M&A volume stayed flat in the first half of the year, and the IPO market remained muted, though there are early signs of a potential second-half recovery. In the meantime, capital continues to flow into private tech companies at record levels, including a surge in secondary transactions. This is giving private tech companies more runway (and more reason) to delay public listings.

New exit models are also gaining traction. From large minority stakes to reverse acqui-hires, big tech companies are finding ways to access talent and technology without triggering regulatory review. These deal structures are starting to reshape how value is created, captured, and distributed across the ecosystem — for founders, investors, and employees alike.

Taken together, these trends point to a broader shift: private markets are becoming the dominant venue for value creation and capture in tech. With that comes the need for better private market investing infrastructure, including real-time data and context, turning private company intelligence into a new competitive advantage. 

Below, we break down the top stories from this first half of the year and our projections for the rest of the year, including:

• AI and $100M+ deals drive tech M&A momentum
• Signs point to tech IPO market rebound in H2’25
• Private tech markets top $2T in equity funding
• Secondaries get bigger and pricier
• New exit models emerge amidst the AI talent war

Download the full report to access comprehensive CB Insights data and charts on the evolving state of tech exits, in partnership with EquityZen.

Top stories in H1’25

1. AI and $100M+ deals drive tech M&A momentum

Tech M&A activity has remained stubbornly flat since Q4’23, stagnating at just over 2,000 transactions per quarter. We project Q3’25 to follow the same trajectory, with 2,040 deals.

Despite flat volume, this year is shaping up to be a record year in terms of M&A deal value, driven by an increase in the number of $100M+ acquisitions. These large transactions represent 4.7% of deal share so far this year, up from 3.8% from all of 2024, and a level not seen since 2021.

AI has also emerged as a bright spot, as corporations race to grab AI tech & talent.

M&A activity in AI reached record levels in Q2’25 at 192 deals, pushing AI’s share of tech M&A to 7.5% so far this year — almost double its share in 2021. Private companies have notably led some of the largest AI acquisitions in the first half of 2025, with OpenAI acquiring Io for $6.5B and Databricks spending $1B to buy Neon. 

The AI race is also pushing big tech companies to rethink their M&A strategy, after years of muted activity. 

Meta scooped up voice AI startups PlayAI and WaveForms this summer — marking its first acquisition since 2022 — in a bid to win the race to build the future of human-machine interactions. The company is betting that voice will become the dominant interface for interacting with AI.

During the company’s Q3’25 earnings call, Apple’s CEO mentioned being open to larger M&A deals to help accelerate its roadmap. This marks a significant move away from Apple’s historical focus on smaller acquisitions.  

Dive into 7 AI-related areas where we expect to see M&A activity this year, as well as high-potential acquisition targets for each, in the free report.

2. Signs point to tech IPO market rebound in H2’25

The global tech IPO market has remained muted during the first half of 2025, with 122 tech companies going public, in line with the numbers from 2024. But recent activity signals things may be picking up.

Figma successfully went public last month, in an IPO often referred to as a test of the public market’s appetite for tech companies. The company was valued at just over $16B at IPO and now boasts a market cap of $39B (as of 8/20/2025).

A few weeks later, crypto exchange platform Bullish followed a similar path, raising $1.1B in at a $5.4B valuation. The company is now trading at a 60%+ premium to its IPO price.

These recent examples have pushed several tech companies (crypto in particular) to announce they had filed to go public, reviving hopes of a tech IPO market rebound. Based on current trends, we project 84 tech IPOs for Q3 ’25 — above the 2-year quarterly average of 72.

Find 40+ blockchain companies with a high probability of going public in the next 2 years

But any rebound is likely to be modest, with private tech companies expected to remain private for longer and the role of IPOs potentially shifting to becoming a clearinghouse rather than a capital-raising mechanism, as predicted by Jared Carmel, Managing Partner, Manhattan Venture Partners:

“We’re witnessing a fundamental shift in how tech companies approach public markets. The average age at IPO has increased dramatically, from under 4 years in 2000 to 12 years in 2015 and nearly 16 years today. I expect this trend to accelerate, with companies staying private for 20+ years becoming the new norm.

