mix and match as a strategy
#75
Happy Sunday, guys!
Warm welcome to the new subscribers!
Let’s get to business.
✍️ Observations
We have never seen anything like this
This Friday, it was announced that a little Norwegian company, PortalOne, raised $15 million in an oversubscribed seed round.
The deal was backed by American investors, and included two Brits (Talis and Seedcamp), one Norwegian (Snö Ventures) and some high profile gaming people. The one angel that caught my attention though is Eugene Wei, who yours truly is a big fan of, because of thorough decompositions like this, or this, or this.
It was pre-seeded by Founders Fund in 2018, and added some local Nordic angels along the way until 2020, when they launched and things started to shape up nicely.
PortalOne does hybrid gaming, meaning that the do live entertainment on top of game streaming.
They do this with a game engine technology designed for mixed reality content and combining game and live shows for providing the right experience. On top of the stream they add live media content - be them live shows, live contests or both.
They’re running two games currently (one of them is an Atari one, also an investor) which they stream live while people play for prizes and with the founders as entertainers during the streams.
They even brought Justin Bieber on one of their shows. The concept caught on, as they already built a social community around the platform, making it both interactive and addictive to watch.
Reality shows for the 21st century - this is the 2021 version of the shows MTV was producing 20 years ago, when it had made the switch from music.
So what makes this special? It is the combination of different items from different industries that compose an unique value proposition.
Is this:
- a software developer?
- a gaming company?
- a media company?
- a social network?
The truth is that it’s neither or all of the above - mixing elements from all those domains and reflected into a business model subordinated to a clear value proposition makes it unique and interesting.
That is why it is not as easy to replicate what they do. Mix and match until you get it right - but to pull it off you need to have built tech infrastructure right from the start, and be able to pick games, and create (good) entertainment.
To quote one of the VCs who was part of the round:
We have never seen anything like this.
Here’s an exercise for you: apply this mix and match concept to other verticals.
What’s the value of a media asset without a tech ad system?
Axel Springer sues Apple because because ad tracking prevention issues and I assume the Germans are the only ones not sensing the irony of still clinging on a past model instead of focusing on creating the future.
Axel Springer is part of the problem the media industry has, not part of the solution.
Their ad-based digital assets are just garbage traps run in the name of providing access to 1-300 words they call news. The balance sheet value of this kind of properties stems from building sophisticated tech to record user data behaviour and service them ads, with the content provided as bait.
The big media players have to decide once and for all if they are in the ad tech business or in the news business. The media assets they operate today can hardly exist without their ad mechanism, and it’s a matter of time until they become obsolete.
The evil pact of content access crawling for $$ with Google and Facebook is just a painful prolonging of the media industry agony.
Is content a marketing expense or a revenue driver?
Another journalist left TechCrunch this week, this time for the glam VC world, where he will do content as a vice-president. Should make for a good email signature. :D
Jokes aside, more and more VCs are investing in content - and I don’t mean running a newsletter and a medium account - as they gradually discover that a marketing cost can become more meaningful than a line in the miscellaneous section from the income statement. Competition works wonders on business models.
But that’s in the US, in Europe we will probably see this kind of plays in the next 2-3 years, maybe, after the grocery fever passes.
This is where I say I told you so
Mister Semiatovski of Klarna confirmed he’s going after Amazon’s marketplace. The money quote:
We will never compete with our e-retailers, to be very clear. With that said, we can help e-retailers compete with large companies living in Seattle.
Time to revisit this, if you didn’t read it already, where I detail the master plan, even have nice pictures that make for a thousands of boring reports. :D
Is my voice genuine enough?
This week I got asked whether I really write the content of those newsletters or if I had someone write it for me.
Got a bit puzzled by the question tbh, it’s hard for me to fathom having somebody else using my voice and doing this kind of work for me. I admit I was tempted a bit to say that I have GPT-3 working for me but I had a rough week and was in no mood for jokes.
I did some research though and it turns out that it is not unusual for CEOs or VCs to have their external communication written by someone else. Except that Sunday CET, Monday CET and Nordic CET are not comm, but a real product.
🔥 Interesting deals
Nordics
🇸🇪 Kry, telemedicine provider with European ambitions, announced $312 million series D. It raised a total of $560 million since 2014.
🇩🇰 Adcendo, which develops cancer treatments, raised €51 million in what is dubbed largest series A for a Danish biotech company.
🇫🇮 Dispelix, manufacturer of see-through displays for augmented reality, raised $12.1 million, half of which in venture debt.
🇸🇪 &Repeat, which built a smart recycling system connecting restaurants to consumers, raised $1.2 million.
🇮🇸 Hefring Marine, a software developer for boat manufacturers and owners, raised from German and American investors.
DACH
🇩🇪 360X, which builds a digital asset marketplace, raised $12 million from Deutsche Borse and Commerzbank.
🇩🇪 n8n, SAAS developer of a workflow automation tool, raised $12 million from American investors.
🇨🇭 Booster, developer of un-manned retail solutions, raised $800k.
🇦🇹 Eloop, a car sharing services provider, raised funding for geo expansion.
🇨🇭 PopUp Shops, operator of a digital marketplace for finding short-term retail spaces for rental, also raised.
France
🇫🇷 Taster, an operator of delivery-only food brands, raised $37 million.
🇫🇷 SOS Accessoire, which operates a niched e-commerce marketplace, raised $12 million.
