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Sustainability tech has been all the buzz in the last few years. Investors are hunting promising ESG businesses, governments are pushing ambitious legislation, and companies are getting on board to adopt new solutions. Sustainability funding is projected to reach unprecedented levels, with BCG Henderson Institute estimating accumulated global investment to achieve net zero to hit $75 trillion by 2050.  And yet, behind the curtain, the picture isn’t quite as rosy. According to Statista, VC investment in sustainability and climate tech has been steadily declining since 2021. While AI startups often manage to secure funding rounds within mere weeks, sustainability-focused companies can spend years in fundraising limbo. As a partner at VC consulting agency Waveup, I’ve seen dozens of exceptional startups forced to bootstrap despite having validated technology and clear market potential — from sustainable agriculture solutions to carbon capture technologies. Something just doesn’t add up in venture capital. Why aren’t investors backing the innovations needed to create a more sustainable future? The core issue lies in how they evaluate investment opportunities. The great expectations mismatch When looking at sustainability tech companies, most VCs expect rapid adoption, hockey-stick growth, and massive total addressable markets (TAMs) (understandably so, as otherwise, the VC formula might simply not work). They apply the same metrics and expectations used for SaaS and AI startups, and while some sustainability companies might fit this mould, many simply are too early in market adoption to demonstrate these characteristics. Consider one of the clients we worked with developing revolutionary ocean-cleaning technology. The team managed to build a product with a clear and proven ability to drastically lower ocean pollution by reducing the amount of microplastics that enter the water. Despite recognition from the UN and an excellent client roster, the company has struggled with financing for years. For VCs, an absence of rapid growth overshadowed patented tech, past environmental impact, and excellent business economics. While recognising impressive results, most investors couldn’t get comfortable with the adoption timeline and speed of growth as, for many corporate clients, sustainability investments remain a “nice-to-have” category rather than a “must-have.”  TNW Conference – Groups get the best fun and the best deals Bring your team and multiply your efficiency to cover more grounds and collect new leads. It doesn’t help that many sustainability solutions require buy-in from multiple stakeholders within organisations, leading to longer and more unpredictable sales cycles. Worse, many companies also need significant upfront investment in physical assets or infrastructure, unlike purely software-based startups. The result? Gloomy statistics: while traditional tech companies typically take three years from Series A to Series B, sustainability technologies need an average of seven-plus years to achieve scale.  The bottom line: impact investments aren’t yet firmly matching traditional VC returns. While there’s been a concerted push since 2015 to argue that impact returns are approaching venture returns, the data often tells a different story – and this performance gap creates a fundamental tension with the VC model. Venture funds operate under strict constraints: they have fiduciary duties to their limited partners, closed-end fund structures, and defined timelines for delivering returns. A fund’s ability to raise Fund II or III depends entirely on the performance of its previous investments. In this context, backing “good investments” that haven’t proven viable enough becomes paradoxically risky — even for an industry built on taking risks.  Rethinking the climate tech model Financing the next generation of climate tech might require new solutions from everyone. The question is, are investors truly willing to find new models? With many VCs (without calling out names), we’re seeing a troubling trend: rather than looking for new ways to adapt investment frameworks and funding mechanisms or dedicating more time to sourcing high-potential nascent climate tech startups, they hire consultants to reposition their existing portfolio companies as “ESG-friendly.” Essentially, this involves finding an ESG angle in otherwise traditional software companies to report to LPs strides made in financing sustainable tech solutions. Needless to say, this approach does little to drive meaningful environmental and social change. What’s the alternative? We have a few ideas. 1. Rethink traditional funding mechanisms VC investors need to work with other ecosystem players to offset financing risks while balancing risks and returns. Today, leading impact investors are working to combine traditional VC money with impact-first capital and structuring investments with different return tranches for various investors. Some use catalytic capital to de-risk early-stage investments or create revenue-based financing options for steady-growth sustainability companies. Others develop outcome-based funding models tied to impact metrics.For companies struggling with VCs altogether, evergreen funds that don’t have fixed lifecycles and allow for extended holding periods can better match sustainability tech’s development timelines. Corporate venture capital and large corporations facing pressures to transition to net zero can also become viable backers by providing both capital and pilot opportunities for sustainability startups. 