Growth Compounds

work in progress

• Hardware has had a bad rep for a long time – perhaps because we approached it wrong? What if you don't need to build an electric bike company (..more on that next time), but find other edges and layers of the atom ecosystem? So examples we picked – Starship Technologies, Aerones, AISPECO, Trace.Space, Entangl, AM Craft, LABA7, Direct Machining Control, CGTrader, Sentante – rethink business model or heavily specialize:
  • Turning product into a service
  • Extreme specialization, high barrier niche
  • Rethinking overall process with software and AI – or marketplace
• Regtech. Complok has raised EUR 50K in a convertible loan from Tenity. Mindaugas Petronis started FindRisk, AI-powered self-service SaaS to enhance risk control and meet regulatory standards. Axiology hardly under regtech tag (DLT trading and settlement system for regulated tokenised securities), but making good progress nonetheless. Keep an eye on Amlyze, Micapass, Esgrid, Inspectle.
• House of Brands – comes from Tomas' LinkedIn – but there is no better way to describe Tesonet portfolio. It's not your average vc fund with a bunch of SaaS. They've got some unicorns in the making (CAST AI, but also watch Hostinger and Oxylabs), a couple of basketball clubs, cannabinoid and medical mushroom companies, a bank, longevity brands, games marketplace, some SaaS, some edtech, and of course – a bar (Sparta). Looking ahead into the desperate election season, Teso should consider a political party, too?
  • A new addition there is Smartproxy, which rapidly grew as a separate entity (130 people, EUR 7m rev in 2022). Building an attractive offering/product, scaling, and then multiplying it with brands – is there a pattern? Note that FT1000 showed Oxylabs EUR 60m in revenue, and there are more products from LT – Honeygain, Proxy-cheap, Proximy, MarsProxies, not sure if they are frenemies?

• Revenues. Congrats to tech firms for securing new projects:
  • Trafi - £2.6m contract for MaaS platform in Nottingham and Derby
  • Interactio – approx EUR 2m for service at UN COP29 event
  • RSI Europe, Granta Autonomy, Unmanned Defense Systems, Dangolakis and LTMilTech to provide drones for a collective EUR 8m purchase order.
• More scalling. Remember, we classified LT scale-ups into two categories – Thoroughbreds ($100m+ revenue) and Colts ($25m to $100m revenue), following Saul Klein's idea (we've got 21 firms there). And they work hard not to disappoint - TransferGo delivered 55% YoY revenue growth (closed at GPB 39m) keeping losses at the same GPB 2m point. The last Taiwania Capital round lifted valuation to $400- $600m mark.
• Fresh start. Plug and Play second batch revealed – some new teams, some teams with reinforced energy: Amia, Askflow AI, DiaWiser, Greet, Hoperfy, Markster, Miniatùra,peoplerank, Playground , Pointai, Scalier, Traxlo, Vespia. Scalewolf wrapped up 3rd pre-accelerator cohort with Unbound Automy and Orius.tech going to the accelerator, along with others. New and well received – SensePilot – they are making technology more accessible with eye tracking, head movements, and voice commands.
• Ukraine. Algirdas – one of these relentless heroes supporting Ukraine.

sponsors

Cloudvisor [AWS partner dedicated to startups]
PayPal [Global integrated payments solution]
Vinted [largest C2C European marketplace, always hiring]
Tech Zity [tech hubs and campuses across Lithuania]
Presto Ventures [investing in startups at the forefront of security, defense, aerospace]
Wargaming [award-winning game developer, careers]
15MIN Group [all the news you need to know]

rounds and capital

• Lithuanian-origin Marty Kausas, CEO and co-founder of Pylon raised $17m series A, led by Andreessen Horowitz, with General Catalyst and YC participating. Pylon is building the next Zendesk in AI era. Marty's parents took a bet and moved to the US from Lithuania 27 years ago.
  • Did your fundraising announcement receive 828 comments? There is always room for improvement.
• Announced in April – Latvian ALTUM selected 3 fund managers with a total of EUR 55.8 million in public funding. Assuming busy with paperwork and agreements, Latvian founders soon will have no excuse.
  • BADideas.fund: Artis Kehris, Raimonds Kulberg, Benjamin Pierre Leblois
  • VNTRS Consulting AB: Kristaps Prusis, Mikaela Pedersen
  • BUILDIT: Zigmārs Reklaitis, Rene Tonnisson
• Latvian car-sharing provider Carguru.lv has acquired Riga-based electric car rental startup OX Drive.

Tech Philomaths' community - join

• Lean and Mean - small profitable Baltic tech firms

• Startup lists for the Baltics - Drone startups, Marketplaces, Sportstech
• Repeat Lithuanian founders - 40 serial founders building now

founder guide

• How to say Hello

• Runway when raising – Keith Rabois suggests thinking about lift instead
• Daniel Gross – how to survive as a founder
• CTO: When to write strategy, and how much?
• Marketing became too specialized – spot on piece by David Peterson. Is this the reason why "Founder is the CMO" became so common?

• B2B marketing
  • Learn from content creators
  • How to Build B2B Marketing Org - we asked Veta from Slite and she expanded a good resource with a personal take.

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further insights

• Learning from Nordic software acquirers – great deep dive into Visma's €4B M&A spree, strategy and results so far.
• Peter Thiel on why it is so hard to know where to invest during AI bubble – people were missing out on Amazon during .com easily
• Palmer Luckey's (Anduril) story for all defence tech founders

• Early-stage investing is like poker (Fred Wilson)

ecosystem

• Mark Zuckerberg and Daniel Ek on why Europe should embrace open-source AI

Europe should be simplifying and harmonising regulations by leveraging the benefits of a single yet diverse market. Look no further than the growing gap between the number of homegrown European tech leaders and those from America and Asia—a gap that also extends to unicorns and other startups. Europe needs to make it easier to start great companies, and to do a better job of holding on to its talent. Many of its best and brightest minds in AI choose to work outside Europe.

• Just like for startups, growth is absolutely critical for countries – compounds over time and defines destiny

If America had 1 percentage point lower growth per quarter since 1980, it would be about as poor as Mexico is today.

P.S. There is some irony at times, so hope you got us right last time – really like what RivalSense is doing and happy to partner with them. Check their Baltic VC newsletter.