BEEF BOURGUIGNON TURNED TEX-MEX (PART II)
(Welcome back. Part I made the case that Europe has built remarkable industrial champions and that ownership, recognition and capital tend to slip away from us. Part II is about what to do about that.)
Part II: Improving The Recipe and Starting to Enjoy It
Two Cautionary Tales
Before getting to the recipe, two failures are worth sitting with, because both are routinely cited as reasons "European industrial ambition doesn't work, let’s not even do it." The honest read is the opposite and the framing should be “European ambition works when the right model is in place, and lack of optionality should scare us not the failures”
Northvolt is the first – when the model is wrong one: The Swedish battery company was, on paper, exactly the kind of European industrial champion this essay is arguing for: European-funded, building strategic battery supply chain, backed by OEMs and public capital. It collapsed. The standard read is that European industrial ambition was misplaced. The honest read seems more uncomfortable. Northvolt was, fundamentally, an execution failure: production targets missed by a wide margin, quality issues, capital plan vastly outrunning operational capability. Strategic customers seem to have eventually walked away because the cells weren't being delivered to spec. That part was on the company. But there is a structural lesson too. Northvolt was built in the maximalist Western model – announce gigantic plans up front to attract capital, raise massive amounts on those plans, build at scale before the operating capability has been proven. That model works in the US sometimes; in Europe it has consistently been a disaster. Compare with Rimac: built slowly, in Zagreb, far from any of the hubs that were supposed to produce European champions. Engineering services for other OEMs to fund the moonshot. Multi-OEM customer base from the start, so no single strategic could pull the rug. Patient capital from wherever it could be found, accepted on its own terms.
Nokia is the second – when there is no optionality. Through the late 1990s and 2000s Nokia was the world's dominant mobile-phone maker, the technology export that defined Finland's economic identity, around 4% of Finnish GDP at peak. Within roughly five years of the iPhone's launch in 2007, Nokia had lost the smartphone era. Caught flat-footed, internally divided over operating systems, unable to bring itself to cannibalise its still-profitable feature-phone business until it was already too late. The interesting question is not why Nokia failed; the same pattern flattened Motorola and BlackBerry on the same product cycle. The interesting question is what happened to Finland afterwards. Lost decade economically. Oulu engineering ecosystem fragmented. Some genuine spinout activity (Supercell, Rovio, Jolla) but nothing close to the macroeconomic hole Nokia left. Modern Nokia survives as a respectable player in communications equipment of different nature, but the broader category-defining role and the GDP weight are gone, and Finland has had no replacement that fills that gap. That is what happens when a champion falls and the system around it has not yet built the next ones. Europe should already have heard this warning shot.
The Capital Question
There is a sharper point I want to make here, because it is the hardest part of this story for the industry we work in to look at honestly.
A lot of the noise about "Europe doesn't produce champions" comes from inside the European private equity, growth equity and venture capital community itself. We are, collectively, among the loudest voices arguing that the regulation is wrong, the capital is too thin, the talent is moving elsewhere. Some of that critique is fair; some of it is convenient. But there is an uncomfortable contradiction sitting underneath it. When the genuinely remarkable European companies do appear, we are not the ones setting the terms.
Look at the Rimac cap table. Look at where Spotify's biggest growth rounds came from. Look at who led the late-stage rounds for half a dozen European tech companies you can name. The pattern is the same: European investors participate in early rounds (if & when they participate) and then thin out as the cheques get bigger and the conviction required gets larger. By the time the company is defining its category, the lead investors are American, Asian, or Middle Eastern. The growth-stage seat at the table (where the value really compounds) is rarely European. There is a structural defence of this, and it is partly true. European LPs are genuinely more risk-averse than American endowments. Insurance companies and pension funds operate under solvency rules that don't reward big concentrated industrial bets. But the response to that constraint has been wrong: rather than evolving the LP layer or building vehicles capable of carrying the right kind of risk, the industry has converged on smaller, safer, software-shaped bets in saturated categories. And then complained, publicly and articulately, that Europe doesn't produce champions while reaching for excessive regulation as the explanation. The regulation explanation lets us off the hook. It is also incomplete.
