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The Research
The global tech industry sits on more cash than any other industry
Total global cash holdings of all publicly-listed companies ($T) by industry
Non-tech companies, however, still control four out of every five dollars sat on publicly-listed balance sheets
- 80%
- share of total global cash holdings that are held by non-tech companies
While Europe controls a tiny share of cash held by public tech companies, it is the largest holder of non-tech cash globally, equating to $1.5 trillion
Share of total global cash holdings of public companies by type and region
European non-tech corporates sit on more cash than those from other regions
- 23%
- Europe's share of the global total of $6T in cash held on the balance sheets of all non-tech publicly-listed companies (excluding companies in the financials sectors)
Non-tech companies have made a record number of investments into European tech companies in 2017 and acquired ~100 tech companies since 2016
Investments and M&A activity of non-tech corporates involving European tech companies
European non-tech corporates have made a number of significant acquisitions - in some cases for $100Ms - of tech companies in 2017
Selected acquisitions of tech companies by non-tech companies
| Target | Acquirer | Date |
|---|---|---|
| Argus Cyber Security | Continental | Nov 2017 |
| August Home | Assa Abloy | Oct 2017 |
| TaskRabbit | Ikea | Oct 2017 |
| Flinc | Daimler | Sep 2017 |
| Luxe | Volvo | Sep 2017 |
| TASS | Siemens | Aug 2017 |
| Squarebreak | Accor Hotels | Jul 2017 |
| Movu | Baloise | Jun 2017 |
| Compte Nickel | BNP Paribas | Apr 2017 |
| Clicars | PSA Group | Apr 2017 |
One interesting question - most countries have a tax credit for R&D for large corporates, and that is mostly for the internal R&D work they do. Would we extend that tax credit to startup acquisitions because in a way, when you acquire a startup, you are supporting innovation? I do not make a big difference between spending your money on your own R&D versus spending your money to acquire a startup to innovate. In the end, it’s the same result. It would be interesting to extend those R&D tax credits to startup acquisitions as a way to boost the M&A market by corporates in Europe.
