DealScape: M&A Activity Accelerates in 2025 – What It Means for Emerging Companies

Startup M&A activity has surged in 2025, with disclosed transactions exceeding $100 billion in the first half of the year, a 155% increase compared to the same period in 2024, according to Crunchbase.

While some of that growth comes from large-cap deals such as Google’s $32 billion acquisition of Wiz, the more meaningful story lies beneath the headlines: both strategic and financial buyers are re-engaging, and activity is picking up across sectors.

Key Trends in Today’s M&A Environment

1. The market is open to smaller, targeted acquisitions.

The majority of recent deals involve growth-stage companies that bring strategic value rather than pure scale. Notable examples include Stripe’s acquisition of crypto wallet startup Privy and Zscaler’s purchase of Red Canary. These transactions weren’t billion-dollar outcomes, but they offered strong alignment between acquirers and their targets.

2. Fundamentals matter more than hype.

Even in fast-moving sectors such as AI, buyers are prioritizing technology fit, talent, and distribution advantages. This rewards founders who have built real product traction, even if revenue is still early, over companies relying on market buzz.

3. Healthcare continues to attract strong interest.

One of the largest deals this year was Modernizing Medicine’s $5.3 billion recapitalization with Clearlake Capital. Buyers remain particularly active in vertical software, clinical decision tools, and service models tied to efficiency and reimbursement.

M&A as the New “Next Round”

Four years after the peak of venture funding in 2021, many startups are increasingly viewing M&A as a viable alternative to additional fundraising. In many cases, strategic exits are emerging as both a credible and preferable path forward.

Perspective for Emerging Growth Companies

For founders and management teams, the resurgence of M&A represents an opportunity to align with the right strategic partner before market conditions shift again. Importantly, these transactions don’t require billion-dollar scale. Companies with compelling narratives, disciplined execution, and clear strategic positioning can drive strong outcomes, even in the $25 million to $150 million range.