Sifted - Mistral alum seeks $80m

Good morning there,

As Paris settles down after hosting the who’s who of AI last week, Sifted’s John Thornhill lays out why he thinks European founders should feel optimistic about the continent’s place in his latest column. 

Elsewhere today, Freya Pratty and Daphné Leprince-Ringuet have the scoop on a former employee from French LLM maker Mistral who’s out to raise $80m for their new stealth AI startup. And Anne Sraders brings you the the deets on the founders going all in on AI and drones at a defence tech hackathon on the outskirts of Munich.

Also coming up:

• The most active semiconductor and photonics investors in Europe
• How the ‘Stanford of the Middle East’ is attracting top European researchers
• Munich founders fear talent war after OpenAI arrival

P.S. On Thursday, I’ll be at Tech Arena in Stockholm — get in touch if you’d like to grab a coffee!

— Mimi Billing, Europe editor

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🤖 Ex-Mistral employee Theophile Gervet is out trying to raise $80m for his new stealth AI startup, Genesis Robotics. The company is developing an AI-powered simulation platform to train the next generation of robots, and is causing a stir in Europe’s AI community: DeepMind developer Philipp Schmid recently described the company’s tech as “absolutely insane.” 

💰NaturalX Health Ventures — the VC arm of German pharma giant Schwabe Group — has unveiled a new €100m fund to back early-stage consumer health startups in Europe, with a focus on Series A. All the money has come from Schwabe.

🇩🇪 German startups fear OpenAI’s plans for a new office in Munich will intensify an ongoing talent crunch, thanks in no small part to the ChatGPT-maker’s lucrative salaries.

🦺 The UK has rebranded its AI Safety Institute to the AI Security Institute. It's also recruited American startup Anthropic to explore how the technology can be used to improve public services.

⚡ The most active semiconductor and photonics investors in Europe.

🤔 What Europe needs to compete in AI.

💬 What German founders want from the next government. Reviving the economy and cutting red tape is top on many founders’ wish list — but so is ensuring that the right wing AfD stays out of the government.

🏫 The UAE’s state-funded Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) is becoming a talent magnet for top European researchers. The perk for them going there? Unrestricted financial support, a salary comparative to industry and encouragement to spin out their research. 

• MBZUAI president Eric Xing tells Sifted he wants to turn the uni into the "Stanford of the Middle East."

📈 Bootstrapped to success: Transformify(TFY) achieves 90% profit growth and gives back to society by empowering NGOs. (Paid for, produced by TFY)

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Inside the European Defence Tech Hub’s hackathon, where engineers are building in a time of uncertainty

Last week I was in a wintry Munich to attend events happening around the annual Munich Security Conference — including a big hackathon on the outskirts of the city put on by the European Defence Tech Hub (EDTH), a nearly year-old defence network and events group. 

As I wrote about in my newsletter Up Round on Friday, there was a shadow cast over Europe’s defence scene by the US signalling it’ll be far more protectionist under president Donald Trump and calling on Europe to step up its own defence. At a drinks event on Friday night, some attendees privately criticised Vice President JD Vance’s bold speech in Munich bashing Europe’s security over things like free speech. But outside of the conference walls, a host of engineers were tinkering away on their own defence tech startup ideas — with most, no surprise, focused on drones and AI. 

Recent geopolitical tensions all factor into the urgency of the hackathon: “We have a nihilist in power who does not care about anything beyond domestic issues and China. There's little incentive for him right now to support Ukraine,” Jonatan Luther-Bergquist, a partner at early-stage VC Inflection and cofounder of EDTH, told me of President Donald Trump. “We can't count on the US. We don't have the money, we don't have the people and war is happening — there's one solution to this for us, at least, and that is tech and adoption of tech.”

I spoke to a number of the hackers who were working on projects ranging from AI voice-to-text defence applications to vision processing for drones. One Ukrainian founder told me that his startup is seeking a lot of demos with NATO forces, and his “main goal” is that “the experience from the Ukrainian battlefield should not only be in Ukraine. We should export it.” 

But the hackathon wasn’t just for the benefit of the engineers — it could be a recruitment ground for some of Europe's buzziest defence tech startups like German AI startup Helsing and autonomous drones company Quantum Systems, both of which sponsored the event. Quantum Systems cofounder Michael Kriegel told me that the hackathon could basically serve as “a very good, easy job interview.” 

Dig into my full dispatch here, but I’m curious to hear from you: what types of defence tech startups does Europe need right now? What novel technologies are you getting excited about? And how do you think Europe is positioned to survive in a world with a less-supportive US ally? I’m all ears.

— Anne Sraders, senior reporter

Anne also writes Up Round, Sifted's weekly newsletter on the latest trends, new funds and people moves across European VC. Not subscribed yet? You can sign up here.

Madrid-based Sensia, a developer and manufacturer of infrared imaging devices for monitoring the energy, security and industrial sectors, raised €19m in funding from A&G Global Investors and SETT.

Lisbon-based Relive, a real estate brokerage platform, raised $5.5m in Series A funding. Indico Capital Partners led the round and was joined by investors including Shilling and Bynd.

Zurich, Switzerland-based Nextesy, which develops tools for business management processes, raised €3.5m in pre-seed funding led by Fifth Quarter Ventures.

Stockholm-based Bluebook, which develops a software for accountancy firms, raised $3m in pre-seed funding. EQT Ventures and Y Combinator co-led the round.

Vienna-based Elio, an eco-design platform, raised €1.9m in pre-seed funding. Ananda Impact Ventures led the round.

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