We talk constantly, and rightly, about giving European entrepreneurs permission to fail. We need the same conversation about European investors. A continent that wants to produce champions and industrial champions in particular needs investors willing to lose serious money on bold bets, and an LP base willing to back them through some of those losses, because that is the only path through which a real winner ever gets discovered. American venture capital is not, on average, smarter than European venture capital. It is allowed to be wrong more often, at greater scale, in pursuit of bigger upside, under a framework built to sustain that. Permission and fit produce the asymmetric outcomes we keep envying.
There is also a compounding problem. When a European company gets built, scaled, and exited, and the lead investors capturing most of the value are foreign, that capital does not, in any meaningful sense, recycle into the next European story. It goes back to its home pools, where it funds the next American or Asian bet. We get the press releases, the local jobs while they last, the headlines about a "European success." They get the carry, the LP returns, and the next round of capital to deploy. Over twenty or thirty years, this is the difference between an ecosystem that compounds and one that quietly leaks value each cycle.
The corporate side of the same question is just as urgent. The Porsche-Rimac story, looked at carefully, is not really a story of failure. It is a story of correct corporate hedging that ran out of time. Porsche took an early-stage position in Rimac years before the European EV transition became existential, and most of Porsche's current and forthcoming high-performance vehicles use Rimac technology. When the legacy business hit a 93% drop in operating profit in 2025, the Rimac stake had become a meaningfully valuable asset that could be monetised to fund the restructuring. The exit isn't the failure mode, the exit is the proof the original bet worked. The right lesson is not "Porsche should have held forever." Sometimes you have to monetise. The right lesson is that every European corporate facing technological displacement should already have three or four Rimac-style hedges on the books, deep enough that one can be monetised in a crisis without erasing the optionality the others provide. Most European corporates have zero. Where they have invested in start-ups, it has often been corporate-venture theatre: small cheques, no commitment, treated as innovation marketing rather than as strategic insurance.
There is a clear historical lesson here. Kodak invented the digital camera in 1975 and chose not to scale it, in order to protect its film business. We know how that ended. The same pattern flattened Nokia, Motorola, BlackBerry. The cleanest counter-example is Apple. Almost uniquely among large-cap incumbents, Apple is disciplined about hedging itself against itself. The Beats acquisition in 2014 ($3 billion) looked at the time like an overpaid celebrity-headphone deal. Five years later, with Apple Music, it was the foundation of Apple's pivot into a services business now generating close to a hundred billion dollars in annual revenue. Apple is also the company that, every few years, quietly buys a small AI lab, a chip design team, a sensor company. Cumulatively, that seems to be how Apple keeps managing to be the company defining the next chapter rather than the one being disrupted by it. It is what European listed corporates, with very few exceptions, do not do. And what is striking is that the corporates most willing to behave this way in Europe seem to be family- or foundation-owned, not listed. Leica's parent has partnered with smaller specialists like Fjorden. Velux, owned by the Velux Foundation, launched Kompas VC. Riedel has spent forty years effectively running the world's most successful wine-category development engine. The structure best suited to genuine corporate hedging in Europe is, again, family or foundation ownership. The pairing of patient European corporate capital with disciplined European growth capital is the model that built ASML in a leaky shed forty years ago. There is no reason it cannot be the model again.
Cooking Our Own Recipe
This is where it gets interesting, because the answer is not to import yet another model. For instance: the Chinese model, heavy state direction, national champions, infrastructure as industrial policy, has produced extraordinary results in EVs and batteries, but is incompatible with European democratic and country specific structures; the American model depends on conditions Europe doesn't have and probably can't replicate at any reasonable speed. Both are coherent inside their own context. Neither transplants cleanly.
