E99 [AI-Translated] SpaceX | De Vigier Award | Dealroom Schweiz | Merantix | Market Snapshot Mai | Exit-Komm | Mosaic

00:00:00: The original podcast was recorded in German.

00:00:03: This podcast Hello.

00:00:13: Welcome to Burn Rate, the VC Insider podcast!

00:00:16: I talk here with Guy Gifredi about a startup scene with focus on venture capital.

00:00:21: We have reached episode ninety-nine and we are recording Wednesday, the tenth of June at nine o'clock in evening.

00:00:27: This podcast is sponsored by our partners Aventures & Wenger Vieli.

00:00:31: So guy what's todays topics?

00:00:33: Episode

00:00:34: ninety-nine Exactly extremely exciting...we've recorded this ninety times already.

00:00:40: Today is again a Transaction of the Month episode.

00:00:43: In the news, we first talk about The Divigiora Award which was presented this evening.

00:00:48: after that We look at A New Deal Room Analysis on the Swiss Start-up Landscape and then we also discuss the burn rate market snapshot.

00:01:05: This time for May, we cover the most important financing rounds and exits in Switzerland as well.

00:01:11: a brief look at Europe the pre-seed round by Founderful in Mosaic, and we go into

00:01:54: The bull case.

00:02:00: projection is correspondingly aggressive.

00:02:03: SpaceX could reach several hundred billion dollars in revenue by twenty thirty up from less than nineteen billion dollars last year, which already substantial one must say.

00:02:13: the biggest driver would then be Starlink through this significantly higher payload capacity of Starship.

00:02:19: That is the rocket.

00:02:20: It could allow SpaceX to bring new satellites into space faster and in particular, expand still young direct-to-sell business meaning satellite communication directly to smartphone without additional hardware.

00:02:34: On top of that there's all AI.

00:02:36: The conservative case is SpaceX simply sells computing power to companies like Anthropic & Google.

00:02:44: The more ambitious case is that Grock develops into a genuine alternative to Claude, ChatGPT and Gemini.

00:02:50: Grock?

00:02:51: That's the LLM from SpaceX.

00:02:53: then SpaceX would suddenly be not only rocket and telecom infrastructure but also relevant AI player.

00:03:01: So Guy what for you strongest part of this bullcase story Starlink or still the classic launch business?

00:03:08: Well I'd say now that starlink certainly major driver.

00:03:11: here I mean, the rocket business.

00:03:13: That definitely remains important but Starlink that really has the potential to generate recurring revenues on a completely different scale.

00:03:22: What will be exciting is what you mentioned The Director Cell.

00:03:25: If Starlink not only sells internet terminals But effectively becomes infrastructure for mobile operators Then the barrier For end customers drops enormously.

00:03:33: They might Not even have To actively switch providers And maybe then Swisscom and our Swiss providers No longer need to bother trying six G or five g antennas somewhere, which nobody wants anyway.

00:03:46: So that could still bring a major shift but they first have to pull it off.

00:03:50: the bear case of course is also Still interesting if Starship does not really come together as well As they expect today and then Starlink might Also Not grow quite as fast as They would like.

00:04:01: And Then Perhaps The Revenue Per Customer Also Comes Under Pressure.

00:04:05: for example If Companies Like Blue Origin Enter the Market and There Is A Price War in Satellite Communications That is then suddenly enormous pressure on SpaceX.

00:04:14: And yes, AI compute is of course an ultra hot topic right now.

00:04:18: everyone is investing in data centers.

00:04:21: at the moment computing power is scarce but maybe that is also only a temporary phenomenon.

00:04:26: and Then suddenly new data centers open up.

00:04:29: more efficient models emerge than The margins of space X could come under pressure If you know.

00:04:36: look at it from the investor perspective max.

00:04:39: Is SpaceX even still a space company?

00:04:41: Or has it by now become more of an extremely hard-to-value rocket telecom AI conglomerate?

00:04:47: Well, I took the trouble once to read the three hundred and forty page IPO prospectus at Leisure.

00:04:52: And it is indeed the case that evaluation depends very heavily on things where there's not yet much revenue being made.

00:04:59: That is a bit of an exaggeration, but it does apply.

00:05:02: I mean the stock market valuation is already crazy.

