🇪🇺 Weekly Dose of European Optimism #2

Hi friends,

Happy Monday and welcome back to our Weekly Dose of European Optimism. Europe isn't just playing defense these days…it's making big moves in fintech, venture capital, and yes, actual defense. With billions flowing into innovation and some surprising new strategies emerging, our continent showing high promise on multiple fronts.

Top stories this week:

• Revolut invests €1B in France, opens Paris HQ

• EIB to provide €70B in startup funding; TechEU platform to launch this year

• Wave Ventures launches €7M Gen Z-led fund

• Trump presidency "biggest force of good for European venture," claims VC founder

• Germany's Merz vows to build Europe's strongest army

Let’s dive into it.

Revolut splashes €1B in France, establishes Western European HQ in Paris

Move over, Brexit doom-mongers. Revolut is making it rain in France with a massive €1B investment that's being called the largest in the French financial sector in a decade.

The neobank, now Europe's most valuable private tech company at a staggering $45B valuation, clearly sees the French market as critical to its European dominance strategy.

This isn't just a token office opening. The Paris hub will oversee operations across six major markets (France, Spain, Italy, Portugal, Ireland, and Germany), while creating over 200 new jobs.

What's particularly telling is that France has become Revolut's fastest-growing market with 5 million customers, including a whopping 1.6 million new users just this year. That's some serious growth.

It's a clear win for French soft power as the country positions itself as Europe's post-Brexit financial services hub. Revolut's dual-hub strategy (Paris for Western Europe, Lithuania for Eastern Europe) shows the company is getting serious about deeper European integration while still maintaining its London global HQ. Smart play as the company eyes a potential 2026 IPO, likely on American shores.

EIB to inject €70B into European startups by 2027

The European Investment Bank is putting its money where its mouth is! In what EIB Group President Nadia Calviño calls "the largest ever programme to exclusively support European innovation and technological leadership," the bank is launching a massive €70B funding initiative aimed at keeping European startups European.

The initiative is brilliantly comprehensive, supporting companies "from idea to IPO" and even helping founders and VCs exit to European buyers rather than selling their stakes to deep-pocketed American acquirers.

It's a direct shot at preventing the chronic problem of European tech being "sold out" to the US. With the potential to unlock up to €250B in total investment when private capital is factored in, this could be the capital injection Europe's tech sector has been desperately waiting for.

The EIB is also signaling a willingness to take on more risk and cut application decision times to six months, addressing the exact criticisms leveled by Mario Draghi in his competitiveness report last year.

With US research funding facing cuts and Trump-induced uncertainty, Calviño sees a golden opportunity: "The current situation in the United States creates an opportunity for Europe to attract talent, to attract investment, to attract capital."

Wave Ventures launches €7M fund led by Gen Z for Gen Z

The kids are more than alright. They're running the VC funds now. Helsinki-based Wave Ventures has announced its third fund at €7M, making it Europe's largest Gen Z-led and Gen Z-focused investment vehicle.

While that might sound like small potatoes in the VC world, it's three times larger than their previous fund and backed by an impressive roster including founders from Slack, Bolt, Skype, Supercell, and Wolt.

What makes Wave Ventures fascinating is its operating model. The fund is managed by a rotating team of Gen Z investors embedded in startup communities across Helsinki, Stockholm, and Tallinn. This gives them unparalleled access to young founders, often before they're on anyone else's radar.

As Slack co-founder Cal Henderson puts it: "Wave Ventures has a truly unique advantage, connecting to the most promising young European entrepreneurs before any other investors could ever have them on their radar."

With plans to deploy the fund across the Nordic and Baltic regions in initial checks up to €100,000, Wave is positioning itself as the first money in for the next generation of European unicorns. Their track record is impressive. They've backed nearly 80% of Finnish startups led by CEOs under 30, including YC graduates like Exa Laboratories and Vetnio.

As emerging tech like generative AI and no-code tools lower barriers to entry, Wave CEO Antonia Eneh sees a perfect storm: "AI is unlocking a new era of speed and scale: young founders are moving faster than ever, thinking bigger, and building globally from day one."

Trump presidency "biggest force of good for European venture," claims VC founder

Well, this is a spicy take. Speaking to an audience of European VCs, Speedinvest co-founder and CEO Oliver Holle made the provocative claim that Trump is the "biggest force of good for European venture" and urged the European VC ecosystem to seize the moment presented by America's increasingly polarized politics.

The argument is fascinating:

While acknowledging that Trump's tariffs aren't great for Europe overall, Holle sees an unprecedented opportunity as founders, scientists, and investors seek environments more aligned with their values.

European qualities like:

• "Modesty”

• “Seeking consensus"

• and democratic principles

…are suddenly looking pretty attractive compared to the chaos across the pond. Even capital from Asian markets is looking for more stable homes, creating a potential funding windfall.

Not everyone's buying the isolationist approach though. Frontline Ventures partner William McQuillan offered an important counterbalance, noting that on average, European companies derive over 40% of their revenue from the US when they go public.

"We need to be careful as long-term investors not to become too isolationist in our thinking and to continue to think globally," he warned. The debate highlights a crucial strategic question for European tech: capitalize on American turbulence or maintain strong transatlantic ties?

Merz vows to build Europe's strongest army in policy reversal

In a stunning policy reversal, Germany's new conservative Chancellor Friedrich Merz has vowed to build "the strongest conventional army in Europe" and is backing this ambition by loosening the country's famously strict debt brake to unlock hundreds of billions in defense spending.

"The federal government will provide all the financial resources that the Bundeswehr needs to become the strongest conventional army in Europe," Merz declared in the Bundestag. This represents a tectonic shift in German defense policy, which has been characterized by post-Cold War disarmament and strict fiscal discipline for decades.

This will be a huge boost primarily for German defense tech companies. Established players like Rheinmetall, Hensoldt, and Diehl Defense will certainly benefit, but the real opportunity lies with German startups and mid-sized firms bringing modern technology to defense applications.

Companies like Munich-based Helsing (AI-powered defense systems), Quantum-Systems (tactical drone systems), and IABG (cybersecurity for critical infrastructure) are perfectly positioned to capture significant portions of this spending. The German government has historically favored domestic procurement for security and sovereignty reasons, and I expect this preference to strengthen under Merz's leadership.

Speaking of defense-tech, I just wrote a thread on Helsing’s its latest product announcement: AI-powered underwater drones.

Highly enjoyable episode from the founder of Europe’s fastest-growing startup right now.

Who says Europe can’t build???

To all founders, investors, and ecosystem builders reading this:

Thanks for reading our 2nd edition! I’m open to feedback on the format of this weekly newsletter, so just reply with what you liked or what you’d like to see from us.

Keep investing and keep building. The European tech renaissance is just getting started.

See you next week,

Ole

P.S. I read all replies if you have anything to share, go for it!

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