Welcome to a new episode of the EUVC podcast, where our good friends Dan Bowyer and Mads Jensen from SuperSeed have a discussion with Lomax Ward, General Partner at Outsized Ventures, to 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.
Our family-and-friends atmosphere provides the ideal setting for in-depth, in-person meetings, fostering lasting business relationships.
Join us at our intimate conference 0100 DACH in Vienna (Feb 18-20), where you can meet with decision-makers from leading firms such as Balderton Capital, Dawn Capital, EIF, Fåntell, id4 Ventures, Lennertz & Co, KfW Capital, NATO Innovation Fund, Verdane, and others.
Click below to discover more about the audience you'll meet in Vienna this February.
✍️ Show notes
Intel's Pullback and Europe’s Semiconductor Vulnerability
Europe's semiconductor ambitions face significant obstacles as Intel's decision to pause its German chip plant project highlights the continent's strategic vulnerabilities. A widening funding gap, energy cost disadvantages, and coordination challenges threaten Europe's goal of becoming a semiconductor leader.
Key Points:
Intel's Pause on German Plant: Intel has announced a two-year delay on its German chip factory, jeopardizing Europe's semiconductor ambitions and exposing strategic weaknesses in the continent's tech infrastructure.
Massive Funding Disparity: China has committed $142 billion to its semiconductor sector, vastly outpacing Europe’s $46 billion. Notably, only €4 billion comes directly from the EU, leaving member states responsible for the remainder. This funding model struggles to attract the necessary private investments, especially as key players like Intel hesitate.
Coordination and Leadership Issues: Political instability in major economies like Germany and France hinders cohesive action. Without strong leadership, Europe faces significant execution challenges in advancing its semiconductor strategy.
Energy Cost Disadvantage: Energy expenses account for 5-8% of semiconductor production costs and can rise to 10-12% for advanced chips. European energy prices are double those in the U.S. and three to four times higher than in China, severely impacting profit margins in a typically 30-40% margin industry.
Structural Barriers Beyond Subsidies: Subsidies alone are insufficient to counteract Europe’s unfavorable industrial and regulatory framework. Meaningful market reforms are necessary to create an environment conducive to large-scale semiconductor manufacturing.
Free Speech - Meta Announcement and the “deplatforming” of Michael Jackson
Meta's pivot toward community-sourced moderation and LinkedIn's high-profile de-platforming cases, such as Michael Jackson's, highlight ongoing tensions between user expression and platform governance. These developments underscore the complex balance between regulation, corporate policy, and freedom of speech online.
Key Points:
Meta's Shift in Content Moderation: Meta has announced the removal of fact-checkers and the shift toward a more community-sourced moderation model similar to X (formerly Twitter). However, this policy change currently does not apply within the EU due to regulatory constraints like the Digital Services Act.
LinkedIn's Deplatforming Controversy: Michael Jackson, a notable LinkedIn user, was banned for controversial comments. His removal has raised concerns about free speech and inconsistent platform moderation policies, highlighting the growing tension between user expression and platform governance.
Implications for Platform Regulation: LinkedIn, owned by Microsoft, may face future pressure to align its moderation policies with other platforms, especially in response to shifting political climates and increased regulatory scrutiny.
Debate on Platform Moderation: The balance between protecting free speech and enforcing content moderation continues to challenge social media platforms. This raises critical questions about transparency, accountability, and the role of tech companies in managing online discourse.
Anthropic and the Explosive Growth of AI Investment
The AI industry has seen unprecedented growth, with Anthropic emerging as a standout example. The AI startup, founded by former OpenAI employees, has rapidly scaled to a $60 billion valuation, reflecting the accelerating global investment in AI technologies.
B2B Revenue Efficiency: Anthropic achieved $875 million in annual recurring revenue (ARR) within two years, demonstrating remarkable revenue efficiency for a B2B AI company.
Infrastructure Dependencies: Despite its massive valuation, Anthropic remains heavily reliant on cloud providers for its operations, underscoring the infrastructural challenges even leading AI firms face.
Talent as Competitive Advantage: Anthropic's rapid success is driven by its team of ex-OpenAI talent, showcasing how elite technical teams can build immense value in a short timeframe.