The aggressive IPO pops we’ve historically seen are fundamentally unfair to founders and long-term investors who actually built these companies. Over the next several years, you’re going to see VCs, private equity, and sovereign wealth funds step in to extract maximum value before these companies ever go public. When they eventually do an IPO, they’ll go public at fair market value without the pop — essentially using public markets as a clearinghouse rather than a capital-raising mechanism.

This shift is already playing out in the data. We’re seeing record levels of private funding, exceeding $2 trillion in cumulative investment, and explosive growth in secondary transactions. The real value creation and liquidity will increasingly occur in private markets, rather than public ones. With companies staying private for two decades, secondary liquidity becomes absolutely critical — employees, early investors, and founders can’t wait 20 years for an exit.”

3. Private tech markets top $2T in equity funding

Private tech companies are staying private longer and now have more capital than ever to do so. 

Over $2T in cumulative equity funding has poured into private tech markets to date, with 90% raised in just the last decade. That funding has enabled companies to keep scaling before tapping the public markets. Today, startups are going public an average of 16 years after being founded, 4 years later than just a decade ago.

Late-stage rounds have also reached new extremes, with Databricks joining the exclusive “Series K” club in July. Just 16 Series K rounds have ever been raised — half in the last 5 years — signaling the growing normalization of ultra-late-stage private fundraising.

Private market check sizes have also grown dramatically. The past 18 months alone account for the largest Seed, Series A, Series B, Series D, and Series E+ rounds on record. And more dry powder is on the way: a recent executive order in the US is opening the door for 401(k) retirement accounts to invest in private markets, potentially unlocking a new wave of capital for private tech companies.

As regulatory barriers fall and new investment vehicles emerge, private tech company investments will increasingly define institutional — and eventually retail — portfolios. 

But there’s a catch. 

Private companies operate in information shadows, beyond public view. Institutions will increasingly need real-time data and context on companies not subject to quarterly reporting, turning private company intelligence into a new competitive advantage. 

4. Secondaries get bigger and pricier

The last 7 quarters have seen YoY growth in secondary transaction activity among VC-backed companies, with no signs of slowing down. As tech companies stay private longer and valuations continue to climb, secondaries are playing a growing role in providing liquidity.

In August 2025, OpenAI reportedly launched a tender offer at a $500B valuation, a sharp jump from its last reported $300B. The offer gives current and former employees a chance to cash out while attracting new capital from institutional buyers. Canva followed a similar playbook, recently conducting a secondary sale at $42B. That’s $10B higher than its October 2024 valuation, which was also set during a prior secondary transaction.

These moves are helping long-time employees and early investors realize returns, while giving latecomers a shot at high-growth companies.

Investor demand is heating up too. According to EquityZen, average discounts in secondary markets have compressed to just 13% below last-round valuations — the lowest level observed between Q1’23 and Q2’25. That pricing shift reflects growing competition and perceived upside, even in companies potentially years from IPO.

While large players like SpaceX, Ripple, and OpenAI continue to dominate transaction volume, interest is expanding to smaller unicorns and breakout startups. In Q2’25, 7 of EquityZen’s top 10 secondary movers had Mosaic scores over 800 and valuations north of $1B, including names like Axiom Space, Brex, and Skild AI.

Explore 500+ private tech companies with strong secondary potential

As secondary markets mature, they’re reshaping liquidity expectations — and giving investors new ways to get exposure to private tech winners without waiting for the IPO window to reopen.

5. New exit models emerge amidst the AI talent war

The intensifying race for AI talent is driving a new wave of unconventional exits in the tech ecosystem, bypassing traditional M&A while still delivering strategic value to acquirers. 

Tight regulation has pushed big tech companies to shift away from full takeovers and toward deal structures that offer access to technology and, more importantly, talent, without triggering antitrust alarms.

Large minority stakes have emerged as one such mechanism. In Q2’25, Meta invested $14.8B for a 49% stake in Scale, marking the largest private funding round of the quarter. As part of the deal, Meta hired Scale’s CEO and founder, Alexandr Wang. At their current pace, big tech companies are on track to complete 14 corporate minority deals in 2025.

