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A Visit to Berlin, and a Tale of Three Cities

The Angle Issue #226

A visit to Berlin, and a tale of three cities
Gil Dibner

I spent most of last week on business in Berlin, catching up with portfolio founders, meeting some new founders, and attending the remarkably well-organized Deep Tech Momentum conference, organized by Techstars. For me, the week was a tale of three cities.

The first city is populated by founders of early-stage B2B companies, one or two in our portfolio and several outside of it. In this version of the city, everyone is focused on sales and scaling. There are customers and revenues. There are sales reps and targets and quotas. There are ICPs and PoVs and ARRs and ACVs. Experiments to run, targets, and everything is measured. Fundraising may or may not happen down the line, but the focus right now is on proving the value of the product and scaling cash flow so that maybe - just maybe - fundraising becomes an option but not a necessity. To thrive in this city, one must have one’s feet on the ground and one’s eyes on the excels.

The second city is populated by “deep tech” founders who are building aerospace companies, space technologies, defense tech, and biotech. At Deep Tech Momentum, I met one founder who is building a mine detection system and another who is trying to reinvent the way satellites are coupled together for launch, potentially lowering the cost and complexity of launches. A third founder I met has developed a way of gathering an entirely novel data set on manual industrial manufacturing processes. It’s not entirely clear what to do with that data set, but it's quite possibly revolutionary for several industries. To live in this city, one must approach every meeting with a beginner’s enthusiasm and a growth mindset. Optimism rules the day, coupled with a healthy curiosity about how to define novel business models and - crucially - financing strategies. In this realm, there appear to be no rules for how venture financing is supposed to work. Aside from an (un)healthy reliance on non-dilutive (read: “government”) funding, no one really knows how any of this is going to be financed.

The third city is the zone of the larger, often international, VCs. While the era we are in is often thought to be one of austerity, that austerity does not apply in this part of the city. These large funds may be less active than they were a few years ago, but they are active - and they’re deploying huge amounts of capital into companies to which the “AI” label can be applied. AI for software creation. AI for mobility. AI for robotics. AI for the sake of AI itself. Earlier this week, I observed that while some of these rounds make sense, many of them seem to be motivated by a yearning by investors to return to a learned comfort zone of irrational exuberance forged during the ZIRP times.

What’s fascinating to me as I traveled between these three versions of Berlin - these three versions of the startup cosmos of 2024 - is how disconnected they are from one another. There's a world of hard-working founders trying to prove that their startup is a business, an economically viable enterprise that could become self-sustaining. For them, financing is one tool among several on their journey to profitability and scale. There is a parallel world of forward-thinking innovators who are exploring the edges of the possible. For them, financing is a gigantic question mark - but it’s one among many others they face as they seek to reinvent huge industries. To me, this second “deep tech” world evokes the Silicon Valley of the 1980s when the venture eco-system was immature and follow-on financing was impossible to predict. And, finally, there is a parallel third world of venture investors eager to deploy capital. For many of them, finance itself is the central activity. While many of these investors are brilliant and capable, many seem mired in the same thinking that got us to where we are now: they are eager to deploy capital into what seems “smart” (or fashionable) right now, but when one tries to pick apart the logic of the investment it appears to vanish into a sea of buzzwords, hope, and inflated expectations.

Of course, this is playing out across the world - not just in Berlin. But my recent trip to Berlin - one city in which all three versions of the startup eco-system are playing out - helped sharpen the observation that as an early-stage VC, we must traverse all three worlds. Our natural habitat is, obviously, the world of founders proving business viability. We are comfortable there, and we know we can add value to that process. We aspire to live in the world of deep tech innovators, and we do spend quite a bit of time there. Those founders are asking the most interesting - and potentially rewarding - questions. As venture capitalists, of course, we also must dwell occasionally in the world of financial hype cycles - and do our best to help our portfolio thrive there as well.

If, as a founder, you find yourself caught between these three versions of today’s startup ecosystem, perhaps we can help. Like everyone else, we are struggling to make some sense of it all.


Revenue Durability in the LLM World
Everything about LLMs seems to make revenue durability more challenging than ever.

A Digital Fabric for Maritime Trade
Why we invested in Portchain.

Three Keys to the Kingdom
The sometimes-competing and sometimes-aligned goals that early-stage founders must manage.


Germany / Industrial. InCylib raised €55M, led by World Fund and Porsche Ventures, to scale up its lithium-ion battery recycling facility.

Greece / SaaS. Harbor Lab raised $16M, led by Atomico, for its shipping management platform, which focuses on streamlining port call logistics.

