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Hey there, welcome to a new edition of Sunday CET.

Today’s the autumnal equinox - the official first day of fall that is, when the sun is directly above the Equator, and the starting point for days to shorten and nights to lengthen.

Feels like the year is almost over - not so much in the European business ecosystem, where after a quasi-quiet summer, we’ve gotten wind to 100+ deals announced this week, assorted with all sorts of other interesting tidbits. We’ve also gotten a new EU government, with a dedicated startup minister and with Ursula starting with a clean state as she finally bit the bullet and got rid of Thierry. Europe is all about the drama. 😀 

Let’s get right at it - thanks for reading, as always, hit reply and let me know what you make of it.

Dragos

Cheat sheets

• 2024 summer recap - names and deals capturing the European VC zeitgeist from over the summer.

• European startups at YC - this summer batch (demo day next week!)

• fintech in Europe that raised this year - later stage, series A and early stage.

• defence startups that raised in Europe this year

• American deals in Europe this year

• Euro fund sizes ranking - seed investors and multi stage investors.

Intel

• hot startups background + mega Euro AI rumours + 10 folks with new investment gigs.

• a few $100M+ deals, which are still done in Europe these days, though at a lousy pace, way down from the 200ish closed just two years ago.

• fresh VC funds still popping out in Europe, more growth funding available too

All this and more prepped for tomorrow’s intel piece, to which you should subscribe too if you want to get smarter about the Euro investment ecosystem.

Market talk

🇩🇪 Axel Springer spun off its ads business, 85% of which will be controlled by KKR and Canada Pension Plan, while the media unit will become 100% owned by Axel Springer CEO Mathias Döpfner

• Axel Springer is doing some €4 billion in annual revenue, 50/50 split between classifieds and media.

• the valuation is not even though - the classifieds business is worth €10 billion, while the media unit is valued at €3.5 billion.

• worthy reminder - Norwegian media group Schibsted did the same with its ads business a few years ago, as it de-merged it into Adevinta, sold this year to PE in a $13.3 billion deal.

🇮🇹 The Germans got upset because Italy’s UniCredit sneakily acquired 4.5% of CommerzBank, as the government is divesting the stakes acquired in 2008 when the bank was in trouble.

• other than the Germans, the whole market is bullish about it though - following the deal, UniCredit became Commerzbank’s second-biggest shareholder, with 9% of the shares, behind the government’s remaining 12%.

• Andrea Orcel, the Italian behind UniCredit is considered to be one of Europe’s best, dubbed Jamie Dimon of Europe

• he’s been a banker all his life, controversial since he is tough and competitive, notably worked closely with Sergio Ermotti, whom the Swiss asked from retirement to pull the UBS/Credit Suisse merger last year.

• also notably he won in court €68 million in compensation from Santander, since the Spanish rescinded his CEO job offer.

🇳🇱 ING announced that from 2026 it would either restrict or stop providing finance to some oil and gas companies that fail to address their carbon footprint on a case-by-case.

• that seems more like a marketing spiel - how many Dutch ppl have you seen willingly lose money? - as the policy could affect some €1 billion of lending (about 25 of ING's clients), which is a small fraction of the today’s overall €656 billion lending book.

🇳🇴 The state of Norway’s banking ecosystem (from a report in Norwegian):

• 2 out of 3 companies consider changing their main bank

• 2 out 10 private customers want to find a new bank in the next 6 months

• 1 out of 2 private customers will switch if given better terms.

• sounds like an opportunity, no?

🇨🇳 Chinese automakers’ answer to the EU tariffs is to build their cars in Europe:

• Byd is doing a plant in Hungary.

• Leapmotor will also produce cars in Europe via a JV with Stellantis.

• Chery is doing electric vehicles in Barcelona also via a JV with a local manufacturer.

• Geely has been controlling Volvo of Sweden since 2010 - it also owns Polestar, which is based in Sweden, but produces its vehicles in China.

🇸🇪 Meanwhile, Swedish pension funds quietly sold a vast majority of their stocks in Chinese companies over the last 12 months.

🇮🇹 Italian eyewear producer EssilorLuxottica has extended its partnership with Facebook to develop smart eyewear for another decade.

🇩🇪 A bank in Berlin had to pay a fine of €300,000 because it refused to tell a customer why it had rejected a loan application - that’s out of a total of €500k in fines imposed in Berlin in 2023 for data protection violations, mostly petty cases.

🇫🇷 The Rothschilds paid €89 million for vineyards they acquired from the billionaire Pinault family in the Chablis wine-producing region of France.

🇪🇺 EU business:

• Draghi’s report was coordinated by an Italian ex-McKinsey turned EU fonctionnaire and a French career bureaucrat, and, from the business world, they have talked to mostly old money companies, with just a few exceptions including Bolt, Mistral, Spotify and Stripe - they should also have talked to the likes of those guys, but need to upgrade to a next level for it. 😀

• the new way to put pressure on EU regulators is to send them “open letters” as it increases PR awareness of being uncomfortable with vocal people - here comes another one about how the fragmented regulation in Europe is hindering AI opportunities.

