🚪 Quiet exits
Startup M&A happens more often than is reported. While VCs tell us an exit is an exit, Flippa's CEO says he's been told not to publicise them because they don't fit the narrative.
There are two main types of exits in startups. The first is the kind that VCs are eager to talk about, the ones that usually involve life-changing outcomes for founders and big returns for limited partners in venture funds.
We had a good example of that last week when Leonardo.Ai was sold to Canva for more than $300 million in what we described as one of the most significant deals for the local ecosystem to date.
The second kind, let's call it a 'quiet exit', often flies under the radar, and in some cases is never actually announced. This kind often involves a good business, led by talented people, that reaches a phase where it is no longer able to generate outsize returns and attract further venture capital. Sometimes it is more of an acqui-hire or distressed sale type of scenario. These quiet exits happen more often than many watchers of the ecosystem might realise.
Blake Hutchison, the CEO of Flippa, the largest marketplace for buying and selling online businesses, says Australian investors tend to downplay sales that don't generate headline-grabbing returns for funds as they don't fit their narrative. Smaller acquisitions often go unreported and are even deliberately kept quiet, he says.
