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What start-ups want from Europe

Europe has big goals to grow its start-up ecosystem. Stripe’s Eileen O’Mara has some thoughts on how it can be done.

It has been 12 months since French president Emmanuel Macron announced that he wanted to see 10 technology companies worth €100bn in Europe by 2030.

His statement was one among a series of announcements from European policymakers who have been setting out their ambitions for the future of European tech amid the emergence of an increasingly sophisticated and successful start-up ecosystem.

Inspired by the success of the French ecosystem under the ‘start-up president’ Macron, Tánaiste Leo Varadkar, TD, announced in March that Ireland should be aiming to create two unicorns a year – a target already surpassed for 2022 since Flipdish, Wayflyer and TransferMate joined the growing ranks of Irish companies with billion-dollar valuations.

However, one year on from Macron’s ambitious pronouncement and Europe’s growth trajectory has started to wane. In 2021, tech funding consistently broke records while Europe boasted an accelerated growth rate of unicorns of 400pc, compared with a rate of 124pc for the US.

Similarly, 2021 was a record year for Ireland, with VC funding for Irish tech start-ups reaching €1.3bn, according to data from the Irish Venture Capital Association.

Today, however, European start-ups face a more challenging economic climate, and many are having to make difficult decisions about what to prioritise.

Smoothing out regulatory friction

New research conducted among Stripe customers – nearly 200 of Europe’s fastest-growing start-ups and scale-ups – brings this more complex picture of the future of European tech into sharp focus. Findings show that less than 20pc of these companies believe Europe will be the global tech leader in the next five years, and less than half say they’re optimistic about growth opportunities in the short-term.

Ireland, however, is generally more optimistic about opportunities in Europe. More than half (53pc) of Irish start-ups say they are optimistic about the future of European tech in terms of near-term growth opportunities, compared to 42pc Europe-wide and only 7pc in Italy.

At first, you might assume this relates to the macroeconomic picture. But dig a little deeper and you start to see that the regulatory environment is a major factor in why start-ups are taking a more bearish position.

Firstly, for small companies getting started, without the benefit of large legal, finance and operations departments, understanding the substance of regulations and how they apply can be overwhelming.

A whopping 60pc of Irish start-ups say regulation works best for large companies and that this presents the biggest threat to their business. This is especially the case when the rules are designed for, and more easily implemented by, bigger businesses that have more resources, and – many start-ups suspect – feature higher up the priority list of policymakers.

93pc of Irish start-ups surveyed said they believe the structures of policymaking are best designed for established corporations, while only 7pc feel they are very engaged in voicing their concerns and priorities to policymakers.

Start-ups in Europe are, therefore, spending an enormous amount of time and, crucially, money building their own infrastructure to comply, and the absence of clear guidance can lead to unhelpful room for interpretation. Increasingly, valuable resources which could be spent on building great products get tied up with legal fees.

The sheer scale of this regulatory ‘friction’ (ie long and complex procedures) presents a very real threat to start-up growth potential. And, in light of recent conditions, potentially even survival.

Over half say the time spent adhering to compliance processes poses the biggest problem, and one in three says they actually considered launching their business elsewhere for this reason.

Digital first

To help address this issue, happily, there is some low-hanging fruit. Digitising more government services, as has been pioneered in the Baltics, would be a good first step to spearhead the creation of greater efficiencies, helping early-stage companies get started faster.

The need to establish temporary remote processes for businesses during the Covid-19 pandemic provided a roadmap for digital adoption. Policymakers across Europe should now ensure that every interaction with government can be done digitally, unless an in-person meeting is absolutely essential.

Indeed, over half of Irish start-ups believe that being ‘digital first’ is key to creating a growth-friendly environment for start-ups.

Similarly, to support early-stage businesses in implementing new EU legislation across different member states, policymakers should improve the accessibility of existing initiatives designed to help. Activating and simplifying European ‘one-stop shops’, for example, would help show companies what’s needed in terms of compliance, and thus reduce the time they spend on regulatory requirements.

Policymakers could also introduce a new ‘start-up and scale-up test’ (similar to the existing SME test) to assess the costs and benefits of new policies specific to internet businesses and to evaluate their benefits after implementation.

Educate and engage

The second issue our research identifies is potentially more complex: the question of how to design regulatory frameworks that accelerate tech innovation.

