Greeting | Strengthening Europe in times of digital transformation

Tech­no­logy has chan­ged our ever­y­day lives in many ways. Tech­no­logy is revo­lu­tio­ni­zing how we commu­ni­cate, how we work and how we live. Our educa­tion, health and science, and also our produc­ti­vity, to name just a few examp­les, are being signi­fi­cantly shaped by digi­tiza­tion and tech­no­lo­gi­cal progress. In view of current deve­lo­p­ments, cutting-edge tech­no­lo­gies will inevi­ta­bly become an inte­gral part of our society.

Despite their ubiquity in Europe, Euro­pean ideas or values are insuf­fi­ci­ently reflec­ted in the tech­no­lo­gies we use in our ever­y­day lives. This has serious finan­cial, poli­ti­cal and cultu­ral impli­ca­ti­ons for Europe. We are in a global compe­ti­tion for pionee­ring tech­no­logy cham­pi­ons and we cannot afford to lose it. The current situa­tion requi­res a long-term stra­tegy to estab­lish our tech sector as the main­stay of our future. This stra­tegy must be based on coll­ec­tive support, regu­la­tion and funding to foster Europe’s excel­lent, ambi­tious tech inno­va­tors and inno­va­tions. Moreo­ver, we must not forget the central importance of flexi­ble regu­la­tion. Subt­le­ties in legis­la­tion can encou­rage fast-growing start­ups, but they can also sever­ely hinder them.

Europe’s tech­no­lo­gi­cal bril­li­ance holds great oppor­tu­ni­ties for the continent’s economy, employ­ment pros­pects and sove­reig­nty. Europe is home to the most tech entre­pre­neurs, univer­si­ties and talent. This gives us enorm­ous poten­tial to secure Europe’s compe­ti­tive advan­tage for the next 50 years and beyond, and to set the guard rails for the future. Our tech­no­logy sector offers attrac­tive invest­ment oppor­tu­ni­ties with promi­sing valua­tions and a wide range of companies
with excel­lent growth pros­pects. Europe’s values of inte­grity, disci­pline and stabi­lity have made us an attrac­tion for both ambi­tious entre­pre­neurs and expe­ri­en­ced inves­tors alike.

As the ecosys­tem has evol­ved, it has become clea­rer that a robust support system — from early stage to capi­tal markets — is lack­ing to chall­enge and nurture local inno­va­tors. An often over­loo­ked fact here is that if Europe is to fund a burgeo­ning tech scene and support digi­tal sove­reig­nty, it also needs a thri­ving finan­cial scene. Curr­ently, tech compa­nies in Europe do not have the same access to capi­tal as those in the U.S. or Asia. There is a considera­ble need for action here. Young, inno­va­tive compa­nies — espe­ci­ally those in the growth phase — must be provi­ded with the neces­sary capi­tal. Ulti­m­ately, access to capi­tal deter­mi­nes whether or not compa­nies deve­lop into global unicorn leaders. In addi­tion, Europe must take a role in the deve­lo­p­ment of mission-criti­­cal infra­struc­tures to unleash its digi­tal sove­reig­nty, not to mention the econo­mic bene­fits that such inno­va­tions bring.

As a venture capi­tal firm inves­t­ing in the most outstan­ding digi­tal and tech­no­logy compa­nies and foun­ders world­wide, LAKESTAR was foun­ded with the express purpose of bridging this gap. By iden­ti­fy­ing, funding and promo­ting Euro­pean tech­no­logy compa­nies that have the poten­tial to posi­tively trans­form our society, we chall­enge Europe’s ongo­ing dependencies.

We are deeply estab­lished in the Euro­pean ecosys­tem for growth-stage compa­nies and for compa­nies about to go public. This gives us the compre­hen­sive and neces­sary exper­tise to assess Europe’s needs in a target-orien­­ted manner. At the same time, we have the vision and credi­bi­lity to support Europe’s coll­ec­tive strength on the global tech­no­logy stage. As a venture capi­tal firm, we believe that foun­ders and start­ups need to be supported throug­hout their growth jour­ney. On the one hand, both angel invest­ments and stra­te­gic seed invest­ments need to be offe­red to foster the early-stage tech­no­logy ecosys­tem. On the other hand, there is a need to enable an effi­ci­ent pathway for the tran­si­tion from private to public markets, such as through tech­­no­­logy-driven SPACs.

Special Purpose Acqui­si­tion Compa­nies — SPACs

For late-stage compa­nies, SPACs offer alter­na­tive access to the public markets, in addi­tion to a conven­tio­nal IPO. They enable compa­nies to join forces with an expe­ri­en­ced part­ner with the aim of gene­ra­ting stra­te­gic added value and further incre­asing growth poten­tial after the merger. After witnessing a wave of SPACs in the U.S., we laun­ched our own €275 million SPAC in Europe, crea­ting a valuable tool to further advance Euro­pean tech pioneers and retain them in Europe.

This crea­tes an oppor­tu­nity for inves­tors to invest in a growth-stage Euro­pean tech­no­logy company, in conjunc­tion with a team that has a strong track record of deal sourcing and value crea­tion in the tech­no­logy sector. The expan­ded scope for invest­ment bene­fits both entre­pre­neurs and inves­tors. Inves­tor confi­dence is streng­the­ned by working with a part­ner that supports the entire commer­cial life cycle. — LAKESTAR always keeps an eye on all rele­vant inno­va­tions and deve­lo­p­ments on the capi­tal market. We have defi­ned clear areas where busi­­ness-criti­­cal infra­struc­tures need to be built in the coming years so that we can target our commit­ment there.

Compa­nies that need 200 to 300 million euros for further growth will gene­rally look to the U.S. market for capi­tal. Our goal is to invest in these compa­nies in order to prevent a struc­tu­ral sell-out of Euro­pean inno­va­tions to the USA. Our task is to help these compa­nies deve­lop into Euro­pean tech cham­pi­ons that secure Europe’s tech­no­lo­gi­cal independence.

We offer compa­nies and inves­tors a substan­tial, dyna­mic and sustainable Euro­pean resource for venture capi­tal. In this way, we streng­then a tech­no­logy stra­tegy that will last. We encou­rage the buil­ding of an ecosys­tem that is driven by ideas, invests in rese­arch, and supports the enforce­ment of more flexi­ble regu­la­tion. This is the only way we can ensure that our tech­no­logy sector can deve­lop its full poten­tial. We want a Europe that sets the tone. A Europe where the future is shaped by vision and strong ideas and talent.

Dr. Klaus Hommels

Lake­star is charac­te­ri­zed by an entre­pre­neu­rial spirit and enjoys working with ambi­tious foun­ders to get successful compa­nies off the ground. Lake­star was foun­ded by Klaus Hommels, one of the leading venture capi­ta­list Europe and has inves­ted in nume­rous compa­nies that are today in of the digi­tal economy, inclu­ding Face­book, Spotify and Skype. and most recently invest­ments in Open­door, Omio, Glovo and Revo­lut. Lake­star has offices in Zurich, Berlin, London, New York and Hong Kong. 
www.lakestar.com