The EDA market continues to consolidate. At this year’s 2019 Design Automation Conference (DAC), Rich Valera from Needham and Company noted that since the collapse of the tech bubble in the early 2000’s, the EDA market has been all about consolidation.
“Many larger scale private companies, including multiple “near IPO’s” – e.g., Denali, Tensilica, Apache, and Spyglass (Atrenta), - have been bought before going public in the last 15+ years,” explained Valera. “It goes without saying that the EDA industry has become very concentrated, one could argue an oligopoly, with most of the revenue driven by 3 major companies.”
The above graphic does not include many of the more recent consolidations:
Cadence acquisition of AWR from National InstrumentsInphi Corp acquired the majority of eSiliconSynopsys acquired DINI Group, QTronic GmbH and certain assets of eSiliconDassault Systemes acquisition of CST
The number of private EDA startup company exits through acquisitions or going public (IPOs) has been declining, which is probably attributed to fewer companies being formed. Additionally, the time to exit for startup EDA companies has generally been well over 10 years. This is a long time period for most startups and their investors, which may explain the modest amount of venture capital funding flowing into EDA.