiple startup acquisition also includes:

PayTM, in November who acquired Shopsity, which was an e-commerce O2O discovery app, & in January acquired Shifu which was a Consumer Behaviour Prediction technology for $8 million.

Flipkart acquired PhonePe a mobile payments app for an undisclosed amount this April, and in July, Myntra acquired Jabong for a $70 million.

There are a few more “could be” acquisitions on the way.

Among the noise, a very intriguing speculation is that Flipkart is engaging with Walmart to acquire Amazon. Walmart had acquired Jet.com for a solid $3.3 billion earlier this year solely to challenge Amazon in the US.

Just over a few weeks ago, China’s largest e-commerce site Alibaba acquired Lazada, a Southeast Asian company for a record $1.5 billion. Although, the rumors circulated around in the Indian market that they might also acquire Snapdeal, which they have a stake in.

ShopClues, a Delhi-based company acquired Bengaluru-based smartphone payment company Momoe for the sole purpose of building their own payment business.

Acquisitions do matter a lot if done right. As the Co-founder and CEO, Sujayath Ali of Voonik says “We do acquisitions for tech which we do not have access to, or will take the time to build. The acquired startups like Getsy already have a system in place. For instance, to redevelop our app ‑ they already know how to do it.” He also adds that apart from an acquired business’s expertise in their niche, some other things matter greatly, such as team organizational skills and its ultimate functioning, and also the style and mannerism with which they do their job.