Andreessen Sees Big Exits for Tech Startups in Next Wave

  • Investor expects return to public markets in 2016, 2017
  • Microsoft-LinkedIn deal may be sign M&A activity under way

Andreessen: More Tech M&A Activity in Pipeline

Marc Andreessen sees technology startups cashing out in a wave of acquisitions and public stock offerings over the next few years.

Andreessen, the co-founder of venture capital firm Andreessen Horowitz, expects many more M&A deals this year and a stream of IPOs in 2017 and 2018. The pendulum has swung too far away from the public markets in recent years and closely held companies have remained private far longer than the historical norm, he said Tuesday at the Bloomberg Technology Conference in San Francisco.

“We have a team inside the firm focused on IPO preparedness,” said Andreessen, who in the past has promoted the benefits of startups staying private.

The IPO market for tech companies has been a dud so far this year. Just one VC-backed tech company -- SecureWorks Corp. -- has gone public in 2016, raising $112 million in April.

It’s not for lack of candidates. There are now 168 unicorns, or tech companies valued at $1 billion or more, according to research firm CB Insights. Andreessen’s Menlo Park, California-based venture firm owns shares in seven unicorns with a combined value of $46.9 billion, according to CB Insights.

Those companies include Airbnb Inc., Pinterest Inc. and Magic Leap Inc. Bloomberg LP is an investor in Andreessen Horowitz.

With mature tech companies sitting on piles of cash and the valuations of some startups beginning to come down, the tech landscape is rich for deal making, Andreessen said.

Microsoft Corp.’s $26.2 billion proposed acquisition of LinkedIn Corp. announced Monday is one example.

“We see more deals in consideration or negotiation than we have in probably four years,” he said.

Twitter Inc., the social media company speculated to be a takeover target, has gained 9.6 percent since the LinkedIn deal was announced. Although Microsoft probably is off the list of potential suitors, others may consider an acquisition, Andreessen said.

“I’m positive there are big companies thinking about it. I’m positive Twitter is thinking about it,” he said.

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