But there are ingredients in both worth taking seriously. From the US: belief in private capital, comfort with risk, faith in entrepreneurs, willingness to let companies grow large on their own terms. From China: willingness to designate certain technology categories as strategic infrastructure, and to coordinate public & private capital, regulation, procurement and political will around them.
Most of the ingredients of the European version already exist. As this essay has tried to show, Europe has multiple traditions of patient, mission-aligned capital whether foundation-owned (IKEA, Velux, Bosch, Rolex, Carlsberg), or family-controlled (Pagani, Koenigsegg, Riedel, much of the Mittelstand), or sovereign-anchored (Airbus), or public-investment-bank-backed (the GIB model). They look very different from the outside. They share something the imported VC model does not: a willingness to hold strategic positions through cycles, defended from quarterly pressure, with horizons measured in decades rather than fund lifetimes.
The European version of an industrial champion may also not look the way the American or Chinese versions do. The American model produces single mega-corporations (Apple, Google, NVIDIA). The Chinese model produces designed national champions (BYD, CATL, Huawei). Europe, structurally, is twenty-seven different markets, languages, regulatory regimes, consumer cultures. The companies that succeed here often do so by being deeply embedded in their region of origin and exporting outwards from that base. The European version of a champion may be a network of regional players, e.g.: Inditex and H&M defining global fast fashion between them, ASML plus Carl Zeiss plus Trumpf forming the indispensable global lithography cluster, Rimac plus Pagani plus Koenigsegg plus Pininfarina forming a network of European hypercar and EV-component specialists. The unit of competition is the network, not the single company. The unit of ownership should match.
The European problem is not that the patient-capital tradition is missing. It is fragmented, under-deployed at scale, lacking political support and disconnected from the founders and companies that need it most. We have already proved we can connect it deliberately when we choose to. Defence, over the last three years, has become exactly that kind of project: strategic priority, coordinated capital, regulatory alignment, procurement coordination, public-private cooperation, no apologies. Alexander Stubb put it bluntly at a recent press conference: “There is not one military in Europe or the US, for that matter, that is capable to conduct modern warfare in the way which Ukraine is doing now. That’s why they’re actually helping out in the Middle east”. And this happened in just 4 years from a country that 12 years ago couldn’t avoid losing a meaningful part of its territory to a foreign adversary. There is no fundamental reason the same logic cannot be applied elsewhere. From electrified and autonomous mobility, industrial battery capacity, brand stewardship, or a continent-wide charging and operating backbone, to biotech development, to defence, but also on the capital/financial industry. We, in the institutional capital world, should not be immune to the same criticism: the same way there is no European Google or Tesla there is also no European Blackrock or European Blackstone, we need to consistently go beyond the Top5 capital industry leaders to find the first European player). We should probably also take a hard look at the mirror, understand what is wrong with our models and stop blaming others…
A few things worth taking seriously, in that spirit that are close to some of the areas Rumo Ventures has been spending time on:
Treat electrified and autonomous mobility infrastructure as strategic, the way we treat defence. A continent-wide, state-of-the-art EV and AV charging and operating backbone, with coordinated regulation, public co-investment, and political cover. This would do more for European automotive sovereignty than any number of new VC funds.
Connect Europe's existing patient-capital pools, rather than build twenty-seven new national VC strategies. The capital already exists, in pension systems, insurance balance sheets, sovereign holdings, public investment banks, foundations, and family offices. What is missing is a coordination layer that allows it to co-invest at scale, across borders, in industrial businesses. Fragmenting that pool further by funding "Berlin's hub" against "Paris's hub" against "Lisbon's hub" guarantees nothing big gets done.
Direct co-investment with corporates and family-owned businesses. A huge share of the European corporate landscape is family or foundation owned. JV structures that let growth companies de-risk innovation against a legacy partner's distribution and balance sheet are far more useful in industrial categories than another seed fund. The current European VC scene is barely set up for this kind of partnership, and yet it plays directly to one of Europe's actual strengths.
