The Next Generation of European Tech Funding: Scale-Ups

(upbeat music) - Europe has already developed and produced multi-billion dollar companies. And there's no reason that past is not per log. - We're about to witness the largest transmission of wealth in European history. So overall, it will be 18 trillion and just for Europe, 3.6 trillion of euros moving from boomers, I would say, to next-geners. - We are late and behind by a mile relative to the US and China for different reasons and are actually losing ground. - Certainly AI may go down in history as the greatest, let's say technological transition or wave in history and by an order of magnitude. I'd say though that Europe has opportunity well beyond AI. - Sam Altman announced that he's gonna be building 30 gigawatts of data center capacity. One large, or medium-sized nuclear plant is only one gigawatts. So that means 30 equivalent nuclear power facilities in order to power just Sam Altman's data centers. - Hello, I'm Tom Parker and welcome to the next five podcast brought to you by the FT partner studio. In this series, we ask industry experts about how their world will change in the next five years and the impact it will have on our day to day. This is the second episode of a two-part special. In the first, we looked at the European tech startup environment. Today, we're exploring Europe's grow stage tech landscape. The funding available challenges ahead and how Europe can build more billion dollar companies. I'm joined by three experts ready to discuss what the next generation of entrepreneurs, tech leaders, talent and finances can expect from the European tech industry over the next five years. So, let's meet our guests. First up, we have Luca Ferrari, co-founder and CEO of Bending Spoons, one of Europe's largest tech unicorns. - Thank you for having me for pleasure. - Hillary Gosher, managing director inside partners, a global venture capital and private equity company that invests in high-growth tech, software and internet businesses. - Hey Tom, thanks for including me and hi everybody from New York. - And Tomaso Fasati, head of wealth management Italy at BMP, however, hi Tom, it's great to be here. - Well, it's a pleasure to have you all here. Let's get straight into the topic of funding. Late-stage financing plays a critical role in the growth trajectory of technology scale-ups, particularly as they transition from early innovation phases to market dominance. I want to explore how tech companies move from startup to scale-up and how they find capital to support their growth. Luca, I'll come to you first. There may be some listeners out there that don't recognize Bending Spoons, but I'm certain that they'll have used some of your apps. There's commutes, a hiking app, streaming platform, BrightCove, we transfer, which I certainly can do my job without. And note app, ever note. That's just a few of the 50 startups that you've bought since you launched in 2013. And I'm deliberately missing one out, at your most recent acquisition that I'm sure you can tell us all about. But perhaps before we get there, can you start by giving a brief overview of what Bending Spoons does? And importantly, your funding journey. - Sure, we are fairly unusual companies, so I guess it warrants an introduction. You could say we're 25% private equity and 75% attack company. Like a private equity firm, we focus on acquisitions. There's a key driver of value creation. But unlike a private equity, which typically operates through funds. And so buys to sell after three, five, seven years, we buy off our balance sheet. I've never sold a business nor do intend to. So we are forever owners and operators. And also unlike a private equity firm, the overwhelming majority of what we do is developing and refining technologies and user experiences. Most of us are software engineers, yeah, researchers, product designers. So the way we do what we do is we require a digital technology business with substantial, unexpressed potential. And then we roll up our sleeves and try to bring a radical transformation across the board. And if we do it right, then we generate a lot of value. We started in 2013 and for the first probably five years, we sell finance through the investment of our own earnings. And then in around 2018, we started using bank loans to accelerate our growth. That has been a critical component of our financing. Makes sense. For now, we work with pretty much every large bank globally, including institutional debt investors from all around the globe. On the equity side of things, we haven't raised a whole lot of equity. Whereas debt, and just to give you a sense of the scale, we have raised over $5 billion in debt. So it's quite substantial. On the equity side of things, we didn't raise any significant equity until 2023. Since 2023, we have raised some equity probably about a billion in total. Mostly secondary financing, so it hasn't really funded the company. It's gone to exceeding shareholders, but probably about $400 million have gone into actual capital increases thereby contributing, although to a lesser extent to our growth. Toward the end of October, we announced two pretty substantial, albeit separate financing events. On the one hand, we raised $2.8 billion in debt from most large international banks. And then, more or less at the same time, we also raised $700 million in equity financing at an $11 billion valuation. There are two from a bunch of world-class investors from all around the world. Why you may wonder, to finance our, certainly our indie activities, but primarily, as it's more capital intensive, our acquisitions, we did announce around the same period that we signed the acquisition of V-Mail, and more recently, the acquisition of BOL, I would expect both to close before the end of the year. Well, Tomaso, let's bring you in here. Can you give us some context as to where funding can be found in Europe before companies at scale-up stage? Another, any in particular that you've noticed, stepping up to the plate in, say, the last five or 10 years? Europe's funding landscape has grown massively over the last 10 years. I had the privilege to run the innovative companies coverage for our European banks in Europe before joining the wealth management activities. And we've seen this from two perspective. Luca mentioned it. Of course, the companies, just in terms of number, we've seen an eight-fold increase from 2015 to today. Back in the day, you had 400 growth companies in Europe, and we now have close to 3,500. And also, in terms of sectors, we were used to more B2C businesses or retail, as well as the social media application. And today, we're way more in the B2B business models and deep tech that represents 75% of the overall funding. Just to