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Hi Sifted reader,

The slowdown is here. Prepare 18 months of runway. Cut costs. This is the advice founders are being fed by VCs in the current climate, but is it what they really need to get through a bumpy market? Find that in today's issue, plus…

• Meet Europe's newest VC funds

• Does Checkout.com’s $40bn valuation still stack up?

• How can startups help employees through the cost of living crisis?

— Sophie, writer & Eleanor, deputy editor

VC has long been full of familiar faces. But (despite the recent slowdown) the success of big funds in recent years has encouraged a whole new crop of money-movers to enter the world of startup investment.

€2bn of the €12bn in fresh capital raised by VCs in Europe between January and June 2022 was raised by first-time fund managers or a new specialist fund from an established VC. 

So, could one of these funds be your next investor?

Once upon a time Klarna was Europe’s most valuable private tech company. But after its valuation was slashed to $6.7bn last week, that crown has passed to Checkout.com.

The company was last valued at $40bn after raising $1bn in January, and similar companies — such as Stripe and Adyen — were also flying high. But surging inflation rates mean consumer spending could soon decline, which could cast a rainy spell on the company’s fortunes.

So does its valuation still stack up?

VCs have recently been piling on founders with their hot takes on the tech slowdown and economic uncertainty — but that’s not what they actually need, writes Lago CEO Anh-Tho Chuong Degroote.

Founders need to shut out distractions and focus on the business fundamentals — and this is where VCs can step in to help.

So how you can best support your portfolio companies?

From first customers to solid marketing strategies, launching a product is no mean feat — and preparation is key. We’ve created a how to — a tech bible if you will — for startup success.

Hear from the experts.

As the cost of living continues to skyrocket, wellbeing startup Juno has found employees are increasingly relying on company benefits to pay for essential items such as food, utilities and childcare.

So here's the big question: How can startups balance extending runway and supporting employees through this difficult period?

Here’s some things other companies are doing to support staff.

Running or working at a startup can be really tricky, and it's often difficult to know who to turn to for advice when things go wrong.

That's why we've set up the Dear Sifted series, where founders or startup operators write to us with their biggest concerns — totally anonymously. We'll then pick a handful to feature, and matchmake the problem with three industry experts.

🥭 Passionfruit raises $3.6m in seed round. Firstminute capital co-led the round with Playfair, and early executives and founders from the likes of Airbnb, Deliveroo and Stripe also participated. For now the freelancer platform helpes match marketing specialists with gigs, but it plans to roll its platform out to adjacent careers such as product managers, management consultants and financial consultants.  

🏠 Casavo raises €400m Series D to expand into France. The Milan-based proptech has been growing in Italy and Spain, where its dynamic pricing tech has helped the company quickly snap up lots of old properties and refurbish them for a profit. Its latest round was split between €100m equity funding and €300m debt, and the company hopes to use the cash to double its headcount and expand into new countries.

⚒️ Seabery announces its first equity investment round. The Andalusian company has just raised an undisclosed sum from Seaya Andromeda and the Spain Oman Private Equity Fund. The startup uses AR to create a simulated environment for trainee welders to learn how to... well, weld. The company is looking to use the funding to accelerate growth in the Asia-Pacific region.

📉 SellerX announces layoffs. The Berlin-based Amazon aggregator has cut 28 jobs, and the sector is looking increasingly fragile as cut-throat competition has left companies struggling to turn a profit. Other aggregators — such as Thrasio, Heroes and Dwarfs — have also cut staff numbers in recent months.

🚗 Zego lays off 17% of its staff. Last week, the commercial motor insurance company announced cuts to its headcount as a last resort due to the wider economic uncertainty and an increase in costs. It's far from the only European tech company making significant layoffs.

👩‍⚕️ French biotech Healshape raises €6m. The company specialises in developing 3D-printed bio prosthetics for breast reconstruction and augmentation. The startup is one of several French femtechs looking to shake up France's medical system. Its latest round was led by Go Capital and Demeter, and it intends to use the funding to accelerate product development.

🌱 Could fermentation tech help feed the planet as current agricultural systems struggle to meet demand?

🔼 How can startups scale sustainably in an economic downturn? Here’s what you should be doing, according to the experts. (Sponsored by Scede.)

Sophie Zhang

Editorial Assistant

Get in touch with them at sophiezhang@sifted.eu

Eleanor Warnock

Deputy Editor 

Get in touch with her at eleanor@sifted.eu
Or tweeting at @misssaxbys

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