DN Capital's Marovac returns to work following investigation into alleged misconduct

Good morning there,

In August last year, we published a story about alleged workplace misconduct at DN Capital by the VC firm’s founder, Nenad Marovac. Today, we’re bringing you an update on that story, as Marovac returns to work and the firm concludes its investigation into his conduct.

Elsewhere, Coatue’s closing its European office, we look at a startup with anonymous founders and $100m in VC funding and dig into the future of Europe’s semiconductor scene as China becomes harder to access.

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DN Capital’s Marovac returns to work following investigation into alleged misconduct

DN Capital cofounder and managing partner Nenad Marovac has returned to work, following allegations published by Sifted about sexual harassment and workplace misconduct earlier this year.

Two sources with knowledge of the firm’s operations tell Sifted that Marovac has returned to day-to-day operations at the firm and is being invited to industry events.

It follows the conclusion of an externally led investigation into the allegations published by Sifted in August. DN Capital told Sifted that the findings of the review of workplace conduct at the firm — conducted by the law firm Withers — “did not match” the claims published by Sifted, and that those claims were “unreliable.” 

The summary of Withers’ findings, written by DN Capital, made no mention of Marovac — who was the focus of the allegations published in August. 

Sifted asked DN Capital why Marovac’s conduct was not mentioned in the review, and to see the original findings sent to the firm by Withers, or be given permission to interview the lawyer who led the investigation. DN declined to give any further comment or information.

In August a spokesperson for DN Capital said that Sifted’s “allegations do not reflect the culture at DN Capital and they have been categorically denied by our founder Nenad Marovac. In the 23 years that DN has been operating there have been no informal or formal complaints of inappropriate conduct from current or former staff.” 

A spokesperson for Marovac at the time of the publication of the allegations in Sifted said he was “shocked, disappointed and saddened to learn of the allegations” and said they did not reflect him as a person nor the culture at DN Capital. “The allegations which have been made by Sifted are anonymous and often in vague and general terms,” the spokesperson said, adding that it wouldn’t be appropriate to comment while an investigation is underway.

The investigation

The firm told Sifted that Withers interviewed 46 current and former employees, and had access to historical internal documents and email communications. DN added that Withers had concluded that the firm had made a “conscious effort” to improve the gender diversity of its team and to support “the development and promotion of women.”

The firm also told Sifted that it has introduced a whistleblowing system and a new DEI training programme for its staff.

DN did not answer whether or not it had communicated the full findings of the investigation to its own investors.

Two former employees who alleged sexual harassment and misconduct at DN to Sifted and participated in the investigation by Withers say that they have not been communicated any of the findings.

“I feel my participation was a total waste of my time and energy,” one said.

DN Capital did not provide a response.

— Tim Smith and Freya Pratty

💰 US investment firm Coatue has announced in an internal memo that it is closing its European office in London two years after opening, according to Bloomberg, as part of an effort to “streamline” its operations.

• The firm’s “commitment to European ventures remains steadfast, as you would expect from a firm with three European leaders,” the note read. 
• The move comes as European startups have struggled amid the downturn, while later-stage investing has tanked. 
• According to the memo, Sarah Cannon — the firm's general partner in London — plans to leave the role and become an advisor to the fund.

🚗 The Spanish ride-hailing app Cabify reported that losses increased 14x to €4.9m in 2022 in the Spanish market, in comparison to €346k the previous year. 

• The Madrid-based company reported revenues of €199.5m in 2022 in Spain — 27.5% more than in 2021. The growth in Cabify’s losses and revenue comes as the startup boosts its investment in the Spanish market. 
• The company, which operates in Spain and Latin America, had reportedly been planning to float on the stock market this year. But the company said in a statement that it is investing in measures to incentivise demand, including in marketing and tools to improve the offer of vehicles.

👩‍⚕️ Paris-based AI startup Nabla, which provides doctors with an AI-powered assistant that generates clinical notes from listening in to patient consultations, has raised a $24m Series B. 

• The round was led by global VC Cathay Innovation and included participation from French investor Zebox Ventures — which was founded by French billionaire and active tech investor Rodolphe Saadé. 
• The company plans to use the fresh funding to fuel expansion across the US, after recently signing a partnership with US healthcare provider Kaiser Permanente to roll out its service to 10k physicians across Northern California.  

☀️ UK-based nuclear fusion startup Tokamak Energy, which is looking to create commercial fusion technology, has raised more than $50m in an ongoing Series C round.

• It’s one of a number of startups in Europe working on the tech, which Sifted mapped last year — but it’ll be the 2030s before Tokamak is able to sell fusion power.
• Until then, it’s looking to make revenue by commercialising the HTS magnet tech that helps power its reactors, which can be used to create powerful magnetic fields and high electrical efficiency in a variety of use cases.

🇨🇳 European semiconductor startups are grappling with their biggest market, China, increasingly becoming off limits, as US export and investment controls start to bite. Founders tell Cristina Gallardo that Europe encouraging more of its own semiconductor capacity will depend on them being able to sell to big markets, even if those markets aren’t politically aligned. 

