E579 | This Week in European Tech with Dan, Mads, Andrew, Lomax & Mike

28:13If they can simplify and improve the tax treatment of, for example, employee share options, that is a huge breakthrough that could be achieved in relatively short order. Because ultimately, what is building big companies in a short amount of time? It's hiring and incentivizing and finding the best talent you can, right? Did you see that Germany have just passed a draft law? So it's not really in law yet, but they passed the draft law looking at founder tax implications and VC tax implications. So not only are they unlocking their manufacturing base very smartly, as we have discussed many times, but they are also now very actively.

28:57And it was pretty much unanimous straight in to look at how they can incentivize founders and investors via the tax mechanism. There are naysayers looking at now that obviously the receipts shortfall that are going to come in in years, whatever, three, five, 10. But I thought that was really smart because normally we look at Germany as being quite slow at that kind of stuff. and they're on it. Yeah, no, and I think you need to, for example, Norway, there's been a big debate about this recently, right? I mean, it's only 5 million people, but clearly it's a very wealthy country. And Norway have had this issue where you would pay capital gains tax on unrealized paper profits every year.

29:33So if you're a startup founder and your company's going from 10 to 50 to 100 to 500 million of value, you're paying tax every year on the paper gain. We've seen a bunch of the Unicorn founders have actually left the country as a result. That's been hugely political in Norway. but one slight issue we have here is that tax is a national competence so you know every single country has to fix their own tax regime you know so it's in a way this isn't actually a brussels solution but i think if if there is some uh unity there that would be great and the final thing before i shut up is around skilled migration if you actually i was looking into it last night uk skill uk net migration is up so it's kind of up it's like there's a guy saying it's the highest it's been since Henry VIII, which, okay, fine.

30:16When it was 12. Interesting data point. I mean, where you got this data from? I don't know. But the point is, is that actually when you look into it, skilled migration, which is the thing that we all want, is actually down dramatically. So these guys, and I suspect that's the same across a lot of many of the countries in the EU. Is there not an American effect? Obviously, we want more really smart Indians in here as an example because I'm not 20 20 percent of the the S &P isn't that isn't it aren't the CEOs in you know something crazy but um isn't there an American effect where what you mean the academics are coming here you mean sorry yeah that kind of R &D that I wonder if there is almost like not an anti-Trump and I don't want to get mads upset with me here but almost like some kind of some kind of American reflective event where where people go okay fine you know, I can't.

31:06But that's because they don't care about the tax because they've got the IRS. I mean, they're followed by the IRS wherever they go. Yeah, they'll go everywhere. What we're not doing is attacking people proactively. Don't forget though, that if you're, you know, a skilled migrant, i.e., you know, you are someone who is capable of earning a lot of money, the salary that you could command in the EU versus in the US, you're taking a sort of 70 % haircut on your salary. So there's got to be a, you've got to really hate Trump and think that J.D. Vance is coming in next. Do you think that like that is set for the next 10 years for you to give up, you know, your sort of golden ticket in the U.S., quite frankly?

31:37So I don't know. I mean, remember, there was the French, what was it? University of Aix in Provence. I don't know, three months ago that was offering like, you know, a few million. So that was academics, not actual, you know, privacy. The French made a big hullabaloo about some U.S. academics who kind of flew over and landed on the tarmac like kind of refugees. But I think they took them in, did they? come on in yeah but i think there's there's it's almost like harking back to the 28th regime we almost need an r &d 28th regime in a way as well uh across the eu which you know attracts r &d and the other thing is also uh we need a bit more boosting up of or maybe harmonization of um uh how universities do university spin outs if you're talking about r &d r &d and a lot of universities in europe still are very sort of fuddy-duddy about that and they're getting smarter mike they're getting smarter that's one area where i actually have some optimism the problem is that's also an oil tanker so that's a kind of 10-year journey that we're on but i i anecdotally that i see better terms across universities now but i mean it's changing very very slowly but i think you know nathan bernice from marestri has been doing a good job on this with um i think spin out dot xyz and there's a bunch of other people beating the drum i was speaking to the imperial team who are in basically you know the the ip team imperial and they're really and they are now setting the tone for cambridge and oxford another well they're great cambridge is great as well oxford's the problem been problem historically cambridge and uh imperial have been great i think those are the things we can also have um uh influence over as vcs though because a whole bunch of times we we said to founders well look we'll be the bad cop you go back and say you've got this you've got this lead investor but they'll only invest if you to only take 5 % of the company.

