I believe a significant technology opportunity right now in Europe is in fintech. A tougher macroeconomic landscape, negative interest rates and looser monetary policy has the potential to open up the way for exciting new business models, as incumbents face solvency risks and continue to lose ground in the face of disruptive innovation. In my opinion this will be beyond payments, trading and other technologies we’ve seen emerging in recent years and could mean a fundamental reshaping of government financial infrastructure including benefits, taxes and subsidies.
Europe has always had outstanding educational product and this favours health technology, particularly at the important confluence of biotech and infotech where Owkin plays. This requires highly technical mathematicians, engineers, and developers who are broad minded and can apply their discipline to the complex field of systems biology, drug discovery and drug development.
Our biggest challenge in Europe has been retaining talent and not losing it all to Silicon Valley, but as mentioned above, am improving regulatory and investment culture, as well as some real lifestyle advantages of living in a European city is encouraging a lot of our top PhDs and post-docs to stay in Europe. Owkin for example, has over 50 European data scientists working on multi-modal analysis and interpretable AI, and our lab is widely considered one of the best life science AI teams in the world.
There is a strong increase in capital for deep tech companies across Europe. Companies like Ynsect, Orcam or AMSilk are demonstrating that you can leverage converging technologies to generate real value in large, global and complex industries. Recognizing these opportunities, investors (and acquirers) from Europe and abroad are investing in European deep technology assets (a majority of US acquisitions are now for deep tech companies). At the same time, a new generation of EU policymakers seeking to maintain “technological sovereignty” are creating incentives that help derisk investments in those businesses.
That said, the amount of invested capital still isn’t representative of the quality and potential value of the deal flow in Europe. This imbalance is especially striking when you consider the size of market opportunities these companies are pursuing, such as meat ($1 trillion), construction ($10 trillion) or clean energy ($2.5 trillion). Capital, in other words, remains unequally distributed across the spectrum of opportunity. Two main reasons for this “funding gap” (1) many VC investors do not have the expertise and structures in place to assess and support those companies, and (2) some historical attributes of deeper technology investments (time to market, capital intensity...) still hinder investors even though these aren’t applicable across all types of deep tech companies.
10 years ago, UK founders would go to Silicon Valley and be asked, ‘when are you going to relocate here?’ That’s no longer a question. Now the question is, ‘How can I invest in this incredible opportunity?’
That’s proof of the shift in external perception about the UK ecosystem. This reflects the work that the British government has done to promote the UK, but also the large number of highly successful tech firms that have come out of the UK. Now there are entrepreneurs who have ‘been there and done it.’ There are role models that the next generation can look up to, and that is fuelling even greater levels of aspiration and ambition.
And it’s not just the UK as a whole, the brand of Bristol where we are based is now recognised globally. We are on the map.