IPOs have thinned the ranks at the top of the GeekWire 200, our ranking of privately held Pacific Northwest tech companies, but even more companies are departing via acquisitions.
These deals are part of a larger trend of well-heeled acquirers snapping up Pacific Northwest tech companies.
So far this year, 101 Pacific Northwest tech companies have been acquired, totaling almost $13 billion in value, according to data supplied to GeekWire by PitchBook. We’re just five months into 2018, but those numbers already surpass some recent full year totals, and it seems very possible that this year will be the busiest for Pacific Northwest tech acquisitions in at least a decade.
There’s a very simple factor behind this trend, says Mike Bursiek, a transaction advisory services partner at EY, and that’s more money. Big companies are carrying historic amounts of cash on their balance sheets, and one way to put that to use is through acquisitions.
Microsoft, for example, finished the first quarter sitting on $132 billion in cash, cash equivalents and short-term investments. It has purchased three companies so far this year: Avere Systems, Semantic Machines and Seattle cloud startup PlayFab.
Additionally, there are more venture capital firms, private equity and hedge funds flush with investment dollars, pumping up startup valuations and upping companies’ willingness to sell.
And while there is plenty of glory to be had in an IPO — who wouldn’t want to push the big stock market opening button — there’s also plenty of risk.
“Because of the private capital available and high valuations, going public may be less attractive for many founders and investors, and M&A is becoming a more appealing exit strategy,” Bursiek said.
Looking ahead, Bursiek expects plenty of continued appetite for acquisitions, with companies in artificial intelligence, cloud computing and big data among the top targets.
Click for the full May update to the GeekWire 200 and continue reading for highlights and an explanation of the GeekWire 200 methodology.
After taking the number one spot last month following the departure of DocuSign via IPO, sales tax automation company Avalara retained the top ranking this month, though it too will be gone soon due to an impending IPO. Avalara is followed by Jeff Bezos’ space venture Blue Origin, vacation rental company Vacasa, compensation software maker PayScale and Portland-based DevOps startup Puppet.
RealWear makes an augmented reality hardhat designed for workers in extreme environments like oil and gas, utilities and manufacturing. The company’s $2,000 HMT-1 voice-controlled device provides remote video calling, document navigation, guided workflow, mobile forms and data visualization. RealWear has shipped units to more than 200 customers.
Skilljar has gotten off to a hot start in the first half of the year. The startup raised a $16.4 million round in March, and the company’s CEO Sandi Lin was a finalist for the CEO of the year honor at the 2018 GeekWire Awards. These moves helped Skilljar shoot up 12 spots in the rankings to number 148.
Skilljar provides the back-end technology and software that lets companies build cloud-based training and onboarding programs for their own users. The TechStars Seattle grad — led by former Amazon employees Lin and Jason Stewart — has more than 150 customers, including giant companies like Verizon, Tableau, Cisco, Spotify, Zendesk, and others.
Algorithmia, which moved up 15 spots to number 162 on our list, checks some of the boxes Bursiek laid out above for a potential acquisition target in 2018. Algorithmia deals with some of the hottest technologies of our time: machine learning, artificial intelligence and blockchain.
In February the company released a new product called DanKu, which is a protocol that allows laypeople looking for sophisticated machine-learning models to post their data on the Ethereum blockchain in hopes of finding a machine-learning researcher who can create a training model for their data. DanKu is a neural network that will evaluate different models as they are submitted, and reward the winning model with the Ethereum cryptocurrency.
Here are the other big movers in May.
- Snap! Raise, up 16 spots to number 25
- iSpot.tv, up 16 spots to number 40
- NVoicePay, up seven spots to number 59
- VICIS, Inc., up seven spots to number 66
- Moxi Works, up 11 spots to number 110
- Decisive Data, up 13 spots to number 112
- ComputeNext, up 10 spots to number 114
- Unikrn, up 10 spots to number 121
- PipelineDeals, up 11 spots to number 125
- Phytelligence, up 13 spots to number 127
- Tagboard, up 11 spots to number 130
- Heptio, up 18 spots to number 132
- New Engen, up 33 spots to number 136
- Fleet, up 26 spots to number 142
- Phylos Bioscience, up 17 spots to number 144
- Lumen Learning, up 12 spots to number 152
- Lytics, up 19 spots to number 154
- Crowd Cow, up 12 spots to number 159
- Seeq, up 17 spots to number 166
- Cody, up 17 spots to number 169
- DefinedCrowd, up 11 spots to number 173
- RFPIO, up 13 spots to number 174
- Make.TV Inc., up 14 spots to number 178
- Wrench, up 12 spots to number 179
- Utrip, up 11 spots to number 184
The GeekWire 200 — sponsored by our partners at EY — is derived from our broader list of more than 1,200 Pacific Northwest tech startups. The list is designed to provide a better understanding of the startup landscape in the Northwest. The rankings are generated from publicly available data, including social media followings, approximate employee counts (via LinkedIn) and inbound web links.
To make sure your startup is eligible for inclusion in the GeekWire 200, first make sure it’s included in the broader Startup List. If so, there’s no need to submit it separately for the GeekWire 200. If your Pacific Northwest startup isn’t among the companies on that larger list, you can submit it for inclusion here, and our algorithm will crunch the numbers to see if your company makes next month’s GeekWire 200. (Please, no service providers, marketing agencies, etc.)
Thanks to everyone for checking out this month’s ranking. And, just a reminder, if you value resources like these, be sure to check out our list and map of out-of-town tech companies with Seattle engineering outposts as well as our list of startup incubators, co-working spaces and accelerators in the region, and our GeekWork job board.