A few weeks ago, I was lugging three nearly-bursting suitcases through JFK airport in New York City, on my way to catch a flight to Berlin. I had just left my job at Fortune, writing about venture capital and startups, to move across the pond and cover the exciting and growing European startup ecosystem here at Sifted.
By way of introductions, I’m Anne Sraders, a Latvian-American expat based in Berlin and Sifted’s new Daily newsletter writer!
After a couple of weeks to settle in, I couldn’t be more excited to cover all things European tech, VC and startups. I’m going to be packing this newsletter full of analysis, gossip, interviews and lots of juicy stories. I also want to cram into my brain everything I can about how the European startup world works. So, on that front, I’d love to hear from you:
What under-the-radar trends or stories is Sifted (and the media broadly) missing?
What is the hot new startup that everyone is talking about, and are they overvalued?
Are you building a cool product we should know about?
I’m all ears, and I’d love to hear from you. Please get in touch via email atanne@sifted.eu— an old-fashionedXorLinkedInDM works too.
Stride VC has stopped fundraising and laid off staff. More VCs could follow
The fundraising environment is tough for founders and investors alike. And for some of Europe’s younger VC firms, the realities of the market have prompted them to hit the pause button and lay off staff. That’s what is happening at London-based Stride, a five-year old VC set up by former Accel partner Fred Destin.
Destin announced on LinkedIn this week that Stride won’t raise a third fund — but will continue supporting its existing portfolio. “Our core priority is supporting our founders and driving as much value as we can for our investors on the two funds we have raised,” he wrote.
One of those portfolio companies, used car platform Cazoo, looks unlikely to drive much value for investors. Its market cap has fallen a whopping 99% in the last two years, although Destin told Sifted that the bad bet isn’t behind the decision not to raise fund three.
“We don’t have a reputational issue around it. We invested at the seed, then the super growth funds came in, it went international and that was a mistake. It’s nothing to do with me,”he told Amy.
“The intention for sure was to raise a next fund in 2024, so we were gearing up for fund three, talking to existing LPs… but the question was, ‘do I feel like doing another fund, or two, or three… or do I find an off-ramp and buy myself some time to think about what I’m doing with my life?’.”
It’s a tough decision for a VC to make, and I wager Destin isn’t alone: I suspect there are even more VCs that are unable to — or simply don’t want to — go back out and raise a new fund, effectively becomingzombie fundsserving their current portfolio companies without making new investments.
If you know of any VCs that are conducting layoffs or considering not raising another fund, you can reach me atanne@sifted.eu, or Amy atamy@sifted.eu.
💰 Paris-based VC Serena has just closed anew €100m early-stage fundaimed at investing in companies developing the ‘invisible’ tools needed to create apps.
The firm’s second fund is backed by LPs likeBpifranceand the European Investment Fund, and plans to dole out €500k-3.5m in more than 20 pre-seed and seed startups.
Nearly half of the fund is earmarked for follow-on investments, and more than 90% of the cash comes from LP re-ups.
🇩🇪 Germany’s financial regulator hits Delivery Hero with €630k fine. BaFinannouncedWednesday that it fined the food delivery company in late October for failing to disclose inside information, which it said violated the Market Abuse Regulation as the company is publicly listed. Delivery Hero has the right to appeal the fine.
It’s not the only company that has been in BaFin’s sights recently. Digital bank Solaris says it evaded an order from BaFin that would have required the fintech to reduce customer deposits over worries that its capital strength and compliance function wasn’t keeping up with its growth, Bloomberg reported earlier this week, citing a letter sent to Solaris.
The German regulator implemented a“permission proviso”on Solaris in late 2022, requiring the fintech to get approval before onboarding any new customers.
👏 Skyral celebrates launch. After months of preparation, UK-based Skyral, formerly Improbable Defence’s battlefield simulation tech unit — which was sold to Luxembourg-based multi family office NOIA Capital for an undisclosed sum earlier this year — celebrated its independent launch in London yesterday.
Initially born with the aim of providing services to the national security and defence communities, over the last year Skyral has broadened its focus to also target large businesses in sectors including telecoms and energy, helping them understand complex problems through simulations, data science and digital twin technologies.
Skyral now plans to grow its staff, made up of just over 100 employees, to about 150-170 by the end of this year, and has big ambitions for geographical expansion: it’s looking for clients in Europe, Middle East and North America.
🛴 Troubled times for Parisians’ favourite two-wheelers. Cityscoot, a provider of shared electric mopeds that have become a familiar sight in the French capital, hasdeclared itself insolventand started proceedings to protect employees and freeze company debt while it looks for new investors.
In July, the startup was selected as one of the main providers of electric mobility services in Paris for the next five years, and the company was planning to deploy a shiny new fleet across the city throughout 2024.
In a tough-to-raise environment, how are CFOs preparing scaleups for their next round? What are the implications of down rounds? Learn how the strategy of CFOs has changed in our next Sifted Talks. RSVP.
🌏 Thinking of expanding into Asia? Various hubs like Hong Kong and Singapore are rolling out the red carpet for startups, and some firms like UK-based Wise have found a foothold in the region thanks to its business-friendly set up. But how do startups know if, and when, they should expand into Asia?
Experts tell Sifted that startups having a well thought out plan — including considerations like where your Asia hub will be, what local licences are required and infrastructure — is key.
Startups also need to consider things like the local grants that are available and at what stage you should think about making the move.
Patents are crucial to a fair chunk of startups in the European ecosystem, protecting inventors’ intellectual property from being replicated by other businesses. It’s particularly important when university spinouts — created off the back of academic research — are breaking new ground with novel solutions to current problems.But which countries file the most patents?
According to data from the European Patent Office:
Germany comes out on top for both the highest number of patent applications and the highest number of granted patents — globally it ranked second for volume of applications.
The rest of the top 10 in Europe, bar Italy and Germany, saw positive growth in the number of applications being filed last year compared to 2021.
With a 5.9% increase year on year, Switzerland saw the most growth in patent applications. A report this year by Dealroom also found that investment for Swiss deeptechs — a vertical that often involves patenting tech — surged by 85% in 2022. The country also boasts the university that, according to Dealroom data, spins out the most companies from academic research: ETH Zurich.
🎧 On the pod this week, Amy and Orlando chat to the CEO of Swedish startup Elonroad about (potentially) electrifying the bridge between Malmö and Copenhagen, why women VCs are overlooked for funding and two hot AI deals.
🔥🔥 London-based Oodles, a platform that lets small businesses rent various tech products like iPhones and laptops, raised $12m.
🔥 Berlin-based cabin rental startup Raus raised €8.5m in funding from ROCH Ventures, Rockaway Ventures, Dupuis Investment, Speedinvest and 10x Founders.
🔥 Copenhagen-based Performativ, which provides wealth management technology to financial services firms, raised a €5.5m seed from FinTech Collective.
🔥 France-based NŪMI, which uses cell culturing to reproduce infant breast milk, raised €3m from investors including Heartcore Capital, Hardware Club and Financière Saint-James.
🔥 London-based Eilla AI, which is developing a generative AI platform for financial analysis for private markets professionals, raised a $1.5m seed from investors including Eleven Ventures and Fuel Ventures.
