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Interesting timing: we have the same debate rising up in France with the acquisition of Medtech (Rosa medical robots) by Zimmer Biomet [1]. CEO and founder, Ber

Interesting timing: we have the same debate rising up in France with the acquisition of Medtech (Rosa medical robots) by Zimmer Biomet [1]. CEO and founder, Bertin Nahum, said he had to sell as he couldn't find the right funding in FR/EU. Real shame and also a sad day for France (med)tech [1]http://www.reuters.com/article/idUSFWN1A40EO http://www.reuters.com/article/idUSFWN1A40EO

demonshalo 10y ago
It's simple. Europe has no money. The middle class has no savings and the investment sector is far too regulated, confined and incapable of looking at a multi-year timescale.
- ProfChronos 10y ago
  "The middle class has no savings" => France saving ratio is 15% vs 5% in the US, so that's definitely not the point.
- toyg 10y ago
  The investment sector is simply too conservative, for historical and cultural reasons. Regulation is mostly an excuse, a fig leaf for a spiritually-bankrupt upper class.
  - Brakenshire 10y ago
    The English Upper Class does have a long and storied tradition of rent-seeking. If you can extract so much value out of something like housing, it's difficult to see why you would get involved in anything risky and technical.
    - roel_v 10y ago
      Why is real estate investing 'rent-seeking' and buying a tech company an 'investment'?
      - daemin 10y ago
        Because owning a piece of property and charging for it is just extracting value out of something static. If investing in a company building or producing something you're helping create value.
        DominikR 10y ago
        This would be the case only if the piece of property was always there and no one had to build and maintain it. For houses this is not the case. You actually have to produce houses and you have to constantly work on them so they don't collapse after some time.
        daemin 10y ago
        Yes, the property has to be maintained, but generally the cost and effort of doing that is minimal, and the usual things that break need to be fixed by the person living there, not the landlord.
        skewart 10y ago
        I think you might be comparing apples and oranges when comparing investing in a company and investing in real estate. There are different ways to invest in a company and different ways to invest in real estate. Investing in a company to help fuel its growth, like VCs do, is analogous to investing in a new development project. There are lots of firms that provide equity investment to developers for new construction. Much like VCs these firms are interested in helping to create something new to meet market demands. Also like VCs they are typically looking for an exit event, where they benefit from the sale of the recently developed property. The tech analogue for being a landlord - holding on to a stable asset and maintaining it - is holding on to an already profitable business and just maintaining it. For example, there are lots of SaaS businesses that have a decent number of customers and the owners are happy to just do the minimum needed to maintain the code and handle customer service requests. You can buy and sell these businesses as an investor much like income-oriented real estate investors buy and sell fully-leased apartment and office buildings. These investors are not helping to create something new in a direct way. However, those income-oriented investors do create a market for stable assets, be it a Midtown Manhattan office building or shares of GE. They aren't directly investing in growth, but they are providing the incentive for growth. After all, while an early stage growth investor might be happy to know that they can sell their stake to another growth investor, as a company gets bigger and bigger its room for growth tends to diminish, and growth investors become less interested in buying it. But the market for its shares doesn't disappear. That's because there are investors looking for stable cash flow, even if it's from a static asset - be it an apartment building from the 1970s or Oracle.
  - B1FF_PSUVM 10y ago
    They're sticking the money into tourism and luxury real estate. Something to do with the southern side of the Mediterranean being ... uh ... in worse shape safety-wise than the northern. So far.
- ricksplat 10y ago
  Too much savings is the problem, and no political will to introduce policies to get it moving again. Austerity kills spending.
  - kriro 10y ago
    How is this a problem? You don't save to hoard, you save to use that money later. Delaying the urge to consume in favor of investment is very much correlated to the growth of an economy (afaik, not an economist but a somewhat interested layperson).
    - toyg 10y ago
      No, these savings are just offsetting shrinking retirement and welfare provisions from the State. They do very little for investment (pension funds are naturally conservative) and nothing for immediate consumption, grinding the overall system slowly to a halt. Japan historically has a similar problem due to cultural elements, Europe is getting there because of prolonged austerity "reforms".
      - derriz 10y ago
        Where do you imagine the saved money goes? In a modern economy "savings" equals investment. Even using a bank deposit account transforms one persons savings into another's business loan or mortgage. This seems to be a widely held misconception - that savings are economically inert - a bit like a squirrel's nut hoard.
        ricksplat 10y ago
        > In a modern economy "savings" equals investment This, is a widely held misconception. A bank is no longer allowed to re-invest more than a small proportion of it's customers' savings. https://en.wikipedia.org/wiki/Fractional-reserve_banking#Reserve_requirements https://en.wikipedia.org/wiki/Fractional-reserve_banking#Res...
        xenadu02 10y ago
- kalleboo 10y ago
  > It's simple. Europe has no money. And stagflation Japan is doing great? I think SoftBank/Masayoshi Son is enough of an outlier that you can't make any extrapolations from this investment. This is the guy who was crazy enough to buy Sprint
  - Symmetry 10y ago
    Stagflation? http://www.tradingeconomics.com/japan/inflation-cpi http://www.tradingeconomics.com/japan/inflation-cpi Japan's inflation has been hovering around 0% for a decade. Unemployment is low too. The problem is a shrinking working population and low productivity growth.

demonshalo 10y ago

It's simple. Europe has no money. The middle class has no savings and the investment sector is far too regulated, confined and incapable of looking at a multi-year timescale.

