Stripe co-founder John Collison says Europe becoming more competitive
Europe has become increasingly competitive with Silicon Valley when it comes to creating successful technology companies, said John Collison, co-founder and president of payments company Stripe Inc.
Collison, speaking at Bloomberg’s Sooner Than You Think technology conference in Paris on Tuesday, said it’s no longer true that startups have to be in Northern California’s tech-centric region to raise sizable amounts of venture capital funding. Collison, who is Irish, co-founded San Francisco-based Stripe with his brother Patrick in 2010, but he said that if he were starting the company now he might choose to do so in Europe.
He pointed to London-based food-delivery business Deliveroo’s $385 million in venture backing last year as evidence that Europe is now able to fund the creation of big tech companies. "There are plenty of spaces now where the market leader is out of Europe," he said. He cautioned that Silicon Valley still had an unrivaled depth of talent compared with other regions.
Stripe -- which also helps small businesses in the developing world incorporate in the U.S. -- was valued at $9.2 billion in 2016.
Stripe competes with established players such as PayPal Holdings Inc., which agreed to purchase IZettle AB, the Swedish fintech company, for $2.2 billion last week. Both companies are challenged by Adyen, a Netherlands-based firm that manages global payments for many large internet businesses and recently displaced PayPal as payments handler for EBay Inc. All the companies are in an increasingly crowded market for flexible payment technologies that circumvent banks or traditional financial-services companies.
Collison also said that he was concerned about the consolidation of power in the hands of just a few very large U.S. tech companies. Although he did not mention the companies by name, he referenced the five largest companies in the U.S. by market capitalization as being tech companies. These include Apple Inc., Alphabet Inc., Amazon.com Inc., Microsoft Inc., and Facebook Inc.
"I am not enthusiastic about having a small number of very large companies that will make it harder for newer entrants to come along," he said.
He said he was worried that Europe’s new data privacy law, the General Data Protection Regulation, which takes effect on May 25, may have "unintended consequences" that will wind up hurting small tech startups while only making things easier for the large U.S. tech businesses that were in many ways the target of the new rules.
Collison compared these potential risks to the banking rules passed in the U.S. after the 2008 financial crisis, which were designed to prevent a few financial firms and banks from being "too big to fail." Instead, the rules only encouraged further consolidation in the financial industry because the largest players could most easily afford to comply with the new regulations while smaller firms struggled with the additional red tape.
He said regulators should be wary of similar issues when they pass new regulation affecting tech companies.