33:21And more often than not, the university will capitulate on that. That's not the thing I'm worried about because we have some control over it. And even the R &D I'm less worried about because there is R &D money going out. It's the later stage. It's the growth. It's making sure that we don't do all the hard bit and then the company buggering off to the United States. And that's really all I care about because every day, that's what my portfolio companies struggle with. They can't raise the depth, the quantum of capital they need versus their US competitors. And I just, we talk about it every month, But like that is that is the problem.

33:52That's the problem. We just need more, though, Andrew, don't we? We just need more. Let's get more. Let's prove to LPs that there's more coming down the pipe. And there are more potential unicorns in the pipe now in Europe than we've ever seen before. And obviously, we've seen a massive groundswell of really solid activity. And we are going to talk about SML and Mistral in a second. So there's there is there are some more case studies. There's some more goodwill. There's some more awareness. I do believe that. But before we move on from EU Inc., Mads, you've been, I know you just got off a very long red eye, but you've been surprisingly quiet.

34:27What else would you add? Is there anything else that you would add before we move on on EU, EU Inc., anything from the Mario Draghi stuff? Well, I mean, I think goodwill and show us the money and all that stuff, I think is fine. I think we were planning on unpacking the ASML deal later, but it's just so connected with this. Let's go now. Let's go for it. Let's do it. It's so connected because, you know, we often say, well, we need to get a bit more money into venture. No, we need to get a lot more money into productive assets in general. The main criticism of ASML investing in Mistral is that investors felt that they should have those funds being paid out as dividends or share buybacks instead.

35:07And that is exactly the endemic issue we have. That's a reflection not of there not being enough venture capital necessarily, but of there just not being enough equity invested in productive assets in general. Because when there isn't enough money, the money that's left has got this mentality of scarcity and everybody just wants to see share buybacks and dividends. Instead of, what an amazing thing, we can make investments. Let's provide you with the capital to go and make stuff happen. So that's why I'm arguing it's not an isolated startup thing. It's all the way through the capital ladder. The whole stack needs fixing.

35:43And that's why we need pension reform. ASML, they've led this$2 billion round into mistrial this week. What does it mean beyond the cash? Just to set some of the things that were on my mind. And then, Andrew, I'm going to come to you next. So will this create stronger tech sovereignty for discussion? Smarter AI hardware software connectivity? Maybe. I was looking at it and thinking, will this end up like that awkward Microsoft OpenAI pairing? is there. But then Microsoft and Mistral already have an agreement and NVIDIA is already an investor, I think. So I'm wondering how that's going to unpack.

36:17How will this work with the EU AI Act? They both, customer and supplier, they kind of sit on either side of the argument. So I don't know if there's any regulatory challenges to this, or are they both going to be massive lobbyists? I don't know. But they were the things that were on my mind. And that's a little bit of up. But Andrew, where were you going to go with this? I was really going to say, I think it proves that European VCs are too small to compete. I mean, it's fantastic in the sense that if this opens up other European companies' balance sheet to invest, it contributes towards solving the capital problem of growth.

36:52But the deal's a bit of a canary in the coal mine for me, which is, if Europe doesn't fix its capital markets with regards to technology, then this next generation of AI and deep tech will either just be bought by the US or will never scale at all. So fantastic news, good for AMSL, but I agree with Mads and I think it's a function of there aren't enough VC funds in Europe that are managing 20, 30, 40 billion. I love the fact, I mean, this isn't ASML's first trip to the circus. I mean, they've been doing a bunch of M &A back 15 odd years and they did, was it a billion or something into Zeiss? I know they've done they've done a bunch this isn't this isn't their first rodeo but mike i know you've got some thoughts on this where would you take this well i'm glad you mentioned zeiss because in that instance it was about the optics the optic technology that zeiss had that would go into that helped to go into asml's machines which then go on to make trip chips of course and so but i don't think that we need to get too concerned about that well i don't see any regulatory issues happening here because they're very different, obviously very different businesses.

