Not too far in the future, camper lovers could be going on holidays that are much kinder to the very nature they are looking to enjoy. At the beginning of this week, London and Vancouver-based startup First Hydrogen revealed the design for its next-generation zero-emission Recreational Vehicle (RV).
The concept has been developed in collaboration with Switzerland-headquartered EDAG Group. Its introduction follows the presentation of First Hydrogen’s next-generation light commercial vehicle (LCV), also a result of a partnership with the global mobility expert.
The company states that the first generation of its fuel cell electric vehicles (FCEV) have already entered road trials with members of the UK Aggregated Hydrogen Freight Consortium (AHFC), starting with fleet management company Rivus.
They will be tested for several different use cases, including delivery of groceries and parcels, health care and roadside assistance. First Hydrogen will then use data and feedback from the road trials to inform the development of its Generation II vehicle.
Hydrogen fuel cells superior to battery EVs?
The <3 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!
First Hydrogen’s vehicles are powered by high performance Proton Exchange Membrane (PEM) fuel cell stacks supplied by Ballard Power. This generates electricity by converting chemical energy stored in hydrogen fuel into electrical energy, using a proton-conducting polymer membrane as the electrolyte. They operate at relatively low temperatures (50 to 100 °C) and can quickly vary output to meet shifting demand, which makes them a good fuel cell choice for the automotive industry.
The company says this gives it a leg up on regular EVs as the hydrogen FCEV can carry heavier payloads. Furthermore, it takes much less time to refuel the hydrogen than it takes to recharge an electrical battery. The next-generation LCV range is projected at 500+ km.
“These concept vehicles provide a glimpse of our company’s future and give a clear indication of our brand direction within the LCV space,” said Steve Gill, CEO of Automotive for First Hydrogen.
First Hydrogen’s next-generation fuel cell LCV will be informed by data from Generation I vehicles currently in road trials. Credit: First Hydrogen
While the quest to decarbonise road transport is admirable in and of itself, there is also a solid financial foundation for the product: the global LCV market is projected to reach €686 billion by 2030. For the RV market, the corresponding prediction for the end of the decade is just under €107 billion.
In Europe, RV sales hit an all-time high in 2021 with 260,000 new vehicles sold, very likely spurred by restrictions following the global health crisis. Here, First Hydrogen identifies particular opportunities with an often eco-conscious campervan crowd.
“The First Hydrogen campervan is an example of how we see hydrogen fuel cell and other electric vehicle technologies having wider applications,” Gill added.
Looking to increase green hydrogen production
As with most startups working with hydrogen, First Hydrogen has to ensure that there will be enough to supply its products. No one will purchase a vehicle that cannot be powered after all, no matter how zero-emission it may be.
Furthermore, the hydrogen needs to be green, meaning produced using renewable energy, otherwise the eco-friendly concept goes out the window. In summer last year, First Hydrogen applied for funding from the UK Government’s £240 million (€272 million) Net-Zero Hydrogen Fund (NZHF).
The company’s two green hydrogen production projects will have an initial capacity of 40MW each and be situated in the Greater Manchester area and the Thames Estuary. The second round of NZHF competition is currently underway for both development and capital expenditure.
Get the TNW newsletter
Get the most important tech news in your inbox each week.
When Russia invaded Ukraine in February last year, work stopped at thousands of Ukrainian businesses – including carbon capture-focused startup Carbominer.
As tanks approached the capital Kyiv, inhabitants of the city, including employees of the company, were forced to flee for their own safety.
Among them was Viktoria Oseyko, chief marketing officer, and her father Nick, founder and chief executive officer of Carbominer. But Ukraine soon retook control of the area.
“When the Russian forces were kicked out of the Kyiv region, it was like three or four weeks and the managing team decided to get back,” explains Oseyko.
Nick and Victoria Oseyko. Credit: Carbominer
The <3 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!
She and her colleagues have since completed a pilot trial of their machine that can capture CO₂ from the air so that it can be piped into greenhouses. This heightens plant photosynthesis, which helps farmers grow crops.
Carbon capture could prove essential component to halt pipeline warming
Carbominer is just one among many eclectic startups in Europe racing to develop technology that can capture carbon dioxide, a greenhouse gas that accounts for66% of global warming.
Although reducing emissions is generally viewed as the key to tackling climate change, the UN, in a report published last month, highlighted that CO₂ removal might be necessary if the world is to achieve net zero emissions and limit warming to 1.5˚C above pre-industrial levels. This is due to what is called committed warming – the future warming in the pipeline as a result of the greenhouse gases we have already emitted.
It takes time for a shift in energy balance to show up. This means that even if we were to stop emitting CO₂ and methane – the leading contributors to climate change – tomorrow, global temperatures would still keep rising as the gases linger in the atmosphere.
New EU location to circumvent geopolitical challenges
The machines designed by the 10-strong team at Carbominer are still in development but Oseyko says that, by the end of the year, they hope to have a device that can capture 46 tonnes of CO₂ annually.
This is fairly small-scale but the firm, which has raised $900,000 (€822,000) in funding to date, hopes that it will be able to provide captured CO₂ to agricultural customers at a relatively low cost.
“We are going to place the machine on site and then bill per usage of CO₂,” explains Oseyko.
The team at Carbominer aims for their machine to capture 46 tonnes of CO₂ per year. Credit: Carbominer
She adds that among the challenges faced by Carbominer, and many other Ukrainian companies, is the difficulty of importing materials into the country at present. And the fact that, under martial law, male members of staffcannot currently leave Ukraine, which makes engaging with the industry and visiting potential clients difficult. To mitigate this, the firm plans to open an office in neighbouring Poland this year, where Oseyko will be based.
