Howdy folks, the new Sunday CET edition is packed and ready - warm welcome to the new people on the list.

Enjoy,
Dragos

Market talk

🇪🇺 This week I have seen quite a few dunks on the European way of doing business and treating its startup people (take this, this, this or this as examples) - nothing new for those in the first lines, or for the regular readers of this newsletter.

• the entrepreneurs, and consequently investors who make money solely out of their work, are frustrated, we’re entering into a golden age of value creation, once in a decade window of opportunity, and the Venn diagram commonality between startup ops and Europe as their home is shrinking.

• Europe is home and still a good place to live yet is badly managed, it has been so for a while now. It’s not only not favourable, but also adverse in many unexpected ways to the idea of building business here - and I mean big and internationally competitive companies creating long lasting sustainable value. Add the poor legislation to the in-adequate inertial attitude, on top of the beautiful economic crisis we’re struggling with, which will deepen and which will further require even more drastic top level decisions.

• this big picture is run by a politicians class both disconnected from how growth can be produced in a quick and sustainable way and in bad need to deal with crisis management. Crisis is when growth is your least worry, and Europe is right in the middle of it. And it’s kind of difficult to change something since it’s a vicious circle, as the way to tax politicians for doing a poor job - by voting them out - resulted overwhelmingly into the emergence of populist protectionist choices, short sighted and with a heavy Russian meddling flavor. And what you vote is what you get, we see all these struggles in most of the European countries, have seen them for quite some time now.

• if protection is your main priority as a mean to survival, you just play defence and that’s at odds with growth, whose lack thereof leads to stagnation, which leads to degradation and we all know where this is going. Just look around, you can already see decaying signs in all big European cities, from North to South and West to East - Zurich probably less so, which is one of Europe’s better kept, albeit it’s a town rather than a city 😀

• jokes aside, in short, Europe looks like a ship taking water from multiple holes - we’re in a pickle, aren’t we? And you can hear this narrative from all layers of societies in any corner of Europe, and the startup people from our bubble make no exception being unhappy and vocal, it’s hard to fight a bad market and the future looks hopeless and gloomy. And even more - they’re just a minority compared to the quiet ones who consider or already did pack up their bags and moved over the ocean to find a proper fit.

• I know this sounds negative, and I wish I had the evidence to be as as inspiring as Ian - but I guess we need to be true to ourselves and that’s the real talk in the street, most of the rest is venting and clickbait, with some isolated constructive efforts here and there and the occasional optimists, which will turn off the lights when the party is over, as an old Romanian joke would say.

• on the other side of the spectrum, this week there was also some good news for the startup community as the EU Inc people apparently got to Ursula herself, who seems open (short video here) to push further the 28th regime idea and make it happen. A small step which is better than nothing, kudos to Index and a few others behind the scenes willing to open doors - as always the devil is in details though.

🇪🇺 Speaking of protection, if you feel that the whole European tech market is being more tech-unfriendly by week - well, that’s by design and it’s just mission accomplished, I guess.

People thought that we were crazy because 10 years ago, Big Tech was untouchable. They were the most admired, the most innovative, the most promising companies that you could think of.

🇳🇴 Norsk Hydro will close its battery materials and green hydrogen businesses and will focus on the core businesses, as they’re bracing for a shrinking market context.

• that is energy and aluminium - NH is one of the largest aluminium producer in the world and a major energy player (they bought local oil company Statoil, now Equinor, two decades ago)

• the Norwegians were also a small investor in Northvolt, the Swedish battery maker that just filed for bankruptcy protection.

• for those not in the know, NH was founded in 1905 just before Norway’s independence with money from the Swedes - the almighty Wallenberg family - and now it’s controlled by the Norwegian government, which owns a third of its equity.

🇮🇹 Andrea Orcel’s Unicredit offered 10 billion to buy smaller rival Banco BPM in a surprising unsolicited takeover offer, which has since been rejected - players always goin’ to play, this guy is one of Europe’s best.

