 Hi, Slash. Hi, Janne. Hi, Mika. Good to be with you here today. So over the next 30 minutes or so, we're going to dive into the tectonic shifts that are shaping venture capital in Europe. But maybe before we get into that, we could start with sort of a conversation starter. So perhaps you could share your story. How did you end up in the world of venture capital in the worst place, if you, Mika, want to start? I realized a few years ago that I really enjoy looking for talent and new ideas. My very first part of my career, I was in the music industry, and I signed artists. And so that was looking for talent and ideas then too. And then for the last 20 years, I was an entrepreneur. I was based in San Francisco. And that went well. But also on the side, I was an angel investor. And when I was being an angel investor, I realized also that it was like looking for talent and ideas. It was very similar to what I'd done most of my career in different jobs. And so then I thought, okay, maybe I should think about VC. I had a good track record. And when I decided I wanted to do VC, I actually moved to Europe to do it. And that's where I'm based. I'm based in Zurich for Lake Star. Yeah, thanks. How about you, Janne? My story is a lot less cooler than Mika's. So I spent 20 years in banking. And I spent... They hate banking here. Officially. Yeah, so I spent 20 years in banking. And then throughout the time I helped companies, essentially, when things were going wrong. And I spent a whole time interacting with regulators and compliance officers and everything. So when I left, I really wanted to kind of shift and change into actually helping companies at the beginning rather than trying to help them at the end. So I was lucky enough to join SoftBank. And I can tell you it's kind of been a complete kind of change for me. Meeting with founders and meeting with young people that want to change the world has an infectious optimism. So I go home a lot happier every day compared to like being at a bank where it has a kind of weight upon you on a daily basis. So for me it was kind of luck to be able to go to SoftBank after my banking career. But it's one that I've loved every minute of since I've been there. Yeah, kids is here. Okay. So 10 on the topic of venture capital in Europe. So once again, Europe is going to post a record year in tech investment. Actually it looks like we're going to cross 100 billion invested in a single year. That's a crazy figure. And Jan, it is clearly something that you're also contributed to SoftBank. So the VC fund one made only around seven investments in Europe. And the share number has been remarkably higher with your fund number two. So what has made Europe look so much more interesting in just a few years? Yeah, you're right. So our first fund that was invested between 17 and 19 only had like 8% of the fund invested in Europe. In our second fund that we've been investing since has 28% in Europe. So it's been, as you say, a big increase between, sorry, let me, let me, a big increase between fund one and fund two. And I think a bunch of factors are contributed. I think we'll discuss a lot of them during our conversation here. But I think it's a combination of where global valuations are. I do think Europe right now probably offers a lot of value compared to some of the other areas, particularly places like India, for example, which have valuations have gone through the roof. But more importantly, I think that the European ecosystem has really matured. I think one, you have companies that were founders in Europe have become a lot more ambitious and they're willing to stick with the company much longer than no longer sellers early. And that's created a number of mature companies that can be able to absorb that late-stage capital that we provide another investor to provide. So I think it really is a change in the European ecosystem that has allowed much more mature, larger companies to produce over the course of the last few years. Yeah, how about Mika? How do you see the development of the European activities? I completely agree with what you said there. And what's interesting is that in the past, if you had an idea in Europe, you would move to Silicon Valley. Or maybe you would move to Berlin or London. But now you can stay put. So I think there's been an incredible diversity of ideas coming from all over Europe. And I think it's just getting started. I really feel that, you know, I've been, especially in the Finnish ecosystem, I've been since the early 2000s, I've been involved in various startups here. And, you know, there's been some success stories, but really it's just getting started, I think, in terms of the startup world in Europe. But I like the diversity too. It's just so many different types of companies that are coming out. Yeah. Well, it's safe to assume that investors at large agree with you with the European attractiveness. The amount of money raised and available in Europe, especially in the crowd space, is something unheard of. And it might be difficult to even end up in any other conclusion that there is actually more money in the market than good companies to deploy it. Are you with me in this statement or not? Perhaps Miko, you can start. Say that again, the amount of money deployed. Yeah. So is there more money in the market than good companies to deploy it? Yes. You know, it's the number of quality companies has increased. It's not like there are a few companies in a lot of capital chasing it. And so I haven't seen, maybe I don't have soft bank has seen it, but we haven't seen a dearth of deals. It wasn't because, you know, there's not enough for us to deploy capital on. So there's plenty of companies. Yeah. How do you say? Yeah, I agree. I think there's a lot of great companies in Europe. I think part of what we discussed earlier becomes a bit of a virtuous circle. As you have capital come in, you also see companies that are being created and it takes a couple of years for that to happen. But importantly, I think as Miko mentioned, there is so much diversification out where the companies are. You can find great companies in areas of Europe that you didn't expect them before. So as you become localized and you look at the various kind of areas of Europe, you can find amazing companies away from the big kind of tech centers. And what's great is that those entrepreneurs and those founders in those countries where traditionally would you