• I almost forgot that this week Thierry Breton was resigned by the EU lead Ursula von der Leyen. It’s just an inside job done between politicians, and rather an ending to a long time conflict between the boss and a guy who acted as if he was the boss. At the end of the day, agree with them or not, Breton and Von der Leyden are a reflection of how the EU politicians think and act about the business, tech and competing in the free market of the 21 century - and this class has gotten us to where we are, stating clearly in the above-mentioned report how much Europe can improve. And sure, let’s be a bit positive about it, the new cabinet has good energy and five years ahead to prove it can be better than the past five.

💣 Google seems a bit desperate - as part of the anti trust case in Europe, it offered to sell its advertising marketplace AdX, but European publishers rejected the proposal as insufficient.

• that’s because it means little in the overall picture:

• this week Google also turned around a €1.49 billion EU antitrust fine while last one it lost on a €2.42 billion worth of penalty fees case, alongside Apple - is anybody keeping track on the those big tech versus Europe fights and fines?

💲 Microsoft unveiled a new $60 billion stock-buyback program - ICYMI, earlier this spring 2024, Apple also announced a share repurchase of $110 billion.

🧑‍💼 Amazon will require workers to return to the office five days a week starting next year.

💳 JPMorgan Chase is discussing taking over Apple’s credit card program from Goldman Sachs.

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In a nutshell

It’s tough to be a consultant nowadays - btw, all of the below are heavy onto implementing AI for their customers.

Also notable

🇩🇪 Tobi Lütke, the German who immigrated to Canada and founded Shopify, in an excellent interview:

• Germans population in general doesn’t believe that tech is adding a lot to life. There is very much a pessimism about the future that means you cannot build tech companies.

• Technology is morally neutral on its own, and if you expect the world to be worse in the future then you might expect new technologies to enable worse behaviours. You have to be optimistic about the future. Otherwise, why would you want to contribute to progress and make it come faster?

• I think it’s very hard to hire staff that’s willing. In North America, I found that people take big chances. If they believe and have conviction in a company doing something, they would leave an excellent career to give it a go. It seems to not be true in Germany, so access to excellent talent is simply harder, based on them making cultural decisions differently, partly because startups are a low-status pursuit from the best I can tell.

🇩🇪 The hope for a swift improvement in the Germany’s economic situation is visibly fading.

🇬🇧 Facts about the state of the British economy:

• Between 2004 and 2021, before Russia’s invasion of Ukraine, the industrial price of energy tripled in nominal terms, or doubled relative to consumer prices.

• With almost identical population sizes, the UK has under 30 million homes, while France has around 37 million. 800,000 British families have second homes compared to 3.4 million French families.

• Britain’s last nuclear power plant was built between 1987 and 1995. Its next one, Hinkley Point C, is between four and six times more costly per megawatt of capacity than South Korean nuclear power plants, and four times as expensive as those that South Korea’s KEPCO has agreed to build in Czechia.

• Tram projects in Britain are two and a half times more expensive than French projects on a per mile basis. In the last 25 years, France has built 21 tramways in different cities, including cities with populations of just 150,000, equivalent to Lincoln or Carlisle. The UK has still not managed to build a tramway in Leeds, the largest city in Europe without mass transit, with a population of nearly 800,000.

• Despite huge and rising demand, Heathrow annual flight numbers have been almost completely flat since 2000. Annual passenger numbers have risen by 10 million because planes have become larger, but this still compares poorly to the 22 million added at Amsterdam’s Schiphol and the 15 million added at Paris’s Charles de Gaulle. The right to take off and land at Heathrow once per week is worth tens of millions of pounds.

🇬🇧 Brexit deal impact in UK is worsening + more UK brain drain evidence.

⚛️ The Brits from Rolls-Royce will build a fleet of mini nuclear reactors in the Czech Republic.

🇪🇺 A case for European defense.

🗣️ Communism is all about the brainwashing, or else - Hong Kong schools begin rollout of Xi Jinping Thought.

✍️ You can now do investments via a chatbot-powered ETF that uses LLMs to harness the writings of the investment world’s most illustrious minds - Warren Buffett, Stanley Druckenmiller, David Tepper etc.

🤯 Ghost jobs - hedge funds scrape job boards to analyze whether a company is growing or not. When you apply for a job on Indeed / LinkedIn, you’re probably not applying for a real role - you’re just helping a company avoid getting shorted by Dingleberry Creek Asset Management in suburban Connecticut.

🔋 Investors are looking for the next derivative on AI and electricity infra is the next big bull market, especially as you have some of the other AI derivatives like the chips running out of capacity.

🫅🏼 The main thing that Paris and PE actually have in common is that they are both loaded with aristocrats all pretending that they aren’t.

📺 Alexis Ohanian aka Reddit founder / Serena Williams husband / 776 investor will produce a women's soccer reality show on Twitter.

💲 Are you even in the investment business, if you’re not in London next month?

🥸 What are different types of digital-twin technology?

🇫🇷 France is Europe’s number 1 destination for naturist tourism - i.e. those who believe nudity is a virtue.

That’s all folks, have a wonderful week!

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