Caroline Brochado and Sophia Bendz on the boom in Europe’s early and growth-stage startups

As part of Disrupt 2020 we wanted to look at the contrasting positions of both early and later-stage investing in Europe. Who better to unpack this subject than two highly experienced operators in these fields?

After a career at Spotify and then as a VC at Atomico, Sophia Bendz has rapidly gained a reputation in Europe as a keen early-stage investor. She recently left Atomico to pursue her early and seed-stage passion with Cherry Ventures. Bendz is a prolific angel investor, with a total of more than 44 deals in the last nine years. Her angel investments include AidenAI, Tictail, Joints Academy, Omnius, LifeX, Eastnine, Manual, Headvig, Simple Feast and Sana Labs. She is known for being a champion of the femtech space, and her angel investments in that space include Clue, Grace Health, Daye, O School and Boost Thyroid.

Carolina Brochado, the former Atomico partner and most recently a partner at SoftBank Vision Fund’s London office, recently joined EQT Ventures to help launch EQT’s Growth fund, which is positioned between ventures and private equity. Brochado led investments in a number of promising companies at Atomico,  including logistics company OnTruck, health tech company Hinge Health and restaurant supply chain app Rekki.

After establishing that these two knew each other while at Atomico, I asked Bendz why she headed back into the seed-stage arena.

“I’m a trained marketeer and storyteller by heart… What makes me excited is new markets opportunities, people, culture, teams. So with that, in combination with my angel investing, I think I’m better suited to be in the earlier stages of investing. When I was investing before joining Atomico, I said to myself, I want to learn from the best, I want to see how it’s done, how you structure the process and how you think about the bigger investments.”

Brochado says the European “cat is out of the bag,” as it were:

When I first moved to Europe in 2012 and first joined Atomico, after having been at a very small startup, there was still a massive gap in funding and Europe versus the U.S. I think you know the European secret is no longer a secret, and you have incredible funds being started at that early-stage seed and Series A, and because I was here in 2012, I’ve seen the amazing pipeline of growth companies that are coming up the curve, how the momentum of those companies is accelerating and how the market cap of those businesses are growing. And so I just became super excited about helping those businesses scale… I just now felt like bridging that gap in between was really exciting.

One of the perennial topics that come up time and time again is whether or not founders should go with VC partners who have previously been operators, versus those with a finance background.

“Looking back, my years at Spotify, we had great investors, but there were not many of them that had the experience of scaling a big company,” Bendz said. “So, I’m happy to give [a startup] more than just the check in a way that I would have wished I had a sounding board when I was 25 and tackling that challenge at Spotify.”

Brochado concurred: “Having operators in the room is just is an incredible gift I think to a fund and at certain levels, having people that understand you know different forms of financing and different structures can also be incredibly helpful to founders who may not necessarily have that background. So I think that the funds that do it best have that diversity.”

Bendz is passionate about investing in female founders and femtech: “It’s such a massive business opportunity that is completely untapped. We’ve seen it many times when you have a female investment partner [that] the pipeline opens up and you get more deal flow from female founders…. So I think we have a lot of work to do. I think it’s definitely improved a lot in the last couple of years but not enough… That is one of the drivers for why I put my money where my mouth is and invest in lifting the founders, but also because there are incredibly interesting business opportunities… There are so many opportunities and products or services that we will see being developed. When we have a more equal society, and more women, both building their own companies, coding and also investing… I can’t wait to see what that world will look like.”

Brochado’s view is that “even beyond founders… the best managers today are putting a lot of focus on this and I think what’s exciting is, I think we’re past the point where you have to explain to people why diversity matters.”

Is there a post-Series A chasm?

Bendz thinks: “We have more big funds in Europe [now]. We have a really solid ground here in Europe of A, B and C investors.”

Brochado said: “It’s definitely getting better. You don’t hear as many founders say that to do my Series B or my Series C I have to move to the Valley as you used to. But there’s a lot of room still for growth investors in Europe. I think Series B is the hardest round actually because, at seed or Series A, you can raise on very early traction or the quality of the management team. At Series B the price goes up but the risk doesn’t necessarily go down as much. And so I think that’s where you really need investors who are sector or thematic focused, who can come with conviction and also some knowledge around the company to really propel that company forward.”

