Huge companies in fast-changing, technology-intensive businesses buy startups. After all, they have the money and need fresh entrepreneurial talent to tap new markets and stay abreast of disruption.
That’s the collective wisdom about M&A in venture capital and startup circles. It’s also how the venture business survives. Though IPOs may get more attention, acquisitions account for the vast majority of startup exits and a majority of venture returns.
But what if the common wisdom isn’t true? What if companies could do perfectly well adjusting to changing conditions, beating competitors and sustaining enormous market capitalizations without buying scrappy startups?
To delve into that hypothesis, we used Crunchbase data to help assemble a list of the least acquisitive large-cap companies. The primary focus was technology companies, but we included other sectors because leaders in retail, consumer products, shipping and pretty much any other industry also invest heavily in tech.
The resultant list shows that many companies with reputations as innovators actually don’t do much M&A. Some did in the past, but have cut back or stopped in recent years. Others have never shown an appetite for acquisitions.
Here are some of the most recognizable names on our list of big companies least likely to buy your startup.
Netflix
Netflix seems like the kind of company that would do a lot of acquiring. It has a valuation around $60 billion, an innovative, risk-taking corporate culture and investors who are comfortable with the company trading at a high multiple relative to earnings. Yet, according to Crunchbase data, the Los Gatos, Calif.-based streaming video giant has never bought a startup (at least not a disclosed purchase).
While Netflix doesn’t buy startups, it does have a history of spending generously on content and licensing deals. Earlier this month, the company struck its first licensing deal in China with the streaming platform iQIYI. It’s also entered into licensing deals with a long list of Hollywood studios, including NBC Universal and others.
Nvidia
Shares of the graphics chipmaker have been on a tear for the past year, and the company’s market value recently surged past $60 billion.
Yet the Silicon Valley company has only made one acquisition in the past six years, after a prior pace of about a deal a year. The…