where is this going?
• where is the investment market going
• best place to start a business
• open banking in Europe
Where is this going?
Venture capital firms are usually competing by outdoing their peers in the same activities in an incremental way. It is unlikely though to see them do things their competitors aren't doing. In this hype competitive environment - where is the market going and what are some structural problems ahead.
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Tech tapas
Next month we're putting together a little pitching event.
Startups presenting will have raised at least one round and have a few employees, other than the founders. They should use tech for building business but don't necessarily have a specific vertical focus as long as they aim to become global companies - they will be vetted beforehand.
It is an invite-only event. If you're interested to be part of it, send me an email telling me why you want in, and we'll take it from there.
Cheat sheet reports
• Marketplaces from Europe.
• Insurtech startups from the Nordics.
• Who are the investors backing Nordic fintech startups
• The most interesting European startups from YC this summer.
• ICYMI - The most interesting deals over the summer:
- in the Nordics and the Baltics
- in DACH (Germany, Austria, Switzerland)
- in the UK
- in France
Note: the reports are for Nordic 9 paying customers only. You can become one from here.
Where's the best place to build companies
I keep having this discussion with a lot of people, especially young Swedes looking to punch above their weight and not really happy in a small market, and now that remote is standard, building teams and tech products on a global scale has never been easier.
What is the best place to locate your physical office though and how do you go about growing the business? People increasingly optimise for the quality of life while incorporating in tax-friendly countries and hiring sales reps locally, based on the geography they target. Juggling with the different legislation and tax requirements as well as with the culture differences has become a de facto competitive advantage for building global from day one.
A recent example I ran into is a couple of Romanians, former Wise employees who set up and run their startup from London via a company inc-ed in Estonia (they just raised). The UK though looks like an increasingly difficult environment for founders because the political self-imposed isolation, which makes it hard and expensive to find and hire the first 10 or so employees. Exactly what you need to get it off the ground.
And now that you can also raise via Zoom, setting up an office where you'd like to raise is not as important. Your mileage can vary, with the American/Silicon Valley exception, where they fake till they make it - a lot of Euro startups say they're based in the Bay Area with an office in Europe during the fundraising process. Alas, most founders that go to the States and manage to build networks, prefer to stay there, because the quality of the business environment is superior. They only come back to Europe for the quality of life or because they were not able to raise/build business overseas.
So what says you? If in Europe, where? Is the US the promised land?
A good sign for taking the pulse of the market is looking at where the immigrants are headed, as people usually go to where they think they find better opportunities. 👇
Schools are still a thing
Did you know?
Every week at Nordic 9 we publish a selection with what is important in the European startup ecosystem.
We curate through hundreds of deals and create an executive summary written professionally in an easy to understand format - tactical bits and industry-wide trends, curated deals, active investors and relevant early stage transactions.
We email it to the Nordic 9 customers every Monday morning - investors, founders and decision makers willing to stay updated with the strategic moves from Europe.
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Notes
🇩🇰 Mastercard acquired a Danish developer of open banking technology from two Nordic banks. The two invested a couple of years ago as they were looking to work with the PSD2 directive, which obliges banks to make customers’ bank data available to third parties - they will now just remain customers.
Open banking is one of the most interesting spaces in Europe and obviously it is also strategic to Mastercard, especially in the Nordics and the UK, according to a report about the open banking in Europe.
The Nordic countries are a great place from a consumer readiness pod since the internet penetration is close to 100%.
The UK open banking model does not include a digital ID authentication service scheme and domestic KYC utility services (such as the Nordic BankID).
In France, Italy, Spain, open banking is being used as a vehicle for digital transformation in domestic payment ecosystems.
In Germany there's a rather collaborative approach, specific to Germany for the development of open banking.
In countries such as Poland and Hungary, open banking is being used as vehicle for bypassing legacy banking infrastructures.
🇫🇷 Spain's La Liga soccer league partnered with French platform Sorare to offer NFTs of all its players, the first major European soccer league to do so. It certainly looks like Sorare has crossed the chasm - they raised $50 million in February, and are in talks for a 10x larger deal at a $4 billion valuation. The NFT success story from Europe.
Also notable, Sorare has outside developers building on their ecosystem, this summer a French startup building on the Sorare economy raised a pre-seed round for it.
🇬🇧 Harry Stebbings hired Kieran Hill of Ascension Ventures.
🇳🇱 How Vanmoof transformed a problem in an opportunity with a brilliant simple idea.
😂 The financial equivalent of covid denial. (coined by David, one of the Euro tech veteran investors, if you don't follow him yet, you should)
🔥 Hedge funds have participated in a record-breaking 770 private deals with an aggregate value of $153 billion since the start of the year. By comparison, hedge funds participated in 753 deals with an aggregate value of $96 billion in 2020. link
🇫🇷 The French Zoov, which rents on-demand electric bikes, also launched a subscription-based model called Fusion. €69 per month.
🇫🇷 A look into the startup world of the French real estate industry.
🇩🇪 Porsche sees waiting times of 6 months and huge demand for all-electric coupe Taycan - the original production capacity of 20,000 units for the year was sold in the first half.
🇫🇷 French doing back-to-school marketing for the juice business.
🇬🇧 Boris Johnson raised taxes to their highest level since the Second World War.
🇪🇺 Crazy European rich
🌶️ J.P. Morgan bought parent of Zagats restaurant guides - credit card loyalty for banks is huge. Mastercard, for example, runs an experience marketplace called Priceless and bought the assets of another one last summer.
🤡 Lawyers now have their own dating app, if that's your thing.
🛴 Good decomposition of the scooter economics.
🏭 Harvard University says it will end its investments in fossil fuels because there is a need to decarbonize the economy.
🎬 After being acquired by private equity, Yahoo hired Tinder's CEO to be its leader.
🤡 Looks like Facebook got the marketing right for their smart glasses, RayBan did them a solid. But Facebook remains Facebook, not really a trustful company.
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Sunday CET
Notes and commentaries about what matters in the European space - concise, no non-sense insights, interesting stories and implications for founders, investors, employees from tech companies or government representatives.
Published every Sunday morning by Dragos Novac and emailed to investors, founders and decisions makers from 50+ countries who want to understand the ecosystem from Europe.