TheChek News Flow

At the 1939 World’s Fair in New York, Westinghouse Electric unveiled Elektro, a 7-foot-tall robot that walked, spoke, smoked cigarettes and gestured with its arms. It was all a show—Elektro’s witty conversation flowed from phrases recorded on a vinyl disc inside its massive body. But the robot wowed crowds that piled in to witness its apparent smarts.

Eight and a half decades later, Toyota and Tesla have joined a race to commercialize walking, talking robots that resemble humans, are powered by AI and will handle many mundane factory and household tasks. But in many ways, the current versions of the robots resemble Elektro—they still need a hidden hand.

The upshot: Versatile humanoid robots seem unlikely to be available to mainstream consumers for years, if not decades.

At an event on Oct. 10, Tesla CEO Elon Musk showcased the company’s latest version of Optimus, a humanoid robot he unveiled three years ago. As he spoke, numerous Optimus robots walked into the crowd and danced on a stage, and Musk promised that future versions would have capabilities similar to those of C-3PO, the empathetic, diplomatic and sentient robot in “Star Wars.” Tesla would sell billions of such robots, Musk predicted in July, driving the company’s valuation to tens of trillions of dollars, up from $705 billion last week.

But while the Optimus robots shuffled around on their own at the event, human workers behind the scenes appeared to be driving almost everything else they did, conversing through built-in speakers and directing the robots’ arms and hands as they mixed drinks at a bar, according to guests at the event and AI experts. When guests asked, Optimus robots themselves fessed up that they were operated remotely by humans, according to guest videos posted on X. “Regarding speech, I believe this was entirely remote controlled and done with human voices through some sort of radio,” William Stein, a tech analyst with Truist Securities, told me.

Six days after the Tesla event, the Toyota Research Institute, the Japanese carmaker’s research and development arm, announced a partnership with robot maker Boston Dynamics to develop humanoid robots for use in factories and homes. Gill Pratt, CEO of TRI, told me that new advances in AI may make it possible to train humanoid robots to handle numerous mechanical tasks, even those they haven’t explicitly been taught to do.

But that’s probably years away. Pratt said that, just as the World’s Fair visitors did in the 1930s, people still often have unrealistic expectations of how close researchers are to developing robots with near-human abilities.

“We are anthropomorphizing tremendously onto the [robots],” Pratt said. “And we are kind of fooling ourselves and fooling each other by wishful thinking about what we wish that they could do versus what they actually can do, which is very, very little right now.”

Show, Don’t Tell

Musk has not disclosed the technology behind Optimus apart from saying it shares the same motors, gearboxes, batteries and AI software as Tesla’s self-driving cars, and he did not respond to an email seeking comment about Optimus.

The Toyota–Boston Dynamics team uses a new type of AI system similar to the large language models that power ChatGPT, but instead employs large behavioral models to train robots by physically showing them a task: for example with a video. This approach, called diffusion policy, is much less work than writing mountains of line-by-line instructions in code, said Shuran Song, a robotics professor at Stanford University who collaborates with Pratt.

The field is in a primitive state: Pratt’s team has used diffusion policy to teach robots specific tasks, like folding a T-shirt. But they often must show the robot how to fold the shirt 100 times before it can do so reliably.

Song said this points up how complex it is to develop an all-purpose humanoid robot: The robot will technically know how to fold the T-shirt, but it will get confused the next time it’s asked to do so on a bed with a different blanket or sheets, or in a different position, or if the weather visible through the window is not the same.

So trainers show the robot how to fold the shirt in every possible condition they can think of. “When you collect 100 examples of doing that one task, the robot can do that task,” Song said.

And that’s only in one house. Take the robot to a different house and you would have to train it again, Song said. Multiply that process by the number of tasks you’d like a robot to do—serve drinks, answer the door, iron a dress, vacuum the floor—and it becomes clear why humanlike robots are not around the corner.

Making matters worse, unlike with AI chatbots and driverless car technology, there is no ready warehouse of training data for humanoid robots. Researchers are just beginning to create the data.

Toyota’s partnership with Boston Dynamics aims to take the development of such robots to the next stage. Pratt said the companies have assigned the partnership 10 employees each, who will work in a Boston Dynamics facility in Waltham, Mass.

The companies start with a robot called Atlas, developed by Boston Dynamics. At a glance, it appears far more agile than Optimus. In the Oct. 10 event, Optimus robots didn’t fall over or bump into anything, but they also just trundled around, stood still, and generally looked as though they were mired in molasses. By comparison, Atlas flips, leaps, rolls, dances and is generally athletic, as you can see in this video.

