Mobile Skills Coveted in Acqui-Hires

Mobile Banking

Big-name companies are increasingly buying up the talent they need to add capabilities they lack internally by acquiring startups with the right tech professionals. Think SAP’s buying SuccessFactors in 2011 as part of its effort to move to the cloud. Today, the hottest quest for acqui-hires is with mobile talent, according to researcher CB Insights.

“…acquirers who are leading the acqui-hire movement are now purchasing teams of smart people (generally engineers) who have a history of working well together with the hope that dropping in these teams might accelerate and advance their own businesses,” says the research firm.

Who’s Attracting Buyers?

Companies being bought out generally have raised less than $5 million and are facing a bit of a financial crunch, having last raised funding 14 to15 months prior to the acquisition. Such a deal allows investors to recoup some of their money and gives founders and team members a bit of cash, as well as employment options.

Chart of Funding Prior to Acquisition

In 2012, Internet companies made up almost 60 percent of acqui-hires, mobile companies 38 percent and traditional software companies just 4 percent, according to CB Insights. Mobile makes up only a small portion of venture capital-backed firms, so its nearly 40 percent cut of the acqui-hire action represents a significant showing, according to the report.

Chart of Aquihires By Sector

And some of the companies that are getting acquired are very young. Forty percent of acqui-hired companies in 2012-2013 had no disclosed funding prior to acquisition – meaning the founders likely did very well in the deal. A sample of the recent acqui-hires: Blogging platform Storylane and integrated social platform Threadsy were both acquired by Facebook; social analytics firm and email marketing company RestEngine were snapped up by Twitter; and mobile gaming startup Loki Studios and frequent flier search startup MileWise were both lured to Yahoo.

Ironically, Angel investors stress the importance of building a great team in attracting capital – turns out it matters regardless of whether your company ever releases a product.