Good morning,

Early AM, fresh coffee on, some jazzy tunes in the background and ready for another edition of Sunday CET.

Welcome to the new people on the list. As always, ping me with comments, questions, rants, gossips and whatnot, I try to answer each and every one of you. And thanks for reading!

PS. In New York for the next three weeks - open for coffee etc, or let me know who I should meet. Tx.

Top intel

Deal highlights from this week 

🇩🇪 ​Mixedbread​, developing an API and SDK service that allows access to state-of-the-art embedding models in seconds, raised $900k in a pre-seed round backed by Tiny VC, System One and angel investors. 

🇮🇹 ​Axyon​, developing a SAAS tool using AI to create bespoke business applications for asset management and trading, raised $4.3 million in a round led by NY-based Montage Ventures, joined by Techshop and a bunch of banks such as ING and Unicredit.

🇩🇰 ​Reel​, building an AI-based electricity procurement marketplace, raised $5 million in a post-seed round led by Transition VC, w/ UVC Partners, The Footprint Firm and angel investors.

🇩🇰 AI-based fintech - pre-seed

🇬🇧 personalised medicine marketplace platform - pre-seed

🇩🇪 ​all-in-one IT solution from onboarding to cybersecurity. all-in-one IT solution from onboarding to cybersecurity - seed

🇩🇪 ​marketplace for product packaging - series A

All in the tomorrow’s intel, and more:

• a detailed look at the business models of a bunch of super interesting AI projects

• the American investor with 6 (six!) Dutch AI startups in portfolio

• 2 (two) Euro accelerators focused on taking their startups to US

• who are some of the more popular VCs

• exits and strategic investors moves.

• and more.

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Market talk

🇬🇧 Story of the week is Apple’s aggressive reaction to the European law that requires Apple to compete with other market entrants.

• ICYMI: 1) the EU asked Apple to open up its closed ecosystem to choice other than Apple Store’s; 2) Apple refused and contested legally this ask saying that opening up to competing services would harm their consumers; 3) A court of law denied Apple’s claim and 4) As a result, legislation was enacted saying that Apple apps should be able to be distributed via other App Stores.

• That simply means Apple needs to follow the law like everybody else.

• Apple’s reaction though is a powerful play demonstrating it’s above the legislators - Tim Cook’s plan B to losing to the EU was seemingly declaring war to Europe, and so we might as well have gotten into one. “They may be the law, but we’re better than that - let’s give them hell!”

• And hell they gave - in short, they twisted the legislation requirements into a more drastic construct by simply repackaging the existing 30% commercial terms into a new model that would allow the existence of an Apple’s Store competitor at very expensive terms - i.e. a €1M "letter of credit" for the alternative store + €0.50 pay for each install.

• All within the legal framework - Yes, we allow other app stores. But the entry barriers are high and costly, and the proceeds are still going into our pockets. You can pay 30% to use Apple Store, or you can pay even more for not doing so’. Made even a calculator for it.

• I won’t even get into how more difficult/expensive it’s gotten for startups building Apple apps that want to use alternative payment systems for app sales. Not easy for big companies either - for example Spotify says it cannot afford these fees if it wants to be a profitable company, so the only option is to stick to the status quo and not use the Apple Store.

• Anyways - take this EU! The EU legislators look like the bad guys now, right? Or just plain silly, the situation looks even worse off for the market now!

• This aggressive attitude is not healthy but in line with Apple using discretionary power that led to all developers, big or small, hating them.

• Apple justifies its forceful attitude by claiming it’s the only way for its users to stay safe and protected from outside harm. Which it evidently is a false narrative, it’s all about the money. Imagine a head of a family abusing their kids and telling to the police “it may look that way but my kids seem happy and safe” - doubt it’d work out well, would it?

• And otoh, listen, let’s be real, it’s been long documented the EU is not exactly the best in class at understanding tech and crafting appropriate legislation for it. Apple’s flex, yet smart, is not only aggressive, but also is seemingly taking the EU for fools, challenging their intellect, alienating not only legislators but a whole tech ecosystem.

• Let’s see what’s next - btw, this is not happening in a vacuum, the EU has likely been warned in advance, and Breton waits for the market’s reaction. Technically this is Apple complying with the EU regulations and the end result is hardly a better competitive environment favouring all market players - which is ultimately the objective of EU doing this in the first place.

👋 Also notably this week, Klarna launched a paid tier for its service, available to the US customers for now.

• Klarna users save approximately $12 monthly against a $8 sub that also includes a loyalty layer with discounts and coupons a la Amazon Prime.

• interesting for a few reasons:

  • adds to the story Klarna is building for IPO

  • a new revenue driver that should reflect in the income statement

  • a new building block for Klarna’s app turning into a super app - now it is a native wallet fronted by a suboptimal marketplace sending ecommerce traffic to its merchants. Suboptimal as this is the only non-native app experience, probably so not to alienate the partners.

