Everyone in techworld has been speculating about how AI will change the startup game. We no longer need to guess. As my colleagues at Sifted have highlighted in their latest report, the adoption of AI is already leading to faster, leaner and more profitable startups. AI has arrived.
In this year’s Sifted 100 leaderboard of the fastest-growing startups in the UK and Ireland, 25 companies have already become profitable. That compares with 12 the year before. Part of the reason, at least, is that many of these startups have been using AI to move faster, with less funding, achieving traction quicker than previously possible.
For example, Eldar Tuvey, cofounder of Vertice, the leaderboard’s top-ranked startup, told Sifted that he — and his cofounder brother Roy — had been able to achieve product market fit far faster at their present company than at their previous two successful startups. “What took us 10 years to achieve in revenue growth in our previous businesses, we did in two-and-a-half years here,” he said.
Many of these startups, including Vertice, do not define themselves as AI companies. Rather they embed the technology in their operations to improve their products, minimise costs and sharpen their competitive edge. The average number of employees at the Sifted 100 companies in this year’s rankings was 28% lower than in 2024. Some founders are even talking about the possibilities of using AI agents to create “zero employee” startups.
The Sifted 100 report certainly highlights the vibrancy of British and Irish startups and shows how AI is beginning to shuffle the competitive cards. Creative and agile startups can use the technology to imagine new services and reinvent business models. That should give Europe another chance to compete at a global scale.
There is certainly increasing optimism across Europe as politicians understand the urgency of reinvigorating Europe’s tech sector amid the new world disorder triggered by president Donald Trump. In particular, the incoming German government has signalled its intent to release the debt brake, increase spending on defence and infrastructure and promote a new wave of innovation. “There has been more movement in the past three weeks than the past three decades,” one leading German VC tells me.
However, Nicolas Colin, the polymath essayist and investor, argues that Europe will only lose if it continues to try to ape the Silicon Valley playbook. Europe needs to seize the moment for a strategic reset to develop its own more distinctive approach. “European tech leaders are beginning to recognise that our fragmented markets, regulatory frameworks and distributed talent can become assets rather than liabilities in the right strategic context,” he writes in his latest essay in Drift Signal.
As an example of how diversity can be a strength, Colin points to the example of Formula 1 as a high-tech sector that “remains distinctively European in its DNA yet globally successful”. The key elements of its success are: specialised technical excellence; collaborative multinational teams; “co-opetition” within a defined regulatory framework, combining fierce competition between teams with co-operation over rules; and strategic alignment at the regional governance level with decentralised innovation.
To translate the Formula 1 template across other sectors, Colin argues Europe needs founders to think beyond national borders from day one, investors to back cross-border consolidation plays, and a collective mindset that views Europe’s complexity as a competitive advantage rather than a liability.
Many of the Sifted 100 startups are proving highly adaptable and are clearly thinking European, if not global. But they, and their backers, will need to rev up the engine even more aggressively if they are to succeed in the ways that Colin would like. Vroom, vroom.
Read the orginal article: https://sifted.eu/articles/john-thornhill-tech-column-opinion-sifted-view/
