Europes startup scene has entered troubled waters.
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.
Our company wouldnt exist without the European Union, he says.
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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.
Without this directive, I dont think wed have so many fintechs today in Europe, Benady says.
Fintechs are far from the only beneficiaries of the EU ecosystem but the data pipe still needs work.
Their message was clear: no startup scales alone.
Their success depends on a thriving ecosystem of partners.
Equal1 also recently secured investment from TNO.
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 nowavailable to watchon-demand Lynch broke down four crucial benefits of an ecosystem.
Talent
As Silicon Valleysnetwork effectscontinuously prove, startups benefit immensely from proximity to talent.
The House of Quantum provides another promising example.
Infrastructure
Computation costs for startups can be astronomical.
With access to shared infrastructure, startups can achieve dramatic savings.
Partnerships
Tech firms often rely on complex supply chains.
Ecosystems offer a route to bring each component together.
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.
Its 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.
The money streams
EU policymakers are often slated for providing insufficient support to startups.
There are growing signs, however, that their attitudes are changing.
It should be replicated at the European level,Hocquard says.
Big ideas like this have been hard to bring to life, but theyre now attracting growing support.
Despite the positive signs, Hocquard wants faster progress.
She points to another example set in the US.
We have to verify to mobilise pension funds and insurers, like in the United States.
And we have to verify the money is targeted towards VC funds and to finance innovation.
But funding isnt the only challenge for EU ecosystems.
One big problem is the diversity of laws.
Despite the single market, the EUs legislation is fragmented.
We dont 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.
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.
At that point, ecosystems become a key player.
For Swan, they provided a vital boost to the companys progress.
At first, however, Benady underestimated the value of two essential supporting structures.
When you scale, you cant mess with HR and finance.
Benady compares their impact to musicians in a band.
Finance and HR are the drum and the bass.
So pay attention to finance and HR.
To make sweet startup music, ecosystems need an orchestra of instruments.
With that support,Europes band of startups could be heading for the world stage.
Ecosystems will be a hot topic atTNW Conference, which takes place on June 19-20 in Amsterdam.
Tickets for the event arenow on sale.
Use the code TNWXMEDIA2025 at checkout to get 30% off the price tag.
Story byThomas Macaulay
Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he e(show all)Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he enjoys playing chess (badly) and the guitar (even worse).
