Robin Wauters shares his last year’s recap and outlook for 2020 on the European tech startup scene in the fourth episode of our “Voice Message From…” podcast series. Listen now to get his opinion on the trajectory of digital tech made in the EU.
After sharing insights from some of Luxembourg’s leading female entrepreneurs, Gosia Kramer and Genna Elvin, and German technology expert Thomas Rappold, the fourth episode of Silicon Luxembourg’s first-ever podcast series features one of the most knowledgeable insiders of the startup scene in Europe.
As Co-Founder & Editor-in-Chief of Tech.eu, Robin Wauters knows about the state of “Tech made in Europe” like no other.
In his voice message to Charles-Louis Machuron, Founder & CEO of Silicon Luxembourg, he is sharing his view on what the pillars of the European startup scene are, where the continent’s ecosystem is headed to in 2020, and what needs to happen to make sure that more startup success stories will happen in the EU.
This first season of “Voice Message From…” is brought to you with the great support of Luxembourg’s pioneer in the coworking field, The Office.
If you prefer reading Robin’s insights, jump to the end of this article where you can find the transcript of the episode.
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Transcript – “Voice Message From…” Episode 4 – Robin Wauters (Tech.eu)
Charles-Louis Machuron (Silicon Luxembourg):
„Hi Robin! As explained in my email last week, I’m sending you this voice message to quickly ask you some questions for a 2019 review and outlook on 2020 with regards to the European tech startup ecosystem.
With you being one of the most knowledgable experts on technology startups in Europe, it would be amazing to get your answers on the following:
– What were the biggest and most important tech stories in Europe in 2019?
– If you compare the fundraising landscape of 2018 with 2019 – how do you evaluate the recent development of the venture funding market in Europe?
– What major headlines will we see about startups in Europe in 2020?
– What is one personal wish of yours for the development of Europe as a tech ecosystem in the new year and actually also the new decade?
Looking forward to hearing back from you on this. Thanks a lot and talk to you soon!”
Robin Wauters (Tech.eu):
“Hey, Charles, good to hear from you. I hope things are well in Luxembourg. Thank you for asking the questions. I’m really honored that you consider me as a guest for this. And these are my answers.
So at Tech.eu, we actually publish a list of the 10 biggest stories every week. So if you counted all out, that’s more than than 500 stories that we’ve sort of highlighted in 2019. So it’s very, very difficult to pick just a few. I think it’s easier to just highlight a few trends, which is that, the European tech sphere is maturing. There’s more and more funding flowing to these companies, even though there are fewer deals. The investment volume is rising quite quickly. Some verticals are really becoming quite mature, like FinTech, Software-as-a-Service, medical technology. In Europe, they’re quite solid industries. So I think the trend lines in a way are much more important to highlight than any specific stories.
I don’t think it’s much of a surprise to say that FinTech is a really, really well developed, fast-growing, mature industry in Europe. I wouldn’t say only in the U.K., you look at Germany, Sweden, and Spain. The growth that we can see in the FinTech space is the most remarkable when it comes to verticals. Obviously, there’s a couple of industries like MedTech and Software-as-a Service that are also quite interesting where we play almost a leading role globally. But FinTech is by far the one that stands out the most. It’s also the one that gets the most funding both on early-stage and late-stage levels. And we see a lot of exits in that space in the future as well. So I think FinTech is really, really standing out when it comes to verticals, the most mature industry in terms of startups, but also globally speaking, probably leading the way. Even though you have companies, well regions like Singapore, Southeast Asia, China, of course, coming up quite quickly, we’re a little bit far ahead when it comes to the US and Asia, when it comes to FinTech and I don’t think we’re going to lose that headstart in the future.
So it’s always a little bit arbitrary to look at it year by year. We’ve been tracking the funding in Europe for the last five years. I would say that the trend is quite clear, more and more funding going to European startups, fewer deals. And you don’t have to be a mathematician to realize that means that the rounds are getting bigger. The valuations of the companies are getting bigger, basically becoming closer to what the US looks like in terms of venture funding. Of course, if you look at the total size of investment volume, but also the number of rounds, we’re still far, far behind the US and even China when it comes to VC funding. But if you look at Europe as a whole on its own year by year, you can see the trend is super, super clear: More investment, fewer deals, which means the rounds are getting bigger. And it also means that the exits are being postponed. So you see less and less big acquisitions, big IPOs, even though they get the news quite a lot. The reality is that in number and in volume, they’re shrinking quite a bit. And that means the companies are just raising more money so they can stay private longer.
It’s always difficult to highlight specific companies or specific industries even. But what do I think the headlines for startups in Europe will be in 2020? If I’m really honest, I think it will be mostly the same as 2019. I think obviously the funding will either grow or stagnate a little bit. The number of rounds will keep going down. The exits will stay relatively low compared to three, four years ago. I don’t think we’re going to see a lot of change now.
I will say, though, if you really want some specific examples, there’s a couple of companies that I really think are making bold moves, like really ambitious, futuristic visions like Lilium, for example, in Germany or Volocopter with the flying taxis. Or really innovative FinTech startups like Klarna, really trying to break into the US with huge investments, huge teams of people going overseas and really showing that European FinTech companies can also make a difference in the US. So those are the stories I hope to see. I hope to see these companies really make a mark, really become category leaders in their fields and show that even if a company comes from Europe, they can really dominate a field globally and not just in Europe.
So I’d basically boil it down to two wishes: One is that policymakers, meaning the governments, both city level, country government, but also European level, wake up to the fact that innovation is not just a ‘nice-to-have’ and a job creator but it’s also quite essential for everything: society, the economy. They really need to wake up to the fact that innovators and entrepreneurs need more support at every single stage of the business and every single step of the way they should be thinking: “How can we remove barriers for entrepreneurs to thrive? How can we leverage what we already have to become global leaders in certain fields?” So I really, really wish for that. The second thing is more collaboration and more talking to each other. I think especially in sort of the less fast-growing regions of Europe, Eastern Europe, Southern Europe or certain parts of southern Europe and the Baltics: More collaboration, more knowledge exchange, more sharing knowledge with each other showing up at each other’s events, sharing expertise, really helping each other grow across country borders. That’s the only way that I think that region is going to move at a faster speed, because otherwise there’s always the risk of them being left behind versus the richer tech hubs such as the UK, Germany, France and Spain.
Thanks again for having me. Hope this was adequate and hope to hear back from you soon!”