Reverse acqui-hires  — where acquirers buy the team (fully or partially) and license the technology — are also gaining momentum. These hybrid transactions often include lucrative licensing fees that serve as a partial liquidity event for investors.

Notable examples include:

• Google hiring key personnel from Windsurf to join its DeepMind division, including CEO Varun Mohan and co-founder Douglas Chen 
• Amazon hiring key members of Adept
• Microsoft bringing in employees from Inflection AI

These transactions let acquirers cherry-pick talent and assets without facing regulatory hurdles or needing to buy out entire cap tables.

But it’s not just big tech adapting;  major LLM developers are adopting similar tactics. OpenAI and Anthropic have collectively made 3 acqui-hires so far in 2025 — Context.ai, Crossing Minds, and Humanloop.

These nontraditional exits may complicate fundraising and hiring for AI startups, as investors and employees weigh the risk of being bypassed in partial team acquisitions. In response, both groups may begin negotiating protective terms to ensure they aren’t left behind.

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Investors and big tech alike are betting that voice will be the dominant interface for interacting with AI, enabling a move away from traditional browser and mobile interfaces toward natural conversational interaction. 

Recent technological advancements have made this vision increasingly viable, with voice capabilities now delivering near-instantaneous responses with sub-300ms latency that matches human conversational flow. This speed breakthrough is critical to unlocking voice AI’s full potential, as Chris McCann at Race Capital, a backer of PlayAI, explains:

“Voice is how people naturally communicate – but most voice AI systems still sound robotic or have high latency in their responses. We believed fast, expressive voice tech would be critical to making AI feel human and useful in the enterprise, especially for IVR, customer support, and sales.”

With voice becoming an increasingly fundamental modality for the AI-powered future and big tech competing to win the AI device race, owning the building blocks that shape human-AI communication is becoming mission-critical. Expect a wave of acquisitions as companies scramble to secure voice AI capabilities.

Using CB Insights’ Mosaic score which measures company health, we identified the top M&A targets in the voice AI space and what makes them such compelling targets (see below graphic).

See the full list of voice AI startups ranked by Mosaic score

• Voice synthesis platform ElevenLabs tops the market with a Mosaic score of 955, making it an attractive acquisition target. Proprietary voice generation technology is becoming as valuable as foundational AI models, positioning the highest-quality voice synthesis as core infrastructure rather than a feature add-on.
• Enterprise-focused Cresta delivers immediate ROI, with some customers reporting 50% cost reductions in contact centers, and positioning it perfectly for companies looking to leverage voice AI to immediately impact enterprise productivity.
• Ultra-low latency startups like Cartesia have an edge, as their ability to deliver sub-100ms capabilities positions them as essential for truly conversational AI experiences that matches human conversation patterns. 

Investors also see companies owning the full-stack as a having key technological advantage compared to those relying on third-party components. This was part of the rationale for investing into PlayAI according to Chris McCann of Race Capital:

“Most voice AI startups rely on open source or other third-party components. PlayAI built the full stack in-house—their own TTS engine, real-time streaming, and sub-100ms latency. That gave them full control and a clear technical edge, which let them power real-time agents for support, sales, and IVR across several Fortune 500s.”

As the AI arms race continues, acquisitions will continue to be focused on talent, tech, and infrastructure rather than existing revenues. Companies that secure advanced voice AI capabilities now will dominate the next phase of AI adoption – whether they integrate into their existing offerings or cash-in on selling the tooling back to others.

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The AI boom has set the stage for a wave of tech M&A this year.

After 2 consecutive years of decline, tech M&A deals were up in 2024, with some of the largest deals centering on AI. AI companies have also bucked the general downward trend in exit valuations, instead seeing nearly double the median acquisition price from 2023 to 2024.

Using CB Insights’ predictive signals, such as Mosaic and M&A Probability, we’ve identified 7 AI-related areas where we expect to see M&A activity this year, as well as high-potential acquisition targets for each.

See highlights below, and download the full report for the rationale behind each prediction, as well as M&A target shortlists.