mention a few, of course, bending spoon and the fantastic job that Luca and Tim have done. You have Mistral in France, of course, in the by-now, pay later in Sweden. You have Clarna, a revolute, did fantastic things in the UK, Personio in Germany, and also ASMR in the Netherlands, keeping in mind that you already have two companies in Europe that are valued more than 100 billion. So this is on the company side, then the investor. That was a great run on the investor side, as well. Not just in terms of number, just to give you a sense you had in 2015, 2,000 investors in the VC growth ecosystem. Today, they're 4,000. They were primarily specialized growth and VC funds in the US. And I'm sure Hillary can discuss about that. And today, we're seeing pension funds, insurance companies, sovereign funds, whether in Italy, in France, or in Germany, the BPI, CDP of this world that are stepping into the game and family offices. So we see that families are more and more investing in the growth ecosystem. And this is for two main reasons. First one, you get next-genres into the game. So the wealth is transmitted to more digital native people. And also the perception of risk is evolving, adapting a bit the risk return approach. You might see a risk from the perspective of investing in a company that might not deliver like a startup that might fail. But you can also see risk as underestimating a technology that could make an entire industry obsolete. And this is where relevant European banks like BNP Paribas can play a key role to simply connect these capitals with the innovation. Well, I want to go on to the US, because in episode one, we touched on the difference between capital access and the overall funding environment in the US compared to Europe. So Henry, I want to bring you in here. According to Atomiko's European State of Tech 2024 report, only 4.1% of European companies are able to reach $15 million of funding rounds compared to 8.3% in the US. There are challenges in Europe that perhaps don't exist at the state side, and I don't want it to make this into a US versus Europe conversation. But I do want to explore what the US is doing well and what Europe can do to compete. Thank you, Tom. Yes, there is a very large pool of capital in Europe for early stage investing. When you see that, just as Thomas has said, in terms of the number of companies that are being funded in Europe and the number of startups that exist, I think that ecosystem of early stage capital is very deep. As Atomiko mentions, the dearth of the gap exists in the next stage. The true series A, the $20, $50 million series A, your series B, that we see a lot of in the US. And a lot of the reason why there are so many larger funds in the US is because historically, US pension funds have allocated significantly more of their overall allocation to private equity and venture. And we've just seen a large number of growth equity firms emerge with multi-million, multi-million dollar funds inside ourselves. We spend a lot of time investing across the ecosystem. We believe that stage is not a strategy. We believe that sector is a strategy. So we invest only in tech, but we invest from series A and seed all the way through to IPO. And our fund is 11 billion today, 12 billion today. And you see a lot of emerging funds that are equally that size who can write $50, $100 million checks. But if I step back and I say, well, what can Europe do to close the gap? I think you're already starting to do that. I think in May this year, the EU launched the Choose Europe to start and scale act that is still under conversation. But definitely looking to clear the way for private funds and pension funds, public-private partnerships to step into some of that gap and fund some of these larger series A, series B, arounds. Yeah, absolutely. And I want to look a little bit more about the funding gap, because while the volume of capital to European growth stage company since 2015 has tripled, there is this 375 billion pound funding gap. And so why does this gap exist? And how can it be plugged? Tomaso, let's go back to you on this. And then we'll go to Hillary. The gap is not just financial. It's a structural gap. We have deep spool of capital in Europe, but they're fragmented by language, by culture, by regulation. And we think there are many things to do. We might start from some simple ones. First, is to mobilize German capital into productive equity. And we believe that the asset management consolidation across Europe will help to develop stronger expertise in the growth ecosystem and also having scale. And the recent acquisition that BNP Pariba made of AXI investment manager, building the second largest asset manager in Europe, goes in that direction. And secondly, but this could be the first one. Have a genuine single capital market across Europe. That simply allows a company from Milan or Paris to raise capital in Berlin or Amsterdam as easily as in New York. Pension funds need to play their role as well. So we could take inspiration from what happened in France with the TB initiative that simply asked large insurers to invest part of their asset under management in the VC or growth ecosystem. At the same time, family offices require training and understanding of the risk that can be hidden in investing in the VC or growth ecosystem. But we strongly believe that with the new generation and the transfer of wealth to the new world, the European, this will accelerate the development of the investment in this specific vertical. Yeah, Hillary, Thomas, I mentioned there about the pension funds playing a part. We touched on this a little bit in the first episode about the ESIRRA or the sort of policies that were brought in in the US in the '70s that can be partly responsible for the strength of Silicon Valley. And let's touch on that part of it, but also perhaps you can bring in other areas of where we can really plug this funding gap compared to the US. Yeah, Tom, that's a great point. ESIRRA does allow investors, specifically allocators, LPs, pension funds to invest tax-free. And so they can take returns. And as we give DPI, those are tax-free for certain ESIRRA listed companies. And that, I think, is very helpful because it allocates-- it encourages those allocators to allocate more money to the private equity and the venture capital space. But I don't think that that is the entire story. I think that capital flows to opportunity. And I don't think it's a bad thing that US capital is flowing to great opportunity in Europe. And I think it supports the European ecosystem. And therefore also encourages additional European capital flow and not just pension funds. But as Tom also said, family offices are investing. Private wealthy individuals have access to these