tech
March 9, 2026
European software sector at critical ‘inflection point,’ warns McKinsey
Europe has a unique chance to lead in software — but only if it improves its ability to turn startups into profitable businesses. That’s the conclusion of a new report from McKinsey and Boardwave, which warns that unless the region tackles structural barriers, its startups will continue to lag behind global rivals.
TL;DR
- European software startups take longer to achieve significant revenue milestones compared to US counterparts.
- Structural barriers like fragmented markets and conservative corporate norms slow down growth.
- Emerging technologies (e.g., AI) and geopolitical shifts offer Europe a unique opportunity in software.
- Key interventions are needed, including increased late-stage funding and support for cross-border sales.
- The EU's Startup and Scaleup Strategy aims to remove barriers and foster continental growth.
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