In the world of startups, acquisitions are often seen as a sign of success. A company that is acquired by a larger, more established player is typically seen as having achieved something significant. However, not all acquisitions are created equal. In fact, there have been a number of high-profile acquisitions in recent years that have resulted in significant losses for the acquiring company. Here, we take a closer look at some of these acquisitions and what went wrong.
One of the most notable examples of a startup acquisition gone wrong is that of Quibi. The short-form video streaming service was launched in 2020 with much fanfare, but it failed to gain traction with users. In October of that year, just six months after its launch, Quibi announced that it would be shutting down. The company had raised $1.75 billion in funding, but it was unable to turn that investment into a successful business. Quibi’s assets were eventually sold off to Roku for an undisclosed sum, but it’s safe to say that the acquisition did not result in a positive outcome for the original investors.
Another example of a startup acquisition that resulted in losses is that of Jawbone. The wearable technology company was acquired by Fitbit in 2017 for an undisclosed sum. However, just a few months later, Fitbit announced that it would be discontinuing Jawbone’s products and services. The acquisition was seen as a way for Fitbit to expand its product line and compete with Apple’s popular smartwatch, but it ultimately proved to be a costly mistake.
In 2016, Twitter acquired the mobile app development platform Fabric from Google. Fabric was intended to help Twitter improve its mobile app development capabilities, but the acquisition did not go as planned. Twitter eventually shut down Fabric in 2018, citing a lack of interest from developers. The acquisition was seen as a way for Twitter to stay competitive in the mobile app space, but it ultimately failed to deliver the desired results.
These are just a few examples of startup acquisitions that resulted in losses for the acquiring company. There are many other examples out there, and they serve as a reminder that not all acquisitions are created equal. While some acquisitions can be incredibly successful, others can be costly mistakes that result in significant losses. As such, it’s important for companies to carefully consider the potential risks and rewards of any acquisition before moving forward.
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