Early weekend AM, brewed a big pot and ready to ride. The grey, 2 Celsius, Baltic Sea view from my window only compensated by the thought that in three weeks I’ll be snowboarding my brains out.
Welcome to the Sunday CET, let’s get to it.
Euro strat
❄️ Powder:
🇩🇪 Target Global
🇮🇱 OTV
🇪🇺 EIB
🇬🇧 firstminute
🇮🇱 Entrée Capital
🇩🇪 BonVenture
🇩🇪 Cavalry Ventures
🇩🇰 Vestas Ventures
🇸🇪 Kinnevik hired Natalie Tydeman.
🔥 Interesting deals:
🇫🇷 Pre-revenue SAAS raised $26 million.
🇬🇧 A bunch of smart guys invested $10 million in an already established SAAS op.
🇩🇪 Developer of an in-car marketplace platform also raised.
🇩🇪 If you’re into B2B logistics marketplace, those guys also seem solid.
🇸🇪 And for the 3D gene sequencing platform interested, here’s one that was backed with $6 million.
🇫🇮 Guys built a prototype in three weeks based on a sprint made over a 5-day cottage trip. And then raised.
🇳🇴 Creandum and Northzone cashing out Kahoot’s positions.
🤓 Observations:
🇩🇪 The clones race has become a war.
Quick reminder, if you’re new to the saga - a hot thing in Germany this fall was investing in aggregators of Amazon-based, small retailers. All of them are copying the model of an American company named Thrasio, which is market leader and also which was valued at $1 billion earlier this year.
And so there’s been companies launched and money raised - I known of at least 8-9 wannabes only in Germany, and of one notable from the UK (notable in the sense that they raised $65 million for it).
However. Compared to a decade ago when the Americans mainly ignored the Rocket Internet people blatantly copying their businesses, things escalated a bit this week.
Specifically Thrasio, the business which is being imitated, just acquired one of their clones from Germany, Thristii, and made it their European office. It says that they now have two offices in Germany, in Berlin and Dusseldorf, operating a $50 million local business.
Not only that, but they also published a press release saying that they put aside $225 million to complete acquisitions of German companies and explicitly stating their differentiators.
What distinguishes Thrasio from other purported acquirers is that we are committed to closing every term sheet we sign, have the ability to close quickly, and can operate a company in the Amazon ecosystem well enough to generate real earn-outs for German sellers. Thrasio's expanded market presence gives German entrepreneurs a much better option: working with the company that is the gold standard in the space (with nearly 100 deals closed), a company with a real track record, and industry-leading data and performance.
Quote of the president dude of Thrasio, no less.
They also do something very smart namely creating the rules of the war:
Thrasio purchases these category-leading brands for a typical purchase price of $1+ million, giving small business owners their hard-won payout.
“You get an offer lower than 1 mil? Come talk to us!”
Read the whole thing. The Yankees got pissed and Boston people are the feisty sort.
A somewhat virgin market has become all of a sudden a zero sum game, and not a friendly environment either. Kinda wondering how much this risk was accounted for.
I guess at least we really get to see if the formula “copy others + consultants + money” makes for successful entrepreneurs in Europe.
PS. The winner of the whole thing? Amazon.
🇬🇧 There’s another war brewing, this time on the British isles.
On one side we have Primer, which does software for merchants in a PSP aggregation play of Stripe, PayPal and the likes, and was just valued south of $100 mill.
On the other, we have checkout.com, which is similar to Stripe, building infrastructure, and valued at some $5 billion not too long ago.
They fight for who’s who in the value chain.
Primer bets on the customer need of aggregating a fragmented access to processors, making it more competitive by providing fee comparison of the vendors.
Checkout says that an extra intermediating player in the chain such as Primer cuts the industry’s margins which are already thin.
Interesting to compare the VC sides as well:
Primer: Accel and Balderton
Checkout: Coatue, Insight Partners, DST Global, Endeavor Catalyst
The winner? Hard to tell.
Both sides chase the same customer profile and usually fragmented markets tend to consolidate, and so there’s one point for Primer, which does plays an aggregation role.
And you also get checkout’s reasoning of not wanting yet another middle man seated at the table.
