Startup Europe. Grown up reporting.
Startup Europe. Grown up reporting.
Startup Europe. Grown up reporting
Startup Europe. Because the future isn’t where you expected
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Here, Sifted’s reporters — in partnership with Dealroom.co — dig into the data, strategy and challenges behind the most important European startups.
We have picked companies based on the money they have raised, how quickly they are hiring and how formative they have been to the startup ecosystems around them. If there is anyone missing from this list, or anything is wrong in the numbers, please let us know by email at [email protected]
Please check out our jobs board to see some of the companies hiring from this list, as well as our lists from other European countries.
Founder and chief executive Lex Greensill was a director at Morgan Stanley and Citibank before founding the eponymous firm in 2011. He subsequently received a CBE in 2017 for services to the British economy and is rumoured to spend the majority of his time on a corporate private jet shuttling between New York, London and his native Australia.
Former British Prime Minister David Cameron is an advisor to the firm, which is backed by SoftBank’s Vision Fund. In May the company raised a round of $800m from the Vision Fund which valued the company at $3.5bn — firm unicorn territory. In October it raised another $655m in new funding the same fund, bringing its total capital raised since inception to $1.7bn.
Greensill is a brilliant and innovative financier, but some also worry about his high tolerance for risk and use of complicated off-balance-sheet financing structures. There have been several scandals surrounding the company. Most recently a Greensill fund, managed by investment manager GAM, witnessed huge outflows earlier this year following a scandal related to one of its bonds, resulting in the funds’ assets falling from €2.1bn to as low as €391m.
Still, the company makes money. Revenue doubled to almost $275m in the last financial year and it made $50m in net profit, according to its Australian accounts. The company is not said to be gearing up to launch it’s first consumer-facing product, a mobile app allowing workers to be paid in advance.
Firstly, it’s an insanely competitive market, with low margins and not much to distinguish all of the different rivals (apart from price).
With too many players, the last 12 months has seen a round of consolidation with rival Delivery Hero selling its German business to Netherlands-based Takeaway.com and UK-based Just Eat and Takeaway.com toying with a merger to create a £9bn behemoth.
Either way, all the dealings leaves €1.8bn-valued Deliveroo looking a little, well, small.
In 2019 the company was also forced to pull out of Germany while at the same time Uber Eats is also making a big push for this market.
Still, it’s not all bad news. In May 2019 Deliveroo, which is led by Will Shu, raised $575m (including money from Amazon), taking total investment into the loss-making six-year-old business to $1.5bn.
The company is also looking beyond delivery, betting on dark kitchens — overflow food preparation spaces to rent out to restaurants which need extra kitchen capacity.
Deliveroo has 16 “Editions” (as its kitchen sites are known) in the UK, one site in the Netherlands, two sites in France and two sites in Spain. In total 140 restaurants use these 21 sites.
In a bid to bring on board even more restaurants, Deliveroo has recently formed a “Restaurant Rescue Team” which will offer struggling businesses space at its kitchen sites.
Deliveroo pulls out of Germany
The food delivery startups, compared
Its valuation has jumped 6000% in two years to $7bn as investors bet it will become a global champion. The wider RPA sector is growing over 60% a year, positioning market leader UiPath well to benefit from the trend.
Of course, companies are waking up to the fact that RPA is not just a magic bullet that can fix all their problems (indeed, it can create a fair few), but it’s still powerful if used correctly.
In 2019, UIPath closed a Series D round of funding, raising $568m to become, at $7bn, one of the highest-valued RPA companies in the world. This was up from a valuation of $110m just two years earlier.
The big question for cofounder Daniel Dines is if it’s going to be a big global RPA company or the big global RPA company. Rivals include companies such as Blue Prism in the UK and Automation Anywhere in the US.
The other big question is when they list on the stock market and where.
Further reading: The Romanian unicorn automating your job
GitLab is essentially a way for software developers to better work together on bits of code, much of which is open-sourced. It had humble beginnings, taking years to take off before going through Y Combinator in the US in 2015.
It has long been in competition with GitHub, which was bought by Microsoft last year, and Bitbucket, but says that now it’s outgrown those comparisons as it competes in a wider range of products.
Chief executive Sid Sijbrandij says the company now competes with an array of different companies such as VersionOne, Jira, Jenkins, Artifactory, Electric Cloud, Puppet, New Relic and BlackDuck.
The really big question for the company going forward is the initial public offering, which is planned for 2020 and, crucially, if it will be acquired before it gets there.
In 2019 it launched a new $460m fundraising, giving the company a post-money valuation of $5.5bn, making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation.
And now, after four bumpy years trying to capture the US market, Klarna has finally made inroads and is reportedly growing at approximately half a million customers a month.
It’s managed to entice a new millennial audience who love shopping online and would prefer — wouldn’t we all? — to pay later rather than today.
There are some concerns that the “pay later with Klarna” button is being overused by young people, who are getting into trouble with debt as a result, so the company will have to manage their image here carefully. They have won some criticism recently from Swedish politicians.
Also notable is that Calvin Broadus, better known as Snoop Dogg (or Smoooth Dog), the American rapper, is an investor and brand ambassador. One big question is if the company will stay European when it looks for an eventual exit, or follow the route of Izettle and Skype, who were bought by US giants.
The Klarna founder’s secret of success
But what it lacks in fame it really makes up for in profits. It’s one of only a handful of money-making fintech companies in Europe, with profits up 220% to £33.9m in 2018.
