Cautious Optimism About Europe's Tech Sector

European tech startups are thriving, according to an article published by The Economist. The article points out that "Europe now creates more startups than America: around 14,000 between January and September [in 2023], compared with 13,000 across the Atlantic." Furthermore, "The old continent, including Britain, has more than 41,000 young tech firms and about 3,900 more mature ones. Together they employ 2.3m or so people, about twice as many as in early 2019 and more than in Europe's property sector (excluding construction). The total value of Europe's private and publicly listed tech companies is again nearing the peak of $3trn reached in 2021." It was $2.8trn in 2022.

The article adds that "European tech's relative resilience can be explained by its increasing maturity. Take the number of companies founded by ex-employees of successful startups. More than 9,000 people who worked for those of today's unicorns which were created in the 2000s have gone on to found their own businesses. That is about 50% more than the number of people who left unicorns which date back to the 1990s in order to strike out on their own."

What is more, as Europe's tech industry continues to mature, it "is also developing its own characteristics. European founders are less cock-a-hoop than their American counterparts at all things ChatGPT-like: from January to September [2023] Europe saw 35 financing rounds backing developers of generative artificial intelligence, compared with 106 across the pond. By contrast, climate-related startups accounted for 27% of all capital invested in European tech in 2023, a much bigger share than in America. Climate-tech firms have now overtaken fintech, until recently Europe's most represented technology niche."

But when comparing Europe's tech sector to America's, the article asserts that the former "is unlikely to become as big as America's just yet. Silicon Valley and its satellites in Austin, New York and elsewhere are still way ahead. America's herd of unicorns (about 700 on last count) is twice the size of Europe's (356)." As someone who has closely observed Europe's startup scene, I concur with the following:

The biggest obstacle to European startups' ambitions is home-grown, however. The EU has repeatedly tried to create a single digital market as frictionless as the American one, but differences in taxes and regulations still abound. Europe has shown what is possible, says Zeynep Yavuz, who invests on the continent for General Catalyst, an American VC firm. The explosion of enterprise in fintech in recent years was a direct result of bloc-wide regulations drafted in Brussels. If EU leaders really want to strengthen European tech, which they all profess to do, they should spend less time trying to regulate various digital markets and instead create a single truly European one. 

Me and my advisor, Lindy Rose
(who also carries the important title
of being my mom), attending
the Silicon Valley Funding Summit 

Setting aside my concerns about differences in taxes and regulations, I continue to seek investment and partnership opportunities with European startups. As I have in previous years, I had the opportunity to attend the Silicon Valley Investment Summit on Jan. 8th, 2024 in Las Vegas, Nev. This event, which aims to connect investors to global startups who are seeking funding and strategic partnerships, precedes CES®. I was provided the privilege of serving on a panel of esteemed investor judges who provided valuable feedback to over 40 startup entrepreneurs. While most startups are headquartered in Europe, some are domiciled in North America (and a couple from South Korea) as this event received support from organizations based in the U.S.):

• Captio (Austria) makes complicated texts simple through their software that translates information into easy-to-understand language, offer trainings and develop digital solutions around the topic of comprehensibility.
• ColibrITD (France) has an objective to utilize the power of quantum computing and technology in the noisy intermediate-scale quantum (NISQ) era, which is the current state of the quantum industry. The Quantum Innovative Computing Kit or QUICK provides customers with technological, financial and environmental excellence in a software platform that runs use cases in the best available hardware at the lowest cost and with optimal energy efficiency.
• .lumen (Romania) aims to help visually impaired people live a better life. Their glasses for the blind reproduce the main characteristics of a guide dog, all in a scalable product. And the product allow users to have a better mobility, helping them to have easier access to education and then jobs, thus helping to improve their social life.
• PhotonFi (USA) is transforming the landscape of wireless communication standards through the utilization of LiFi technology. Their innovative approach involves harnessing the potential of invisible light to transmit and receive information at remarkable speeds, delivering enhanced security and mobility.
  
• SiPeral (France) is developing a high-performance, low-power microprocessor that will be the heart of European supercomputers essential to Europe's technological sovereignty in strategic areas such as artificial intelligence, medical research, climate change mitigation, energy management.
• SMT (South Korea) has a product that measures the water quality and temperature in real time, filters water, and sterilizes it with UV rays at the same time.
• Veintree (France) is providing everyone an easy access to a secure digital tool to protect their private life through biometric solution based on the capture and analysis of hand vein networks to authenticate users, without identifying them.
• Xelera Technologies (Germany) is a software provider for high-speed network technology and machine learning applications. They solve data rate and response time bottlenecks in software applications and systems with a performance-optimized software stack. Their product also increases the energy efficiency of data center and cloud servers.

I wish to thank the European Network of Research and Innovation Centers and Hubs, USA (ENRICH in the USA) for producing such a great event in partnership the University of Nevada Las Vegas Office of Economic Development, UNLV Sports Innovation, European American Enterprise Council, European Innovation Council and SMEs Executive Agency, Enterprise Europe Network, Angel Launch, Keiretsu Forum Southern California, myGlobalVillage, NGI Enrichers, Small Business Development Center (SBDC) at the University of Pittsburgh, Silicon Valley SBDC, Temple University SBDC, and the Foundry 415 Innovation Group. It is always a great experience attending ENRICH in the USA's events and I look forward to attending the next Silicon Valley Funding Summit.

​Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.