OOO 8 weeks

Hello, welcome to Sunday CET and happy summer! Hope you’re staying cool and enjoy it at least as much as European VCs presumably would during the 8 weeks of related-holidays*.

Let’s get to business.

Ecosystem pointers

Interesting Euro AI startups Quite a few interesting AI startups popping out in Europe these days, post Mistral saga - i.e. Flowise, Haven or Sohar as well as deals such as Command, Quazel or Reka. We keep weekly track of what’s new in the space via our intel updates sent to the N9 customers (reminder: you can trial them for free by directly subscribing to Monday CET). Also on topic, here’s a quote from the work of a journalist documenting the thinking of some of France’s emergent AI startups:

80% of our users are in the US but we are based in Paris because AI engineers are good and cheap compared to the States.

For the sake of a good Sunday argument, that doesn’t sound like an ‘outsmart the Americans’ strategy - being a low cost provider means competing on costs not on value added. It rather sounds like software offshoring as by default, this puts France in competition with similar Polish, Vietnamese or Indian hubs, for example. Not saying it’s something bad but not a competitive advantage either - while I love the energy and enthusiasm, developing yet another AI feature on the cheap and with a lil’ wow factor but without a solid business case is just a futile exercise that will only lose money. Arguably, France, and Europe in general, lacks solid business startup people capable to strategise globally and able to cross the chasm with a risky tech product - hopefully we’ll eventually get to an inflection point where the local business creativity and international ambition should trump the typical copy/paste European impulse when it comes to tech startups. Nevertheless, fact is that it’s hard to do American business from Europe, the better ones usually move to the US, and those are the ones who provide outsized money to investors - otherwise every day we will be reading how Americans acq-hired yet another local startup. That’s the half empty side of the glass, as mentioned above, I have actually seen some intriguing work from local startups incorporating native AI into business models that should make for big biz with a bit of luck and if executed correctly.

Fintech deals this year Who invested in what in fintech in Europe in H1 - we have produced a cheat sheet reviewing the most important deals by sectors: banking-as-a-service, embedded tools, web3, impact, insurance, SAAS etc link 

Other cheat sheets
- who actually invests in AI startups in Europe - link
- notable American investments in Europe in H1 2023 - link
- EV startups, payment orchestration, heat pumps

Contextual add ons:
- Roxanne Varza on being an angel scout in France
- Andreas Helbig on what it’s like to be an investor at Atomico
- Simon Menashy on billion-dollar AI startups
- Albert Wenger on AI existential dillemas
- Danny Crichton on how in the UK the E or S or G is more of an F and U.
- Stanislas Lot on some of the up and coming insurance startups from Europe
- Martin Mignot on the disconnect between the huge societal gains and investors ROI, the scooter edition
- Ben Evans on the ‘Lump of Labour’ fallacy visavis AI
- Ben Thompson on Threads, Facebooks clone of Twitter

Euro intel This week’s intel include:
→ quite a few Euro billion deals and their implications
→ the most active investors in Europe H1 2023: growth, early stage, Americans, angels
→ the usual curation of interesting early stage deals
→ … and a whole lot more.
High signal, zero noise - we send it tomorrow in the AM, get it too.

Europeans ❤️ Twitter

Elon doesn’t ❤️ back Europe - no hay dineros, solo chicos malos.

Notes 

Euro-Local

🇬🇧 Apple has announced the launch of Tap to Pay on iPhone in the UK, allowing independent sellers, small merchants, and large retailers in the country to use ‌iPhones‌ as a payment terminal.

This is a big deal as Apple doesn’t allow would-be competitors such as banks and other fintechs from Europe to use the NFC chip in the iPhone for incorporating their own tap-to-pay solutions. The EU is looking into this afaik - and btw this is the kind of serious work the EU needs to produce, instead of regulating say, ‘the AI’.

🇬🇧 A flaw in Revolut’s payment system in the US allowed criminals to steal more than $20 million of its funds over several months last year.

