Sifted - Graphcore acquired by SoftBank

Good morning there,

Today we have news that German defence tech Helsing has raised €450m in fresh capital; General Catalyst led the round. Reporter Kai Nicol-Schwarz also has the news that after months of speculation UK semiconductor startup Graphcore has been acquired by SoftBank. 

Plus, contributing editor Éanna Kelly brings us a big story on all things Swiss tech... scroll on for that.

Elsewhere today:

• 9 Nordic soonicorns close to the $1bn valuation threshold.
• Looking for the next $1bn idea? You might find it here. 
• When not to take a corporate's money.

— Tom Nugent, newsletter editor

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Switzerland: come for the sights, stay for the tech? 

Click on the website of a Swiss investment firm and you’re very likely to see images of VCs skiing on crisp snowy mountains or bathing in pristine lakes. There are worse jobs. But while everyone thinks of Switzerland as this idyllic place, bursting with money, this doesn’t mean investors can simply slide over to rich folk on ski lifts and tap them for dosh. 

“You put money in New York to make more of it while here it’s the opposite, this is a place where you put money to keep it safe,” says Alex Stöckl, founding partner of Zurich VC firm Founderful, when explaining what it’s like raising capital for his fund. “A Swiss wealth manager looks at a VC and says ‘no fucking way’.”

So maybe life’s not all straightforward for Swiss VCs. But one thing’s certain: they don’t lack for big, brainy stuff to invest in. 

An example: Onward, based in Lausanne, is one of the few companies in the world that can reconnect paralysed human brains with their bodies and help them regain some muscle control. In 2021, the company went public and it hopes to be among the first to commercialise a brain-computer interface, which could help people with spinal injuries. 

“The tricky bit is when you have to do DD [due diligence] on a company that wants to create a brain chip; imposter syndrome can kick in for sure,” says Stöckl. Two-thirds of Founderful’s portfolio are spinouts from Switzerland’s top two universities: EPFL and ETH Zurich. “We try to identify projects long before incorporation,” Stöckl says. As of June 2023, ETH Zurich has produced more spinouts than any other uni in Europe.

Big, brainy tech is a Swiss specialty, says Michael Sidler, cofounder and general partner at Zurich-based VC redalpine. “Switzerland was never much good at creating consumer tech companies — the talent who can do this mostly emigrates to Berlin. But when you need hardware combined with computer vision, say, this is where we’re very strong,” he adds. The country has produced some big firsts, including gene editing company CRISPR Therapeutics. 

Switzerland’s biggest weakness is that — perversely — it has too few problems. From masterful watches to Roger Federer, it can all feel a little too perfect. “Complacency can be an issue when you have a fantastic standard of living, high salaries and no employment problems. It takes away some of the scrappiness,” says Sidler.

Others point to a potentially bigger problem: Zurich is boring. Except it really isn’t, argues Stöckl, who — born in Germany — brings the benefit of an outsider’s perspective. “District 4 in Zurich, a nightlife hotspot, reminds me of Copenhagen four years ago or Shoreditch 10 years ago. The streets are full of people on a Monday night. It is way more exciting than people perceive it to be.”

Stöckl tells the story of a London-based investor friend who visited him one Tuesday last year. “I told him to bring his swimming trunks.” Two-hundred metres from Stöckl’s office, right in the middle of the business district, is an outdoor bathing area next to a bar. “My friend said, ‘You know what, I cannot tell anyone in London about this. When they hear I went for a lunch swim on a Tuesday, they will kill me. They run to their Pret A Manger at lunch and eat their shitty sandwich.’ I replied to him: ‘This is every day in Zurich’.”

For more on the Swiss tech scene, check out our Central Europe leaderboard report, which ranks the fastest-growing startups in the region

— Éanna Kelly, contributing editor

🇩🇪 German AI defence startup Helsing raised €450m in Series C funding led by US VC General Catalyst, the company announced yesterday. The three-year-old startup has been hot with VCs in recent years; other investors including Lightspeed, Accel and Saab participated in the funding. 

• Helsing says it will use the funding for R&D and to bolster its work in the Baltics. 
• The deal comes as defence tech has been heating up with investors as Russia’s war on Ukraine rages on.

🇬🇧 Graphcore has been acquired by SoftBank, following months of speculation about the future of the UK-based semiconductor startup.

• The company, which makes chips for AI applications, will become a wholly owned subsidiary of the Japanese investment giant but will continue to operate under the Graphcore name.
• The acquisition will see Graphcore “significantly” grow its team in the UK, said cofounder and CEO Nigel Toon on a media briefing yesterday.
• The announcement confirms Sifted reporting earlier this week that a deal had been agreed.

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🤔 When not to take a corporate’s money.

💡 Looking for the next $1bn idea? You might find it here.

👀 9 Nordic soonicorns close to the $1bn threshold.

🗄️ 20 future of work startups to watch. (Sifted Pro subscribers)

🇬🇧 UK announces biggest overhaul of listings regime in decades. (Financial Times)

London-based Switchee, a data platform for social housing providers which is aiming to lower heating bills and prevent mould in houses, raised £5m in funding from AXA and Octopus Ventures. 

Brussels-based Soda, which helps data teams test, prevent and debug data issues, raised $14m from investors including Singular and Point Nine.

Amsterdam-based Scaler, a platform for ESG data collection and reporting for the real estate sector, raised $10m in Series A funding. Plural led the round and was joined by investors including Base10.

Berlin-based kolum, a carbon pricing platform, raised €2.1m in pre-seed funding from investors including FoodLabs.

Stockholm-based Arkion (formerly Skyqraft), an AI analytics platform for power grid companies, raised $4m in funding. Subvenio Invest led the round and was joined by investors including Neptunia Invest and Antler.

London-based Iconic AI, an AI-driven games studio, raised $4m in pre-seed funding. HodlCo led the round and was joined by investors including FOV Ventures, Interface Capital and Deepwater Asset Management.

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