00:05:05: we looked at that this week and also saw there is this Elon magic multiple And that is off course already very substantial.

00:05:12: But yes It Is Also The Appeal But Also The Risk.

00:05:16: I Mean The Individual Business Units Potentially reinforce each other, Elon Musk has done that well.

00:05:21: Rockets bring satellites into space more cheaply.

00:05:24: Satellites generate telecom revenues and this infrastructure can in turn enable new data and AI businesses.

00:05:32: so a classic flywheel.

00:05:34: the biggest wildcard remains Elon musk himself.

00:05:37: he is on one hand significant part of the investment story.

00:05:42: On The Other Hand He Is Also A Classic Key Person Risk.

00:05:46: When We Invest key person risk is very, very decisive for us.

00:05:51: So the decisive question here is therefore not only whether SpaceX rises or falls on the stock market in the short term but whether the company already has a stable foundation?

00:06:02: Or whether the entire vision still depends heavily on one person and of course it does so.

00:06:07: if Elon Musk has a heart attack tomorrow that probably even more likely than for an average person or he does not come down from a trip.

00:06:16: That is also possible, probably also more likely then for a normal

00:06:19: person.".

00:06:20: Then the whole story's of course gone.

00:06:22: but yes one can always say that you can always see.

00:06:25: until now Elon Musk has been sensationally well on track and probably The Columbus Of Our Time And I find this guy absolutely brilliant.

00:06:33: One can already argue about his statements in second word But if i only look at business activity i have to say hats off.

00:06:41: that is beyond.

00:06:42: I believe we will still be talking about Elon Musk in one hundred years what he has accomplished and above all, With that, SpaceX remains one of the most exciting but also most demanding valuations in the tech market.

00:07:01: One must say extremely large opportunities very high expectations But many open questions that will only be answered in the coming years.

00:07:10: my students asked me this week Yes would you invest now?

00:07:14: It is hard to say.

00:07:16: I think on the first day we will see a strong rise in the first few hours.

00:07:20: And I mean, the lockups are of course substantial so the top managers are not allowed to sell immediately.

00:07:26: but these lockups then end after six months usually.

00:07:30: and if you now think back to the year two thousand and The bubble that burst it burst precisely at the point when the top Managers no longer had these lock ups and then sold shares massively?

00:07:42: And i think the share price could develop similarly than It is very possible that on the first day, meaning distributions.

00:08:16: Today, an interesting article in the NZZ how many millionaires SpaceX will create?

00:08:23: So all these people can of course put money back into the system and invest in private equity and venture capital which is certainly positive from these.

00:08:32: IPOs also announced this week that they are going to the stock market and also shopping.

00:08:41: That is good for us, it's good for the market!

00:08:44: And we'll ensure that imagination still present a little bit in near future.

00:08:50: Good let me get into news of the week... Namely you're coming directly from a party?

00:08:55: Namely from The Division Award which was presented this evening.

00:09:00: The De Vijeur Award is one of the most important and traditional startup prizes in Switzerland, namely since nineteen eighty nine.

00:09:08: And the foundation supports young entrepreneurs in transforming innovative ideas into high growth companies.

00:09:16: especially an early phase this support can be decisive.

00:09:19: we know that In addition to the prize money, the winners receive access to a strong network of investors alumni and industry experts.

00:09:28: This year up to five awards will be given each endowed with one hundred twenty thousand francs.

00:09:34: in total The foundation has already distributed more than fifteen million francs To Swiss startups.

00:09:41: this makes the award not only recognition but also an important impulse for the swiss innovation And startup ecosystem guy.

00:09:50: You are an ambassador of the Divigior Foundation and you were there at the award ceremony this evening.

00:09:55: How was it?

00:09:56: Well, of course very good I cannot say otherwise.

00:09:59: The event takes place each year essentially in the summer house of the diviger foundation in solitarn a Very beautiful property.

00:10:08: In the basement There is no internet so everyone effectively has to listen And watch what he's being presented on stage.

00:10:15: You do not always have that, the phones remain so deeply hidden in pockets and anyone who looks at them immediately puts it away again.

00:10:23: The event was very well organized.

00:10:25: Hannah & Celine did a good job there.