Carbominer’s device consists of two linked machines. One has a large fan that draws air towards a sorbent, which captures the CO₂, and the other machine uses electrochemistry to release the CO₂ again when needed.
But one of the key difficulties with direct air capture systems is the need to move air around in order to get at the CO₂ within it – this requires energy. Oseyko says that, when fossil fuel-based electricity is used to power Carbominer’s system, it stops being carbon negative — but the firm intends to use renewable energy only.
Hitching a ride on existing air flow
In Finland, the team at Soletair Power has been thinking about how to get around the energy consumption issue.
“You need to move quite a lot of air in order to capture the CO₂. In buildings, that air is already moving,” says chief executive officer Petri Laakso.
Soletair Power’s carbon capture tech essentially piggybacks on existing ventilation systems in buildings, which transport indoor air – rich in CO₂ breathed out by occupants. The firm has 10 employees and has received €1.5 million in funding to date, besides an undisclosed amount in grants.
The amount of CO₂ captured depends on various factors including the volume of air moved in each case but Laakso says systems already installed by the firm capture on the order of tens of kilos of CO₂ per day.
Will net-zero plans drive deployment?
Again, industry values the captured CO₂. Soletair Powerhas installed its technology in an office in the city of Vaasa, Finland, where the trapped CO₂ is eventually used in the manufacture of concrete so that it can be embedded permanently in building blocks.
“This is a valid technology,” says Dawid Hanak at Cranfield University. “It’s just how much you can capture and how scalable that is.”
Credit: Soletair Power
Laakso says his firm has already installed systems in Finland and Germany and will install another this summer. While individual deployments will not capture enormous amounts of CO₂, he adds, hundreds or thousands of buildings might eventually use the tech, vastly increasing its impact.
“There are many real estate companies promising that they will be carbon net zero by 2028 and they are turning to us,” says Laakso.
The cost? It varies depending on the installation but currently a large system can remove CO₂ for about €500 to €1,000 per tonne. Many firms are hoping to slash the cost of removal to $100 (€91) per tonne or below, eventually, so that CO₂ capture becomes affordable at the scales required to reach net zero.
Competitive advantage despite efficiency concerns
Carbon capture tech has its pros and cons. Stuart Haszeldine at the University of Edinburgh notes that there are easier methods of reducing humanity’s climate impact.
“The simplest way of addressing the climate issue is actually to become more efficient and get more value out of the same energy,” he says. Insulate buildings, for instance, so they require less energy to heat.
However, reducing one’s carbon footprint will become increasingly attractive commercially, argues Haszeldine as he suggests that firms able to lower their overall CO₂ output will have an advantage in terms of revenue and perception.
Plus, direct air capture helps to address CO₂ emitters that are spread over large areas and therefore hard to control, such as farming. If you can’t catch the CO₂ reliably at source, at least you can pull it out of the atmosphere later.
Using existing farming techniques to store carbon for millenia
Even some difficult-to-decarbonise industries could soon play a bigger role in seizing CO₂. In Ireland, a startup called Silicate has come up with a way of treating agricultural land so that it draws carbon out of the air and into the ground where a chemical reaction takes place, locking it down.
Silicate currently employs ten people and has not yet raised funding other than via grants, including $100,000 (€91,000) as a winner of the Thrive / Shell Climate-Smart Agriculture Challenge.
Surplus concrete is ground to dust before applying it to farmland. Credit: Silicate Carbon
Maurice Bryson, founder, explains that the process relies on unwanted or waste concrete, which can be crushed into a powdery material – “like a fine snowdust”, he says. By spreading this over a field, say every four years, farmers can maintain a high (more alkaline) soil pH, which is better for growing crops.
Farmers already de-acidify their soil usinga technique called liming but the difference with Silicate’s approach is that the concrete reacts withcarbonic acid in the soil, removing CO₂ from the air. The substances formed by this process, bicarbonate and calcite, ought to store carbon for many thousands of years.
Reduced costs with increased investment?
The firm aims to achieve removal rates of two tonnes of CO₂ per hectare, per 10 tonnes of crushed concrete applied to such an area – during the course of one year.
“The process is very passive, once you apply it to the field it gets to work itself,” says Bryson. “A key win, we think, for us is there is a possibility for the cost to fall below that $100 per tonne [of CO₂] price point.”
While direct air carbon capture technology is still in its infancy, investment in carbon capture and storage more than doubled over the past year, reaching an all time high of nearly €6 billion in 2022. With so many startups ploughing this field, and rising urgency over reaching net zero globally, these technologies will likely have a noticeably bigger role to play in the coming years.
Get the TNW newsletter
Get the most important tech news in your inbox each week.
Anyone who has ever experienced phantom ringing in their ears knows that it is a nuisance to say the least. Those who have tinnitus – hearing continuous ringing, buzzing, humming or even roaring sounds – often experience anxiety and depression as a result.
The condition affects approximately 15% of the global adult population. However, treatment has remained elusive, with those afflicted left to find their own ad hoc mitigation solutions.
Neuromod, a medtech startup from Ireland, is looking to change that. The company has just received €30 million in funding to further commercialise its tinnitus treatment device, Lenire.
A different kind of electrotherapy
With its patented bimodal neuromodulation technology, Lenire works by sending mild electrical signals to the tongue, while patients listen to auditory stimulation through headphones.
Thus far, over 700 patients have participated in clinical trials with the device, which consists of three parts. A handheld, lightweight controller allows the user to control timing, intensity and synchronisation of the stimuli, while Neuromod’s proprietary Tonguetip module sits in the user’s mouth, administering electrical pulses to the top of the tongue. Simultaneously, Bluetooth headphones deliver customised sound stimuli to the auditory nerve.
The <3 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!
