How to build global tech leaders in Europe
Published by The faces of Scale-Up Europe How to build global tech leaders in Europe 2
Contents
3 4 8 Key dates The Scale- Executive The milestones of Up Europe summary Scale-Up Europe Manifesto The essentals and The call to join forces recommendatons of around startups Scale-Up Europe
11 16 22 Investments The battle Europe’s Can Europe turn record for talent deeptech startup funding into a Ideas on diversit and challenge sure thing? atractng the best Turning brilliant brains into breakthrough tech
30 36 38 Startups Looking Postface and forward About this report: corporates A brighter future? methodology and partners Contracts, scale, money, and when collaboraton makes sense How to build global tech leaders in Europe 3
Key dates
December 2020 March Scale-Up Europe 2021 May initatve announced by 2021 President Emmanuel Kick of event at Macron Staton F in Paris End of workshops
February April June 2021 2021 2021 The initatve is launched Start of workshops / Recommendatons on Sifed.eu consultatons to defne presented to President recommendatons to Macron and other scale up European tech stakeholders from EU member states alongside this report
French President Emmanuel Macron announced the Scale Up Europe initatve in a video interview in December, alongside Niklas Zennström 4
The Scale-Up Europe Manifesto
Scale-Up Europe is a call to join forces around startups: to reinforce Europe’s sovereignt, develop the prosperit of our economies and societes, and achieve the objectves of social cohesion and climate transiton that are at the heart of the European project.
We, founders and startups, corporatons, investment funds, industry groupings and other innovaton ecosystem stakeholders, are joining forces as a communit and stepping up to respond to the opportunites and challenges that await our contnent.
Over the past decade, Europe has built a prosperous, fast growing and resilient startup ecosystem that atracted €40bn+ in 2020 — sixfold the investment of 2010 — and spawned global scale-ups including 70+ unicorns, creatng more than 2 million jobs.
Looking forward, we are convinced Europe can reach the next level, and have set an ambiton for the contnent to become home to 10 technology companies each valued at more than €100bn by 2030.
We believe that investng in disruptve tech and growing leaders able to harness the potental of the current industrial revoluton are of critcal importance for our contnent, for at least three reasons:
• What is at stake is not only our abilit to stay at the forefront of innovaton, but also whether we can maintain a major role in the balance of internatonal power and establish our own rules and standards.
• Tech and startups are at the heart of the prosperit of our economies and societes. They generate millions of jobs across a range of skills and sectors and, by creatng signifcant value, they are well positoned to help preserve our European social model.
• Achieving the objectves of social cohesion and climate transiton, that are at the core of the European project, will not be possible without the contributon of entrepreneurs. How to build global tech leaders in Europe 5
We have identfed fve key challenges on Europe’s road forward:
Appropriate funding from European investors is missing in the late and exit 1 stages of the ecosystem, in partcular at IPO stage. The right balance has to be found between expertse, favourable regulaton for private investors, as well as an efcient multplicator efect for public money.
European startups are fghtng to atract the best talent and are not sufciently 2 open to diversit. A more open, less fragmented pan-European market is key to winning the global batle for startup talent. In this respect, diversit is a strong enabler to be placed at the core of our ecosystem.
Europe is stll behind on developing deeptech scaleups. 3 Creatng appropriate funding mechanisms, that bring together the science and business worlds to channel research eforts, are appropriate levers for Europe to become the world’s deeptech powerhouse.
Efcient collaboraton between startups and corporates has to be enhanced. 4 Promotng winning collaboraton models, understanding cultural diferences, increasing mutual understanding and facilitatng startup takeovers by European corporates are appropriate tools to bridge the startups and corporate gap.
For these ideas to reach full bloom, further investment in coordinaton and 5 executon needs to be made at the European level. Scale-Up Europe needs to graduate from a report to a fully-fedged initatve, with both the capacit and the mandate to help transform this report into realit.
European leaders have shown they have grasped the importance of the startup economy. That is why the Scale-Up Europe communit has worked in recent months towards issuing a set of the most game-changing recommendatons, geared towards the European Commission, our natonal governments and our startup ecosystems. The Scale-Up Europe communit has come together to facilitate mutual understanding, urge acton and guide it. 6
Founding members The ~170 tech leaders and ~30 start-up associations who committed to the Scale-Up Europe initiative
Renaud Allioux, Preligens Lucien Burm, Dutch Startup Diego Docavo, Spanish Patrick Hertzog, Nexthink Associaton Startups Bulent Altan, Mynaric Karoli Hindriks, Jobbatcal Pascal Cagni, Business France Pierre Dubuc, Open Christan Angermayer, Apeiron Classrooms Taavet Hinrikus, Wise investments Claire Calmejane, Société , Lakestar Générale Nicolas Dufourcq, Bpifrance Klaus Hommels Giulia Balestra, UNHCR, the , Ynsect UN Refugee Agency Moussa Camara, Les Osman Dumbuya, CGI Studios Antoine Hubert Déterminés , Back Olga Barreto Goncalves, Xavier Duportet, Eligo Thibaud Hug de Larauze Market Startn.lv Malin Carlstrom, ABB Ltd. Bioscience , Malt Sophia Bendz, Cherry Regis Cazenave, Reliasol Nicole Eagan, Darktrace Vincent Huguet Ventures , Balderton Nicolas Celier, Ring Erik Ekudden, Ericsson Cayetana Hurtado Marguerite Bérard, BNP Jeremy Jawish, Shif Paribas Phil Chambers, Peakon Martna Fitzgerald, Scale Ireland Technology Jonathan Cherki, Elina Berrebi, Gaia Capital Carole Juge-Llewellyn, Joone Partners Contentsquare Antoine Flamarion, Tikehau Capital Michal Kardos, Sapie Mathieu Beucher, Klaxoon Giorgio Ciron, InnovUp Sebastan Fuchs, SUP46 (Start Bryce Keane, Atomico Csongor Bias, Startup Hungary Nathalie Collin, La Poste up people of Sweden) , Stripe Erwan Keraudy, Cybelangel Maximilian Bitner, Vestaire John Collison Lukasz Gadowski, Team , Ivalua Collectve Philippe Collombel, Partech Europe David Khuat Duy , ABB Ltd. Benedikt Blomeyer, Allied for Bruno Cremel, Partech Dominique Gaillard, Ardian Anton Kotov Startups , L'Oréal Jean-Michel Dalle, Agoranov Nicolas Gaume, Space Cargo Camille Kroely Mathias Bohge, R3 Echo Ring Unlimited , Evaneos Soraya Darabi, TMV Eric La Bonnardière Hans-Christan Boos, Arago Alain Godard, EIF / FEI , Amadeus Cristan Dascalu, Romanian Denis Lacroix Kat Borlongan, La French Tech Jan Goetz, IQM Tech Startups Associaton Martna Larkin, World Economic Forum Jan Bormans, European Juan de Antonio, Cabif Irene Gomez Luque, Startup Network Telefonica , CNES Alexander de Carvalho, Public Jean-Yves Le Gall Ivo Boscarol, Pipistrel Aircraf Joerg Goschin, KfW Capital , LVMH Eva de Mol, CapitalT Franck Le Moal Jean Bourcereau, Ventech Gunnar Graef, Deutsche Alexandre Le Vert, Osivax Eric de Montgolfer, Invest Ventures Pieterjan Bouten, Showpad Europe Yann Lechelle, Scaleway BVBA Jean-Laurent Granier, Alix De Sagazan, Ab Tast Generali Martne Legendre, Allianz Michael Brehm, Redstone Olivier de Panafeu, Roland Charlote Gréant, Startups.be Bernard Liautaud, Balderton Nicolas Brien, France Digitale Berger Capital / ESN Gerard Grech, Tech Naton Marie Degrand-Guillaud, Christan Lindener, Airbus Olivier Brousse, Veolia Compte Nickel Benoist Grossmann, Idinvest Linda Liukas, Rails Girls Eileen Burbidge, Passion Bertrand Diard, Serena Paula Groves, ImpactX Capital Capital André Loesekrug-Pietri, JEDI Daniel Dines, UiPath Christan Hecker, Trade Bertle Burel, Wonderbox Republic Jouni Lounasmaa, Startup Foundaton How to build global tech leaders in Europe 7
Deborah Loye, SISTA Adrien Nussenbaum, Mirakl André-Hubert Roussel, Etenne Tichit, Novo Nordisk Arianegroup Nicolas Macquin, Vitruvian François Nuyts, Allegro Nigel Toon, Graphcore Partners Matej Rus, Startup Slovenia Marie-Paule Odini, Hewlet Rafaèle Tordjman, Jeito Elke Manjet, SAP Packard Enterprise Jean-Charles Samuelian, Alan Henning Trill, Bayer Alexandre Margoline, Permira Basten Oggeri, Innovafeed Guillaume Santamaria, InfraVia Maarika Truu, European Daniela Marino, Cutss Abadesi Osunsade, The Hustle Simon Schaefer, Startup Startup Network Crew Portugal Nenad Marovac, DN Capital Laura Urquizu, Red Points Antoine Papiernik, Sofnnova Ulrich Schmitz, Axel Springer Alison Martn, Zurich Insurance Dan Vahdat, Huma Pär-Jörgen Pärson, Northzone Helmut Schoenenberger, Tobias Martnez, Cellnex Ventures UnternehmerTUM Pasi Vainikka, Solar Foods , Beta-i Ricardo Marvao Clark Parsons, Deutsche André Schwämmlein, Flixbus Pieter van der Does, Adyen , Asociación Startups Carlos Mateo Patrice Selles, Biotalys Constantjn van Oranje Española de Startups Michel Paulin, OVH Cloud Nassau, Techleap Cem Sertoglu, Earlybird , Sifed Marie Mawad Eve Peeterson, Startup Estonia Venture Capital Roxanne Varza, Staton F , Blablacar Frederic Mazzella Fleur Pellerin, Korelya Naren Shaam, Omio Ivan Vassilev, BESCO , Accor Patrick Mendes Nicolas Peter, BMW Christan Sinding, EQT Ersilia Vaudo, ESA (European Space Agency) , ISAR Daniel Metzler Nicolas Petrovic, Siemens Mat Smith, Startup Britain Aerospace Vicente Vento, DTCP Magdalena Piech, European Reshma Sohoni, Seedcamp Sacha Michaud, Glovo Tech Alliance François Véron, NewFund Markus Solibieda, BASF VC , CNRS Johanna Michielin Oscar Pierre, Glovo Grégoire Vigroux, Fenix Innovaton Loïc Soubeyrand, Swile Evgenia Plotnikova, Dawn Julien Villeret, EDF Christan Miele, German Capital Kinga Stanislawska, Experior Startups Associaton Venture Markus Villig, Bolt Stefano Porcari, Saipem SA Martn Mignot, Index Ventures Lars Stenqvist, Volvo Robert Vis, MessageBird Marketa Prenosilova, Czech Isabelle Vitali, Sanof Virginie Morgon, Eurazeo Invest Mirjam Storim, BMW , Grazia Vitadini, Airbus Belen Moscoso del Prado Caroline Ramade, 50inTech Pierre-Emmanuel Struyven, Sodexo Supernova Invest Alexander von Frankenberg, Juliete Rant, Viva Technology Emilie Mouren-Renouard, Air Dharman Sury, Data4 High Tech Gründerfonds Liquide Markus Raunig, Austrian Jenny Wang, Re-inc Startups Christophe Tallec, Hello Michiel Muller, Picnic Tomorrow Check Warner, Ada Ventures Johannes Reck, GetYourGuide Finn Murphy, Startup Ireland Maximilian Tayenthal, N26 Thomas Ybert, DNA Script Thibault Remy, Meilleurs Ali Niknam, Bunq Agents Julian Teicke, Wefox Panos Zamanis, Hellenic , Startup Associaton Stanislas Niox-Chateau Hanno Renner, Personio Stephane Tholander, France Doctolib Biotech Niklas Zennström, Atomico Florian Reuter, Volocopter Nathalie Nodin, Veepee Emmanuel Thomassin, Mathias Zwingli, Rasmus Rothe, Merantx Delivery Hero David Nothacker, Sennder Digitalswitzerland 8
Executive summary
Scale-Up Europe gathers a select group of 170+ of Europe’s leading tech founders, investors, researchers, corporate CEOs and government ofcials around the same goal: to accelerate the rise of global tech leaders born in Europe in the service of both progress and technological sovereignt.
