More money in the market and interesting bets from Europe.
1st edition
This is the first edition of Sunday Central European Time (Sunday CET), a selection with what we found noteworthy in the European investment space.
It has 1,761 words and will take about 9.6 minutes to read. If you don't already subscribe, sign up here.
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1. More money in the market
2. Learning about how others are doing it
3. Interesting bets
4. Data, research, observations
5. What others think
1. More money in the market
€2 billion will be invested in France-based venture capital funds focusing on late-stage investments.
The other €3 billion are for global tech funds that invest in listed companies and are managed by France-based asset managers.
The money comes from asset managers and insurers including Axa, Natixis, Aviva and Allianz.
The announcement was made as part of a larger plan including streamlining the country’s corporate tax and labor laws to make it easier for companies to hire staff and issue stock options to new employees.
A little context - in 2018, a total of €3.7 billion of venture funds was invested in France (pdf), out of a total of €21 billion invested in Europe (excluding Israel and biotech).
This is the largest European private equity firm listing in over 20 years, as it closed orders of €1.2 billion for a 20% float on the Stockholm stock exchange.
EQT has €40 billion of assets under management across 19 funds - the prospectus materials make for an interesting read. Also EQT announced launching a philanthropic foundation.
EQT Partners is Scandinavia’s biggest private equity group founded in 1994 by companies controlled by the Wallenberg family from Sweden, which, at one point, famously employed 40% of the industrial workforce from the entire country.
🇩🇪 Project A announced a new €180 million fund to back early-stage startups
This is the third fund launched by the Berlin-based early-stage investor since its founding in 2012 and brings total assets under management to €440 million.
Project A, led by Thies Sander, is looking to back early-stage startups in Europe, at seed and Series A with initial rounds funded up to €6.4 million. Besides Berlin, the company is currently working to set up presences in London and Stockholm.
🇫🇮IPR.VC has raised a €42M new fund to invest in European TV, film and interactive content.
IPR is a Finnish venture investor focused on media content, operating from London and Helsinki, with €62 million under management.
The company was founded in 2015, is led by Timo Argillander, and their investments include Tubecon, Lightneer and Koukoi Games.
🇮🇱 Remagine Ventures announced closing a $35M fund out of Tel Aviv.
The funding was provided by media companies including Axel Springer and ProSiebenSat.1, Japanese Adways and American Liontree LLC.
Remagine Ventures is led by Kevin Baxpehler and Eze Vidra, has already made 6 investments since its founding last year. It is looking to fund early stage investments w/ focus on entertainment and media tech from Israel and the U.K., with synergies between the two territories.
🇸🇪 Norrsken Foundation adds €31M from Niklas Adalberth.
Adalberth is known as one of the founders of Klarna, a Swedish new generation financial service company valued at $5.5 billion this summer.
In 2016 he founded Norrsken Foundation, a combination of a working space in Stockholm and an investment fund financing startups with the potential to radically improve the world. NF has invested in 15 companies to date.
2. Learning about how others are doing it
🇩🇪 How to monetize a social network - the European way
Good Hood, the European version of Nextdoor, announced its intentions to start monetizing its operation.
Founded in 2015 by Christian Vollmann, Grand Hood built a network of hyperlocal, social neighborhoods active in 4 countries and which had about 1 million registered users at the end of 2018.
The assumption is that they don’t want to charge users and/or sell advertising and instead will ask users for donations and bring in small local biz presenting their services on an affiliate model.
In 2018, Good Hood raised €16 million from corporate and financial investors including Burda, Lakestar, Deutsche Tele Medien, NWZ and pd ventures.
A lot of money and strategic interests - a tough and not very straightforward business case but ambitious and interesting to follow nonetheless.
🇵🇹 Sword Health investment memo
Sword Health is a tech-enabled physical therapy provider from Portugal (Porto) that just raised $8 million in a series A investment round led by Khosla Ventures and a bunch of angel investors.
