Daily Musings

Evening all

Italy’s UniCredit swoops in on Commerzbank. A vendetta for Germany’s 5-2 victory in 2022? Perhaps. A shock to regulators? Likely. While reactivating my Duolingo account to visit the App’s almost-threatening Owl Mascot, I share my musings del giorno below.

Salute
Philip

Today’s Stories

• Depop founder Simon Beckerman’s food marketplace Delli raised USD 6m internal seed. Lead on the round: Balderton and HV. Simon himself participated as well. Raise comes on top of a 16x top line growth vs. 2023 - further upside now to come from expansion plans in the US. The company’s value proposition is clear - give food producers a marketplace to sell their goods to supermarkets and land on grocery store shelves rather than just selling at local street markets. So far the company has attracted 500 local vendors to use the platform - launch was in 2022. Another case to be made to back great founders who could emerge as serial entrepreneurs

Chart Art

• Venture Returns = Power Law + Time. Outliers make the fund. And often to become true outliers the companies need upwards of a decade. Carta data is beginning to support this notion. 2017 and 2018 are the top-performing mean and median vintages with the strongest outliers

• The FT made headlines with its analysis of the Chinese venture ecosystem. Summarising for context:

  • Startup launches collapsed since 2018 (51k in 2018 vs. 1k in 2023)

  • In tandem VC fundraising and capital deployment has shrinked

  • With failures mounting, the leading local VC - Shenzhen Cap. - has filed for 41 lawsuits against their PortCos to try and claw back assets and somehow make a bang on their buck

  • As venture investors, we love good pivot stories. And the legal players in the country are doing just that. Amidst the lawsuits firms like DeHeng have shifted from IPO and buyout advisory to redemption clauses

  • Local funds are especially struggling to explain to their often state-owned LPs what happened to their investments. Losing govvy money may be what some consider a no-go in the market - considering that founders are now starting to personally be liable and taken for their assets, I would think that is diplomatic wording of the severity

• The ECB cut the benchmark rate by 25bps - as expected. Depo rate @ 350bps. Some context: Service inflation remains stubborn - 4.4% in July. Headline inflation seems on track with Lagarde’s target range, supporting the cut. August the figure reached a three-year low of 2.2% (vs. 2.6% for July)