View profile

The Climb #11 - Funding freeze, pressured networks, VC reputations, post-covid world and more 🔥

The last 15 days have been a month! The issue is a bit different this time as we experience a very sp
The Climb #11 - Funding freeze, pressured networks, VC reputations, post-covid world and more 🔥
By Ghislain de Buchet • Issue #11 • View online
The last 15 days have been a month! The issue is a bit different this time as we experience a very special moment. Send me your feedback and be safe.

#StayAtHome 😷
#StayAtHome 😷
🥖 Funding activity in France
It seems that if you -as a founder- are not in the very end of the closing process of your financing round, it won’t be easy to grab fresh VC money in the coming days. As the crisis hammered Europe, VCs decided to focus first on their portfolio companies and put on hold external financing opportunities. The situation should improve soon as most French VCs (77% of 70 Partners polled) don’t believe the crisis should affect their business more than 2 months. Though, a handful of startups managed to close their ongoing financing quest and/or disclose it in the last 15 days:
> Insurtech Akur8, which provides AI-based pricing models to insurance carriers that enable them to improve their profits and win market share, raised a €8m Series A from BlackFin Capital Partners and Mtech Capital.
> Generation Z mobile banking startup Pixpay grabbed €8m from GFC (existing investor) and Bpifrance to strengthen its presence in France.
> Other funding rounds include video outdoor robots cameramen Move'N See (€4m), telemedecine platform Wellium (€2m), mobile insurance Coverd (€1.2m), podcast platform Ausha (€1.2m), asset tracking solutions inVirtus Technologies (€750k), food safety SaaS Qualizy (€500k), gift boxes Masterbox (€425k) and gaming meetup platform Lanslot (€330k) among others.
⚡ Other hot moves in France
> French competition watchdog fined Apple $1.2bn for antitrust violations.
> Cashback company iGraal got acquired by German ecommerce group Global Savings Group from M6 (51%) and other investors for €123.5m (cash and stocks).
🌍 Also in Europe
> Networks under pressure - As everyone is stuck at home, network providers face huge pressure to keep networks alive. Video streaming providers such as Netflix, Youtube, Amazon agreed to contribute and were joined by Facebook, withdrawing their high-quality options for European Subscribers. Disney + also announced they will launch in France on April 7th instead of March 24th after the French government and Orange’s CEO Stéphane Richard urged Bob Chapek to delay the long-awaited launch of the platform. It still launched in the rest of Europe with downgraded streaming quality though.
> Some European countries decided to use location data provided by network operators to curb Coronavirus expansion, as China did (among other tech-enabled authoritarian measures). The European Commission also urged telecom operators to hand over mobile data to track the virus. It will be interesting to see in what extent mobile tracking will be efficient as Europe is probably the strictest region in the world with regard to personal data. Moreover, mass surveillance not being supposed to happen in Europe, European governments do not have a direct line with every citizen like in China, which forces them to manage the crisis at the group level instead of the individual scale. All in all, this crisis shows once again the gap between the West and Asian mobile-first countries when it comes to applied technology.
Martin Mignot
📱 vs 📠

QR codes vs Paper certificates
Street level infection map Vs nationwide aggregates
GPS-controlled quarantine vs nationwide lockdowns
Etc. Etc.

Western gvts have failed to adapt to modern tech, and this crisis is a tragic consequence of it.