2. Provide actionable help to accelerate the road to scaling Monthly advice in board meetings will be valuable, but the true contribution lies in hands-on help driving adoption. The best impact investors put their time where their money is by partnering with corporate venture arms to secure pilot opportunities and market validation for their portfolio companies, collaborating with government agencies on grants and subsidies, and working with industry consortiums to accelerate adoption. 3. Adjust metrics and expectations Investors need to consider new frameworks for evaluating sustainability investments. Traditional SaaS metrics could be replaced with impact-adjusted indicators that consider both financial and sustainability outcomes or allow for longer return lifecycles that align with the sector’s development timeline and adoption curves. Important to note: this isn’t about lowering standards; it’s about adapting them to match the unique characteristics of sustainability technologies.  For VCs, the question shouldn’t be whether to invest in sustainability tech but how to adapt their approach to these critical innovations. Without this shift in perspective, we risk missing out on the next wave of transformative technologies that could help address our most pressing environmental and social challenges. After all, the biggest risk might not be backing sustainability tech

An AI-powered note-taking app developed by Munich-based startup Bliro could offer a more secure way to transcribe audio. Bliro uses natural language processing and machine learning algorithms to extract relevant information from in-person or virtual conversations. It then generates structured meeting notes and automates follow-up tasks. So far, pretty standard.  However, unlike popular transcription tools like Otter, Fireflies, or Notta, Bliro isn’t a bot that hops onto your call, records an audio file, and then transcribes it. Instead, the platform transcribes in real-time, ensuring that no audio recordings of conversations are ever created.  This guarantees compliance with strict privacy and security requirements like GDPR, the company said. That also means you don’t need the other party’s consent to record, streamlining the note-taking process.  The 💜 of EU tech The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now! Maurice Schweitzer, Bliro’s co-founder, told TNW that the approach eliminates risks associated with audio and video recordings. “A transcript lacks personally identifiable elements like voice or facial recognition, making it impossible to verify who said what with absolute certainty,” he said. For those transcripts that do contain personal information like names, the company “prioritises compliance” at every step, Schweitzer added. Schweitzer co-founded Bliro in 2022 alongside data scientist Martin Thoma, as a privacy-first transcription tool, spun out from AI research at the Technical University of Munich.  In addition to eschewing the recording process, Bliro encrypts all data processed in the app and stores it on servers in Frankfurt. It does not share data with third parties, including its own employees, without explicit consent. Nor does it use user data to refine its AI models, the company said. “Many large companies avoid recording-based solutions due to privacy and compliance concerns — making Bliro the only viable option for them,” said Schweitzer. Bliro targets customer-facing teams who use the app to automate meeting transcriptions, generate AI-driven summaries, and create follow-up actions — while maintaining privacy and compliance. The app currently supports 15 languages.  Today, Bliro announced it has raised €2.8mn in a funding round led by German early-stage VC LEA Partners, with participation from 468 Capital and Dutch seed investor Rockstart. Bliro also launched its iOS app, which transcribes and analyses face-to-face conversations. The new funding will be used to accelerate product development and win more customers. Schweitzer said more than 1,000 companies already use Bliro, including well-known German brands such as ImmoScout24, OMR, and Telefónica Germany. source

Dutch software firm Bird is moving most of its operations out of the Netherlands and opening new global hubs as it seeks a reprieve from “overregulation” in Europe, said co-founder and CEO Robert Vis. “The AI Act, financing, compensation, taxes, employment law — starting and running a company [in Europe] is hard,” Vis told TNW, adding that there are “too many disparate markets that are overregulated with no clear vision for the future while the world around us is changing.” Bird (formerly MessageBird) is one of the Netherlands’ leading tech scaleups, reaching unicorn status in 2018. Bird’s main product is a cloud-based platform that manages customer communications across messaging apps, calls, video, SMS, and email. The company also recently launched a new “AI employee” chatbot, which handles tasks such as responding to customer inquiries, qualifying leads, and providing personalised support.   Vis is now looking overseas to fuel the company’s next advances. TNW Conference – Groups get the best fun and the best deals Bring your team and multiply your efficiency to cover more grounds and collect new leads. “Both The Hague and Brussels enjoy being in meetings and talking more than they get shit done,” Vis said, adding that EU policymakers are “killing innovation.”    