- Sunday CET
- Posts
- coincidences
Howdy folks - HNY and welcome to Sunday CET.
Today we talk Chinese in Europe, trains and airplanes and Europe not being lucrative for the VC business.
Enjoy,
Dragos
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Market talk
🇸🇰 A Slovak battery producer just raised a €100 million series C with Chinese and Indian strategic investors - namely other battery producers from Asia.
this is interesting to look at from the perspective of the European sovereignty discourse frequently heard from populists in all corners of the continent.
we’ve got the same Chinese which, for example, were blamed by the Swedish for Northvolt’s inability of building a similar battery manufacturing business due to supply-based low prices.
same Chinese which control multiple similar industrial assets in Europe (i.e. in Sweden they own Volvo among others) as a mean to enter the market and control the GTM channels - it is their blueprint for setting up biz outside the home market.
if you didn’t know already, the Chinese have come up with a smart scheme to bypass globally the high tariffs imposed by the EU/US - they now export raw materials and supplies to countries not affected by the China blockade, such as Vietnam, assemble or re-package and then export directly from local companies, which they own or control. Or just like the above-mentioned Slovak company, which is strategic to the country and has the government in the captable too.
and by all means, this is a direct result of the Chinese export push strategy, which is surging and outpacing global trade.
btw, in case you didn’t notice, China is at the same time at war with Europe, alongside Russia.
also, a coincidence or not, Slovakia is the country whose president Fico is Putin’s muppet acting against Europe’s interests in an official manner, alongside Viktor Orban from Hungary.
probably nothing, right?
more coincidences - worth noting in the above series C deal Lilium's mention, which is in the captable probably with an in-kind contribution of some sort. Same Lilium which went insolvent a month ago and was just sold for scraps to a German investor who did similar buyout deals in the 1990s.
and speaking of Lilium, its competitor, Volocopter, another producer of electric planes with an air taxi model, also filed for insolvency. Curious to see whether they find a white knight able to make an arbitrage play for a distressed asset.
🇪🇺 There is a cogent explanation for why Europe is in this situation and the Chinese capital is freely flowing into the continent:
the fiscal policy after the great financial crisis (from 2008) was in part made with a mercantilist paradigm that privileged foreign demand relative to domestic demand, and in part because it was constrained by an incomplete single market, fiscal policy turned unduly restrictive, supressed domestic demand and cut public investment.
that’s straight from Draghi’s report 👇️ - in other words, a problem for Europe was an opportunity for China - and really, at the end of the day, one cannot entirely blame the Chinese for playing the game in a better way.
🇬🇧 I have also some positive turnaround news - take Britain from all places, where Rolls Royce is now worth around £50 billion, which is 14X higher since 2020, when it added the likes of GIC of Singapore and Kuwait Investment Authority in the captable.
🇬🇧 British Airways blew up its 40-years old loyalty program because it was easy to game and not economically viable - its heavy users are up in arms.
🇫🇷 Has Mistral lost its edge now that the French are seriously pushing for a business model while Meta’s open source model is gaining a lot of traction?
alas they have hardly built a solid American presence from what I gather - the next six months are critical, I usually don’t make predictions, but I wouldn’t be surprised if the French will be openly up for sale pretty soon.
🇬🇧 Nick Clegg, a former British deputy prime minister and ex-leader of the country’s Liberal Democrats, left Meta after 6 years of leading the American company’s policy and lobbying efforts.
he was replaced by an American politician and the move indicates a priority for Meta to court Trump’s inner circle.
🚄 We now have a direct daytime train between Berlin to Paris, that takes 8 hours and costs €59. Leaves at 10am, arrive 6pm - if DB, which runs the service, has no delays, that is.
meanwhile, the Chinese announced a new model of a high-speed train that could be the world's fastest when it enters commercial service, at 450 km/h. That’s an upgrade to existing trains already operating at speeds of 350 km/h.
another one with the Chinese - they have developed a large passenger aircraft that’s a direct competitor to the likes of Boeing and Airbus, already in use as it completed a first international flight last week.
you noticed above that two German alt airplane manufacturers went belly up, right? 😀
🇫🇷 The latest economic forecast for France ain’t looking good, all while the French stocks were the worst performers of 2024, compared to S&P, FTSE, DAX and the TSX Composite.
and more bad news - the French red wine consumption is in sharp decline as tastes change among young drinkers, switching to beer, spirits and alcohol-free options.
data shows that consumption of red wine in France has fallen by about 90 per cent since the 1970s.
end of the world is coming, it’s clear. 😀
🇬🇧 The UK has terrible weather, outrageously expensive hotels/rentals (because of under building), and ruined most of its city centres in the postwar era - and yet makes $73.9 billion a year out of tourism, third in the world after Spain ($92 billion) and US ($176 billion).
