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Hey there,

Welcome to Sunday CET!

This weekend - Mistral, Lovable, VC depression, Nvidia, Elon, EU/US tech wars. And a whole lot more, let’s get right at it.

Enjoy,
Dragos

Signals

Interesting deals

🇸🇪 Hubert (chatbot SAAS for recruitment interviews) - seed
🇪🇸 Rauda (end-to-end customer automation platform) - seed
🇮🇹 Waveful (AI social app ) - pre-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:

🟩🟩🟩🟩🟩🟩 🇳🇴 Oteria (Oslo) - skin cancer screen app (50%)
🟨⬜️⬜️⬜️⬜️⬜️ 🇫🇷 Reyouzz (Lille) - marketplace for recycling consumer goods. (17%)
🟨🟨🟨🟨⬜️⬜️ 🇩🇪 ZeKju (Augsburg) - messaging app for shippers/truckers (34%)

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

Intel this summer

• British AI for prediction markets link

• investors paying premium in Europe this year

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

• active investors in the Nordics summer 2025.

• the VC economics for a drone interceptor startup

• AI deals made in Europe by Europe's mega funds + American

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Market talk

Current situation

• Bolt is transacting at $7.3B.

• ElevenLabs to consider employee share sale in a secondary deal at $6B.

• Revolut already did so at $75B.

• Mistral reportedly closed at $14B, way above the $9B they were initially seeking.
  → if Dealroom’s 110M ARR number is correct, that’d be a 127X multiple. Yuge, likely reality is 2-3 orders of magnitude away, I heard multiple un-confirmed numbers in a large delta tbh.
  → the Apple rumours were fake btw, the French would never. Unless the price is right, of course, and current one is a solid anchor.

• Lovable received investment interest at $5B this week, or 38.5X of August’s $130M ARR - that’s up $1B from what it got just a week ago, while they have raised at $1.8B/24X in June.
  → $1B extra a week, there’s 16 more weeks till the end of the year - where will this go? 😀 
  → jokes aside, what’s changed so dramatically since June to justify this jump? On one hand, there’s nothing new on the business side, we’ve got an early stage team executing flawlessly against a hyper-growth opportunity. On the other, it’s a blunt indication that the prior price was rather low - and now we’re mid-FOMO, with capital looking to be spent in a low-supply market, validated day by day by increased belief that Lovable will be at least a $100B+ company, growing with the ecosystem it’s part of. Last part is equally important, the top AI companies are thriving, and they’re more later stage than Lovable is.
  → so, for example, if investors find an entry at 10B and exit at 100B it’s still a 10X decent return. It’s the same type of calculation with Mistral, which has a rather local consolidated play and additionally priced in being a significant part of the French national story of getting the country to the other side of the shitty macro.
  → will the Swedes raise this year again? They rightfully play hard to get now as they have leverage. The better question is what’s the cracking pricing point - (insane) money is money and we live crazily unique times.
  → I had an investor tell me over the summer that Lovable’s going to get traded at $20B at the next round and thought that’s crazy talk - calculation for $20B valuation here.

• quick aside here - somebody noted that Europe is in a bubble since the trades are at higher multiples than ZIRP ones i.e in 2021, Klarna’s $45.6B valuation was at a 30X multiple, while Mistral above, or Framer of n8n, for example, were just priced north of that. Couple of notes:
  → Europe is in a deep VC depression, with dealflow at pre-covid levels and with less than 100 high tradable assets, while most of the value is fleeing en-masse to the US.
  → last month, half of the $3B the VCs spent for startups was on only six deals.
  → that’s not to say there’s no valuable startups out there, au contraire, we are seeing plenty of interesting stuff in Europe, but the market fundamentals are not great.

Moves

• Nvidia invests in startups, which then buy its AI chips, then Nvidia rents those chips back.
  → the startups (i.e. CoreWeave, Lambda) get to increase the chip rental revenue, improving ability to go public.
  → Nvidia not only benefits from any increase in the startups’ value as a shareholder, but also gets to increase its own revenue from the chips that the startups are buying.

• OpenAI increased the size of its tender to $10.3B (vs. $6B previously) at a $500B valuation - deal provides liquidity for employees.

• Anthropic raised $13B at $170B pre, or 36.6X revenue multiple.

• Klarna wants to IPO at $14B this month, launched a consumer debit card available in the EU.

• its US-competitor Brex just licensed in Europe in order to offer its corporate credit cards and payment solutions directly to businesses across the EU and the UK.