The device catches the powerful streams of water with underwater rotors attached to adjustable legs. Engineering and maintenance can then raise the legs above the surface for easier access. Furthermore, the rotor design can be reversed to adapt to different tide cycles.
Part of broader UK net zero strategy
Orbital will situate the new part of its Orkney project adjacent to the EMEC. The Option Agreement is for 30MW, which the company says would equate to approximately 12 new O2 tidal turbine devices across the site. Orbital has also confirmed it has the necessary grid connection in place to service the project.
Andrew Scott, CEO of Orbital Marine Power, commented on securing the Crown Agreement, stating,
“As the UK looks to accelerate the decarbonisation of its energy system, we firmly believe tidal projects can bring unique benefits while harnessing a perfectly predictable and secure source of renewable energy. We’re proud to be building that vision in Orkney with this investment in our Westray Project.”
Andrew Scott, CEO of Orbital Marine Energy
Last year, Orbital also received strategic investment from Franco-American offshore oil contractor TechnipFMC to “accelerate market scale-up and deployment,” with TechnipFMC becoming a shareholder of the company.
Ocean energy could play a big part in energy transition, but needs to scale fast
The oceans do indeed have a great deal to offer when it comes to renewable energy. Tidal energy projects have long held significant potential, but is still an as-yet-underdeveloped energy source. In a 2018 report, the IEA named off-shore renewable electricity generation a “rising force in global energy.”
However, it needs to be deployed much more rapidly, hitting a target output of 27.0TWh by 2030 for a net-zero by 2050 scenario. This means it needs to grow at a rate of above 33% per year from now until the end of the decade, which would take several fleets of Orbital’s O2s.
But things are picking up. As reported by Power Technology, in the UK in 2022, four projects were awarded contracts for a total of 4.08MW.
Encouraging to see positive signals from @energygovuk in their announcement today of a ringfence allowance to support #tidalenergy in AR5 of this year’s Contracts for Difference scheme. 🙌https://t.co/1YbxIWIrkN
Alistair Carmichael, MP for Orkney and Shetland, commented on the new project with Orbital,
“These are exciting times for tidal stream energy. Progress with Orbital’s Westray project is a vote of confidence in the potential here in the isles and demonstrates exactly why expanding grid capacity for Orkney has been so important.
“This good news is also evidence of the need for a more robust strategy from the government on tidal stream deployment, including continued and expanded backing in the next round of Contracts for Difference funding. We need to continue to ramp up development in the years to come.”
With a slew of tidal and ocean energy startups vying for the shores around the UK, perhaps this technology could be one of the keys to non-invasive and unobtrusive reliable renewable energy generation. Let’s wave and see.
On Christmas morning last year, dozens of households in the Republic of Ireland woke up to a hot water tank that had been heated overnight – for free.
These households were part of a pilot run by the pioneering social enterprise EnergyCloud, which has found a way of using surplus wind energy on blustery nights to help people who are experiencing fuel poverty.
All it takes is the installation of a special switch that allows EnergyCloud to activate water heating when there is bountiful energy on the grid. People can still heat their hot water tank via a manual switch whenever they choose and they can also switch the whole system off if they are away from their home for a time.
“We can remotely send a message that clicks on your hot water and heats up your immersion at night-time,” explains Derek Roddy, co-founder of EnergyCloud. He adds that free water heating was delivered multiple times last year, not just on Christmas morning.
Energy prices in Europe have soared in the last couple of years, due to shifts in demand during the pandemic and, more recently, Russia’s invasion of Ukraine. This has triggered a worrying rise in fuel poverty but efforts to help are afoot. Renewables, in particular, could be coming to the rescue.
EnergyCloud is a non-profit social enterprise with a voluntary board of 11 people. Funds and technologies are donated by EnergyCloud partners, including Roddy’s firm Climote, energy provider SSE Airtricity and Amazon Web Services.
People who receive free hot water get text message alerts so that they know when it is available. “It is making a difference in people’s lives,” adds Roddy.
Hot water tanks, he says, can be reimagined as batteries: “A typical hot water tank would store 6 kWh of energy in hot water, which is a staggering amount of energy.” If you added up all the hot water tanks in Ireland, you would get a total of around 6 GWh.
Costing the surplus
Surplus energy from wind farms is an increasingly expensive problem. In 2022, the UK’s National Grid paid £215 million to shut off wind generation when the electricity wasn’t needed – a cost that gets passed on to consumers, further raising prices. EnergyCloud has found a way of using surplus energy while also helping people who might be struggling to pay their energy bills.
Everyone, in theory, benefits from this – not least because a lack of heating and hot water can cause or aggravate health problems. The UK’s Building Research Establishment estimates that cold homes, in England alone, cost the National Health Service more than half a billion pounds each year.
Other initiatives to help households experiencing fuel poverty in the past have included a programme in Scotland that installed Tesla Powerwall batteries in more than 100 homes, though Roddy notes that the costs are minimal when you are able to divert energy to existing hot water tanks instead.
EnergyCloud says it aims to install its remote-controlled hot water tank switches in at least 10,000 homes by the end of the year and the enterprise is already planning to expand into Northern Ireland and Scotland.
“It’s a really interesting concept,” says Marilyn Smith at the non-profit EnAct, which researches social issues around energy consumption. However, she notes that some people might hesitate to allow the installation of remotely controlled equipment in their homes. So far, that hasn’t been a barrier for EnergyCloud. All participants have been voluntary and Roddy says 65,000 additional homes have already expressed an interest in joining.
A ‘public good’
Smith argues that emerging energy companies are increasingly presenting renewables (and surplus electricity) as a potential “public good”. Other European ventures have sought to help low-income households around the world access renewable energy directly. Take Trine, a 16 person-strong firm based in Sweden that allows people to invest in solar energy projects in Africa, Asia and Central America. More than €80 million have been raised via the platform so far.
