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More venture capital sloshing around Europe


Steve's ITK

November 24 · Issue #54 · View online

Steve's In The Know: Thoughts from a European tech insider.

Opening thought: More venture capital sloshing around Europe
It has been such a hectic news month that I thought it would be a waste not to put out an edition of Steve’s ITK. It has been a while I know!
Cue a few dozen people unsubscribing as they try to work out why they subscribed to this nonsense in the first place.
Conversely, I’m told that the more sporadic a newsletter is published, the more unsubscribes it entices. And there was me thinking that if you haven’t got anything worth saying, don’t say anything at all.
The last few weeks has seen a plethora of new VC funds being announced, meaning that more venture capital is sloshing around Europe.
First up was Balderton Capital, one of the so-called “big four” early-stage VC firms in London (the others being Accel, Atomico and Index), which has raised a new $400 million fund to continue backing European tech startups at Series A.
In an interview with Balderton Partner Suranga Chandratillake, I pondered whether or not European tech is in a bubble (certainly the sentiment amongst the early-stage VCs I talk to is that things are heated and there will be an inevitable correction at some point - when or how big is perhaps the only thing up for debate). His answer was measured as always, although Chandratillake did point out that it’s often hard to know if you are in a bubble if you are actually in one.
I also covered the launch of Gil Dibner’s Angular Ventures (which took four years to raise!), a new $500 million fund from Spotify backer Northzone, and a new £100 million “Scale Up” fund from MMC Ventures.
Bubble or no bubble, according to Atomico’s latest report on the State of European Tech, European tech startups raised a record $34bn in venture capital funding this year, up 40% from 2018, beating Asia and the U.S., which saw investment decrease.
Of course, not all funding is equal - arguably there are the top tier VCs and then the rest, although I don’t pick favourites and there are some bonafide top tier VCs whose money I wouldn’t take even it was free (of course, there is no such thing as free venture capital).
On that note, another VC-related story I broke this past week was the imminent launch of Lazard’s newly created “Venture and Growth Banking” division. The idea is that the global investment bank’s new 10-person team - many of which seemed to have bailed from Numis - will match investors with European scale-ups. However, unlike many investment banks, the focus of Lazard Venture and Growth Banking will include Series B and C, perhaps in a bid to win the business of future (hopeful) unicorns early.
Bonus: I heard that the U.K.‘s best City reporter was also onto this one. Bad luck MK, you can’t win them all.
Talking of winners: congratulations to Shona Ghosh at BI, who won tech journalist of the year at the UK tech awards, beating a host of incumbent media and therefore achieving what I failed to do last year! Emily Nicole was also a very worthy runner up this year.
On your scooter
One story I did break this week that seems to have genuinely caught everyone off guard - including the notoriously gossipy German business media - is news that Circ, the Berlin-based e-scooter rentals startup founded by Delivery Hero’s Lukasz Gadowski, has made around 50 layoffs.
I managed to get Gadowski on a WhatsApp call and with a brave face he put forward a number of logical reasons for the reduction in headcount. The takeaway is that there is an increasing focus on trying to reduce burn-rate and become financially sustainable amongst all of the scooter companies after the initial land grab and huge fundraising spree.
As one e-scooter CEO put it to me, we are now in a post-WeWork and post-Softbank climate where raising a huge war chest of capital on a future promise is getting increasingly difficult.
With that said, acquisition and/or merger rumours amongst European e-scooter companies remain noisy.
As always, watch this space…
These businesses are the anti-Crunch
Just before I went on leave in November, I filed a HUGE feature on… modular synthesisers and the long-tail businesses behind the phenomenon.
Fuelled by passion not venture capital, most companies in the Eurorack space are neither startups nor established OEMs. Instead – and quite remarkably – the industry remains a long tail of boutique manufacturers, with some of the best-sellers still operating as one-person shops. Inspired by technology that is almost half a century old, and intentionally designed not to scale, these businesses might well be considered the anti-Crunch.
The piece was well-received by people in the synth scene and raised a few eyebrows along the lines of: I never expected to see TechCrunch write about modular synthesisers. Let’s just say, I didn’t exactly seek out permission :D
Things I wrote
Circ, the Berlin-based e-scooter company, makes layoffs following ‘operational learnings’
Wonderbly launches Wonderbly Studios to let other brands use its personalisation API for printed books
Robinhood launches… UK waiting list
Perlego raises $9M Series A for its textbook subscription service
Dream Games raises $7.5M seed to develop ‘high-quality’ puzzle games
MMC Ventures outs new £100M ‘Scale Up’ fund to double-down on its portfolio at the later stage
Northzone raises new $500M fund to back startups in Europe (and the East Coast, US)
Balderton Capital raises new $400M fund to back European tech startups at Series A
Angular Ventures outs $41M seed fund for European and Israeli enterprise and ‘deep tech’ startups
Investment bank Lazard has quietly recruited a ‘Venture and Growth’ team to focus on European scale-ups is a digital receptionist for SMBs taking calls
Plum, the ‘AI’ money management app, raises $3M more and comes to Android
Voi raises another $85M for its European e-scooter service
GoCardless partners with TransferWise to bring low-cost currency conversion to recurring payments
Google Pay comes to Curve, the banking platform that consolidates all your cards into one
Closing thought: The album is done - finally.
After three years, I finally finished the album I’ve written and recorded with friends, ready for a provisional March 2020 release. The learning curve for production and mixing was steep but hopefully the end product will speak for itself. Either way, the process has been incredibly fun and extremely rewarding creatively. Best of all, lifelong friendships have been made, reignited or solidified.
We’ll be launching a crowdfunding campaign soon for a short vinyl run for those of you who own a record player. And then after the vinyl lands, we’ll make the entire album available on all the usual streaming and download channels: Spotify, Apple Music etc.
A few more details: the album is 10 tracks, 3 singers, 11 musicians, spanning soul, funk and blues-rock, with a definite retro vibe.
More to follow, including the artist and album title :D
(Give me a shout if you own a record player and subscribe to ITK, I’m genuinely intrigued what the cross-over is.)
Get in touch
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