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Spotify’s CEO Daniel Ek Will Invest Over $1 Billion of his Own Wealth To European Start-ups

Spotify CEO Daniel Ek announced that he will be investing 1 billion euros (the equivalent of $1.2 billion) of his own wealth to invest in European start-ups.

Start-up event organizer Slush hosted a virtual talk where Ek announced that he would be using his own funds to make “moonshine” bets in Europe. He spoke on his plan to focus investments on new tools aimed at scientific innovation, which he referred to as deep technology. The sectors where Ek is specifically looking to invest include biotechnology, education, health, and machine learning. 

“I want to do my part; we all know that one of the greatest challenges is access to capital,” Ek said.  He went on to discuss how he wanted to create a “new European dream” over the next ten years.

In recent Forbes estimates, Ek is worth $3.6 Billion, which means he is willing to use about a third of his own wealth for these investments. 

Ek felt pushed to this decision due his own frustration after observing U.S. rivals purchase European tech companies.  Many of the industry’s best have also been relocating to the U.S. to be a part of the tech industry in Silicon Valley. This has been most notably seen with the Irish owned Stripe. The company’s founders headed California in an effort to build up the company.

He added, “I get really frustrated when I see European entrepreneurs giving up on their amazing visions selling early on to non-European companies, or when some of the most promising tech talent in Europe leaves because they don’t feel valued here. We need more super companies that raise the bar and can act as an inspiration.”

What It Means

In the realm of technology, the United States and China are often seen as leaders with Europe often lagging behind. Europe does not have tech giants like Amazon, Tencent, Microsoft, or Alibaba. 

Last year, according to Atomico (a venture capital firm), Europe’s tech start-ups had $34.3 billion in capital. A few companies have continued to raise substantial amounts of money including Klarna, who raised $650 million with their “buy now, pay later” app, and Revolut, who secured $580 million with their digital banking app. 

Ek announced that investors, governments, and scientists will be consulted for his investments. By funding $1.2 billion, the Spotify founder will compete with industry leaders like Northzone, Balderton Capital, and Atomico (which was founded by the former CEO of Skype Niklas Zennström).

The region has not only struggled with companies and talent moving to the U.S., but also with public trading going to the American Stock Exchange first. When Spotify went public over two years ago, the Stockholm, Sweden based company was first listed in New York.  London-based Farfetch, an online luxury marketplace, also chose to first go public in the United States. This year, while many software companies have gone public in the States, few have gone public in Europe.

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