38:02Strategically for ASML, this is actually a brilliant deal. These guys are just down the road in Paris from the Netherlands. Culturally, there's a fit. I was actually talking to, under the radar, talking to a couple of sources in the investment community about this, who were quite close to the deal. And they were just saying that the culture fit is great. The strategic fit is great, especially for ASML. And also, of course, Mistral gets its independence. And it's not quite the same as when OpenAI did the deal with Microsoft. That was a very much of a kind of, you know, two bedfellows having to kind of get along, the odd couple.

38:48And ASML is quite far away from, you know, the GPU world as well. in terms of it's not you know in australia isn't going to be putting a billion bucks into asml's chips because they don't make them so they just make the machines so the so i think it's actually a really good deal all around but i think andrew's got a very good point that this wasn't a kind of a european version of sequoia or a16z investing a billion it was a you know very large european corporate uh i mean i'd like personally i'd like to see more of them more of them if that was possible but Yet there still remains this issue. Yeah, I mean, if you try and unpack the deal a bit, I completely agree with you, Mike.

39:29You know, Mr. Alistair, I think they've surpassed 100 million euros in recurring revenue. So at the valuation that's discussed here, but I think this is going to be like 14 times recurring revenue. It's 11.3 billion, I think, valuation. Way, way lower than the US. That's the other thing to point out. Way lower than the multiple would have been in the US. It's a fraction. You know, you look at the valuation multiples on Anthropic and OpenAI are much higher. You have a lot of real-world use cases now. I think BNP, they've got more than 800 AI use cases in production from Mistral. So there's a lot of good businesses growing fast.

40:06They're creating real value from an application perspective. And it looks like ASML will get that too. So yeah, but completely agree. It's a symptom of the European venture ecosystem just not being able to write checks that size. And let's face it, 1.3 billion euros sounds like a lot, but it's not a lot in the grand scheme of things when, you know, Anthropic is raising$13 billion rounds. From Mistral's point of view, it's a no brainer. Like these people wrote a very, very big check into the company and clearly they would have tried to tap the VC markets and had limited success. I was a bit surprised by that.

40:42You know, they've got Lightspeed. Lightspeed have been there from early stages and they have a lot of capital. But from ASML, I have been trying to think why, why would they do this? You know, actually this is quite a big check for them. You know, what's the strategic relevance? I, I don't probably think we all are party to the precise internal strategic rationale there, but you know, I could, ASML is a one trick pony and they know that, you know, they have a 90%, you know, basically monopoly on, on what they do, but that ain't gonna, that ain't gonna, you know, be there forever. And actually, you know, I was just thinking about this, look at Illumina.

41:16Illumina had a 90 % market share in next generation and sequencing, right? 80 billion market cap company. Now they're losing their monopoly. They're down at 15 billion market cap. In a way, like if I was at ASML, I would have looked at what happened to Illumina and I'd be thinking the same thing. This could happen to us. Andrew invests a lot in sort of next generation compute, future of compute, for example. What happens if we move beyond Silicon? What happens if we move to stacking? What happens if the EUV becomes less relevant in the future? What happens if AI actually absorbs less compute than we thought, which means we sell fewer machines.

41:50I would also suggest that there probably is the hand of Brussels in this somewhere. And I'll tell you why. Because there are, I think, 5 ,000 independent suppliers that supply ASML dotted around Germany, Benelux, France, right? All of those, that's tens of thousands of jobs that rely on ASML being a dominant position, right? And actually, if ASML starts to lose its crown, actually politically, that's really, really dangerous for the EU. This doesn't solve ASML's risk of losing its monopolistic position, but I think it gives ASML a slightly deeper view as to what's happening at the model level, gives it maybe a little bit more soft power and positioning around the world when it comes to AI.

42:38I think it's great to see this. Normally, we see the Europeans getting quite protective individually within the EU, which is the whole problem. Actually, it's good to see some collaboration between two of the bigger member states economically. But I'm just trying to work out why Airsmob would write this check, you know? I mean, it's not as if they print 8 billion a year, right? Which is a lot, but it's also like, this is a big check for them to write, you know? When also, sorry, they print 8 billion a year, but they have a huge, they have huge capex internally and constantly trying to stay ahead of the game.

43:10So it's not like they couldn't have just carried on spending and investing in the future of their machines, you know? I think they're going to get some applications that will help them directly improve the performance around maintenance, around kind of the sign of next gen processes. So I think they'll get a lot of real world AI expertise that they can use to optimize. Sorry, I just want to jump in on that. Don't you think that? I mean, they could have just become a, they could have just licensed some software. They don't have to spend a check this big. No. And take an equity stake to get access to this.