“There’s plenty of technology out there – batteries, panels, converters,” says Trine founder Christoffer Falsen. “It’s really about being able to accelerate that with the injection of capital.”
He explains that Trine-funded schemes can, for example, allow a household in Kenya to purchase a solar panel in instalments, enabling them to access cheaper electricity and move away from fossil fuel generators, which are extremely common in much of Africa. To date, nearly 3 million people worldwide have accessed electricity from renewables funded by Trine’s investors.
Although it was “unthinkable” before, Falsen says Trine may soon allow investors to support renewables projects in Europe as well: the rise of energy prices on the continent means increased profitability from energy projects, so the potential returns have risen, too. Previously, European ventures were not attractive enough in this regard.
“I think there will be a bigger push for energy independence and that, I think, will be very good for this entire sector,” says Falsen. He notes, however, that there are questions over whether high energy tariffs in Europe will continue, adding to uncertainty for investors.
Electricity at cost
Europe’s growing cadre of “energy communities” – groups of households that buy into generation projects such as small-scale wind farms – already understand that energy independence can shield people from the highest bills.
A long-running example is the community in Eeklo, Belgium that benefits from wind energy harnessed by EcoPower. It provides electricity to customers more or less at cost.
“We have a lot of wind in our region,” says Jan de Pauw, project engineer at EcoPower. There are 65,000 EcoPower members in Flanders, of which a few thousand live in Eeklo. The company has a headcount of around 50 people, operates a total of 20 windfarms in Flanders, and has raised €60 million of citizen-invested capital to date.
“People become members of EcoPower not because they want to earn a lot of money and have a high dividend but they want to have access to locally produced energy at a fair price,” says de Pauw.
The advantages have become clear during the last 12 months, as energy bills rocketed in Europe. EcoPower estimates that its members saved around €700 on their total bill for 2022. To become a member, households must buy a single share for €250 but people experiencing fuel poverty can pay this off in tiny instalments of just €3.50 a month for six years.
With more and more renewable generation on the continent, expect to see increasing opportunities for sharing or cheaply distributing energy in the forms described above.
There could be other impacts of all this, too, as well as helping people in low income or fuel-poor households. Roddy says that, once participants in the EnergyCloud pilot heard that their free hot water would come from local wind farms, they expressed glowing acceptance of renewables. (TNW asked to speak to a participant but were told none was forthcoming.)
Big, white and pointy onshore turbines have occasionally been described as eyesores by some. But schemes such as EnergyCloud, which make clear the potential financial benefits of renewables, could change attitudes, argues Roddy.
“People got this straight away. This was not a hard sell,” he says. “I think we’ll have people literally approaching their elected representatives insisting that there’s wind farms and solar farms built in their area.”
With a global recession impending, Europe’s startups are feeling the pressure. Investment opportunities are dwindling and customer acquisition is getting harder. So what can startups do to survive during this time?
From hiring freezes to spending cuts, founders are making preparations to get through the recession unscathed. There are many ways to cut spending during this time that don’t involve layoffs, it’s just about being a little savvy and thrifty, and looking out for programs that are designed to give startups a boost.
Here’s your go-to checklist for smart ways startups can cut spending and save during the recession:
1. Scrap the office and go fully remote
The new TNW Newsletter
Getting to the heart of the European tech and startup scene
Thanks to the pandemic, most people are now accustomed to working remotely and interacting with their teams virtually. Although many businesses have been navigating back towards being in-office at least a few days a week, it costs a lot to hold a space that’s not being used all the time.
Either ditching the office altogether or moving to a co-working space can save a lot of money. Kate Lister, President of Global Workplace Analytics estimates, “a typical employer can save about $11,000/year for every person who works remotely half of the time.” For those that go fully remote, asynchronous working will help employees maintain flexibility during the day, and create a work-life balance that suits them and allows them to be most productive.
If you’re worried about maintaining your company culture, gaining some tips and inspiration from businesses who were operating remote models before the pandemic can be useful. Buffer and Zapier, for example, are both remote-first businesses, with global teams collaborating together from all over the world. Both businesses find that maintaining frequent, open communication is essential for the success of their remote teams.
One important thing to remember is that fully remote companies should always factor in some budget for in person team-building events throughout the year to foster team spirit and connection.
2. Choose your cloud provider wisely
Cloud services are used by many startups for everything from basic tasks like data storage, to the more advanced functions like AI and machine learning. But many also end up in a situation where they accept free cloud credits and end up taking on products and services they don’t necessarily need.
Choosing the right cloud provider can be tricky, especially as the business develops and your needs change. Ideally, you’d want the flexibility to be able to reconfigure your cloud architecture or even switch providers as these needs change, however, many startups get locked into contracts with high egress fees.
Adopting a multi-cloud strategy could be a good solution allowing you to select the services most suited to each of your team’s needs and take advantage of reserved instances and other discounts. There are also some new cost-saving cloud technologies on the market now, such as Serverless technology and Kubernetes autoscaling.
Also be sure to check out Scaleway’s Next 100 Startups Shaping Europe’s Future Program designed to support up and coming startups during the recession. If selected, Scaleway will cover up to 80% of your cloud infrastructure costs over a period of 24 months.
3. Optimize organic reach, rather than paying for a boost
Did you know, around $70 billion was spent on paid search ads in the US in 2021?
Instead of throwing money at ads, focus on organic marketing strategies that will reap the same benefits at no cost.
Best SEO practices to help with organic traffic include staying on top of keyword targeting: monitoring analytics of keyword performance will help you to continuously have oversight of what’s working and what can be improved, so you can keep optimizing your approach and improving your reach.
