Stripe CEO and co-founder Patrick Collison speaks at the 2022 Italian Tech Week in Turin, Italy.
Giuliano Berti | Bloomberg | Getty Images
Founders of some of Europe’s biggest tech unicorns backed an open letter on Monday calling for a “tech renaissance” by creating a single pan-European entity to boost startups and innovation in the EU.
The list of entrepreneurs backing the proposal includes the likes of Patrick Collison, Payments tech giant Stripe; Daavet Hinrikus, co-founder of money transfer app Wise Plural of venture capital firmsand Eléonore Crespo, CEO French accounting software unicorn Pigment.
The letter was also signed by venture capital firms Index Ventures, Sequoia Capital and Seedcamp.
“The large number of countries and cultures in Europe gives it an unfair advantage. But because of this, our startup scene is fragmented,” Read the open letterpublished on Monday on the newly created website of the EU Corporate Initiative.
“Legal and regulatory compliance is a burden, and cross-border collaborations are rare,” the letter reads, adding that unlike U.S. venture capitalists, European investors tend to keep their capital at home. This results in “suppressed momentum, unrealized potential, and artificial limitations on our startup’s chances of success.”
The founders are calling on policymakers to allow the creation of a new single entity called EU Inc under the EU’s Article 28 regime, rather than creating new EU-wide legislation to simplify the regulation of technology startups.
The so-called Article 28 regime is a proposed legal framework within the EU that provides an alternative to member states’ own national rules, rather than replacing them.
For example, the European Companies Act provides an alternative to Article 28 for the establishment of public limited liability companies in the EU, in addition to the existing national laws of the 27 EU member states.
According to a press release on Monday, the new structure for EU companies will “standardize investment processes, streamline cross-border operations and create a unified employee stock option framework” to help European startups expand quickly and attract more capital.
Other signatories of the open letter include Ilkka Paananen, chief executive of Supercell, a Finnish mobile game publisher owned by the Chinese tech giant. Tencentand Miki Kuusi, CEO of Wolt, a European food delivery app owned by an American online food delivery platform. door panel.
The initiative by EU companies comes as many officials are calling for major reforms in Europe to help the bloc compete more effectively as an economic superpower with the United States and China.
Last month, former European Central Bank President Mario Draghi stated long awaited report Calls for an additional investment of 800 billion euros per year to make the EU more competitive on the world stage.
Draghi identified technological innovation as a key area for improvement, saying the region remains “stuck in a static industrial structure, with few new companies emerging to disrupt existing industries or develop new growth engines”.
Meanwhile, European Commission President Ursula von der Leyen has made supporting innovation, competitiveness and smarter regulation one of her priorities. win re-election as president.
Andreas Klinger, an investor and co-sponsor of the EU Inc proposal, said: “In the world of startups, motivation is everything. Anything that slows you down will not slow you down. Slowing down will also kill you by preventing you from reaching escape velocity.
“While the European startup ecosystem has world-class talent, global ambition and unique advantages, it remains incredibly difficult to establish here. EU Inc aims to remove these artificial constraints and allow our startups to truly accelerate their growth.”
Europe has long lagged behind the United States and China in cultivating global technology giants. The United States is the largest technology market, Amazon, Google, Yuan and apple. Meanwhile, China has its own tech giants, including Alibaba, Tencent and Baidu.
“Building a tech giant in Europe today requires navigating a maze of different regulatory and market conditions,” said Martin Mignot, partner at Index Ventures. “EU Inc is our opportunity to significantly streamline and simplify the environment.”
European tech startups raised $45 billion worth of venture capital last year, according to Atomico’s 2023 report European Science and Technology State Report. That number pales in comparison to the United States, where startups have raised $120 billion. Meanwhile, Chinese startups raised $48 billion in 2023, according to Atomico.
Although more new startups are created in Europe than in the United States, European technology companies are 40% less likely to receive venture capital five years later than their American counterparts. Atomico said in its reportpublished in November 2023.
