Earlybird’s Year in Review 2023
Distributing Continued Tech Optimism
We are excited to share with you our 2023 Year in Review from across the independently-managed Earlybird family of funds. Despite geopolitical upheavals and numerous challenges for both startups and investors, this past year featured an array of portfolio wins described below. So we remain staunchly optimistic about tech — with good reason! Hear from the individual funds as they share portfolio activity and news and get some glimpses inside our pan-European VC.
This year by the numbers, to date: Across the Earlybird family of funds, we made 52 investments: 25 new and 27 follow-on rounds to support a growing pack of portfolio companies; we now count 85 Earlybird teammates across Europe. Earlybird also celebrated its 26th birthday, so we’ve weathered a few storms which helps chart a path ahead. Read updates from all the respective fund teams and thoughts on what’s to come in 2024. Let’s go!
Earlybird Digital West: Exploring New Frontiers
AI and Climate tech were naturally major topics. At Earlybird Digital West, we saw great opportunities to back key portfolio companies who are changing the future: In AI, there was the record-breaking USD 500 M Series B of our portfolio Aleph Alpha, leading the way for responsible and trustworthy AI in Europe, starting in Germany. Our portfolio company Ethon AI, a spinoff from ETH University to empower manufacturers in preventing quality losses at scale, had a USD 6.8 M Seed round.
Within Climate tech, we celebrated Nosh Bios’ EUR 3.2 M Seed round plus major industry progress and partnerships to unlock the promise of alternative proteins. We were stoked about Greenlyte Carbon Technologies (GCT) closing a EUR 4.5 M extension round, building atop their EUR 3.5 M Pre-Seed Round, to raise a total of EUR 8 M in just 9 months since founding. GCT serves as a powerful example of our funds’ concept: an Earlybird-X portfolio later backed by the Digital West Fund. Another example is eleQtron, who put their own data center into operation, received quantum computer orders to be implemented in leading hybrid computing infrastructure and was honored with the “Quantum Effects Award” innovation prize at the quantum tech trade fair in Stuttgart.
Further extending our dedication to frontier technologies, we were over the moon to support our Space tech portfolio company, satellite launch service company Isar Aerospace in closing its USD 165 M Series C round.
To top this off, we are happy to share a video that encapsulates our dedication to frontier and deep tech portfolio companies, among others:
Our remit extended beyond that to Fintech, where we supported our startups such as Upvest in closing a EUR 30 M round. Upvest announced an exciting integration of their plug-and-play investment API for our portfolio company N26’s customers, allowing customers to buy and sell ETFs and stocks directly from their current accounts — and demonstrating the innovative connectivity across our portfolio. We welcomed Spanish Wealth Tech Flanks who announced a USD 8 M round. Portfolio company Sikoia secured a USD 6 M in Seed funding. In decentralized finance news, M^ZERO Labs closed a USD 22.5 M investment round–creating a decentralized network to let large users securely connect resources to a decentralized infrastructure.
On the Digital West team, we welcomed new Principal Laura Waldenstrom, active in our enterprise software team, covering dev, data, AI, and ecom infrastructure, and were thrilled to announce 2 well-deserved promotions to Principal: Dr. Marie-Thérèse Buttlar and Dr. Moritz Belling. In close collaboration with Partner Dr. Christian Nagel, Maresa has been elevating our food tech practice as well as exploring digital health opportunities, and she is now covering our team’s efforts in France, which includes Paris-based Gourmey. Moritz has actively supported our Energy tech practice alongside Partner Dr. Hendrik Brandis, particularly Marvel Fusion as well as space tech champion Isar Aerospace, alongside Partner Paul Klemm.
This year, we focused on key events: Apart from time spent among the founder and VC community in London, Berlin, Munich, and Paris, we traveled to Lisbon for a memorable Night of FoodTech Visionaries, and to Amsterdam for Money 20/20. We were also inspired by TOA, Slush, Bits & Pretzels, and hosted a popular Gen Z VC event in-house. Speaking of Berlin in the summer, Super Return LP was a great opportunity to connect with our limited partners. In September, our extended founder community gathered in Berlin to network and gather insights on GTM, fundraising, and people excellence from key speakers.
Earlybird Digital East: Backing Founders with Global Ambitions & Roots in Emerging Europe
In 2023, Earlybird Digital East Fund continued its strong commitment to supporting tech startups with global ambitions and roots in Emerging Europe. It was a year of hitting important milestones including successful exits, promising new investments, and strong follow-on rounds.
