Episode #376 This Month in German, Swiss, and Austrian (GSA) Startups — March 2023
Welcome to our March 2023 wrap-up with important news from the startup scenes in Germany, Austria, and Switzerland in 30 minutes or less 🙂.
We follow our top-down structure in the news: The top news, followed by a bird’s eye view at the startup ecosystem, next deeper looking at fascinating startup cities, and we end with general information. And for those serious about startups, there is a collection called: Stay ahead of the curve, where we share exciting reads, articles, studies, and podcasts.
Welcome to our startup news wrap-up for March with Chris from New York City and Joe from Frankfurt. We recorded this news episode on March 27th, 2023. A little disclaimer: You may have noticed a lot of stress in February here at Startuprad.io. We should have remembered a few news items in our backlog and added them to this episode.
All news not yet included here will be published in our next news episode for April, to be published on April 27th. Find all links to the quoted information on our Medium blog link below.
If you celebrate it: Happy Easter! We also try to bring you a bit of culture from Germany here.
Our Highlights:
Good news and bad news for Fintechs Raisin and N26. Raisin gets its unicorn status back and gets a lot of new business, so much in fact that the complaints at Bafin are mounting. N26 generated 200 mn € revenue in 2021 but has to deal with a senior employee uprising. Neobank Ruuky is saved last minute. Startup Bonify reportedly makes a 20 mn € exit, but employees only get invited to a barbeque. GoStudent is a no-go with courts, and the first Goldman-backed fintech in Germany struggles. Bavarian Airlines may be just a hoax, and Grover shows the first signs on their way to an IPO.
Let’s talk startups:
The Video Podcast Will Go Live on Thursday, March 30th, 2023
The Audio Podcast Will Go Live on Thursday, March 30th, 2023
As always, the audio podcast will go live a few hours earlier. Our publication on Ximalaya always occurs on the following Friday, March 31st.
Chapters Audio and Video:
00:00 Intro (Easter in Germany, Strike in Germany)
06:12 Top News Germany, Austria, and Switzerland — March 2023
15:00 Housekeeping
16:17 Ecosystem News for GSA 00:16:40 News by Startup Hubs
21:52 Tech News 00:22:10 Tech News — New VC Funds and How to Pitch
23:05 Tech News — General Tech News GSA
23:55 Tech News — Schumpeter’s Creative Destruction
26:23 Tech News — Fintech News GSA
27:52 Tech News — Successful Fundraisings (Small Selection)
29:11 Goodbye and Stay Ahead of the Curve
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This recording is supported by HTAI and the Enterprise Europe Network Hessen
This recording was made possible by HTAI and the Enterprise Europe Network Hessen. These organizations have made tremendous contributions to helping startup businesses succeed and thrive, providing a range of services from helping to find grants to ongoing partnerships. By taking advantage of these resources, startup companies can network and develop innovative strategies for success on the international stage. The dedicated support of HTAI and the Enterprise Europe Network Hessen is paramount in providing startup businesses with the tools for lasting success. Look for our dedicated sub-podcast in partnership with them: Tech Startups Germany on our https://linktr.ee/startupradio
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Top News
Good News and Bad News at Raisin
The rising interest rates are good for deposit broker Raisin. They were driving an increase in business and helped them to get a unicorn valuation with their most recent fundraising. It seems they even got a bit overwhelmed by the new business. Let’s have a look at the news:
We reported about Raisin’s (then) ongoing fundraising and that they are about to get their unicorn horn back. This is now confirmed: Deposit broker, fintech Raisin, raises 60 m Euros in VC funding, reclaiming its formerly lost unicorn status https://finanzbusiness.de/nachrichten/fintech/article15433944.ece
The bad news: It seems complaints are piling up so that BaFin takes notice https://buff.ly/3m7nqY1
N26 Good News and Bad News — As well
In February 2022, six high-ranking managers of N26 wrote an email warning the founders the company was turning dysfunctional. This became news about a year later when the Chief Risk Officer stepped down. Most of the managers backing the email left already.
First: N26’s top executives warned co-founders over ‘dysfunctional’ leadership https://buff.ly/3JAI8bT
Second: Thomas Grosse, our guest from the past, became Chief Risk Officer and reportedly sent the email to the N26 founders. This month he stepped down: Thomas Grosse steps down for personal reasons, reports Börsenzeitung https://buff.ly/3SRKm9U note also that his position was required by BaFin, to get N26 out of regulatory troubles.
