Sifted - Paris’ je ne sais quant

Good morning there,

Many startups build their labs or facilities outside the expensive epicentres of hot European cities — not Alice & Bob.

The four-year-old Paris-based quantum computing startup has chosen to build its lab near the heart of the city, to attract the best international talent. The company is already thinking of opening another production site, still within a 30-minute bike ride from the centre. That's going to cost more money — on top of the $30m Series A it bagged in 2022 — to build expensive computers in the pricey city. Today, my colleague Daphné Leprince-Ringuet takes us through her visit to the lab, as well as her conversation with founder Théau Peronnin on competing with Big Tech, fundraising and the possibility of an IPO way down the road.

Elsewhere today, we take a look at Dubai’s new crop of European tech founders, payments fintech SumUp’s massive new debt funding and the fastest-growing startup teams in Germany.

— Anne Sraders, senior reporter

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Paris’ je ne sais quant 

It’s not that often you get to see a real-life quantum computer less than a five-minute bike ride from home. So when Paris-based quantum computing startup Alice & Bob offered me a lab tour this week, I jumped at the opportunity. 

Unlike most of its local competitors, like Pasqal and Quandela who have chosen to open labs about an hour out of town, Alice & Bob’s HQ and quantum computers sit more centrally inside Paris’ ring road. The main reason for the more pricey real estate? “Attracting international talent,” the startup’s founder Théau Peronnin tells me.

It comes with challenges: there are maybe ten buildings in central Paris suitable to host a quantum lab, he says. It’s not just about needing heavy-duty lifts: quantum computers are highly sensitive machines, meaning that the vibrations from the metro are big no-nos for a company like Alice & Bob. So much for that nice Haussmanian architecture that people associate with the French capital. The company has had to sacrifice the chic apartment office for a large industrial building in the southwest of the capital.

But overall, the founder tells me, it’s been well worth the €330-per-square-metre bill — especially when you consider the company’s other expenses. One quantum computer and its rack, for instance, costs a hefty €3m to build. Alice & Bob is also battling Amazon for talent, who are offering as much as 2.5x their salaries. 

It’s not exactly a fair fight, but a postcode about a ten-minute ride from the Eiffel Tower certainly helps.

For now, the lab hosts four computers. They are all encased in large refrigerators that cool the devices to temperatures colder than outer space — which is necessary to enable quantum particles to remain stable. There is enough room on-site for a fifth computer, after which the company will be looking to open another industrial site, “but less than a 30-minute bike ride from Paris,” according to Peronnin.

It means the startup, which last raised a $30m Series A in 2022, is going to need some cash — and a lot of it. “We will eventually have to raise a Series B,” says Peronnin. “And the order of magnitude… is €100m.”

I sat down with Peronnin to discuss what it means to raise that kind of money in Europe (spoiler alert — it’s tough), why Alice & Bob has what it takes to convince investors and what the long-term prospects are for a European company developing a technology that is seen as a critical part of the bloc’s sovereignty. 

— Daphné Leprince-Ringuet, French tech reporter 

🇩🇪 ICYMI: German fintech N26 is locked in a tussle with its work’s council over a new supervisory board.

• Berlin-based neobank N26 is converting from a GmbH (a private limited liability company) to a European stock corporation (SE) which means it must create a new supervisory board.
• In dispute: whether employees should have representation on the newly-created board. German law states that for a company with 500 or more employees, one-third of the board must be employee representatives, which is currently not the case at N26. The matter will have to be settled in court, reported Finance Forward this week.
• This isn’t the first time N26 has rubbed its works council up the wrong way. In 2020, when the works council was founded, N26 founder Valentin Stalf attempted to squash it which led to criticism on social media. He subsequently apologised for his actions.

💰 Goldman Sachs has led a €1.5bn debt round into payments fintech SumUp as startups continue to look at alternatives to equity funding. Fellow fintech Pleo also announced today it’s received €40m in debt financing from HSBC Innovation Banking.

Data takes the wheel: scaling at speed

Access to healthy and accurate data can make or break a startup’s customer retention strategy. With that much power on the table, how can today’s founders take advantage and scale at speed? Join our upcoming Sifted Talks with Delivery Hero, ANNA Money, Twilio and Qonto on May 15, to find out.

🇦🇪 Meet Dubai’s new generation of European tech founders. The UAE has always pulled in a lot of workers from overseas. Now there’s a new crop of European entrepreneurs choosing to build their startups in the country, which has said it wants to create 20 tech unicorns by 2031. 

• Famous European tech founders residing in Dubai include Guillaume Pousaz, the Swiss founder of fintech Checkout.com and Pavel Duvol, the Russian founder of Telegram, who reportedly has a villa in Jumeirah Islands, a luxurious man-made archipelago off Dubai. 

📈 Germany’s 10 fastest-growing startup teams.

💻 How to use APIs to build your startup.

Ghent, Belgium-based Aikido, which provides a platform to help developers spot and fix security vulnerabilities, raised $17m in Series A funding. Singular led the round and was joined by investors including Notion Capital and Connect Ventures. 

Bern, Switzerland-based Ikerian, which provides software to help eye doctors manage and analyse medical images and data, raised $6.1m in extended Series A funding. Topcon Healthcare led the round.

The Hague, Netherlands-based RESONIKS, which uses acoustic sound patterns to help metalworking companies find defects in metal objects, raised €2.7m in seed funding. Kvanted led the round and was joined by investors including Faber and EIT Manufacturing. 

Bordeaux, France-based Touch Sensity, which is developing technology that makes materials sensitive to physical interactions for testing and to track and monitor defects and damages, raised €1.75m in funding (as well as €1.25m in debt) from investors including LIFTT, DAA Capital Partners, Newfund Nouvelle Aquitaine Euskal Herria and NACO.

London-based Symbe, which uses AI to help salespeople by automating the creation of business cases, raised £1.2m in pre-seed funding. Concept Ventures led the round and was joined by investors including Pact VC, Notion Capital and Nodes Ventures.

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