附近上门 Predicts: Why The Race For Talent And Tech Could Accelerate Startup M&A In 2026

Editor鈥檚 note: This article is part of our 2026 forecast coverage. See our IPO market outlook here, and our venture investment outlook here.

For years, industry observers have predicted an uptick in startup M&A activity, in part due to the limited number of companies going public. As the IPO dam finally broke in 2025, we didn鈥檛 see a huge surge in M&A dealmaking, but we did see a large spike in the known value of M&A deals.

Globally, in 2025 so far, there have been around 2,300 M&A deals involving venture-backed companies with a collective known deal value of more than $214 billion, per 附近上门 . (It must be noted that most of the reported M&A deals do not have amounts, so the dollar amount is based only on the deals in which a value was provided.)

Interestingly, deal count was only up slightly, signaling much larger deal sizes. The dollar amount is up from a known value of $112 billion in 2024, for an impressive 91% increase.

The trend was similar in the United States, which dominated M&A activity, comprising about 73% of all transaction values and 56% of transactions alone, globally.

There was a known value of $157 billion across nearly 1,300 deals, compared with a known $79 billion across about 1,100 transactions in the U.S. in 2024. Around 37 of those deals were valued at $1 billion or more, per 附近上门 .

, technology, media and telecoms deal advisory and strategy leader for , is not surprised by the uptick in M&A deal volume and dollars.

鈥淎 healthy IPO market tends to increase M&A activity rather than reduce it,鈥� he told 附近上门 News. 鈥淢any companies pursue dual-track strategies, simultaneously preparing for an IPO while exploring M&A, which gives them greater flexibility and leverage in negotiations. The threat of a public offering can be used as a bargaining chip to drive up a startup’s sale price.鈥�

On top of that, he points out, a strong IPO market creates a new wave of cash-rich public companies that 鈥渋mmediately look to acquisitions to accelerate their growth,鈥� ultimately stimulating M&A demand.

Larger deals tick up

$32 billion purchase of cloud security unicorn marked the largest acquisition of a private, venture-backed U.S. company, not just this year so far, but ever. The next-closest deal historically, per 附近上门 data, was 鈥檚 2014 acquisition of for $19 billion. Still, that deal alone wasn鈥檛 responsible for the large increase in value of M&A transactions this year.

The next-closest deal in 2025 was 鈥檚 $10.3 billion buy of South Korea fintech . After that came 鈥檚 $8.87 billion acquisition of .

In fact, M&A exit numbers this year are the highest ever for unicorn companies, with 36 deals in 2025 totaling $67 billion in value.

Other large transactions included:

In late May, quietly announced its $6.5 billion acquisition of , a little-known but highly technical company focused on model deployment and orchestration.
In March, it would acquire chip design company , in a $6.2 billion cash transaction.
In December, , the company behind social media platform , announced plans to combine with fusion company . The two signed a merger agreement to combine in what TMTG called a stock transaction valued at more than $6 billion
Healthcare software platform in March sold a majority stake to at a reported value of $5.3 billion.

Strategic plays and a flurry of acqui-hires

, technology sector leader, believes that strategic plays drove 2025鈥檚 M&A surge far more than distressed sales.

鈥淐orporations聽are writing big checks for AI, cybersecurity, data acquisitions, and massive tech and talent deals,鈥� he said. 鈥淭hese tech and talent deals used to be worth tens of millions, and now we are in the billions.鈥�

Indeed, fear of missing out appeared to be a driving factor in a lot of M&A activity, especially when it came to AI. The sector also drove a flurry of acqui-hires.

鈥淥n the one hand, big corporates are snapping up seed/Series A startups for talent and tech 鈥� we can call that the AI acqui-hire trend. Many teams with fewer than 100 employees have landed $100 million-plus exits,鈥� Hoebarth said. 鈥淥n the other hand, a cohort of聽3-聽to聽6-year-old unicorns that stalled on IPO plans is finally selling.鈥�

Looking ahead to 2026, he predicts that acquirers will likely increasingly focus on earlier plays 鈥� scooping up emerging tech before it scales, especially聽in high-growth sectors like AI and cybersecurity.

, co-founder of and a corporate attorney for startups and small businesses, agrees that more acquisitions are happening at seed and Series A, but believes that more value is being transacted at later stages.

鈥淎cquirers are buying at an earlier stage to speed up to capability rather than build internally, as hiring the same team individually is slower and riskier,鈥� she noted. 鈥淪eed and Series A founders are more willing to sell in light of the current financing environment and the fact that there is less stigma around a really early exit at present.鈥�

Unless the financing environment picks up evenly for early-stage seed and Series A companies, she expects this trend to continue.

AI vs. everything else

Not only did the ultra-competitive environment, especially in the AI and cybersecurity industries, drive more acqui-hires, but talent also played a larger role than ever in determining transaction value.