just sold early to some of the big companies from the value of London and now willing to stick with it and create a large company. So for me, it's not just kind of, there are great companies in Europe, but what's really heartening for me is those great companies all over Europe. And you can find great, great founders in a lot of weird locations. Yeah, so there are 27 countries in Europe, so that's incredible diversity. In the past, the criticism was that there are 27 countries that's fragmented, it's difficult to operate, how do you go across the borders and everything else. But with 27 countries, it means that there are 27 diverse views on how to solve problems. I mean way more than 27. I mean every city in those countries have different views. Because what really drives entrepreneurship is three things. It's ideas, which is what those 27 countries diversity provides, capital and talent. And these are now available. So the ideas were always there, but if you were actually going to start a company in your own country, you probably had to move to either a big center or to the U.S. or something, but now you can actually start it there. And I think there's a lot of reasons that's happening is that the not only is there talent that has scaled companies available in capital from people like us that are providing it, but a lot of these companies now have global ambitions from the beginning. What I didn't see 10 years ago or even five years ago sometimes in some countries is that everyone in these countries now, in these companies now, they all do their business in English. I think this is a big change. In Finland it's been English forever, but in a lot of countries it was in their local language and part of it was that they weren't thinking big enough, they weren't thinking global enough. So why English is important is that if you're in an era country and if you want to get the other things going, the talent and the capital, you need to maybe hire people from somewhere else. You might hire someone from Amsterdam or someone from London or someone from New York and English is going to be the language. If they're going to come to your company and you're speaking your local language, it becomes very alienating, it's very difficult then to scale and to have that talent. So, you know, the combination of the fact that there's just capital available, ideas are everywhere, very unique ideas, and then there's talent that's going to be available. And because it's being English, it actually works. I'm finding that Europe is becoming an incredibly robust, you know, 27 countries that are really spitting out really amazing companies. And it's just, I keep saying it, it's just getting started because this flywheel of these three things, ideas, talent and capital, it's just getting going. Yeah, that is definitely true. Okay, so when we think of this dynamic from the founder's perspective, so there is a lot of available capital, VCs are fighting for the best investment opportunities. How has it changed the dynamics for the founder? How have the fundraising processes developed? Janne. Yeah, so I think, you know, as you said, there is a lot of available capital, and founders can almost often get overwhelmed by that. But I think not all capital is the same. So I think, and I'm not saying some people are bad or good, like different founders and different companies require a different type of capital. So I think once you break it down that way, every one of us, when we compete for deals, we bring something different for the table. So the one thing that I do think that founders should look at is basically what are they looking for from their next capital partner, right? And I think that will kind of be able to narrow it down quite a bit. But from our perspective as we look at some of these deals, it's definitely a lot faster. You can no longer kind of wait around analysis, you know, paralysis by analysis. You kind of need to move quite fast. And, you know, some of the times you actually need to probably do a bit less work than you've done in the past. You need to take some things on faith. Because if you wait around, you're just not going to be able to get it done. So for my side, the thing that's probably changed the most is the speed of these rounds and how quickly you need to be able to react. I would agree with that. Also that there's a lot more local capital available. So there are these seed funds have now sprouted up in every country in Europe. We talk to them a lot. In these seed funds, I think are kind of the first line. The first line actually is a lot of these angel investors, angel groups and such, so pre-seed. But because there's all these seed funds there, there is actual local capital available. So I think the question a founder has sometimes at the earliest stages is like, okay, do I go for my local person who is going to be maybe very helpful because they're local? Or do I go with maybe a Europe-wide one, like Lake Star? Or do I go with an international one from the US or something? And that at that early stage I think is kind of a, for me it's an obvious decision. You should go with as local as possible because you need to get help. But the challenge is that there's some big funds going earlier and earlier and so it's very alluring to take money maybe from international VC at the very earliest stages. But if I counsel a founder I say like, look, you can take that money later. So for me all this capital coming in also it matters which stage you are as a company. Are you seed? Are you series A? Series B? Do you need growth capital? I think that also matters what type of capital you want. I do think that the best companies have a lot of choices and I think the founders that have their feet on the ground are really thinking as Janne said is that they're thinking about the long term that then they will make the right decision but they have to really, they have to know what they're looking for at that time. I think that's the challenge. Yeah, that is definitely true. How about then if you think that from your perspective has your work as a VC investor changed when the kind of landscape has become so much more competitive? Well, you said it well. It's a move a lot faster. There's a lot more speed involved and so the challenge is that you know how can you have done enough research and have enough of relationship with a company so that you are ready to move when it's time to invest in them