Ecosystems

european-vc-deal-value-down-61%-in-first-half-of-2023,-report-finds

European VC deal value down 61% in first half of 2023, report finds

Corporates and innovation, Ecosystems, Government and policy, Investors and funding, Startups and technology / /

Venture capital funding in Europe is plummeting as investors shift focus from growth to cutting costs.

In the first half of 2023, European VC deal value was 61% lower than at the same time last year according to a new report by Pitchbook, a financial data firm.

The total capital raised in the continent was €8.9 billion. At the current rate, the full year is on track to pace 37% below 2022 levels.

Analysts blame the decline on surging interest rates, high inflation, fundraising hurdles, and a subdued IPO market.

These economic headwinds have prompted new investment strategies. Instead of prioritising growth at all costs, VCs are increasingly working with their startups to restructure operations and extend runways as far as possible.

A gloomy impact of this prudence is mass layoffs and hiring freezes at startups. British unicorn GoCardless, for instance,  is cutting 15% of its global workforce as of June 2023.  According to Pitchbook, startups with lower growth rates that need funding to survive are likely to face down rounds and valuation cuts. More companies are also likely to seek capital despite lower valuations.

This recently occurred at Getir, the Turkish food delivery app. In April, the company raised €435.5m from Abu Dhabi state fund Mubadala at a valuation of €5.7bn. Just a year earlier, the same investor had injected €690.7m into Getir at a valuation of €9.9bn. The new funding effectively slashed the startup’s value by 42.4%.

Source: PitchBook • Geography: Europe *As of June 30, 2023
VC deal activity peaked in Q1 2022 and has been on a steady quarterly decline since. Credit: Pitchbook

The cautious approach has depressed both value and volume of deals. Exit activity has slowed to decade lows, with corporate acquisitions now the most common exit option. Debt-heavy leveraged buyouts, however, have lost share. 

US participation in European deals has also plunged. To date, American participation in VC deal value in 2023 is down 69% year-on-year.

The software sector, which laid the foundations for today’s VC industry, has been hit hard by the downturn. In the second quarter of 2023, the value of software deals dropped 71.8% year-on-year — more than any other sector.

“Just as the dot-com bubble reset the sector in 2000, we are seeing a similar reset from the bonanza of deals in 2021 and 2022,” said Pitchbook’s analysts.

Nonetheless, there are signs of hope. The generative AI investment boom could spur dealmaking for software startups in the space.

Sectors that are less cyclical in nature, such as biotech and pharma, have also shown resilience. A notable example of this is Ascend Gene And Cell Therapies. In May, the London-based startup raised €120.3m for its gene therapy tech.

Source: PitchBook • Geography: Europe*As of June 30, 2023
Median deal size has doubled in recent years and sits at €2.1m for 2023. Credit: Pitchbook

Overall, Pitchbook’s data suggests a trend towards larger deals, often as follow-on VC investments that provide extra runway to their startups. Venture growth stage and late-stage deals, meanwhile, have gained a growing share of the VC deal count, while the proportion in angel and seed stages has shrunk.

The findings add further evidence of the current difficulties in securing funding. 

Mercifully, a recovery could be on the horizon — particularly in the US, where the Federal Reserve has suggested that monetary tightening will soon end. But in Europe, high inflation could lengthen the contractionary cycle.

European VC deal value down 61% in first half of 2023, report finds Read More »

ebike-maker-vanmoof-goes-bust,-leaving-riders-in-disarray

Ebike maker VanMoof goes bust, leaving riders in disarray

Ecosystems, Investors and funding, Startups and technology / /

After pausing sales, closing stores, and being unable to pay its bills, beloved Dutch ebike maker VanMoof has officially been declared bankrupt.

Just last week, Dutch courts granted the company a two-month ‘suspension of payment’ to protect it from creditors while it worked with administrators to find a solution.

However, yesterday, the court of Amsterdam withdrew the suspension of payment and declared all three of VanMoof’s legal entities in the Netherlands bankrupt. VanMoof’s units outside the country are not affected.

Such a swift bankruptcy decision usually occurs in cases where authorities can see that a company has exhausted all available cash and any options for financing and sale.  

😞

In the past day, we tried to secure investment to keep us afloat and honor our commitments with customers and employees, but unfortunately, that was not possible. The proposal to other bike companies for a buy-out did not work either.

We have no choice but to file for…

— VanMoofer News (@VanMooferNews) July 17, 2023

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Two administrators have been appointed as trustees and are investigating the possibility of pulling VanMoof out of bankruptcy by selling it to a third party, the company told TNW via email.

The only way VanMoof can stay alive is if it sells off its assets and operations to a third party. This theoretical buyer would not take responsibility for VanMoof’s outstanding debt. 

Bankruptcy is the final blow for VanMoof which, despite being one of the most heavily funded ebike startups in the world, has been making major losses on its ebikes for years.

vanmoof-founders-bankruptcy-ebike
Brothers Taco and Ties Carlier founded VanMoof in 2009 with a big dream: to revolutionise cycling in the city. Credit: VanMoof

VanMoof bikes feature a sleek, simplistic design and have become commonplace on the streets of Amsterdam, where the company was founded in 2009. It has around 700 employees.

