Born in the pandemic, Moonfire’s first $60M Seed fund will combine remote investing with big data

During the pandemic, we’ve seen the rise of ‘Zoom investing’ – where VCs literally use remote video conference tools like Zoom and Google Meet to take pitches from entrepreneurs. Now a new European Seed fund plans to leverage that emerging behavior and bake it into their model.

Mattias Ljungman, the former co-founder of Atomico formed Moonfire when he left in December 2019, but few details were revealed about his new operation. Today Moonfire reveals it will be a $60 million seed-stage “data-driven” VC that will also leverage the new advantages of remote working which entrepreneurs themselves have had to adapt to.

Admittedly Ljungman didn’t have much choice. Starting in January 2020, he ended up having to found, raise and close the fund, as well as invest, almost all remotely. But, he says, that means it will continue to take advantage of this ‘new normal’. “We are doing zoom investing. It’s the death of geography, and people are now pretty comfortable with that way of living,” he told me, literally via Zoom.

Moonfire’s first fund has been raised from LPs spanning the usual swathe of institutional investors, entrepreneurs, and VCs. Cendana, the US-based seed fund investment firm, is the anchor investor. It is joined by Utah School & Institutional Trust Funds Office (SITFO) and Reference Capital, among others. Moonfire says the fund was significantly oversubscribed.

Moonfire will focus on a very broad range of areas which will include Health & Wellbeing, Work & Knowledge, Gaming, Community & Leisure and Capital & Finance. Its most recent investments across Europe include Humaans, Electric Noir Studios, Skunkworks, Pento, Awell Health, Mindstone, Business Score, Homerun, HiPeople, LoveShark, WillaPay, Oliva, Equify, and more.

Ljungman ‘knows his onions,’ as the phrase goes. As a co-founder of Atomico he spent 20 years investing tech startups-turned-unicorns including Klarna, Supercell, Viagogo and Climate Corp.

Mike Arpaia and Candice Lo. Arpaia will partner the firm with Ljungman. Former computer scientist Arpaia joins Moonfire with experience from Etsy, Facebook, Kolide, and Workday. Lo has been an entrepreneur but is an operator turned investor with experience at Uber in Europe and China, as well as an early-stage investor with the UK’s Blossom Capital.

Ljungman says data will form the cornerstone of the fund. He said: “Venture will always be a relationship business, but it should be powered by data, software, and machine learning to hone and optimize everything we do from discovery, screening, and evaluation to delivering better insights for our founders. We are able to enhance traditional thesis-driven investing and make decision-making quicker and more effective.”

Of course, just about every VC these days says it uses data to invest – Inreach Ventures in London, for instance, is just one of many that makes a great play of this idea.

Over a video call, Ljungman countered: “You’re looking at utilizing software, automation, and machine learning. If you look at any industry that is what happened – software is eating it up. It touches every component of your process from discovering companies to managing them, evaluating them, helping them with support. So we still have our thesis-driven approach, but what we’re doing is pairing it with software, like a bionic suit, so this is how to augment what we do and do it bigger and better.”

He added: “The European ecosystem is a lot bigger today, so relying on gut instinct, relationships, networking is not going to be efficient. Utilizing software is going to be critical for us. We have 1.4 million people already in our database. These entrepreneurs usually have a really nice history. The average entrepreneur is a lot older than it used to be, as well. If we’re looking at thousands of companies per year, there are real network effects. The more you build out your data the more you build out your portfolio, the more you make more investments, the better you are at helping and supporting your portfolio companies because you’ve institutionalized that knowledge.”

Graham Pingree, Partner at Cendana Capital, said in a statement: “We’ve been watching the European start-up ecosystem mature and grow in the past year and we’re excited to have the opportunity to partner with the team at Moonfire as they look to expand their portfolio. Moonfire, like Cendana, is passionate about supporting founders at the earliest stages of their journey and they have the skills and expertise needed to nurture a new generation of founders.”

Supercell likes Metacore’s games so much it just gave it another $180M credit line

Metacore, a Finnish mobile games company, seems to have an amazing ‘relationship’ with Supercell, another (quite successful) Finnish mobile games company.

Back in September 2020, Metacore raised $17.7 million in equity from Supercell and another $11.8 million line of credit, sometimes also called a debt round. That amazing relationship appears to be ongoing. Because Metacore has now raised yet another debt round from Supercell, but this time for €150 million ($180 million). These guys really like each other.

The simple reason for this is two words: Merge Mansion. This game has been so spectacularly successful that Supercell clearly wants a stake in that success, and it has the cash reserves to make that bet.

