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Tech Unicorns Are Taking Over European Stock Markets

Tech

Unicorns are thriving in Europe, too, where over 30 companies qualify with a minimum $1-billion valuation, and this year they’re going IPO in record numbers—or, more to the point, in record dollar figures.  

According to Dealroom.co, Europe has already seen 27 IPOs this year, and while that’s less than half the number from last year, in dollar terms, it’s a blockbuster: While 57 IPOs raised $8.28 in Europe last year, this year so far 27 have raised a whopping $32.5 billion. 

An earlier Dealroom.co report from March listed European unicorns worth some 63 billion euros (around $72 billion).

(Click to enlarge)

In fact, Europe is outshining the U.S. in terms of tech IPOs, according to CNBC, citing a London Stock Exchange spokesman, with almost twice as many tech IPOs than the U.S. for 2016 and 2017. 

This year is looking even better and London is the poster child—still. The UK accounts for nearly 40 percent of Europe’s tech unicorns, including Farfetch, The Hut Group, Deliveroo, Transferwise and many others.

(Click to enlarge)

The regional comparison looks like this, according to Dealroom.co:

(Click to enlarge)

That makes the UK the biggest contributor to the tech ecosystem, and there’s no sign that it plans on giving up that throne anytime soon.

So what’s going public soon in Europe? It’s a long and mouthwatering list, particularly in the aftermath of the most recent IPO—Dutch Adyen. Related: The Wild Card In The New Eurozone Budget Agreement

Adyen went public on June 13 and saw its stock jump nearly percent over the initial share price. And it’s a big deal for this PayPal rival.

Adyen hit a market value of almost 14 billion euros (over $16 billion), or more than 12 times revenues and 170 times earnings, according to the Financial Times, which suggests this tech unicorn would be the envy even of Silicon Valley.

And Adyen wasn’t the only wild European tech unicorn story this year. Not even close.

In May we saw Czech cyber security company Avast go public on the London Stock Exchange in one of the five largest tech flotations on that exchange ever.

Also last month we saw PayPal acquire Swedish payments company iZettle right before the unicorn had planned to go public. On May 17, PayPal confirmed it would acquire iZettle for $2.2 billion—PayPal’s biggest acquisition to date.

The Swedish company has its own mobile-phone hardware for accepting credit card payments and also reaches into software and financing services for small business--and it will help California-based PayPal expand further in both Europe and Latin America.  

And the big one that really started off the year with a bang was Swedish music streamer Spotify, which listed in New York in April. Spotify now has a market cap of over $32 billion.

(Click to enlarge)

And now that Europe’s all grown up and it’s unicorns have sprouted Pegasus wings, everyone’s anticipating the next round of IPOs…

Related: Why Investors Must Look At Small-Cap Stocks

Alternative lender Funding Circle, out of the UK, is one that could IPO still this year. The company links individual investors and institutions with small businesses starving for credit and claims to have arranged some 3.4-billion pounds in loans since it launched in 2010. This week, Funding Circle moved to remove its loan book from its website even though access to this book was one of its founding fundamental principles. Now, word on the street is that this is a precursor to going public in a 2-billion-pound flotation (over $2.6 billion) this year.

This year could also see British fashion site Farfetch go public with a potential valuation of $6 billion, as well as Germany’s Marley Spoon, a meal-kit provider that is reportedly planning to list in Australia.

In the meantime, venture capital (VC) money is swarming around Europe—up 33 percent in 2017, from the previous year, according to Dealroom.co.

By Josh Owens for Safehaven.com 

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