Giant Venture's co-founder: ‘Europeans must think bigger and embrace those with wild ideas’

“Europeans must think bigger and embrace those with wild and ambitious ideas,” says McLain, a former founder himself of data analytics company Beehive. “Silicon Valley thrives on a culture of bold risk-taking and global ambition. Europe is catching up but needs to double down on fostering this mindset, ensuring founders aim big, and investors back them at scale.”

The 'magic sauce' in Silicon Valley

Finding ways of backing founders at scale has long been an issue in Europe.

European Commission President Ursula von der Leyen has promised to change that by introducing measures to make the EU a friendlier place for startups to grow and thrive.

But there’s still a lot of work to be done, and McLain outlined four areas he thinks Europe needs to focus on.

“Firstly, regulations must be unified and policy harmonised within the EU, particularly across regulated industries like healthcare, to make it easier for startups to scale geographically,” he says. “Secondly, administrative red tape should be removed – notaries and excessive KYC [Know Your Customer requirements] create unnecessary friction for financing startups. Thirdly, stock options for startup employees should be encouraged and receive beneficial tax treatment – an ownership mentality is a huge part of the magic sauce in Silicon Valley. Finally, financial markets should be reformed to make it more attractive for founder-led technology companies to list in Europe or the UK rather than the US.”

There are already signs, though, that Europe is becoming better at creating unicorns – which McLain says will also help future startups grow.

“Over time, as more people see companies scale from zero to multi-billion outcomes, I’m optimistic there will be a virtuous cycle of success,” he says. “Silicon Valley’s advantage often lies in its depth of operational expertise – leaders with experience scaling startups to global success, and this is starting to emerge in Europe with recent successes like Revolut.”

Looking for 'mission-driven' companies

So what kind of companies are Giant Ventures looking for at the moment?

The VC firm launched two new funds last year totalling $250m (about €240m), including $100 million dedicated to seed investments in early-stage companies.

So while some investors seem to be shying away from the climate tech sector, Giant’s focus remains on finding “mission-driven” companies within climate, health and economic mobility.

In short, “ventures that tackle the world's biggest challenges while delivering outsized returns,” McLain says.

“That has not changed,” he adds. “The need for a sustainable planet and humanity’s desire for health and economic opportunity are evergreen, secular investment trends.”

Energy solutions is of particular interest at the moment, especially as the big tech companies ramp up the use of “energy-hungry AI”.

'Exploring ideas further down the stack'

McLain pointed to previous investments in battery storage companies like Field and Haven, Swedish company Flower, which has solutions for balancing the energy grid, and Evroc, a developer or more sustainable data centres.

“We’re excited by businesses riding the momentum of these second-order consequences,” he says. "We’re also exploring ideas further down the stack, including ambitious ideas for novel GPU architecture, such as photonic chips, which would reduce energy consumption at the source."

Other areas of interest for Giant include using AI to develop new proteins and enzymes – a field that was awarded the Nobel Prize in chemistry last year and could have massive impact on climate tech – and robotics accelerating the installation of solar farms.

Last year, Giant also invested in CuspAI, a Cambridge-based startup that uses AI to develop new materials.

“There’s a Cambrian explosion of ideas,” McLain says.