kind of assets through one of our portfolio companies, Moonfair, which is a German-based aggregator of capital pools and investing the governments themselves are providing subsidies. There's access to credit markets that they weren't before. One of our portfolio companies, Ali Labs, just raised a round of both equity and credit. It was a much more efficient way to manage their cap table. But that credit line comes from a European bank. And so I think that the companies can avail on subs of multiple sources of capital. And they're already starting to do that. And I think capital flow where there's opportunity. And we've made three investments. Just some that I can cite. One out of the UK, Omnia, which is an AI procurement platform, we did fill a grant out of France, which is a cybersecurity company. We've just done flank out of Germany. All of these are current investors with Europeans. So I do think that there's a great US European partnership as we think about funding the next generation of growth equity. Brilliant. Thank you so much, Ali. Now Luca, you touched on that earlier. In your opinion, what do you think Europe can do to better support growth companies? I know that your growth story has been slightly different to others. But what would you say Europe can do as a support structure for most tech companies that will be going in this growth stage? I suspect I have a bit of a contrarium view on this problem that most people listen to Hillary. I think she may agree with some of what I'm about to say. But she'll be the judge of that. But I think often I hear people say we need more capital. Why is in Europe deploying as much capital as the US or on a per company basis or in aggregate? And I think that's mostly the wrong way of looking at the problem. Because people who deploy capital essentially seek returns. There may be marginal considerations, but essentially they seek returns. And there has never been, certainly not in the last 30 years, major problems in investing in Europe. It's not perceived as a geopolitically dangerous zone or anything like that. So as long as the world at large has ample capital, the reason why we don't see as much investment here as saying the US is because the companies we have on the whole are not as appealing as investment opportunities. I think the better question we need to ask ourselves is how do we get more high potential companies and how do we get them to a point where people are interested, whether they're based in Canada, the US, in China or France, to deploy $50 million to $100 million into making them even more successful companies. So the question is, how do we attract some of the best entrepreneurs, investors, inventors, engineers. When you look at it from that angle, I think the answer is relatively straightforward. The solution may be difficult or painful, but I think the tomato situation is clear. Europe is perceived as a much less appealing place to the business than the US. I hear it all the time when I talk to top entrepreneurs, top investors from anywhere in the world, certainly outside of Europe. They perceive-- and again, not everybody, but a majority perceive Europe as a place of heavy-handed regulation, complicated, unnecessarily complicated bureaucracy. Generally, a certain level of unfriendliness toward capitalism and business, like a greater level of weariness than, say, you see in North America. And it's not terrible. It's still a nice place to do business, but in a highly competitive world, even if you're only 20% less appealing, people will tend to go elsewhere to do it. And so I think we need to make changes that will make Europe at least on par ideally better, because now we have to catch up relative to the US. And I think it starts with the aggressive deregulation understanding that regulation should not concern itself with fixing or preventing somewhat mild corner cases. If it means making 99% of normal cases more frictionful or annoying costly, regulation should not be about scaring away innovation and risk-taking. It should really focus on covering the really severe problems and letting things go the way they should for the most part. So I'd love to see our governments and the you invert course completely, like a U-turn. And rather than launching new and new acts across the board, like anything under the sun being regulated more, always with the explanation that that will make things simpler somehow, which I never understood, I think they should really invest into removing, as many of the laws we have as possible, and making Europe an incredibly appealing free market where to do crazy ambitious investments and company building. But also like to see a more uniform market, we have done a lot in that regard, but ultimately we select so many languages. Again, I understand this is difficult to do with the cultural heritage we have, but it would be great to see Europe transition to say English as the fundamental language, like Singapore did. Singapore had plenty of languages, Chinese, Malaysian, they decided, okay, we gotta do English here 'cause otherwise we'll never be an appealing international hub for investment, and they've been prospering not just for that reason, but that's one of the reasons since I'd love to see more uniform regulation, I'd love to see a more sensualized power, 'cause as long as our national governments retain 80% of the power, ultimately you're not gonna make Europe one big union where people can invest and operate somewhat seamlessly. - Well, I'm glad you said there was a unified language proposition there because just like any Brit, I'm embarrassingly bad at speaking any other language. Then my own, but to Maso, let me bring you in here, 'cause I want you to add some points on the back of Luka, and then let's go to Hillary. - Sure, and Luca raised an interesting point on how do you make European growth companies more appealing, but for sure there is a huge part of responsibility that comes from the ecosystem. And we've seen a great agenda that was drawn by Mr. Draghi recently, just saying, okay, now it's time for a U-turn and to simplify things, just to give you some simple ideas, we love the fact that you can have a simple and single company identity across all over Europe, like the Inc in the US, Luka was a bit more drastic having a single language right away, and this is an interesting one, of course, but the single market remains a first vital step. And maybe on the deep technical system, we might adapt a bit the conversation as we know that we need huge capital in early stage phase and the risk return approach of European is not always that sensitive in this phase, and then the revenue generation starts a bit further on in the development of the company. It's exactly the contrary of what Bending