Sifted - Can Macron and Scholz be tech bros?

Good morning there,

There’s a healthy dose of competition between France and Germany’s tech ecosystems but French President Emmanuel Macron’s state visit to Germany this week — the first in 24 years — was all about burying the hatchet.

Just a few weeks before a critical EU election, Macron and German Chancellor Olaf Scholz want to show the bloc’s two largest economies are on the same page — and tech’s a significant part of that agenda.

Elsewhere today:

• When will Europe's neobanks hit 100m customers?
• What is Def/acc? Matt Clifford on Entrepreneur First’s new programme.
• N26 growth limits lifted by German financial regulator.

— Daphné Leprince-Ringuet, French tech reporter

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💳 Whether it’s revenue or staff, turnovers are part of any company’s outlook. However, the latter is proving trickier to curb, especially for startup CFOs and their budding teams. Register for our next Sifted Talks on June 12th to learn how to build your finance team from the ground up.

Can Macron and Scholz be tech bros?

When it comes to tech, Germany and France love a tussle. As Europe’s two biggest ecosystems outside of the UK, they’ve been jostling for second place for years.

While Germany has historically been a larger ecosystem, the rise of France’s “startup nation” — helped by Macron’s efforts to boost French tech — has kept tech and government folk across the Rhine on their toes. In 2022, France leapfrogged Germany for the first time to become Europe’s second best-funded tech ecosystem.

Some say that Germany would benefit from emulating Macron’s tech policies and enthusiasm for startups. “[Macron] markets his location very confidently,” Verena Pausder, the chairperson of the German Startup Association, told Sifted. “German politicians can learn a lesson from this spirit.”

Although a little bit of competition between the two countries is inevitable, European tech would benefit if there was more handshaking between them than arm wrestling. 

This week, Macron was on the first French presidential visit to Germany in 24 years, just a week before Europeans elect the next EU Parliament — and tech was high up on the three-day agenda.

“The next five-year term will be crucial for Europe’s economic and geopolitical future,” says Marianne Tordeux-Bitker, director of public affairs at startup and VC lobby France Digitale. “What place will Europe play in AI? In quantum? In its strategic dependence on other nations or big corporations outside of the EU?

“To enable European tech to scale… it is essential that the Franco-German couple is aligned.”

Despite Macron and Scholz not always getting on, putting on a united front was the theme of the visit. 

Writing in the Financial Times on Monday, the two leaders defended “more innovation, more single market, more investment, more level playing field and less bureaucracy”. They notably called for the revival of a capital markets union (CMU), a plan to create a single market for capital that could enable smoother cross-border investments. The CMU was first proposed almost 10 years ago but has faced resistance from some EU countries. 

There’s broad agreement that European startups would benefit from more cooperation — particularly French and German companies. “In the European market, if you want to be a dominant startup, you have to target [France and Germany] as a priority,” says Alexis du Peloux, partner at VC XAnge, which has a presence in France and Germany. 

“France and Germany, as market leaders, have the responsibility to show the path of collaboration,” says Julien-David Nitlech, managing partner at Franco-German VC IRIS.

“Funding 10 European champions instead of 27 local candidates will always be more ambitious and promising.”

Will words turn into action? As often in politics, we’ll have to see. “We are counting on the next Commission to identify competitiveness and strategic autonomy — particularly with the CMU — as top priorities for the next term,” says Tordeux-Bitker.

— Daphné Leprince-Ringuet, French tech reporter

🇩🇪 German financial regulator BaFin is lifting the growth restriction it placed on neobank N26 in 2021 which has stopped the company from onboarding more than 50k new customers per month for the last two and a half years. The limit was put in place over concerns about money laundering and financial crime. N26 will be free to onboard an unlimited number of new customers from June onwards.

• The German neobank says it has spent €100m on compliance over the last two years and has introduced intelligence-based models that analyse the fraud potential of individual customers before they open an account. 

🇬🇧 Executives from 120 UK companies — including Atom Bank, Intrinsic Semiconductor and Orbex — have sent a letter endorsing the country’s Labour Party ahead of the country's general election on July 4.

• “We are looking for a government that will partner fiscal discipline with a long-term growth strategy, working in partnership with the private sector to drive innovation and investment,” the letter read.

💰 Private equity fund Bridgepoint has invested a hefty €650m to acquire a majority stake in French intranet provider LumApps and support the company’s international expansion. The transaction saw the UK firm purchase shares from existing investors Goldman Sachs, French public bank Bpifrance as well as VCs Eurazeo and Iris. 

