Venture Chronicles - January 2020
Overlooked #5
Hi, it’s Alexandre from Idinvest. Overlooked is a weekly newsletter about underrated trends in the European tech industry. Today, I’m sharing the most insightful tech news of January.
For 2020, I want to pick one piece of news per day and write a short comment about it. I want to talk about something that strikes me. Something that happened in the tech ecosystem.
Time flies.
It’s good to take the time to step back and look at what happened. “The Owl of Minerva begins her flight only at the coming of twilight” as Hegel said in his Elements of the Philosophy of Right.
I want to share with you this project. You will have a monthly issue of the newsletter with all the aggregated news. I hope that you will enjoy the format!
Please note that the date picked for each event is not always the exact date of the event but the date I decided to write about the event.
Wednesday, Jan. 1: Vivendi is selling a 10% stake in Universal Music Group to a consortium including Tencent and financial investors valuing the music major at €30bn. The consortium has the option to double its stake in the company. I did my last investment banking presentation on UMG. Souvenirs, souvenirs… (FT)
Thursday, Jan. 2: Disney remains the 1st movie studio in the film industry, generating $11bn of revenues in 2019 at the global box office. It has demonstrated a strong ability to renew itself in the past decades by acquiring flagships assets. As the company is entering the video streaming space, I am excited to see what they will be able to achieve (The Economist)
Friday, Jan. 3: A great interview with Index’s partner Danny Rimer. On European founders vs. US founders: “The west coast folks tend to have the best polish, and you really have to take what they say and dial it down. In Europe it's the opposite – when they say they're quite good, they're usually incredibly good.” On loosing the Airbnb deal: “We weren’t organised to win – that still hurts.” (Wired)
Saturday, Jan. 4: Snapchat acquired AI Factory - a startup behind its new Cameos feature for $166m. I hope that this acquisition will be as successful as the one of Zenly. (Techcrunch)
Sunday, Jan. 5: Netatmo is entering the smart door lock space with an announcement at the annual CES conference. I love Netatmo’s founder: Fred Potter. He was part of the Withings adventure and was able to build another successful IoT company with Netatmo, which was sold to Groupe Legrand in Nov. 2018. He is also an active business angel having invested in tier-one French startups like Ledger and Qonto. If you are a French speaker, you should definitely listen to podcasts on which he is a guest. (Techcrunch, Le Gratin 🇫🇷, GDIY 🇫🇷)
Monday, Jan. 6: Carrefour is acquiring French food-delivery company Dejbox. A typical success story in a difficult space. But also a good news for the French VC ecosystem which is still struggling to announce positive exits. In 2018, MeilleursAgents and Drivy were the two only majors exit and were c.$200m deals. (Boris Golden, Vincent Dupied)
Tuesday, Jan. 7: US tier one VC fund USV is investing in Europe. US VCs are hunting on European lands to find investment opportunities. It’s a $5m series A in a contract management UK company called Juro with the participation of the existing seed investor P9. (USV, Techcrunch)
Wednesday, Jan. 8: Getaround is laying off 25% of its staff. Another Softbank backed company is announcing layoffs in a hard context for the investment fund which is struggling to raise its Vision Fund II. I would be interested to know the impact of these layoffs on Drivy’s workforce. It’s hard to understand the rationale of the following series of events. (i) In August 2018, Getaround raised a $300m round from Softbank. (ii) Drivy was acquired in April 2019 for $300m by GetAround. (iii) Getaround raised another $200m round from Softbank in Sep. 2019 at a $1.7bn valuation. (The Information)
Thursday, Jan. 9: Another Withings-like story. Birchbox France founders are buying out their company from Birchbox. Otium Capital is entering the shareholding structure of the company. Pierre-Edouard Stérin - Otium’s founder - will bring his strong expertise from Smartbox in the box business to the table. (Les Echos 🇫🇷)
Friday, Jan. 10: US-based D2C mattress company Casper has filed to go public. In 2018, it generated $251m revenues (+45.5% CAGR between 2016 and 2018) and a negative $93.2m net income. 50.7% gross margin. 20% repeat customer rate (I did not know that selling mattress was a recurring business). Will it turn into an unicorn? Not sure. (Techcrunch, IPO Prospectus)
Saturday, Jan. 11: Takeaway has eventually beaten Naspers in its war to acquire Just Eat for £6bn. Food delivery is a capital intensive business with low differentiation. It is not surprising to see a strong consolidation trend. The same is happening in the ride-sharing and the electric scooter businesses. (FT, Takeaway Investor Relations)
Sunday, Jan. 12: It’s Sunday. Time to take a step back. Two deals in the food industry this week. So give a look at the reports from Sifted, Deloitte and Dealroom on the future of food. Numerous interesting trends highlighted: dark kitchens, on-demand grocery, D2C meat alternative brands etc.
