Media tech in Europe, Europe’s series A funding landscape and more.
#18
This is the 18th edition of Sunday CET, a weekly curation of what we found interesting in the European investment tech landscape.
PSA - Next week I will be speaking at Future of Tennis about how we are changing the traditional tennis industry with BestShot, an AI software solution. Open for a cup of coffee if you in Amsterdam.
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1. More money in the market
2. How others are doing it
3. Interesting bets
4. Data, research, observations
5. What others think
1. More money in the market
🇬🇧 London-based private equity firm Stirling Square closes €950m fund targeting mid-market opportunities
🇬🇧 Ancala Partners, LLP, a London, UK-based independent infrastructure investment manager, closed Ancala Infrastructure Fund II, at €735 million.
🇮🇱 Fortissimo Capital Fund closed its fifth fund at $650 million.
🇪🇸 GPF announced its 3rd fund, a €300 million one raised from wealthy families, to invest primarily in Spanish SMEs.
🇬🇧 European VC A/O PropTech has announced a €250 million fund to invest permanent capital in proptech startups transforming the real estate market.
🇫🇮 Tesi and Keva, the Finnish State Pension Fund, Ilmarinen, Elo and LähiTapiola have established Growth Fund Fund IV Ky, a €165 million investment fund to be invested in 10 to 14 domestic venture capital funds over the period 2020-2025.
🇱🇹 INVL Asset Management closed a private equity investment fund for the Baltic region, at €165 million.
🇫🇷 Elaia announced closing a DeepTech innovation fund at €76 million for funding 25-30 investments at the pre-seed level.
🇪🇸 Sabadell launched its fourth venture capital fund, Sabadell Selección Ventures II, with a committed investment of €60 million.
Bonus:
Antler, a startup incubator headquartered in Singapore and active in Sweden and Norway, announced securing $25M more from British investment management company Schroders, investment house FinTech Collective and Ferd, the vehicle used by Johan H. Andresen, the Norwegian industrialist and investor.
Bbooster Ventures, an early stage investor from Spain (Valencia), becomes part of the Draper Venture Network, will be called Draper B1.
Sequoia is coming to London
Balderton Capital hired two new General Partners - Rana Yared (from Goldman Sachs) and David Thévenon (from SoftBank)
2. How others are doing it
🇪🇸 Barcelona-based with a German-founder media outlet EU Startups was valued at €1.2 million at the end of 2019, as it raised €73K from 81 investors.
As I have built and sold a media company in a different life, media industry is a subject close and dear to my heart. I find it fascinating to follow how the companies, small and big, new and old, are still struggling to adapt and figure out a sustainable business way.
In the European tech media - the English speaking one - we’re seeing a transitional phase from ad-based, optimized-for-traffic media rooms to a leaner, based on a subscription model, thinking. Add into the mix the multi-language and 27-country fragmentation of the market and you have a difficult business problem to solve and market to conquer.
On one end, there are providers such as EU-Startups and Tech.eu, mainly acting as aggregators of press releases given away for free as *media* and making money from either selling reports or events. Tech.eu also has a soft sub model, charging for a more complete aggregation sent by email, I would be surprised if it has more than a few thousand subscribers though.
On a higher end, there is sifted.eu, subsidized by FT, aiming to create quality content which it still gives away for free. Still waiting to see where it is going, as there is no free lunch and quite curious whether reaching breakeven will justify keeping up the pace of writing great content.
But this positioning buys them a good brand building process in the market, helpful when and if they will start monetizing the content. Still think they are searching for their North Pole, but it is an exploratory process, there is no recipe on how to do it right, just gut feeling and experiments, and in Europe a rather singular model on this vertical.
Notably, FT also acquired TNW last year, which owns one of the better tech events from Europe. There are obvious synergies and a bigger picture in place (FT’s mother company has a similar strategy in Asia) but also rather disparate expensive efforts at a cost of focus - probably it makes sense to cross sell and bundle in one or more packages, together with FT’s proposition. We will see rather soon, creating great content is expensive and not really sustainable if you just want to live off of selling it.
There’s also Techcrunch, which has a good brand name backed by veteran journalists, and more oriented towards scoops and better-documented articles - still, difficult to assess how profitable the European operation is, market estimates indicate that overall TC makes north of $20 million a year.
However, TC looks more like a dinosaur living off of its inertia, good brand and lack of real competition in Europe. And have you checked their website and mobile app? Simply terrible, come on, it is already 2020.
And in the middle there are a lot of small outlets, either small, English-written brands or in a local language-written, bigger fish in a small one-country pond, usually owned by the larger media groups.
Quite sure this is an incomplete picture but fact is that as the European investment ecosystem becomes more mature, competitive and border-less, there is a need of good sources of coverage and insights.
The question is how much is the market willing to pay for it. EU Startups’ valuation can be an indicator. A back-on-the-envelope calculation starting from Sifted’s payroll can also point to how much is FT is investing.
It is obvious though (to me at least) that in the years to come, media will not be won by the outlets with the highest traffic or social media following but by the ones with the better brands and smarter product strategy.
Conventional media thinking from the past 10-15 years, ever since media business discovered the internet, is long outdated, probably the best example of a good media biz done for the 21st century is Skift.
