Klein and Ragab also discussed the "missing zero" problem in Europe, referring to the lack of late-stage capital. Klein pointed out that the European ecosystem is much younger than the Bay Area's, and while it's catching up in early-stage dealmaking, it's lagging in funding rounds of $100 million or more. However, Ragab noted that the capital gap forces European companies to be leaner and results in a market with lower volatility.
Key takeaways:
- TechCrunch's StrictlyVC series recently held an event in London, discussing the similarities and differences between the U.S. and European venture markets with Saul Klein, founder of LocalGlobe, and Raluca Ragab, managing director at Eurazeo.
- Despite challenges such as proximity to ongoing wars and a lack of late-stage capital, European startups and VCs have much to celebrate, with a surge in AI companies and a strong presence in security and privacy, sustainability, and deep tech.
- Both Klein and Ragab highlight the resilience and growth of the Israeli startup scene, despite the Israel-Hamas war, with companies continuing to deliver and capital still flowing into the country.
- There is a significant gap in late-stage capital in Europe compared to the Bay Area, with the UK alone having a $35 billion gap. However, this has resulted in European companies being leaner and the market having lower volatility.