{"id":673280,"date":"2025-06-03T14:25:14","date_gmt":"2025-06-03T11:25:14","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/european-software-sector-at-critical-inflection-point-warns-mckinsey\/"},"modified":"2025-06-03T14:25:14","modified_gmt":"2025-06-03T11:25:14","slug":"european-software-sector-at-critical-inflection-point-warns-mckinsey","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/european-software-sector-at-critical-inflection-point-warns-mckinsey\/","title":{"rendered":"European software sector at critical \u2018inflection point,\u2019 warns McKinsey"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6af24b41df8ae\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6af24b41df8ae\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/european-software-sector-at-critical-inflection-point-warns-mckinsey\/#Turning_point\" >Turning point?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/european-software-sector-at-critical-inflection-point-warns-mckinsey\/#Scaling_up_European_tech\" >Scaling up European tech<\/a><\/li><\/ul><\/nav><\/div>\n<div id=\"article-main-content\">\n<article class=\"text-token-text-primary w-full\" dir=\"auto\" data-testid=\"conversation-turn-38\" data-scroll-anchor=\"true\">\n<div class=\"text-base my-auto mx-auto py-5 [--thread-content-margin:--spacing(4)] @[37rem]:[--thread-content-margin:--spacing(6)] @[72rem]:[--thread-content-margin:--spacing(16)] px-(--thread-content-margin)\">\n<div class=\"[--thread-content-max-width:32rem] @[34rem]:[--thread-content-max-width:40rem] @[64rem]:[--thread-content-max-width:48rem] mx-auto flex max-w-(--thread-content-max-width) flex-1 text-base gap-4 md:gap-5 lg:gap-6 group\/turn-messages focus-visible:outline-hidden\" tabindex=\"-1\">\n<div class=\"group\/conversation-turn relative flex w-full min-w-0 flex-col agent-turn\">\n<div class=\"relative flex-col gap-1 md:gap-3\">\n<div class=\"flex max-w-full flex-col grow\">\n<div class=\"min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal [.text-message+&amp;]:mt-5\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"83ccd4df-b020-4c16-b643-899dedbea5d5\" data-message-model-slug=\"gpt-4-1-mini\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[3px]\">\n<div class=\"markdown prose dark:prose-invert w-full break-words light\">\n<p data-start=\"0\" data-end=\"126\" data-is-last-node=\"\" data-is-only-node=\"\">Europe has a unique chance to lead in software \u2014 but only if it improves its ability to turn startups into profitable businesses. That\u2019s the conclusion of a new report from McKinsey and Boardwave, which warns that unless the region tackles structural barriers, its startups will continue to lag behind global rivals.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<p><span style=\"font-weight: 400;\">The report, <\/span><i><span style=\"font-weight: 400;\">Europe\u2019s Moonshot Moment<\/span><\/i><span style=\"font-weight: 400;\">, found that the continent has over 280 software companies generating more than \u20ac100 million in annual recurring revenue (ARR). These scaleups include the likes of Spotify, Revolut, Adyen, and Vinted.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, European software businesses that reach the \u20ac100 million ARR threshold take 15 years on average to get there. That\u2019s five years longer than their US peers, the report found.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Europe also lags in birthing software giants. While 5\u201310% of US firms reaching \u20ac100 million in ARR subsequently scale to \u20ac1 billion, fewer than 3% of their European peers reach that milestone.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The report highlighted some of the reasons for this stalled growth: fragmented markets, conservative corporate norms, and a slower flow of late-stage capital relative to early-stage investment.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Turning_point\"><\/span><b>Turning point?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"inarticle-wrapper latest channel-cta hs-embed-tnw\">\n<div id=\"hs-embed-tnw\" class=\"channel-cta-wrapper\">\n<div class=\"channel-cta-img\"><img decoding=\"async\" class=\"js-lazy\" src=\"https:\/\/s3.eu-west-1.amazonaws.com\/tnw.events\/hardfork-2018\/uploads\/visuals\/tnw-newsletter.png\"\/><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/s3.eu-west-1.amazonaws.com\/tnw.events\/hardfork-2018\/uploads\/visuals\/tnw-newsletter.png\"\/><\/p>\n<div class=\"channel-cta-input\">\n<p class=\"channel-cta-title\">The \ud83d\udc9c of EU tech<\/p>\n<p class=\"channel-cta-tagline\">The latest rumblings from the EU tech scene, a story from our wise ol&#8217; founder Boris, and some questionable AI art. It&#8217;s free, every week, in your inbox. Sign up now!<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><span style=\"font-weight: 400;\">Despite the hurdles, the report\u2019s authors are confident that all the ingredients for Europe\u2019s success in software are now in place.