The DACH Tech Scene in 4 Deals
The DACH region comprises Germany (D), Austria (A) and Switzerland (CH) - in other words, the German-speaking heartland of Europe. Home to well over 100 million people, the DACH region is also where you'll find a thriving tech ecosystem, featuring both legacy players and a rich variety of exciting startups.
With major companies such as Microsoft, Oracle, and Siemens investing heavily here in recent years, more and more attention is being given to a region that's often been overshadowed by headline-hogging tech hubs like London and Silicon Valley.
While VC funding in the DACH region dipped last year in line with global downward trends, 2022 also saw the emergence of a new crop of DACH unicorns, including Grover (an online marketplace for refurbished tech) and Choco (a food-ordering platform for the restaurant industry). We also saw the emergence of exciting new VC funds, including Europe’s first healthtech VC to be set up by an exited healthtech founder (namely, YZR Capital, launched by Teleclinic founder Reinhard Meier).
Anyone interested in the DACH tech sector – whether you’re founder already based in the region and looking to exit, or looking to expand into the market – should register to attend our two upcoming DACH-focused events. In partnership with legal experts from law firm Osborne Clark, we’ll be revealing the latest tech M&A valuation trends, discussing notable deals, and talking you through how to prepare for an M&A transaction.
Our first briefing takes place in Hamburg on 28 February (register here) while the second will be in Cologne on 28 March (register here). In the meantime, let’s take a look at some of the most significant M&A deals to have taken place in the DACH region in recent times.
Kites and Zoom
With its user base having exploded during the pandemic, teleconferencing company Zoom was well placed to make acquisitions in 2021. That summer, it snapped up Kites (short for Karlsruhe Information Technology Solutions), a startup focused on real-time machine translation solutions.
The move was made in recognition of how language barriers can be a serious hindrance when communicating through tools like Zoom. As the teleconferencing giant put it in a statement on the deal (made for an undisclosed sum), acquiring Kites “will help Zoom’s engineering team advance the field of [machine translation] to improve meeting productivity and efficiency by providing multilanguage translation capabilities for Zoom users.”
Findologic and Nosto
We all know by now that AI will be on everybody’s lips in 2023. This is the year in which the startling, world-changing potential of tools like ChatGPT will be felt across all industries, in all parts of the world. We’re also expecting to see lots of fundraises and takeovers in this space, with one early example being the acquisition of Austria-based product discovery platform Findologic.
Purchased by Finnish e-commerce firm Nosto for an undisclosed sum, Findologic aims to boost conversion rates for online retailers by applying its AI tools to every stage of the search and navigation journey. Its platform provides bespoke product recommendations based on behavioural data, optimising the shopping process and making it easier to cross-sell products and services. The acquisition is a reminder that DACH isn’t simply a euphemism for “Germany”, with plenty of innovation happening in the “A” and “CH” parts of the region. And, speaking of, “CH”…
Imburse and Duck Creek Technologies
Switzerland got off to a flying start in 2023, M&A-wise, with the announcement in early January that SaaS payment solutions firm Imburse was being acquired by Duck Creek Technologies, a provider of system solutions for the insurance industry.
Companies like Imburse have been benefitting from the fact that the DACH region is actually the world’s second largest market for SaaS solutions, with only the US yielding more revenues for SaaS providers. Imburse itself specialises in payment solutions for insurers, allowing organisations – even those with limited IT infrastructures – to easily connect with global payments networks and optimise payouts and collections. The acquisition is just the latest in a series of milestones for the company, which was named one of the TOP 100 Swiss Startups in both 2021 and 2022, and has raised millions in funding along the way.
Back and Personio
Acquirer appetite for HRTech firms has surged in recent times (see our newest report on the industry here), and one beneficiary of this interest was German company Back. Purchased last year by HR software firm Personio, Back’s software tools empower clients to process employee requests, provide automated responses to common questions, deal with errors (such as payslip mistakes) and optimise knowledge management through popular platforms like Microsoft Teams and Slack.
According to the co-founder and CEO of Personio, Back was identified as a great fit because “our customers will benefit from a one-stop shop for employee requests”. And also because the Back team will help Personio develop its capabilities in what it calls “People Workflow Automation”, enabling the HR teams of its SME clients to connect tools and marshal data in an efficient, holistic way. The acquisition led to Back being fully folded into Personio, with Back’s co-founder being made the new Head of Product, Workflows and Integrations at Personio.
These cases are just the tip of the iceberg when it comes to major deal activity in the DACH region. For a deeper dive into exactly what investors and acquirers are looking for in Germany, Austria and Switzerland, and how you and your business can benefit, be sure to come to our imminent briefings in Germany.
Register to attend our Hamburg event on 28 February here.
Register to attend our Cologne event on 28 March here.