Sifted - Ex-Monzo staff want in on share sale

Good morning there,

Our big Q3 review is here. Some highlights…

It was bumpy. Few blockbuster deals — the megaround did not have a mega quarter — but Series A raises were at a year high. Munich was on a tear. High-Tech Gründerfonds was one of the few VCs signing cheques left and right. “Maybe everyone was just in a hurry to wrap things up before heading off to the beach,” says Romy Schnelle, the fund’s managing director. 

France had big out-of-office energy; Sifted tracked just 10 deals there in August. Was everyone watching the Olympics? I wouldn’t blame them: you can do a SaaS deal anytime but you have to wait four years to see Raygun breakdance. Our Paris colleague Daphné Leprince-Ringuet offers more nuance in the report.

Bottom line, loads of great nuggets and data points to discover: our head of research Jonathan Sinclair has more below. 

Elsewhere today:

• Big pharma is increasing investment into European startups — here’s where capital's being spent in 2024
• More than 50 former Monzo employees petition board to be included in share sale
• Vay secures €34m European Investment Bank loan to bring 'teledriven' cars to Europe

— Éanna Kelly, contributing editor

/A message from our sponsor Royal Academy of Engineering

Applications open: Science and technology VC fellowship

A pioneering Fellowship designed to enhance investor capability in identifying and deploying capital into high-potential, scalable, life science and deep tech ventures.

😯 A group of former Monzo employees are petitioning the digital bank’s board to allow them to participate in the company’s upcoming secondary share sale, announced last week. According to two people with direct knowledge of the matter, a group of 58 — many of whom were early employees at the UK neobank — signed a letter to its board of directors requesting to be included in the secondary transaction.

• A spokesperson for Monzo said: “We recognise Monzo has been built by the many people who’ve worked here over the last nine years, both current and former employees, and we’re grateful for everyone’s contributions to make meaningful progress on our mission so far. The option to participate in the current secondary sale has been offered to current employees, to recognise their ongoing contribution, engagement and work towards our growth – which ultimately benefits our customers and all option and share holders of Monzo.”

🇩🇪 German remote-driving startup Vay has raised €34m in debt from the European Investment Bank to roll out its service in Europe. The company launched its first driverless car service in Las Vegas in January 2024, where remote driving technology already has regulatory approval.

• "In Las Vegas, we can grow at your own pace and in our own time without always having to go back to the regulators. In Europe [...] you have certain service areas, and you test that and go back to the regulator, and so on," says Vay cofounder Thomas von der Ohe. "Europe has more uncertainties from a business perspective."
• Some cities in Europe are already showing an openness to having driverless cars on their streets sometime soon, von der Ohe adds, such as Hamburg — where Vay conducted test drives without a safety driver on public roads in 2023.

🤝 Klarna has signed a multi-year agreement to sell up to £30bn in buy now, pay later loans originated in the UK to a subsidiary of US hedge fund Elliott Investment Management, the FT reported, as the fintech looks for ways to free up capital ahead of an anticipated public debut.

• Klarna will still underwrite the loans and provide customer service to borrowers. Klarna 
• CFO Niclas Neglen said: “By efficiently managing our assets, we can deploy shareholder equity more effectively.”

💊 As many of the world’s most valuable pharma companies increase their dealmaking into European startups — Sifted has tracked where that capital is being spent. 

• Among the pharma companies that have upped their dealcount in 2024 — or expect it to rise — are the venture arms of Germany’s Merck, Switzerland’s Novartis, the UK’s AstraZeneca and the US’s Johnson & Johnson, Amgen, AbbVie and Pfizer, according to data provided by the companies, Sifted data and comparable data from Dealroom. Follow the money here.  

🧱 The construction tech startups actively fundraising.

🇦🇹 Could Europe's next XR and VR hub be Austria? (Sponsored by Austrian Business Agency)

Q3 in data

Momentum stalled across Europe in the third quarter of 2024 as equity funding fell by 34% to €10.1bn following a strong Q2 (€15.4bn), according to Sifted’s Q3 report. 

