the French Achille’s heel

#222

Author

Dragos Novac
February 02, 2025

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Good morning and welcome to Sunday CET.

February already and we’ve got a full plate of things to chew on, coming from all over the place - Europe, US and China. Let’s get to it, hit reply for q’s and comments.

Dragos

The week at a glance

Market talk

Should Mistral be for sale? As I said last week, everything’s for sale for the right price.

  • Underwhelming growth financed by 1b VC money makes for a hard case of a future-defining tech company made in France.

  • Otoh, Softbank pricing OpenAI at 300b and 34% market share, puts Mistral’s 5% at a $40b price tag - which is 7X-ish since last year’s Mistral valuation.

  • Miracles have happened, but hard to envision a buyer meeting this price for a niche player growing slower than the market. NB: don’t under-estimate a patriotic bid, ego beats ROI.

  • Unless the French finally grok an Erik Schmidt moment to give themselves a fair chance, which last year was off the table.

  • We’ll see what investors price soon - it’s evident that a deal values distribution rather than an equally good product across the spectrum. Distro is the French Achille’s heel, see below the economics breakdown.

Interesting startup deals


🇫🇷 Beans (B2B2C marketplace) - $1.5 million
🇳🇴 Receipts (digital receipts SAAS) - $1.8 million
🇬🇧 C the Signs (AI-based cancer prediction system) - $8 million

🔒 Premium feature: other interesting deals: pre-product $100M rounds, multiple $20M+ series As (one $50M), unicorns, 15 startups that just joined YC etc. Sign up.

  • Bad economy: Deutsche Bank had a 92% profit drop for Q4, and overall down 7% year-on-year.

  • French DOGE: Is that even possible?

  • Germany in 2040: Hyperinflation / total economic breakdown / currency cut and afterwards further slow decline into oblivion.

  • Europe depends on US business, the Irish case: more than one third of Ireland’s corporate tax receipts come from three companies.

  • More AI fear from the French: The government will create a public institute for anticipating possible AI risks. Or might as well just politicians justifying some salaries out of public money.

Investors spotlight

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Also notable 

💲 Cheat sheets:

🇨🇳 DeepSeek:

🤓 Apple canceled plans to build a rival to Meta's AR glasses and seems unsure about where to go with its Vision Pro headset.

  • meanwhile, Meta sold more than a million of its Ray-Ban smart glasses in 2024.

🏦 This requires a longer discussion, maybe in a future mail: why mass-market neobanks haven’t taken off yet in the US.

💲 Goldman Sachs received Kremlin approval to sell its Russia business to Balchug Capital from Armenia.

  • ING also announced this week reaching an agreement to sell its business in Russia to local company Global Development JSC

  • Austria's Raiffeisen, Italy's UniCredit and Hungary's OTP are still operating in Russia nearly three years after the conflict in Ukraine began.

🇩🇰 Half of the Danes perceive USA as a threat today - Denmark used to be the American best ally in Europe. without grasping the real context

🇸🇪 After Germany and UK, Elon Musk has now opinions about Sweden without grasping the real context. The guy loves Europe 🤷

😱 The Swiss and technology - folks from Basel-Stadt printed fliers with an URL typo and instead of re-doing their job right at a cost of 100k, they bought the domain name for 900 francs, and now they depend on people overseas for proper link re-directs.

🇬🇧 In the UK, the retail crime is so bad that retailers started hiring mystery shoplifters.

🌿 Legal weed didn’t deliver on its promises.

🚇 NYC subway’s most dangerous stations are on 4/5/6 Lexington Ave. line.

⚭ The economics of marriage and love.

🪐 Researchers confirm the existence of an exoplanet in the habitable zone.

🍝 The perfect cacio e pepe recipe.

That’s all folks, have a wonderful week!

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