• I have in the works a piece about who has the potential to build super apps in Europe and how - should be ready soon for the N9 subscribers (you can become one from here).

🤔 Here’s a nice profile of Amie, one of the myriad VC-backed startups from Europe doing a calendar app with the hope of turning it into a 1 billion business.

• The TC article is basically a PR piece saying that the Germans took their product out of stealth as a reaction to Notion launching a similar calendar feature to the product Amie is building.

• If you bother to go beyond the TC puff piece though, the real market talk is a different narrative.

• Here’s the context - Amie was launched in 2020 as a productivity app and switched to a calendar app in 2022. In stealth ever since.

• You read that right - a calendar app in stealth for years!

• We have a saying in the startup world - what you do with $500k (as a software startup) is telling for how you build your company. That’s because you can put a MVP in the market and establish tentative PMF for it with 500k.

• I mean - 4 years and 8 million in VC money for a product that’s actually a feature, that’s still in stealth - you gotta show something for it at least, right?

• This reminds me of another super-hyped British startup done because a VC was unhappy with his calendar and whatsapp experience.

• So he pulled a crew to scratch that itch and raised 4 million from investors, VCs included, in 2021 because… - well, it’s (that VC is) Paul from Lightspeed!

• 3 years and endless iterations later, now that product is - you guessed it! - an AI-assistant that costs 5 bucks a month → an undifferentiated play right in the middle of the market.

• All those shiny apps are solutions in search of a big problem - utilities with minimal switching costs in a market with endless other competitors and standing slim chances to become big because of the lack of identity and a strategic plan against a solid business case.

Also notable 

🇮🇹 The Italian police found a tax fraud carried out by 85 suspects involving $1.9 billion in false invoices, with the money laundered through a system of so-called Chinese shadow banks.

• You read that right - shadow banks.

• 1.9 billion is about as much revenue as Wise and Revolut pull together in a year!

• Keep in mind that this is what the police discovered, which only scratches the surface of the underground economy - the shadow economy in Italy is as large as the GDP of Austria.

🇫🇷 Bereal’s newly found growth hack is to get friends with the advertising industry people and influencers.

• They do this because that’s where the money is and they need to make some pronto - have raised 90 million since 2021 and investors need to justify spending so much money for a consumer app that was supposed to be the next Instagram.

• Bereal’s reach is 23 million DAUs, up from 20 million last August.

• That is still less that what Zenly had when it was closed by Snapchat in 2022.

💲 Random numbers I ran into:

• Turkish startup in Germany doing a Shopify-like platform: $1M to $10M ARR in 16 months.

• Ukrainian startup operating a mental health marketplace: $100k to $10M in 17 months.

• French scaleups.

🇪🇺 The EU is EU-ing:

• Have you noticed the farmers protests from all over Europe that keep on going for several weeks now?

  • That’s because you cannot set ambitious environmental and social standards ignoring what the local market can actually handle in a realistic way.

  • … a local market that’s a poor laggard in the grand scheme of things, way behind and badly out-competed by the US and China.

  • results speak louder than words - last time I checked, being reactive and just jealous of the best in class, without building value-creation assets and a fitting environment, will make you a sore loser.

  • And yup, the EU is doing exactly the same with the AI, in case you had any doubts.

• Oh, and btw - Christine Lagarde is performing poorly or very poorly as president of the European Central Bank, according to a survey among her employees. Probably nothing.

• Europe’s banks are asking investors not to pay too much attention to a new green metric due to be published in in the coming weeks, as early estimates show the industry woefully behind where it needs to be.

  • The Green Asset Ratio, launched by the European Banking Authority in 2021 with a deadline for 2024, measures the percentage of assets that aligns with the bloc’s list of sustainable business activities.

  • The EBA in 2021 initially estimated the figure was about 7.9% on average.

• Even the politicians acknowledge it…

  • The EU funding institutions need to lower a little bit their risk aversion rate with respect to certain projects.

• The EU needs to make progress on its long-mooted drive to unify its banking and capital markets now that it can no longer rely on the City of London.

🇬🇧 From January 31st HM Treasury will change legislation to raise the qualification criteria for a HNW Investor to £170k income (up from £100k) or £430k non pension, non household assets.

• Why is this important - accredited investors (i.e. meet the above criteria) can receive initial tax relief of up to 50% on investments up to £200,000 and if they sell their shares after 3 years, any profit is free from Capital Gains Tax.

🦆 Peak AI:

• Paris-based ad and marketing group Publicis plans to invest €300M in AI, including €100M in 2024, to help improve media planning, buying, and optimization.

🇬🇧 Is the UK just a nearshoring option for the American tech companies?

• Developers are increasingly based in the UK, while the marketing team remains in NY. Python developers can command between $250-350k in New York, while the equivalent are paid about $75k in London.

• Alas, the Americans have always paid better for the value creation process, because they’re also better at extracting value from the said process.

