Why this VC who co-founded a $30 billion Softbank-owned semiconductor firm is bullish on Europe's tech future - 'We have the money, we just don't know how to allocate it'
- Hermann Hauser is a tech investor in Europe who co-founded Cambridge, UK-based semiconductor company ARM, which was bought by SoftBank for $30 billion.
- Hauser co-founded Amadeus Capital Partners in 1997 and is on the European Innovation Council, which could have $100 billion to deploy over seven years.
- The funding boost is a big part of efforts to catch up with Silicon Valley peers, he says.
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Moves to bolster Europe's tech sector are gaining pace.
There's the boom in unicorns coming out of the UK, Germany, and France.
There's the dizzying costs of living and hiring in Silicon Valley that's causing both startups and VCs to flee the region to seek opportunities in Europe.
And then there's the growth of European VC funds that's helping them to better compete with their California peers in backing the hottest new entrepreneurs.
"If you look at the gradient between Silicon Valley, the East Coast, the UK, and Europe, it used to be steep," Hermann Hauser, co-founder of Amadeus Capital Partners and SoftBank-owned semiconductor company ARM, told Business Insider in an interview. "The order is still the same, but the difference between them is now diminishing very rapidly. Things have changed significantly."
But despite Hauser's positivity, European VC funding remains at around a fifth of that in the US - a gap he says is part of the motivation to boost the amount of capital available to companies in Europe and help the region catch up.
Catching up
Hauser is a member of the European Innovation Council, which could have up to $100 billion to deploy to European tech in the next seven years. The funding is part of the extended Horizon Europe project which was provisionally approved under the EU's long term budget, with support for both research and businesses in the form of grants and loans.
It's not enough, but it's a start, he says.
Helping the effort: The European Research Council. Founded in 2007, the ERC gives out generous grants to promising researchers in any discipline and the organization has nearly doubled its 2014 to 2020 budget to €13.1 billion ($15 billion).
"If you look at the fundamentals, European universities are still among the best in the world - on par with US and ahead of China," Hauser added. "They are IP generation machines, and the ERC deserves credit for that."
The next challenge, he says, is to better deploy capital, particularly for scaling purposes.
'We have the money, we just don't know how to allocate it," he said.
For example, Hauser says plenty of people have experience of scaling a company from say $300 million to $500 million in Silicon Valley, but very few in Europe. Getting that talent and management expertise into European companies can help with some of those growth challenges.
"If you look at the first 20 years of Silicon Valley, it was not successful. But Europe's just had our first 20 years," Hauser said. "I'm particularly positive about fintech in Berlin and London."