Spain is hot, American money influence and investors aren’t all that smart
#16
This is the 16th edition of Sunday CET, a weekly curation of what we found interesting in the European investment tech landscape.
MENU
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
🇬🇧 RBS’ new boss Alison Rose announced £1bn in funding through Natwest to support female entrepreneurs in the UK.
🇪🇺 EU announced €200 million to boost space sector investment.
🇬🇧 London’s Blossom Capital has announced its second fund, $185 million to invest in early-stage European tech companies.
🇬🇧 Active Partners, a consumer-focused investment firm based in London, has held the final close of a GBP100 million fund focused on consumer brands from the UK and Europe.
🇳🇴 Equip Capital aims closing Equip Capital I at €150 million.
🇸🇪 J12 Ventures announced the first close of a $50 million seed investment fund.
2. How others are doing it
🇪🇺 A lot has been said about American investors interest in spending more time and money in Europe.
In general competition is good for consumers aka founders, especially since the American way of doing business is more pragmatic and risk-taking oriented - in Europe the VC investor job is still a very young profession, as (tech) startups as a class started to get serious traction only in the past 10 years or so.
Inevitably the effects will be felt at the seed and pre-seed level, once the competition for later stage deals will lead to high level valuations and everybody will look for undervalued assets down the value chain.
The early stage infrastructure in Europe is incredibly fragmented and unprofitable, supported by high subsidies of local governments and EU.
Add also the fact that the knowledge is also scattered and rather local than global, inefficient and insufficient for the founders’ quest to get to the next level until the exit.
This is probably the biggest vulnerability of the European ecosystem, startups growing make it in spite of that not because of that.
And this rather than the lack of capital access makes European startups to flee to US/Silicon Valley. There’s never been so much investment money available in Europe.
Besides a more homogeneous 300m ppl market, the US offers entrepreneurs access to a concentrated area of investors available, knowledgable and experienced, three attributes that are still difficult to find aplenty in Europe.
It is as easy to book a ticket and fly to the East or the West Coast as to go to London, for example, in order to internationalize and raise money. And yet the US investors are more available, easier to talk to and sell to. They get it and their risk appetite is different than that of the Europeans.
And hopefully this is where a more active US VC presence will impact by doing business directly in Europe. Competition creates market efficiencies.
🇪🇺 Speaking of US vs EU investors’ way of dealing with risks:
🇬🇧 Using data to shorten VC learning cycles (Frontline Capital)
🇬🇧 Playfair Capital launched a wellness program for their founders - costs £50/month.
🇪🇺 Index Ventures launched Not Optional - a call on EUR legislators to fix the patchy, inconsistent and often punitive rules that govern employee ownership — the practice of giving staff options to acquire a slice of the company they’re working for.
🇬🇧 Also Index Ventures has a handy tool helping startups to figure out how to build a stock options plan.
🇩🇪 Leaders for Climate Action is a movement of over 200 tech CEOs with the goal of implementing change on a personal and company level, as well as to call on political decision-makers to set a clear course for effective climate action in Germany.
🇳🇴 Doing content works magic, the spillover effects edition (context link)
🇫🇮 If you ever wonder if there is anybody doing VR right, there is a company in Finland you should know about.
🇸🇪 A journalists went spontaneously into a company’s office and asked to see an updated shareholders structure of the company. As he was refused, he notified the police - link under paywall, background story here.
Bonus
How to structure investors updates (Daniel Gross)
How To Invest In Startups (Sam Altman)
How to Tell Your Story: A Simple Framework for Startups (Om Malik)
AngelList is generally known as a platform connecting investors with startups. A few years ago they started to make investments. Here is where they are at the end of 2019:
- $1.8B AUM
- 47 unicorns in portfolio
- 36% of all top-tier deals
- 3.5M candidates job-hunting
- 25K product launchesUpdates from VC Silicon Valley click below for the whole thread
3. Interesting bets
🇧🇪 Belgium
Visitor Management Software with iPad check-in system | $15 million | Five Elms Capital, Join Capital
creator of a content marketing tool | €1.1 million | Peak Capital
🇪🇪 Estonia
developer of “smart manufacturing” software | $3.9 million | 42CAP
🇫🇷 France
online seller of outdoor equipment | €10 million | 123 IM, BNP Paribas Développement, Sofimac Régions
developer of the next generation of chemotherapies | €800k | French Tech Seed Fund, angel investors
🇩🇪 Germany
manufacturer of a solar-powered electric car | €50 million | crowdfunding
🇳🇱 The Netherlands
manufacturer of an autonomous floor-cleaning robot | Koolen Industries
🇵🇱 Poland
AI-based Robotic Text Automation platform | Cogito Capital Partners, Barclays
🇪🇸 Spain
marketplace for microstays at hotels (3, 6 and 12 hour blocks) | €8 million | Dila Capital, Angel Ventures
provider of a digital advertising solution for taxis | €1 million | angel investors
🇸🇪 Sweden
plant based food alternatives | €3.25 million | Northzone, Astanor Ventures, Kale United, Inventure
medical platform designed to help people manage chronic illnesses | $2.1 million | Norrsken VC, Noaber Foundation, angels
🇬🇧 UK
an alternative to traditional MBA courses | $14.1 million | Balderton, Hillsven Capital, Octopus Ventures
healthcare platform connecting aging populations with carers | £8.2 million | Acton Capital
CRM platform which simplifies launching shopper engagement and loyalty programmes | £6.4 million | Guinness Asset Management, Maven Capital Partners
online platform which connects consumers to financial advisers and mortgage brokers | £5.6 million | British Smaller Companies VCT, British Smaller Companies VCT2, YFM Equity Partners Growth II fund
global leader in cannabis data, conferences and consulting | £1.25 million | Altitude Investment Management, Artemis Growth Partners and Enexis AB
toxicology testing services | £750k | Northern Venture Capital Trust Funds
4. Research, data, observations
🇪🇸 Investors are bullish on Spain.
A look at PE deal flow in Spain reveals that the country has gone through something of a private equity renaissance. Spanish PE deal value reached a historic high in 2018, with just over €39 billion transacted across 183 deals.
Although last year saw a dip in total deal value to around €22.7 billion, it still represented the second-largest value of PE deals in Spain over the decade—and deal count was the fourth-largest during the time period. Furthermore, investors maintain that the underlying fundamentals of the country's PE market remain promising going into 2020.
🇪🇸 ASCRI made public its numbers regarding the venture investment deals from Spain.
517 venture deals totaling €737 million
84% deals < €5 million, 18 deals > €100 million per ticket
79 deals made by international investors, 362 investments local and 76 public funds.
🇪🇸 Spain has 170 accelerators and active incubators focused on startups.
🇬🇧 The UK's top 25 VCs: a guide made by journalists.
🇫🇷 What are the 120 companies part of La French Tech 120 - a government-backed support program “for 120 startups that have the potential to become global technology leaders”.
🇫🇷 The 2020 French Fintech Landscape - 592 startups
🇬🇧 The European EdTech Funding Report 2020 (Brighteye Ventures) - link
🇪🇺 Germany Breaks Korea’s Six-Year Streak as Most Innovative Nation - link
🇪🇺 European regulators have imposed 114 million euros in fines for data breaches since 2018. France leads the way with the biggest single fine - of 50 million euros against Google.
🇳🇴 The Norwegian government launched a national strategy for artificial intelligence.
🇸🇪 Ikea is building a 7-floors store in central Vienna with zero parking spaces.
Sounds nice, you can have the purchases home-delivered, but Ikea’s value proposition for cheap furniture is no longer valid.
🇪🇺 Brussels-Vienna night train returns as Europe eyes flying alternatives.
The revival of the Vienna to Brussels route comes after authorities in Sweden – the spiritual home of the “flight-shame” movement – announced they were also considering the launch of night trains between Malmö and other European cities.
Bonus:
Millennials’ share of the U.S. housing market: Small and shrinking - link
The state of the fertility industry: Inside the big business of babymaking - link
Venture capital is changing - new & developing funds consistently rank as best performers.
More insights available here.
Mastercard SpendingPulse report w/ details about holiday shopping from November 1 through December 24 in US - link
5. What others think
🇪🇺 The beginners guide to startup bootstrapping
🇬🇧 “Investors aren’t all that smart” - thread
🇫🇷 The Tokyo Job: Inside Carlos Ghosn’s Escape to Beirut
🇪🇺 Will Europe Lead In 2020 As 2019 Risks Fade?
Brexit and the U.S.-China trade war weighed heavily on Europe in 2019; these pressures are now easing as 2020 gets underway. December’s U.K. election win by the Conservative party and the announcement of a U.S.-China “phase one” trade deal have greatly diminished risks of a no-deal Brexit or trade war escalation in 2020. These developments may lead to an early spring for Europe, relative to other economies, as the green shoots of growth reemerge.
Bonus:
I mapped the circa 450 unicorns in the world, and dug into the LinkedIn profiles of their Cofounders, with a special focus on the Cofounder and CEO of the unicorn.
How venture investing works:
Thought this is a nice ending :-)
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!