No 2024/11 Acqui-hiring and deep-tech ventures

Evidence from Sweden

Abstract

Recently, acqui-hiring, which refers to the acquisitions driven by gaining access to target human capital, has emerged as a proliferating phenomenon in acquisitions of small technology firms. However, we still know little about this phenomenon, particularly outside the community of Silicon Valley. This study sheds new light on the nature of acqui-hiring by focusing on what drives acqui-hiring. Using a sample of 213 technological acquisitions of Swedish technology firms, our results show that firms tend to be acqui-hired when they are younger and when they are based on the development of deep tech, a group of emerging disruptive technologies, of which the technological base involves high levels of technological newness and complexity. The results show a support to our initial idea that acqui-hiring could be driven by the acquiring firm’s need to acquire complex knowledge and/or new capabilities that are embodied in target key employees or engineering teams. In addition, we develop a typology and identify four types of acqui-hiring. We use case illustrations of deep-tech acqui-hiring to demonstrate four differentiated acquisition strategies, including technology strengthening, product expansion, product experimentation and technology experimentation.