As a technology company with deep roots in Europe, we have seen first-hand how smart regulatory policy can drive innovation. At its best, regulation operates like infrastructure, on which companies can easily build. 80pc of Irish start-ups believe that harmonised and clear regulations like the GDPR and PSD2 are key advantages within the European tech ecosystem.

PSD2, an EU directive aimed at regulating payments, provided a clear, sector-specific framework that helped set the standards for the payments industry. Many of the world’s leading fintechs are European and the companies we surveyed highlighted the positive role played by PSD2.

We now need to ensure this approach is seen as the rule, not the exception. While we know policymakers are looking to use regulation to foster innovation, Europe’s fastest-growing internet businesses tell us they don’t see the impact of that yet. And the suspicion that policymakers do not understand the realities facing start-ups is entrenched.

Part of the solution, therefore, will be found in greater engagement between start-ups and policymakers. Building on efforts already underway, like the EU Startup Village Forum, start-ups should be regularly consulted to ensure their concerns are reflected in any new legislation to help unlock their ingenuity. Understanding how to replicate frameworks like PSD2 will require particularly close consultation to identify priority sectors, and what policies are best equipped to support them.

There is no shortage of initiatives designed to address areas of friction for start-ups, from Scale-Up Europe, to the Startup Nations Standard, to the efforts undertaken by the European Commission around the development of a New European Innovation Agenda. All focus should now be on relentless execution that delivers for Europe’s start-ups, particularly as the economic environment deteriorates.

Bringing together the aforementioned existing efforts should be a top priority for policymakers. To help with delivery, policymakers could create a central go-to point of contact (a commissioner for digital entrepreneurship, for example) to address legislative roadblocks, and work with member states to ensure they follow through on their commitments.

If we collectively get this right, Europe will come out of this difficult period stronger than ever.

The European tech ecosystem still has a lot to offer, including an impressive depth of talent, several top universities and natural geographical advantages – all of which were called out as positives by the start-ups we spoke to.

In Ireland, 80pc of  start-ups cited high levels of education as a key advantage of the European tech ecosystem. And with companies such as Stripe, Intercom, SoapBox Labs and others partnering on initiatives such as the new Immersive Software Engineering programme at the University of Limerick, our impressive talent pool will increasingly benefit start-ups and scale-ups in our ecosystem.

Combine all this with a more supportive, more efficient and more frictionless regulatory environment, and the bull case for European tech becomes hard to ignore.

By Eileen O’Mara

Eileen O’Mara is the EMEA revenue and growth lead at Stripe, the financial infrastructure platform.

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Top 10 Florida Cities Dominate The Business Startup Landscape In The U.S.

Top 10 Florida Cities And Business Startup Landscape In The U.S.

The Voice Of EU | Florida emerges as a hub for entrepreneurial endeavors, with its vibrant business landscape and conducive environment for startups. Renowned for its low corporate tax rates and a high concentration of investors, the Sunshine State beckons aspiring entrepreneurs seeking fertile grounds to launch and grow their businesses.

In a recent report by WalletHub, Florida cities dominate the list of the top 10 best destinations for business startups, showcasing their resilience and economic vitality amidst challenging times.

From Orlando’s thriving market to Miami’s dynamic ecosystem, each city offers unique advantages and opportunities for entrepreneurial success. Let’s delve into the chronologically listed cities that exemplify Florida’s prominence in the business startup arena.

1. Orlando Leads the Way: Orlando emerges as the most attractive market in the U.S. for business startups, with a remarkable surge in small business establishments. WalletHub’s latest report highlights Orlando’s robust ecosystem, fostering the survival and growth of startups, buoyed by a high concentration of investors per capita.

2. Tampa Takes Second Place: Securing the second spot among large cities for business startups, Tampa boasts a favorable business environment attributed to its low corporate tax rates. The city’s ample investor presence further fortifies startups, providing essential resources for navigating the initial years of business operations.

3. Charlotte’s Diverse Industries: Claiming the third position, Charlotte stands out for its diverse industrial landscape and exceptionally low corporate taxes, enticing companies to reinvest capital. This conducive environment propels entrepreneurial endeavors, contributing to sustained economic growth.

4. Jacksonville’s Rising Profile: Jacksonville emerges as a promising destination for startups, bolstered by its favorable business climate. The city’s strategic positioning fosters entrepreneurial ventures, attracting aspiring business owners seeking growth opportunities.

