European startups that harness emerging technologies such as artificial intelligence, machine learning, big data and blockchain to drive enterprise solutions and digital transformation are attracting some big investments this year.
While EU startup funding is expected to decline in 2023, in line with global economic trends, there’s still plenty of cash available to nurture the growth of those companies that really stand out. Especially notable is the massive inflow of capital being funneled into the AI space, driven by the excitement around ChatGPT and similar technologies that have become increasingly capable of holding natural, humanlike conversations.
Fintech startups are also continuing to pave the way forward with disruptive new business models that blaze the trail of innovation in capital markets, making certain asset classes available to a wider range of investors. Also gaining momentum is Web3, with its promise to transform the internet with innovations such as decentralized identities and virtual worlds.
AngelBlock
AngelBlock is making waves as an alternative crowdfunding platform for startups that aims to ensure investors remain fully involved with the projects they back. Companies can use the UK-based AngelBlock’s platform to raise funds from so-called citizen investors, who are given cryptocurrency tokens representing their stake in the company in return.
Besides enabling a new class of investors to fund startups, what really stands out about AngelBlock’s platform is its post-raise governance and vesting structure, which aims to increase collaboration between the companies and those who fund them. Startups must specify a number of milestones pre-raise that must be met in order to unlock the next chunk of capital. The decentralized nature of its platform means investors can then vote to decide if the startup has done enough to merit unlocking those funds. If a majority of investors decides against it, they can then direct its leadership team to rectify anything they’re unhappy with. At the same time, the startup is protected by on-chain vesting, which prevents investors from selling their stake in the company early. In this way, AngelBlock helps to ensure the interests of both the startup and its investors remain aligned.
Unlike other crowdfunding platforms, AngelBlock doesn’t charge any fees on the capital raised by startups. Recently, it announced that SOLA-X, a decentralized finance platform, will be the first project to raise funds via its platform. It’s also looking to foster innovation among Web3 startups with the launch of its very own grants program, giving promising projects access to further funding opportunities.
Libertify
One of the biggest advantages of Web3 and decentralization is that it opens the doors to anyone to be able to invest and build wealth. Yet there’s a danger to this, in that most people have little experience in mitigating the risks and challenges of financial markets.
Enter Libertify, a French risk management investing app that refers to itself as the “crypto seat belt”, using AI algorithms to help new investors navigate the volatility of cryptocurrency markets and sudden price swings. Libertify has created an automated platform for building crypto portfolios, with users able to invest with confidence in hundreds of different cryptocurrencies. It works by monitoring market trends, detecting price swings and movements in order to dynamically rebalancing the investor’s funds to minimize potential losses and maximize gains.
Users are able to set their level of risk tolerance, and this will have a direct impact on how the app rebalances their funds across different cryptocurrencies, ensuring that their investment positions align with their needs.
Wakweli
Headquartered in Geneva, Switzerland, Wakweli is trying to tackle the extremely pressing issue of fraud in Web3 ecosystems. The company was founded in 2021 and has been incubated by the Swiss software firm EverdreamSoft, setting itself the ambitious goal of becoming the most trusted authority for authenticating non-fungible tokens, or NFTs.
Wakweli, which means “truthful” in Swahili, launched its protocol in Alpha in 2022 in an effort to combat problems around NFT fraud and copyright infringement that are still common in the Web3 space. It raised $1.1 million in seed funding in February, demonstrating clear demand for such a service.
Wakweli aims to increase trust in NFTs through its unique “proof-of-democracy” protocol, which can be used by digital artists and other creators to verify their NFTs with a certificate of authenticity, represented by a tick mark on any blockchain explorer. To verify an NFT, creators can deposit cryptocurrency tokens into a smart contract. The NFT will then be verified by an independent third party certifier, who deposits an equivalent amount of tokens and releases the Wakweli certificate to the NFT creator. The certifier is then able to earn yield from this deposit in return for verifying the NFT is genuine. However, if someone is able to later prove that the certified NFT is not genuine, that person will be able to claim the deposits of both the creator and the certifier as a reward for spotting the fake.
AllianceBlock
Not to be confused with AngelBlock, AllianceBlock is creating an ecosystem of decentralized finance tools in order to connect the world of traditional finance with digital capital markets, making the latter more accessible to investors.
They recently unveiled their next-generation wallet designed to securely store digital assets and identity information called NexeraID. It can integrate with custodial, semi custodial and non-custodial wallets and from existing social web2-based login platforms for simpler onboarding towards web3. According to AllianceBlock, NexeraID solves some of the biggest challenges in the space today around self-svereignty, self-custody and privacy.
AllianceBlock has been able to create a number of unique services, including alternative, structured financing for crypto projects through its partnership with ABO Digital, and a similar service that enables art to be used as collateral to obtain finance. More recently, it announced a partnership with Crunchbase to make that platform’s startup data available to businesses and developers building blockchain applications. The flurry of announcements demonstrates that AllianceBlock is on a real hot streak right now, seeing rapid and widespread adoption of its ecosystem.
Mistral AI
Generative AI startups are getting a lot of attention this year, and Mistral AI has taken full advantage of that with its recently announced €105 million seed funding round. It’s believed to be a record-high seed funding raise for any AI startup.
Mistral AI is based in Paris and was founded earlier this year by former Meta Platforms’ researchers Timothée Lacroix and Guillaume Lample, and Arthur Mensch, who previously worked for Google’s DeepMind. It’s a competitor to the Microsoft-backed ChatGPT creator OpenAI, building an alternative generative AI foundational platform for enterprise-focused applications.
One thing that sets Mistral AI apart is that all of its models and datasets will be fully open-sourced. By using public datasets, Mistral AI said customers will be able to avoid legal complications when creating AI applications. They can, of course, still use their own proprietary data.
In an interview with TechCrunch, Mensch said it has become clear that generative AI can be extremely useful in many kinds of situations. Despite that, many enterprises are struggling to understand how to best use it to their advantage. “We need to figure this out for them,” he said. “We want to give them tools that are easy to use to create their own products.”
Colendi
Fintech startup Colendi has created a technology platform that’s designed to make credit and banking services more accessible for consumers, merchants and businesses. It relies on novel risk-assessment technologies and the use of AI and alternative data models, such as information that can be mined from people’s smartphones.
Colendi, which was founded in Turkey and now based in London, also offers a “buy-now, pay-later” consumer loan service via a network of partners. It supports both micro-credit and other financial services, and is fully integrated with various mobile and e-commerce payment channels, enabling its 15-million strong user base to access credit at the point of sale.
Colendi has been making strong progress in recent months, securing a $150m credit facility from Turkey’s Fibabanka last October, and acquiring the blockchain infrastructure startup SETL, which was led by former Bank of England executive director Sir David Walker earlier that year.
In the wake of the SETL acquisition, Colendi announced plans to launch a corporate blockchain solution to support embedded financial services in digital market verticals such as securities trading, energy and pay-as-you-go insurance.