Amsterdam-based Bird will now open up three new offices in the US, and one each in Singapore, Dubai, and Istanbul. It will also open a “meditation, rejuvenation, and health centre” in Thailand for its employees, Vis said in a LinkedIn post.  Nevertheless, Bird will maintain an office in Lithuania and keep its tax base in the Netherlands for now — so it’s not leaving the EU entirely.  Earlier this month, Bird cut 120 jobs — roughly one-third of its total workforce, which is mainly based in Europe. New AI tools contributed to the staff cuts, said Vis, but it was also an effort to “position our teams closer to our customers” in the “Americas and Asia,” he told TechCrunch.   The news comes as the EU pushes ahead with its landmark AI Act, which entered force last year. The act lays out a rulebook for governing AI based on risk levels, designed to ensure the technology is deployed safely, transparently, and ethically.    The US, meanwhile, is moving in the opposite direction. While the EU imposes strict rules, the Trump administration is removing AI restrictions and giving tech sector leaders such as Elon Musk prominent roles in government.  “There is no stopping this technology whether we like it or not,” said Vis. “Whatever the future will hold — if you want to compete you need to be liberal not restrictive.” Robert Vis is a former speaker at TNW Conference, which takes place on June 19-20 in Amsterdam. Tickets for the event are now on sale. Use the code TNWXMEDIA2025 at the check-out to get 30% off the price tag. source

For decades, European tech insiders have looked across the Atlantic with a mix of admiration and frustration. Casting envious eyes on the deep-pocketed VCs, an enormous consumer market, and a pipeline of elite talent, they often view the US as a promised land for business growth. The sentiment fuels calls for Europe to replicate Silicon Valley’s model. But Vidya Peters, CEO of Dutch unicorn DataSnipper, argues this approach is flawed. Rather than merely mimicking US tech, she urges startups and scaleups to embrace Europe’s strengths. A key one is sustainable, long-term growth. “Five years ago, it wasn’t very fashionable to be profitable,” Peters tells TNW. “But I think this is where the European sensibility is a strength, because European companies have always taken this approach, and now it’s hugely valued in the current economic climate.” The 💜 of EU tech The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now! This sharply contrasts with Silicon Valley’s growth-at-all-costs mentality. European businesses are already benefiting from this distinct approach. “When you watch some of these companies come out, they are much more durable in their growth and competitive advantage,” Peters says. DataSnipper is a prime example. The company was profitable early on, scaled rapidly, and recently hit a $1bn valuation. Ahead of her headline talk at TNW Conference in June, Peters shared a few secrets behind the company’s success. One is based on another European trademark: data protection. Privacy and security are integral features of DataSnipper’s core product, an AI-powered platform that automates repetitive finance and audit procedures.   “It’s been super important to our customers that we’re not training on their documents and data — and that’s been a central piece of how we built our AI products,” Peters says. “We review and look at their data to provide insights, but that data is theirs.” The company must also abide by the EU’s stringent data laws. Critics argue that these rules stifle innovation, but Peters points to the advantages.  “Europe really has the opportunity to lead in this space by balancing innovation with customer data protection,” she says. By embedding safety and transparency into AI, she continues, startups and scaleups can carve out a competitive edge over US rivals. “Doing it from a base of trust can help European companies win customers in a different way than their American counterparts can.” DataSnipper also has roots in another European hallmark: a bar in Amsterdam.  From Amsterdam to the world In 2017, Maarten Alblas and Jonas Ruyter were having a beer. Joining them was a friend who worked in auditing for KPMG. He faced a common affliction in his profession: an enormous spreadsheet that required painstaking scrutiny. He had to search through the document for invoices, bank statements, and receipts — all the while cross-checking the data.  Alblas and Ruyter believed software could ease his suffering. They settled on a solution: an intelligent automation platform that would dramatically increase the quality and efficiency of common audit procedures. The idea led to the founding of DataSnipper. Their software proved a hit with auditors. Soon, their user base had spread from the Netherlands to the UK and Germany. After finding success in Europe, they targeted new markets beyond the continent. To further fuel the growth, the company appointed Vidya Peters as CEO in 2023. She joined with expertise honed in Silicon Valley, most recently as Chief Marketing Officer of MuleSoft. During her time at the software giant, the company went public on the NYSE before being acquired by Salesforce for $6.5bn.  