The next challenge, Pratt said, is training robots to piece together discrete skills picked up in different tasks to handle a situation they have never seen before. “We have found ways, and we believe it has a lot of potential to go much further, of combining different tasks into general competence at mechanical things,” he said.

One of the most difficult things to replicate is the human hand, with its five fingers, all moving dexterously. No one in robotics has managed it, and even when robot hands get pretty far, the fingers sometimes break off in usage and generally are not robust.

Song suggests equipping humanoid robots with pincers rather than hands and fingers. She picked up a lightweight device on a desk behind her. It had two big pincers and a GoPro camera on top. She called it a handheld gripper and said it could instantly train a robot.

The idea is that when you buy your humanoid robot, you would also purchase one of these grippers. At home, you would take the gripper in your hands, turn on the GoPro, and go about whatever tasks you wanted the robot to carry out, like folding your laundry. Within limits, the robot would be able to replicate what you did after just one go, because it would be custom trained for your home. “Everybody can just carry this gripper and collect a lot of data for the tasks they care about,” she said.

In his Oct. 10 event, Musk predicted that every person on Earth would eventually buy an Optimus, which would become Tesla’s biggest product, surpassing EVs and its future Robotaxis. “I think this will be the biggest product ever of any kind,” he said.

Musk didn’t say when all of this would happen. I asked Song how long she thought it would take before there were all-purpose humanoid robots everywhere. Would our grandchildren see them? “I feel probably years,” she said, “but I don’t think it’s next generation. I think within our generation. When I’m getting old, I will probably have a robot at home.”

A fledgling startup is setting out to become one of Europe’s first “AI compute” hyperscalers, with renewable energy playing a pivotal part in its pitch to prospective customers.

The AI goldrush has spurred unprecedented demand for “compute,” which refers to the processing power, infrastructure and resources needed for tasks such as running algorithms, executing machine learning models, and processing data. One of the big beneficiaries of this demand has been Nvidia, emerging as a $3 trillion powerhouse off the back of demand for its GPU (graphics processing units) and associated AI hardware.

In tandem, an industry of cloud infrastructure providers has sprung up off the back of Nvidia, raising bucket loads of cash en route. In the U.S., we’ve seen the likes of Lambda and CoreWeave hit lofty billion-dollar valuations to expand their datacenter operations. Now, Finnish startup DataCrunch is throwing its hat into the ring, touting itself as one of the “few serious players” in the space with all operations in Europe.

‘GPU-as-a-service’

Founded in 2020 by CEO Ruben Bryon, DataCrunch — like its peers — sells GPUs “as-a-service,” promising to reduce the costs for AI processing. The company today said it has raised $13 million in seed funding, constituting $7.6 million in equity financing from backers such as ByFounders, J12 Ventures, and Aiven co-founder Oskari Saarenmaa. The remaining $5.4 million debt segment hails from Local Tapiola and Nordea.

While it’s slightly unusual for a seed-stage startup to raise such a significant portion as debt, DataCrunch has done this for the exact same reason that others in the space, such as CoreWeave, have also been raising hefty amounts of debt. It’s all about using physical assets — e.g. Nvidia GPUs — as collateral to secure loans, rather than giving away more equity.

It’s also more efficient to secure large buckets of capital this way, as the banks can simply take away the GPUs if things go belly-up for DataCrunch. For those who control the purse strings, it’s much less riskier than investing in a pure-play SaaS startup, for instance.

“Given the business that we’re in, our main expenses for expansion are capex [capital expenditure] driven,” Bryon told TechCrunch. “This is the logical way to go about it, and as we grow, additional access to that financing becomes available.”

This new round takes DataCrunch’s total funding raised since inception to $18 million, and will go some way toward helping it build out its infrastructure to support Nvidia’s latest servers and clusters, including the shiny new H200 GPU. In turn, this will help it grow a customer base that not only includes corporate clients such as Sony, but individual AI researchers working at the likes of OpenAI.

“That has always been an important market for us, and I think that this ‘individual’ market has been left behind by many,” Bryon said. “For me, personally, it’s important — at the weekend, I’m often using our own services, and have been since the beginning.”

Indeed, flexible, on-demand pricing is a far more alluring proposition for independent researchers and developers who might just need a little bit of compute for personal or university projects.

