A new analysis reveals that European tech firms, worth a collective €1.2 trillion ($1.4 trillion), have either debuted on stock exchanges or been bought out by international entities in the last ten years.
A study, executed by Swedish investment group EQT AB in collaboration with consultancy McKinsey & Co., documented approximately €700 billion in transactions involving the acquisition of European businesses by foreign investors, as well as the initial public offerings of tech firm shares, between 2014 and 2025. As of January, the valuation of these entities had climbed to roughly €1.2 trillion.
These conclusions emphasize the magnitude of an issue that is becoming increasingly urgent for European regulators and financial market specialists, as regional frontrunners such as chip designer Arm Holdings Plc and Spotify Technologies SA consider the United States for more robust capital markets. This outflow has economic ramifications for Europe, ranging from employment reductions as enterprises relocate their growth hubs overseas, to less tangible impacts such as the depletion of domestic expertise and future tech innovators, according to Viktor Engelsson, partner and head of early-stage tech investments at EQT.
“When a European business lists in the U.S., the focal point shifts — often permanently,” he stated. “The listing decision may seem like a financial one, but it’s actually a choice about where your business will flourish.”
EQT has also previously divested or floated certain tech assets abroad. In the prior year, the firm sold AI startup Sana to Workday Inc. for $1.1 billion, and is also contemplating New York as a potential listing venue for cyber insurance provider CFC, Bloomberg News detailed.
“The US has accomplished what Europe may have overlooked – recognizing capital markets as a vital avenue for companies to fund their operations,” articulated Björn Sibbern, CEO of SIX Group AG, which manages the Swiss stock exchange. “The US has excelled in this area more than Europe, and Europe needs to bridge the gap.”
To counteract this pattern, the European Union is establishing a €5 billion Scale Europe Fund to support local projects in quantum computing, AI, and other cutting-edge technology sectors. EQT is among a number of asset managers chosen as potential administrators of the fund, sources informed Bloomberg earlier in the month.
“It will remain crucial for Europe to gather additional capital within its markets to guarantee competitiveness with its American counterparts,” emphasized Laura Fruehauf, an international transaction attorney at Freshfields. “Particularly in defense, AI, and deep-tech in general, European leadership status can be viewed as a competitive edge over global players.”
Indications suggest that the allure of US markets is diminishing. Payments provider SumUp is weighing an IPO on a European exchange after initially considering a US listing, and crypto broker Bitpanda has designated Frankfurt as a prospective market entry destination, Bloomberg reported.
European enterprises also require the necessary size to enter the major stock indexes, in addition to a sufficiently large US presence to capture the attention of investors in New York – otherwise, they risk being disregarded within the market. “If you assess the performance of numerous European firms that have become US-based, it’s not invariably a success story – both concerning share dynamics and the potential of becoming insignificant in the vast market if the company fails to demonstrate robust results,” stated Sibbern.
Source: Bloomberg