00:10:28: Audrey Hoffman, who presides over the foundation now also gave an intro on how the DeVigio Foundation analyzes and supports founders... And they are clearly on line!

00:10:40: It is not only a business that should be built, but effectively a problem should be solved and that should addressed sustainably.

00:10:48: Not just hey I build up quickly generate revenue then sell the thing as quickly possible for higher price.

00:10:56: of course you can also notice in selection between entrepreneurs who were among the final ten and topics they had there.

00:11:04: One must say the winners.

00:11:05: congratulations to five prize winner.

00:11:07: those were dental robotics.

00:11:09: They make a small mobile dental system where dentists can go to customers at home in that sense, small and stylish and handy.

00:11:17: That has enormous

00:11:18: potential.".

00:11:18: I was a little surprised.

00:11:19: they won the prize or one of five prizes.

00:11:22: Carol Nano we have already reported on them several times also won the Prize.

00:11:27: They made post-silicon compute with carbon nanotubes described themselves as next ASML extremely exciting technology.

00:11:35: The other three were again in MedTech health tech space.

00:11:39: Alpinassana addresses malnutrition.

00:11:41: Kriya Technologies is also still an interesting case, they have developed a technology for how to transport biomaterials cryogenically meaning extremely cold minus eighty degrees or lower with high vacuum very simply.

00:11:58: and orthocents we've spoken about them a number of times.

00:12:02: on burn rate They are supposed to monitor and support the healing process after surgery for implants.

00:12:09: The five further companies, those would certainly be ones that were almost a little more exciting or at least also exciting one in quantum space with Kendra Windworks in clean tech space.

00:12:21: then there was iron energy storage based on iron Upgrade a major topic.

00:12:27: How do you get the energy from solar panels, smaller operators into the system and how to manage that?

00:12:33: They have built software for that.

00:12:35: And last one was also bio start-up with ADS Bio.

00:12:41: All in all I would say very well chosen startups!

00:12:44: The founders did great job there.

00:12:47: Yes i will definitely continue support foundation as an ambassador.

00:12:52: Give good founders small hint.

00:12:54: They should apply there because it really is a good price with good reach.

00:12:58: On top of that, you have course met many investors and also people from the

00:13:02: ecosystem.".

00:13:03: The mood was very positive.

00:13:05: Good!

00:13:06: Mood Very Positive.

00:13:07: Let us take this to the second piece news.

00:13:09: A new analysis from Deal Room delivers fairly typical Swiss result internationally relevant excellently educated and efficient but not particularly large.

00:13:20: In the global comparison of the largest startup hubs, no Swiss city makes it into the top twenty.

00:13:26: But once you put performance in relation to population size meaning per capita The picture looks considerably better.

00:13:34: Lausanne is among leading locations worldwide.

00:13:41: Zurich at rank sixteen.

00:13:43: and in the defense tech sector, Zurich also makes it far towards the front.

00:13:47: So guy is that now only good news?

00:13:50: or Is It a politely formulated hint?

00:13:53: That Switzerland despite excellent universities And A lot of deep-tech research still struggles to build truly large startup hubs?

00:14:02: Well I mean one can clearly say i mean that is not unknown.

00:14:06: Switzerland certainly does not have an innovation problem.

00:14:09: We've been the Innovation World Champion for over a decade, year after year and Lausanne and Zurich show that from research... ...from universities with very specialised talent many also good start-ups can emerge.

00:14:22: The report clearly shows.

00:14:24: Yes, we still have a little bit of a scaling problem.

00:14:27: If you want to play in the league of the largest ecosystems then You simply need a lot of capital enormous international visibility and companies that when they grow from seed stage To global champion demonstrate that end up present worldwide.

00:14:41: Switzerland is better positioned with hidden champions who do not lean out Of the window quite so broadly And also do not quickly reach hundred billion valuations as one often sees In The Bay Area now also recently in London, and of course New York.

00:14:56: Those are far ahead of everyone else!

00:14:58: I would say.

00:14:59: an interesting question that crystallizes here when you read the report in detail is does Switzerland actually really need a single startup metropolis?

00:15:06: Or will it be more realistic to position Zürich, Lausanne or Basel all locations as common Swiss ecosystem essentially as a metropolis Switzerland?

00:15:16: Max what do think about this?

00:15:18: Well, I think the network is already a strength.