Initated by President Emmanuel Macron, the Scale-Up Europe initatve focuses on four key drivers: deeptech, startup-corporate collaboraton, talent and investment.
The founding members kicked of a collectve debate on these themes on March 4, contnuing the discussion through workshops and open consultaton. Together, we’ve commited to a manifesto outlining ambitons for European tech, and defned a strategy and roadmap to be presented to heads of state later this year on how to scale the tech ecosystem to the next level.
21 recommendations for scaling European tech
INVESTMENT For public authorites: 1. Leverage the multplier efect of public funding at EU level 2. Create a favourable ecosystem for the listng of tech companies on European stock markets 3. Boost private fnancing toward the high-performing VC asset class 4. Develop secondary markets in growth assets For the ecosystem: 5. Develop visibilit and informaton on the performance of European VCs
TALENT For public authorites: 6. Create a tech worker status for European talent, with a standardised contract and the portabilit of social rights across the contnent How to build global tech leaders in Europe 9
7. Create a fast-track European tech visa for non-Europeans and a favourable expat tax regime 8. Establish compettve stock opton schemes in European countries and then align best practces Europe-wide For the ecosystem: 9. Develop a European diversit ratng based on tech companies' reportng 10. Develop an internatonal culture early on in startup development with English as the working language 11. Help foreign employees setle in, for example with aid schemes for opening bank accounts and fnding housing
DEEPTECH For public authorites: 12. Create standardised patent transfer framework to accelerate technology transfers out of universites, and between startups and big companies 13. Boost the role and visibilit of the European Innovaton Council (EIC) by promotng a long- term deeptech roadmap complete with public procurement schemes, and adapted funding and administratve support 14. Modernise regulatons to take into account breakthrough innovatons 15. Promote a specifc acton plan for European public banks, the EIC and European Investment Fund (EIF) to help funds adapt to deeptech requirements For the ecosystem: 16. Foster entrepreneurship within universites by: (i) adaptng curricula, (ii) encouraging connectons between disciplines, (iii) integratng entrepreneurs/VCs in universit bodies
STARTUP-CORPORATE COLLABORATION For public authorites: 17. Establish a tax credit for European corporates investng in European startups 18. Adopt a Small Business Act for business administratons that will beneft startups For the ecosystem: 19. Elaborate a charter of reportng and best practces on collaboraton (open innovaton, procurement) and takeovers 20. Develop an Erasmus inspired exchange programme for tech allowing employees to move seamlessly between startups and bigger companies
TRANSVERSAL 21. Launch a European tech mission commited to strengthening the European startup communit and furthering the Scale-Up Europe roadmap 10
What it takes to scale up European tech
Despite the challenges of the Covid-19 pandemic, 2020 was a good year for European startups and technology. Record levels of venture capital investment fowed into innovatve new companies, and the digital transformaton of larger corporatons contnued at pace. At the same tme, startup-friendly reforms by governments and an ongoing change in how talented young graduates see entrepreneurship have put Europe in a beter positon than it has ever been to capitalise on digital trends.
But Europe stll lags behind the US and Asia in areas such as investment and the development of key technology. If the region is ever going to close the gap and leverage tech innovaton to develop its economies and pursue its social ideals, it needs to up its game another level.
With that ambiton in mind, more than 170 of Europe’s entrepreneurs, researchers, investors, corporates and politcians have convened in recent months to discuss, debate, and come up with a series of recommendatons on key themes of focus as part of the Scale-Up Europe initatve.
A consensus has emerged that to get more investors and internatonal talent to notce Europe, the region needs to beter deploy its compettve advantages — from brilliant brains to a market that potentally spans over half a billion consumers. And it needs to get well-established corporatons on board with the next digital revoluton too. Developments in the felds of artfcial intelligence, quantum computng and cybersecurit, among others, are seen as key not just to economic growth in the coming years, but also having wider strategic, politcal and social implicatons.
There are four key areas where acton is critcally needed to help turn European startups into future global tech leaders: investment, talent, deeptech and startup-corporate collaboraton. How to build global tech leaders in Europe 11 A. Investments Can Europe turn record startup funding into a sure thing?
THE PROBLEM The amount of funding raised by European startups has been on a spectacular growth path over the past European investment remains fve tmes less than North decade, and the region has both atracted more global America’s $141bn for this year. $74bn was invested in investors and been able to deliver bigger funding Asia in 2020, where there’s been a contnued decline of rounds for its tech ecosystem. In fact, according to VC investment into Chinese private tech companies amid fund Atomico, 2020 was a record year for European trade wars with the US — on top of atempts by Donald investments, reaching $41bn in early December. Trump’s administraton to block technology providers from China. On the whole, the year demonstrated Europe’s abilit to navigate the challenges brought about by the Covid-19 There’s ground to make up, but it’s clear that Europe is crisis and confrmed the overall positve trend that has steering itself in the right directon. The overall success been building up in recent years. Progress so far also of 2020 was driven most notably by the increase proved Europe is capable of delivering more of the larger in so-called ‘megarounds’, ranging from $100m to fundraising rounds it needs to grow global champions, as $250m, which for many years had been one of Europe’s well as atractng a record number of American investors. most pressing weak points — so much so that some compared European startups to a “forest of bonzaïs” Now, the region needs to use this momentum as a given the lack of more developed, ‘bigger’ trees. stepping stone to further deepen its fnancing pool, and catch up to the stll much bigger envelopes invested in US and Asian startups.
Money fowing to startups Capital invested ($bn) in Europe, North America, Asia and Rest of World by year
— EUROPE — NORTH AMERICA — ASIA — REST OF WORLD Source: Atomico and Dealroom
IMAGE: Lilium 12
France grew VC investment in 2020 despite Covid-19 Money pours into venture VC Investment (€bn) into tech startups across Global capital fows (€bn) into venture capital major European ecosystems by region
— UK — GERMANY — FRANCE — USA — EUROPE — ASIA — REST OF THE WORLD Source: Dealroom, as of June 2021. Excludes SPACs and grants. Source: Dealroom, as of June 2021.
This year, the top 10 largest rounds alone raised $4.1bn, France was the frst EU country to step in with a or 16% of total capital invested in Europe in the frst generous bailout package last year, which included nine months of 2020. The companies that benefted a €4bn cash injecton for its startups, and additonal from those megarounds came from all corners of the measures such as furloughing (“chômage partel”) contnent, including: Sweden’s Klarna ($650m) and that have also helped companies adapt quickly. Other Northvolt ($600m); the UK’s Revolut ($580m), Karma European governments quickly followed with bailout Kitchen ($317m) and Cazoo ($310m); Germany’s Auto1 packages and startup-specifc measures of their own. Group ($300m), Lilium ($275m) and Tier ($250m); France’s Mirakl ($300m) — as well as Romania’s UiPath In doing so, policymakers have likely avoided a lastng ($225m). dent into the positve investment trend of recent years. While Covid-19 lockdowns have caused some deals to be delayed, what remains is a stockpile of ‘dry powder’ The overall success that’s expected to be poured into tech companies. In France alone, state-backed Bpifrance estmates of 2020 was driven “ there’s about €10bn in investors’ pockets waitng to be most notably by the deployed into startups of diferent sizes.
increase in so-called Prospects for future improvement in scaleup ‘megarounds’.” performance will rely on Europe’s abilit to keep growing its pool of investors. Part of that will come from atractng more global technology investors. Another part will Not all countries can boast these fgures. Looking at depend on geting more internatonal fund managers to country trends on a year-by-year basis, France is the discover the European tech scene and inject money into only one of Europe’s three largest markets to grow in new homegrown funds. 2020. The country had already seen investments in startups increase nearly threefold between 2015 and For existng investors, there’s also a preoccupaton 2019, showing a net acceleraton, albeit with a broader with creatng more exit opportunites, especially as the gap to fll. Thanks to the uptck in investment, France number of bigger — more mature and beter valued exceeded €5bn in capital invested in 2020 for the frst — startups seeking stock market listngs in Europe is tme. Paris is now Europe’s number two hub for startup stll limited. Successful exits are crucial for seeding the investment — it’s number one if you count London out next generaton of founders. To boost the pipeline of of Europe afer Brexit. tech IPOs, executves from Euronext teamed up with How to build global tech leaders in Europe 13
can prove fragile in the context of trade tensions, including former US President Trump’s push against Chinese tech providers like Huawei. Europe needs an investment reserve that is structured in such a way that the region can rely on homegrown VCs and private equit frms, as well as US and Chinese tech investors.
