Budapest Letters #29
๐ค Programming note: Budapest Letters will be out for ๐ holidays.
Next edition drops on 10 January 2022.
๐ Hi All! Great to have you back. This is Budapest Letters, my newsletter covering startup and small business stories from the CEE region, or interesting developments that might have something to do with this part of Europe. Hope you will enjoy it!
Before we jump into edition #29, big shout out to our new subscribers, good to have you here. And one more thing before we roll, if you like what you read, subscribe + share ๐
Cheers, Aron
๐ข TL;DR
Top stories this week: โ๏ธ Revolut, a popular European challenger bank, receives a full blown banking licence in Lithuania โ๏ธ Ramp, Lokalise and Teamscope raises ๐ต โ๏ธ The myth of the boostrapper founder is de-bunked, for good
๐ฅ Story of the Week
Revolut, one of the most popular challenger banks in Europe, was granted an official Lithuanian banking licence by the European Central Bank. The startup, that already held an e-money licence in the country for sometime now, will now become a fully fledged local banking provider. Big milestone for the company.
But also a big milestone for all other European competitors (e.g. Monzo, N26, Starling) and clients, alike. Up until now the central argument as to why challengers fail to overtake incumbents was that most customers do not trust them becomes they are not legally banks. Well, this is not the case anymore.
Or at least not in Lithuania. But whatever happens in the Baltics, I feel, will not only decide Revolutโs short- and medium term success as a full blown bank (i.e. legitimate incumbent replacer in the eyes of clients across Europe) but it will decide the faiths of all other such attempts. If Revo nails it, the incumbents might find themselves in a pickle. A real and very huge one, in fact. If they fail, the position of the old guard, foโ realz, will not be challenged for another 5-10 years.
So get the ๐ฟ ready and enjoy the show because it will get excitingโฆ
Show Me Da ๐ถ
๐ Ramp, a crypto startup from ๐ต๐ฑ, bagged โฌ47M, led by European VC bigwig Balderton Capital (๐ฌ๐ง) and existing investors, like NFX (๐บ๐ธ), Galaxy Digital (๐บ๐ธ) and Seedcamp (๐ฌ๐ง). The company, that allows any business to offer crypto-enabled services easily and securely, will use the money to expand further; on a side a note, Rampโs latest funding round just comes 6 months after its seed one.
๐ Lokalise, a localization startup from ๐ฑ๐ป, received โฌ44.5M, led by CRV (๐บ๐ธ), with participation from the likes of Creandum (๐ธ๐ช), Dawn Capital (๐ฌ๐ง) and 3VC (๐ฆ๐น), plus various business angels. The startup, that operates a platform which - according to the company - reduces localization (i.e. transforming foreign language materials into native tongue) times by 90 per cent, will use the fresh funding to expand its team, boost product development and partnerships, globally.ย ย
๐ Teamscope, an HRtech startup from ๐ช๐ช, nabbed โฌ1.3M via a convertible loan agreement that will be used to grow its team and fine-tune its product (= a SaaS platform that helps with executive hiring), that is already used large intl. clients.
๐ง Food
Few weeks ago I came across this super interesting piece from Jeff Younge (Managing Editor @ EdSurge) via the Hustle, a site which you should definitely sign up for, called Who gets left out of โbootstrappingโ? and itโs an eye opener.
I will not delve into all the bits, just give it a go its a 5 mins read, but the gist is that bootstrapping is a myth, in most cases. It is fuelled by our love and admiration for the man in the ring. The people who starts from nothing (or very little) and makes it big by having grit. The person who cannot be stopped.
Zuck, Bezos, Woodman and so on, you all know the stories. But according to Younge, interestingly, in many of the famed cases the bootstrapper founders did not really bootsrap per se because making it big is not only about ๐ฐ
Money is surely important but having a valuable network of friends / family or a priviliged social status is as important, if not more, to succeed. But this side of the stories, intentionally or unintentionally, are usually left out of these tales.
And this creates a broken and unhealthy environment for entrepreneurs in which personal journeys that, while actually rooted in humble beginnings / hardship, are covered up by stories that are far less authentic in terms of bootstrapping.
Learning: choose your business role models wisely ๐
And now thisโฆ