and so our strategy is that we try to get to know the companies as early as possible. We may not invest at pre-seed or seed or even series A but we will track the company be helpful to them in some ways and we just want to watch that company. So then when it's time for them to do a round we will know how they've navigated the ups and downs of entrepreneurship. It's very hard to look at a company for two weeks or three months even and really understand how good is that team at executing when the times get tough or what kind of decision have they made but if you watch them over time and then that then hopefully helps you then when it's time to do the investment like okay I know this company yeah maybe I don't have the deepest due diligence but I've been watching this company for a while I'm ready to do a check really fast or term sheet very quickly. That's been the way we've been trying to approach it because it is it's incredibly quick right now and there's just a lot of people just who you know five million out of a you know very large fund it's nothing and so they're placing bets left and right and we're a bit more thoughtful about each of those checks and so we have to have our own approach to make sure that we compete well in those situations. Yeah we're there's exactly the point that we made around kind of speed but we're lucky because we we essentially invest quite late so some of the analysis is going to be a bit easier because you can't see the company is actually there it has revenue you can see the product market fit you can see the customers so it allows us to go faster but the biggest thing for me is kind of away from kind of as you said founders are spoiled for choice right now so we can you need to do a bit of a sales job but also what we've done I think a good job over the course the last few years is also working very closely with some of these earlier-stage investors right because I think ultimately that is in my mind the best way to source opportunities for us at the stage where we play so that ability to create relationships with the earlier-stage investors I think is super important for us because that we don't compete with them we play at a different level and that's how you see the best companies and you're able to essentially share some of the learnings they have which helps accelerate your view on a company as well. We were talking about the backstage about the cooperation among the investors in Europe I think is quite good it's like in Silicon Valley you see a lot of what we call sharp elbows where people just push each other out of the way of deals and I think there's a lot more cooperation in Europe and I think partly it's because a lot of the investors are very local and so you want to work with them local level but I think also it's just a different mindset in a way what happens in Europe. We're just nicer in Europe. That's probably true. That's probably true yeah. Maybe if we still zoom out a bit so how do you see the transparency between available funding and then to cut out amount of good investment opportunities affecting VCS and asset plus so there are a growing number of LPs joining the space and many new many of them are trusting like a first fund managers so some of them might be left out unsatisfied so what will this mean for VCS in the future how about you Janne. Okay go first Janne. So look I think growth where we play and I won't speak for VCS but like growth where we play is now an established asset class like people view it and LPs allocated as an asset class now and I think it'll have it's probably one of the most popular ones and has been recently and you've seen an enormous amount of money come into the space I think when SoftBank raised its first fund was very very large was 100 billion at the time the next big fund was a couple of billion now you have a proliferation of 15 and 20 billion dollar funds so that's changed the growth asset class completely and I think one it'll change LP appetite but importantly it'll also affect valuations right ultimately rounds a matter of demand and supply and if you have this much money that's been raised and it's dry and sitting by the side looking to invest you will see a natural appreciation in prices because everyone's trying to get into the space so I think the increase in LP interest in growth is kind of creating a new asset class in my mind and that increase kind of a man that's been raised will pretty much dry valuations for the short term which I think is what we're seeing and what you will continue to see for a while I would agree that it's interesting that VC has become part of the world institutionalized but I remember because I raised my first round for my first company in 1998 I was lucky to have Sequoia Capital as my investor but then it still felt like a clubby thing it almost felt like there were a lot of VCs out there it was a hobby and it was a very risky asset class so you had a very certain type of person that would invest in VC firms and over the last five years plus it's really become institutionalized where it is a viable asset class and the growth it's got a very clear risk profile and so you're seeing people coming in who would never have invested before especially in Europe we're seeing pension funds and insurance companies they never would have invested so the amount of capital coming in from sources that never would have considered as a class of investing continues to increase I think it's because the returns are good and actually again it's institutionalized so they can look at it and go they know what they're doing it's not going to be a zero for me on this one I can project out there's still a challenge I think in VC that it's an illiquid asset and that's what you've seen whether it be Sequoia or a few others I've been trying to solve this liquidity question because when you invest in a VC fund you don't get any returns actually money back to you so five, seven, ten years down the road I think that is a bit of a challenge still for some investors but there's just enough money coming in that I'm not worried about what your question is like are people going to be worried about like oh they're going to dry up capital if things don't work out I think it's hit a totally different phase right now as an investment Thanks then maybe a bit of the topic of unicorns I think we're going to cross 300 European unicorns this year and as you alluded Mika earlier they're