Spoon has demonstrated through the years, but we are in a deep tech, interesting breakthrough phase, and we need to analyze this one, and maybe adapt a bit the VC ecosystem structure, maybe blending a bit more public and private capital, and maybe Larry can comment on the US IRA initiatives or the investment made by the public sector. And we strongly believe that clusters on specific verticals can be a huge accelerator of this process. What do we mean by cluster is simply putting large manufacture, startups or scale-ups, VC, innovators, and university, on I would say robotics in Germany or mechatronics in Italy, and simply accelerating learning curves. And by creating and building up the ecosystem, you might build global champions as Bending Spoon is doing. - Can I interject very quickly because you mentioned that I suggested some more drastic measures? Not that I enjoyed it, maybe my nature, I think a lot of entrepreneurs like to be a bit bolder, but I think here it starts with diagnosing the issue. It's not that Europe is doing great, and we're talking about how do we go from 9.5 out of 10 to 10 out of 10. We are late and behind by a mile relative to the US and China for different reasons, and are actually losing ground. So we're not gonna catch up at all by making incremental minor tweaks. We'll just die of a slow death. So it's either, I really suggest we take a clear stance. We could die of a slow death, and it could be a relatively pleasant dying for a while, or we could try to catch up and really give ourselves a chance to win and be a leader, but that requires, I'm absolutely certain requires, drastic measures. And we have to go way beyond the interests of individual countries or subgroups. It has to be a top-down, aggressive, ambitious plan. Whether it's what I suggest that other things are mixed, but it's certainly not in minor interventions that we fix the problem. - There's certainly drastic language there. So I like it. It's sort of a brave heart moment. Tomas said, did you want to jump in a hip? I do want to get to a Hillary as well. So yeah, just a very quick one. This is a great point raised by Luca. My point is, shouldn't we be smart and where to cooperate and where to compete? We're lagging behind on the hyper-scale clouds or some gene high infrastructure, but we still have strong industrial capabilities, fantastic engineers. And I'm sure that Luca can discuss about the talent he has at Benningspoon in Italy or in Europe. And maybe from there embedding a technology that we weren't able to create ourself, but just to capitalize on it and try to make global champions. - Brilliant, Henry, come in. - So following up on what Luca said, while it does require some drastic top-down initiatives, I've never known innovation that happened by committee. And that's kind of what happens in Brussels, which is committee. And you really do need to sweep aside some of the structural impediments, as both Luca and Tomas said, that does hold Europe back. One of the things that I would say that hasn't been picked up on that is important is the ability for employees to make money through esops and resops. The reason that you've got such a fluid capital cool in the US and you attract so much talent is that when people join startups, they know they're taking a risk. They know that those startups may fail and that they'll be out of a job. But there's no stigma to labor movement. There's very free labor movement. If it doesn't work in one company, I go to the next company. I take my skill set and I develop from there. But when I do work in a company that wins, I land up being the person who then starts the next business. And I think about what we call silicon slopes, which is the Salt Lake City area. That was never historically a big startup cluster as Tomasso talks about in that language. But there were a couple of initial companies with entrepreneurs either in the valley and then went back home to Utah or started in Utah. And that has burgeoned an entire ecosystem of entrepreneurs. I think Qualtrics, I think Pluralsight, there's multiple companies that have come out of that ecosystem. You see the same in Stockholm, frankly. If you think about Clareno, if you think about Spotify, there are so many companies that have come out of Stockholm that creates the next generation of entrepreneurs. Those same entrepreneurs are the ones right now. That loveable is feeding off the back of. But that's all based on the ability of employees to one have freedom of movement and mobility and two to profit and benefit from the success of those companies. And I do think there's an impediment that neither of my fellow panelists talked about around making sure that if capitalism isn't to be a dirty word, then capitalism needs to be spread. And everybody needs to benefit from the fruits of it. I think that's one of the things that does distinguish. The U.S. is that stock options don't get taxed fully. I've got companies in Germany where we're bending over backwards to give v-sups and all sorts of things that try and make a tax-free. And because people get taxed on notional future value when there's been no realization they haven't got any money out. But they still being taxed. It isn't an enormous impediment and burden on people who want to be in the startup ecosystem. I'm actually very much in favor of taxes, by the way. I believe that the most powerful system you can have is governments letting companies, entrepreneurs, executives, deploy resources as freely as possible. Whether it's human resources, capital, raw materials, try just to get out of the way as much as they can as governments. But then tax in a way that creates a reasonable redistribution so that wealth benefits a broad number of people and creates a society that feels right and it's nice to live it. So I'm not advocating for some sort of libertarianism where everybody fend for themselves. I just advocate for a market where those who have the knowledge are close to the facts and have all the incentives aligned to make something work can make the decisions on how to make that work. And then governments should come in very, very downstream once the wealth has been created, capture some of it for redistribution and support. Brilliant. I want to move on to a big topic. It is the hot topic. It's AI. There's huge growth opportunities in Europe for AI. Francis Mistral, as Tomaso mentioned earlier, is valued over $6 billion. But the US still dwarfs Europe in AI tech funding. $47 billion compared to Europe's $11 billion in 2024. And in fact, the US's AI company anthropic raised $13 billion alone last year. So that's more than the whole of Europe. And that valued the company at $183 billion. Clearly, the scale of US funding is huge. But there is hope that Europe