She later gained extensive experience of Europe’s tech landscape. In 2019, she served as Chief Operating Officer of Marqeta, a payment processing firm. Again, she helped her company go public. In 2022, Marqeta made its market debut on the Nasdaq. The company ended the day with a market cap of over $16bn. At DataSnipper, she set her sights on accelerating growth and global expansion. The strategy has reaped rewards. In 2024, Deloitte named DataSnipper the fastest-growing tech company in the Netherlands for the second year in a row. Last month, the business reached the coveted unicorn status after raising $100mn at a $1bn valuation. Over 500,000 audit and finance professionals across more than 125 countries now use the software. As DataSnipper scaled, the company benefited from another European advantage: access to international talent.  DataSnipper’s talent pipeline “People undervalue the ability to hire from across the world here,” says Peters. DataSnipper has directly benefited from this access. From the Netherlands, the company can hire global talent on a visa with greater ease than in the US. Peters describes this as “a secret weapon” for European startups and scaleups. “It is much easier to do so with the visa opportunities that you have in Europe, the ability to issue work visas is significantly easier in Europe than it is in the US.” A diverse range of people now work for DataSnipper. In the company’s Amsterdam headquarters, 70% of employees are from outside the Netherlands. “That’s incredibly valuable because we have every language that you could possibly want to sell in Europe, and you can attract them right here to Amsterdam,” says Peters. DataSnipper’s global outlook has been instrumental in its expansion. After establishing itself in Europe, DataSnipper opened offices in New York, Tokyo, Kuala Lumpur, and Mexico City. Despite its global expansion, DataSnipper remains firmly rooted in the Netherlands. One of the country’s many attractions is a simple matter of time. “People forget that America is not the heart of the world,” says Peters. “You can wake up in Europe and sell to Asia Pacific. And after your lunch, you can sell to the US.” Europe’s pros and cons Despite the advantages of life in Europe, startups here still face substantial challenges. One is the diverging regulations, tax laws, and banking systems, which present roadblocks to growth across the continent. “We’re not taking full advantage of being part

German startup Proxima Fusion — whose team includes engineers from MIT, Google, SpaceX, and McLaren — has unveiled a fusion energy reactor design it believes offers the quickest route to commercially viable fusion power. Dubbed Stellaris, the machine is a quasi-isodynamic (QI) stellarator with high-temperature superconducting (HTS) magnets. This type of reactor uses complex, twisted magnetic fields to confine hot plasma, creating the conditions needed for fusion reactions. “Stellaris is designed to operate in continuous mode and be intrinsically stable,” Francesco Sciortino, Proxima’s co-founder and CEO, told TNW. “No other fusion power plant design has yet been demonstrated to be capable of that.”   Stellaris’ design builds on the Wendelstein 7-X, the world’s largest stellarator, located at the Max Planck Institute for Plasma Physics in Germany. While Wendelstein 7-X was developed for research, Stellaris could one day power the grid.  TNW Conference – Groups get the best fun and the best deals Bring your team and multiply your efficiency to cover more grounds and collect new leads. Proxima aims to bring the design to life with its first demonstrator — Alpha — slated for completion in just six years. Alpha will be the first-ever fusion device demonstrating net energy production in a steady state, said Sciortino. The machine will lay the foundation for Proxima’s first 1GW fusion reactor, which the company hopes will power up sometime in the 2030s.  Stellarators have several advantages over their more popular cousin, the tokamak (the type adopted by ITER mega project under construction in France). They need less power to operate and are more stable. Their biggest drawback is complexity — stellarators are notoriously hard to design and build. This is why they were largely set aside in the 1960s for the tokamak. However, advances in computational power are closing the gap. An AI-enabled fusion reactor design Similar to other industries like automotive or aerospace, Proxima uses AI supercomputers to rapidly iterate the best fusion reactor designs based on key parameters like cost, material availability, and efficiency. So instead of having to build multiple prototypes, Proxima can jump straight into building a functioning demonstrator.  “The understanding of complex geometry and its consequences is everything in stellarators,” said Sciortino. “AI is helping Proxima to uncover patterns that lead to simpler, faster, and cheaper designs.”  Stellaris is designed to generate more power per unit volume than any previous stellarator. HTS magnets create stronger magnetic fields, allowing for smaller, faster-to-build, and more efficient reactors. This approach also reduces costs in both construction and operation. Stellaris uses only existing materials, making it buildable with today’s supply chains, the company said. Full details of the reactor were published today in the journal Fusion Engineering and Design. The renders of Stellaris feature a unique twisting design. Credit: Proxima Fusion Munich-based Proxima made history in 2023 as the first company to spin out from the esteemed Max Planck Institute for Plasma Physics, one of the world’s leading fusion research centres. The institute focuses exclusively on fusion and has more plasma physicists than MIT. Proxima raised €20mn in funding last year as it looks to turn the mind-bending physics of fusion into a viable business.    “When Proxima started its journey, the founders said, ‘This is possible, we’ll prove it to you,’ and they did,” said Ian Hogarth, a partner at Plural, one of Proxima Fusion’s earliest investors. “Stellaris positions QI-HTS stellarators as the leading technology in the global race to commercial fusion.” source