Co-founded by Rishi Khosla and Joel Perlman, OakNorth is a platform that leverages big data and machine learning to help banks around the world improve their lending to lower mid-market businesses. Its white-label software-as-a-service solution is being licensed to a dozen banks globally.
The platform proposition was proven via OakNorth Bank which launched in September 2015, offering loans of £0.5m to £50m to fast-growth businesses, targeting a market that has been largely underserved by traditional banks in the aftermath of the financial crisis. So far, it has lent £4bn and says it has only had two defaults and no credit losses.
In 2019, the bank secured an investment of $440m from SoftBank’s Vision Fund — the largest investment of any fintech in European history at the time.
OakNorth’s chief financial officer Cristina Alba-Ochoa tells Sifted that in Europe there are a whole lot of “clueless fintech people” building businesses that are likely to become big losers and that their failure is “more likely than people want to believe”.
OakNorth calls out “clueless fintech people
Used cars are a huge market, with around 39m cars sold every year in Europe (compared to 17m new). Within the market, Auto1 it’s a giant. The company has taken in €460m from Japanese conglomerate Softbank and since launching in 2012 has expanded into more than 30 countries. It says it is now trading with more than 35,000 professional partners and selling more than 40,000 cars per month.
But watch out, because there are rivals. Cazoo, the brainchild of Zoopla founder Alex Chesterman, has raised €60m pre-launch to sell second-hand cars direct to consumers later in 2019. It’s a slightly different model, as it’s selling to consumers not dealers, but still a potential threat as market dynamics in this space evolve swiftly.
Other rivals to Auto1 include Emil Frey and AVAG Holding. There is a torrid history of other used car platforms coming crashing down: notably Beepi. Watch out as well for business cycle vulnerability, in a recession big-ticket items like cars are often the first purchases consumers will put off taking.
The company, which says it does not see profitability as a “core metric”, is pushing big-time for growth, splashing cash to launch a huge advertising campaign to build on its 3.5m subscriber base.
Led by founder Valentin Stalf, the bank in 2018 rolled out a #nobullshit advertising campaign in some of the 24 markets it is active in around Europe, with slogans such as “Nicht die Bank deines Opas” (“Not your grandad’s bank”) and “F¥€K Fees”.
It is also joining rivals such as Revolut in making a play for the US market, which is going to be no easy feat (other neobanks in the US have had limited success).
It’s been less plain sailing for N26 in Germany though, with the company coming under recent scrutiny from BaFin, the German financial authority, for falling behind on anti-money laundering processes.
Rivals, most notably Revolut, have also come under similar scrutiny. N26 is competing with the likes of Monzo and Revolut, but they all share a core long-term challenge: persuading customers to switch to them as their main bank.
Digital banks Monzo, Revolut, Starling and N26 compared
It’s a giant in the travel space. There are more than 56,000 experiences on the site, half of which are in Europe. One investor told Sifted that GetYourGuide is like the kraken. It’s big and its tentacles reach far — yet you might not know it’s there until you stumble across it.
In May 2019 the company won a $484m investment lead by “king-making” investor SoftBank, and the company is now making a play to get everyone to know about it and become a central part of the global travel industry akin to Airbnb or Skyscanner.
GetYourGuide may be big, but it’s still barely scratched the surface of “experiences”: there’s room to grow in Asia and North America, outside of capital cities — like Yukon, Canada — and into food, sports, events and music.
There are also thousands of smaller operators out there all over the world. GetYourGuide has its work cut out if it wants to become the place where people find what to do at their destination.
Its chunky investment from SoftBank will certainly help with that — but can it ever become the go-to place for “experiences” in the way that for many travellers Airbnb is now the first stop for accommodation?
Why has SoftBank invested in GetYourGuide? job
Its “GP at Hand” service in the UK has proved hugely popular, particularly with the young, who see it as a better and more convenient alternative to traipsing to a doctor at inconvenient times of the day. The UK government has praised the company as one of the “biggest names in AI.”
In August 2019, the company closed a $550m round of funding at a more than $2bn valuation, the largest-ever fundraise in Europe or the US for a digital health delivery startup.
This was mainly to help the startup push into the US (and to some extent the Asian) market. On the company’s job site, there are more than 100 positions advertised in America, highlighting the extent of their ambitions there. The US market is potentially hugely more lucrative than the smaller and largely state-controlled European market.
Babylon has proved controversial in the UK, which is still its biggest market. This is because its flagship GP at Hand service officially operates its own clinic within England’s state-funded National Health Service. More than 40,000 people have left other clinics to join, in effect sucking money from other parts of the country.
The people who have joined are also generally healthier tech-savvy patients, according to critics, leaving other clinics to pick up the tab for the more expensive half of the population. There have also been questions raised about the quality of its care, something the company has always claimed is top-notch.
Babylon was founded in 2013 by Ali Parsa, a former banker at Goldman Sachs who previously co-founded Circle Healthcare, which was the first private company to run an NHS hospital but fell into financial crisis in 2012.
Today their ambitions are a little more limited, focused on gaming. Improbable last year raised $100m from Chinese internet group Netease, which is one of the world’s largest developers of online multiplayer games, as it doubles down on that market as the best way to build their technology and actually make some money in a hugely growing market (consumers around the world spend around $140bn on games each year).