What’s at stake in the end is the abilit to turn a fve or 10 year trend into a lastng long-term state of play.
EXPONENTIAL GROWTH PATH
“The European tech market is worth $2tn. It took decades to achieve the frst trillion, but just a few years to double that,” says Niklas Zennstrom, chief executve and founding partner of Atomico. “At least an additonal $2tn will be produced by European tech within the next 10 years.”
Zennstrom is one of several investors in Europe who are IMAGE: Northvolt facilites convinced the region’s startup scene is going to contnue acceleratng, on an exponental growth path. Stll, that optmism hasn’t clouded judgments, among local counterparts in La French Tech last year to ofer training fnanciers, that changes are needed to make sure the and meetups specifcally designed for startups preparing trend from the past decade doesn’t reverse. for the stock market.
WHAT’S AT STAKE The European tech market is worth $2tn. In recent years, the region has shown its abilit “ to atract, sustain and point investments in the right It took decades to directon to lay the foundaton for several achieve the frst promising trends. trillion, but just a few One is the emergence of future breakthrough years to double that.” technology, through supportng deeptech innovaton. Another is the accelerated digital transformaton of the Niklas Zennstrom, chief executve and region’s economy. Now, Europe has an opportunit to founding partner of Atomico build on current momentum and foster further interest from investors for its startups. That means being able to atract funding for more ‘megarounds’ — crucial to the In May, Atomico’s Zennstrom and Bpifrance chief region’s abilit to spawn global tech champions, as well executve Nicolas Dufourcq hosted VCs such as as making sure the money is fowing into smaller rounds Northzone and Korelya, and startup groups including at all stages of startup development. Invest Europe, at a Scale-Up Europe workshop. There, they brainstormed how tech regulaton should evolve, Furthermore, China’s situaton in recent years has given as well as what needs to change within European VCs a demonstraton of how overreliance on foreign investors themselves. 14
Zennstrom is an advocate for the emergence of more homegrown VCs who can pitch in on bigger fundraisings The key themes of and back the growth of new global giants. In contrast, more than half of the money going to megarounds (over €100m) in Europe today is actually coming from startup foreign investors, he says. Another issue with relying too much on foreign investors, especially in the later funding investment rounds, is that there’s a bigger chance that the startups raising money end up seeking a stock listng abroad too, says Zennstrom. Bigger homegrown fnanciers How can Europe develop more homegrown We need to create investors that are able to take on bigger rounds? “asset managers across Europe who Investment drivers are tech savvy, and To what extent is the ‘tech for good’ movement a analysts who can draw for investment in Europe? dig into the business models of companies Exits that are more and How can the contnent create exit opportunites more complex.” for founders and early or growth stage investors?
Nicolas Dufourcq, chief executve of Bpifrance
IPOs “We have more capital coming in, but we also have to How can Europe pave the road to a stock listng make sure we have a very robust pool of capital across for startups? all stages, from angel investng to seed, venture and growth, and also on the public markets,” Zennstrom said at the Scale-Up Europe kickof in March. “There’s more to do on that front. We need to make sure European State money companies are being listed in Europe.” Are Europe's startups too reliant on state money?
One way to spawn more Europe-wide multnatonal growth funds is to beter connect diferent startup ecosystems and encourage consolidaton, says A more atractve Europe Bpifrance’s Nicolas Dufourcq. The risk otherwise is that What are the region’s selling points (and US funds with deeper pockets get to cherrypick the best weaknesses) when it comes to atractng more US startups, he says. and Asian investors?
“We need to improve some elements of the chain,” says Dufourcq. “We’re not where we need to be on the stock markets. We need to create asset managers across Europe who are tech savvy, and analysts who can dig into the business models of companies that are more and more complex. We don’t have enough of that.” How to build global tech leaders in Europe 15
Investment recommendations
As part of the Scale-Up Europe initatve, • Deploy a set of tools to encourage the Develop secondary markets in partcipants worked on determining ways deepening of the market: growth assets in which Europe can take startups funding → Help scaleups during pre-IPO to the next level. That includes overcoming • Create incentves for secondary phase with dedicated training the Covid-19 pause and, beyond it, investors to boost their involvement growing the pool of investors and spawning → Encourage the buildup of in VC funds bigger funds that can take the baton and experienced tech analyst teams, facilitate exits. Atractng global fnanciers notably within asset managers • Support the development of should be a key part of the plan, as well as → Develop a European SPACs platforms enabling secondary facilitatng the road to IPO. [special-purpose acquisiton operatons in VC company] model with longterm Here are the Scale-Up Europe communit’s • Encourage the creaton of annual commitment for sponsors by recommendatons on investment. liquidit windows for investment in establishing harmonised criteria startups in VC and growth fund term for admiting SPACs on stock sheets markets → Allow multple votng rights for FOR PUBLIC founders on listed companies to AUTHORITIES increase the atracton of an EU listng FOR THE Leverage the multplier efect of ECOSYSTEM public funding at EU level Boost private fnancing toward the Develop visibilit and informaton • Increase the EIF investment capacit high-performing VC asset class on the performance of European to seed 10-15 funds larger than €1bn VCs each, via the creaton of a sovereign • Train and mobilise limited partners funding structure leveraging private (LPs) to invest in VC as a way to • Launch a public billboard of capital (structures that could include diversif their portfolio. This move European VC funds performance layered funds and/or a mix of equit should be aided by a thorough based on voluntary contributon and debt) educatonal efort led at a high by partcipants, with the possibilit politcal level and backed by robust for LPs to access a detailed level of • Enhance collaboraton with public quantfed analyses anonymised informaton on returns banks and encourage further partnership between public banks • Partcipate in Basel/Solvency/AIFMD/ • Support and strengthen the market and the EIF, for example on eligibilit MIFID regulatory renegotatons to by beter advertsing the European criteria for funds, notably geographic, obtain favourable conditons for ecosystem; also, use existng without automatc alignment VC investment and advocate for events for targeted promotonal supportve policies limitng threshold opportunites • Implement additonal ‘non-dilutng’ efects instruments for startups, such as • Push GPs to further report on their loans or non-votng stocks, favouring • Foster beter access for retail environmental, social and governance a multplier efect investors to VC vehicles by adaptng (ESG) performance, as a comparatve current laws (e.g. one thing to look at advantage versus the US or Asia, and is the defniton of semi-professional foster alignment on ESG criteria by Create a favourable ecosystem for investors in the AIFMD and MIFID public banks and the EIF directves) the listng of tech companies on European stock markets • Encourage the harmonisaton of foreign direct investment laws • Include in the European sovereign LP between European countries, notably mandate the support of pre-IPO and by reviewing the applicaton of EU transiton funds, notably by including rules investment in pre-IPO and post-IPO crossover funds 16 B. The battle for talent Ideas on diversity and attracting the best
Europe has boosted investments in its startups as well as goten smaller companies and bigger corporates to work together more and more. Now, the region’s entrepreneurship and technology ecosystem needs to broaden its talent pool.
To deploy its full innovatve potental, Europe needs to go beyond just giving rise to startups that refect the interests and abilites of a select few. For now though, entrepreneurship isn’t equally accessible to everyone, and neither is a career in tech. And while the situaton isn’t specifc to Europe, it is a problem the region needs to tackle with more gumpton.
Despite eforts in recent years aimed at improving the diversit of entrepreneur profles and talent at startups, young white men from privileged backgrounds are stll overrepresented. So are Europe’s capital cites, and its best-known engineering schools.
There’s no queston about the qualit of tech talent in Europe today. The contnent has demonstrated its abilit IMAGE: Czechitas to spawn some of the world’s most qualifed candidates in felds including science and engineering, and even atract some of the brightest to entrepreneurship. THE PROBLEM But the more startups and technology come to symbolise potental for Europe’s future — hope that Last year, 85% of startup funding went to all-male it can spawn the next tech breakthrough, upgrade its founding teams. But what’s perhaps worse is that in economy for the digital age, create jobs and have a voice looking at deals by gender compositon of founding on the global stage — the more the tech scene needs teams over tme in diferent European countries, Atomico to become diverse and inclusive. The more it is also has noted there’s barely been any change at all for pressed to tap new profles to feed its progress. On that several years. Progress on gender diversit in European front, the current situaton is reason to worry. tech stagnated in 2020, it said.
