Sifted - Trump vs. European tech

Good morning there,

If you’re dreading the idea of Donald Trump returning to power in the US, you’re not alone. Plenty of European founders and investors are worried about his protectionist policies and stance on Russia’s war on Ukraine. 

So it came as a surprise to many in Europe’s tech ecosystem that their peers in the US — including some top investors from a16z and Sequoia — are backing Trump in the electoral campaign. 

“Baltic entrepreneurs feel betrayed by top Silicon Valley VCs,” one Latvian founder told Sifted, who like some others in today's column chose to remain anonymous to protect relationships.

I get into the debate below.

Elsewhere:

• The EU promises more funding for startups 
• Europe’s 10 most active climate tech investors

— Zosia Wanat, senior reporter

From scaling to selling

M&A is an exciting prospect for any startup. But as your business grows, so does your global workforce, potentially delaying a finished deal. Could this impact your startup? In our next Sifted Talks, panellists from Babbel, Deloitte, Herbert Smith Freehills LLP and Omnipresent will discuss the complexities of selling a scaling international business.

Trump vs. European tech

For the last couple of days, the global VC town's main talk has been that some of Silicon Valley’s biggest hitters have expressed their support for Donald Trump in the upcoming US presidential election. The flurry of new backers followed Trump’s announcement of his running mate: JD Vance, a senator, US Marine veteran and former VC investor who’s worked closely with Paypal founder Peter Thiel.

The list of techies backing the duo includes a16z’s Marc Andreessen and Ben Horowitz, Sequoia’s Doug Leone, Elon Musk, Palantir cofounder Joe Lonsdale and crypto billionaires Cameron and Tyler Winklevoss.

But, in Europe’s tech scene — which often shies away from party politics — not everyone is best pleased with their transatlantic colleagues lining up behind Trump. 

The criticism is coming most loudly from central and eastern Europe (CEE) — a region that has been heavily involved in helping Ukrainians fight against Russia. Trump, some fear, will take a milder approach towards Russia and cut US financial aid to Ukraine. 

“That's extremely f***** up news for Ukraine, Estonia and many European nations. Can anyone explain why Silicon Valley iconic investors are blatantly abandoning Europe for a few $?,” Ragnar Sass, Estonian angel investor and the cofounder of the unicorn Pipedrive who has been helping Ukrainians on the frontline for the last three years, wrote in a LinkedIn post. 

“This election is not about taxes and policies. It’s about good and evil - democracy versus autocracy,” Sass told Sifted. “It’s about the most core values of the world. Any Silicon Valley investor helping Trump and Vance getting elected is supporting Russian genocide in Ukraine.” 

Danijel Višević, a general partner at World Fund, a Berlin-based climate tech VC, says that, while he understands that VCs care about quick wins and quick returns, the basis of their business is “social freedom, a free market economy, a reliable justice system and democracy.” 

“If Trump becomes president, he will attack these four pillars, which will also massively harm the VC business. That's why I think the decision by venture capitalists to support this notorious liar and hate-monger is not only opportunistic but unfortunately also stupid.”

But Silicon Valley VCs backing Trump argue that he will be a better president for the startups. They stress that Joe Biden’s programme stifles innovation through overregulation in fields like AI and burdensome taxes, such as the plan to introduce the unrealised capital gains tax (the tax on valuation increases). 

Trump, they say, has a much more laissez-faire approach and wants to support startups operating in AI and crypto. But while many in Europe appreciate that Trump might be better for domestic business, some fear that his “America First” approach to global cooperation could be bad for international economic collaboration.

“It is a concern for sure — the isolationist stuff that the Trump camp spews out is alarming,” said one investor from the Baltics who describes themselves as a conservative. “That said, given who the Democrats have as their candidate, it is entirely unsurprising to me that large swathes of the US public are considering doing the unthinkable.”

What’s your view on Silicon Valley’s top VCs supporting Trump’s campaign? Are you concerned or excited about his return to power? As always, we’re happy to hear your thoughts.

— Zosia Wanat, senior reporter

🇪🇺 Ursula von der Leyen’s promises for startups: more public and private money, focus on AI and biotechnology. In a speech, as she was re-elected as the European Commission president for the next five years, Von der Leyen promised to focus on implementing and enforcing rules the Commission has already adopted — like the EU AI Act — and rolling out measures that will help European startups compete internationally. 

• “We will step up our investment in the next wave of frontier technologies, in particular supercomputing, semiconductors, the Internet of Things, genomics, quantum computing, space tech and beyond,” she said. 
• She also said the Commission will increase scientific research spending and will expand the activity of the European Innovation Council, the EU’s venture arm.  

🇨🇿 Prague-based ZAKA, one of the most active family offices in venture in Europe, is raising a €15m VC fund with external LPs — and has completed a €10.5m first close. It will back pre-seed and seed startups from CEE, the UK and the US with a focus on B2B software, AI, biotech and healthtech. 

🇩🇪 German science and technology giant Merck is set to buy French startup UnitySC, which provides quality inspection tools for semiconductors, for €155m. 

• UnitySC produces specialist equipment to measure and control the material used to make chips. Merck’s CEO Bélen Garijo said that the acquisition will enable the German company, which supplies semiconductor materials and chemicals, to “benefit from the growth opportunities of artificial intelligence”.
• The acquisition remains subject to regulatory approval and is expected to be completed by the end of 2024.

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With environmental pressure mounting, our latest report takes a journey through the tech that is changing airports — and air travel — across the globe, from vertiports to hybrid planes.

💪 Europe’s 10 most active climate tech investors.

🤝 Executive coaching can be a great way to grow, personally and professionally. But how do you find the right coach and use them effectively? Chloé Hajnal-Corob, a product leader-turned-coach, shares her top tips for startup operators looking to be coached.

European startups heading to the States later

European startups are delaying expansion to the US, according to data from Frontline Ventures. The average age that a European B2B SaaS startup heads stateside has risen from four pre-pandemic to five in the time since. The data was based on 35 startup expansions before 2020 and 40 after.

• “One reason for the slowdown in US expansion is that since Covid, the world is more open to doing business remotely,” said Will Prendergast, partner at Frontline Ventures. “Founders don’t need a physical office in the US to break into the market or they can employ US workers to work remotely for a longer period before moving into a physical office environment.”

VCs, founders, does this ring true to you? Or are you seeing startups head stateside even earlier than ever? Let us know.

Berlin-based Grover, a platform for renting tech like phones, cameras and laptops, raised €50m in bridge funding from investors including Cool Japan Fund, Energy Impact Partners, Korelya, Augmentum and Circularity Capital.

Aarhus, Denmark-based Landfolk, a marketplace for holiday home rentals, raised €10.3m in Series A funding from EIFO, SEED Capital and Heartland.

Barcelona, Spain-based Nearby Computing, a platform for edge computing orchestration and automation, raised €6.5m in Series A funding. Walter Ventures and JMEVentures led the round and were joined by investors including Telefónica, Akamai, Cellnex Telecom, Lenovo and Redeia Group.

Berlin-based SAIZ, which uses AI to provide size recommendations for online shoppers, raised €2.5m in seed funding. EnjoyVenture and Salica Investments led the round and were joined by investors including Houghton Street Ventures and Gateway Ventures.

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