Tech M&A prediction highlights

• Big tech players set their sights on humanoid robotic: As physical AI takes off thanks to the rise of LLMs, humanoid robotics is becoming big tech’s next battlefield. Among high-potential acquisition targets, 1x stands out for its dual focus on industrial and consumer humanoids (just in January, it acquired Kind Humanoid to accelerate household robot development). This makes it a prime target for Meta, which recently announced plans to enter the consumer humanoid market.
• Enterprise tech heavyweights compete for AI infrastructure dominance: We’re already seeing strong signals from cash-rich companies such as Cisco and IBM, which are future-proofing their business models with AI investments. Hardware-aware AI optimization players CentML and Nota AI — which help accelerate AI model deployment while reducing compute costs — appear in our AI infrastructure acquisition target list. These companies have already shown quantifiable efficiency improvements as well as validation from Nvidia as a partner or investor.

Source: CB Insights advanced search. Data is dynamic (as of 2/27/2025).

• Data center energy demands fuel interest in cooling tech: Companies offering immersion and liquid cooling solutions enjoyed a funding rebound last year, attracting a combined $120M in fresh funding. Hypertec and Submer are high-potential acquisition targets in this space.
• Professional services firms seek AI capabilities: GenAI is coming for knowledge jobs — and leading professional services firms are buying AI capabilities to get ahead of it. One area where we see high M&A potential for professional services firms is to cater to clients’ responsible AI needs, with potential acquisition targets such as Lasso Security and HydroX AI.
• Pharma companies target AI drug discovery startups: AI drug discovery M&A is surging, with 12 deals in the sector since 2023. That M&A deal volume reflects both a maturing technology and growing urgency among pharma players to bring AI tech in-house.
• SaaS giants fortify their offerings with AI agent acquisitions: While some believe AI agents signal the death of SaaS companies, we anticipate SaaS leaders will acquire AI agent companies to avoid disruption. We’re already starting to see this happen with ServiceNow acquiring Moveworks for close to $3B in March 2025.

Source: CB Insights — ServiceNow Acquisition Insights

• Coding AI agents drive next wave of AI agent consolidation: Explosive growth, soaring valuations, a fractured AI agent landscape, and rising doubts about revenue defensibility make the coding AI agents market ripe for consolidation. While some players like Cursor look too expensive for an acquisition, we’ve identified Warp, Vidoc, and Bito as likely targets with high Mosaic scores and higher-than-average M&A Probabilities.

What is Mosaic?

Mosaic is CB Insights’ proprietary metric that measures the overall health and growth potential of private companies using non-traditional signals. Mosaic is widely used as a target company and market screener to identify high-potential emerging tech companies, typically defined as those with a score of 510 or higher.

What is M&A Probability?

M&A Probability is CB Insights’ proprietary signal that measures a private company’s chance of an M&A exit within the next 2 years. It is used to quickly screen and triangulate companies based on exit likelihood.

Combining both Mosaic Score and M&A Probability makes it easy to shortlist acquisition targets.

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The US and European markets both experienced a slight dip in total deal counts QoQ. However, the number of $100M+ deals in these regions is on the rise, signaling that more buyers are willing to stomach large acquisitions for the right target.

Key Q3’23 tech M&A insights include:

• • The slowdown in tech M&A is largely driven by risk-off strategic acquirers, with financial sponsors also treading carefully amidst a scarcity of high-quality assets and macroeconomic uncertainties.
  • Valuation step-ups for institutionally-backed M&A targets have dropped to 0.7x compared to the valuation given at their last equity round — down from 1.5x in the previous quarter.
  • Europe has emerged as a formidable player in tech M&A volume, with a more than 80% QoQ increase in $100M+ deals — challenging the US in both deal volume and high-value transactions.
  • Big tech M&A activity has come to a standstill in Q3 with no significant deals announced, reflecting the impact of a stringent regulatory environment.
  • Contrary to the overall trend, billion-dollar M&A deals have risen by 50% from a recent low in Q1’23, with 21 such deals taking place in Q3. More broadly, the median valuation for M&A targets has continued to rebound, reaching $41M in Q3’23.

