Startup Europe Partnership, a pro-startup initiative established by the European Commission, has penned an open letter to the EU’s biggest decision makers on tech, business, and the economy, calling for a refocus of efforts and funds to improve the environment for tech company scaling in Europe.
The letter, How EU Programmes Can Help Innovators and Startups, has been addressed to a number of EU politicians, such as European Commission president Jean-Claude Juncker; vice president for the Digital Single Market, Andrus Ansip; and commissioner for digital economy and society Mariya Gabriel, among several others.
The group, which is led by non-profit Mind the Bridge Foundation, is raising the issue around scaling challenges for European tech startups. It points to the wealth of young tech businesses in Europe but also the dearth of scalers and “unicorns” in comparison.
“Europe needs more tech companies that are able to grow rapidly and go international while producing revenue, employment, and innovation on an increasingly larger stage,” the letter reads. “If Europe has somewhat partially filled the gap in seed and early stage financing, later stage growth financing (including access to IPOs and investments from pension funds and wealth foreign sovereign funds) still need to be significantly improved.”
The group has made three key recommendations:
First, EU programmes need to support the entire ecosystem rather than individual actors, it said. Development efforts should focus on growing the various ecosystems around the continent for greater results instead of supporting individual projects and companies.
Second, the letter calls for more supports and resources for investors. Connected to the previous point, the authors believe that the EU should back investors and funds so that more money can spread around Europe rather than investing directly in startups through different financial instruments and grants. The EU should invest in VC funds or funds of funds, it said, and if it does invest in a company, that investment should be matched by private investors.
Finally, focus needs to shift to the later stages more generally. Europe is well-positioned for starting companies and gaining seed rounds. Attention needs to move away from this.
The letter has been signed by several familiar names in European tech including Alberto Onetti, chairman of Mind the Bridge and cofounder of Funambol; Frédéric Mazzella, president of Blablacar; and Karen Boers, president of European Startup Network.