👀 You might have heard of Marc Andreesen’s pro-innovation e/acc movement, you might have even heard of the slightly more cautious eu/acc counterpart, or the regulation-light “🇬🇧/acc” agenda. Now, there’s a fresh /acc in town — def/acc — and it’s the focus of a new programme from company builder Entrepreneur First.

• Def/acc isn’t specifically about defence tech — it’s regarding technology that defends against big threats to humanity like pandemics and cyber attacks.
• The programme will invest $250k in promising startups using AI and other technologies to make the world safer.

🤔 What is a wealth partner and why do founders need one? (Sponsored by Citi Private Bank)

Earlier this month, Brazil’s Nubank became the first neobank outside Asia to reach the 100m customer milestone, 11 years after its launch. It made $1bn in profit and $8bn in revenue last year. While those are numbers that Europe’s big-name neobanks — Monzo, Starling, Revolut and N26 — are yet to reach, they have made significant headway.

• Revolut, founded in 2015, is closest to Nubank’s figure with 40m customers as of three months ago. It did, however, fail to retain profitability in its 2022 financial results.
• Monzo has 9m customers and N26 has 4.2m customers, but they are yet to reach profitability. At 3.6m, Starling has the fewest customers but is the only neobank out of the four that’s currently profitable.

June 3 | Vienna. Join Sifted at the ViennaUp Startup Festival for an exclusive networking event to connect with the fastest-growing startups on our Central Europe Leaderboard. RSVP. 

June 4 | Munich. Newsletter editor Tom Nugent is moderating a panel on the state of Europe’s spinout ecosystem at Spinoff Summit 2024. Going to be there? Reach out.

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 4-6 | Munich. Reporter Kai Nicol-Schwarz will be at Bitz & Pretzels healthtech conference. Reach out if you'll be joining him.

June 4-6 | Amsterdam. Fintech reporter Tom Matsuda will be at Money20/20. Drop him a line.

June 12 | Online. Tom Matsuda is also bringing together a panel of experts from Omio, Eight Roads and Tipalti for our next Sifted Talks to look at how to build, nurture and maintain an airtight finance team to improve your bottom line. RSVP.  

November 6-7 | Barcelona. Join Impact/Week — this annual summit is dedicated to defining the critical problems of our time and enabling solutions to them. Connect with Europe's top impact founders, investors and enablers, at a truly unforgettable location. Save 30% on tickets by quoting code SIFTED30. RSVP.

Stockholm-based Cloover, which is creating an operating system that offers software, energy and finance solutions for the renewable energy ecosystem, raised $114m in seed funding (split debt and equity). Lowercarbon Capital led the round and were joined by investors including 9900 and QED Investors.

Cork, Ireland-based Zartis, which helps customers design software tools and build software teams, raised €10m in funding from Development Capital.

London-based Swiipr, a London-based airline payments platform for flight delay payments, compensation and operational payments raised £6m in Series A funding. Octopus Ventures led the round and was joined by investors including TX Ventures and Solano Partners.

Lyon, France-based Vizcab, a software platform that helps buildings understand and reduce their carbon footprint, raised €4.5m in Series A extension funding. KOMPAS VC led the round and was joined by investors including Global Brain and Brick and Mortar Ventures.

Torino, Italy-based Revolv Space, which provides components for small satellites, raised €2.6m in funding. Primo Ventures led the round and was joined by Takeoff Accelerator.

Copenhagen-based ZTLment, which helps ordering and booking platforms run payment operations, raised €2.4m in pre-seed funding from investors including PreSeed Ventures, Upfin and Giant Ventures.

Guildford, UK-based Signapse, which builds AI solutions for people who need access to sign language translation and interpretation, raised £2m in seed funding (£1.5m in equity; £500k grant from UK government). Soulmates Ventures and Deeptech Seed Fund led the round and were joined by investors including the Royal Association for Deaf people, Empirical Ventures, CEAS Investments and FSE Group. 

Copenhagen-based Claimlane, a returns and claims management platform for brands and retailers, raised €1.8m in seed funding. Vendep Capital led the round.

Turin, Italy-based Zefi.ai, which uses AI tools to help product teams analyse user feedback, raised €1.6m in pre-seed funding. 360 Capital and 14Peaks Capital led the round and were joined by investors including B Heroes, Believe in Tech, Secways, Aticco Ventures, Growth Engine, Vento and Halo Fund.

Dublin-based inspeq ai, a software development platform that focuses on data security and privacy when evaluating and monitoring LLM apps, raised $1.1m in funding. Sure Valley Ventures led the round and was joined by investors including Founders Fund and Plug and Play.

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