Sifted - Three years of war in Europe

Good morning there,

Today marks the third anniversary of the invasion of Ukraine, and while the US and Russia remain focused on finding solutions that suit them, the conflict looks set to continue a while longer.

A year on from war breaking out, Sifted spoke to several startups and operators who either tried to keep their companies running or shifted from coding to producing military equipment. Three years on, Sifted once again interviewed Ukrainian founders to hear firsthand the toll the war has taken.

“We clearly understand the price that has been paid so far, because we all have graves of people we were close with,” says Alex Serdiuk, cofounder of AI voice startup Respeecher, which is based in Kyiv. “That's not something you expect to have in your 30s or 40s.”

The war was also on the minds of the audience at last week’s Techarena conference in Sweden — which joined the international alliance NATO last year in response to the Russian threat.

Swedish Prime Minister Ulf Kristersson referenced Ukraine in his opening speech at the event; in an interview he later stated that “defence tech is now peace tech,” and emphasised that democracy must defend itself. I’ve got more on how politics is entering the startup scene in my dispatch from the conference below.

Elsewhere today:

• How Ukraine changed defence tech in Europe 
• Europe is rearming. But does defence tech make investment sense?
• Why data centre startups might not be VC-backable
• EU’s AI Act could be tweaked as part of upcoming review
• Visionaries Club rubs shoulders with tech VIPs — here are its recent bets
  
  

— Mimi Billing, Europe editor

/A message from our sponsor TNG Technology Consulting

Find out if your new unicorn's horn is made of plastic

From an in-depth technical review to AI analysis, TNG Technology Consulting offers Technical Due Diligence Services for a comprehensive assessment of your M&A targets.

🇪🇺 The EU’s wide-ranging AI Act could soon be tweaked as part of an upcoming “fitness check” expected to take place by the end of the year. It comes after lawmakers and tech leaders called for a regulatory rollback at the AI Action Summit in Paris. 

🇺🇦 Three years after Russia’s full-scale invasion, Ukraine’s startup founders tell Sifted they’re doing their best to maintain business as usual, even as the prospect of a peace deal brokered by a hostile Donald Trump looms large. 

🪖 The war in Ukraine has upended Europe’s defence tech industry, attracting unprecedented sums of money, redrawing ethical red lines and prompting some companies to experiment with their tech’s military applications.  

🎖️ Europe is rearming. But, Sifted's editorial director and cofounder John Thornhill asks in his latest column: does defence tech make investment sense? 

🍟 Last week, Microsoft unveiled a new quantum chip, a technology it’s been working on for two decades but until now has been mostly theoretical. It’s caused a lot of excitement within the industry, but what did Microsoft actually do? And what does it mean for European startups? We explain all here.

💡 Wherever Visionaries Club shows up, a distinguished crowd seems to follow. Launched in 2019, we dug into the Berlin- and London-based VC firm with a habit of rubbing shoulders with high-profile techies.

💰 More up-and-coming data centre companies are pitching to VCs, but some are dubious about taking a chance, considering the cost of building data centres and the resources needed to run them.

Free to apply: Sifted’s UK & Ireland Leaderboard

We're looking for startups in UK & Ireland that are on a high-growth trajectory to feature on our next leaderboard. Could your startup be one of the fastest-growing companies in the country? Don't miss out on this opportunity to showcase your success!

Searching for startups at Sweden’s Techarena 

Opening Sweden’s leading industry event Techarena on Thursday, Sweden's Prime Minister Ulf Kristersson acknowledged what was on everybody's mind — the recent news on Ukraine, remarking: “Geopolitics sometimes beats technology.”

An appropriate tagline for the two-day event in Stockholm might be “Europe (particularly Sweden) against the world”, as organisers sought to keep up the momentum of the AI Action Summit, held in Paris earlier this month. 

But instead of billion-dollar investments (Sweden is against subsidies), eight government ministers appeared on stage to show their commitment to tech — and promised to help Europe become “more like Sweden,” citing the country’s functioning capital market and looser regulatory framework. 

This “very Swedish affair”, as one attendee described it, played host to policy experts, lawmakers and big corporations like Amazon and Microsoft. 

But one group was notably absent from the main policy discussions: startup founders. Swedish success stories — like Spotify, Klarna and other unicorns — were mentioned on stage, but nowhere to be seen. 

While high profile guests like Richard Branson, Netflix cofounder Marc Randolph and former Finnish prime minister Sanna Marin addressed massive crowds, startups were relegated to the smaller side stages and pitch competitions.

Click here to keep reading.

— Mimi

Paris-based EG 427, which develops precision molecular therapies for chronic diseases in neurology, raised €27m in Series B funding. Andera Partners and Bpifrance led the round and was joined by investors including SCI Ventures.

Cologne, Germany-based Metycle, which is building a digital platform for the trading and processing of recycled metals, raised €14.1m in Series A funding. 2150 led the round and was joined by investors including DFF Ventures, Market One Capital, Partech and Project A.

London-based Safe Intelligence, which has developed a novel way to deeply validate AI models to ensure their robustness and resilience at deployment, raised £4.15m in seed funding. Amadeus Capital Partners led the round and was joined by investors including OTB Ventures and Vsquared Ventures.

Barcelona, Spain-based Repscan, an AI-based digital footprint identifier which removes negative online content like false reviews, raised €3m in Series A funding. Investors included Swanlaab Venture Factory, Bonsai Partners, Pinama Capital 23, Boyser, Oriol Carulla and Josep María Frigola.

Barcelona, Spain-based Zymvol Biomodeling, which engineers tailor-made enzymes for varied industries, raised €3m in seed funding. Faber Ventures led the round and was joined by investors including Elaia Partners and Übermorgen Ventures.

Munich, Germany-based Bliro, an AI assistant for meetings, raised €2.8m in funding. Investors included LEA Partners, 468 Capital and Rockstart.

Lausanne, Switzerland-based Dphi Space, which designs, builds and deploys shared satellites for hosted payloads, raised €2.22m in pre-seed funding. QBIT Capital led the round and was joined by investors including Zurich Cantonal Bank, Apprecia Capital and Kickfund.

Vilnius-based Pulsetto, which builds wearable tech designed for vagus nerve stimulation for neurotech applications, raised €2m in funding from Scalewolf.

Bordeaux, France-based Genial, which helps SMEs integrate genAI into workflows, raised €1.8m in funding. Huttopia and Crédit Agricole led the round and were joined by investors including Founders Futures.

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.