Acquisition is a common use of VC funding by startups. It perfectly fits the VC agenda which is to use funding to secure a competitive, ideally leading, position in the market.
M&A is a growth lever for startups, especially in a competitive market. Stripe bought Paystack. Databricks acquired Tecton, Neon, BladeBridge, Tabular, Arcion, MosaicML. Wiz bought Dazz, Gem Security, and Raftt. ServiceNow acquired Moveworks. Snowflake purchased Crunchy Data. CoreWeave agreed to buy Weights & Biases. Ripple acquired GTreasury. AlphaSense purchased Tegus. etc. etc.
That’s a gross over-simplification. M&A has been the modern way to grow for decades.