Sifted - The Klarna alumni-turned-founders

Good morning there,

You can't move for AI startups in Paris. The French capital is home to some of the most high-profile companies in Europe — including Mistral, H and Poolside, which between them have taken close to $2bn from investors in the last year and a bit. 

As my colleague Daphné Leprince-Ringuet reported in September, that’s led to a fight for the best researchers and engineers in the city.

The competition is about to get stiffer. US tech giant OpenAI 'officially' opened its office there this week after confirming the move last month.

It's looking to bolster its commercial development, marketing and communication teams in Paris — and it also plans to sweep up the sharpest technical minds.

“France trains top engineers, the brightest of which still often move to Silicon Valley to work in tech companies,” Arnaud Fournier, a solutions architect at the company heading up the Paris office, tells Daphné in an interview. “We’ll enable them to stay and work in France, and put their talent to the benefit of the French ecosystem.” 

Going after the best researchers could potentially put it in direct competition with startups like Mistral — which, according to Sifted analysis, hires heavily from two of France’s top technical universities. 

Fournier doesn’t see it that way though. “We aren’t pointing fingers to one or another competitor thinking: ‘We’re scared’ [...] Instead, we are thinking that we are here because the ecosystem is buzzing,” he says.

Elsewhere today:

• The 11 Klarna alumni who’ve become entrepreneurs since last year

— Tom Nugent, newsletter editor

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🇬🇧 UK government plans to mobilise up to £80bn from pension funds for investment could fill a void in the country’s tech sector, startup groups and investors tell reporter Kai Nicol-Schwarz. 

• Last night, chancellor Rachel Reeves announced plans to consolidate fragmented pension fund schemes across the country to boost investment into new businesses and critical infrastructure — including VC funds.
• It’s the “biggest set of reforms to the pensions market in decades”, she said.
• “Pension fund reforms are one of the biggest growth levers the Treasury can pull,” Dom Hallas, executive director of lobby group Startup Coalition, told Sifted. “Once it’s delivered we should see billions more into the British venture-backed tech ecosystem — which is not only good for founders, it’s good for the pensions of British workers too.”

👀 ‘I don’t see Mistral as competition’: OpenAI exec on Paris office opening.

🤝 Europe’s later-stage fintechs continue to be a vital training ground for the continent’s employees-turned-entrepreneurs — and buy now, pay later player Klarna is no exception. Fintech reporter Tom Matsuda found 11 of them who’ve started companies since last year. 

• According to a report by VC firm Accel and data platform Dealroom released in October, Klarna alumni have launched 62 startups. That puts it ahead of Revolut, which came out on top for total alumni-turned-founders the last time that data was pulled.
• Earlier this week, Klarna also took its first steps to becoming a publicly traded company by submitting a draft registration statement to the US Securities and Exchange Commission. 

🇫🇷 French tech is notoriously concentrated. The majority of funds are raised by startups in and around Paris, with many VCs rarely making it past the capital’s ring road — but that might be only painting one part of the picture.

• From Lille in the north and Toulouse down south to Grenoble in the east, several tech hubs have emerged outside the capital in the past few years.
• “[International] investors still come to Paris first. But now they are starting to know names like ‘Grr-no-ball [Grenoble]’,” Paul-François Fournier, executive director of innovation at French public bank Bpifrance, tells Sifted.
• And many trends — ranging from reindustrialisation to more remote work through great train networks — are contributing to growing French tech ‘in the regions’.

💪 Europe’s funding gap in focus: Beyond The Billion’s $1bn drive expands to Paris and London. (Paid for and produced by Billion Dollar Brew)

Rising 100: The ultimate B2B SaaS startup list

Searching for Europe’s next unicorn? Then look no further than our definitive list of 100 B2B SaaS startups changing the game. We also check in on how last year’s cohorts are faring in today’s ecosystem.  

London-based Tessl, which is building an AI platform developers and their teams can use to create and maintain code, raised $100m in Series A funding. Index Ventures led the round and was joined by investors including Accel, Google Ventures and Boldstart Ventures.

• The company also announced a $25m seed round (raised in April) led by Boldstart and Google Ventures. 

Toulouse, France-based OpenAirlines, which provides sustainable flying software solutions, raised €45m in funding. Eiffel Investment Group led the round and was joined by investors including Mirova and Caisse de Retraite du Personnel Navigant Professionnel de l’Aéronautique Civile.

Moulins-sur-Tardoire, France-based Elicit Plant, which leverages the properties of phytosterols to enhance plant health, raised €45m in funding. Carbyne Equity Partners led the round and was joined by investors including Sofinnova Partners, the European Circular Bioeconomy Fund and Ecotechnologies 2 Fund.

Dublin-based Gazelle Wind Power, which is developing modular floating offshore wind energy units, raised €11.4m in funding. Indico Capital Partners led the round and was joined by investors including DST Group, August One, Wah Kwong and E2IN2.

Rotterdam, Netherlands-based C2CA, which is building a waste concrete upcycling facility, raised €10m in Series A funding from investors including InnovationQuarter, Taaleri Bioindustry, Chrysalix Venture Capital, Cimsa Building Materials, Titan Cement and PI-Impact.

Bath, UK-based Naturebeads, which is developing a biodegradable alternative to plastic microbeads, raised £7.8m in Series A funding. Eos Advisory led the round and was joined by investors including Mito Tech Ventures, CDP Venture Capital, PI-NB and Paragon Capital Management. 

Mallorca, Spain-based Laminar Pharma, which is performing discovery and initial clinical development of MLT-based drugs, raised €5.9m in funding from investors including the Matutes Family, Fundación alba Pérez and Dentol Capital.

Barcelona, Spain-based Biorce, which is developing an AI assistant for clinical trials, raised €3.5m in funding. YZR Capital and Mustard Seed Maze led the round and were joined by investors including Outsized Ventures, Pathena Family Office and Plug and Play Tech.

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