Third: Some Good News: N26 increases revenues due to rising interest rates. They are looking at 200 mn € income for 2022 (+67%) https://buff.ly/3nkRIqE
Neobank Ruuky Saved Last Minute
First, we told you: Bad news for Hamburg-based neobank Ruuky first had to file for insolvency. Now the service will be terminated https://buff.ly/3ZHgzTM
We shared that the insolvent neobank Ruuky was supposed to be liquidated. Now it appears they have found a buyer https://buff.ly/3LjEvII
Millions or just a BBQ?
Germany’s largest credit bureau bought German startup Bonify SCHUFA, for 20 m €, and the employees only go to a BBQ https://buff.ly/3lCfs9w The problem was the company did a down round, and with the liquidation preferences (meaning who gets paid first) there was nothing left for the employees with stock option plans.
GoStudent gets Legal Headwinds
GoStudent gets another court ruling against them. First, a Cologne court agreed GoStudent showed anti-competitive behavior. Now they get a setback with an Austrian ruling against them for automated contract extensions https://buff.ly/3ZvEV2t
Related: Austrian unicorn Gostudent partially sentenced by Cologne Regional Court in a competition dispute https://buff.ly/3lYgg8s
Goldman Sach’s Backed Startup has to Fight
We had them as a guest in 2017, and they made headlines as Germany’s first startup investment by Goldman. Now they have to fight: Fintech Elinvar loses a third reference customer. MM Warburg ends the cooperation after five years. They also lost since September Fürstlich Castellsche Bank and DKB https://buff.ly/3F1QvL8
Bavarian Airlines Crashed Before First Flight?
We have shared reports of an upcoming new airline called Bavarian Airlines — Now, questions arise. For example, the founder claimed to be 18 but is only 15 years old. The required paperwork to establish German companies has yet to be filed. The (not so long past) of the founder is littered with websites of financial services companies that are offline now. … It seems nothing of the story was true https://buff.ly/3mv2YRd Also, a complaint with the legal authorities has been filed: https://buff.ly/42KEd3O
Unicorn Grover Preparing for an IPO?
Grover, the unicorn gadget renting company, lures the experienced CFO away from Lilium. https://buff.ly/3kW3Qhi such a move could be a first step towards an IPO a few years down the road
Housekeeping & Time to Brag
Today we want to hint at two events we will attend this year where we are media partners. Look at our medium blog for discount codes:
- EU startups Summit (April 20th to 21st) in Barcelona, use code STARTUPRADIO20 for 20% off. Learn more about the event and book your tickets here: https://www.eu-startups.com/eu-startups-summit-2023/
- Tech Open Air TOA (July 5th to 7th) in Berlin https://festival.toa.media/
- Our Guest Crypto Custodian Finoa Gets License Approvals From German Regulator BaFin https://buff.ly/3SIA9wv
Learn more in our interview with one of the co-founders: https://buff.ly/3kB6lVS
2021 was a good year for them as well: They increased their revenue from 550k to 13 m € https://buff.ly/42yzyC8 - Berlin’s Monite raises $5M seed for its embedded B2B payments platform https://buff.ly/3lyrSPF. Learn more about the company and its founder in the interview here: https://buff.ly/3Nhzyiv
Ecosystem
- Our friends from Equidam have an update on startup valuations in Europe for February: The State of Startup Valuation — February 2023 | Equidam https://buff.ly/3Zl0VwP
First, there have been lowered valuations, BUT the outlook is better. - Our Interview: Exploring Germany’s Startup Strategy With Digital Commissioner Anna Christmann:
Hubs
Germany has a federal tradition, which means it is much less centralized than other countries. For example, Germany’s highest court is in Karlsruhe; the Federal Employment Agency is in Nürnberg, and so on. Therefore not all startup activities happen in Berlin (only around 20%) or Munich (around 8%). We try to highlight some of the hidden gems here.
