Budapest Letters #11
👋 Hi All! Great to have you back! Before we jump in, big shout out to our new subscribers, good to have you on board. And more thing before we roll, if you like what you read, subscribe to Budapest Letters (if you had not done it) and spread the word.
Cheers, Aron
📢 TL;DR
Top stories this week: ✍️ Rimac Automobili is taking over Bugatti, a legendary French sportscar maker ✍️ eobuwie.pl and Foros raised 💵, while Tresorit was acquired by Swiss Post ✍️ Next Earth, an all-in-one crypto project might attract international attention with its uber-ambitious vision ✍️ Poland is the pride of CEE, Europe’s fastest growing tech region, according data compiled by Dealroom
🔥 Story of the Week
Porsche-backed Rimac Automobili, a high-end electric sportscar startup from 🇭🇷, announced that it will take over Bugatti, the 112 year old legendary 🇫🇷 sportscar company from Volkswagen Group. The deal is not cash but share based, resulting in a new joint venture called Bugatti Rimac. The newly formed entity will be owned by Rimac Automobili (55%) and Porsche (44%), a VW subsidiary; so practically, the German car giant just restructures its French luxury car brand, not sells it.
Still, Mate Rimac’s story, the 33 year old founder behind the electric sportscar company that bares his name, is amazing. Back in 2009, when Rimac founded his then one-man company nobody (apart from Rimac) thought that 12 years later not only will Rimac Automobili be an established specialized carmaker with 1000+ employees but it will form an alliance with Porsche, a strategic partnership that could realistically shape the electric vehicle (EV) industry for decades to come.
🧐 Personal take: Porsche first invested in Rimac Automobili in 2018, building up a 24% stake in the Croatian startup in 2 later phases (2019 and 2021). A smart move, especially considering the fact that Rimac is now one of the pre-eminent EV makers in the car industry, a space that will become even more competitive.
According to the International Energy Agency, the overall stock of EVs reached 10.2 million worldwide at the end of 2020, with China in the lead (44%) and Europe (31%) and the US (17%) as runners-up. But the fastest growth in EV sales came from Europe: a compound annual growth rate of 60% from 2016 to 2020 (vs. 36% increase in 🇨🇳 and 17% increase in the 🇺🇸). Booming numbers everywhere.
But what is more is that Rimac will now have two separate entities under its watch: Rimac Technology, which will focus on the development, production and supply of battery systems, drivetrains and other EV components to global carmakers (i.e. not just VW group members), and Bugatti Rimac, the newly formed high-end luxury sportscar maker that will build one of a kind vehicles.
So it is safe to say that Mate Rimac will soon be Mr. EV, as it was meant to be.
Show Me Da 💶
👏 eobuwie.pl, an online fashion retailer from 🇵🇱, became one of Europe’s latest tech unicorns after it raised €130M from Softbank’s Vision Fund 2, a global investment heavyweight. The money will be used to solidify eobuwie’s place in its markets (17 and counting) and prepare the company for an IPO in 12-24 months.
👏 Foros, a green investment startup from 🇱🇹, bagged its first ever outside investment (€1.2M) led by Iron Wolf Capital, 70V and Coinvest Capital, all well known local VC firms. According to the company, the money will be used to grow its team, further develop its platform/products and expand into new markets.
👏 Swiss Post Group acquired a majority stake in Tresorit, a 🇭🇺/🇨🇭 E2E encrypted cloud services provider. While the financial details of the deal were not disclosed, it was announced that the company will keep its name, team and independence within the state-owned postal giant that heavily diversified its operations in recent years with ventures into logistics, transportation, finance and many more.
Congrats to all teams!
🚨 Startup Alert
This weeks alert is on Next Earth, a super ambitious crypto project from 🇭🇺 that was recently launched. I must admit that my excitement re: the project comes (mostly) from the fact that I barely understand what it is about, except that it thicks all the buzzwords that grabs international attention from crypto enthusiasts and business media outlets. NFTs, DAO governance, DeFi solutions, environmental charities, digital marketplace, etc. You name it. It is all there.
But if we put aside the buzz and just concentrate on what Next Earth offers (as per their whitepaper + roadmap), a very interesting metaverse takes shape. According to the company, it will operate an NFT based, transparent digital land purchasing platform without a middle-man, enabling users to buy and sell land (instantly) via personal digital wallets. Its story, however, does not stop at here. The universe, modelled on our own planet, will see new ventures created by businesses (virtual and real life ones) and indidivual users that can be purchased a/o exchanged.
Fascinating. Especially, if they can pull it off in a safe and sound way.
🧠 Food
I know, last week I also promoted a report but it seems that interesting VC investment analyses are just popping up like crazy this summer. Like this one from Dealroom on the CEE region and Poland, specifically. Great stuff.
Small teaser from the report:
“Central and Eastern Europe has become the fastest growing tech ecosystem in Europe. Between 2015 and 2019, investment in the region grew 4.3x from 0.3B to $1.8B, more than twice as fast as Western Europe. The region has also now produced eight unicorns, including Vinted and Gitlab, and six billion dollar exits, including Skype and LogMeIn. These success stories are breeding a large pool of talent, skills and capital to be recycled amongst the growing number of rising star startups in the region, fuelling growth. (…) Since 2013, Poland has ranked first in CEE for number of venture capital rounds, 823 compared to Estonia’s 477, and second by total amount raised at 0.9B. More than a third of that investment came in 2019 alone, as Polish startups raised record levels of funding, in what is still an ecosystem in its first phase of development.”