2023 marked another successful exit, with the acquisition of Mikrogroup, a leading provider of ERP & accounting software for SMEs, by TeamSystem in August 2023. Mikrogroup’s acquisition validated the potential of SME-focused SaaS applications, affirming our core focus on this vertical. Apart from underlining our thesis, this marked the sixth successful exit within the 2014 vintage portfolio of 15 companies, among others such as UiPath, Minit, and Vivense.
Among the new investments in 2023 is DraftWise, a New York-based legal tech startup transforming how lawyers draft and negotiate legal documents using state-of-the-art AI. DraftWise stands out in the market, with its AI models tailored for law firms, a stellar founding team merging tech and legal expertise, and an impressive client base featuring globally renowned law firms. Explore the investment thesis behind Draftwise here.
2023 also witnessed remarkable achievements within our existing portfolio. Binalyze, a Digital Forensics and Incident Response (DFIR) solutions leader, which we originally backed in the pre-seed round in 2021, secured a $20 million Series A round. Vue Storefront, the leading front-end development platform for headless e-commerce software, also marked a milestone with a $20 million Series A round. Furthermore, Cerbos, a younger portfolio company providing an open-source API tool to build and manage permission systems at organizations, raised $7.5 million in its seed round.
We are excited about 2024 and hope it will bring more success and positive impact within our investment focus.
Earlybird Health: Supporting Patient-Centric Innovation in Europe
Following the successful first closing of our Health II Fund, our commitment to supporting companies across the healthcare space continues – driving impact and positive patient outcomes.
- Alongside Pfizer Ventures, we co-led the USD 49 M Series B investment in Grey Wolf Therapeutics, one of the largest venture financings in the immuno-oncology field.
- A few months later, we co-led the EUR 47.75M Series A+ investment in Ariceum Therapeutics alongside Andera Partner, allowing the company to acquire Theragnostics Ltd and further expand its pipeline.
- We celebrated our ophthalmology portfolio company Oculis as it went public on the NASDAQ, which we supported via an upsized PIPE financing.
In 2023, we published our first in a series of annual reports on Impact & ESG, further deepening our commitment to supporting medical innovations that impact our society and meet sustainability goals. Read more about that report in Tech EU here.
Throughout the year, we expanded our UK presence by introducing the Digital Health Cocktail Hour in London and the TechBio Cocktail Hour in Cambridge. We also continued co-hosting the Digital Health Cocktail Hour in Berlin.
In September 2023, we launched the first in a series of events for women in the Healthcare Venture Capital space. The European Breaking 7% Dinner in London brought together women from across the industry and BD deal-making roles in Europe to foster networking and career development. Discover more about this initiative here.
With our strong history and long presence in the healthcare industry, we continued publishing our opinions on the healthcare space, ranging from DNA and RNA-based therapies, to the next revolution in interventional cardiology and obesity and its treatments.
Moreover, our Partner Lionel Carnot spoke on The #PopHealth Show industry about ESG and Impact, our Partner Thom Rasche reflected on the close relationship between public health and VC, and our Principal Dr. Christoph Massner shared insights on mental health startups.
Lastly, we welcomed investment team members Junkai Zhu and Dr. Alejandro Restrepo Arango to our Berlin office. Junkai holds a BSc in Medical Sciences and Management from Imperial College Business School and brings prior experience as an investment banker working in London. Alejandro holds a PhD in Neuroscience from the University of Göttingen and has completed a short postdoctoral position at the Max Planck Institute for Multidisciplinary Sciences.
Earlybird-X: Embracing Deep Tech Possibilities
In 2023, Earlybird-X focused on supporting deep tech companies at their earliest stages and empowering their pioneering advancements. We took a continent-wide approach in finding the best deep tech throughout Europe and established notable footprints in the thriving ecosystems of the UK, France, Nordics, and Portugal. The dividends of our strategic university network, which embraces the various spinoffs that emerge from academia, are now vividly evident as we witness a cascade of achievements.
Not only have our portfolio companies flourished, but the collective strength of our formidable co-investors has solidified our standing as the preeminent deep tech investor in Europe.
Here are a few highlights from among our Deep Tech Investments in 2023:
- Nortech AI: Plug-and-play Industrial IoT for data collection & performance management, starting with the maritime industry.
