Tom Wehmeier - Partner, Head of Intelligence @ Atomico

0:00Okay, we are back. Welcome. We have now got Tom from Atomico. Tom is a super interesting guy who knows a lot about the ecosystem. But why don't you introduce yourself? Tell us like who you are, what you're working on and what your role specifically is at Atomico because it's unusual, I guess. Yeah.

0:17Tom Wehmeier:Well, first of all, hi. And yeah, thanks for having me. Great to be here. So yeah, I'm a partner at Atomico. Maybe a little bit about Atomico just before I get on to me. We're obviously a European tech investor, active across the spectrum. So right from the earlier stage all the way through into late stage growth. And we're 20 years in now. So we partnered with$22 billion companies across six fund cycles now. about Klarna, Framer, Neko, Deepow, SyQuantum, yeah, lots of others. Yeah, maybe more on me then. I've been in and around European tech for, well, this is into my third decade now, so longer than I care to admit, the lion's share of that time with Atomake.

1:02Tom Wehmeier:Yeah, I mean, obviously, that's given me just this amazing vantage point and perspective on just, you know, what's been happening in and around technology in Europe and my role as you say it is a bit unusual I'd say it splits three ways and so by day you know functionally I lead a team of engineers and data scientists and really what we're working on is basically how do we apply data and insights in a in a systematic way to support what we do as a firm and I think as you can probably guess that spans you know spans a full investment life cycle so how do we do that from a sourcing perspective all the way through to liquidity um but actually it's not just not just not just about what we do on the investing side but also you know how can we apply that across everything that we do as a firm front so from network and events to fundraising to finance so that's like role one and i sit on our ic so obviously that keeps me busy and then yeah probably the best way to describe the the sort the third area of focus is is what i would call market market education um so 10 years ago now i started our annual state of european tech report and and really that was you know with the goal of basically how can we help europe tell its own story um with data amazing and what was the you know for the ecosystem it's amazing you know the report is fantastic it's great to be able to see it and it feels like everybody from across the ecosystem puts into it and and loves it what was the justification of the rationale from atomico like what was it like why did they want to do this what was the thinking so i think basically we saw this perception reality gap um and yeah there was everything that we saw on the ground happening that was you know our reality and then there was you know perception as shaped by you know the narrative in the media by you know what you hear when you walk into the room with institutional investors when you step outside of europe and and really we kind of felt like we needed to find a way to to bridge that gap you know how do you how can we help in any way to to basically build a more optimistic but also realistic narrative for European tech and do that without being cheerleaders and I think you know fundamentally we basically really believe that narrative matters like narrative is what shapes reality and in tech it's you know it's it's such a material influence on on how people think on how they act and you know it's it's a determining factor at the end of the day and where founders choose to build their companies where talent choose to go where capital flows um so you know we wanted to be part of that narrative and then i think the other word that i said was was being realistic and i think at the end of the day like you know it's great to have a positive ambitious narrative but blind optimism is not going to get us anywhere if we want to really unlock and achieve you know the full potential as an ecosystem and so So, you know, with this report, what we've tried to find the balance of doing is, you know, champion progress, but also, you know, really highlight transparently what's not working.

4:26Tom Wehmeier:You know, is it regulatory and administrative purgatory? Is it the competitiveness of the talent market? Is it, you know, gaps in the capital stack, public markets? There's a long list, right, of challenges. And so, you know, I think we've always tried to sort of bring those to light. um yeah honestly i think when when when draggy published last year i think anyone who's been following along with us for the for the last 10 years or so probably wouldn't wouldn't have been you know all too surprised by the things that have been put on the table because you know we really tried to to to bring those um to the fore yeah i think it's that that that line of um telling a good story and trying to tell a positive optimistic narrative but also combining it with the reality and the data, I think is something that's really hard to get right.

5:14And it's something that shifts, I think. And I think now people are moving towards a more optimistic narrative, which is good to see. But you're right, you've got to ground it in the data and the insights and the analytics. Otherwise, you don't make the real changes that need to be made by the politicians or the regulators or whoever. You know, over the 10 years since you've been doing the report, how has the report itself changed?