But it has not all been smooth sailing. In 2019 Improbable took a blow when it became embroiled in a public spat with one of its major partners, Unity, which makes one of the world’s most popular graphics engines. There is also concern that the cost of their system is too high for small games developers, leading to worries about the startup’s overall business model. SpatialOS has a free tier for testing and prototyping purposes, so developers are able to build prototypes and familiarise themselves with the platform without paying hosting costs.
According to Companies House filings, 2018 losses increased ten-fold and revenues fell to £579,859 from £7.8m in 2017, which is not ideal.
Just as Nordic fintech Klarna is backed by Calvin Broadus (better known as Snoop Dogg, or Smoooth Dogg), the American rapper, Atom bank is backed by US musician will.i.am, the lead singer in the Black Eyed Peas.
Will.i.am is a strategic advisor and, apparently, provides “an external perspective on culture, philanthropy and technology”.
The company also does consumer loans and mortgages. In July 2019 it said that its total consumer and business lending was up by 76% to £2.4bn year on year, supported by growth in deposits from £1.4bn to £1.8bn. Atom says it gets applications of up to £20m in business loans and £10m in residential mortgages each week.
In 2018 Atom announced that it would partner with fintech startup Thought Machine to migrate all of its banking technology to a platform called Vault. The big question is if the bank can grow to join the ranks of the other fintech unicorns or if it will remain a second-order player.
The startup operates a bit like Uber: it’s a mobility service that doesn’t actually own the veichals. Flix works with “partner companies” – traditional charter bus services – which hire drivers and pilot the buses. Flix supplies the branding, booking services, routing and marketing power.
Long-distance bus travel isn’t necessarily a very dynamic service, but Flix has tried to jazz it up with free Wi-Fi and all-digital booking via app, web or voice assistant. FlixMobility now serves more than 2,000 cities in 29 countries, with headquarters in Munich and Berlin. It holds 90% of the German long-distance bus market.
FlixMobility is also going multimodal with trains. Chief information office Daniel Krauss told Sifted that FlixMobility hopes to expand its number of routes from two to perhaps six in Germany, and it’s looking across borders. France and Sweden are set to open up their national rail systems in short order, and Flix is in discussions to get in on those networks.
But the company a daunting challenge ahead: mega growth helped by a €500m raise in 2019 (on a reported €2bn valuation). This is to beef up its rail services across Europe, enter the carpooling market and expanding internationally into South America and Asia.
German transport unicorn FlixMobility wants to move the world
They’ll also buy you a particular dress in a size 12 from Zara, or grab some painkillers from a pharmacy or a tin of baked beans from a supermarket.
Oscar Pierre, the 20-something founder, now says he wants to go even further, ferrying laundry, cash, packed lunches, tickets and even people to wherever customers want them to go.
The four-year-old startup in 2019 closed a €150m raise, nine months after raising its last round of $134m. It operates in 124 cities across 21 markets (18 of which launched in 2018).
It has also recently opened seven “dark kitchens” in Madrid, Barcelona, Buenos Aires, Lima, Milan and Kiev. Local restaurant partners, which have reached peak capacity in their own kitchens, can rent these “Cook Rooms” to produce even more takeaway grub for Glovo’s couriers to carry to customers hungry for more.
And for investors out there, they want even more money. “To be honest, we just closed the round, but next week I’m going to start working on the next one,” Pierre told Sifted in 2019.
Glovo goes big on grocery
Glovo: The everything app
The company has done a good job of removing the hassle from managing finances while also crafting an image as “ethical”, with features like an optional gambling block and customer-centric service — for example allowing users to get their salary a day in advance of being paid.
Last year Monzo announced a £113m fundraise. It is reportedly just weeks away from raising fresh funds of between £50m and £100m in a Series G round (question: has anyone done a series Z round?)
Despite its fans and unicorn valuation, however, the bank is renowned for its “disrupt-now-and-make-money-later” approach. Monzo’s losses climbed to £47.2m in the fiscal year ending February 2019 (compared to Revolut, for example, which reported a £14.8m loss for 2017).
The widening losses are driven largely by a near-tripling in personnel costs as the company increased headcount from 300 to more than 700. Blomfield says losses will likely rise further on the back of a £20m marketing drive last year.
But, while sceptics of its business model abound, there are some positive financial signs as well. Monzo says it has stopped burning cash on new customers because people are increasingly starting to use the app-based bank as their main provider (crucial for any neobank).
Monzo’s latest annual report said the proportion of customers depositing salaries reached 30% by the end of February 2019, up from 12% a year earlier. Total customer deposits rose more than sixfold to £461.8m, while customer numbers almost trebled to 1.6m.
The company’s “per-user contribution margin” — basically money made or lost on each customer — reached £2 by the end of February 2019, from -£30 a year earlier. Earlier this week Monzo announced a £113m investment that valued the bank at just over £2bn.
There’s something about Monzo
Digital banks Monzo, Revolut, Starling and N26 compared
Drivers can’t really profit much, as the price for a passenger is only supposed to cover petrol and general wear and tear, so the company has not faced the same regulatory scrutiny as ride-hailing companies such as Uber.
The carpooling app, valued at €1.6bn, is expanding into long-distance bus journeys, where it faces stiff competition from fellow European FlixBus, amongst others.
The French startup has already acquired Ouibus, a bus operator travelling between big cities, and Busfor, an eastern European bus booking platform. It’s also making interesting moves in the shared commuting space with a new(ish) service in France, BlaBlaLines.
