Bloomberg: Acquihiring could lead to... more public companies?
One month after Meta “acquihired” Scale AI in a $14.3 billion “strategic partnership and investment” deal that bought the social media giant Scale’s CEO, a 49% stake in the AI data-labeling company, and privileged access to the company’s technology, the husk of Scale AI is laying off 200 employees — 14% of its workforce — as well as ending its relationship with 500 contractors.
It’s a common story these days as Big Tech firms look to buy up others’ innovation without angering antitrust watchdogs — a move that results in gutted private companies and the increased consolidation of power in Big Tech. Another recent example: Google’s poaching of many executives from Windsurf, which prompted OpenAI’s planned $3 billion acquisition of the AI coding startup to fall apart (followed by a separate deal with Cognition).
Bloomberg Opinion, though, has a highly optimistic — if highly unlikely — take: the acquihiring trend could actually be a good thing because it could force venture capital to invest in firms that have better business models more suited to going public, in an effort to make slightly more money than they do from firms that are acquihired, and by extension would create more public companies and more competition for Big Tech.
“Instead of pushing startups to get the highest possible valuation for a sale, VCs in an acquihiring market would prefer firms with a greater chance of running a long-term business and floating on the public markets. Strategic sales to Big Tech have always offered a premium over IPOs, but when such sales are less likely, going public becomes the more viable option. That could put venture investors on the hunt for startups with more sustainable businesses, not just those with a pitch deck promising hockey-stick growth and a total addressable market the size of Canada.”
Sure!
Asking VCs to shift away from potential “hockey stick growth” companies is completely antithetical to their raison d’être. So too is asking superstar employees not to look a gift horse in the mouth.
It’s a common story these days as Big Tech firms look to buy up others’ innovation without angering antitrust watchdogs — a move that results in gutted private companies and the increased consolidation of power in Big Tech. Another recent example: Google’s poaching of many executives from Windsurf, which prompted OpenAI’s planned $3 billion acquisition of the AI coding startup to fall apart (followed by a separate deal with Cognition).
Bloomberg Opinion, though, has a highly optimistic — if highly unlikely — take: the acquihiring trend could actually be a good thing because it could force venture capital to invest in firms that have better business models more suited to going public, in an effort to make slightly more money than they do from firms that are acquihired, and by extension would create more public companies and more competition for Big Tech.
“Instead of pushing startups to get the highest possible valuation for a sale, VCs in an acquihiring market would prefer firms with a greater chance of running a long-term business and floating on the public markets. Strategic sales to Big Tech have always offered a premium over IPOs, but when such sales are less likely, going public becomes the more viable option. That could put venture investors on the hunt for startups with more sustainable businesses, not just those with a pitch deck promising hockey-stick growth and a total addressable market the size of Canada.”
Sure!
Asking VCs to shift away from potential “hockey stick growth” companies is completely antithetical to their raison d’être. So too is asking superstar employees not to look a gift horse in the mouth.
