Tech IPOs like DoorDash, Airbnb, Snowflake, Palantir, Unity Software and Lemonade have astounded people. To many it feels like 1999 all over again. Prices are indeed stretched for perfection, but they are also based on ultra-low interest rates that could go negative given the deflationary effect of technology, at just the time when governments need inflation. Hence, the future cash flows of hyper-growth tech companies are worth a lot more today on a present value basis. However, another factor is driving these valuations - our entire world is "going tech", going digital, in every industry. Soon there will be little distinction between offline and online. More traditional companies, such as Germany-based Oetker Group, are starting to understand that their legacy will depend on technology, and they are taking action. They are making strategic acquisitions of technology-based companies - "techquisitions." In this post I discuss Oetker Group's recent acquisition of online beverage delivery service flaschenpost.
