- Sunday CET
- Posts
- build your way to get lucky
Good morning and welcome to Sunday CET!
Last summer weekend, how’s that working out for y’all? :-) Hope everyone is doing alright, pretty hot and lazy on my side, looking forward to some chill time in Portugal next week.
This edition is packed and ready to go, enjoy!
Every week we deliver manually curated intel from the European VC ecosystem. All you should know in a 5 minute comprehensive digest covering the long tail of the early stage activity from across the continent.
Don’t miss out - sign up here and get the next one on early Monday am.
Ecosystem pointers
🇪🇺 Series A deals Over at Nordic 9 we have tracked about 200 deals for startups that raised between 10 and 50 million in the second quarter in Europe - that's roughly 100 less than what we have in our books for Q1 2023.
A third of the transactions from the list were series A deals. On one hand, that’s a good place to start for finding premium series A-level assets and possible unicorns emerging from the post-ZIRP period → handy if you’re a late stage investor.
On the other, it’s a good exercise for learning what seed dealers were able to mark up on the higher end of a lousy market → homework about what series A folks buy.
Top of the cream is Neko, of course, the scanner startup from Sweden bearing the Daniel Ek premium, managed by the ex-Watty founder, and which announced in June its 60M+ series A from the likes of Lakestar, Atomico and General Catalyst.
Neko is followed by an AI startup incubated by EF in 2020 and pre-seeded the following year by 7percent and Counterview - Gensyn raised now $40M+ series A led by a16z.
Other expensive series A deals come from Belgium, Romania, Italy or Germany.
In spite of the UK market being in disarray, London is still where the money is at in Europe (sorry, France!), having dealt a good chunk of the 10M+ series A in Q2 - Uncommon or Material Evolution are some names to look at.
Also worth noting is that in spite of being fairly tiny markets, Finland and Denmark had 4, and 2 respectively, 10M+ series A deals in Q2.
Not least, in the same outsider category - Bulgaria and Poland (though the Polish are technically HQ-ed in NYC and started out of London).
The big list with all the details includes more than 70 deals structured by countries and is available in this cheat sheet.
PS. Same 10M+ series A list but for Q1 2023 → link.
💲 Other cheat sheets
👀 Venture returns benchmark
53.2% - less than 1x cost
19% - 1x-2x cost
16% - 2-5x cost
11.8% - at least 5x
5.4% - at least 10x
1.1% - 100% or more of the committed capital of the fund that backed them.
Sample: 11,350 companies backed by 259 funds from 1986 to 2018.
One of two goes bananas and it’s a statistical flip of a coin. All investors will rightfully claim they only look to back fund returners but that’s just aspirational as statistics show that it’s highly unlikely they would do that - 1% is a margin error and that’s rather luck than knowledge to run into and be able to invest in fund returners. Alas you build your way to get lucky, each model and its associated execution are different and the heavy lifting is in the post deal sourcing phase, working the lower brackets - leaving the value add BS aside which any smart founder will doubt, the real question is how do you align your best self as a VC to a startup opportunity in order to move the needle towards a >10x bracket? Is your VC value add to a startup what makes the difference in a portfolio of 20, 50, 100 startups?
➕ More context:
Train your VC sales skills Here’s a fun tool to understand how the VCs think - remember that bots are programmed to use logic and reasoning, which you will be surprised not to find sometimes when dealing with investors, who are mere humans.
Founder is selling a company for $125M+: moderate win for VC, life-altering for him. One investor (gets 3X+ back) has blocking rights and extorting the founder for more for $$'s to him. Real life shit.
Investors are busy people and deserve holidays too.
ChatGPT economics are taught in schools now.
AI is reinventing the legal industry.
Will Enterprise AI models be winner take all?
Apropos of idols in the investors world - the scam in the arena.
Private equity firms hand over distressed companies to rivals.
☝️ Startup radar We have started sending a new weekly email to our Monday CET subscribers with a curation of interesting early stage startups from Europe (we come across TONS of industry intel every week) based on signals such as product, business model, growth, key investors, or team.
Think of it as a personalised startup sourcing concierge - if you want to get an idea, you can sift through a list of 50+ startups from this cheat sheet (available for free for the next 24 hours) and can subscribe from here for getting such a list every week, alongside cheat sheets focused on European VC and startups intel.
High signal, zero noise - we send our next intel digest tomorrow in the AM, get it too.
Solar is where it’s at
Solar, with its low costs and ability to be built at any scale — from a single panel on a rooftop to a sprawling multi-gigawatt array — will account for the bulk of the EU power additions in the coming years.
