"2016 will be looked on as the year the European tech industry truly came of age; poignantly, in a year when the whole European experiment has been called into question," claims partner Victor Basta.
Magister says it can also see a new wave of $5billion companies emerging in Europe, underpinned by comparatively strong growth and revenue performance by European ‘unicorns’ and by a climate of innovation in some of the hottest technology sectors.
According to Magister, this year’s six blockbuster are NXP’s sale to Qualcomm, Softbank’s purchase of ARM, Tencent’s acquisition of Nordic gaming company Supercell, Activision’s purchase of Candy Crush parent King, and the successful IPOs of Markit and Worldpay.
Magister claims the only other European tech companies achieving similar valuations since 2010 have been Skype, Autonomy, Nokia’s handset business and Zalando. It says that not only has the quantity of blockbuster deals increased in 2016, but adds that quality has also improved dramatically. Whereas it says Microsoft’s purchase of Nokia mobile was a ‘distress sale’, the acquisitions of ARM, King and NXP are purchases of leading companies with huge strategic potential.
Basta noted: "2016 has been an unprecedented year for European tech. We have seen a Nordic company, Supercell, founded barely six years ago attract $9bn from one of Asia’s internet giants. And one of the pillars of the mobile revolution, ARM, has grown to a $35bn acquisition by Softbank in less than 20 years.
"The exponential growth in value associated with Silicon Valley is no longer confined to Pacific Time Zone. Entrepreneurs in Europe now have home-grown models of how to create, build and scale companies of huge value without ever leaving the European continent."
Basta believes that, rather than companies without much revenue being hyped into valuations of hundreds of millions, even billions, of dollars, there is far more focus in Europe on the fundamentals. "This makes European companies more attractive targets for large profit-driven Asian investors and strategic buyers – which we believe is the next wave."
