Hi there, Welcome to the 131st edition of Heartcore Insights, curated with 🖤 by the Heartcore Team. If you missed the past newsletters, you can catch up here. Now, let’s dive in! Prepared Mind – The Sovereign European Tech StackEurope’s digital foundations are built abroad. From cloud computing (AWS, Azure, GCP) to productivity software (Google Workspace, Microsoft 365), mobile operating systems (iOS, Android) and developer tooling (GitHub, Docker, Kubernetes), the vast majority of platforms powering European businesses are US-built and owned. Chinese dependencies, though more opaque, are quietly rising: Tencent Cloud is expanding in Europe and Chinese-made legacy chips, critical to vehicles, industrial automation and consumer electronics, underpin key parts of Europe’s supply chain. The numbers make it plain: US vendors control ~70% of Europe’s cloud market; European providers just 15%. In core layers, semiconductors, hyperscalers, AI infra, Europe holds little control, captures little value and has limited say in shaping its digital future. More than a commercial inconvenience, it is a strategic vulnerability. In October 2025, an AWS automation failure disrupted over 2,000 global services, cascading through Europe’s healthcare, fintech and logistics sectors. Last month, a cyberattack grounded flights in London, Brussels and Berlin, while unexplained control system failures and drone incursions disrupted air traffic in Denmark, Norway and Germany. Different causes, same pattern: our critical infrastructure runs on fragmented, foreign-controlled digital rails. And these incidents are no longer rare, they are escalating. A US executive order could suspend access to mission-critical tools overnight. This isn’t theoretical: the US has already weaponised tech infrastructure in the China–Taiwan chip standoff and through semiconductor export bans.
For years, Europe has been painted as the “unsexy” player in tech: fragmented, over-regulated and bogged down by legacy systems; a market to be sold into, not one to build from. But those same traits: diverse markets, strict privacy laws, entrenched public-sector infrastructure, are now becoming strategic advantages. Fragmentation creates niche opportunities; regulation demands compliant-by-design products; legacy systems force innovation at the integration layer. Much like Europe’s energy transition, the push for digital sovereignty has reached a geopolitical tipping point. What was once a long-term ambition has become a near-term imperative. The foundations are forming. Landmark regulation (GDPR, Digital Markets Act, AI Act) is pushing the market toward transparency, compliance and interoperable alternatives. Public capital is aligned: the EU has committed €43B through the European Chips Act and sovereign cloud initiatives in Germany and France are accelerating. User appetite is shifting: governments, enterprises and SMEs are increasingly willing to adopt European-built solutions, driven by trust, compliance and increasingly, cost. As open-source foundations mature, the total cost of ownership for local tools is falling, especially when factoring in data residency, vendor lock-in risk and compliance overhead with non-EU providers. Whether it is in sovereign-grade cloud infrastructure (e.g. Evroc, OVHcloud), open-source AI foundations (e.g. Mistral AI, Black Forest Labs) or next-gen productivity platforms (e.g. n8n, Taktile), Europe no longer has to settle for second-best. Emerging vertical AI players like Prior Labs (tabular data), ElevenLabs (voice models) and Mirelo (audio models) further show that European teams can build at the frontier. At Heartcore, we see Europe’s sovereign tech revival led by three types of companies:
Together, they form the backbone of a resilient European tech stack. The opportunity is enormous. Europe spends €1.4T annually on tech, of which €265B goes to cloud and compute alone, yet EU-native providers hold <10% of that market. This isn’t just a gap. It’s one of the clearest arbitrage opportunities in global tech. If you are building the next layer of European infrastructure, we’d love to meet you. The next decade will reward founders who pair deep technical vision with local trust. Rebuilding Europe’s tech stack isn’t just necessary, it’s one of the clearest asymmetric opportunities in the market today. ~ Paulina Koschitz, Principal, Heartcore Capital
🇪🇺 Notable European early-stage rounds
🇺🇸 Notable US early-stage rounds
🔭 Notable later stage rounds
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Tuesday, October 28, 2025
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