Facing slowing growth at the half-way mark of 2023, CEOs and Board members at companies big and small are focusing on performance metrics and getting tough about right-sizing operating expenses. Total tech M&A transaction value is down a whopping 64% from '22 levels and 75% from the record reached in '21. That is $200B in annual transaction value in '23 versus $800B in '21, and large transactions are far and few between.
PE funds across the world are struggling with some of their underperforming and overvalued portfolio companies, so selling their assets is just not attractive at the moment. Big tech buyers like Google, Apple, Amazon, Salesforce, Intel, etc. are focused on right sizing their own operations and not so interested in M&A right now. With IPOs still off the table, the current herd of 800 tech unicorns are becoming more grounded to reality. The 100,000 VC-backed tech companies are doing their best to grow while desperately trying to not run out of money and have to negotiate a down round financing.