The German startup ecosystem is off to a strong start in 2026: Between January and June, 3,053 new startups were founded. This represents a 52 percent increase compared to the second half of 2025 and means more startups were founded than in all of 2024.
The main issue that Europe tends to have isn’t purely creating new companies, it is scaling them. Because the “single market” is still waaaay too different between countries, because the capital markets are too fractured, and banks have a low risk tolerance, companies can’t scale up nearly as quickly , which is why for example, Spotify is listed in US indices
The “no real single market” tends to not apply to software companies, which can spread to other countries in europe relatively easily. There are also some reasons why people think its unlikely to be a lack of capital. For example if there were less venture capital in europe, then that capital would go to only the most promising startups (VCs can pick and choose who they fund). So you would expect the return on investment to be higher than in the US. But that’s not the case.
Other reasons that impact scaling of startups are lack of know-how since highly skilled people tend to move to where the biggest companies are, e.g. silicon valley. And, and this one is always hard to hear, labor protections. It is a lot more risky to scale up when the people you hire are hard to let go if you encounter hurdles while scaling up. The eu countries with comparably many unicorns, are ones that have very flexible hiring and firing.
The no single market still applies to software, namely due to A- higher compliance requirements in Europe, B- waaaay bigger localisation efforts
Absolutely. Europe doesn’t lack ideas or founders: it lacks one deep, liquid capital market. A real Capital Markets Union could let European savings fund European scaleups instead of watching them head to New York for serious growth capital.
It’s honestly more common cultural differences makes companies incapable of scaling outside of the cultures they were created in
Walmart doesn’t exist in Europe. How come?
But if any company manages to scale across all of Europe, they’re commonly able to expand to any location on the globe. The same can’t be said for single national American mega corps.
Walmart has a huge variety of products, which are low value dense and need to be restocked a lot. At the same time people are generally price sensitive. Delivering a full truck of a single brand of say frozen pizza to a store is probably overkill. As in it requires a lot of storage space in the store until it is sold. That increases cost. So you need to take in the truck into a distribution centre and then send trucks with all kinds of frozen products to multiple stores. That creates a pretty strong moat. Combine that with culture and branding and it becomes really hard to enter a market.
If you have fewer products to sell, that becomes a lot easier. McDonalds has been able to set up restaurants all over the world. Thanks to having a pretty limited number of products to sell. That is also how German supermarket brands like ALDI and LIDL have been able to conquer most of Europe.
Actually, Walmart doesn’t exist in Germany anymore. They tried, but US work conditions clashed with unions, and stuff like Walmart greeters was really creepy to germans, which is why they didn’t like to shop there. So, at least for Germany, the main reason Walmart doesn’t exist here is cultural
Walmart bought British Asda a few years later. They sold it since, but it worked out decently well for them. They also own stores in a lot of other countries outside of Europe, which certainly have a different culture.
I’m not sure we need megacompanies to corrupt our politics… midsized, sure, but I’m wary of whatever company has the size of Saudi Aramco.
Yes, and then the nice midsized companies will be bought out by bigger American ones.
Then we force big companies that operate here to be broken up and act as independent, midsized companies.
A small company is personal and ideal, but can be prone to collapse.
A large company is an indifferent corrupt moloch, with the power to manipulate politics.
A midsized company can be more resistant to collapse, without ‘having to’ be bailed out by governments due to entrenched corruption.
Don’t allow that. Let them compete.