🇩🇰 The Danish Parliament passed a new law for taxing the agricultural emissions, including methane that farm animals expel through their poop, farts and burps.

• $43 per tonne of methane (as per carbon dioxide equivalent), which will rise to $100 in 2035.

• data: 5X as many pigs and cows in Denmark as there are people + 2/3 of land is taken up by farming.

🇳🇱 Just Eat Takeaway said it would withdraw from the London Stock Exchange at the end of the year, and will only maintain its Amsterdam listing.

• folks jumped on pointing the finger to LSE, which had seen many other tech companies de-listing - or avoid the British stock exchange altogether.

• however, also keep in mind that the Dutch are not exactly famous for good management either - they bought Grubhub for $7.3 billion in 2021 and sold it back for ten times less, namely at $650 million, earlier this year. This gotta be some sort of a record.

🇩🇰 There was a little chaos in Denmark this week, as a telecom network went down due to a software update - caused a bit of minority report mayhem, as you’d expect, no mobile phone service, trains at a standstill, the emergency call system was also said to have failed.

🇸🇪 Almi Invest, which is Sweden’s governmental agency funding startups, put out a list of ways local companies can be impacted by the American elections - equally applicable to any European startup.

🇸🇪 Klarna’s Q3 results - dressing up the IPO bride.

🇬🇧 Barclays has been fined £40 million over the reckless failures to disclose details of its rescue by Qatar during the 2008 financial crisis.

💪 Plenty of other intel and insights on the European startups and VC market on our list for professionals - you should subscribe, I am told it’s pretty good.

Also notable 

💭 De-banking is real, on both sides of the ocean - anecdote 1, 2 + context (Marc Andreessen says it’s one of the main reasons for supporting Trump)

• that’s due to the intersection of banks required to follow strict KYC rules, applied by the ear sometimes, and a bunch of tech-driven and increasingly lucrative emerging verticals, which are at the edge of both regulations and business comprehension.

• change happens slowly then suddenly and it’s rather a society hypocrisy applied on banking done for and by folks in the 20th century - people use crypto in all sorts of legal ways, do like to gamble, which is again legal, use OF, which is legal, and so on.

• whoever does serious fintech business is fairly familiar with working around it, this problem is an opportunity in disguise for the neo banks (hello Revolut) and the trend is going up and to the right, which will eventually go mainstream - I expect some more openness particularly coming from the US government that should accelerate it in the next period, eventually arriving to Europe some years after.

🎧 Good podcasts to listen to this week: Klaus Hommels and Marc Andreessen.

🖖 A list of Sequoia’s scouts in Europe.

🇳🇴 Startup accelerators are still popping out - likely a short-lived one as all marketing initiatives from non-core players.

🇪🇺 Seed bets made by multistage funds in Europe this year.

🇯🇵 Japan’s prime minister Shigeru Ishiba portfolio of individual stocks has outperformed Japan’s stock benchmark - up by about 102% since the start of 2020.

🇮🇹 Italy took down an international TV network selling illegal content to 22 million users producing €250 million in revenue monthly.

🤙 Telegram generated $525 million in revenue in the first half of 2024.

♾️ Music revenues overtake cinema’s pre-pandemic peak on back of streaming boom.

🇨🇳 Huawei pivots from Android and launches phone with own software in sign of China-US splintering.

💲 Americans say you need $5.3 million to be considered a success - or make an annual salary of $270k. Chump change, right?

🙈 The content you read on Linkedin is cringy not only because of people posting all sorts of attention-seeking crap, but also because it’s written by bots. About half of it.

🥸 Pink Floyd guitarist David Gilmour is unable to sell his £10 million seafront mansion because of an administrative error which means he is not actually the owner.

🐵 Electric Dreams at the Tate, or what tech and art were like before the digital age - I went there last week, it’s super cool, you should check it out if you’re in London.

That’s all folks, have a wonderful week!

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