Sifted - Alt-food startups to watch

Good morning there,

On Sunday, voters in the East German states of Saxony and Thuringia will head to the polls to elect new state governments — and it’s looking likely that Germany’s far right party, Alternative Für Deutschland (AfD), will gain even more power. 

Today, I get into what startups think will happen if the party — classified as “confirmed right wing extremist” in Thuringia and Saxony — gets a big share of votes.

Elsewhere today:

• 7 alternative food startups to watch, according to investors
• Climate change and turbulent geopolitics buoy insurtech startups
• The European startups in Y Combinator’s latest cohort 

— Miriam Partington, senior reporter

Entrepreneurs, want to go global?

🌁 Just 10 European startups have made it into world-renowned startup accelerator Y Combinator, out of a cohort of 223.

• That's less than the previous cohort — which had 13 European companies — and the one before that, which had 26.
• 54% of the global cohort are working on, you guessed it, AI. 

🇩🇪 Elections take place in the East German states of Saxony and Thuringia on Sunday — and startups say they are concerned about the right wing party Alternative für Deutschland (AfD) gaining further traction. 

• According to opinion polls, the AfD is on track to win in Thuringia; in Saxony it could win or come a close second. This could have far-reaching implications for startups when it comes to hiring talent, getting investment and continuing to live in an open and democratic society, founders tell Sifted.
• In particular, some think the AfD’s hostile approach to immigration will damage the tech ecosystem, which relies on international experts. “Our success as a deeptech startup is dependent on finding international talent in the specialisations and skill sets we need,” says Wandelbots founder Christian Piechnick. “Typically, [these] are not easy to find, and needless to say, it’s not necessarily Germans taking these jobs.”
• Startups and other organisations are pulling together across Saxony and Thuringia to stand up against the AfD, forming alliances such as the “Cosmopolitan Thuringia” initiative which champions diversity, openness and democracy.
• “It’s so important to say that innovation does not stop at national borders and that’s why we need an open-minded society,” says Christiana Kilian, chairperson of STIFT, a foundation for technology, innovation and research in Thüringen. “It’s so important to tell people, you are welcome here. We need you for our future.”

🐮 7 alternative food startups to watch, according to investors 

🧐 ICYMI: How many startup organisations does Europe need?

39 of the UK’s 100 fastest-growing companies have a foreign-born founder or cofounder, according to a new report from The Entrepreneurs Network (TEN). 

• Immigrants, the startup support network argues, “play a disproportionate part when it comes to starting some of the most dynamic, promising and influential companies in the British economy”. 
• Yet, it warns, the UK is swiftly becoming “a less attractive place in which to grow a business”, as a result of visa restrictions and increasingly hostile rhetoric around immigrants. 
• It’s not the only voice raising concerns. Blue Lake, a London-based VC that backs diaspora founders, also rang alarm bells this week, with the publication of a new survey of international founders in the UK. “Since Brexit, the UK has faced competition from both the US and the EU in attracting tech talent and founders,” David Gilgur, founding partner at Blue Lake, told Sifted. “Anti-immigrant sentiments are unlikely to attract the best and brightest.”
• The largest proportion of foreign-born founders at the UK’s fastest-growing companies come from the US (15.2%), followed by Germany (9.1%). 

TEN’s report makes a set of policy proposals — including changes to the UK’s skilled worker and global talent visa rules and fees — to keep the UK attractive to overseas talent.

A riskier world could boost insurtech startups

• Investor interest in insurtech is surging, as natural disasters, new technology and geopolitics spell risk and reward for the sector, our latest Sifted Pro Briefing finds. 
• Europe’s position has strengthened — the continent’s share of global insurtech deals reached 35% in Q2, a record high, according to CB Insights. 
• European insurtechs also achieved a seven-quarter fundraising high ($500m) in Q2, driven by a $93m deal for Iceye, the Finnish satellite imagery provider which insurance companies use to monitor hazards and their impact on infrastructure and property.
• Other notable European deals this year include rounds for a trio of London companies: pricing intelligence platform hyperexponential ($73m Series B), home insurer Urban Jungle (£11.2m) and automation software provider Artificial Labs (£8m).

• Global warming is making storms, floods and wildfires more extreme — and, in response to an uptick in catastrophes, insurers have three choices: pull back, raise premiums or explore novel insurance options. 
• AI could have a big role to play in the sector — and is proving tempting to VCs; AI-focused insurtechs raised a third of all funding in the sector globally in Q2, according to Gallagher Re.

To discover every insurtech funding round announced in Europe this year, here’s a sneak peak of our funding tracker — exclusive to Pro subscribers.

Startup Europe's must-attend event is back in London

Sifted Summit, October 2-3, brings together Europe’s startup founders, operators and investors under one roof to explore the trends and challenges shaping the ecosystem. Network with key players, hear from over 200 star speakers, join official side events, engage in intimate roundtables and more!

Moirans, France-based WATTALPS, a lithium-ion battery startup, raised €11m in Series A funding from new investors Supernova Invest, Move Energy and Ring Capital. CASRA Capital, EIT InnoEnergy, Eximium and EIC Fund also participated.

Gothenburg, Sweden-based Nordic SeaFarm, which is focused on sustainable seaweed cultivation, raised €2.1m in funding. The round was led by InnoEnergy and Inter IKEA.

Copenhagen-based Tiimo, a visual planning app for people with ADHD and autism, raised €1.4m, bringing its total seed funding to €4.3m. The round was co-led by Crowberry Capital and People Ventures, with participation from Inner Foundations.

If you’d like to submit a deal, get in touch. 

For more deals, analysis and M&A insight, become a Pro subscriber to receive our weekly Deals newsletter.

• Sign up to our specialist newsletters if you want more on fintech, climate tech, startup life and VC.
• Tune in to Sifted’s podcast, Startup Europe.
• Join the Sifted team along with 3,000+ startups, founders and investors at Sifted Summit this October. Get your ticket now!
• Join Sifted’s journalists for live Sifted Talks with industry experts, diving into the biggest questions facing startup Europe.
• Access investment-grade research on the hottest sectors, rising stars and success stories from across European tech by subscribing to Sifted Pro.
• Follow us on LinkedIn and X.