, owner of Israel-based , believes that in 2025, pricing has effectively been split into two markets: AI and everything else.

鈥淚n AI, talent and IP value often dominate, including outsized acqui-hires that would be irrational in other sectors,鈥� he said.

However, in non-AI tech, pricing remains anchored in revenue multiples and public comparables, heavily influenced by unit economics and operational KPIs.

鈥淟ooking into 2026, I expect greater financial discipline across all sectors, including AI, with stronger emphasis on sustainable P&Ls and defensible unit economics,鈥� he predicted.

KPMG鈥檚 Bahal said that while traditional valuation metrics such as revenue multiples still play a role, acquisition prices are increasingly being dictated by the strategic value of a company鈥檚 talent and its intellectual property.

鈥淭his fundamental shift toward valuing people and technology over pure revenue is the new reality in dealmaking, especially as the 鈥榓cqui-hire鈥� trend accelerates to secure top engineering talent in high-demand fields like AI,鈥� he said.

Unlike Sagie, he thinks this trend is not temporary.

鈥淚t is expected to intensify through 2026 as the war for talent and unique technological capabilities continues to be a primary driver of value,鈥� he predicted.

M&A driven by down rounds

Talent and technology weren鈥檛 the only things driving M&A activity.

In Hoebarth鈥檚 view, the most common trigger聽event聽in 2025 was a funding crunch. Because there is so much money flowing into AI companies, it can be easy to forget that a lot of other sectors are struggling.

鈥淢any founders opted to be acquired when facing a down round or failed raise,鈥� Hoebarth said. 鈥淲e聽saw startup down rounds hit a decade high 鈥� about聽16% of deals 鈥斅爐his year, so rather than accept significant dilution, founders聽did a聽pivot to M&A. These down rounds get lost in the broader AI narrative, which continues to be very positive, for now.鈥�

Mignano agrees. In 2025, the most common practical trigger that pushed early-stage founders to sell wasn鈥檛 a single dramatic event but a confluence of many, she said.

Those events include the inability to raise the next round at all or on good terms. If an AI company, the AI technology was not defensible “enough” to get it to the next round, and founder fatigue after a number of years where they have been financially strapped.

Another factor?

鈥淓xpansion and increased revenue metrics require a capital-intensive GTM build that the current investors won鈥檛 fund and that a possible acquirer may fund post-acquisition,鈥� Mignano noted.

Looking ahead

So what鈥檚 ahead for 2026?

Bahal believes that the trajectory of the M&A market in 2026 will be determined by the overall health and stability of the economy.

鈥淎 bull case would be fueled by the need to continue the digital transformation of every business, a favorable regulatory environment, falling interest rates and continued economic growth, which would give dealmakers the confidence to pursue strategic acquisitions, particularly in technology and AI,鈥� he said.

Conversely, Bahal believes that a bear case would emerge from an economic downturn, marked by higher inflation or increased regulatory scrutiny and increased geopolitical uncertainty, creating headwinds that would cause both buyers and sellers to pause dealmaking.

Hoebarth notes that EY-Parthenon Americas is forecasting a modest increase in M&A activity in聽2026, and definitely lower than what occurred this year. The U.S. M&A deal volume is expected to grow聽about聽3%, following a 9% increase in 2025, according to their data.

In his view, bull case聽factors include easing monetary policy and continued lower interest rates, strong corporate balance sheets, significant private equity dry powder, and continued innovation in high-growth sectors like AI and cybersecurity.

Hoebarth believes that bear case factors include an聽economic downturn,聽trade and tariff uncertainty,聽tight funding markets limiting liquidity, and increased regulatory scrutiny, especially in China, the EU and the U.K., or geopolitical barriers slowing deal approvals.

鈥淭he elephant in the room聽is still the question of聽what happens with AI,鈥� he said. 鈥淲e do see early signs of a pullback in the AI space, which would have ripple effects far beyond the tech ecosystem.鈥�

Sagie believes that if the macro environment 鈥渟tops getting in the way, M&A activity will take care of itself.鈥�

鈥淟ower and more predictable interest rates, fewer regulatory surprises, and easing trade tensions would give boards and buyers the confidence to plan again,鈥� he said. 鈥淲hen that happens, consolidation comes back naturally, not because companies are desperate, but because buying becomes a faster and less risky way to grow than building from scratch.鈥�

The bear case is not about technology suddenly breaking, Sagie points out.

鈥淚t is about hesitation,鈥� he said. 鈥淚f rates stay high, geopolitical noise continues, or capital markets remain jumpy, buyers slow down. Decisions take longer, deals get smaller, and only the transactions with a very clear strategic rationale actually close. What separates the two is confidence. When executives believe they can underwrite the next three to five years with some degree of certainty, M&A moves quickly. When that confidence is missing, even good assets struggle to transact.鈥�

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