Germany / Marketplaces. Caeli Wind raised €11M, led by Notion Capital, for its wind farm land marketplace.

Germany / SaaS. Trawa raised €10M, led by Balderton Capital, for its AI-powered energy management platform targeting small and medium-sized businesses.

Sweden / SaaS. Leya raised $10.5M, led by Benchmark, for its AI-powered legal assistant and workflow automation platform.

UK / E-Commerce. Purple Dot raised $10M, led by OpenOcean, for its pre-order and waitlist management platform for DTC e-commerce brands.

UK / Artificial Intelligence. Malted AI raised £6M, led by Hoxton Ventures, for its platform for creating cost-effective small large language models.

French / Fintech. Tulyp raised €1.5M, led by Speedinvest and Kima Ventures, for its trade finance platform for small and medium-sized businesses.



Chat-GPT4o. This week’s big news is OpenAI’s latest release, GPT-4o. This human-like model borders on science fiction and can reason across audio, vision, and text in real time - and enables some pretty magical interactions with AI. From tutoring students to providing real-time assistance to the blind, the possibilities this release has enabled seem endless. OpenAI CEO Sam Altman shared his thoughts on Chat-GPT4o: “the new voice (and video) mode is the best computer interface I’ve ever used. It feels like AI from the movies; and it’s still a bit surprising to me that it’s real. Getting to human-level response times and expressiveness turns out to be a big change. The original ChatGPT showed a hint of what was possible with language interfaces; this new thing feels viscerally different. It is fast, smart, fun, natural, and helpful. Talking to a computer has never felt really natural for me; now it does.”

SF’s AI boom. Following years of uncertainty of San Francisco’s position as the place to be for startups, especially during the pandemic, AI has helped put the Bay Area back on the map. According to Crunchbase data, “last year, more than 50% of all global venture funding for AI-related startups went to companies headquartered in the Bay Area”. Furthermore, the Bay Area alone had more AI-related startup funding deals than all countries outside of the US. Many founders are now returning to the Bay Area after the mass pandemic exodus, to be closer to the AI center of gravity.

AI-automated labs. As published in Science, a consortium of six AI-automated labs created new laser-emitting materials without human intervention. This effort yielded a compound with unprecedented efficiency, demonstrating that AI-driven labs can outperform human scientists in certain areas. The automated process involved synthesizing, testing, and assembling materials across labs in different countries. The AI overseeing the operation incorporated feedback from each experiment, significantly speeding up the discovery process. This achievement highlights the potential of AI in revolutionizing scientific research, enabling faster and more efficient development of new materials.


Sequoia’s PMF framework. Sequoia released a terrific framework for helping founders understand and achieve PMF, categorizing it into three archetypes:

  • Hair on Fire: Solving an urgent, obvious problem in a crowded market, requiring a best-in-class, differentiated product.

  • Hard Fact: Addressing a widespread, accepted issue by changing customer behavior with an innovative approach.

  • Future Vision: Creating a visionary product that seems like science fiction, requiring belief in a new paradigm.

Each path has unique challenges and operational priorities, and startups may shift between paths as they evolve – “PMF may seem like a destination you’re trying to reach—but keeping and expanding on it once you arrive is an ongoing quest that will last as long as your company does”. 

The winning strategy. Index Ventures’ Martin Mignot detailed in a thoughtful post the different strategies three neo banks, Revolut, Monzo and N26 deployed. They had similar traction back in 2017, but Revolut has since grown substantially more than Monzo and N26. Revolut has 27M monthly active users, while Monzo and N26 have 4M and 2M, respectively. The entire post is worth reading, but two of Revolut’s strategies laid out in particular are key: “they relentlessly focused on reaching profitability”, and “they built small teams that were highly scalable, highly quantitative and highly agile”.


Themes vs. verticals. Charlie O’Donnell advises VCs to differentiate themselves from the thousands of other funds by focusing on broad themes, rather than specific sectors. This approach, Charlie argues, helps VCs attract top founders, create effective networking filters, and signal expertise, helping them stand out in a crowded market.

Deal done. Wiz’s deal to acquire Lacework recently collapsed during diligence. Wiz was planning to acquire Lacework for $150-200M, a far fall from Laceworks’ latest valuation north of $8B. But investors were also going to get Laceworks’ $800M in cash returned as part of the transaction.


Aquant is tackling complex equipment challenges with personalized AI, delivering custom recommendations to enhance service team performance.

Tensorleap’s CTO, Yotam Azriel, recently spoke on the Satellite Image Deep Learning podcast about interpretable deep learning.



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