Sifted - Navigating hurdles as a migrant founder

Good morning there,

First-generation migrants are a tough bunch — and often well-suited to the world of entrepreneurship.

But navigating a new country — let alone raise capital, hire talent and attract customers — is no easy task. And migrant founders are often faced with hurdles others don’t have to overcome.

So, what needs to change to support them and ensure fresh talent continues to enrich the startup ecosystem? DACH reporter Miriam Partington will be discussing all this and more at our second Sifted reader breakfast meetup on Wednesday May 29 in Berlin. It’s free to attend; apply here. And scroll on for more thoughts today. 

Elsewhere, if you’re a woman at a startup or scaleup, please take our latest reader survey. We want to learn more about women's workplace experiences in the startup ecosystem — and will share our findings soon. It’s entirely anonymous — and the response so far has been immense. 

Also coming up today: 

• Maria Rotilu, Europe’s first Black solo GP, announces first close of target $10m fund
• Plant-based meat startup THIS hopes to hit profitability this year despite consumers’ waning interest in the category

— Ali Humayun, junior editor

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Navigating hurdles as a migrant founder

In the six years since I moved to Berlin I’ve met and heard the stories of many migrant founders who’ve built successful businesses in Germany, despite facing bureaucracy, harder access to funding compared to native German founders and, sometimes, discrimination. 

One in five founders in Germany have a migrant background; 58% of them are born outside of Germany. Many of the country’s most successful tech businesses, such as Auto1, Omio, GetYourGuide, Research Gate, Delivery Hero and BioNTech — which co-developed one of the Covid-19 vaccines with Pfizer — all have founders with a migration background.

Yet data suggests first-generation migrants in particular face challenges when it comes to dealing with public authorities and banks and establishing a network, according to the 2023 Migrant Startup Monitor. Anecdotally, raising capital is also difficult. 

“It’s super tough to raise money as a migrant, especially in Germany. There’s a lot of trust issues,” says Zakaira Jaiathe, cofounder and CEO of Waanda, a digital wholesale marketplace connecting African producers and artisans with retailers in Europe.

“There should be more VCs focusing specifically on migrants, because if they’ve founded a company here in Germany they’ve already had to overcome a lot, and they probably learned how to navigate a lot of things in life which is what makes them a good bet.”

Founders born outside of Germany tell me they find it hard here to secure visas, apply for tax numbers, open a bank account and access loans with a foreign passport. Understanding how to set up a company here can also tie you in knots.

“Trying to understand which company structure to use, whether it’s AG versus GmbH, and then making sure that your shareholder structure and shareholder agreements are right, all the different documentation you need to prepare — it can be a nightmare,” Alina Bassi, founder of Kleiderly, which creates sustainable plastic out of disused clothes, told Sifted in an interview last summer. 

From conversations I’ve had with founders lately, it’s clear that the fresh ideas that talent from abroad brings are needed more than ever in Germany. Founders, investors and startup organisations have long noted that the country — which is facing economic challenges, including labour shortages — needs an entrepreneurial reboot to ensure it stays globally competitive. 

Last Thursday night at the German Startup Awards in Berlin, Verena Pausder, the chair of the German Startup Association, acknowledged the contribution migrant founders make to German innovation in her opening speech and reminded founders that the German startup scene stands against Germany’s right wing party, the AfD.

“Our startup scene, with its high proportion of migrant founders and people from all over the world who work in our startups, is the best proof that diversity is what makes us strong and that we reject a radical right-wing party like the AfD without question — without ifs and buts,” she said.

What needs to change to support migrant founders is the topic of a Sifted breakfast meetup I’m hosting on May 29 at Techspace Eiswerk in Berlin. I’ll be speaking to Gülsah Wilke, founder of 2hearts, Waanda’s Jaiathe and Sophie Chung, founder and CEO of Qunomedical, and there’s the chance to network afterwards. There are still spaces available, and you can apply to attend here.

In the coming weeks, I’ll also be writing about how migrant founders are shaping German tech, how startups are responding to challenges of hiring talent from overseas and the networks helping founders make sense of the business landscape in Germany. If you have any opinions to share, or other stories Sifted should be telling, please get in touch.

—  Miriam Partington, reporter

🤝 Exclusive: Openseed, a new solo GP fund to back operator-led startups in Europe and Africa, has done a first close. 

• Started by former Octopus Ventures and Oxford Seed Fund investor Maria Rotilu — Europe’s first Black solo GP, as far as Sifted is aware — Openseed will write cheques up to $150k into around 60 very early-stage startups. 
• Rotilu hopes to close the fund at $10m, and will invest in three broad areas: the future of commerce, health and work. 

