Budapest Letters #46
ππ» Hi All! Great to have you back after a quick 2 week break. Hope you had a great time while it lasted, especially since summer is finally on. But now, let us get back to business π This is Budapest Letters, my newsletter covering startup and small business stories from the CEE region, or interesting developments that come out of this part of Europe.
Before we jump into edition #46, 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 ππ»
Cheers, Aron
π’ TL;DR
Top stories this week: βπ» French startup incubator and investor The Familyβs struggles keep mounting after it was revealed that one of its ex-founders allegedly used company money to build a luxury real estate for himself βπ» Rimac Group, Nomagic, Zowie and Spaceflow raised πΆ βπ» Polandβs Good Sleeper aims to solve the ever growing problems related to insomnia βπ» Firstpick, a Lithuanian VC firm, published a report on how Q1 2022 looked for the Baltic startup scene
π₯ Story of the Week
Back in March (edition #39) I wrote about the troubles of hyped π«π· startup incubator / founder community / VC fund The Family but it seems the story did not end (by far) with what came to light then. Quick recap of the saga: Alice Zagury and Nicolas Colin, two of the companyβs co-founders, alleged that Oussama Ammar, their third co-founder, siphoned $3M off the The Family without any explanation. And as Ammar - according to them - did not respond to repeated, behind the doors requests to come clean with the whereabouts of this sum, they hired lawyers (+ PwC) and took the whole case to the courts. However, these claims were heavily challenged by Ammar, who felt no responsibility over the lost money.
Serious movie material here, already. But as it turns out, per Tech.eu, there is more. According to Zagury, Colin & Co. their ex-partner not only made π° disappear, he used it for enriching himself by using it to build a luxury estate.
Ouch. Again. This whole story gets worse by each quarter. So it will be interesting to see whether The Family, after all the hype and glitter of re-inventing European startup incubation, community building and VC investing, can make a comeback.
Show Me Da πΆ
ππ» Rimac Group, an electric sportscar maker from ππ·, received β¬500M lead by SoftBank (π―π΅) and Goldman Sachs (πΊπΈ), with participation from existing investors Porsche (π©πͺ) and Investindustrial (π¬π§). The startup, that builds premium electric sportscars and supplies top global carmakers with relevant technology, will use the fresh funding for expanding its team and its manufacturing capacities.
ππ» Nomagic, a robotics startup from π΅π±, bagged ca. β¬20.5M co-led by Almaz Capital (πΊπΈ) and Khosla Ventures (πΊπΈ), with participation from most existing investors, like Hoxton Ventures (π¬π§). The company, that provides smart pick & place robotic solutions for order fulfillment in e-commerce warehouses, will use the money to expand internationally (especially to the US) and grow its team.
ππ» Zowie, a chatbot startup from π΅π±, nabbed ca. β¬13M led by Tiger Global (πΊπΈ), with participation from existing investors, including Gradient Ventures, 10xFounders (π©πͺ) and Inovo Venture Partners, a local VC firm. The startup, that offers AI-powered chatbot technology for e-commerce businesses that want to automate customer service and boost sales, will use the fresh raise to expand.
ππ» Spaceflow, a property technology startup from π¨πΏ, bagged β¬8M led by the Hydda Group (πΈπͺ). The company, that provides plug & play tenant experience and community engagement platform for its users, will use the money to grow within Europe (focus: Scandinavia, UK and the DACH region) and grow its team.
ππ» Additional investment news that you should know about:
Neurolabs, a syntetic computer vision startup from π·π΄, raised ca. β¬3.2M led by Bulgarian VC fund LAUNCHub Ventures: more on this via The Recursive
Machinations, a game design startup from π·π΄, snatched β¬3M led by British boutiqe VC firm Hiro Capital: more on this via The Recursive
GScan, a deep tech startup from πͺπͺ, bagged β¬1.4M led by a group of co-investors: more on this via Tech.eu
π₯ to all founders and teams on the fresh raises!
π¨ Startup Alert
This weekβs alert is on Good Sleeper, a healthtech startup from π΅π±, that offers its users the Terapia BezsennoΕci application to counter the affects of insomnia.
In practice, the app provides cognitive-behavioral therapy (i.e. standard method to tackle insomnia) for patience over a well structured program that lasts 6 weeks. The app holds over 1k therapies so it gives users a wide variety of options.
How it all works is relatively straightforward:
Users need to download the app - currently only available in Polish; but with a fresh ca. β¬266k investment led by French VC firm LT Capital and Adamed, a Polish pharma company, an English version will soon be ready.
After registration, the program starts. It consists of six weekly sessions that patience can conduct themselves via their homes. Each session incl. educational videos, tests and techniques to change habits and thoughts.
Between sessions, users need to log into the app (preferably) every day and use the available tools that allow them learn new techniques.
From the first day of the program and the first session, users run a so-called Sleep Diary within the app, which allows them to monitor sleep parameters and compare improvements in sleep performance from week to week.
During each subsequent session, users receive a report with their personal sleep parameters from the previous week and indicators of sleep performance progress from the beginning of the program.
Neat, right? And also super helpful! You might not have known but, according to the European Insomia Network, insomnia afflicts in a chronic fashion probably more than 10% of the πͺπΊ population and probably is the most frequent sleep disorder per se. So what this app and founder Jan Potworowski is doing is π
π§ Food
Firstpick, a Vilnius-based early-stage venture capital fund, prepared a report on how the first four months of 2022 looked for the Baltic startup scene. Here.
Spoiler alert, it went something like thisβ¦
Numbers are unbelievable. Of course, not overtly suprising, due to the fact that the Baltic 3 (= Estonia, Latvia, Lithuania) are nowdays (i.e. past few years) are a clear tour de force in European startupland. Let it be in the number of launching innovative, high growth companies or attracting more capital than all other CEE countries, combined. Still, the Baltics and their investment numbers look πͺ
Some bits from the report via JonΔ VaituleviΔiΕ«tΔ (Partner @ Firstpick):
$1.3B already raised in 2022 by local startups;
That is $0.5B more than at the same period last year;
Series A and later rounds are happening every month;
3 Series A were raised within 8 months from Seed rounds;
3 new unicorns - NordVPN, Glia and Veriff.
But check the real stuff for the details. Pure gold. Baltics are killinβ it!