As a founder of a tech startup or scale-up, 2022 is a great year to turn your gaze on Europe. Despite the challenges presented by the current pandemic, the tech industry is stronger than ever. In fact, it’s often been our lifeline throughout, and the appetite to buy more technical solutions is only set to increase.
The opportunities to capitalize on that are there for the taking. The stages of panic, triage and rebuild are over, so expansion is the next logical move allowing you to unlock business across Europe.
So, why should startups be looking to Europe? Europe offers businesses plenty of opportunities for growth. Affluent economies and stable legal systems, as well as the advantage of a varied, highly qualified and richly diverse tech talent pool. Tap into a new customer base and reach out across language barriers with your business and product. Let’s examine a little more in-depth as to why your startup should be looking specifically to Europe this coming year.
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In addition to the reasons given above, after the U.S., Europe is the second largest B2B software market. It makes sense to set up shop in Europe and grow your business there, following in the footsteps of some of the most globally-successful tech companies. According to TechCrunch, 31% of Zoom’s revenue, along with 38% for Slack, 39% for Asana and 48% for Dropbox comes from Europe.
Europe has an active startup incubator and accelerator scene. Several of our partners are leading that charge, including:
The succinct answer to why should startups be looking to Europe is that it’s simply the best choice for maturity and stability.
Sticking a pin in a map? London has long been the destination of choice for Silicon Valley tech startups, with its advantages of ease of access, no language barrier to negotiate, and a booming economy based on the always strong pound sterling. Any current uncertainties — such as those caused by Brexit — should not shake the certainty that London remains a highly attractive relocation destination, as Dominic Jacquesson of Index Ventures writes.
Market growth for London-based startups shows no sign of slowing down, despite any political uncertainty:
While London won’t necessarily be the springboard for all tech companies in Europe, it certainly is for the United Kingdom, so, if the U.K. is important to your business, look no farther.
The Nordic countries always top the Best Places to Live lists, making them great places to look, especially if you’re planning to expatriate any existing employees in the future. With miles of coastline, Denmark and Norway make great locations for supply chain management, but that’s only one advantage. Denmark is known for being relatively easy to do business, and registering one takes about three days. Denmark is home to hundreds of tech startups, and is considered to be one of the most exciting and thriving tech startup hubs in Europe. All startups in Denmark have access to guidance and advice free of charge, and you will be joining a vast network of entrepreneurs and incubators.
Norway, world leader in renewable energy, also comes in highly as a country for ease of doing business and is known as a thriving hub for green and sustainable tech startups. Unsurprisingly, as it has the largest per capita usage of electric cars in the world, so any green or automotive tech should look no farther.
Sweden is another great European launchpad, especially if your tech product targets the B2C market.
As our colleague Petri Rinne put it, “Overall entering the Nordics is more straightforward compared to many other European markets, as almost everyone speaks good English and you get meetings with decision makers much faster.”
Strong government support is in place to back startups, investors, VCs and accelerators. Helsinki is a safe environment, with a great work-life balance, and the Finnish low bureaucratic level makes it relatively easy to do business.
Plus there’s an incredibly bright talent pool of engineering talent ready to tap into, stemming from their highly-rated universities such as HIIT: Helsinki Institute for Information Technology.
Last year, Business Finland provided start-ups with a total funding of €142 million.
France has become one of the top scorers in international ranking when it comes to tech. Funds raised by French startups have quadrupled in the last five years according to La French Tech — the movement where startups, investors and policymakers collaborate.
French Tech Green20 selects 20 startups each year to promote the next champions of ecological transition. They are chosen based on the environmental impact of their products, and the ability of deployment of those solutions. That’s an interesting opportunity given that the stimulus package offered by NextGenerationEU (NGEU) includes the promise to ‘make Europe greener, more digital and more resilient.’
There’s also the convenience of a fast-track scheme of residence permits for non-EU startup workers, investors and founders available with the French Tech Visa.
As language barriers can be a hurdle to cross when you look to Europe, it’s worth knowing that in Germany 56% of the population speaks English. With a population of 82 million, that's a lot of people speaking your language. That means you can get farther without localizing your marketing and website, but you still need local partners because sales are always closed faster in the native tongue.
Germany, in particular, is a good country for startup funding, attracting over €8 billion from VC funding this year, according to Sifted.
In June this year, Bloomberg reported that Germany is releasing €10 billion in order to support startups in their first phases of growth, which is great news and a good reason to bring your business there, helping to secure future prosperity and growth for the country and for your business.
Centrally located in Europe, Germany has easy access geographically to the markets in neighboring countries. Specifically, look to Berlin and Munich as the hotbeds of new business and emerging talent.
Will your vertical suit the market there? Germany is best known for deep-tech, such as AI & Machine learning, logistics, mobility, and Internet of Things, and, of course, automotives. We have long associated the automotive industry with Germany, but automatically think of combustion engines. These days, green is clean, which is part of what made Sennder digital freight logistics the next big German unicorn, raising a total of $240 million to become one of the most valuable tech businesses in Europe.
Now we may be biased because our company was founded in Spain, but perhaps we’ve saved the best for last. Bankinter's weekly startup data analysis is a great example that Spain has a thriving tech startup community with loadsoffunding.
Spain is at the centre of cutting-edge technologies, and the sector is booming. Many of the top fintech companies are already there such as the Barcelona-based ID Finance. Barcelona is also home to MWC, Europe’s hottest and largest event for connectivity. Previously called Mobile World Congress, every player in the telecom and IoT space is present at this massive event, and the Mobile Capital startup ecosystem behind it is really impressive. The Catalan capital is also home to the annual EU Startup Summit.
Wayra is Telefónica’s tech incubator, with more than 200 portfolio companies and a combined portfolio valuation of more than $1.5 billion. StartupLabs is a Malaga and Sevilla-based smart capital and accelerator.
Green energy and greentech is growing fast in Spain, companies such as holaluz is the first independent energy company in the country.
The Association of Scientific Parks and Technologies of Spain (APTE) offers advice on all sources of funding for science-related tech startups, and has more than 60 members located all across Spain. Check them out for networking opportunities and upcoming events. It’s a good place to find support services, or perhaps some co-working space while you take the first steps.
Spain’s third city Valencia, home to 2022’s KubeCon+CloudNativeCon, open source’s biggest event, is emerging as a beautiful place to grow your tech startup or scale-up. This December sees the Digital Summit 2021, held in Valencia, where it will be possible to network with potential clients and investors, as well as the big corporate names. A good location to showcase your startup portfolio?
There may not exist a million answers to why should startups be looking to Europe, but it’s close! Europe contains over 500 million inhabitants and 28 new countries for you to explore for new international customers and fresh talent, making it a ripe and ready market to expand your tech startup.
There are a wealth of business opportunities waiting for your European launch. All you need to do is decide where to launch your company in Europe and then hire the best European sales partners for your sales targets and verticals.
Aren’t sure if you’re ready to start? Check out our free ebook that helps you answer: Is your tech company ready for global expansion?