• Simon Thomas, founder and CEO of Paragraf, a Cambridge-based startup developing graphene-based semiconductors, says his company decided not to sell a magnetic field sensor, capable of operating in high-radiation environments, in China, because it could have been of interest to the Chinese military. 
• “My biggest concern is we could be trading somewhere and in the future be told to stop, and if we have developed a significant market in that country, that would be very damaging to the business,” he tells Sifted.
• European investors are advising founders, especially those based in the UK and the Netherlands, where governments have taken a more hawkish approach towards Chinese investment, to stay clear from Chinese and Asian capital, says Arjan Göbel, partner at FORWARD.one, a Dutch VC firm that invests in early-stage semiconductor startups. Some European chip startups are instead looking at investment from Saudi Arabia and the UAE, which are emerging as an “intriguing alternative” to China, says Sami Moughrabie, managing partner at deeptech VC Atmos Ventures.

🔍 Can you raise $100m for your startup and still keep your founders anonymous? That’s what Swedish energy storage startup Ingrid Capacity managed to do last April when it raised a round led by Singapore-based investor BW ESS — one year after it was founded.

• The company has so far developed six battery energy storage systems across Sweden — enough to cater for about 100k people — and is planning to more than triple its capacity by year-end as well. It’s also looking at European expansion. 
• But there’s no mention of the founders or CEO in any of the 17 press releases the company has sent out since 2022. There’s also no link to an ‘about us’ page anywhere on the company’s homepage. So who are they? Mimi Billing finds out.

🤭 How to learn from mistakes. Travel startup Flash Pack fell into administration during Covid, before relaunching in November 2021. Cofounder Radha Vyas says reflecting on the mistakes she and cofounder Lee Thompson made during the first iteration of the business means they’ve changed their tune second time around. Her tips on learning from mistakes include:

• The blameless post-mortem — an exercise that takes place regularly during the year to dissect what went wrong during a crisis and collect learnings to apply to the business. Vyas says it encourages the team to admit (in a safe space) what they personally feel they could have done better and suggest improvements for next time. 
• Clarifying your goals — once you’ve taken stock of learnings, it’s important to clarify what goals are really important for your business, and incorporate them into your strategy. To make sure everyone remains aligned, remind the team of what your North Star is throughout the year.  

🧪 European investors need to follow US investors’ lead and take big bets on biotech if the bloc wants to compete on its own turf, the CEO of $20bn Belgium-based biotech Argenx told the Financial Times.

💸 Chips are our most important bit of hardware, used in everything from military tech to wind turbines — and in 2023, investors jumped on the semiconductor train. Funding for the sector surpassed €1.2bn across the year, up by 46% compared to 2022’s $827m. 

• Every stage of funding saw growth in 2023 compared to the previous year — except Series B rounds, which saw a smidgen ($50m) less raised than in 2022. 
• Later-stage rounds (Series C+) saw the biggest jump in funding, up 150% on 2022’s figure.
• For the trends set to shape the sector in 2024, plus an early-stage market map of the startups to watch and the most active investors, dig into our latest Pro briefing (exclusively for subscribers).

🇫🇷 Just like the rest of Europe, 2023 was not a good year for startup fundraising in France. Just €8.5bn was raised by French startups last year, versus close to €15bn in 2022, according to new data published by tech advisory firm Avolta. Total deal count was more resilient, however, with 1,061 deals closed in 2023 compared to 1,375 in 2022. 

• Avolta highlights that some sectors are “basking in hype”, such as sustainability, AI and deeptech. Mistral AI shows up twice in the top 10 funding rounds of the year. And gigafactory Verkor’s monster €850m round last September no doubt contributed to energy standing out as one of the most sought-after sectors. Fintech, on the other hand, saw an 80% reduction in the total amounts raised.
• It’s been a record year for exits in France, with 405 operations recorded by Avolta for a total exit value of €5.3bn. That puts 2023 more or less on par with 2022 (377 exits for €5.4bn). The figure is way off 2021, though, which saw 378 operations for a total of €10.4bn. 
• The bigger picture isn’t so good either — over the last five years, Avolta found that 66% of exits in France were below the €50m mark.

🛍 Revenue, runway and returns: How to go-to-market in 2024. Join Sadia Nowshin and a panel of experts on January 24 to dive into the latest strategies, tools and frameworks startups are using to drive profitable growth.

💼 Startup to scaleup: Creating the dream Gen Z workplace. Join us for a Sifted Talks on January 31 to find out how founders can understand, engage and empower this new generation of workers to fuel the next growth phase of their startup.

🌳 Are you an early-stage climate tech startup currently fundraising? Share your pitch deck with us by Thursday, January 11 to join our next virtual pitch event on January 30 at 12:30 GMT. To watch the event, RSVP here.

Leiden, Netherlands-based Vico Therapeutics, a biotech developing therapies for severe neurological diseases, raised a $60m Series B funding. Ackermans & van Haaren led the round and was joined by investors including Droia Ventures, EQT Life Sciences, Kurma Partners, Polaris Partners, Pureos Bioventures and Eurazeo.

Bern, Switzerland-based LEM Surgical, a company that builds robots to help surgeons perform spine operations, raised a €23.6m Series B.

Geelan, Netherlands-based Matisse Pharmaceuticals, a biotech focused on treating sepsis and septic shock, raised €3.6m from investors including Brightlands Venture Partners.

London-based Self Space, a therapy service you can access on the high street or online, raised €2.6m in seed funding. Redrice Ventures led the round.

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