Bigger than BlaBlaCar?
Maxi Mobility, the parent company of Cabify, in 2018 raised $160m from investors including Japan’s Rakuten at a valuation of $1.4bn. In 2016 it was valued at just $320m.
Founder Juan de Antonio, an engineer by training who is mildly famous in Spain for living a frugal life in a modest part of northern Madrid, has been focusing on global expansion and going into other areas of “mobility”.
The company has a business allowing people to rent electric scooters via their mobile phone.
Cabify has, like other ride-hailing startups, come into frequent conflict with established taxi companies (notably in Barcelona in 2019). One big worry for the group is its modest size compared to the global behemoth that is Uber.
The cross-border money transfer company reported an annual post-tax net profit of £10.3m in the fiscal year ending March 2019, up 66% from the previous year. Revenues at the firm rose about 53% to £179m.
The company has a clever model (now replicated by many others) that means it doesn’t actually move money across borders, which would incur fees, instead maintaining separate pots for each currency, which it then disburses funds from. Around £4bn is transferred every month.
The company was set up in 2011 by Estonian friends Taavet Hinrikus and Kristo Kaarmann, who saw an opportunity in high bank currency exchange fees. It now works with some banks, for example with France’s Groupe BPCE as well as fintech rivals Monzo and N26, which have integrated TransferWise’s software into their platforms.
Kaarmann, TransferWise’s chief executive, boasts that the company has become one of a “rare breed of unicorns” because it makes money, which is helped by businesses increasingly using their services.
The company is backed by a number of high-profile investors, including British billionaire Richard Branson, Silicon Valley venture capital firm Andreessen Horowitz and Valar Ventures, the venture fund cofounded by Peter Thiel.
Still, internal research at Barclays shows Starling is growing at a similar pace taking into account its belated app-launch. Meanwhile, First Direct, a digital division of HSBC that launched in 1989 has 1.45m users.
Led by Anne Boden, Starling can also claim a robust deposit base, having now hit £1bn in customer assets. That suggests a healthy number of customers are using the bank as a primary account rather than as an ad-hoc spending tool. In comparison, digital competitor Revolut reported £902m in deposits last year — despite having six times the number of customers.
Starling is also reportedly on-track to reach profitability by the end of 2020, a rarity amid the challengers. Starling also has a thriving banking services division (making its infrastructure available to third parties) and also a marketplace for third-party financial products.
Inside Anne Boden’s Starling
Digital banks Monzo, Revolut, Starling and N26 compared (https://sifted.eu/articles/challenger-banks-monzo-starling-revolut-n26-compared/)
Led by Nikolay Storonsky, the company has around 6m customers, up from 1.5m a year ago, and is adding around 16,000 accounts a day. It has around 1,200 employees compared to 400 a year ago.
The last fundraise, in April 2018, valued the company at $1.7bn but the company is expected to target a valuation of around $5bn to $10bn for its next funding round, which could be as much as $1.5bn ($500m in new equity and a $1bn convertible loan).
There are even reports that Japanese investment giant SoftBank might invest, although Storonsky refused to comment when asked by Sifted: “We speak with many big investors.”
However, amid this fast growth Revolut has also been stung by a series of negative articles pointing to teething problems at the bank and an allegedly toxic corporate culture. Tech publication Wired described a workplace where turnover and bad behaviour is rife, while The Telegraph newspaper in the UK said that the company turned off a system designed to prevent money laundering for three months in 2018, something that Revolut denies.
Still, public perception of the bank is improving and the growth numbers are nothing short of exceptional. One next big move for the company is formally launching a retail product in the US in the latter part of 2019. But further acceleration would come if the company bags a $1.5bn investment.
Storonsky also has big ambitions, saying that he would want a $20bn price tag before going to an IPO (which would give the company the seventh-biggest IPO ever in stock market history)
Europe is beating the US in fintech innovation, says Revolut’s Nikolay Storonsky
Led by Ludovic Le Moan it has raised nearly €300m since it was founded in 2010 and has some notable backers such as French gas giant Total and the entrepreneur Henri Seydoux.
But it’s had a tough few years. There are a number of competing technologies jockeying for position and the growth of IoT generally not being as explosive as some had hoped.
One such rival technology is Narrowband IoT (NBIoT), which has the backing of most of the large telecoms companies and has been deployed by more than 142 operators worldwide. Another rival LoRa, another rival technology, meanwhile, is being developed by an alliance that has more than 500 members, including companies like IBM, Cisco, HP and Foxconn.
By comparison, SigFox’s technology, also just called SigFox, is used by far less widely and it’s not been adopted by any global consortiums.
But the company is now working to get back on the front foot once again, recently telling Sifted that it was aiming for 1bn connected devices connected on its network by 2023 (up from 16m today).
IoT arms race is on: Sigfox promises 1bn connections in three years
Its pitch is that existing graphics processing units (GPUs) used in regular computers and phones aren’t designed for the immense workloads required for machine learning and deep learning.
So something new is needed, which they call an intelligence processing units (IPUs).
Their ambition is to become the Arm or Intel of the new generation of AI chips — i.e. providing the design architecture and being part of every chip made.
Initially laughed at when they started proposing the idea back in 2015, the company raised $200m in December 2018 from investors including Microsoft and BMW, giving it a valuation of $1.7bn.
