Sifted - Checkout.com in the spotlight

Good morning there,

Guillaume Pousaz, the founder of multi-billion dollar fintech Checkout.com, has long found questions about the company’s relationship with adult websites “annoying,” as he put it in a 2020 interview with Sifted. 

Previous coverage suggested Checkout — which makes money by processing payments — worked with clients such as OnlyFans and Pornhub, deemed too risky by its competitors. 

Over the years, the company has sought to distance itself from the adult industry, telling Sifted in January that it’s now “a very minuscule part” of its overall portfolio. 

Despite that, an ongoing lawsuit threatens to dredge up ‘vice’ industries again, by linking Checkout to a mysterious Cypriot entity historically listed on a mail-order bride website and once a client of Paxum Bank, known to serve the porn industry.

Checkout told Sifted it does not comment on legal matters, or disclose specifics on client relationships. The fintech said it has strict requirements for clients, in line with both its “risk appetite and obligations as a financial institution.”

Elsewhere today:

• Klarna to file $1bn IPO as soon as next weeks, reports say
• 8 German AI startups to watch, according to VCs
• How many climate VCs will manage to raise a second fund?

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🔦 Lawsuit puts Checkout.com's ties to adult entertainment industry in spotlight.

⚔️ In a new paper Berlin-based VC Project A and the German military’s Cyber Innovation Hub drew up a list of proposals to strengthen the country’s defence ecosystem, as Europe moves to rearm.

💪 UK-based SME neobank OakNorth reported its eighth consecutive year of profitability yesterday — with a lot of that driven by US expansion. 

💰 Swedish buy now, pay later fintech Klarna aims to raise at least $1bn in an initial public offering expected to be filed publicly as soon as next week, according to reports. 

🪪 German identity verification startup IDnow has been acquired by New York HQ’d private equity firm Corsair Capital in an all-cash deal worth $295m.

🖼️ UK-based Stability AI has raised fresh funding from UK advertising group WPP, which plans to use the company’s AI models across its image, video and audio output, and establish a joint research and development pipeline.

🇩🇪 8 German AI startups to watch, according to VCs

🤔 What should founders actually do after they exit?

🌱 During the heady days of 2021 and 2022 — when capital was cheap and the tech ecosystem was abuzz — new climate VCs were popping up on what felt like a weekly basis. Three years later in a very different environment to then, Freya Pratty asks: how many of the cohort of climate VCs will manage to raise a second fund?

📈 'Think and create twice as fast': how impact startups are using AI to scale (Sponsored by ESADE)

Find Europe’s rising stars — before your competitors

Sifted Pro keeps you ahead of the game with unlimited journalism, reliable startup data, and market intelligence. Identify the next game-changing investment opportunity in Europe today.

Karlsruhe, Germany-based Ineratec, a producer of sustainable e-fuel, raised €40m in debt funding from the European Investment Bank and €30m in grant funding from Breakthrough Energy Catalyst.

London-based Swap, an e-commerce operating system, raised $40m in Series B funding. Iconiq Growth led the round and was joined by investors including Cherry Ventures, QED Investors and 9900 Capital.

Cambridge, UK-based Trimtech Therapeutics, which develops treatments for neurodegenerative diseases, raised £25m in seed funding. Cambridge Innovation Capital and SV Health Investors led the round and were joined by investors including Pfizer Ventures, M Ventures, Eli Lilly and Company, MP Healthcare Venture Management, Cambridge Enterprise Ventures and Start Codon.

Munich, Germany-based Alpine Eagle, which specialises in machine learning for counter-drone systems, raised €10.25m in seed funding. IQ Capital led the round and was joined by investors including General Catalyst and HCVC.

Berlin-based HelloBetter, a digital mental health care platform, raised €6m in capital and media for equity funding. Mutuelles Impact led the round and was joined by investors including MMV, HealthCap, Expon and DVH Ventures.

Barcelona, Spain-based Vega Chargers, which specialises in smart chargers for electric vehicles, raised €5m in funding. Orbis led the round and was joined by investors including Suma Capital and Cdti.

Antwerp, Belgium-based Conveo, an AI-powered market research platform, raised €4.9m in seed funding. Y Combinator, 6 Degrees Capital, Entourage Capital, Pitchdrive and Syndicate One participated in the round.

London-based Mission, a natural energy drink company, raised £2m in funding. Pierre Gasly participated in the round.

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