Did they both see European entrepreneurs still making silly mistakes, or has the ecosystem mastered?

Brochado thinks 10 years ago it was hard for European founders as a lot of the talent to scale companies was still in the U.S. “What you’ve seen is a lot of big companies grow up in Europe, a lot of people come back from the U.S., and so I think that pool of talent now is larger, which is very helpful. I don’t think it’s yet at the scale of where the U.S. is. But it gives us, you know as investors, a great window of opportunity to help get some of that talent for our portfolio companies.”

The impact of COVID-19

Bendz thinks we will “see a much slower spring, but… I think it has been overall a good exercise for some companies, and I have not seen a slower deal flow. I’ve actually done more angel deals this spring than I normally do… Some businesses have definitely accelerated their whole business concept because of COVID. Investments are being made even though we haven’t met the founders. We’re able to do everything remotely so I think the system is kind of adjusting.”

Brochado’s view is that at the growth stage “there’s been a flight to quality. So actually, the really great companies or the companies that are seeing great tailwinds or companies that will still be category-leading once [have] seen a lot of interest. It’s been a very busy summer, which usually it isn’t, particularly at the growth stage… I think a lot of money is still in the system, and has flown into technology. And so if you look at how tech in the public markets has performed it’s performed extremely well. And that includes European public companies and within tech.”

Watch the full panel below.

Startups – TechCrunch

After lockdowns lead to an e-bike boom, VanMoof raises $40M Series B to expand globally

E-bike startup VanMoof has raised a $ 40 million investment from Norwest Venture Partners, Felix Capital and Balderton Capital. The Series B financing comes after a $ 13.5 million investment in May. The funding brings VanMoof’s total raised to $ 73 million and furthers the e-bike brand’s ultimate mission of getting the next billion on bikes.

The Series B funding will be used to meet the increased demand, shorten delivery times and build a suite of rider service solutions. It also aims to boost its share of the e-bike market in North America, Europe and Japan.

Partly driven by the switch of commuters away from public transport because of the COVID-19 pandemic, the e-bike craze is taking off.

Governments are now investing in cycling infrastructure and the e-bike market is set to surpass $ 46 billion in the next six years, according to reports.

Ties Carlier, co-founder of VanMoof, commented: “E-bike adoption was an inevitable global shift that was already taking place for many years now but COVID-19 put an absolute turbo on it to the point that we’re approaching a critical mass to transform cities for the better.”

VanMoof says it realized a 220% global revenue growth during the worldwide lockdown and sold more bikes in the first four months of 2020 than the previous two years combined.

Stew Campbell, principal at Norwest said: “Taco, Ties and the VanMoof team have not only built an unparalleled brand and best-selling product, but they’re reshaping city mobility all over the world.”

Colin Hanna, principal at Balderton: “As the COVID-19 crisis hit supply chains worldwide, VanMoof’s unique control over design and production was a key advantage that allowed the company to react nimbly and effectively. Moreover, VanMoof’s direct to consumer approach allows the company to build a close relationship to their riders, one that will be strengthened by new products and services in the years to come.”

VanMoof launched the new VanMoof S3 and X3 in April of this year. I reviewed the S3 here and checked out the earlier X2 version here.

Startups – TechCrunch

Willo, a freemium video interview SaaS, scores ~$320k during the remote work boom

Scotland-based video interview startup Willo has scored a £250,000 (~$ 320k) seed round of funding after watching demand for its asynchronous Q&A style video platform leap up during the COVID-19 lockdown.

Guernsey-based VC firm 1818 Venture Capital is investing in the seed round, with Willo board members Steve Perry, Stefan Ciecierski and Peter Preston also kicking in a smaller chunk of the capital.

Willo says usage of its SaaS platform has grown at least 80% each month since April, after the UK went into a nationwide lockdown to slow the spread of the novel coronavirus. Customers have also been finding new uses for the product beyond video interviews — such as for reviews, training, and learning and development — as remote working has been supercharged by the pandemic.

