On April 9th, 2024, Bangladesh’s ShopUp and Saudi-based Sary announced a merger to form SILQ Group, a cross-regional B2B commerce titan targeting the Gulf and Asian markets. Backed by $110 million from Sanabil Investments (a Saudi PIF subsidiary) and Peter Thiel’s Valar Ventures, the deal underscores a growing trend: startups are increasingly turning to mergers to accelerate growth, enter new markets, and outpace rivals.
In the world of startups, mergers and acquisitions represent a critical growth strategy that can transform market dynamics overnight.
In 2021, Indonesian tech giants Gojek and Tokopedia merged to form GoTo Group, creating an $18 billion tech conglomerate spanning ride-hailing, e-commerce, food delivery, and financial services. This landmark merger created Indonesia’s largest tech company and demonstrated how domestic champions can join forces to build regional powerhouses.
Many of today’s most dominant tech companies are an outcome of mergers and acquisitions. Take Google as an example. Some of the most popular Google products including Gmail, YouTube, and Drive are results of acquisition. The same is true for Meta or Apple and many other tech giants of today.
In Bangladesh’s growing startup ecosystem, we have seen both small local questions such as Shikho acquiring Bohubrihi or Chaldal acquiring Cookups, and cross-border acquisitions such as GoZayaan acquiring Pakistani travel-tech company FindMyAdventure.
While mergers and acquisitions are two different things, more on that in a moment, the broader point here is that mergers and acquisitions play a critical role in the growth of companies.
But what is a merger? What drives such unions, how do mergers work, and how do they reshape industries?
What Is a Merger?
A merger occurs when two companies integrate their operations and combine their assets, talent, and market reach, forming a single new entity.
Unlike acquisitions, where one company purchases and absorbs another, mergers typically involve a more equal partnership between organizations that see mutual benefit in combining forces, though power dynamics often tilt behind the scenes.
For startups, mergers are a form of inorganic growth—a shortcut to scale that avoids the slow grind of organic expansion. In addition, mergers often serve distinct strategic purposes that differ from traditional corporate mergers, bringing together complementary technologies, market access, and talent pools that would take years to develop independently.
Why Startups Merge: The Strategic Calculus
Many different factors can influence a merger decision. As sectors mature, investors may push for consolidation to create stronger players capable of dominating fragmented markets. Combining operations can reduce duplicative costs and improve efficiency. Mergers can help startups reach critical mass faster, and compete more effectively against larger incumbents or new entrants. However, it is important to note that there can be more than what meets the eye. Companies can merge for many different reasons than ones stated in a public explanation.
Let’s take a deeper look into some of the more straightforward and well-documented factors that drive merger decisions
Market Expansion: Entering new geographies is costly and risky. SILQ, for instance, merges ShopUp’s dominance in emerging Asia with Sary’s Gulf footprint, creating instant cross-regional leverage.
Synergies: Combining operations can cut costs (shared tech, logistics) and boost revenue (cross-selling). A merged entity might also negotiate better terms with suppliers.
Resource Pooling: Startups often lack capital or expertise. SILQ’s $110 million war chest—and backers like Sanabil—signal investor confidence in the combined entity’s potential.
Competitive Edge: In fragmented sectors like B2B commerce, mergers reduce rivalry and create regional monopolies.
Survival: Struggling startups may merge to avoid collapse, though SILQ’s case is one of ambition, not desperation.
Valuation Surges: A merged entity can command higher valuations pre-IPO.
Many other less straightforward factors may influence a merger decision including the interest of different parties involved, pressures from stakeholders, and so on.
The Mechanics of Startup Mergers: How Mergers Work
When startups merge, several key processes unfold:
Negotiation: Founders and investors align on vision, equity splits, and leadership. Both companies must agree on their respective valuations to determine the ownership split in the combined entity. This often involves complex negotiations about the relative value each brings to the table.
Power balances matter: while ShopUp and Sary tout “equality,” one often leads post-merger governance.
Due Diligence: Legal, financial, and operational audits ensure compatibility.
Integration: Perhaps the hardest phase. Post-merger, combining teams, technologies, and business processes becomes the most critical challenge. Cultural clashes and operational harmonization make or break mergers.
Regulatory approval: Depending on the jurisdictions involved, mergers may require approval from competition authorities or other regulatory bodies.
Funding: Mergers attract investors seeking de-risked scale. SILQ’s backers bet that a unified platform can capture emerging market SMEs faster than rivals.
The ShopUp-Sary Merger: A Strategic Analysis
The formation of SILQ Group through the ShopUp-Sary merger represents a textbook example of complementary strategic assets creating a stronger whole.
By combining ShopUp’s footprint in South Asia with Sary’s presence in the Gulf region, SILQ instantly becomes a cross-regional platform spanning multiple high-growth markets.
Both companies operate B2B marketplaces with likely overlapping technological needs. Combining these assets creates efficiencies.
The substantial $110 million funding round led by Sanabil Investments and Peter Thiel’s Valar Ventures demonstrates how mergers can attract larger institutional investors interested in scale.
The merger pools leadership expertise and engineering talent, potentially accelerating product development and market expansion.
The Risks and Challenges
Mergers aren’t panaceas. Nearly 70% of mergers underperform due to cultural misalignment due to differing corporate philosophies, integration overload leading to poorly executed tech or process mergers, and regulatory hurdles.
When two different companies come together, the new entity faces many distinctive challenges. Running a standalone startup is already challenging; managing post-merger integration adds another layer of complexity that can distract from core business operations.
When startups with different investor bases merge, conflicts can arise over future direction, capital allocation, and exit timelines.
Endnote
The ShopUp-Sary merger indicates an emerging trend of cross-regional unions in emerging markets, allowing startups to rapidly scale across multiple geographies. This approach is particularly valuable in fragmented markets where local knowledge remains critical but technological infrastructure can be shared.
In the case of SILQ, it would not be unusual to expect the ShopUp-Sary merger to encourage more similar moves of cross-border collaboration connecting South Asia’s massive consumer markets with the capital-rich Gulf region. Bangladesh’s growing startup ecosystem, with its technological talent and large domestic market, makes it an attractive partner for Gulf-based platforms seeking expansion.
For investors in both regions, these mergers offer paths to create truly regional champions that can achieve the scale necessary to attract later-stage funding and eventually reach public markets.
For the newly formed SILQ Group, success will depend on how effectively it can integrate operations while leveraging its expanded geographic footprint and substantial new funding to capture the B2B commerce opportunity across its target markets.