Dear reader,
As a European myself, our VC ecosystem's tendency to deify the US one is frustrating.
The US and Europe have made fundamentally distinct societal choices. Our economies aren't organized the same. The values our respective governing bodies stand for blatantly differ.
The question this RO Long Read seeks to answer is: how can Europe create a late-stage VC ecosystem that fits European values rather than blindly replicating the US' methods?
Answering this question starts with precisely understanding why US late-stage seems to overwhelmingly "dominate" European late-stage today.
Without further ado, please enjoy part I of this RO Long Read.
Biography
This article was written by RO’s Europe Correspondent, Hélène Ghosn.
Based in Paris, Hélène knows the startup ecosystem from both sides, having worked as a VC analyst at Serena Capital and as the CEO's right hand at Virgil.
This RO Long Read draws on months of interviews with investors, founders, and institutional actors. Serena is among the funds discussed in this piece; this article was produced independently and reflects no commercial or editorial partnership of any kind.
A common narrative holds that Europe’s late-stage ecosystem lacks the financial depth to compete with the United States’.
However, if the issue is lack of capital, how can we explain the launch of the €5B Scaleup Europe Fund, or the $1B funding round raised by AMI? If Europe has the capacity to finance late-stage ventures, why does the transatlantic gap persist?
The issue is a difference in sheer volume rather than a lack of capital. The US ecosystem simply enjoys deeper capital pools than the European one. That translates into higher investment capacity. Numbers back this claim: in the first nine months of 2025, the US attracted $177B in VC, whereas Europe raised only $33B.
But this would miss a significant part of the explanation. The divergence isn’t solely quantitative, as the two ecosystems also differ in nature. The US and Europe organise and mobilise their resources differently, and these institutional differences produce different economic outcomes.
This is particularly visible in VC. In the US, the innovation ecosystem is intertwined with a defence-driven model and sustained by vast pools of private institutional capital. In Europe, by contrast, welfare structures have shaped both pension systems and public-private capital formation.
It thus makes little sense to assess both systems with the same standards. Europe’s late-stage dynamics cannot be understood without examining how its capital is structured, how long-term risk is financed, and how its institutional configuration differs from the American model.
The purpose of this RO Long Read is to explore how Europe’s unique architecture shapes its late-stage trajectory and what this implies for its ability to compete on its own terms. To do so, we’ll scrutinize multiple angles:
- Is Europe’s reliance on American investors at later stages a structural weakness or market logic?
- Should Europe compete head-on at late stages, or lean into its early-stage strengths?
- Is the EU’s version of the AI race about scale and speed alone, or about shaping systems aligned with European priorities?