Furthermore, data showed that people from less All male teams dominate funding rounds in 2020 privileged backgrounds were less likely to become Source: Europeanstartups.co entrepreneurs, and 81% of founders surveyed said they’d been living comfortably before they set up their startup. Black founders made up only 1% of the 1.2k entrepreneurs Atomico surveyed last year, and 2% of this year’s respondents. How to build global tech leaders in Europe 17
It’s clear at this point that if Europe is to turn its cites WHAT’S AT STAKE into global talent hubs capable of rivaling Silicon Valley, it needs to show it can mobilise a wider array of There’s an abundance of research highlightng how candidates to stmulate innovaton. more varied teams make beter decisions at companies, and generate beter returns. But the real issue at hand There are now more than a hundred ‘diversit in is much larger. Startups have a chance to expand their tech’ communites across Europe trying to tackle reach beyond a limited bubble by actng as key job that problem. In Prague, for example, a nonproft creators and talent enablers. called Czechitas is working to boost the partcipaton of women in the country’s IT sector. Governments have also contributed. France Startups have an for instance has made a push to atract foreign opportunity to tech talent by easing the administratve “ process for candidates to get a work permit, and integrate talent that seting up a separate fast-track — a plan dubbed has been overlooked, ‘French Tech Visa'. The government has also set up a digital training scheme in 2015 called Grande École and create value on du Numérique and the French Tech Springboard the back of it.” (or ‘Tremplin’) to cultvate talent from diverse backgrounds. There’s macroeconomic value to grab in unlocking the As Covid-19 speeds up the transiton to remote work employment market to a bigger variet of candidates — for millions of employees across Europe, countries and startups and the technology sector can contribute to across the region have an opportunit to tap talent from this broader purpose. By giving access to tech jobs and Berlin to Madrid or Warsaw. Furthermore, the rise entrepreneurship to a more diverse workforce, startups of ‘nomad workers’ also creates a broader pool of have an opportunit to integrate talent that has too ofen candidates. been overlooked, and create value on the back of it.
Hiring away from home Tech jobs boom Approximately what % of your employees are % change in share of tech jobs searches per citzens of the country in which your company is million by country, October 2019 to October 2020 headquartered? Source: Atomico and Indeed Source: Balderton Capital survey 18
In doing so, they would seize a chance to address a The key themes of much broader social and politcal issue that universites, big corporatons and other parts of European societ talent and have broadly failed at.
diversity IS RED TAPE CHASING TALENT AWAY FROM EUROPE?
“I used to live in Silicon Valley, and I wondered every day Diversit and inclusion as I jogged in front of Google’s ofces why it was that all How Europe can make entrepreneurship and the smart people were going there to work,” says Karoli tech jobs more accessible for candidates from Hindriks. “What would it take to get them to move to diferent backgrounds. Tallinn instead?”
It’s the multbillion-euro queston the rest of Europe is stll trying to crack. Hindriks founded her startup Female founders Jobbatcal fve years ago, selling a service to help How to get more women in leadership positons internatonal hires relocate. But others in Europe have and more money into startups founded by their own ideas on what the contnent should do to women. atract top global candidates, and diversif its talent pool in tech and entrepreneurship.
As part of the Scale-Up Europe initatve, founders Minorit ethnic founders including Wise’s Taavet Hinrikus and Cabif’s Juan de How to create positve precedents and make sure Antonio debated how to broaden the talent pool that the these founders get the atenton they deserve. startups and technology ecosystem can tap in Europe. Their discussions spanned from stock optons and tax reforms to quotas for minorit hires and diversit more broadly. ‘Ivy league’ bias How to beter spot and support entrepreneurs “It’s great to reduce frictons and quick access to visas who come from underprivileged backgrounds. is an integral part of it. And then mainly stock optons — it’s about being compettve with other markets, and currently we’re not,” de Antonio said. “Complexit is part of it but also taxaton.” Foreign talent What are Europe’s unique advantages for Overall though, one of the core questons Europe needs atractng talent and how can it deploy them to answer is how to atract internatonal candidates, (educaton, healthcare, or purpose as a driver to especially more experienced ones: people who’ve atract candidates…) had frst-hand experience at scaling a company and can help do it again. The other key queston is about diversit. Talent mobilit and nomad workers “We have a huge shortage of talent. In fact, talent How to facilitate mobilit and remote work. appears to be the frst barrier for development in the French tech ecosystem,” says Frederic Mazzella, the cofounder of unicorn Blablacar and co-president of startups group France Digitale. How to build global tech leaders in Europe 19
“We’re seeing VPs, SVPs and EVPs from Silicon Valley Mazzella says he’d love to see a pan-European come to work at French scaleups for example,” says equivalent to the French Tech Visa — a European Tech Roxanne Varza, the director of Paris-based tech Visa — which would make it easier for startups to hire in incubator Staton F. “Stll, the whole ecosystem has a any country in the region. shortage of talent — we need more.”
That’s true elsewhere in Europe too. While A lot of founders tell exceptonal technical talent, from engineering us the hard part is to maths and the broader sciences, is one of “ Europe’s biggest strengths, the region is stll missing top actually once they designers, sales and even communicatons tpes. get to Europe.” “As the ecosystem gets more and more mature, we need Roxanne Varza, director of Staton F senior profles to structure the teams, the process and the scaling,” says Mazzella. “We need profles who have experience in hypergrowth to be sure they can replicate “We can’t stop at a visa,” says Varza of Staton F, at what worked and share it all around.” which about a third of founders are foreigners. “For me the queston now is implementaton: how do embassies, consulates pitch in? How do we get more administratve THE ADMIN TRAP processes online?”
For Jobbatcal’s Hindriks, Europe’s biggest hurdle “Plus, a lot of founders tell us the hard part is actually to atract this much-needed talent is bureaucracy. once they get to Europe. It’s doing things like opening a “The biggest problem of internatonal hiring isn’t the bank account, geting a mobile phone subscripton and hiring itself, it’s the whole immigraton and relocaton rentng a fat,” she says. “The simpler we make all these process,” says Hindriks. “We’re building technology to things the more happy founders we’ll have.” help overcome hurdles, from form flling to the whole inefcient monster that candidates ofen face in Europe.” Hindriks in turn argues the rest of Europe should take a leaf from Estonia and push reforms further stll. “Estonia is a young country that had to take a technological leap, so it put a digital identt in place and [now] you can do prety much anything with a single click,” she says. “How can we replicate this model across Europe?”
Digital processes like Estonia’s would theoretcally allow companies to hire and fy the new employee over within 24 or 48 hours, instead of a process that tpically takes several months.
DIVERSITY CATCHUP
Beyond the focus on foreign talent, there’s a lot that can be done in Europe to atract more diverse candidates.
“Some people stll think diversit is [just] nice to have, but mentalites are changing. It’s a direct booster to return on investment to have more women on board, more foreigners, more candidates that span beyond the usual IMAGE: Staton F 20
hiring networks and come from various socioeconomic backgrounds,” says Staton F’s Varza.
Efectve diversit policies also boost an employer’s profle and make hiring the best talent easier, says Caroline Ramade, the founder and chief executve of 50inTech, whose goal is to reach 50% representaton of women in tech by 2050. “The best talent isn’t willing anymore to go work at a company where they’ll have to batle to build diverse teams,” says Ramade. “It’s become a real HR retenton tool, and not just for female candidates.”
Diversit policies aren’t just about hiring. Candidates are IMAGE: Staton F paying more and more atenton to aspects including work-life balance, ofce hour fexibilit and generous leave packages for new parents. that, she argues, would be relatvely straightforward. The frst step is collectng data about existng investments, TOO MANY ALL-MALE TEAMS and then deciding on targets and new criteria for future rounds as well as for money pumped into VCs. The problem is even more acute among founders. “There's a clear bias against women in entrepreneurship, “There’s no point telling women to learn to code and in access to money, and in tech more broadly in Europe,” become entrepreneurs if it’s to ofer them no opportunit says 50inTech’s Ramade. “That starts a vicious cycle: at the end of that process,” says Ramade. “The pipeline women don’t get investments, so they don’t scale, they is full at the beginning, but there’s a serious blockage don’t do exits, they don’t cash out and they can’t become along the way.” Ramade’s view is that VC investors key investors who change the kind of mentalit that is need to get over their preconceived notons and reject holding back the VC space.” spurious claims like “‘the idea that female entrepreneurs don’t know how to scale’”.
There's a clear bias There are more than a hundred ‘diversit in tech’ communites across Europe trying to tackle this problem. against women in Now, policymakers are lining up to contribute. “entrepreneurship, “2021 has to be [the] year where we build the in access to money, foundatons to make sure that the ‘innovaton divide’ in and in tech more Europe is reduced, while increasing the representaton of women as CEOs of tech startups, and ensuring Europe’s broadly in Europe.” tech sovereignt,” said Mariya Gabriel, European Caroline Ramade, founder and Commissioner for Innovaton, Research, Culture, chief executve of 50inTech Educaton and Youth.
