Research: 1.2 trillion euros lost over ten years, Europe's tech industry faces offshoring crisis

Ask AI: Why has Europe’s capital markets lagged the United States in attracting tech companies?

IT Home, March 25, reports: According to Bloomberg, a study shows that over the past decade, European tech companies with a total value of €1.2 trillion (IT Home note: at the current exchange rate, about 9.6 trillion yuan RMB) have either listed on overseas exchanges or ultimately ended up in the hands of foreign acquirers.

The study was conducted jointly by EQT AB, a Swedish private equity firm, and consulting firm McKinsey. It tracked technology company acquisition deals by non-European companies totaling about €700 billion from 2014 to 2025, as well as IPOs of European tech companies. As of this January, the valuations of these companies have surged to roughly €1.2 trillion.

The research highlights the seriousness of the issue, which has become a hot topic among European policymakers and capital market experts. Local leading companies such as chip design firm Arm and music streaming platform Spotify have all been turning toward the United States to tap into larger pools of funding. Victor Ingelslson, a partner at EQT and head of its early tech business, said that relocating businesses abroad would have an economic impact on Europe—losing not only jobs, but also harder-to-quantify losses, such as the loss of domestic technical expertise and the loss of future tech entrepreneurs.

“When a European company lists in the United States, its development focus shifts—often in a permanent way,” Ingelslson said. “The listing decision may look like a financial consideration, but in reality it concerns the company’s future growth foundation.”

EQT has previously sold or listed some of its technology assets overseas as well. Last year, the firm sold its AI startup Sana to Workday for $1.1 billion, and it is currently considering choosing New York as a potential listing location for cyber insurance company CFC.

Björn Sieberborn, CEO of SIX Group AG, the company that operates the Swiss stock exchange, said: “The United States has done one thing, and perhaps Europe has been lacking—that is, treating the capital markets as a core channel for corporate financing. The United States does better than Europe in this regard, and Europe needs to catch up.”

To curb this trend, the EU is preparing to set up a €5 billion (“European Scaling Fund”) to provide financing for local quantum computing, artificial intelligence, and other deep-tech companies. According to people familiar with the matter who told Bloomberg earlier this month, EQT is one of the few asset management firms on the shortlist of candidates for managing the fund.

Laura Freuhhauf, legal counsel for global transactions at the UK law firm Farrant & Partners, said: “Europe still needs to keep mobilizing more funds toward the market to ensure it can compete with the United States alongside. Especially in defense, artificial intelligence, and the broader deep-tech fields, having the label ‘European leading company’ can be seen as a major advantage compared with international competitors.”

There are already signs that the appeal of the U.S. market is weakening. Bloomberg reports that after payments company SumUp considered listing in the U.S., it is now planning an IPO on a European exchange; crypto broker Bitpanda has chosen Frankfurt as a potential listing location.

For a European company to enter a benchmark index, it needs to have sufficient scale. If it wants to attract attention from domestic investors in New York, it also needs to have a large enough business footprint in the United States; otherwise, its stock may face the risk of being ignored by investors.

Sieborn of the Swiss stock exchange group said: “Look at how many European companies that listed in the U.S. have performed—often their path hasn’t always been smooth. If results are poor, it’s all too easy to be forgotten in a huge market.”