Startup Europe — The Sifted Podcast
00:01:11 · Anne Sraders, Daphné Leprince-Ringuet
[00:01:11] S1: As you said, Daphne, Sequoia seemingly kind of surprisingly announced on Wednesday that they're shuttering their London office. As you mentioned, it has been six years since they've been here. You know, this isn't the first time that we've seen a Silicon Valley firm close its office in The UK. We saw Andreessen Horowitz do that last year after only two years. We've also seen investment firms like Coatue and Tiger Global close their offices. So this isn't really surprising, but I think people were taken aback that the fact that Sequoia was doing this. They've been pretty active, as you said, Daphne, in in the landscape. They've made a bunch of deals over here, and so I think it kind of took people by surprise. The firm talked about in a social media post that, you know, this isn't about the team. They're excellent. They said we simply don't see the need for a local presence. We believe Europe will continue to produce outlier founders and companies, and that we can continue to provide world class support from our home base in the Bay Area. So clearly, this is kind of a retrenching to their home roots. [00:02:11] S0: So Sequoia doesn't only have its kind... Well, its physical presence that it's closing. The company also had a scouts program which we have been following a lot at Sifted. Do we have any update on what that means for the scout program at all? [00:02:25] S1: Yes. So Sequoia announced that it's also cutting its entire Scout program. So presumably those Scouts in Europe will be gone as well.
00:02:25 · Anne Sraders, Daphné Leprince-Ringuet
[00:02:25] S1: Yes. So Sequoia announced that it's also cutting its entire Scout program. So presumably those Scouts in Europe will be gone as well. [00:02:34] S0: Okay. So what's the reaction been among the founders and VCs that you've spoken to so far?
00:02:42 · Anne Sraders
[00:02:42] S1: So I would say it's been pretty mixed. I think I am seeing a lot of negativity. I think some folks are saying things like, you know, this is super sad for Europe. As one VC texted me, others are saying that Europe is kind of in a managed decline. Interestingly, also some founders have chipped in. Victor Riparbelli, the cofounder and CEO of AI Startup Synthesia, which is based in The UK, wrote on social media that he said the sad reality is there aren't enough big deals in Europe to justify a permanent presence. So that's quite a statement coming from a founder based in in Europe. I think while there is also, you know, a lot of pessimism going on, I think other VCs are kind of approaching it a bit more practically. One was talking to me about how, you know, seeing a US firm kinda go back and forth between The US and Europe isn't really abnormal. As I mentioned, we've seen this happen with Andreessen, and we've seen it happen with Coatue. It doesn't really say anything about the quality of founders in Europe. And I think others are also adding that, you know, Europe will be fine. People overreacting. There is an element as well of, you know, people kind of rallying around Europe in this moment. I think they're kinda defending it saying, you know, there's maybe bigger opportunity for local investors to compete for deals now. A few firms like Balderton and Capital and Index Ventures are kind of subtweeting Sequoia a little bit, posting about how, you know, we're we're here. We're never gonna leave. We're sticking it out. So I think you're seeing a lot of rallying happening around Europe as well.
00:04:10 · Daphné Leprince-Ringuet, Anne Sraders
[00:04:10] S0: Have you seen any reaction, I'm curious, around... As you said, that Sequoia is not the first big U. Firm to come to Europe, open an office and then leave. I think we saw this with Andreessen Horowitz earlier or last year, if I remember well. But then I also remember after the kind of boom period of 2021, 2022, where a lot of US investors were backing all these European startups caused a lot of excitement. And then when we kind of went through that downturn, we saw a few USBCs suddenly not being so active in Europe anymore. Have you seen any kind of frustration with that back and [00:04:48] S1: forth that you mentioned? Yeah. I think, again, it's sort of the the boom and bust cycle, and I think people are pretty aware of that. As you mentioned, there's a few examples we've seen recently of firms kind of retrenching from from Europe and, you know, it's... I think some people are pretty practical about it saying, you know, this is sort of just how these cycles go when there's, you know, when when the times are good, people are all about expanding and then maybe when there's an opportunity or or there's a bit more, you know, kind of global geopolitical upheaval, maybe they go back to The US. And so I think I think people are still quite steadfast that this isn't a problem with founders in Europe, and and it's not a problem with opportunities. It's really more about the particular market cycle that we're in.
00:04:48 · Anne Sraders, Daphné Leprince-Ringuet
[00:04:48] S1: forth that you mentioned? Yeah. I think, again, it's sort of the the boom and bust cycle, and I think people are pretty aware of that. As you mentioned, there's a few examples we've seen recently of firms kind of retrenching from from Europe and, you know, it's... I think some people are pretty practical about it saying, you know, this is sort of just how these cycles go when there's, you know, when when the times are good, people are all about expanding and then maybe when there's an opportunity or or there's a bit more, you know, kind of global geopolitical upheaval, maybe they go back to The US. And so I think I think people are still quite steadfast that this isn't a problem with founders in Europe, and and it's not a problem with opportunities. It's really more about the particular market cycle that we're in. [00:05:28] S0: Yeah. It's maybe not a long term trend, but rather, as you said, a boom and bust boom and bust cycle happening. So the signal for Europe from what you're saying seems to be not so good. People you've spoken to seem quite pessimistic. Do you think they were expecting this at all? Were there any kind of signs that Sequoia was slowing down in terms of deal making in Europe at all?
00:05:28 · Daphné Leprince-Ringuet, S2
[00:05:28] S0: Yeah. It's maybe not a long term trend, but rather, as you said, a boom and bust boom and bust cycle happening. So the signal for Europe from what you're saying seems to be not so good. People you've spoken to seem quite pessimistic. Do you think they were expecting this at all? Were there any kind of signs that Sequoia was slowing down in terms of deal making in Europe at all? Ad[00:05:54] S2: This podcast is brought to you by Chargebee. As an AI founder, you're doing the hard work of reimagining entire industries, repeatedly identifying use cases that abundant intelligence and domain specific know how can solve and shaping the future in the process. Chargebee enables founders just like you to monetize that work as inventively as you build your products. Whether you want to charge based on usage credits, outcomes, seats, or a hybrid model that combines all of those alongside complex enterprise contracts, Chargebee can help. It is the billing, metering, and monetization infrastructure purpose built for this era. Learn more at chargebee.com/sifted. That's chargebee.com/sifted.