can catch up. So Luca, I want to come to you because one of your apps, Remini, is one of the most-used Gen AI products with over 100 million monthly users, which is a staggering number. Is AI the opportunity for Europe to build more billion-dollar businesses? Certainly. AI is a mega-down in history as the greatest, let's say, technological transition or wave in history and by an order of magnitude. So it's necessarily, besides posing substantial risks, it certainly poses incredible opportunities. I'd say though that Europe has opportunity well beyond AI with God more than half a billion people here to my knowledge, one of the best-educated populations globally. And so, regardless of AI, we should have a much greater share of the world's leading corporations across segments and sectors than we currently do. Now, again, AI being a somewhat new wave may offer better opportunity for breaking that trend than more established industries. But again, if we fix the fundamentals, I think Europe offers an exceptional opportunity for a new kind of a renaissance of economic growth and enthusiasm. Hillary, let's bring you in here. Yeah, I would jump in and say, you know, Europe has already developed and produced multi-billion-dollar companies. There is a huge opportunity in AI, but you know, what Europe represents is a deep industrial base. And that industrial base is ripe for AI workflow and genetic automation. And so, I just think that there's a huge opportunity there to take some of those industries and think about how AI can be deployed. I mean, if I think about just, you know, where insights invested in multi-billion-dollar companies over the last decade, you know, venture delivery hero, Hello, Fresh, Sonya Source. I mean, you know, the list does go on. And so, I do think Europe has what it takes to create that multi-billion-dollar opportunity. It's everything we talked about previously, which is how do you create the conditions that enable those companies to thrive. I would say that Europe wants to create sovereignty around chips. And, you know, I think that that's loatable. I think that it's an appropriate ambitious goal. I think it's a long way from being nearly caught up. And I don't think it's sufficient. If I think about what it's going to take to really win an AI, it's won the frontier models, as, you know, Luca just mentioned, you know, Mr. Hall is out there. But it's only one of the top five top 10 models out there with many of them, most of them in the US. You were investors in both ontropic and open AI. Both of them have seen tremendous growth over the last couple of years, you know, up just ontropic only released code coding in March. And that alone is already a 600 million dollar business. So, I do think that you're behind on frontier models, although Mr. Hall is fantastic. You're catching up on chips. And I think that's important. But the other two ingredients of data centers and 70% of European data centers are owned and managed by US businesses. And then in order to run data centers, you need supply of a secure energy. And that's another area where Europe needs to think about infrastructure development. So, you know, it's four ingredients. It's the frontier models. It's the chips, it's the data centers, and it's the energy supply. And I think there's a lot of progress and movement towards that. But I think ultimately that may be an impediment for thinking through how does Europe grow the next generation of billion dollar AI businesses in particular. And just to come back on your point, Hillary, of course, the gap is important. It's even bigger if you consider the huge investments that only the magnificent seven are carrying on the AI space that are not of 300 billion. So, for sure, then I agree the fact that we can have a strong opportunity for a European innocence. Because now AI is not just only a software is getting into the physical world and you have energy grades or data center building as Hillary was mentioning. We still believe that the creation of a strong ecosystem of specific vertical not leading or building the largest language model will help us to find specific areas where we can lead. And the industrial manufacturing and engineer capabilities all together can bring us to the next level, at least on specific verticals. I agree with that. I would say that and 100% agree that where Europe is really strong is some of these in specific industrial verticals where there's been enormous strengths in the industrial hotlands of France and Germany and the rest of broader Europe. But just to give you a sense of this Sam Altman announced that he's going to be building 30 gigawatts of data center capacity. One large or medium-sized nuclear plant is only one gigawatts. Forget anthropic or meta or any of the others, Gemini. Europe's not the linear nuclear anytime soon as far as I can see. So either you're going to find sustainable sources of energy or you're going to be using fossil fuels either way is going to be expensive. And so unless Europe solves that energy problem, I think you're going to be severely handicapped not just on chips. It was a brilliant point. Well, because I actually want to give some context on the chips of them to you that Hillary mentioned there. Because in 2020, a trillion micro-trips were manufactured around the world. Yet Europe only accounted for 10% of the global chips market. In comparison, the US has 12% now and is aiming for 14% by 2032. Both adwarfed, however, by East Asia's 75% of the market with China expected to have the largest share of production by 2030, following $100 billion of governmental subsidies. With semi-conductors serving as the backbone of AI, the European chips act is aiming to hit 20% of the market by 2030. But Luca, I mean, Hillary's already discussed it there, the importance of sovereignty on chips. Is it too little, too late for Europe now giving those numbers that I've just discussed? It's hard to say for sure. And I think the percentage of the market itself is not-- it's a useful indicator, but it doesn't really tell the whole story. Because I guess if the goal here isn't a commercial goal, but a strategic goal of having more self-reliance in case of international disruption or conflict, then it's mostly about having sufficient production of enough of the value chain that you can be mostly autonomous or autonomous with certain select allies, not necessarily a high percentage of the market. I'm no expert in the infrastructure of AI. I understand it on a high level. Nor have I studied the chips act in detail. But I do think I can make a general point that might be interesting. It feels to me that in Europe, we tend to regulate or make investment from a government's perspective to treat the symptoms. We keep ignoring the