“It’s one of our priorites for 2021 to deal with the State-backed investors are in a good positon to get innovaton divide, in partcular women innovators as the ball rolling on changing the current state of female well as less advantaged parts of Europe, countries like entrepreneurship, she says. “I pay my taxes, I’m a Greece or Portugal,” says Jean-David Malo, director of European citzen and I think these state-fnanced banks the European Innovaton Council (EIC) task force at the have a dut,” says Ramade. Implementng something like European Commission. How to build global tech leaders in Europe 21
Talent recommendations
As part of the Scale-Up Europe initatve, • Adopton by natonal authorites of • Publish general and specifc diversit partcipants worked on a plan to broaden favourable fscal conditons (e.g. ratngs (e.g. by functon such as the tech talent pool. Part of this plan is something like the French regime, engineering, sales, etc.) geared towards atractng internatonal which ofers income tax exempton candidates. Another part involves giving for eight years afer arrival on certain • Share best practces and promote access to a broader range of profles, as revenues such as ‘inpatriaton’ virtuous companies to raise well as promotng diverse teams at all levels bonuses, for up to 30% of income) awareness on diversit issues in companies. Establish compettve stock opton Develop an internatonal culture Here are the Scale-Up Europe early on in startup development communit’s recommendatons on talent. schemes in European countries and then align best practces with English as the working Europe-wide language
FOR PUBLIC • Create comprehensive natonal • Greater efort by founders to make AUTHORITIES frameworks (legal, fscal and their company cultures open to administratve) allowing startups foreign employees and to prepare Create a tech worker status to grant stock optons as part of their startup for internatonal employee packages exposure by: for European talent, with a standardised contract and the • Adopt favourable regimes regarding → Promotng the use of English as portabilit of social rights across tax rates (capital gains rather than the working language and optng income), tax tming (at sale point for documentaton in English the contnent rather than at grant or exercise), from the frst fundraising strike price (lower than last round • Start with a ‘digital nomad’ status → Communicatng on internatonal valuaton), exercise period (several in European countries, allowing platforms to raise brand years) employees to work legally anywhere awareness abroad across the EU on a remote basis → Considering internatonal profles • There should be healthy peer for internships and positons pressure from the largest countries to • Create in the longer term a unifed foster alignment Europe-wide “European tech worker” status Help foreign employees setle in, dedicated to startup employees, for example with aid schemes grantng access to: for opening bank accounts and → A standardised employment FOR THE fnding housing contract ECOSYSTEM → The portabilit of social rights • Develop assistance services for across Europe (pension, Develop a European diversit foreign talents before and upon healthcare) ratng based on tech companies' arrival in the EU: reportng Create a fast-track European tech → Develop partnerships with relocaton agencies to facilitate • Create a European tech diversit visa for non-Europeans, and a connectons with scaleups and ratng, based on the voluntary ofer preferental rates to the favourable expat tax regime reportng of diversit key youngest startups performance indicators by scaleups, • Create a “European tech visa” to be such as gender balance (share of issued by all member states: → Help with housing search and women by level of seniorit, gender contract signing, notably via pay gap), social and educatonal → Dedicated to founders, translaton services employees, investors and background (level of educaton, researchers (for example in natonalit), inclusion (share of → Help with children's school critcal areas such as climate disabled employees, wage gap enrolment procedures change) between botom and top employees) • These services should be developed → Grantng residence and a work • Include these diversit KPIs in by natonal, regional and local permit through an accelerated companies' ethical and fnancial organisatons, in partnership with procedure in less than a month reportng startups → Implying no sponsorship fee for startups 22 C. Europe’s deeptech challenge Turning brilliant brains into breakthrough tech
Germany, Switzerland, France, Estonia and other Graduates from these and other European countries across Europe are spawning some of the establishments have gone on to spearhead some of the world’s most sought-afer innovaton talent — but that world’s most advanced research programmes in artfcial hasn’t translated into the kind of economic growth intelligence (AI), quantum computng and human- the region would like to achieve. Nor has it generated machine interactons, as well as developments on the signifcant strategic advantages and positons of future of health in the feld of biotech. technology leadership on the global stage. That has added to the aura of Europe’s scientsts. In That’s not to say Europe hasn’t demonstrated its abilites, turn, behemoths from Facebook to Amazon have set and value-creaton potental, in the felds of science and up labs in Paris, London, Warsaw and other cites to technology. Engineering and maths educaton at École tap local talent pools and research the latest cuting Polytechnique in France, ETH Zurich in Switzerland, or edge developments, in felds from drone delivery to AI. Cambridge Universit in the UK competes with oferings Investors meanwhile are increasingly scoutng Europe for from MIT or Stanford in the US at the top of global entrepreneurial opportunites. That includes the region’s rankings. Paris-Saclay Universit is on par with Princeton deeptech startup ecosystem and projects emerging out as the world’s best-rated mathematcs school, according of scientfc and engineering challenges. to the Academic Ranking of World Universites.
THE PROBLEM
Stll, that hasn’t been enough for Europe to come out on top of the technological revoluton of the past two decades. The region has fallen behind with the emergence of the digital and data economy. The gap has widened since the fnancial crisis of 2007- 8 and the global recession that followed. The US’ recovery was both stronger and more stable than the EU’s, leading to a $5.9tn GDP gap between the two economies by 2020.
That was thanks in great part to the success of technology companies — and that’s where Europe lags behind. At about 28% of the top 85% of large and mid cap US stocks (and 27% of the S&P 500), technology consttutes the largest segment of the US’ most valuable companies. None of the UK, France or Germany reach even half of this proporton, with roughly 1%, 7%, and 13% respectvely of their 85% largest stocks being tech. IMAGE: École Polytechnique How to build global tech leaders in Europe 23
Richer, poorer The big, and the really (really) big Europe has fallen behind the US in terms of GDP Top 5 US and EU Public Technology Companies by ($tn, current prices) Market Cap ($bn) — EUROPEAN UNION — UNITED STATES — EUROPEAN UNION — UNITED STATES Source: IMF. 2021 data is annualised. Source: Google Finance, as of June 2021.
What’s most alarming is that Europe has lost some of Stll, it’s encouraging to see the current trend of its previous tech glory. It has dropped out of the mobile investments in European innovaton and startups, phones market altogether, and its semiconductor leaders including in deeptech. Since 2016, cumulatve have been dwarfed in size by global counterparts. For investment into deeptech companies in Europe has failing to keep up with developing new service oferings surpassed $36bn. It was about $8.9bn in 2020, down for consumers, it has also seen its natonal telecoms from $10.2bn in 2019, according to Atomico. champions turned into dumb pipes for transportng Google and Netfix’s data. But while investments have grown signifcantly over recent years, European deeptech stll needs to catch up to the kinds of money that has gone into the US and China. Those two countries combined grabbed about What’s most 81% of global private investments going to deeptech alarming is that companies over the course of the 2015 to 2018 period, “ according to a joint report by Boston Consultng Group, Europe has lost the management consultancy, and Hello Tomorrow, a some of its previous research, events and consultng company. tech glory.” WHAT’S AT STAKE
And while Europe has had its share of global digital Europe is now faced with admiting defeat in the frst successes carried by a new generaton of entrepreneurs deeptech batle, but gearing up to win the war. In other — at companies like Spotf, Skype, Avast and Criteo words, the region needs to get its assets aligned to fght to name a few — it is no match for the US and China, for its place on the podium for the next generaton of which have propelled an overwhelming number of breakthrough innovaton. technology upstarts into the realm of global mammoths, some of which are now worth trillions of dollars. For AI, quantum computng and cybersecurit are among further comparison, the startup data platform Dealroom the felds that governments including France, Germany calculated the entre private European deeptech and the UK have listed as priorites for the coming years. ecosystem is worth some $150bn. Covid-19 has also intensifed the spotlight on biotech, 24
while mountng pressure to tackle climate change is also Finally, and perhaps most importantly, entrepreneurs a key target for scientsts and innovators. Developments argue deeptech could ofer Europe the answers it needs in these felds will be instrumental on several levels: to face some of the biggest challenges of our tme: from economic, but also politcal and social. Covid-19 to climate change. As state money goes to stmulatng European economies and billions of euros Economically, these technologies translate into already into shifing to greener societes, deeptech is bound to high-growth markets that are gearing up to atract huge beneft and, in turn, help governments get the most bang investments around the world. AI alone is predicted to for their buck. create more value by 2030 than the combined yearly GDP of Europe’s three biggest economies, according to That’s what’s at stake for Europe, as it batles to gain an analysis by PWC, the consultng frm. edge in technological innovaton.
AI alone is predicted WHY SCIENTISTS GO TO DEEPTECH to create more value “ What Europe needs more of is founders like Malo Huard. by 2030 than the Like an increasing number of Europe’s brilliant scientsts, combined yearly GDP the entrepreneur and PhD graduate studied probabilit and statstcs at Paris-Saclay Universit before joining a of Europe’s three cohort of maths whizzes, scientsts and engineers who biggest economies.” embody the region’s hope of convertng smarts into breakthrough tech and, eventually, a globally compettve business ofering. But even beyond that, new technologies are likely to transform the way we work, live, and interact with each “More and more people around me are becoming other in the future. Roles from phone customer service entrepreneurs — there’s real enthusiasm for the world representatves to medical researchers will morph to of startups,” says Huard. “I was looking for a bridge include fully robotsed or technology-supported tasks in between doing research and developing concrete the next job market revoluton.
Additonally, the ever-growing pervasiveness of technology in the lives of people and companies will make it even more crucial to the sovereignt of governments and the freedoms of citzens. That’s part of what has pushed Europe to implement creatve tech regulaton in recent years, including on data privacy — and it’s what is likely to drive innovaton in the next round.
Robot workforce Work potentally displaced by automaton by 2030, according to McKinsey’s fastest new tech adopton scenario Source: McKinsey Global Insttute Analysis • FTE = full tme
IMAGE: Milvue How to build global tech leaders in Europe 25
applicatons at companies. For me, startups are that middle ground.” The key themes of
Huard’s startup Milvue is working on AI for analysing x-rays in emergency rooms. He set up the company deeptech part-tme in 2018, and since completng his PhD last year joined the project full-tme, along with four other scientsts, to expand into other medical applicatons of Business in science statstcal analysis. How to go beyond science for science’s sake, and turn more fundamental research, homegrown To encourage more founders to go Huard’s way, ideas and brain power into industrial products last month Paris-Saclay Universit hosted its tenth and solutons. annual ‘startups day’. It labeled entrepreneurship “a priorit” for its students and researchers, not just in mathematcs but in other felds too, from physics to computer science. Science in business How to beter raise awareness about deeptech in Other graduates include the founders of Watz (AI for the business world. visual recogniton), Hublex (segways to get around big worksites), Kimialys (biotech, working on in-vitro diagnostcs), and Reenbow (teaching kids English using augmented realit). Alumni of Paris-Saclay include the Diverse groups founders of carpooling unicorn BlaBlaCar, as well as How to promote and facilitate entrepreneurship procurement platform Ivalua and human resources in the science communit, but also bring diverse startup HR Path, whose latest fundraisings amounted to profles together — great scientsts with others €54m and €100m respectvely. who understand marketng, fnance and business.