43:39They've got very operationally involved. If you look behind the scenes, there are now, there's some cross fertilization of people. If ASML want to use more AI and it's like any manufacturing company wants to use more software and AI and its development processes, they don't have to go and take a large equity stake in a supplier. No, they can just license it. In many ways, nobody has to do anything, but it's probably a great deal too. I mean, that's the point I was making before. 14 times revenue at this growth rate, that's great. You know, next year, they continue to grow at this rate. It's going to be five to seven times revenue.

44:11That's a really good investment. and you get somebody on the board and you have a direct line through to the CEO, you get to shape the future of the company. So this is the difference, in my view, between European mentality and US mentality, which is always, we look at this mentality of scarcity. Oh, all this other stuff we could do with the money, blah, blah, blah, blah, blah. Listen, this is a good deal. You create a lot of value for them. Let's go for it. I agree with Mads. And I think if you've got the founder of a LLM, not just at L &M, but frontier open source, as well as proprietary, you know, deep generative AI on speed dial when you're trying to accelerate the capabilities of your manufacturing processes, God knows what, I mean, you know, the sky's the limit.

45:01That person is on speed dial and they're not just licensing something, not just in a queue, you're, you know, they're down the road and on speed dial i i agree that my point my point was i'm i'm trying to work out why the hell would asml do this and i think i i think that's the reason they need they need to be rings because they are at risk they are this one trick pony they are at risk of having their monopoly broken at some point they need to be ringside for what's coming down the pipe and this is the price for that and it's fine okay mad i don't like okay yeah it may be for i don't think anyone on the board of asml is thinking this is a great like you know multiple arbitrage kind of deal because that's not how these companies i don't think and maybe fine that may be a byproduct of the transaction but i i think it's that i think it's and actually this is actually refreshing because you wouldn't see normally europeans thinking like this probably actually mad they would be thinking in court in hardcore terms of pure roi this is more strategic let's build together probably what like you know in the us when you had one big company ring up another being like you know let's do something together man this would say and they would write a one billion dollar check into something that's non-core that kind of shit happened the whole time in silicon valley good to see that happening on kind of big scale in europe i think blemick's point is right that there are one trick pony in the sense that they produce you know the most advanced machines in the world and if you lose that if you no longer produce the most advanced machines in the world because someone overtakes you then that that's what underpins your monopoly so he's spending a billion to to be you know at the forefront, to have the ear of the CEO, to understand what's going on is not a lot of money in order to underpin your entire business and reduce risk.

46:42The more interesting question for me is whether it is just that or whether they are thinking sort of more strategically about diversifying the business. And this is a first step towards that. And what I love about the the biggest American companies is Amazon becoming a data center and infrastructure company and SpaceX becoming a provider of global internet. That ambition level and that willingness to roll the dice again and again and go to new markets is I think what makes the biggest companies in the world stay big and more and more dominant. And I'd love to see some more of that ambition from some of these big corporates in Europe that have very large balance sheets and could just risk some of that capital like go out there and you know you've done it once spent spent I think it's great I think I think it's I think it's a great thing and Europe on Europe bring it on Mike anything else I know you've looked at this deal quite closely anything else from you any dirty secrets we can share well I'm gonna be putting up a column about it but on my socials, but I just want to sort of echo, I think it is a sort of a strategic deal.

47:54It's getting that direct line to the frontier models. I wouldn't read too much into the sovereignty aspect, and that's something that I certainly was quite interested in, you know, was there conversations at Brussels level, come on, guys, smash your heads together, let's get these guys going the road. but I'm not even sure anyone's really tuned in enough to know what's going on at that level but the sovereignty aspect I think is interesting but I think it's a culture thing as well because I think like I said these guys you know they're up the road the Netherlands and Paris is down the road and I think if they looked at if Mistral had looked at the similar kind of deal and probably people were knocking on their door in the US I think the culture fit might not have suited them quite as well and i think that's probably one of the major that's certainly the feedback that i've got from my sources is that that culture fit was a big piece of the piece of the decision making well we will definitely look out for your column so please give us the link and we'll put that in the comments of the pod i want to shift gears a bit into defense so we've seen this week we saw obviously Doha being bombed.

