Why Europe's Tech Firms ♥ New York - by Matthew Campbell and Zijing Wu

Even with some successes, such as online jukebox Spotify, Europe’s tech industry continues to lag the U.S. Total venture capital investment in the third quarter of 2011 in the U.S. outstripped that in Europe by almost eight times, according to the European Private Equity and Venture Capital Association and the National Venture Capital Association. Only one of the 10 largest global technology companies by market value, Germany’s SAP (SAP), is European. The value of tech companies in the U.S. is $3 trillion, according to Bloomberg data, almost nine times the $351 billion in Western Europe.

But after years spent lamenting their local technology scene, Europe’s startups and their venture capital backers are finally bullish about building businesses on their home continent. They just don’t want to list their shares there. 

Instead, companies including Irish communications software developer Openet and Prague-based antivirus firm Avast Software are headed for initial public offerings in New York, spurred in part by mounting investor interest in Facebook’s $5 billion share sale. “Ten years ago, we would have expected that the majority of the companies we backed would go public in Europe, with a minority in the U.S.,” says Barry Maloney, founding partner of London-based venture capital firm Balderton Capital. “It’s been completely the reverse.”

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