This Week in European Tech with Dan Bowyer, The consumerisation of climate and more
Learn directly from Dan, Mads, Eka Ventures, Eleven Ventures, WVC:E. and other leading European VCs.
Today's email is packed with great insights. To kick things off, we’ve got you the following:
And then we’ve got some previously published submissions on the community insights platform that we wanna share with you because we think they deserve a lot of love. And of course, we can’t skip the new upcoming workshops taking place at the EUVC community.
Election Drama, Big Tech’s AI Monopoly, Buffett’s Cash Strategy, Starmer’s Slow Reforms, and Founder Burnout – with Dan Bowyer
✍️ Show Notes
U.S. Election Drama & Its Global Impact
The episode kicks off with a discussion on the upcoming U.S. election and its implications for tech, M&A, and the venture ecosystem. Dan and Mads dive into election stakes, predicting outcomes in key swing states, and the influence on global markets.
Geopolitical Impact: The outcome of the U.S. election is likely to shape global geopolitical dynamics, influencing U.S. involvement in Ukraine, the Middle East, and broader international relations. Mads highlights how these events could ripple into tech and finance, potentially impacting inflation and market stability.
Tech M&A Hopes: Under Trump, a more business-friendly stance could emerge, particularly regarding tech mergers. Policies easing restrictions on tech M&A would likely open more liquidity options for startups, fostering exit opportunities and enhancing deal flow in the venture space.
Election Drama and Market Uncertainty: With nearly half of U.S. voters casting ballots early, Dan and Mads comment on the close polling and potential for a highly contested result. They discuss how this uncertainty fuels volatility in global markets, keeping investors on edge and impacting VC sentiment in the U.S. and Europe.
Implications for Tech Policy: Beyond M&A, tech policies may face significant changes post-election. Depending on the administration, regulatory perspectives on Big Tech, immigration policies affecting tech talent, and spending on innovation and defense technology could all shift dramatically, impacting both the U.S. and European tech ecosystems.
The CHIPS Act & Strategic Concerns
Dan and Mads examine Noah Smith’s perspective on the CHIPS Act, a bipartisan initiative that’s bolstered U.S. semiconductor manufacturing, fueling job growth and competitiveness in a critical sector.
U.S. Semiconductor Leadership: The CHIPS Act has established the U.S. as a global leader in semiconductor production, driven by streamlined regulations and robust federal funding. This support has attracted significant private investment, multiplying the initial government outlay and ensuring U.S. dominance in semiconductor technology.
Economic & Strategic Impact: With over $280 billion in funding, including $52 billion for semiconductor research and manufacturing incentives, the CHIPS Act aims to strengthen the domestic supply chain. The long-term impact extends beyond tech, affecting sectors like defense, automotive, and consumer electronics, while creating thousands of high-skilled jobs across the U.S.
Europe’s Efforts to Compete: Europe’s CHIP Act seeks to emulate the U.S. success by allocating €11 billion for semiconductor projects, aiming to drive private investment and reduce dependency on non-European suppliers. However, Europe faces challenges, including slower regulatory processes and limited central funding, which hamper its ability to keep pace.
Collaborative Initiatives & Potential Gaps: While U.S. semiconductor initiatives have accelerated due to federal coordination, Europe’s approach relies on individual nations to fund and execute projects, often leading to delays. Dan and Mads suggest that a unified European strategy with faster approval processes and greater cross-country support will be essential if Europe wants to close the gap with the U.S..
Warren Buffett’s Strategic Sell-Off: Cashing Up for Future Opportunities
Warren Buffett has been making headlines with Berkshire Hathaway’s substantial sales, especially in Apple, resulting in a record $325 billion in cash reserves. The timing and motivations are multifaceted:
Market Valuation Concerns: Buffett is cautious about current high stock valuations, making it challenging to find value-driven investments. Selling now allows Berkshire to wait for better opportunities if markets correct.
Tax Strategy: With the possibility of future tax increases, Buffett's recent sales capitalize on the current corporate tax rate of 21%. Selling Apple stock, in particular, could result in a tax bill of $20 billion but offers tax advantages at today’s rates.
Portfolio Balance: Apple’s significant position (nearly 50% of Berkshire's portfolio) presented a concentration risk. This sell-off helps diversify holdings and balance the portfolio’s risk exposure.
Preparedness for Economic Downturns: By bolstering cash reserves, Berkshire is positioned to deploy capital if an economic downturn or market volatility creates value opportunities.
Buffett’s conservative and strategic approach suggests a readiness to invest in new opportunities while mitigating current risks, echoing his long-held value-focused investing principles.