49:08We've seen the drones coming in from Russia into Poland on purpose, not on purpose. We don't know. I don't know how they can't be on purpose, but we'll wait and see how that pans out. It just feels like a few lines have been crossed and defence still very heavily on everyone's minds across Europe. Now, in the UK, the government has pledged to lift defence spending to two and a half percent of GDP by 27. And there's a promissory note to get that to three percent in another three years. We'll see if that happens. As part of that plan, this week, 250 million has been committed to five local economies, basically outside of London and the Southeast to invest in defence, dual use and the industrial side, this resilience piece.

49:52Prioritising British and UK-based defence firms and all about developing regional defence partnerships between government and these other areas of the UK. So feels sensible. There's a slight possible, you know, shoving this money out into the regions feels like there's obviously a political angle. But Mads, where would you take this one? Yeah, I mean, that's a good question. I think the big context shift is you've got kind of the first NATO engagement with Russian assets, that sort of changes everything. And we saw Poland was quick to invoke Article 4. That means there's a kind of consultation between the NATO members.

50:31That means there's an urgency across the alliance. And I think UK strategically has taken the right direction, but events are somehow overtaking the planning speed. So it's probably something we're going to discuss is how can we move faster here? Because it's clear we've been talking about Russia for many years now. And there is movement, but are we moving fast enough to really step up and counter the threat we're seeing? So on the UK side, where would you take that? Yeah, I mean, look, there's some money being put into strategic hubs. It's probably fine. It looks like relatively small fry still.

51:08250 million does not get me. I'm hearing not excited. I mean, I think one of the questions you asked is, you know, how do startups engage, right? Can they? Does it make sense? My sense is, listen, if you're not already engaged, probably not, I would say intuitively. Then again, look, there is a massive need for improvement in manufacturing and supply chain. If you have cool tech in that space, there might be dual use applications. So in that sense, you should partner with folks and companies that are already operating in the space. Very quickly on that one, Mads. This first T50 is the initial unlock of the, or someone correct me if I'm wrong, I think it was 2 billion pledged in total.

51:46So there's more pots of capital to come for more investment across the MOD and government departments where there may be more opportunities for startups to engage for discussion. No, I mean, look, it's good, right? We just need more. It comes down to how real do you think the threat of having to go to war is as to how urgent you think the problem is. as we talked about before the the ability to wage war is not just whether you have enough tanks but it's your industrial base it's your capacity to spin up and build and ensure your supply chains are resilient and you've got access and there are so many holes in the european setup and the uk setup at the moment you know i think there's one factory in europe that produces all the tnt what happens if that factory gets you know blown to pieces you'll have no more tnt and so this is about you know i read this as a sort of hat tip towards trying to to accelerate to industrial capacity um which we don't really have compared to you know the late 30s where we were able to spin up a warfagon machine because we had a civilian shipbuilding industry we could repurpose we had the factories and we just don't have those anymore so we've got more ships being built and but we have i mean the the danes and the norwegians are now throwing things into scotland and up north aren't they?

53:01Your MADS, your fellow kin? China can build like 40, isn't it? 40 major ships a month or something. It's insane. It outstrips all the other world's capacity combined to build shipping. So I think it's obviously it's positive because it underpins, you know, those regional industries. Will it result in 50 ,000 jobs by 2035? I don't really know or care. I care about will contracts follow from government to support these industries. And I care about will that result in capacity for our industrial base and for our military, which is going to be a big enough stick that bad actors think twice. So it's all good, but even the budget increase is up to 3 % and beyond.

53:47A lot of these increases will only pay for what we've already committed to. People forget that they think it's new cash coming in. The budgets are all so out of whack. Then actually a lot of this money coming will simply pay for what was committed to the capacity years ago. We're not even into service yet. So definitely some pork barreling in this report. There's definitely just like shifting money around the country to curry favor in different regions. And the numbers are very small. 250 million out of 55 billion total annual budget is a drop in the ocean. If you're a startup, this report tells me that the UK is just still, despite all of the lip service that people are paying to innovation defense um and a high degree of speed i think the uk is still is still um very slow so i think you need to go to the hair on fire problem which is the um the eastern eastern block eastern front effectively you know and look look look what's happening in poland i mean their defense is defense spending and as a percentage gdp is way higher than ours they are actually and probably probably up after this week look i mean if you look at anecdotes that I've had from founders in Poland, uh, negotiate, uh, negotiating through procurement cycles, everything, they are literally cutting all of the procurement channels now just to buy stuff.

