More tech talent is seeking purpose-driven work in Europe

Since the US is recognised as the world’s most vibrant location for tech start-ups, it was surprising to see UK-based venture firm Atomico report recently a net inflow of tech workers into European companies from other parts of the world, including the US, in the first three quarters of 2023.

One of the attractions for tech talent, Atomico posited in its latest State of European Tech report, is the proliferation of jobs that have been created at climate tech and other purpose-driven companies in Europe. In the first nine months of last year, more than 160,000 workers from within the tech industry and nearly 65,700 workers from other industries joined sustainability-oriented companies in Europe, far ahead of the next highest category (health) to draw talent.

In the first three quarters of last year, 27 percent of total capital invested in European tech companies went to the carbon and energy sector, including climate tech – more than double the share of investment that the sector received in 2021.

Atomico’s findings are consistent with what many venture fund managers told VCJ when we started to look into the numbers that Atomico reported. (See cover story, Why tech talent is flocking to Europe, in affiliate title Venture Capital Journal’s Mar-Apr print edition: registration or subscription required.)

Activate Capital Partners, whose portfolio includes a couple of European climate tech start-ups such as Sympower, is flooded with resumes whenever it posts for new associate positions, said Eric Meyer, a principal at the San Francisco-based firm.

Sympower, in Amsterdam, whose sustainable energy system is designed to respond to disturbances and fluctuations in supply and demand on the electricity grid, plans to double its workforce of about 130 people this year, adding 25-50 new positions in its engineering group alone.

As a benefit corporation that is very values-driven, Sympower is “able to recruit young people who want to make a difference, people that you otherwise might not be able to get”, Meyer noted.

He doesn’t see a huge flow of tech talent into Europe from other regions but said both Sympower and Enpal, a portfolio company based in Berlin, are looking to hire some people from the US, where the majority of Activate’s portfolio companies are based and have similar talent needs.

Acre, a talent search firm that specialises in recruiting for finance and asset management positions, has also seen more inquiries from people seeking to align their work with their values and sense of purpose. “Climate anxiety is a key facet for a lot of people,” and is “much more visible now than it was even two years ago, let alone five”, said Ian Povey-Hall, global head of sustainable finance and impact investing at Acre.

He noted an increase in people with high-quality mainstream skill sets such as commercial operations and tech data modelling seeking to apply those skills to companies focused on sustainability. “Even though they’re doing a more generic job, the opportunity to do that within a company that they align to is definitely a growing trend that we’re seeing and that’s impacting the market.”

In addition to the draw of purpose-driven companies in Europe, quality of life and work-life balance considerations are prompting more tech workers to move to Europe, sources told VCJ.

Despite lower tech salaries than in the US, which can be a turn-off to some American and Middle Eastern workers, the stronger social safety net in Europe and problems in US society such as gun violence have “a lot of people turning their heads this way”, said Abhishek Lahoti, head of platform at Highland Europe, who was born and raised in Ohio. Many expats in his professional network who moved to Europe have told Lahoti that it’s hard for them to consider returning to the US, though they eventually will do so to be close to ageing parents.

The relative ease of getting a digital nomad visa in some European countries is also playing a part in the talent migration. Tech workers from other parts of the world see Europe as more welcoming than the US, said Christian Leybold, a founding partner who oversees Headline’s European venture deals. This is partly due to the residual effects of the Trump administration’s crackdown on immigration.