When not to raise VC, why you get passed by investors and a larger Euro context
#36
Hello from Stockholm, where everyone is already vacationing.
This weekend is Midsommar, the most important holiday in the Nordics, officially celebrated on a Saturday between June 20 and June 26.
Unofficially, it is a 3-day weekend full of parties, kicking off the infamous Nordic summer holiday - around this time, people in Scandinavia usually take time off until the first or second week of August.
Summer solstice, which was yesterday, means we’re mid year and 2020 still has plenty of surprises ahead of us.
I’m trying a new format with this edition, let me know what you think of it. Enjoy!
MICRO
🇬🇧 Good profile of Hoxton, one of the most prolific early stage investors from the UK. They just announced their second fund at 100M.
🇷🇺 An interesting interview with Mail.ru co-founder Dmitry Grishin, who raised a second fund of $100 million to invest in seed and series A in US.
🇫🇮 If you’re a founder, before raising $1M from a $50M venture fund, look in the mirror and ask:
Do I see myself building a $3B business?
If the answer is Uh, no you are probably better off not raising VC.
This is from a great presentation full of gems about what VC raising really means for founders made by Jyri Engeström.
🇪🇺 Why VC investors pass on startups: a thread.
Alternative title: don't take it personally.
🇪🇺 Another day, another research piece with another invented term: soonicorns from France.
🇬🇧 Citymapper is looking for a buyer.
I don’t think anyone wanted to invest in them because they have no business model
Most certainly Facebook looked at them before acquiring the Swedish Mapillary, presumably cheaper judging from the money raised.
Mapillary raised about $25M from Atomico and Sequoia, Citymapper north of $50M from Index and Benchmark.
🇫🇮 Frustrated by the long process of securing a permit in the EU, Health Hack Labs decided to go ahead and launch Fixu Drink in the US and Russia.
Fixu Drink is a hangover drink made from natural ingredients.
🇮🇹 Bain Capital has made a 3 billion-euro bid for a ~25% stake in Serie A, Italy's pro soccer league, in competition with rival private equity firm CVC Capital Partners.
Serie A revenue in 2018-19 season was $2.5bn, 60% of it from broadcast rights.
🇸🇪 How The Local tweaked its way to 11,000 new paying members in 3 months.
🇪🇺 A good list with 10 agricultural and food technology startups.
🇪🇺 Another list with European startups built with social and environmental impact in mind.
🇬🇧 News by the ton: 75 years of US advertising
🇬🇧 UK’s Triumph Motorcycles introduces its first electric bike
🇩🇪 BMW Group and Mercedes-Benz AG end ‘long term’ automated driving alliance. BMW will slash 6,000 of its over 120,000 jobs worldwide this year, while 'Germans are not tired of cars'
🇳🇱 Uber fires 200 of the 1,500 employees from its international headquarters in Amsterdam. Plenty of engineers in the market.
🇨🇭 You can stay in a 'hotel room' without walls that offers breathtaking views of the Swiss Alps. 295 Swiss francs ($310) a night.
MACRO
🇪🇺 A good piece explaining why Amazon is under investigation by EU.
EU:
Amazon runs an online store and also sells its own products on that platform. The criticism is that it's both the player and the referee.
Amazon:
There are plenty of companies that act as both a shop and supplier. Tesco and Sainsbury's both sell their own labelled products in their stores, for example.
🇪🇺 The European Commission opened two antitrust investigations into Apple’s App Store and Apple Pay practices, following complaints by Spotify and Rakuten over Apple’s 30 percent cut on subscriptions and sales of ebooks through its App Store
🇩🇪 Germany launched a coronavirus contact tracing app on iOS and Android, says it costs €20M to develop and will require €2.5M- €3.5M per month to operate.
Already downloaded by 6.5 million people.
🇳🇴 Norway ends virus tracing app over privacy concerns
🇬🇧 Sadiq Khan (London’s mayor) took a 10% pay cut to his £152,734 salary and also froze pay for his senior appointments at City Hall.
🇩🇪 Germany considers tax advantages for working from home
🇬🇧 In June 2016, the UK voted to leave the EU. Then a funny thing happened...
Quietly, with zero fanfare, the EU grew its trade in goods by more than the total value of all the trade it does with the UK.
🇬🇧 Speaking of Brexit - the U.K. will use “shock and awe” tactics based on behavioral science to spur businesses and the public to prepare for the end of the Brexit transition period.
🇩🇪 A great interview with a former German diplomat in the UK from 2018 to 2020, touching upon cultural and political differences, British exceptionalism and the lack of a compromise culture.
