Good morning Sifted reader,

Last week presented us with a textbook case of startup ethics. Mistral, the much-hyped French AI startup, released its first large language model (LLM).

The internet was quick to point out that Mistral's model was, unlike equivalent models from some of the tech giants, extremely helpful — if you're looking for instructions on how to make a bomb, that is.

The company raised €105m when it was four weeks old, and released a model when it was four months old.

Dare I say, that's perhaps a little too fast?

AI isn't much regulated — yet — but this is exactly why it needs to be. What's remarkable, as one AI safety researcher pointed out to us, is that a company so in the spotlight didn't take the time to fine-tune its model, or build any moderation mechanisms.

With large amounts of investor cash should, I think, come great responsibility.

– Amy, editor

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😔 Diversity VC is no more. The community, which aims to promote diversity in VC, is pausing its operations in the UK, it told followers in an email last week. "Unfortunately the current funding and economic environment is such that we have to pause some of Diversity VC’s activity going into the future. We want to thank our sponsors, who have tried to continue, but have had to make tough decisions," reads the email.

🕵️‍♀️ The UK financial regulator is preparing to launch a review of private market valuations, reports the FT. For VCs, that could mean a whole lot of paperwork; most investors use the valuation a company attracted at its last funding round — unless a market has dramatically taken a turn for the worse, or the better (ie. the travel industry during Covid).

🏗️ AI Clearing, a Poland-born construction tech startup, has raised a $14m Series A — and signed a deal with the biggest construction site in the world.

🦜 VCs on Twitter (sorry, X) had a lot to say about Invest Europe's finding that European VCs outperform their US counterparts over five and ten-year time frames.

"I think this is unpossible 🤨" — Bessemer's Alex Ferrara
"VC is not a game of averages" — Lightbird's Thomas Meier
"IMO this is more about amount of $$$ in US venture and lack of price discipline than it is about EU venture. More important comparison is where the bulk of realized unicorns have come from (companies actually going public and holding their value)" — Expa's Dylan Itzikowitz
"You can pick this apart but reality is EU VC is and has been much more capital efficient than US VC for a long time. The critique was always size of outcome, then came Spotify, Adyen, ARM, Supercell, etc... US top decile stop outperforms EU top decile, but directionally the point here is EU venture is playing in the same league now as US." — Lightspeed's Paul Murphy

🤼 How to manage your managers. Too many founders forget that if managers in their team are struggling, it's probably their fault, not their employees'.

Do you ever find yourself saying, 'Don't worry, it'll be quicker if I just do it'?
Do the same problems crop up time and time again?
Are managers finding it hard to work together?

Then you're probably not managing your managers.

🎨 Do you need a chief design officer? The case for hiring one early.

🏃 Are we entering an era of lean unicorns? When investors were pumping cash into startups, hiring a few dozen new people was no big deal. But now that all eyes are on the bottom line, startups are increasingly finding ways to decrease their human costs.

🇬🇧 London calling: Why the city remains a major international hub for VC investment (sponsored by Latham & Watkins)

🍔 Foodtech’s next frontier: Healthy processed foods (sponsored by ECBF)

There are at least 80 early-stage startups working on spacetech in Europe — and almost a quarter of them (18) have been backed by the European Space Agency. A further 11 have received funding from the European Innovation Council.

Accelerators based all over the continent are also active investors in Europe's spacetech scene — as we show in our latest Sifted Briefing.

They're supporting startups doing everything from satellite manufacturing to launcher technology, which we map out here.

🇬🇧 The whole team of Sifted journalists (17 and counting...) will be at the Sifted Summit in London THIS Wednesday and Thursday. Hundreds of founders, investors and operators from across startup Europe have registered over the past week. Grab one of the last remaining tickets today!

🧩 For those of you struggling to find product-market fit, join our Sifted Talks on October 18. Hear advice from a serial entrepreneur, seasoned product operator and unicorn founder. RSVP — it's free!

💊 And if you're an investor interested in healthtech, join our next Pitch event on October 24, exclusively for Sifted Pro subscribers. We'll showcase some healthtech startups in fine fettle looking for funding in Q4.

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🔥🔥

British neobank Perenna has netted $52m from Silverstripe Investment Management — backers of competitor Zopa.
Oxford-based Sitryx, which is developing therapeutics for chronic autoimmune and inflammatory diseases, has announced a £32m raise, which includes new investor Oxford Sciences Enterprises.
Mobility provider SIXT has backed German chauffeur service startup Blacklane to the tune of €33.9m. The partnership will see Blacklane's services integrated into the SIXT app.
German supply chain and ESG platform osapiens has raised €25m from Armira Growth.
Kranus Health, which offers digital therapy for erecticle dysfunction, has raised a $15m Series A extension.

🔥

Austrian smart grid power and voltage sensor startup Greenwood Power has received €5.1m from eQventure and tecnet equity.
Techbio Eagle Genomics, based in Cambridge, has raised a further £3m for its microbiome research platform, from investors including the Environmental Technologies Fund and abrdn plc.

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

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