Feeding the matrix, investors allstar and Tik Tok in Europe.
#49
Hello and welcome to a new edition of Sunday CET.
October already in, three more months to go. Weeks feel like years and meanwhile we have corona, Trump w/ corona, recession, Brexit closure, US elections, and the NBA finals to deal with until we’re ready to part ways with 2020. I have a feeling there’ll be more than that though.
Here’s what I have for you today.
Euro funds
Euro startups
🇪🇺 Money is cheap these days, why don’t we sell it: $600M, £240M, $160M, $110M, $90M
🇸🇪 10 Chambers
🇫🇷 PandaScore
🇫🇷 Multis
🇳🇴 Greenbird
🇩🇪 Tiegoo
🇬🇧 Psykhe
🇪🇺 25 very early stage health tech startups from the Nordics you should know about
🇪🇺 The 12 European tech startups most likely to IPO next
🇪🇺 The Europeans building Musk’s hyperloop vision
Euro strat
🇫🇮 Wolt opened two physical grocery stores in Finland this year, focused mainly on online delivery though. In Helsinki for the moment, w/ average delivery time of 35 minutes, pretty good for Nordic standards.
🇸🇪 Foodora, owned by Delivery Hero, will also open a similar hybrid store in Stockholm.
🇸🇪 Both Wolt and Foodora will likely be competing with the almighty Amazon, set up to open up in the Nordics this fall.
Speaking of which - Klarna’s CEO is pissed off at the local media because it consistently covered Amazon’s launch in Sweden and hence provided free marketing.
While it is true that media has a different agenda than the local business interests, I think Nordic consumers are smarter than that and competition is badly needed in the Scandi food space, both retail and hospitality.
🇬🇧 Walmart sold its British supermarket chain, Asda, to UK private investors for $8.8 billion.
🇩🇪 Volocopter - developer of urban air taxi services - started doing commercial operations of air taxis in Japan.
🇩🇪 Tesla acquired ATW, a German supplier assembling battery modules and packs for the auto industry. ATW, a subsidiary of Canadian ATS Automation Tooling Systems, was on the brink of liquidation due to a slump in orders.
🇬🇧 Beckham's Guild Esports raises £20M ahead of debut on the London Stock Exchange.
🇬🇧 SuperAwesome - Kids Web Services (KWS) platform - was acquired by Epic Games.
🇪🇺 Google has offered a second round of concessions to try to persuade European regulators to clear its acquisition of wearables maker Fitbit.
Google said it had offered to restrict the use of Fitbit data for Google ads and would also tighten the monitoring of that process
Pressure from regulators is good but…
… Fitbit is strategic for Google as smart watches have gained a lot in popularity and consumer behavior market share - Apple is selling lotsa them, especially in US, where it is becoming dominant. Europeans still love Android products more than Apple’s because they’re cheaper.
And that is why the Fitbit deal has less to do with an ad play and more with a business play - but Google’s credibility is very low with the regulators, as it should be.
🇪🇺 Speaking of which, Google finally gave in and officially decided to pay media companies for the content they are crawling.
It is a big compromise wrapped up in a new news app they are building. I think it is just a piece of the battle as things will change more in the future, whereas Google will start paying more and more for the right of crawling media websites.
Let me explain.
While the right of freely crawling a news site is debatable in principle as it’s also a free distribution channel for the said media, for Google it is strategic to get access to the media content.
That is for a simple reason: its ad layer, which is where it makes money from, is useless without having access to data to make it work. A very good part of that is gathered from the media assets and the data associated with it.
The data points collected from crawling websites are richer than the regular guy would be able to tell. The sites content and its meta are corroborated with the behavior data extracted from the Analytics and with the one from the cookies tracking the user journeys throughout the entire internet. The more data points connected over a longer period of time, the better.
And bonus, if you give Google your inventory for placing ads (a very common scenario in media business) that would be an extra data boost.
And one more bonus: if you browse while you are logged in with a Google account (YT, etc) that history data is equally valuable, dully tracked and thrown into the Google matrix.
That’s just an overly simplistic view - suffice it to say that an AI-based software product, such as the ad stack built on top of Doubleclick, is useless without the data you feed it with. The more data you feed it, the better the output becomes.
That data is a result of the content access - that is why it is strategic for Google and it will start paying for accessing content more and more.