00:15:21: The distances are short and regions complement each other well.

00:15:25: Lausanne with EPFL & AI Zurich with ETH and Fintech DeepTech Basel with life sciences.

00:15:33: But yes, internationally there needs to be clearly recognizable lighthouses.

00:15:37: nobody abroad automatically thinks in terms of a networked Swiss cluster.

00:15:41: that is why you probably need both I think better collaboration within Switzerland and at the same time more ambition To make individual hubs more visible and larger.

00:15:50: so The question is therefore does one want?

00:15:53: I mean Switzerland alone would I think already be a good lighthouse?

00:15:56: So that one says Switzerland equals innovation world champion.

00:16:00: And within Switzerland, there are various clusters.

00:16:03: whether one now tries to market the individual hubs so Market Basel individually, Market Zurich individually and EPFL which is kind of happening a little bit at the moment.

00:16:13: I think it's considerably more difficult.

00:16:16: Long story short i'd wish for better stronger collaboration with individuals in Switzerland.

00:16:22: That is currently, I do not know how you see that but not yet happening or to the desired broad effect.

00:16:36: Let us come to the third piece of news.

00:16:39: Merantix Capital has closed a new fund of one hundred and three million euros.

00:16:44: with that, The Berlin based AI investor wants to finance around forty European startups roughly half through classic seed investments ,the other half Through its own venture studio.

00:16:55: what is exciting here?

00:16:56: Is not only the fun size but above all the approach.

00:16:59: Merantics sees itself Not as a classic investor But as an ecosystem With an attached Fund.

00:17:05: The company wants to provide founding teams not only with capital, but also connect them with industry partners potential customers and talent.

00:17:14: I personally find particularly interesting a statement from Morantics founder Adrian Locker.

00:17:20: the venture studio companies would as rule already have first paying customers before they even written single line of code.

00:17:28: The focus is primarily on AI applications in areas such as robotics, manufacturing logistics healthcare bio life science and fintech infrastructure.

00:17:41: With large language models an interchangeable AI tools without clear differentiation Morantics by contrast deliberately cautious.

00:17:51: Guy, is this approach meaning customers before code and deep integrations into existing value chains?

00:17:57: From your perspective the right European counter model to US models?

00:18:01: or are there a risk that Europe thereby builds solid B-to-B companies but leaves truly large AI platforms for others.

00:18:09: Well perhaps first one must also say... This is now the strategy of Merantix Capital.

00:18:15: They're not only investors in Europe.

00:18:18: they pursue very clear thesis.

00:18:21: Accordingly, we now focus really on what they are doing.

00:18:24: We are in Europe very much deep tech investors who also do not shy away from investments that go beyond just the application layer but customers before code.

00:18:35: I actually find a good reality check because it prevents startup simply building something and thereby completely missing real market.

00:18:43: especially in AI space.

00:18:45: you can quickly develop impressive demos.

00:18:47: today.

00:18:48: The decisive question that remains is whether a real problem is being solved and whether the customer's actually willing to pay for it.

00:18:56: But at the same time, this must not simply turn into individual project business.

00:19:00: It is decisive what happens after first customer.

00:19:03: Can the solution be standardized or deployed as product in many companies?

00:19:08: Or does every customer then need custom solutions more than consulting businesses?

00:19:13: In the first case, a large software company can emerge from that.

00:19:16: And in the second case... Well, THAT is simply the actual consulting one builds!

00:19:23: Europe does not therefore necessarily have to produce THE NEXT open AI – in my eyes or also in the eyes of Morantics.

00:19:30: But Europe should also NOT ONLY become an integrator of American AI models.

00:19:35: The opportunity lies in developing scalable products with global ambitions From strong industry relationships which Morantics has.

00:19:42: This episode is presented by ARE Ventures, the Bernie's Business Angel Club.

00:19:47: ARE Venture brings ambitious Swiss startups together with experienced investors who offer more than just capital A strong network real expertise and hands-on support for their decisive early steps.

00:20:00: If you want to grow as a startup or an investor are looking for access Then apply for our next event at www.ouraventures.ch.

00:20:11: Venger and Vieli, your partner law firm for startups.

00:20:14: Whether founding financing round or exit Startups face complex legal challenges.

