By Lou Sokolovskiy

In March 2024, the payments giant Stripe quietly acquired a startup you’ve probably never heard of. Supaglue, a four-person company specializing in data integration, didn’t have much revenue or a large customer base. What it did was something that Stripe desperately needed: a team of highly-skilled engineers.

Stripe folded the Supaglue team into its revenue automation unit. The product was left behind.

That acquisition, modest and barely noticed by the market, is emblematic of a sweeping shift reshaping the mergers and acquisitions (M&A) landscape: companies are increasingly buying smaller firms not for their technology or market share, but simply to get the people.

This practice, known as an “acqui-hire,” has long been a Silicon Valley tactic. But in recent months, it has increasingly become a defining strategy across the U.S. lower middle market, particularly in the white-hot race for artificial intelligence talent.

From Wall Street to Silicon Valley and even into corporate boardrooms in Seattle and Chicago, the lower middle market of mergers and acquisitions (deals typically valued under $500 million) is being reshaped by a single, strategic imperative: acquire talent or fall behind.

Acqui-Hiring Goes Mainstream

Acqui-hiring has increasingly become one of the most pervasive trends in dealmaking in recent months. In a labor market that remains tight for top-tier technical and professional talent, companies across industries are using M&A as a fast lane to acquire human capital.

This shift is especially visible in the lower middle market, where small, nimble startups offer not just solutions but specialized teams. According to recent data, nearly 40% of all U.S. deals from 2022–2024 closed below $50 million, many of them quietly structured around acquiring workforce expertise.

Jenny Fielding, managing partner at EverywhereVC, recently noted on X: “Friend in M&A in the Bay Area says Corp dev [is] hiring like crazy. Have not seen this much staffing up since 2021.”

Notable Talent-Driven Acquisitions (2024–2025)

Some recent high-profile examples of talent-led deals underscore just how diverse — and strategic — this trend has become:

• Stripe acquires Supaglue (2024): A textbook acqui-hire, Stripe brought on Supaglue’s small team to boost internal integration capabilities.
  
• Airtable buys Dopt (2024): The workflow software firm scooped up a startup known for its AI engineering talent — not its customer base.
  
• Starbucks and Empower Delivery (2025): In a rare move for a coffee giant, Starbucks licensed a startup’s software and hired its full engineering team to accelerate tech upgrades in its stores.
  
• Private equity roll-ups: PE firms in sectors like managed IT services (MSPs) are using acquisitions to assemble skilled teams and broaden technical capabilities.

More Than Just Tech

While acqui-hires are most common in technology — particularly artificial intelligence — the model is gaining ground in professional services, HR, and even food and retail. A report by Windsor Drake published earlier this month found that in consulting, IT services, and design, the people being acquired are often the most valuable assets on the balance sheet.

In the HR and staffing industry alone, 54 deals closed in 2024, a 17% year-over-year increase, driven largely by buyers looking to absorb recruiting and placement expertise.

 “Talent acquisition remains a primary strategic objective for buyers in professional services,” read the Windsor Drake report. 

Unlike earlier acqui-hire waves during dot-com busts or crypto winters, today’s deals are often win-wins. Startups that struggle to raise capital in a saturated venture market are finding soft landings — and new careers — at acquirers hungry for their skills.

Acqui-hires, traditionally seen as desperate exits, now seem to have become savvy career moves.

Deal structures reflect this change. Acquirers are increasingly prioritizing generous compensation packages for key team members, often offering equity and leadership roles while minimizing payouts to passive investors. The team — not the IP — is the treasure.

What’s Driving the Trend?

A confluence of forces is fueling this surge:

• Labor Shortages: Despite economic fluctuations, high-skill labor remains in short supply — particularly in AI, data science, and digital transformation roles.
  
• Immigration Constraints: Stricter visa policies have made it harder to source overseas talent, increasing the value of domestic teams.
  
• AI Arms Race: Big Tech and mid-tier software firms alike are racing to acquire foundational AI talent, even if it means buying startups with limited commercial traction.
  
• Private Equity Pressure: PE firms looking for platform growth see acqui-hires as a shortcut to talent density, especially in fragmented industries like IT services and healthcare.

The Outlook: More of the Same

Industry observers expect the pace of talent-focused M&A to accelerate in late 2025 and beyond. PwC’s most recent outlook indicates AI-related acqui-hires are becoming a strategic necessity for many companies. The PwC report found that workers with AI skills, such as machine learning and prompt engineering, command a 56% wage premium, up from 25% last year, suggesting high demand and potential scarcity.

As more startups reach the end of their runway without clear paths to profitability, acqui-hires could become the dominant exit route — particularly in sectors where institutional knowledge is paramount.

The message from the front lines of M&A is clear: if you can’t hire them, buy them.

For a growing class of mid-sized firms, lower-market private equity buyers, and even old-school brands like Starbucks, the math is simple. Hiring a dozen top engineers one-by-one takes time and luck. Acquiring a startup that already has them? That takes capital — and a willingness to value human talent as the core asset it truly is.

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Aug. 2025

Note: This piece was written in June 2025 and includes trends and developments through mid-year.