At the offices of Deliveroo, a food delivery startup with headquarters in an upmarket neighborhood here, signs of activity are everywhere. The communal kitchen hums with 20-something developers. A gold-painted scooter, which co-founder William Shu once used to make deliveries, stands in the center of the office as people bustle about.
The frenetic pace belies a more cautious approach that Shu, 36, a former Morgan Stanley investment banker, has recently started taking at the startup.
Over the last year, Shu has urged colleagues to be more circumspect with growth plans, forgoing rapid expansion in competitive markets like the United States to focus on places where Deliveroo already has a loyal following. And while the startup has raised almost $200 million, employs roughly 400 people worldwide and operates in 12 countries, Shu says profitability — and not just aggressive growth to beat rivals to new markets — is increasingly important as the company moves beyond its British roots.
"We need to make the economics work," he said. "We have to understand that every round of funding must be treated as our last."
The focus at Deliveroo is symptomatic of a change across many European startups. Just as in Silicon Valley, where a number of privately held tech companies have been stung by lower valuations and investor questions about their sustainability, that same unease has now reached Europe's tech community, in a sign that a move away from soaring boom times in startups is going global.
Driving the pullback are some of the same forces that have caused a change in Silicon Valley's startup scene. Tech stocks are gyrating because of fears of a global economic slowdown — exacerbated in Europe by the region's migrant crisis and persistent financial problems. Valuations of some startups worldwide got ahead of themselves. As a result, venture capitalists in Europe and farther afield are becoming more cautious about funding local startups that do not have proven business ideas.
"When Silicon Valley sneezes, the rest of the world catches a cold," said Fred Destin, a partner at the London office of Accel Partners, a venture capital firm.