SA国际传媒

Public markets are riding high, and many big tech acquirers are flush with cash. However, it’s a very dull year for big acquisitions of private technology companies.

Seven months into 2017, we鈥檝e seen just one big unicorn M&A deal: . And that was back in January. Two other one-time unicorns acquired this year, data management technology provider and Middle Eastern online retailer , sold for well below their peak private valuations.

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The unicorn M&A scene looks particularly sluggish and valuation-challenged when compared to last year. In 2016, acquirers snapped up five tech unicorns at prices that were higher or about the same as their private valuations (here鈥檚 the ). And none of those companies had to first dangle the prospect of an impending IPO, as was the case for AppDynamics, which sold days before its planned public debut.

It鈥檚 not just the unicorn space where big deals aren鈥檛 happening. So far, this year, (defined here as those that raised $20 million or more in venture investment) have gone on to be acquired for disclosed or reported valuations over $100 million. Meanwhile, in 2016, there were at valuations of $500 million or more.

Still, big new rounds keep getting done in 2017. Over 450 companies in sectors other than life sciences (meaning primarily tech) have raised rounds of $20 million or more, according to SA国际传媒 data. Of those, at least have been for $100 million or more, up from 75 in the same period last year. A single investor,, has been a backer of 14 companies that raised financings of $100 million or more this year.

What Does It Mean?

So what鈥檚 going on? Can this be written off as just a slow period for big venture-backed M&A? Is it a valuation issue? Or are there structural shifts occurring that explain acquirers鈥� wariness to shell out for big purchases?

鈥淚t could be happenstance, or some sectors may be running into resistance due to high multiples,鈥� says , managing partner at early-stage firm . He added that acquirers may also be waiting on the sidelines to see what happens with proposed tax reforms.

A Trump administration plan to may be a factor in delaying M&A. Currently, of dollars in overseas accounts to shelter their earnings from U.S. taxes. Apple alone is estimated to be holding on to a cash stockpile of over $250 billion, most in non-U.S. accounts. The Trump proposal would reportedly cut public companies鈥� income tax rate to 15 percent from 35 percent. It would also cut the tax on repatriated offshore earnings to 10 percent.

Fast-growing, venture-backed companies are also finding it easier to stay private longer, 聽making them less receptive to sub-optimal acquisition offers. After all, who needs an exit when SoftBank is offering a fast $200 million?

Unicorns and near-unicorns are also looking to extend their exit timelines by providing some returns to early investors and employees. Rohit Kulkarni, who heads up private investment research for private company marketplace told SA国际传媒 News he has seen 鈥渟ignificantly higher activity in terms of early investors and employees seeking liquidity.鈥�

Typically, Kulkarni says, early investors are looking to sell 10 to 15 percent of their holdings, and employees somewhat more. Such sales are no substitute for an acquisition or IPO exit, but it can help a company retain key employees, satisfy stakeholders, and delay exit by perhaps a year or more.

While big M&A deals aren鈥檛 happening, companies can also still tap into a fairly receptive IPO market. Last week鈥檚 well-received debut of tech-focused real estate brokerage Redfin showed there are pockets of strong retail investor demand鈥攅ven amidst suffering in the broader IPO market for some recently-debuted tech shops.