fundamental issues again. I already mentioned earlier that I think the fundamental issue is we have not, for decades now, being sufficiently appealing as a place or to build a business innovate, take risks, invest. We should be asking ourselves why the US are better off in this and other areas, why China is better off, despite, to my knowledge, not having had any chips acts. And then once we understand those fundamental drivers, I think it would be best to focus on fixing the fundamentals first. Otherwise, we're just painting the surface, but we're not making the machine more resilient for the long run. That being said, the act may be a great idea, I don't know. But it just as an approach, it seems to me, we're coming in late and trying to do something quite superficial when the basics of our society and markets are not where they should be. There was an example of the Europeans coming together. A couple of decades ago, with the A bus versus Boeing, where Europe did join forces to create A bus, which is a formidable competitor globally today. But there was the luxury there of that industry not moving too quickly. I'm not sure you have luxury today. The speed with which the AI industries are innovating, the speed with which demand for AI compute and the speed with which new models are being released and the learning algorithms reinforced, etc. It's sort of unprecedented. And I don't think you can regulate your way out of that or you're not going to move fast enough. Unless there is, as Lucas said, a sense of urgency is at least there's a way of breaking barriers and everybody cooperating with that same sense of urgency. And maybe the sense of urgency comes from a combination of the, of course, the technological breakthrough, but also the fragmented geopolitical situation. I mean, we have a fit on the ground with almost all the wealthy families around Europe and Asia. And as BNP part of our health management, we often see how difficult it is to handle the innovation plus the fragmentation. But this might accelerate at some point some decision because you have no other choice than have your texts of renty or to have military independence. So to avoid us, Luca was mentioning to die slowly. So this is a real, I would say, vital consideration that also Europe is doing. We're not there yet, but I feel like also being part as a large institution that something is getting closer because we all feel the sense of urgency. I felt like Luca, you were going to jump in again now. I probably would add a quick point, which is, I sometimes find that when we talk about sovereignty and in this case, Europe versus the US and China naturally, when it comes to AI, ultimately, wouldn't it be much more efficient to take people and capital that are already directed toward these investments, where competence is there, and creating the conditions for Europe to be a preferred route for those investments. Like, if OpenAI wants to make these massive investments, and maybe we have tried that, but has someone gone to them and said, OK, like I'm sure many US states have and told them, we really want you to make 50% of these investments in Germany or France, tell us what you need. I think, ultimately, that's not as good as having our own OpenAI, but it's infinitely better than having nothing, which is probably what we'll end up with. If we try to rebuild everything from scratch and we don't have the competence right now, the momentum from people who have been doing it for a decade. And then once you have people here, competences are here, some of the IPs here, or you're in a much better position strategically, leverage, knowledge, certainly try to do that. By the way, it's not even mutually exclusive, relative to trying to do your own additional investments, but that would be, I would suspect, much better ROI, because there is already a lot of wind going in, almost the right direction. You just need to open the window on the right side of the house. There's genuinely good will across the pond, across the Atlantic. The US sees Europe as an enormous market, an enormous opportunity, 400 million people, multiple countries, multiple huge industrial base. So, in spite of what's going on with tariffs, the underlying relationships and partnerships that we, in the US, want to form with Europe. And the reason why we insight invest in Europe is there is fantastic talent. There's great opportunity, there's great innovation, there's great engineer, and there's great industrial base. So, I do think what Lucas says is right, is there's an opportunity for both sides to one. Yeah, in fact, you just set this next part up perfectly, Hillary, because there is a real positive around talent in Europe. It is going head-to-head, especially European talent in AI with the US, with venture-back companies in Europe hiring 13, that's one 3% of the talent pool, versus 16% in the US. In 2024, artificial intelligence and machine learning attracted the most number of new joiners to companies with 30,000 from outside tech and 5,000 retaining from other tech competencies. That's compared to 7,000 in 2015. So, perhaps, how does Europe learn from the last decade and seize on this AI talent opportunity? And then, perhaps, how can Europe entice talent to remain or from elsewhere in the world? Luke, let's go to you. At a good news, Dad, the same things I mentioned earlier that you would do to generally speaking faster investment, innovation, a thriving market would help with these two, because talented people, ultimately, in my experience, pretty much all want the same three things. Give or take, which is work on keep challenging problems. Number two, work with amazing colleagues, because it's more fun, and you get to learn more, you accomplish more. And three, you want to be paid in a highly competitive manner. The world is globalized today, thinking of moving from France to the US is not as daunting a prospect as it was a century ago. And so, ultimately, the way we produce and develop new talent is through cutting edge world leading companies doing R&D here, and so people get to learn. And or new great companies being built in the country, they will create peeling jobs, people will stay, and maybe, you know, will at least partly invert the trend of the brain drain toward North America, which is being very clear. So here again, I would focus on making Europe a place where these sort of people absolutely look forward to building a business. And again, it goes back to the fundamentals. But other than that, the basics here are great. Like we said, several of us have mentioned it. Hundreds of millions of people generally well-educated. We're not less smart than the Chinese or Americans. You know, so the raw material in terms of human capital is there, we just need to create better conditions for those people to stay, and develop as much. 