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Mega rounds are back
Well kinda, it’s not what it seems, I will explain. 😃
Looking over the list of the top rounds from this year, just recently we had the likes of H2 Green Steel, Northvolt, Verkor, 1Komma5°, Driveco, Low Carbon, Accenta.
Most of this year’s expensive bets are in energy and infrastructure, which are under-invested, tech lagging sectors in Europe - the bets are sizeable because the biz is capital intensive and the vertical is interesting as it is still stuck in the last century’s economic paradigm, one of the rather singular segments private investors are actually bullish on in Europe these days, if we’re to judge the yoy dealflow spend.
Of course, the war in Ukraine pushed the agenda to the top and created premises for pent up demand, also putting more wind on the sails of the climate-focused folks who seemed to be a bunch of mere idealist activists just a couple of years ago, during ZIRP times. Shit got more serious now, and make no mistake, it’s not because VCs got worried about the quality of life on Earth all of a sudden - far from that, it’s where some of the smart money can be invested today. Forget about putting a million in SAAS, energy is serious business.
AI also has become a thing - again, kinda, just like web3 was a thing last year, with a bunch of investors who went beyond contributing to hot takes in social media and putting $ to work, and/or doubling down on the likes of Builder. Sifting through the actual done deals, there’s not a lot of catchy signals, the local AI startups gathered the usual, typical European me-too, no-business-model exercises, with some interesting moves at the egdes, accentuated by the Americans betting big on the French - an honorable contribution to an already crowded competitive space that the EU was quick to bring its unique value add to by regulating it.
Lightspeed leading Mistral’s mega round is also yet another piece of evidence that the VCs in Europe actually able to take startup risks early on are American. I love you but you are not serious people - the locals are still at the level of consultants worried about LTV and CAC model spreadsheets at pre-seed.
Also notable - Helsing. It’s a big deal, and has been only covered by the media because Daniel Ek has a stake in it (btw, the DE brand is the organic PR Prima Materia sells upfront as the fund’s value add and it is working) - but looking further the click-driven content, Helsing is one of the strategic AI startups that Europe has produced lately ever, most valuable to date at $1.5 bill and which, in a sad way, the war in Ukraine has validated big time - they have gotten tons of VC rejections when they had raised seed back in 2021, btw. Yes, it’s a story that needs more writing about, get to it!
Note the combination of the EU narrative of sovereignty with the Helsing’s lead investors being American. Worth repeating it - serious dudes don’t talk about taking risks in social media, they do it. Oh, and remember Nato VC - why are they not in Helsing’s narrative yet? Maybe they are, and keep it under wraps? Or, maybe nobody needs politicians in the captable of a serious business? Or, again maybe, they’re still sleeping in their 1 billion dollar shoes figuring out how to get an IBAN?
Beyond that, most of the mega rounds this year are bridges resulting from investors triaging their assets, and scooping the media that everything from their portfolio is for sale (of course it is!) while waiting for better times. Which, at least at macro levels, are yet to be emerging on the immediate horizons - you noticed that ECB raised rates to record high of 4%, right?
💲 Euro intel cheat sheets
➕ More context
Startup sourcing concierge - every week we send to our Monday CET subscribers a curation of interesting early stage startups from Europe. You can sample the archive with 100+ startups from 25 European countries here (available for free for the next 24 hours) and can subscribe to get in your inbox every week from here, alongside cheat sheets focused on European VC and weekly curated early deals.
Deals highlights this week
🇨🇭 Viboo, developing a Predictive Control as a Service platform (PCaaS) which makes smart thermostats even smarter, closed a $1.9 million seed funding round from High-Tech Gründerfonds, Swisscom Ventures, and Rainmaking Impact. (press release)
🇩🇪 cleverly, operating an online tutoring platform, closed a $5.1 million seed extension funding round backed by emma Ventures, Rubio Impact Ventures, Capnamic and business angels. (Business Insider)
🇳🇴 Databutton, developing a framework used for cross-functional collaboration, build and distribution of apps, APIs, and models, raised $5.1 million seed in a round co-led by Skyfall Ventures and Maki vc. (Tech EU)
🇫🇷 Swan, doing embedded finance SAAS on top of banking APIs for providing banking services on demand, raised $40 million series B round led by Lakestar and joined by Accel, Creandum and Bpifrance. (press release)
🇬🇧 Open Cosmos, startup designing, building and operating satellites out of , Harwell, UK, raised $50 million Series B from ETF Partners, Trill Impact, A&G and Accenture Ventures. (press release)
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We cover (much) more early stage intel from the European long tail every week over at Monday CET.
Other stories
🇬🇧 Arm’s shares went up 24.7% in its Nasdaq debut, valuing the company at $65.2 billion.
It's P/E is now higher than Nvidia's.
