EU scale-up firms relocate more frequently than US or UK firms and they often relocate outside of the EU and most frequently in the US, according to a capstone project led by College of Europe masters’ students in 2024 on “The European scale-up ecosystem: Evidence on late-stage enterprises location choice” and mentioned in a new EIB economic study: “The scale-up gap: Financial market constraints holding back innovative firms in the EU”.
The number of scale-up companies in the EU -defined as companies that have successfully concluded a deal with a post-money valuation of between $500 million and $10 billion- lags behind those in the US and China.
This is partially attributed to a deficit in scale-up finance and lack of technical assistance and explains why funding is a key reason for relocation decision. However a majority of firms do not relocate. The students found out that out of a sample of 563 firms (237 both in the US and in the EU and 69 in the UK) only 64 relocated but they were mostly from the EU (35).
EU firms relocate more frequently than US and UK firms and EU firms relocate outside the EU, whilst US firms relocate within the US, and UK firms relocate within the UK or to non-EU countries. The US is the most popular destination, especially San Francisco, and within EU, Ireland, Luxembourg and the Netherlands.
Relocation is more likely in some sectors like software, tech and biotech/pharma with a suitable ecosystem and better funding possibilities -though not immediate financing- being the key reasons for relocation.
The College of Europe students who completed the capstone are Niklas Patzig, Silvère Claisse, Duarte Borrego, Michele Gentile, Robin Shackleton and Emilie Kieler. Click here for the presentation.
A capstone is a students’ consultancy project: a team of four to six Masters’ students works under the supervision of the EIB Group staff who has proposed the topic. Click here to see previous capstones.
From left to right: Emilie Kieler, Robin Shackleton, Niklas Patzig, Duarte Borrego, Michele Gentile, Silvère Claisse
