VC | E466 | This Week in European Tech with Dan Bowyer, Mads Jensen, Lomax & Andrew J. Scott
May 12, 2025
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Lomax Ward from Outsized Ventures discusses the latest on public markets and the emerging venture capital landscape. Mads Jensen of SuperSeed dives into the wind sector crisis and the implications of AI advancements. Andrew J. Scott, founding partner at 7percent Ventures, critiques the UK’s deep tech challenges and public sector failures. The dynamic conversation also explores the evolving nature of secondary markets and the competitive race between Google, OpenAI, and others, revealing insights that could shape the future of European tech.
The cancellation of Orsted's wind project highlights the economic viability challenges of large-scale renewable energy initiatives in Europe.
An investment boom in the UK's deep tech sector raises concerns about exit opportunities, underscoring a gap with U.S. funding levels.
The rise of secondary markets in venture capital reflects a shift in exit strategies as IPOs become less predictable and accessible.
Deep dives
Impact of Public Markets on Venture Capital
Public markets play a crucial role in the venture capital ecosystem, influencing private investments and exit strategies. The podcast discusses how more than half of European startups raising venture capital now flip to Delaware C Corporations, signifying a shift towards U.S. models that offer significant benefits. The information outlines that IPO sizes in the U.S. are almost double those in Europe, which has a notable effect on the funding landscape and strategic decisions for startups. This disparity emphasizes the need for private market players to understand public market trends as they navigate the future of venture capital.
The Cancellation of the Orsted Offshore Wind Project
The cancellation of Orsted's offshore wind project in the UK raises concerns about the economic viability of large-scale renewable projects. The project, initially estimated at £8-9 billion, became unfeasible due to a 40-50% increase in construction costs exacerbated by rising interest rates and supply chain constraints. As European manufacturers fall behind, particularly to Chinese companies, the viability of wind energy in Europe faces significant jeopardy. This scenario illustrates the potential need for government intervention to finance and back such projects, given the lower costs of capital available to governments.
Growth of the Deep Tech Landscape
The deep tech landscape in the UK is witnessing significant investment growth, particularly in the future of compute sector, which jumped from £3 million in 2015 to £300 million in 2025. Despite this impressive increase, the UK still lags behind the U.S., where investments are approximately ten times greater. Interestingly, the lack of exits in this sector continues to be a challenge, indicating that while investments are increasing, the long-term profitability and success of these ventures remain uncertain. This investment discrepancy highlights the need for strategic moves to bolster the UK’s position in deep tech and improve the exit landscape.
Challenges in Public Sector IT Projects
The podcast sheds light on the complications surrounding public sector IT projects, particularly referencing the NHS modernization costs projected at £21 billion over five years. Historical failures, like the National Program for IT, which ballooned from an initial estimate to a $12 billion debacle, illustrate the risks inherent in large-scale public spending initiatives. The hosts argue for a strategic shift towards smaller, scalable projects led by agile startups rather than traditional large contractors to ensure more successful outcomes and better resource allocation. This approach connects with the government's new AI strategy aimed at streamlined project execution and innovation in public service delivery.
The Emergence of Secondary Markets in Venture Capital
Secondary markets are becoming increasingly vital in venture capital, with a significant proportion of exits now occurring through secondary sales rather than initial public offerings. The flexibility offered by secondaries allows early-stage investors to manage liquidity concerns while supporting founders by ensuring they maintain a favorable cap table. This evolving facet of venture capital dynamics emphasizes the need for fund managers to adapt their strategies to leverage these sales effectively, as traditional IPO routes become less predictable and accessible. The podcast points out that as private companies remain private longer, the primary market's structure must evolve to accommodate the changing liquidity landscape.
Welcome to a new episode of the EUVC podcast, where our good friends Dan Bowyer and Mads Jensen from SuperSeed, in discussion with Lomax Ward from Outsized Ventures and Andrew J. Scott, Founding Partner at 7percent Ventures, cover recent news and movements in the European tech landscape.Behind the headlines—wind implosions, deep tech dead ends, exit deserts, secondaries, and AI drama—lie seismic shifts that will define the trajectory of European startups and the capital that fuels them.Here’s what’s covered:
01:30 Europe’s Wind Sector in Crisis
05:12 Hornsea 4 Fallout & Government Accountability
10:24 The Collapse of Deep Tech Momentum in the UK
15:36 Public Sector Catastrophes: Fujitsu’s £12B Flop
20:48 UK-EU Youth Mobility Deal & Trade Strategy
26:00 Trump, IP Tariffs & Global Trade Disruption
31:12 RIA Funds & the Evolving VC Model
41:36 Secondary Markets in Venture
46:48 The AI Arms Race: OpenAI vs. Google
52:00 European Drone Unicorns & GovTech
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