Top labs and universites across Europe are all pushing their scientsts towards entrepreneurship. In doing so, they’ve become the kinds of places where governments Deeptech investors and policymakers are hoping new tech champions How to grow the deeptech investor pool. will see the light. European startups are emerging as scenario number one to get research out of the lab and into business, in felds like quantum, AI, cybersecurit or biotech. Deeptech to address Europe’s big challenges “Fundamental research has focused on universit How to leverage pandemic recovery schemes research labs only since the 70s, with companies on the to further develop deeptech and apply it to other hand concentratng only on commercialisaton and environmental, societal and industrial challenges. going to market,” says Christophe Tallec, general director of Hello Tomorrow, which launched out of Paris. “The link between the two worlds was missing for a long tme,” says Tallec. “Over the past couple of years, startups have European coordinaton emerged as the go-between.” How to beter coordinate eforts across Europe to take on major science and tech challenges In recent years, Europe’s deeptech successes have together. included startups from BioNTech, one of the frst to develop a vaccine against Covid-19, to Ynsect, which is working on insect-based replacements for animal food. 26
BIG SCIENTIFIC QUESTIONS consultant, advising customers including governments. “We weren’t necessarily dreaming about becoming Many up and coming startups are focused on answering entrepreneurs,” says Guo. “We wanted to work hard for the most pressing issues that humans face, and fguring something we believe in, to do something addressing the out how technology can help fx them — an approach challenges our generaton faces — all we really wanted that resonates with scientsts. was to save the planet.”
Wantng to answer some of these billion-euro questons is how insect farming startup Innovafeed We wanted to work got started. “When we created Innovafeed, we hard to do something didn’t start with the idea of growing insects. We “ started with wantng to create a more sustainable food addressing the chain: feeding a growing populaton as well as preserving challenges our the planet,” says cofounder Aude Guo. generation faces — The company, which has raised €210m so far, was set all we wanted was to up in 2016 by four cofounders in their late twentes. Guo, who trained as an engineer, previously worked as a save the planet.”
Aude Guo, cofounder of Innovafeed
Entrepreneurs argue deeptech could ofer Europe the answers it needs to face some of the biggest challenges of our tme: from Covid-19 to climate change. Policymakers in turn ofen cite deeptech as Europe’s secret weapon. “Deeptech is key to the digital transformaton, the health transformaton and the digital sovereignt of the European Union,” says Malo, director of the Commission’s EIC task force.
But turning brains into business isn’t an easy task. For one, Europe’s push for a technical revoluton is fairly recent, and comes afer several decades of falling behind on building a digital and data economy. Stll, the voices of entrepreneurs, investors and policymakers are joining together to point to deeptech as Europe’s second chance — where science can make the diference on the global stage.
Jan Goetz, the chief executve and cofounder of Finland’s quantum startup IQM, another of Europe’s deeptech successes, argues there’s an opportunit for the region to become a global leader in key markets like quantum computng or space tech. “If the US had already won the race, we wouldn’t see companies like Google ramping up their EU partnerships and investments,” says Goetz. “Europe has ideas and know- how thanks to great research. The global race isn’t over yet, at least not in our sector.” IMAGE: Innovafeed How to build global tech leaders in Europe 27
WHAT NEEDS TO CHANGE
But to reach these goals, some things need to change in Europe. The region needs more structured processes to bring academic talent, corporates, investors and startups together around the same table, says IQM’s Goetz, who was one of the atendees of a Scale-Up Europe workshop on deeptech.
It also needs to do more to atract scientfc talent to entrepreneurship, he says. To do that, Goetz argues money should go towards minimising risk for scientst innovators: paying bumped-up salaries for these tpes of profles for instance, or fnancing their projects over several years. “The alternatve for these candidates is a salary at Google or IBM, so we need to ofer them some fnancial securit.”
Beyond the money, there’s room for a broader culture change, says Goetz. “If we’re waitng untl students are doing their PhD to target them, we’re too late,” he says. “The change in mindset should start as soon as kindergarten, and if kids are building solar cells in their IMAGE: CNRS Innovaton school science fair, why not go a step further and build a mini business plan for it too?”
Its work spans early conversatons with researchers about generatng business with their innovatons, to The change in liaising with potental investors later. mindset should “ “The queston throughout the process is valuaton: start as soon as what’s the best way to transfer the technology to the kindergarten.” business world? And is entrepreneurship the best route?,” says Michielin, whose team includes 65 people Jan Goetz, chief executve and — experts in various areas from patents to industrials. cofounder of IQM “We bring potental partners in early and have those discussions with them again and again.”
The innovaton unit of French research lab CNRS is testmony to the change in mindset. CNRS Innovaton THE NEXT CHALLENGE has been around for 25 years, but its mission has changed from patents and licensing to entrepreneurship. For Michielin, the priorites for Europe’s deeptech “The core of what we do today is to help scientsts turn development are the contnuous fnancing of their fndings into business,” says Johanna Michielin, fundamental research, easier access to pan-European director of CNRS Innovaton. opportunites for entrepreneurs, and industrial investments to help startups scale. “We’ve made a To do that, the lab has built a network of VCs, seasoned huge push to create deeptech startups in Europe,” says entrepreneurs and corporate partners including energy Michielin. “Now these startups need some incentve to giant Total and defence and cybersecurit group Thales. stay in Europe — that’s the next challenge.” 28
Investors too have a part to play. “We need to encourage around €3bn, and the European Innovaton Ecosystem scientsts so maybe someday we’ll see, in Europe, giants for about €500m. that are worth at least hundreds of billions,” Polish entrepreneur and investor Lukasz Gadowski said during In France, Macron designated AI, cybersecurit and the kickof event of Scale-Up Europe. quantum computng as primary areas of focus for the country’s future and pledged to spend €1.8bn “The queston is creatng things that make us global on quantum technologies over the next fve years. leaders — we don’t want to be followers. Copying a State-backed investor Bpifrance, which has invested trillion dollar company to create a $50bn company, over €20bn in French startups across all sectors and that’s not what will make us leaders,” said Gadowski, industries, has cited deeptech as a priorit for 2021. whose holding company Team Europe invests in clean aviaton and clean energy, among other technologies. “The piece that’s stll missing is procurement. “We need to identf felds where we lead globally, and Governments need to up their game on that front,” go at it frst.” says Hello Tomorrow’s Tallec. “One way to do that is [to] encourage consortums of companies and public providers to pitch, rather than have startups go at it alone, when they’re ofen undersized and understafed The question is to take on mega projects.” creating things that “make us global leaders — we don’t want to be followers. Copying a trillion dollar company to create a $50bn company, that’s not what will make us leaders.”
Lukasz Gadowski, entrepreneur and investor
“In Europe, we have many game changing and disruptve startups but ofen these companies do not have the same opportunites provided by the VC market in the US and China,” says EU Innovaton Commissioner Gabriel. “To face this problem, we want to increase the pipeline of market ready [business ideas], by taking the risk at the beginning of the scaleup process throughout the direct investments.”
The EU’s ‘Horizon’ research and innovaton programme has budgeted EIC fnancing for more than €10bn, the European Insttute of Innovaton and Technology of IMAGE: Volocopter How to build global tech leaders in Europe 29
Deeptech recommendations
As part of the Scale-Up Europe initatve, Boost the role and visibilit of the deeptech specifcites. These plan partcipants looked at how European EIC by promotng a long-term should allow for: resources, including top-notch local talent, can be reorganised and mobilised deeptech roadmap complete with → facilitated syndicaton of rounds, to achieve bigger returns for the region. public procurement schemes, to beter share risk between Part of that is ensuring Europe deploys and adapted funding and investors its compettve advantages beter — from → adapted sizing of funds to meet administratve support high-qualit low-cost state educaton, to deeptech needs for larger capital universit research labs and tax breaks, to • Create and advertse a long term EIC- → expertse in deeptech and strong European pluralit. Another part relates backed deeptech roadmap around support to startups, such as to promotng entrepreneurship in the key challenges venture studio models scientfc communit, and making investng → evergreen funds in deeptech startups more appealing to a • Equip deeptech startups with broader pool of fnanciers. administratve support and adapted funding Here are the Scale-Up Europe communit’s recommendatons on deeptech. • Develop special public procurement instruments within the EIC which would allow: FOR THE ECOSYSTEM → Allocaton of large procurement FOR PUBLIC contracts to scaleups in key Foster entrepreneurship within AUTHORITIES areas of the roadmap universites by: → Broad coordinaton of European Create standardised patent agencies' procurement, tailored → Adaptng curricula (e.g. develop transfer frameworks to accelerate to scaleups entrepreneurship courses, technology transfers out of mandatory internships in PhD tracks) universites, and between startups Modernise regulatons to take into → Developing largescale and big companies account breakthrough innovatons entrepreneurship centres with adapted fnancial, human and • Establish natonal tech transfer politcal support frameworks to be adopted by • Adopt a proactve approach to universites' technology transfer regulaton, by: → Encouraging connectons ofces, including standardised between disciplines through procedures with indicatve terms → Identfing four to eight key common projects and courses (based on European best practces innovaton areas to regulate across majors in priorit, based on the most benchmark) and negotaton → Integratng entrepreneurs pressing solutons expected to guidelines and VCs in universit bodies be developed in coming years as teachers, thesis or grant • Further exchange best practces → Adaptng regulaton in these commitee members within the existng tech transfer areas to antcipate and allow → Promotng success stories network — the European Technology disruptve innovaton, and and risk culture to remove Transfer Ofces circleCreate a new provide visibilit psychological barriers European structure to promote intellectual propert strategy and • The EU could contribute to this help to monetse existng patents (for Promote a specifc acton plan recommendaton by developing instance, a new ofce based on the a European deeptech label for model of France Brevets) for European public banks, the universites commited to boostng EIC and European Investment innovaton, and prioritse public • Set new key performance indicators funding accordingly (KPIs) to help evaluate which Fund (EIF) to help funds adapt to universites should earn an EU- deeptech requirements designated ‘deeptech label of excellence’ • Develop natonal public banks and EIC/EIF acton plans dedicated to deeptech funding, by injectng money into private VC funds meetng 30 D. Startups and corporates Contracts, scale, money, and when collaboration makes sense
In the race to create global technology leaders, part of and Facebook eat away at their value propositons and the fx is spawning startups capable of generatng the gnaw at their profts. next wave of breakthroughs. But it doesn’t make sense for Europe to lead a tech-only development strategy, nor Some would argue even technology fag-bearers in does a startup-only focus ft — at some point, startups Europe are old. The biggest listed French technology and corporates need to come together if Europe is to company, Dassault Systemes, dates back to 1981 — leverage its innovaton for economic growth. almost 20 years before Google was created. Europe’s biggest tech stock, German enterprise management The contnent, for now, is dominated by older industries. sofware company SAP, was founded in 1972. Oil companies, carmakers, food and drink, banks and industrial conglomerates stll make up the bulk of the Giving birth to new leaders is part of the soluton. region’s economies. Technology companies account for Geting well-established companies to transform and only about 6% of the CAC 40, France’s leading stock compete, in an increasingly tech-heavy environment, is market index. That proporton has nearly doubled in also key for the contnent. It’s an issue startups can help recent years with the arrival of companies like call centre address. In turn, startups stand to gain from collaboratng sofware provider Teleperformance and payments group with corporates, if they can atract more business, scale Worldline, but it’s close to nothing compared to the their breakthrough technologies and fnd backers with weight technology companies have in US indices. In deeper pockets. comparison, about 27% of the S&P 500 is tech-related.
