Patrick Collison, CEO and co-founder of Stripe, spoke at the 2022 Italian Tech Week in Turin, Italy.
Giuliano Berti | Bloomberg | Getty Images
The founders of some of Europe’s biggest tech unicorns wrote an open letter on Monday calling for a “tech renaissance” fueled by the creation of a single pan-European organization to foster start-ups and innovation in the region. I supported it.
The list of entrepreneurs supporting the proposal includes Patrick Collison, CEO of payments technology giant Stripe. Taavet Hinrikus, co-founder of money transfer app Wise and venture capital firm Plural, and Eleonore Crespo, CEO of French accounting software unicorn Pigment.
The letter was also signed by VC firms Index Ventures, Sequoia, and Seedcamp.
“Europe has the unfair advantage of having many countries and cultures, but because of this our startup scene is fragmented,” a new website for the EU Inc initiative said on Monday. The open letter reads as follows:
“Law and regulatory compliance is burdensome and cross-border cooperation is rare,” the letter said, adding that unlike U.S. venture capitalists, funding from European investors tends to stay within national borders. added. The result is “suppressed momentum, unrealized potential, and artificially limiting a startup’s chances of success.”
Rather than enact new legislation at EU-wide level to simplify regulation of high-tech startups, the founders decided to create a new single legal entity called EU Inc under the EU’s 28th regime. They are calling on policymakers to allow their establishment.
The so-called 28th Regime is a proposed legal framework within the EU that provides an alternative to, but not a replacement for, member states’ own national rules.
For example, European Company Law provides an alternative 28th option for establishing a public limited liability company within the EU, in addition to the existing national laws of the 27 EU member states.
According to a Monday press release, EU Inc’s new structure will “standardize investment processes, simplify cross-border operations and create a unified employee stock option framework” for European startups. It says it will support rapid expansion and attract more capital.
Other signatories of the open letter include Ilka Paananen, CEO of Finnish mobile games publisher Supercell, which is owned by Chinese tech giant Tencent, and DoorDash, the American online takeout platform. This includes Miki Kusi, CEO of Walt, a European food delivery app owned by the company.
The launch of the EU Inc initiative comes as many officials are calling for major reforms in Europe so that the bloc can more effectively compete as an economic power with the United States and China.
Last month, former European Central Bank President Mario Draghi published a long-awaited report calling for an additional €800 billion in annual investment to make the EU more competitive on the world stage.
Draghi cited technological innovation as a key area for improvement, saying the region remains “sent into a static industrial structure with few start-ups 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 part of her key focus since winning her second term as president.
“In the startup world, momentum is everything. What slows you down doesn’t just slow you down; it kills you by preventing you from reaching escape velocity,” said co-sponsor of the EU Inc proposal. said investor Andreas Klinger. At Prototype Capital.
“Despite world-class talent, global ambitions and the unique strengths of the European startup ecosystem, it remains tremendously difficult to build it here. EU Inc. We aim to remove this and enable our startups to truly accelerate.”
Europe has long lagged behind the United States and China in creating global tech giants. The United States is the largest market for technology and is home to Amazon, Google, Meta, and Apple. China, on the other hand, is home to technology giants such as Alibaba, Tencent, and Baidu.
“Building a European technology giant today requires navigating a maze of different regulations and market conditions,” said Martin Mignot, partner at Index Ventures. “EU Inc is an opportunity to dramatically streamline and simplify our environment.”
European technology startups raised $45 billion worth of venture capital funding last year, according to Atomico’s 2023 European State of Technology report. This pales in comparison to the US, where startups have raised $120 billion. Meanwhile, Chinese startups raised $48 billion in 2023, according to Atomico data.
Atomico published a report in November 2023 that found that while the amount of new startups being created in Europe exceeds that in the United States, European tech companies are less likely to secure venture funding in five years than their American counterparts. He said it was 40% lower than the previous year.