Add to that the scenario that media properties started getting paywalled and thusly become unavailable to Google’s spiders.
And getting paywalled combined with DTC (newsletters) and good brand can make for an interesting strategic play trading off free inbound traffic from search engines.
Which inbound traffic you:
i) convert into ads, which is a one time play because that traffic is lost if you don’t have ads to serve and bounce rates are very high anyways - that is the standard go-to-strategy for media biz
or
ii) convert onto getting customers to pay for content or at least create an account, if you have a pure SAAS play that is - publishers are terrible at this tactic btw.
The more bloated and horrible the reading experience of a media property is, the more a publisher optimizes for the first. And that includes the cookies the GDPR enforced warning about, which are a must only if your business needs to use tracking cookies, which are for ads purposes.
Also why Google Analytics, which is a very powerful analytics product, has a compelling free version which is pretty much standard for publishers - that data is also feeding off Google’s ad tech, building sophisticated consumer behaviour models based on which it serves ad products.
And, of course, that is also the reason for which Google pays a few billions a year to both Apple and Firefox just to be one of the search engines in their browsers.
No data to feed its ad stack with, no business for Google.
PS. Weirdly fitting to this is that my son randomly asked his friend Google last night:
Hey Google, do you have a brain of your own?
G’s answer: have a good night!
Euro insights
🇳🇴 Are you prepared for Financial Armageddon? Invest in startup tech and you will be fine. :-)
🇮🇹 Interesting interview with the two Italians developing Emma.
🇨🇭 When should your start-up ‘go global’?
🇪🇺 Eurozone inflation falls further below zero:
Temporary factors are causing disinflation in the eurozone, but the longer it lasts the more worrying it becomes. That seems to give plenty of ammunition to the ECB doves to argue for more stimulus in December.
🇪🇺 ECB made public a report of the implications of transitioning to a digital euro currency.
Potential scenarios that would require the issuance of a digital euro include higher demand for electronic payments that creates a greater need for a risk-free digital means of payment, as well as the potential that a cyber attack or pandemic disrupts the existing payment system and requires a digital euro to serve as a back-up.
Another scenario is a further sharp drop in cash usage that leaves some people financially excluded.
Also
ECB officials believe the Chinese central bank is potentially a couple of years away from launching its own digital renminbi after it already conducted large-scale experiments.
Other central banks, including Sweden’s Riksbank, the Swiss National Bank and the People’s Bank of China, are further ahead of the ECB with equivalent projects of their own, adding to concerns that the eurozone could lose control of its money supply.
The report is available here.
🇪🇺 This week the internet talked about a memo sent by Coinbase’s CEO Brian Armstrong to his employees. Go ahead and read it, if you didn’t already.
And then read what others make of it.
It’s not a black and white kind of discussion, au contraire, and it is important to ponder it out - it reminds me of all the debates we had in grad school about whether a company’s mission is/should be rightfully maximizing the shareholders value.
🇫🇷 How to build a MVP for less than $20k - thinking to write about building one for less than $5k but anyways.
🇪🇸 If we’re still debating this we’ll never think outside the box - Spain’s copycat startups: shame or gain? After all, Rocket Internet has done so much good for the community, right?
More than 100 million monthly active users in Europe - matching the same number in the U.S.
British users are the most numerous in Europe, but they’re not the most dedicated. TikTok’s 1.2 million Norwegian users open the app 17 times a day, spending 74 minutes scrolling through video.
TikTok also has 11 million users in France, who watch just over an hour of videos each day on average, 10.7 million in Germany, where the company recently announced a new country manager, and 8.8 million in Spain.
A further 9.8 million Italians use TikTok every month, 30 percent of them aged 18 to 24.
The overwhelming majority of TikTok’s users are women: In the U.K., it’s 65 percent of them. In Spain, nearly three-quarters of TikTok users are female. TikTok’s Nordic audience is more evenly split down gender lines: in Norway and Sweden, 44 percent of users are men.
Euro bits
🇬🇧 Startup Garage is a membership club designed to support entrepreneurs by providing a space to meet and connect with others.
🇫🇮 Gaming startup Armada went bankrupt - founded in 2015, raised a total of $10 million from Creandum, Index, Initial Capital, Backed VC et all.