Otoh, 15% of Arm’s shares were taken by Apple, Samsung and other customers - that can put a floor under the stock and attract retail interest.
Same goes for the Instacart’s IPO, whereas Pepsi, a key customer, is said to be an anchor investor with $175 million worth of shares.
Not least - the likes of Sequoia and Andreessen Horowitz who have IPO as the liquidation event, say they intend to re-up their holdings with Instacart’s shares post IPO, which makes you wonder why limited partners in these funds pay the venture capital managers to get access to deals they can’t get on their own. As soon as it’s public, they can just buy Instacart themselves. It seems more like a move to preserve relationships or for optics.
🥕 Another one with Instacart:
The series C investors had an annualized return of 9%, which maybe on first glance doesn't look that bad, but the S&P 500 had an annualized return of 12.3% over the course of 8 years (2015-2023). Anyone that invested in the D, E, F, G and subsequent rounds had even worse outcomes than those at the C. Investors at the Series I stand to lose 80% of their invested capital.
The single biggest winner is decidedly Sequoia Capital, which invested ~$6M at the Series A. That single investment is now worth $675M.
🇮🇪 The Irish Data Protection Commission has fined TikTok €345 million for violating children’s privacy - the app unlawfully let anyone potentially watch and interact with teenagers in 2020.
🇪🇺 Iliana Ivanova has been approved by the European Parliament as the EU's new commissioner for research and innovation, replacing Mariya Gabriel, who resigned as EU Commissioner in May.
🇪🇺 The European Commission President Ursula von der Leyen announced another European victory on the tech innovation front, whatever she thinks that may mean, as the EU now has three of the five most powerful supercomputers in the world - people made fun of this on Twitter, but nobody has the guts to actually tell the EU people they’re being ridiculous in rapport with tech understanding sometimes, because, well they’ve got budgets to distribute and everybody’s gotta eat at the end of the day.
Related: profile of an European politician who’s finally happy to be taken seriously by tech CEOs.
🇨🇭 Students from ETH Zurich and Lucerne University of Applied Sciences and Arts have broken the previous world record for acceleration with their hand-built electric racing car, mythen. The vehicle accelerated from zero to 100 km/h in 0.956 seconds over a distance of 12.3 metres.
🇬🇧 Monzo launches Investments, letting users invest as little as £1 in BlackRock-picked funds, its first foray into the investment market
🇫🇷 France's government ordered a halt to sales of the iPhone 12 because it emits electromagnetic radiation levels that exceed European Union standards. Apple has agreed to install updates.
🇺🇸 Open AI is looking to hire about 20 people in London and Dublin - local bossman is a former Stripe and Google dude.
🇸🇪 Klarna threw a party for employees because the company has become profitable. There’s a VC lesson in there, I bet, or maybe VCs even paid for it. 🙃
🐯 How Tiger Global fell to earth.
🚗 Tesla dominates the US market, but EV newcomers include the first electric models from Lexus and Fisker, two sedans from BMW and one mass-market Hyundai. link
🇨🇳 The Chinese Communist Party has ordered BlackRock and Templeton Franklin executives in China to take classes in “Xi Thought”.
Some bank executives and business heads have to take around a third of working time to study Xi Thought, joining activities and courses, or reading four books from Xi every month. Attendance is mandatory this year and they also need to submit papers on what they’ve learned.
👀 How long it took different companies to find product-market fit.
💪 2023 Sales Benchmarking Report of 143 startups shares trend data from 2021 through H1 this year.
We are what we eat
Mo’ Sundaying
🤔 European startup education is shit - are you a young European wanting to study entrepreneurship in school? Leave - and join programs such as Project Arrow.
🇫🇷 Bernard Arnault built a luxury empire on ‘desirability.’ But with five children, who will inherit it?
🇬🇧 You know the Brits are deep under when they’re jealous of the French patriotism. There’s even money prizes for finding solutions taking the former kingdom out of the malaise.
🍻 Oktoberfest kicked off in Munich this weekend - it’s been held since the year 1810.
👁️🗨️ A look into Rome’s super-luxury hotels:
Rome, a city striated with epochs and contradictions, has always been a mix of the highest and the lowest, emperors and slaves, nobles and knife-wielding thieves, decadent do-nothings and hard-working stiffs. Even so, there is something particularly surreal about the current moment, when the city is becoming increasingly awash in exorbitant hotel options even as it feels the grip of what Romans call the degrado, or degradation, a more than 15-year slide into an often anarchic and acrid state of abandon.
🇨🇳 China has one-fifth of the world’s population and buys half its cigarettes.
🔌 Cocaine is set to become Colombia’s main export, overtaking oil, as production of the narcotic continues to expand as the government take a more lenient policy regarding drugs.
🛋️ Furniture used to last generations. Now it barely survives a move - here’s why.
💤 There’s a theory that the brain uses REM sleep to learn the body.
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