Good morning Sifted reader,

On the agenda today we dig into how VCs really feel about the funding market in Europe right now, break down where oil and gas giants are investing their money and chat to the Estonian founders on a mission to save forests.

Plus...

A big week for schmoozing in la French Tech
Which European VCs are raising right now?
Selling SVB to HSBC was the "wrong decision" says OakNorth CEO

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“They are living in cuckoo land.” Founders who think the fundraising landscape will start looking sunnier soon might need a dose of reality, say the 100+ investors who responded to a new Sifted survey on the state of the funding market in Europe.

44% said the fundraising landscape for startups will either remain unchanged or get worse in the next six months.
Only a third expect to do more deals in the next six months.
Two thirds said valuations were lower compared to six months ago; just under a third said they were unchanged.

Things aren’t rosy for investors either.

More than half said that it was a bad time to be trying to raise money as a VC — 14% went so far as to say the situation was “very bad”.
More than one respondent said it was a myth that there is a lot of dry powder — or money waiting to be invested — kicking about.

On the (slightly) more optimistic side:

Over half expect M&A activity of VC-backed companies to increase (although how often that would mark a great outcome for a founder or investor is debatable).
41% expect they’ll do about the same number of investments in the next half year — although 17% think they’ll write fewer cheques…

🩺 A good day for healthtech raises:

CMR Surgical, a British robotics unicorn, has raised $165m from existing investors SoftBank and Tencent. The company sells robotics systems — which help surgeons perform operations to treat cancer and bowel disease — to hospitals.
Corti, a Danish startup building a generative AI tool for doctors and nurses, has raised a $60m Series B led by Atomico and Prosus Ventures. It plans to user the cash to focus on global expansion, beginning with the US.

💰 Sifted's caught wind of three major funds raising right now.

🇩🇪 The Bonn-based startup that made it into the big leagues. Andrè Christ sold his company LeanIX — which helps enterprises track their IT architecture — to software giant SAP earlier this month.

Though he won't say exactly how much he took home, the deal is worth an estimated $1.2bn.
That makes it the biggest in German tech history — and tops Dr Oetker’s acquisition of on-demand beverage delivery company Flaschenpost for $1bn in 2020.
But with LeanIX upping its revenue to just shy of €100m this year, expanding headcount to 600 people and cracking America early on in its journey, why did it sell?

🤺 ChatGPT beater? Google DeepMind is reportedly close to releasing a new AI model. It's been designed using techniques from AlphaGo — the company’s AI system that famously beat a champion player at the board game Go in 2016 — and could topple ChatGPT's dominance.

🌳 “Forests are probably the closest thing to religion we have" — and that's why a bunch of Estonian startups are on a mission to save them. From putting forests on blockchain to creating a digital twin of the whole planet, Sifted's Zosia Wanat went down to the woods to find out more.

🏦 Selling SVB to HSBC was the "wrong decision" says OakNorth CEO. The head of one of Europe’s rare profitable unicorns tells Sifted that his company bid “100 times more” than HSBC for SVB, but still lost out to the bank — which he reckons is too big to properly support high-growth companies.

🤝 Special purpose vehicles 101. Angels, VCs and even LPs use them — but how do they work?

🇺🇸 Want to expand into the US or Canada? This region could give you the most value. (Sponsored by Invest Alberta)

It’s been a big week for schmoozing in la French Tech.

Nearly 2,000 suited and booted LPs and investors spent the first part of the week mingling in Paris’s Tuileries Garden at IPEM’s (International Private Equity Market) annual gathering.
After the comedown from several years of foie gras funding, the talk of the town was venture capital’s “fall from grace” — and a reminder that loss rates are at historic highs and LPs are rethinking their fund allocation for high-risk investments.

Then came France Digitale Day — the annual gathering of the who’s who of French tech.

Among music parades, popcorn machines and live karaoke at the somewhat eccentric venue — the Fairground Museum — EU Competition Commissioner Margrethe Vestager made an appearance to tell founders they rock.
On everyone’s lips was also the story of the year: French engineers are finally returning from the US and launching AI startups in Paris.
Amid the optimism you’d hardly know that outside the museum’s doors a record number of French startups are selling up on the cheap — or that tech funding in the country has nosedived 61% so far this year, compared to last.

“Entrepreneurs wouldn’t be entrepreneurs if they didn’t dream,” one investor said. But as a panel on selling to the public and private sectors was halted by a marching band featuring mysterious figures on stilts, I couldn't help but think: How much longer will we keep dreaming?

— Daphne, French tech reporter

2022 saw oil and gas giants Saudi Aramco, Chevron, Equinor, Shell, BP and TotalEnergies make 29 investments into European startups (the same six companies made 30 investments into US startups during the same time period). So far this year there have been 19 rounds involving oil and gas CVC investment.

Collectively the group has closed around 200 deals since the first investment Sifted could find, in 2009.
A quarter of those deals are in industrial tech for the existing oil and gas industry.
14 deals (7% of the total) went to carbon capture and storage startups.
Just 11 deals (5.5% of the total) went to companies working on renewable energy technology.

Sifted Summit is just around the corner

Less than two weeks left until the Sifted Summit! Grab your ticket now to mingle with 3,000 of startup Europe’s most innovative founders, investors and operators. With so many networking opportunities going on over the two days — via meetups, roundtables, workshops, an afterparty and the option to book meetings with all attendees via the Sifted Summit App — you can’t afford to miss out!

Get your ticket today

🔥🔥

Dutch AI upskilling coach developer Lepaya has raised $38m in Series C funding. Investors included Endeit, Target Global and Mediahuis Ventures.
Germany's Fernride, which provides an automation solution for the truck industry, has added $19m to its Series A funding, bringing the total round to $50m. Germany's DeepTech and Climate Fonds, Munich Re Ventures and Bayern Kapital were among the investors.
KYP.ai, a German SaaS startup offering workplace productivity insights, has secured a €17.5m Series A led by OTB Ventures, with 42CAP and Tola Capital chipping in.

🔥

Oxford University spinout Navenio, which offers a hospital patient and staff tracking platform, has raised $6.3m in Series A funding led by Oxford Science Enterprises.
German digital health startup HelloBetter, which provides therapy courses, has raised €5m from HSBC Asset Management.
Role-playing video game developer Spectarium, based in Finland, has raised a €5m seed round.
Mobile game platform Rocky Road Games, based in Iceland, has drummed up $3m in seed funding led by Luminar Ventures.
UK-based Renew Risk, which offers risk modelling and analytics for things like offshore wind farms, has raised £1.7m in seed funding.
Ireland's Kayna, which provides embedded insurance infrastructure, has raised €1m in pre-seed funding from Delta Partners and MiddleGame Ventures.

If you’d like to submit a deal, get in touch.

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