Monday, Jan. 13: UK-series A investor Balderton is on fire! Two deals announced on the same day: (i) $14.1m for Jolt to develop an alternative to expensive MBAs, (ii) $10.0m for Containous which is building solutions to ease networking of their cloud applications, microservices, and APIs. (Techcrunch for Jolt, Press Release for Containous).
Tuesday, Jan 14: Visa is acquiring Plaid for $5.3bn. It is a great move from Visa. Entering the open banking is key for them to survive because its core business model based on physical credit cards is being disrupted by digital payments. Plaid is building a strong ecosystem breaching the gap between modern financial applications (e.g. Revolut, Paypal, Robinhood etc.) and large and old-fashioned financial institutions. Hello Mastercard, don’t you want to acquire European peer Tink for the same amount? It would be great for the European tech exit environment! (Press Release, Quartz, Visa’s Deck on the Acquisition, Stratecherry, Joe Hannon)
Wednesday, Jan. 15: UK-based VC Felix Capital is raising a $300m third fund to invest in the consumer sector across Europe and the US. It has a “thematic” approach investing in “digital lifestyle” opportunities. (Sifted, Techcrunch, Medium)
Thursday, Jan. 16: P2P mobile payment app Lydia is raising $45m in a series B round led by China investor Tencent. With my student art association, we signed a partnership with Lydia back in 2015 and helped it to become the payment app used by all HEC students. It was a key event for me to fall in the entrepreneurship cauldron. Since then, Lydia has become a phenomena for the millennial generation and is now part of our vocabulary. Don’t be surprised if the next time you come to Paris, someone asks you to send him a Lydia! (Techcrunch, Press Release)
Friday, Jan. 17: French startup Matera (ex-illiCopro) is raising a $11.2m round led by Index. It’s a SaaS platform to help co-owners manage all the tasks related to property management in France. Matera has attracted 1k buildings and 25k users and plans to expand in other geographies (Belgium, Spain, Italy and Germany) in the coming months. (Techcrunch)
Saturday, Jan 18: KRR is behaving like an activist investor. The US Private Equity Fund disclosed a 6.3% stake into Dave & Buster’s which is an American restaurant and entertainment business and said that it wants to engage with the management about the current strategy of the company. (Axios)
Sunday, Jan. 19: It’s Sunday. Time to take a step back. I wanted to dig into the USV investment thesis on climate change. USV is a top VC fund based in the US and they recently announced two deals related to this topic: Wren (solution to offset your carbon footprint in exchange of a subscription) and Leap (API to connect devices to the energy markets). (Albert Wenger, Presentation)
Monday, Jan. 20: Tink is raising a €90m round at a €415m post money valuation led by Dawn Capital, HMI Capital and Insight Partners. Tink is the European equivalent of Plaid. It is providing a single platform to easily connect to all banks APIs. The company raised €200m in funding in total. The plan is to continue its geographical expansion in Europe and develop the product. (Techcrunch)
Tuesday, Jan. 21: Tencent is making another deal in French fintechs! Qonto is raising $115m in a round co-led by Tencent and DST Global. 65k companies are using Qonto in France, Italy, Spain and Germany. Qonto has a payment licence (50% of companies use Qonto’s banking system) and is now applying to become a credit institution to enter the B2B lending space. (Techcrunch, Nicolas Dabbaghian 🇫🇷)
Wednesday Jan. 22: Front is raising a $59m series C not with a venture fund but with prominent executives in the tech industry (people from Atlassian, Zoom, Qualtrics, Okta etc.) which is super uncommon at this stage of financing. I love Front for several reasons: it’s a French eFounders startup, Mathilde Collin is an amazing CEO and the company is going after a great challenge which is to reinvent the mailbox to make it more productive and collaborative. (Mathilde Collin 1, Mathilde Collin 2, Forbes)
