Here we go, with a new weekly tech roundup together with Dan Bowyer, Mads Jensen, Lomax Ward, and more. Let’s get into it.
Looking for more insights? Here are some great articles and news from the venture community that you should check out.
Before we dive into the podcast, we wanted to introduce you to our next masterclass session on VC Fund Performance Benchmarking.
Benchmarking is more than just numbers - it’s a critical tool for GPs and LPs to measure performance, position funds effectively, and align with market expectations.
Join us for this 2-hour masterclass designed to demystify VC benchmarking and provide actionable insights to navigate key metrics like IRR, TVPI, DPI and PME.
Led by Joe Schorge, Managing Partner of Isomer Capital, this session will help you understand how LPs think, how benchmarks are created and - most importantly - how to use them to evaluate performance, communicate results, and position your fund confidently in the market.
This Week in European Tech with Dan Bowyer, Mads Jensen, Lomax Ward and Andrew J. Scott
Welcome to a new episode of the EUVC podcast, where our good friends Dan Bowyer and Mads Jensen from SuperSeed in a discussion with Andrew J. Scott, Founding Partner at 7percent Ventures and Lomax Ward, General Partner at Outsized Ventures, cover recent news and movements in the European tech landscape 💬
Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.
Work with the communications experts for European tech and venture.
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✍️ Show notes
Apple Will Win Consumer AI
In the race for consumer AI dominance, Dan Bowyer argues Apple is positioned to lead due to its unparalleled ecosystem and strategic focus on voice technology.
Key Points:
Interconnected Ecosystem: Apple controls 2.2 billion devices globally, including 1.5 billion iPhones, with 87% of U.S. teens using iPhones. This integration sets it apart from fragmented ecosystems like Android.
Voice as the Next Frontier: Siri, powered by partnerships like OpenAI, could become the go-to consumer AI standard, rivaling ChatGPT. Apple aims to make voice commands seamless across apps, leveraging its ecosystem's cohesion.
Execution Over Innovation: While some argue Apple has lost its innovative edge, others point out that its strength lies in execution, stitching together technology into cohesive consumer experiences.
Mixed Reality Synergy: Voice commands will play a pivotal role in emerging mixed-reality devices, a trend Apple can capitalize on despite challenges like Vision Pro's limited success.
OpenAI Will Be Dethroned as the AI Leader
Despite its stronghold in the AI space, OpenAI faces mounting challenges from rivals like Google, xAI, and Anthropic, all vying for dominance in raw model performance and next-gen applications.
Key Points:
Rising Competitors: OpenRouter data highlights Anthropic as the leader in next-gen embedded applications, followed by Meta/Llama, Deepseek, and Google/Gemini.
Global Innovation Push: The emergence of cost-efficient models like Deepseek from China showcases innovation outside the U.S., challenging OpenAI's dominance.
Internal Challenges: OpenAI’s leadership instability and increased competition for top talent pose significant risks to its market position.
We Will Get a Recession in the US: What Will It Mean for Europe?
Mads Jensen predicts that the US economy is headed for a recession in 2025, with clear warning signs from multiple financial indicators. This recession could have significant implications for Europe’s already sluggish economy.
Key Points:
Deteriorating US Financial Indicators:
Fed funds rate has dropped by 100 basis points since September 2024, yet Treasury yields have risen by the same amount to approximately 4.6%.
Chicago PMI is weak, signaling a looming recession.
Credit card delinquency rates for subprime borrowers reached 22%, the highest since 2010.
Credit card providers wrote off $45 billion in 2024, the largest figure since 2010.
Commercial Real Estate Challenges:
Delinquency rates on commercial office loans are at 11%, exceeding the 2012 peak.
Small banks, which control 67% of commercial real estate loans, are under stress, echoing but compounding the instability seen in 2022.
Potential Spillover to Europe:
Europe’s economic outlook is already fragile due to slow growth and political gridlock in key economies like Germany, France, and the UK.
A US recession could exacerbate Europe’s challenges, slowing exports and investment while amplifying financial instability.
Market Concentration Risks:
The US stock market’s narrow rally is highly concentrated, with the top 10 companies making up 40% of the S&P 500 and just three companies—Apple, Nvidia, and Microsoft—accounting for 20%. A downturn in these stocks could trigger wider market panic.
There will a major stock market correction in 2025
The market correction predicted for 2025 will likely have widespread implications. What are the key transmission mechanisms that could affect growth globally?
Key Points:
1. Market Corrections and Global Impacts
Will there be a major stock market correction in 2025?
A significant correction in the U.S. stock market could have widespread effects, given its central role in the global economy.