• JP Morgan is also pushing its retail banking capabilities in Germany.
  → launched in the UK five years ago, handles £23 billion of deposits (as of 2024)

• Stripe and Paradigm announced Tempo, a standalone blockchain network designed for fast, stablecoin transactions.
  → think of it as an alternative money pipe to what Visa/Mastercard handle with their card networks that sit on top of banks - a next gen network on top of a global stablecoin ecosystem to explode in the following decade.
  → the neutrality is key as they want adoption from banks, fintechs, wallets, or even competitors - the idea is that merchants could accept both, just like they now accept Visa, PayPal, Apple Pay.
  → short-term market pains are where Visa/Mastercard is still obscenely expensive - FX/cross border remittance, micro-transactions, merchant fees.
  → for example, you know how German merchants prefer cash and refuse card transactions? Tempo is a cheap alternative that’d give the Germans no excuse to do cash only transactions.

Aligning value with reward

• Capitalism at its best - European mind cannot comprehend this:
  → Tesla’s board will pay Elon Musk of up to $900B in stock if he turns Tesla into an $8.5 trillion company in a decade.
  → yes, B stands for billions!
  → that’d mean Elon increase 8X from Tesla’s current market cap in 10 years.

  → he’d need to stay at least 7.5 years and have a CEO succession plan in place to unlock the final tranches.
  → KPI targets: 20 million Tesla vehicles, 1 million Robotaxis, 1 million Optimus humanoid robots, Full Self-Driving (FSD) subscribers to 10 million.
  → NB: Elon says that Tesla will derive 80% of its value from Optimus robot, which have yet to hit the market. If you’re an investor, what’s your robot portfolio position now? 😀 
  
  

Policy and (big) tech

• this week, three European countries announced buying performant equipment → 🇨🇭 Apertus, 🇫🇷 Asgard, 🇩🇪 Jupiter

• there’s a near €2 trillion European headache for a 2025 already marked by tariff twists and turns, deficit worries and now a political crisis in France.

• Ukraine to open weapons factory in Denmark.

• Microsoft will unbundle its product and will sell Teams separately from Office 365, as it complied in order to avoid a hefty EU fine.

• the EU fined Google €2.95B over abusive practices in online advertising technology, the second-largest antitrust fine ever in Europe - the largest was also against Google.
  → in France, Google also got a €325 million fine for placing tracking cookies and ads on Gmail without consent.

• there is an American high level response to this → ‘the US administration will not allow these discriminatory actions to stand’
  → NB1: the response was given as Trump was dining with the most powerful American big tech CEOs
  [side note: Elon Musk was remarkably absent while Zuckerberg sat next to the president. In addition to CEO Sundar Pichai, Google was represented by Sergey Brin - Trump took a liking at his girlfriend]
  → NB2: the above fines were for American tech dis-obeying European legislation. In the US they are under a similar legal scrutiny, and get similar fines as well.
  → NB3: likely a play for the American side for maximizing its immediate and transactional leverage vs Europe’s needs of protection against Russians.

Closing notes

• OpenAI will launch an AI-powered recruiting platform to compete with LinkedIn [yes, please] - effort led by a French, btw.

• Plaud, producing AI note-taking devices transcribing the busy days of doctors or lawyers, have sold 1M of its devices since 2023, on track to reach $250M ARR. Did so bootstrapped - like savages. 😀 

• Amazon made a deal with JetBlue in the US to have its still-to-launch satellite internet service Project Kuiper to power the Wi-Fi on flights.

• a16z is building the next YC - its Speedrun accelerator has invested $180M into 150 startups over the last 18 months.

• Crypto com and Underdog partner to offer sports prediction markets.

• McLaren’s F1 arm reached a £3.5B valuation, 6X since 2020.

• how much are you using voice-first AI to interact with computers?

• if you own a country in Europe, call Anton.

• in Sweden there’s a startup that let’s people rent out their public transport pass. Not available in Sthlm though.
  → fwiw, a SL monthly pass in Stockholm is SEK 1060 ($115), in the upper-middle European tier, way below London (£293) and Dublin (€115), and more expensive than Paris (€86), Copenhagen (€98).

• the fourth season of the White Lotus show will be set up in France 
  → that means more Americans will flock there and complain about the lack of A/C.

• Daniel Ek's eldest daughter Elissa is a singer and just put out a single.
  

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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