Sifted - What does Trump mean for European tech?

Good morning there,

The European tech world is still digesting the news that the leader of the free world will once again be Donald Trump. 

After the 78-year-old's convincing US presidential election victory over Kamala Harris, the new Republican administration in the White House will set about how to implement its “America First” agenda for a second time when it takes office in January. It’s likely to include trade tariffs, rollbacks in regulation and a solid amount of influence from Elon Musk, one of the president-elect’s main endorsers.

But while some of the US tech and VC community lined up in support of Trump ahead of the election, many in the European entrepreneurial community have concerns about what it could mean on this side of the pond. We’ve broken down how the news could impact the continent’s defence sector. Investors are worried, among other things, that the election result could lead to “fewer contracts to non-US companies in the defence space as US policy becomes more protectionist”.

More broadly, in Europe, the “unpredictability factor is back,” according to Christian Miele, general partner at Berlin- and San Francisco-based VC firm Headline.

“Trump’s talked about imposing significant tariffs on imports, and that could disrupt supply chains, especially for tech companies heavily reliant on US-EU trade,” Miele tells Sifted, adding that climate tech startups, which saw opportunities in President Biden’s Inflation Reduction Act, could be in for a hard time.

“Market dynamics are already reacting — European clean energy stocks have dipped since his win, reflecting concern that his policies might not favour green tech as much.”

AI founders will also be very aware that the US, which many already consider more fertile ground for startups in the space, is seeking to position itself as a more industry-friendly environment, with promised lighter touch regulation from President-elect Trump.

“Trump has said he will repeal Biden’s Executive Order on AI. This will be the most impactful change — Silicon Valley surrogates have argued that the order’s reporting requirements (very similar to those being imposed in most of Europe) favour Big Tech and make it harder for startups to compete,” says Roeland Decorte, founder & CEO at AI sound startup Decorte Future Industries and president of the Artificial Intelligence Founders Association.

Founders with operations in the US are staying positive. Ángel Alberich-Bayarri, founder and CEO of Valencia-based medtech company Quibim, works with several hospitals in the US and sees it as a key market.

“As a medtech company with European headquarters and strong ties to the US, we are optimistic about the ongoing partnership between our regions in advancing healthcare technology,” Alberich-Bayarri tells Sifted. “The US has long been a leader in medical innovation, and we are confident that policymakers will continue to advance this leadership.”

All in all, we’re certainly in for another wild ride over the next four years, with a US president-elect who's shown he is less beholden to the status quo. If you’re keen to share how you think the incoming Trump administration could affect your business, do get in touch.

Elsewhere:

• Axeleo Capital's new fund hopes to help solve climate tech’s FOAK problem
• ‘I could barely breathe’: Easee founder Jonas Helmikstøl on burnout at the brink of insolvency, and his new startup
• European tech’s busiest sector

— Tim Smith, news editor

/A message from our sponsor HSBC Innovation Banking

💰 Emerge, a London-based VC firm, has raised £56m for its second fund to invest in 25 to 27 startups working on learning and the future of work.

• The firm writes cheques between £500k-2m, taking a 15% stake in startups. 
• Emerge is eyeing startups in areas like talent assessment and selection, career navigation, language learning, educator tools and co-pilots, talent sourcing, self improvement and workforce development.

💸 Axeleo Capital, a Lyon, France-based VC firm, has launched a new fund focused on first-of-a-kind (FOAK) climate tech. The finance gap for FOAK companies is well-documented — when companies have a product but not the capital to build a factory to produce it. Axeleo hopes to fill that gap.

• The new fund has reached a first close of €125m and is targeting €250m by 2026.
• Backers of the fund include the Révolution Environnementale et Solidaire fund, Bpifrance and the Veolia utilities group. 
• The fund will write cheques of €3m-10m at Series A and B, and has money reserved for follow-ons.

🇺🇸 Donald Trump won a second term in the White House — and according to some VCs, it doesn’t just matter for Americans, but for European defence tech startups, too. Investors weighed in on what a second Trump presidency might mean for Europe’s defence companies, from NATO budgets to Ukraine-related revenues. Read more here. 

🗣️ “I could barely breathe,” Easee founder Jonas Helmikstøl tells Sifted, talking about the burnout he suffered when his EV charger company was on the brink of bankruptcy following a sales ban in Sweden, one of its largest markets. 

• In a candid interview with Sifted’s Mimi Billing, the Norwegian founder admits his setbacks when things turned sour, as well as those of Easee’s investors and other shareholders. 
• One year after leaving Easee he’s on his next mission – to create “a scalable energy system that helps people achieve energy independence” — with his new VC-backed startup Starflow.

💪 From 10 years of bootstrapping to 250m monthly users: Crisp IM sets itself up for a fresh new start. (Paid for and produced by Crisp IM)

Europe’s busiest sector in 2024 is… 

• Biotech: the sector is Europe’s ninth most funded this year, per Sifted data, but it’s the most active industry by deal count, writes Sifted Intelligence’s Fede Scolari. 
• Biotech startups, which pursue high-risk research to find treatments for the most stubborn diseases, have absorbed €2.4bn in investor capital in Europe this year and look well on track to match (if not exceed) deal volume from 2022 and 2023.
• This is all with good reason. The sector is an attractive harbour for exit-driven investors: these are businesses that float well on public markets, particularly in the US, where 24 biotech companies have listed already this year.

Our latest Pro briefing spotlights 85 biotechs from pre-seed to Series A; two of which tell us they’re fundraising right now [Switzerland’s Regenosca and UK’s Neobe]. 

You can also find Sifted’s entire library of briefings here.

Our Sifted 30 highlights

Discover the pulse of tech innovation in Eastern Europe & the Baltics with our latest report ranking the fastest-growing startups in 2024. See where the action is happening, the hottest sectors and what’s next for these standout companies.

London-based Kaizen, a platform that assists financial institutions with compliance reporting, raised £42m in funding. Guidepost Growth Equity led the round.

Amsterdam-based Modifi, which helps SMEs with cross-border trade finance, raised $15m in Series C funding. SMBC Asia Rising Fund led the round and was joined by investors including Maersk, Neva SGR, Picus Capital and GFC.

Paris-based Theremia, which is developing a platform using AI tools to optimise drugs for specific population subgroups, raised €3m in seed funding. Eurazeo and Salica Investments led the round and were joined by investors including Entrepreneur First and Tiny VC.

Heerenveen, Netherlands-based Taggrs, a server-side tracking and data management platform, raised €2m in funding. No Such Ventures led the round.

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