https://t.co/CgRSME25Av
> Lilium, a Germany-based startup which designs and builds vertical take-off and landing (VTOL) electric aircraft and which eventually plans to run in its own flying taxi fleet, raised $240m from existing investors Tencent (lead), Atomico, Freigeist and LGT. Launch of the service expected in 2025.
> UK-based leading challenger bank Revolut launched in the US. The fintech also announced it was releasing Revolut Junior, an app dedicated to kids under 17.
🤝 Fellow backers
> Last two weeks, VCs have been mainly busy assessing the situation for each of their portfolio companies and their ability to stay alive in a almost-no-revenues conjoncture. On the investment side, most pitches moved to conference calls, the overall investment process is slowed down and there have even been few rumors about VCs trying to benefit from the situation renegotiating signed term sheets or ghosting founders says Matt Clifford (Entrepreneur First). Hopefully, we know it’s NOT the majority and that most investors are all in with “their” founders.
> Like in many industries, the hiring process in most VC funds has been freezed until further notice and some juniors working in overstaffed firms are even getting prepared to be fired in the coming weeks (mainly in the 🇺🇸) as it could take weeks/months for the activity to recover.
> Some VCs are afraid that capital calls towards LPs could be more complicated than predicted and put at risk the investment activity. An article from Brian Caulfield, Venture Partner at Draper Esprit, reminds us well how it works.
> Leading Israel-based VC Pitango just filed for a second growth equity fund.
🔮 A better post-coronavirus world?
Despite being terrible, this crisis also brings to light what needs to/will be improved. Startups and big tech players will for sure play a big role in reshaping society in the post-coronavirus era. Among many changes to be expected affecting the tech industry, below is a short selection (o/w some become more and more obvious as time goes by):
> 💻 Work is decentralized: this crisis will probably lead to more flexible organizations as people will have understood how a team can work together remotely. More physical meetings being replaced by video calls, less business travels, less fairs, etc. But people also seem to have perceived more than ever the value of meeting together to discuss crucial topics and build a healthy corporate culture.
> 🤓 School is more than building + teacher: as many kids around the world remain stuck at home attending classes through Zoom, education is shaken up as it had never been before. This large-scale experience highlights how difficult it is to teach and should lead to more investments in startups facilitating tech-enabled hybrid education.
> 🩺 Digital GPs become mainstream: telemedicine was already a big trend but Covid-19 might be the tipping point that would convert people to use this kind of service for basic medical consultations. In the last two weeks, online platforms saw huge increases in consultations. In the UK, GPs have been encouraged to reduce face-to-face appointments and go digital. In France and Germany, rules are being loosened as platforms face crazy growth rates.
> 🚌 New paradigm for mobility: smart combination of micro-mobility solutions and the existing public transports offer to fit new needs. In China, the demand for micro-mobility solutions has exploded as people start to return to work, avoiding crowded public transports as much as they can.
> 🛒 ecommerce becomes stronger than ever: to survive in crisis-mode, more economic players try to make the most of what internet can offer as the lockdown is expected to last another few weeks. The French government shared a playbook to SMEs to help them go online, promoting the penetration rate of under-developed ecommerce categories. On the demand side, the virus should force digital shopping adoption of formerly web-shy consumers as purchase options outside are limited. See here how digital grocery is booming in the US and here how Southern Europe is adopting it massively.
> 🎤 Voice as an enabler for hygiene 2.0: post-crisis, some expect the world to become more and more “no-touch”. We can bet on voice, among other biometrics identification solutions (palm, iris/face recognition, etc.), to be at the heart of the system. Trend to be coupled with more IoT and OMO (online merge offline).
Of course, there are many more. Read this extended article from Politico and this tweetstorm for more inspiration.
🔥 Meanwhile in the East... (brief and short)
> Indonesian super-app GoJek raised additional $1.2bn for its Series F, bringing total round amount to $3bn. Rumors of possible merger with its rival Grab are still live although Singapore and Indonesia expressed disapproval as it could lead to monopolies in numerous markets.
> Japanese conglomerate Softbank is cleaning its balance sheet to silence critics regarding poor performance of some of its portfolio companies and the WeWork saga. The firm announced it was selling off assets for a total amount of $41bn.
🧮 By the numberz
> c. 2.5 BILLION people stuck at home as the Covid-19 keeps spreading around the world.
📦 Misc
> The World has stopped moving: check Citymapper Mobility Index
💡 Essential content
> Resources for founders: startup rescue kit by France Digitale, the email sent from Sequoia to founders and CEOs (March 5th), how to deal with cash in crisis-mode from Serena and a list of support measures/resources for European startups from Sifted.
> More readings for a smart confinement: Reading list for leaders in uncertain times from the a16z’s archive.
That's it for this issue.
Thanks for reading The Climb!
📢 If you liked it, the best way to show your support is to forward this digest to someone who might love it too.
👋 If you’re not a subscriber, you’re invited to join the crew.
💚 Make sure next revues do not land into your spam folder by adding the email address to your contact list.
✉ Reach out to me for any feedback, recommendation or just to send kind words.

-See you in two weeks-
Did you enjoy this issue?
Ghislain de Buchet

Talking about tech & VC every second Wednesday

If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue