The Evolving Mix of Venture Exits in 2025

The headline story of venture exits in 2025 is not just the slow reopening of the IPO market. It is the return of mergers, roll-ups, and acquihires as alternative liquidity paths. While public listings still attract most of the attention, Silicon Valley Bank’s State of the Markets: H2 2025 report suggests that the center of gravity for exits has shifted back toward M&A. The pattern is not uniform, and the outcomes are often modest, but the volume and structure of deals reveal how the exit math for startups is changing.

SVB’s analysis shows that more buyers are themselves venture-backed, more deals are small or undisclosed, and a growing share of activity is driven by the search for AI talent rather than by traditional revenue synergies. That combination is reshaping what a “successful” exit looks like for founders, employees, and investors.

Startups Are Buying Startups

One of the clearest shifts in the data is who is doing the acquiring. In 2025, 46% of M&A deals included a VC-backed buyer, up from much lower levels earlier in the decade. SVB notes that more VC-backed companies are getting into the startup buying game, as acquisitions become an increasingly valuable strategy to acquire growth.

Instead of being bought primarily by large corporates, many startups are being acquired by their better-funded peers. The report highlights several prominent AI unicorns as active consolidators, including OpenAI, which has made 5 acquisitions since 2023, and Databricks, which has acquired 17 companies over the same period. These buyers are not just adding revenue; they are also acquiring infrastructure, product capabilities, and specialized engineering teams.

The logic is straightforward. In an environment where organic growth is harder to achieve and where time to market matters, acquiring a team or product can be faster and, in some cases, more economical than building it in-house. For large, well-capitalized startups, M&A becomes a way to extend their own runway for innovation while absorbing competitors or adjacent offerings.

More Deals, Less Headline Money

Although M&A activity is picking up, the financial outcomes are more restrained than in the last cycle. SVB’s data through June 2025 shows that 90% of deals are undisclosed. Historically, a high share of undisclosed deal values tends to correlate with smaller exit sizes and less favorable outcomes for the sellers. The report reads this as a signal that many transactions are designed to preserve some value rather than to generate outsized returns.

Among the subset of deals where pricing is known, only 7% were sold for at least 3x the total amount of venture capital raised. That is down from 22% of deals achieving a 3x-or-better outcome in 2021. In other words, more companies are being acquired, but fewer are delivering premium, multiple-of-capital exits.

This aligns with what many investors describe as a “soft landing” environment. Rather than running companies to the point of failure, boards and management teams are opting to sell earlier, often to return some capital to investors and provide continuity for customers and employees. The upside is limited, but the alternative, which is an eventual shutdown, is often worse for all involved.

Acquihires and the AI Talent Race

The resurgence in M&A is not driven only by traditional strategic logic. SVB points to the rise of acquihires, particularly in AI, as a defining feature of the current cycle. As foundational model providers and AI-heavy platforms race to expand their capabilities, acquiring teams has become a central talent strategy.

The report describes this as a response to the frenzy to acquire AI talent, noting that more companies are circumventing conventional M&A through acquihires that bolster their in-house development stack. In many of these deals, the primary asset is not revenue or an existing customer base but the expertise of a relatively small group of engineers or researchers.

This shift has also created tension. SVB cites backlash around Google’s acquisition of Windsurf’s leadership team for $2.4 billion, an acquihire-style transaction that left other stakeholders without meaningful returns and pushed the issue “to the forefront” of ecosystem debate. The episode illustrates how acquihires can produce very different outcomes across the cap table: attractive outcomes for a small group of executives or key employees, but far more limited recovery for other shareholders.

A Recovery in Activity, if Not in Payouts

Despite the mixed economics, SVB argues that the recent pickup in M&A is a sign of healing after a difficult period. One metric the report tracks closely is the ratio of M&A exits to venture deals. As of 2025, there are 8 M&A deals for every 100 VC deals, the highest ratio in seven years.

For comparison, in 2002 there was one M&A deal for every four VC deals, around 25 per 100, while by 2024, that ratio had fallen to roughly one M&A exit for every 20 venture deals, or about 5 per 100. The recent move back up to 8 per 100 suggests that consolidation is once again operating as a meaningful outlet for private-company liquidity, even if the absolute level is still well below early-2000s norms.

SVB is careful to note that this increase in activity hasn’t yet turned the corner into a full-fledged rally. But it views the trend as directionally positive: more deals, more active buyers, and more ways for companies to find a home short of an IPO or a large strategic sale.

What This Means for Founders and Investors

The picture that emerges from SVB’s M&A data is of an exit market that is pragmatic rather than spectacular. For founders, being acquired by another startup, especially a well-funded unicorn, is increasingly a mainstream outcome rather than a footnote. These transactions can keep products alive, provide career continuity for teams, and return at least some capital to investors, even if they fall short of earlier valuation marks.

For investors, the rise of roll-ups and acquihires means that portfolio returns may rely more on a combination of one or two outsized winners and a larger number of modest, sometimes undisclosed M&A events that preserve capital or deliver partial recovery. The distribution of outcomes becomes more granular: fewer blockbuster IPOs, more small and mid-sized exits whose details never hit the headlines.

SVB characterizes this environment as one where the frenzy to acquire AI talent is heating up, but the outcomes are uneven. That unevenness is visible in the numbers: stronger deal flow, more VC-backed buyers, and higher M&A-to-VC ratios, but a smaller share of transactions producing high multiple-of-capital returns.

In that sense, 2025’s exit market reflects a broader adjustment across the venture ecosystem. The next phase of venture liquidity may depend less on a resurgence of very large public offerings and more on a steady stream of targeted acquisitions such as roll-ups, acquihires, secondaries, and strategic deals that keep innovation compounding, one transaction at a time.

Chief Brand & Investor Relations Officer

Sneha Dadrwal

Frequently Asked Questions

Q: What does SVB’s data show about venture exits in 2025?

A: M&A plays a larger role than it has in recent years, with more deals, more VC-backed buyers, and a higher M&A-to-VC ratio. Outcomes remain modest, but activity has clearly picked up.

Q: Why are more startups acquiring other startups?

A: SVB notes that well-funded, venture-backed companies are increasingly using acquisitions to add talent, product capabilities, or infrastructure when organic growth is slower or more expensive.

Q: How large are most of these exits?

A: The report shows that 90% of deals are undisclosed and only 7% deliver 3x-or-higher returns on capital raised, down from 22% in 2021. This points to more “soft landing” outcomes than premium exits.

Q: What is driving the rise of acquihires?

A: A surge in demand for AI talent. Many buyers, including major AI platforms, are acquiring teams to strengthen their technical stacks rather than buying for revenue or customer bases.

Q: What does this mean for founders and investors?

A: Founders are more likely to see continuity-focused exits to peer startups, while investors should expect a mix of modest M&A outcomes and a smaller number of outsized wins to drive fund performance.

Sources

1. State of the Markets: H2 2025. Silicon Valley Bank, 2025.