The Dynamic State of the European Tech Ecosystem

The European tech landscape has experienced a remarkable bloom in recent years, sparking an intense demand for homegrown talent. Key players like Daversa Partners have emerged as vital architects in not only constructing Diversity, Equity, and Inclusion (DEI) initiatives within the ecosystem, but also in molding the future of the global tech industry through a trajectory that could one day see Europe surpass the U.S. in investment and innovation.

November 1, 2023 – The U.S. venture capital market has experienced an unprecedented slowdown over the past couple of years, with a decrease in IPOs and a substantial decline in investment funds, according to EY. But despite challenging global economic conditions and a slow venture market, Europe’s tech ecosystem is undergoing a transformative period. The market continues to display robust growth potential, driven by a surge in homegrown talent and an increasing number of founders emerging in the region. “While there has certainly been a decline in the overall investment levels, not unlike the rest of the world, the numbers we’re going to reach at the end of 2023 are still historically quite strong,” said Jamie Sanger, partner and head of International at Daversa Partners. “And the European tech scene remains incredibly resilient, remaining close to $3 trillion. As a market, Europe currently leads or has become a major hub of innovation across many different sectors. The founder and talent flywheel is accelerating at the fastest pace we’ve seen to date, and is creating a really, truly distributed continental tech ecosystem,” said Mr. Sanger from London, where he is based.

This entrepreneurial renaissance is not only contributing to Europe’s tech ecosystem but also positioning it as a key player in shaping the future of global technology. “Europe is either leading or dominant in fintech, climate tech, broader purpose-driven tech, health tech, industrial tech, amongst others, with AI impacting all of those industries. This is driving a significant amount of new investment,” said Mr. Sanger. “We are seeing so many amazing new founder stories emerge across all of these categories.”

Closing the Funding Gap: Early-Stage Innovation Thrives

In the past, Europe has typically trailed behind the U.S. in terms of early-stage funding for startups. However, recent trends depict a substantial contraction of this disparity. The investor community is progressively acknowledging Europe’s burgeoning potential as a hotbed for innovation, leading to an amplified infusion of capital during the formative stages of startups.

“In recent years, the difference in funding between Europe and the U.S. has remarkably narrowed,” said Billy Garneau, director at Daversa Partners. “Presently, Europe is only a few percentage points apart. This acceleration owes much to the prevailing market dynamics, which have unequivocally demonstrated that late-stage and public firms are not always the safest bets. With a reservoir of untapped capital waiting to be deployed, investors have shifted their focus towards earlier stage businesses, leading to more promising outcomes for the European tech landscape. In times of turmoil, innovation often finds fertile ground, and this increased early-stage investment will catalyze further innovation within the European ecosystem, birthing the next wave of game-changers for our era.”

Additionally, “the returning potential of the IPO window also plays a role inspiring confidence that companies have the opportunity to build material outcome, which then feeds both the talent and capital flow, and then creates the next generation of great companies and ultimately enhances our ecosystem,” said Jamie Manecky, associate director at Daversa Partners.

Related: Candidate-Driven Market Continues to Complicate Hiring Top Talent

This influx of funding is resulting in greater innovation across various sectors within Europe’s tech ecosystem. Startups now have access to more resources and support during their critical early stages, enabling them to develop groundbreaking ideas and technologies that have the potential to disrupt industries globally. This shift in turn then creates a growing demand for tech talent within Europe.

A Shift in Focus: Homegrown Talent Takes Center Stage

Historically, Europe has grappled with the issue of retaining premier tech talent, as many skilled individuals have sought greener pastures in the U.S. or other nations. However, a significant paradigm shift has been observed in recent years. New-age companies are now appreciating and harnessing the prowess of homegrown talent. They are veering away from an exclusive reliance on overseas recruitment, and instead, are capitalizing on the reservoir of skilled professionals within Europe’s own borders.

Mr. Garneau explains that the success of the European market over the last five years has brought new founders to the surface through the sheer amount of scaling outcomes.


Talent Will Decide Who Wins in Today’s Tech Revolution
Technology has always been a major disruptor of business. Historically, innovations like electricity, the telephone, the typewriter, and of course computers have all resulted in work getting done more quickly and efficiently. In recent years, however, technological change has been faster and more expansive than ever before, reaching beyond just the tech giants and impacting all kinds of businesses. It has been so swift, in fact, that many leaders were caught short, only now grasping its significance and what it will mean for the future of their companies. So it is that finding talent in data, artificial intelligence, and software-defined products, among other areas, has become imperative across virtually every sector. And executive search firms that have been quick to capitalize on this need and develop expertise and establish deep relationships have become key players in ushering in this new era and helping determine what businesses will ultimately win the day.

