Why I chose to start an AI company in Europe

The conventional advice for any ambitious AI founder is straightforward: move to the United States.

The San Francisco Bay Area in particular offers extraordinary access to capital, talent, and a culture that assumes young companies can become global category leaders. I understand the attraction. I have lived and studied in the US, and many friends took that path. And I believe that any European business-to-business technology company with global ambitions does need a meaningful American presence.

But when we founded Parloa in Germany, we chose a place that, in several ways, creates an unusually strong foundation for an enterprise AI company.

Europe offers deep technical talent, it forces companies to develop the operating muscle required to achieve global scale, and it enables founders to access capital from around the world.

Europe's first advantage is the depth of its technical talent.

According to the newly published annual report from the World Economic Forum's Leaders for European Growth and Competitiveness initiative, 27% of university students in the European Union study STEM subjects – compared with around 20% in the US.

Europe has world class universities, deeply respected research institutions and a long tradition of scientific and engineering excellence. Over the past two decades, many of the largest US tech companies have also built major engineering and research hubs across the region. They have invested in technical teams in cities such as Zurich, London, Munich, Paris, Berlin and Warsaw, creating a large pool of engineers who have worked on products and infrastructure at global scale.

Europe also has an increasingly ambitious startup ecosystem. Around 900 new, venture capital-backed AI companies are created here every year, or roughly the same number as in the US. Overall, the continent is home to more than 35,000 early-stage companies, giving talented engineers a vast number of opportunities to build new products and services.

Europe's second advantage initially creates more work for a founder.

A company starting in the US can build for one, large domestic market in one language, and internationalize later. A company starting in Europe quickly encounters new language needs, customer expectations, legal environments and ways of doing business that cross borders. That complexity forces founders to design products and organizations for an international scale much earlier.

Parloa builds AI agents for customer experience, and voice is one of the hardest forms of AI to get right. Language is only the beginning. Tone, interruption patterns, dialects and expectations differ between countries – and even between regions. An experience that feels natural in English can feel completely wrong in German, French, Spanish or Italian. Building in Europe meant that multilingual capability just had to be part of our architecture from the start, rather than an addition to a product originally designed for one market.

The same principle applies to the structure of the company itself. European founders learn early how to enter new markets, hire across jurisdictions and serve customers with different regulatory and procurement requirements. In enterprise software, they also learn to treat governance, security and data privacy as core product capabilities from the beginning.

While this first phase in Europe requires more effort, the return is a much stronger foundation. Once technology and operating systems work across languages, jurisdictions and demanding enterprise environments, international expansion becomes far more repeatable.

This is particularly important in business-to-business AI. Large companies expect technology to work across countries, integrate with complex systems and meet high standards for security, governance and reliability.

The complexity of Europe provides training for achieving global scale.

The third argument founders often hear is about funding.

It’s true that the US has much deeper capital markets, especially at the growth stage – the crucial period between developing a product and fully expanding operations. The Forum's Leaders for European Growth and Competitiveness initiative correctly identifies this gap. Europe should do much more to mobilize its own capital for technology and innovation.

For an individual company, however, the decisive question is whether global investors believe it can lead a category. European AI companies are already showing how mobile capital has become. Earlier this year Stockholm-based Legora announced a $550 million Series D round of funding led by a prominent US investor. Lovable, also founded in Stockholm, more recently raised a $400 million round co-led by a US investor valuing it at $13.3 billion – while keeping its centre of gravity in Europe. Parloa has raised more than $560 million from investors on both sides of the Atlantic.

The newly launched Scaleup Europe fund aims to help tackle the funding gap between the US and Europe; it was among the investors in Mistral’s $3.5 billion round of funding announced this week.

These companies have different products, markets and histories, yet they prove the same underlying point: a European headquarters does not place a ceiling on the capital available to an exceptional company. US investors are increasingly searching for the strongest AI businesses around the world. That means a company can build its foundation in Europe and expand aggressively into the US, while drawing the best investors from both continents.

Europe still has work to do.

We need faster decision making, simpler regulation and a more unified market. The continent also needs more growth capital of its own, and a stronger culture of backing companies for the long term. These downsides are real, yet they are too small to truly limit the ambition or destiny of a great company.

With the right people, the right mentality, and a willingness to move with urgency, founders can build quickly from Europe: Daniel Ek built Spotify from Sweden; Robert Gentz built Zalando from Germany; and Nikolay Storonsky built Revolut from the UK. Each success attracted more talent, capital and belief to the ecosystem, inspiring the next generation of founders to keep raising the bar.

The current generation of AI companies has an opportunity to extend that compounding effect. What should the ultimate goal be? It should be to make saying “I want to build a $100 billion company in Europe” the norm – not the exception.

I chose to build Parloa in Europe not because it’s the easiest place to start, but because I believe it is, and can continue to be, one of the best places to build a generational business.