55:00Yeah. That's not happening in the UK. Right. So that's happening because it's a real hair on fire problem, unfortunately. And so, you know, this kind of. If so facto, like defense budgets are going to triple quadruple over the next five, six years. therefore it's a great place to build a startup like be careful you know i mean you look at the you look at the companies that have the sort of relatively new non-prime companies in the uk that have won big defense contracts palantir yeah like clearly well-funded i mean that's a 22 year old company right but like it's not exactly a startup and takiva you know which is a portuguese company down the road from me in lisbon which won a large contract with the raf they're buying an airport in wales now that's quite a good story they're investing a lot investing 400 million pounds locally to kiva is a 20 year old company it's a startup you know it got like a series something when is a startup not a startup when it's not growing when it's not growing super fast anymore i think that the bit the the procurement stuff that lomax you picked i mean i think there have been improvements to be fair to to british procurement site it's not where it should be but it's getting better but there are some other sort of challenges which are cultural within how they not just just the speed at which you procure but what you procure and what the military want and one of the reasons that the big the military like buying big ticket items like ships and expensive aircraft is because it's quite hard to slice and dice those projects so once they're sort of it's proved that you spend billions of pounds on a ship the chance is that if you bid you say you need six ships then even if a new the government comes in a slice of the budget, you'll probably end up with four.

56:36If you need 1 ,000 drones to protect airspace or you need 1 ,000 attack drones or 10 ,000 drones even, it's not much help if actually a government comes in and cuts that down to like suddenly 500 drones. It's very easy to get sliced and diced when you have a lot of something which is low cost. It tends to get chopped in half and then drawn and quartered again. And so actually there are some fundamental issues around how we need to rebuild our military capability with a lot of things that are cheap, which go against the entire heritage of how you buy stuff because of the fear of politicians coming in and just slashing the budgets.

57:15And after you end up with a capability that doesn't have efficacy, it won't work. Well, I mean, you talked about Palantir, but we've got Helsing trying to be a kind of anduril of Europe, you know, producing drones, battlefield AI, various kinds of things. And I think that they I think they just recently just made an announcement with a partnership around something technical to do with battlefields, you know, logistics and what have you. So there's all that all these kinds of deals going on at that kind of level. at a startup level. I mean, I want to give a shout out to my friends over at the Resilience Conference that's going to be happening in October.

57:57I think under the hood, there's quite a lot happening that doesn't get talked about, that doesn't see the light of day. And it is probably going to be at these smaller levels like drone testing with TechEver and pilots with small technology providers. I still think though that Ian Clark in the 1970s said that effectively the militaries should always be in R &D until there's an actual war and then suddenly you've got the up-to-date stuff but until then stay in R &D and that's kind of where we are especially in dual use and dual use has got legs because you can sell into the civilian market and you can take longer timelines into selling into primes or military but i think there needs to be a real policy initiative among primes and just hammering them down to just say like let's buy from smaller companies let's buy faster let's do more r &d and then much more of like a policy approach a legislative approach to like smash the primes up a bit or beat them around the head and get them to buy from the smaller providers like andrew's invested in a very interesting startup that does does engines for instance for for drones and things.

59:14So, you know, I think there needs to be a lot more of that going on as well. So here's some other things that were on my mind this week. Not all Eurofocus, but I thought some of them were interesting. So I'm going to put them in the pot. Anyway, Larry Ellison of Oracle fame became the richest man in the world for a few seconds, beating Elon Musk. And there are some very good reasons behind that. I don't know if anyone wants to chime in on that. We saw Klarna's IPO at Time of Press did really well. And it's since kind of quietened down a little bit. but I think the Klarna IPO was pretty solid. We've talked about the German cabinet changing the tax rules for founders and VCs.

59:49Don't know the exacts on that yet, but I thought that was a really cool, interesting thing. Who's buying a skinny iPhone? I have no idea who that market is. I don't know if anyone's got any thoughts on that or anything else on your minds. So Mads, I'll start with you. Anything in there to pick up on or anything else you'd like to talk about this week? Look, the Klarna IPO finally happened. Yeah. And that's great. It wasn't bad. Listen, listen. So, yes, sure, it's down a lot from the peak. I think the peak valuation was$46 billion, and it's down to, what,$15 billion now. But it's raised money. It's oversubscribed.