00:20:20: Venger & Vieli accompanies founders At every stage of their company With tailored advice on corporate Law Financing Tax issues And IP protection.

00:20:30: Venger&Vieli Your legal counsel For startups.

00:20:34: Let us get to the main topic.

00:20:36: Today, that is the burn rate market snapshot for May twenty-twenty six.

00:20:41: let's start with Switzerland.

00:20:43: according our compilation only thirteen financing rounds were published in may where the amount was also communicated.

00:20:51: approximately one hundred and ninety million swiss francs of fresh capital we're invested in the companies.

00:20:57: two million in grants came on top of that.

00:21:00: prizes are all so included.

00:21:02: Then there were further strategic investments and some financing rounds where for once no amounts were published.

00:21:10: In terms of volume, May is slightly below April.

00:21:13: in April two hundred twenty-two million we're invested but the picture is somewhat different when you go deeper... ...in April We had a very broad mix of AI climate tech industrial Tech and capital market transactions And in may that was a very clear focus namely life sciences.

00:21:32: That is also nice to see.

00:21:34: Exactly!

00:21:35: The largest fundraise of the month was WindwardBio, the Basel-based biotech company raised US dollar one hundred and sixty five million dollars.

00:21:44: The round was led by OrbiMed.

00:21:46: participating additionally were among others AA Capital, Sanofi Ventures, Novo Holdings & further specialized healthcare investors.

00:21:56: Windward Bio is working on long acting therapies for immunological diseases.

00:22:01: What is exciting here, not only the size of The Round but also The Pace.

00:22:06: The company was only launched in twenty-twenty five and has since raised a total of three hundred sixty five million US dollars.

00:22:14: Additionally we have special case Nucleidum.

00:22:18: The headlines from May speak off series B of one hundred and five million Swiss francs.

00:22:24: that's correct!

00:22:25: But In may one hundred five million were not newly invested again.

00:22:29: rather the Series B was increased to this amount.

00:22:32: The extension, meaning new investment, amounted to approximately twenty-six million Swiss

00:22:39: francs.".

00:22:39: Well I find both transactions.

00:22:42: they illustrate for me an important difference between biotech and software cases.

00:22:47: in Biotech very large amounts of capital often flow into the company before any or relevant revenues emerge.

00:22:53: Clinical data has to be collected, a credible pipeline has to built.

00:22:57: And yes you then have to convince the specialized investors from these fields that a lot of capital is invested so they can get market at all.

00:23:05: Besides two large transactions there were also few more life science and medtech rounds.

00:23:11: Biocopy from Baseland raised nine million.

00:23:14: Neurosoft bioelectronics from Geneva closed a seed round of seven and half million US dollars.

00:23:20: They developed brain-computer interfaces on the surface of the brain without having to penetrate deeply into the tissue,

00:23:26: And outside of life sciences we continue see an interesting breadth.

00:23:30: Stellar alpina for example raised three point five million Swiss francs.

00:23:36: The young Zurich based startup develops compact detonation based propulsion systems for mobility in space.

00:23:44: Avian closed a pre-seed round of two million Swiss francs and is working on systems for the early detection of industrial fires, And Mosaic which we will come to talk about later raised a three point eight million US dollar around for real time spatial intelligence so one can say AI remains present but AI was not the dominant capital magnet in Switzerland In May.

00:24:08: The same applies.

00:24:10: The largest deal of the month was by far Limitech biologics.

00:24:14: They were acquired by Eli Lilly for up to seven hundred and eighty million US dollars, some defined milestone payments are included in that so direct transaction value is not quite high.

00:24:26: Limitec develops vaccines against bacterial infections.

00:24:30: We briefly touched on what they do in the last episode, I believe.

00:24:33: The next exit was Nealab.

00:24:35: They were acquired by US company.

00:24:37: nine oh eight devices for twenty three million.

00:24:40: and then there is Curly, Swiss manufacturer of dog harnesses and accessories which was acquired by Thule just under seventeen million francs assuming all conditions or milestones are also achieved in coming years.

00:24:52: Then we're a few transactions where no amounts were communicated.

00:24:56: But I find it very good when we see three transactions in one month where the exit is actually also reported.

00:25:03: We will talk about that in a listener question.

00:25:05: Yes, you are right Exactly.

00:25:07: That really is, otherwise it always that people do not share that.

00:25:11: now we have a countertrend there and overall the exits are an interesting mix.

00:25:16: We had biotech industrial analytics consumer brand with Curly and IT services.

00:25:21: so the exit activity broader than financing side.

00:25:25: in May.

00:25:25: let us briefly look at startup ecosystem outside of funding rounds.

00:25:30: One highlight in May were the Swiss startup days in Bern around The Collective Gathering and Startup Days, where the Swiss start-ups scene came together for two days.

00:25:40: That is relevant because especially in a selective financing environment personal networks and exchange between founders investors and corporates as well politics are gaining importance again.

00:25:52: then we had ZKB pioneer prize at Technopark.

00:25:56: The main prize of one hundred thousand francs was won by RDDT laboratories.

00:26:02: All five prize winners who were on site are extremely exciting in my view and the accelerator programs House Start Accelerator and Microsoft AI accelerator, where concluded gave the participating companies a lot visibility.

00:26:17: And finally, the SEF Growth Awards were also presented last week at The Swiss Economic Forum.

00:26:36: I also find it striking how international the capital flows were this month.

00:26:49: With a large rounds again, we have specialized global investors at the table and with the exits everything was sold abroad so that Swiss IP is being taken over or partially takeover by abroad through participations.

00:27:03: That confirms once again We are globally connected in Switzerland.

00:27:07: but The old question remains How much ownership value creation and long-term upside effectively stays?

00:27:15: Let us briefly look at Europe.

00:27:16: For May, a considerably stronger financing picture shows itself here than in the previous month.

00:27:22: In four complete weeks from the fourth to the thirty-first of may more then two hundred and forty five financing deals with total volume of at least nine point.

00:27:30: six billion euros were recorded across europe in april.

00:27:34: we are around five point.

00:27:35: one billion euros.

00:27:37: may was therefore again very capital intensive months.

00:27:40: At that same time it is important.

00:27:42: These figures include different forms of financing, among them classic equity rounds growth financings as well also debt.

00:27:50: The largest deal came from the UK.

00:27:52: pure dot DC secured financing off two point seven billion US dollars for the expansion of its data center infrastructure in Europe and the Middle East.

00:28:03: that is not a typical startup round but it shows very clearly where a lot of capital is currently flowing into the physical infrastructure behind the AI boom.

00:28:12: It is nice to

00:28:13: see

00:28:14: that data centers are also gaining speed in Europe and not only being built in the rest of the world.

00:28:20: while we look from behind, The second large transaction – Also form UK Isomorphic Labs.

00:28:27: Many will certainly have heard them.

00:28:29: They received an investment of USUSD USD.

00:28:33: The company was founded as a subsidiary of Alphabet out-of-the-deep mind environment and is headquartered in London.

00:28:41: Building on technologies like AlphaFold, Isomorphic Labs develops an AI-based platform that's supposed to identify new drug candidates faster... ...and bring them into clinical development.

00:28:52: Alongside that we have further large AI infrastructure cases.

00:28:56: AntScale for example secured a financing round of US dollars for a data center project.

00:29:02: in Norway Recursive superintelligence came out of stealth mode with a round of six hundred and fifty million.

00:29:09: So that was the long-stealth mode, And a big bang they made there!

00:29:13: Fractal also raised two hundred twenty million to develop new chips for AI inference

00:29:18: Exactly...and at same time May wasn't only an AI month one must say.

00:29:23: Large financings took place in space security energy and fintech.

00:29:29: ICI, my goodness the names are getting increasingly weird guy right?

00:29:33: It is not so easy to pronounce at all.

00:29:36: ICI from Finland secured a credit facility of three hundred million euros to expand its satellite-based intelligence platform.

00:29:44: Focused energy from Germany raised two hundred and forty million US dollars for fusion technology EOS X-Space from Spain, one hundred and forty million US dollars.

00:29:55: And Vonova from Ireland came with a series C of ninety four million euros.

00:30:00: consistently the UK remains the most important European funding hub but that also shows The total volume continues to depend heavily on a few very large transactions.

00:30:12: The deal flow is broad, but a considerable portion of the capital concentrates on capital intensive companies and infrastructure projects.

00:30:21: As a conclusion for Europe, capital is available.