Another strategy is to optimize the landing page itself: making sure it has a load-friendly design and user experience (UX), that the content provides value to the audience, and that you have backlinks to help the user move across different pages of your site.
All of these factors will improve your search engine ranking. In addition to being a cheaper option, organic marketing has a lot of business benefits over paid ads too. When your content is optimized more strategically, it’s likely to last longer and see a prolonged flow of traffic, unlike paid ads that are only profitable when they’re live. It also helps to build a more loyal following as you’re engaging the audience at every step of the funnel.
4. Cast your net in the freelance talent pool
Most companies are introducing hiring freezes, but what if you have some talent gaps in your team that need to be filled for the business to continue developing?
Instead of hiring full-time, consider contracting freelancers or agencies to take on jobs on a project basis. Consider which positions you need on an ongoing basis and which you only need on an occasional or seasonal basis. Hiring freelancers instead of full-timers can save employers around $11.6 an hour per employee.
In addition to monetary benefits, outsourcing is a great way to access different skill sets, expertise, and strengths tailored to specific projects in a way that’s not possible otherwise.
There’s a wide pool of options to choose from all over the world and, of course, when you find a good and reliable freelancer, there’s no reason why you can’t hire them for additional projects and build up a good relationship as you would with a full-time worker.
5. Declutter your box of tools and subscriptions
In the digital age, companies are using multiple tools and apps for their business operations. Sometimes we have so many tools and subscriptions that we don’t even remember what they all are or what they’re for. Having a good clear out and canceling subscriptions for anything that’s not being used will reduce unnecessary spending.
There are a lot of tools that have similar functions, so having a browse to compare the offerings might mean that you’re able to find a better deal that suits you and saves a bit of money. Some multi-use platforms and tools additionally consolidate and integrate functions, so you get more bang for your buck rather than having a separate tool for every task/team.
6. Take advantage of funding opportunities
You might be taking all the measures you can to save money, but sometimes an extra helping hand can provide a bit more security. There are several open programs, both EU-funded and privately sponsored, to support startups during the recession and enable them to continue growing and scaling:
The European Innovation Council (EIC) for example, has a range of funding opportunities to back everything from research and mentoring to building business plans to scale and develop for market.
As mentioned earlier, Scaleway’s 100 Startups program is providing cloud funding support for 24 months.
Climate-KIC has a number of grants available specifically for startups that are accelerating the transition to zero-carbon and climate resiliency.
For low-tech SMEs wanting to develop AI techniques, StairwAI is a good option.
Eurosearch is a great place to find a range of funding opportunities, specifically tailored to different types of startups.
There’s no need to panic as the recession approaches. Instead, it’s time to get smart about spending, find the best options and discounts available, and always be on the lookout for the many funding programs and opportunities out there!
The European Union is on a mission to curb the power of big tech. In recent years, the bloc has doled out vast antitrust fines to Silicon Valley giants, set global standards for data privacy, and proposed a raft of digital regulations. Yet critics say the rules have been ineffective.
Analysts claim the legislation has failed to protect competition, while giving companies routes to avoid enforcement. In 2023, the bloc has grand ambitions to change that.
A key component of the plans is the new Digital Markets Act (DMA). The landmark legislation prohibits platforms from ranking their own products more favorably than those of third parties, and from processing data collected from different services. Fines for single infringements can reach 10% of the offenders’ global turnover, and up to 20% for repeated violations. In May 2023, the new rules will start to apply.
The act is the cornerstone of two complementary objectives for the EU: reducing big tech’s dominance and fostering European challengers.
To find out how these plans will unfold next year, TNW asked an array of tech experts for their predictions for 2023.
Building competition
The impact of the DMA was a common topic in our experts’ forecasts. Amandine Le Pape, COO of secure messaging and collaboration app Element, and Matthew Hodgson, technical co-founder of the Matrix open standard, both lobbied for the regulation. The duo is optimistic about the impact on competition.
“Big tech is being forced to embrace interoperability, which will unleash a new era of innovation,” said Le Pape. “Consumers and businesses will have more choice, better features, and improved privacy. Messaging is finally catching up with the openness of the web and email.”
Amandine Le Pape, COO of Element.
Hodgson, meanwhile, pointed to the effects on opening up access.
“The DMA stipulates that big tech must open up its APIs to enable widespread interoperability,” he said. “It’s a huge step forwards, but the best interoperability comes from a widely adopted open standard rather than a tangle of bridges — as demonstrated by both the web and email.”
“The DMA will force a change in behavior.
Supporters and opponents alike agreed that the DMA will have deep repercussions.Geoff Blaber, the CEO of analyst firm CCS Insight, envisions its influence extending far beyond European borders.
“We predict that the DMA will force a change in behavior from large tech players in Europe that is likely to ripple through business operations globally,” Blaber wrote in a recent report. “It will also further motivate US politicians keen to avoid a scenario in which Europe defines the antitrust agenda without US involvement. A degree of harmony and consistency between US and EU legislation would be a clear advantage but is by no means assured.”
Making business plans
Increasing competition could leave gaps for European challengers to enter. The EU, however, has historically struggled to turn its world-leading research into big tech companies.
One barrier is the notoriously slow and inefficient transfer of IP from academia to the economy. This problem is illustrated by the EU producing more research papers than the US, but turning far fewer into commercial applications.
According to Luigi Congedo, a venture capitalist and Innovation Advisor at marketing firm Clarity, this weakness can be reduced by changing the EU’s investment framework. This, he argues, could stimulate a more effective technology transfer — and prevent promising startups from being acquired by Silicon Valley giants.