Venus Williams is most famous for being one of the best tennis players of all time, but she’s also a prolific angel investor. In her latest business move, Williams has backed French startup WeWard. WeWard is a free app that offers real-world rewards for walking. It tracks your steps and lets you earn points (called “Wards”), which can be exchanged for gift cards, donations, or discounts. The goal is to encourage people to be more active while benefiting from their daily movement. Williams has invested an undisclosed sum in the company and will also act as an ambassador. WeWard, meanwhile, has committed to donating $25,000 to her charity, CARE, and will host a month-long “Venus Williams Championship” where users can unlock up to $40,000 in donations by reaching step milestones.  “A large part of staying well and active is simply by moving your body whichever way you can, and with WeWard, walking becomes a fun and rewarding experience,” said Williams, whose portfolio also includes French social investing app Shares and Pelago, a British startup tackling substance abuse via “virtual clinics.” The 💜 of EU tech The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now! Beyond physical rewards, users can collect virtual trading cards — dubbed WeCards — placed at specific locations on the map, a bit like Pokémon Go. Users can compete with friends or join virtual leagues, tracking their progress on leaderboards and earning gold, silver, or bronze medals based on activity levels.  The idea is to incentivise people to walk further and more often — and it seems to be working. Approximately 6.5 million WeCards are collected daily by the roughly 20 million people who use the app, the company said. Walking plans WeWard’s CEO, Yves Benchimol, founded the startup in 2019 alongside Nicolas Hardy and Tanguy de la Villegeorges. The company is almost completely bootstrapped, save for a few hundred thousand euros in seed funding raised in 2020.  While WeWard has not raised much capital itself, it has handed plenty of money out. To date, the company has given $20mn in cash back to users and $1mn to charity partners, it claims. WeWard generates revenue through retail partnerships, advertising, and features like “Playtime,” where users can earn additional rewards by engaging with third-party mobile games directly through the app.  WeWard is just one of a cohort of pro-walking fitness startups. Rivals include Walk15, a Lithuanian company that’s trialled its tech with public healthcare services. Walk15’s co-founder and CEO, Vlada Musvydaitė-Vilciauske, told TNW last year that she wants to create “a pharmacy for walking.” source

Europe’s biggest food delivery firm Just Eat Takeaway.com is set to be acquired by tech investor Prosus for €4.1bn, in one of the biggest acquisitions in the history of Dutch tech.  Prosus — the investment arm of South African tech firm Naspers — has agreed to buy Just Eat Takeaway’s shares at €20.30 each in an all-cash offer. That’s a 22% premium over the delivery app’s recent three-month high but only a fifth of its pandemic-era peak of above €100 per share. Following the announcement, Just Eat Takeaway’s shares climbed 53% on the Amsterdam Stock Exchange this morning. Just Eat Takeaway was formed in 2020 through the merger of UK-based Just Eat and Dutch company Takeaway.com. The €7.4bn deal made the Amsterdam-based company — which has been both a speaker and partner at TNW Conference — one of the world’s largest food delivery platforms. However, it’s been a turbulent few years for Just Eat Takeaway since then, amid cooling demand and tough competition from rivals. The company also had a few missteps, most notably its botched takeover of US delivery app Grubhub. Just Eat Takeaway acquired Grubhub for $7.3bn in 2021 only to sell it off for $650mn just three years later.  TNW Conference FLASH SALE is LIVE Meet investors from Sequoia, Walden Catalyst Ventures, and more. Take advantage of our 50% our Startup, Scaleup and Investor Programs. Ends 21 February. For Prosus, the deal is an opportunity to turn Just Eat Takeaway into a “European tech champion,” said its CEO, Fabricio Bloisi. The Prosus plan for Just Eat Takeaway Prosus already owns iFood, Latin America’s largest food delivery platform. The firm also has stakes in Germany’s Delivery Hero, Chinese shopping platform Meituan, and Swiggy, a grocery delivery app in India. Prosus has wanted to add Just Eat Takeaway to its delivery empire for years. The South African-owned firm tried to hijack the merger of Just Eat and Takeaway.com in 2019 with a £5.1bn (€6.1bn) bid.    Just Eat Takeaway announced the deal today alongside its annual results, reporting a 35% jump in pre-tax profits for 2024, reaching €460mn. Jitse Groen, the company’s CEO, said it was “now a faster growing, more profitable, and predominantly European-based business.” Groen hopes that Prosus’ expertise in the delivery sector and AI technology will bring further profits for Just Eat Takeaway.   “Prosus fully supports our strategic plans, and its extensive resources will help to further accelerate our investments and growth across food, groceries, fintech and other adjacencies,” said Groen.   