At the end of the Next Round conference, we discussed the key development directions of the European and Slovenian startup and scaleup ecosystem with the Director of the Slovene Enterprise Fund, Maja Tomanič Vidovič. Another reason for the strategic conversation was the visit of EU Commissioner Mariya Gabriel, who is responsible for innovation at the European level. The timing of the conversation also coincided with Slovenia's Presidency of the European Council, so there was no shortage of interesting topics to discuss. Read a summary of the conversation in the interview below, and the full conversation in the video.
A common European goal is to create the conditions for more "unicorns"
The first day of this year's Next Round Conference is dedicated to tackling the challenge of how to create more European high-growth technology companies - unicorns. Slovenia's presidency of the European Council also made the conference the right place for this discussion. The goal for all members is to ensure that we have even more innovative entrepreneurs who will be able to grow globally and show themselves as successful companies outside Europe.
Marko Rant from the Invoice Exchange presenting the company and the proposals for ecosystem improvements
Unicorns are companies that create a better society
It is important to understand that big tech companies are not just companies that make a lot of profit but are first and foremost companies that create a better society, said Maja Tomanič Vidovič. Education, healthcare, environmental care and other areas are the ones that high-tech companies are changing for the better with their solutions. That is why it is so important that Europe has such companies.
A positive response from the European Commissioner's office the very next day
For the important political part of the conference, the Fund, in cooperation with the Ministry of Regional Development and Trade, created the so-called "Progress Traffic Light", which analysed the measures for the development of the startup ecosystem in individual countries. The European Commissioner was so impressed by the system that the day before the conference, her cabinet started an initiative for Slovenia to continue the system's development and to take on a leading coordination role for the development of the ecosystem at the European level. A detailed presentation of the "Progress Traffic Light" can be found in the report from the Next Round conference and in the video below.
European Commissioner for Innovation meets Slovenian scaleups
The importance of startups and scaleups for the European Union was confirmed by the physical presence of the European Commissioner for Innovation, Mariya Gabriel, who spent Tuesday morning in the company of the Slovene Enterprise Fund, the Ministry of Economic Development and Technology and the Slovenian, French and Portuguese Commissioners responsible for startups and scaleups. An important part of the programme was a meeting with Slovenian scaleup companies developing deeptech solutions.
European Commissioner getting to know Slovenian company Elaphe
Scaleup companies developing deeptech solutions, which are still scarce in Europe, are therefore one of the priorities, the European Commissioner added in her speech.
We don't want to be a bad copy of Silicon Valley, but a proud European original
In her conversation with the European Commissioner, the Fund's CEO also touched upon the strategy of building a European ecosystem based not on trying to replicate successful American or Chinese ecosystems, but on Europe's unique strengths. More in the statement below.
We will have to take risks and change the culture
Maja Tomanič Vidovič also highlighted the attitude towards failure and the lack of risk-taking in all parts of society. She was also referring to institutions such as pension funds and banks, which are already entering venture capital funds abroad and investing in high-growth companies with part of their investments, whereas this is not yet common in Europe due to reticence and fear. There is a need to change the way we think - the money that such funds invest in high-growth companies is used to pay back into the pension funds through employment and tax payments, thus ensuring the financial future of the retired population. We should not forget to encourage successful individuals to invest part of their surplus funds in start-ups, the Fund's Director warns.
A well-connected ecosystem
The Director of the Fund sees the strengths of the Slovenian ecosystem in the good integration of key players and their cooperation. Slovenia also has a really good and wide range of incentives for young innovative companies, both through the Startup Plus Program of the Slovene Enterprise Fund, the SPIRIT Agency and various research institutions. She also mentioned the strengthening and integration of initiatives in the field of health tech as very encouraging. Additionally, they found the winning combination of financial and substantive support for different growth phases brought together in the Startup Plus programmes organised by the Fund. This way, a start-up really has a huge amount of support available in one place to increase its chances of success.
Lack of foreign investors is a major weakness to be addressed
The Fund's Director sees the weakness of our ecosystem as a lack of foreign investors, which will require more steps and effort from now on. Foreign investors also need to be provided with a friendly and favourable business environment; such as tax breaks and strict legislation. More cooperation in this area will be needed from different ministries - the Ministry of Finance, the Ministry of Justice and others. She also stressed the importance of e-notaries, which will facilitate the remote handling of contractual relations. Estonia is a shining example in terms of its orderly and attractive ecosystem for foreign investors, despite being a small country. Why?
The main goal in 2022 is a 70M fund
The Fund will continue to develop the Slovenian ecosystem with the same intensity as in the past 15 years. However, the Fund's CEO highlighted three main strategic objectives for 2022:
- Establishing a new, open-ended and flexible €70 million fund together with the EIF to invest in high-growth technology companies at different stages of development.
- Strengthening substantive support in the area of connectivity with global innovation hubs through programmes such as startup and scaleup houses.
- Strengthening the promotion of investment and the importance of venture capital, attitudes towards this type of financing and raising awareness of the importance of high-growth deeptech companies, which is still too much affected by scepticism and negativism.
€4 million for startups in 2021
The Slovene Enterprise Fund's Startup Plus Program includes 147 companies in 2022, with just over EUR 4 million in funding so far in 2021 through various financial products (the P2 start-up incentive, the SK75 covertable loan and the SI-SK direct equity investment). What's more encouraging is that the companies in which the Fund has invested in, have so far received another EUR 11 million from private investors. In addition to the money itself, the companies involved also benefit from substantive support in the form of more than 10 different programmes and more than 160 mentors (more about that here).
Content support for recipients of P2, SK75 or SI-SK financial products under the "de minimis" scheme is co-financed from the Slovene Enterprise Fund and the European Union from the European Regional Development Fund. This is implemented on the basis of the Content Support for Funds Recipients (SMEs) Programme in the 2018-2023 period, under the Operational Programme for the Implementation of the European Cohesion Policy 2014-2020.