Hello and welcome to a new edition of Sunday CET.
So.Much.Dealflow. And… so.much.going.on.
In spite of recession and lockdown, it seems like the deal ops in Europe is at very high levels. There’s a lot of money that needs to be put to work and people are already comfortable with the new reality of doing business online.
And everything moves much faster! The pandemic will be over but some of the old ways of doing business will certainly not be the same.
The downside is that there’s no serendipity anymore and previous dead times used for background thinking have to be programmed into the daily routines. If you need creative thinking, like I do, you need to block chunks of time and respect them religiously as there’s always one more thing you can do glued to your screen.
Anyways. Here’s what I have for you this Sunday.
MENU
1. Powder
2. Highlights
3. Strat
4. Eurobits
5. Graph of the week
6. Reads
1. Powder
🇫🇷 Jolt Capital
🇮🇱 Peregrine Ventures
🇬🇧 Seedcamp
🇵🇹 Faber
🇮🇹 Fondo Boost Innovation
🇦🇹 Speedinvest
🇪🇸 Carlos Gonzalez-Cadenas joins Index Ventures as investment partner. (he is one of the most active angels in Europe)
🇬🇧 Sapphire opens London office, eyes Europe. Sapphire has been launched by SAP 10 years ago and was focused mostly on the US market until now.
2. Highlights
🇬🇧 Hopin
🇪🇪 Pipedrive
🇩🇪 Tier
🇬🇧 Heroes
🇬🇧 Railsbank
🇫🇮 IQM
🇫🇷 Livestorm
🇧🇪 Edgard & Cooper
🇸🇪 Spotify to buy podcast ad company Megaphone for $235 million
3. Strat
🇬🇧 I am not the type of guy who gets excited about uni or deca or uber corns from Europe or elsewhere, that’s investors job. I am more into interesting stuff built by smart people.
And what Hopin has been doing is nothing far from remarkable for an European startup - if we’re still considering Brits as Europeans, that is. :-)
In 18 months to build something from 0 to 3.5 million users and 50,000 customers bringing in $20M in ARR - this is really inspiring for any founder aiming to build products people want.
Sure, corona played its factor and the timing was perfect, but it really doesn’t matter. Execution does.
It’s true, the $2.1bn+ valuation is a bit too high for a 20 mill a year business, but it factors in the upside, the execution and the demand - investors have not had too many opportunities of this kind in their career in Europe.
🇪🇪 Very smart PR from Bolt with a press release announcing nothing new in the context of its competitor, Tier, raising $250M. The media bought it and covered it equally - and so they were part of the conversation.
Since we’re at it, otoh Voi did nothing but fed the media with a rumor that they’re raising too. However, it is notable reading between the lines of one of their investors in terms of positioning and how they perceive the market.
The TL/DR (site is in Swedish) is that Europe is a Tier/Voi business and the American competitors are “bad” and not competitive and count just because they have money. Oh, well.
More background on the subject in this article with a misleading title. :D
🇪🇺 It looks like the cloning race has gotten amped up a notch in Europe.
After a timid German start with classic pre-seed announcements, noted in last week’s email, two Italians based in London announced securing funding of $65 million in debt and equity for building a business aggregating Amazon’s SKUs operators.
And just as the week was ending, some of the Germans rebounded and announced adding $25 million to the table (includes a credit line, which is important).
If you’re curious like me, you can read the announcement of one of their investors, which probably is copy/pasted from the investment memo.
It doesn’t say anything else than hope and wishful thinking. I truly wish we could see this type of investments in Europe more often, funding this kind of risks is what makes an investor to be different than a money manager.
But, realistically speaking, this is less of a conviction investment - the likely hedge to putting so much money in a pre-revenue, pre-product, pre-everything, is the fact that the founders just need to copy an already existing blueprint and they were previously employed by McKinsey and Rocket Internet. How badly can they screw it up, right?
Also, you may find handy to learn that Amazon has 65k 3rd party sellers and operates 100k EU marketplaces and some numbers to crunch if you’re into evaluating TAM.
Oh, and there’s also a great interview with the Thrasio CEO, the guy who had the vision, executed it and now is an inspiration for the entrepreneurs part of the Euro ecosystem that wants to compete with Silicon Valley.
🇪🇺 Speaking of Europe vs Silicon Valley, it looks like YC increased the number of Euro founders they took into their last batch (26).
What the article doesn’t say is that YC actually is aggressively scaling its operations - just look at the size of the staff (I’ve been saying it for a while in these newsletters). And scaling includes increased scope and size of their school as well, which is a great funnel towards the YC accelerator.
YC is free of charge, open to anybody and competes directly with the local accelerators that matter in Europe, which, in turn, rather focus to convert corporate heads into startup people than having an all-inclusive approach.
In other related news, there is another American accelerator which notably hired two employees to do sales on the European grounds. Their model is different though as they require customers pay for materials and network, and upon graduation may get funded.
