Which unicorns could be overdue a fundraise in 2024?

Good morning there,

I’ve had a couple of sobering conversations with VCs this week. They agree that 2024 is going to be a crucial year for startups — and those that haven’t been able to raise funding from their backers since more abundant times could be forced into M&A or failure this year as runways get shorter.

On the flip side, though, there are startups that seem to be doing just fine without VC money — who have found product-market fit and are eyeing the IPO window closely to see when it might creak open.

My colleague Kai Nicol-Schwarz and I set out to discover which unicorns haven’t raised funding since 2021 and could be due a fundraise — and it’s a pretty interesting list. Scroll on for that.

Elsewhere, we take a look at a new fund of funds that wants to back first-time VC managers, stats on the number of new startups in Germany and a new Parisian startup tackling menopause. 

— Anne Sraders, senior reporter

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How to get your revenue back on track

As sales cycles get longer and budgets are slashed, how can startups keep their customers spending their cash? On January 24, startup founders and revenue leaders will dig into their 2024 plans for boosting revenue. 

Which unicorns are overdue a fundraise in 2024? 

For the last two years or so, the conventional wisdom bestowed upon startups and scaleups has gone something like this: conserve cash, extend runway and try not to raise another round if you can help it. That has of course been influenced by the cratering valuations we’ve seen coming off the highs of 2021 and early 2022, and the fact that VCs themselves are struggling to raise fresh capital. But for companies who haven’t raised since the salad days of 2021, runway may be looking precariously short right now.

Some of those scaleups will likely have to go out and raise again soon, particularly if they aren’t yet profitable. Others may have found a stronghold and are in the black, and likely won’t need to raise more funding. My colleague Kai Nicol-Schwarz and I decided to look into which unicorns — those companies whose valuations are $1bn and above — might be overdue a funding round this year. Using Dealroom data, we only looked at companies that hadn’t raised since 2021, had raised over $50m and had at least 50 employees. 

And we found a pretty interesting mix: it includes French fintech Lydia, a wannabe financial superapp that hasn’t publicly announced funding since its $100m round in December 2021. Two of Europe’s heavyweight neobanks are also on the list, including Germany’s N26, which last secured one of Europe’s largest rounds with its $900m Series E in 2021. It laid off 4% of staff in April, and the company told Sifted it isn’t currently fundraising. The UK’s Monzo is on there too. Reports emerged in October last year that the UK neobank was in talks to sell a £300m+ stake, which would value the company at £3.5bn. That deal, if it were to go through, would likely be the last stop before flotation. 

Other startups include Amsterdam-based Hotmart, which provides entrepreneurs with a platform and tools to create online courses. The company had reportedly hired bankers ahead of a public listing in 2021 (which never materialised) — and then things got rockier, prompting it to conduct layoffs in late 2022. 

As a caveat, as I’ve written about before, some companies take a while to announce funding rounds, if at all. What is certain is that 2024 will be a critical year for startups. I wager we’ll see a mix of companies that end up being able to secure funding from their investors (but perhaps still at lower valuations than their previous round), and, unfortunately, I imagine a lot of companies won’t be able to get that cash infusion and might shut down or try to get acquired. 

What do you think? Which companies should we be watching? Send me a line.

— Anne Sraders, senior reporter

🇫🇷 Paris-based startup Omena has closed a €600k seed round from business angels and family offices — almost half of which were women — to tackle the challenges that arise during menopause.

• Omena is a free app that provides users with information about symptoms, treatments and prevention. A premium version includes wellness programmes to tackle different symptoms, from nutrition and exercise programmes to sexology and behavioural therapy.
• It’s a topic that receives too little attention, despite causing symptoms for 80% of women and concerning all those over the age of 55.
• Only 6% of femtechs in France address menopause; globally, startups tackling issues linked to it raised 1.3% of femtech funding between 2012 and 2021.

💰 Attention, first-time VC fund managers: a new fund of funds is launching to back investors on their first rodeo. 

• London-based Thema aims to invest up to £5m into three to four first-time funds each year in exchange for a 15-20% stake in the VC management company — the firm that runs the fund(s) a VC raises. 
• Cofounder Sam Ettelaie is eyeing VC managers “who’ve been community builders, have some sort of operational experience, have that more traditional investment experience and have proven themselves to have some sort of network that’s defensible,” he tells Sifted. 

🇬🇧 Even as AI regulation heats up in Europe, the UK government is reportedly planning to publish a series of tests that need to be met in order to pass new laws to rein in the rapidly advancing tech, according to the Financial Times.

• The circumstances in which the UK government would move to regulate models include if the AI companies don’t uphold voluntary commitments to avoid harm with their technology, or if the systems put in place by the UK’s AI Safety Institute fail to identify risks, per the report.

🔄 Why more European founders are turning towards Latin American markets. 

👶 Parents make great founders, so why are we constantly punished for it?

🇩🇪 There were 2,489 new startups founded in Germany in 2023 — a 5% drop compared to 2022, according to a new report by The German Startups Association. 

• Berlin overtook Munich in 2023 for the highest number of startups per capita. However, the number of startups in Berlin dropped by 7% and in Munich by 13% between 2022 and 2023. Hamburg, Germany’s third-biggest startup hotspot, increased its number of startups by 10% in the same period.
• Smaller regions in Germany are beginning to grab their share of the limelight. Since 2019, the share of startups in Berlin, Munich and Hamburg has decreased from 41% to 33%. Smaller regions such as Saxony, Baden-Württemberg and Lower Saxony, by contrast, increased their share in 2023.
• The cities of Darmstadt, Karlsrühe and Heidelberg — the latter two of which are in the region of Baden-Württemberg — took third, fourth and fifth place, respectively, behind Berlin and Munich as the top 10 major cities that recorded the most startups per capita in 2023.

🏥 2023 well and truly signalled a break from the post-Covid boom times in digital health — but the rise of AI and increasing pressures on the health workforce still present opportunities for startups. It’s all covered in our latest briefing — which also includes an early-stage market map and the sector’s most active investors. Here are some key stats:

• Digital health startups raised a record $10.5bn from investors across 2021 and 2022 — Companies like Kry, Cera and Doctolib all raised nine-figure sums. 
• It’s a different picture in 2023, with startups in the sector picking up just $1.4bn last year — the lowest amount since 2018.
• There were 14 digital health exits in 2023, but more are expected in 2024 in a predicted wave of M&A, as startups that raised during the frothy years begin to reach the end of their runways and struggle to convince investors to part with their cash. Dig into all the numbers here (exclusively for Pro subscribers).

🛍 Revenue, runway and returns: How to go-to-market in 2024. Join Sadia Nowshin, Stripe’s Fanny Talagrand, Synthesia’s Steffen Tjerrild and Creandum’s Lars Nordwall on January 24 to dive into the latest strategies, tools and frameworks startups are using to drive profitable growth. RSVP.

🌳 Come along to our climate tech pitch event. Join us virtually on January 30 to hear from five early-stage climate tech startups currently fundraising — exclusively for Pro subscribers. RSVP here.

💼 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. RSVP.

Munich-based Sinpex, which helps financial institutions automate their anti-money laundering processes, raised €4m in funding. TX Ventures and ACE Ventures led the round and were joined by investors including EquityPitcher Ventures and AI FUND. 

Aveiro, Portugal-based Primetag, which provides influencer data and marketing analytics, raised €3.5m in funding. Indico Capital Partners and Iberis Capital led the round.

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