In past decades, European champions have found themselves kicked of global podiums. Even technology Companies like mobile phone pioneer Nokia fag-bearers in and natonal telecoms brands from Orange to “ Deutsche Telekom have seen newcomers like Google Europe are old.”
More tech in the US MSCI Index Sector Weightngs (%) — INFORMATION TECHNOLOGY — OTHER SECTORS Source: MSCI Factsheets, May 2021. How to build global tech leaders in Europe 31
THE PROBLEM Too often, when tech In recent years, there has been a growing trend leaders emerge out for large corporatons to run accelerators, open “ innovaton programmes and corporate venturing arms. of Europe, they seek Dozens of European companies, from LVMH to BP or stock market listings Unicredit, have set up such structures. away from home.” Household names like Daimler, Nestle and Siemens all have full-fedged corporate innovaton strategies. That’s or China, efectvely driving the ‘multplier efect’ of important because well-established companies like innovaton — and its abilit to create jobs — away from these are producing heaps of data in factories, shops Europe. And too ofen, when tech leaders do emerge and cites from Munich to Paris or Stockholm. Siemens, out of Europe, they seek stock market listngs away from Daimler and Nestle are stll among the region’s biggest home. Spotf and Criteo for instance have both sought employers, accountng for hundreds of thousands of listngs in the US, on the New York Stock Exchange jobs. Combined, they employ just under 1m full-tme and the Nasdaq respectvely. In March, Romania-born workers. They also dominate European stock markets, sofware company UiPath was the latest Eurotech star to with the three having a combined market cap of $612bn. unveil plans for a public listng in America.
Theoretcally at least, all these big company incubators Furthermore, research and development spend by provide resources that startups can use as stepping European companies, in comparison to their US stones. European corporates are ideal candidates to buy counterparts, is skewed less towards tech and sofware products and services from smaller partners, share data and more towards sectors like automobile and pharma. through research and development agreements, or help There’s room for more technological transfers to take spread breakthrough technologies by bringing them in- place between startups and bigger companies. Transfers house for deployments at a bigger scale. of breakthrough innovaton through deeptech startups, for deployments at a bigger scale at established So far though, this form of collaboraton has too ofen got companies, are especially promising. stuck at the wishful thinking stage, and defnitely hasn’t been signifcant enough overall across Europe.
Spending spree For one, European incumbents just don’t buy many R&D spend by US companies leans towards startups. That means European startups that do get tech and hardware; Europeans spend more on sold are usually taken over by behemoths from the US traditonal industry — UNITED STATES — REST OF THE WORLD — JAPAN — CHINA — EUROPEAN UNION European Titans Source: McKinsey Global Insttute analysis Market cap ($bn) and total employees — SIEMENS — DAIMLER — NESTLE Source: Google Finance & company flings, June 2021. 32
The key themes of startup- corporate collaboration
Diferent tpes of collaboraton How to beter understand corporate-startup collaboraton models and learn from global best practces.
Overcome culture clash How to achieve a power split between startups and corporates that is balanced and productve. IMAGE: Spotf London HQ
Facilitate takeovers WHAT’S AT STAKE How to beter integrate startups in bigger companies without altering their innovatve DNA. The digital transformaton of Europe’s economies is at stake. Europe faces a test with regards to its abilit to bring an older generaton of giants into the world of connected industry, AI-fueled developments and Tech transfers cybersecurit challenges. How breakthrough tech can scale faster through startup-corporates collaboraton. It’s clear the region can’t aford to exclude well- established corporatons from its technology ambitons, or it risks seeing its economies fall further behind in the global race. At the same tme, dinosaurs will not Data survive — and Europe can’t aford the consequences, How to make more data available across partners partcularly in terms of job destructon, as it waits for a and industries, and beter exploit the heaps of new generaton of technology companies to pick up the data being generated by Europe’s ‘old economy’ baton. players. Geting startups and corporates to cooperate — and eventually merge — within Europe is essental. But upgrading older companies is only part of Covid-19, an accelerator why collaboraton is important. For startups, it’s an To what extent can collaboraton aid recovery opportunit to grow, by teaming up with corporate from the pandemic? partners for expansion, or multplying exits through corporate takeovers. How to build global tech leaders in Europe 33
COVID ACCELERATION drastcally in recent years. “Fast forward fve years, and you’ll fnd most corporates are now convinced of the “For most companies, Covid has brought about a benefts of working with startups. They know they can heightened level of consciousness about how important shave years of their R&D, they can revamp old habits and digital transformaton is and how fast it needs to structures internally, and they can shake up corporate happen,” says Julie Rant, managing director at Viva culture to introduce more agilit and atract talent.” Technology, the annual tech conference in Paris.
One reason for the acceleraton is that digital COLLABORATION FOR DEEPER transformaton increasingly tes into the broader CHANGE picture for corporates, with motvatons ranging from productvit gains to atractng talent, or as a tool for For some, especially companies in the luxury and reaching green and sustainabilit targets. Another is a cosmetcs sector like LVMH or L’Oréal, developments change in culture. with startups have been integrated back into the core propositon and become a part of the products on ofer. “Covid, because it has brought about so much In the industrial sector, companies including Vinci or uncertaint, has forced all businesses into a test-and- Volvo have set up incubators and put open innovaton at learn kind of mindset. That is giving more space to risk- the heart of their R&D strategies. taking,” says Rant. “As a result, decisions that used to be put on hold for months and go through neverending “The name of the game for us is uncertaint, and it’s not audits are being made much faster by corporates.” because of Covid, it’s because of the deeper change in our industry around electrifcaton and decarbonising transport — an era of leapfrogging to new technology, Covid has and trying to solve problems without knowing exactly brought about a where we will end up among this innovaton revoluton,” “ says Lars Stenqvist, executve vice president of Volvo heightened level of Group Trucks Technology and chief technology ofcer of Volvo Group. “We need partners to get there and we consciousness about need agilit, to adjust along the way.” how important digital Stenqvist’s team has been working for fve years on a transformation is.” collaboraton strategy, learning and adjustng to strike Julie Rant, managing director at Viva Technology the right tone. “When we started we were just excited to have a startup hub, and we scanned too broadly. Our approach was too general,” says Stenqvist. The way the As a result, Rant says collaboraton with startups has group’s breakthrough innovaton unit, called CampX, accelerated as well. On that front too, well-established is run now, starts with a set of engineering challenges companies are geting over their usual tendency of like electrifcaton or smart mobilit and brings partners waitng it out or puting back decisions in areas that around the table to search for answers. aren’t necessarily within their comfort zones, and it’s now CEOs who are geting involved in these kinds of deals. “We went from everything being super confdental to The change is most radical when looking at corporate sharing what we’re working on. It’s all within a careful behaviour over the past fve years, says Rant. framework of course, but we’re invitng partners in and opening up Volvo’s markets and commercial “Corporates tpically were turning to startups as a way opportunites to partners,” says Helene Niklasson, to monitor what’s new to the market, in a protectonist who heads CampX. “And we have the freedom and approach — collaboraton was something for annex budget to make decisions quickly and create those links areas and startups were rarely linked to anything core between innovatve partners and our best engineers business,” she says, adding that this has changed in-house.” 34
“We have heritage and knowledge with some of the US buyers lead tech takeovers world’s top engineers. Startups have agilit. Together we 63% of tech startups acquisitons globally are can reach a win-win, built around the smartest people”, made by US enttes says Niklasson. — EUROPE — UNITED STATES Source: Europeanstartups.co, as of June 2021.
VALUATIONS AND TAKEOVERS
There is one caveat to how far European corporates have come on working with startups: they stll do very few takeovers relatve to their US counterparts. “It’s probably the point that has evolved least in recent years,” says Viva Technology’s Rant. “That feeds into the broader issue of exits, which is a real problem for European startups.”
At Volvo for instance, the conversaton about whether the group should invest in a startup isn’t one to have early on. “How can we work together, bring knowledge together and what values do we share? That’s what we’re interested in frst and foremost,” says Stenqvist. The underlying idea is that corporates are convinced of the need to acquire startups — but they are put of by “Corporates more and more are going to be asking obstacles including valuaton models that have litle in themselves the queston: do I pay 10 tmes operatng common with the fnancial analysis of well-established earnings to buy this startup, or do I develop in-house companies. Whether that really needs to change though, and accept that it’s going to take me four or fve and whether startup takeovers should be encouraged years?” says Rant. VCs can play a role in educatng the as a vector for exits is a subject of debate within the broader ecosystem about understanding startups data ecosystem, and there’s no clear consensus. and valuing their assets, she says. That’s step one to encouraging more takeovers. Partcipants at a Scale-Up Europe workshop in May from companies including Sodexo, Telefonica, BMW and Airbus, as well as startup founders, argued acquisitons are only part of the fx for Europe.
