Sifted - Aleph Alpha raises $500m 🔥

Good morning there,

Fintech hasn't had its funnest year — but perhaps the tables are turning. Klarna's reported its first quarterly profit in four years, Monzo's reportedly in talks to raise a big new round via a share sale and three veteran fintech bosses are setting up a new wealthtech platform. 

To keep up to date with all the latest twists and turns in Europe's once (and perhaps once again) sexiest sector, sign up to our weekly Fintech newsletter.

— Amy Lewin, editor

🤖 Germany’s answer to OpenAI raises $500m. Aleph Alpha, which

builds large language models (LLMs) similar to OpenAI’s GPT-4, has closed one of Europe’s biggest AI rounds ever. 

• The round was led by a group of seven new investors including the Innovation Park Artificial Intelligence (Ipai), based in Heilbronn, Bosch Ventures and SAP, among others. US investors were (deliberately) few and far between.

🛍 Klarna sets up holding company — and posts profits. Swedish buy now, pay later giant Klarna reported a pre-tax profit of SEK 90m ($8.3m) in the third quarter of 2023, its first profitable quarter since Q2 2019.

• It comes after reports that Klarna has set up a holding company in the UK ahead of a possible IPO (most likely in the US).
• Shares in Klarna CEO Sebastian Siemiatkowski’s listed trading company, Flat Capital, rose by over 9% on Monday. 

🇧🇬 From pitching to politics. We can expect an innovation push from Sofia: Vassil Terziev, Bulgaria’s most active startup investor, has been elected the capital's next mayor. 

• Terziev is one of Bulgaria’s best-known entrepreneurs: he’s a cofounder of Telerik (the biggest exit in Bulgaria to date — $262.5m) and the first angel investor in the unicorn fintech Payhawk. He was also a managing partner at Eleven Ventures. The Recursive has more here. 

10x more money goes to VC funds owned by all-male vs all-female teams

The gender funding gap problem isn't just affecting female founders: a new report from Ada Ventures, Diversity VC and Google Cloud has found that female VCs are struggling to raise, too.

• In the UK, all-male owned VC funds raised around 10 times more capital than all-female owned funds — and almost five times more capital than mixed-gender owned funds — between 2017 and 2023. 
• So, of the £6.6bn raised by UK-based VCs since 2017, just £462.5m was raised by all-female owned funds. 
• Plus, the report found that just 23 women in the UK have a significant stake (owning over a quarter of the company) in a VC firm. 

So you want to run a green startup?

As climate tech rapidly grows, reaching a record $70.1bn in funding last year, there are plenty of differing opinions on how to build a startup in the sector. To cut through the noise, we asked sustainability founders, investors and operators for their best advice.

Read it in our latest report

💡 A Swedish startup wants to ‘stream energy' on electric roads, charging cars as they drive.

• A team of Swedish engineers are working on tech which could — if it can scale up — mean a paradigm shift in the way we drive our cars. Lund-based Elonroad is retrofitting roads to charge cars as they drive along them (think of it like a giant Scalextric).
• “We can stream energy, the same way we're streaming music,” says the company’s CEO, meaning batteries wouldn’t need as much capacity, potentially cutting the costs of cars, and removing the need for curbside charging infrastructure.

💬 "If governments want to help startups, they should stop being such terrible customers." A rise in public funding of tech startups across Europe is a "noble gesture," says cofounder and general partner at Project A Ventures, Uwe Horstmann — but what startups really need is for public bodies to actually use the technologies they fund and enable. 

🌳 How to scale a climate tech — with a corporate (sponsored by Founders Intelligence)

⛽️ Why these startups are betting on biofuel (sponsored by New Energy Challenge)

• German devtools startup Langfuse raised a $4m seed from Lightspeed, La Famiglia and Y Combinator.
• London-based Prosper, a new wealthtech platform from three serial fintech execs, has raised a £3.2m angel round from fellow fintech founders like Monzo's Tom Blomfield, plus Connect, MMC Ventures and Portfolio Ventures. Nick Perrett and Ricky Knox of Tandem, and Phil Bungey of Nutmeg are the founding team.
• Paris-based mobile gaming developer startup TapNation raised €15m from Re-Sources Capital and Paluel-Marmont Capital.
• Estonia's Raiku, which produces compostable packaging to substitute single-use plastic packaging, raised €5.65m from the European Innovation Council and others. 
• Italy-based Dreamfarm raised €5m for its nut-based alt cheese products.
• French pay-by-the-mile car insurance provider Flitter has bagged a €3.5m seed led by Swiss insurer Helvetia. 
• Ensol, a French startup which makes photovoltaic equipment for households to capture solar energy, has raised €3m from Otium Capital. 

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