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⌨️ Former Google CEO Eric Schmidt is funding a new €300m French AI lab — but he’s worried about Brussels.

• The non-profit AI lab based in Paris will carry out open research in the field of foundational AI models. It was announced by French billionaire Xavier Niel last September, and has a six-person all-male founding team. Melty face. 
• Schmidt is clearly schmitten with France — “it’s obvious France should be a leader in this space,” he said at the first edition of a new AI event, ai-Pulse, at Station F on Friday — but less so with the EU. “The maths and technical talent in France are world-class. The problem is you’re stuck with Brussels.”
• The 1,000+ attendees of the event (who included employees from the crème de la crème of French AI startups, including Mistral, Nabla, PhotoRoom and Poolside) were also treated to a video from president Emmanuel Macron, ever a fan of tech, and lunch supplied by eccentric restaurant chain Big Mamma.

🙅‍♀️ Meanwhile, France and Germany are blocking the EU’s AI Act from passing.

• Brussels is meant to be finalising the law, but some European policymakers want to add provisions that would place extra requirements on companies that make foundational AI models, like LLMs. 
• France and Germany — home to Mistral and AlephAlpha, AI startups that would be impacted — aren’t happy with that twist in the tale, and so are blocking the deal, people familiar to the talks tell Sifted.
• If a deal isn’t reached by December 6 it’ll likely have to wait until the EU elections are done and dusted in 2024. Buckle in.

🐻 And Germany’s Bunestag also passed a new law on Friday which will reform tax rules around employee stock ownership programmes, or ESOPs.

• “It’s the biggest reform in the history of the German startup scene,” says Christian Miele, general partner at VC firm Headline and chair of the German Startup Association.
• The draft law now has to go to the Bundesrat, which is scheduled to meet this week.

Fintech has historically been the crown jewel of the UK’s startup sector. But it’s dropped to third place in terms of sectors that have raised the most so far in 2023. 

Big rounds raised by companies like Zenobe Energy, a battery storage startup, and Conigital, a driverless vehicle startup, have pushed the energy and transportation sectors to the top of the podium this year. 

In our latest briefing on the UK startup scene, we also discovered that: 

• The UK is Europe’s VC hotspot, with more than double the number of active investors than France. 
• The average size of Series C+ rounds is dropping — but pre-seed/seed, Series A and Series B rounds are holding steady. 
• Total funding raised by UK startups in 2023 is on track to match that raised in 2020. 

To read the full briefing — and 100s more — sign up to Sifted Pro.

💩 'We’re doing stuff that’s going to change the way people think about food forever': Sifted sits down with Zoe’s Tim Spector. 

😭 My three cofounders quit on the same day. Here’s how I dealt with it.

🥼 Thinking about applying for a patent? Here’s what founders need to know first. 

🧮 Germany’s “not doing enough” to support quantum startups, says the CEO of Terra Quantum. The Swiss-German company, which develops quantum algorithms and works with big companies like HSBC and Thales, wants the German government to pay closer attention to the transformational power quantum could have on many big national industries. 

⬇️ SaaS inflation: How to reduce your company’s software spending (Sponsored by Vertice) 

Sifted Pro — definitive insights on startup Europe

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This Thursday Sifted's Daphné Leprince-Ringuet will be at FDDay Impact Day in Paris. If you'll be there, say salut. 

🔥🔥🔥

• Amsterdam-based SkyNRG, a sustainable aviation fuel producer, raised €175m from Macquarie Asset Management.
• Stockholm-based Northvolt, a battery cell manufacturer, raised a $150m convertible note from Canadian institutional investor CDPQ to build a gigafactory near Montreal, in Canada. 
• Stockholm-based Matsmart/Motatos, an online food retailer, has raised €40m in a funding round led by UK-based Circularity Capital to spend on growth in the German and Nordic regions. The company, which pulled out of the UK earlier this year, believes that this round will take it to profitability on a group level.

🔥🔥

• Leuven, Belgium-based VaultSpeed, a data warehouse automation platform, raised €15.1m in Series A funding. Octopus Ventures led the round and was joined by Fortino Capital, PMV and BNP Paribas Fortis Private Equity. 
• Graz, Austria-based blackshark.ai, a geospatial intelligence platform known for creating a digital twin of Earth, raised €13.8m in extended Series A funding from investors including IQT, Point72 Ventures, M12, Maxar, Safran, ISAI Cap Venture (Capgemini’s VC Fund managed by ISAI), Einstein Industries Ventures, Interwoven Ventures, OurCrowd, Gaingels and OpAmp Capital.

🔥

• Czech Republic-based VRgineers, which develops VR headsets used for pilot training for military and enterprise clients, raised a $6m Series A. Taiwania Capital led the round and was joined by N1. 
• Berlin-based femtech Frieda Health, which is developing a digital health platform, has raised a €2.5m pre-seed from longevity company builder Maximon. 

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