🇪🇸 Glovo launched a grocery service delivery based on a network of 20+ dark stores and says that it wants to go beyond food, in multi-category deliveries and compete with Amazon.
They certainly have what it takes to beat a 15 minute delivery grocery business proposition.
🇬🇧 The CMA (UK’s Competition and Markets Authority) has agreed to fast track the anticipated merger of Crowdcube and Seedrs to an in-depth Phase 2 investigation, after finding likely competition concerns.
4. Euro bits
🇪🇺 The most interesting Nordic investment deals of the 2020 fall.
🇫🇷 Remember last week’s French junior minister saying that it’s high time to build an attractive European model for entrepreneurs?
How about fixing the fundamentals first?
🇬🇷 Meanwhile, Greeks are playing it smarter than the French. They have good weather and beaches too.
🇦🇹 If the winter tourism season falters, Austria's entire GDP could shrink by as much as 1.5 percent.
🇪🇺 Americans hedging the Trump regime, the Eric Schmidt edition:
The former CEO of Google, one of America’s wealthiest people, and his family have won approval to become citizens of Cyprus in October. This would give him the ability to travel to the European Union, along with a potentially favorable personal tax regime.
Right on time - last month, EU took legal action against Cyprus and Malta over passport schemes for paying for getting citizenship.
🇬🇧 Markets in everything, the luxury tech edition: former Vertu employees are launching a new luxury smartphone at £3,000 a piece.
Rather than try to beat Apple, Google and Samsung on specifications, the phone is a retro handset in almost every sense. It offers voice calling over 2G/3G, as well as SMS text messages and, uh, that’s about it.
The only nod to modernity is an air quality sensor.
I give them 6 months.
🇪🇺 How to take over a market and screw competitors in 3 steps:
1. Build a decent product and give it away for free
2. Lock in a sizable audience, say 1bn ppl
3. Start charging after 5 yrs
This has been Google’s GTM for 20 years. Great for consumers, toxic for other value creators. Latest example: Google Photos.
Speaking of which: a group of 165 companies and industry bodies have called on EU antitrust enforcers to take a tougher line against Google.
Here’s some data showing that 1 of 2 Google search results (41% to be exact) are directing to Google’s properties, as opposed to plain vanilla organic results from the web.
Google is the most powerful media monopoly that ever existed.
🇬🇧 Amazon UK’s customer service had a bad night last night. Read the whole thing.
🇪🇸 The national government wants to impose a 5% tax on all revenues generated in Spain by video on demand companies such as Netflix, HBO and others. This tax will only affect companies that have revenues of at least €50m in Spain. The amounts collected will be used to finance local production of audiovisual content (via)
🇸🇪 Nent (owner of Viaplay) wants to become the European streaming market leader, launches in Poland and the US in 2021, and in 5 further markets by end of 2023.
🇪🇸 Spain will start testing fly taxis between Barcelona and Santiago de Compostela, part of EU’s Horizon 2020 program.
🇩🇪 Lilium, the German aviation startup, inked a deal with Orlando, FL, to establish a U.S. transportation center for its flying taxis.
🇸🇪 Pablo Escobar sues Klarna.
🇩🇪 Why Germans love getting naked in public.
🇳🇱 Dutch Deputy Prime Minister calls for Digital Services Act regulation against AirBnB
🇬🇧 Faced with closures because of coronavirus measures and fierce competition from retail giant Amazon, 250 independent UK bookshops have banded together on a new online platform.
🇦🇹 Apparently EU Council of Ministers have in the works a resolution to ban end to end encryption on apps like Whatsapp and Signal.
5. Graph of the week
I saw it, it’s watchable but the Netflix content is so bad that anything decent would stand out.
6. Reads
Moats & Network Effects in Financial Services.
The latest crazy pre-seed funding round in Silicon Valley is a mobile SAAS for setting up a live-shopping store. It’s called Popshop Live and raised at $100M valuation.
Fashion brand Supreme was acquired by VF Corp from private equity investors for $2.1 billion. It’s the biggest VF’s largest acquisition since it bought Timberland in 2011 for $2.3 billion.
Casper aside, consumer brands are thriving.
Reuters launches a non-finance B2B media product. The target: 124 million professional decision-makers globally.
Dan Gilbert, owner of the Cleveland Cavaliers, sold his business for $532 million, bought it back for $64 million, and turned it into a $42 billion empire. thread
Great story on how a legion of tech grifters, led by HP, turned printer ink into liquid gold.
DoorDash, Wish and Affirm Join Airbnb to Fuel Year-End IPO Boom
McDonald's launched a plant-based burger called 'McPlant'.
Sony gets into drones.
Beyonce, Peloton strike multiyear content partnership.
Happy Sunday!
Thanks for reading 🙌
Created every Sunday by @drnovac.
Please share it with your networks and encourage your colleagues to sign up here - thanks!
Feel free to reach out if you have any questions, comments, feedback, or if I can be helpful.