“We have over 1,000 users in 60+ countries — growing 2x faster this month than previous months!” says CEO and founder, Euan Cameron. “Core industries are recruitment, customer research, learning and development and non-profits for volunteers etc.”

The seed funding will be put towards accelerating Willo’s international growth — with a recruitment drive that will add 24 members of staff planned, in addition to spending on further product development.

Cameron confirms it’s working on adding real-time video to the platform, when we ask — so it’s gunning to go after a slice of Zoom (et al)’s lunch.

“Our core product offering is simple, affordable async video communication. However, we are currently in development of a realtime (Live) interviewing option so that organisations can seamlessly flip from an asynchronous video into a realtime one,” he says.

Currently Willo offers an interface that let employers pose questions for candidates/staff to respond to by recording a video response. The platform stores all videos in a dashboard for easy reviewing and sharing.

For the recruitment use-case it also offers a question bank — letting employers choose from “hundreds” of pre-written questions to shave a little friction off the recruitment process.

Expanding on some of the additional uses customers have been finding for the platform during the pandemic, Cameron tells TechCrunch: “We have an education charity in the UK (worktree) who use Willo to ask people in successful careers around the world about their job and their career path. Worktree then provides these videos to kids in schools to help them make career choices.

“A business in Europe uses Willo to identify niche influencers who have potential and bring them on board a training and development program.”

Another example he gives is a university in India that’s using it to find and enrol software engineers for a degree course. Businesses are also using it to obtain customer testimonials and for customer research. And of course Willo’s own VC investor is a user — having adopted the platform for all new business pitches.

“Every new business must go through Willo as part of what they have branded their ‘Ten Minute Pitch’. They connect Willo to Calendy to automate this workflow which is cool,” he notes, adding: “What is most interesting is that all of these examples previously used to rely on face-to-face meetings or video calls, but they had to adapt.”

Willo is also putting a tentative toe into the waters of artificial intelligence for the hiring use-case, although he says its roadmap has shifted to focus more on chasing growth as a result of the pandemic lockdown effect.

Its website trails an “AI-powered” beta feature that’s doing keyword analysis with the aim of identifying personality and behavioral traits, based on how candidates speak.

Asked about this, Cameron says: “Currently, our AI which is in beta is purely focused on the transcription of the audio, we are working hard on not only transcribing accurately but also creating keyword trends. For example, if you are an analytical person we can identify that and call it out to the organisation by looking at common words and themes within your interview.”

“This is very much in its infancy as COVID-19 has pushed us to focus on delivering what we already do at scale and for the many additional use cases [mentioned previously],” he adds.

Applying algorithms to automate elements of the hiring process is something a growing number of startups have been dabbling in in recent years. Although there can be legal risks around bias/discrimination when applying such tools — given the varied and often complex patchworks of applicable laws in different jurisdictions. (In the UK, for example, equality, employment and data protection law may all need to be considered.)

Asked how Willo is avoiding the risk of AI-powered keyword analysis leading to unfair/unequal effects for interview candidates, Cameron says: “Regarding UK equality law we have been working with organisations on a 1-to-1 basis around training and development of their own staff to ensure that they are using Willo as a tool for good. We believe that the same bias and discrimination would occur in a face-to-face or live video interview so it is a case of eradicating that from the individuals through training. We partner with an HR consultancy to help deliver this training when requested.”

“We are working with an incredibly experienced data and compliance expert to ensure we introduce AI effectively, legally and to the benefit of both interviewer and interviewee,” he adds.

“Our core values are always to be transparent and ensure that we are adding value for all users. One of the challenges with AI at Willo is to ensure that we continue to enhance the human interactions at scale — the number one piece of feedback we receive from users is that they loved seeing and hearing from people — so we never want to automate that out of the product.”

On the competitive front, Cameron lists Sparkhire, Vidcruiter and Recright as “key” competitors though he notes that Willo, which offers a freemium tier, is positioning itself to be accessible for a wider range of users.

“They all focus primarily on recruitment and are prohibitively expensive for most SMEs and start-ups. I believe that video interviewing should benefit everyone, not just large multinationals,” he adds.

