The Biggest Startup Acquisitions of 2018

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It’s the biggest dream of every startup founder: a larger company swoops in and buys out the whole company to acquire an innovative idea, proprietary technology or just to wipe out the competition. However, few startups are able to build their nascent business into a viable firm and even fewer can attract an outside buyer. In 2018, these lucky few startups were able to transform their years of hard work into financial success.    

1. Flipkart

India’s biggest success story, FlipKart, is the Amazon of South Asia. With over $2.9 billion in annual revenue, it wasn’t a surprise when American retail giant Walmart came calling. After a largely unsuccessful attempt to enter the Indian market on the brick-and-mortar side, Walmart opted to purchase a 77% stake in Flipkart to the tune of $16 billion. Sachin Bansal, who co-founded the company in 2008, will reportedly receive $800 million in the deal.

2. Ele.me

Founded in 2008, Shanghai food delivery service Ele.me has quickly become of one of China’s most successful startups. The company now services over 2,000 Chinese cities with its 30-minute food delivery guarantee. Attracted by its rapid growth, Alibaba began investing in the company in 2016. After Ele.me acquired Baidu’s food delivery service in 2017, Alibaba elected to snap up the startup for $9.5 billion. Co-founder Xuhao Zhang will stay on at the company as chairman.  

3. Flatiron Health

Frustrated with the slow pace of cancer research, Nat Turner and Zach Weinberg launched Flatiron Health in 2012. They hoped to use improved technology to parse oncology research across the United States. The company soon attracted more than $130 million in investment from venture capital firms like Google Ventures. Their software caught the eye of Swiss pharmaceutical giant Roche, who grabbed the up-and-coming startup for $1.9 billion. As part of the deal, Flatiron will remain an independent entity and Turner and Weinberg will continue in their current positions.  

4. Glassdoor

The original purpose behind Glassdoor was to build a Yelp for job hunters. Robert Hohman, Tim Besse and Rich Barton had become friends while working on Expedia for Microsoft and decided to take the leap and launch a startup of their own in 2007. Glassdoor soon had a thriving business based on job recruiters and became the fastest growing career website of 2015. Japanese conglomerate Recruit Holdings offered $1.2 billion for the startup in May 2018. With this deal, Recruit has taken over the top two jobs sites in the United States; it acquired the Indeed job search engine in 2012.

5. Ring  

Inventor James Siminoff founded smart doorbell company Doorbot in 2012 when he realized that he couldn’t hear his doorbell from the garage. After a disappointing stint on ABC’s Shark Tank, Siminoff changed the startup’s name to Ring. Riding the wave of television publicity, Siminoff was able to get his camera-equipped doorbells into the hands of consumers. By 2017, Ring had more than 1 million customers and had received almost $230 million from venture capital firms. Amazon, seeing the benefits Ring could bring to their Amazon Prime delivery service, snapped up the startup for a cool $1 billion.

6. 99

In July 2012, a trio of Brazilian entrepreneurs decided to launch Brazil’s answer to Uber. Their ride-hailing startup 99 was born and soon spread across the country. It managed to attract investors from Brazil, the United States, Japan and China. By 2016, passengers were using the startup’s app to go on 4 million rides per month. As Uber expanded in Brazil, Chinese ridesharing startup Didi Chuxing began eying the Latin American market. In January 2018, they made their move by acquiring 99 for a whopping $1 billion, officially making 99 the first unicorn in Brazil.

7. Kensho

Daniel Nadler was a philosophy student at Harvard when he lured software engineer Pete Kruskall away from Google to start their own company. The two men used machine learning technology to develop their own search engine software for the stock market. The tool was soon being used by companies all over the U.S. to analyze hedge funds and provide insight into the market. Goldman Sachs and S&P Global jumped on board, investing $57 million into the growing company. In March 2018, S&P Global acquired Kensho for $550 million, setting a new record for an A.I. acquisition.

8. Naked Hub

When Grant Horsfield founded coworking hub startup Naked Hub in 2015, he never imagined that one day it would be one of the biggest coworking companies in Asia. Together with his wife Delphine Yip-Horsfield, a Harvard-trained architect, Horsfield expanded the mainland startup into Hong Kong and Vietnam. Eager to enter the Asian market, American competitor WeWork acquired Naked Hub for $400 million in 2018, adding Naked Hub’s 20 locations to its stable of offerings.  

9. Grapeshot

John Snyder and Martin Porter were no strangers to the world of startups when they launched Grapeshot in 2006. They had already developed and sold their own search engine in the 1990s. With Grapeshot, they hoped to use new technology to help companies create targeted ad campaigns. As the two men built their brand, interested venture capital firms soon came calling to the tune of $22 million. Oracle acquired the company for $400 million in April 2018, eager to add the startup’s technology to their Data Cloud platform.

 

10. Mozy

A modest web hosting company from Utah, Mozy was started in 2005 by Josh Coates, a former software engineer at Microsoft and the Internet Archive. Throughout most of its early history, Mozy flew under the radar. It was funded mainly by former NetWare developer Drew Major and Draper Associates. In 2007, EMC Corporation purchased the startup from Coates and added a home version of the company’s products. Carbonite, a backup service company based in Massachusetts, purchased the firm in February 2018 for $145.8 million.  

Whether the purchase makes international headlines or the deal is quietly put through with interest from the business community, these acquisitions gave investors some of the most profitable exits of the year. From e-commerce sites to ride-hailing startups, these 10 startups accomplished the main goal of every startup founder: a successful and profitable acquisition.

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