The most common answers are lack of capital, too much bureaucracy, insufficient government support, etc. Of course, there is some truth in all these arguments. But the real picture only emerges when you start looking into the people behind the tech giants and unicorns.
And when you ask this question from a founder perspective, the answer is clear: Europe doesn’t have or support enough technical founders.
What does it mean to be a technical founder? We refer to founders who have a degree in Computer Science or IT, or who have worked in a software developer or engineering role, such as a CTO at a company.
So why are tech founders so important? Because, almost without exception, they are the ones who build the tech giants.
In the US, if you look at the top 10 tech companies by market cap, 96% of the founders have a tech background. In Europe, that number drops to 76%. This doesn’t seem like a big deal, but the majority of the top 10 tech companies in the US are under 30 years old, while the majority in Europe are over 40 years old. This highlights the lack of success in European tech over the past few decades.
If we look at tech unicorns founded since 2000, we see a very clear difference: 70% of American unicorn founders have a tech background, compared to just 30% of European founders.
Europe has always had great financial, consulting and creative talent that has built many successful companies over the past few decades. What it has lacked until now has been technical talent to solve some of the toughest technology challenges.
Looking at European tech startups that have become unicorns since 2023, for the first time technical founders outnumber non-technical founders.
This bucks the trend seen among the thousands of founders applying to Antler residencies across Europe.
Between 2021 and 2023, the number of aspiring technical founders increased by 300%. The number of former data engineers and data scientists deciding to become technical founders increased by 1,600%, and full-stack engineering leaders increased by 1,300%.
This is a change that occurred during the recession, and the main driver of that change appears to be layoffs.
Between 2021 and 2023, Antler saw a 3.5x increase in the number of applications it received from former employees of tech companies that had let go. If you look specifically at the number of tech founders coming from these companies, that number increases by 800%.
Layoffs at companies like Zalando, Gorillas, and Klarna have transformed world-class tech talent into tech founders.
This could be the missing piece of the puzzle for European tech. The impact these tech founders are having is already clear: just look at the meteoric rise of Mistral, an AI startup founded by three tech founders. They achieved a $6 billion valuation in just 18 months.
This could be the start of a new era for European tech: with so many talented tech founders entering the market, Europe has never had a better chance of producing tech giants.
Christoph Klink is Antler.