Startups – TechCrunch

Why e-commerce startups aren’t raising more funding during this historic boom

After yesterday’s look into the somewhat lackluster pace of investment into e-commerce-focused startups this year, a few VCs sent in notes that added useful context. So this morning let’s discuss why the pace of e-commerce startup fundraising has been so milquetoast in 2020.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

To frame the oddity of e-commerce startups not raising a flood of cash during what are historic boom times, we noted Walmart’s staggering online sales growth in Q2, which TechCrunch’s Sarah Perez broke out into a separate piece. Today, for a soupçon more, Target reported its Q2 earnings. Its results are similar to Walmart’s own, if even more extreme.

The American retailer reported that its “store comparable” sales were up 10.9% in the quarter, which was rather good. But Target also reported that its “digital comparable sales grew 195%,” which is staggering. Target’s revenue mix moved from 7.3% digital in its year-ago quarter to 17.2% in its most recent.


If you’ve been around the internet lately, you can’t help but trip over more data detailing this extraordinary moment in e-commerce history — there are years of change happening in just a quarter’s time. For a taste, former Andreessen denizen Benedict Evans has some great data on U.S. and U.K. e-commerce growth, and here’s yet another great chart to chew on. It goes on and on.

So the e-commerce boom is real, and the startup funding funk is as well, per the data we ingested yesterday via CB Insights. What gives? GGV’s Jeff Richards had an idea, and we chatted with Canaan’s Byron Ling as well. We’ve also done a little digging into some of the largest, recent e-commerce rounds to get some flavor on who is raising in the space. Ready?

Why e-commerce VC isn’t going straight up

If you recall, our thesis yesterday was that, perhaps, the kill zone theory often posited concerning Amazon meant that the e-commerce space is less investable than we’d otherwise imagine and that because some things are “sorted” to a degree, there is less green space available in the sector for startups to tackle.

Bits of that might be right.

Startups – TechCrunch

Is the 2020 SPAC boom an echo of the 2017 ICO craze?

I wanted to write an essay about Microsoft and TikTok today, because I was effectively a full-time reporter covering the software giant when it hired Satya Nadella in 2014. But, everyone else has already done that and, frankly, there’s a more pressing financial topic for us to parse.

Let’s take a minute to take stock of SPAC (special purpose acquisition companies) which have risen sharply to fresh prominence in recent months. Also known as blank-check companies, SPACS are firms that are sent public with a bunch of cash and the reputation of their backers. Then, they combine with a private company, effectively allowing yet-private firms to go public with far less hassle than with a traditional IPO.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

And less scrutiny, which is why historically SPACs haven’t been the path forward for companies of the highest-quality; a look at the historical data doesn’t paint a great picture of post-IPO performance.

But that historical stigma isn’t stopping a flow of SPACs taking private companies public this year. A host of SPACs have already happened, something we should have remarked on more in Q1 and Q2.

Still, better late than never. This morning, let’s peek at two new pieces of SPAC news: electric truck company Lordstown Motors merging with a SPAC to go public, and fintech company Paya going public via FinTech III, another SPAC.

We’ll see that in hot sectors there’s ample capital hunting for deals of any stripe. How the boom in alt-liquidity will fare long-term isn’t clear, but what is plain today is that where caution is lacking, yield-hunting is more than willing to step in.

Electric vehicles as SPAC nirvana

The boom in the value of Tesla shares has lifted all electric vehicle (EV) boats. The value of historically-struggling public EV companies like NIO have come back, and private companies in the space have been hot for SPACs as a way to go public in a hurry and cash in on investor interest.

Startups – TechCrunch

Byrd, an Austrian-German logistic startup nets €5M funding to power the e-commerce boom, plans to launch in the Netherlands and France

Byrd is an international e-commerce fulfillment network that gives online shops access to a scalable and powerful logistics solution. Recently, the logistics startup has raised €5M funding in Series A round led by Rider Global, a venture fund with a strong focus on logistics, e-commerce, and mobility.

