On Monday, Europe’s tech leaders signed a publicly-traded multi-billion-euro tech fund to boost the European tech sector. Worlds tech leaders are not hesitant to keep up to date with the latest tech, but that doesn’t’ come cheap. Initially reported by Reuters, the publicly traded multi-billion-euro will allow Europe’s tech sector to compete with U.S. and Asian rivals. France’s finance minister on Monday declared the new investment fund.
The fund was much needed to remove Europe’s dependency on foreign tech giants. Characteristics of tech firms push them forward for global outreach. Bruno Le Maire talked about the higher level of financing to compete more and less to depend.
You can find the joint declaration for a pan European scale-up initiative here.
It said the initiative is aimed to enlarge access to funding for scale-ups by unlocking capital resources for funds based in Europe. Last year the budget raised over 100 billion euros by investors on the private market. This year, to develop European pan funds in the last-stage segment, a €10 billion public-trade initiative is signed.
The landscape started with a bang when the E.U. Council Presidency for France prioritised the tech sector, a booming market. 18 E.U. Ministers signed the joint European Tech Champions Initiative (ETCI). Last year’s investments’ primary target was young tech companies that gave birth to 100 new unicorns.
In the long run, paying out is a motivator for the fundraiser, and it is a promising one. At a conference for digital sovereignty, Le Maire talked about the ultimate goal, which is ‘to have ten technology companies worth more than 100 billion euros each by 2030.’
The German finance ministry also declared a billion-euro investment to the fund from Berlin. Currently, the funds set up on venture capital are not large enough to support startup tech firms, let alone the existing ones. So, the European companies chose U.S. funds to give them the initial boost. It comes at a cost. E.U. has strict state aid rules, and it makes up for a bit of complication. The U.S. and Chinese tech firms benefit from the initial public offering (IPO) and funding. It is pretty tough for European tech startups to achieve the same level of support.
According to Bruno Le Maire, if Europe wants to expand its vision and make it a reality, then the dependency on foreign tech giants need to get lighter. And to achieve it, funding is necessary.
The statement was represented by France’s Minister for the Economy, Bruno Le Maire of finance and Recovery. From Denmark, Simon Kollerup, minister for industry, Business and Financial Affairs, Germany represented by Robert Habeck, mister for Economic Affairs and Climate Action, and many more.
The European Union plans to create 10 to 20 European pan funds to boost the tech sector, especially startups. Today, most of the prominent name from tech belongs to U.S. and China. As Europe likes to stay on top of news and discover new potentials in tech, they do not want to lay behind just cause of lack of funding, which is again one of the most significant barriers to climb. The publicly traded multi-billion-euro fund is an investment. An investment to compete with global tech leaders. Currently, cloud, security, and innovation are prioritised in the sector. Who knows what the future might hold, and we may be in the early stage of the tech revolution.
As Europe is not interested in following other tech leaders on their discoveries, they want to innovate on their own too. Even though they compete to leverage the crown, it is a mutual benefit. Each would benefit from one another, even though the pace will be seamless.
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