The 2025 edition of State of European Tech from Atomico highlights a blind spot in the European tech ecosystem, which weighs heavily on the continent’s competitiveness: if Europe creates startups, it does not buy them. This problem is today one of the main obstacles to the emergence of world leaders. If the European ecosystem has reached an indisputable maturity with more than 40,000 tech companies, a talent base comparable to that of the United States, and an entrepreneurial dynamic that continues to assert itself, at the crucial moment when a company must consolidate its position or access liquidity, Europe finds itself without an internal relay.
The consequence is that Europe only captures 10% of the global value of technological exits. Not because its startups are less efficient, but because potential buyers from the old continent remain largely behind. Thus the most significant operations continue to be carried out by American or Asian groups, faster, more capitalized and above all more familiar with acquisition strategies as an engine of growth. European gems change flags earlier than in the rest of the world, decision-making centers move outside the continent, and the liquidity resulting from these transactions feeds competing ecosystems instead of irrigating the European scene.
Large European groups adopt an overly cautious approach to capital, favor controlled balance sheets and remain attached to the idea that technology must be developed internally. This posture, inherited from an industrial tradition, places them out of step with their American competitors, for whom M&A constitutes a natural lever for consolidation and innovation. The report also highlights that only 20% of large European companies actually collaborate with startups, compared to 50% in the United States. Without a prior relationship, acquisitions become more difficult, riskier and later, if not simply impossible.
The lack of internal M&A particularly weakens scaleups. At the moment when they cease to be startups and must accelerate internationally, they hit a wall: insufficient late-stage rounds, stock markets that are too fragmented, and an almost total absence of European buyers capable of taking over. Many end up raising at valuations lower than their potential, slow down their development, and turn to American funds, or choose a listing outside Europe. At this stage, the entire intellectual property, value chain and industrial potential of the continent are eroding.
According to the Atomico report, Europe is not only penalized by its lack of buyers, it is also deprived of the knock-on effects that make thriving ecosystems strong. Local exits traditionally nurture the next generation of founders, enrich managerial skills, strengthen management teams and allow employee stock options to be transformed into capital reinvested in new projects. In the absence of an active mergers and acquisitions market, this virtuous mechanism remains underdeveloped.
The next decade will be decisive. If the continent wants to claim lasting leadership, it will need to equip itself with a real internal M&A market, capable of supporting its companies and protecting the value created on its soil. This requires a change in the behavior of large European groups, regulatory harmonization which facilitates cross-border mergers, and a profound cultural change where acquisition becomes a strategic tool, and not a decision by default.
Europe has startups, talents and technologies. Its financing chain is becoming more dense, and its assets in deeptech constitute a decisive strategic advantage, an area where we are starting strong, unlike the previous wave dominated by SaaS and the cloud, where we were structurally behind. But it is still missing the essential: a collective desire to transform these advances into industrial champions. As long as the continent does not acquire European buyers capable of acting quickly and on a large scale, value creation will continue to go elsewhere.
