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European startups and the race for VC funding

Europe is home to some of the best talent, most innovative startups and most inventive entrepreneurs in the world – yet it seems that this wealth of talent isn’t always reaching its true potential.

Venture capital investment is still underdeveloped in Europe: in 2016, venture capitalists invested about €39.4 billion in the US, but only €6.5 billion in the EU.[1] What’s more, VC funds within Europe tend to be much smaller than their US counterparts, leading to the most creative and promising of startups to move to the US, where they’ll have better growth opportunities.

It’s up to Europe, then, to do better and address the lack of suitable VC funding in the EU. This is why the European Commission and the European Investment Fund (EIF) have recently announced the launch of a Pan-European Venture Capital Fund-of-Funds Programme (known as the much catchier VentureEU) in a bid to attract investment in European start-up and scale-up companies.

VentureEU, which is backed by €410 million in EU funding, aims to raise up to €2.1 billion in public and private investment; this initial investment round is expected to trigger an estimated €6 billion in further investment in startups across Europe, according to the European Commission and the EIF.

Acting as a fund-of-funds, VentureEU will be the intermediary between large institutional investors and smaller venture capital funds, and it will help provide small European startups with access to international funding. This effort is part of a larger Investment Plan for Europe, which aims to make better use of Europe’s financial resources and provide assistance and visibility to investment projects.

Around 1,500 start-up and scale-up companies are expected to gain access to this fund, which should enable them to grow into world-leading companies and be the living proof of Europe’s technological expertise.

At Talent, we’re dedicated to making Europe a leader in the tech industry – with capital cities like Berlin, Paris, and London at the forefront of our efforts.

We know that getting more (and better) investment in Europe is key to building a global tech scene strong enough to withstand the consequences of Brexit, whatever they are for tech businesses and entrepreneurs.

But beyond receiving investment, we also believe tech companies need to be attracting and securing top digital talent from across Europe – which we’re doing every day from our offices across the UK, Berlin, and Amsterdam.

Get in touch with us today if you’d like to find out more about tech talent across Europe, or if you’re a skilled tech professional looking for your next challenge in a new European location.

 

By Stuart Day

 

[1] http://europa.eu/rapid/press-release_IP-18-2763_en.htm