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Germany outpaces Europe's downturn
Germany is beating the odds, how Vay provides driverless cars without AI, and more...
SearchVentures
November 06, 2024
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German startups beat the odds
German startup funding is growing despite European VC investments experiencing the worst-performing quarter in four years.
What's driving this trend in Germany?
This Week’s Trends
Germany beating the odds
The Driverless Startup That Skipped AI
Latvia’s first unicorn merges with its rival
Read Time 4 minutes
The Startup Trend
Positive Takeaway for Germany
Startup funding in Germany grew by more than a third to $2.4 billion last quarter, making it the second-most funded country in Europe as of Q3. This is despite the disappointing funding trend for Europe in 2024.
> German startups are mainly leading late-stage startup funding, despite it being down 57% year over year in Europe.
> Startup funding in the U.K., Europe's largest market, fell 43% year over year, while France, which is typically second, slowed to $1.4 billion last quarter.
“Europe is really a grouping of many smaller markets, investors tend to think of it as one big region, when in fact they need to approach Europe market by market”
Startup Feature
The Driverless Startup That Skipped AI
Founded in 2018, Berlin’s Vay is taking a unique approach in the driverless race. Instead of waiting for full autonomy, Vay is creating door-to-door car sharing with human operators that control cars remotely, arriving at your doorstep when needed.
“Autonomous cars are still far from reality for most cities.”
With $109 million in funding from investors like Coatue and Atomico, Vay’s goal is to create a hybrid between autonomous and normal driving believing that autonomous cars will take longer than expected.
Beating AI to the Race
For Vay’s founders—Thomas von der Ohe, Fabrizio Scelsi, and Bogdan Djukic—the mission was to find a solution that could be viable immediately, not a decade from now. With backgrounds at Tesla, Zoox, and DeepMind, the team noticed the regulatory challenges of full autonomy firsthand and decided to sidestep them.
“We’re bringing a practical solution to market now, rather than waiting years for full autonomy.”
Vay’s model puts human tele-drivers in control, offering a safer, faster path to market that blends car-sharing and ride-hailing without the need for a driver to deliver the car. Going against the grain their pitch attracted $105 million in startup funding, making Vay one of Europe’s most valuable remote-driving startups.
A Different Kind of Vision
Investors see Vay as a more immediate bet in the mobility space, one that skips the technical and challenging regulatory barriers of autonomous vehicles.
With a revenue model that combines per-minute usage fees with flexible subscription options, the startup has already logged 4,200 trips by its users after doing a test launch in Las Vegas earlier this year.
“We’ve proven demand exists, and our main challenge now is scaling our fleet to meet it.”
Vay’s advantage lies in its simplicity and timing. With autonomous tech still years from broad acceptance, Vay offers a practical alternative for today’s cities. Earlier this year, the European Investment Bank decided to back Vay with €34 million in debt financing, betting on its potential to make urban transport more sustainable.
“Vay is more than just a expensive vision that will take years to realize, and we are already looking to expand across Europe.”
Growing at 20% month-over-month with just 20 cars in its fleet Vay is now investing in a larger network of cars is looking to enter. Although the Berlin-based startup is still a long way from profitability, investors believe that an early bet on their business model before full-self driving would allow them to capture a market waiting for a solution.
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Headline News
This Week In Startups ✍️
Founders
> Printful, Latvia’s first startup unicorn providing print-on-demand services, is merging with its rival, Printify.
> Patchwork Health, a workforce management software provider for healthcare, has acquired L2P Enterprise Ltd, a fellow healthtech startup.
> Research Grid, a London-based AI startup whose software automates back-office admin for clinical trials, has raised a $6.5 million seed round.
Investors & VCs
> Axeleo Capital, a French VC, launches a €125 million fund for climate tech, aimed to finance innovative and resilient green technologies in Europe.
> Flywheel Capital, led by Ex-Crowdcube executives, has raised $10 million as they target a final close of their first fund of $25 million to target the secondary market.
> Resurge Growth Partners is raising €120 million to help turn around startups whose growth has stagnated and are no longer attractive to VCs (VC orphans).
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Cheers,
Odin Lund & Hari Mohandas
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