Chinese Startups Embrace Mergers
Mogujie (a company on the Fortune’s unicorn list) is buying Tencent-backed Meilishuo to form a new company worth about US$2.5 billion. New funds will be raised to bring the total valuation up to US$3 billion. This is merely one of the many mergers and acquisitions that we are seeing in the startup industry.
Just like established companies, start-ups merge to acquire assets, harness synergies, reduce costs, reduce competition and increase market share. In the tech world, the digital market share is theoretically global. It is mostly limited by fulfilment infrastructure since technology has greatly reduced the barriers pertaining to payments and language differences.
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