Sifted - Are founders overreacting to AI Act? 🤔

Good morning Sifted reader,

When the cofounder of Berlin-based startup Babbel told people he wanted to move his startup to the US, he was warned about the most common mistakes Europeans make when expanding stateside. He made them all. 

In the end, the only way Thomas Holl made it work was to pack his bags and fly to New York himself. A decade on, and Babbel is thriving there. 

In the third instalment of Sifted's series on expanding to the US, we asked founders what mistakes they made when hiring in the US. 

Elsewhere, the UK is gearing up for its AI summit this week. Sifted's own Cristina Gallardo and Tim Smith will be there. 

— Orlando Crowcroft, commissioning editor

A MESSAGE FROM OUR SPONSOR PAPAYA GLOBAL

Has the fintech bubble burst?

For over a decade, fintech went up like a rocket. But in 2022, a drop in tech valuations has pushed investors to do some soul searching. Our latest report takes a look at the bright spots in Europe’s fintech sector, including those helping CFOs navigate the downturn.

🇸🇪 Klarna will outsource 500 jobs in customer services and operations, affecting workers in Australia, Finland, Germany, Italy, Netherlands, Norway, Spain, Sweden, the UK and the US, people familiar with the changes told Sifted. "A lot of the questions that we have remained unanswered. There is a lot of uncertainty," one employee affected by the process told Sifted.

🏥 Healthtech startup Manual was selling Ozempic for weight loss more than a week after the UK government banned off-label sales of the drug. Sifted was able to order Ozempic via the Manual website on October 26, despite an October 18 deadline for stopping sales for weight loss. Health officials imposed the ban over fears that a shortage could mean diabetics would not be able to access it. 

💪 Elon Musk has told staff at X that he sees both YouTube and LinkedIn as future competitors as the company branches out into hiring and video. Speaking at an all-hands to mark one year since Musk bought the company, he and CEO Linda Yaccarino also spoke about the billionaire's ambition to turn X into a superapp, that also allows payments. 

❌ Two more senior executives have left Stability AI, Bloomberg reported on Friday. Adam Avrunin, Stability's general counsel, and Ozden Onder, its chief people officer, left the company in October. It comes after Sifted reported in August on a mass exodus of talent at the company.

🇬🇧 LocalGlobe, Index Ventures and Passion Capital top list of best unicorn-backing VCs in the UK. The ranking was put together by data platform Dealroom and scored investors based on the number of unicorns and future unicorns in their portfolio.

🇫🇷 Christmas has come early (again) for French startups. Thanks to new budget laws, an extra €500m of funding per year is expected to be injected into French startups via a tax break for those investing in them. On the latest episode of the Sifted Podcast we spoke to entrepreneurs about the new rules. We also discussed why we shouldn't be scared of quantum computing and the new founder to reality star pipeline in Poland. 

🎤 How do you create great content for your event? Sifted's events and editorial teams share their best tips.

🇪🇺 EU chief takes up invite to UK AI Safety Summit. European Commission president Ursula von der Leyen will attend the November 1-2 AI Safety Summit organised by the UK, according to an update of her official calendar. Neither US president Joe Biden nor German chancellor Olaf Scholz are expected to take part. Von der Leyen will travel with Commission vice president Věra Jourová.

In the latest installation of our series on European startups expanding to the US, founders break down 10 things not to do when hiring staff, including: 

• Don't ignore the salary gap — salaries in the US are as much as two to three times higher than elsewhere, so make sure it is a cost you can bear. 
• Don't hire the same way as in Europe — one founder tells Sifted that his failure to dig very, very deep into one person's resume resulted in him hiring someone who proved to be "a total train wreck". 
• Don't forget about time zones — one founder describes the nine-hour timezone between Berlin and the US as "totally unsustainable." 

Read the rest of our series: Expanding to the US 101 | The rather unimpressive track record of European fintechs looking to go stateside.

Unlock the best of Sifted

Source vital market intelligence on startup Europe with exclusive insights you won’t find anywhere else. Track hot topic trends, identify up-and-coming startups and stay on top of the latest market developments.

👩‍🏫 Edtech was in a different stratosphere during the pandemic years of 2020 and 2021, as the demand for remote learning skyrocketed and VC cash flowed. But as that unique window of enforced home learning has now closed, B2B edtech founders have had to look elsewhere for business.

• But despite deal count and deal size dropping this year, big deals are still happening, our latest Pro briefing shows.
• Greek/UK startup Hack The Box, which offers cybersecurity training to companies, bagged a $55m Series B in January. And in July, Goldman Sachs scooped up Oslo-based edtech Kahoot! — one of the region’s biggest edtechs — in a deal worth close to $2bn.

Have a job to fill?

Fancy getting your jobs in front of Sifted’s highly engaged readership? Job listings start at £249. Sign up here.

🔥🔥

• Twinco Capital, a Spanish startup offering supply chain finance solutions, secured €50m in debt from BBVA Spark.

🔥

• Madrid-based Shakers, an AI-powered recruiting startup, raised a €6m seed round from Brighteye Ventures, Adevinta Ventures and Athos Capital.
  
  
• Munich-based startup Mybacs raised a €5.6m Series A to expand its probiotics products.

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

There are plenty of ways to get your fix. 

• Sign up to our specialist newsletters if you want more on: fintech, climate tech, startup life, VC.
• Tune in to Sifted’s weekly podcast, Startup Europe.
• Join Sifted's journalists for live Sifted Talks with industry experts, diving into the biggest questions facing startup Europe.
• Access investment-grade research on the hottest sectors, rising stars and success stories from across European tech by subscribing to Sifted Pro.