Recently, the Khosla’s lead guy in the deal, Delian Asparouhov, made public the investment memo, documenting the process and analysis of getting the deal done. It is a great case study providing the lens through which investors look at a company.
The DNA of the company can be a dealbreaker
The right attitude and internal approach/process to push forward the company can very often be a solid competitive advantage. We were reminded of this by a series of articles put together by Accel a couple of years ago with three successful founders about their way of building things:
🇫🇮 Ilkka Paananen of Supercell
🇸🇪 Lars Björk from Qlik
🇸🇪 Jonas Nordlander from Avito
3. Interesting bets
🇫🇮 Customer analytics and insights via Smiley Terminals kiosks | $25M | Verdane Capital, Northzone
🇬🇧 Cancer diagnostics through machine learning | $22M | Atomico, Connect Ventures, Greycroft, Hoxton Ventures, EXOR Seeds
🇸🇪 Electric off-road motorbikes | $14M | Creandum, e.ventures
🇩🇪 Tech-based, consumer fitness | €6.4M | EQT Partners
🇩🇰 Camera wearable for automatic broadcasts and analytics of football matches | $6M | CourtsideVC, Ventech Capital, Seed Capital
🇨🇭Geospatial AI software to extract satellite and drone imaging insights | $3.3M | Space Capital, Space Angels, Atlantic Labs, Omidyar Network
🇩🇰 Software framework transforming app sketches into prototypes | $2.8M | byFounders, LDV Capital, av8 Ventures
🇫🇮 Software-based drive systems for electric motorbikes | $2M | Maki VC, Butterfly Ventures
🇫🇷 ZipRecruiter for Europe | €1M | Cabiedes & Partners, Denis Fayolle
🇫🇷 Robotchef hardware | €1M | The Family
🇩🇪 AR guidance technology for regulated industries | €1M | BayBG, Bayern Kapital
🇬🇧 D2C review platform | $300k | Hunter Walk, Shakil Khan
🇪🇸 Plant-based meat manufacturing technology | New Crop Capital
🇬🇧 alt-MBA by Founders Academy
4. Data, research, observations
🇬🇧 The subtle art of (not) understanding Gen Z
If you’re in your early 30s this shouldn’t be new stuff for you - it is a standard report about the next consumer generations, probably a redacted internal memo made for the partners in the company.
Having said that, it is a good effort, provides background perspectives and arguments and even has a tl:dr version at the end of it for the lazy ones.
🇸🇪 Creandum’s thesis around mobility.
Mobility in all sorts of shapes and forms is a hot topic for the period to come in Europe, put on the radar by the US-based on-demand scooter companies expanding into the old continent a couple of years ago. Interesting clusters in different parts of the value chain are already emerging in Spain, Germany and the Nordics.
🇸🇪 Summa Equity published its portfolio report for 2018.
Summa is a private equity house founded in 2016 by five partners led by Reynir Indahl - closed first fund in 2017 at SEK 4.5 billion (EUR 420M) and Fund II in 2019 at SEK 6.5 billion (EUR 610M).
🇳🇴 Argentum also published its analysis of the six months of 2019 for Nordic PE.
Argentum is an asset manager founded in 2001, based in Norway (Bergen) and owned by the Norwegian government.
🇮🇸 What did the VC and startup funding look like in Iceland in 2018.
About 20 investments and $93 million deployed, almost tripling the amount invested last year, not counting monster-rounds ($75 million plus). If you are after Iceland investment data, Northstack is the place to go.
🇳🇴 Kistefos Bond Investor Presentation – August 2019.
Kistefos is a private investment company owned by Christen Sveaas, one of the richest Norwegian business men.
🇩🇰 Heartcore’s Max Niederhofer observations about the 2019 YTD.
Heartcore is the former Sunstone Technology, the 12 years old tech arm of Sunstone, and an early-stage European venture capital firm with offices in Copenhagen and Berlin.
🇬🇧 The 2019 State of European Tech Survey.
Every year, UK-based investment company Atomico is putting together a comprehensive data-driven analysis of European technology. This is the third year and I encourage you to contribute to it if part of the ecosystem, it will be published by the end of the fall. See the 2018 edition and the 2017 one.
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🇪🇸 Jaime Novoa of K Fund VC relaunched his weekly newsletter covering the deal flow and startup-related stories from Spain. Apart from looking good, the gist is that the newsletter got a web interface that makes it easier to search for company-related news throughout the archives. It is free of charge.
🇳🇴 🇸🇪 Similar to Jaime’s, we can also recommend two other English-based NLs covering EU countries: one from Norway (Kjetil Holmefjord) and another from Sweden (Martin Weigert). Both are free of charge.
Nordic 9 also sends a monthly comprehensive big picture covering the Nordic market. Also free of charge. (disclaimer: I am the founder of N9)
5. What others think
🇸🇪 How to do due diligence on investors
This one will be useful for the not-so-connected, first time entrepreneurs. Given that the funding market is very fragmented and that raising money is a complicated process, you need to learn who you deal with beyond searching the online trails. The online content is mostly PR, as investors need badly to differentiate somehow publicly, apart from being $ providers. Don’t get impressed by name throwing, get out of your comfort zone and do your homework. Investors will most definitely do the same about you.
🇩🇪 The Three Rules of Freemium
A classic from Point Nine Capital, one of the European investors making use of content in a smart way to build up their reputation. PNC invests mainly in SAAS biz but all of their content, as well as the one of founder Christoph Janz, are a must read for any entrepreneur looking for structure and clarity.
🇳🇴 The cap table problem in the Nordics
This is a general problem, not only in the Nordics, especially for first time founders, given the limited investors/entrepreneurs experience in Europe compared to mature markets.
Generally speaking, founders should be concerned if they have less than 50% control of the company before they raise their Series A. As they are looking for outside money before building a business, they may lose sight of the consequences of giving up significant ownership in the business as they focus on simply getting capital.
Otoh, investors will always tell you that a smaller piece of a larger pie is better than a bigger piece of a smaller pie. But if you lost control of the company you will be just a puppet in the board’s hands and will have little leverage on the future.
You are in the corporate world and look to switch boats taking risks as an entrepreneur. Or… you want to make a career switch and look for different jobs or verticals. Or… you are at a point in time you just want to make a dramatic change.
Hampus provides a structured outline of how to go about planning what is next for you, backed by a lot of books recos, to which we would only add How Will You Measure Your Life? by Clayton Christensen.
Btw, all hajak.se content is worth reading and digging through.
🇬🇧 Everything revolves around the quality of the product, all the metrics and success are driven by it.
Another great insight from an experienced SAAS guy, Jonathan Gale, in a podcast made for Notion VC. Has a handy transcript of it at the link.
🇪🇸 Why Barcelona Is THE Place To Scale Your Startup
We wouldn’t say *the* place but the article certainly makes a good case for Barcelona, and Spain in general, having become an interesting option for building a startup.
Iberia is an up and coming region in Europe, still very affordable, full of opportunities (the Spanish-speaking ecosystem is huge), with access to great talent and good infrastructure. Throw in the good weather and, also important, a very friendly environment with the foreign workforce, as opposed to kicking it out, for example (hello Sweden).
🇳🇴 Strengths and weaknesses of the Norwegian startup scene
A thoughtful piece about the Norwegian market, written by Esben Poulsen, a Dane running an Oslo-based incubator called Arkwright X. Norway is an underrated gem in terms of new and interesting tech.
🇺🇸 Bonus link from NYC - one month as a VC analyst
TL:DR - not as aspirational as it looks from outside, and not too easy either. Hard work at the bottom of the pyramid.
Thanks for reading 🙌
Created by @drnovac every Sunday. Please send feedback at dragos@nordic9.com.