The presence of tech giants in Europe is changing the dynamics of the region's talent pool

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In last year's report, we highlighted 53 acquisitions made since 2011 by the top 5 largest US tech companies. Since then, they've made 10 further acquisitions in Europe

Acquisitions of European deep tech companies by US tech giants since December 2016

TargetLocationAcquirorDate announcedTotal funding prior to exit
RegaindFranceAppleSep 2017$0.5M
AIMatterBelarusAlphabetAug 2017Undisclosed
FayteqGermanyFacebookAug 2017Undisclosed
GameSparksIrelandAmazonJul 2017Undisclosed
SensoMotoric InstrumentsGermanyAppleJun 2017Undisclosed
BedditFinlandAppleMay 2017$4.0M
Open Build ServiceGermanyMicrosoftApr 2017Undisclosed
Donya LabsSwedenMicrosoftJan 2017$1.5M
Limes AudioSwedenAlphabetJan 2017$4.6M
indoor.ioFinlandAppleDec 2016Undisclosed

We also highlighted how large global tech companies are expanding their presence in Europe through large - and fast-growing - engineering centres to tap into the local talent pools. This is having an inflationary effect on salary levels

Median software engineer salary ($ per year) in selection European cities

The expansion of global tech giants in European tech hubs is forcing local entrepreneurs to up their game in how they attract and retain talent

higher average salaries are offered by Facebook ($87k) or Google ($83k) to software engineers compared to the market average in London ($55K), according to Glassdoor

There’s a lot more competition for talent both from established tech giants and new companies starting up across Europe. European startups need to treat finding, growing and keeping talent just like they would customer acquisition or product development: have it as a key metric on the management dashboard and see it not just headcount but pipeline, attrition, development programmes and succession planning. It’s up to leaders to ensure their teams are diverse and there are enough highly capable managers to keep them engaged. Digital talent, particularly the top people, has an ever growing number of options in Europe and choose where and who they want to work for. If founders do not prioritise this from the outset, talent will go elsewhere.

Dan Hynes

  • Atomico

The huge gap between software engineer salaries will see founders adopt different strategies to attract and retain talent, including setting up satellite offices to tap engineering pools in additional cities to their HQ. Unsurprisingly, founders report that finding software engineering talent is their biggest hiring challenge. It's also noteworthy that the rise of AI is driving an increasing battle for data science talent.

In which one area does your company have the most difficulty recruiting talent?

There’s never been a better time to be a European angel investor. We’re now witnessing a whole new generation of companies being born from alumni of previous European scale-ups and other tech giants based in the region. With the advantage of having been through the pain, failures and successes of building a company before, Europe has never had such an exciting crop of early-stage startups

Neil Murray

  • The Nordic Web

But while the presence of big tech companies forces founders to up their game on the talent side, it's clear that the presence of these tech giants has a hugely positive effect. Their alumni are prolific at founding companies in the region.

Number of European companies founded by alumni of major tech companies