Sifted - Headline's $865m fund

Good morning there,

Summer's over — and funding is, finally, flowing into European venture again. In the last month VCs have raised almost $3.5bn; Balderton and Atomico closed more than $1bn in funding each — and now San Fran- and Berlin-based Headline has a new growth fund of $865m to play with. Today, senior reporter Anne Sraders has more on where it plans to deploy the capital. 

Elsewhere:

• Exclusive: Credit card fintech Yonder raises £23.4m as it eyes EU expansion
• DeepMind AI drug discovery spinout Isomorphic Labs issues £182m in new shares
• Germany unveils €12bn initiative to bolster startup scene

— Tom Nugent, newsletter editor

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💊 DeepMind spinout Isomorphic Labs, which has developed an AI drug discovery platform for the pharma and biotech industries, has issued £182m in new shares, according to Companies House documents. 

• The company’s AI platform can recommend which potential molecule combinations will have the intended result on the body in a prospective new drug. Its leader — and DeepMind cofounder — Demis Hassabis has said Isomorphic Labs is looking to halve the time it takes to find new medicines.
• The shares were priced at £1.65 each, a 65% increase since Isomorphic last issued £89m-worth of shares in 2021, priced at £1 each.
• The news follows Isomorphic Labs announcing two partnerships worth up to $2.9bn with pharma giants Eli Lilly and Novartis in January this year.

🇬🇧 Yonder, a British credit card startup specialising in reward points, has closed a £23.4m funding round as it eyes up EU expansion. 

• The investment was co-led by RTP Global and Repeat (previously Jigsaw), a new fund that’s operated in stealth for the past four years. 
• Yonder’s valuation is now above £100m (up from £70m when it last raised in April 2023), says CEO Tim Chong. It has more than 20k users, and Chong says it tripled revenues in the past 12 months. 

🇩🇪 San Francisco- and Berlin-based VC Headline has raised $865m for a new growth fund — and it’s planning to invest half of that in European startups. The firm has also hired a new team to run the fund, led by outgoing TCV growth investor Shalini Rao. 

• Rao tells Sifted she’s particularly interested in pharma, software and defence scaleups. 

🇩🇪 German politicians announced that they hope to pour €12bn into the country’s startup scene by 2030 to provide more growth capital to startups and strengthen the German economy.

• The so-called WIN Initiative, which was announced earlier this year, is set to mobilise money from public and private capital sources such as Deutsche Bank, Allianz, Commerzbank, Deutsche Telekom, AXA Deutschland and insurance companies such as HUK Coburg.
• At the Startup Germany summit on Tuesday, a declaration of intent was signed by all parties supporting the initiative (to cheers from the audience), including 20 corporations such as BlackRock and Deutsche Börse, and Chancellor Olaf Scholz himself.
• Politicians clarified how the hoped-for €12bn will be spent, though no details were given about how much money has already been committed.

👀 Amazon aggregator unicorn SellerX is no longer up for auction. The auction — initiated by two of its debt providers, BlackRock and Victory Park Capital — was cancelled on Tuesday. The startup’s creditors have instead decided to continue debt negotiations with the struggling company. In Q2, BlackRock had marked its loan with non-accrual status, meaning SellerX had stopped making payments.

• Read the backstory on how SellerX came to auction here. 

👀 The marketing startups currently out fundraising — plus, their pitchdecks

🔍 How to find the best startups to invest in. (In partnership with Barclays)

Digital marketing 101

• Low engagement: every marketer’s biggest fear. As we see above, round counts in 2024 are on track to hit the lowest level in years. 
• What gives? Online ad saturation, for one thing — and targeted ads don’t seem to be getting much better, either. 
• It can be a daunting sector for startups, due to the dominance of industry gorillas like HubSpot. There’s also confusion galore over what comes after Google’s cookie phase-out — that tiny bit of software is the workhorse of Europe’s near-$100bn digital advertising economy. 
• Still, growth areas exist. If you're in the cookie-replacing business, you’ve got people’s attention. Startups touting “first-party data” and “contextual marketing” approaches are in fashion with some investors. 
• And as social media continues to attract the most internet eyeballs, startups specialising in influencer marketing are in demand. 

Capture those leads: discover 88 early-stage digital marketing startups in our latest briefing.

For access to our full briefing library, plus our weekly deals newsletter breaking down the latest funding trends and unlimited access to Sifted’s journalism, subscribe to Sifted Pro.

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Berlin:

• Sadia Nowshin is at Atlantic Labs’ From the Labs event today. Drop her a line if you’re also attending.
• Anne Sraders is at Project A's defence conference tomorrow. Also there? Get in touch.

London: 

• Freya Pratty is at the Frame conference for VCs and LPs today, and the RealTech conference tomorrow. If you’re at either of those, get in touch.
• The whole team of Sifted journalists is at the Sifted Summit on October 2 and 3 — along with many of Europe's smartest founders and investors. Get your ticket now before they're all snapped up!

Oxford:

• Kai Nicol-Schwarz is at climate festival The Heat tomorrow. Also there? Drop him an email. 

Richmond, UK-based Peratech, which develops force and haptic-based user interfaces, raised $31.5m in funding from investors including Dark Matter Partners.

Lyon, France-based Brenus Pharma, which specialises in the development of vaccines against cancer, raised €22.2m in Series A funding. Angelor led the round and was joined by investors including UI Investissement/Kreaxi, Crédit Agricole Centre-France, Crédit Agricole Centre-Est, Noshaq, Investsud, Jacques Gardette and Stéphane Legastellois.

Paris-based Inbolt, a robot guidance solution, raised €15m in Series A funding. Exor Ventures led the round and was joined by investors including Bpifrance, Yann Fleureau, MIG Capital, SOSV and BNP Paribas Développement.

Amsterdam-based CarePay International, an healthcare insurance platform, raised €10m in funding from investors including Reinsurance Group of America. 

Paris-based Wegrow, which developed a rating system for best business practices, raised €7m in Series A funding. Nauta led the round and was joined by investors including Wille Finance, Shapr Ventures, Scalefund, VU Venture Partners, and She1K.

Southampton, UK-based Aquark Technologies, a quantum spinout from the University of Southampton, raised €5m in seed funding. NATO Innovation Fund led the round and was joined by investors including EIFO and UKI2S.

Copenhagen-based Scandinavian Biolabs, which develops targeting early-stage hair loss, raised €4m in funding. Auréa Group led the round.

Vienna-based ContextSDK, which is a user context platform for mobile apps, raised $4m in seed funding. Speedinvest led the round and was joined by investors including First Momentum Ventures and Heracles Capital.

Leuven, Belgium-based Fixform, a platform for building management and maintenance, raised €1.5m in funding from investors including Pitchdrive, Imec.istart, Delaware Ventures and StarApps. 

Paris-based My Digital Buildings, which specialises in spatial building data, raised €2m in funding. The deal was made up of €1.2m equity from Paris Business Angels, Badge, Rhône Dauphiné Développement, Daylight Investissement, Laurent Fiard and Guillaume Anelli, and a debt facility of €800k from Bpifrance, CIC and BP Aura.

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