Raised €9 million to date

Others including VentureFriends, FJ Labs, consumer Internet companies as well as current investors participated in the round. To date, the company has raised more than €9 million from business angels and VCs, including Speedinvest, Reflex Capital, Hermann Hauser, and KK Incube, as well as public funding.  

CEO and Co-Founder, Alexander Leichter, said: “E-commerce is booming but consumers are more demanding than ever. We armour retailers with the best possible logistics solution, so they can compete with the world’s biggest online shops, meeting consumers’ ever-increasing expectations now and in the future.”

Major focus on technology

With this funding, Byrd is planning to add another three European countries to its fulfillment network in 2020. Also, with a new Chief Product Officer and a Head of Data Engineering and Analytics, technology will be a major focus in the next months. 

E-commerce fulfillment platform 

Byrd offers an e-commerce fulfillment platform that helps SMEs to easily outsource their logistics so that they can focus on their core competencies and efficiently grow their business. 

The company uses digital interfaces to connect e-commerce systems to its warehouse management system, which is used by partner-warehouses internationally. 

The fully integrated solution enables the fulfillment of orders with no time delay and with maximum proximity to the recipient, therefore reducing shipping costs and cutting delivery times.

Wake up call for e-commerce market

The COVID-19 crisis had a powerful impact on the e-commerce market. To make the supply chain more flexible and resilient, large brands are now seeking flexible on-demand fulfillment solutions, like Byrd, claims the company. 

Furthermore, the ability to fulfill from multiple warehouses simultaneously, as well as the digital interface which provides full transparency thanks to real-time data, are two major reasons for big brands to work with byrd. 

With the outbreak of the Coronavirus, many retailers have started selling products online and need an efficient fulfillment solution. Compared to last year, the number of requests we received from merchants increased by almost 500%”, says co-founder and Chief Commercial Officer Petra Dobrocka

Coming soon to the Netherlands and France

Currently, the company can ship 10,000 orders per day from more than 10 different warehouses, with storage capacities of more than 500,000 square meters. At present, the company operates in the UK, Germany, and Austria and will launch in the Netherlands and France in the coming weeks. 

Founded in 2016 by Alexander Leichter, Christoph Krofitsch, Petra Dobrocka, and Sebastian Mach, Byrd has offices in Berlin and Vienna. It has grown from 25 to 60 employees in the last 10 months and has ambitious plans to become a global player in the growing e-commerce market by revolutionising the logistics industry.

”We are excited about the market that Byrd is active in. The increasing e-commerce share of direct-to-consumer brands in the US is a trend we see emerging rapidly in Europe as well. To successfully compete with established industry leaders, retailers need flexible logistics solutions like Byrd,” explains Timur Boridko, Managing Partner at Rider Global.

Main image credits: Byrd

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Startups – Silicon Canals

Tandem snags $5.7M for its language buddy app amid COVID-19’s e-learning boom

The Berlin-based startup behind Tandem, an app for practicing a second language, has closed a £4.5 million (~$ 5.7M) Series A round of financing to capitalize on growth opportunities it’s seeing as the coronavirus crisis continues to accelerate the switch to digital and online learning.

With many higher education institutions going remote as a result of concerns over virus exposure risks of students mixing on physical campus there’s a growing need for technology that helps language students find people to practice with, as Tandem tells it. And while language learning apps make for a very crowded space, with giants like Duolingo and Babbel, Tandem focuses on a different niche: Native speaker practice.

As the name suggests, its app does pair matching — connecting users with others who’re trying to learn their own language for mutual practice, by (their choice of) text, phone chat or video call.

The platform also incorporates a more formal learning component, by providing access to tutors. But the main thrust is to help learners get better by practicing chatting to a native speaker via the app.

Because of the pandemic push to socially distant learners, that’s a growing digital need, according to Tandem co-founder and CEO Arnd Aschentrup. He says the coronavirus crisis spurred a 200% increase in new users — highlighting a “clear appetite” among consumers for digital language learning.

The team has taken another tranche of funding now so it can scale to meeting this growing global opportunity.

The Series A is led by European VC firm Brighteye Ventures, with Trind Ventures, Rubylight Limited and GPS Ventures also participating. It brings the startup’s total raised to date to £6.8M.