“We need to create our Google, Facebook, and Microsoft, and, in order to do it, create a better environment to compete and do business across the continent,” he said. “If we fail in creating a real European platform for innovation and instead maintain the current ‘country-based model,’ all our emerging businesses will end up becoming M&A targets for American multinational companies.”
“I expect more openness.
Another issue for tech businesses in the EU is integration across member states. Companies have long complained about the complexity of navigating the union’s tax and employment requirements. Congedo predicts the bloc will address these challenges.
“I expect more openness to make recruitment and hiring easier across states, and also for foreigners like American businesses to hire in the EU,” he said.
Luigi Congedo, a venture capitalist and Innovation Advisor at Clarity.
Deeper tech
In its effort to nurture homegrown businesses, the EU has targeted legislation at specific areas of tech. A notable example is the European Chips Act. Proposed in February 2022, the framework aims to encourage semiconductor production in the union.
As of 2022, Europe accounts for less than 10% of the global production of semiconductors. The European Commission wants to ramp that up to 20%, by plowing €43 billion into the sector.
Mark Lippett, CEO of chip specialist XMOS, has mixed expectations for the legislation. While he welcomes the investment, he’s worried that the bloc will wrap the sector in red tape.
“Providing funding for businesses in a supply-threatened environment offers some obvious fail-safes in times of trouble,” he said. “However, EU projects can become somewhat mired in bureaucracy, and the velocity can be sucked out as a result.”
“This will help fuel innovation.
Another focus area for the EU is artificial intelligence. The European Parliament is currently finalizing its flagship AI Act, which will place stringent rules on high-risk artificial intelligence systems.
IT companies hope the legislation boosts European innovation. Matt Peake, Global Director of Public Policy at Onfido, an ID verification firm, believes it could provide regulatory clarity, without the burdens of excessive compliance and operational costs.
“This will ultimately help fuel innovation in AI, which helps to reduce bias, and drive more inclusive online services,” he said.
Ultimately, the EU hopes to stimulate innovation by leveling the playing field. It’s an approach that’s attracting imitators around the world.
“The question is whether innovation is best fostered broadly through open competitive marketplaces or determined by a minority of platforms operating at significant scale,” said Geoff Blaber, CEO of CCS Insights. “Consensus has undoubtedly shifted to the former.”
The European Union has an unusual IT strategy. While the US prioritizes the development of global tech giants, the EU focuses on becoming the sector’s leading regulator.
In 2022, the bloc launched two sweeping sets of stringent new rules: the Digital Markets Act (DMA), which seeks to bolster competition in online services, and the Digital Services Act (DSA), which aims to protect people from online harm. Analysts expect the regulatory drive to accelerate next year.
“The only thing we can be certain about is that there will be more regulation next year, and increased enforcement of it,” said Alan Calder, CEO of GRC International Group, a global provider of IT governance, risk management, and compliance solutions.
To gauge the details, TNW asked IT experts across the bloc what they predict from the EU’s policies in 2023. All expect significant changes in legislation, with certain technologies particularly prominent in their forecasts.
Tighter security
Our experts expect significant developments in cyber security regulation. Kostas Rossoglou, Shopify’s Head of Public Policy and Government Affairs for EMEA and International, highlighted the importance of the Digital Operational Resilience Act (DORA).
The recently-adopted regulation aims to harmonize the financial sector’s approach to cybersecurity. To comply with the rules, organizations will need to review legacy IT systems and potentially invest in new software potential investment in new software. This may be costly in the short term, but Rossoglou is optimistic that it will pay off. He expects levels of security to increase, thereby limiting attacks, reducing downtime, and saving cash.
“Although it will be a couple of years before mandatory compliance, it will eventually put financial organizations in a much stronger position for handling outages, leaks, unauthorized access, and data loss,” he said. “Within the highly sensitive information that the financial sector holds, this is incredibly important.”
“It’s never too soon to be aware.
Another proposal working its way through the EU is the Cyber Resilience Act. This regulation will establish cybersecurity requirements for connected devices, which will provide consumers with transparency on practices, testing, and general functions.
The legislation is currently going through a consultation process. Rossoglou recommends organizations keep a close eye on its progress next year.
“It is likely to be a year or two before it is finalized and then organizations will be given a 24-month transition period to comply,” he said. “However, it is never too soon to be aware of upcoming changes. Regularly monitoring for updates will ensure that businesses are prepared for the changes in good time.”
This is a picture of Kostas Rossoglou, Shopify’s Head of Public Policy and Government Affairs for EMEA and International.
Indeed, these preparations could become increasingly crucial. Calder predicts new EU rules to be accompanied by stricter enforcement.
“The whole area of cyber security will, in particular, experience a ratcheting up in terms of regulation, and regulatory enforcement as the EU Commission moves to force organizations to take cyber security steps they’re failing to take voluntarily,” he said.
Algorithmic accountability
The EU is also developing new regulation for artificial intelligence, which is based on the technology’s potential to cause harm. Named the AI Act, the legislation will force anyone who wants to use, build, or sell AI products and services within the EU to follow the rules.
“It is expected that the legislation will set a precedent for other jurisdictions to evolve or follow,” said Matt Peake, Global Director of Public Policy at ID verification firm Onfido. “The framework is designed to be risk-based, so that the level of regulation will depend on the level of risk.”
According to a global survey by Accenture, the rules will have a deep impact. Some 95% of respondents said at least part of their business will be affected by the EU regulations.
Accenture’s researchers expect a risk management framework to become necessary for compliance with the AI Act. They also predict the regulation will be adopted before the end of 2023, with a two-year grace period before the rules come into force. That timetable, however, may be less generous than it appears.
“Our experience working with large organizations on major enterprise-wide compliance programs (e.g. GDPR, Responsible AI) suggests that it could easily take as long as two years to establish all the necessary controls they will need to be compliant,” the research team wrote in a report.
