Europe should act to cease tech start-ups leaving to listing in US, Swedish PM warns | USAEMALL.com

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Europe urgently needs to make its capital markets more attractive or risk having all its technology companies list on US stock markets, Sweden’s prime minister has warned.

Ulf Kristersson was speaking after his country lost out on listings by a series of homegrown tech companies. Spotify, the music streaming service, listed in New York in 2018, while Klarna, the fintech pioneer, has chosen New York over Stockholm for its forthcoming IPO. Einride, a driverless truck start-up, is also looking at the US rather than Europe.

Kristersson, from the centre-right Moderate Party, told the Financial Times that the Scandinavian country was losing out on such listings despite having more IPOs than any other EU country in the past decade.

“Should it be a natural law that European tech companies almost exclusively go to US stock markets to go public?” Kristersson asked. “There are lots of reasons for it — but one is that access to capital and the willingness to invest is much better.”

There was “a lot of homework to do” for Europe, he said.

“I wish it wasn’t so,” he added.

Europe fretted for many years about its inability to produce tech companies to match Google, Meta and Apple. But, now that the continent is producing a growing number of start-ups, it is facing a battle to keep them.

The chief executive of one company currently considering a listing said there was “almost no other choice” than the US for an IPO.

“The investors and the capital are in the US,” the executive added.

Because of the threat of tariffs and attacks on European allies by US President Donald Trump, many businesses are reconsidering the depth of their ties to America.

But European tech executives said that, while their own continent had got better with early-stage financing, it was hard to avoid the US for listings.

One Swedish tech executive, who is not currently planning to list, said there was “a lot of distaste” for Trump.

But the executive added: “Look at the valuations for US and European tech companies — you’d be hard pressed to make an argument to list here.”

Kristersson said that Europe needed to implement its plan for a capital markets union, designed to create a single market for investments on the continent.

He added: “Sweden has had more listings in Stockholm than Spain, Germany, France, and the Netherlands together. Whether that is a Swedish strength or European weakness can be discussed.”

Markus Villig, chief executive of Estonian start-up Bolt, which is starting to look at a listing in the US or Europe, said that Sweden had one of the best markets on the continent because of its high levels of retail investors. He urged other countries such as Germany to encourage people to invest more in stocks.

“How do we make sure that these new companies get access to the right capital, the right talent, and they can actually go and compete meaningfully versus US ones?” Villig asked. “If you are limited by funding and talent, the [difference between the US and European companies] compounds.”

Europe has been unsettled by some of Trump’s threats, particularly to cut off intelligence and military support from its ally Ukraine.

Kristersson said he had “a certain understanding” that the US wanted to scale back its financing of European security, but added that he was “never going to cast aside the transatlantic link”.

He added: “We in Europe should not do anything to weaken the transatlantic link, which has been good for the democratic world in 80 years. But we are not going to take the link for granted.”