Spotify CEO pledges to invest $1bn in European ‘moonshot’ tech

25 Sep 2020

Daniel Ek speaking at the 2018 Spotify Investor Day. Image: Getty Images for Spotify

Daniel Ek said he wants to stop tech talent leaving for the US as Europe is ready to build more of its own ‘supercompanies’.

Spotify co-founder and CEO Daniel Ek has said he plans to invest €1bn of his own personal wealth into European tech start-ups over the next decade in a bid to take on Silicon Valley.

Speaking at a virtual start-up event organised by Slush, Ek pledged to back “moonshots” in Europe’s deep-technology sector, and help create a “European dream” to rival the traditional American concept.

‘Europe is more than ready to have more supercompanies of its own’

“We all know one of the greatest challenges is access to capital and that it why I will devote €1bn of my personal resources to enable the ecosystem of builders to achieve this European dream over the next decade,” he said.

“I will do so by funding so-called ‘moonshots’, focusing on the deep technology necessary to make a significant positive dent, and work with scientists, entrepreneurs, investors and governments to do so.”

According to Forbes, Ek is worth $3.6bn (€3.1bn). He launched music-streaming giant Spotify in 2008 and the company went public a decade later.

‘We need more supercompanies’

Ek said that a lot has changed since then, “not only for Spotify but for the entire industry and certainly the world around us”. He added that we are now at an “important crossroads” and the pandemic has provided an opportunity to “rethink, redesign, rebuild in new radical ways” – with Europe potentially taking the lead.

For this to happen, there needs to be more opportunities for entrepreneurs to grow their businesses in Europe, and more opportunities for well-educated tech talent to avoid a “mass exodus to the US”.

“I get really frustrated when I see European entrepreneurs giving up on their ambitions by selling very early,” Ek said. “Or when some of the most promising tech talent in the world leaves Europe because they don’t feel valued here or because there’s no company in Europe that matches their ambition.”

According to Atomico’s 2019 start-up report, a record $34.3bn was invested in European tech last year. The report added that there were 99 VC-backed companies in Europe that had achieved a valuation of more than $1bn, up from 85 unicorns in 2018.

Ek said that although the value of venture capital deal-making and the number of deals has increased, Europe is still not “reaching its full potential”.

“We need more supercompanies that raise the bar and can act as an inspiration. Europe is more than ready to have more supercompanies of its own,” he said.

“The model we need is one where different stakeholders work together to be the centrepiece of our efforts here in Europe … I want to do my part.”

Sarah Harford was sub-editor of Silicon Republic