Europe has yet to launch a €100 billion tech IPO since SAP, while the U.S. and China produce billion-dollar companies at an increasing pace. Tesla revolutionized the U.S. markets with electric vehicles and battery tech, and China’s BYD evolved from a battery maker to a leader in EVs and renewables.
The issue in Europe isn’t a lack of talent but rather the absence of systems that enable scaling innovation, hindering promising startups from becoming giants. This is especially true in energy tech, which requires aligned infrastructure, capital, and regulation. European startups struggle in these areas.
For instance, Europe’s IPO drought is notable: SAP went public in 1972; no European tech company has since reached a €100 billion valuation. Despite the matured startup ecosystem, increased venture capital, and various innovation programs, the industrial leverage seen in the U.S., through companies like Tesla, Nvidia, or Enphase, remains largely missing in Europe.
The core issue is that Europe has talent, entrepreneurial drive, and technology but lacks a scalable system to transform them into global champions.
Energy Tech as a geopolitical industrial opportunity
China is electrifying its economy nine times faster than the global average, dominating technologies like batteries and grid infrastructure. Meanwhile, the U.S. is undergoing a renewable energy boom, particularly in Republican-led states, where energy tech is seen as a new growth engine.
Europe often lags, but its fundamentals are robust: costly and geopolitically fragile fossil fuel imports. In 2024, Germany spent over €64 billion on oil and gas imports. Although Europe saved $59 billion in fossil fuel costs due to clean electrification, policy contrasts this saving. A new EU–U.S. trade agreement includes a commitment to import $250 billion energy from the U.S. annually—an unrealistic figure that challenges Europe’s climate goals and energy sovereignty.
Three structural levers Europe must pull
To lead in energy tech, Europe needs reform in three areas:
1. Mobilise institutional capital
EU frameworks like Solvency II and AIFMD discourage pension funds from the VC markets, yet these investors are essential for scaling energy tech infrastructure. Mandates linked to tax incentives or public-private co-investments could shift dynamics, as shown by France’s “Tibi” initiative.
2. Make public capital VC-compatible
Europe’s public development banks need agile governance structures akin to VC units, demonstrated by countries like Israel or Canada, to replace traditional, inflexible funding approaches.
3. Build (don’t import) Energy Tech champions
Europe must build its own champions by using public procurement to create early markets and supporting energy tech accelerators. A vision similar to the U.S. Buy American Act for local manufacturing should guide Europe, focusing on batteries, heat pumps, and grid software.
Riding the European electric wave
Despite lacking oil reserves, Europe has capital, technical expertise, and a strong industrial base. Political pressure and public support foster a clean direction, but political coordination is needed to establish a true industrial strategy for energy tech to thrive.
The shift to “Electric Europe” is about competitiveness, not just climate. Immediate action with capital, coordination, and strategy can ride this wave, potentially leading to the emergence of Europe’s next SAP from cities like Berlin, Rotterdam, or Marseille.