European Capital and the Scale-Up Funding Gap

Europe Has the Money. So Why Is European Capital Financing Growth Elsewhere?

Europe does not necessarily have a shortage of capital. The real challenge is where that capital is invested, and whether enough of it reaches European companies when they need to scale.

That’s where the story gets interesting.

European households generate around €1.2 trillion in savings every year. Yet much of that capital is invested outside Europe, while European scale-ups often look abroad for the large funding rounds they need to grow.

Why are European scale-ups looking abroad?

Europe is strong at financing research and early innovation, but later-stage companies can face a harder time accessing deep pools of growth capital. This can push promising businesses towards US investors precisely when they are starting to scale. The issue is therefore not only how much money Europe has, but how effectively European savings are mobilised towards European innovation and growth.

This is the question explored by Sofia Fernandes, Head of Business Development – Funding at Evolution Europe, in her latest article, “Europe Has the Money. So Why Are We Financing America?”

Why does European capital continue to finance growth elsewhere while European scale-ups search for investors abroad?

Read Sofia’s full article on LinkedIn