🇫🇷 Sweep, which builds SAAS for B2B carbon tracking, raised $5 million.
🇫🇷 Pixyl, developer of AI-based tech solutions for medical radiologists and clinicians, raised $2.6 million.
Other hubs
🇬🇧 Autonomous Flight, which builds a drone for passengers, raised $6.9 million.
🇵🇹 Sensei, which builds a software tool for retail stores, raised $6.5 million
🇬🇧 Cuckoo, which builds an alternative telecom service, raised $6 million.
🇪🇸 MagicBell, which was part of the 40 Euro startup batch at YC this winter, raised $1.9 million.
🇪🇸 ienai SPACE, which does development for nano-sattelites, raised $1.2 million.
✌️ Tomorrow morning on the Monday CET
Family offices backing a mobile payment system alternative to the American tools used by retailers in Europe. No VCs!
Interesting French startups backed by non-French investors at early stages.
Details about a startup operated from Berlin and Amsterdam, inc-ed in Cyprus, back office in Russia and funded by American investors.
Seedcamp’s non-UK investment deals from 2020.
Monday CET is covering early stage intel from Europe, an is emailed every Monday morning.
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💡 Charts and data
What will you do when this is over
Age distribution
The invasive species
🚀 Other notes
🇪🇸 A Spanish bank launched its own private social network - they built it around a collection of over 200 short, targeted videos on finance, economy and well-being.
It also links users to bank agents and their fellow customers, enabling them to interact in La Placa (the market square). Other features they have in the pipeline include a marketplace to buy and sell products and services, as well as crowdfunding and P2P lending.
Multi-language (English too), with plenty of utility provided around the banking core proposition. As always, the devil is in the details but if executed right, it has interesting potential.
🇮🇹 You know what can be sold online and delivered in 40 minutes? Pharma products. They will converge with groceries at some point.
🇫🇷 Speaking of groceries, Alex wrote a very good analysis about the emerging Euro grocery business, which you should read, if only for understanding a complex strategic environment.
My only observation is that the end game could be different than a simple player aggregation leading to liquidity events for investors aiming to milk a 10% increase in the grocery market.
The opportunity is the convergence of different types of tactic plays, heavily using tech, that could make for some interesting and unique business models. They call this innovation in business school (a good example is the above-mentioned Norwegians).
The more unique the model, the harder to replicate and to beat, and I guess this depends on whether the grocery founders are visionary or simply applying some banal McKinsey frameworks to build stuff and get rich out of it.
🚗 Uber launched an interesting service called Uber Rent with Valet, whereas you can get a car you rent dropped off at the location of your choice.
It’s been a while since I saw an exciting idea in this space, and this is interesting because the market they go after (i.e. rent a car) is mainly old school.
The product page with the marketing materials is not available in Sweden, which I find offensive in anno domini 2021.
🇬🇧 The little London seed fund that could. Second IPO in a row. GG
🇪🇺 Turns out, we have a meaningful B2B startup ecosystem in Europe, McKinsey discovered.
🇪🇸 The city of Barcelona is preparing an anti Amazon tax. Only deliveries by pure e-commerce companies will be taxed. The retail stores delivering at home will not.
This is Europe.
🇨🇭 Joe Biden called Switzerland a tax haven. Swiss got pissed.
Truth is that Switzerland is one of the lower taxes countries from Europe.
🏦 Here’s a reminder that the current financial providers are still living in the past and they deserve to be so heavily disrupted, especially banks:
Traditional financial institutions get their 50% of their moat from regulation, 40% from trust, and 10% from product.
How do you think they will do in a world where regulations don‘t matter as much, and trust is free?
They don‘t even know how to compete on product anymore.
Does it make sense to you now why EU regulates rather than innovates?
🇪🇺 Last week I wanted to write more about EU’s intention to regulate AI, whatever that is. Decided that instead of me being nasty, you could read this:
It will take years before any of this could become law. But European authorities are showing that they want to imagine what might go wrong with the technology and try to stop it — in some cases before A.I. is in wide use.
The harms are still mostly hypothetical. How do you regulate it?
🇪🇺 The EU is highly dependent on some 137 products -- 6% of its total imports by value -- mainly raw materials and chemicals used by energy-intensive industries but also including active pharmaceutical ingredients and other health-care products.
🇪🇺 Allegations of harassment, some of it sexual, and an “unhealthy climate of fear” revealed at the Luxembourg headquarters of the European Investment Bank.
They came up as after the disclosure of a December suicide, the second on the premises in seven years.
🇪🇺 Apple is being ruled by the EU these days, facing a hefty $27 billion fine for screwing Spotify over. The possible outcome:
It is likely that apps will be able to use their own payment systems, that Apple’s 30% will change, if not necessarily disappear, and that Apple will have to give third party apps the same kinds of hardware and integration access as its own services.
You should read the whole thing.
🇸🇪 While Apple is busy understanding how to best manage the App Store monster it created without the outside handling, Spotify has fixed the openness problem. Ben explains in simple words.
👋 This week Basecamp announced some changes that include asking people to stop talking about politics and focus solely on the task at hand, namely the work at their day job. One third of their employees quit as a result.
Resetting a culture is painful, having the guts to do it and change a status quo that seemed to be working fine, at the risk at disrupting your own business, is even harder.
🌲 Climate 101: Part 1 Causes
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