ProfChronos 10y ago
"The middle class has no savings" => France saving ratio is 15% vs 5% in the US, so that's definitely not the point.
toyg 10y ago
The investment sector is simply too conservative, for historical and cultural reasons. Regulation is mostly an excuse, a fig leaf for a spiritually-bankrupt upper class.
- Brakenshire 10y ago
  The English Upper Class does have a long and storied tradition of rent-seeking. If you can extract so much value out of something like housing, it's difficult to see why you would get involved in anything risky and technical.
  - roel_v 10y ago
    Why is real estate investing 'rent-seeking' and buying a tech company an 'investment'?
    - daemin 10y ago
      Because owning a piece of property and charging for it is just extracting value out of something static. If investing in a company building or producing something you're helping create value.
      - DominikR 10y ago
        This would be the case only if the piece of property was always there and no one had to build and maintain it. For houses this is not the case. You actually have to produce houses and you have to constantly work on them so they don't collapse after some time.
        daemin 10y ago
        Yes, the property has to be maintained, but generally the cost and effort of doing that is minimal, and the usual things that break need to be fixed by the person living there, not the landlord.
        skewart 10y ago
        I think you might be comparing apples and oranges when comparing investing in a company and investing in real estate. There are different ways to invest in a company and different ways to invest in real estate. Investing in a company to help fuel its growth, like VCs do, is analogous to investing in a new development project. There are lots of firms that provide equity investment to developers for new construction. Much like VCs these firms are interested in helping to create something new to meet market demands. Also like VCs they are typically looking for an exit event, where they benefit from the sale of the recently developed property. The tech analogue for being a landlord - holding on to a stable asset and maintaining it - is holding on to an already profitable business and just maintaining it. For example, there are lots of SaaS businesses that have a decent number of customers and the owners are happy to just do the minimum needed to maintain the code and handle customer service requests. You can buy and sell these businesses as an investor much like income-oriented real estate investors buy and sell fully-leased apartment and office buildings. These investors are not helping to create something new in a direct way. However, those income-oriented investors do create a market for stable assets, be it a Midtown Manhattan office building or shares of GE. They aren't directly investing in growth, but they are providing the incentive for growth. After all, while an early stage growth investor might be happy to know that they can sell their stake to another growth investor, as a company gets bigger and bigger its room for growth tends to diminish, and growth investors become less interested in buying it. But the market for its shares doesn't disappear. That's because there are investors looking for stable cash flow, even if it's from a static asset - be it an apartment building from the 1970s or Oracle.
- B1FF_PSUVM 10y ago
  They're sticking the money into tourism and luxury real estate. Something to do with the southern side of the Mediterranean being ... uh ... in worse shape safety-wise than the northern. So far.
ricksplat 10y ago
Too much savings is the problem, and no political will to introduce policies to get it moving again. Austerity kills spending.
- kriro 10y ago
  How is this a problem? You don't save to hoard, you save to use that money later. Delaying the urge to consume in favor of investment is very much correlated to the growth of an economy (afaik, not an economist but a somewhat interested layperson).
  - toyg 10y ago
    No, these savings are just offsetting shrinking retirement and welfare provisions from the State. They do very little for investment (pension funds are naturally conservative) and nothing for immediate consumption, grinding the overall system slowly to a halt. Japan historically has a similar problem due to cultural elements, Europe is getting there because of prolonged austerity "reforms".
    - derriz 10y ago
      Where do you imagine the saved money goes? In a modern economy "savings" equals investment. Even using a bank deposit account transforms one persons savings into another's business loan or mortgage. This seems to be a widely held misconception - that savings are economically inert - a bit like a squirrel's nut hoard.
      - ricksplat 10y ago
        > In a modern economy "savings" equals investment This, is a widely held misconception. A bank is no longer allowed to re-invest more than a small proportion of it's customers' savings. https://en.wikipedia.org/wiki/Fractional-reserve_banking#Reserve_requirements https://en.wikipedia.org/wiki/Fractional-reserve_banking#Res...
      - xenadu02 10y ago
kalleboo 10y ago
> It's simple. Europe has no money. And stagflation Japan is doing great? I think SoftBank/Masayoshi Son is enough of an outlier that you can't make any extrapolations from this investment. This is the guy who was crazy enough to buy Sprint
- Symmetry 10y ago
  Stagflation? http://www.tradingeconomics.com/japan/inflation-cpi http://www.tradingeconomics.com/japan/inflation-cpi Japan's inflation has been hovering around 0% for a decade. Unemployment is low too. The problem is a shrinking working population and low productivity growth.