- ColibriTD: Paris-based startup recently listed among Station F’s 40 startups to watch, and developing a framework to make Quantum Computing technology accessible to any enterprise.
- GCT: Greenlyte Carbon Technologies opened their Greenberry 2 facility in Essen, Germany and achieved great acclaim already for their Direct Air Capture solutions.
- Quantum Diamonds: Munich-based startup for quantum sensing technology involves sensors with solid-state qubits embedded within diamonds known as the nitrogen-vacancy (NV) center.
- eleQtron: 2023 was key for eleQtron with a data center and innovation awards, earning recognition in German news publications, Manager Magazin, and FAZ.
The Earlybird-X team had many memorable moments including attending Station F quantum gatherings, Hello Tomorrow, Slush, VivaTech, Deep Tech Momentum, and further Tech EU events. We hosted a CDTM Workshop in Munich and had a speaker slot on Tech Transfer at the Sifted Summit and also partnered again with Stage Two. Another highlight was a sunny team offsite to Palma de Mallorca, Spain — loaded with Paella!
The team also welcomed Viktoria Beck, covering the French market out of Paris and Berlin. Read her perspective here, including her participation in a Tech event at the French Embassy in Berlin.
Earlybird Vision Lab: Supporting Migrant Entrepreneurs in Germany
Vision Lab is an incubator and impact fund with a six-month program presented by Earlybird in collaboration with Bain & Company, Egon Zehnder, Handelsblatt Media Group, and many other partners. The program is designed to provide startup teams in Germany with migrant backgrounds the opportunity to access mentorship, funding, and networking resources. We are the first German VC to have created such a dedicated program and fund and welcome supporters of all kinds to be part of this important movement.
The Vision Lab program was thrilled to support two separate cohorts in 2023, with a total of 22 participating startups. Vision Lab celebrated the close of Cohort 3 early this year, which consisted of 10 unique teams.
Directly following this successful close, Vision Lab onboarded 12 more teams to kick off Cohort 4. In November 2023, Cohort 4 graduated from the program — taking part in our Demo Day, pitching in front of more than 80 angels, investors, and other members of the Startup ecosystem. To learn more about incredible startups in all cohorts, please visit this Notion page.
For founders in Germany of migrant origin, please keep an eye on our Earlybird LinkedIn channel. The application period for our upcoming 5th Cohort runs through the end of this year. We encourage eligible individuals to submit their applications to us right away: visionlab@earlybird.com.
To get up to speed on all the 12 teams in the 4th Cohort who are innovating in Germany, check out our round-up Medium blog post below.
Distribution of More Tech Optimism in 2024
To wrap up, we have many reasons to call ourselves tech optimists and aim to distribute and build on that spirit via our teams and portfolio companies. Besides the progress above, what gives us that inherent optimism?
- Even during the pandemic in 2021–2, we saw grounds for a more positive upswing in 2024. We saw there was a fundamental crisis where, yes, there were ups and downs in capital markets but we could also see the accumulated value of tech as uninterrupted. While the value of technology grows, so does the gap to that value. We could see that the resilience of not getting back into those markets would only hold for approximately 3 years, and this is proving true, as investors start to enjoy the return to investing.
- This optimism is supported by macroeconomic conditions, where we see a shrinkage of inflation that could lead to reduced interest rates. And interest rates drive valuations. We have already started to see an uptick in the valuation of startups.
- We see a perfectly-timed outlook for 2024: with falling (or at least not spiking) interest rates, tailwinds from the capital markets, and a huge value gap in tech. Great examples where we see this taking shape include our portfolio company Isar Aerospace, which is set for its first test flight soon, and our mobility startup, Lilium, now highly de-risked concerning battery innovation. Great deals present funding opportunities for innovative startups, opportunities for investors, and demonstrative value for LPs.
Join us
With 85 Earlybird teammates working in service of more entrepreneurship across Europe, and thanks to an additional 16,000 + followers on LinkedIn community this year (welcome!), we are glad to keep growing our strong tech optimist network.
If you are looking for new professional challenges, please visit the jobs board with a range of opportunities across our portfolio companies. We’d love to welcome you to the #EBVCgang.
Thank you for reading and for being part of our ecosystem. We wish you all a great start in 2024!
Please keep up with us by following our Medium publication, Earlybird’s View.