Capital instruments designed for things that aren't software. Industrial businesses, supply-chain reshaping, hardware, materials, energy infrastructure. These need investors and instruments designed for their cash-flow profile and capital intensity. They also need bridge-stage capital that can act fast when an industrial company hits the inevitable hard middle of its scale-up.
Strategic procurement and regulatory access as industrial policy – intangible support. What Verne needs more than equity is cities. What Rimac Technology needed in its early years was a fast deployable Tier-1 contract more than another funding round. Public procurement and regulatory access at city and EU level are the most underused industrial policy tools we have, and they cost relatively little compared to direct subsidy.
Build European capital vehicles for European brands, and protect the instruments we already create. There is no continental, professional, long-horizon vehicle today that does for European industrial and luxury brands what Gulf sovereign capital has done for English football. That gap is why Lotus, Volvo and MG ended up with Geely and SAIC, why Leica is reportedly entertaining Chinese and Swedish bidders, why Bugatti/Rimac just moved its ownership anchor outside Europe. And once we do build the right instruments, we should be willing to keep them. The Green Investment Bank is the cautionary precedent: a working European patient-capital instrument with continued upside ahead of it, sold to a non-European buyer potentially at the lower end of its valuation range. Building these vehicles is half the job; defending them across political cycles is the other half.
We've made the case for European sovereignty in defence over the last few years. We need the same conversation about economic sovereignty. Not in the protectionist sense, but in the sense of having the tools, capital structures, and political will fit for purpose, so the next industrial champion built in a forgotten corner of Europe doesn't have to be financed, owned and ultimately harvested somewhere else just to make it to scale, and can help us transition into new technologies and new worlds.
So What Now
How do we stop trying to be Silicon Valley or Shenzhen, and start building the European model that we actually need, drawing on what works from both without pretending we are either?
How do we ensure the next Rimac gets noticed by European institutional capital, in places nobody is watching? The question is not even if there are more “Rimacs”, because there are (we see it at Rumo Ventures), how do we get there before someone else does?
How do we move from “27 national venture strategies” to one European growth strategy that actually crosses borders and maximizes the best of what each member state has to offer?
How do we give European investors the same permission to fail that we are finally beginning to extend to European entrepreneurs?
How to we elevate the importance of industrial & hardware businesses to form the backbone of Europe’s growth story?
How do we get European corporates to hedge their futures the way some of the best family-owned ones already do, by genuinely backing the disruptors that might cannibalise them, rather than waiting until necessity forces a fire sale?
How do we build European capital vehicles capable of doing for our iconic brands and people what Gulf sovereign capital has done for Premier League football clubs?
How do we get cities, regulators and public capital aligned around the “Vernes” and the next wave of technology in general, rather than buying the imported version a decade later?
How can the European capital/investment model & organisations evolve into something unique and fit for purpose that truly maximizes Europe strengths?
How do we bring the significant but scattered capital around Europe together to build economies of scale vs. solo acts?
How do we evolve corporate and political leaders to understand the importance of nurturing, interacting, supporting (both tangibly and, more importantly, intangibly) and contracting within an ecosystem that might hurt building in the short-term but will serve us tremendously well in the long-term?
And, honestly: how do we get to the point where the name "Rimac" lands without explanation in a European PE conversation? We all should wish them well, but even if they fail those learnings would be invaluable, and “everyone” should know about it and be able to learn from it.
Something is dramatically wrong in the system at the moment. Because the most damaging thing about the Porsche-Rimac deal isn’t that Porsche sold. It's that the conversation about what/who was actually being sold, and what kind of Europe we are or are not building behind it, barely happened – mostly because we don’t believe we can.
And there is no pretension here that these questions have easy answers. But a few things seem to be clear: changing the tone, caring for each other/the community, looking at what we are good at and understand how we can evolve them to become something new in itself that can make us better politically, economically, financially, socially, morally, is everyone’s responsibility, not just one person’s responsibility. And even clearer seems to be that it needs to start with a belief that we do it in our own terms!