🦄 The DART Weekly #13 ~ EU VC attempt

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January 16, 2021
Hej Folks,

News, news, news. Dodging the 2nd impeachment of the Donald and Chamath courting Plaid, VC investments are all over the place. Will Europe have another record year?

Time will tell. In the meantime enjoy The DART brand new podcast. From now on you will have access to our subpar English in written and oral form. What a blast!

SPOILER ALERT! The 1st real episode is dropping on Monday. Stay tuned.

Entrepreneurship Chronicles

Many of you have recently read the 2020 State of European Tech report by Atomico. But how many of you know the story behind the man who founded the VC firm? He comes from the cold north, more precisely from snowy Sweden. We are talking about Niklas Zennström, självklart!

A B.Sc. graduate from Uppsala University, he got his M.Sc. from KTH. As a fresh graduate, he joined the telco company Tele2, working in different functions and roles. This experience turned to be gold for Niklas, who, after launching two successful companies (seems easy right?), founded Skype in 2003.
After selling Skype to eBay in 2005 and buying it back, albeit part of a consortium, in 2009, he finally departed from it in 2011, when Microsoft bought it for $8.5B ... and Niklas got $1B richer.

What did he do with the money, you might wonder? He invested it and so Atomico was born.

THE TAKEAWAY
As always, a quote from Niklas himself: “If you want to be an entrepreneur, it's not a job, it's a lifestyle. It defines you. Forget about vacations, about going home at 6 pm - the last thing at night you'll send emails, first thing in the morning you'll read emails, and you'll wake up in the middle of the night. But it's hugely rewarding as you're fulfilling something for yourself.

Ventures 101

🇪🇺 EU direct investments in startups 👍👎

The European Commission has completed its first direct equity investments into startups. 42 lucky (?) companies have already received between €500k and €15M (European Commission), 117 are in the pipeline awaiting trial… I mean, due diligence.
The goal? Bridge the funding gap and boost innovation in the continent.
The outcome? A shitstorm of opinions.
Let’s shovel our way out of it.

The Targets

European Innovation Council Fund (EIC) is meant for startups developing breakthrough technologies including deeptech, medtech, agritech, foodtech … No, not the average SaaS company (LinkedIn). It aims to help them gain critical mass and commercial viability for the sake of EU’s tech sovereignty.

The Pitch Deck

Forget about it.
Similarly to the process for getting Horizon 2020 grants, approaching EIC requires a written proposal, 50-100 pages essay thoroughly defined (European Commission). If selected, the founders are invited to pitch to an interview board, gathered just for the occasion.
The process is extremely bureaucratic. Especially when it is compared to fundraising 101, where a pitch deck is the first contact point and members of the investment board follow the startup along the entire process.

The Term Sheet

The messiest ever.
It states that investors can put any amount from €500k to €15M in return for a stake in the firm.
Does EIC introduce the startup to additional investors? "Yes", says a spokesperson. "I have been misled", state multiple founders who thought that EIC would have helped in finding private investors covering 50% of the amount (Politico <- plenty of negative statements).

The Aftermath

The EU is officially a VC fund (kind of). What now?

  • What are the implications of having the EU among the shareholders? Will you be eligible for a follow-on investment (sifted)? Can you nimbly change course and pivot?
  • How will a more active role of the EU shape the European VC space? Will it hinder competitors to attain tech sovereignty?
  • Is the EU simply offering a lifeline to unprofitable businesses? Or is it going after a solid return on investment?

Whatever!
Have you heard that Cameo racked $100M last year? Maybe it’s worth investing after all!

 

🎙 The DART Bullseye

A weekly podcast on innovators, entrepreneurs and investors. AKA people familiar with the matter.

The DART Bullseye? Is that a podcast about pubs? Not really.
Tune in to have a taste of it from the hosts themselves: Federico & Matthieu.
 
    

Of Unicorns and Cowboys

🦄 The Rounds

The deals worth knowing in Europe and beyond - ordered from coolest to coolio

🇮🇹 Primizie: B-corp Cortilia closed a €34M round led by all major Italian VC funds. The e-grocery scaleup aims at acquiring a bigger portion of the local market.

🇬🇧 Alpha: Checkout.com is the EU's largest unicorn with a $15B valuations. The scaleup boomed in the past 2 years due to the increase in transaction volumes of 250% YOY.

🇩🇪 Trucker: Berlin-based Sennder raised $160M and became a unicorn. The scaleup connects enterprise shippers with trucking companies, addressing a $427B market.

🌈 The Pots

The exits you should follow in Europe and beyond - IPO, direct listing, SPAC, bankruptcy ... all awesome stuff

🇺🇸 Side effect: Affirm rose 99% during IPO on Wednesday and Shopify earned $2B. The two companies forged a partnership for point-in-sale financing.

🇩🇪 Dealership: German Auto1 prepares to raise €1B during its IPO in Q1 2020. 615k cars were sold through the online car dealer in 2019.

🤠 The Funds

The tales of unicorns' hunters you should know about - particularly relevant if you are a founder looking for backing

🇩🇪 Structure: After multiple investments in startups, Delivery Hero launched its own fund: DX Ventures. It'll drive innovation in food, delivery, and beyond.

🇧🇬 Scarcity: 250M people, $2.5T in GDP, little-to-no VC funds. LAUNCHub has the way to the best deals paved for its brand new €44M fund.

🌍 Ranking: What's the most successful VC, the best one at spotting unicorns? Dealroom provides a comprehensive list of all firms in the EU and beyond.

🧑‍🎤 ... and The Quirky Ones

The crazy stuff we gossip about while sipping our chai latte - it's like others, but better

🇺🇸 Gamification: 5M to 200M users in 19 practical quote tweets. The strategy behind Duolingo's growth explained.

🇬🇧 Deep pockets: Have you heard of HealthHero? The 1-year old telemedicine provider is poised to become a leader in space acquisition after acquisition.

🇸🇪 Impact: Norrsken Foundation launched an accelerator for impact startups addressing 1B people problems. It'll invest 100k upfront in each participant.
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