The puzzle discovery game has 800,000 daily players, and an annual revenue run rate of over €45 million, so it’s really on a growth curve.

Why so successful? Well, players have really loved the idea that they can literally merge two items they pick up in the game to make a brand new thing. So for instance, you can merge two rakes and you get another kind of tool that you can then can use somewhere else. This is a very unique mechanic in mobile games.

Supercell is also enamored of Metacore’s games development strategy: it creates games with two to three person teams and only adds resources when a game takes off. This innovative approach to game development is at least part of the reason Supercell is doubling down on its investment, not just Merge Mansion itself. It’s a sort of ‘fail-fast’ approach to game-making that is clearly paying dividends.

So why this approach to the latest financing?

I spoke to CEO and Co-Founder Mika Tammenkoski who told me: “Yes, it is it is credit line. We are more about scaling up the company as we are scaling up revenue. We already have meaningful revenue, we can invest the money, and we can expect a certain kind of return on investment. So this is the cheapest investment that we can get. Equity investment would dilute us. So this makes sense from that point of view. With Supercell, we have a really great partner, backing us. They know exactly what is ahead of us. They know exactly the kind of challenges that we have, and that makes us aligned in that sense… We both think long term, we both want to scale the game as big as possible. And with Supercell we get the best terms overall.”

So there you have it. Metacore and Supercell are locked in an embrace which any other outside investor is going to have to invest in big to get a look in on the action.

Sprout.ai raises $11m Series A led by Octopus Ventures to apply AI to insurance claims

It was way back in 2018 that Omni:us appeared to disrupt the insurance market by applying AI to this most legacy of all industries. It has now gone on to raise $44.1 million. In a similar vein, Shift Technology in France has raised $100 million.

Now a UK startup aims to do something similar, but this time it will be coming out of the key market of the UK, where the insurance industry is enormous.

Sprout.ai is an insurtech startup that use AI to help instance companies to settle claims within 24 hours. It’s now raised £8m/$11m Series A round led by Octopus Ventures. The round was joined by existing investors, Amadeus Capital Partners, Playfair Capital and Techstars. It was Seed funded buy Amadeus in 2020.

Sprout.ai supplies global insurers, such as Zurich, with a product that applies NLP and OCR to insurance claims (which might involve such as handwritten doctors’ notes for instance) to enable them to be resolved faster, in not a dissimilar fashion to Omni:us and SHift. Sprout.ai says it now has deployments in Europe, South America and APAC.

Niels Thoné, CEO of Sprout.ai, said in a statement: “Sprout.ai’s mission is to revolutionize customer service within global claims automation. Our innovative and industry-leading AI claims engine is poised to solve the current market inefficiencies, allowing insurers to focus on customers in their moments of need.”

Nick Sando, early-stage fintech investor at Octopus Ventures, said: “We are often at our most vulnerable when we submit insurance claims, and it doesn’t help when we then have to wait another month for it to be processed. Sprout.ai empowers insurers to process claims in a fraction of the time, creating much better outcomes for customers when they need it most.”

As we can see, the market is hotting up for this kind of service, so it will be interesting see if these startups end up ‘land-locked’ to their language markets or not. Certainly, I can see M&A opportunities for whoever starts to lead the pack.

Sprout.ai raises $11m Series A led by Octopus Ventures to apply AI to insurance claims

It was way back in 2018 that Omni:us appeared to disrupt the insurance market by applying AI to this most legacy of all industries. It has now gone on to raise $44.1 million. In a similar vein, Shift Technology in France has raised $100 million.

Now a UK startup aims to do something similar, but this time it will be coming out of the key market of the UK, where the insurance industry is enormous.

Sprout.ai is an insurtech startup that use AI to help instance companies to settle claims within 24 hours. It’s now raised £8m/$11m Series A round led by Octopus Ventures. The round was joined by existing investors, Amadeus Capital Partners, Playfair Capital and Techstars. It was Seed funded buy Amadeus in 2020.

Sprout.ai supplies global insurers, such as Zurich, with a product that applies NLP and OCR to insurance claims (which might involve such as handwritten doctors’ notes for instance) to enable them to be resolved faster, in not a dissimilar fashion to Omni:us and SHift. Sprout.ai says it now has deployments in Europe, South America and APAC.

Niels Thoné, CEO of Sprout.ai, said in a statement: “Sprout.ai’s mission is to revolutionize customer service within global claims automation. Our innovative and industry-leading AI claims engine is poised to solve the current market inefficiencies, allowing insurers to focus on customers in their moments of need.”

