It's "just a matter of time" before Europe builds a slew of $10 billion technology companies to compete with the behemoths at Silicon Valley, the founder of Skype and CEO of investment firm Atomico told CNBC Wednesday.
Speaking in an interview at the Slush technology conference in Helsinki, Finland, Niklas Zennstrom said that European tech firms will grow in size over time as the startup ecosystem expands. But, he added there are still issues to address, such as later-stage funding.
"In terms of seed (early stage) and series A (critical stage) funding, we are on parity with the U.S...when it comes to growth finance...we really do have a...gap here," Zennstrom told CNBC.
The comments from the head of Atomico, which has invested in Angry Birds maker Rovio and Swedish payments firm Klarna, came as it released a report Wednesday on the state of the European startup scene.
One of the key highlights was that investment in European tech firms is set to hit $10 billion this year, above 2014's figure of $7.1 billion, with a large share being invested by non-European funds.
Nonetheless, the U.S. has produced 2.9 times more billion dollar startups - so-called "unicorns" - than Europe, from the first quarter of 2013 to the second quarter of 2015, according to Atomico.
In the exit space, Europe has seen over 100 technology initial public offerings since 2011, with European startups raising more money when they float than their U.S. peers this year and last year.
Private companies are finding it easy to raise large sums of capital, but Zennstrom said that there are "still not that many companies that have the quality to be truly sustainable companies."
But, because European tech startups are not raising the sizes seen in the U.S., founders are focused on building more sustainable businesses as they do not have cash to burn, the Skype founder added.
"This is something you find with companies here in Europe compared to other locations like China and Silicon Valley. Because we have less capital, entrepreneurs here are trying to build sustainable businesses, they don't require as much capital," Zennstrom told CNBC.