DESPITE the general acquisitions and investment market experiencing the coronavirus economic shockwaves at some point in 2020, the big five tech companies or FAMGA (Facebook, Apple, Microsoft, Google, and Amazon) accelerated their push to fully acquire or buy a stake in existing businesses.
Data acquired by Finbold indicates that the big five tech companies’ financing of unique equity deals between 2019 and 2020 spiked 69.78% from $7.28 billion to $12.36 billion. Despite the staggering surge in funding, the number of deals reminded 35 during the period.
Between 2016 and 2020, the financing value surged 373.56%. In 2018, the deal count was 24 with financing of $3.84 billion while in 2017 the amount was $2.92 billion from 21 deals. As of 2016, the financing stood at $2.61 billion from 13 deals.
Elsewhere, the tech companies recorded an increase of 125% in the number of acquisitions between Q1 2020 and Q1 2021 from four to nine. The last quarter of 2020 registering the highest figure at 14. As of Q3 2020, the acquisitions stood at 13 while during Q2 2020 the figure was seven.
However, between the same period, the number of investments dropped 60% from ten to four. The highest investment was during Q2 2020 at 11 dropping to eight as of Q3 while in the last quarter of 2020 the figure was six.
Acquisitions and investments focus on emerging technologies
The report highlights the overall trend in acquisitions and investments by the big tech companies. According to the research report:
“From a broader perspective, the investments show the big tech’s urge to capitalize on changing consumer behavior while expanding their reach to new markets. In recent quarters the overall investment and acquisition by the FAMGA were in companies powering the utilization of emerging technologies like AI, VR, supply chain and cloud service as they enhanced their already existing product offering.”
As these companies lead the way in reshaping the global tech ecosystem, the acquisitions show they are also consolidating their power. The drop in investments over the same period can be linked to economic uncertainty as most businesses were uncertain about their prospects.