Female Foundry Week 122: Big Cash-Out. Net Revenue Retention. Don’t think like your investor. Mind the gap. Female Foundry x Cambridge Tech Week.
Welcome to The Week 122, 2024 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
Finnish biotech NADMED, co-founded by Jana Buzkova picks up a €3.5m Seed round led by Nordic Science Investments for its NAD tests; Oslo-based SportAI, founded by Lauren Pedersen, raises a €1.6m Seed round led by Skyfall Ventures to leverage computer vision for sports coaching; Vilnius-based Tingit, co-founded by Indrė Viltrakytė, raises a €500k Pre-Seed round led by Firstpick to digitally streamline the repair industry; Swiss digital coaching platform FLOWIT, co-founded by Dr. Yasemin Tahris, lands a €4.2m Seed round co-led by Vi Partners and Alstin Capital; London-based Piclo, co-founded by Alice Tyler, raises an undisclosed amount Series B round led by EDP Ventures for its end-to-end energy energy marketplace; Tallin-based UP Catalyst, co-founded by Kätlin Kaare, raises a €2.3m Seed round led by Warsaw Equity Group to create battery materials from CO2; London-based AI customer service startup Gradient Labs, co-founded by Danai Antoniou, fetches a £2.8m Seed round led by LocalGlobe; Swiss Apheros, founded by Julia A. Carpenter and Gaëlle Andreatta, raises a $1.85m Seed round led by Founderful for its metal foam cooling technology; Birmingham ESG risk management company Bendi, co-founded by Mandeep Soor, secures a £815k Pre-Seed round led by West Midlands Co-Investment Fund; Munich-based patient support platform XO Life, co-founded by Dr. Friderike Bruchmann, secures a €7m Series A round led by Genesis Capital Equity for its meta platform for patients; London-based eNOugh, co-founded by Ina Jovicic, picks up a £240k Pre-Seed round led by PurposeTech VC for its AI-powered safety badge.
Spotlight
Big Cash-Out.
Revolut, a darling of European fintech, announced on Friday this week that it achieved a $45bn valuation (up from $33bn in 2021) through the secondary sale of shares to investors. The news comes as Revolut reportedly prepares for its long-awaited IPO, a month after reporting record annual profits and weeks after securing a long-awaited UK banking license, which took more than three years for regulators to approve. As a result of the sale, it’s not only Revolut’s co-founder and CEO, Nik Storonsky, whose stake is estimated to be worth billions of pounds, who benefits significantly. Over 400 crowdfunding retail investors who backed Revolut in 2016—some with as little as £100—are also big winners, having seen the value of their investments soar by staggering 40,000% (Yep, that £100 chip-in is worth £40,000 today).
It’s important though to remember that Revolut is a clear outlier. Crowdfunding returns are generally low, especially for hardware and lifestyle brands. A study from 2018 found that the average rate of return in crowdfunding is about 8.6%, largely due to the low survival rates of startups. Additionally, many tech startups now only begin crowdfunding at Series B or later, leading to small return multiples.
However, is Revolut’s bonanza the beginning of more big retail investor cash-outs by fintechs that raised crowdfunding rounds a few years ago? Time will tell.
For example, Freetrade, which raised £100k in crowdfunding in 2016 is now valued at approx. $225m. Monzo, which raised £20m from 36,006 investors in 2018, is now worth $5.2bn. In 2021, Curve shattered its own crowdfunding record from 2019 by raising £6m from 6,827 investors in just under three hours, and is now valued at approx. $800m.
Meet Visionaries Cohort I
Menza
“Making invisible actionable.”
This week, I would like to introduce to you Menza, the second company from Cohort I of the Female Foundry Visionaries AI Incubator in partnership with Google Cloud.
Do you know that only 0.5% of corporate data is ever analysed and used? That’s right! In numbers, this means a 6% loss in revenue opportunities and a 20% increase in costs for businesses. Built by a powerhouse technical duo Mariam Ahmed and Qasim Munye, with one exit under their belt, Menza, utilises a multi-agent, model agnostic and proprietary approach to deliver a data platform that empowers anyone to obtain detailed and granular insights into their business. - In seconds! (check Mariam’s walk-through demo here or book a demo session here)
Flexibility and ease of use sit at the core of Menza, which already supports over 450 integrations. Its early backers include Y Combinator and Top Harvest Capital.