“What’s happened is that there has been a seismic change in industry, but there has not been a seismic change in process,” said Paul Daversa, founder and chief executive officer of Daversa Partners, which helps build leadership teams for growth and venture-backed companies. “The executive search industry was founded in 1926. It’s almost a 100 years old. It’s $12 billion dollars in annual TAM and the parochial processes by what has been evolved for traditional companies has rarely if ever been changed.”


“Ten years ago, investors and clients believed the best talent was in the U.S. or at U.S.-based companies and 50 percent of Daversa’s European placements across a diverse client base were relocations from the U.S., mainly Silicon Valley or New York City,” he said. “Now that number is less than 10 percent. Over the last few years, Daversa has seen a number of scaled companies and outcomes that are fueling the next generation of founders across Europe, with European founders, CEOs, and investors focused on the amazing talent that has come out of the companies built over the last five years in Europe,” he added.

This transformation holds considerable significance for a multitude of reasons. Primarily, it underscores Europe’s capacity to foster and nurture high-caliber individuals within its own territory. By capitalizing on local talent, European companies can forge robust ties with their communities and fuel local economic expansion. Secondly, this shift curtails dependence on international workforce, bolstering the region’s self-sufficiency and resilience.

The emergence of new founders in Europe signals an entrepreneurial renaissance that is reshaping the region’s tech landscape. As more individuals recognize the opportunities within Europe’s tech ecosystem, they are taking the leap and starting their own ventures.

Building DEI in the European Tech Ecosystem

This wave of entrepreneurship brings with it fresh perspectives, diverse ideas, and innovative approaches to problem-solving. It also fosters a collaborative environment where founders can learn from one another, share resources, and drive collective growth.

The entrepreneurial renaissance in Europe is not only creating economic value but also fostering a culture of innovation that permeates throughout the entire region. Nonetheless, diversity within the tech ecosystem is still lagging, something pivotal to building great boards and executive leadership teams with a diversity of viewpoints and ideas.

“The more diverse your teams are, the more effective they are,” said Haleigh Singer, associate director at Daversa Partners.We recently partnered with Signal AI to help diversify their board. Not only in gender and ethnicity, but in market experience by adding talent from outside the U.K. This is extremely positive. In addition, founders are having conversations much earlier in the life cycle of a company to add seasoned operators to their boards. This aids in diversifying executive recruiting and broadens perspectives for those founders.”

Supporting Infrastructure: Incubators and Accelerators

To further nurture this entrepreneurial renaissance, Europe has seen an increase in the number of incubators and accelerators dedicated to supporting early-stage startups and bringing new founders and talent into the ecosystem. The presence of these support systems not only helps individual startups succeed but also helps diverse and first-time founders by providing the support they need.

Related: Meet the New Female Powerbrokers in Tech Recruiting

“Nearly 40 percent of founders of new companies are repeat founders,” said Ms. Manecky. “So, what’s different about these founders today is the experience; they’ve had the opportunity to see the movie before in full color. These programs provide invaluable mentorship to new founders, along with networking opportunities, and access to funding for founders looking to turn their ideas into successful businesses.”

Shaping the Future of Global Technology

Europe’s dynamic tech ecosystem holds immense potential to significantly shape the future of global technology. The combination of homegrown talent, closing funding gaps, an entrepreneurial renaissance, and supportive infrastructure positions Europe as a formidable player in technological innovation.

This has been exemplified by the talent within Europe. “Many years ago, in the U.S. tech scene, you had to go to Silicon Valley to be successful,” said Mr. Sanger. “You had to go to the investors and the talent pool. Today, you don’t have to go to Silicon Valley, or New York, or even the U.S. to be successful. We’ve watched unicorns here scale and we’ve watched the number of countries becoming launch pads for unicorns increase significantly,” said Mr. Sanger.

As European companies continue to develop groundbreaking technologies and disrupt industries across various sectors such as fintech, health tech, and clean energy, they are contributing to global advancements. This not only benefits Europe but also establishes it as a key driver in shaping the future trajectory of technology worldwide.

Conclusion: Embracing Europe’s Tech Renaissance

Europe’s tech ecosystem is experiencing an exciting period of growth and transformation. The surge in homegrown talent, the narrowing of the funding gap, the emergence of new founders, and the presence of supportive infrastructure all contribute to Europe’s position as a global tech powerhouse.

As search firms continue to navigate the talent landscape, keeping an eye on Europe’s dynamic tech ecosystem is essential. The region offers a wealth of opportunities for collaboration, investment, and talent acquisition. By embracing Europe’s tech renaissance, search firms can tap into a thriving network of innovative companies and individuals that are shaping the future of technology.

Related: Shifting Trends in Technology Recruitment

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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