Good morning there,

This morning, Sifted’s Europe editor Mimi Billing looks at the lack of women-led AI companies grabbing the fundraising headlines in European tech, and asks whether that means the funding gap between male and female founders will widen (even more) this year. The answer: yes, probably. Scroll on for that.

We also have news that US neobank Mercury — which is backed by Andreessen Horowitz and Coatue — is closing bank accounts used by startups to pay employees based in Ukraine. Many Ukrainian founders are furious.

Elsewhere today:

• GenAI investment to delay profitability at digital health unicorn Kry

• All the new European unicorns of 2024
• Morgan Stanley leads $31m investment into international payments fintech Sokin

— Tom Nugent, newsletter editor

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😬 US neobank Mercury has told Ukrainian startups their bank accounts will be closed from August due to complex compliance requirements. The move puts Ukrainian businesses in the same category as those that face international financial sanctions, such as Russia, Iran and Belarus— and has enraged many founders who rely on the bank to pay their Ukraine-based employees.

• “We will continue to revisit this policy and hope that we can change this in the future,” Mercury told Sifted in a statement.

🇸🇪 Swedish digital healthcare startup Kry says that doubling down on its investment into generative AI is set to delay profitability at the company.

• The unicorn is profitable on a country level, which does not take into account centralised company costs like developing tech on its digital platform in all its markets. It had initially set its sights, however, on getting out of the red across the business by the end of 2024. Kry says that would have happened this year without its heavy investment into AI — among its biggest overheads in the past 12 months — but it is now likely come in 2025. 
• According to the company’s latest accounts, pre-tax losses for 2023 fell to €78m — roughly half of the €155m they were in 2022 — after savings from the company’s “major restructuring”. Revenue rose slightly from €168m to €188m.

💰 Morgan Stanley Expansion Capital, the investment arm of the American banking giant, has led a $31m investment into London-based international payments fintech Sokin. 

• Other investors involved in the transaction include Aurum Partners, the family office associated with the American football team San Francisco 49ers, and former PayPal chief commercial officer Gary Marino, who will take a board position. 

💸 San Francisco-based VC firm Iconiq Capital announced a massive new $5.75bn growth fund to invest in startups — its seventh and largest-ever growth fund. The firm has a London office and has previously backed Dutch payments firm Adyen and German AI translator startup DeepL.

Where are the women in AI?

At a recent coffee meeting with an investor in Stockholm, we talked about some of the great generative AI startups we’ve both met. For example, one-year-old Leya, which does AI for legal and has just raised its Series A, came up. 

Leya, as well as LegalFly and Dust (all with funding rounds this month), are examples of a GenAI boom that has seen the sector raise more in 2024 so far than it has in any previous full year, according to a recent report by data platform Dealroom. That same report shows that AI startups more broadly have raced to secure 18% of all VC funding in Europe.

But view the “About Us” or LinkedIn pages of the companies raking in the capital and you’ll see a common theme: the vast majority of them have men-only founding teams. 

None of the companies on the list of the 10 biggest European GenAI funding rounds in Sifted’s recent report on H1 dealmaking has a female cofounder. Scroll a bunch of the recent AI fundraises and it’s the same. 

Across European tech in general, female founders have a hard time raising capital. According to Atomico’s State of European Tech report, only 3% of venture capital in Europe went to all-women founding teams last year; 82% went to all-men founding teams.

There are women-led AI startups out there. Sifted recently covered agentic AI startup Stanhope AI’s £2.3m raise, for example. Beyond that, it seems like it’s slim pickings. So with GenAI being the hottest area for investment at the moment, where are all the female founders? 

During the same conversation with the investor, I could only think of one other female-founded GenAI startup, Swedish-born AI learning copilot Melon. But it shut down in March, because it “didn't have enough success to be profitable or gain the confidence of investors,” the founder told me in an email.

Recent AI developments promise to be a core part of future businesses, so it’s a big problem from a diversity perspective if women aren’t involved in shaping it. 

As the investor I spoke to pointed out: “AI is getting all the venture capital at the moment. If women are not starting AI startups the gap in capital raised between male and female entrepreneurs will grow even further.”

Am I wrong to think there are so few female-led AI startups? Are there others I’ve just not come across? If there are, are they being funded? As always, if you have thoughts you want to share — please get in touch.

— Mimi Billing, Europe editor 

🦄 All the new European unicorns of 2024.

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Luxembourg-based Gcore, which provides edge and cloud computing solutions for media businesses and the entertainment industry, raised $60m in Series A funding. Wargaming led the round and was joined by investors including Constructor Capital and Han River Partners. 

London-based Plum, a savings and investment app, raised £13.4m in Series B funding from investors including Eurobank, iGrow Venture Partners, VentureFriends and Ventura Capital. 

Lisbon-based Sqill, which uses AI tools to automate brands’ creative workflows, raised €2m in seed funding. GED Ventures led the round. 

Zurich, Switzerland-based NetFabric, which uses machine learning to improve network monitoring, raised €2m in pre-seed funding. Founderful and Playfair Capital led the round. 

Cambridge, UK-based Assisterr, which is developing a community-owned network of small language models, raised $1.7m in pre-seed funding from investors including Web3.com Ventures, MOONHILL CAPITAL, Contango, Outlier Ventures, Decasonic, Zephyrus Capital, Wise3 Ventures, Saxon, GFI Ventures, Koyamaki Ventures and Lucid Drakes Ventures.

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