🇸🇪 Volvo has sold so many hybrid and electric cars this year, it now has excess CO2 credits to sell to rivals.
Swedish carmaker also launches €500m ‘green bond’ to invest in electric vehicles.
🇸🇪 Otoh, Polestar had to recall all the 2200 cars sold since launch a few months ago, due to a software glitch that led to power losses, even while the vehicle was driving.
🇪🇺 Europe has an Investors Allstars, based on the popularity among 2000 voters:
Entrepreneur of the Year: Heini Zachariassen, Vivino
Investor of the Year: Stephen Chandler, Notion Capital
Service Provider of the Year: Orrick
Growth & Buyout Fund of the Year: Francisco Partners
Exit of the Year: Hummingbird (Peak sold to Zynga)
Young Entrepreneur of the Year (in memory of Mark Sebba): Daniel Stammler & Janosch Sadowski, Kolibri Games
Venture Capital Fund of the Year: Creandum
Tech4Good: Female Founders
🇪🇺 EU’s latest unemployment numbers:
🇪🇸 43.9%
🇬🇷 39.3%
🇮🇹 32.1%
🇸🇪 28.4%
🇵🇹 26.3%
…
🇦🇹 10.6%
🇲🇹 9.5%
🇵🇱 9.1%
🇨🇿 8.8%
🇩🇪 5.8%
🇮🇪 Irish judge rules that sugar content of Subway’s sandwich bread exceeds stipulated limit and they should thusly be classified as confectionery.
🇬🇧 Uber wins legal fight to regain London license as a judge overturned a ban on the ride-hailing app by the city's transport regulator
🇸🇪 Swedish pension fund AP7 sued and won against Google’s owner Alphabet on the grounds of several cases of sexual harassment discovered at Google.
AP7 is a shareholder in Alphabet, and the $310 million it won will be spent by the Americans on various workplace initiatives and programs with a focus on diversity, justice and inclusion.
🇩🇪 H&M Germany fined $41.3M in one of largest GDPR penalties:
excessive monitoring of several hundred employees by one of the H&M’s German subsidiaries
🇲🇨 Let’s not forget it’s weekend and we have a whole Sunday in front of us - here’s a list of classic movies made in Monaco
Reports
Report about the Gen Z cultural trends and shifts within the last 12 months
App Store net revenue grew 31% Y/Y in the September quarter, to $5.7B, outperforming our +24% Y/Y forecast by 7 points.
If we keep the rest of our September quarter Apple Services forecasts unchanged, the latest App Store data would imply September quarter Services revenue of $14.5B (+15.9% Y/Y), $300M, or 240bps ahead our $14.2B estimate (+13.5% Y/Y), and $375M, or 300bps above consensus of $14.1B (+12.9% Y/Y).
Meanwhile Apple and Epic toned it down and go to court instead of a public trial, as what they can loose is much more than what’s to be gained.
Reads
Investing early in others + why poor ppl play lotteries + Brett interview = link
More theorizing about creators in the passion economy.
The secret economics of a VIP party - there’s an invisible system behind every £100,000 bar tab and its currency is pretty women.
What's an unsexy business that is killing it & you've learned a ton from?
Dotdash's acquisition strategy is the right way to buy digital media companies.
Tidbits
Substack has about 250K paying customers with its top 10 publishers bringing in $7M collectively.
Substack’s model is scalable for the long tail not for the head of the curve.
Facebook got pissed at the Social Dilemma documentary from Netflix and produced a very defensive blog post about it.
Whatever - it’s like Coca Cola arguing in a blog post that sugar also has some benefits. You drink it, you know what to expect.
If Kanye was pitching Silicon Valley on YC, here’s how I’d frame his narrative.
Google’s in-house incubator Area 120, launched Tables, a tool for collaboration, workflow, and automation which looks like Airtable.
Oper8r describes itself as Y Combinator for funds and emerging fund managers and hopes to fill in the gap between what it takes to be an occasional investor and become a full-time VC backed by institutional dollars.
Facebook is opening its experimental predictions app to all users.
Uber spun off its freight unit, which is a digital brokerage that connects shippers and long-haul truckers in the deeply fragmented world of logistics. Raised half a bill for it too.
Happy Sunday!
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Created every Sunday by @drnovac.
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