5:37Tom Wehmeier:we well we got bigger for a few years and then we decided that actually bigger wasn't always better and you know like you know being able to tell a really crisp story um you know has has been uh you know has been important to you um i suppose it's it's evolved from just being you know this thing that we publish um once a year to being really a platform to open doors and and spark conversations throughout throughout the whole year i think maybe maybe like what's what's more interesting is uh is how the ecosystem is itself has kind of changed over the last 10 years and um uh you know i think when when people sort of ask okay like what's the state of european tech today and my you know i think it first of all depends on exactly your point of where you rely on this like optimist pessimist spectrum because depending on where you sit on that you're going to give a different answer obviously as as i've shared um i sort of see myself you know on the optimistic side also trying to be objective um i don't know if you saw this article uh last week i think it was in the ft the headline was europe's quest to build a trillion dollar company and and I think like for me it was like this like amazing framing of uh you know of where we are today and and kind of basically encapsulates um you know the sort of state of the ecosystem in in in such a cool way because on the one hand you know a headline like that shows how far we've come because we've we've upped our ambition level like a thousand x we've gone from you know when we started our report 10 years ago we were chasing billion dollar dreams and now we're chasing trillion dollar dreams and you know like anyone anyone who's been around this space for for a while you can't fail to see that we've just gone like through this sort of transformational period of change we've built something you know like from an ecosystem perspective super real right like there's there's strong resilient foundations we've got we've got millions of people working in tech we've got well now we've created trillions of value in aggregate as an ecosystem hundreds of billion dollar companies obviously some of the fastest growing companies of all time at the same time too it's like it's this quest right like we're still searching for that trillion dollar company and and the u.s has got eight its biggest companies are bigger than our entire ecosystem and say you know i think it it always sort of tells you that you know no matter where you think you've got and the progress that you've made you you just have to keep accelerating and moving forward and you know the rest of the world just just isn't standing still and say you know we sort of comes back to this point right like we have to we have to fix the things that still today are slowing us down you know back to it and i was gonna say how useful do you think the comparison is to the US.

8:43I've seen a lot of stuff on socials and LinkedIn at the moment, people saying we shouldn't even be focused on them, we should be trying to run our own race. Other people saying, you know, we should be looking at them and trying to emulate and trying to replicate what they've done. And there's a lot of geopolitical things underlying it, whether we should be forging closer relationships, trying to be more independent or resilient. What's your take on that?

9:03Tom Wehmeier:Yeah, I mean, I think there's like no binary answer to it. It's like not either or. Like I think I think competition matters because competition raises the bar it sets standards and so I think it's really important to have that like check in to to see how we're doing I think at the same time too we've always felt like we need to make sure that we run our own race you know like we need to um speak about the things and control the things that that that we can um ultimately that's mostly about you know how we how we can build the best possible operating environment for you know for our entrepreneurs here in Europe and and measuring our progress in terms of how far we have come is going to be you know is it's probably going to be a more useful thing to help us to really understand both the progress and then the things to to fix.

9:53And how how do you feel about the way that politicians are approaching these things that we need to fix? There's been a lot of news recently even rumors in the UK of doing the stamp duty holiday for IPO shares we're seeing the EU startup plan you know EU Inc it feels like there's been a change in in the level of engagement from governments is that what you're seeing as well I mean like no question right um but I think you sort of step back it's like I think everyone