Starmer’s Vision for Reform: Promises and Progress
Labour leader Keir Starmer has outlined ambitious reform plans for the UK, yet many question where tangible actions meet the rhetoric. The discussion covers the expectations and gaps in his administration’s approach:
A Push for Stability First: Starmer's emphasis on stability over immediate investment aims to repair structural issues, like filling the fiscal gap and addressing NHS deficits, before making significant new investments. While this resonates with some, others find it lacks the urgency needed for immediate economic stimulation.
Investment Frameworks & Private Sector Frustration: The government’s approach to major projects, like the third runway at Heathrow, is a litmus test of its commitment to attracting private capital. There’s a pressing need for regulatory clarity and expedited approvals to reassure investors. As it stands, the government’s slow movement has left investors skeptical about the UK’s readiness to “go back to building and growing”.
Labour’s Connection to Business Realities: Starmer’s administration is criticized for lacking direct business experience among key decision-makers, which affects their understanding of wealth creation and economic growth dynamics. Without this, policies risk being overly bureaucratic or distant from the needs of the private sector.
Will big tech enjoy all the gains from the AI boom?
With AI continuing to reshape industries, the conversation centers around whether big tech companies will consolidate their grip on AI-driven gains, or if there’s room for broader participation.
AI Boom and Market Dominance: Since OpenAI’s ChatGPT launched in late 2022, AI has propelled trillions in market cap for tech giants. Companies like Microsoft, Google, and Meta are poised to capitalize on their scale, deep resources, and proprietary models, making it challenging for new entrants to compete.
OpenAI’s Competitive Edge: OpenAI's rapid iteration and product quality—backed by Microsoft—are setting a high bar. This progress has spurred companies like Google to revisit and reinforce their own AI strategies, as competition heats up across the board.
Europe’s Role in AI and Semiconductors: The discussion highlights that for Europe to participate meaningfully in the AI boom, investments in semiconductor manufacturing are critical. Existing players like ARM and ASML offer a base, but more robust funding and policy support are needed to support Europe’s tech independence and prevent over-reliance on big U.S. players
Balderton Capital’s Report on Founder Mental Health: Burnout on the Rise
Balderton Capital’s latest founder wellbeing survey sheds light on the growing mental health challenges facing startup founders, with burnout rates escalating across the ecosystem.
Burnout as a Major Issue: The survey reveals that over two-thirds of founders now identify burnout from stress as a significant issue, marking an increase from 62% last year. The findings underscore the intense pressures of the startup journey, exacerbated by financial stress, high expectations, and an uncertain market.
Factors Driving Founder Stress: Financial uncertainty is one of the leading stressors, with 42% of founders attributing burnout to financial strain amid down rounds and capital constraints. The mental toll appears even more pronounced for older founders, who tend to face additional family and financial responsibilities.
VC’s Role in Supporting Founders: The report raises questions about the responsibility of VCs to support founder wellbeing. Some VCs are exploring new ways to alleviate stress beyond capital, such as offering childcare support, coaching, and mental resilience programs. Balderton and others are considering how they can better balance the high-stakes nature of venture with empathy for founders’ mental health.
The Consumerisation of Climate (Part 1)
Guest post by Estia Ryan, Principal & Head of Research at Eka Ventures. | Originally published on Eka Ventures Newsletter.
After exploring Consumer Health & UK Consumer, we’re now turning to the Consumerisation of Climate.
At Eka, we think a lot about Sustainable Consumption. In recent weeks, we’ve seen more Sustainable Consumption signals including eBay’s slashing of UK seller fees to keep up with competition, rumours of Vinted’s secondary round fuelled by continued resale growth, or even Rent the Runway’s strategic pivot earlier in the year towards resale.
What better time to unpack the Consumerisation of Climate?
In this series, we’ll be exploring three sub-themes: (1) Circular consumption (i.e. Vinted, eBay, Rent the Runway), (2) Sustainable brands (i.e. Patagonia, Hylo, Oddmuse), and (3) Enabling Technologies (i.e. Hived, Axle, UseAgain).
We know that consumer supply chains contribute a high percentage of total environmental impacts across carbon, land & water use, and material use. In the UK, consumption emissions are close to 750 million tonnes of CO2 annually. There are a few ways to shift this.
Firstly, we can keep goods in circulation for longer so that our linear economy becomes more circular. This is what we’ll be exploring in this weeks edition. Other strategies include creating more sustainable brands from the outset which can better slot into a circular economy (i.e. designing goods with better inputs and with an ability to be recycled more easily).
Introducing circular consumption 🗞️
Linear vs. circular consumption: what’s the difference?
Linear consumption means that products are created using raw materials, purchased, and then discarded once their use has ended. This process not only consumes vast amounts of natural resources, but also generates significant waste, contributing to overflowing landfills and pollution.
Circular consumption offers an alternative. Instead of discarding goods after use, these are kept in circulation for as long as possible through reselling, renting, repairing, and recycling. This model reduces the need for new resources, lowers waste, and minimizes the environmental impact of production.
