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Venture capital’s latest strategy: private equity–style roll-ups

Venture capital firms have increasingly been acting like private equity firms by investing in or buying mature businesses in need of a turnaround. Now those firms are utilizing another PE strategy—rolling up multiple competitors into a single company that can operate more efficiently by combining costs.


 

Several years ago, McKinney said, “I would have been laughed out of the room if I pitched VCs on the strategy” to buy old payment providers. Since then, he added, the strategy has become “the hottest thing in Silicon Valley.”

Tags

asset management, vc, pe