For a better context and a good parallel of what tech media means in US:
Jessica Lessin (founder of The Information) has focused her site on the larger picture, pursuing industry scoops and keeping the publication ad-free, instead charging $399 a year for complete access. The Information achieved profitability in 2016, Ms. Lessin said, three years after she left The Wall Street Journal to start it. She added that she expected $20 million in sales by the end of 2020, and for her staff of two dozen reporters and editors in the Bay Area, Seattle, Los Angeles, New York, Washington and Hong Kong to grow.
Bonus
raising series C - the experience and the deck
P/M fit thread
3. Interesting bets
🇦🇹 Austria
manufacturer of display technologies for augmented reality (AR) devices | Hermann Hauser Investment, APEX Ventures
job network for food and beverage (F&B) professionals | €1.5 million | Speedinvest, karriere.at, Howzat Partners
🇩🇰 Denmark
developer of a testing environment for game developers | $1.7 million | PreSeed Ventures, Saltagen Ventures, Propagator Ventures, Pool Global Partners
🇪🇪 Estonia
🇫🇷 France
digital freight forwarder focused on fine-art shipping | €9 million | Acton Capital, Global Founders Capital
radio-frequency technology embedded in mobile or fixed anti-drone solutions | €5.5 million | MBDA
🇮🇹 Italy
plug-and-play technology connecting cars to the cloud | €5.6 million | P101, Linkem
🇩🇪 Germany
manufacturer of clean portable batteries | €8.5 million | SET Ventures
digital therapy provider | €6 million | SHS Gesellschaft für Beteiligungsmanagement, Think.Health, VC Fonds Kreativwirtschaft, High-Tech Gründerfonds.
mobile school app that helps schoolchildren, parents and teachers communicate | €2 million | HTGF, business angels
🇮🇱 Israel
voice-control technology for machines | Hyundai Motor Company, NextGear Ventures, ATOORO Fund.
🇵🇱 Poland
manufacturer of robotic technology for warehouses | $8.6 million | Khosla Ventures, Hoxton Ventures
online English learning platform for children | €1.3 million | LETA Capital, BonAngels.
🇪🇸 Spain
end-to-end loyalty marketing platform | €2 million | Greycroft
🇬🇧 UK
sports wearable biomechanics startup | $9 million | Hiro Capital
provider of a platform for creation and global fulfilment of on-demand merchandise | $5 million | Gresham House, Force Over Mass Capital
bicycle insurance startup | $4.7 million | LocalGlobe, Creandum
4. Research, data, observations
🇬🇧 Europe’s Series A Funding Landscape: A Snapshot
🇱🇹 The rising stars of Lithuania’s startup scene
🇫🇷 The shortlist of startups in the challenge organised by the French Football Federation
🇬🇧 A mobile app that helps find tennis partners is the 2019 winner of the Tennis Industry Association UK’s Innovation Awards.
🇪🇺 The EU wants a consortium to make a new, non-US based cloud platform
The project, called Gaia-X, is a collaboration between the European Commission, Germany, France, and according to an email from a spokesperson for Germany’s Federal Ministry for Economic Affairs and Energy “some 100 companies and organisations”. (Firms confirmed include SAP SE, Deutsche Telekom AG, Deutsche Bank AG, Siemens and Bosch.) The first proofs of concept for the European cloud are set to be ready towards the end of this year.
🇸🇪 IKEA’s app upgrade offers consumers a number of opt-in or-opt out options and a panel to adjust how their data is used. Pretty cool - hopefully this will be an inspiration for other retailers - context + video
🇩🇪 99 second hand smartphones are transported in a handcart to generate virtual traffic jam in Google Maps.Through this activity, it is possible to turn a green street red which has an impact in the physical world by navigating cars on another route to avoid being stuck in traffic. " #googlemapshacks
🇬🇧 Schools trial body cameras to aid safety and monitor behaviour in the UK.
Bonus:
Total VC funding in the Mid East for 2019? Barely $700 million across a population little over 150m. Israel alone raised over $6.5 billion in 2019 and has a population of just 8.5m (link)
Global SportsTech 2020 (source)
It’s industry's largest dataset on what it’s like to run a startup with 3,600+ submissions and 190,000+ data points.
comparison of internet ad platforms (link)
5. What others think
🇪🇺 What to expect when pitching European VCs
If you’re in the United States and you’re sending your pitch deck to investors, you can expect about 50 percent of your views to come in just the first nine days. You’ll also hit 75 percent of your visits in just over a month, which is very much in line with the 11-15 week average window.
Sending out your pitch deck in Europe, you can expect to wait over two weeks (15 days) for the first 50 percent of your visits. And you’ll likely wait nearly two months (53 days) for 75 percent of your visits.
There are a lot of reasons for the discrepancies. It could be that your potential investors are more spread out. We also don’t see the same level of urgency in EU funding rounds as we often see in the U.S.
🇪🇺 European "deeptech" and AI-first companies on average raises €16m less than US counterparts between Seed and C. Biggest delta in average round size is actually at Series B (€8.7 of the total €16m gap)... things seem to equalise by Series C (average size €30-32m)... for those that make it that far.
Bonus
VCs were all about funding tech breakthroughs but that has got lost. A lot of VCs look more like private equity companies that do not want to lose any money so they end up backing dog-walking apps rather than quantum computing.
doing a PhD is not really worth it. Oh, the big ego of being called a doctor…
Happy Sunday!
Thanks for reading 🙌
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Created every Sunday by @drnovac. Please share it with people who may find it interesting - thanks!