Hello friends! Axel from Gilion here.
It feels great to have finally crossed the ocean that is the summer holidays, and be back at the firm shores of regular work life and distributing this newsletter. Markets do not seem to have taken any extended breaks, so let’s dive in!
VC on the Rise, But Still Below 2021 Peaks
Pitchbook just released their Q2 data on European VC funding, and there’s some positive movement. Deal amounts and sizes are picking up since Q1, yet we’re still far from the dizzying heights of pre-2022. Lower interest rates and the prospect of major European tech IPOs (we see you, Klarna) might turn the tide, but for now, our experience as lenders mirrors the data—VC funding is still sluggish outside of AI and a few other hot sectors.
Read more about European VC trends.
The Rise of Acqui-Hires: A Silver Lining in Startup M&A
TechCrunch recently published an insightful piece on the rise of "acqui-hiring"—when startups are acquired primarily to bring on their talent rather than for the business itself. We all know the road to IPO or profitability is tough, and for many startups, an acqui-hire can be a lifeline, avoiding the harsh reality of bankruptcy.
While it might feel like a setback, acqui-hires can be surprisingly beneficial for all parties involved. The article points out that these deals often lead to better option packages and career trajectories for employees than they might find in the open market.
I know several members of our Gilion network have been through this—I'd love to hear your thoughts and experiences!
Interest Rate Cuts: A New Wave of Opportunities?
The Swedish Riksbank has just announced a 25 basis point (bp) interest rate cut, signaling what could be the start of a broader trend of lower rates across Europe. For borrowers with floating rates, this translates to immediate savings. However, as we’ve discussed before, while these reductions are notable, they’re often less impactful than amortizations for the typical startup or scale-up borrower.
But the story doesn’t end there. Lower interest rates have far-reaching implications beyond just lending terms. They also affect the returns of pension funds and other long-term investment vehicles, which often rely on low-risk investments. With declining returns from these safer bets, these funds may increasingly look to higher-risk investments, such as venture capital or the credit facilities we provide.
It's still early days, but if this trend continues, we could see a surge in investment appetite, particularly in the tech and startup sectors. This is definitely a space to watch closely in the coming months.
One last thing before we go..
Gilion is reporting for Table Captain Service at Bits & Pretzel
A bunch of the merry team at Gilion will be joining 5,000 other founders, investors, and industry leaders for three days full of learning, networking & business at this year’s Bitz & Pretzel.
I, myself, have humbly accepted the role of Table Captain and I’m looking forward to connecting and rubbing elbows with some of the smartest founders Europe has to offer.
Make sure you get your tickets now, and one week before the event head over to https://www.bitsandpretzels.com/ and sign up for a session with me. Hope to see you there!
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