In an internal email sent to staff, founders Taco and Ties Carlier said, “we feel sadness, but most of all we feel an immense sense of pride for what we have achieved together.” 

VanMoof riders now enter a period of uncertainty over the future of their ebikes, which require custom parts and specialised software to fully operate. 

vanmoof-ebike-bankruptcy
Known for their simplistic, sleek design, VanMoof ebikes were an instance hit. Credit: VanMoof

Matteo, a VanMoof rider since 2018, told TNW he is hoping he doesn’t have any (more) issues with his bike “because clearly I will not be able to get it serviced and I doubt the one year of remaining warranty on my battery is worth anything.”

Matteo, like many VanMoof customers, reports his ebike, an S2 model, has suffered several technical issues since purchase, including a faulty electric motor and battery. These faults took weeks to get resolved. “But when it worked it was a great product and I loved it,” he said.

“When it worked it was a great product and I loved it.

Until recently, customers were solely dependent on VanMoof’s own repair service, resulting in long lead times. “Even something as simple as straightening a wheel could not be done at a normal bike store,” said Matteo. 

“When it [VanMoof ebike] will eventually die, I think I will just go and buy a Cowboy,” said Matteo, referring to the Belgian ebike brand, and VanMoof’s closest competitor.

For riders like Matteo, the days spent darting through the city atop a VanMoof are numbered. But until then, here’s some initial guidance on how the company’s bankruptcy will affect customers:

💥The court declared the Dutch legal entities @VanMoof Global Holding B.V., VanMoof B.V., and VanMoof Global Support B.V. bankrupt.

What will happen now?

Repairs, open orders & the App. 👇

🔧If you had your bike in repair, you’ll be able to pick it back up when announced, but…

— VanMoofer News (@VanMooferNews) July 18, 2023

VanMoof also said that no new bikes will be delivered, even if they have already been paid for. The same applies to ordered accessories and parts. Customers who ordered a bike and made a down payment for it should file a claim. Whether any money will be refunded remains to be seen.   

According to a tweet, the Dutch police have been inundated by calls from VanMoof customers looking to take action against the company. The police rightly pointed out that the insolvency is a civic matter not a criminal one, and suggested they stop bothering them and let them attend to more urgent matters.

While VanMoof told TNW that it has no further comments at this time, more announcements are expected soon. 

Ebike maker VanMoof goes bust, leaving riders in disarray Read More »

early-stage-european-saas-startups-set-for-funding-rebound,-report-finds

Early-stage European SaaS startups set for funding rebound, report finds

Ecosystems, Investors and funding, Startups and technology / /

In the second half of the year, early-stage European SaaS companies will see a significant funding increase across Series A and seed rounds. That’s according to the aVC index, a new monitoring tool developed by London-based AlbionVC and Google Cloud.

The aVC index is based on an anonymous survey of 40 investors, who are actively deploying capital into the European ecosystem at seed, Series A, and Series B stages. The respondents expect to invest £2.4bn (€2.8bn) early-stage SaaS startups by the end of the year.

The projected recovery follows stagnant investment activity in Q2 2023. Specifically, 25% of VCs chose not to issue new term sheets despite having sufficient capital available. UK funds issued an average of three terms sheets, while their European counterparts came at an average of two. Overall, only 4% of all portfolio companies received externally-led term sheets.

In addition, two in five VCs believe valuations will fall further in 2023, with a quarter predicting a 20% or higher drop. But, in total, respondents reported that they expect more investor-friendly terms.

Nevertheless, there is cause for optimism in the second half of the year. The aVC index found that Q2 already showed an increase in the number of companies within investors’ active pipelines.

The index’s Q2 score reached 54 — with a rating below 50 indicating a contraction in the market and a rating at 50 indicating no market change. For Series A, in particular, the index was 57.1, pointing to higher funding activity in this stage.

Meanwhile, the VCs surveyed reported they have significant capital reserves, with two-thirds of the funds dedicated to new investments and the remaining one-third intended for follow-on investments.

“The funding market now appears to have bifurcated. Some companies are attracting 2021 levels of interest — whether because they are in super hot sectors (including gen AI and climate tech), or because there is strong investor demand and a limited supply of exceptional companies,” said Robert Whitby-Smith, Partner at AlbionVC.

“While such deals are still an exception there is a feeling among VCs that the tide is turning and an expansion in the aVC index at Series A confirms this.”

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Early-stage European SaaS startups set for funding rebound, report finds Read More »

a-world-first-spacecraft-reentry-to-earth-is-approaching

A world-first spacecraft reentry to Earth is approaching

Deep tech, Ecosystems, Insider / /

A car-sized spacecraft is falling down to Earth — but there’s a plan to catch it.

Aeolus, the first satellite to directly observe wind profiles from space, is almost out of fuel. Earth’s atmosphere and gravity are now dragging the 1360-kg craft down to our planet at increasing speed.

In the original plan, Aelous was expected to fall naturally back to Earth. But the European Space Agency (ESA) has proposed another idea: an assisted re-entry — the first of its kind.

