In May 2025, the European Commission adopted the EU Startup and Scaleup Strategy, positioning startups, research and innovation as key priorities of its mandate, with the aim of closing the innovation gap between the EU and its global competitors and boosting competitiveness. By improving the conditions for startups and scaleups, the Strategy outlines a comprehensive set of actions to make the EU the best place in the world to launch and grow technology-driven innovative companies, including also legislative, policy and financial support measures to address the needs of innovative companies throughout their development.
In order to better understand the reasons behind the relocation of EU-founded startups and scaleups outside Europe, on January 12, the European Investment Bank (EIB), in collaboration with the European Commission’s Directorate-General for Research and Innovation and the Joint Research Centre, released the study “Drivers of Relocation by Innovative EU Startups and Scaleups”. The study addresses a critical challenge for Europe: the outflow of high-potential companies to markets that offer better access to capital, larger and more unified markets, and more favourable regulatory environments. Understanding the reasons behind this relocation is essential for creating effective support mechanisms that can help European startups scale globally while retaining their value creation within the EU.
According to the study, approximately 10% of EU scaleups have relocated abroad, with 85% of them choosing the United States. The trend is especially pronounced in sectors like digital technologies, artificial intelligence, and biotechnology, which are among the industries most likely to move outside the EU. From 2008 to 2021, nearly 30% of European unicorns (startups valued at over $1 billion) relocated their headquarters, with the majority moving to the US. Relocation is not simply a matter of international expansion; it represents a structural shift in business operations, with key functions like legal headquarters, R&D, and executive teams being moved abroad. This has serious implications for Europe’s ability to retain and grow world-class innovation leaders. The study highlights that when companies relocate, value creation, intellectual property, strategic decision-making, and investment flows increasingly shift outside Europe, weakening the continent’s long-term competitiveness and technological sovereignty. As the global competition for innovation intensifies, the ongoing outflow of companies risks undermining Europe’s efforts to close the innovation gap with the United States.
In response to this trend, the EU has taken several steps to support startups and scaleups through initiatives like TechEU, a financing platform created by the EIB, which is expected to mobilise €250 billion in total investments by 2027. The European Tech Champions Initiative, another key effort by the EIB, invests in large-scale venture capital funds that support tech companies during late-stage growth and before initial public offerings. Together with these initiatives, the European Innovation Council is also providing continuous funding and advisory support to help companies scale up globally while remaining within the EU. The EIC Global Business Expansion Programme, which focuses on the Americas and Asia-Pacific, connects European startups with corporate partners and public buyers to improve their visibility and market presence.
By addressing the barriers that push startups to relocate, Europe can create a more supportive environment for its most innovative companies, helping them to grow and thrive on the global stage while contributing to the EU’s long-term economic resilience.
Source: EIB
