Sifted - The 5 virtues of VC

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Investors, how is it going with your LPs right now? We want to know. 

Please take the time to fill in our survey — anonymously, of course — and let us know how things are looking in VC land.

Fintech unwrapped 4.0 — our latest report

From the unmistakable 2023 trends — think startups helping CFOs navigate the downturn — to the sectors VCs are excited for, our new fintech report explores them all.

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Italians are bringing their tech chops back home

When Italian entrepreneur Riccardo Zacconi cofounded King.com — maker of the wildly popular Candy Crush mobile game — in 2003, it wasn’t in Italy, but the UK.

Then in 2017 — two years after selling his company to US gaming giant Activision Blizzard for $5.9bn — he was scathing about the ability of Italian startups to expand internationally. “If only it were possible to ‘think globally’ in Italy, many more startups would be successful,” he told business think tank Ambrosetti Club.

The country also lags behind its European peers when it comes to funding. Despite being the world's 10th largest economy, Italy doesn’t make the top 20 European countries for capital invested in startups.

But, as I reported recently, there are signs this is slowly starting to change.

More private money is being put aside for domestic tech, while more Italians are heading home to start tech companies — many of them having already succeeded with a venture before. 

From Qomodo, which recently raised one of Italy's biggest ever pre-seed funding rounds, to JetHR, Italy's serial founders are starting to make waves in the old country. 

— Amy O'Brien, reporter

👩🏽‍⚕️ Medical startup Doctorly has raised a €7.2m Series A extension, just eight months after its $10m Series A.

• Its lead investor, VC Simon Capital, is backed by the family office of the Bitburger Group, among others, and was formerly known as Bitburger Ventures —the German company confirmed that half the funds for the round came from family offices.
• Doctorly founder Samir El-Alami says it has been a struggle to raise from VCs over the years as a healthtech company — and that this round was no different. “If you’re a regulated healthtech startup the [Series A stage] is just the beginning for you — but it's the middle for VCs,” he tells Sifted. 

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Don’t get left behind

👌 "A common misconception is that VCs are arrogant, but I think that’s because people confuse candour for meanness," says Johannes Weber, as he lays out the five virtues of VC in a response to Elena Mazhuha's 'five deadly sins of VC', which caused a stir last month. 

📃 How do you launch a direct-to-consumer (D2C) product in a regulated market? George Thomas, chief product officer at fertility startup Béa Fertility, has this and all your other D2C questions answered. His advice?

• Understand the regulations that apply to your product, your industry and your target market. 
• Consult either an in-house expert or a consultant who has experience in your specific sector.
• Work on your go-to-market timeline. 
• Give yourself some space: regulatory testing can take time.

Looking at an exit? Private equity wants your startup.

For a long time the only way VC-backed companies could exit was 1) M&A, and 2) an IPO. The former accounted for 75% of exits before 2010, the latter 17%. That's no longer the case, according to a new report from investment bank Clipperton — the new hot trend is VC-to-PE.

• Exits to private equity firms surged from 8% of all exits for VC-funded companies between 2006 and 2010 to 24% between 2021 and 2023. 

SaaS' annus horribilis continues 

Despite GenAI giving the software-as-a-service (SaaS) sector a funding boost this year, it has been a rough 12 months for SaaS startups.   

• SaaS companies saw their annual revenue growth rate fall to just 8.4% in September this year, down from 60% in Q1 2022, according to a new survey from venture firm OpenView and payments provider Paddle.
• Smaller Saas providers have been hit hardest, with median year on year revenue growth down 26% at companies with between $5m-20m ARR.
• It hasn't been easy for public companies either: revenue growth is down 16% over the last 12 months. 
• Go-to-market execution is also a source of anxiety — 73% of founders said it is keeping them up at night.

• CAST AI, which uses AI to help companies control their cloud spend, has raised $35m in a Series B round.
• Synthetic biology platform Octarine Bio has secured €4.35m in a round led by Unconventional Ventures with Óskare Capital and The Footprint Firm.
• GreyScout, the online brand protection SaaS platform, has raised €3.5m. 
• Insurtech Insly has secured £1.5m in venture debt funding from Hambro Perks. 
• Krakow-based LiveKid has raised €3.14m to expand its kindergarten platform to Latin America.
• SpinDrive, a Finnish company providing active magnetic bearings for original equipment manufacturers (OEMs), has secured €3.8m in Series A funding led by Rhapsody Venture Partners.
• Diesta, a London-based insurtech startup, has announced a $1.9m seed funding round. 

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