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Good morning and welcome to Sunday CET!
Let’s get to it.
Every week we deliver manually curated intel from the European VC ecosystem. All you should know in a 5 minute comprehensive digest covering the long tail of the early stage activity from across the continent.
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Ecosystem pointers
🇪🇺 Investors dealing internationally The kind of startups non-local investors are funding is a meaningful market signal, be them via local offices, or by combining desk work with creating relationships with local investors and scouts - it all boils down figuring out what it is they see and others don't.
I had a look over the activity of more than 100 non-local investors dealings in select regions from Europe from this year. Some lens you can use:
there’s multistage investors such as Balderton (new deals in Germany - i.e. Deepset, Clue), Partech (Prolific, Pydantic) or Headline (Growblocks, Plumery, Mistral).
… or multi geography seed, either traditional or new comers, such as Speedinvest (i.e. Lizee, One Trading, Dronamics) or Project A (Bucket, Cosmic Lounge)
… or super early stage focused across the continent such as FJ Labs (Numeus, Faks, Triver) or Tiny (11x, DBTune, Command AI).
… or vertical focused such as Lowercarbon (Undo Carbon, Woodoo) or Pale Blue Dot (Pionix, Green-Got)
… or Americans long established or recently infiltrated in London such as GV (Cur8, Deepset), Khosla (Swiss Quazel or German Daedalus on top of British deals) or Sequoia (strong French affinity where they also have scouts on the payroll - i.e. Dust, Gladia, Elyn).
…or high profile Americans without a local office such as USV (fxhash, m3ter, Carbonchain) or Spark (2 new British deals this year)
… or angels such as Charlie Songhurst
A whole lot more to reflect on and learn from this cheat sheet, available for our customers.
🤔 Other cheat sheets
🇬🇧 More late stage funding A new UK investment fund run by the government with up to £1 billion in capital raised has been launched to support companies at the growth stage of their funding cycle, as they seek Series C rounds and above.
Technically it’s a good move, as in general the late stage funding in Europe is ridiculously under-served
NB. I guess this is better complemented by the news of IVP finally opening a London office, after 43 years of existence, that’s a great signal for betting on Europe.
And while it makes sense business wise, I am usually wary - as the EU itself has consistently demonstrated over the past years (and Poland these days), the story of politicians or career clerks who want to play VC is usually turning into a joke that tends to be reflective of the quality of the private investment market in Europe. And being a VC is easy I am told, I mean even NATO does it, right?
Bonus link The VC world is fuelled with entitled kids who have absolutely no clue about what struggle means. (coming from a French, no less)
🇳🇱 Shares in Dutch payments processor Adyen hit their lowest level in more than three years, as the shares fell nearly 40% on Thursday.
The Adyen share plunged because expectations were much higher. Adyen was at an enterprise value of 43X its 12-month core earnings - that compares with 12.7X for French rival Worldline and 8.8X for Italy's Nexi.
It’s a value trap but in reverse.
🇬🇧 Checkout com has cut short its contract with Binance amid compliance concerns.
Checkout in recent months has been processing between $300 million and $400 million in Binance transactions.
Binance was once Checkout’s largest customer, processing approximately $2 billion in Binance transactions during a single month in 2021.
🇩🇰 Novo Nordisk’s market capitalization has matched the GDP of its home country and has led to lower interest rates in the country
The US sales are soaring, and converting unusually large amounts of dollars into kroner raised the local currency’s value relative to the euro.
🇳🇴 Norway’s $1.4 trillion sovereign wealth fund returned 10%, or $143 billion, in the first half of 2023, indicating it’s back on track following one of the worst years in its history.
That’s almost a third of Norway’s GDP of 482 billion.
🇬🇧 The electric vehicle manufacturer Arrival is working with advisers to prepare for possible insolvency.
Arrival listed on New York's Nasdaq stock exchange via a SPAC in 2021
None of its vehicles have yet made it into commercial production.
💲 OpenAI's burning a $700k daily to keep ChatGPT running - this cost does not include other AI products like GPT-4 and DALL-E2.
700k*365 = $255.5 million per year and some change → compare this number to, say, Mistral’s $114 million worth of odds to catch up in a few years span.
But that’s a matter of national pride, just like it was when the French have tried to clone Google and other American tech - this time is different, it always is, right?
Now the French leaders have a plan to build an open source native AI industry. And unless they shoot themselves on the foot, as history seems to indicate, there’s just one other problem: they’re in the EU, currently known more for regulating AI than for encouraging it.
👀 As founders fail to secure compute power for their nascent artificial intelligence startups, some venture capital firms, including Index Ventures, are now using their connections to buy chips and then offering them to their portfolio companies.
This month, Index Ventures struck a partnership with Oracle to provide a mix of Nvidia’s H100 chips and an older version, called A100, to its very young portfolio companies at no cost.
➕ More context:
How to beat European VC investors? Simply, just show up.
How Klarna pivoted from BNPL to a generative AI commerce company. (it did not, it still sells short term loans and e-commerce leads but incorporated ChatGPT into its marketplace engine, hence the clickbait).
Tom Blomfield on bad investors meetings (it’s Softbank, his story was widely circulated a couple of years ago)
All in all we went from $0 to $100m to $0 because I followed the advice of the VCs. (take it with a big grain of salt though)
Lux Ventures Q2 2023 report.
☝️ Startup radar We have started sending a new weekly email to our Monday CET subscribers with a curation of interesting early stage startups from Europe (we come across TONS of industry intel every week) based on signals such as product, business model, growth, key investors, or team.
Think of it as a personalised startup sourcing concierge - if you want to get an idea, you can sift through a list of 50+ startups from this cheat sheet (available for free for the next 24 hours) and can subscribe from here for getting such a list every week, alongside cheat sheets focused on European VC and startups intel.
High signal, zero noise - we send our next intel digest tomorrow in the AM, get it too.
How is Apple eating the forbidden fruit of finance
The whole thing is worth digging into.
Bonus link: Apple could be interested in purchasing ESPN.
Other notes
🇪🇺 European countries are increasing taxes, now that the inflation is seemingly under control.
🇩🇪 Europe is nothing but a consumers market, the German cars edition.
🇸🇪 The Swedes had a wake up call (the Russians made the call actually) and pivoted their energy policy. As they had previously aimed to limit and phase out nuclear power, now they plan to build as many as 10 new nuclear reactors in the next 20 years - here’s why.
🇪🇸 Spain registered 195% more business bankruptcy declarations in the first quarter of 2023 than in the fourth quarter of 2019, and 235% than in the same period of that year.
🇬🇧 Voters say Brexit was rhetoric and broken promises.
💲 Why Austrians and Germans are obsessed with the ability to use cash? Some interesting answers here - my theory, fuelled by plenty of anecdotes, is that cash leaves less trails for fraud/corruption AND banks are greedy bastards charging huge commissions. And then again, the Germans are not the most tech savvy in Europe either, au contraire.
📉 The ‘Big Short’ dude bet $1.6 billion on a stock market crash. Btw, Margot Robbie explaining the stock market in her bath is worth revisiting.
🥕 Remember Medium?
👁️🗨️ Good convo about AI’s impact in the societal development.
⚔️ The people who you are selling to or buying from are to be treated as hated enemies.
🇫🇷 Sobering perspective on Paris.
🇦🇷 Random fact: monthly rent is $90 in one of the better parts of Buenos Aires.
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