Sifted - Europe's first femtech unicorn

Good morning there,

Today we’ve got the news that period tracking app Flo Health is set to raise $200m from US growth investor General Atlantic — which takes its valuation beyond $1bn and gives Europe its first femtech unicorn. Reporter Kai Nicol-Schwarz has more on that below. 

Elsewhere today:

• ElevenLabs cofounder Mati Staniszewski: OpenAI is our biggest competitor
• The GoCardless founder factory: 10 alumni-turned founders
• Employee equity in the UK is broken: here’s how to fix it

— Tom Nugent, newsletter editor

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Europe's first femtech unicorn

UK period-tracking app Flo announced yesterday that it’s set to raise $200m from US growth investor General Atlantic — the backer of the likes of Uber and Airbnb; no femtech startup has ever raised more than that on either side of the Atlantic. 

The news did two things: It gave Europe its first femtech unicorn and made Flo stand out in a digital health sector that has seen funding fall precipitously in recent times. 

Zoom out: Funding for digital health startups has slowed since it spiked during the Covid pandemic; last year digital health startups picked up just over one-third of what they did in 2021. Figures for 2024 aren’t looking any more promising. 

Add to that, when I asked investors at US healthtech conference HLTH’s Amsterdam debut a month or so ago where Europe’s next digital health unicorn would come from, none of them put their money on a femtech. They instead suggested AI automation, remote patient monitoring and preventative care companies.

The data: The answers they gave could be symptomatic of the dire state of femtech funding here in Europe; in 2023 European startups in the sector raised just $191m, according to data platform Dealroom, a fraction of the $9.7bn shelled out on the wider healthtech sector. 

There have been some notable raises. Previously, the largest raise by a femtech startup was women’s health product maker Elvie’s £70m Series C, which was picked up across several rounds in 2021. Swedish digital birth control startup Natural Cycles picked up $55m in May this year, one of the largest European digital health rounds of 2024.

Flo’s Series C blows both of those out of the water, and mints it as Europe’s first new digital health unicorn since 2021 — when the likes of the previous generation of healthtech darlings Kry, Alan and DocPlanner all hit a billion dollar valuation. 

— Kai Nicol-Schwarz, reporter

💰 XAnge, a Franco-German VC firm with more than €600m in funds under management, has quietly stopped fundraising for its inaugural crypto VC fund even as the Web3 market shows signs of recovery, according to two people with knowledge of the matter. 

• In 2022, the firm announced it was raising for a crypto-specific fund — the Digital Ownership Fund — and targeting a close of €80m. It recruited cofounder of Paris-based Web3 luxury platform Arianee, Luc Jodet, to head up the endeavour, which planned to focus on seed and Series A blockchain investments.
• The two people say the crypto fund struggled to gain enough backers to hit a first close; one source said European limited partners — the backers of VC funds — were hesitant to allocate capital to digital assets. 
• XAnge CEO Cyril Bertrand confirmed to Sifted that it’s no longer raising for a crypto-specific fund. Jodet remains on the team, but will now invest in crypto companies from XAnge’s latest flagship generalist vehicle, a €220m fund raised closed in 2022.

🍳 Audio AI startup ElevenLabs is no stranger to the darker side of AI. In January this year the company was at the centre of a deepfake controversy when an AI-generated robot caller impersonating Joe Biden phoned some voters in New Hampshire telling them not to vote in the state’s primary election; some audio detection experts said that the deepfake was likely created using ElevenLabs‘ technology (ElevenLabs has never admitted this). 

• “It’s one of the biggest question marks for the whole space: how can we counter those bad actors…” the company’s cofounder Mati Staniszewski tells senior reporter Zosia Wanat over brunch. The other big question? How to prevent “fraud and scams at scale,” he says. 
• Also on Staniszewski’s mind is OpenAI: “They will probably also start to build more and more models in audio,” he tells Wanat. “We think they won’t be focused on it as a vertical but their quality will get better, and for some of the use cases it might be enough. In the use cases where there is less control or less quality, but the price is important, OpenAI will probably be a bigger competition.”

🇬🇧 Employee equity in the UK is broken: here’s how to fix it.

🏭 GoCardless founders factory: meet the 10 former employees-turned-founders.

💰 How to get in front of investors. (In partnership with Barclays)

🚀 Space industry calls for bolder bets in UK funding strategy. (Financial Times)

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Trento, Italy-based Alps Blockchain, a startup that builds and operates mining farms, raised €105m in funding. Azimut Group led the round.

Aachen, Germany-based Protembis, a medical device startup which has developed a catheter-based filter device for use during cardiac interventions, raised €20m in venture debt funding. The European Investment Bank (EIB) led the round.

Vienna-based Tset, a carbon accounting software startup, raised €12.7m in Series A funding from investors including Carbon Removal Partners, Brose Ventures and Ingenics.

Zurich, Switzerland-based Metafuels, a startup producing sustainable aviation fuel, raised $4.9m in grant funding from the Swiss Federal Office of Energy.

Hannover, Germany-based Marcley, a startup offering multi-family homes a shared, green electricity supply, raised €4m in funding. Virida Capital and Venture Stars led the round and were joined by investors including Enjoy Ventures and Climate Founders.

Berlin-based Amperecloud, which has developed software to manage renewable energy sources like solar and wind farms, raised €3.3m in Series A funding. Encevo led the round and was joined by investors including Point9 and Vireo Electrification Fund.

Gothenburg, Sweden-based Melt&Marble, a startup using precision fermentation to make sustainable fats, raised €2.76m in grants funding from the European Innovation Council (EIC).

Deventer, Netherlands-based OpusFlow, an all-in-one ERP solution for sustainable installers of things like solar panels to heat pumps, raised €1.7m in funding from Peak.

Newcastle, UK-based Luminous XR, a company offering employee training and business operations support with XR training tools, raised £1m in funding. Mercia Ventures led the round.

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