As European venture capital markets demonstrate renewed vigour amid global uncertainty, a noteworthy arbitrage opportunity has emerged between European capital and South Asian innovation ecosystems. This week, Saint Clair Advisory & Capital travels to Colombo to participate in Disrupt Asia 2025, where our Managing Partner Carl Härtlein will contribute to panel discussions examining the evolving landscape of cross-border venture capital investment.
European Venture Capital: A Market in Transition
Recent market analysis reveals a nuanced yet encouraging picture for European venture capital. The Financial Times1 reports that European start-ups are experiencing considerable investor interest, with valuations for artificial intelligence, fintech and defence groups rising as venture capital firms compete for opportunities in the continent's most promising companies. This resurgence follows three years of market contraction, with European venture capital investment now positioned to achieve its highest annual total since the exceptional years of 2021 and 2022.
The evidence is compelling: AI voice start-up ElevenLabs is discussing employee share sales at a valuation exceeding $6 billion, representing a doubling of the company's worth since January. Similarly, French AI group Mistral is pursuing fresh capital at approximately $10 billion from investors including Dutch chipmaking equipment supplier ASML, nearly doubling its previous valuation. German drone start-up Quantum Systems is contemplating a fundraising round at up to €3 billion valuation, whilst UK fintech group Revolut has permitted employees to sell shares at a $75 billion valuation, almost double its previous level.
According to Dealroom data, European venture capital deals are projected to rise 3-4 per cent in 2025, reaching $57 billion. This environment creates particularly favourable conditions for companies capable of bridging valuation disparities between emerging and developed markets, especially those with proven technology and clear regulatory pathways to European market entry.
Sri Lankan Innovation: A Case Study in Global Potential
The trajectory of Jendo Innovations provides a compelling illustration of Sri Lanka's emerging capabilities in global innovation. What commenced as a university project over a decade ago has developed into a medical technology with significant potential for global health impact. Jendo Innovations, a Sri Lankan biomedical start-up valued in the multi-million dollar range, has developed an artificial intelligence-powered device capable of detecting early-stage heart disease within fifteen minutes.
The company has successfully completed its latest investment round2, predominantly supported by US investors, marking a significant milestone in its development trajectory. Under the stewardship of Chairman and CEO Keerthi Kodithuwakku, the company is positioning itself for US market entry, with FDA approval processes well advanced. The company's device employs machine learning and cloud-based analysis to examine blood vessel cells, detecting endothelial dysfunction at the earliest detectable stage of cardiovascular disease, enabling preventive interventions before symptom onset.
Jendo's achievements extend beyond technological innovation to encompass significant international recognition. The company secured recognition as one of the Top 10 Innovations at Cambridge University's Innovation Forum in 2017, followed by the CEO Award at MetLife Insurance's Regional Innovation Competition in 2018. In 2022, the company's leadership participated as panellists at the World Intellectual Property Organisation Conference on IP and Artificial Intelligence, with subsequent nomination for the WIPO Global Innovation Awards in 2023.
The company has secured patents in Sri Lanka, Japan, and the United States, with clinical results published at the Institute of Electrical and Electronics Engineers Biomedical Engineering World Congress. Most recently, Jendo's team participated as panellists and speakers in the Global Initiative for AI for Health, organised jointly by the International Telecommunication Union, WIPO, and World Health Organisation.
Strategic Considerations and Market Positioning
Sri Lanka presents a compelling proposition for European investors seeking global expansion opportunities. The nation ranks among the top ten globally and third in Asia for talent affordability, whilst maintaining a top-thirty position in Asia for talent and experience. With over 950 technology start-ups and an ecosystem that has generated $252 million in value between 2021 and 2023, Sri Lanka demonstrates both capability and value.
Jendo's development trajectory illustrates the potential for systematic value creation through international market access. The company is preparing for Series A funding, scheduled for early next year, which will support international expansion and regulatory approvals. This timeline aligns favourably with the current European venture capital environment, where investors are actively seeking high-quality opportunities with clear technology differentiation and regulatory frameworks.
The company's vision encompasses "a network of centres worldwide where anyone can receive a comprehensive cardiovascular assessment in fifteen minutes," representing a model that could transform healthcare from reactive treatment to proactive prevention. This approach addresses a critical global health challenge, as cardiovascular disease accounts for nearly eighteen million deaths annually, often without warning signs that traditional diagnostic methods can detect early.
Cross-Border Value Creation
The opportunity for value creation lies principally in facilitating Sri Lankan companies' access to European markets. Jendo's success demonstrates the technical capabilities and innovation potential present in the Sri Lankan ecosystem. What these companies require is strategic guidance, regulatory navigation support, and market access expertise to achieve international scale.
European companies stand to benefit from partnerships that provide access to cutting-edge innovation at favourable valuations, whilst Sri Lankan start-ups gain the expertise, networks, and capital necessary for international market navigation. This creates mutually beneficial arrangements where both parties capture value through successful market expansion and, ultimately, strategic exits in European markets.
The combination of established medical and engineering expertise represents a particular strength of the Sri Lankan innovation ecosystem, as demonstrated by Jendo's interdisciplinary approach. This merger of capabilities has proven instrumental in their success and suggests broader potential for similar innovations.
Looking Forward: Disrupt Asia 2025
This week's Disrupt Asia conference features contributions from President Anura Kumara Dissanayake, Rajan Anandan from Peak XV & Surge, and Sanjiva Weerawarana, Founder and CEO of WSO2, demonstrating Sri Lanka's commitment to establishing itself as a regional innovation centre. The conference's objectives are expected to include announcements of launching new investor-friendly regulation, a public Fund of Funds and establishing a Virtual Special Economic Zone, signalling substantial governmental support for the start-up ecosystem.
Through our participation in these discussions, we observe considerable potential for creating systematic connections between European capital and South Asian innovation. The confluence of proven technical capabilities, attractive valuations relative to European equivalents, advancing regulatory frameworks, and strategic geographic positioning establishes Sri Lanka as a compelling destination for discerning European investors and corporations.
With European venture capital valuations experiencing renewed strength and capital actively seeking quality opportunities, the timing appears particularly favourable for establishing these cross-border partnerships. Jendo's evolution from university laboratory to multi-million dollar enterprise demonstrates the transformative potential of local innovation achieving global impact.
The question is not whether this arbitrage opportunity exists, but rather whether European market participants will act with sufficient alacrity to secure advantage before broader market recognition occurs.
Saint Clair Advisory & Capital specialises in cross-border venture capital and corporate development, assisting European companies in accessing global innovation opportunities whilst supporting international start-ups in scaling to European markets.