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# Tech Cos.
The rise of technology
Source: Capital IQ, Financial Times Global 500
1996 2001 2006 2011 2017
0 2 1 3 5
0
5
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
4
Number of years to become a billion dollar revenue company
$bn
5years
35 years
15 years
5 years
8 years
Disruption is increasing in velocity and magnitude
5
» Information
» Messaging
» Imaging
» Search
» Retailing
» Banking
» Entertainment
» Marketplaces
» Social networks
» Transportation
» Gaming
» Revolution
» Health
» Medicine
» Artificial intelligence
» 3D printing
» Currencies
» Energy
» Water
» Food
ARAB SPRING
SOLAR POWER
ENERGY STORAGE
CLEAN WATER
CRYPTOCURRENCY
AI MANUFACTURING
The low hanging fruits
Enabled by bandwidth
Enabled by smartphones
Taking care of basic needs
Enabled by Internet of Things
Steps of technology disruption
7
The increasingly crowded Unicorn club
Source: CBInsights – Private Unicorns since 2011
Date of $1bn Valuation
UNICORN
HUNTING PERMIT
MUST CHECK SPECIMEN FOR SLOWING GROWTH
RATES, WEAK FUNDAMENTALS, AND HIGH CASH BURNS
SEASON
START
2016
8
Unicorn hunting season – justified?
9
European Unicorns make money…
Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016
Note: CAGR is calculated based on data available, the amount of years taken into account varies across data set; (1) % of sample, sample includes 37 of the 47 companies; (2) company profitability based of EBITDA
» Unprofitable Unicorns
sacrifice profit for growth
» Average CAGR for
unprofitable Unicorns
141% vs 49% for
profitable Unicorns
» Unprofitable companies
are on average 4 years
younger
(2)
(2)
(2)
(2)(2)
(2)
(2)
60%of unicornsare profitable(1)
PROFITABLEUNICORNS
UNPROFITABLEUNICORNS
40%of unicorns
are unprofitable(1)
10
Unicorns are being built everywhere
Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016
» 10 new Unicorns spread across 7 different countries; US created 30
» Denmark and Switzerland created their first Unicorn
EUROPE US
SWEDEN
LUXEMBOURG
DENMARK
SWITZERLAND
ISRAEL
GERMANY
UK
30
10
11
Country
CumulativeValue
$39.6bn $31.1bn $20.8bn $4.7bn $7.2bn $3.4bn $9.3bn $8.0bn $4.0bn $2.3bn $1.6bn $1.1bn $1.1bn $1.0bn
No. ofUnicorns
18 7 6 4 3 3 2 2 1 1 1 1 1 1
LTMAdditions
2 1 2 1 0 2 0 0 0 0 0 1 1 1
Which country is the Unicorn champ?
Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016
12
12 $1bn tech businesses in the North
GP Bullhound Research – Northern Tech RevealedNote: Valuation based on press estimates, most valuable defined as Northern headquartered businesses with valuations above $0.5bn as of 27 March 2017*Indicates a private business
$8.6
$4.8
$2.4 $2.3 $1.9 $1.8
$1.5 $1.3 $1.1 $1.1 $1.0 $1.0 $0.9 $0.8 $0.8 $0.7 $0.6 $0.6 $0.5
$b
n
Our next challenge...
Cumulative value of European unicorns ($bn)
Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis.Note: valuations as of March 2017 25
736
408
116
6332 31 27
Apple Facebook Europe Uber The North Airbnb Snap
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