Unlocking growth: How institutional capital can redefine Europe’s global role

Fueling Europe’s Future: Institutional Capital, Innovation, and the Path to Global Tech Leadership

At Web Summit Lisbon 2025, Sam Eshrati of Nordic Angels initiated a panel discussion on the state of European venture capital. He highlighted a decade-low in European VC fundraising and exits, contrasting it with a more dynamic US market. The core question was whether European capital is thriving or struggling due to persistent liquidity challenges, setting the stage for a nuanced debate.

Mr. Bjorn Tremmerie, from the European Investment Fund, clarified that the current liquidity crunch is cyclical, with Europe typically a quarter or two behind the US. Ms. Carolin Wais, Partner at Plug and Play Tech Center, added that the issue is capital deployment, not availability, noting an estimated €100 billion in institutional dry powder remains uninvested. Restoring investor confidence is vital.

Ms. Wais noted that Plug and Play’s unicorns average 14 years to exit, often exceeding typical fund lifecycles. Mr. Dave Mullen, Partner at Pinegrove Venture Partners, observed a shift towards secondary markets for liquidity as leading companies increasingly stay private. He also identified a critical “capital gap” in Europe post-Series A, compelling startups to seek US growth funding, potentially leading to talent drain.

The discussion then focused on emerging managers. Mr. Mullen stressed that 65% of venture deal flow originates from a General Partner’s network, making it crucial to underwrite the investor’s entire ecosystem. This network-centric approach presents a challenge for external funds seeking to identify credible European emerging managers without deep local insight.

Mr. Tremmerie, whose EIF actively supports emerging managers, emphasized the need for a “single differentiating factor,” such as a strong network or a proven dealmaking track record. Ms. Wais advised European emerging managers to specialize, focusing on specific geographic regions (like Albania or Lithuania) or deep vertical expertise, rather than adopting a generalist approach.

Addressing the Andreessen Horowitz narrative that Europe prioritizes regulation over innovation, Mr. Mullen argued that the EU’s coherent policy, particularly GDPR in FinTech, has fostered significant success. This strategic approach has positioned Europe as a global leader in certain sectors, demonstrating a thoughtful path to long-term growth.

Ms. Wais highlighted the vast capital disparity, citing OpenAI’s €60 billion funding versus A Alpha’s €500 million, which inherently limits scaling. Mr. Tremmerie acknowledged the “Europe regulates” caricature but highlighted the Draghi report’s call for faster, simpler, and bigger European approaches. He suggested GDPR offers an elegant solution to data privacy concerns.

The panelists concluded that despite existing challenges, US investors are increasingly active in Europe. The path forward involves leveraging Europe’s strengths in deep tech and regulation, combined with policy efforts to increase “gross capital.” This strategy aims to empower European founders to scale effectively, moving beyond limiting external narratives and solidifying Europe’s global tech role.