News and information from Europe 🇪🇺
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It would be nice to see more worker owned startups. I guess that's too much to ask though.
The recent Merz gov reforms include a change of shareholder laws so that employees can be paid in shares
I have mainly been seeing AI and defense companies in the German tech market. Not the kind of companies we need.
Germany quietly setting startup records while everyone keeps insisting Europe can’t innovate is pretty funny. The real test comes next though: founding 3,000 companies is great, but if the successful ones still need to move to the US to raise serious growth capital, Germany has only solved half the problem.
The main issue that Europe tends to have isn’t purely creating new companies, it is scaling them. Because the “single market” is still waaaay too different between countries, because the capital markets are too fractured, and banks have a low risk tolerance, companies can’t scale up nearly as quickly , which is why for example, Spotify is listed in US indices
The "no real single market" tends to not apply to software companies, which can spread to other countries in europe relatively easily. There are also some reasons why people think its unlikely to be a lack of capital. For example if there were less venture capital in europe, then that capital would go to only the most promising startups (VCs can pick and choose who they fund). So you would expect the return on investment to be higher than in the US. But that's not the case.
Other reasons that impact scaling of startups are lack of know-how since highly skilled people tend to move to where the biggest companies are, e.g. silicon valley. And, and this one is always hard to hear, labor protections. It is a lot more risky to scale up when the people you hire are hard to let go if you encounter hurdles while scaling up. The eu countries with comparably many unicorns, are ones that have very flexible hiring and firing.
The no single market still applies to software, namely due to A- higher compliance requirements in Europe, B- waaaay bigger localisation efforts
Absolutely. Europe doesn’t lack ideas or founders: it lacks one deep, liquid capital market. A real Capital Markets Union could let European savings fund European scaleups instead of watching them head to New York for serious growth capital.
It's honestly more common cultural differences makes companies incapable of scaling outside of the cultures they were created in
Walmart doesn't exist in Europe. How come?
But if any company manages to scale across all of Europe, they're commonly able to expand to any location on the globe. The same can't be said for single national American mega corps.
Walmart doesn’t exist in Europe. How come?
Walmart has a huge variety of products, which are low value dense and need to be restocked a lot. At the same time people are generally price sensitive. Delivering a full truck of a single brand of say frozen pizza to a store is probably overkill. As in it requires a lot of storage space in the store until it is sold. That increases cost. So you need to take in the truck into a distribution centre and then send trucks with all kinds of frozen products to multiple stores. That creates a pretty strong moat. Combine that with culture and branding and it becomes really hard to enter a market.
If you have fewer products to sell, that becomes a lot easier. McDonalds has been able to set up restaurants all over the world. Thanks to having a pretty limited number of products to sell. That is also how German supermarket brands like ALDI and LIDL have been able to conquer most of Europe.
Actually, Walmart doesn't exist in Germany anymore. They tried, but US work conditions clashed with unions, and stuff like Walmart greeters was really creepy to germans, which is why they didn't like to shop there. So, at least for Germany, the main reason Walmart doesn't exist here is cultural
Walmart bought British Asda a few years later. They sold it since, but it worked out decently well for them. They also own stores in a lot of other countries outside of Europe, which certainly have a different culture.
Half of these startups are AI experts selling their own snake oil. I would wait after the bubble explode before getting excited
Artificial intelligence is the key driver of the boom: 1,038 of the newly founded startups have a clear AI focus—more than one in three—and thus more than in all of 2025. The software sector remains by far the strongest industry, with 844 new startups. But the boom is also evident in other fields: Medicine (274) and the food sector (181) are among the sectors with the highest number of new startups—AI applications and related technological advances are also key drivers of development here.
I wonder if the "fake it (with AI) until you make it" will have similar or worse success rate than before AI. Startups sure didn't wait for AI to produce bullshit.
Measuring the number of new startup's as a success factor is IMHO very stupid. I once started a startup. Starting a startup is not that difficult. Keep that startup running past the five year mark, then you may start to talk about success...
Yes, but for germany this might be a metric for reduced bureucracy. Failing a startup is always easy, but starting a startup in germany might not be trivial.
Otherwise I agree.
It is very easy. Can be done within a week for a capital based company and even faster with a personal liability company.
Source: Am a Founder.
The amount of nihilistic, anti-German views (which are even mostly unrelated to the topic) is very telling imo. And more so as the views come in parts from accounts that post almost exclusively comments seeking to criticize Europe while hailing China and Russia if I may say so.
telling of what?
How many of those startup's are one person delivery contract firms, exclusively working for Amazon?
Verena Pausder comments: “To create global champions ‘Made in Europe,’ we need a strong European capital market.
She should start a startup to fund startups.
Though the easiest way would be to overvalue a company, e.g. an electric car company, which allows its investors to borrow against the shares and invest that money in new startups.
Unfortunately, Europe doesn't make it easy to borrow against shares yet. /s
Or one expands typical funding channels. Why do you think that investment is a bad thing?
Yeah but most of these startups were founded because people fear for their job and want a redundancy...
Isn't that kinda what you'd want to see though? I.e. if older less competitive businesses are not able to operate or compete, we don't want them to just hold onto talented people, and we don't want those talented people to be jobless. It's good if those people go and start new, dynamic, competitive companies.
Obviously there's a balance to be found, and we don't want companies to be allowed to just dump employees for no reason every time they hit a hiccup, but Germany has very generous worker protections, and a strong social safety net. It's good to see these people starting new companies.
Or have been made redundant and now use their severance.
This is NOT good news. It is actually bad news.
A lot of these startups are founded by people who have recently been fired or otherwise made redundant. The survivability of these companies is questionable.
Additionally there are on going issues that the relatively quick process of starting up a company is used by organised crime in money laundering (e.g. Chinese Prato based structures) - there are estimates that these use thousands of shell companies that vanish after months
Just looking at the number of startups is a very very bad metric. Much more interesting would be:
Gross revenue in the first year
Average employees per Startup (a lot of these are single employee companies)
Reported profit per company after one year
Lifetime of startup companies
I am afraid a lot of these metrics will be really really bad looking.
Despite what people think founding a company is easy in Germany. You can do found a limited liability company with basically only the notary costs+1€. I had mine started in a week at the beginning of Covid. Getting a notary appointment is the hardest and most expensive part and that is only necessary for a limited liability company. Otherwise? Generate a few documents and send them in. You can do that electronically these days if you can sign via eIDAS.
No issues.
Bureaucracy comes later.
The German mandatory old age insurance comes to check in. Oh...you are building a new company, are the only employee or have very little employees and only have two clients so far? Yeah fuck you that's dependent employment and you are not a actual company. They can even decide in one year it's not and then come back next year and decide differently.
The workers comp deciding seemingly randomly when they come to check you actually do things the way they want.
The tax office is a different matter as well. (Mine is actually somewhat cooperative and nice. Other's aren't)
And don't get me started on the sheer lack of competence in the German banking system. I operate outside Germany as well and the difference is staggering.I happily let someone pull a teeth out of my jaw without anaesthesia or deal with the tax office every day if I could avoid those. With my Italian and Swiss banks? No issues.
Source: Founder - 6 years ago. Still hating it. Worst and best decision of my life.
Worker rights are important too though!