Sifted - Lilium needs a lifeline

Good morning there,

While Europe's most-hyped AI startups continue to raise huge funding rounds with apparent ease (looking at you, Poolside and ElevenLabs), many of the continent's much-hyped scaleups of yesteryear are struggling.

Munich-based flying taxi startup Lilium (backed by Atomico, Earlybird and Tencent) is facing mounting liquidity issues, according to its half year report published last week — and needs to raise more funding soon, or dramatically cut costs. 

Meanwhile Bristol-based chipmaker Graphcore, which was acquired by SoftBank for over $600m earlier this year, only made $4m in revenue in 2023, according to its latest company accounts. That's a far cry from the $1bn in revenue founder and CEO Nigel Toon predicted Graphcore would hit by 2024, back in 2019. 

Plus:

• The things nobody told me about launching a VC firm: How to set up a fund structure. 
• Period tracking app Clue CEO on why she’s stepping down
• 11 Cambridge startups to watch, according to investors

— Amy Lewin, editor

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😕 German flying taxi company Lilium is facing mounting liquidity issues, according to its half year report published this week. The company says that it “immediately requires additional capital to continue to finance its ongoing operations” and will be forced to cut costs, reduce operations or file for insolvency if it cannot raise fresh funding.

• The stark warning comes just months after Lilium raised $114m from investors in May.
• The startup, founded in Munich in 2015, has been backed by VCs including Atomico, Earlybird Venture Capital and Tencent and in 2021 listed on the Nasdaq via a SPAC. 

🍟 UK-based chipmaker Graphcore made just $4m in revenue in 2023, according to its latest company accounts, filed on Friday — three months on from the company’s $600m+ acquisition by SoftBank.

• It's a small increase from the $2.7m it made the year before. Losses before tax, meanwhile, fell to £131m by the end of 2023, compared to $197m the previous year.

🎙️ Polish AI voice startup ElevenLabs is being courted by investors who are willing to price the company at $3bn, according to reporting from TechCrunch. 

• ElevenLabs uses generative AI technology to create synthetic voice products that can be used for applications like dubbing videos and voicing news articles.
• In January, the company secured a $1bn valuation in an $80m Series B round co-led by Andreessen Horowitz, Nat Friedman and Daniel Gross.

🧐 The things nobody told me about launching a VC firm: How to set up a fund structure. 

• When you raise your first fund, especially if it’s small and you are solo, most LPs worry about how you will allocate your time, and scale investing and portfolio support. Yet the biggest, most unexpected bottleneck Carmen Alfonso Rico, founding partner at VC firm Cocoa, encountered was around ops — everything from setting up a fund structure to all the processes and providers required to run a fund. In this piece, she lays out everything she’s learnt.

🩸 Clue’s outgoing CEO Audrey Tsang on the challenges of scaling a female health startup. 

• After three and a half years at the helm of period and ovulation tracker Clue, Tsang — who is expecting her first child — is stepping down to focus on family for a while. Clue’s former chief product officer, Rhiannon White, will step into the top job. 
• The female health startup founded in 2013 by Ida Tin — who coined the term “femtech” — has faced challenges over the last few years in terms of scaling the business and growing revenue, amid a backdrop of Covid-19, economic turbulence and a limiting of reproductive rights in the US.
• Clue says it is turning things around though, having launched various new products last year and rebuilt 80% of its technical platform, and is close to achieving profitability, Tsang tells Sifted.

🪙 Sam Altman’s Worldcoin deprioritises Europe due to GDPR regulatory fight

🎓 11 Cambridge startups to watch, according to investors

🤑 How to raise from high-net-worth individuals

How to expand with an M&A mindset 

90% of executives expect an increase in foreign M&A targets in 2024. If you’re looking to go global, our Sifted Guide will help you better understand how to navigate the complexities of moving to a new market, from finding the right talent to bridging the cultural divide.

Today and tomorrow. Editor Amy Lewin and Startup Life reporter Anisah Osman Britton are at the WVC:E conference in Paris. If you're there, say hi!

November 7 | In-person. Sifted breakfast in Barcelona. Sifted senior reporter Freya Pratty will be joined by Alejandro Marti, founder of climate risk platform Mitiga and a local VC, to discuss which areas of impact tech Spain can excel at. Sifted has 20 free tickets to give out, and those recipients will also get a ticket to the wider Impact Week. Apply to attend.

Vilnius-based Green Genius — which develops solar, wind, biogas and hydrogen projects — has raised €100m in equity funding from the European Bank for Reconstruction and Development.

Zurich-based Voliro, a company building flying inspection robots for industrial maintenance, has raised $12m in a Series A led by Cherry Ventures.

Aachen-based Voltfang, a German startup developing battery storage technology, has raised an €8m Series A.

Maslomiaca-based Proteine Resources, a Polish biotech company which creates insect feed for poultry and pets, has raised €1.36m from SMOK Ventures and Bitspiration Booster VC.

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