entertainment

Good morning,

Welcome to Sunday CET!

Today we talk about startups media, fresh cash for happy employees, AI-gen content and smart sales in Europe. And many other stories.

Enjoy,
Dragos

Signals

Interesting deals

🇬🇧 Alguna (tool used to automate complex enterprise pricing & billing) - seed
🇳🇱 Euclyd (ultra-efficient silicon systems for foundation AI models) - seed
🇸🇪 Hedda (AI-powered bidding platform) - seed
🇮🇪 ​Rekord (orchestration layer for complex credit decisioning) - seed

• we add more of those on Linkedin.

What would you invest in?

I have picked three early stage, seed level startups from Europe with intriguing odds for growing. You're the VC - who gets your term sheet?

Last week’s results:

🟩🟩🟩🟩🟩🟩 🇸🇪 Arkion - AI-powered asset intelligence for power grids. (47%)
🟨🟨🟨⬜️⬜️⬜️ 🇬🇧 Juniper - all-in-one reproductive healthcare insurance (23%)
🟨⬜️⬜️⬜️⬜️⬜️ 🇬🇧 kuano - platform for rapid, cost effective quantum modelling of enzymes (10%)
🟨🟨⬜️⬜️⬜️⬜️ 🇳🇱 Spherical - dedicated semiconductors used for electronic satellite subsystems. (20%)

Let’s see your say this week - click on the link of your choice below - we’ll add the result next week.

Cheat sheets

• investors paying above the market in Europe this year

• TAM of aviation tracking link

• Lovable’s projections on how to get at a $20B valuation

• active investors in the Nordics over the summer link

• British AI for prediction markets link

Intel this week

• bunch of non-Brits pulling off cool early stage startups in London - from Austria, Croatia, France, Israel, Italy, Turkey etc

• not known American funds doing pre-seed in Sweden, one of them has ​a guy​ on Stockholm ground.

• the Nordics producing yet another fintech that’s unicorn wannabe plus a $10B+ one

• Australian buys a Norwegian factory, builds most valuable growth startup business in Europe

• French founder with two pivots in two years, eventually moves to US as the Euro thesis is not a fit - with tier 1 investors money.

• another French founder who already sold two startups, one to SAP and another to Sopra Steria, gets back in the saddle and raises seed for the next one. Yep, AI.

• Euro defence tech growing on Ukraine contracts paid for by the Pentagon + the connection between Intel's CEO and European startups

• 12 new funds closings + 3 brand new funds announced

• … and a bunch more.

Pure signal source, must read every week if you’re serious about startups in Europe - don’t miss out. Sign up now and get it in your inbox tomorrow am

Market talk

Do we need entertainment shows about startups in Europe?

Two Brits (1, 2) raised funding for putting together a streaming show about investors and startups in Europe, copying an American concept that got legs in the past year - that’s actually their second take at it, as they have already tried to do it once before the summer.

You see this kind of stuff every cycle, I think it is a cool idea and look forward to seeing it happen. A few comments over my very early morning coffee:

Their premise is as follows - Tech Crunch Europe gone, TNW gone, Business Insider going - the only place left for EU founders is Sifted. It bottle necks news and allows them to control what gets seen and what doesn’t. That’s a problem.

I agree it might be a problem, but is a streaming show on the internet the solution to it? Those above brand names employ(ed) journalists, whose work involves reporting, reaching out to people and writing stories they need to do research for.

This is hard work that, unfortunately, the market doesn’t seem to value too much these days, due to the social media slop - all sorts of people copy/paste the journalists work on Linkedin/Twitter chasing followers for achieving influencer status. In the media business those guys are called aggregators, and are mostly derided - nobody who works hard to write a story will respect somebody who copies it instantly for gaining benefits.

