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Future of Capital Allocation

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The week's developments in investing & technology, explained | 27.9.23

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Europe, watch out: Americans are coming for your startups. So far this year, US firms are responsible for nearly half of the funding for European startups. How does the influx affect Europe’s tech scene?


There’s a divisive new investing trend in the US: a rise in “anti-ESG” funds. They invest in vice stocks like tobacco and gun producers, have explicitly conservative values, or simply don’t believe in ESG targets’ effectiveness. Will these funds outperform those with ESG targets? 


We cover these stories and more in today’s edition — from how startups are enjoying the spoils of the US-China space race, to why Poolside chose to move to Paris over London.


—Charlie and the Research & Intelligence Team


The investment ecosystem

🗽 Who’s backing Europe’s startups? The US, it turns out. American firms have contributed nearly half of the funding for European tech companies so far this year. Amid a global market slowdown, any investment is a saving grace for startups — but is the influx of American capital a double-edged sword? 


☄️ Startups reap benefits of space race: The US and China are facing off to go back to the moon — and pouring billions into startups that will help them get there faster. Space-techs are using these government contracts as a proof-of-concept to raise more money from private investors. 


♻️ ‘Anti-ESG’ funds are on the rise: Critics say that although ESG investing is well-intentioned, it’s ineffective — and even harmful. Enter anti-ESG funds, which in the US managed £1.72 trillion as of the first quarter of this year.


🗣️ Crucial networking tips for VCs: An American VC explains how she built her European network from scratch, from having a “give-first” mindset to putting out top-tier content.


Chart of the week

The UK surges ahead of European countries as one of the region’s top VC hubs, with exit activity totalling £400 million. France follows, ranking second for exit value. Note: Only European countries with relevant data are included in this chart.


How AI is transforming investing 


📈 CIB goes all-out on gen-AI: Corporate and investment bank traders have long used machine learning models to predict trading patterns. Now, they’re using AI at scale — to sort through regulator reports, offer insights on real-time liquidity, improve client services, and more — while most of the industry lags behind

👩‍💼 Goldman Sachs sees AI as a productivity boost: The investment bank plans to create an AI that can surface deep insights from internal systems, strategy and research, designed to save employees hours or even days of work. (Sound familiar? McKinsey released a bespoke consulting bot last month.) 



👩‍💻Why did Poolside choose Paris over London? The US AI startup, which last month raised a £103 million seed round, moved to Paris because Emmanuel Macron’s government is “committed to providing the conditions for AI companies to succeed”, its founder said. Rishi Sunak, take note.


☄️10 fastest-growing European deeptechs: Based on headcount growth over the last year, Stability AI tops the list. Three of the top 10 deeptechs are in the UK; France and Germany follow with two each.




Noteworthy deals

Series A+:

  • San Francisco startup Writer, which aims to improve corporate content creation, raised a £81m Series B round led by Iconiq.

  • UK spacetech Open Cosmos raised £40m in Series B funding from Accenture Ventures and ETF Partners.

  • London’s HyperJar, a money management app, raised a £19.4m Series A round led by Susquehanna Private Equity Investments.

Pre-seed & seed:

  • Oslo AI assistant startup Databutton raised £4.1m in a seed round led by Skyfall Ventures and Helsinki’s

  • Brussels healthtech Awell, which automates clinical workflows, raised £4m in a seed round led by Octopus Ventures.

  • Paris startup ColibriTD raised £900,000 in seed funding to grow its quantum-as-a-service model in a round led by Earlybird Venture Capital.

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Disclaimer: This content is for informational and educational purposes only. It does not constitute financial, investment, legal or tax advice.

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