It has reached that valuation in just five years and now employs more than 200 people. The one caveat to all the excitement is that the IPU is yet to be commercially available, although as interest in AI increases around the world it remains promising.
It has built a platform that is designed to sift through large volumes of medical data, for example clinical trials and academic papers, and make it faster to develop new drugs.
The slight snag is that nobody really knows how well it is going to work and the company has recently seen its valuation slashed in half.
In 2018 the company, which is backed by troubled UK stockpicker Neil Woodford, was valued at $2bn after it raised $115m. But in 2019 it announced an investment from Singaporean sovereign wealth fund Temasek and a valuation of just $1bn.
On the bright side the company won a partnership with British pharmaceutical giant AstraZeneca to use machine learning and artificial intelligence to discover potential new drugs for chronic kidney disease and idiopathic pulmonary fibrosis — giving a corporate stamp of approval to the technology.
It handles paperwork and payment and takes a cut. The company has also developed automatic photo-editing algorithms to improve shots and give images a consistent look; for example, so all Airbnb shots can be standardised.
The wacky thing about the French startups is not so much the idea but the amount of the money it has raised, taking in another $230m in investment in June 2019. Who knew there was so much money in photos?
The next step for the company is to open up to the consumer market. So one day you may be able to get your wedding photographer through Meero. Also worth watching is the progress of its artificial intelligence editing technology — the tech team expanded from 80 to 300 people according to the company.
These are the 12 French startups with the fastest growing teams
Founded by the charismatic Naren Shaam, the startup has been a hit, winning more than 27m monthly users and 800 partners. In October 2018, it raised $150m in investment, one of Germany’s biggest investment rounds.
In 2019 the company changed its name to Omio (it had been GoEuro) and said it was planning expansion into new markets including South America, Asia and the US. But each one of these would be a risky undertaking. The company now has some expertise in integrating with transport providers, but will that be enough?
The company competes with the likes of eBay, Craigslist, OfferUp and to some extent Facebook in the crowded world of second-hand, locally-focused marketplaces. Founded by Alec Oxenford, Jordi Castello and Enrique Linares in 2015, it’s been fantastically successful, with more than 100m downloads and 400m listings.
It also has a history of acquisitions. In 2016 it merged US operations with Barcelona rival Wallapop and reportedly was looking to merge with Offerup at one point as well.
In 2018 the South African tech giant Naspers invested $500m of new capital into the company, and more deals could be in the works. Other top-flight investors include Accel, Insight Venture Partners, New Enterprise Associates, 14W, Eight Roads Ventures, Mangrove Capital Partners and FJ Labs. The company’s offices are located in New York and Barcelona.
The company is the continent’s best-funded healthcare booking app, having raised a total of €237m, including a €150m round in 2019 which took the company to ‘unicorn’ status with a valuation of more than €1bn.
In 2018 Doctorlib made clear its big ambitions when it bought French startup rival MonDocteur, with the Doctorlib chief executive Stanislas Niox-Chateau saying they were looking across Europe.
The company is at some point set to run into its biggest rival Docplanner, the Polish medical booking platform, which raised €80m in a series-E funding round in 2019 as well. That, and the company could be looking to take out some more smaller players with its war chest.
Docplanner and Doctolib are heading for a face-off
Bolt had been a sub-brand of Taxify focused on e-scooters launched in Paris. But the company said it had “started to outgrow” the Taxify brand and wanted to highlight that it is not all about cars but about transport more generally.
The name change has been a questionable strategy, at least where their Google SEO rankings are concerned, as legendary Olympic sprinter Usain Bolt now has his own scooter company Bolt Mobility.
In the land of taxis, the big focus for the company is its recent launch in London, where it is trying to take on Uber. It has a clear selling point: it is promising to pay drivers more and charge customers less.
But it will still not be easy. Uber accounts for more than two-thirds of all ride-hailing journeys in the capital, and is integrated into Google Maps and Citymapper. Can Bolt really make a dent? And how much money can it burn winning some market share?
Bolt is also getting into food delivery with Bolt Eats with launches planned in Latvia, Estonia, Lithuania and South Africa. Its main competitor close to home is similarly-named Wolt, a Helsinki-based food delivery firm founded in 2014 which operates in 15 northern and eastern European countries, including Estonia.
Why Uber competitor Bolt is moving into food delivery too
According to the company, their system is “modelled on the human immune system” and uses “self-learning cyber AI technology that detects novel attacks and insider threats at an early stage”.
What this really means is that it ships computer servers to businesses containing its software, which then can be plugged into the company network to detect abnormal behaviour.
The company has had some all-star backers and a great deal of hype. Mike Lynch, who sold his enterprise software company Autonomy to HP for $11.1bn, played a key role in Darktrace as a board director until he stepped down after being charged in the US with 14 counts of conspiracy and fraud over the Autonomy sale (he rejects all the charges).
Clients include parts of the National Health Service, Gatwick airport and Drax, the UK’s biggest power station. The company reported annual revenues up from £30.8m to £59.5m in the year ended June 2018, but losses widened by 36% to £39m because of investment in research and an increase in staff.
It allows companies to process and accept cross-border payments from credit and debit cards, online banking, Klarna, Apple Pay and others, all with a single integration.
It’s a direct rival to Dutch payment firm Adyen, which listed on the Amsterdam stock exchange last June and has since seen its stock soar.