But for the moment the chase is not getting market share from each other but rather onboarding new merchants. Until the market is saturated, there’s place for both to co-exist, even though they can each bypass each other if there’s collision.
The pie is big enough to feed plenty, though Primer seems hungrier (raised 10X less).
I’d bet on the hungry underdog.
🇸🇪 Speaking of clones, there’s a notable one in Sweden too, this time of a DTC selling razors for women. According to the local media they also copied the communication materials.
Why notable? Just raised $18 million this week from angels only.
🇸🇪 Klarna’s CEO, Sebastian Siemiatkowski, says he’s frantic about competition. We knew that already.
In other Klarna news, Sequoia’s Mike Moritz took over the chairmanship of their BOD.
Anecdotally, at Sequoia’s pitch to invest in 2010, Siemiatkowski asked something along the lines: “if Mike Moritz is so high on our business, how come he didn’t bother to come to Sweden to pitch me?” After the meeting, Moritz called and the deal was done.
🇸🇪 Here’s a startup with a smart recycling idea for food deliveries packaging:
When you are finished with a package, you scan a QR code from it on an app, and then take it to recycling point and get paid for it.
To make it a business, they sell the solution to the restaurants.
Not sure is scalable outside Scandinavia, where this kind of mechanism is really effective.
⚡ Quickies:
🇪🇺 Who are the people doing Nordic dealflow for international VCs.
🇪🇺 A list with interesting exits and strategic deals from the Nordics this fall.
🇬🇧 Worried that Amazon or Google seem to be circling around your business - are you a seal?
🇬🇧 52 things I learned in 2020
🇪🇺 Interview with the mayors of London, Lisbon and Toronto about tech in cities
🇬🇧 Facebook News will pay UK outlets for content in 2021
🇬🇧 Why did it take nine hours to go 130 miles in our new electric Porsche?
🇬🇧 An iconic 171-year-old tailor shop in London is using robots to perform virtual fittings
🇨🇭 Switzerland bucks European trend by opening ski slopes
🇪🇺 Europeans ski. A lot. Europe accounts for the same amount of skiing trips as the rest of the world combined.
🇮🇹 Italy introduces Christmas travel ban to control coronavirus
Graph of the week
50 Years of Gaming History, by Revenue Stream (1970-2020)
Other stuff
🎡 Big bois
Why Salesforce bought Slack - btw, Slack for Salesforce is what Instagram was for Facebook. But on a larger scale.
How Microsoft crushed Slack.
Stripe in talks for funding at $70 billion+ valuation + Goldman Sachs, Citi and Barclays are all partnering with Stripe.
🎪 Yucky cyborgs
By buying a customer service start-up, Facebook is trying to use its trademark playbook to remake WhatsApp into an inescapable way for businesses to interact with us.
That means they will do exactly what they did to Instagram. Bleah.
Speaking of sneaky FB - Libra rebrands in further efforts to distance itself from the original Facebook-led vision
🎩 For media hats
The Atlantic says that it has now surpassed 700,000 total subscribers — gaining more than 400,000 subscribers since the launch of its paywall 14 months ago
All the ways to make money in media without ads
WarnerMedia’s CEO explains why he’s blowing up the movie business
👀 Markets at a glance
On demand scooters:
104k scooters | 76 operators | 9 million users | 22 countries | 122 citiesReddit revealed that it now has 52 million daily users, +44% yoy
OnlyFans says it will generate $2B+ in sales in 2020, now has 85M users, is adding around 500K users a day, and is paying out $200M+ a month to its 1M+ creators
+ bonus: Why OnlyFans grew faster than any other creator platform this year.
In October 2020, Chess.com got 125M games played and 5.3M accounts.
🖖 Don’t do drugs, kids
The US pot consumption is super high as cannabis sales hit record levels over the Thanksgiving weekend. They want to make it legal in the States anyways.
And speaking of consumption, this is a sad story about how drugs f-ed up the life of an iconic entrepreneur.
🍭 Life is hard and then you die
How Some Black Startup Founders Are Thriving in a Pandemic Year
The Modern World Has Finally Become Too Complex for Any of Us to Understand
Happy Sunday!
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