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cEurope already holds the essentials to create the world\u2019s next generation of software champions: deep talent pools, vibrant founder networks, and a rapidly maturing capital base,\u201d said Ruben Schaubroeck, senior partner at McKinsey.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While Europe lost out to Silicon Valley firms like Google and Microsoft in the early internet era, emerging technologies like AI may offer a new opening for the region\u2019s tech startups. Geopolitical shifts could also drive governments to invest in local tech ecosystems and rethink digital sovereignty, said the report.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThere\u2019s no denying that European tech has faced structural barriers, but we\u2019re at a genuine inflection point,\u201d Phill Robinson, CEO and co-founder at Boardwave, told TNW. \u201cNew <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> arenas, geopolitics, and an evolving operating environment are creating a unique opportunity for Europe to boost innovation.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now Europe must turn that potential into profits, the report argues. To that end, it suggests five key interventions to boost Europe\u2019s software ecosystem:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Expand late-stage funding<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Encourage experienced founders to start new companies<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Make it easier for sales and marketing teams to work across borders and help startups grow faster<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Encourage more large firms in Europe to buy software from European startups by offering government support or financial incentives<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strengthen public-private partnerships to de-risk new technologies<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Scaling_up_European_tech\"><\/span>Scaling up European tech<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The McKinsey\/Boardwave report comes hot on the heels of the EU\u2019s landmark Startup and Scaleup Strategy, launched last week. The plan set out several reforms designed to remove barriers to growth for the bloc\u2019s early-stage companies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cIf implemented boldly, and most importantly quickly, it can help Europe move from fragmented success stories to systemic, continent-wide scale; otherwise, we risk being left behind,\u201d said Robinson, commenting on the new strategy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The EU\u2019s proposal includes provisions for a long-awaited \u201c28th regime,\u201d which would allow companies to operate under a single set of rules across the 27 member states. It is intended to reduce headaches around taxes, employment rules, and insolvency.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Robinson said he believes the EU\u2019s new strategy will strengthen Europe\u2019s software ecosystem by making it easier to operate across borders.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe need to act as one innovation ecosystem, not 27 different ones,\u201d he said. \u201cThat\u2019s what makes this Europe\u2019s moonshot moment. If we connect and act now, we can lead. And not just in Europe, but globally.\u201d<\/span><\/p>\n<\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN63nwsw68G3Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/category\/technology\/\" target=\"_blank\" >Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/european-software-sector-critical-inflection-point-mckinsey\" target=\"_blank\" >Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Europe has a unique chance to lead in software \u2014 but only if it improves its ability to turn startups into profitable businesses. That\u2019s the conclusion of a new report from McKinsey and Boardwave, which warns that unless the region tackles structural barriers, its startups will continue to lag behind global rivals. The report, Europe\u2019s&#8230;<\/p>\n","protected":false},"author":1,"featured_media":673281,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/tnw-blurple?filter_last=1&fit=1280%2C640&url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2021%2F12%2Fshrinking-software-gq.jpg&signature=f1dcb358b76027f0862877045efa2d99","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-673280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/673280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=673280"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/673280\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/673281"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=673280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=673280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=673280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}