Checkout.com provides online payment solutions for a number of fast-growing businesses, including other companies featured on this list like Deliveroo and TransferWise.
Chief executive Guillaume Pousaz is on record as saying “we’re the next Adyen”.
The startup reported $46.8m in total revenues in 2017 according to Companies House filings, a 56% increase on the previous year. Profits rose 61% compared with the year before to $23.9m, with a gross profit margin of 51% (which is huge).
The company has increased revenue by 50% a year for the past five years and Guillaume Pousaz says he wants to keep this going for another five.
Now it is so much more, thanks in part to an acquisition-heavy strategy that has seen it expand into a wider range of financial products. In 2018, the company expanded into longer-term investments thanks to a partnership with Vanguard and in 2019 it bought pension specialist Fairr.
Raisin says it considered building its own pensions product but concluded it would take two to three years to do. Fairr, founded in 2013, has already developed a dashboard to make the complex German pensions system easier for customers to understand. Fairr was the second acquisition for Raisin in 2019, following the acquisition of MHP-Bank in March.
The company, which is led by Tamaz Georgadze, is feeling pretty plump with cash after raising €25m from Goldman Sachs in August 2019 on top of a €100m Series D round three months before. Business-wise, Raisin now has more than 84 partner banks from 24 countries and eight platforms covering all of Europe and the UK.
Frank Freund, cofounder and chief financial officer, told Sifted in 2019 that the company was eyeing up the retirement market for potential businesses to buy next. One of the big questions for the company is how well it can execute on its acquisition strategy. The company’s US platform launch is also planned for later in 2020.
It’s a testament to the fact that Deposit Solutions is well on its way to becoming a central player in Europe’s financial landscape with its software that allows banks to collect deposits from people across Europe who are not their direct customers.
Already the software links 100 banks in 18 European countries. The startup has 200,000 customers who have used its platform to transmit more than €14bn since it was founded, including €5bn in the past 12 months.
Deposit Solutions’ valuation more than doubled since its last financing round in August 2018, when it raised $100m. The next step is to take on America’s $12,000bn domestic deposit market.
They are getting some consumer traction — at the end of last year, for example, Sainsbury’s became the first UK supermarket chain to start stocking edible insect snack-packs in its stores, after agreeing to a supply deal with UK-based Eat Grub.
French startup Ÿnsect is one of the leaders in this space but, for now, it has its sights on the more prosaic $500bn animal feed market.
Ÿnsect won $125m in funding in February 2019, which will go towards scaling up a highly-automated facility in France producing mealworms using techniques similar to those seen in indoor vertical farming (with the mealworms rotated around various optimised growing environments before meeting their end by being steamed, much like shrimp are).
Led by Antoine Hubert, the company has around 25 patents covering all aspects of its production techniques.
The challenge for Ynsect is regulation (weirdly the rules on what animals are allowed to eat are even stricter than the ones for humans) but also economics, as for now it’s reasonably expensive as a protein source.
Ÿnsect’s market at the moment is mainly hypoallergenic dog food because pampered pets are an area where the cost of the product is less of a consideration. Hubert says that chickens are next on his list.
Ynsect CEO Antoine Hubert on entrepreneurship & edible insects
It’s strategy so far has been a clever one: staying out of the way of the bigger deliver startups such as Deliveroo (which has raised $1.5bn compared €160m for Wolt) and focusing on smaller cities and less developed markets.
It’s concentrated largely in the corridor running south from Helsinki through Estonia to the Czech Republic, Greece and Israel. Wolt is happy to enter a smaller city or 30,000 to 40,000 where many delivery companies are focused on those with more than 1m people, saying that they can still make the economics work.
The company has some big backers such as Iconiq Capital in the US and London-based venture capital fund EQT Ventures.
The nagging worry though is what the impact will be of the larger delivery companies pushing into smaller cities (as Deliveroo are already starting to do in the UK). Wolt could easily find itself an acquisition target for a bigger rival wanting to scale up in a whole new type of market.
Europe’s food delivery wars are just beginning
Companies pay GoCardless to collect direct debits from customers on their behalf. It then takes a fee of up to 1% from those transactions and in return also provides data to help businesses retain their customers for longer.
The company is processing $10bn in payments annually for more than 50,000 organisations in the UK, Europe and Australia (for example enterprise software company Sage, travel site TripAdvisor and fitness company Les Mills).
GoCardless’s cofounder and chief executive Hiroki Takeuchi is hugely respected in the London startup world, not least because of his return to the business following a life-threatening bike accident in 2016, which left him paralysed from the chest down.
The big question for the company is how its move outside the UK into international markets, notably in the US, will go over the coming year.
Brunch with Hiroki Takeuchi, founder of GoCardless
It appears to have tapped into a millennial audience hungry for travel advice written by locals on the ground, while its listicle-heavy format (e.g 11 German Fairytale Villages You Need to Visit At Least Once) works well in the online-era.
The company has seen a see-sawing of strategy over the past year, however, which combined with some poorly-handled lay-offs of staff has won it some bad press (a poor culture a Culture Trip, they said).
The big business question is how the company will fare in trying to diversify its sources of revenues beyond the standard fare of advertising, affiliate deals and partnerships but creating an online travel agent.
Another question is whether it can maintain that level of traffic in a world where one Google or Facebook algorithm change can often make a huge difference to reader numbers.
