Europe’s traditional incumbents are cash-rich and hungry

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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

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

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

Argus Cyber SecurityContinentalNov 2017
August HomeAssa AbloyOct 2017
TaskRabbitIkeaOct 2017
FlincDaimlerSep 2017
Luxe VolvoSep 2017
TASSSiemensAug 2017
SquarebreakAccor HotelsJul 2017
MovuBaloiseJun 2017
Compte NickelBNP ParibasApr 2017
ClicarsPSA GroupApr 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.

Romain Lavault

  • Partech Ventures