For a detailed analysis of the current tech M&A environment, including strategic moves by key players and regional dynamics, CB Insights clients can access the full Tech M&A Q3’23 Report by signing in and downloading it using the sidebar.

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Per the CB Insights Tech M&A Q2’23 Report, the number of $100M+ M&A targets grew 24% quarter-over-quarter in Q2’23 to reach 68. That level is still 31% below where it was during the same period in 2022.

Of the $100M+ deals inked in Q2’23, more than half were in the $100M-$499M range, while just under a third were billion-dollar deals.

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Cross-border deals involve a buyer from one country acquiring a company headquartered in a different country, and they can help companies expand into untapped markets and acquire new customers.

With 317 transactions of this kind in Q2’23, Europe did almost as many cross-border deals as all other regions combined (324). Europe’s propensity for cross-border M&A could in part be fueled by the EU members’ shared regulatory frameworks and closely overlapping markets.

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However, the median valuation per employee for tech M&A deals started to fall as the sector watched private-market valuations deflate across stages. That figure eventually bottomed out at just under $600K in Q1’23.

Notably, in Q2’23, it rose for the first time since Q4’21 — jumping by around $120K quarter-over-quarter (QoQ) to surpass $700K, per the CB Insights Tech M&A Q2’23 Report.

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After the boom times of 2021 and early 2022, valuations had a long way to fall when the market turned sour. By Q4’22, the median M&A valuation for institutionally backed companies was just 0.6x the valuation of their previous round. This rebounded slightly in Q1’23 to 0.8x — still a discount vs. the prior round and a potential loss for any later-stage investors.

Institutional investors likely breathed a sigh of relief in Q2’23, when M&A targets saw a median valuation step-up of 1.4x over their previous round, according to the CB Insights Tech M&A Q2’23 Report.

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Historically, big tech players have snapped up startups to acquire tech talent and expand into new markets and product lines. However, they face a more challenging regulatory climate — especially in the US and Europe, where anti-trust pressure has been mounting.

Combined with the prevailing risk-off mentality of strategic acquirers, this has led to a drastic decline in big tech acquisitions. Between Amazon, Apple, Google, Meta, Microsoft, and NVIDIA, only Apple disclosed an acquisition in Q2, according to the CB Insights Tech M&A Q2’23 Report.

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While the continent’s M&A deal volume ticked down 4% quarter-over-quarter (QoQ) in Q2’23, it remains elevated compared to pre-2021 levels. For comparison, tech M&A volume in the US has slumped to levels not seen since 2020’s Covid lockdowns.

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The CB Insights Tech M&A Q2’23 Report highlights that the number of M&A transactions by corporations has eroded in the quarters since — hitting just 1,728 in Q2’23 as economic uncertainty and rising interest rates have driven corporations to become firmly risk-off when it comes to tech M&A.

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The US M&A market remained tepid, with US-based tech M&A transactions falling 9% QoQ and trailing Europe for the sixth quarter in a row. That said, US target companies are still attracting larger valuations: 41% of the M&A targets valued at $100M+ in Q2 are headquartered in the US.

Other Q2’23 tech M&A highlights include:

• Though still below 2021 highs, the number of M&A targets valued at $1B+ rose to 21 in Q2, up from 14 the prior quarter. Billion-dollar deals comprise just 1% of all M&A activity. 
• After 2 quarters in decline, the median valuation for M&A targets rebounded in Q2, nearly doubling to $45M.
• Buyers paid more per employee in Q2’23 than in the previous quarter, with the median valuation per employee rising to $700K, up $120K QoQ. 
• In Q2, companies acquired for $100M+ had a median headcount of 359 people — the highest in 10 quarters.

• For institutionally backed targets (i.e., those previously backed by VCs, PE, etc.), M&A valuations in Q2 were 1.4x the last round’s valuation — a notable rebound after 2 depressed quarters.
• Big tech M&A activity hit an 18-quarter low, with just 1 deal in Q2, reflecting the more challenging regulatory (anti-trust) climate that big tech players are facing.
• Cross-border M&A deal activity fell 9% QoQ but remained above historical levels, driven by higher volumes between countries in Europe, as well as between Europe and the US.

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