Tio Tech A is a Nasdaq listed blank check company, also known as a SPAC (Special Purpose Acquisition Corporation). The purpose of the company is to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
Our company is led by a highly experienced team of entrepreneurs, executives and investment professionals with successful track-record in founding and operating companies with multi-billion-dollar valuations, as well as successful investment and transactional execution experience. For more on our team of founders and board members, click here.
Our management team, directors and advisors bring together strong founder-led operators, with experience of building some of the most iconic decacorns (i.e. companies with a valuation in excess of $10 billion) in Europe, including successful stewardship of these entities in private and public markets. They are complemented with serial entrepreneurs and investors with deep and successful investment track records in several technology investments in Europe, with numerous successful exits and decades of work experience in the field, generating and access to European founders and institutional investors. We believe our combination of founder, operator, advisor and investor experience give us an advantage to attract, and help create value following the business combination for, our acquisition target:
Access. Our management team, directors and advisors are deeply embedded in the European technology landscape, each with more than ten years’ operating or professional experience. These individuals have a strong network in European technology, with numerous direct investments, several limited partnership investments in, and venture partner relationships with, leading European venture capital funds, deep roots in European founder and entrepreneur networks, and broad advisory relationships and experience across many technology verticals, including e-commerce, fintech, adtech, digital media and healthtech.
Operational advice. Our management team, directors and advisors have a demonstrated track record of building technology enabled companies. We believe that special purpose acquisition companies led by operators have a competitive advantage over purely investor-led special purpose acquisition companies, due to in-depth know-how of business fundamentals, industry expertise, long-term founder relationships and strategic vision pre- and post-business combination. One year after taking a target public, founder-led special purpose acquisition companies (i.e., those whose leadership has former C-suite operating experience as opposed to purely financial or investing experience) traded at about a 40% premium compared to other special purpose acquisition companies. Our management team, directors and advisors are able to leverage its experience of building decacorns with global presence and taking them public, such as HelloFresh, as well as the extensive professional network to recruit and use top talent to create competitive advantage and create a successful long-term partnership. •
Strategic advice and transaction experience. Our management team, directors and advisors also have a strong combined track record of operating, advising and investing into European technology companies, and M&A roll-ups to accelerate growth, given that our team has collectively supervised hundreds of investments and acquisitions, to bring differentiated perspectives for the Company and potential targets. Notable examples include HelloFresh’s acquisition of Factor75 and GreenChef in the US, Spark Networks’ acquisition of Zooks in the U.S., and advisory roles at Delivery Hero on many important strategic initiatives including corporate development strategy and M&A, integral in growing the company to be valued at more than $30 billion that it is today in terms of market capitalization.
Public market returns. Our management team, directors and advisors have served public and private boards of directors, across various technology sectors. They have successfully taken companies public, both in Europe and the U.S., and navigated complex governance challenges, creating value for public investors and contributing to their companies’ global success. In addition, Mr. Beckers, one of our advisors, has a demonstrated track record in public market investing.
Deep sector expertise. Our management team, directors and advisors have significant experience in consumer-oriented, internet enabled business models and more specifically in our focus sectors. Our depth of knowledge within our focus sectors will enable us to not only evaluate merger targets, but to support them long-term in their strategic initiatives and business plans, so that they can continue to strengthen their competitive advantages, innovate and lead within their sector.
While we may pursue an acquisition opportunity in any industry or geographic region, we currently intend to focus on technology-enabled businesses in Europe.
Technology continues to transform industries and the global economy at an accelerating rate, creating significant opportunities for investors positioned to capture them. Technology-enabled businesses continue to outperform in almost every sector globally. Technology companies also tend to have increasing returns to scale, implying that there is potential for growth for today’s public and private market technology leaders to build iconic companies in many sectors of the economy. The ongoing digital revolution has been reducing friction and transaction costs for years, further accentuated in recent times due to COVID-19, resulting in accelerated consumer and business digital adoption.
