People in Silicon Valley tend to dismiss the startup market across the pond as too small or not hungry enough, a sentiment not unlike how Europeans view their potential.
This year's annual Slush conference in Helsinki showed a venture market that feels on the brink of transformation, poised for the first trillion-dollar startups.
Founders, venture investors and government officials alike acknowledged the obstacles that have traditionally prevented Europe from reaching its true size and potential. For years, European founders have moved to the United States to start their companies or exited earlier than necessary because they operated in markets lacking local customers and cash.
Companies like OMERs Ventures and Coatue made concerted efforts to expand into Europe after the pandemic, including opening offices in London, but have since closed those stores. For example, OMERs fired many of its European teams. Meanwhile, Silicon Valley companies have argued for years that startups and investors need to retreat to San Francisco to focus on innovation.
People generally think the kinks have been ironed out. Multiple venture investors told Slush's TechCrunch that the idea that the market lacks capital or that deeper U.S. funds aren't interested is overblown.
One investor specifically stated that there is absolutely more US capital in European markets today than there was five years ago. Additionally, some headlines attract more attention than others. When OMERs Ventures announced its exit, IVP and Andreessen Horowitz both said they would open offices in London.
European companies are also beginning to find success in resisting pressure from US investors to relocate to the Valley to establish companies.
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Anton Osika, co-founder and CEO of Vibe coding platform Lovable, said in Slush that the company's rapid growth ($200 million in annual recurring revenue just a year after launch) is thanks to the startup choosing to stay in Europe and instead hire Silicon Valley veterans in Stockholm.
Taavet Hinriks, a partner at Estonian-founded Plural who was first hired by Skype, told Slash that while the European market is about 10 years behind the US, startups are now becoming fully mainstream, unlike 10 years ago.
Another VC added that when he started investing in startups decades ago, startups and their revenues did not make up a significant portion of the region's GDP or revenue, but now the situation has fundamentally changed and the share held by startups will continue to grow.
A growing number of European success stories, such as Spotify and Klarna, are also raising the profile of the region and giving founders confidence not to exit early. It has also given startup employees the skills and financial security to start their own businesses.
Regulators aren't sitting idly by, either, and have recently been working to make it easier for startups to succeed. The EU is moving towards regulatory changes next year that will allow startups to register in all EU member states at once, not just in their home country. While such measures have their own challenges, this movement is progress.
Of course, hurdles remain. European companies remain less likely to experiment with and implement startup technologies than their American counterparts. But the mood at Slush couldn't be more optimistic. Europe looks ready to come into its own, even if it takes a little while to get there.
Slush's welcome banner read, “Still suspicious of Europe? Let's go to Hell.”