00:30:24: It is flowing increasingly and strategically into areas like AI and data centers.

00:30:30: with that the focus is definitively shifting away from pure software towards infrastructure, data centers chips ,and also drug discovery .

00:30:39: And then simultaneously alongside that come of course also few sovereignty themes such as space energy security.

00:30:48: very good Let us come to the listener question of this week and namely, This time from an anonymous listener.

00:30:54: And he writes The following very interesting as An investor in numerous Swiss startups It always upsets me greatly when exits are presented As a great success on LinkedIn and Impress releases When it was actually A fire sale.

00:31:10: most recent example Konami Return for investors, zero point zero.

00:31:16: I understand that the narrative always has to be positive but a little humility would do many people good?

00:31:21: What you think about often far too positively communicated exits?

00:31:26: Guy!

00:31:29: Well, I mean i'm glad that the question has come up and it was formulated in such a way.

00:31:34: we do not quite have to mention all of ourselves.

00:31:36: That is always discussed together.

00:31:39: actually one fundamental reasons why burn rate exists at all?

00:31:43: We started with wanting bring more transparency into ecosystem.

00:31:46: off course exit fire sales celebrating as proper exit but also financing rounds hyping them when down round.

00:31:57: Those are topics, yes I find it really not good when you bring false incentives into the media especially in an ecosystem where we do have many people who've allocated quite a lot of capital to startups.

00:32:09: They see positive announcements at others that companies may be going well... The exit is still away.

00:32:16: and then with those who fully written them off celebrate they made huge exits.

00:32:21: so i actually found this not optimal as sold as great exit but also that it is not simply turned into a sad story swept under the rug.

00:32:31: One simply has to try to put that in perspective, A little.

00:32:35: That Is My View.

00:32:36: We can gladly go into more detail on why and what one could do there.

00:32:41: What's your perspective?

00:32:43: Well I myself have also been affected few times And i find its really fundamentally suboptimal.

00:32:49: when you have fire sale thats communicated as great success.

00:32:53: Thats a no-go for me Perhaps briefly for the listeners, what is a fire sale?

00:32:59: A fire sale is already a remarkable achievement.

00:33:02: It means that you are able to not drive the company into a wall meaning into bankruptcy and at the moment there are very many bankruptcies but rather you're able find someone who takes the company off your hands usually one franc maybe also for hundred thousand francs.

00:33:19: But one must say that is not nothing because the buyer must then take on all the cash burn.

00:33:24: That it's often still present, and sometimes also substantial.

00:33:30: A huge success for the founders.

00:33:39: It is simply a success in the sense that one managed to hand The company over To new owners and often it Is then, the case That the employees can also stay And so on and So forth but Then presents that as a great success.

00:33:54: That one sends out a press release, then perhaps even engages the PR agency to write big announcement with photo and so on and That does not work.

00:34:09: One should not necessarily do that, rather one can celebrate a success!

00:34:13: One can celebrate an exit when one has sold substantially if one now says... If one now sees okay..one was able to realize a notable amount then I find one can Celebrate that Exit and also revel in it but actually only In that case.

00:34:30: otherwise i Find one Should Actually Not Communicate Much.

00:34:34: Perhaps A message on LinkedIn that one Has Handed The Company Over To New Owners.

00:34:38: That is it.

00:34:39: But not now a big theater, a LinkedIn Theater.

00:34:42: I find that suboptimal and that is kind of also something that has been happening quite a lot recently... ...that one has of course massively promoted these success stories.. ..and i found that not necessarily optimal.

00:34:55: rather i find that one should also transparently show when that was NOT the case but simply be open about it!

00:35:02: And a fire sale is not Automatically a personal failure.

00:35:06: I think that is quite important, but it also not automatically great success and i think that's indeed decisive And therefore the question absolutely justified.

00:35:18: We should certainly be more self-critical with ourselves and present the narrative accordingly to outside as well.

00:35:24: Well what you said there was very important.

00:35:27: The company still exists or employees at least have for period of time same work.

00:35:32: The IP is not simply no longer used or bought out of the bankruptcy administration.

00:35:38: And for such a fire sale, it's also an enormous amount of work to even take place at all!

00:35:47: And of course it is clear if you run a marathon not in two hours world record, but in five and half hours.