PS1 Explosive growth in solar power means most EU countries will hit their 2030 renewable energy targets ahead of time.
PS2 The heat pump space is getting hotter by the day in Europe, you got that, right?
Other notes
🇪🇺 Plug and Play did a deal with the EIC Fund for having their portfolio companies part of a customised 1-week acceleration week in Silicon Valley.
Being taken to the US is probably the only best value add a startup can get from a venture capitalist such as the EU. Notably, startups will be responsible for covering their own trip and accommodation expenses for the duration of the program.
Plug and Play is one of the more active startup accelerators with multiple local programs across Europe, together with Techstars.
🇬🇧 OnlyFans generated $5.6 billion in gross payments, $1.1 billion in revenue and a $525 million profit in 2022. The number of “creators” increased +47% to 3.2 million, and the number of “fans” +27% to 239 million
OnlyFans is the Euro unicorn nobody talks about.
🇩🇪 Deutsche Bahn is said to discuss a €1.6 billion deal for selling Arriva, a transportation group that runs bus (including the London Overground network of suburban rail services and Chiltern Railways) and train services in Britain and several continental European countries.
🎮 Microsoft has submitted a new deal to acquire video game maker Activision Blizzard, in an attempt to win over the UK competition regulator which previously blocked the $69 billion takeover.
🇬🇧 PwC UK reported that its partners' pay fell to £906,000 from £1m, and blames it on high-level corporate dealmaking being sluggish. However, PwC UK reported a 16% rise in revenues to £5.8 billion for the year to the 12 months to the end of June.
🇳🇱 Heineken sold its Russia business for $1 to local packaging and cosmetics company Arnest Group. The process was initiated in March 2022 so it only took them 18 months.
🇩🇪 Property prices in Germany drop in 14 major cities - is now a good time to buy real estate?
🇬🇧 Britain is a mess, the transportation edition. Alas not all doom and gloom, some notable things are worth paying attention to.
🇪🇺 The EU’s Digital Services Act went into effect this week: here’s what that means.
🌞 IBM sold its weather business, including Weather com and business-oriented services, to private equity.
💲 Zillow, the American real estate marketplace, is offering mortgages with just a 1% down payment as it tries to attract house hunters facing the most-unaffordable market in almost four decades.
🤝 Shein will acquire a third of Sparc Group, the operator of the American fast fashion retailer Forever 21. Sparc will also take a minority stake in Shein.
Lateral thinking
👁️🗨️ In which sector are the top performers stupidest?
🥕 If you could afford to do so, would you get a full body scan?
☄️ 16 scenarios by which the fertility fall might end.
📉 The Linkedin marketing team counted the share of members adding AI skills to their profiles.
Number of folks in Singapore doing so grew 20 times from January 2016. Finland (16x), Ireland (15x), India (14x), and Canada (13x) round out the top five countries.
If you didn’t already, I suggest doing the same too, reading a newsletter mentioning AI means you got the AI skills too, after all. 🙃
Mo’ Sundaying
🏠 The Silicon Valley elite spent $800 million as it wants to build a new California.
🎙️ 36 powerful people in podcasting weigh in with their predictions, plans and biggest pet peeves.
🇪🇸 Je suis Jenni Hermoso (or soy, rather) - periodic reminder of the times we live in.
🇨🇳 China banned fish from Japan in response to treated wastewater from the Fukushima nuclear plant getting released into the ocean. Meanwhile, Chinese statistics show that 13 nuclear power plants in China each released more radioactive tritium into the ocean in 2021 than the planned amount to be released from Japan's Fukushima Daiichi nuclear power plant in one year.
🇺🇸 Of 16 large US cities, Americans are most likely to consider Dallas and Boston as safe to live in or visit.
🤭 Tourists are ruining the world’s greatest destinations.
💪 Jennifer Aniston went from sitcom star to Hollywood power player.
🎾 Andy Roddick on pressure, fame, failure, love, and loss that came twenty years after winning the US Open.
⌚ Rolex thefts are on the rise as luxury watches worth £1 billion are missing.
🖼️ 2,000 items are thought to have been stolen from the British Museum, but some have started to be recovered. The BM boss resigned, saying he hadn’t taken theft warnings seriously enough.
🐟 A fish dropped out of the sky by its bird captor caused a power outage for a section of homes in a New Jersey town.
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Created every Sunday by @drnovac of Nordic 9 with weekly notes and observations from the European startup ecosystem.
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