Hidden Euro investment gems, online groceries and wine business movies.

#41

Hi - welcome to a new edition of Sunday CET!

This week I discovered some interesting startup gems (i.e. plant-based tuna, app store for saas), found an interesting movie about wine entrepreneurship and looked a bit at the online grocery model.

Enjoy!


More money in the market

FUNDS

🇬🇧 UCL Technology Fund 
🇫🇮 Capman
🇮🇹 Programma 102
🇦🇹 Apex Ventures
🇮🇹 Eureka! Ventures
🇳🇴 Idekapital

BETS

🇬🇧 electric vehicles made in microfactories
🇺🇸 producer of 100% plant-based tuna
🇪🇸 dark kitchen
🇩🇪 App-Store for SaaS: one invoice, one user management, one login
🇬🇧 mobile game under a form of a crime drama series
🇮🇹 content aggregator via an email sub
🇪🇸 video chat tool with pair programming
🇩🇰 indoor vertical farmer (200 tons per year)
🇳🇴 software tool showing relevant research based on analysing your writing (really cool)


Observations, research, data

🇮🇱 Israel Funding Ecosystem

🇳🇴 You know you look at an interesting deal when the bosses of two PE houses from Europe (EQT and Summa Equity) are part of a $13 million series A round.

🇩🇰 Speaking of which, the Zendesk founders and the H&M owner/CEO have invested in a little known producer of affordable sustainable furniture founded in Denmark in 2018.

🇳🇱 Wondering where Europe’s largest drone hub will be located? Rotterdam, made by a Japanese corporation and a Dutch startup.

🇹🇷 Turkey has become an European gaming hub - Zynga made a 4th deal in Istanbul as it acquired a hypercasual mobile game firm, Rollic, founded in 2018. $168 million for 80%.

🇬🇧 Uber buys UK-based taxi-software company Autocab, in a deal that will extend the company's reach in the UK from ~40 locations to ~170.

🇪🇸 Magnum Capital, one of the larger PE houses from Spain, invested in an international business school.

🇳🇴 Zoom started selling a bundled video solution (hardware and software) as a service together with a Norwegian company it invested in.

🇮🇪 Chinese-owned video app TikTok to set up first European data centre in Ireland.

Meanwhile Microsoft is set to buy the entire TikTok business, including Europe and India ops.

Idle wondering how much of a discount should Microsoft include in TikTok’s valuation as Facebook cloned it almost pixel for pixel to its newly launched Reels on Instagram.

🇩🇰 One of the better European entrepreneurs, Heini Zachariassen (Vivino), has a documentary out over at Amazon Prime about his entrepreneurial story. Recommended.

Heini also has a YT channel called Raw Startup, with useful startup advice.

🇩🇰 Investor profile - byFounders ($)

  • partners founder/operator/investor ratio of 1.5 (very good)

  • how they go about the market and help their startups

  • what their competitive edge is compared to other VCs

  • the controversy at their launch in 2017.

🇫🇷 Bsit just announced acquiring Karamel, an app that helps find and reserve activities for children.

It’s likely a stock deal - Karamel has 100k users and was backed by Kima Ventures and a bunch of angels (Thibaud Elzière, Oleg Tscheltzoff and Roxanne Varza via the Atomico angel program).

Bsit has an interesting strategy as earlier this year they also launched a secondary product with revenue potential.

🇬🇧 Weezy is a new London startup promising to deliver groceries within 15 minutes, for the moment in Fulham and Chelsea (some affluent hoods from London) - here’s the PR spiel.

The 15 min seems like an extreme constraint that could work for viral purposes but not sure it’s scalable. 15 minutes vs 1-2 hours is not much of a big differentiator as in retail consumers care more for i) price; ii) product scope and iii) stock availability. On top of that it’s more important to be predictable and on time rather than the fastest, given you deliver within an hour or so.

Weezy’s app (ios) seems to be still very rough to the edge of unfinished and what’s the point of selling online if you can place an order only from 10am to 10pm? Dark kitchen but for the ecommerce?

These constraints seem more suitable for impulse, on-the-spot transaction decisions rather than for planning - buying groceries is a planning process. Definitely an interesting experiment to follow.

Tbh I like better Jow’s edge in the space, also a retail aggregator of online groceries but based on customized menus they put on the front end for consumers - it’s a sort of lock-in preventing price-based decisions, making switching costs higher and without the inventory costs (they’re operating on top of physical retailers).

Online grocery retail is a dog-eat-dog business that relies heavily on suppliers, great logistics, distribution and good consumer prices. You live on thin margins and, as it’s the case of Weezy, you also have inventory costs that will require a lot of capex (storage, refrigerators, mopeds etc) and opex (stock), you work with perishable goods you need to turn over fast etc.

It is a hard business requiring consumer branding, differentiation and marketing spending even though the main asset to build has little to do with those.

Selling groceries online is a good trend to ride nowadays in Europe, as Covid augmented the e-commerce demand but the opportunity is rather taking share from local supermarkets than from Amazon. It is hard to compete with Amazon’s prices and logistics - you may win some local fights but not the war.

