I’m sure I don’t need to remind any of you when Instagram was acquired for $1 billion by Facebook earlier this year. There were many things about the acquisition that made the world go crazy. But aside from the insane valuation for “a company with no revenue and 10 employees” and the fact that Mark Z was signing the check, the other tiny detail that had everyone going nuts was the company’s age; at the time of the acquisition, Instagram 551-day-old Instagram had not even celebrated it’s 2nd birthday.
And you thought Instagram was young.
Of course other companies have been acquired in less time than Instagram (though never for $1 billion). For example, Socialcam, the “Instagram for video” who received funding from none other than the likes of Yuri Milner, Laurene Powell Jobs and a long list of similarly impressive names, was swallowed up by Autodesk in less than 6 months after it’s launch in February for $60 million.
Yes, we’re getting younger.
On this side of the pond, companies are getting acquired at an equally young age – often “copycats” by their US equivalents (though there are exceptions). For example, French Joliebox (recently acquired by Birchbox) was acquired just a year after it’s launch. Joliebox also had a rather agressive acquisition strategy, swallowing up early-stage competitors in the UK and Spain. Similar to Birchbox, LivingSocial acquired its France-based competition, Dealissime, around the time of the startup’s first birthday as well – though Dealissime (to my knowledge) never made any acquisitions.
Not always about copycats.
That said, it’s not always the copycats that are getting acquired by their US counterparts. Sparrow, acquired before it’s 2nd birthday (à la Instagram) by Google is perhaps France’s best-known example.
Obviously, acquiring early is not a French-only phenomenon. German Fab.com competitor, Casacanda, was acquired within months of its launch – as was the case with the company’s UK-based competitor, Llustre. Though it does seem to be getting more and more common, which clearly demonstrates that the market is maturing – and that potentially more foreign companies are paying attention to France and using this as their strategy to enter the market.
Got his money on the mark.
Acquiring early can definitely raise criticism from investors, as was the case with Sparrow. But one investor who seems not to mind is business angel and Fotolia CEO Oleg Tscheltzoff – who happened to be an investor in Joliebox, Dealissime and Llustre (though not Sparrow). You can see his latest investments here. Keep your eye on them because there are certainly a few in there that could be next up for early acquisition.