Europe 2016: Startups seek global spotlight as datacentres grow

If Europe’s technology scene could be said to have grown up in 2015 then supporters in 2016 might well be hoping for the emergence of even bigger success stories that can leap the barrier from local success to global player. With such a wide variety of languages, businesses and micro-cultures, all we can do is provide a quick tour of the continent – here it is.

UK-founded Mimecast went public at the back-end of 2015, providing the country with a long-awaited IPO even though it ended up being on the US’s NASDAQ market. Few would argue that London has emerged as a vibrant technology hub over the last five years and the capital takes advantage of the world’s biggest financial market, a large media enclave and an exuberant creative community. Investment bank GP Bullhound calculated in the summer of 2015 that the UK had almost half of Europe’s ‘unicorns’ – pre-IPO companies valued at $1bn or more. In London alone these include music identification service Shazam, apparel site ASOS, controversial money lender Wonga, property finding site Zoopla and e-commerce tech firm Powa. Outside the capital you could add flights finder Skyscanner and white-goods site among others.

However, while any visitor to Shoreditch in east London would sense the startup buzz, there’s a general sense in the UK that what’s needed is a giant to punch through and raise levels of expectation. While B2C garners much of the attention it might be that it’s in the less tinselly B2B sector where that chance of a unicorn lies. The emergence of a series of new banks that don’t have the legacy or tarnished brands of incumbents might be one source, as might be the new financial service providers.

Leave the capital that tends to overshadow much of the rest of the UK and one area that has some significant support is the north of England where the Government has provided funding to try to stimulate former industrial towns and cities under the TechNorth banner.

Germany can of course point to SAP as a true leader in global tech, fully able to take on the Americans at their own game, while at the consumer internet end of the scale it can give the Samwer brothers’ Rocket Internet group of startup clones.

As with London, Germany, and especially Berlin, has become a genuine startup destination that attracts people from all over the world and German efforts have been helped by local giants like Bayer, Metro and Deutsche Telekom investing in the country’s nascent companies. Germany’s political leaders from Angela Merkel (this year’s TIME Person of the Year) down have also acted to reduced obstacles for startups and to connect new entrants with funding sources. Local hopes on the up include fashion retailer Zalando, Rocket-backed furniture site Home24, and Delivery Hero for food ordering. In 2015 Germany’s startups had a banner year and translating funding and local presence to become worldwide brands will be the challenge for 2016.

Punching above its weight still is Sweden with the country that gave the world Skype now counting Spotify as its leading light now that Candy Crush Saga maker King, originally headquartered in the country, is being acquired. In Russia, search giant Yandex remains closely watched, as do several others but many entrepreneurs today prefer to seek their fortunes outside of their home country. Russian elections are due at the end of 2016.

Finland is seeing a heartening renaissance after the punch to its guts that was the decline of Nokia. Ironically, Nokia’s fall might have led indirectly to the country’s wider rise in tech. No longer reliant on one huge player, there is now a healthy variety of startups and, say experts, a greater willingness to try their luck.

In France, Paris continues to have a lively startup culture and Deezer and Netvibes, acquitted by Dassault in 2012, may now be counted as veterans of the scene. Deezer’s future and its ability to compete with Spotify will be particularly closely watched after the demise of Rdio. Of course, the Paris attacks will put the country on alert for some time to come and 2016 will also bring the distraction of the football European Championships.  

Spain and Italy have been among those hit hardest economically in recent years but both are using tech to bounce back. Italy, attempting to sweep away recent scandals, has recently been investing in its startups via its Invitalia fund. Online fashion site Yoox was recently acquired by Net-A-Porter but others in the field, notably Shopfully, which directs users to local stores, are on the rise.

As for Spain, its ability to innovate has often been ignored but the success of companies like Zara owner Inditex with its fabled value chain excellence to the rise of so many leading restaurants serving molecular gastronomy show that creativity often bubbles under. Spain has a host of interesting startups from global payments firm peerTransfer to forex platform Kantox, and Barcelona continues to emerge as a centre of entrepreneurialism (and of networking, thanks to its huge conference centres).

It’s not known how Barcelona startups like online voting service Scytl, Tappx for cross-promotion of apps, and geolocation used goods trading app Wallapop will be affected by the prospect of Catalan independence but that change appears more likely than ever. Prime Minister Mariano Rajoy, like so many politicians, has promised a warm welcome for entrepreneurs but bureaucracy can still make life difficult in Spain. Perversely, it might be that the very high rates of youth unemployment make the country more amenable to having a risk-taking startup mentality.

Payments solution provider Adyen flies the flag for the Netherlands and stands out for being profitable already and taking a long view rather than rushing towards an IPO.

Outside the startup scene, Safe Harbor will be carefully watched to see if a compromise can be reached. A proposed change in rules caused jitters over data protection and privacy and it was notable that Microsoft, Google and AWS all recently announced plans for new local datacentres in Europe. If the cloud generation was all about “not knowing or caring where my data is sitting” then in Europe not worrying about data residency might be banished forever.

In other red tape of the General Data Protection Regulation (GDPR) rules, waiting in the wings for a long time already, might finally bite in 2016 and have a major effect on how European (and international companies operating in Europe) collect and handle data. 


« Climate change tech: COP21 and the buildings of the future


'Old boys' bullying club' means 31% of STEM women plan to quit »
IDG Connect

IDG Connect tackles the tech stories that matter to you

  • Mail

Recommended for You

Trump hits partial pause on Huawei ban, but 5G concerns persist

Phil Muncaster reports on China and beyond

FinancialForce profits from PSA investment

Martin Veitch's inside track on today’s tech trends

Future-proofing the Middle East

Keri Allan looks at the latest trends and technologies


Do you think your smartphone is making you a workaholic?