'Cause you could also stay, but if you don't work on as challenging a project in as high performance and environment, you're not gonna be ultimately at the end of the day, five or 10 or 15 years down the line, as stronger professional. To master. Sure, fully agree, and talent in Europe is exceptional. And at the beginning, it's still at a fair price. And of course, then competition comes global. So the issue is more the talent retention than the creation of it. So the quality of the university is good. You have fantastic engineer. I'm sure that Luca can confirm, but as well in many, in many other fields. At the same time, you need to feed them with proper challenges and stimulating environment. So of course, building the cluster that we were mentioning before, not only help to properly deploy capitals and to accelerate learning curves, but also to retain talents that need to be fitted with interesting project and seeing people around them that you can do things. And what we can learn from the US is this approach of, okay, we can do, even if you don't have all the ingredients for the perfect recipe, but you have a strong drive to deliver, bringing all the different parts of the ecosystem together. That can be, of course, the engineers, the VC, the growth companies, but banks as well, we hold the responsibility together with the full ecosystem to build global champion and also to fuel and feed the talent retention. And at the same time, do not forget the global framework. Ilari was mentioning it before, you need the proper stock option framework across borders that just simplify and is fair on the way it is treated. And at the same time for an investor or the founder of a company, whether it is in France, Italy, or Germany, that they have the same level, I would say, of fiscal treatment or recognition. - Hillary, did you want to have anything? - I agree with everything. Frictionless, labor mobility, better stock option, portability, all of those things make sense. And the talent is obviously there. I would say that, and I don't want to be controversial, but I'll mention this, which is, work ethic is a huge component of why the startups in the US succeed. People work 24/7, and I'm not advocating that. What I'm advocating is they are so energized by what they're working on. They are so energized by, you know, SpaceX. The energy of what those engineers are working on, the idea of the next frontier, you know, they're excited to be there because they're with their friends because they're stimulated intellectually, they're going to be rewarded economically, and they feel like they're changing the world. And that is the energy that you get in Silicon Valley. And I do see pockets of that existing in Dublin, in Berlin, in Stockholm, in Paris, in London, where, you know, once you attract these hubs of fantastic talent who have labor mobility can work between various companies, can upskill, can work on projects that they love, and who are with an ecosystem of folks who are kind of work hard, play hard, that definitely creates a recipe for success. Brilliant, thank you, Henry. I want to start looking a little bit more into the future here. Consulting firm Corn Ferry has reported that the average age of CEOs within the technology sector, globally, is now significantly younger than counterparts in other major industries. Averaging between 35 and 45 years old compared to an average age of over 50 in sectors like finance or energy. So when we are looking at the next generation of tech leaders, what lessons can they take from today when it comes to funding, building and growing a tech Titan in Europe? Luca, you started bending spoons in your 20s. So what's your advice? Well, the lesson is that age doesn't matter. Of course, your experience is through live shape, your abilities and skills. But age should never be a consideration when choosing a total point to any post, a multitude, pay someone. And I guess it's a cultural trait that's perhaps somewhat common across the world, but less so in technology because technology has historically moved faster, especially the last few decades. And so it's maybe a little bit further in overcoming this bias. But there has been a bit of a cultural flaw, if you will, that people tend to assume competence simply out of years of experience, which we have found repeatedly at least in my company to not be true. In many professions, the value of experience starts to rate pretty quickly. Certainly, you don't need decades of experience to reach your maximum level of ability, let's say. And so I hope we can all remember that age shouldn't be a factor and build a more meritocratic environment at our company. We pride ourselves in trying to be a radical meritocracy, where you could become the CTO in five years if you proved that you are the best candidate. And in fact, that was the case with the CTO. But hopefully that becomes more widespread. Yeah, absolutely. Tommaso, what does funding look like for the next generation? Can you perhaps discuss where the generational wealth is being passed down? And especially around the fact that Gen Z will have the biggest purchasing power of any generation. Where will the money be found? And where will it be invested? Well, we're about to witness the largest transmission of wealth in European history. So just to give you a couple of numbers, so overall, it will be 18 trillion. And just for Europe, 3.6 trillion of euros, moving from boomers, I would say to next-geners, that are often digital native, sometimes impatient, and impact driven. So this will benefit to the growth and tech ecosystem, for sure. Our analysis has been prepared by wealth management, being close to those families, that today, on average, asset allocation to the growth ecosystem is less than 1%. And our estimate is that this will come closer to 7% in the next five years. Mainly, because you will have this transfer of wealth, that will bring people that are closer to tech in liquid investments to allocate a bit more capital to this ecosystem. Then you have a responsibility to deploy this capital in a smart way. And of course, you can have the support of banks, but of course, of entrepreneur, or VC fund, or growth funds. And taking to consideration, also the pumps you might find in the road, you know that some valuation might be a bit high at some point, but there is no doubt on the longer view. And maybe at some point, also the banks will need to adapt also their investment strategy and the way they connect capital to innovation, just bringing them closer. We are at the crossroad of technological breakthrough that will completely change the way we manufacture things. We also think that on the investment