Earlybird Digital East rebranding as own fund

Good morning there,

This morning we’re reflecting on the tragic news that tech founder and investor Mike Lynch is believed to be among the five bodies found by rescue divers after his yacht sank off the coast of Sicily on Monday, according to the Telegraph. We ask what his legacy is for UK tech.

We’ve also got the scoop that Earlybird Digital East — the fund associated with Berlin-based Earlybird Venture Capital, which invests in central and eastern European startups — is breaking ties with the Earlybird family and rebranding. Anne Sraders has more details below.

Elsewhere today:

• Thomson Reuters snaps up UK AI startup developing LLMs for the legal sector
• Ex-Checkout.com duo raise $4.5m to help platform companies streamline payments
• UK digital bank Starling posts new job ad that signals it’s gearing up for an IPO

— Tom Nugent, newsletter editor

🇬🇧 British entrepreneur and investor Mike Lynch, cofounder of cybersecurity company Darktrace and software firm Autonomy, is believed to be among the five bodies found by rescue divers in the search of his yacht, which sank Monday in a violent storm off the coast of Sicily, the Telegraph reports. Fifteen people escaped the yacht before it capsized, while one person remains missing. The body of Lynch’s 18-year-old daughter is also believed to have been found.

• Lynch, one of the UK's best-known tech entrepreneurs, was acquitted of criminal charges in the US in June after a 12-year legal battle over Autonomy's $11bn sale to Hewlett-Packard in 2011.
• A UK judge ruled in favour of HP in a civil fraud case in 2022, with the US computing firm seeking billions in damages.

💰 Exclusive: Two Checkout.com alumni have raised $4.55m in funding for their fintech startup Revenew — which emerges from stealth today. Revenew aims to help platform businesses like Uber and Spotify to streamline their payment operations. 

• LA-based VC firm Fika Ventures led the round; Dash Fund and TTV Capital also participated.
• The two cofounders are Ben Foster, Checkout’s former senior vice president of engineering, and Nicolas Thomson, who was the payment fintech’s head of product. 

🤝 Global news and tech company Thomson Reuters has acquired UK AI startup Safe Sign Technologies, which develops large language models (LLMs) for the legal sector, for an undisclosed sum.

• The sale comes as the market for AI legaltech reaches fever pitch, with at least six young European companies in the space raising significant VC funding this year. 
• Reuters, which has developed its own AI tool for lawyers, CoCounsel, has bought 10 companies since 2020, spanning legaltech, software and payments.
• In March, Thomson Reuters chief executive Steve Hasker told the Financial Times that it has an $8bn war chest to spend on acquisitions and investments in AI-focused businesses.

🇬🇧 UK digital bank Starling has started the hunt for a group head of investor relations, signalling that it’s moving closer to a potential IPO. Its online job listing says the company is looking for someone to work with senior management to deliver a ‘successful public listing or other capital event’.

Earlybird Digital East is splitting with the Earlybird family and rebranding

There have been a lot of shakeups among VC firms in the last year, from organisations breaking ties with their China arms (like Sequoia Capital in the US) to VC M&A, like General Catalyst’s merger with Berlin-based VC La Famiglia.

Now, Earlybird Digital East — the VC fund known for making one of European tech’s most successful bets with its investment in Romanian software unicorn UiPath’s $1.6m seed round back in 2015 —  is spinning off from the Earlybird family, I report this morning. 

The fund (which will soon have a new name) has had a licensing deal with the Berlin-based Earlybird Venture Capital since 2013 and has been operating separately. Now, they’re parting ways, a source with knowledge of the decision told me. 

Cem Sertoglu, managing partner at Earlybird Digital East, confirmed the move, adding in a statement that “starting in the autumn of 2024, Digital East Fund will no longer be a part of the Earlybird family of funds,” and that it’ll continue to operate separately (as it has been) and “our structure, team and strategy will not change”.

Earlybird Digital East’s investment in UiPath — which went public via a $1.3bn IPO back in 2021 — helped the fund make a $2.3bn return on its $150m 2014 fund, Sifted understands.

You can dig into the full scoop here — but I’m curious to hear from you, readers. Do you think we’ll see more local teams or funds split off from pan-European VC firms in the future, in an aim to build their unique brands? How important is VC brand these days? I’m all ears. 

— Anne Sraders, senior reporter

👀 Saudi wealth fund brings era of easy money to an end. (Financial Times)

Climate intelligence: VCs are coming in hot

• One of the big pursuits of the future is figuring out the climate change price tag for businesses, real estate, supply chains and cities. 
• To this end, VCs are pumping hundreds of millions of pounds into the rapidly growing world of climate intelligence — which includes the data, risk models, tailored analyses and insights institutions need to understand and respond to climate risks.
• Funding for Europe’s early-stage climate intel startups in 2024 could surpass 2023 figures, per our latest Sifted Pro briefing (🔐), published today. The sector has soaked up $335m this year, compared to $412m for all of 2023 (the sector’s peak was $507m in 2022).
• So who are the top early-stage climate intel backers in Europe? For public funds, it’s the European Innovation Council and the EU Agency for the Space Programme. The big VC backers include US investor Plug and Play and London’s Seraphim Space.

Curious to know more about Sifted Pro? Click here for info on our library of 150+ briefings.

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Lausanne, Switzerland-based Vandria, which develops small molecule mitophagy inducers that rejuvenate cells and treat age-related and chronic diseases, raised $10.1m in Series A extension funding. ND Capital led the round and was joined by investors including Hevolution Foundation and Dolby Family Ventures.

London-based BeyondMath, which uses AI for advanced engineering design, raised $8.5m in seed funding. UP.Partners led the round and was joined by investors including Insight Partners and InMotion Ventures.

Zurich, Switzerland-based Optiml, software to help real estate asset and portfolio workflows become more sustainable, raised $4m in pre-seed extension funding. BitStone Capital led the round and was joined by investors including KOMPAS VC, Innovation Endeavors and Planet A Ventures.

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