Startup Europe — The Sifted Podcast
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.
00:09:19 · Anne Sraders, Daphné Leprince-Ringuet
[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. [00:10:09] S0: And for those bigger deals that you just mentioned, I think it always comes back to the growth funding problem in a way. But what do you think this says about Europe? The fact that this is such big news that Sequoia is shutting their office, that we've got this huge pocket of capital that's becoming obviously not stopping investing in Europe, that's, you know, becoming a bit more distant or showing that they don't feel like they need someone on the ground. Is it yet another reminder that we lack our own pockets of capital, especially for big rounds like when companies get to later stages?
00:10:45 · Anne Sraders, Daphné Leprince-Ringuet
[00:10:45] S1: I think in some way, I think what it's maybe more is this feeling that Sequoia is kind of a bellwether for how US investors think about Europe. And in that way, yeah, maybe it is a bit discouraging. But I think when it comes to a certain size and stage, as we all see, you probably still need US money. There are funds that are trying to change that, like the European Commission's Scale Up Europe Fund, which is a €5,000,000,000 fund aiming to kind of close that that scale up gap that we talk about. But, you know, again, one or two funds isn't enough to plug plug the hole here. And so investors from The US will definitely still be a really key part of the market at least for the foreseeable future. But, again, I think a lot of it's more just sentiment and feeling like, you know, there is so much focus being attracted by San Francisco. And I think there's a bit of frustration that that's always happening and that, know, hey. There actually are really great startups in Europe building in this exciting time. And so I think it's a bit of that as well. [00:11:42] S0: And potentially a pull for more founders to want to go to San Francisco to keep building their companies rather than stay in Europe. Did you hear anything about any silver linings for Europe? Is this, can this be positive for Europe in any particular way? I'm thinking of smaller VCs maybe. What have you been hearing on that? Yeah.
00:11:42 · Daphné Leprince-Ringuet, Anne Sraders
[00:11:42] S0: And potentially a pull for more founders to want to go to San Francisco to keep building their companies rather than stay in Europe. Did you hear anything about any silver linings for Europe? Is this, can this be positive for Europe in any particular way? I'm thinking of smaller VCs maybe. What have you been hearing on that? Yeah. [00:12:03] S1: I do think some believe that local VCs kind of maybe have a bit more of a chance to get their foot in the door a bit earlier. Again, I think that is mostly for early stage stuff. I don't think that's really the case for later stage companies. And I think, yeah, again, as I said, there's a bit more optimism around maybe this will be decreased competition. But I think, ultimately, if we're being honest, if if Sequoia is knocking on your door, you're probably gonna open. So, you know, I think a lot of founders are are still definitely gonna take meetings with Sequoia no matter where they're based. Yeah. Definitely. [00:12:34] S0: Cool. And in terms of the... You mentioned Sequoia's partners. Do we have any clue what they are going to do next? Not all of them are leaving Europe. Quite the contrary, actually. Can you talk us a bit more through what we know there?
00:12:34 · Daphné Leprince-Ringuet, Anne Sraders
[00:12:34] S0: Cool. And in terms of the... You mentioned Sequoia's partners. Do we have any clue what they are going to do next? Not all of them are leaving Europe. Quite the contrary, actually. Can you talk us a bit more through what we know there? [00:12:48] S1: Yeah. So actually only one of the partners is going to be going to San Francisco. I think a couple of them have said, you know, they're gonna continue to invest in Europe, and they're gonna attend their portfolios here. But their messages have sort of been along the lines of stay tuned. You know, we'll we'll update you what's next. So it's still kind of TBD, I think. Do you [00:13:08] S0: think that this move from Sequoia reflects a kind of slowdown in deal making in Europe and general enthusiasm and perspective that Europe is a good place to build a company and invest in a company?