Just Eat Takeaway confirmed that its current leadership would remain in place under the agreement, which is still subject to shareholder approval.  If the deal is approved by shareholders and the relevant authorities, it will be one of the largest acquisitions of a Dutch tech company in history.  Other notable buyouts in the country include Warburg Pincus and Apax Partners’ €5.1bn acquisition of T-Mobile Netherlands in 2021 and Siemens’ €628mn purchase of Rotterdam-based software startup Mendix in 2018. US chip maker Qualcomm’s $44bn attempt to acquire its Dutch rival NXP in 2018 would’ve been by far the largest buy, but it fell through after failing to win approval from Chinese regulators. Dutch tech will be a hot topic at TNW Conference, which takes place on June 19-20 in Amsterdam. Tickets for the event are now on sale. Use the code TNWXMEDIA2025 at the check-out to get 30% off the price tag. source

Shares in European aerospace and defence companies soared to record highs this week, elevating expectations for the continent’s military tech startups. Britain’s BAE Systems leapt by 9% on Monday, while Germany’s Rheinmetall jumped by 14%. Stocks in Sweden’s Saab, Italy’s Leonardo, and France’s Thales also boomed. By the day’s end, the Stoxx Europe aerospace and defence index had hit an all-time peak. Military tech firms have also been surging. Kate Leaman, chief market analyst at online broker AvaTrade, said these companies have “huge potential” for growth — particularly those with AI-driven solutions. “We’re already seeing a shake-up in the defence sector, with AI-focused players like Palantir outperforming more traditional defence giants,” Leaman told TNW. “This suggests that cutting-edge, tech-centric firms could possibly capture a sizeable share of the market.” European defence tech startups have also grabbed investors’ attention. In 2024, they attracted a record $5bn in VC funding — a 24% increase over the previous year. TNW Conference FLASH SALE is LIVE Discover the next big thing. This week only, take advantage of our 2 for 1 offer on General Attendee and Corporate Passes. Ends 21 February. The momentum has raised expectations of future public listings. “Many defence tech startups haven’t gone public yet, but with the market heating up and investor interest growing, there’s a strong possibility we’ll see more IPOs in the near future,” Leaman said. “That could open the door to fresh investment opportunities and raise the profile of these emerging companies.” The push for defence tech The spending spree comes amid mounting concerns about Europe’s military sovereignty. Leaders across the continent have been shaken by the Russia-Ukraine war and tensions with the Trump administration. Ukraine’s President, Volodymyr Zelensky, has called for the creation of an “army of Europe”. His French counterpart, Emmanuel Macron, has urged his allies to “wake up” and spend more on defence. European Commission President Ursula von der Leyen wants to trigger an emergency clause exempting military expenditures from the fiscal restraints on EU countries. A growing share of their budgets is going to military tech — and startups are beginning to cash in. According to a new report from McKinsey, investment in European defence tech startups increased by over 500% between 2021 and 2024 compared to the previous three years. The report added, however, that the sector remains about five years behind the US’s in terms of maturity. A major factor in this gap is the struggle to secure late-stage funding — a common problem for European startups across industries. Nonetheless, the rise of defence tech is set to continue. “Military spending is rapidly moving away from traditional hardware toward software, drones, and robotic solutions,” Leaman said. “As a result, defence tech companies specialising in these areas may enjoy increasing demand for their products and services.” Defence tech is a key theme at this year’s Assembly, the invite-only policy track of TNW Conference. The event takes place on June 19 and 20 — a week before the NATO Summit arrives in Amsterdam. Tickets for TNW Conference are now on sale. Use the code TNWXMEDIA2025 for an exclusive subscriber discount. source

Europe’s startup scene has entered troubled waters. Long overshadowed by Silicon Valley and now being chased down by China, the continent is urgently looking for boosts. Increasingly, the search is leading to ecosystems.  The ecosystem model creates networks of individuals, organisations, and resources. Their shared expertise and resources can produce a multiplier effect, driving innovation and accelerating growth. A core component of European ecosystems is the EU. While its tech strategy often faces criticism, the bloc has also played a key role in driving startup success. Just ask Nicolas Benady, the CEO of Swan, a thriving banking-as-a-service (BaaS) fintech based in France. “Our company wouldn’t exist without the European Union,” he says. TNW Conference FLASH SALE is LIVE Discover the next big thing. This week only, take advantage of our 2 for 1 offer on General Attendee and Corporate Passes. Ends 21 February. Benady points to the impact of the Payment Service Directive, an EU law that established standardised rules for electronic payments. The legislation sparked the success of many global fintech leaders, from Revolut to Adyen. They finally had a chance to compete with banks in payments. Swan has reaped the benefits. Last month, the startup announced it had raised €42mn — the second part of a Series B round that brought Swan’s total funding to an estimated €100mn.  “Without this directive, I don’t think we’d have so many fintechs today in Europe,” Benady says. Fintechs are far from the only beneficiaries of the EU ecosystem — but the network still needs work.  At TNW’s Nurturing Scaleup Success webinar on Tuesday, Benady joined a panel of European tech experts to explain the power and peril of ecosystems. Their message was clear: no startup scales alone. Their success depends on a thriving ecosystem of partners. 4 pillars of a thriving ecosystem Jason Lynch, CEO of quantum computing startup Equal1, has firsthand experience of the power of ecosystems. His company has partnered with Arm on computing breakthroughs, collaborated with Nvidia to blend hardware with software, and teamed up with the Netherlands Organisation for Applied Scientific Research (TNO) on product development.  Equal1 also recently secured investment from TNO. To strengthen the alliance, the startup has set up shop in another component of the Dutch ecosystem: the House of Quantum in Delft, a national campus for quantum startups. Lynch has high hopes for the relocation. “Being in a centre of excellence… is a critical piece of an ecosystem,” he says.  At the TNW webinar — now available to watch on-demand — Lynch broke down four crucial benefits of an ecosystem. 1. Talent As Silicon Valley’s network effects continuously prove, startups benefit immensely from proximity to talent. The House of Quantum provides another promising example. With a steady stream of experts flowing through the site, the centre is giving Equal1 a fresh talent pipeline. 2. Infrastructure Computation costs for startups can be astronomical. With access to shared infrastructure, startups can achieve dramatic savings.  3. Partnerships Tech firms often rely on complex supply chains. Ecosystems offer a route to bring each component together. “What a centre of excellence like Delft offers is an ability to work very closely with companies that are just across the corridor,” says Lynch.  4. Customers End users are drawn to areas with substantial expertise and companies. They help startups to validate and commercialise their products more quickly. “A hub like this really attracts in those end users,” says Lynch.  Yet Lynch also has concerns about EU ecosystems. Chief among them is a failure to commercialise ideas. “It’s well-recognised that European research is leading the world. People would probably say that bringing that research to market is where Europe has more of a challenge. For me, that’s about speed, getting out of the way of startups, and trying to lower the barriers as much as possible.” The money streams EU policymakers are often slated for providing insufficient support to startups. There are growing signs, however, that their attitudes are changing. Clotilde Hocquard, Public Affairs Lead at France Digitale, a European organisation that connects startups and investors, points to several positive developments. One is an expansion of funding streams, such as a new EU initiative to mobilise €200bn for AI investments. Another is France’s Tibi Initiative, which brings institutional investors together with accredited VC firms to encourage tech investing. “It should be replicated at the European level,” Hocquard says. Big ideas like this have been hard to bring to life, but they’re now attracting growing support. Hocquard noticed the momentum shift after last year’s publication of the Draghi Report, which revealed alarming problems for European innovation.  “Policymakers are starting to realise that they need to do something to make sure startups can thrive in Europe,” she says.  Despite the positive signs, Hocquard wants faster progress. She points to another example set in the US. “We have to make sure to mobilise pension funds and insurers, like in the United States. And we have to make sure the money is targeted towards VC funds and to finance innovation.”  But funding isn’t the only challenge for EU ecosystems. The double-edged sword of regulation Swan may only exist thanks to EU rules, but the bloc’s regulation is a double-edged sword. One big problem is the diversity of laws. Despite the single market, the EU’s legislation is fragmented. “We don’t have anything single,” says Hocquard. “We have 27 member states doing what they want with their rules.” This smorgasbord of laws raises barriers to scaling across borders. If the ecosystem could harmonise the rules, startups would face smoother paths to expansion.   Hocquard points to company law as a powerful and straightforward initial target. She also urges member states to stop twisting EU rules in different directions. “If there’s a European law, it should be applied in a uniform way across the continent,” she says. Ecosystems for scale The urge to scale can lead to premature decisions. Benady advises early-stage founders to first focus on the product-market fit. “Once you start to see commercial traction, then you have