🇩🇪 Hard cold facts about doing VC-backed startup work in Europe, the German chapter:

• German startup that recently closed a seed round paid:

  • €30,000 for all legal fees (from document drafting to negotiation to completion)

  • €40,000 for Notary fees (reading the documents to the Founders for 8 hours and sending a box of paper)

• sounds like an elaborated scam - it’s not, it’s the law!

• … and a lot of dough either, €70k is the yearly salary of an experienced software developer in Europe.

• running a startup in Germany is beyond making any economic sense - fwiw, I always encourage the startups I work with to just incorporate elsewhere, even though they choose to run some ops there (most of the ambitious ones move to the States).

🚙 Tesla Model Y was officially the best-selling car overall in Europe in 2023.

• followed by Renault Clio, Dacia Sandero, Volkswagen T-Roc, Opel Corsa and Dacia Duster.

• in brand aggregate though, the Volkswagen Group was the largest one, followed by Stellantis and by the Renault Group.

• watch out for the Chinese.

🇩🇪 BMW will deploy humanoid robots in the car maker's facility in the USA.

✍️ Google says that whether a human or AI wrote an article doesn’t affect its ranking in Google News.

• new data shows that while 90% of news organizations block AI bots, right-wing outlets like Fox News, Breitbart, Newsmax, and The Daily Caller, mostly permit them.

• if you’re a journalist and not building your own personal audience, you’re not paying attention.

🤷 Bing's ChatGPT feature has barely moved the needle for the browser, which increased its market share by less than 1% in 2023. link

🛒 Retailers return to the just-in-time inventory management strategy which many companies had employed before pandemic-driven product shortages and volatile shifts in consumer demand prompted a switch to a “just-in-case” stockpiling approach.

💰 Tiger Woods and Nike broke up after a 27+ year relationship - here’s a smart marketing hack on top of it.

💡 How Silicon Valley startups really work.

🖖🏻 Rodolfo is hiring for building a near-zero energy chip.

📈 Some fintech predictions for 2024.

Mo’ Sundaying 

🇳🇴 Here’s a story I learnt about recently:

• In 1978 Norway and Sweden had in the works an industrial cooperation whereby Norway would get 40% of the shares of the Volvo car holding, while Volvo would get control over oil resources on the Norwegian continental shelf.

• Deal would value the 40% at SEK 20 million - $18 million at that time.

• Out of the three unprospected North Sea areas that Sweden was offered in exchange only one turned out to have gas (the Oseberg oilfield), and none of them had oil.

• The plan was rejected in January 1979 by Volvo's shareholders, who believed that Volvo was being sold too cheaply and that the Norwegian oil industry was not worth so much.

• Just a few years later, the Oseberg oilfield struck black gold and from then on, Norway’s oil productions skyrocketed, peaking in output in 1997 - the reserves came to around 350 million cubic meters of oil, worth somewhere in the vicinity of $140 to $200 billion.

• That doesn’t even take into account the vast natural gas reserves also present in the area.

• The Swedes sold Volvo for $1.5 billion to the Chinese 30 years later.

🤭 Have you noticed lately officials from different countries making all sorts of statements about how we all should be prepared for a war? That’s neither random, nor weird, just worrisome - them dudes are setting up expectations.

• The war narrative

• NATO has been underestimating Russia’s war machine

• Most of Russia’s war chips are made by US and European companies

🇳🇴 A plagiarism scandal rocks Norway’s government.

• Sandra Borch, Norway’s minister for research and higher education, resigned last week after a business student in Oslo discovered that tracts of Borch’s master’s thesis, including spelling mistakes, were copied without attribution from a different author.

🇳🇱 Dutch are weird people who have lots of odd cultural conventions. We should just be mocking them for it, not celebrating them.

🇫🇮 What the top Finnish conductors earn.

🇯🇵 Impressions from a longer stay in Tokyo - TLDR: one of the best cities in the world.

🇦🇷 ICYMI - the Argentinian president at Davos.

🇬🇧 Here’s something innovative the Brits have come up though with lately: a new drinking game.

• Strangers across the country are buying each other drinks out of both kindness and in the hope of getting a free tipple when they themselves go to the pub.

• The game works like this: Every day, those hoping for free drinks send photos of their faces, a Wetherspoons pub name, table number and a plea for generosity to a Facebook page.

• Volunteer moderators check photos of the players’ IDs and pick a few dozen winners each night to post their picture and pitch, usually ensuring a few free rounds.

• Moderators shut down the posts when too many drinks are ordered. Tequila, in particular, seems to prompt a quick shut down.

• Anecdotes on topic here.

🦜 Potty-mouthed parrots teaching other birds to swear as zoo hatches plan to stop problem. In the UK that is.

• The parrots are cursing and telling zoo visitors to “fuck off”.

🐧 A penguin wandered onto a New Zealand airport runway. A rescue ensued.

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