Europe calling? Check out this interview on the Europe startup ecosystem first
We recently caught up with Marcel Meyer who is a Partner at Deloitte, Switzerland at the NASSCOM Product Conclave. He works as an auditor and advisor to investment managers, PE funds, VC firms, Hedge funds and asset management companies. As part of his work, he has been involved with lots of portfolio companies across Switzerland & Eastern Europe. Here are some key takeaways on the Europe startup ecosystem from the interview with Marcel.Don’t think of Europe as a single ecosystem
Europe is a very segregated market and Eastern Europe is a very different story altogether, with a young ecosystem evolving there. Even in the rest of Europe, there are ecosystems that exist but are definitely not as evolved as US. Domestic markets in most parts of Europe are fairly small hence startups there have to focus on global markets.
The existence of large companies has spawned local, industry-specific ecosystems
Switzerland has a very sophisticated pharma industry in addition to being a financial centre. This has led to a lot of healthcare and biotech startups; the idea is to grow them to a stage where the big pharma companies get interested in acquiring them. A good example is that of an American biotech company that set up an incubator because of the fantastic exit opportunities. Another example is the number of mobile technology startups in Finland due to Nokia.
Government support plays a big role in ecosystem growth
Zurich has a state sponsored technopark and there is huge government support to drive innovation based businesses. In Russia too, the government is extremely active and is spending actively (a great example is the recent pledge of $15.2 bn recently by the government to the Skolkovo Innovation Centre on the outskirts of Moscow).
India needs to bridge the gap with Europe if Indian companies want to succeed in those markets
There are some Indian healthcare and biotech companies that are manufacturing in India and distributing in the Baltic countries, through Ukraine. But apart from this, it is difficult for very young Indian startups to sell in Europe because there are not too many existing relations with India. Mainland Europe will be a better bet than Eastern Europe on the tech side as products are very similar leading to direct competition in the latter geography. There will still be a need to educate European markets about how Indian companies operate and build acceptance for the ‘Made in India’ tag. But if the startup has a strong product and is willing to set up shop in Europe, then there are opportunities.