The Safety Paradox: Anthropic has emphasized AI safety while achieving commercial success, balancing responsible development with aggressive growth.
Valuation Dynamics: Anthropic's 69x revenue multiple highlights investor appetite for AI growth, though it also raises questions about sustainability in an overheated market.
Global AI Investment Surge: In 2024, global AI investment reached $104 billion, and this figure is projected to continue rising in 2025 as demand for AI solutions accelerates.
NVIDIA's AI Chip Breakthrough and Moore's Law Disruption
NVIDIA's CEO has claimed that the company's AI chips are advancing faster than Moore's Law, setting new benchmarks for computing power. This rapid progress is driven by innovative strategies in hardware and infrastructure development.
The Stack Multiplication Effect: NVIDIA's advancements stem from the integration of silicon, networking, and a layered software stack, resulting in exponential performance improvements across its AI products.
Capital Concentration in AI Infrastructure: NVIDIA's dominance in AI infrastructure has created a formidable market moat, consolidating capital and technological advantages within the company and setting high barriers to entry for competitors.
Productivity Inflection Theory: The rapid acceleration of AI capabilities is pushing industries toward a productivity inflection point, potentially leading to significant societal disruptions as technology outpaces societal adaptation.
The Long Road to Quantum Computing
NVIDIA CEO Jensen Huang has stated that practical quantum computing is still 15 to 30 years away. Despite significant research efforts, the technology faces major technical hurdles that slow its commercial viability.
Error-Prone Physical Qubits: Current quantum computers rely on physical qubits that are highly susceptible to errors, limiting their practical use in large-scale computations.
Logical Qubits Requirement: Hundreds of thousands of logical qubits will be necessary to perform meaningful work, a milestone far from current technological capabilities.
Shor's Algorithm Challenge: To run complex algorithms like Shor's for breaking encryption, approximately 4,000 stable logical qubits are required, highlighting the scale of the challenge.
Scaling Limitations: Bridging the gap between today's error-prone quantum systems and scalable, fault-tolerant machines will require decades of sustained innovation and investment.
The Debate Over British State Funding in Tech
An article in The Telegraph criticizes British state funding in the tech sector, sparking a debate about public investment's effectiveness and necessity.
Public and Private Sector Funding Impact: The British Business Bank (BBB) invested £3.5 billion in 23,100 businesses, attracting an additional £2.5 billion in private sector investments, and supporting nearly 40,000 jobs.
Criticism of State Involvement: The article portrays state-funded startups as overly dependent on public funds, potentially stifling private risk capital and innovation.
Public Perception Challenges: Negative media narratives could undermine public trust in government-backed funding initiatives, raising concerns about long-term viability.
Kraken: A UK Tech Success Story
Kraken, launched by Octopus Energy in 2020, has grown into a significant player in the global energy market, revolutionizing the energy supply industry with its innovative technology platform.
Market Dominance: Octopus Energy is the UK's largest electricity supplier, founded by Greg Jackson, serving 6.8 million households and holding a 22% market share.
Global Expansion: Kraken manages over 60 million customer accounts worldwide, with half operated for third parties. The platform aims to serve 100 million clients by 2027.
Financial Performance: Kraken reported £20 million in profit for 2023 with a client base of 22 million, tripling its size in a short span.
Future Potential: Octopus Energy's Kraken platform is poised to become a major global force in the energy sector, positioning itself as a "monster company" in the making.
The Rise of European Unicorns in 2024
Europe saw 13 companies achieve unicorn status in 2024, reflecting a modest rebound from 2023 but still significantly below the peaks of 2021 and 2022.
Notable Companies: Poolside, Wayve, and Bending Spoons are among the standout unicorns. Bending Spoons notably expanded through acquisitions like Issuu, Brightcove, and Streamyard.
Funding Trends: The return of mega funding rounds ($100M+) has strengthened in 2024, with 136 companies reaching this threshold, up from 86 in 2023.
Strategic Growth: Companies like Bending Spoons exemplify smart scaling strategies—bootstrapping for six years before raising $600 million, achieving a $2.6 billion valuation.
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 Masterclass | 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.
💬 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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