“People who are studying for a Masters or a PhD — that’s a segment we want to stay connected to because it’s often people who are a few years away from doing something really great,” Bryon said.

Hook them in now, and reap the rewards later when they hit the big time. That’s the general gist.

But there’s no escaping the giant elephant in the room, one that all the cloud companies are having to reckon with: the gargantuan amount of energy required to power this AI revolution.

Green machine

Part of DataCrunch’s “advantage” is the fact that its data centers are located in the Finnish capital, Helsinki, and Iceland — a country running on 100% renewable energy for years already.

“In Helsinki, we can subscribe to green energy from the grid,” Bryon said. “And currently, in one of our two Finnish data centers, the waste heat is captured to heat up Helsinki itself. In Iceland, we have the advantage that the ambient air temperature is always low, while the energy mix on the grid is already 100% green. So Iceland is pretty much one of the greenest places in the world to have these kinds of operations.”

This will be a big focal point for the company moving forward. While it plans to offer its services to any company globally, it will mostly remain anchored in the Nordics and Iceland. “Perhaps in the future we’ll look at Canada if we can find suitable locations, where we can have a similar advantage in terms of carbon footprint of our operations,” Bryon said.

It’s these “green” credentials that DataCrunch hopes will also set it apart from other European rivals: companies like FlexAI in France, which recently exited stealth with $30 million in seed funding; and Nebius, which recently emerged from the ashes of Russian internet giant Yandex and has just become a public company again.

There is a trade-off here, though: While low latency is often one of the big selling points for AI compute providers, DataCrunch isn’t necessarily going to be in that bucket, which means it will be better suited for a particular kind of workload.

“Our strategy is such that we’re not going to be the provider with the absolute lowest latency due to being in 100 locations around the world,” Bryon said. “We are more focused on the compute that doesn’t have that strict latency requirement. We can still have a decent enough latency though, it might not be 10 milliseconds, but it will still be something like 100 milliseconds.”

It’s also worth noting that DataCrunch’s data centers are in shared “co-location” facilities for now, but the company says it’s planning to start building out its own data centers in 2025 — something it will need significantly more capital for.

“I want us to be on a path toward going public with this company, and we’ll need access to plenty more capital to keep expanding the company,” Bryon said.

Train maker ‘analysing a possible transaction’ from steelmaker Sidenor

A Spanish train maker that the Madrid government wants to keep out of the hands of a Hungarian consortium is in talks over a potential acquisition by a steelmaker from Spain.

Talgo, which was drawn into a political storm by a takeover bid backed by Hungary’s illiberal prime minister Viktor Orbán, said on Monday that it was negotiating with Sidenor, which is based in the Basque country.

In August, Spain’s government vetoed the €619mn Hungarian bid for Talgo on “public security and order” grounds, creating a new conflict between EU member states and Orbán’s Russia-friendly government.

The Spanish government had no immediate comment on the Sidenor talks. But when Sidenor first signalled its interest in Talgo last week, Carlos Cuerpo, Spain’s economy minister, said the government was ready to “accompany and help” Talgo find “a viable long-term solution”.

Talgo said that in its talks with Sidenor, it was “analysing a possible transaction that could involve the acquisition of a significant percentage of [Talgo’s] share capital or its entire share capital”.

The Hungarian consortium, known as Ganz-Mavag, has vowed to take legal action in Spain and at EU level “to defend the legitimacy” of its offer for Talgo. But there are signs that its interest in the acquisition is fading.

Spain has classified the documents explaining its veto and declined to comment on whether its concerns are linked to Orbán and his relationship with Russia, the closest of any western leader since Moscow’s full-scale invasion of Ukraine in 2022.

But a senior Spanish government official previously told the Financial Times that Madrid was concerned about the possibility of the Hungarian consortium acquiring train technology that Ukraine needs to strengthen its rail links with the EU.

The Ganz-Mavag consortium is 55 per cent owned by Hungarian trainmaker Magyar Vagon, with the other 45 per cent in the hands of Corvinus, a state-owned development finance institution that co-invests with Hungarian companies abroad.

In a sign of waning interest, the Hungarian state this month reduced Corvinus’s share capital, taking out a sum that was not far short of the entity’s planned contribution to the Talgo bid.

Talgo’s principal business problem is a lack of production capacity. It has been struggling to fulfil orders on time for new trains from clients including Deutsche Bahn and state-owned Spanish train operator Renfe.

Part of the Hungarian consortium’s pitch was that it could quickly increase Talgo’s factory capacity using the existing plants of Magyar Vagon.