And because masses get a lot of it for free on Linkedin, they don’t even bother to consume media products any more, and more importantly, will never consider paying for it. Those publications are gone for a reason, building a media business is hard, consumers won’t pay for content as it’s free on the internet, leading to a consequent need to push on engagement numbers to sell advertising - for example Sifted did crossword puzzles over the summer to pump up their numbers. Btw, even Sifted is a struggling business and has a bad rep because it pushed on engagement at the cost of making compromises on content.

Back to our show, I am keen to see the type of product they will put out. I doubt they will do the above-mentioned journos job which is their stated raison d'être, but even entertaining guests in a live podcast is hard work, arguably even harder as you also need to be spontaneous, crack a joke or two and lead a decent conversation - you know, entertain people. And so, I am rooting for them.

Besides the product, it will be interesting to see the audience and how they will turn it into a business, which also could be a challenge, as the European TAM size is not particularly big. If you step outside of the bubble, you will see that startups are not as popular in Europe as they are in the US, and moreover over here the audience is fragmented in 30 countries/languages w/ most of it not comfortable with the English language. Likely the core target audience is 100-120k people, which is Sifted’s newsletter readership - at 20-30% engagement rate, you get 30-40k people actually caring and Sifted has worked hard for eight years for getting at these numbers and build a community brand.

Will a streaming show manage to attract more people? It is possible - again a quick example is to look at the 20vc trajectory, done by a Norwegian kid in London focused on the local community, now ended up as a commercial product mostly focused on the American market, that’s where money is, and the implicit attention. Alas, the market was different back then, and a favourable market is a necessary ingredient for finding PMF.

Conversation starters

Cash for employees is better than paper money 

• Stripe is in talks to repurchase shares from VC backers at a ​$106.7 billion valuation, above the 2021 peak at $95B. Sequoia previously bought shares at $70 billion in 2024.

• Checkout dot com is also doing an employee share buy back at $12 billion valuation, down from 2022’s peak $40B. Revenue-wise post 2022: -14% (2023), +45% (2024), expects +30% this year at $300B processed.

• Both deals meant to provide early liquidity for employees as an IPO is not a near event, in a macro with higher interest rates, less rosy public markets, w/ more investor caution.

• Checkout’s case is also an opportunity for value re-anchoring for future investors dealings - current buyback is a company/employees transaction which doesn’t involve investors, hence pricing was not set by market but by an outside evaluator.

Layoff people who cannot be retrained for age of AI 

• That’s what Accenture is doing these days, as they put 11k people on leave for saving $1B+ in a process they call upskilling - i.e. getting rid of people where AI re-training is not a viable path for the skills they need.

• Accenture reported $69.7B in revenue for fiscal 2025, $5.1B of which from re-selling AI implementations.

Doing smart sales in Europe 

• OpenAI just did a distribution deal with SAP for a significant chunk of business the Germans are supposed to produce from next year on out of the public sector institutions (ministries, agencies, research bodies), who require strict data sovereignty and compliance guarantees.

• Idle observation: notice how fast OpenAI is moving for putting flags on the map, building B2B business in Europe - and contrast, for example, to Mistral’s approach of building business w/ velocity, approach, segmentation etc.

• Related: Anthropic’s international growth is outpacing even their most ambitious forecasts, and nearly 80% of Claude’s activity now comes from outside the United States.

Stablecoins in Europe 

• Seven European banks plan to roll out a new euro-denominated stablecoin in the second half of next year - designed to facilitate fast, low-cost, and secure cross-border payments, as well as programmable financial transactions.

• Not sure you’d need a consortium to build a complex system and why banks won’t implement already existing stablecoins.

• Nonetheless, this should be interesting to follow as it is not every day you see major changes in the fintech space, where usually innovations meet huge resistance - add to it that the ECB is in the process of developing a digital version of the euro, while the Brits are still working on new legislation on crypto assets.

• Related: Coinbase wants to develop a super app for customers that would provide an array of financial services such as cards and payments beyond crypto trading - a bank replacement for people.