“Takeovers are essental for corporatons. Not only do startups grow, corporatons also grow in this process and represent the opportunit to disrupt existng business models to meet changing consumer needs,” says Belen Moscoso del Prado, chief digital and innovaton ofcer at food services company Sodexo. But diferent tpes of partnerships can help address technology and consumer needs, she says.
“The goal should not be to get acquired, but to create European digital giants,” says Adrien Nussenbaum, cofounder and chief executve of startup Mirakl. “We need to foster the market conditons incentvising European companies to go public, not sell and list on Nasdaq. From larger European mutual funds to lower taxes on capital gains there are a lot of levers.” IMAGE: Airbus How to build global tech leaders in Europe 35
Startup-corporate recommendations
As part of the Scale-Up Europe initatve, startup-corporate consorta (e.g. Develop an Erasmus inspired partcipants worked on a plan aimed the American Small Business Act, exchange programme for tech at acceleratng collaboraton between enacted in 1953, sets a 23% target of startups and well-established companies SME procurement at federal level) allowing employees to move in Europe. Part of that meant highlightng seamlessly between startups and • Coordinate among natonal the ways in which well-established bigger companies corporatons and startups can do authorites on how the umbrella more to: communicate, collaborate rules can apply in practcal terms • Create partnerships between commercially and co-innovate. Another in specifc sectons of government, corporates and startups across part focused more specifcally on creatng including through seting annual Europe, allowing temporary employee exit opportunites, including by geting targets transfers European corporates to engage in more M&A actvit. → Internships and gap-year programmes: opportunit for Here are the Scale-Up Europe young talents to gain experience communit’s recommendatons on startup FOR THE in both a large company and / corporate collaboraton. ECOSYSTEM a startup, through a single applicaton process Elaborate a charter of → Secondments: opportunit for reportng and best practces on employees to work for a few FOR PUBLIC collaboraton (open innovaton, months in a partner structure AUTHORITIES procurement) and takeovers • Promote these opportunites Establish a tax credit for European • Development and promoton of internally and throughout the a charter to be updated regularly ecosystem to encourage their corporates investng in European containing: development across countries startups → Voluntary reportng by → For example, since 2016 France corporates of the evoluton of allows corporates to gradually their level of collaboraton with write of their investment in startups, included in companies' innovatve SMEs over fve years annual report → Other mechanisms to be → Best practces and success considered include tax breaks stories regarding: or the extension of R&D tax – Collaboraton: procurement, benefts dedicated structures (innovaton teams, • Promote these fscal incentves to incubators), corporate VC encourage their use by corporates – Takeovers: sourcing • Share best practces between of targets, level of countries independence afer takeover
• Development of a system of “stamps Adopt a Small Business Act for of approval”, granted to startups business administratons that will by corporates and certfing their beneft startups capabilites (abilit to scale, product qualit, etc.) to accelerate startups • The Small Business Acts would screening and approval by other set mandatory shares of public corporates procurement to be allocated by administratons to startups and 36
Looking forward A brighter future?
The spur for the Scale-Up Europe initatve was the into realit. The Scale-Up members did not pull any simple acknowledgement that the contnent doesn’t punches, and came up with a bold plan for building a have anything remotely on a par with Apple, Amazon, more diverse, ambitous and sustainable Europe — one Alphabet, Alibaba or Tencent, companies with market that refects our growing aspiratons for the kind of values well into the hundreds of billions of euros. contnent where big, infuental things happen.
Yet techies have learned by now that well-meaning, Ideas to bring the Scale-Up Europe initatve to a larger politcal initatves and promotonal schemes tend to be stage and implement its recommendatons include: one-hit wonders, with freworks on the launch date and then litle to no follow-up. Will the ideas in this report • An annual Scale-Up Europe summit, where a similarly fame out, leaving Europeans to despair of their high-level collectve of ministers, unicorn founders tech underachiever status? and key EU commissioners can come together to back and renew the Scale-Up Europe strategy. We certainly hope not, and point instead to the many This transformaton requires commitment from signs that things may fnally be going right for Europe. everyone. Together, the contnent’s tech and politcal heavyweights will take stock of the previous year and coordinate, and share accountabilit, on the most pressing startup policy issues for the year There’s rising hope ahead. that European “ A white paper highlightng no more than two to companies are three fagship issues, including data, concrete ready to evolve into proposals and signatures from tech heads, should circulate before the summit. This will give member something bigger.” states an overview on the state of play in Europe’s ecosystem, as well as tme to properly vet and evaluate the issues to be discussed at the meetng. This is the most excitng and hopeful tme for anyone interested in solving the world’s biggest problems. • To help keep the initatve afoat year-round, each Politcal atenton for building high growth companies European country could also appoint a ‘Scale-Up has intensifed in Europe in recent years. Recent Europe Correspondent’ – a government ofcial initatves to assist their growth include the Startup in charge of sharing their country’s experiences Naton Standard and the launch of the EIC. and progress with the European tech communit. These fgures will help set the tone for a transformed There’s rising hope, then, that European companies culture. are ready to evolve into something bigger, with a concerted, data-driven strategy needed to move the • Running parallel, an operatonal team could be process along. jointly run by the tech communit, member states and the European Commission to help enact the This report has laid out recommendatons for what Scale-Up Europe strategy, contnue to grow our needs to happen, and while many of the concepts may communit and ensure ongoing commitment and not be novel, it is now tme to fnd ways of turning them engagement. How to build global tech leaders in Europe 37
• Programme funding and technical assistance, meanwhile, could be made available for countries with less mature ecosystems. Experience, money and skilled people are needed to successfully push startup friendly policy — three things that many member states, especially those with fedgling tech hubs, do not have in abundance. Building capacit right across the contnent--and not just in Europe’s current tech capitals--is seen as key to the initatve’s success.
It’s now time for us to stop talking and start “doing. We are eager to get to it.”
Over the past decade, European tech ecosystems have grown in part by recognising when they had to change. This is such a moment.
French President Emmanuel Macron prodded Scale-Up Europe to life but it will take a lot more work to sustain the efort, and convert the group’s energy and ideas into positve change. And while it will take tme to realise some of the ideas in this report, it is entrely within our capacit to do so.
To succeed, buy-in will be needed right across the politcal map, from ofcials in Brussels to Bucharest. The other key ingredient is the tme and dedicaton of the big European startup names, who – it is hoped – will remain front and centre of this movement, having signed IMAGES: Scale-Up Europe kick of event at Staton F in Paris our manifesto.
Our plan calls for sweeping change and we want to be clear about our commitment. It is only with unrelentng focus from the ecosystem itself that European leaders will contnue with enough purpose on the right path. Pan-European accountabilit
It’s now tme for us to stop talking and start doing. We recommendaton are eager to get to it. Launch a European tech mission commited to strengthening the European startup communit Sign the manifesto here: scaleupeurope.tech and furthering the Scale-Up Europe roadmap 38
Postface and methodology
Convinced that tech has the potental to maximise value creaton and address Europe's key challenges, Scale-Up Europe members have come together as the voice of the European tech ecosystem. The recommendatons in this report came out of consultaton with all communit stakeholders, with a strong focus on delivering impact and ensuring feasibilit.
Since its kickof on March 4 2021, the Scale-Up Europe initatve combined three months of intense open consultaton, a comprehensive survey, 30+ qualitatve interviews and a series of six digital workshops open to the ecosystem. More than 200 startup founders, CEOs of corporatons, investors, representatves of public insttutons, universit leaders and startup associatons answered the call and convened around four key themes: funding spectacular growth, winning the batle for startup talent and antcipatng the future of work, becoming the world’s deeptech powerhouse, and bridging the gap between startups and corporatons.
Partcipants shared their concerns, insights and ideas to boost the European ecosystem — the results of which are in this report.
We are proud to present a strong set of actons, especially as they are shared across the ecosystem with a wide consensus. 21 key recommendatons emerged from the ecosystem consultaton and were refned with Scale-Up communit members as well as experts and policymakers. The communit of European startup associatons was also mobilised through dedicated work sessions, bringing their insights and expertse, notably regarding the best implementaton strategy.
The initatve was led in close cooperaton and with the expertse of Scale-Up Europe partners: La French Tech, Staton F, Viva Tech, Hello Tomorrow, Roland Berger, European Startup Network and Sifed. We are convinced that our recommendatons have the potental to lead to the emergence of European tech giants, provided they are implemented with the support of public authorites and all ecosystem stakeholders. By 2030, we can realise the collectve ambiton of achieving 10 tech companies in Europe valued at more than $100bn. Together, let's take acton and make it happen. Scale-Up Europe is brought to life through the collective eforts of
France’s startup movement, The world’s largest startup In only 4 years, VivaTech has powered by its ecosystem and campus based in Paris, gathering become Europe’s biggest startup bolstered by its government. They 1.000+ startups and a whole and tech event and is recognized bring together these two radically entrepreneurial ecosystem under worldwide as a powerful catalyst diferent worlds bound by a single one roof. for business transformaton, mission: make France a great startup growth and innovaton for home for global mission-driven the common good. tech champions.
The mission-driven global The common voice for European The only management consultancy organizaton that aims to startups, unifing 24 European of European heritage with a strong accelerate the transfer of deep natonal startup associatons internatonal footprint. As an technologies to solve our most and fostering a startup-friendly independent frm, solely owned pressing industrial, environmental ecosystem so that European by our Partners, we operate 50 and societal challenges. startups can grow and thrive more ofces in all major markets. Our successfully in Europe. 2400 employees ofer a unique combinaton of an analytcal approach and an empathic atitude.
Sifed is the Financial Times- backed media platform for This report was writen by Marie Mawad, edited by European entrepreneurs, Éanna Kelly, designed by Gaétan Nivon, charted by innovators and investors. Bill Leaver and produced by Chris Sisserian. The faces of Scale-Up Europe twiter.com/scaleupeuropeen linkedin.com/company/scale-up-europe scaleupeurope.tech
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