💪 Plant-based meat startup THIS hopes to hit profitability by the end of the year, says new CEO. Despite a fall in consumer interest in the category last year — and layoffs sweeping startups in the sector — THIS’s new CEO Mark Cuddigan is optimistic that the tide can be turned.

• “There are a lot of people who would declare themselves as flexitarians but aren't transitioning away from eating meat, and the reason why is because I feel they're let down by the taste and the quality when they try plant-based meat and they go back. So you're sort of knocking on an open door,” Cuddigan, who replaced the founders at the head of the company earlier this year, tells Sifted.

💸 The Sunday Times has revealed its annual list of the 350 wealthiest individuals and families in the UK — and there are a few startup names on it.

• Checkout.com CEO Guillaume Pousaz has dropped to 44th place — 14 lower than last year — after a challenging year for the business. The Swiss entrepreneur now has an estimated worth of £4.4bn; £1.5bn less than in 2023.
• He’s closely tailed by Revolut founder and CEO Nik Storonsky in 45th place, who also dropped seven positions. The fintech founder is worth £4.3bn, £820m less than last year.
• Euan Blair — son of former British prime minister Tony and cofounder and CEO of edtech Multiverse — is a new entrant in joint 337th place. He’s worth £375m on paper.

May 20-22 | Tallinn. Senior reporter Zosia Wanat is at the European Business Angels Network (EBAN) Annual Congress — message her for a coffee.

May 21 | London. Fintech reporter Tom Matsuda will be at the FTT Payments conference. Get in touch with him if you'll be there.

May 21 | Online. We’ll be showcasing five of the hottest early-stage healthtech startups currently fundraising (and potentially one or two healthtech founder superstars) — exclusively for Pro subscribers. RSVP.

May 22 | Tallinn. Startup Life writer Anisah Osman Britton is at Estonia’s Latitude59. Going to be there? Message her.

May 22-25 | Paris. Join Sifted at VivaTech, the annual startup and tech event in Paris from May 22-25. Discover the latest innovations, expand your network, and meet inspiring tech leaders. Get your pass here.

May 29 | Berlin. DACH reporter Miriam Partington will be hosting an intimate breakfast meetup for Sifted readers alongside 2hearts, Waanda and Qunomedical to showcase the successes of migrant founders in Germany and to share advice on how to navigate the challenges of building a business there. RSVP; it’s free!

June 3 | Vienna. Get ready to network with Sifted at the ViennaUp Startup Festival! Join us for a networking event to celebrate the Central Europe Leaderboard. Don’t miss out on hearing from Peter Windischhofer, cofounder and CEO, Refurbed, Janice Goodenough, founder and CEO of HYDROGRID, and Tamas Kadar, CEO & cofounder of SEON. RSVP. RSVP.

June 4 | Paris. French tech reporter Daphné Leprince-Ringuet will be hosting our third breakfast reader meetup of the year at Station F. She’ll be joined by guest speakers from Miraki and Doctolib to discuss how France’s most established unicorns have approached — and are still navigating — the hurdles of internationalisation. RSVP.

June 4 | Munich. Newsletter editor Tom Nugent is moderating a panel on the state of Europe’s spinout ecosystem at Spinoff Summit 2024. Who should he meet while he’s there? Get in touch.

June 12 | Online. We’ll look at how to build, nurture and maintain an airtight finance team to improve your bottom line, alongside experts from Tipalti, Omio and Eight Roads. RSVP.

Karlsruhe, Germany-based Codesphere, which allows developers to code and scale applications in the cloud, raised $18m in Series A funding. Creandum led the round and was joined by investors including LEA Partners, Begin Capital, 42CAP and 468.

Stockholm-based QA.tech, an AI-based testing tool for applications and SaaS services, raised €3m in seed funding. PROfounders led the round and was joined by investors including Curiosity and byFounders.

Prague-based Behavio, which develops brand tracking and ad testing tools, raised €2.3m in seed funding from Airbridge Equity Partners.

Brussels-based Companion.energy, which develops software products for industrial companies to reduce energy costs, raised €2.1m in funding. Übermorgen Ventures and Cavalry Ventures led the round and were joined by investors including Entourage and imec.istart future fund.

Paris-based Tulyp, a platform that helps SMEs access trade finance services, raised €1.5m in seed funding. Speedinvest led the round and was joined by investors including Kima Ventures and Purple Ventures.

Warsaw-based Quantia, which uses AI to help boost sales for consumer brands, raised $1.2m in pre-seed funding. Inovo VC and Team X led the round.

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