The culture of Culture Trip
It’s also gearing up to play a far more central role in its customers’ lives once we’re all driving electric vehicles, generating energy at home with our solar panels and using smart meters — and need someone to help us manage that (more complicated) future.
There is competition from other players in this market; in the UK, there’s Ovo Energy (founded in 2009), in Spain, Holaluz (founded in 2010).
But Bulb has been growing far faster, and has more customers. The next big (and potentially dangerous) move for the company is international expansion into France, Spain and Texas. It has launched for “friends and family” in each of these markets. A full launch is planned in 2020. But can Bulb put a dent in the dominance of the incumbents in those markets as it has in the UK?
Bulb Energy: the fastest growing startup in the UK
Doctolib of France still remains the continent’s best-funded healthcare booking app, having raised a total of €237m, including a €150m round in 2019 which took the company to ‘unicorn’ status with a valuation of more than €1bn.
Docplanner’s funding round, which brings its overall funding to more than €130m, does not yet make it a unicorn, but the Warsaw-based company is rapidly catching up with its French rival.
“Doctolib may have raised more but we are happy with our round,” Peter Bialo, chief financial officer of Docplanner, tells Sifted. “Many of the countries we are in are much more affordable to work in [than Europe]. This will be adequate for us for two to three years.”
Docplanner has operations in Poland, Turkey, Italy, Spain, Mexico and Brazil, and has been focusing on rapid growth in Latin American markets over the last few years. It employs more than 1000 people.
Doctolib, meanwhile, employs 750 and has focused mainly on the French and more recently the German market. Bialo says that a period of consolidation is coming for healthcare booking apps: “At some point this will become a face-off.”
For investors, it will be key to watch who wins this battle.
Docplanner and Doctolib are heading for a face-off
Led by Erez Galonska, the idea is that consumers can actually pick fresh produce such as tomatoes or lettuce themselves, which has proved popular.
The company in June 2019 closed a $100m series B led by London VC Atomico with Balderton Capital, Astanor Ventures and Cherry Ventures also in the round.
It has already won deals with big supermarkets such as Casino, Intermarche and Auchan as well as Amazon fresh in Germany, Switzerland, and France – now it’s looking for more in the UK and the US and beyond.
The bigger picture here, says the company, is that eco-conscious consumers are increasingly going to want to get their fresh produce locally — and nothing is more local than having the actual farm itself in your nearest supermarket.
This at least is the vision of Lilium, the Munich-based startup making one of the world’s first all-electric vertical takeoff and landing (VTOL) jets.
The company is taking the kind of ‘jump jet’ technology that the military has been using for some time but making it cheaper, quieter and more eco-friendly by using electric engines.
Cofounder Daniel Wiegand has a huge vision, not building toys for rich people, but creating a global flying taxi service, accessible for everyone — a kind of ‘Uber of the skies’.
It has some big backers, including London-based VC Atomico, and after a $90m Series B funding round in 2017 has raised total capital of $100m (making it one of the best-capitalised companies in this space). Not only that, but rumours are that it is looking at raising a new $500m round.
But while money is coming in, turning a profit is still a long way off. Lilium is planning to be operational in several cities by 2025, although trial services will start earlier than this in several locations.
And the company’s ambitious plans to build not just a flying car but a flying taxi service will need huge amounts of capital. This is quite apart from the even bigger question of what the regulators are going to say.
Lilium’s flying taxi service: clear for takeoff?
It’s not glamorous. It’s an HR software company focused on simplifying payroll management, expense reports, as well as absences and leave of your employees. But it is the real deal.
The company started with the founders Firmin Zocchetto, Ghislain de Fontenay and Florian Fournier translating the ultra-complex French Labour Code into plain computer code and evolved from there.
The company now has more than 3,000 customers in France, Germany, Spain and the UK and is growing fast. In June 2019 the company raised a fresh €70m from Eurazeo and Bpifrance and plans to double its workforce by 2020.
Its big challenge for the company is that every move to a new European geography is hugely complex, having to understand a whole other labour code. But if they can do France, maybe can do anywhere?
It has won repeated investment from South African technology giant Naspers, who have been impressed by its rapid growth since 2009. Amazingly, in some countries such as Poland and Russia, more than 80% of students are on Brainly, according to the compmy. In the US it is 15-20%.
Students can go onto the Brainly platform to ask for help with homework questions, anything from how to work out an equation to advice on upcoming exams. Asking a question costs points, and users can earn more of these if they answer questions others have posted on the platform.
Michal Borkowski, Brainly’s cofounder and chief executive, tells Sifted that there is much more room to grow and they are aiming to reach 500m students. “There are more than one billion students in the world, and every student needs help with learning sometimes,” he says.
The question Brainly has to answer, however, is whether it can make money from its millions of users. The company has recently started experimenting with a freemium model in Poland and the US. This model has proved hard for others though. And Brainly is also up against some formidable firepower from US and Asian rivals.
Read more: Polish edtech company Brainly has 150m users – but can it make money? (https://sifted.eu/articles/brainly-polish-edtech-startup/)
So, for example, a teacher can make a simple quiz about rivers South America for a geography class. What’s startling about the company is not the technology, but the numbers: Kahoot! had 1.1bn players in more than 200 countries in 2018.
The startup has seen strong growth particularly in the last couple of years thanks to rapid user expansion in the US, which appears to have prompted entertainment giant Disney to take a 4% stake in the startup at a $376m valuation (shares of Kahoot are traded on the Norway OTC as an unlisted stock). Other investors are Microsoft, Nordic investor Northzone, and Creandum.
