Sifted - Monzo's new valuation

Good morning there,

Today we’re exploring how powerful new AI technology is being applied to some very big industries. While many entrepreneurs and investors have been racing to build LLM-powered products for enterprises, a smaller group of founders have been quietly working on training AI models on the laws of physics, with the aim of transforming how we design everything from cars to semiconductors.

One founder, who’s developing AI to improve electric motor design, says he’s working in a field that’s “trying to replace a $5tn a year industry — the oil industry — with something else. That is what decarbonisation is. So the things that start to fill that gap are going to be hugely valuable.” Read the full story here.

Elsewhere:

• Monzo ups valuation to $5.9bn in employee share sale
• Europe’s first accelerator for VCs launches
• French tech reacts to government budget

— Tim Smith, news editor

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💰 UK neobank Monzo has upped its valuation to $5.9bn in an employee share sale as it gets ready for EU expansion. The fintech said on Friday that investors taking part in the deal include StepStone Group and Singaporean sovereign wealth fund GIC, which participated in Monzo’s $610m fundraising earlier this year.

👉 Advisory firm Mountside Ventures is launching Europe’s first accelerator for VCs today. The first programme will start late January 2025, run for 12 weeks and be free for participants. It’ll include matchmaking events around Europe, mentoring from LPs and established VC partners and fundraising workshops.

• To apply, VCs will need to be ‘emerging managers’ (ie. working on their first to third fund — although Mountside is fairly loose with this definition) and based in Europe.
• “We’re hoping every VC in Europe applies,” Jonathan Hollis, Mountside’s managing partner, told editor Amy Lewin. “The only people we expect not to apply are people who have LP money thrown at them.”

🇪🇺 Leading European scaleups and VC firms — including the founders of DeepL, Personio and Remote, and GPs at Seedcamp and Index Ventures — have backed a petition that calls on European policymakers to create a new single, pan-European legal entity which would help companies operate and scale across the 27 EU countries. 

• The “EU Inc” designation would allow startups to follow one pan-European set of business rules that would apply across the bloc. The new structure would help to standardise investment processes, simplify cross-border operations and create a unified employee stock options framework.

🇫🇷 France’s weeks-old government unveiled its budget proposal for 2025 last week, and it didn’t go down well with founders. 

• The text, which isn’t final, slashes several mechanisms that benefit startups, including tax breaks for those building innovative products and those recruiting R&D teams (which could see the cost of hiring go up 40%). 
• “The impact on companies’ capacity to innovate could be colossal,” Marianne Tordeux-Bitker, director of public affairs at startup and VC lobby France Digitale, tells Sifted.
• Some founders said it’s a negative signal for the sector; one told Sifted that the proposal was the last push that convinced them to register their new company in the US rather than in France. “It risks partly killing the dynamic,” they said.

💪 ChatGPT for trillion-dollar industries — meet the startups using AI to engineer better hardware.

👩‍💼 There is, among VCs — and among women VCs in particular — a feeling that the ‘path to partner’ is not a clear one, nor an easy one. Most firms are small and only have so many seats for partners; most who hold those roles are in it for the long term — and so it’s rare that a spot opens up.

• This lack of predictable progression often leaves junior investors frustrated, and wondering if they need to jump ship to get the partner title.
• The answer, according to new data from executive search firm Erevena, is yes, they probably do need to move to make it up the ranks. Dig into the data here. 

This story first appeared in Sifted’s weekly VC newsletter, Up Round. Sign up here. 

🧠 How to streamline your marketing strategy —  Corinne Aaron, CMO of electric autonomous vehicle startup Einride, Fabio Bin, cofounder and CMO of traveltech WeRoad and Marni Allen, CMO of personalised supplements startup Bioniq, share their tips.

Catch the eye of investors on our Nordics Leaderboard

Gain recognition among the fastest-growing startups in the Nordic region by featuring on the Sifted leaderboard. Free to apply — applications close October 25.

🇩🇪 Berlin. Senior reporter Miriam Partington is at healthtech Personio's HUG conference on October 17. Drop her a line if you're also there. 

🇫🇷 Paris. French tech reporter Daphné Leprince-Ringuet will be at the dotAI conference on October 17-18. Also there? Get in touch.

🇪🇸 Barcelona. Join Sifted senior reporter Freya Pratty at an intimate breakfast meet-up in central Barcelona on November 7, to discuss which areas of impact tech Spain can excel at. The event is intended to welcome and support 40 early-stage founders with complimentary coffee and a light breakfast. Apply to attend.

Paris-based Constellation Technologies & Operations, which is developing a satellite constellation for telecom operators to provide internet from space, raised €9.4m in seed funding from investors including Expansion and Bpifrance.

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