1:00:26Revenue is still growing, although it looks like they're losing money, which I can't quite work out how they can still be. But anyway, I mean, I think the lesson there, I think, is it's better to IPO at a realistic valuation than to wait forever. And I think this is one more great company that's through the IPO gates, right? And it'll help distribute some liquidity back to LPs and sort of, you know, stimulate the recycling of capital into the next generation of startups. So overall, I think it's pretty positive. I spoke to a Sequoia partner today, and they said they were very happy with the result.

1:00:57Well, Sequoia made, I think,$3.5 billion on a$500 million check, right? So a$5 million series of checks. Atomico actually were reasonably big winners if you want to, you know, highlight a European success. They invested, I think,$12 million. And I think their total holdings now are$150 ,000. So 10x,$12 million. It is over 13 years. It's quite long. But, you know, it's not a bad result. Standard for Europe, though, baby? Anyone. It takes a long time to build a big company. But, yeah. We talked about it earlier this year. Klarna missed the window. Remember, they filed their S1. And then we had Liberation Day, whatever, tariffs, et cetera.

1:01:32And the markets tanked. And Klarna missed it. But actually, it's probably a good thing they missed it. because they actually came back in a more robust environment and it actually performed very well. So let's see. Mike, anything in there you would have an opinion on or anything else that you'd like to discuss before we vamoosh? Come on, Mike, give us a scoop. Give us a scoop. Give us a scoop. Well, I'm slightly out of day-to-day news production at the moment, but I'll let you know when I'm back in. But I thought it was really interesting how it's going to create a lot of millionaires. You've got, I think I was noted that co-founder Victor Jacobson, who left in 2012, cashed out three and a half percent of his$1.6 billion holding.

1:02:17Chief product officer made, became a millionaire, chief operations officer. So we're going to see a bunch of angels. We're going to see a clan and mafia basically come out of this. Recycling, baby. be yeah and so the clan and mafia will will go into the ecosystem and long may they reign that would be interesting to see what they do next andrew anything else from my list or anything else on your mind before we go there's a big microelectronic process of electronics show excel which i won't be going to but it's nice to see it happen that sounds very sexy jesus because how to drag the room down we can't end on that note but what we should end on is quantum Oh, my word.

1:02:56Quantum is pumping at the moment. Yeah. No, no, no. Not again. You know, it was massive deals. Cyquantum had just come out and announced a one billion dollar raise. Now, Cyquantum, which came out of Bristol, let's not forget. I mean, it's kind of built as a US company, but originally the academics were based in Bristol. So it's really a kind of UK origin project. And seven billion valuation. We talked about Quantinium two weeks ago. Quantinium also originally out of Cambridge. right so actually you know europe is playing a material role within within this quantum to quantum boom at the moment and there's a general feeling amongst the investor community that we are getting closer to really useful quantum computers i mean the market certainly thinks that iron q is now trading at 13 billion low max would you say that europe's got a leading quantum over the us um no we've got a chance of winning but we're gonna we're gonna have more money is gonna have come from somewhere look i mean look at this so iron q us 13 billion you know quantilium now has become a u.s project 10 billion you know um psyquantum 7 billion iqm out of spinland just raised you know i don't know 1 billion valuation um and i i you know mike oxford ionics right which sold uh i know four months ago out of oxford obviously to iron q at a 1 billion valuation it's funny how in europe now we talk about all these exits 1 billion 2 billion you know these valuations and these fundraisings, like these numbers we would have been like hitting the roof about, you know, a few years ago.

1:04:23So it is all kind of all really exciting stuff, but you know, selling to a U S company is not great, but we have got amazing talent in Europe, but it is probably an area to answer your question, Mike, where I think we have relative parity. I mean, Andrew, maybe it's more bullish and thinks we'll win. I don't know if you regard quantum as a winner takes all market, but certainly Europe has parity technologically with the U S. well on that note gentlemen i'm gonna i'm gonna call a day there and just say i love the fact that we ended on an upside thank you so much hello max for bringing that and always rely on you for not being a debbie downer loving it mike thank you so much for joining us it's been a gift and thanks very much next week great to see you mike thanks mike cheers

1:05:17Thank you.