As a result, the technology companies in the S&P 500 outperformed the broader S&P 500 between 2010 and 2020 by 277% on a cumulative basis. Since market lows near the beginning of the pandemic lockdowns in March 2020, technology companies in the S&P 500 have outperformed the broader index by 21%, representing $7 trillion in market value, indicating the value that technology companies are bringing to the real-world economy.
There are a number of trends, particularly in Europe, which we believe will allow us to identify attractive target opportunities and provide unique post-combination value-creation. These trends include:
Private technology company landscape. The number of attractive private companies of scale has increased significantly, driven by a surge in non-traditional investor involvement in venture capital and the growing size of late-stage venture financing rounds. This has enabled private technology companies to stay private for longer—according to McKinsey, the average age of U.S. tech companies that went public in 1999 was four years, while that statistic had grown to 12 years by 2020, and in Europe today there are 17% fewer public companies as compared to 2000—creating a vast landscape of late-stage, highly-valued private technology companies that need to find liquidity for shareholders through public markets where private placements no longer suffice.
European technology landscape. The total estimated enterprise value of European technology companies founded after 2000 in the public and private markets has increased to almost $1 trillion, up five times from 2016, the majority of which remains in the private markets today, with 29 private unicorns added in 2020 alone. Such growth of European technology landscape has been driven by a 124% increase in capital invested over the last five years (compared to reduction in capital investment in US and Asia between 2018 and 2019), helping create a number of global champions from Europe, such as Adyen, Adevinta, Delivery Hero, HelloFresh, Spotify, UIPath, as well as a growing landscape of more than 150 unicorns. Amidst this favorable backdrop, Europe has been offering more attractive value opportunities compared to the US, according to Pitchbook data, translating into greater return opportunities for investors, as evidenced by the returns for venture capitalists in Europe outperforming their U.S. counterparts by 6.4% and 5.6% after 3 and 5 years respectively, according to Atomico. In public markets, the European high growth Tech Index has outperformed both the NASDAQ (+182 points) and the Euro Stoxx 50 (+286 points) over the past five years.
European Consumer-Oriented Internet technology. The European Union is one of the largest consumer markets, with a growing landscape of highly valued European consumer technology companies. There is over $100 billion of value in private unicorns in Europe, with marketplaces, fintech, digital media and e-commerce making up the majority of European unicorns. While digitization has been a consistent and secular theme, we believe COVID-19 has accelerated consumer digital adoption, leading to a long-lasting step-change uplift in demand. According to McKinsey, 75% of people using digital channels for the first time indicate that they will continue to use them when things return to “normal.”
Opportunity for a technology-focused SPAC. We believe that companies at a certain stage in their development, will see material benefits from being publicly-traded, including increasing brand and company awareness, developing a more liquid currency for both employee incentive options and acquisitions, diversifying funding sources and better access to capital. However, we believe, management distraction, a sub-optimal price discovery mechanism and the resultant longer-term aftermarket impact have discouraged private technology companies from going public.
Opportunity for European-focused SPAC. European companies typically have access to less growth capital options than their peers in the U.S., leaving founders and investors with increasingly difficult fundraising decisions. This is a major contributing factor to the prevalence of trade sales over initial public offerings as an exit channel in Europe, often leading to pre-mature value crystallization for investors, founders and employees. European companies face increased regulatory, investor base and public perception challenges when attempting to go public in the European Union. We believe that our European geographic focus will provide a competitive advantage because we believe a large set of technology-focused companies in Europe can be significantly value accretive as U.S. listed public companies with the right guidance and leadership. With so much capita tied up in illiquid private markets, we believe there will be significant interest from European founders and investors in these categories to engage with our team to achieve a U.S. public listing. We believe we can exploit the growing number of attractive opportunities that Europe presents by leveraging our existing business and investor network and unique local insights of our management team, which we believe gives us an advantage over outside investors and further confidence for potential targets.
We intend to focus on founder-led, late stage growth equity opportunities in the high-growth technology sector who are seeking a liquidity event through a public listing and that value operational and public market expertise. We intend to acquire target businesses in the technology-enabled sector that we believe have the following characteristics: