- 18 hours ago
Europe has talent, capital, and ambition, yet its most promising startups still struggle to scale, or leave. Somewhere between early growth and global scale, momentum is lost. Why? The reasons are debated: fragmented markets, regulatory complexity, access to capital. New ideas like the 28th regime aim to simplify this path and reduce friction across borders. Yet the question remains whether structural change can keep up with the speed at which companies need to grow. Is Europe solving the right problem? And what would it take to turn a strong startup ecosystem into a true scale-up economy?
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00:00Okay, well that's a nice intro music. Welcome everyone. Can Europe build global
00:06champions? The answer is yes, so our work is done here. We've been having a very
00:10spirited conversation backstage about this, so I'm excited to kind of get into
00:13it on stage. Europe has the talent, we have the capital, we have the ambition, yet a
00:19lot of our promising startups still struggle at the growth stage and many
00:23leave. There are all kinds of new ideas that I think are coming into play, the
00:2728th regime which aims to simplify the path and reduce friction across borders.
00:34But you know we really need to still think about what how we turn a strong
00:38startup ecosystem into a kind of like a truly true scale-up economy. So we have
00:44two people here who I think have got deep expertise in how we do it. Thank you
00:49both for joining us. Ekaterina I'm gonna start with you first please. So we've
00:54been having this conversation now for as long as I've been you know in the
00:57technology sector which is a good 20 years. People always talk about
01:02fragmented markets, a lack of late-stage capital, regulatory complexity. Has
01:08anything changed in 20 years?
01:12Good afternoon to everybody and I'm glad to be here. Of course it has changed a lot.
01:20what need I think people to talk more about in Europe and actually what we have and what we have
01:27achieved during this
01:30years and I think we should start always talk about what is our biggest strength and it's the talented people
01:36that we have. We have the best deep tech
01:38talent scientists in the world. We have the best engineers. We create more startups than actually any other region in
01:46the world and we
01:49actually host 30% more AI engineers than United States. We have very very very
01:56advanced research and technology infrastructure which you may have an access to if you are a startup. We are also
02:07a
02:08biggest single market in the world and we are each continent and last but not least we have
02:15a really strong strong industry and strong we know how to manufacture we know how to produce. So yeah it's
02:24a lot has
02:24achieved has changed and I think that's good that we should start top positively. Speaking about capital for example
02:34in the last ten years the VC capital has increased four times so only between 2019
02:452023 the deep tech VC capital has doubled so this is less than four years.
02:53We, yeah, we have challenges yet but let's start to talk positive about ourselves and then I think this will
03:01change the general mood I would say.
03:04Yeah we need to be better at telling our story and I'm interested just to follow-up question Ekaterina on
03:10the 28th regime. If you can talk a little bit about that and how you feel that it's going to
03:14be a
03:14change things for Europe. The 28th regime it's I think it's one of the decisions that we did put on
03:23the table and I'm very grateful to the community who was really very supportive and I would say it was
03:29a really team Europe work. We sit together, we discuss and we built and we did come up with that
03:36proposal as European Commission. That's exactly
03:40We will proposal to solve one of the biggest challenges that we still have and this is our fragmentation. We
03:49are the biggest single market yet but we are not a real single market yet. That's the proposal. The 28th
03:57regime is so-called our own Delaware regime and I would say it will be even better because it will
04:03be all digital, it will be faster and it will be cheaper for the founders when they found.
04:08And I hope that agreement will be achieved by the end of the year in the Council and in the
04:15Parliament.
04:17Thank you. So, Jean Charles, you know, you've scaled across Europe. I think you're in four countries now and hopefully
04:24several more by the end of the year.
04:27From the founder perspective, obviously, Catherine has talked about the 28th regime, you know, reducing friction across borders. From a
04:36founder's perspective, what do you need? What's important that we change?
04:42Hi, everyone, and thank you for the question. I don't want to start with what I need. Like, I don't
04:49need anybody to give me anything. I think the reason why we are entrepreneurs and why you have amazing companies
04:58in Europe or outside of Europe is because people felt about a problem in society and unmet need from customers.
05:09That you wanted to solve for us. It was about prevention on healthcare with Alan. And so I've never asked
05:17myself, like, what do I need from the States or Europe? I just asked myself, how do I solve those
05:23very incredible problems?
05:24And of course, when you simplify how we can operate, if we can have a bit less regulatory burden or
05:32paperwork to do stuff, we will always be happier. But people believe that if people believe they do not succeed
05:40in Europe because of that, I think they are missing the problem.
05:42It's just they didn't find a problem that was big enough for their customers. And they didn't solve it. And
05:48so I want to put back like the church in the middle of the village, as we say in French,
05:54but like, I want like to focus on one matters.
05:57Because we need ambition, we need people that develop amazing products, we need talented people, we need to work hard,
06:05like nothing is going to be given to us, it's going to be really hard to build huge companies, and
06:10everything is there to do that.
06:13And so instead of thinking all the time, what do we need from Europe? What do we need? How can
06:19we get more subsidies? Or like, just go and build amazing companies and businesses. And you have a lot of
06:25examples already in Europe, we, they have not only at the scale of the largest companies in the world, but
06:33some are on the past too. And we should celebrate that. We should celebrate the ecosystem that is being created.
06:39In the story of Alan, we never had troubles raising money to achieve what we wanted to do. When you
06:48have a great business, you have global investors willing to invest. Yes, you have less gross capital in Europe, likely,
06:54and I've also seen the difference between a US investors that make a decision in a meeting and the European
07:02investor that's on your list of 120 questions when you are early stage. And so we need to change the
07:08mindset.
07:08We need maybe to change the relationship with limited partners. But it's going to come, I think, more by the
07:14market, they will see that by being slow, they do not compete on the best companies, and they cannot get
07:20investment. And I hope they will learn from it. And yes, if we can work with Europe to change the
07:26narrative, to keep simplifying, simplifying everything we can, to remove some of the administrative burden, or some of the things
07:34that have been done with very good intention, but that's slow down Europe, like,
07:38there are really good thing in GDPR, but having everyone clicking on a website, yes, every time they open, maybe
07:46not the best use of your open time. So how we can just find the balance on how we regulate
07:50in a smarter way, and then we will be all good to build global champions.
07:54So for the founders in the audience at the moment, you would make the case for staying in Europe, building
08:01in Europe, as long as they can find product market fit. That's the key to it.
08:05So at least my experience with Alain is that we started in Europe, we are now operating in several countries
08:11in Europe and outside of Europe, and we can build a global business from there.
08:15Having helped starting Mistral AI and being on the board, I think we can build a global champion in AI
08:23in Europe as well. And it's not easy, but it's nowhere it has been easy to build a very large
08:29business.
08:29So yeah, I would just say, if you have what it takes, just go for it in Europe, and it
08:34will be amazing. And it's not going to be easier in the US.
08:39Maybe for some markets, for some products, like that you develop, maybe your customers are more in the US and
08:45you should more.
08:46There are many markets, many projects, many offers that you can build out of Europe.
08:51So Iker Akaterina, I'd like to come back to you, please. Some of the kind of most valuable European founded
08:56companies did kind of scale partly by leaving Europe or going public in the US, for instance.
09:04Do you think that's a failure of Europe or just simply about global capital markets and the way they're structured?
09:09I wouldn't call it a failure. And I wouldn't blame the founders if they are looking for investments outside Europe,
09:21because this is the founders devoted to their incorporation and their goal to solve problems, as you rightly said.
09:30I mean, they look for funds and capital to develop and to grow. And that's actually, I'm always saying, actually,
09:42we want actually foreign investment flow in Europe.
09:45We want your money, we don't mind. But what we actually want is also European founders to be able to
09:54find those investors also in Europe.
09:58So that's, we work. That's something that we work. And that's, again, is a capital market union or civic investment
10:04union.
10:05We managed to create a scale-up Europe fund for the scale-ups in particular, because this is actually where
10:11we should really focus, I believe.
10:13We have more or less good developed private VC landscape or seed phase.
10:21We have a lot of also national, but also European instruments as European Innovation Council fund.
10:28But we really need bigger VCs for scale-ups. Together with the private sector, actually, we sit together, we agree
10:37on our goals to keep our deep tech scale-ups in Europe.
10:42That the goal is to help them exactly to become global. We want our companies to become global, to sell
10:49outside European Union.
10:52And we managed to launch this fund for less than six months. So show us that we can do it
10:59and we can do it relevantly fast.
11:00Yeah.
11:01I'm completely agree with the speed. That's the difference. And that's something that is a mindset, yes. But I think
11:09it's also a know-how, a knowledge.
11:12Don't forget that they did create this VC system minimum 20, 30 years before us.
11:20Yeah.
11:21So yeah, that's development in process, but a lot is happening in Europe and many positive is happening in Europe.
11:28Yeah, absolutely.
11:29Jean Charles, there's this kind of story that we keep telling ourselves in Europe that our founders, they think too
11:38small.
11:38They sell too early. Do you think this is just us telling ourselves, you know, a myth almost?
11:46Like we keep telling this story. Do you think it's true? I don't see any lack of ambition in Europe.
11:52But we keep telling ourselves that we're failing because we're not the US and we're not China.
11:57I think we are telling ourselves the stories. But if you look at you have European champions, Spotify, that didn't
12:06sell out and that is really big.
12:08You have a revolute in the UK that is growing and building a leader. You have companies like us that
12:15are not for sale and that want to build a global leader.
12:19Yeah.
12:19And so you have those and it's great that you have those. It's also great that some founders exit and
12:24give back money to the VCs and to the limited partners so they can reinvest in the ecosystem.
12:30And so we should not be against acquisition, even acquisition from U.S. companies from time to time. You need
12:36a dynamic environment where money flow.
12:39But like it's the more you eat, the hungrier you get more or less. And so people, we get more
12:46and more ambitious, the more exit they are, the more they see that it gets bigger, the more they see
12:52that people succeed.
12:53And so I don't think we lack ambition. I do think that indeed we, in terms of the capital markets,
13:00IPO-ing in Europe, you need to do it maybe later stage than in the U.S.
13:05because you don't have the same depth of analysts, money flowing. But again, it's just being more patient, having private
13:11companies a bit longer.
13:13And then they could IPO, I think, pretty big and pretty successfully in the U.S. I do think that
13:20in terms of speed, we have still some stuff indeed in Europe where if someone wants to leave a company
13:26in France, they are blocked for three months, staying at their former employer.
13:30A quarter in the life of startup is a lot of time. And so if we could fluidify that just
13:37for the benefit of the employees that want to join the company, it's not like they want to stay in
13:41the former one.
13:42All the things that can add some oil in the ecosystem will help us be faster and more ambitious. But
13:49I don't think that at least all the founders I'm talking with, nobody wants to exit.
13:55Nobody wants to build something small. They want to build something gigantic. But the message I want to pass is
14:03let's not just follow the headline.
14:05You need some founders that want to build some gigantic stuff. You need some founders that want to do exit.
14:10You need some founders that want to bootstrap their company.
14:13You need a diverse ecosystem and we need a diverse ecosystem that is ours. We don't need to replicate exactly
14:20the same shape and form than the U.S. or China.
14:23We can build something that is really meaningful in Europe with our own rules. The only thing that I really
14:29truly believe is that if we want to set the cultural tone of the world, like the mindset,
14:36if we want to export our vision of democracy, our vision of society, we need to build the category leaders
14:42because that's going to be through the usage of citizens.
14:45And so we need to have the ambition to build mega corporations in Europe. We also need to accept that,
14:52I don't know if at the commission level, but that we create European giants.
14:56Sometimes in Europe we create our own complexity by not willing to have people merger and have a French champion
15:03or German champion.
15:04Everybody wants a champion where we should accept that people merge and we have maybe unfairness between the states, but
15:12a chance to compete at the global level.
15:15This kind of thing that we, again, we elevate the ambition and we don't fight our small turf and we
15:21try to build a global champion.
15:22I hope we build the mindset that we bring in Europe and we accept to consolidate across Europe to build
15:28something more meaningful and more competitive against China or against the U.S.
15:33Ekaterina, sorry, did you want to come back on that?
15:35I just say I couldn't be more agree. I mean, it's something that I believe it's happening. It's not at
15:42the speed that I wish to see, but I will give you one example of the one of the public
15:47procurement that we did organize.
15:49Like we wanted to lead by example in the European Commission for European cloud. Okay, we may not have one
15:55big company, but it shows that they have the one goal to grow.
15:58Companies from a couple of member states get together formal consortium apply and they won this tender absolutely fair competition.
16:10So we can do it and I completely agree that only together we are stronger and that this we have
16:17to start think as one.
16:19And that's the biggest challenge. I think that was actually if we talk about challenges, I would point only one
16:24which we have to address.
16:26And this is this is that consolidate really think as one and that no matter where this company is originated,
16:34if it's a global multi trillion company is going to create jobs,
16:38it's going to pay taxes, it's going to do actually to grow from Europe, it will be a European company.
16:44All the member states will benefit from such big companies and he touches something that we have also to adapt
16:52and we work on that in the Commission.
16:53This is our competitiveness legislation. It was last updated like 20 more than 20 years ago.
17:01Now apparently it's not the same as 20 years ago. So we are working in the Commission to adapt this
17:07legislation.
17:08So I think we're all in agreement that, you know, clearly Europe is a great place to build.
17:13But one of the challenges still is the late stage capital is, you know, it is thinner than in the
17:17US.
17:20Clearly, we need more access to institutional capital.
17:24How do you think about that? How can we begin to sort of like change the risk appetite for like
17:29those that large institutional kind of capital,
17:31the pension funds and make sure that flows a bit better into, you know, growth stage companies?
17:37Yeah, we start to think about the scale bureau fund and the first meeting of the with the possible founding.
17:47That time we didn't dare to call them yet founding investors.
17:50It was possible founding investors happens in the end of October last year.
17:55And in the last six months, we managed to raise already three billion.
18:00It's a deep tech scale up fund with excellent private investors.
18:06We managed to choose to select on the very competitive procedure, the fund manager.
18:13And I'm very optimistic that by the September, October, the fund manager will start to make a first investment round
18:20and you managed to raise the remaining five billion target that we set.
18:24And what is positive? And this is a signal to the market.
18:27This is how I see this fund because it's signal to the market.
18:31OK, it's a good business.
18:33There will be a big return if you invest in our innovative companies because these two goals,
18:40keep those companies, help them to grow from Europe.
18:42But second goal is show that there is a high return.
18:45That's a profitable business.
18:46Yeah.
18:47And what is really positive is we have not only Jews like Novo Nordis, Caixa, Santandel,
18:53but we have the biggest pension fund in Europe, ABG, and the biggest insurance company in Europe as founding investors.
19:01That's something that I hope we will also start to have a multiplier effect and more institutional investors.
19:09We work also with the EAB, European Investment Bank, on the so-called institutional investors pact that we want to
19:17motivate
19:17and to show them possibilities which are existing in different member states, different instruments, be it national, be it private,
19:28because very often it's even they don't know how to do it.
19:31Some of them are very small.
19:32I mean, we have pension funds whose asset management is 25 million.
19:38Apparently, they cannot invest in funds as scale-ups, but they can invest in seed funds, for example.
19:43So we need all the ecosystem.
19:46So a lot is happening.
19:47And I'm nonstop going to repeat this because I really believe that we should start to think much and talk
19:53much more positively about ourselves.
19:56And the ecosystem that was built last decade is remarkable, remarkable in Europe.
20:02Well, I think there's a lot to be positive about.
20:04I mean, here in France, I mean, Jean-Charles, you'll know, you know, about this, the TV initiative,
20:08which I think has unlocked 13 billion euros in LP commitments across 37 institutions.
20:14Like, how do you sort of think about this kind of, like, challenge around capital flowing into sort of, you
20:22know, growth stage startups?
20:23Like, how do we change the mindset of LPs?
20:27How do we change the mindset of institutions?
20:30Honestly, my answer is going to be a bit of the same, but make your business so attractive that people
20:37want to fight to enter it.
20:39And it's an amazing return.
20:40And I think we should, again, not be naive.
20:43Like, investors are looking at the optimization of their returns, and they honestly don't care where it is.
20:51And Europe is in a stable, so they might have some preconception in the US or be a bit slower.
20:57But again, if your business is obviously a category winner, you will not have problems attracting money.
21:04There are industries like more deep technology and so on where you want, like, maybe more long-term capital that
21:11is able to take more risk,
21:13which was the first initial definition of venture capital when it was created that was to serve those kind of
21:19goals.
21:19And it has changed a bit over time with shorter-term returns and so on that we need.
21:26But again, I don't think we have a major problem of growth stage investing.
21:32The biggest European companies that are succeeding have investors knocking at their door all the time, which is really fine.
21:41And so we just need more of those companies.
21:43And I talk with a lot of LPs or, like, fund managers that are trying to trade the new generation
21:50of growth fund.
21:51I think the deal that has been done between the Commission and EQT for the European fund is going to
21:57be really interesting.
21:58We have more and more, but you need, like, a match between offer and demand.
22:03You need also enough companies that are able to digest that money and to grow to the scale.
22:08So it's kind of a chicken-on-the-egg problem.
22:11We will need more IPO.
22:13We will need, again, more exit.
22:15We will need more consolidation.
22:16But I'm not really scared about that.
22:20I don't think it's going to limit, again, what could limit us is the lack of ambition of funders.
22:28But I think it's going.
22:32Maybe more like some cynicism in the purchaser in Europe.
22:37Meaning, like, if you are a new product in the U.S., you're going to pitch it.
22:41And even a large corporation is going to be willing to test it.
22:44It's true that in Europe you have more hurdles to get to get to your first customer, your first deal.
22:50Like, people welcome a bit less innovation.
22:52They see more the risk than the upside, usually.
22:56And so it's how, again, collectively we change that mindset by changing the narrative, by telling amazing stories, and by
23:03pushing people to take a bit more risk.
23:06And that it comes through our education, which is not a very risk-rewarding education as well.
23:14But I do believe that it's just a matter of time, communication, and doing the work together that will solve
23:20it.
23:20You touched something that I maybe wanted to end this, because I absolutely agree.
23:26I believe that the question now is not that if Europe is able to finance, to find a capital for
23:35scale.
23:35The problem is, is it buying, actually, innovation?
23:38That's the real issue, I think.
23:42And that's why I'm nonstop very often when we speak about with founders, but not only.
23:49And we are so focused on how to help them to find clients.
23:52Because, of course, I mean, there will be more investors if they have clients.
23:57And very often, actually, the first client should be some public organization, being a government, being commissioned.
24:02And I don't think that even our investors are so risk-averse.
24:07I think we are, as buyers, more risk-averse.
24:10That's how we think.
24:13What we do, and I think first, I mean, show positive examples.
24:17This always helps.
24:19Because very often, the perception is absolutely wrong.
24:21That it's something, it's not, it's new technology, it will be more expensive, it will cost more to the taxpayers.
24:28And very often, it's the opposite.
24:29I very often say that we are not rich enough to buy cheap products.
24:34I mean, in the end, maybe, very often, it will be much more cost-effective.
24:39And also, I believe that we should also motivate the private sector, our corporation, to procure more.
24:46So it's never only the public money.
24:48Never.
24:48There will be never enough.
24:49But they really can be a multiplier.
24:52They can boost.
24:52They can do the risk for the private sector.
24:55We are working on pre-commercial public procurement.
24:58Yeah.
24:58To give the guarantees to the public procurer that if they procure innovation, especially pre-commercial innovation, there will be
25:05no problems for them with the control and authorities.
25:12But also, to make a best legislation that actually multiply and boost.
25:16So clients are really important.
25:18We don't have long left.
25:19But I do want to get into one of the kind of the areas that Europe's always criticized by.
25:24And it's a story we tell ourselves that we're over-regulated.
25:27How best do you think about protecting European values while also enabling people like Jean Charles to innovate at pace,
25:34at real scale?
25:35I think it is, first of all, values and speed and competitiveness are not things that are controversial.
25:42Even they are really very connected.
25:44And I believe in the geopolitical situation that we have now in the world, the rule of law, the democracy,
25:54working democratic institutions, the rule of law, and stick to the high values and actually protect them and fight for
26:02them is competitive advantage.
26:04It's not disadvantage.
26:05So I really believe that – I'm sorry that I forgot to tell the fifth advantage that we have in
26:11Europe.
26:11We are a democracy.
26:13We are predictable.
26:14And that's something that matters and I see as competitive advantage.
26:20But I really believe that we should show that being democratic doesn't be slow.
26:26And that's how I hope we show in commission.
26:31That's why I'm saying six months to raise a big fund.
26:34It's quite fast.
26:36Yeah.
26:37And then all of us should do their work, not complain.
26:40Do – all of us do their work.
26:42We as politicians, as commission, the governments, the investors, the founders, the private sector has a role and focus on
26:50the positive and make this more urgent, more fast.
26:55This sense of urgency, I want all of us to feel it.
27:00Jean-Charles, let's kind of think about, you know, being positive towards the end of this session.
27:08Like, Europe is an amazing place to build business.
27:12It's also an amazing place to live, frankly.
27:14Like, what's the opportunity here?
27:16If you're looking forward in 10 years, what do you hope we've managed to achieve in terms of really supercharging
27:22the ecosystem?
27:25I just want us to collectively create, and it will be people in this room, like the champions of tomorrow.
27:32And you – indeed, in your previous question, you kind of opposed, like, how can we sustain the European values
27:38while innovating?
27:39No, it will be innovation and creation at the core of the European values.
27:44And if you look at the story of Europe, we have been a continent of innovation.
27:48We invented a lot of things across the time.
27:51During the Renaissance, it was blooming everywhere.
27:53And so, I just think I would love to see that kind of new creativity burst in Europe, all across
28:02the country,
28:04where we celebrate that we have a great global champion and we don't start complaining about having two big players
28:13before we have won on the global marketplace.
28:15I think it will be really, really important.
28:17And so, I would like to be a continent that wins because we build the best product in the world
28:23and not because we just try to regulate the ones that others do.
28:28And I do think we have the potential, we have the people, we have the capital to do so.
28:32So, it's just a matter to, as you said, to get back to work and stop complaining and whining.
28:36Well, I think that's a great note to leave things on.
28:38I think, you know, we've got such opportunity here in Europe and we just – all of us in this
28:42room need to get back to work and start building.
28:44Thank you both so much.
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