US Startup M&A Market Collapsed 94% YoY in Q4 2022, But Acquihires Surge

The US venture-backed M&A market experienced a dramatic 94% year-over-year decline in Q4 2022, the worst quarter in 20 years, with deal values plummeting from $34.6B to $2.1B. Despite the overall contraction, acquihires—acquisitions targeting teams rather than revenue-generating businesses—have become the dominant transaction type as early-stage startups seek financial certainty in a difficult fundraising environment. This pattern mirrors the 2013-2014 acquihire surge when tech giants prioritized talent acquisition during favorable market conditions.