🇬🇧 JP Morgan now wants to do business with VC-backed companies in Europe and hired about 20 bankers in the UK to a team in its commercial bank that works with start-ups, on top of 10 that it recently brought on in Israel. The new additions in the UK include former SVB executives such as Rosh Wijayarathna, who has been hired as a managing director and innovation economy lead for the UK and Ireland, and Folake Shasanya, who will be a managing director leading venture capital co-ordination in the region.

🇬🇧 UK regulators received detailed and complex submission from Microsoft regarding the Microsoft/Activision Blizzard $75bn deal and are open to revise and approve the deal. That’s after US courts earlier this week sided with Microsoft to reject an initial attempt by the Federal Trade Commission to block the merger.

🇪🇺 Google made available Bard in the EU this week.

🇪🇺 Threads delay in EU isn’t GDPR (it’s compliant) but due to DMA/DSA uncertainty - Meta says it blocks EU users from accessing Threads through a VPN.

🇬🇧 Nvidia is in talks to be an anchor investor in Arm IPO - will Nvidia become this cycle’s Cisco?

🇩🇰 Unity announced an AI marketplace.

🇪🇺 Another day, another hefty EU fine for an American company proceeding with an aqusition before the antitrust watchdog blessing.

🇪🇺 Amazon has become the first US company to challenge the EU’s proposed legislation designed to force Big Tech to police content online, arguing it is being unfairly targeted by the law.

One requirement is that they undergo an independent annual audit carried out on measures that the platforms and search engines use to fight disinformation, hate speech and counterfeits. Another is that they open up their algorithms to the commission and offer approved researchers access to their data. They also have to conduct risk analyses for illegal content on their services and come up with mitigation measures.

🇪🇺 NATO have selected the investment team to run the Alliance’s new 1 billion euro deep technology venture fund, which will be led by Andrea Traversone of Amadeus Capital as MD.

🇫🇷 The European Commission rejected a demand from France that it "reconsider" its appointment of an American to a key post in the EU executive dealing with the regulation of US tech giants.

Mo’ data

• The average price of a used Tesla

Alas, in San Francisco the price for an electric VW is $55k vs $35k for Tesla.

• What it takes to be in the top 1% in USA. A lotta money

• Almost two-thirds of Tinder's users are already in a relationship - and half don't even want a date.

Other stuff

⚔️ Elon, AI, Meta, Twitter business 

• Forget about Mistral, Elon Musk announced an OpenAI alternative, worth $20 billion pre-launch as he is recruiting top AI talent and offering equity in his new startup. He detailed it in a chat yesterday, where he basically said his edge is he’s more trustworthy than OpenAI (he’s not).

• Meta also said it would make its its open-source LLM commercially availble - Andrej Karpathy from OpenAI called it here the most advanced in the market. Btw, that whole video is worth digging through, if you’re into this kind of stuf.

• In a counter to Meta launching a Twitter clone, Twitter started doing ad money share with top content contributors. A smart move - there’s some really nice payouts, makes all the efforts of peeps trying hard to engage on Threads seem silly.

• Meanwhile, Threads hype is going away fast, as ‘Twitter, but worse and without Elon Musk’ ain’t going to cut it.

• Not least, Musk says that Twitter’s still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load.

👀 Google doing Google stuff Google violated its standards in ad deals, about 80% of the time. Bonus reminder: Google scraps all the content from the internet, including paywalled stuff.

🔗 M&A coming right up Wave of consolidation expected across tech as cash-strapped companies seek buyers or risk going out of business

👁️‍🗨️ Emerging AC A slew of American startups building better AC devices.

📉 Traditional media contractions Disney CEO Bob Iger is considering selling some of the company’s traditional TV assets, which include ABC and FX, because he thinks traditional TV is dying. Not ESPN though.

🥕 The cost of carrots and other ingredients used to make a traditional French coq au vin rose again in June, 10.6% yoy.

🇩🇪 The German humour German blogger calls politician lady fat, she sued and had Deutsche Bank block his bank account.

💲 Dealing with cash only What’s the best way to get (a lot of) cash in Mexico with a US bank account. TL';DR: not too many options.

🇺🇸 Capitalism at its best An American politician rolled out a fundraising program allowing supporters to earn 10% cut of money they raise.

* Summer holidays always stir debates about life in US vs life in Europe - here for your weekend delight: 1, 2

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