coming from various different cities 26 if I counted correctly and so we're not talking about just a few mega hubs when we're talking about Europe Mika what do you think this is? Is there something fundamentally different in Europe compared to for example US or Valley the epicenter of companies? Yeah I think we did the same study and it's amazing just because a year ago it was like 210 unicorns or something that was 300 and we looked up it was 26 countries but it was 65 cities 65 cities around and so there's so many different factors going on I think that there's just the fact that there's just enough capital and these companies are going global tech is taking over so many different industries so whether it be agriculture or logistics there's so many different industries that actually Europe has a lot of strength in so I just because the overall trend line is strong I'm not sure what the number for the US is but they've also had massive explosion in unicorns too so it's also probably driven by evaluations have also just jumped despite the fact that Europe I think is cheaper than a lot of the markets in the world it's still the valuations have jumped up and so unicorns have happened plus the rounds of financing have happened quicker and quicker so you're seeing people within two years become unicorns and so the speed has also changed Yeah I fully agree with that but I think what we're also seeing is I think you're seeing Europe catching up a bit I think it was where Europe was was unnatural just given the size of the market the availability of talent the great academic institutions the IP that was generated out of Europe it was unnatural how few of these companies were being built here so I think what's happened I think is Europe has caught up a bit to what's happened in the US and China in particular so I think what you're seeing is much of a natural balance I do think there's a lot more to go and I do think there's a lot more companies to actually be built out of here and what I love about European companies is if you look at them and I think the reason why they trade at a bit of a discount initially to US companies is once you have a great company in one of the European countries it's not a given that you'll be able to grow it to the other European countries as easy as if you have a great company in California and want to scale it across the US so I think some of that initial barrier to expansion exists and that's why they initially trade but once you achieve that and once you're able to then go across the full consumer spectrum in Europe then your moat is quite high because once you're able to take we're investing in a company called Auto One you combine seamlessly a car in Spain and sell it in France that's a difficult logistical operational exercise once you achieve that it's very hard for a new enter to come in so I think there are some natural barriers within Europe that create great entrepreneurs in that that thing you're going to see these people be able to compete very well globally but there is a bit of the beginning as to how can you scale a company from one country to the other yeah interesting maybe continuing on the topic there's some interesting ongoing development in many smaller European cities currently where the kind of first generation of success stories are starting to exit and distribute the kind of spillover effects to the local economies how do you see see the implications of that are we going to see the second generation of these smaller hubs around Europe or what's going to happen next Mika I'm having a hard time hearing so the second generation of founders you're saying yeah well those are I think as an investor some of our favorite kind of founders is the second third time founders I think they're they've gone through the exercise and especially the second or third time founders who maybe had mild success in the first time around but they're literally still hungry and they have a chip on their shoulder to really make sure that the next one's going to be bigger and bigger I you know that is in the past I felt like a European entrepreneur or someone who did well in their job they would just go they would just go down to the center pay and just hang out that was like a classic thing that I felt like when every time I met like someone fairly wealthy from Europe like yeah I made a lot of money and now I'm retired and in Silicon Valley people didn't ever be retired they would always stay in the system they stayed as they became investors, mentors started more companies they're on boards and so the kind of talent pool and the knowledge pool in Silicon Valley always stayed in the system and that's happening in Europe now where you're just you know you might have done very well with your previous business but now you're a VC or now you're an angel investor so I really am I've been very very happy to see that kind of trend that you don't see people leaving the kind of ecosystem they stay in in some capacity and they share their knowledge or their capital or their connections or whatever else be so that I think has gotten much much stronger because I can't tell you like in the 2000s I met many people who did well and they were just like I'm out of here and I was like what you know so much you got to be in you got to be in the game help us out here so yeah yeah I think I think that's absolutely right and you see countries that have had a one very very large exit you can see how quickly the ecosystem gets built around it whether it's because you know the founders are then some of the best angels in the country whether they have like teams of people that have seen that large exit you can hire talent now that's seen the ability to scale and a bit that you know the entrepreneurs in that country are now there to dream right if someone else made it I can make it as well in this country so I think there's a big emotional change when you have a very large exit in one of these countries and that's what we're seeing we're seeing kind of all these things crop up and suddenly you see within that ecosystem a huge increase from there I think we'll see more of that I'm still waiting I'm Greek so I'm still waiting for the big Greek exit and the system to happen there but I think I think it will happen across across Europe yeah you know in the US you had the PayPal mafia here you have the Skype mafia and I've heard about the transfer wise mafia now and you know there's