Frankfurt
- Frankfurt-based fintech Captiq raised undisclosed VC round — VC Magazin https://buff.ly/3KIrIzp
- COMPREDICT’s virtual sensors are changing the future of connected mobility https://buff.ly/3LWLAj1 Writes Tech.eu. You can learn more about the company and one of the founders in our exclusive interview here https://buff.ly/3yStcjm, published in September 2022.
Hamburg
- Hamburg-based Impossible Cloud Doubles Down on Multi-Service Cloud Solutions With HV Capital and 1kx Leading a €7M Seed Round https://buff.ly/41CeLNo
Düsseldorf
- Myne is a Berlin-based proptech startup, brokering shared ownership of villas. After raising 23,5 m € they now buy their Düsseldorf based competitor Villa Circle https://buff.ly/3ISi22z
Bruchsal
- Volocopter gets Sumitomo Corporation (Fortune 500) to invest in Series E funding and becomes a strategic partner for their market entry in Japan https://buff.ly/3klxfB8
Tübingen
- Amazon opens AI research facility in Tübingen, Germany https://buff.ly/3EWgT8X
Heidelberg
- Meet Aleph Alpha: Germany’s best competitor to ChatGPT https://buff.ly/3JDqlQg
Bochum
- Bochum-based Edgeless Systems raises $5 million for public cloud security https://buff.ly/3ZfmAGq
Jena
- Jenabatteries, the company building Cerq Batteries, has to file for insolvency https://buff.ly/3z7XVZH
Austria
- Austrian AI startup magic_dev raises 23m US$ from investors including Google https://buff.ly/40pHy6u
- Austria’s Finmatics puts AI in the hands of accountants, raises €6 million https://buff.ly/3TFVlUc
- Could you name a soonicorn from Austria? Try Refurbed; they are a marketplace for used electronics https://buff.ly/3IONpMR
Switzerland
- The largest online comparison portal in Switzerland, Comparis, is under scrutiny by the finance oversight body Finma. Now they have to ax at least 10% of their workforce https://buff.ly/41MNNTr
- Noema Pharma Raises USD112M in Series B Financing https://buff.ly/3l0SLeF
- Former Uber exec Steve Salom was tapped by Switzerland’s ACE & Company, tasked with launching a €150 million Swiss-focused fund https://buff.ly/3Z6kgBv ACE is a global private investment platform. That means you can not directly pitch them.
General News / Tech News / Companies News Section
New VC Funds and How to Pitch
- Cambridge-based Amadeus Capital Partners and Vienna-based APEX Ventures orchestrate deep tech support with a joint €80 million fund for startups in GSA/DACH. So far, they have raised 28 m €, but their goal is 80 mn. https://buff.ly/3m2ATAo
Pitch APEX here: https://www.apex.ventures/apply/ - Spex Capital (from London) targets €100m for digital health deals (to be invested worldwide) https://buff.ly/3IZqcYc Note: The fund is targeted, not raised yet, so you can not pitch for money here yet.
- Partech Closes Africa II fund at 245 Mio. EUR — VC Magazin https://buff.ly/408ABqX To find someone to pitch from Partech’s Africa team, follow this link: https://partechpartners.com/team/
Tech News
- For the first time, Amazon closes down a logistics center in Germany. The building outside of Berlin needs to be updated. The employees will get other offers https://buff.ly/3J1MSqN
- Nestlé invested in Munich-based drinks startup Yfood and got many negative reactions on Twitter. https://buff.ly/3SIqbeC
- Former Foodora CEO Ralf Wenzel founded JOKR, an instant grocery delivery service. After leaving many locations (New York, Boston, Columbia, Chile, …). Now they want to double down on Brazil with 50 m new funding https://buff.ly/3L2jmmi
Schumpeters Schöpferische Zerstörung ⇒ Creative Destruction Still Ongoing:
Schumpeter was one of the most influential economists of the 20th century and coined the term creative destruction in German Schöpferische Zerstörung. Learn more about him here: https://en.wikipedia.org/wiki/Joseph_Schumpeter
- Berlin is home to most startups in GSA, so, unsurprisingly, they are also the No 1 location for layoffs in GSA. We are sure the city is not proud of this first place https://buff.ly/3YDiZ4M
