If the key takeaway of Sifted Summit Day One was “here’s where we need to do better”, the optimism switch was flicked on and taped down by Sequoia partner Luciana Lixandru early on day two yesterday: In Europe “it’s time to focus our dreams and ambitions and resources to build generational companies.”
So which companies could be “generational”? Fintech giant Revolut is one, Lixandru said. German investment platform Trade Republic is another. Both fintechs, where Europe “has a real edge,” where “we hold our own on the global stage.”
Both of those companies were founded in 2015. The founders of the next cohort looking to nail down their place in the log of great European tech companies need to do one thing: To think of their companies as their life’s work, to “think decades ahead,” Lixandru said.
There’s a big opportunity for winners in the region to come off the back of the AI boom. “AI is one of the core drivers of this renaissance in the European ecosystem,” Lixandru said. “I think we’re on the right track.”
Robotics is another space where Europe can win. “If seven years ago you asked me if I wanted to back a robotics company I’d have said no,” Lixandru said. But today? “We’re seeing so many smart people go into robotics, I think that’s the first sign, when you see some of the smartest people go into the sector.
“I think we’re well positioned for many reasons. We have some of the best robotics universities in the world, we have the talent.”
So what do those companies need to thrive?
Money is one thing, obviously. “We need way more capital for growth investing,” Sebastian Becker, general partner at Redalpine, said on a panel about closing Europe’s growth funding gap.
Pension funds in particular need to be more active. “When we talk to pension fund managers, they see VC as a casino, it’s a gamble.” Becker said. “This is what we need to change [...] many pension fund managers are not incentivised to do something new.”
As they grow, brand also “really matters”, Lixandru said. “It can’t be an early moat but it matters,” she said. “Having this brand sensibility that some of these AI native companies have is important.”
More European founders are putting themselves out there, with social media their play park. “Anton from Lovable is a very good example, he really has the gift,” Lixandru said.
The ever-present pull of America — though tampered by changes to the country’s visa regime — was also a topic of discussion.
“If you’re looking for a big market it’s right there,” Ross Harper, founder of UK mental health AI startup Limbic, told the conference. There are clever ways to harness the best of the US and Europe, EIC ambassador Bindi Karia added. “Scale geometrically,” she said. “What I mean by geometrically, why can’t companies have their dev teams here and their commercial units on the ground in the US?”
Europe also needs more exits, Roxanne Varza, director of Station F, told the Summit. “We need more liquidity in these markets,” she said. A viable route to the public markets isn’t on the table for a lot of companies at the moment though, Varza added. “An IPO is not something people are striving for, and we should be trying to fix that.”
Europe’s best companies, though, need to resist the urge to exit early, she said, citing French LLM maker Mistral.
“Earlier this year there were rumours about Apple acquiring them, but they ended up raising. We need more companies in Europe that turn down the acquisitions,” she said. “A lot of people said it would have been bad for France.”
