Yesterday, the EU announced VentureEU, a new “fund-of-funds program” designed to make the bloc more competitive in the global startup space.
VentureEU will split a $2.6B pot among 6 different European VC firms. So far, the EU has committed $505m of its own budget, but still has to persuade private investors to front the remaining money to hit their goal.
Hopefully they have better luck than European startups…
The initiative aims to close the “fund gap” between Europe and global VC powerhouses like the US and China.
According to VentureBeat, US startups raised 6x more venture capital than European startups in 2016. On average, European VC funds are only a third the size of their American counterparts.
But is $2.6B (divvied 6 ways) really gonna get the job done?
Well, let’s see how it stacks up:
Y Combinator singlehandedly launched a $1B fund last year (it raised a separate $700m just 2 years earlier), Silicon Valley darling Sequoia Capital has a $8B fund in the works — and, of course, there’s Softbank’s $100B Vision Fund, which dwarfs them all.
Long story short: The EU’s gonna have to shell out a little more if they want to keep companies from jumping across the pond to raise late-stage funding.