side, you will democratize and simplify the access to growth and VC investment, or what we call the private equity and the liquid investments. And I'm sure that as a BNP-Pari-Bawolf management, we can play a decent role there. Absolutely. Hillary, what advice would you give to the next generation of European tech founders? We've talked about where the money's coming from. I think that global capital is a global pool and it flows to where opportunity exists and is an enormous opportunity in Europe. I think some of the new sources of capital is to master mentioned this massive wealth transfer. This is all going to a version and energize the startup and the tech ecosystem. I would say that we should almost step back and think about humans in the loop, which is a word that we use obviously in AI right now, which is how do you pay technology and people? And at the end of the day, raising capital is a people game. It's the relationships that you form. It's the person that you want on your board. It's the long-term public point-on-port marriage that you're going to have while you scale and grow this business and who's going to sit on your board. And so my advice to entrepreneurs is, even if they're young, even if there are the next generation of problem solvers who don't approach it with preconceived notions and are using technology to solve some of these hard problems, lean on those folks who are experienced leaders and what it means to lead people because people leadership is as much as an important part of growing the business as the technology and product itself. And then develop relationships early with global investors. U.S. investors, European investors, everybody's calling in to entrepreneurs as they begin. Start those relationships early, figure out who you want to work with, understand what value they bring to the table, other than just capital. In fact, we have an entire group called Inside Onside, which is around working on-site with portfolio companies. Very similar to what Luca does at Bending Springs, which is, how do you work closely with those companies to help them scale and grow? And so, yeah, I just say, human in the loop still continues to be equally as important. Brilliant point. Well, given actually all of the brilliant points that have been discussed today, the big question and the name of the series is all about the next five years. So what can we expect? It's a big, big question. But what can we expect over the next five years for European tech scale-ups? Luca, let's go to you. I'll just interpret it more from a optimistic pause. Like, because it won't could answer, well, not much given the track record, but trying to be optimistic, which is mostly my nature. Let's say, when you suck, I think it's good news, 'cause it means you could be a lot better. If you're already perfect, then there's nothing to do. I love Europe. We're building my company. We're building it here because we try to make an impact, contribute, show that you can be super ambitious and do something at a global level and win and dominate and create a lot of value. And so I do hope that over the next five years, we'll see that you turn, we talked about before. I believe, again, looking at this from the opportunity perspective, that precisely because Europe has been bogged down by insane levels of regulation and bureaucracy, and I think the wrong culture when it comes to business and markets, it's a bit like a pressure cooker and all of these negative effects are keeping the lid down with force. If we could just let go a little bit, we might be surprised in that there's plenty of growth and prosperity we can unlock, somewhat easily, somewhat quickly. There is a parallel in history, which is clearly way more extreme. So I'm not saying it's a sane situation, but nature of the situation is similar. China and their mile didn't grow almost at all, almost nothing in a world that was growing pretty fast. As Deng Xiaoping came in and essentially brought free markets with lots of caveats, but broadly speaking, China exploded, but it wasn't for some genius policy. It was simply because we removed that lid. Now, that was a much heavier lid and there was a lot more pressure, but conceptually it's similar. It got the lid out of the way. I think in Europe, we should try to look at our service in the same way and do everything we can to kind of move that lid aside. Brilliant, Hillary. We're bullish on Europe. 14% of our portfolio companies are based in Europe. We've made some very exciting AI investments after the last while, across spans across Europe. We did pack them, which is a supply and negotiation AI platform out of Estonia. We did Zelex out of London, which is AI full detection for accounts payable that we're just seeing pockets of innovation everywhere. But I think as Lucas says, imagine what you could do if you've released the pressure cooker given everything we were already seeing, just how much more of an explosion they could be. So in a long-term very bullish on Europe, I think some of the SACT and the Labor Mobility Act and the Blue Card, some of the investments in data centers and talent pools, it's all going to pay off. You're playing the long game and five years of short in the history. - Thomas, what we've seen the next five years will be more transformative that what we've seen in Europe in the last 10 because technological breakthrough we're lagging a bit behind as Lucas was mentioning. And of course, there is a great opportunity. We are absolutely optimistic. We feel a sense of urgency. And we take our part of responsibility in the sense of urgency of building great champions. And I'm sure that bringing capital in a disciplined way across the board will help to foster this innovation. And at the same time, we need to be conscious of what we've built as a society through the years, as European, as Italian, as French and German. And maybe have a step further to get a bit more consolidated together, either mention the Airbus solution. This was of course a nice one. We should have a hundred of them to make sure that we are all on the same page. But what brings me optimism is the quality of people that we see around. And we see this new generation that is really wanting to lead this ambition. And each one of us should take this part of responsibility. - Well, that's fascinating insight from, or it's been a pleasure, an absolute pleasure speaking with you all today. So thank you to Tommaso Fassatti. - Thank you, thank you Tom, thank Celery and thanks to all our fascinating conversation. - And thanks to Hillary calling in from New York. - Yeah, lovely to talk with you. It's very interesting. - And finally, thank you, Luca Ferrari. - Thank you for having me. - Well, thanks everyone for listening. Bye for now.