Budapest Letters #8
๐ Hi All! Great to have you back! Before we jump in, as always, big shout out to our new subscribers, welcome, good to have you with us. And one more thing before we roll, if you like what you read, subscribe to Budapest Letters (if you had not done it) and share.
Cheers, Aron
๐ข TL;DR
This weeks main stories are as follows: โ๏ธ Europe recorded its 24th startup unicorn in 2021, easily beating its record from last year (8 unicorns) โ๏ธ Ramp and Change raised nice little sums, while Wise - one of Europeโs fintech darlings - will go public on the London Stock Exchange โ๏ธ Agremo, a Serbian startup pushes agriculture into the future โ๏ธ Scale-Up Europe, a startup manifesto strongly supported by French President Macron, launched in Paris with much funfare
๐ฅ Story of the Week
Ledger, a crypto security startup from ๐ซ๐ท, bagged a monster $380M investment round led by 10T, an equity growth fund from ๐บ๐ธ, making it the 24th unicorn startup from Europe in 2021. Just to put this news into context: there were 8 European startups making unicorn status in 2020, 12 in 2019 and 5 in 2018.
So despite barely passing the first half of this year (plus COVID, plus its devastating effect on the global economy) we are already close to pass the performance of the past 3 years, combined. Not to mention that VC investments in European startups currently stand at โฌ32.5M, a close figure to the amount local startups raised in 2020, overall ๐ฅ If this is not recovery, not sure what is ๐คฉ
CEE sidenote: While this years European unicorn list (up to now) is mostly made up of startups from the UK and Germany, the CEE region is also represented thanks to Vinted (๐ฑ๐น) and Printful (๐ฑ๐ป) so ๐พ ๐พ ๐พ
Show Me Da ๐ถ
๐ Ramp, a crypto payment infrastructure provider from ๐ต๐ฑ, raised โฌ8.3M (chiefly) from Galaxy Digital and NfX, two investment firms from ๐บ๐ธ, and various other VCs (e.g. Seedcamp) and well known business angels (e.g. Balaji S. Srinivasan, Roham Gharegozlou and Wiseโs Taavet Hinrikus) with smaller tickets. The company, via its full-stack crypto payment infrastructure, enables its partners to offer crypto-enabled services without the need to own any licences on their own. Think of Stripe, GoCardless or PayPal but for crypto payments. A vital and very much forward looking solution from Warsaw that could (realistically) go ๐
๐ Change, a crypto investment platform from ๐ช๐ช, bagged โฌ3.7M through Funderbeam, a popular crowdfunding platform from - yep, you guessed it - Estonia. The company, while offering basically what several other popular crypto exchanges already offer (e.g. Coinbase, Binance or Bitpanda), aims to differentate itself with targeting rookie crypto investors, specifically. This could be a niche.
๐ Wise, one of the pre-eminent fintechs of Europe, announced its intention to go public on the London Stock Exchange in July. Huge news for London and CEE, obviously; especially in light of the fact that other European rooted startups, like Romaniaโs UiPath, normally eye the New York Stock Exhange for their own stock market listings. So this is huge news in many ways and will be interesting to see how they fare. One more technical note re: this, Wise will aim for a direct-listing and not an IPO; difference is that in the former case, there are no new shares issued and no intermediary involved (e.g. investment bank). More on this here.
๐จ Startup Alert
This weeks alert is on Agremo, an innovative agrotech startup from ๐ท๐ธ, which I found when reading a bit about the local scene. The company developed a software platform for agribusinesses, crop growers and related fields, that perform analytics based on aerial imagery (leveraging AI, computer vision and machine learning) to provide more efficient crop management. The platform is also compatible with any kind of connected equipment (e.g. drones, sensors). Up until now, the startup raised ca. โฌ750k from (mostly) well known local VC firm, SCV.
๐ง Personal take: While I am not an expert on the agro sector, by far, I do think that climate change is real and is already painfully visible around us. This means what we grow, how and thus what we eat will dramatically change in next decades. But the good news, in this unavoidable transformation, is that there are companies like Agremo, which could equipe farmers and agribusinesses with an innovative technology that could help them tackle difficulties that may lie ahead.
I am very optimistic about and super interested in agrotech because the solutions it provides are crucial for life and our future. Sure, mindfulness apps / iPhone games / productivity apps / etc. are all cool and interesting, but without food on the table, nobody will care about the next Evernote or Candy Crush Saga, trust me.
๐ง Food
French President Emmanuel Macron, who very much positions himself as the de facto EU leader in waiting (i.e. as Angela Merkel is set to retire from German/EU politics later this year), announced in 2020 his wish to make the EU a startup powerhouse. Following up on this, French Secretary of State for Digital Transition and Electronic Communications, Cรฉdric O, launched the so-called Scale-Up Europe initiative earlier this year, that brought together 200+ members of the European tech ecosystem (e.g. founders, investors, corporations, politicians).
Scale-Up Europeโs main aim is to enable - via actionable proposals - the emergence of 10 European tech companies with a valuation of more than 100 billion dollars by 2030, while strengthening the continent's digital sovereignty.
But just to illustrate what an uphill battle this is, here is two interesting and thought-provoking snapshots from Stanley Pignalโs recent Twitter feed:
Not an encouraging base, right. But as I recently learnt from Sing, an animated movie that I watched ca. 100 times in the past week thanks to my daugtherโฆ
โYou know whatโs great about hitting rock bottom. There is only one way left to go. And thatโs up.โ
In this light, the odds are not as bad as it might seem. Especially, if we add to this that the proposed steps of Scale-Up Europe were collectively developed by the brightest minds of European business, incl. Niklas Zennstrรถm, founder of Skype / Taavet Hinrikus, founder of Wise / John Collison, co-founder of Stripe / Daniel Dines, founder of Uipath. So what are these concrete stepsโฆ here is 2:
Launch a Europe-wide support structure for startups, AND
Create a fast-track visa for recruiting foreign-born tech talent.
Sounds promising? Yes. Does it contain anything new, compared to all other similar proposals from the past 5-10 years? Not really. Then why should anyone pay attention to this? Firstly, because it is pushed by President Macron and he really wants to score massive political points in 2022 (i.e. French EU Presidency + French presidential elections, both in the first half of 2022). And secondly, because these proposals are really backed by the best and brightest (or at least the most successful) European startup founders so they probably know what is needed.
And this is great news for Europe. When politics/leading politicians and business/business leaders aims and goals collide, good things can happen.
So let us hope they will actually make this happen.