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Hi Sifted Reader,

This week layoffs have begun to hit Europe’s shores. BNPL giant Klarna, speedy grocery delivery company Gorillas and digital health scaleup Kry have all announced cuts, with more expected to follow — we report the latest. Plus…

• Will Klarna and its rivals survive the downturn?
• The top UK startups to watch in 2022
• Why you need diverse cap tables

— Sophie, editorial assistant & Tom, digital editor

This week BNPL giant Klarna announced it was laying off 10% of its staff — and that its pre-tax losses tripled to $250m during the first quarter of 2022. 

It is a worrying sign of how exposed one of investors’ — and consumers’ — most beloved innovations of the past decade is to macroeconomic headwinds.

So what does the future hold for Klarna and its BNPL rivals?

Fancy €100k, free Amazon strategic support and a snazzy trophy? If you’re a small to medium business selling an innovative physical product, apply for the Amazon Launchpad Innovation Awards for your chance to win prizes that could boost your startup's growth. Entries close May 29 and some restrictions apply.

The UK is a European tech powerhouse. Its 48 unicorns and more than 40k startups receive the most funding of any country in Europe, and in 2021 London was the fourth-most active tech city in the world.  

Last year Scotland also received 67% more VC money than it had the year before, in a sign that there are growing opportunities outside of England’s dominant capital. 

So which are the UK’s startups to watch in 2022?

Traditionally, founders and employees who owned stocks in their startup couldn’t turn their equity into cash until their company was sold or went public.

But that's slowly changing in Europe with the rise of secondaries, which see employees cash in some of their equity long before their startup exits.

So why are secondaries becoming more common?

The cloud is becoming an increasingly popular way for startups to scale operations as they grow. 

But choosing the right cloud infrastructure can be difficult, especially for founders who are tight on time and money.

Here's how to get started with the cloud.

According to data platform Beauhurst, at seed and growth-stage companies in the UK a measly 20% of shareholders are women.

And although some startups like jobs platform Flexa and legal platform Valla have recently raised rounds that feature a diverse set of investors, they're outliers.

So why are diverse cap tables a rarity?

💳 Klarna fires 10% of its team. The Swedish BNPL giant is set to make significant cuts to its headcount, according to a recent announcement by CEO Sebastian Siemiatkowski. Amid a valuation crunch and a global economic downturn, the CEO says the company needs to double down and focus on its core business. 

🛒 Gorillas fires half its employees at HQ. The speedy grocery delivery startup has halved its headcount at its Berlin headquarters to lower costs while it raises additional funding. The company will pull out of Italy, Spain, Denmark and Belgium, and plans to focus its energy on creating revenue in its five core markets: Germany, France, UK, Netherlands and the US. 

🧠 French mental health startup raises €15m Series A. Moka.care, a French startup that offers a platform that connects employees to therapists and coaches, has raised a $15m Series A led by Left Lane Capital. The round also attracted backing from VCs and celebrities alike, including three famous French sportsmen: Blaise Matuidi, Antoine Griezmann and Antoine Dupont.

🌍 Sequoia announces Arc accelerator cohort. Earlier this week, the VC launched its first startup accelerator programme, Arc. Seventeen companies and 33 founders have been selected to participate in the eight-week course, during which they will learn how to build enduring businesses from some of Europe’s top founders and operators.

🏦 Smart locker startup Budbee raises $40m to extend bank loans. The Swedish last-mile delivery company has just raised a $40m round from existing investors Kinnevik, H&M and CNI Nordics, as well as employees. It needed the cash to extend and increase the size of the bank loans it's been using to scale.

Preparing for your Series A can mean more than just chunky cheques and bold bets. Join us at 12:30 BST today we hear how the experts cut through the BS to enter their next phase of growth.

Register to attend.

📺 Sifted’s Future Proof newsletter writer Alejandro Tauber explores how the Flemish public broadcaster VRT became a media powerhouse. 

🌿 Sifted’s climate tech reporter Freya Pratty speaks to Tove Larsson, general partner at Norrsken, about why VCs need to invest in more climate hardware.

🤔 Partner at Frontline Ventures Finn Murphy looks into the end of massive funding and rapid tech growth, and asks, should VCs have known better?

💶 Sifted’s Eleanor Warnock reports on a new survey of 34 VCs that looks into whether they are still investing in Europe, and what’s happening to valuations.

🧐 Tech layoffs have begun to hit Europe — here are the startups letting go of their employees. 

💬 The “war for talent” is an opportunity for scaleups — not a problem. Here’s how to compete with Big Tech for talent. (In partnership with Forme Partners)

Sophie Zhang

Editorial Assistant

Get in touch with them at sophiezhang@sifted.eu

Tom Nugent

Digital Editor 

Get in touch with him at tomnugent@sifted.eu
Or tweeting at @TJNugent92

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