Spotify founder Daniel Ek is investing over $1 billion of his own money into European startups to push Silicon Valley from the center of the tech world
- Spotify founder and CEO Daniel Ek said Thursday he planned to put €1 billion (about $1.2 billion) of his personal fortune into funding European startups.
- His goal is to create "super-companies" that can make Europe a rival to to the U.S. tech scene.
- Ek plans to invest in risky early stage companies working in health care, education, machine learning, biotechnology, material sciences and energy.
- Ek said he was frustrated at the lack of European venture capital, blaming it for a lack of innovation and a brain drain of promising European companies to U.S. buyers.
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Spotify founder and CEO Daniel Ek said he's pouring €1 billion (about $1.2 billion) of his own money into funding European startups in a bid to create "super-companies" that can push the U.S. from the center of the tech world.
"Some of the most promising tech talent in the world automatically leaves Europe because they don't feel valued here," the Swedish billionaire said during an online fireside chat for Node by Slush, the Financial Times reported. "We need more super-companies that raise the bar and can act as an inspiration."
Ek said during the chat that the funds would go to early stage "moonshot" companies tackling big problems that have little chance of short-term profitability, Sifted reported. He is interested in the areas of health care, education, machine learning, biotechnology, material sciences and energy, Protocol reported.
"The types of moonshots that I'm talking about, at least when I talk to the scientists and the entrepreneurs, they often face no [funding] options, because these ideas may be too early to bring in venture capital," Ek said.
Europe has developed a few tech unicorns, including Spotify, but lags behind the U.S. and China. Ek said he was frustrated to see so many European startups sell themselves to U.S. buyers because of a lack of local resources.
"If you compare Europe versus the US, we're still, by an order of two or three, underfunding for each and every stage in Europe compared to American [venture capital] companies," Ek said.
Ek said he wanted to help create a new "European dream," like the American Dream— but based on European values of collective good, rather than American individualism.
Ek, worth $3.6 billion according to Forbes, should be good for the money. He plans to create a team to help him invest the massive sum and will "work together with the community" to find companies to invest in, according to Protocol.
People in the European startup world cheered the move on social media.
"We have some of the most inventive minds and risk-takers in Europe, but we are not using our full potential. It's up to each of us to raise the bar. 💪," tweeted Elina Kajosaari of Finnish startup Compensate.
Co-founder of British accelerator program Founders Factory Brent Hoberman congratulated Ek on Twitter, calling the plan a "shot in the arm for European deeptech and the boldest, bravest bets."
"MAKE EUROPEAN GREAT AGAIN!" tweeted Sifted editor Michael Stothard.
Some others questioned if the investment was a good use of Ek's fortune.
"Dear songwriters & artists, here's where all your money goes…" tweeted European Parliament advisor Benjamin Feyen, linking to an article on the announcement.
Ek said in his talk that he was "well aware that what I've just said will probably create some attention. And if you know me well, I prefer to avoid attention. But I also believe it's hypocritical to encourage entrepreneurship and not invest it in personally. So put your money where your mouth is, as they say."
Neither Spotify nor Elk immediately responded to a request for comment from Business Insider, but here is Ek's talk in full.
Got tips about startups or venture capital? Email Max Jungreis at [email protected], DM him on Twitter @MaxJungreis, or contact him on encrypted messaging app Signal at (907) 947-0299.
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