Nick Sando, early-stage fintech investor at Octopus Ventures, said: “We are often at our most vulnerable when we submit insurance claims, and it doesn’t help when we then have to wait another month for it to be processed. Sprout.ai empowers insurers to process claims in a fraction of the time, creating much better outcomes for customers when they need it most.”

As we can see, the market is hotting up for this kind of service, so it will be interesting see if these startups end up ‘land-locked’ to their language markets or not. Certainly, I can see M&A opportunities for whoever starts to lead the pack.

Pivoting from offline into virtual events for enterprises nets Tame a $5.5M Seed round

In March 2020, Tame had a digital event suite for offline corporate events. But with the pandemic hitting, it did a hard pivot into providing a highly customizable virtual events platform, primarily used by companies for their sales events. The result is that it has now raised a seed round of $5.5m, a large round for its native Denmark, led by VF Venture (The Danish Growth Fund), along with byFounders and and three leading angels: Mikkel Lomholt (CTO & Co-founder, Planday); Sune Alstrup (Ex-CEO & Co-founder, The Eye Tribe); and Ulrik Lehrskov Schmidt.

The investment will be used to scale from 20 to 60 new employees across Copenhagen, London, and Krakow; expand to the UK, and grow revenues.

Founder Jasenko Hadzic, CEO and Co-founder said the pivot to virtual grew revenues “by 700% organically last year. No sales. No marketing. Organically. Therefore, Tame sees a huge opportunity and is going all-in on expanding aggressively to position itself as a market leader.”

Jacob Bratting Pedersen, Partner, VF Venture, said: “At VF Venture, we want to help develop and drive innovation. The corona crisis has brought digital momentum with it, and here Danish IT entrepreneurs have the opportunity to seize that agenda and bring Danish technology and expertise to the global market. Tame is a really good example of that. Tame has great potential to create a strong, global business for the benefit of growth and jobs in Denmark.”

Hadzic himself is already a success story – he eventually made it into the tech industry after arriving in Denmark as a child refugee from war-torn Bosnia during the Yugoslavian civil war.

But don’t mistake Tame for a Hopin. Hadzic told me: “We’re not interested in getting TechCrunch Disrupt as a customer or, or the big trade fairs. We just want to focus on those enterprise companies which we sell to a marketing department or an HR department.”

London’s Stride VC raised second $138.6M seed fund, hunts for third partner

Stride VC, a London-based seed investment fund, has raised its second fund, which will be £100M ($138.6M) – identical to its first fund. The fund will invest primarily in London startups but also look at select European opportunities.

The breakup of the LPs in the fund is 10% fund of funds, 60% other institutional, 28% family offices, and 10% individuals. Stride said some 80% of this new fund came from returning LPs, and 20% from two new unnamed institutional investors. Stride does not have any public or government investment.

Investors include the founders of Cazoo, King, Pillpack, Dott, and institutional investors such as Delin Ventures, Draper Esprit, Mubadala, and CNP (Groupe Frere).

Stride Founder Fred Destin told me that while the fundraising was planned for June, the two new unnamed institutional investors “reached out in January, and confirmed their intention to invest around mid-Feb after a quick diligence process. We weren’t planning to raise until June. We secured all allocations March 12 and closed 31 March. Breakneck speed for a fund,” he said.

Stride has also gone through some personnel additions. The successful podcaster about VC, Harry Stebbings, who co-founded Stride with Destin, departed amicably in early February to set up his own fund. Cleo Sham is the new partner joining full-time in June, as announced on Twitter. In August last year it lost its Paris-based partner, Pia d’Iribarne, who has set up Newwave.vc.

Destin also told me he will be looking for a new third partner for the fund, and two more team members: “I’m mainly looking for exceptional talent. If they don’t fit some kind of mold, or don’t have an MBA and speak like MBA people, even better. What I mean is I don’t want people who just look for your references.” But, he added, “don’t @ me on Twitter about it!”

Shane Burgess has joined to head up talent; Pietro Invernizzi, formerly of The Family, runs the ‘First Check Programme’.

Destin says Stride remains “firmly committed to Seed”, usually leading or co-leading a funding round. But that it will also expand from pre-seed funding with £250K checks to sometimes larger investments in companies like Huboo where it invested £4.5M. Its core investment program ranges from £750K to £4M (usually £2M) and lower rounds from £250K.

Destin describes the fund as “artisan venture capital” where it invests in “small batches”. He said: “We understand startups are chaotic and we embrace the chaos. We value trust over everything else. We are not about control; we’re about impact. We’d rather do the work than talk about it, hence the minimal website.”

Over a call, he added: “We don’t take board seats, we prefer to provide something to the founders that’s meaningful to them. So we’ll do ad hoc things, such as a strategy session, help them recruit someone, pointed interventions. The founders seem to really like it.”

