Introduction: The Hidden Power Move in M&A Strategy
In the fast-paced world of startups and innovation, competition is often viewed as the ultimate motivator for progress. The more players in the game, the faster the innovation cycle moves. But beneath the surface, a darker strategy is reshaping how competition plays out—the “buy and bury” M&A strategy.
This isn’t your typical merger or acquisition. It’s not about synergy, team integration, or shared visions. Instead, it’s about eliminating a threat before it ever becomes one. For startups with potential, it means getting acquired only to be shut down or sidelined. For consumers and the market? It often means missed opportunities for better products and services.
What Is the “Buy and Bury” Strategy?
At its core, the buy and bury strategy involves acquiring a startup not to grow its products, but to bury them—either by shutting them down entirely, shelving their intellectual property, or quietly integrating their features into existing products without giving them room to flourish.
This form of defensive acquisition has become increasingly popular among dominant tech firms and industry incumbents. It’s a way to eliminate future rivals before they can challenge the status quo. Unlike typical M&A activity that’s fueled by a desire to grow and diversify, this strategy is laser-focused on protecting existing market share.
Why Tech Giants Are Embracing the Buy and Bury Strategy
Big Tech operates in what economists call winner-takes-most markets. The returns on scale, user base, and data networks mean that even a slight threat from an upstart can translate into billions in lost revenue over time.
So instead of waiting for a startup to grow into a formidable rival, why not buy them out early?
Here’s the logic that drives this trend:
- Eliminate competition early: It’s far cheaper to acquire a promising startup at $50 million than to lose billions battling them in a few years.
- Absorb the talent: Known as “acqui-hiring,” this allows companies to bring in top startup talent while quietly sunsetting their original product.
- Minimize disruption risk: Startups often innovate in areas incumbents ignore. Buying them removes that blind spot.
Famous Examples of the Buy and Bury Strategy
While companies rarely admit to using this tactic publicly, several acquisitions stand out as textbook cases of the buy and bury M&A strategy:
- Facebook and tbh (2017): The teen-focused anonymous messaging app had skyrocketing popularity. Months after acquisition, Facebook shut it down. The motive? Likely to eliminate a potential threat to Instagram’s teen engagement.
- Google and Meebo (2012): Meebo was a social messaging pioneer. After its acquisition, Google integrated parts of it into Google+—a platform that itself eventually failed. Meebo’s core offering was discontinued.
- Twitter and Vine (2012): Vine revolutionized short-form video and helped launch social media stars. Yet Twitter shut it down in 2016, just before TikTok rose to dominate the space. Many argue Twitter failed to invest in it deliberately.
- Meta and Moves (2014): Meta acquired Moves, a fitness-tracking app, only to shut it down four years later. The app’s technology was never integrated meaningfully into Meta’s ecosystem.
The Strategic Purpose Behind Buy-and-Bury Deals
These acquisitions are not flukes. They are part of a calculated defensive M&A strategy designed to pre-emptively reduce competition. Think of it like chess—taking out pieces before they even reach the center of the board.
While some buyouts are publicized as “innovation opportunities,” the outcomes often tell a different story:
- Products are discontinued
- Teams are reassigned
- Roadmaps are shelved
- Competition is quietly neutralized
The ultimate goal isn’t growth—it’s containment.
The Impact on the Startup Ecosystem
The startup acquisition landscape is shaped not just by dollars and valuations, but by psychology and incentives. When founders and investors know that the fastest path to an exit is building something that scares Big Tech just enough to get bought out—not enough to survive post-acquisition—the focus shifts.
Negative consequences include:
- Short-term thinking: Founders optimize for quick flips, not lasting value.
- Investor pressure: VCs push for exits, especially from known acquirers.
- Fewer breakthrough innovations: Startups avoid risky moonshots in favor of safe, acquirable features.
Instead of building the next Google, many are aiming to be Google’s next feature.
Regulatory Pushback: Are Killer Acquisitions Finally Being Challenged?
The term “killer acquisition” has entered the regulatory vocabulary. Governments are beginning to see how defensive M&A deals can stifle competition and innovation.
Notable developments:
- The FTC and DOJ in the U.S. have announced increased scrutiny of acquisitions that eliminate future competition, even if the startup has minimal revenue at the time of sale.
- The UK’s Competition and Markets Authority (CMA) has blocked multiple deals based on future competition threats.
- In Europe, the Digital Markets Act (DMA) and other antitrust tools aim to limit gatekeeper power in tech.
Retroactive scrutiny is also gaining traction. Facebook’s acquisitions of Instagram and WhatsApp are now seen as potentially anticompetitive—even though they were approved at the time.
What Startup Founders Can Do to Avoid Being Buried
If you’re building a startup that’s gaining momentum, it’s vital to understand your options and risks. Defensive acquisitions often come with attractive price tags—but they can also derail your vision.
Here are some strategies to protect your mission:
- Build with defensibility in mind: Focus on network effects, data moats, and brand loyalty.
- Avoid single acquirer dependence: Diversify your potential exit paths, including IPOs, private equity, or independent scaling.
- Vet acquisition intent: Ask acquirers about product roadmaps, team autonomy, and investment commitments.
- Choose values-aligned investors: Work with backers who support long-term impact over quick exits.
- Retain control: Maintain founder veto rights or board influence where possible to protect your startup’s future.
Are All Buyouts Bad?
Not all acquisitions are inherently negative. Some help startups scale faster, reach new audiences, or benefit from global infrastructure. The key distinction lies in intent.
A strategic acquisition is about growth, synergy, and innovation. A buy and bury acquisition is about removal, containment, and risk avoidance.
Knowing the difference—and acting accordingly—can define the legacy of your startup.
FAQ: Buy and Bury M&A Strategy
What is the buy and bury strategy in M&A?
It’s when a dominant company acquires a startup not to grow it, but to eliminate it as a future threat—either by shutting it down or absorbing its IP.
Why do tech giants use the buy and bury strategy?
To maintain market dominance, minimize disruption risk, and prevent smaller players from gaining traction in adjacent or emerging markets.
Are buy and bury acquisitions legal?
They are currently legal but under increased scrutiny from antitrust regulators in the U.S., EU, and UK. Authorities are assessing whether they reduce competition unfairly.
What can founders do to avoid being buried?
Focus on building long-term value, develop strategic defensibility, and partner with acquirers and investors who align with your mission—not just your valuation.
What are killer acquisitions?
“Killer acquisitions” are a form of buy-and-bury strategy, where companies acquire and shut down nascent competitors before they can grow into meaningful rivals.
Final Thoughts: Are You Building a Legacy or an Exit?
M&A doesn’t have to be the end of your story—it can be the next chapter. But founders, investors, and regulators must stay vigilant. When acquisition becomes a tool of suppression rather than progress, the entire innovation ecosystem suffers.
The real question for startup leaders isn’t whether you’ll be acquired—but why.
Are you building something that changes the world—or just something that makes it easier for someone else to keep their power?
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