Do we need a European tech unicorn?
Adyen, BlaBlaCar, HelloFresh, Spotify: Europe does have unicorns, but it’s still lagging behind in comparison to the US or China. But what defines a European unicorn? At the Pirate Summit in Cologne (Germany), startup founders, ecosystem builders, and investors came together to discuss the matter.
The question itself, ‘Do we need a European tech unicorn?’, was initiated by Manuel Koelman, one of the co-founders of Pirate Summit. Not from obliviousness to the current unicorns out there, but Koelman wondered about European ownership. When startups grow, that often leads to a natural transfer overseas. “They end up in American hands” argues Koelman, “but how can we create or maintain a more European focused venture or ownership?”.
Level playing field
The European market is a challenge for startups and VCs, in comparison to that in the US. For example: European startups get smaller amounts of funding, while family-owned-businesses form a strong investment party (unlike in the US). Koelman’s ponderings were challenged by Oliver Thylmann (co-founder of Giant Swarm), who seemed less concerned about Europe’s position in the global ecosystem. He questioned what the added value of a big (billion dollar) fund in a country like Germany would mean, “the money is there — think about the banks, but it’s more distributed”. So, it’s not that there isn’t any funding available; it is just spread out more. Although that brings along a more challenging environment than the concentrated VC-fund system of other countries, making this more insightful can level the playing field for funding opportunities within Europe.
“Do we need more tech innovation and leadership coming out of Europe?”
Not losing values
Koelman, to take the discussion beyond being about money (not the biggest problem), then proposed to rephrase his question, “Do we need more tech innovation and leadership coming out of Europe?”. Both being core contributing values to create a unicorn. And, they bring along a focus on what is then important for expansion and a scalable company. The revised question sparked a heated response from Nicholas Brien (France Digital), who jumped in by questioning if and when ‘talent’ then doesn’t need to go abroad anymore to thrive. France has a lot of talent in the computational fields, but doesn’t know how to keep them: “AI startups for example, if they want to or need to scale they need to go the US or China in order to survive in their market. Which then also leads to moving their HQs to these known places. So, it’s not just a question of finding and keeping the right talent, but also of the market.”
“China’s strength is its unity.”
More unified
But, how easy is it then currently to create and cater for ‘the European market’? According to most of the participants in the discussion it’s not that easy. Leon Pals (Startup Foundation) points out that language is a big issue — but he is also positive about future developments, “Founders in the Netherlands, for example, didn’t know what was happening in Germany because of the language difference. That has changed: now communication often already happens in English”. Elements such as design or language are often being adapted to the local audience, which might lead to a too local perspective instead of creating a stronger sense of unity. As Elena Matthiolius (Finance in Motion) mentions about the success of the other startup ecosystems, “China’s strength is its unity”; leading to the suggestion that there needs to be a stronger pro-EU focus for the European startups.
Another point raised about this ‘unification’ is that European ecosystems have the tendency to market themselves as a “small system of nations”, according to Ondrej Svoboda (Startup Safari Paris). “Why not market it as the European ecosystem?”. Thylmann agrees with this point, “The only thing that the US actually leads is in marketing. The steering column in a Tesla is German-made, but we make no association with Germany there. They [the US ecosystem] talk a lot faster and louder”.
So, did the group reach a conclusion on what defines a European unicorn? No. But, there are three key take-aways on what might lead to having more European unicorns:
1) Make sure Europe is unified — it’s the European ecosystem, not a collection of smaller systems
2) Don’t lose (local) values — have a say in the expansion and means to attract and maintain local talent
3) Level the playing field — the money is out there but it needs to become more accessible
What are your thoughts on the matter? Will Europe soon take a leap in raising more unicorns? Share your thoughts in the comments!
