Today’s Insights 🔍 

• Startup Funding Comparison

• Why EU startups fail in the US

• Sources of Startup Capital

• Growing European Talent

Read Time: 2.5 minutes

Startup Funding Comparison 📊 

The US startup market received 267% more investment in 2023. The UK attracts 40% of the total startup investment in Europe.

This difference reflects the challenges of a fragmented European startup market with varied regulations that hinder cross-border investments. Despite this, European startups have a 21% annual growth in capital investments, outpacing the 7.8% of the US, indicating strong momentum for European startup investments.

Weekly Startups News 🧑‍💻

Gulf Investment in European Startups
There's a growing trend of investments from the Gulf region into European startups, with several investors emerging as key players in closing deals.

Major FinTech Fundraises in Europe
January 2024 saw significant funding rounds in the FinTech sector in Europe, including major raises by hyperexponential, Bumper, Billink, ZILO, and Vertice.

EU's Measures Against Foreign Takeovers in Deep-tech
The European Union is taking steps to protect deep-tech startups from foreign takeovers, particularly focusing on dual-use technologies.

Startup feature
Why the European startup N26 failed to capture the US market

The US market failure of N26 cost them 500,000 American customers following the shut down of their mobile banking app in Jan 2022.

Founded in Berlin, N26 is a digital banking fintech valued at over $6 billion and has over 2.5 million customers across 24 European markets.

Despite its success in Europe, N26 faltered in the US, facing stiff competition from established players like Chime, Varo and major banks.

Hindered by underestimating local competitors, navigating bureaucratic US regulations, and failing to connect with consumers loyal to domestic brands, N26's market entry fell short.

The reality of the failed US expansion for N26 showcases the challenges involved in the market differences of the US and Europe.

Source of Startup Capital ⚖️

The European startup market differs through significant corporate and government funding (representing 41% of startup capital). This contrasts the US private-sector-driven startup investment capital.

A key insight is that European government capital holds reduced market volatility due to the countercyclical behavior of grants and investment mandates for startup innovation. Read more about this

Growing European Talent 🧑‍💻

Innovation requires talent, and for Europe, the available talent pool has experienced a significant increase. With a net inflow of 10,500 international industry professionals, the European startup infrastructure is positioned to take advantage of disruptive innovation.

The key insights of an increasing European talent asset is that high-skilled sectors such as deep-tech, fintech and software benefit from foreign expertise.

SearchVentures Insights

The data underscores that, while the total investment in startups for the US is threefold that of Europe, the disparity is shrinking, as Europe holds a 21% annual growth rate (relative to the US growth of 7%). 

Europe differentiates its startup investments with its significant use of government funding, reducing funding volatility by prioritizing impact over returns. Additionally, the increase in international talent into Europe enhances the talent pool for startup innovation. This underlines the appeal of European startups as a key player in deep-tech and software

Help share SearchVentures

Like what you see? Subscribe Now

You share. We listen.

We turn complex market data into clear visuals to highlight key trends. Beyond general analysis, we offer insights tailored to individual needs - be it startup founders or investors.

You can reach out to us on socials or at www.searchventures.co

See you next week

Cheers,

Odin Lund & Hariprasad Mohandas