Transmission Mechanisms:
Stock market corrections reduce household wealth, which dampens consumer spending and slows economic growth (wealth effect).
U.S. exports play a modest but impactful role for Europe:
7% of UK GDP depends on exports to the U.S.
4% of EU GDP depends on U.S. exports (22% of the UK’s total exports, 20% of the EU’s).
Second-order impacts could lead to further stock market volatility in Europe and beyond.
2. Tech Sector Resilience or Strain?
How will the tech sector fare during a correction?
Enterprise software startups selling into the U.S. could face challenging quarters as corporate budgets tighten.
However, the transformative nature of technology may buffer these effects, keeping the downturn relatively shallow for innovative companies.
3. Bigger Picture: U.S. vs. Europe
Why is the U.S. pulling ahead in growth and innovation?
U.S. economic growth continues to outpace Europe, underpinned by nearly double the R&D investment:
U.S.: 3.5% of GDP invested in R&D.
Europe: 2.22% of GDP invested in R&D (on a smaller GDP base).
An impressive 92% of U.S. R&D now traces back to VC-backed companies, emphasizing the role of venture capital in driving innovation.
Implications for Europe:
To compete, Europe must create conditions for more scaleups, fostering the next wave of trillion-dollar companies.
Scaling up isn’t just about startups; it’s about ensuring growth-stage companies can thrive on a global stage.
4. The Concentration of Market Power in the U.S.
How concentrated is the U.S. stock market?
The top 10 stocks now account for 40% of the S&P 500 index.
Notable players include Apple, Nvidia, Microsoft, Broadcom, Berkshire Hathaway, and JPMorgan Chase.
The top three alone—Apple, Nvidia, and Microsoft—make up over 20% of the index.
What does this mean for investors?
Free cash flow (FCF) of these top 10 companies is at its highest level in history (~27%). These companies are extremely valuable and profitable.
However, the index is heavily concentrated, leaving it vulnerable to downturns in just a few stocks.
5. M&A: A Bright Spot Amid Market Challenges
Why will M&A activity pick up in 2025?
Despite market turbulence, M&A is expected to thrive:
Pent-up demand: Several years of delayed deals will create momentum.
Higher interest rates: Rates will remain elevated but not high enough to derail transactions.
Valuation resets: Recession-driven adjustments in valuations will create opportunities for deals.
Leadership change: With Andrew Ferguson replacing Lina Khan as FTC Chair, regulatory barriers will ease, making M&A more feasible.
Opportunities for Shareholders:
Liquidity events will increase, offering exits for those willing to accept less-than-ideal valuations.
Founders and VCs should consider these opportunities strategically to weather market uncertainty and capitalize on liquidity events.
Introducing very early Ventures Crypto Update
We’re teaming up with EUVC to share our quarterly updates, which were previously only available to our investors! We, that’s very early Ventures, a Blockchain focused VC fund, run by computer science PhDs, investing in tech heavy infrastructure. Hope you enjoy!
1) DeFi Resurgence
Decentralized Finance (DeFi), especially on Ethereum, has seen a strong boom across all relevant metrics in Q4 of 2024. This strength in one of Web3’s most proven use-cases could catalyze further growth across the board. It is partially driven by expectations for a clearer regulatory framework in the US over the next year, given the change of seat in government. The following metrics illustrate the growth in DeFi:
All-time-high in total trading volume on decentralized exchanges, achieving $340B+ monthly volume in November and December (source)
All-time high in total issued stablecions at $200B+ (source)
All-time high in funds deposited on the borrow/lending protocol Aave at almost $40B, overtaking previous highs in 2021 and reversing the year-long declining trend (see chart below)
2) New Investments
We’ve finalized 2 investments in Q4:
Valantis builds the next generation infrastructure for decentralized exchanges (DEX) with a modular, scalable approach. Key innovations are in the modularity as well as a unique request for quote model that delivers better execution prices. Thanks to their superior approach, they are currently fulfilling over 10% of all trades on CoW Swap for ETH-USDC. Operating in a market where DEX trading now represents around 10% of all spot crypto volume, Valantis is uniquely positioned to become the standard infrastructure layer for decentralized trading. We’ve invested alongside SevenX, Kraken Ventures and Figment in this round.
Olas builds infrastructure for autonomous AI agent economies, enabling the deployment and coordination of AI agents that can interact with blockchain networks and each other. The platform has shown significant traction with 1600+ agents deployed and 2.3M+ total transactions by agents. We were impressed by the long-term vision of the team of AI agents as the primary way of interaction with blockchains, and by their deep understanding of the use-case developed over years. This is the first VC round, led by 1kx, and executed as an OTC transaction where the public token was bought at a steep discount to current market price in exchange for vesting.