Current team’s focus? Nailing product entry and growth! So if you’d like to join Menza’s next fundraising round, you might need to wait until next year.
In the meantime, the team is looking for intros to medium-size businesses that take in a lot of data (think: Sumup, Wagestream, Butternut Box etc.) Want to get in touch? Drop an email to Mariam ➯ here.
Check other female-founded companies in Cohort I.
Fundraising
Net Revenue Retention.
In a tough macroeconomic climate, retaining your existing clients is crucial. Why? It’s been proven that a 5% improvement in customer retention can increase profitability by 25-95% (yep, even 95%!), while acquiring new customers often costs 5-25x more than retaining current ones. That's why watching your Net Revenue Retention (NRR) is vital to making your company profitable. Unlike churn, which only tracks losses, NRR provides a much fuller picture: it factors in both losses and growth, reflecting changes from upsells, expansions, and churn. How to calculate NRR? It’s simple! NRR = (Net recurring revenue - MRR lost from churn - MRR lost from downgrades + Revenue from upgrades) / Base recurring revenue × 100 (see the formula here).
What’s a good NRR? In general, an NRR of over 100% means strong retention and growth. 80–100% means good retention but limited growth (you might need to improve upsells or reduce churn). An NRR below 80% means poor retention and a need for a better retention strategy. Here’s a good article that explains NRR in detail. What’s the difference between NRR and GRR? See here. Also, look up the industry benchmarks.
Don’t think like your investor.
There is so much content for founders these days—good, bad, valuable, useless. You can find pretty much everything, and every investor will have an opinion on how you should be building your business. I met with a founder earlier this week who wanted my view on her GTM strategy. She was well-prepared and well-researched. She had followed frameworks. She even quoted LinkedIn posts from a couple of VCs while explaining her market entry strategy. I was overwhelmed. I was puzzled. She had all the ‘answers’ and yet was testing no questions.
Remember, knowing how investors think will only get you so far (including reading this newsletter!). The work of investors is not about building companies; it’s about analysing them. So, stop obsessing over what investors might think. Obsess over your customers instead. Be a founder. Build and break. What should matter to you is reality. Reality will provide you with so many answers! What counts is what you are getting wrong, not what you think is right (or worse, what ‘someone else' thinks is right). Yes, mentors are helpful. Connections useful. But especially at early stages, nothing is more valuable for guiding your decisions than your own experience and convictions (based on that real experience). Not much can prepare you for reality more than reality itself. So, don’t linger on the edge of the pool—dive right in.
Analysis
Mind the gap.
A newly released report reveals that European startups are taking longer between funding rounds as venture capital dealmaking continues to be slow.
The median time between funding rounds has increased across all series compared to last year. On average, it now takes Seed-stage companies 18 months (up from 17), Series A - 20.4 months (no increase), Series B - 24 months (up from 19), Series C - 22 months (down from 23), and Series D+ - 28 months (up from 22) between fundraising rounds.
The post-pandemic VC boom, meant that funding rounds were frequent as capital flowed freely. However, the 2022 downturn reversed this trend, making startups extend their runways, cut costs and wait for valuations to recover. The raise in median pre-money valuations (see Week 218) this year may encourage more startups to fundraise again.
Community
Cambridge Tech Week x Female Foundry
Female Foundry is an official partner of Cambridge Tech Week this year. From September 9th to 13th, Cambridge will be a hotspot for deep tech startups, innovators, scale-ups, and investors. This year's deep dive topics include AI, Quantum, Semiconductors, and Climate Tech.
Are you a startup and or a scaleup? Use the promo code CTWSUSU50 for a 50% discount on your tickets ➯ HERE.
Also, make sure to register for Investor Pitch Sessions and take part in the Innovation Alley Awards! See you there.
Hiring
This week hiring:
Wype ➯ Head of Operations | SAPI ➯ Head of Sales and Partnerships | Pigment ➯ Entreprise Account Executive | Telness Tech ➯ Head of Support.
Founder & Investor Meetups
Thursday, August 29, Amsterdam ➯ Nyenrode MEETS | Friday, August 30, Paris ➯ Le Pitch Day.
That’s all for this week. See you next Sunday!
Agata
Written by Agata Leliwa Nowicka, an investor, a startup adviser, a two-time entrepreneur, and a founder of Female Foundry based in London.
Suggestions? Drop me an email.
Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.