Sifted - Are VCs and founders getting along?

Good morning there,

Founders have been through a lot in the last few years. The downturn has tested their resilience, mental health — and relationships with their investors. About a year ago, a Sifted survey showed things between founders and their VCs had been going downhill. 

But so far this year I’ve heard from several investors that things seem to be looking up in 2024. Are founder-VC relationships improving, too? That’s what we want to know in our latest reader Survey — which you can fill out (anonymously) here. We’ll publish the results in a few weeks.

Elsewhere today, we take a look at the startup that says it could reduce methane emissions for cows by up to 70%, a fresh biotech fundraise for a company making clinical trials more efficient and the latest data for tech salaries in Berlin.

— Anne Sraders, senior reporter

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Are VCs and founders getting along?

About this time last year, we’d just surveyed a bunch of founders and senior startup leaders about how the downturn was affecting their relationship with their VCs. And things weren’t great.  

As one founder told us: “It feels like being gaslit; [Our investors] are pushing multiple rounds of layoffs, benchmarking against bankrupt companies and not acknowledging that they have made a paradigm shift to preserve cash burn.”

Half of the respondents said relationships with their investors were getting worse. They said VCs were micromanaging more, they were less helpful with practical advice and were ramping up the pressure to become profitable. 

The rest of the year ended up being pretty bleak for founders and VCs alike. Earlier this year, Hendrik Brandis, cofounder and partner at German VC Earlybird, told me about 2023: “If you managed to bring money in at a flat valuation, it was already a great success.” He added that his firm was focused on “keeping our key portfolio companies afloat”. 

But lately, I’ve been hearing a different tune. Investors tell me there’s more activity in the market, excitement around deals and a pickup in financings; but many of those challenging dynamics from last year are still in place — and the dealmaking data for Q1 hasn’t quite borne out the hype. To put it another way, I feel like I’m getting mixed signals right now. 

That’s why we’ve decided to poll founders again to see how those relationships with their investors are faring, and if they’re feeling as good about things as VCs. Founders: Have you felt supported by your VCs in the last year? If anything, what are they advising you to cut back on? Have they been more open to giving you funding? Do you feel like you’re under more or less pressure from VCs now than in early 2023? We’d love to hear from you in our new — anonymous — survey. It should only take a few minutes, and we’ll be publishing the results soon. 

— Anne Sraders, senior reporter

Applications are now open for the Sifted 100: Central Europe

We’re looking for startups in central Europe with a strong track record of revenue generation to feature on our inaugural leaderboard — a ranking celebrating the region’s top 100 fastest-growing startups. Believe your startup deserves a spot?

🇸🇪 Swedish startup Agteria has discovered a molecule — which it uses as a base for livestock feed — that it says can help reduce methane emissions from cows by 50-70% without adding extra costs to farmers.

• The solution is derived from asparagopsis — a genus of red algae — and the startup already has letters of intent for it with several milk and dairy producers in Europe, which have pledged to cut emissions by 50% by 2030. 
• Agteria was founded late last year, and recently raised €1.4m to take its patented molecule through the European Food Safety Authority (EFSA) approval process and to set up studies with universities to test it further.

💰 Biotech Qureight raised an $8.5m Series A to make clinical trials more efficient. The Cambridge-based startup has developed a platform that hosts clinical trial data — which is typically spread across different databases and is therefore difficult to analyse efficiently — in one place. Companies can then use AI models on the platform to analyse their results and make quicker, more informed decisions on the drug development process.

• Another potential use for the platform is using the data it collects to develop ‘fake’ virtual trial patients. This could reduce the cost of trials for smaller pharma companies and improve the diversity of test subjects. It’s currently still in beta testing, but CEO and cofounder Dr Muhunthan Thillai says FDA approval is part of the company’s roadmap.

💷 UK digital bank Zopa posted pre-tax profits of £15.8m for 2023, from a loss of £26m the year before, according to the Financial Times. The bank increased its deposit base by 15% to £3.4bn during the period, and has a total loan balance of £2.7bn.

• CEO Jaidev Janardana said the company was ready for the public markets and would prefer to float in London — but caveated that UK markets weren’t ready for a flurry of fintech listings.

🏎️ Formula One champion Nico Rosberg announced a first close of $30m for a new fund of funds to back software-heavy VCs focused on areas like AI, biotech, climate tech, blockchain and consumer. 

• The capital has come from European family offices and the fund is targeting a final close of $75m. It’ll look to back around a dozen VC firms.

🇬🇧 UK rethinks AI legislation as alarms grow over potential risks. (FT)

🇩🇪 Berlin tech salaries are up in 2024 — but the gender pay gap persists. Between 2023 and 2024, the median salary among Berlin tech professionals increased by 7.14% from €70k to €75k. But, women still earn an average of 15% less than men; women earn a median salary of €68k, compared to men who earn €80k.

• The survey shows that the 15% gap is also consistent in leadership positions, where men receive a median salary of €95k, while women receive €83k.
• “The survey findings confirm that as progressive as the tech industry claims to be, we are still faced with the impact of unconscious biases in decision-making, which favour men in leadership and technical roles,” said Tamara Rose Morales, business and leadership coach for women and DEI consultant, in a statement.  

Dublin-based GridBeyond, which is an AI-driven energy and smart grid platform, raised €52.3m in Series C funding. Klima led the round and was joined by investors including Energy Impact Partners, Mirova, Act Venture Capital, ABB, Constellation and Yokogawa Electric Corporation.

London-based Lawhive, an online platform matching customers with legal professionals, and an AI legal assistant, raised £9.5m in seed funding. Google Ventures led the round and was joined by Episode 1 Ventures.

Rotterdam, Netherlands-based Pryme, which uses chemical recycling to convert plastic waste into reusable products, raised €10m in funding. Taranis Carbon Ventures led the round.

London-based Unwritten, a platform quantifying the impact of climate risk on investor portfolios, raised $3.5m in seed funding. Connect Ventures led the round and was joined by investors including Planet A Ventures, Sand River and Adapt Nation Capital.

Prague-based Apify, a data extraction and web scraping platform for AI, raised €2.8m in funding from investors including J&T Ventures and Reflex Capital.

Lund, Sweden-based Saveggy, a startup making plant-based vegetable packaging, raised €1.76m in funding from investors including Unconventional Ventures, LRF Ventures and Almi Invest GreenTech.

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