Europe's Tech Companies Continue "Outflow": $1.4 Trillion in Market Value Lost Over 10 Years

A recent study shows that over the past decade, European tech companies have lost a total market value of up to €1.2 trillion (about $1.4 trillion) through overseas listings or acquisitions by foreign firms.

The study was conducted jointly by Swedish private equity firm EQT AB and consulting firm McKinsey. It estimates that between 2014 and 2025, the total value of European tech companies acquired by non-European firms and those conducting their initial public offerings (IPOs) abroad is approximately €700 billion. As of January this year, the overall market value of these companies has surged to about €1.2 trillion.

The research highlights an increasingly pressing issue for European policymakers and capital market experts: many “European homegrown champions,” including chip design company Arm and music streaming platform Spotify, are turning to the U.S. market to access deeper capital support.

Victor Englesson, head of EQT’s technology division, pointed out that this “outflow” has multiple impacts on the European economy: not only does it mean fewer jobs, but also less quantifiable losses—such as weakened domestic technological capabilities and the potential loss of future entrepreneurs.

Englesson stated, “When a European company chooses to list in the U.S., its development focus often shifts—and usually permanently. The choice of listing location may seem like a financial decision, but at its core, it’s about choosing the future growth environment for the company.”

In fact, European countries have long been aware of this issue. Market observers and regional officials have repeatedly emphasized the urgency of reforming Europe’s capital markets.

In January, IMF Managing Director Kristalina Georgieva called on European leaders to accelerate the construction of the Capital Markets Union, improve energy alliances, reduce cross-border labor mobility barriers, and increase investment in research and innovation.

Nicolai Tangen, CEO of Norway’s Norges Bank Investment Management (NBIM), recently warned that Europe must act quickly to achieve capital market integration. “In terms of capital markets, we really need to pick up the pace. Winners will take all. Capital always flows to the most liquid and highest-valued markets, so solving this is crucial.”

Europe’s Capital Markets Urgently Need Integration

However, EQT itself has previously sold some tech assets or arranged overseas listings. Last year, the firm sold AI startup Sana to U.S.-based Workday for $1.1 billion. Additionally, reports suggest EQT is considering listing cybersecurity insurer CFC in New York.

Björn Sibbern, CEO of SIX Group, which operates the Swiss stock exchange, said, “The U.S. has the right approach by viewing capital markets as the core channel for corporate financing, whereas Europe lags behind in this regard. Compared to the U.S., Europe needs to catch up.”

To reverse this trend, the EU is preparing a €5 billion “European Scale-up Fund” to support the development of quantum computing, artificial intelligence, and other deep tech fields.

Laura Fruehauf, a global transactions lawyer at Freshfields, said, “For Europe, continuously mobilizing more capital into domestic markets to stay competitive with the U.S. remains crucial. Especially in defense, AI, and broader deep tech sectors, the ‘European champion’ status itself could become an advantage over international competitors.”

However, signs of waning attractiveness in the U.S. market are emerging. For example, payment company SumUp is considering listing on European exchanges after previously planning an IPO in the U.S.; crypto broker Bitpanda has chosen Frankfurt as a potential listing location.

Additionally, European companies aiming to enter benchmark indices usually need to reach a certain size; if they list in New York, their U.S. operations must be large enough to attract local investors, or they risk becoming overlooked “marginal stocks.”

Sibbern noted, “Many European companies listed in the U.S. don’t perform ideally—whether in stock price or market attention. If their performance isn’t strong enough, they can easily get lost in the vast market.”