Stride’s Fund I has backed 29 companies so far. Perhaps the best know is Cazoo. Although much of its portfolio is undisclosed and defies ‘themes’ it’s known to have invested in:

  • API Infrastructure: STRAPI, Impala, WeGift
  • Ecommerce: Cazoo, Front of the Pack
  • SaaS: SEDNA, Cord, Unibuddy, WeGift

Destin told me: “We don’t necessarily think it’s helpful for companies to be announcing what they do and what they’ve raised. And for ourselves, we don’t need it to flatter our ego. A lot of our companies are happily operating below the radar.”

Sorbet raises $6M Seed led by Viola Ventures to tackle the thorny financials of Paid Time Off

A US/Israeli startup, Sorbet — which is tackling what companies do with the financial risks as employees accrue Paid Time Off (PTO) — has raised $6 million in a Seed funding round led by Viola Ventures, with participation by Global Founders Capital, Meron Capital.

The economics of Paid Time Off is relatively hidden in the business world, but essentially,
Sorbet takes on the burden of this PTO from employers and then allows employees to spend it. This gives the employers far more control over the whole process and the ability to forecast its impact on the business.

Sorbet says that in the US, employees use only 72% PTO balances, even though it’s the most sought-after benefit. But this, effectively, comes out at 768 million unused days off a year, worth around $224 billion. This creates a difficult problem for CFO’s and accountants because its creates balance sheet liabilities on the company’s books, says Sorbet. If the employee doesn’t use all of their PTO, the employer can end up owing them a lot of money which creates a cash flow liability on the company’s books. So Sorbet buys out these PTO liabilities from employees, then loads the cash value of the PTO on prepaid Credit Cards for the employees.

Speaking to me on a call, CEO and cofounder Veetahl Eilat-Raichel, said: “We researched this whole idea of paid time off and found this huge, massive market failure and inefficiency around the way that PTO is constructed. It’s kind of one of those things where, on the face of it, there’s this boring bureaucratic payroll item that turns into a boring balance sheet item. But under it is a $224 billion problem for US businesses… If you think about it, employers are borrowing money from their employees at the worst terms possible and employees aren’t benefitting either. So everyone’s hurting here.”

She said: “Sorbet assumes the liability on ourselves and so then we can allow the company to control their cash flow and decide when they want to pay us back. They gain a lot of financial value because we are able to be very, very attractive on our funding. So it saves costs, it provides them with complete control of their cash flow, and it allows them to give out amazing financial benefits to employees at a time where we can all use some extra cash right now.”

The platform Sorbet has built will, it says, sync with calendars, HR, and payroll systems, identifies habits, and then proactively suggests personalized, pre-approved 3-6 hour “Micro Breaks”, 1-4 day “Micro Vacations” and +1 week Vacations. This, says the startup, increases PTO used by as much as 15%.

Employers can constantly renegotiate the terms of the loan with Sorbet, thus matching future cash flow, insulating themselves against salary raises (wage inflation), and take advantage of other benefits.

The cofounders are Eilat-Raichel, who previously worked at L’Oreal and Lockheed Martin, and a Fintech entrepreneur; Eliaz Shapira, co-founder and CPO; and Rami Kasterstein co-founder and board Member.

The TechCrunch Survey of Dutch tech hubs: Calling Delft, Eindhoven, Rotterdam, Utrecht

TechCrunch is embarking on a major new project to survey European founders and investors in cities outside the larger European capitals.

Over the next few weeks, we will ask entrepreneurs in these cities to talk about their ecosystems, in their own words.

This is your chance to put Delft, Eindhoven, Rotterdam, Utrecht on the Techcrunch Map!. We covered Amsterdam here.

If you are a tech startup founder or investor in one of these cities please fill out the survey form here.

We are particularly interested in hearing from women founders and investors.

This is the follow-up to the huge survey of investors (see also below) we’ve done over the last six or more months, largely in capital cities.

These formed part of a broader series of surveys we’re doing regularly for ExtraCrunch, our subscription service that unpacks key issues for startups and investors.

In the first wave of surveys, the cities we wrote about were largely capitals. You can see them listed here.

This time, we will be surveying founders and investors in Europe’s other cities to capture how European hubs are growing, from the perspective of the people on the ground.

We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and generally how your city will evolve.

We leave submissions mostly unedited and are generally looking for at least one or two paragraphs in answers to the questions.

So if you are a tech startup founder or investor in one of these cities please fill out our survey form here.

Thank you for participating. If you have questions you can email [email protected] and/or reply on Twitter to @mikebutcher.

