#4 Swiss Exits: Analysis of buyers and their locations
As part of our Swiss exit infographic series, we’re highlighting some of the key takeaways from the 134 exits we tracked in the past several years. In case you missed our previous posts, have a look here:
#1 Introductory article on Swiss Exits Infographic
#2 Swiss cantons that produced most exits
#3 Top sectors and industries of exited startups
In this article, we will explore who the most active buyers of Swiss startups are and where they are from.
Overall Swiss buyers lead the pack, having acquired the most Swiss startups with 37% of the total. The U.S. is neck to neck with European buyers, having both acquired 29% each. Other international buyers, on the other hand, acquired a mere 7% of Swiss startups.
Swiss media companies are the biggest swallowers of Swiss startups
Strikingly, Swiss media companies emerged as the most active buyers of Swiss startups. From the total of 42 Swiss buyers, 14 were media companies, accounting for around 32% of the total. Tamedia was the most active buyer, having acquired four digital startups (mainly platforms and e-commerce) in the past five years. NZZ acquired three digital startups from 2014 to April 2017, whilst Ringier bought two e-commerce startups. In fact, all startups acquired by Swiss media companies were in the digital sector, primarily with verticals in e-commerce and platforms. In addition, as most Swiss media companies are based in Zurich, we noted that half of the startups (7) acquired by the total of 14 media companies were also located in Zurich.
Another active Swiss buyer was the telecom company Swisscom, having acquired three digital startups since 2013, which involved H-Net, a startup delivering SaaS, the crowd services platform Mila and the mobile/app Tweasy. Other Swiss buyers included pharma companies, which, although not as active as media companies, acquired five pharma/biotech startups in total. The world’s top pharmaceutical companies Roche and Novartis acquired one startup each, namely GlycArt and Thommen Medical respectively. Other Swiss pharma buyers included Cilag, Arpida and Therametrics.
Lack of transparency on prices paid by Swiss acquirers
What is the average purchase price for Swiss buyers? Generally, the price of acquiring the startup is rarely disclosed. In fact, only 5 out of the total 42 Swiss acquirers divulged prices. One purchase by Tamedia/Ringier was disclosed which involved the job platform jobs.ch for CHF 390 million. Another renowned Swiss buyer which revealed the purchase price was Roche, who acquired the biotech startup developing anticancer drugs, GlycArt for CHF 235 million. Interestingly enough, both cases involve prices that are significantly higher than the average acquisition price of Swiss startups, which according to our findings, is around CHF 156 million. Therefore, it is fair to assume that exits with undisclosed prices tend to have lower valuations. Our next blog post will dig further into the topic of lack of transparency on exit price of Swiss startups.
US buyers’ preference for EPFL and ETH spinoffs
Focusing on US buyers who also took a large bite of Swiss exits with 35 in total, some immediate trends can be seen. For instance, slightly less than half (17) of all the US acquired Swiss startups were ETH and EPFL spinoffs. In fact, reputable US companies like Google, Microsoft, Apple and Intel only acquired ETH and EPFL spinoffs. Google acquired an ETH spinoff (mobile app) one year after it was founded in 2013. Apple acquired a motion capture platform that was an EPFL spinoff, whilst Intel bought two Vaud-based, high-tech startups, both EPFL spinoffs.
Who were the most common US buyers? Our findings show that high-tech and IT companies are the most prominent US buyers having acquired 20 Swiss startups, which accounts for more than half of all US acquisitions. 10 high-tech US companies bought 7 high-tech Swiss startups which involved semiconductors, image sensors, lasers and drone technology as well as three digital startups, all SaaS. With regards to US IT companies, only digital startups were acquired, almost all B2B with a focus on SaaS.
US acquisitions are slightly more transparent that CH
Similar to Swiss buyers, very few US buyers disclosed the acquisition price for Swiss startups. However, out of all the buyers in our study, US acquirers revealed the exit price the most, with 11 out of the total 35 acquisitions. The largest purchase involved the reputable US pharma company Celegne, who bought the biotech startup EngMab for around CHF 604 million. This was the second largest acquisition of the total 134 Swiss exits that we tracked. Interestingly however, none of the US IT giants (Google, Microsoft, Apple and Intel) revealed the acquisition price.
Which buyer is likely to pay the most for Swiss startups? Based on the available data on disclosed prices, one cannot draw concrete conclusions that one buyer is paying significantly more than the other.
Germany takes the lead from the bundle of European buyers
Who were the most active buyers in Europe? Germany took the biggest slice with 18 acquisitions, and France followed with 7 acquisitions. UK buyers acquired three Swiss startups, all biotech/pharma.
Taking a closer look at German buyers, digital companies were the most active, acquiring 8 Swiss startups mainly in verticals such as e-commerce, platforms and SaaS. The German online food delivery platform Delivery Hero acquired the majority of the Bern-based startup foodarena.ch for an undisclosed amount. In fact, almost all German buyers did not disclose prices, aside from the IT company Xing, who purchased the employee referrals platform Buddy Broker (and their product eqipia) for USD $7.4 million. German IT companies were also active, buying a total of five Swiss startups. The German company SAP acquired two Swiss digital startups, namely the Zug-based startup Hybris delivering SaaS for web content management as well as the Luzern-based Secude, also focusing on SaaS. Merz Pharma bought two biotech/pharma startups, namely a spinoff from Lausanne University Clinic, Neocutis and the Geneva-based company, Anteis.
French buyers acquired five digital startups, two of which were ETH spinoffs and one EPFL, as well as two high-tech startups with verticals in electronic payment terminals and micro-sensors. The largest purchase out of all exits in our study involved the French buyer Astrog, who bought the digital startup Autoform for CHF 700 million. In general, we noted that higher transaction sizes are mostly disclosed, like this particular French acquisition.
Other international buyers make very little sound
Worldwide, Canada’s Stingray and Sandvine acquired two digital startups, namely iConcerts and TECLO respectively, both with undisclosed prices. Japan, China, Russia and South Africa acquired one Swiss startup each, none of whom disclosed the transaction sizes.
All in all, our results show that asides from local buyers, the U.S. and Germany are the most active consumers of Swiss startups. Some of the largest acquisitions have also involved American buyers, which goes to show that this international buyer is likely to continue playing an active role in the Swiss startup ecosystem.
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Originally published at www.investiere.ch on June 15, 2017.
