European Growth Capital Must Lead Rounds to Keep Winners Home

What's New

Europe produces too few large public companies because European investors rarely lead growth rounds. Christian Sinding, investment committee chair of the Scaleup Europe Fund at EQT, argues this in a podcast on Alt Goes Mainstream. He says American investors have led 80% of growth rounds over the last decade. When the lead capital is American, the path to a US listing tends to follow. Allocators weighing European growth exposure should judge managers by how often they lead rounds.

Why It Matters

The argument challenges the common view that Europe lacks capital. Sinding says European capital exists but has lacked scale and speed. US growth investors are the other side, having led most European rounds by moving faster. The thesis also depends on a larger European exchange that does not yet exist. EQT manages the fund and is still raising it, so the case supports its own fundraising.

By The Numbers

• 80%: share of growth rounds led by American investors over the last decade. Asian investors led some, and Europeans a small portion.

• 13%: share of European savings invested in the stock market. Sinding puts the US figure at around 31%.

• €5 billion: target for the fund's first round. Sponsors have discussed a next wave of €20 billion.

• 1,000: companies on the fund's target list. Active dialogues number 200. The fund plans 30 to 40 investments.

How It Plans To Win

• Speed. Founders ask Sinding how the fund will compete and why it will win. His answer is pace of execution. He says US growth investors have long moved faster than European capital, and the fund is built to match them.

• Operating support beyond the check. The fund draws on EQT's industrial network, offtake programs, mentoring and IPO preparation. For hardware-heavy companies like 1X and Evroc, EQT uses a "scaleup brick" playbook covering customers, capital and offtake partners.

• Themes shared across strategies. EQT started backing space through its ventures arm years ago. It now owns satellite base stations in infrastructure and bought a German launch services company in private equity. The fund's first deal, Iceye, falls in the same theme.

Memorable Quotes

• "If you look at the last 10 years, 80% of all growth rounds have been led by American investors." The data point behind the fund's existence.

• "You don't need to go to the US if the capital is here." Sinding ties where companies raise growth money to where they eventually list.

• "If we didn't have all those capabilities I talked about and we didn't have the speed and we only had capital, we'd be in zero co-leads." An admission that money is the easiest part of the fund's pitch to replicate.

• "Why can't we create the European stock exchange that will have trillion euro companies on it? I think we will." The thesis needs an exit venue Europe has not yet built.

The Wrap

Sinding's case gains weight if the fund co-leads rounds against US firms on equal terms. It also needs EU Inc. and capital markets reforms to pass. It weakens if founders keep picking US growth leads, or if European winners still list in the US. The listing venues of the fund's first portfolio companies will settle it over the rest of this decade.