3) Strong Performance of Public Markets
Public markets have performed very positively in this quarter. Spurred by the Republican sweep and more expected regulatory clarity in the US, and even a potential strategic Bitcoin reserve, Bitcoin temporarily broke $100,000 before correcting back briefly. Ether and the broader token market, particularly the sector of DeFi (see headline 1) above), have also performed strongly. We are positioned well within DeFi, e.g., through private investments such as Valantis or Parabol. In public markets, we like CoW Swap and Spectra:
CoW Swap continues to show strong traction as a leading decentralized exchange, processing $6B+ in each November and December, and recently adding support for the fastest growing L2 Base (founded and operated by Coinbase).
Spectra has amassed momentum, launching their v2 and aggregating over 100M total value locked in the protocol.
Best,
The very early team
M&A in European tech slowed in 2024 — but insiders expect things to heat up
2024 turned out to be a slower year for M&A in Europe than many bankers, investors and lawyers expected.
There were 858 exits of VC-backed companies in Europe last year, down about 11% from 2023 and off a whopping 37% from the frenzied days of 2021, according to new PitchBook data (which could still change as further deals are announced). The value of those deals, however, ticked up, largely thanks to Spanish luxury beauty and fashion company Puig’s $2.8bn public listing in May on the Spanish stock exchange. M&A deal value hit €61.8bn last year, up from €42.2bn the year prior.
A quarter of VC capital was invested in AI in 2024
New figures released by Balderton Capital and Dealroom reveal that despite a flat year for overall VC investment, European AI companies have doubled in value in just four years.
Europe’s generative AI sector is capturing a quarter of all venture capital investment in the region, up from just 15 percent four years ago. Some $13.7bn was invested in AI companies in 2024, compared to the $10.9bn invested in healthtech companies and the $9.2bn invested in fintech.
Some things are made for platforms - music, cabs & pizzas. But fund solutions aren’t one of them. Their individual client focus and regulation-first approach is your guarantee for flexible solutions accommodative to a broad range of deal and client specifics. The kicker? Prices that match any of the shelf-products in the market.
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💬 EUVC Community | LP AMA with AQVC’s Marius Weber
Join us for an exclusive AMA session with Marius Weber, Founding Partner at AQVC.
After a history as a co-founder of startups and a manager of several VC funds over the last 15 years, in 2021 Marius Weber partnered with his long time friends Marcus and Oliver and co-founded AQVC, a tech enabled asset manager for Venture Capital which is divided in two departments.
This AMA is part of our ongoing series of small-group sessions designed to foster deep, meaningful discussions within the VC community. Participation is free for members of our community, but spots are limited. Reserve your spot now to ensure you don’t miss this opportunity.
Emerging fund managers face countless challenges when setting up and structuring their first VC fund. The process is complex, daunting, and full of pitfalls, from navigating legal frameworks to engaging with the right service providers, the foundations you lay now will shape your growth trajectory.
That’s why we’re planning an exclusive 3-hour masterclass designed to equip emerging managers with the insights, strategies, and tools needed to tackle these challenges head-on.
✍🏻 EUVC Masterclass | Marketing & VC Fund Narrative
Your brand is everything. It’s what sets you apart, helps you win the best deals, attract LPs, and ultimately drive your growth. For emerging fund managers, building a credible brand and establishing the right marketing foundations early on are game-changers. Yet, many don’t know where to begin.
Your fund’s narrative is what makes the difference between an LP glancing at your deck or deciding they’re ready to write a check. It’s your brand that makes LPs feel confident they’re partnering with someone who knows how to make magic happen.
We’re planning a masterclass on building strong marketing foundations with a top industry leader. If enough people show interest, we’ll make it happen.
🗓️ The VC Conferences You Can’t Miss
There are some events that just have to be on the calendar. Here’s our list, hit us up if you’re going, we’d love to meet!
GoWest | 📆 28 - 30 January 2025 | 🇸🇪 Gothenburg, Sweden
Investors Summit Bilbao 2025 | 📆 11 - 12 February 2025 | 🇪🇸 Bilbao, Spain
0100 DACH 2025 | 📆 18 - 20 Feb 2025 | 🇦🇹 Vienna, Austria
0100 Europe 2025 | 📆 02 - 04 April 2025 | 🇳🇱 Amsterdam, The Netherlands
0100 Emerging Europe 2025 | 📆 14-16 May 2025 | 🇭🇺 Budapest, Hungary
GITEX Europe 2025 | 📆 23 - 25 May 2025 | 🇩🇪 Berlin, Germany
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