August was the quietest month for funding (€1.37bn) since April 2017 and the lowest for deal count since August 2014. Sifted tracked just 250 rounds — 43.3% less than this year’s rolling average.

Megarounds and venture debt were prominent themes in the first half of the year, detailed in Sifted’s H1 report, but both fell sharply in Q3. Just 27 megarounds were announced, compared to 42 in Q1 and 47 in Q2; debt investment only reached €1.2bn, whereas it was as high as €12.6bn in Q1 and €6.3bn in Q2.

As a result, late-stage funding only amounted to €2.1bn of total funding (including debt and grants), 70% less than Q2 and a mere 18.4% of the volume injected into the ecosystem over the past quarter. 

Consistency at early stage is helping move the numbers in the opposite direction: pre-seed to Series A deals contributed 34.2% of Q3’s total — compared to 17.2% and 23.8% in Q1 and Q2 respectively. 

Of all named rounds in Q3, Series A was the highest for funding. Pre-seed deal values are moving upwards too: the median round size has jumped from €0.7m to €0.8m to €0.87m over the past three quarters — averaging quarter-on-quarter growth of 11.7%. 

Climate tech received the most investment in total (€2.9bn), followed by B2B Saas (€2.6bn) and healthtech (€2.5bn). Of the 98 sectors tracked by Sifted, drug discovery (€980m), biotech (€703m) and electric vehicles (€562m) attracted the most funding; while medtech (66), biotech (65) and foodtech (58) topped the deal count charts.

The UK (€3bn) led Germany (€2.4bn), and France finished back in third with €1.2bn raised. UK and French investment fell by 71% and 75% respectively compared to Q2 — but in Germany the figure grew by 12%. Belgium, Finland, Poland and Portugal also had encouraging Q3s.

On a city level, London (€2.1bn) landed the most funding, followed notably by Munich (€1.2bn), which has emerged as a leading European tech hub. It finished just behind Berlin and Paris for deal count.

— Jonathan Sinclair, head of research

Sifted’s Q3 report was originally published on October 16. Pro subscribers were given exclusive early access and are able to access the underlying data featured across the report. You can find out more about Sifted Pro here.

Data can be your startup’s biggest asset — here’s how to use it

The world is drowning in data, but many startups miss the mark on underutilising it in business decisions. Without a solid infrastructure and data strategy, key insights get lost in the noise. Our guide shows you how to harness data effectively, from collection to analysis.  

Stockholm-based Aira, which develops and instals sustainable heat pumps and builds other clean energy tech solutions, raised €63m in funding from Temasek, Statkraft Ventures, Kinnevik and Altor.

Stockholm-based CorPower Ocean, which harvests electricity from ocean waves, raised €32m in Series B funding. NordicNinjaVC, SEB Greentech and InnoEnergy led the round and were joined by investors including Santander Asset Management, Iberis Capital and Cisco Investments.

London-based Autone, an inventory management platform for retailers, raised $17m in Series A funding. General Catalyst led the round and was joined by investors including Speedinvest, Y Combinator, 2100VC, Motier and Financière Saint James.

Prague-based Eyeball.Club, which helps professional football clubs scout upcoming talent using AI tools and data analytics, raised €5m in seed funding. Vendep Capital led the round and was joined by investors including Sportlogiq, Heartland and Founderment.

Sheffield, UK-based Mindtech, which develops synthetic data to train computer vision systems, raised £4.4m in funding. Edge led the round and was joined by investors including Mercia Ventures and the Northern Powerhouse Investment Fund.

Baar, Switzerland-based Albatross, which uses AI tools to help online businesses improve user engagement, raised €3m in funding. Redalpine led the round and was joined by investors including Daphni.

Zurich, Switzerland-based Sallea, which manufactures edible scaffolds that enable the cultivation of textured meat and fish cuts, raised €2.4m in pre-seed funding. Founderful led the round and was joined by investors including Kost Capital.

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 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.