Aeolus measurement geometry
Data from Aeolus was used by meteorology centres to improve weather forecasts. Credit: ESA

To reduce the threat of space junk, rockets and satellites are designed to safely reenter Earth’s atmosphere once their missions end.

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The rapid descent generates so much heat and friction that smaller objects often disintegrate in the sky — but larger bodies can stay intact. To reduce the risks to human life, these entities need to safely land in uninhabited regions.

Under current regulations, spacecraft must either burn up entirely or undergo a controlled reentry. But Aeolus was designed before these rules were made. 

How ESA plans to guide a falling satellite safely back to Earth
Credit: ESA
Aeolus is currently falling at around 1km a day, but it will rapidly accelerate. Credit: ESA

The Aeolus mission was planned in the late 1990s, when there were no guidelines about reentries. At the time, Aeolus was designed to fall on an area of Earth that would be quite random.

To comply with today’s requirements, ESA changed the plan. Mission control will now use the satellite’s last drops of fuel to bring the satellite back to Earth.

“This assisted reentry attempt goes above and beyond safety regulations for the mission, which was planned and designed in the late 1990s,” said Tim Flohrer, head of ESA’s Space Debris Office, in a blog post.

“Once ESA and industrial partners found that it might be possible to further reduce the already minimal risk to life or infrastructure even further, the wheels were set in motion. Should all go to plan, Aeolus would be in line with current safety regulations for missions being designed today.”

In 2019, ESA performed a 'collision avoidance manoeuvre' to protect Aeolus from colliding with a satellite in SpaceX's Starlink constellation
In 2019, ESA performed a ‘collision avoidance manoeuvre’ to protect Aeolus from colliding with a satellite in SpaceX’s Starlink constellation. Credit: ESA

Aeolus will first naturally descend from its operational altitude of 320km to a lower orbit. When it reaches an altitude of 280km — a process that can take weeks — ESA will attempt the first re-entry manoeuvres.

A sequence of moves will then bring the satellite down to 150km above Earth. The final, critical commands will guide the satellite to an altitude of 80km, where most of the satellite will burn up in the atmosphere. Some debris, however, may still make it to our planet’s surface.

To avert the extremely remote risk that debris poses to life, ESA is targeting the reentry at a vast expanse of ocean far away from land.

If the manoeuvres are successful, ESA expects to complete the journey in late July or early August. However, as a first-ever attempt at an assisted reentry, it’s not guaranteed to work. If the plan has to be aborted, Aeolus’ natural descent will continue.

But if the mission is accomplished, it will set a new standard for satellite reentry and space junk mitigation.

A world-first spacecraft reentry to Earth is approaching Read More »

cowboy-releases-digital-ebike-key-to-keep-vanmoof-riders-on-the-road

Cowboy releases digital ebike key to keep VanMoof riders on the road

Ecosystems, Investors and funding, Startups and technology / /
Cowboy releases digital ebike key to keep VanMoof riders on the road

Unless you’ve been living under a rock, you’ll probably know that ebike darling VanMoof is facing bankruptcy.  

Obviously, this isn’t good news for VanMoof riders, who could be locked out of their own bikes which largely rely on a unique software app created by the Dutch company.

But fear not VanMoofers, Belgian ebike rival Cowboy has released an app to keep you on the road. ‘Bikey’ enables VanMoof riders to generate and save their own unique digital key in case VanMoof’s servers go offline.

The app is now live on the Apple app store in beta, but will be available for Android soon, said the company. The app currently works with the popular S3 and X3 ebike models, with plans to extend support for new S5 and A5 ebikes. 

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cowboy-app-vanmoof

“Our software team worked through the night on this and we must stress that it’s a beta so bugs may be experienced… but we wanted to get this shipped ASAP because it will only work while the VanMoof servers are still live,” a spokesperson from Cowboy told TNW. 

Without the key, VanMoof owners would essentially lose total access to most of the functionalities of their ebikes, which can cost in the region of €‎3000. 

While the move is a touch audacious, Cowboy’s spokesperson insists that “this is about keeping bikes on the road, which is our no.1 mission as a company, regardless of whether the bikes are made by a competitor or not.” 

“People rely on their ebikes for their livelihoods,” the spokesperson added. 

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dutch-startup-taps-ai-and-robotics-to-automate-ev-charging 

Dutch startup taps AI and robotics to automate EV charging 

Ecosystems, Investors and funding, Startups and technology / /

As EVs surge into the mainstream, industry and consumers alike are looking for quicker and easier ways to charge. While advancements in battery technology promise the former, Dutch startup Rocsys believes automation will help make charging a whole lot more efficient. 

Rocsys has created a robotic arm guided by AI-powered computer vision technology that can convert any charger into an autonomous one. Once you pull up in your EV, the robot’s ‘eyes’ locate the vehicle, move the plug toward the socket, and charging begins. The robot essentially replaces the human hand.       

This makes the charging process easier for drivers but also caters to the next generation of vehicles that don’t have a driver at all. As Crijn Bouman, co-founder and CEO, puts it: “Why should a self-driving car need a human babysitter to charge?”