As a steelmaker, Sidenor does not produce any trains itself and it is not clear how it would seek to alleviate Talgo’s production bottlenecks.

Eastern Europe is also a growing market for train sales. Last month Talgo president Carlos Palacio and the president of Polish rolling stock maker Pesa, Krzysztof Zdziarski, signed a preliminary deal for Talgo to provide its technology for high-speed trains in Poland.

Obsession with odds spawned a trading giant — and shaped the industry’s approach to markets

Jeff Yass used to see options trading as a “game”. Now he sees it as a “mission from God”.

The billionaire co-founder of Susquehanna International Group has claimed he was a socialist during his student days at the State University of New York, but now he talks about capitalism with the zeal of a convert.

“Throughout history, the money lenders have always been viewed with suspicion,” he told a student group dedicated to the promotion of free markets in 2021. “When you’re against finance, you’re fundamentally against all human progress.”

Having flown under the radar for years, Yass has recently gained prominence as a major donor to Republican political candidates and as one of the largest investors in ByteDance, the Chinese owner of TikTok.

But despite the newfound scrutiny, less attention has been paid to the trading business at the heart of SIG’s “mission”.

Most large trading firms now make markets in practically every asset class. But a disproportionate number of the most successful started as options traders. And few have a longer or stronger record in the options market than SIG.

On a given day, SIG’s gross exposure across all its long and short positions is upward of half a trillion dollars. Most of the positions offset each other, meaning it has a much smaller net exposure, but the gross number — which has been rising steadily in recent years — is another demonstration of its scale. At the end of the second quarter, SIG held more than $50bn of stock and options tied to Nvidia alone.

“Most of the viable prop trading firms in the world today had their origins in options, and Jeff Yass is the elder sibling of all of these players,” said Paul Rowady, research director at Alphacution and a former portfolio manager at options trader O’Connor & Associates. “Susquehanna is an extension of Yass’s fascination with probability.”

Options are a type of derivative that give the right, but not the obligation, to buy or sell an underlying asset at a fixed price in the future. Notoriously complex to price and often highly risky, they have boomed in the retail fervour that blossomed in the wake of the Covid pandemic.

Yass started trading them as an independent trader on the Philadelphia stock exchange in the early 1980s and quickly made so much money he encouraged a group of his college poker buddies to band together and start their own firm.

“I called them and said this game is unbelievable, come on down to Philadelphia,” he said in a SIG-produced video.

Today, SIG is one of the few independent firms left standing from that first “golden age” of US derivatives trading. It has grown from the “Susquehanna Six” into an organisation of more than 3,000 employees, making it the largest dedicated proprietary trader in the world.

Even by the standards of the market making industry, SIG is secretive. The group has never taken in external capital, is managed through a maze of subsidiaries, does not publish financial statements, and rarely speaks to the press. When representatives do speak publicly, it tends to be on pet topics such as poker, golf or libertarian politics. It declined multiple requests to comment on this article.

However, analysis of regulatory filings points to a firm that is hugely profitable and that has expanded rapidly in the past few years, even as its competition threatens to catch up.

Options were booming in popularity during the 1980s following the launch of the first listed contracts tied to stock indices in 1983.

But pricing them efficiently is complicated, which created opportunities for mathematically minded traders such as SIG. Within months of its launch in 1987, it had made tens of millions of dollars with a well-timed purchase of put contracts — options that protect against a market downturn — shortly before the Black Monday stock market crash.

More than three decades later, SIG has been a major beneficiary of another surge in volumes. Volatility at the start of the coronavirus pandemic led to a leap in trading across a host of assets, but nowhere has the increase been more pronounced — and more sustained — than in options.

Investors this year have exchanged an average of 47mn US-listed options contracts a day, according to data from the Options Clearing Corporation, compared with 19mn per day in 2019. 

The bulk of SIG’s core US trading is handled by a unit called Susquehanna Securities, which traded 2.7bn options contracts last year — more than the entire industry in 2007.

Several traders at rival firms said a shift to short-dated options — high-risk, high-reward contracts popular with retail speculators — had reduced the profit that market makers tend to make on each individual trade, but the increase in volumes more than made up for it.

SIG does not publish detailed financial statements in the US. But filings by one of its international units show “members’ equity” — a measure of net assets, and the best available proxy for trading firms’ retained earnings — has historically been highly correlated with revenue and net profits.

By the end of 2023, members’ equity at Susquehanna Securities was up 65 per cent compared with the end of 2019 and more than double the end of 2017. Susquehanna International Securities, which is based in Ireland, reported net profit of $430mn and members’ equity of $1.1bn in 2022, the most recent year for which data are available. If the domestic business were anywhere close to the profitability of SIS, it would have generated annual profit of well over $3bn in 2023.

Initially, most observers assumed the pandemic-era options mania would abate as lockdowns were lifted and housebound retail traders returned to their day jobs. Many prop trading firms struggled when volatility and volumes dropped in the aftermath of the 2008 financial crisis, but this time volumes have continued to rise.

John Rothstein, chief operating officer at Optiver, another large market maker, said there had been a permanent shift in behaviour.

“We take nothing for granted . . . market conditions will vary,” he said. “However, I do think there’s a fair belief among practitioners that the low volumes of the post-GFC period are probably gone.”

As those comments highlight, however, SIG is not alone in benefiting from the rising tide of options trading, and competition is growing.

Susquehanna Securities’ members’ equity has consistently been larger than the main US units of its rivals Citadel Securities and Jane Street (although Citadel Securities tends to pay larger dividends). But its main competitors — as well as smaller rivals such as Chicago Trading Company and the US units of Optiver and IMC — have been growing more quickly over the past five years.

Citadel Securities already claims the largest market share in the US options market on its preferred measure, and at the end of last year, analysis by Alphacution showed that the total value of Citadel Securities’ options market exposure surpassed Susquehanna Securities’ for the first time.

“There is a very good group of trading firms out there that are creating a very competitive environment,” said a senior trader at another market maker. “We do [expect] a long-term increase in investor participation and therefore long-term growth in markets. But on the other hand you also see that the cost of doing business rises very rapidly as well, so it isn’t easy.”

In its early days, SIG was wary about growing too fast. Co-founder Steven Bloom said in 1989 that the firm was concerned about losing the “intimacy” of one managed by a group of old friends.

Today, SIG maintains some remnants of its dorm room roots. Traders in its Bala Cynwyd, Pennsylvania headquarters still dress more casually than their rivals at Ken Griffin’s Citadel Securities, and it has a reputation for being insular. New traders, usually hired straight from college instead of poached from rivals, go through an intensive training programme to inculcate them in the ways of Yass’s focus on gaming and decision-making.

“You get paid a little less, but some people like that suburban lifestyle,” said an employee at a rival trading firm.

Staff turnover is low — helped by a history of using aggressive non-compete clauses. But even occasional exits have helped to spread Yass’s attitude around the industry.

Most famously, Jane Street — now one of Susquehanna’s largest rivals — was founded by a trio of former Susquehanna traders who emulated its attitude to secrecy, obsession with games, and empire-building ambition. Industry lore has it that Griffin first got the idea to create a market maker while he was a student in the late 1980s, after angrily finding out he had made less money than he expected on a trade against Susquehanna.

Any reservations about expansion have long since been cast aside. In its own words, the firm is now active in “essentially all listed financial products and asset classes”, from bitcoin trading to using its “strong fundamental understanding of weather prediction” to bet on energy and power markets.

Unlike Griffin, who started with a hedge fund — Citadel LLC — before building his market making firm Citadel Securities, Yass started with a market maker before expanding into areas traditionally more associated with a hedge fund.

The different heritages means Citadel’s securities business has a stricter focus on pure market-making strategies whereas SIG makes more directional bets that have more in common with Citadel LLC. As early as 1996, for example, Susquehanna established a unit called Heights Capital Management to manage direct investments into listed companies.

It is also a big player in private markets. Aside from its well-known investment in ByteDance, its venture capital private equity arms have invested in hundreds of groups including UK-focused retail brokerage eToro, while another unit lends to real estate developers and mid-sized companies.

Citadel Securities and Jane Street are both occasional investors in companies and projects linked to their core businesses such as new stock exchanges or artificial intelligence start-ups, but SIG has gone much further with its venture capital and private equity investments, pumping billions of dollars into projects from agricultural gene editing to the moving company College Hunks Hauling Junk.

One of the few expansion plans Susquehanna has discussed publicly is its attempt to become a powerhouse in sports gambling, particularly in-play betting — gambling on games after they have started. Golf and American football may seem like less obvious markets for a financial firm, but they combine several of the same features that initially drew Yass to options: hard-to-price, time-limited trades and potentially massive scale.

