People in Silicon Valley often dismiss the European startup scene, claiming it’s either too limited in size or lacks ambition, but this perspective is far from how Europeans see their own opportunities.
This year’s Slush conference in Helsinki highlighted a venture ecosystem on the verge of significant change, one that believes it could soon produce its first startup valued at a trillion dollars.
Entrepreneurs, investors, and government representatives all recognized the obstacles that have historically prevented Europe from reaching its full potential. For a long time, European founders either relocated to the U.S. to launch their ventures or sold their companies earlier than necessary, largely because the local market lacked sufficient customers and funding.
After the pandemic, firms like OMERs Ventures and Coatue made deliberate moves to expand into Europe by setting up London offices, but these have since closed. For instance, OMERs parted ways with much of its European staff. At the same time, some Silicon Valley firms have argued recently that innovation requires both startups and investors to return to San Francisco.
Many now believe the major issues have been addressed: Several investors told TechCrunch at Slush that concerns about the market being underfunded, or that American investors aren’t interested, are exaggerated.
One particular investor pointed out that there is now significantly more American investment in Europe than there was five years ago. Some news stories also get more attention than others: When OMERs Ventures announced its withdrawal, both IVP and Andreessen Horowitz revealed plans to open London offices. (Andreessen, however, later closed its office as well.)
While the temptation to move to the U.S. is still strong, European startups are increasingly succeeding by resisting American pressure to relocate to Silicon Valley.
Anton Osika, co-founder and CEO of Lovable, a platform for vibe-coding, shared at Slush that the company’s impressive growth—reaching $200 million in annual recurring revenue within a year—was due to remaining in Europe and instead attracting experienced Silicon Valley professionals to Stockholm.
Taavet Hinrikus, a partner at Plural and the first employee at Estonia-based Skype, remarked at Slush that although Europe trails the U.S. by about ten years, startups have now become mainstream in a way that wasn’t true a decade ago.
Another venture capitalist mentioned that when he first started investing many years ago, startups and their revenues made up only a tiny fraction of the region’s GDP, but now the landscape has changed dramatically, and the influence of startups is set to keep expanding.
The increasing number of European successes like Spotify and Klarna has also enhanced the region’s reputation, giving founders more confidence to hold out for bigger opportunities. These companies have also equipped startup employees with the expertise and financial resources to launch their own ventures.
Regulators are also taking action, working to make it easier for startups to thrive. The EU is preparing to introduce regulatory changes next year that would let startups register across all EU countries at once, rather than just in their home nation. While this brings its own set of challenges, it marks progress.
Of course, some challenges persist. European corporations are still less inclined than their American peers to try out and adopt new startup technologies. Nevertheless, the mood at Slush was overwhelmingly positive. Europe appears poised to reach its potential, even if it has taken a bit longer to do so.
As the welcome sign at Slush boldly stated: “Still doubting Europe? Go to Hel.”