Follow the money
Cryptocurrencies are becoming a focal point of tech regulation. In the EU, a growing range of controversies has led the bloc to develop new legislation for the sector.
“I think 2023 will be a landmark year for crypto regulation,” said Ivan Liljeqvist, cofounder and CEO ofMoralis, a Web3 API provider.
Liljeqvist highlights the importance of the Market in Crypto Assets (MiCA) bill. In February, the European Parliament is expected to vote on the bill — the first comprehensive crypto regulation in the continent.
Ivan Liljeqvist, cofounder and CEO of Moralis.
With Big Tech getting into Web3 and the metaverse, competition is likely to heat up over the next few years — which could invite more regulatory scrutiny. The European Union recently introduced its Markets in Crypto Assets (MiCA) legislation, but even insiders from the EU Commission agree some of the phrasing around NFTs is ambiguous and even straight-up inaccurate.
The proposals could become integral to the European Commission’s future digital finance strategy. In addition, they may provide a reference point for other regulatory bodies.
“While the bill is unlikely to be rolled out until the end of the year, whenever we are dealing with legislative firsts I think the expectancy is for legislators to be cautious and over-regulate rather than under-regulate,” said Liljeqvist.
“What I want to see, and what I think others in the market want to see, is regulation that is sensible rather than stifling, protecting the principles of innovation and competition. I believe the most important thing is for the bill to be open-minded and flexible enough to be revised depending on how markets develop.”
Liljeqvist wasn’t alone in expressing caution. Jake Stott, CEO of Web3 creative agency Hype, is concerned about the impact on the market.
“As tech behemoths like Meta, Reddit, Google and Apple continue to venture into Web3 and NFTs, the regulatory situation could quickly escalate, triggering even more uncertainty in the market.”
“They must move at a faster pace.
Some critics, however, argue that the EU needs to be quicker to regulate the sector. Martin Magnone, co-founder and CEO of credit company Tymit, believes the new legislation will only start to make an impact in 2024.
“If the EU is to successfully take a stronger stand, they must move at a faster pace in line with industry movements,” he said.
Opening access
The payment sector, meanwhile, is preparing for the European Commission’s review of the PSD2, an EU regulation for online transactions.
Industry insiders have high hopes for the review, which is slated for 2023. They believe it could lead European SMEs and consumers to receive better payment outcomes — at a better price.
Under the current rules, only credit institutions can access European payment schemes. As a result, non-banks and more innovative firms must go through traditional banks to benefit from the schemes.
“This creates dependencies on credit institutions and their legacy systems; single points of failure; and increases the cost of payment services offered by non-credit institutions to European SMEs and consumers,” said Elanie Steyn, Director of Operations at payments platform Modulr.
“Should the PSD2 review include consideration on which institutions can directly access and settle European payments, the impact could be seismic. Opening access has the potential to level the playing field, create greater competition, and lower payment costs for all Europeans.”
Indeed, many of the experts we spoke to expect the EU to prioritize open access.
“The EU’s main focus for 2023 will still be the Big Tech platforms and achieving their goal of making them more open and interoperable,” said Tymit CEOMartin Magnone.
“The measures introduced so far to moderate the monopoly of large tech companies, from labor laws to taxes, have only been partially effective and not yet produced the desired effects. In 2023, we will see the EU make further strides to remedy this and achieve its open access goals.”
War has decimated much of Ukraine’s economy, but a notable exception is the IT sector. As of November, the industry’s annual export revenues had hit a record $5.5 billion — 13% more than in the same period last year.
Since Russia invaded in February, 58% of Ukrainian tech firms have processed new orders from clients. Despite brutal assaults, martial law, and general mobilization, 85% have restored their pre-war business activities. That’s according to Lviv IT Cluster, a community of companies, universities, and local authorities.
“Ukraine’s tech industry is not only showing the ability to operate fully, but it’s demonstrating growth,” says Stepan Veselovskyi, the group’s CEO. “The export of IT services grew by 9.9% compared to last year, and brought in more than $6 billion in revenue, surpassing the 2021 figure by $542 million.”
Veselovskyi (center) at the IT Arena conference, which his organization runs. Credit: Lviv IT Cluster
The new TNW Newsletter
Getting to the heart of the European tech and startup scene
This triumph over adversity has been indispensable for Ukraine. While conflict ravages the country’s coffers, the sector provides wages for workers, taxes for the economy, and technical support for the war effort. Tech provides the military with encrypted communications, UAVs, and cyber defenses, and civilians with digital IDs, air raid alerts, and online payments.
IT will also be integral to the post-war recovery — but getting there will be tough.
It can be mutually beneficial.
A summer survey by Lviv IT Cluster found that over 50,000 IT workers had relocated since the invasion, while a further 7,000 had joined the armed forces. Those that remain now endure blackouts caused by attacks on infrastructure. Some fear that empathy from clients will dwindle as war fatigue sets in.
As the challenges mount, help from overseas becomes increasingly crucial. But the benefits of support extend far beyond altruism.
“Charity is good, but you can also work with companies. It can be mutually beneficial,” says Oleksandr Yatsenko, managing partner at BRISE Capital, a Kyiv-based investment firm.
Yatsenko (far right) also works for the Ukrainian Startup Fund and software firm Finmap. Credit: Lviv IT Cluster
Indeed, Ukraine’s tech ecosystem has a unique blend of assets. The country’s rich history in computer science laid the foundations for a thriving sector. Today, it encompasses over 200,000 IT specialists and one of the world’s biggest pools of tech talent. Stellar programming skills, a high level of English, and a timezone that overlaps well with both the US and Europe comprise a compelling package.