5. Miami’s Entrepreneurial Hub: Miami solidifies its position as a thriving entrepreneurial hub, attracting businesses with its dynamic ecosystem and strategic location. The city’s vibrant startup culture and supportive infrastructure make it an appealing destination for ventures of all sizes.

6. Atlanta’s Economic Momentum: Atlanta’s ascent in the business startup landscape underscores its economic momentum and favorable business conditions. The city’s strategic advantages and conducive policies provide a fertile ground for entrepreneurial ventures to flourish.

7. Fort Worth’s Business-Friendly Environment: Fort Worth emerges as a prime destination for startups, offering a business-friendly environment characterized by low corporate taxes. The city’s supportive ecosystem and strategic initiatives facilitate the growth and success of new ventures.

8. Austin’s Innovation Hub: Austin cements its status as an innovation hub, attracting startups with its vibrant entrepreneurial community and progressive policies. The city’s robust infrastructure and access to capital foster a conducive environment for business growth and innovation.

9. Durham’s Emerging Entrepreneurship Scene: Durham’s burgeoning entrepreneurship scene positions it as a promising destination for startups, fueled by its supportive ecosystem and strategic initiatives. The city’s collaborative culture and access to resources contribute to the success of new ventures.

10. St. Petersburg’s Thriving Business Community: St. Petersburg rounds off the top 10 with its thriving business community and supportive ecosystem for startups. The city’s strategic advantages and favorable business climate make it an attractive destination for entrepreneurial endeavors.

Despite unprecedented challenges posed by the COVID-19 pandemic, the Great Resignation, and high inflation, these top Florida cities remain resilient and well-equipped to overcome obstacles, offering promising opportunities for business owners and entrepreneurs alike.

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European Startup Ecosystems Awash With Gulf Investment – Here Are Some Of The Top Investors

European Startup Ecosystem Getting Flooded With Gulf Investments

The Voice Of EU | In recent years, European entrepreneurs seeking capital infusion have widened their horizons beyond the traditional American investors, increasingly turning their gaze towards the lucrative investment landscape of the Gulf region. With substantial capital reservoirs nestled within sovereign wealth funds and corporate venture capital entities, Gulf nations have emerged as compelling investors for European startups and scaleups.

According to comprehensive data from Dealroom, the influx of investment from Gulf countries into European startups soared to a staggering $3 billion in 2023, marking a remarkable 5x surge from the $627 million recorded in 2018.

This substantial injection of capital, accounting for approximately 5% of the total funding raised in the region, underscores the growing prominence of Gulf investors in European markets.

Particularly noteworthy is the significant support extended to growth-stage companies, with over two-thirds of Gulf investments in 2023 being directed towards funding rounds exceeding $100 million. This influx of capital provides a welcome boost to European companies grappling with the challenge of securing well-capitalized investors locally.

Delving deeper into the landscape, Sifted has identified the most active Gulf investors in European startups over the past two years.

Leading the pack is Aramco Ventures, headquartered in Dhahran, Saudi Arabia. Bolstered by a substantial commitment, Aramco Ventures boasts a $1.5 billion sustainability fund, alongside an additional $4 billion allocated to its venture capital arm, positioning it as a formidable player with a total investment capacity of $7 billion by 2027. With a notable presence in 17 funding rounds, Aramco Ventures has strategically invested in ventures such as Carbon Clean Solutions and ANYbotics, aligning with its focus on businesses that offer strategic value.

Following closely is Mubadala Capital, headquartered in Abu Dhabi, UAE, with an impressive tally of 13 investments in European startups over the past two years. Backed by the sovereign wealth fund Mubadala Investment Company, Mubadala Capital’s diverse investment portfolio spans private equity, venture capital, and alternative solutions. Notable investments include Klarna, TIER, and Juni, reflecting its global investment strategy across various sectors.

Ventura Capital, based in Dubai, UAE, secured its position as a key player with nine investments in European startups. With a presence in Dubai, London, and Tokyo, Ventura Capital boasts an international network of limited partners and a sector-agnostic investment approach, contributing to its noteworthy investments in companies such as Coursera and Spotify.

Qatar Investment Authority, headquartered in Doha, Qatar, has made significant inroads into the European startup ecosystem with six notable investments. As the sovereign wealth fund of Qatar, QIA’s diversified portfolio spans private and public equity, infrastructure, and real estate, with strategic investments in tech startups across healthcare, consumer, and industrial sectors.

