Key Factors
- Nicolas Dufourcq, the pinnacle of France’s state funding financial institution Bpifrance, warned that Europe is turning into “doubly colonized” by Chinese language trade and U.S. tech.
- “It is not sooner or later; the implications at the moment are,” he warned an viewers at non-public capital convention IPEM.
- Bpifrance manages belongings price round 100 billion euros ($117 billion).
The pinnacle of France’s state funding financial institution Bpifrance has painted a grim image of Europe, saying the continent is caught between the world’s two largest economies and is unable to fund its personal future-critical industries. Nicolas Dufourcq warned that Europe is being overcome by Chinese language trade and U.S. know-how and is accelerating its financial decline by exporting its financial savings. “I am sorry to be radical in my imaginative and prescient, however we’re doubly colonized: industrially colonized by the Chinese language, digitally colonized by the U.S.,” Dufourcq mentioned at IPEM, a non-public capital convention in Paris. “It is not sooner or later; the implications at the moment are.” The core of the issue, he steered, lies with Europe’s huge pool of personal and institutional capital that’s not being invested at house. Even European ultra-high-net-worth people, household places of work and asset managers sometimes pour cash into conservative belongings like actual property, after which U.S. tech after they wish to tackle extra threat, he mentioned — as a substitute of backing homegrown innovators. “The financial savings of Europe, when they’re invested in risk-taking belongings, they go to the U.S.” Dufourcq cited challenges confronted by French quantum computing startup Quandela, which he claimed has developed a chip that outperforms some American rivals however was struggling to lift non-public capital in Europe. Bpifrance, the French sovereign wealth fund that manages round 100 billion euros ($117 billion) in belongings, has participated in three rounds of investments for Quandela, which has raised 61.85 million euros in whole, in response to FactSet. Quandela didn’t reply to CNBC’s request for remark. Enterprise-backed firms within the United States raised almost 4 occasions as a lot capital as their friends in Europe within the first half of 2025, in response to knowledge from PitchBook. “We’re in dire want of personal capital to finance deep tech, which is the way forward for Europe,” Dufourcq mentioned. Danger-on vs. Danger-off The Bpifrance chief attributed this “failure” to a deep cultural divide. He contrasted Europe’s threat aversion with the “Californian tradition,” the place traders see it as their “responsibility” to fund high-risk, high-growth startups to safe future dominance. “If you do not have that tradition in Europe, you’ll proceed to put money into tourism, wine, actual property, and U.S. tech,” he mentioned sarcastically. Final week, Harry Stebbings, founding father of VC fund and podcast 20VC, indicated the problems have been related within the U.Okay. “We’ve got a risk-off mindset. America has a risk-on mindset,” he instructed CNBC’s “Squawk Field Europe.” He mentioned his VC agency had raised between $800 million and $850 million — and $750 million of that was from the U.S. “I imply, that is astonishing. After we make some huge cash for our traders, all of it would return to the U.S,” Stebbing added. In terms of public markets, nevertheless, Sweden is bucking the downtrend affecting Europe, as firms have raised greater than $2 billion in preliminary public choices within the nation to this point this yr. Consultants have attributed the buoyant marketplace for shares in Stockholm to the Swedish tradition that accepts larger threat from equities , relative to bonds. Whereas Bpifrance is actively funding strategic sectors, Dufourcq admitted that state intervention alone was inadequate to counter the development. “We have to increase the extent of aggressivity of our capital allocation in Europe in direction of our personal pursuits,” he added.