Many European founders have the goal of cracking the American market, but actually making a success of moving stateside is a real feat of endurance. Polish beauty booking app Booksy is one startup that has managed to get it right — after several bumps in the road since launching in 2014, the US market now makes up almost half its global business, it has more users in America than all of its competitors combined and it's profitable. Sifted’s Zosia Wanat sat down with cofounder Stefan Batory to find out how it did it. Scroll on for that.
Elsewhere today, we look at what the newly-signed AI Act means for European startups, dig into Europe’s YC for first-time fund managers and ask why Northvolt and other battery startups are on a quest to replace lithium in their batteries.
In their new report on the state of European CX, IDC and Zoom reveal how leading European companies are reshaping customer experiences — from the challenges they face to the future evolution of CX.
Stefan Batory, the cofounder of Polish beauty booking app Booksy, found out about global expansion the hard way. His first startup, ride-hailing app iTaxi, was a success in home country Poland, but stood little chance competing against the likes of Uber and FREENOW when those companies expanded into the Polish market.
When it came to launching Booksy, that was front of mind for Batory and his cofounder. “On day zero, we already knew that we wanted to make a global company. We wanted to be an Uber, not an iTaxi,” he says.
In setting that goal the company isfar from an outlier in central and eastern Europe(CEE) — 17% of CEE startups that have raised more than €1m in funding have moved abroad; among their top destinations are the US west and east coasts, according to a report on CEE by data platform Dealroom. That includes some of the region’s biggest names. Romania’s UiPath, one of Europe’s most successful tech companies, has had its headquarters in New York since 2017.
Making a success of it was far from easy though. For years, growth was “hard, bad and ineffective,” says Batory. In the early days, the company, which is a platform that enables users to search and book appointments at hairdressers, beauticians, stylists and barbers while allowing businesses to manage their registries, had to overcome a fragmented beauty market and convince investors — who liked the product but were less sure about the founders — to back the company.
Before raising Booksy’s seed round Batory also took a big risk. With a meagre marketing budget, he decided to spend his cash partnering with an American Instagram account, barbershopconnect, rather than looking closer to home.
“It was a gamble, we knew that if this succeeds, we’ll raise a round, if it doesn’t then we’ll have to close the business,” he says. “And it worked.”
Despite some bumps in the road since then — including laying off 70% of its staff worldwide and pivoting into new services to get through the pandemic — the US market now makes up almost half its global business, Booksy has more users in America than all of its competitors combined and it's profitable. Senior CEE reporter Zosia Wanat sat down with Batory to find out how it did it.
Sifted’s also been exploring the trend of European founders moving to the US more widely in the last few months — you can find thefull extent of our coverage here.
🤝 Done AI deal. After painstaking 36(!) hours of talks, European policymakers agreed on Friday night the landmark deal on how to regulate AI in the region. Thierry Breton, European commissioner responsible for forging the deal, has stated that the finalised AI Act will make Europe “the best place in the world to do AI.” Startups aren’t convinced.
What’s in the deal for startups:
New requirements for companies working on generative AI (with some exceptions — we covered it here)
A list of prohibited and high-risk usages of AI which will be subject to stringent rules
The creation of “sandboxes” where AI can be tested in real-life conditions.
“The agreed AI Act imposes stringent obligations on developers of cutting-edge technologies that underpin many downstream systems, and is therefore likely to slow-down innovation in Europe,” the Computer & Communications Industry Association (CCIA) said in a statement. “This could lead to an exodus of European AI companies and talent seeking growth elsewhere.”
"The inclusion of innovation tools like AI sandboxes, real-world testing options, and the prohibition of unfair contract practices towards startups and SMEs within the AI Act will fortify and empower the European AI startup ecosystem,” says Jeannette Gorzala, vice president of the European AI Forum. ”However… these tools must be accompanied by robust support in funding, talent retention, and the cultivation of an innovation-centric culture”
Next steps: The end of the political negotiations is an important milestone, and a good opportunity for policymakers to post celebratory tweets, but much of the text will still be polished on the technical level in the upcoming weeks. So stay tuned, because the devil is in the details.
🎵 More leaders set to leave Spotify. A week after 1,500 layoffs were announced at the music streaming service, it’s also been revealed that the company’s CFO Paul Vogel — who’s held the position since 2020 — is set to step down early next year.
The Guardian reported that Vogel cashed in on over $9m worth of company stock last Tuesday, the day after the job cuts were announced, as its share price soared by as much as 8%.
Spotify’s head of marketing, Taj Alavi, is also set to leave, reports Bloomberg.
🇩🇪 ETH Zurich plans teaching and research centre in Germany. The Swiss university has been given a ‘major donation’ from the Dieter Schwarz Foundation — founded by the former Lidl CEO — to roll out a new teaching and research centre in the German city of Heilbronn, where an AI campus is being built.
20 new professorships will also be created over the next 30 years in Zurich and Heilbronn thanks to the donation.
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📈 Meet Europe’s YC for first-time VC managers. Raising a new fund is pretty tough in today’s climate — especially if you’re having a stab at it for the first time. Enter Vienna-based Allocator One, an accelerator for VCs, which just raised a pre-seed round.
It’ll run two cohorts of 12-15 people a year, and will give all VCs standardised deal terms: a €1m anchor investment per GP, a 1% management fee on that commitment and 10% interest to the manager.
That’s not as good as the standard 2% and 20% deals that most VCs take, but Allocator One handles regulatory and admin work and also supports investors with their fundraising readiness.
It’s already selected its first cohort of five firms.
💬 Join our latest pitch event tomorrow,as we host five women-led SaaS startups currently fundraising and interview serial entrepreneur Jessica Holzbach, who’ll be giving us insight into the joy and frustrations felt by founders this year. Exclusively for Pro subscribers.RSVP.
🇪🇸 Tomorrow and Wednesday, senior reporter Cristina Gallardo will be attendingTech Spirit 2023in Barcelona.
💪On Wednesday, Miriam Partington is bringing together a panel of experts to unpack the productivity and wellbeing tips you need to start the new year off.RSVP (it’s free).
Oslo-based ARTBIO, a clinical-stage radiopharmaceutical company developing targeted alpha radioligand therapies for cancer, raised $90m in Series A funding. Third Rock Ventures and an undisclosed healthcare fund led the round. Existing investors F-Prime Capital and Omega Funds also participated.
Munich-based Scalable Capital, a digital investment platform, raised €60m in a Series E extension. Balderton Capital led the round and was joined by HV Capital.
Dublin-based Invert Robotics, which specialises in robotics for testing in non-destructive environments, raised €2.5m in funding. Business Venture Partners and TechNexus Venture Collaborative led the round.
Lisbon-based Virtuleap, a VR startup improving training within the health and education sectors, raised €2.5m in funding. GED Ventures Portugal led the round.
Paris-based Kleep, which has developed an AI tool for e-commerce brands that helps their customers select the right size of clothing, raised €1.8m in funding from undisclosed angel investors.
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