Elon Musk’s MAGA politics are fast becoming a mega problem for Tesla. New registrations of Tesla vehicles plummeted across Europe last month amid widespread boycotts against the EV brand. While broader economic forces are at play, Musk’s role in the Trump administration and his open support of far-right politicians appears to be fuelling his company’s precipitous fall from grace — and gifting rival brands a golden opportunity. Germany’s transport authority reported that new Tesla registrations in January fell by nearly 60% year-on-year. That’s despite the country’s battery-electric vehicles sector seeing a combined 53.5% growth in sales last month. Dramatic declines in registrations were also reported in Spain (75.4%), France (63.4%), Sweden (46%), and the Netherlands (42.5%). The dip has been linked to the behaviour of Tesla’s CEO. The 💜 of EU tech The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now! “There is no doubt that ‘the Musk factor’ has influenced Tesla’s sales in the same way as his reputation impacted Twitter when he bought it and rebranded it as X,” Andrew Fellows, an automotive industry expert at Star, a market intelligence firm, tells TNW. Musk, an already divisive figure, has gone on a MAGA rampage in recent months, with the world’s richest man — and the social media platform X, which he owns — fast becoming a mouthpiece for Trump-era conservatism.    In Europe, Musk has openly endorsed Germany’s populist AfD, even hosting an interview on X where he heaped praise on the party’s leader Alice Weidel. At the Trump inauguration on January 20, Musk made a controversial hand gesture, which many interpreted as a Nazi-style salute.  Musk’s actions are either despicable or courageous, depending on whom you ask. But for those who deplore his actions, Tesla — a brand hard to set apart from its leader — is an obvious target.  The backlash against Tesla On January 23, political campaigners beamed an image of Musk making the Nazi-like salute along with the word “Heil” onto Tesla’s gigafactory in Berlin. After Musk joined an AfD rally by video call in late January, Poland’s Tourism Minister Slawomir Nitras called for a boycott of the EV brand. In early February, a Tesla showroom in the Netherlands was defaced with swastikas and anti-fascist slogans.  Tesla Gigafactory, Berlin (In collaboration with @politicalbeauty) pic.twitter.com/xwRUiYX03p — Led By Donkeys (@ByDonkeys) January 22, 2025 It’s not hard to argue that public sentiment against Musk is souring. However, whether the entrepreneur’s actions are hurting Tesla’s bottom line is harder to measure.  One of the best ways to gauge that is to ask Tesla owners.  In the Netherlands, one in three Tesla drivers want to get rid of their car because of Musk, according to a recent survey. One such individual is Tim Kraaijvanger, the founder of Tesla360.nl, a Dutch site dedicated entirely to Tesla products. In an ironic twist, Kraaijvanger recently sold his Tesla and bought a Polestar instead.  “I do not wish to be associated with [Musk’s] ideology,” he told Wired. “While Musk might get away with a [Nazi-like] salute in some parts of the world, European markets reject such behaviour.” Musk’s antics could be good news for other EV-makers, as more people like Kraaijvanger jump ship. “It’s a fantastic opportunity for rival manufacturers,” says Fellows.  Among those poised to take advantage is Polestar, the Swedish EV brand. Polestar’s CEO Michael Lohscheller said that the company has seen a spike in enquiries from disgruntled Tesla owners in recent months — and he’s encouraging his salespeople to target them. “We get a lot of people writing that they don’t like all this,” Lohscheller told Bloomberg News. “It’s important to listen closely to what they say. And I can tell you, a lot of people have very, very negative sentiment.” Some drivers, not yet ready to part with their Tesla, have begun attaching stickers to their cars bearing messages such as, “I bought this car before Elon went crazy.” Even some of Tesla’s employees want to distance themselves from their boss, according to the Washington Post.  As of today, Tesla stock has fallen 15% in the last month.  “Tesla is developing a serious reputational problem,” says Fellows. The automotive industry expert believes Musk and Trump share around 30% of the blame for the EV maker’s sales decline. He attributes the remaining 70% to “industry factors.” The blame game Tesla’s Model Y was Europe’s best-selling car in 2023, but intense competition has challenged the brand’s market share. In 2024, Tesla’s sales declined by 1.1%, its first drop in over 10 years. In September, Chinese automaker BYD became the world’s leading EV brand, thanks to its aggressive pricing strategy.   While Tesla has made modest changes to its lineup in the past few years, rival brands like VW, Renault, and BMW have been rolling out new models, sometimes with lower prices.     Tesla has also been subject to many of the same challenges as other EV makers — slowing demand, supply chain shocks, and decreased subsidies for first-time buyers. But the company also has some unique issues of its own.   “Tesla was already facing several headwinds in 2025 before CEO Elon Musk found himself at the centre of several controversies with the potential to impact the company’s sales volume and profitability,” Peter McNally, senior analyst at London-headquartered research firm Third Bridge, tells TNW.   Musk’s firm has also been busy updating its Model Y, which McNally believes contributed to the sales drop as customers wait for the latest model before upgrading. The refreshed Model Y is set to go on sale in the US next month. Musk’s antics couldn’t have come at a worse time for Tesla, as it grapples with intense competition, an ageing model lineup, and a wider slump in demand for electric vehicles.  Tesla’s reputation in Europe now largely hinges on its CEO — unless the company decides to oust him.  source