Rarely has a holiday been celebrated in the Netherlands so exuberantly and business became so quiet as in the summer of 2022. Despite the great fear of a recession and all the unrest in the world, the Netherlands collectively closed the Covid-19 period (for now) by taking an extended holiday.
While it was extremely quiet this summer, No Monkey Business – and many other companies – is now insanely busy. People are buzzing with ideas, and everything needs to be set in motion right now.
As far as I can see, it stays with technology companies too business as usual. What I mean by that: in the United States there is remediation left and right. For example, social media company Snap has 20 percent of its staff. Streaming giant Netflix is also cutting jobs.
But first, those restructurings are partly the result of a huge rush on staff by the same tech companies during Covid-19, when they huge growth spurt went through.
Secondly, the Netherlands is not the United States. The economic waves are generally less violent here. Specifically for tech companies: barring exceptions, tech companies are prospering and there is growth. Rather than firing employees, Dutch tech entrepreneurs are anxious to hold on to staff.
A similar story applies to/in our own business, guiding tech companies to the next phase via a Dream Exit. in various company sales processes we see valuations of about 14 to 16 times the EBITDA (earnings before tax and exceptional items). That is slightly less than pre-corona (or also in the corona time for specific companies), but still ambitious. On average, a so-called multiple of about 6 times EBITDA applies in the Netherlands.
This observation does not stand alone. I would like to devote my next blog to the growing spectrum of acquisition and merger strategies in which tech companies become involved. For now I would like to point out an interesting number: 20 billion dollars (20.2 billion euros).
That's the amount that tech giant Adobe pays for Figma, a software house that makes collaboration in the field of design easy. That 20 billion roughly means a multiple of 100 times the turnover. For the vast majority of companies, that is an unattainable multiple – for a number of reasons. But it is clear: and whether that tech with future potential still in demand is!