Here are all the startups pitching today at Venture Day Minsk

Venture Day Minsk (organised by tech startup hub Imaguru) is run annually, but because of the pandemic and the political situation in Belarus it has gone virtual. Even Imaguru itself has had to switch to online-only operations after Lukashenko’s thugs shut down its physical space. If you want to support them, check out their startups, and maybe grab a T-shirt.

There are are always interesting startups to watch out of Belarus, a country which has produced startups like Splitmetrics, MSQRD, PingFin, DEIP and TrackDuck well as PandaDoc.

A run-down of who is pitching in below.

You can tune in to the live stream here. Investors can network with the startups here. And you can join the startup pitches on Clubhouse here. On twitter the hashtag is here.

Startups pitching:

1 – TeenUP: learning video platform teens-2-teens to unlock the teenagers’ potential and personality @TeenUP12

2 – Dignity: app for Business & Personal needs to talk, organize, sell, pay & manage without middlemen, make your Digital life private and secure your Assets #dignity

3 – Voxmate: an intuitive, gesture-based, Android app for people who are blind or visually impaired. It makes news, books, games and instant messaging accessible in a completely new way @voxmateapp

4 – LabMap App: app to explain laboratory tests in 24 hours in a clear language and monitor the state of health and the dynamics of biological indicators.

5 – Pigpughttps://pigpug.co/: AI neurofeedback brain training system for kids with ADHD and ASD @PigPugHealth

6 – SOVA App: mobile app for overwhelmed, exhausted or anxious people to get stress relief fast and sleep well by night rituals  #sovaapp

7 – Itgen: an online edu platform for 1-1 live tutoring for kids from 8 to 16 years old @itgenik

8 – Filmustage: app which highlights breakdown elements in movie/game screenplays in seconds, changing the process from breakdown creation to breakdown discussion @filmustage

9 – DjinnSensor: IoT & cloud solution to manage indoor environment #djinnsensor

10 – Skinive: a Skincare AI-Assistant, based on the DL & CV technologies & medical experience which enables you to check your skin spots within 30 seconds. @skinive1

11 – FARBA: a professional apps design and prototyping tool  #farbaapp

EU-based digital assets platform Finoa inks $22M Series A funding led by Balderton Capital

Institutions need to keep their crypto assets somewhere. And they aren’t going to keep it on some random, or consumer-grade crypto operation. This requires more sophisticated technology. Furthermore, being in the EU is going to be a key barrier to entry for many US or Asia-based operations.

Thus it is that Berlin-based digital asset custody and financial services platform
Finoa, has closed a $22 million Series A funding round, to do just that.

The round was led by Balderton Capital, alongside existing investors Coparion, Venture Stars and Signature Ventures, as well as an undisclosed investor.

Crucially, the Berlin-based startup works with Dapper Lab’s FLOW protocol, NEAR, and Mina, which are fast becoming standards for crypto assets. They are going up against large players such as Anchorage, Coinbase Custody, Bitgo, exchanges like Binance and Kraken, and self-custody solutions like Ledger.

Finoa says it now has over 250 customers, including T-Systems, DeFi-natives like CoinList and financial institutions like Bankhaus Scheich.

The company says its plan is to become a regulated platform for institutional investors and corporations to manage their digital assets and it has received a preliminary crypto custody license and is supervised by the German Federal Financial Supervisory Authority (BaFin).

The company was founded in 2018 by Christopher May and Henrik Ebbing, but both had previously worked together at McKinsey and started working in blockchain in 2017.

May commented: “We are proud to have established Finoa as Europe’s leading gateway for institutional participation and incredibly excited to accelerate our growth even further. We look forward to supporting new exciting protocols and projects, empowering innovative corporate use cases, and adding additional (decentralized) financial products and services to our platform.”

Colin Hanna, Principal at Balderton Capital, who leads most of Balderton’s Crypto investments, said: “Chris, Henrik, and the entire Finoa team have built a deeply impressive business which bridges the highest levels of professionalism with radical innovation. As custodians of digital asset private keys, Finoa needs to be trusted both with the secure management of those keys and with the products and services that allow their clients to fully leverage the power of native digital assets. The team they have assembled is uniquely positioned to do just that.” 

May added: “We identified a lack of sophisticated custody and asset servicing solutions for safeguarding and managing blockchain-based digital assets that successfully cover the needs of institutional investors. Finoa is bridging this gap by providing seamless, safe, and regulated access to the world of digital assets.”

“Being in the European Union requires a fundamentally different organizational setup, and poses a very high entry to new incumbents and other players overseas. There are few that have managed to do what Finoa has done in a European context and hence why we now see ourselves in a leading position.”