- Onefootball: Berlin-based app lets go more than 1/3rd of all its employees in two downsizing rounds just weeks apart. First 60 employees had to go, now 150 more will have to leave https://buff.ly/3kxsAfE
- Banovo offered bath refurbishing for a fixed price and got to eight-digit revenue, but now has to file for insolvency https://buff.ly/3ZxwtzI
- Hamburg-based Sleeperoo (famous from Germany’s Shark Tank “Die Höhle der Löwen) has to file for insolvency https://buff.ly/3ER1h6N
- Volatiles Lighting has to file for insolvency https://buff.ly/3KV2wWu
- Get It Done, the Berlin-based service startup — that offered online merchants to sell services matching their products — has to file for insolvency https://buff.ly/3yiR1jX
- Otto Group shuts down Mytoys online shop, including all 19 retail outlets. The press release suggests they were never profitable, and Corona did the rest. 800 jobs will be lost https://buff.ly/3yhV14h
- Berlin-based cargo bike startup Avocargo must file for insolvency https://buff.ly/40c5zhF
- Despite raising 15,5 m US$ for food delivery service, Yababa has to file for bankruptcy https://buff.ly/40aIgoB
Fintech News
- Berlin-based tax app Taxfix (coined unicorn in April 2022) buys competitor Steuerbot https://buff.ly/41ujlxb
- German finance oversight starts investigations in Uniswap, since they have started marketing to German clients but don’t have a license there https://buff.ly/3l8li22
- Deutsche Bank joins as an investor: Payments fintech DataMesh bags $30 million Series A https://buff.ly/3Zcwx7V
- finway the Munich-based expense management startup for SMEs raises 10 m US$ in Series A funding with lead investor Capital 49 https://buff.ly/3m0C2Zl
- After coming for C24 and Solarisbank just recently, German finance oversight BaFin now goes after online broker flatexDEGIRO https://buff.ly/3YpYZCN
- Neobroker Scalable Capital had a big data leak in 2020. They had to pay the penalty, but now a court in cologne also agreed they must pay an affected client 1.200 € in damages. Scalable will not appeal https://buff.ly/3ZxjCxz
- Bitpanda Technology Solutions is now available to financial institutions via Visa’s Fintech Partner Connect program https://buff.ly/3FHl6Ow
End on a High Note: Successful Fundraisings:
- Estonian Skeleton Technologies powers up with €51M investment from Germany and Saxony — Invest in Estonia https://buff.ly/3ZLbA4J
- Enapter, a green hydrogen production company based in Berlin, has secured a €25 million bearer bond with Patrimonium Middle Market Debt Fund. https://buff.ly/3SCXxvf
- Munich-based cybersecurity startup Build38 raises 13 M € in Series a funding https://buff.ly/3K3bjF2
- Berlin-based doctorly Raises €9.4M in Series A Funding https://buff.ly/3YcrHXE Backers included The Delta, Horizons Ventures, Speedinvest, Well Technologies, UNIQA Ventures, Calm/Storm and Seedcamp
- Swiss-based Aera Health raises 4 m Euro in pre-seed funding https://buff.ly/3FMscRK
- VisionHealth raises 3 million Euro to finance extended COPD and asthma study for market preparation of Kata®, an innovative digital therapeutic for improved inhalation | BioSpace https://buff.ly/3ZiRNcm
- Germany’s trawa raises €2.4 million to become the renewable energy supplier https://buff.ly/3mqNOw9
- traplinked Raises EUR 2.3M in Seed Funding — FinSMEshttps://buff.ly/3EAteQ9
Stay Ahead of the Curve
- Last note: Had a bad 2022? You are not alone: The holding of billionaire family Reiman named JAB Holding, owner of companies like Keurig, Dr. Pepper, Senseo, Krispy Kreme, PRET, Peets, Panera, orJacobs, had no excellent year in 2022. They lost 4,47 bn €, lowering the value of their assets to 49,5 bn Euros https://buff.ly/3neXR81
- Tech valuations reset in 2022, tumbling from inflated highs. Only Seed/Angel valuations are stable; the worst hit are the valuations in Series C, and Series B https://buff.ly/3EzcatJ
- Berlin’s Barren Housing Market Is Putting Its Tech Boom at Risk https://buff.ly/3m3WWGF
- For Bain Capital Ventures, ‘it is 2021 all over again’ (well, almost) https://buff.ly/3ENIAAR
- The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales https://buff.ly/3y3oDlR