We lay out a few high profile examples of linear, re-use, and rental companies below across core consumer categories.
Peer-to-peer platforms: eBay, Vinted, Vinterior, Back Market, Depop
Peer to peer platforms connect individual buyers and sellers (typically consumers rather than businesses) to trade goods on a platform. Several P2P platforms are pioneering the circular consumption model by facilitating the exchange of secondhand goods and offering rental services. Examples include:
Monetising circular economy platforms
Peer to peer platforms are typically monetised using a combination of ads, seller fees, buyer fees, and posting fees. We’ll explore this in more detail in an edition later down the line. Ebay’s seller fees were in the press last week after the company decided to slash fees in response to competition.
Previously, sellers had been required to pay fees for each item they list, and eBay would take a percentage of the final sale price when the transaction is completed. You can still see the US site’s list price here based on the various consumer categories. Now, eBay lets sellers list items for free.
On the P2P sites, there is typically a lot of customer education which happens in the flow (this will be a recurring feature in other marketplaces). Here, eBay walks us through how we can list, price, and send our items.
Vinted has a very similar flow…
… and so does Vinterior.
Vinted, Vinterior, and eBay charge no seller fees now (note that Vinterior does charge 20% VAT to sellers). Vinted flags that paying VAT is not necessary if that you sell is less than the total that you buy. As mentioned, selling fees and gross take rates are quite complex, and will be the subject of a later newsletter edition (!).
The climate question: unpacking impact in circular consumption
Circularity enables three climate unlocks: carbon, water, and waste.
Carbon. By reducing the need to manufacture new products, circular consumption decreases the carbon emissions associated with production and transportation. For example, buying a secondhand piece of clothing or a refurbished electronic device can significantly reduce its carbon footprint compared to buying new. Vinted publishes an annual impact report highlighting their carbon mitigation.
Water. The fashion & electronics industry are notorious for their water consumption, specifically in textile production and rare earth mining. By extending the life of clothing & electronics through resale or rental, we can mitigate the water usage associated with creating new garments. Backmarket includes a section on this in their impact report.
Waste. Almost all consumer industries contribute significantly to waste. By extending the life of products, we can significantly reduce the amount of waste. See Ebay’s report on waste (upper RHS) below.
A note on reverse logistics
An important step in enabling circular consumption is reverse logistics. This is the process of moving products from their final destination back to the seller or manufacturer for reuse, recycling, or refurbishment. One example here is UseAgain, which helps retailers re-use their glassware.
We will be exploring this in more detail in Part 3 of this series - small foreshadowing!
Can mass consumption be circular?
As consumer awareness around sustainability continues to grow, the demand for circular consumption models is expected to increase. P2P platforms like eBay, Vinted, and Hurr are leading the charge by making it easier for consumers to buy, sell, and rent items in a way that reduces waste and lowers environmental impact.
Circularity (i.e. re-use, resale, rental) may not reach 100% of products, but we do believe that all products will need to be circular. We’ll be exploring what this looks like next week when we look at Sustainable Brands, which have traditionally operated in the linear economy but are shifting their models to be more sustainable.
As always, get in touch if you’d like to debate or chat around this article. I’m at estia@ekavc.com 👋
Maternity in Venture Capital: 7 in 10 Women Concerned About the Return to Work
Guest post by Sophie Winwood, co-founder & CEO of WVC:E.
Data from 120 respondents from 20 European countries and various fund sizes has revealed the following.
Over two-thirds (71 per cent) of women planning on having children or more children were concerned about returning to work in venture capital, and one in five respondents (20 per cent) were very concerned.
Almost 80 per cent of respondents felt there was room for improvement in their return to work process, and just over one in three (38 per cent) said there was considerable room for improvement.
The top three concerns shared by respondents were career progression/promotion opportunities (32 per cent), the long-term sustainability of working in VC and parenting (25 per cent), and establishing boundaries, e.g., evening events (23 per cent).
84 per cent of respondents were concerned about parental leave (the amount of time off or the pay level).
Understanding board responsibilities and governance
Guest post by Roberta Tihomirova, Head of Marketing at Eleven Ventures. | Originally published on Eleven Ventures.
Before diving into the intricacies of building a world-class board, let’s pause and ask: Why even have a board?
While it seems to be a given, especially for venture funded companies, few founders or board members truly consider the actual value a board can and should provide. The answer is very specific to the type of company, the founders, and the challenge that the business needs to overcome. One possible answer is that the board is the only place where founders can navigate the inherent complexity of building a startup. They do so by having an ongoing discussion with involved people that share incentives but are not fully immersed in the day-to-day operations.
Tactyc is the leading forecasting and scenario-planning software for venture capital funds, combining portfolio construction, portfolio management, forecasting, and reporting into a unified platform.
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🗓️ The VC Conferences You Can’t Miss
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