when the music stops
#69
Hey guys, how are y’all doing.
Getting a bit of cabin fever on my side, finding it more and more difficult to work on longer streaks and concentrate throughout an entire week. I miss travelling, meeting people face to face and hanging out. The struggle is real.
Here’s what the Sunday CET looks like this week.
Euro intel
❄️ Powder:
🇪🇸 PAI Partners
🇩🇪 AM Ventures
🇫🇷 Quantonation
🇪🇪 Taavet+Sten
💸 Active this week:
VCs: FJ Labs, Octopus Ventures, Element Ventures
Angels: Tony Jamous, David Nothacker, Laurent Ritter
🔥 Interesting deals:
🇬🇧 B2B SaaS platform for legal
🇸🇪 “one of Europe's largest vertical farms”
🇪🇸 consumer service helping people doing their taxes
🇸🇪 social network for gardeners/gardening
🇫🇷 next gen social network
🇫🇷 video software solution for creators
🇩🇰 video software solution for calls of more than eight people.
🇩🇪 SAAS for carbon-neutral analytics
Reports
A raw Euro climate tech list and a Nordics-focused curated one.
Funds announced in DACH in 2020.
✍️ Observations
🇬🇧 Passion Capital plans to crowdfund the final stage of its latest £45 million vehicle, with a £350k allocation to retail investors via Seedrs.
It is an interesting experiment.
Not sure about the reasoning behind it, but an implicit opportunity I see is that Passion can do more than raising money per se and build a community around the retail investors, a very fragmented segment not served particularly well by any product in the market.
Angel List comes to mind as a sort of a community where they hang but in Europe is not as popular and here usually mom and pop investors gravitate either in closed circles or on open investment platforms used for crowd equity sales.
Building a community is an exercise that requires specific skills, and a rather different business than being a consultant deploying money and managing equity positions in a portfolio of companies.
One thing is clear though about the European investment market - the supply is much higher than demand, it is becoming hyper-competitive and is fairly fragmented both at the bottom and in the middle.
Competing requires you to be good at what you do AND some differentiation and strong brand (twitter/medium is not enough, sorry), preferably creating economic loops that can be added to the main business model, reinforcing it.
A few quick examples of additional economic loops: revenue-based financing, FoFs - investing in other early stage funds or micro VCs, angel programs, getting involved in secondary deals or, as always ahead of the market, what Andreessen is doing with the media business (a move that the conventional investors will get in a few years only after they will read a report detailing tangible results - so much to ask from visionary risk takers :D).
[btw, there’s at least one investor in Europe that does media with the VC as a business model]
Right now, Europe is still high on money and lots of the drinks are on the (EU’s) house. But it is a question of time until the aggregation will occur - surviving it requires running a fund like a business not like a portfolio manager and I guess we shall see if Euro investors have what it takes to actually run a business when the music stops.
And so, getting back to what Passion Capital is doing - it does look like a minimum path to creating a differentiating experience for stakeholders from the market.
The investment ecosystem in Europe presents so many opportunities and ways to innovate and has incredibly few people with vision and taking advantage of them. It is a market where everybody is the same and copies each other, without any bit of risk taking for doing something new. All this while the medium feels like being in the 2000s on the internet, you don’t know where to look first.
🇫🇷 Probably one of the most important stories of the week - Europe’s largest cloud services provider, OVHcloud, was involved in a fire incident that destroyed one of four data centres in Strasbourg and damaged another.
The net result: millions of web-based products cannot be reached - God knows if they had back ups or if the assets will be gone forever.
It’s one of those reminders for people building business using the internet that shit happens all the time, and that laying out the fundamentals the right way is extremely important in order to minimise risks. If you’re in tech and haven’t had a tech audit before, maybe it’s time to look into it.
Also, while regrettable, kinda ironic turn of fate for all the French PR efforts to proclaim tech sovereignty from “the American imperialists”.
🇪🇺 Not a week goes by without reading about online grocery startups backed by happy early stage investors.
