European tech gets political

The latest State of European Tech report from venture capital firm Atomico reveals a significant upward trend in investment across the continent. However, this year's report transcends its typical analysis, morphing into a vital advocacy piece that underscores a notable transformation: European startups and investors are increasingly engaging in lobbying efforts. Tom Wehmeier, Atomico's head of intelligence and the report's author, emphasized the importance of not only showcasing progress but also utilizing these insights to forge a path forward. The report presents four clear policy recommendations: Fix the friction, Fund the future, Empower talent, and Champion risk. Atomico's authority is bolstered by its impressive portfolio, which includes renowned European companies like Aiven, DeepL, Klarna, Pipedrive, Stripe, and Supercell. As European tech companies grow in scale, they are adopting lobbying strategies akin to those of Big Tech and traditional industries. This includes hiring public affairs professionals at the company level and collectively voicing their concerns through open letters that draw the attention of European institutions. The alignment of Atomico's recommendations with pressing issues in both the startup ecosystem and the Brussels policy landscape highlights this trend. For the first time, the report incorporates a statement from Ursula von der Leyen, the president of the European Commission, expressing her desire for "the future of AI to be made in Europe." This high-level endorsement reflects the increasing sophistication of European tech lobbying. Atomico points out that the classification of the proposed 28th regime—whether as a 'regulation' or a 'directive'—is crucial for ensuring the uniformity that tech companies need to flourish across the EU. Atomico's insights are packaged not just in written form but also through engaging video content and discussions at tech conferences like Slush, targeting both the tech community and policymakers. However, the report also highlights a potential disconnect between the tech industry's lobbying efforts and the general public's concerns, as many Europeans may not prioritize the creation of homegrown trillion-dollar companies. Alexandru Voica, head of corporate affairs at AI unicorn Synthesia, noted the growing significance of communications and policy in the tech sector, especially in a landscape marked by distrust toward technology firms. He reflected on how the focus has shifted from marketing-driven growth to risk management and reputation building. While the push for lobbying carries its own set of challenges—such as the risk of aligning too closely with specific political factions—Atomico's central assertion resonates widely: "Europe effectively stands at a crossroads."