Budapest Letters #7
👋 Hi All! First of all, sorry for the delayed newsletter drop. Unfortunately, due to family reasons, I did not have time to finish up this piece over the weekend. But now its done. Polished. Hope you will enjoy it, along with the rest of the week. Before we jump in, as always, big welcome to our new subscribers, great to have you with us! One more thing before we roll, if you like what you read, subscribe (if you had not done it) and share.
Cheers, Aron
📢 TL;DR
This weeks main stories are as follows: ✍️ EU Parliament emphasis the need for more funding for female entrepreneurs ✍️ Gideon Brothers and Time is Ltd. raised hefty sums, while Softbank teams up with Speedinvest to improve diversity in the European startup scene ✍️ Productboard, a Czech startup that reimagines product development, is backed by big guys ✍️ Financial health goes mainstream
🔥 Story of the Week
Some of you might remember that few weeks ago I already wrote about the disgrace that is VC investments in women-led startups (Budapest Letters #3). Fortunately, it seems that my Substack is popular with MEPs as the European Parliament is calling for more funding for female entrepreneurs. Okey, my role in this development is probably a gross over-exaggaration and this has more to do with an upcoming report on gender equality in STEMS (= Science Technology, Engineering and Maths). But hey, in the end, only the results count, right 😉
So what exactly the EP proposes? Education and proactive support. According to the Parliament, at present only 36% of STEM graduates in Europe are women which makes us trailing most of our key competitors, like China. In light of this, the first big step is to ensure that girls feel comfortable with choosing science in schools, so the promotion of female role models and tackling discrimination are absolute crucial. No suprise then that MEPs want the Commission and member states to set up more mentoring schemes with female role models, traineeships for digital education and support for women during transition from school to work.
Nothing to add from my side, just that all of us should support women because their success is a success for all of us. It is a “win-win” scenario at its purest.
Show Me Da 💶
👏 Gideon Brothers, a promising robotics and AI startup from 🇭🇷, raised €31M from a bunch investors, including Koch Distruptive Technologies, the investment arm of the mighty Koch Industries Inc. from 🇺🇸. The company, that helps the automation of large warehouses by building AI and 3D vision-based autonomous mobile robots, will use its fresh funding to further develop its technology and to expand globaly (mainly to the US and Western Europe). Great news for Croatia.
👏 Time is Ltd., a data analytics startup from 🇨🇿, bagged €4.6M from well known investors, such as Accel. The company aggregates and analyses data from ca. 400 sources (mostly workplace collaboration tools like Google Workspace, Zoom, MS Teams and Slack) so that managers within user organizations are able to find new ways to measure productivity, engagement and increase effective collaboration.
👏 Softbank, one of most active and infamous (cough, $300M for WeWork, cough, $1B for Wirecard, cough) global startup investors from 🇯🇵, and Speedinvest, a well regarded VC firm with 🇦🇹 roots, announced the launch of Emerge, a startup accelerator that will be launched this fall. Emerge will be focusing on young companies that have at least one under represented founder (i.e. people of color, female, LGBTQ+, disabled or refugee) with the aim of increasing diversity in the European startup universe which, truth be told, does not exist that much.
🚨 Startup Alert
This weeks alert is on Productboard, a product development startup hailing from 🇨🇿, that managed to develop a customer-obsessed product management platform that empowers teams to deliver the right products to market faster. And its product is 🔥, both according to heavy-hitter users (e.g. UiPath) and investors.
The latter group is especially fascinated with it, not suprising that some of the big beasts of startup invesments (i.e. Tiger Global, Index Ventures, Kleiner Perkins, Sequoia Capital and Bessemer) were all included in its last funding round ($72M) back in March. Unbelievable accomplishment, if you ask me, and a true testament that this team is really onto something. It will be interesting to see their progress.
🧐 Personal take: A superior digital experience that users adore was already crucial for business success years ago. But now, after the rapid digital transformation caused by COVID (+ changing client needs/expectations), it is now the single most important attribute a company can have. And Productboard offers precisely something on this end, and its ever growing customer base loves it.
Enabling product-driven organizations to consolidate customer insights and identify trends to help them prioritize the right products and features for their clients, are slam dunk. Plain and simple. The future looks bright for the startup.
🧠 Food
Financial Health. Financial Wellness. Financial Fitness. Financial Well-being. I am sure at least one rings a bell for all of you and this is totally normal. Trust me. Why? Because today, these are the hardest of hardcore corporate buzzwords you can find in financial services. Banks, large consultancies and their affiliates (e.g. ad agencies, PR firms) all omit this. Goodbye to predatory lending, overpriced and overtly complex mortgages, and say hi to ethical banking that puts customers first.
Big banks, small banks, credit unions and digital challengers all market themselves as financial health advisors whom are like doctors. But instead of prescribing a pack of Aspirin or Adderall to their sick patients, they sell them cash loans and well, well, well, same old mortgages and credit cards. Tricky.
Of course, I do not want to sound negative. Firstly, because I do believe that banking can be better. Just look back to its early roots. The initial aims and practices of the industry were noble: making sure that local communities prosper by utilizing collective wealth in the best possible way. But thankfully, it is not just the past as even today many established players act accordingly, like Triodos. Secondly, numerous fintechs (e.g. PictureWealth, Frollo, Emma) with the help of technology take this mission seriously, something we can all benefit from.
Still, I am bullish, because while I do believe that financial advisors could become like doctors (or general practicioners, if you prefer) one day, the road until then is long and very bumpy. Currently, the market climate, the setup of our economies and the core of shareholder capitalism simply prohibits this development. It just cannot happen. Profit is king. Shareholder returns are king. Credit card fees are king and rewarded, not another customer w/o debt or late payments.
Sure, it could and should be different. And it will be. But when? I am not sure.