“It all ties back to his fascination with probability,” Rowady said. “The kind of question that you ask about the life of an option — what is the likely outcome here? . . . It’s the same question you ask about the outcome of a Texas hold ‘em game, or that is now being inserted into the sports world. What’s the probability that somebody catches this pass or throws that touchdown?”

So far, Susquehanna’s gambling efforts have been limited in scope compared with the billions it has spent in other areas. It formed SIG Sports Analytics in Dublin in 2016, whose staff include Yass’s son Doug, and is building out a team of quantitative sports researchers in Dublin and at its Pennsylvania headquarters. It makes markets on exchanges such as Betfair, but trading profits have been volatile, swinging from a $59mn gain in 2020 to a $30,000 loss in 2021 and back to a small profit of $3.1mn in 2022, the most recent year for which data are available.

The Yasses have said the real goal of the Dublin business, however, is to build expertise ahead of a long-anticipated relaxation of betting rules in the US. Sports gambling has already exploded in popularity since a supreme court ruling in 2018 overturned a long-standing ban, but restrictions on interstate betting have prevented the creation of nationwide betting exchanges such as Betfair in the UK.

The other obvious attraction of sports for Susquehanna is the fact that most other participants in the market are using far-less sophisticated techniques.

Given the intense competition for skilled quant traders and programmers, Susquehanna presents itself to prospective employees as a workplace that combines intellectual stimulation with fun — recruitment videos highlight poker tournaments, summer happy hours on its suburban campus and holiday parties in Philadelphia nightclubs. But Yass senior has not been shy about some of the more aggressive aspects of its culture, and has said one of his central tenets is “making sure you’re betting against someone you’re smarter than”.

A devotee of the Chicago School economist Milton Friedman, Yass has little time for trends such as environmental, social and governance principles, thinks the Federal Reserve’s control of the money supply is “a violation of our basic freedoms”, and opposes most regulations.

Asked about protections for retail traders during his 2021 speech to the student group, for example, he acknowledged that some would inevitably “bet more money than they can afford to lose”, but said it was the price of living in a free society.

“It comes down to do you believe in liberty or not,” he added. “If you’re not adult enough to go buy or sell stocks, if you don’t have the freedom to do that, how much freedom do you really have?”

Revolut and Monzo show it is not all doom and gloom for European VC

European unicorns are shrinking. The glory days of 2021 and 2022, marked by easy money and investor nonchalance over profitability, pumped up valuations. But the subsequent dearth of funding rounds — only half have passed the bowl since then — leaves these valuations looking desperately outdated.

Europe’s universe may be overvalued to the tune of nearly €100bn, or more than a fifth of aggregate value based on the last funding, reckons PitchBook, in the worst case. That means some of the continent’s 139 unicorns may no longer be worthy of the title. PitchBook cites Italian buy now, pay later fintech Scalapay and mobile payments app Satispay, both valued at more than €1bn two years ago, as examples.

More will amble out the (back) stable doors. So far this year, two out of five start-ups seeking funding have done so at a lower value than achieved previously. Only a handful of new unicorns were minted last year; the net number has more or less flatlined since 2022.

Gathering clouds over Europe, which has always lagged behind the US and China when it comes to creating $1bn-plus start-ups, are inevitable. Tech thrives on scale. Delivering meals, shopping and banking — or all three — is a lot easier when your home market of hundreds of millions all speak the same language.

This is a cyclical game. To keep investing, venture capitalists and their investing clients need to get money back. Stasis on distributions means stasis on fresh cash infusions. Thus few would argue that a new generation is about to be birthed, or that the worth of the old stable will swell. PitchBook’s best-case scenario is that valuations plateau.

But it is too early to pension the sector off. For one, fewer rounds also signal changing sources of funding. At least some of the stables are generating their own cash flow or still have some left from when markets were kinder. Others are turning to venture debt, which neither dilutes nor elevates equity valuations. Payments app SumUp raised €1.5bn from private credit lenders led by Goldman Sachs earlier this year.

Europe is less reliant on classic VC too. Corporate capital is playing a bigger role. Governments play an outsize role, accounting for more than a third of European VC funding last year.

Fintech is where Europe, specifically financial services-heavy Britain, flexes most muscle. Down rounds in the sector are eclipsed by Revolut, which secured a $45bn valuation a few months ago, up from $33bn in 2021. Or take peer Monzo, which secured a valuation of up to $5.9bn. Not a trendsetter, but a sign it is not all doom and gloom for European VC.