Patrick Collison, CEO and co-founder of Stripe, speaks on the 2022 Italian Tech Week in Turin, Italy.
Giuliano Berti | Bloomberg | Getty Photos
The founders of a few of Europe’s largest tech unicorns on Monday backed an open letter calling for a “tech renaissance” fueled by the creation of a single pan-European entity to advertise start-ups and innovation within the bloc.
The listing of entrepreneurs backing the proposal consists of the likes of Patrick Collison, CEO of payment technology giant Stripe; Daavet Hinrikus, co-founder of cash switch app Smart and venture capital company Mn.hand Eleanor Crespo, CEO of French accounting software unicorn Pigment.
The letter was additionally signed by VC corporations Index Ventures, Sequoia and Seedcamp.
“The multitude of nations and cultures in Europe is its unfair benefit. However due to that, our startup scene is fragmented.” read the open letterwhich was revealed on Monday on the newly created web site for the EU Inc. initiative.
“Authorized and regulatory compliance is a burden and cross-border cooperation is uncommon,” the letter stated, including that not like US enterprise capitalists, capital from European traders tends to remain inside nationwide borders. This ends in “stunted momentum, unrealized potential and artificially limiting our startups’ possibilities of success.”
As an alternative of writing new EU-level laws to simplify laws for tech startups, the founders are calling on politicians to permit the creation of a brand new single entity known as EU Inc below the bloc’s 28 regime.
The so-called 28 regimes are proposed authorized frameworks throughout the EU that provide an alternative choice to member states’ personal nationwide guidelines, slightly than changing them.
For instance, the European Firm Statute affords an alternate twenty eighth possibility — along with the prevailing nationwide legal guidelines of the 27 EU member states — to arrange joint-stock firms within the EU.
EU Inc’s new construction will “standardize funding processes, simplify cross-border operations and create a unified framework for worker inventory choices” to assist European startups scale shortly and lift extra capital, based on a press launch from Monday.
Different signatories to the open letter embrace Ilka Paananen, CEO of Supercell, the Finnish cellular recreation writer owned by the Chinese language tech large Tencentand Miki Kuusi, CEO of Wolt, the European meals supply app owned by the US on-line takeaway platform DoorDash.
The launch of EU Inc as an initiative comes at a time when many officers are calling for main European reforms to assist the bloc compete extra successfully with the US and China as an financial superpower.
Final month, former European Central Financial institution President Mario Draghi issued a long awaited report calling for €800 billion of further funding a yr to make the EU extra aggressive on the world stage.
Pointing to technological innovation as a key space the place enchancment is required, Draghi stated the area was nonetheless “caught in a static industrial construction with few new firms rising to disrupt present industries or develop new development engines”.
In the meantime, European Fee President Ursula von der Leyen has made assist for innovation, competitiveness and smarter regulation a key a part of her focus from wins a second term as president.
“Within the startup world, momentum is every thing. Something that slows you down does not simply sluggish you down – it kills you by stopping you from reaching escape velocity,” stated Andreas Klinger, co-initiator of EU Inc’s proposals and investor at Prototype Capital.
“Regardless of the world-class expertise, world ambition and distinctive strengths of the European startup ecosystem, it’s nonetheless absurdly tough to construct right here. The intention of EU Inc is to take away these synthetic restrictions and permit our startups to essentially speed up.”
Europe has lengthy lagged behind the US and China on the subject of producing world tech giants. The US is the most important marketplace for know-how, house to Amazon, Google, Meta and An apple. In the meantime, China has its personal tech giants, together with Alibaba, Tencent and Baidu.
“Constructing a tech large from Europe in the present day requires navigating a maze of various laws and market circumstances,” stated Martin Mignot, companion at Index Ventures. “EU Inc is our alternative to dramatically streamline and simplify the panorama.”
European tech startups raised $45 billion in enterprise capital funding final yr, based on Atomico 2023. State of European Technology Report. That pales compared to the US, the place startups raised $120 billion. In the meantime, Chinese language startups have raised $48 billion in 2023, based on information from Atomico.
Whereas the amount of latest startups created in Europe outpaces the US, European tech corporations are 40% much less prone to safe enterprise funding after 5 years than their US counterparts. Atomico said in its reportwhich was revealed in November 2023.