MetaVision Dubai, a newcomer to the scene, has swiftly garnered attention with six investments in European startups. Focusing on seed to Series A startups in the metaverse and Web3 space, MetaVision raised an undisclosed fund in 2022, affirming its commitment to emerging technologies and innovative ventures.

Investcorp, headquartered in Manama, Bahrain, has solidified its presence with six investments in European startups. With a focus on mid-sized B2B businesses, Investcorp’s diverse investment strategies encompass private equity, real estate, infrastructure, and credit management, contributing to its notable investments in companies such as Terra Quantum and TruKKer.

Chimera Capital, based in Abu Dhabi, UAE, rounds off the list with four strategic investments in European startups. As part of a prominent business conglomerate, Chimera Capital leverages its global reach and sector-agnostic approach to drive investments in ventures such as CMR Surgical and Neat Burger.

In conclusion, the burgeoning influx of capital from Gulf investors into European startups underscores the region’s growing appeal as a vibrant hub for innovation and entrepreneurship. With key players such as Aramco Ventures, Mubadala Capital, and Ventura Capital leading the charge, European startups are poised to benefit from the strategic investments and partnerships forged with Gulf investors, propelling them towards sustained growth and success in the global market landscape.

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China Reveals Lunar Mission: Sending ‘Taikonauts’ To The Moon From 2030 Onwards

China Reveals Lunar Mission

The Voice Of EU | In a bold stride towards lunar exploration, the Chinese Space Agency has unveiled its ambitious plans for a moon landing set to unfold in the 2030s. While exact timelines remain uncertain, this endeavor signals a potential resurgence of the historic space race reminiscent of the 1960s rivalry between the United States and the USSR.

China’s recent strides in lunar exploration include the deployment of three devices on the moon’s surface, coupled with the successful launch of the Queqiao-2 satellite. This satellite serves as a crucial communication link, bolstering connectivity between Earth and forthcoming missions to the moon’s far side and south pole.

Unlike the secretive approach of the Soviet Union in the past, China’s strategy leans towards transparency, albeit with a hint of mystery surrounding the finer details. Recent revelations showcase the naming and models of lunar spacecraft, steeped in cultural significance. The Mengzhou, translating to “dream ship,” will ferry three astronauts to and from the moon, while the Lanyue, meaning “embrace the moon,” will descend to the lunar surface.

Drawing inspiration from both Russian and American precedents, China’s lunar endeavor presents a novel approach. Unlike its predecessors, China will employ separate launches for the manned module and lunar lander due to the absence of colossal space shuttles. This modular approach bears semblance to SpaceX’s Falcon Heavy, reflecting a contemporary adaptation of past achievements.

Upon reaching lunar orbit, astronauts, known as “taikonauts” in Chinese, will rendezvous with the lunar lander, reminiscent of the Apollo program’s maneuvers. However, distinct engineering choices mark China’s departure from traditional lunar landing methods.

The Chinese lunar lander, while reminiscent of the Apollo Lunar Module, introduces novel features such as a single set of engines and potential reusability and advance technology. Unlike past missions where lunar modules were discarded, China’s design hints at the possibility of refueling and reuse, opening avenues for sustained lunar exploration.

China Reveals Lunar Mission: Sending 'Taikonauts' To The Moon From 2030 Onwards
A re-creation of the two Chinese spacecraft that will put ‘taikonauts’ on the moon.CSM

Despite these advancements, experts have flagged potential weaknesses, particularly regarding engine protection during landing. Nevertheless, China’s lunar aspirations remain steadfast, with plans for extensive testing and site selection underway.

Beyond planting flags and collecting rocks, China envisions establishing a permanent lunar base, the International Lunar Research Station (ILRS), ushering in a new era of international collaboration in space exploration.

While the Artemis agreements spearheaded by NASA have garnered global support, China’s lunar ambitions stand as a formidable contender in shaping the future of space exploration. In conclusion, China’s unveiling of its lunar ambitions not only marks a significant milestone in space exploration but also sets the stage for a new chapter in the ongoing saga of humanity’s quest for the cosmos. As nations vie for supremacy in space, collaboration and innovation emerge as the cornerstones of future lunar endeavors.

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