Startup Europe — The Sifted Podcast
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.
00:06:49 · Anne Sraders
[00:06:49] S1: Interestingly, Sequoia didn't really seem to be dropping off too much in terms of deal making ahead of this decision. According to some Sifted data that we pulled, Sequoia actually... You know, the activity was a bit slower this year compared to 2025, which was the peak, but it was still above twenty twenty four's levels. So we saw that it participated in 12 primary rounds through late October this year versus 18 over the same period in 2025 and about 10 in 2024. So this wasn't like, you know, they massively went silent and all of a sudden they're like, yeah, we're leaving. I do think that there's a couple different things happening of why this is this is sort of been the decision. They've merged their early and growth teams together, And they're also signaling again that they're really going to be focusing on San Francisco and the AI boom that's happening there. And that's actually something that we're seeing across The US and even Europe because of how huge this opportunity is out in San Francisco according to these investors. It's actually even happening in in Europe as I mentioned. Swedish VC, Creandum, announced a new $750,000,000 fund, which will invest in part in The US. They've actually tripled the size of their San Francisco office in the last year or so. And so I think it's not just US investors like Sequoia that are really seeing the the boom is all happening in in SF. A lot of European investors wanna get in on it as well. But again, I think importantly, it's, you know, it's not Sequoia saying that they don't like Europe. They won't invest here anymore. They're gonna keep doing deals as they say. And, again, the investment hasn't actually slowed that much recently. But I do think it's it's worth pointing out that some of Sequoia's recent and kind of hottest deals, like the Ineffable Intelligence deal you mentioned also with 11 labs, were both done by US partners. So I think Sequoia, from their perspective, feel like, you know, we can still get these good deals even if we're not based in Europe.
00:08:43 · Daphné Leprince-Ringuet, Anne Sraders
[00:08:43] S0: I wonder how Europeans feel about that. So... Yeah. You mentioned that Sequoia still plans to make deals. I think going through the reaction I was seeing on social media, I was seeing quite a lot of realistically, if you're not on the ground, especially in a region like Europe where it's dozens of different countries, different languages. If you're not there to meet the founders, you're going to struggle to make those deals. Do you think that's true or or is that just perhaps slightly frustrated response to to to the news? [00:09:19] S1: I think it's a little bit of both. I do agree that especially for some of those really early stage companies where people essentially find a founder who wants to start something and try to back them from the jump, that's going to be more challenging if you're, you know, out in San Francisco versus on the ground in, you know, Berlin or Munich or Paris or wherever it is. So I do think that is true in in one way. But I think for... Especially for probably even seed and and later these days since they're so big, like, think that those founders really do want the firepower of a Sequoia. They have obviously the big brand name. So I'm not sure how important that will be for founders once they reach that stage. But as you said, I do think for earlier stage deals or maybe even for very specific markets like The Nordics or something, you might want a local investor for that. So think it's a bit of a mixture.