This week includes one from London that doesn’t deliver in 10-15 minutes (how’s that for a change) and a buyout in Germany by a Czech fund which has already in portfolio an established op locally competing with Rohlik (the Rohlik conquering Germany too)
That’s one more reason to get into the report detailing the subject.
✍️ Other notes
🇪🇺 Speaking of fast growing markets in Europe.
In the Netherlands, unit sales of new ebikes outstripped sales of all new cars.
Not just EVs. All new cars.
Electric bicycles are projected to outsell cars all over Europe, and it’s sooner than you’d think.
Expect announcements soon.
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🇸🇪 Swedes are doing a SPAC on the local stock exchange.
Speaking of which, in US everybody and their mothers (read billionaires and celebrities) are doing SPACs nowadays. A matter of time till the trend gets adopted by Europe’s billionaires and celebrities.
ICYMI - here’s a list with who’s doing SPACs in Europe.
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🇸🇪 Also in Scandinavia, the two local media companies Schibsted and Bonnier started together a logistics company aiming to distribute e-commerce products based on their newspapers distribution network.
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🇪🇺 The European Union will regulate the fast-growing sustainable-finance industry for the first time asking managers of funds that invest in line with environmental, social or governance considerations, known as ESG, to put forward a tangible, measurable plan for how they will do so.
This will apply to all asset managers that raise money in the EU, whether they are based within its borders or not, from March 10.
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🇩🇪 The Germans are having in the works legislation regarding the private investment market. They may have good intentions but they simply don’t get it:
As proposed in the legislation, real shares are not a viable option for startups, as they create tax uncertainty for employees and place requirements on startups that make them impractical to use.
Germany is not the only one, Sweden has the same kind of legislation afaik.
The problem, in plain English, is that the stock options are treated by law as taxable as income in a similar fashion to a salary, even though it is un-realized income since it is only on paper.
So you have to pay taxes for money you don’t get. And taxes are pretty significant also.
So, yes, on one hand Europeans startups may not provide employees with a cut from the future value they create, but they also do not have any reason to do so.
But come on guys, let’s kick Silicon Valley’s ass!
🚅 Quickies
🇸🇪 Understanding Naspers and their Tencent investment - very good.
🇫🇷 Moneyball for the consulting business.
🇬🇧 How Britain became the dumbest society in the world
🇫🇷 How to find startup ideas.
🇩🇪 Apple will make Munich the largest engineering hub in Europe.
🇬🇧 TikTok's headcount in Europe has doubled in the last six months, and it's taken out a lease on another London office - its third.
🇪🇺 What folks say about desirable cities to live in nowadays - some unexpected Euro names too.
🇳🇱 In a country that set a world record with 26 years of unbroken economic growth through 2007, despite working some of the shortest hours on earth, who needs ideals?
🇷🇺 In trying to block Twitter, Russia accidentally blocked its own websites.
🇬🇷 Holidays anybody? Here’s a stunning video of the Corinth Canal.
Charts of the week
The What We Build slide from Roblox initial deck
When real estate agents and engineers join in
Other stuff
A bit late to notice but interesting nonetheless - former Techcrunch COO now works for early stage investor SOSV.
Bessemer’s state of the cloud 2021.
China unveiled a new five-year plan calling for the country to accelerate its independence from the United States on technology development.
Microsoft + Google = fight
Excel never dies.
More than 1,250 developers made at least $10,000 last year through virtual sales in their Roblox games.
Apple plans to release its long-rumored mixed reality headset in mid-2022, followed by augmented reality glasses by 2025.
Facebook is developing a wristband to control virtual reality interfaces.
Also Facebook has nearly 10,000 employees working on its augmented and virtual reality devices. That’s almost 20% of its entire workforce, and double the number of Twitter’s total employees.
How Yahoo News reached 1 million followers on TikTok in 1 year
Happy Sunday!
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Created every Sunday by @drnovac.
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