One big questions for the company is what will happen with the Disney relationship: will there be more Disney content on the platform, for instance?
Another question is how the two main business lines will develop, which is games for students and games for business users, and also how sales of its “premium” paid offerings will develop (particularly for businesses, where margins are potentially much higher).
The second quarter of 2019 saw a 300% increase in revenues from invoices to $2.3m, suggesting monetisation plans are heading in the right general direction.
On the back of this win, Alan started providing health insurance for employees of small companies, differentiating itself from the century-old industry giants such as Axa and Generali with a simple pricing structure and cheerful app.
Today it is seen as one of the most promising startups in France, targeting increasingly big companies and with a long-term mission to become a platform for a range of different healthcare services (for example, connecting people with doctors) and not just health insurance.
Alan has raised around €75m from the likes of Index Ventures and DST Global, and is seen as a potential future French unicorn.
Cofounder and chief executive Jean-Charles Samuelian told Sifted recently that he is pushing hard. “If we want to become the European champion of healthcare — becoming a gateway to the whole healthcare system — we need to be aggressive.”
One big question for the French startups is this though: can they begin to scale outside France? Another is: when will an insurance giant like Axa – with more or less limitlessly deep pockets – just snap them up?
4 questions for Alan cofounder Jean-Charles Samuelian
In 2018 the Swedish startup, which facilitates video calls to doctors or psychologists, raised €53m in a round was led by Index Ventures with Accel, Creandum and Project A. Then in early 2020 it raised $155m in a funding round led by Ontario Teachers’ Pension Plan to support plans for further expansion in Europe,
The idea is that the service saves everyone time: users put in their symptoms and then organise a call rather than going to the GP every time there is a problem. The company already provides nearly 2% of all GP visits in Sweden. Since the company was founded in 2015 it has completed more than 1.4m patient meetings.
The big question for the company, which operates in Sweden, Norway and Germany under its own name and in the United Kingdom and France under the name LIVI, is how the European expansion will go. It already has tough competition in this new space from the likes of Babylon Health (UK), Push Doctor (UK), Min Doktor (Sweden) and ViviDoctor (Belgium). There are also ongoing challenges of companies such as Kry working to disrupt such a sensitive and heavily-regulated sector such as healthcare.
Kry had net sales of 234 million Swedish crowns ($25 million) in 2018 and an operating loss of 256 million crowns.
The ‘femtech’ doctor on demand will see you now
Citymapper wants to do so much more than tell you the best way to get from A to B. In 2017, it also started running buses and a shared taxi service, with a plan to reinvent not just buses but also how transport systems are run. Citymapper was all set to become the brain of London’s enormously complex transport system (then the world’s).
But it did not really turn out like that. In summer 2019, Citymapper ended its shared taxi service. Instead, it is now focusing on selling a “subscription to mobility” — also known, in non-tech speak, as tickets. But investors are reportedly growing disillusioned with its inability to find a business model that works (and worried about Uber and Google’s moves in this space). 2020 could be a tough year for Citymapper.
What Citymapper did next
The fintech companies that provide the payment hardware and software can make a cut on each transaction and generally win pretty sticky customers, so competition is fierce in this lucrative market.
Three of the market leaders are Sweden’s iZettle, which was bought by PayPal last year, Silicon Valley’s Square and SumUp in the UK.
Of the three BBVA-backed SumUp has the lowest valuation ($1bn compared to $26bn for the listed Square and $2.2bn for iZettle at the time of acquisition) but it is still a big UK fintech.
Since it was founded in 2011 SumUp has successfully expanded into 31 markets and has over 1m customers, helped by a merger with Rocket Internet’s Payleven in 2016.
SumUp claims more than $200m of annual revenue and has recently made several acquisitions, including Danish company Debitoor and “multi-channel” e-commerce platform Shoplo.
SumUp now also does invoicing, bookkeeping, third-party integrations of payments and more. The big question is how long it can remain independent and if it can keep fighting with the bigger rivals.
The company issues company cards, with accompanying software, which allows both employees and managers to automatically match receipts and track all company spending in real-time.
With the company cards all connected to the same Pleo account, employees don’t need to charge expenses to their own credit cards and then claim back from the company.
Led by Jeppe Rindom, the company raised a $56m series B round in May 2019 and has backers such as Swedish investors Kinnevik and Creandum as well as the American private equity firm Stripes.
With the money, the company is set to increase its speed of growth in Europe, more than doubling its headcount, and add on other services such as credit, invoices, a vendor marketplace and open up for reclaiming VAT.
The company does not really see itself as a fintech, saying it has more in common with communication tools such as Slack, Asana, and Trello rather than with fintech companies such as Tink or Klarna.
Pleo: “We don’t see ourselves as a fintech company” (https://sifted.eu/articles/we-dont-see-ourselves-as-a-fintech-company/)
The startup, which targets middle-income shoppers and is the first to offer free delivery in the Netherlands, has since taken more than 10% of the online shopping market and is hiring aggressively and expanding into new markets.
In 2019 the company said spending on growth had meant that its losses had blown out from €5.8m in 2016 to €45.5m a year later. Turnover, however, had doubled to €200m. The big question is where the company goes next, and if it can roll out across other European markets.
Amsterdam tech companies create more jobs than any other sector
København K, Denmark
La Courneuve, France
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