10:21Tom Wehmeier:knows that this is like this crossroads moment for for Europe like it's it's pretty abundantly clear if you spend any degree of time thinking about it that um entrepreneurship tech innovation like that is what's central to to our future prosperity to to security to growth um and so i think what we've seen happen now in yeah like i guess like the last 12 years is like for the first time that's like truly recognized like startups we're not a sideshow we're not an afterthought like this is essential and this is like the main event and so you know when you see things like the yeah like the startup and scale up strategy that that got launched and when was it like may you know it's a recognition of that um you know it's pretty cool to hear Europe and European leaders stand up and say we want to make Europe the best place to grow and launch global tech companies and then come out with a with a plan you know behind how to do that we've not seen that before now a plan and ideas and a policy paper turning into into like action that moves a needle like there's a there's a lot that needs to happen between those two things but um uh you know it's it's good to see that it's on the agenda and it's top of the agenda yeah it's a a lot of people of our speeches you know have mentioned that gap and i think that what we're seeing at the moment is yeah that optimism and that engagement coming from politicians but yeah that gap to execution implementation is massive and i think the people that i've spoken to are definitely skeptical in the government's ability to implement and execute on some of these plans do you think we'll see improvement in that place as well like we're definitely seeing improvement in the the the ambition and the um the yeah the intention there's definitely improvement in the intention from governments do you think we're going to see improvement in the execution as well i think we i think we have to because the consequence of not seeing that is too great um i think we have to be pretty balanced in terms of like as we think about like this wish list of things that we want to see get done how many of those things actually get done um but you know what like i think what's going to make a difference here is the role that we can play to try to make sure that you know we do make a success of this so um you know like there's a few things that i think like we as an ecosystem can kind of do to to basically like at least like nudge the probability um you know of meaningful change kind of happening so first of all it's like how do we help set the right priorities because they you know the thing is like there's no shortage of idea like even if you just look at the commissions plan there's literally like dozens of ideas in there of things they can do but like what are the things that to focus on like the small number of things that are really going to move the needle um i think this the other thing that that is going to be really important and i know you've spent time chatting to andreas and like the eu inc guys and you know it's like shaping the proposed actions so that they are designed and implemented in a way that actually solves problems not like potentially compounds them is a really important thing so like making sure that their inputs are like are heard in the right way and and obviously like the whole of like the eu inc campaign is is about making sure that the 28th regime is a 28th regime that actually fixes things and then uh yeah i mean like like you say it's ideas are cheap and execution is everything so yeah and execution takes a long time yeah but but you know i think we have to like the the window of opportunity is there the doors are open like we have to engage we have to make our voice heard we have to like keep showing up it's like presence and pressure relentlessly persistent that's what's gonna you know make a difference and like they those are big statements but you know like people are showing like andreas and and others are showing that that this can help to get things done and and even the smallest things like on an individual level can help like get involved in the consultations yeah yeah you know like all these all these kind of things um you know are going to help yeah and yeah i mean absolutely and i also wanted to get your view on the state of european tech right now you know there's been so much noise about uh are we in a bubble bubble versus not bubble um is this bubble different to other bubbles because this has the ability to build trillion dollar companies versus like the 2021 quick commerce bubble or the crypto web 3 bubble um you know what's your kind of take on on that whole thing like are we in a bubble and and i also want to get your view from the perspective of someone in venture as well because not only are we in a bubble but how how much does it matter for you in your job in bc yeah i think it's a great question so i think like i alluded to i think i've probably seen three or four full cycles now yeah um and i think when you when you've seen that you understand that they're basically like that cyclicality like things inflating things coming back in that's a feature it's not a bug of uh you know both of like financial markets but also of just how technical like technical progress happens um so i think i think in the end like it it's not so much a question of are we in a bubble or not but are we building and allocating capital and talent to to ideas and companies that have enough fundamentals to keep dancing when the music stops um obviously the challenge is that the noisier the music gets and it's pretty noisy out there the harder it is to to hear the signal um i think from a you know from an investor perspective you know that the game on the field largely remains the same like who are the outlier founders who's doing something that's like actually transformative whose heads down and just like relentlessly executing through all the noise and therefore who has the best shot at building something truly durable that you know that outlast bubbles and cycles because you know we were always going to see those and um uh you know that's that's ultimately like how you make sure that you you survive out the other end um when there's you know another tougher period and i think i i think that is makes sense and is truer the earlier stage that you invest because the earlier that you invest if you back an outlier founder the returns are going to be absolutely massive i think what's what's interesting but also where the trouble is as the late stage investors you know the kind of companies that are investing in the billion dollar rounds pre-empting investing 100 million dollars do you think that's where it's riskier to be investing while you're in a bubble yeah i mean i think it's it's definitely the tough place to play right um so you know i think again if you sort of step back we know that there's going to be there's going to be an enormous amount of you know of capital that um that that is torched right through this period it is the same in in every kind of um you know cycle that we go through at the same time too there will be those even at the late stages that are able to find the signal in the noise and and put money to work in bets that you know where the upside is is sufficiently significant even at the types of valuations that we see right now that you know that that works and again it sort of comes back to like how do you find signal in the noise and it's it's a lot noisier so it's tough but that's the art right like that is the uh you know and that is the game that you have to play and do you think that this is a different type of bubble to the ones that we've seen previously or like i think i'm always in two minds of thinking oh that's just like every time there's a bubble people just think this sounds different versus is this time actually different with the level of technology innovation that we're seeing the most dangerous four most dangerous words right is this time it's different i think there's there's things that rhyme and there's things that look and sound very different um is uh you know is is the is the reality so um you know i don't think you can kind of say in a binary way it's like it's definitively uh yeah it's definitively different or not yeah i guess uh time will tell um um but look to finish off can you touch a bit more on the report i think you're gathering submissions at the moment you're gathering feedback is that right and then the plan is to release it soon yeah no thanks for uh thanks for bringing it up so we'll release at slash say 19th of november so we're about yeah just just coming up to a month out um one of the most important inputs into the report is is the survey you know like we've basically larger scale longest running survey of the ecosystem and say head to state of european tech.com you'll find a link to the survey and i think like we said like it really matters that the voices of the ecosystem are heard because we will go and do our bit to make sure that um you know those voices and perspectives are shared um to the people that matter be that in brussels or national capitals or anywhere else yeah very cool oh look i'm going to be live streaming from slush maybe there's an opportunity where we can do a uh a breakdown or something yeah we should do that we should do that um all right let's um yeah let's let's talk about that'd be really fun um but cool look thank you so much for joining like um let's stay in touch I'm super excited to see the report I always read it thoroughly and it always gives me amazing content to talk about online um so yeah thank you so much for joining let's stay in touch no it's been a pleasure and thank you also for what you're building here which is truly needed no my pleasure I'm trying to make it work one day at a time but uh having a good time all right cheers sir thanks tom