These attributes have made Ukraine a global hub for IT outsourcing. Now, the country wants to turn its expertise into domestic tech giants.
President Zelensky’s administration has made bold moves to bring these ambitions to reality. this future. In 2019, his government established the Ministry of Digital Transformation. By 2024, the department aims to put every public service online, expand access to high-speed Internet; teach 6 million Ukrainians digital skills, and increase tech’s share in GDP to 10%. It currently accounts for around 4.5%.
Industry is united with government.
To reach these goals, the government has championed business-friendly policies: low taxation, minimal paperwork, and massive deregulation, alongside extensive anti-corruption reforms and funding initiatives, such as the Ukrainian Startup Fund.
This program has been bolstered by collaboration between the public and private sectors. War has made both sides appreciate their interdependence.
“The world should know that industry is united with the government and they help each other,” says Ivan Babichuk, chairman of the supervisory board of Lviv IT Cluster. “And it makes [Ukraine] a protective and secure place to run a business — despite the whole security issue around the country.”
Babichuk (right) in conversation with Ukrainian official Alex Bornyakov. Credit: Lviv IT Cluster
The hardships of war have added further qualities. Ukraine’s digital infrastructure and economy has been remarkably resilient since the full-scale invasion, while the workforce has acquired a rare blend of courage and adaptability. New skills in crisis management, leadership, teamwork, and efficiency have been forged in conflict.
“Most companies have retained customers and the volume of their contracts,” says Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation. “Ukrainian developers have shown that they are capable of doing their job well even under extreme conditions. For the whole world, this is an indicator that Ukraine is a reliable partner and an attractive investment destination.”
We’ve become more active — and stronger.
Some tech businesses have thrived since the invasion. Take Mosqitter, which won the prestigious IT Arena Startup Competition in 2021. While the conflict escalated, the company grew its team and developed a new product line.
“Difficulties bring you opportunities and possibilities for growth,” says Olga Diachuk, the company’s COO. “It shows you who you really are, what you are made of, and how smart you are.”
Digital businesses also typically require fewer physical resources — which makes their revenues increasingly important to Ukraine. Brick-and-mortar stores, for instance, are now more likely to close due to safety concerns than e-commerce sites.
Nonetheless, tech firms face immense challenges of their own. Investment from overseas will be crucial a component of their future fortunes.
“It’s very important to keep the support of the local tech ecosystem from outside as Western-based funds do,” says Joachim Laqueur, General Partner at VC firm Acrobator Ventures.
“Technology is such a long-term beneficial force. Now we’re seeing the first wave of successful companies breaking the ground. Even during the time of war, these people, these companies are able to address problems that are not restricted by borders.”
Laquer (second from right) was on the jury for the 2022 IT Arena Startup Competition, which was won by WRAP, an app that automates video production flows. Credit: Lviv IT Cluster
People who already invest in Ukraine note that war is fostering a unique set of skills. For example, thousands of volunteer hackers have joined the IT army, an organization that’s defending Ukraine against Russia’s vaunted hacker groups.
Members of the group have attained unparalleled experience. Mykhailo Fedorov, the country’s Minister of Digital Transformation, describes the conflict they’ve withstood as “the first world cyber war.” The volunteers now want to share their expertise with international allies.
“Ukrainian tech companies are strengthening their cyber defense capabilities, and can help other countries better understand the nature of modern cyberattacks,” says Veselovskyi, the Lviv IT Cluster CEO.
The First World Cyber War. The first IT Army in the world. 270K of angry IT-warriors of cyber frontline. Rutube shutdown. AI tech & identification of war criminals. And many more cases to disclose after the victory. You are free to join, by the way. pic.twitter.com/3PDP075nU5
— Mykhailo Fedorov (@FedorovMykhailo) May 26, 2022
Despite these strengths, the potential of Ukraine’s tech sector will only be fulfilled through support from the international community. For Veselovskyi, the simplest way they can help is by cutting all ties with Russia.
“The next step is motivating your local governments to support Ukraine and get involved with Ukraine’s fundraising initiatives,” he says. “The future safety and economic prosperity of Europe depend on the victory of Ukraine on the battlefield. You can start working with Ukrainian companies already today through our B2B platform Lviv Tech.”
To forecast the sector’s future, Veselovskyi’s team surveyed over 5,000 tech industry representatives. In the most positive scenario, which presupposes European integration and liberalization of the economy, 78% of the respondents would remain in Ukraine. A further 12% would try to move abroad, while another 10% are yet to decide.
The best way to help Ukraine is to invest in Ukraine.
This outcome can provide the foundations for a flourishing post-war industry. To build this, continued support from Europe will be essential. Government officials have sought to spread this message at IT events around the world.
“We tell them one specific thing: the best way to help Ukraine is to invest in Ukraine,” says Bornyakov, the Deputy Minister of Digital Transformation. “Work with Ukrainian companies, give money to Ukrainian startups, and if you are able to hire Ukrainian freelancers, do it.”
The stakes are extremely high. IT remains the only industry in Ukraine that still shows growth. If it shrinks, the whole country will suffer. If it expands, however, the sector can help Ukraine not only survive, but flourish.
In July, Sweden’s payments firm Klarna marked a drop in valuation at $6.7 billion, down from $46 billion in June 2021. The buy-now-pay-later firm — which was once seen as Europe’s most valuable private tech company — recorded its first ever large-scale layoffs in May as it shed 10% of its staff. Similarly, Berlin’s once fast-growing rapid grocery delivery startup Gorillas recently laid off 300 employees. Between the global economic downturn and poor public market performance, Europe’s world of tech is currently facing a major decline in venture funding, sliding to its lowest point in nearly two years. Investments in…
