In this ever-growing start-up ecosystem, the desire to have the best-performing talent in an organization has never been so strong. Particularly in the technological field, there is not enough talent to go around, so companies are changing the way they recruit. One such method made its way to the news recently after Intel “acqui-hired” a Hyderabad chip-maker start-up Ineda System, which is also said to be one of the tech giant’s key addition to its portfolio.
So what is this new phenomenon that is all rage in the start-up market?
Acqui-hire involves the acquisition of a company in order to secure the personnel working for it. However, while this new way of recruiting top-performing assets delivers results for the big corporations, it has its own demerits.
Acqui-hire transactions can be termed as an agreement where an organization acquires another not for its services or products but for the people working in it. The acquirer is usually a time-proven organization. Usually, the acquirer acqui-hires the complete team of a start-up but sometimes it might just do with the best talent of the start-up. The acquirer, considering the performance of the start-up, can judge that their teams can work together and align with their company vision.
How different is acqui-hire from acquisition ?
The acquisition is a process of buying out the entire business of a company along with all its employees whereas acqui-hire is a process of retaining the core team of an organization without valuing the business that they have built. In an acquisition, the acquirer is paying for the “unique” business idea and the team which is able to solve that “unique” problem. But in the case of an acqui-hire, the acquirer is buying the team which is skilled enough to solve problems that are faced by the acquirer’s organization.
Here are some top acqui-hire transactions from India:
1. Intel – Ineda System
Intel in February 2019, acqui-hired 100 engineers from chip-maker Ineda Systems core team for an undisclosed amount in an all-cash deal. Founded by industry veterans from U.S. and India Dasaradha Gude and Balaji Kanigicherla in 2011 at Hyderabad. The transaction was purely for their skillset in graphics and low-power SoCs for consumer and enterprise applications.
Airtel acqui-hired, Bengaluru based AuthMeID Services and a Gurgaon-based startup Quikmile. While AuthMeID is focused on artificial intelligence-based solutions, Quikmile focuses on building tech-enabled logistics platforms for India. As a part of this deal, both the start-up teams will join Airtel X Labs that build solutions in the areas of AI, IoT, AR, and VR.
3. Vokal – StupidChat
The Bengaluru-based knowledge-sharing platform Vokal, acqui-hired quizzing app firm StupidChat Technologies in an all-stock deal in May 2019. Vokal is planning to use StupidChat’s six-member team to come up with daily engagement products for its platform. Sourav Karmakar and Saheb Roy founded StupidChat Technologies in Kolkata in November 2017.
4. Lendingkart – KountMoney
Online lending marketplace for personal loans KountMoney was acqui-hired by fintech start-up Lendingkart in 2016. The entire team of KountMoney joined Lendingkart. Founded in 2015, by Deepak Modak, Gaurav Somani, Abhishek Periwal and Abhi Ranjan, and it served borrowers looking for credit in a hassle-free manner. The acqui-hiring helped Lendingkart boost the latter’s technology and data analytics capabilities.
5. Apple -Tuplejump
In 2016, Apple acqui-hired a Hyderabad-based AI startup Tuplejump in April 2016. Tuplejump works as a data mining and analysis platform. It was reported that all the seven members of the team including founders Rohit Rai and Satyaprakash Buddhavarapu joined the team who are now working at various offices at Apple.