How a Canadian company became the world’s best acquirer of tech firms

F or older startups these are tough times. The weak recent stockmarket debuts of Arm, a British chipmaker, Instacart, a grocery-delivery group, and Klaviyo, a software firm, have dampened enthusiasm for initial public offerings. Venture capital (vc) has dried up. Data from PitchBook, a research firm, show that late-stage startups need almost three times as much money as is available to them. Many are putting themselves up for sale. Acquisitions of private firms valued at $100m or more are at their highest since September 2022. One happy buyer is Constellation Software. The Canadian firm’s targets must have sales of at least $5m and show consistent revenue and profit growth. A strong management team, preferably founder-led, is a plus. Though it has splurged on larger deals, the median value of firms it acquires is around $3m. According to Royal Bank of Canada (rbc), since 2005 Constellation has spent $8.7bn on more than 860 firms (see chart 1). In that time its revenue has grown by abou

F or older startups these are tough times. The weak recent stockmarket debuts of Arm, a British chipmaker, Instacart, a grocery-delivery group, and Klaviyo, a software firm, have dampened enthusiasm for initial public offerings. Venture capital (vc) has dried up. Data from PitchBook, a research firm, show that late-stage startups need almost three times as much money as is available to them. Many are putting themselves up for sale. Acquisitions of private firms valued at $100m or more are at their highest since September 2022. One happy buyer is Constellation Software. The Canadian firm’s targ