European Tech Firms Buck the Market with $500 Million in Deals
(Bloomberg) -- Europe’s tech companies announced nearly $500 million in deals on Monday as venture-capital backed firms defied the gloomy markets.
Lilium, an Uber-like service for private jets, closed a funding round of more than $240 million to continue development of its electric air taxis and to build manufacturing facilities, the Munich-based company said. The round was raised by existing investors, including Tencent Holdings Ltd.
Cazoo, a U.K.-based online car buying company also announced that it has raised 100 million pounds ($116 million) in a round led by DMG Ventures to “accelerate the U.K.’s shift to online car buying.”
Global Savings Group agreed to acquire iGraal, a French firm that gives customers cash-back rewards when they buy online, in a deal valued at 123.5 million ($131.8 million) euros in cash and shares.
Still, future investments might be harder to come by as the spread of the novel coronavirus pandemic takes a serious toll on the markets. Global stocks dropped on Monday after a weekend surge in the coronavirus death toll and a failure by U.S. Congress to agree on a $2 trillion stimulus plan.
Sequoia Capital -- the world’s largest venture-capital firm -- sent a note to its portfolio companies this month calling the virus the “black swan of 2020.” Private financing may “soften” to levels seen in the wake of the recessions in 2001 and 2009 and companies should consider spending less on things like marketing and headcount, the firm said in a letter published on Medium.
Cash has been pouring into venture capital over the past few years -- which saw firms take in more than $77 billion last year according to data from PitchBook -- as investors chased yields that eluded them in less risky investments and looked for a way to take part in the tech boom.
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