Hello friends! Axel from Gilion here.
Guten Tag! From a buzzing Bits and Pretzel in Munich to the biggest VC raise of all time there’s no shortage of news in the world of debt and investing.
Lass uns gehen!
Bits & Pretzel: a personal reflection
Gilion was well-represented at this year’s Bits and Pretzels, the Munich-based startup conference that continues to grow in size, attracting a dynamic mix of international startups and investors. I had the honor of serving as a Table Captain, leading discussions with various ecosystem participants in a dedicated Bits and Pretzels tent at Oktoberfest, while my co-founder, Henrik, delivered a well-received talk on data-driven investing.
One of the highlights for me was gaining deeper insights into the German startup ecosystem. It has become increasingly clear that Germany’s startup scene extends far beyond Berlin, with each city offering a unique blend of startups shaped by its industrial heritage. For example, Munich boasts many automotive-related companies due to its strong ties to the automotive industry.
Bits and Pretzels also did an excellent job of spotlighting business angels, in contrast to a sole focus on VCs. At Gilion, we have greatly benefited from the expertise of our angel investors, and it was clear that the German angel network, particularly with the wealth created in the country’s renowned Mittelstand sector, is a force to be reckoned with. I had conversations with several angels who have invested substantial amounts in multiple successful scale-ups.
Mastercard on an acquisition spree
I’ve written extensively about M&A in the past, and there have been some notable stories recently, with Mastercard taking the spotlight as the acquirer of the moment.
In mid-September, Mastercard made one of the largest tech exits in Nordic history by acquiring Gothenburg-based AI company Recorded Future for an impressive €2.5 billion. This week, they struck again, acquiring subscription management company Minna Technologies. While the acquisition price is rumored to be a more modest, but still significant, €70 million, it’s clear Mastercard is making strategic moves.
Several aspects of these acquisitions stand out to me. First, after years of discussion around financial giants partnering with fintechs, it feels like we’re finally seeing real action. Perhaps Mastercard was spurred into this by Visa’s acquisition of Tink—a company that also happens to be Gilion's top recruitment source—a couple of years ago.
Second, both Minna and Recorded Future are based in Gothenburg. Unlike Germany (as I mentioned in my post on Bits and Pretzels), where multiple cities contribute to the tech scene, Sweden’s tech ecosystem is heavily centered around Stockholm. Hopefully, this fresh influx of capital will help energize Gothenburg’s startup ecosystem and spark further growth.
Biggest VC raise in history goes to… OpenAI
OpenAI just pulled off the largest VC raise ever, closing a $6.6 billion round that now values the company at a whopping $157 billion. Thrive Capital led the round, but familiar names like Microsoft, Nvidia, and SoftBank also jumped in. With this latest round, OpenAI has raised $17.9 billion to date—insane, right?
So, what’s all this money for? Well, OpenAI says it’s doubling down on cutting-edge AI research and scaling its infrastructure, which makes sense considering the eye-watering costs they’re facing. Training these massive AI models is no picnic. Apparently, they’ve already spent $7 billion just on training and $1.5 billion on staffing. GPT-4 alone reportedly cost over $100 million to build! Not to mention the burn rate for running ChatGPT—$700k a day.
Interestingly, there are rumors that OpenAI is asking investors not to back rival AI startups like Anthropic and xAI, so it’s clear they’re playing hardball. Plus, with all the competition heating up—from Meta to Google and even new players like Runway—it makes sense they’re gearing up for a fight.
There’s also talk that OpenAI might shift away from its nonprofit structure soon, likely to allow more flexibility with raising funds. A move like that would allow them to tackle even bigger projects like building AI chips to reduce dependency on Nvidia.
A few last things before we go..
Data-driven VC: After AI, what comes next
My dear co-founder Henrik Landgren, has penned a truly insightful piece sharing his learnings from a decade of data innovation across startups and VC, and why the fusion of 1st and 3rd party data offers the next big opportunity for investors!
Check out the full newsletter at Data-driven VC.Stay tuned as we continue to explore the ever-evolving landscape of technology and its financial ecosystem.
And as always, do let us know if there’s anything you’d like for us to cover.
/Axel
