In the first quarter of 2025, startup mergers and acquisitions (M&A) reached a remarkable exit value of $71 billion, marking the strongest quarter since 2021, according to Crunchbase data.

This surge in activity saw a 26% increase in M&A deals involving venture-backed startups compared to the same period in 2024, totaling 550 deals, although slightly down from 563 deals in the previous quarter.

Among these transactions, 12 announced acquisitions were valued at over $1 billion, with notable deals including SoftBank's acquisition of Ampere Computing and Clearlake Capital Group's purchase of Modernizing Medicine.

Private equity firms have also ramped up their acquisitions of venture-backed companies, spending over $56 billion in 2024, and announcing 22 acquisitions in the first quarter of 2025, including significant deals by Clearlake Capital and Bain Capital.

Unicorn startups are increasingly active in the M&A space, acquiring smaller peers, with at least 423 U.S. venture-backed companies sold to private, VC-funded companies over the past year, although many deals did not disclose their prices.

The largest startup-to-startup acquisition in the past year was Stripe's $1.1 billion purchase of Bridge, followed closely by AlphaSense's $930 million acquisition of Tegus.

M&A activity for AI-related startups was particularly strong, with 81 deals representing a nearly 33% increase from both the previous quarter and the same quarter in 2024.

A standout deal in the tech sector includes Google's planned acquisition of cybersecurity unicorn Wiz for $32 billion, which would become the largest acquisition of a private company if finalized.

Despite the optimistic environment for M&A, ongoing economic conditions may still influence the pace and scale of future deals.

Experts are predicting a potential rebound in M&A activity for 2025, although current market instability and shifting valuations are causing some caution among large strategic acquirers.