By James Mao, Stu Willson
990 startups — backed by the world’s best investors — that are potential acquihire candidates
Back in March 2020, as headed into faced the initial wave of Covid, we published a list of 220 acquire candidates.
We’re back!
In the past 4 months, we’ve seen all markets encounter significant headwinds. We may be in the second quarter of negative GDP growth, the tech-driven NASDAQ is down 33% ytd, public SAAS multiples have gotten crushed, and global venture funding remains “on pause.”
Given the uncertain public and private market landscape, we asked ourselves: might there be amazing opportunities to acquire high quality teams who’ve yet to reach product-market fit?
To answer this question, we developed a framework to screen for acquihires: startups that may be more attractive for their teams than their products and services. We used this framework to identify 990 startups that fit the following criteria: backing from high-quality investors and positioned outside of its optimal fundraising window.
>> Click here to get the full list: Radicle 2022 Acquihire Opportunities <<
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This acquihire screen is an example of how Radicle uses company and people mapping to surface insights. Everyday we are creating custom expert networks of startup leaders in the markets you care about and using them to power insights products — like deep dive landscapes, market maps, crowdsourced trends & insights, competitive intelligence, panels, and private conferences.
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At the top of the funnel, we looked for operating startups that have raised less than $5m in funding and hadn’t announced a fundraise in over 2 years (per prior work we’d done, the average time between Seed and Series A is 18 months). We ran these screens on Crunchbase data.
We then narrowed the set of startups using our Investor Quality score, only looking at companies that fall into the 90th percentile or above. The Investor Quality score is a reasonable indicator of team quality. Top-notch investors don’t back bad or inexperienced teams.
We found that of the 990 companies, 154 are fintech startups (including 30 payments startups), 100 are sales, marketing, or advertising focused, and 110 are in AI and ML.
The top 10 companies in the set by Investor Quality are:
- CrowdMed: CrowdMed provides prediction market technology using the collective intelligence of ‘medical detectives’ to produce diagnostic suggestions.
- Upbeat: Upbeat is a software-powered next-generation PR agency that focuses on media marketing for various companies.
- Etleap: Etleap is an ETL solution for creating perfect data pipelines from day one.
- Pagedraw: Pagedraw is a UI builder that turns mockups into code automatically.
- Aesthetic: Aesthetic is an e-commerce platform that enables NFT creators to create free and paid drops, and share content with token-holders.
- CrowdJustice: CrowdJustice is a crowdfunding platform that allows communities to access the courts to protect their communal assets
- Omni: Omni is the fastest way for customer success, support, and sales teams to find the up-to-date answer to a customer’s question
- Vetcove: Vetcove is the largest B2B veterinary marketplace, enabling veterinary hospitals to compare and buy supplies from all of their vendors.
- Shoptiques: Shoptiques is a software company building tools to help boutiques across the world streamline operations and increase sales.
- Dreams: Dreams is a mobile-only TV platform that redesigns TV for the most important device.
The top 10 companies in the set by Investor Quality but founded after 2019 are:
- Botany.io: The operating system for exceptional software engineering teams
- dot.LA: dot.LA is a digital newsroom covering L.A.’s startup and tech community
- Reploy: Reploy is the easiest way to generate unique production-like environments for every feature, complete with a shareable link.
- Riot: Riot develops of a security platform designed for fighting phishing attempts.
- Ribbon: Ribbon is a one-stop-shop online platform for live and recorded events that provides services such as Zoom integrations and email marketing.
- Seam: Seam is an API for developers to control homes and buildings.
- Lightdash: Lightdash turns a dbt project into a full-stack BI platform.
- onetool: onetool is a free platform where you can discover, subscribe & manage your SaaS tools.
- Hellometer: Hellometer is a service that makes managing fast food restaurants easier.
- Eze: Eze is a B2B marketplace for electronics allowing buyers & sellers to trade in wholesale quantities with real-time market data.
Source: Crunchbase
>> Get the full list: Radicle Acquihire Opportunities <<
Our criteria are obviously only the first step to identifying acquihires. There will most definitely be outliers. Sometimes, but very rarely, a startup finds a market and an economical way to self-fund and it’s off to the races (see Zapier, having only raised $1.5m in venture capital and scaling to $140m ARR as of 2022). But this is the exception. Most of the companies we’ve identified will not be able to raise another round and subsequently will have to wind down.
But a failed experiment doesn’t mean lost value for all parties involved. Startups with ill-fated individual outcomes have created value at more cohesive group levels in the past, and 2022 should be no different. As market cycles turn, we hope that there’s an opportunity for big companies and startups to team up and capitalize on this opportunity.
Any questions about this work? Feel free to to reach out: james.mao@radicleinsights.com or stu@radicleinsights.com
About Radicle
Radicle is an innovation insights company. We believe philosophically that the best people to help you navigate the future are the people shaping it. We find those people and use their insight, experience, and expertise to enable better decisions. Radicle creates custom expert networks of startup leaders in the markets you care about and use them to power insights products — like deep dive landscapes, market maps, crowdsourced trends & insights, competitive intelligence, panels, and private conferences.
