MIke Lynch of Invoke Capital, one of the UK’s most high profile tech entrepreneurs says the £24bn takeover of ARM Holding by Japanese tech and investment giant Software is overall a positive move as it shows the UK can built world class high valuation companies. But, he says the politicians are being misleading when they say it is about inward investment to the UK.
How did you react when you heard?
Mike Lynch, Invoke Capital: "On the one hand, it is very good to see a UK company get to that size, it is a little more than half of Intel’s market cap, This proves the UK can punch above its weight. On the other hand a little sad to see one of our great giants being sold, But overall good to see that it was done once it reached such as size. Once the offer was made, no management could reject it."
What does it say about growing a technology giant in the UK?
"It says we can do it. The issue is if you look at the other side of the equation, once ARM leaves the FTSE100, who’s left? Sage, which is fine but where are the other big UK technology companies? It points to the London markets and the FTSE not reflecting the reality of the digtial advances in the real economy."
What does it say for UK tech sector growth?
Politicans saying this is an investment in Britain is spin and it is misleading. The money goes to the shareholders, many of which I believe are foreign and which may end up in Chilean mining companies. To say this is inward investment in the UK is spinning, it is not.
Overall the message it sends is positive. It proves we can built a $33bn company. We must ensure that UK companies don’t sell up too early. ARM is an example of what can happen when you built a UK company for the long term.
Mr Lynch’s Invoke Capital is the capital arm behind several UK start ups including Dark Trace and which was recently valued at over £400m.
