(March 25): European technology companies with a combined value of €1.2 trillion (US$1.4 trillion) have debuted on overseas exchanges or ended up in the hands of foreign buyers over the last decade, a study found.
Conducted by Swedish private equity group EQT AB in collaboration with consultancy McKinsey & Co, the study recorded about €700 billion of buyouts by non-European firms and initial public offerings (IPOs) of tech companies between 2014 and 2025. As of January, the value of those firms was estimated to have soared to about €1.2 trillion.
The research illustrates the scale of an issue that has becoming a hot topic for European policymakers and capital markets experts, as local champions like chipmaker Arm Holdings Plc and Spotify Technologies SA turn to the US for deeper pools of capital. The exodus has economic consequences for Europe in terms of lost job opportunities as companies shift their growth focuses elsewhere, as well as others that are harder to quantify — like the loss of local know-how and future tech founders, said Victor Englesson, partner and head of early-stage technology at EQT.
“When a European company lists in the US, the centre of gravity shifts — often permanently,” Englesson said. “The listing decision looks financial, but it is really a decision about where your company grows up.”
EQT has in the past sold or listed some tech assets overseas. Last year, the firm sold AI startup Sana to Workday Inc for US$1.1 billion, and EQT is considering New York as a possible listing venue for cyber insurer CFC, Bloomberg News has reported.
“What the US have done that Europe might have missed is to look at capital markets as a key way to fund companies,” Bjørn Sibbern, chief executive officer of SIX Group AG, which runs the Swiss stock exchange said. “The US have done a better job on that versus Europe, and Europe needs to catch up.”
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To combat the trend, the European Union is putting together a €5 billion Scale Europe Fund to finance local quantum computing, artificial intelligence (AI) and other deep-tech ventures. EQT is among a handful of asset managers shortlisted to run the fund, people familiar with the matter told Bloomberg earlier this month.
“It remains key for Europe to keep mobilising additional capital to its markets to ensure competitiveness with their US counterparts,” Laura Fruehauf, counsel in law firm Freshfields’s global transactions group, said. “Especially in defence, AI and deep tech more broadly, being branded a European champion can be seen as a competitive advantage over international players.”
There are signs that the attraction of US markets is fading. Payments group SumUp is exploring an IPO on a European exchange after previously considering a US listing, while cryptocurrency broker Bitpanda has chosen Frankfurt for a potential market debut, Bloomberg has reported.
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European companies also require scale to access benchmark indexes and a US business large enough to attract local interest in New York — or they risk becoming a stock overlooked by investors.
“If you look at the performance of many European companies that listed in US, it does not always end up on a great journey. In terms of performance, in terms of being a little bit forgotten in a big ocean if you do not perform well,” SIX Group’s Sibbern said.
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