Acquirers Are Snapping Up Boom-Era Startups That Haven’t Raised Funding In Years

Crunchbase News — when a venture-backed startup goes a few years without raising a new round, it’s common to presume its odds of a sizable exit have gone down as well. But that’s often not the case, an analysis of Crunchbase data shows.

This year, a number of larger acquisitions of private companies involved startups that haven’t disclosed a new investment for more than four years. Several of these acquisitions are quite recent — and in some cases, quite large. The standout is Uber’s purchase earlier this month of ezCater, a platform for catering and workplace meals, for $2.3 billion in cash. The deal comes nearly five years after Boston-based ezCater raised its last reported venture funding round. That’s not the only one. A number of companies whose names might feature on a playlist of 2021 boom-era unicorns have sold to acquirers in recent months, including one-time highfliers like Airtable, Headspace and Miro. In many cases, companies are selling at valuations which, while not puny, are still far below their former peaks. Who’s getting acquired To illustrate the extent to which these aging startups are finding acquirers, we used Crunchbase data to put together a list of 15 deals involving well-funded companies that haven’t raised equity funding for four or more years. Post-peak runway One big issue for older and middle-aged startups is that valuations hit a cyclical peak in 2021 and early 2022. Many companies that raised during that time had difficulty attracting fresh capital or were reluctant to close new rounds at reduced valuations. Even with the more recent AI boom, little went to this cohort. Moreover, since the 2021 boom-era rounds were quite large, funded startups commonly had the option to cut operating costs and extend their runways with existing capital. As a result, quite a few companies that haven’t raised rounds in years are still chugging along, managing to survive and even grow without more venture funding. EzCater is a case in point. In the year prior to its acquisition, the business generated more than $2.5 billion in gross bookings.