🇪🇺 EU wants to build a green Ultra-Rapid-Train network, part of a recovery programme from the COVID–19 crisis - 10-year, €2 trillion investment program focusing on public health, transport infrastructure and energy/decarbonisation.
An average speed in the range of 250–350 km/h should be achieved.
This would allow passengers to halve the current rail travel times, for instance, from Paris to Berlin to about four hours, making air travel for a large part of the intra-European passenger transport obsolete.
🇪🇺 China lost its status as a market economy after it initiated a lawsuit against the European Union, and which was further suspended at the request of China.
🇪🇺 A good map of technology platform origin - goes well with the background explanations.
DEALFLOW
💰More money in the market
🇬🇧 Meta Change Capital, based in London, announced a €100 million VC fund focused on blockchain, founded by Æternity co-founder Nikola Stojanow and estimated to close in Q4 2020.
🇩🇪 Fly Ventures, based in Berlin, raised its second fund at €53 million to invests in seed-stage European startups within enterprise and deep tech,
🇸🇪 Pale Blue Dot, based in Malmö, is a newly announced €53 million seed-stage venture company focusing on climate-tech companies from Europe.
🇨🇦 ArcTern Ventures hired the former MD of Equinor to head its European operations of what they claim to be the world's largest cleantech funds ($150M)
💵 Interesting bets
🇸🇪 €50 million equity & debt | podcasting company
🇫🇮 $40 million | refurbished electronics marketplace | Finnish-only investors (bold bet)
🇫🇷 €15 million | a telemedicine booth manufacturer | Atoga, Aviva France, Bpifrance
🇬🇧 $10 million | money transfer service for migrants | Seventure, Vostok
🇬🇧 €8 million | textile recycling technology company | H&M, Sulzer
🇸🇪 $3.4 million | manufacturer of electric water boards | local angels
🇪🇸 €3.3 million | manufacturer of fully biodegradable hunting and shooting cartridges
🇩🇪 $3.3 million | a concierge bot for employees on Slack | La Famiglia, Gradient Ventures, P9, Seedcamp
🇪🇸 €3 million | digital real estate agency | Torch Capital, DN Capital, Cathay Capital and Seaya Ventures.
🈴 M&A
🇪🇸 Verse Technologies (payment company) was acquired by Square
🇸🇪 Mapillary (mapping company) was acquired by Facebook.
🇫🇷 Sentelis (industrial AI) was acquired by Accenture
🇸🇪 Oumph! (plant-based meat company) was acquired by US-based Livekindly.
ENCORE
🗣️ Observations
The Basecamp crew launched an email service called Hey specifically positioned to compete against Gmail.
In the process they started a war with Apple, invoking some common sense reasons. Apple doesn’t really care because when you’re the strongest dude in the room you have leverage and don’t really listen, you just tell others what to do.
So in order to compete with Google, Basecamp needs Apple’s approval - a paradox that reflects very well the mobile duopoly and in general the internet gateway role played by the two.
It is an interesting case with long term implications.
Related: this is how you do troll marketing.
Twitter launched an audio-tweet feature option.
Uber started selling SAAS to transit companies.
Tesla released its 2019 impact report which is an eye opener about the climate impact a car manufacturer can make with spillover effects in so many adjacent verticals.
Podyssey launched Deep Dives, curated guides on trending podcasts, hot topics, and relevant podcast recommendations.
SiriusXM acquires Simplecast to double down on podcasts with distribution and analytics tools
Y Combinator is relaunching its free online bootcamp Startup School as a continuous year-round program.
Things to know in AdTech, today.
The five leading e-bike brands are Rad Power, Pedego, Trek, Specialized, and the Alta Group — Raleigh, IZIP, et al. These five collectively enjoy about 70% of the total e-bike market in 2020.
📚 Books
Zero To One - Peter Thiel
🗞️ Interesting reads
The conventional wisdom in Silicon Valley is that the best venture capitalists are light years ahead of the rest. The “gods of venture capital” are not nearly as divine as many believe - they’re good investors, but their legendary status is owed to structural advantages developed over time rather than some superhuman company-picking skills among the partners.
Marc Andreessen on productivity, how he spends his time, learning, reading, his "build" essay and much more - link.
some very good talks w/ Niklas Zenstrom, Ilkka Paananen, Riccardo Zacconi, Rishi Khosla etc
If you were to project out the top 5 venture firms in 10 years, what would they be.
You can only invest in companies in a single category for the rest of your career. What category would you pick and why?
How to be a career-changing mentor - 25 tips from the best mentors we know
The FDA just approved the first prescription video game — it’s for kids with ADHD
the recording of the Snap Partner Summit
Happy Sunday!
Thanks for reading 🙌
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