Weezy is basically a bet for developing a competitive logistics and delivery service, ultimately to be exited off to a lagging retail chain or even to Amazon in an edge, lucky case. Question is how many such logistics and distributions hubs can London sustain, and other big cities for that matter, on top of taxis, food and postal services - all of them will ultimately want a piece of the grocery delivery service.

Heartcore is one of the backers, unusual for them to take such early risks, probably high on conviction from prior deals with Taster (a dark kitchen op which relies on 3rd parties distribution) and La Fourche (a digital consumer buying club for organic food).

They now invested in three different parts of the chain, a correct directional bet based on the thesis that the online food delivery is going to grow quite a bit in Europe in the future. Arguably Weezy seems the most riskier of the three, and not because of the stage but because there’s no visible moat - it’s a pent-up demand business with lazy incumbents.

🇪🇺 Top 14 European Countries — Electric Vehicle Market Share

  • Norway, Iceland: >30%

  • Sweden, Netherlands, France, Portugal, Switzerland: 5% - 9%

  • Belgium, Lichtenstein, Germany, UK, Ireland, Luxembourg, Finland: 3% - 5%

Data is cumulated for fully electric vehicle (BEV) market share so far in 2020.

If it was a global report, China would have made it onto this list as well, tied with Ireland just outside of the top 10 at #11 in 2020.

🇫🇷 Accor’s hotels occupancies this week:

  • China 60%

  • France 56%

  • Germany 39%

  • UK 35%

  • North and Central America 35%

50% of bookings are now being made less than 5 days out. This time last year it was 10 days.

🇪🇸 Real Madrid wants to invest 9 million in startups

🇩🇰 The story of Noma and Noma 2.0

🇩🇪 The WWII story of Adidas and Puma

🇸🇪 The new IKEA ad for the meatless meatball looks very sci-fi.

🇪🇺 Nikola is a US-based clean transportation company competing with Tesla and its remarkable rise has relied heavily on European expertise. 

If Europe has this expertise, why hasn’t it produced its own rival to Elon Musk’s carmaker? Maybe it’s a lack of chutzpah.

🇬🇧 Is Britain an overcrowded island, failing to hear the tick-tock of the demographic timebomb?

🇫🇮 FT will stop printing its newspaper in Finland this month, as circulation dropped and the focus is on digital.

🇵🇹 Lisbon is offering to pay as much as three years of rent up front to lure property owners to switch their short-term Airbnb rental units into long-term lets for locals. Owners have delayed a decision to switch because they were waiting for reservations to pick up in the summer.

🇪🇺 Google: “The Fitbit deal is about devices, not data”

European Commission: “We need to launch an in-depth investigation to ensure the transaction does not distort competition”

Better to prevent than to correct, I guess.



Other interesting stuff

📢 Here’s an interview with Sonos CEO complaining about Amazon and Google price wars as they sell their hardware at loss and subsidize them from software margins.

Sonos complaining about unfair competition is not new and goes back to the times the company was just a startup and started colliding with Google and later on with Apple.

I love Sonos, been a customer since 2007 and I am really fond of the brand and what they’ve accomplished.

But, besides noticing that their products are not as top notch as they used to be, the first lesson you learn as an entrepreneur is that life and business are not fair and the winners always will find a way to build competitive advantages that also play a defensive role, especially against predatory monopolies such as FANGA.

And so I tend to agree with Brett, Sonos is better off in combination with a stronger partner - be them Spotify of even IKEA, with which it’s building some interesting stuff.

🏫 More education unbundling

  • Google offering a $300 course, can be completed in 6 months and they will consider it equivalent to 4 years Bachelors degree when you will apply for a job at Google - Data Analyst, Project Manager, UX Designer etc

  • The Catherine Project:

    Oxford-style tutorials, on great books and fundamental questions; on related skills (writing, dead languages ...) & peer-led reading groups. No credits, no degrees, no grades, no fixed tuition. Online for the moment, seeking interested students, any age and background 16+. Funded by donations.

  • Roughly 20% of first-year students have deferred from Harvard. Harvard had also anticipated 40% of their undergraduate population choosing to live on campus; they now expect only 25% based on the number of students who have accepted the invitation to do so.

🔒 US set up a sort-of-firewall blocking Chinese telcos and cloud providers, and kicking the Chinese apps out of app stores. Submarine data traffic will get a look. U.S. app makers are instructed not to put apps on Huawei's store.

Cold war it is.

 Phil Schiller, Apple’s long time marketing leader, is out. He is also (still) in charge of Apple Store. Looks like Hey, Airbnb and Classpass had an effect after all.

🖇️ Guess who else wants to contribute to the crowded collaborative working space? Wordpress - it basically transformed its internal tool, P2, into a commercial project.

💰 Sahil Lavingia launched a $5 million fund which he raised using just a Notion memo, a few tweets and a Zoom call with more than 1,800 registrants. Website is minimal too.

🕶️ The Next 'Mafia'? Mapping The Alumni Of Square.

🏠 The Singapore housing model

💚 Microsoft’s astonishing climate change goals, explained

🏳️ 2021 Planning and Global Economic Collapse

Happy Sunday!


Thanks for reading 🙌

Created every Sunday by @drnovac. Please share it with your networks and encourage your colleagues to sign up here - thanks!

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