🇬🇧 Meanwhile, London now has more 24-hour gyms than 24-hour clubs as the number of 24-hour licenses held by pubs, bars, and nightclubs has significantly decreased, falling from 183 in 2021-22 to 58 in 2023-24.
in contrast, the number of 24-hour gyms is ~300.
I’ve told you that the end of the world is coming…! 😀
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Also notable
🇸🇬 Last month I spent some time in Singapore and made a few notes (scroll down at the end of it).
🇪🇺 VC investments in Europe are nice but mostly irrelevant - anybody just focusing on investing in Europe is missing out on 80%+ of the value created.
food for thought: is there any correlation to the current massive exodus of European founders to the US?
💲 1 out $10 of LPs money goes to a16z, which now officially runs the US administration since Trump has hired many a16z folks in various key official positions. More allocation data:
a16z: $7.2b, 11%
General Catalyst: $6.0b, 9%
Thrive Capital: $5.5b, 8.4%
Flagship Pioneering: $3.6b, 5.5%
TCV: $3.0b, 4.6%
ARCH Venture Partners: $3.0b, 4.6%
Norwest Venture: $3.0b, 4.6%
Tiger: $2.2b, 3.4%
Kleiner Perkins: $2.0 billion, 3.1%
IVP: $1.6 billion, 2.4%
Venrock: $1.2 billion, 1.8%
🫢 And since we’re in the middle of a heavy industry consolidation, many VC firms are dying off - the tally of VCs investing in US-headquartered companies dropped to 6,175 in 2024, meaning more than 2,000 have fallen dormant since a peak of 8,315 in 2021.
🤡 An American VC-backed startup that unexpectedly closed its doors just before Xmas (and was acquired a week later) had the writing on the wall right after its investors pushed the founder/CEO out due to mis-aligned strategy vision.
this kind of stories are more frequent than not in the startup world, but not made public either because of NDAs or legal actions.
coincidence or not, startup folks are more adamant to raise money from professional investors as they don’t want to give up a board seat because they don’t want a VC firing them or telling them what to do.
💲 Tim Cook joins the people kissing the ring of the new American president as he will personally donate $1 million to Trump's inaugural committee. Apple needs a bit of leverage, particularly since it’s at war with Europe, and Trumps is it.
♾️ Here’s a trend that’s global:
official statistics show Germany’s birth rate fell to 1.35 children per woman in 2023, below the UN’s “ultra-low” threshold of 1.4 - characterising a scenario where falling birth rates become tough to reverse.
Estonia and Austria also passed under the 1.4 threshold, joining the nine EU countries - including Spain, Greece and Italy - that in 2022 had fertility rates below 1.4 children per woman.
France had the highest birth rate at 1.79 children per woman in 2022, but the national figures showed it dropped to 1.67 last year, the lowest on record.
same in Asia i.e. more than 40 percent of South Koreans below the age of forty have stopped dating. In 2020, more than 52 percent of South Koreans in their twenties preferred a childless marriage, up from about 30 percent in 2015.
more than 30 percent of all Korean households comprise only one person.
seeing such cases around me as well, young families reluctant to have kids for financial reasons, stress, unstable society etc. Fact is that becoming a parent is the most difficult job in the world and there’s no school in this world teaching how to become one - exogenous variables are just add ons to that.
😱 PlasticList, a project listing quantifiable amounts of plastics contained by specific foods we eat, found that 86% of the foods tested have plastic chemicals.
crazy other findings, check it out.
and it is not only food that’s dangerous - but also consumer goods available in drugstores, with the likes of sunscreen, tampons and antiperspirants laced with poisons that can make people sick.
all this happens in the USA while most of those products are banned in Europe, btw.
increasingly hard to avoid getting poisoned while over the ocean, but, of course, there’s an app for that too.
💲 Running Wikipedia each year costs $3 million in hosting and $107 million in salaries.
🇬🇧 A British startup is building an undersea habitat designed to live on the seafloor at depths up to 200 meters for weeks, months, and possibly even years.
🇪🇸 If you have four days to visit Madrid, here’s an intellectual's travel guide for you.
🤝 China and Japan have agreed on an unprecedented list of initiatives (at least since WW2) to warm their respective public opinions to each other - it’s kind of a big thing.
🦢 Possible black swan events for 2025.
🎥 Eighteen of the twenty highest grossing movies in 2024 were sequels/remakes.
🏨 The top 10 hotels of 2024.
🚦 Traffic lights will have a fourth color in 2025 - white - that would signal to other drivers that the self-driving vehicle is managing traffic conditions.
That’s all folks, have a wonderful week!
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