Private equity could be gearing up to shop for vulnerable tech companies

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TechCrunch noted a week ago that an investor in Coupa was sounding the alarm that the software company might be sold to private equity for a price below what the money manager felt was fair. The plea went unanswered, with Coupa selling for a discount to what the investor had demanded as a minimum, we reported this morning.

That the deal happened so quickly after the warning is not surprising. The investor in question wouldn’t have tried to make unseemly public noise unless something was imminent. That the deal got done at the price it did, however, is notable. How come? Because private equity has more money than god and tech is cheaper than it has been in ages.

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The combination, in light of the Coupa sale, makes us wonder if tech is about to discover itself amid a fire sale — a situation where the balance of power is not in its hands. This could apply to public tech companies and those that have yet to pull the trigger on an IPO for one reason or another. Neither cohort is in great valuations shape, making them similarly vulnerable.

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