Who’s holding the bag for the AI revolution 

• Solve for the equilibrium:
  AI’s computational needs are growing more than twice as fast as Moore’s law as they serve a handful of pioneers building AI products
  + even investors have built unreasonable startup traction expectations based on a few top of the market outliers
  + big companies cannot explain the AI value.

• Lateral thought: how long until the consumer market will have access to the most advanced AI models at $20/month? Is the current pay for AI consumption pricing model sustainable or we’ll see a co SAAS-like model adoption?

More slop, but paid 

• Meta will launch paid, ad-free versions of Instagram and Facebook in the UK, each costing £2.99 per month on the web, and £3.99 on iOS and Android. The same Meta will inject its social network timelines with short-form, AI-generated videos.

• so you pay to see ad-free AI-generated content 😀 Jokes aside, Meta is doing so as a way to justify the data collection on the free accounts - the law requires platforms to offer users equivalent services when they do not want to consent to personalized or behavioural ads

• Across the street, YouTube is also testing AI hosts, who will share stories and trivia about the music users are listening to.

• Soon the social media content will mostly be AI generated, with a good chunk of AI bots interacting with each other, simulating engagement. Two ways you can look at this. On one hand, like anything new, there’s opportunities here i.e. quasi-zero costs content creation, more creativity, personality cloning, while on the other hand, lack of authenticity or manipulation are quick risks to come to mind. Fwiw, social networks have long been populated by algo’s content, not your own, and optimised for clicks and engagement.

• Food for thought: what happens if you create content for an audience made out of bots, how will you convert content into sales? In a world driven by AI-generated content what will matter is close relationships and personal brands.

Policy

• NATO has invested $728 million in new space capabilities, including a new data lake in Germany.

• American spacecraft manufacturer Planet will start building satellites in Berlin.

• Poland has become the biggest buyer of drones from Taiwan - 60% of Taiwan’s drone exports.

• ECB recommends households should keep emergency cash, alongside enough food and other essentials to sustain them for at least 72 hours in the event of a crisis.

• and if Europe being mid-WW3 is not enough, are you ready for the apocalypse?

• the OECD says the global economic growth will slow from 3.3% in 2024 to 2.9% in 2026 - but full impact of US tariff shock yet to come.

• president Donald Trump has called on Microsoft to fire its head of global affairs, Lisa Monaco, over her ties to the Democratic Party.

• Apple quietly delayed release of a show about a top-secret undercover investigator who infiltrates online hate groups to take down the most violent extremists - interpreted as Apple viewing the subject matter as too politically problematic right now.

• the US got TikTok at a bargain but at least the Chinese get to keep 50% of the profits.

Other notes

• it’s that time of the year - the survey for Atomico’s yearly State of European Tech report is open, fill up your takes here

• Andreessen Horowitz may not be in the VC business, but returns a great deal of money to their LPs.

• Europe is a highly fragmented market with 4,600 asset managers - while M&A between asset managers can cut costs, it doesn’t fundamentally address the issue of fee compression among retail investors who are increasingly price sensitive.

• there are more robots working in China than the rest of the world combined - btw, a bunch of VCs just visited China to get a reality check.

• shocker, the Linkedin cosplay is actually real or corporate excellence in Britain:
  ‘I manage a team of twelve people who create documents for other teams who create documents for senior leadership who don't read documents. I make £150k a year. It's completely absurd, and I'm riding it as long as I can while building something real on the side.’ - some VCs will fund this dude. 😀 

• Samsung will start showing ads on their customers $1,800+ smart fridges, whether you like it or not.

• ChatGPT hallucinations are a feature, not a bug.

• the European mind cannot comprehend this: the kids I spend a little time with speak with disdain of B2B software and with respect for hard problems.

• financial intimacy is a thing: friends opening joint bank accounts to strengthen their relationships

• the mathematical challenge of making a 30 team NBA schedule - If everyone hates you equally, you’ve done your job.

• once considered rarefied and exotic in the United States, sushi has become a convenience food.
  

That’s all folks, have a wonderful week!

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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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