all these little groups of you know people that have been done well one place and they're taking that skill and going on to the next spot so that's very fun to watch yeah how about the kind of future then can the number of European unicorns keep on growing like where are the bottlenecks if anywhere maybe you can start yeah I absolutely think it can keep growing I think I think there are whole sectors of industry that still have a lot of disruption to come like this so many things that frustrate us on a day-to-day basis as consumers there's so much to be done and what's happening across kind of consumer expectations technology in life sciences in fintech there's so much to come and I think Europe is ideally is ideally placed to create some of that some of that innovation we have great IP we have great talent we have great capital now so to make us point we have all the various kind of factors that contribute to to growth and great companies to come out of here so I'm incredibly bullish of Europe as an ecosystem and I think there's tons to come from here I was listening to Suje Tile earlier talk about Latin America and so what I've also found interesting is that I'm obviously I'm extremely bullish on Europe but I've seen actually there have been ecosystems now sprouting up all over the world and that I think that just shows to the power of tech and innovation it's just happening in every country I mean I think Europe is leading the pack in many ways because it was lagging in some ways and so it's really making leaps and bounds and I think what you've seen also is that universities and governments have now figured out oh wait a minute entrepreneurship is the future for us we need to really benefit from that so instead of spitting out engineers and designers and business people out of universities that go to work for big companies now they're all going to entrepreneurship and so the whole system is now starting to support it in Europe and so I think you know like I said all of the world is seeing these things but I think Europe has a system-wide effort to really help entrepreneurs which I think you know bows well for the future because I think I keep saying it just got started in the last three to five years especially in terms of like universities and everything all this stuff because we need more talent we need people being trained we feel excited about entrepreneurship we need more slushes basically so it's it's great I think there's just so many different factors that tell me that including what you said there's just so many different sectors that are just coming up strong yeah there's a lot of talk around change in European founder mentality I do agree or I do think that we all agree that the founder mentality has been changing but like what does it mean in practice how has it changed? I think it's a level of ambition I think to your point earlier like previously if you could have an exit early on and then retire to south France that was okay and I think the level of ambition has really changed the second thing is in my mind is the fear of failure right a lot of in Europe and society that I grew up you know if you had a company that failed that was terrible your parents were ashamed to discuss it with their friends right but in other particularly in the US having kind of a serial entrepreneur that's failed and tried was a badge of honor I think that's starting to change in Europe the fear of failure is starting to go away combine that with increased ambition and visible examples you can point to of other people that have done it I think I've created what we're seeing now which is entrepreneurs being a lot more both brave and ambitious and seeing some of the comps that we're seeing right now I don't know much to add to that because I'm glad to the last point there because I think also there's just so many examples in their local market there's somebody who knew somebody who knew somebody maybe three person people removed a thousand people and so you look at it and go that's how I got started I was a couple of my friends started companies and I saw how they started companies I'm like oh I could do that and it was really like for many years I thought it was a really distant very difficult thing to start a business but once I saw a couple of friends of mine do it so that was a very local thing I think it's a similar thing happening in different cities and countries people see they're in the news they see you know the office they're like oh wait I could probably do that so I think you know the first two factors for sure what you said and that third one that there is concrete examples of how to do it or at least inspiration why you should do it definitely can I agree with that okay maybe I say ending question we've been talking about the so called European flywheel what excites you the most personally and it what do you what are you waiting for in the European future well I think you know the flywheel for me like I said is is an idea the talent in the capital and those are all coming together in a great way what I really liked about seeing in Europe is the you know as long as it still remains the EU and I still count the UK as part of Europe the flow of these things is pretty amazing so we have quite a few companies that have engineering headquarters in different place from their HQ and so they have this flywheel spinning but not basically rooted to one geography it excites me a lot I think it's really cool and I think COVID has actually accelerated a lot of that because now you could work from home and so the idea that you don't have to be rooted somewhere to you know still take advantage of this flywheel spinning I think it's exciting yeah that's kind of what we discussed before for me like it's being European it's a huge pride thing like there's no reason why Europe should not compete equally and win in the international stage and I see kind of this happening now so for me it's with hope about the future it feels with hope that the great comes to come out of here you know I have three young kids and I don't want them to feel that they have to go to the US to become the next big entrepreneur I love the fact that being in Europe now you can do compete equally and have just as much of a future as you would have if you move the US so for me that's as a European it's a big thing that's an excellent note to end with yes thanks Janne, thanks Mika thank you very much, thank you