Thursday Jan. 23: UK-series A investor Blossom Capital is announcing its $185m Fund II only 11 months after the closing of Fund I. Ophelia is giving her fund six key investment criteria: (i) mission driven & visionary founders, (ii) disruptive tech with a unique UX which can have a worldwide reach, (iii) potential to build a $10bn company, (iv) networks transcending frontiers, (v) tech with a distribution advantage, (vi) downturn resilient. (Ophelia Brown, Sifted, Techcrunch)
Friday, Jan. 24: Memphis Meat is raising a $161m series B to bring cell-based meat to the market. The round is led by SoftBank Group, Norwest and Temasek. Famous individuals like Bill Gates and Richard Branson and traditional meat companies like Cargill and Tyson Foods are also investors. (Forbes)
Saturday, Jan. 25: Goldman Sachs announced that the bank will no longer advice any American or European company wanting to go public unless they have at least one board member with a diverse background (i.e. non straight white man). (Axios)
Sunday, Jan. 26: It’s Sunday. Time to take a step back. Cambridge Associates has published a report on the VC industry with numerous precious insights. I was surprised by the decreasing loss ratio in VC from 51.5% to 20.0% - which is contrary to how the economics of the industry should work. Moreover, it’s always good to remember that the VC market is still a drop in the ocean compared to the global equity or bond markets. (Cambridge Associates)
Monday, Jan. 27: ManoMano is raising €125m. Temasek is leading the round. ManoMano is an ecommerce website for DIY, home improvement and gardening products. In 2019, the company grew its GMV by 50% reaching €600m and expanded in other geographies which now represent 33% of total sales (Germany, Spain, Italy, U.K.) (Techcrunch)
Tuesday, Jan. 28: Alan’s CEO is publishing his first public annual letter to shareholders. It’s worth reading as Alan is one of the most impressive French startup. Started as a digital insurance company, Alan has the ambition to enhance the whole healthcare system. Jean-Charles and Charles have built a team of A players. Every time, I discover a new Alan employee I am always amazed by how smart he is. Here are the results for 2019: 2.5x growth in annual recurring revenues from €20.1m to €50.1m, a demonstrated capacity to go upmarket (8x growth on companies with 200+ FTEs, new features (Alan Map, Doctor Address Book, Telemedecine), a new brand identity and 100 new people in the team! (Alan)
Wednesday, Jan. 29: As you may know, the electronic scooter market is undergoing a consolidation phase. German scooter startup Circ is getting acquired by US competitor Bird. Circ has 300 employees and operations across 43 cities in 12 countries. Both companies are complementary in terms of geographical focus. Bird also announced a $75m funding extension increasing its last series D round led by Sequoia and CDPQ to $350m. Acquisition price is undisclosed. (Press Release)
Thursday, Jan. 30: Guillaume and his team have reached the impressive $1m ARR (x4 vs. 2018) milestone without any external funding with three marketing SaaS projects: lemlist, lempod and lemtalk. I am super impressed and happy to see successful French tech companies bootstrapped, with a strong business presence abroad and with a great culture. (Medium, Growth Makers 🇫🇷)
Friday, Jan. 31: French public investment arm BPI is announcing a first closing for its new €10bn “Lac d’Argent” (Silver Lake) fund which aims at protecting French large corporates during a transition in their activity from foreign investors and activist funds. The idea is to bring long term and value added capital imitating what pension funds are doing in the US and in Canada. French individuals will be able to invest in this new fund. (Les Echos 🇫🇷)
Thanks to Julia for the feedbacks! 🙏
See you next week for another issue! 👋