Bloomberg Businessweek

46

J

Bloomberg Businessweek August 20, 2018

109

U.S.

59

China

26

Europe

eez, Europe, what more do you need? Great

universities. Fantastic transit systems. More

than twice the population of the U.S. The inest

cars, watches, wine, beer—OK, the Americans

do better beer now, but still. So many glorious

advantages. And yet Europe, as ever, continues

its reign as the globe’s consumer-tech underachiever.

The heyday of Nokia Corp. and Ericsson AB is a dis-

tant memory, and Europe doesn’t have anything remotely

comparable to Apple, Amazon, Alphabet, Microsoft, or

Facebook, or Alibaba or Tencent, companies with market

values ranging from $400 billion to $1 trillion and counting.

With apologies to Stefon, Europe’s hottest tech business is

Spotify ($34 billion); the only one into nine igures is SAP

($140 billion), the German maker of the world’s most bor-

ing business software.

The good news for Eurostartups is that they’ve got their

best chance in a good, long while to make something of them-

selves. China’s national champions are struggling to expand in

markets for which they haven’t adequately tailored their ser-

vices. And Silicon Valley is two years into a string of unforced

errors: Fake news. Cambridge Analytica. The new MacBook

Pro keyboard. On Aug. 13 the Associated Press reported the

latest outrage—Google has been tracking app users’ loca-

tions and storing that data even if users change their pri-

vacy settings to forbid it from tracking their location activity.

Facebook Inc. and Google are persuasively if unintentionally

making the case that the world needs alternative visions of

the future—all Europe needs to do is ind some.

Over the past few years, Europe has brought in the kind of

money it used to lack, worn down some barriers to regional

expansion, and built a handful of startup hubs in its national

capitals. “Europe’s tech ecosystem has the talent, ambition,

and velocity to produce companies of comparable scale to the

Facebooks and Ubers of the world,” says Manish Madhvani,

managing partner of GP Bullhound LLP, a tech-focused invest-

ment adviser. And still, many of the continent’s best eforts

keep laming out or selling out too early. It’s worth taking a

tour through this lovely land of walkable cities and missed

business opportunities to igure out what’s gone wrong, and

what may inally be going right.

Private companies with valuations

of more than $1b

 Valuations greater than $100b

€4b

2

0

722

591

Q1 2010 Q4 2017

European VC deal values

Booking.com

Americas

Europe

Asia-Pacific

12

57%

31

2013 2017

Share of global VC funding

Number

of deals

closed