“Given the accelerated user-uptake and clear market opportunity, we felt that 2020 was the right time to partner with the team at Brighteye to bring Tandem into the mainstream,” says Aschentrup, adding: “We anticipate significant growth opportunities for online learning and social learning in the wake of Coronavirus.”

He says two “key trends” have emerged over the past few months: “Firstly, schools and universities providing language courses have either temporarily shut down, or moved almost entirely to remote lessons. Students are therefore relying on additional platforms to learn and practice languages, which is precisely what Tandem offers.

“Secondly, we know that lockdown has enormously limited people’s ability to socialise. Friendships have been harder to maintain, and new connections more difficult to spark. We’re excited about Tandem’s ability to connect people all across the globe despite lockdown. Since Coronavirus began, engagement on Tandem’s video chat feature has increased three-fold, and new user signups have increased 200%.”

Tandem had been growing usage prior to COVID-19 — increasing membership from around a million back in 2017 (when we last spoke), to more than 10 million members now, spread across 180 countries.

Aschentrup couches the underlying growth as “strong organic demand”, noting the platform has been profitable since 2019 (hence not taking in more outside funding ’til now). But, with the pandemic curve ball accelerating the switch to remote learning, it’s expecting usage of its platform to keep stepping up.

“We’ve successfully increased our community numbers 10 fold in recent years, profitably and organically,” he tells TechCrunch. “More people than ever value digital learning solutions combined with human connection, and so the time is ripe to introduce Tandem to language learners more widely around the globe. With the team at Brighteye on our side we’re excited to further develop Tandem’s reach and voice over the coming period.”

“We expect increased interest in online-learning to sustain well after lockdown lifts. In China — where lockdown sanctions were implemented and lifted earlier — user engagement has remained buoyant.”

“Once people experience the value of learning as part of a like-minded global community, it often becomes a lasting part of their lifestyle,” he adds.

Tandem’s best markets for language learners are China (10%), the US (9%) and Japan (9%) — which combined make up close to a third (27%) of its user base.

While the most popular language pairs (in ranked order of popularity) are:

  1. English – Spanish
  2. Spanish – Portuguese
  3. English – Chinese
  4. English – French
  5. Chinese – Japanese

While the vast majority (94%) of Tandem’s user-base is making use of the freemium offering, it monetizes via a subscription product, called Tandem Pro, which it introduced in 2018 to cater to members who “preferred taking a community approach to language learning”, as Aschentrup puts it.

“For $ 9.99 per month, members can access key features such as: translating unlimited messages, finding Tandem partners nearby or in specific locations — for example ahead of international travels or studying abroad — and having enhanced visibility in the community as a featured Pro member,” he explains.

Aschentrup describes the “community aspect” of Tandem as a key differentiator vs other language learning apps — saying it helps users “develop and maintain cross-cultural friendships”.

“Members are often on opposite sides of the world to each other, yet able to enjoy a window into another culture entirely. Now more than ever, we’re pleased to be facilitating members’ healthy curiosity about other languages, countries, and styles of living.”

The new funding will go on developing additional features for the app, and expanding the team across marketing and engineering, per Aschentrup. Currently Tandem has 24 full-time employees — it’s planning to double that to a 50-member team globally, post-Series A.

Commenting in a statement, Alex Spiro, managing partner at Brighteye Ventures, lauded the team’s “innovative and effective strategy” in building a community platform that tackles the language gap by connecting learners with fluent speakers.

“The product has not only proven resilient in this global crisis but has seen impressive growth during the period, and the team is now very well equipped to come out of it stronger and to continue to support loyal language learners that now number in the millions and will number many more in the coming years,” he added.

Startups – TechCrunch

[Lemonade in TechCrunch] Startups Weekly: Tech unicorns look to IPOs as Lemonade, Accolade boom

Lemonade is being valued at more than 15x the value of its annualized Q1 revenue despite not sporting the gross margins you might expect investors to demand for it to merit that SaaS valuation. And Accolade only expects to grow by about 20% in Q2 2020 compared to its year-ago results while probably losing more money.

Read more here.

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