we still remember what the Soviet occupation was like - this means taking defense and sovereignty at a completely different level of seriousness and urgency

non-obvious, hard companies matter for having a chance to create €100B-€200B+ companies out of Europe

Europe is fragile in sovereign energy production, which is the foundation of everything

there’s a new European angle: doing things that are not 100% correlated with NVDA stock

it always feels the outside world sees “the Baltics” as one ecosystem much more than it feels so inside. A few years ago we realized that not even all the unicorn founders from Tallinn, Riga and Vilnius have met each other. For a few summers we’ve been organizing gatherings to fix that and build stronger ties. But the ecosystems in these 3 countries feel quite different; in practice I would maybe even link Tallinn and Helsinki closer together today.

Also, for this age, the fact that we still remember what the Soviet occupation was like means that the Eastern Flank of NATO takes all tech development around defense and sovereignty at a completely different level of seriousness and urgency. Never again! This is why we count 110 new defense tech startups that have popped up in Estonia since Russia started a full scale war against Ukraine…

What was much more unknown even a year ago was if there is a real commercial market for their product, bringing water back to Earth's orbit to be used as propellant and sustaining life.

Today they are on track with the engineering plans for Mission 1, but have completely blown through any of our dreams about off-take agreements, pre-orders, pipeline and other proof of commercial traction that we could have expected for this phase of the company.

Space economy is becoming real, both for commercial and defense motivations.

The problem comes when it’s time to scale, across Europe and across the world. That’s where audacious capital to match tends to suddenly dry up.

So paradoxically, the bigger structural problem might be seed stage startups not dying, but remaining… SMEs?

Seems that there is something very compelling about Europeans solving specific lack of labour issues with AI - something where we have natural urgency because of our demographics and societal priorities and inherent capabilities when it comes to our deep AI talent. We see powerful European teams solving the lack of human hands with physical AI (Monumental → bricklayers, Sunrise → factory workers, Starship → couriers, Teton → medical nurses, etc) but also with pure software layers (Metaview → recruitment, Sano → medical trials).

In recent conversations with some American friends there seems to be a new angle for excitement for what is happening in venture in Europe: doing things that are not 100% correlated with NVDA stock, solely dependent on access to tokens from few key model labs and denominated in USD… have you ever thought of European venture as a geopolitical-macro-hedge?

that’s what you get to read about in our intel piece from next Monday.

+ everything that was important in VC Europe this week ← join Europe’s best investors and get it in your inbox from here & have full access to our database here.

Q3 in Europe - high signal & high value deals and most active investors in the Nordics, DACH, UK, France, Americans etc

Active investors and high signal startups in Italy, Spain, Sweden

British case for AI prediction markets

Lovable’s financial projections.

the VC economics for a drone interceptor biz

Last week’s results:

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

the French parliament rejected the proposed Zucman tax for taxing the ultra-rich this week - earlier this year, the British ministers have also rejected calls for a wealth tax in the UK.

those ‘taxing the rich’ schemes are considered as ways to balance national budgets. Also notably, in the US, Trump has avoided implementing a similar tax - alas Trump knows how to play this card better than any politician, his reforms largely benefited high-income individuals and corporations instead of increasing their taxes.

wealthy people from Europe moving for tax reasons has been in the news for a while. They will always optimize their money management but money is not just for saving, it’s also a tool for influence - what do you have money for if you cannot display it publicly and use it for influence? Money just loses its status if you’re in Dubai, for example, with all sorts of other people with which you only have in common that you pay less taxes (even Switzerland is boring like hell btw).

that is to say that money is power and those with it will naturally go where power is made - and that’s in the big cities, namely Paris or London in Europe.

this would make UK-based startups less attractive for founders who want to build global companies (and raise VC accordingly) - as they might face a large unrealised capital gains tax bill when leaving for international expansion, effectively locking in the founder to the UK unless they sell the company first. Or if they incorporate elsewhere to begin with. Also important to note, it can complicate employee equity as well - especially if staff move internationally between UK and non-UK offices.

otoh, this will affect minimally the early-stage startups that are UK-focused, or unlikely to scale internationally - because the gains won’t be large or they won’t relocate, and local startups people will never trigger this charge.

the British government follows path of other European countries and takes an assumed risk, as the startup drain has been happening for a while anyways. And from a treasury perspective, losing a few potential founders is tolerable if it secures large, predictable gains from successful ones i.e one unicorn exit can generate more tax revenue than thousands of seed-stage failures combined. However - the exit market is also really bad in the UK too.

as a side, startup people worry less about taxation, and usually leave a country for three reasons: customers access, talent access, capital access. Taxation matters after success, not before - the government knows this, but also knows that if you overtax early, you kill risk-taking and if you undertax mature exits, you lose redistribution and legitimacy. It’s the very reason for signalling startup friendliness through offsetting incentives (i.e low startup tax burdens, R&D credits), even though they know the real determinants are ecosystem depth and capital access.

an exit tax adds a tension to the system already strained - in boom times, it makes sense to capture gains but in crisis times, you need to lower friction and increase velocity of startup creation. If the UK doesn’t toggle between these modes, it ends up protecting a shrinking pie rather than baking a new one.

here’s another data point - the UK has the most significant employment crisis since the late 1990s, with approximately 1.2M recent graduates competing for only 17,000 entry-level job openings.

the opportunity cost of starting something has never been lower - when you cannot find a job, you’d consider starting a company, whichleads to creating new jobs, which leads to growth.

will that translate into an entrepreneurship wave in the UK though? When you have 1.2 million young people locked out of jobs, entrepreneurship becomes social policy - not just economic policy. And in that context, an exit tax, while rational for treasury stability, sends a contradictory signal - ‘take risks, but don’t succeed too freely. Because if you do, there’s a bounty for your freedom’

Epic and Google made a deal that forces Google to reform its app store and open Android app payments with cap fees at 9% or 20%, as well as a new Android program with easier alternative app store registration. Here’s looking at Apple’s App Store business model.

Tesla shareholders approved a massive pay package for Elon Musk, which would grant him shares worth nearly $1 trillion. Increased aligning of huge CEO pay to KPIs is becoming a trend, as Rivian’s CEO also got a similar $4.6 billion pay package.

OpenAI has 1 million business customers - marching towards the $1T in five years.

Meta records revenue of $16 billion a year out of running advertising for scams and banned goods. Yup, that’s billions!

in the US, airlines canceled more than 1,000 US flights last Friday, after the FAA ordered 10% flight reductions at 40 American airports as air traffic controllers were not paid due to the government shutdown. The government shutdown hit its 38th day Friday, now the longest in US history.

Michael Burry of Big Short fame discloses bets against Palantir and Nvidia after bubble warning. The two companies he's shorting are the ones making all the money in the market.

VC coup - Sequoia’s boss Roelof Botha was pushed out by top lieutenants after three years.

how Marc Andreessen’s bet on President Trump is paying off.

why VCs are doing content and social media - help the best people preferentially attach to portfolio companies. Works with LPs too - it’s the oldest marketing trick in the book.

the Americans want to put out a bill that would require companies to report AI job losses.

there’s a new mayor in NYC: left wing Zohran Mamdani - dude is feared of being too ideological, too combative, and not pragmatic enough for the job of running a complex city. If the city is clean and runs well, none of this will matter.

‘vibe coding’ has been named Collins Dictionary’s Word of the Year for 2025.