00:35:53: Then say hey that's still remarkable achievement.

00:36:01: It was handed over to good hands.

00:36:06: we have now built super story for twenty years and are now the kings because we were able to sell the company.

00:36:13: I also see that exactly the same way.

00:36:15: what is important, it's a fair contextualization which i think right now really not quite actually happening.

00:36:21: And It Is Also The Case.

00:36:23: One Does Not Have To Say Anything About Transaction Values In Switzerland & Also With Buyers Who Are Often Still in Private Hands.

00:36:29: You Cannot Read From A Balance Sheet What They Paid For This Company.

00:36:34: Yes, people sometimes try to present themselves a little better than they perhaps would like.

00:36:39: And for the investors who stand behind that it is of course simply yes!

00:36:44: A pure drop-of acid on a wound... The writeoff hurts and then suddenly colleagues come hey you invested there.

00:36:50: don't you also want to invest with me because you just had an exit there?

00:36:54: You may not even be allowed to say anything because you are still under NDA.

00:36:58: That is why I understand the anger or frustration of our anonymous investor quite well.

00:37:30: was not recouped in the exit, it is de facto a fire sale because the investors or at least not all investors got their money back.

00:37:39: And therefore I do think critical examination is important and also up to us at burn rate.

00:37:52: Well, is that good or not?

00:37:53: So we had for example Curly today.

00:37:56: Or I mean they realized seventeen million...I think ten million upfront and the remaining seven million in earn out.

00:38:03: And there are only two founders and as far I understood they're completely bootstrapped.

00:38:08: Now that is not a fire sale, but it's good exit both probably walking away with four to five million each tax-free?

00:38:15: That is the success for me!

00:38:17: Then you have completely different cases.

00:38:19: of course look very large But when you looked closely realize oops well perhaps the last investors still got something with liquidation preference.

00:38:28: otherwise other investors especially early stage investors came out empty-handed.

00:38:34: At this point, still quite interesting I was also contacted by someone on Anthropic.

00:38:39: The thesis is that the Series A and B investors would get nothing from the exit because they were massively diluted.

00:38:47: We then looked at that together guy and realized the series A investors still hold approximately three to five percent of the company.

00:38:55: And have a multiple of approximately four to five hundred.

00:38:59: so, That is also exciting.

00:39:01: when you them such cases it becomes really exciting.

00:39:06: there can be very interesting for early investors But that only as a side note.

00:39:12: Very good, we could probably still discuss and chew on this topic for half an hour or an hour And get worked up again but let us set that aside.

00:39:20: If you have further questions Or would like inputs On this topic of assessments Dear Mr Anonymous Then do write us an email.

00:39:26: Perhaps We will not pass your name.

00:39:29: So then Let's come to the transaction Of month.

00:39:32: The decision was Not easy For Us.

00:39:34: Which Transaction To Work Through for this episode.

00:39:38: We decided on Mosaic, the company has as mentioned in

00:39:57: also participating.

00:39:58: The company develops particularly energy-efficient chips that are meant to enable devices to have real time spatial

00:40:04: perception.".

00:40:05: Well, I find it quite exciting.

00:40:08: Mosaic is not simply building yet another AI chip.

00:40:12: rather the startup addresses a very concrete hardware bottleneck.

00:40:16: many devices today have cameras and sensors but simply not enough computing power to continuously understand their surroundings.

00:40:23: classic processors CPUs and GPS are often far too power hungry for small battery-operated devices.

00:40:31: They get to hot or large, and Mosaic wants to penetrate directly into the hardware with spatial intelligence... ...and build a specialized chip for

00:40:39: it.".

00:40:40: Mosaic was founded in twenty twenty four by Alfio DiMauro and Moritz Scherer.

00:40:45: Both completed their doctorates at ETH Zurich in the field of electrical engineering.

00:40:51: The two bring deep expertise in system and chip architectures, an industrial experience from projects with companies such as Meta, NXP & Global Foundries.

00:41:01: Mosaic is a typical ETH DeepTech case one can say technically demanding.

00:41:06: hardware heavy and emerge form concrete research problem

00:41:10: And the problems can be explained relatively simply meaning smartphones and autonomous devices should not only record their surroundings but effectively understand them.

00:41:21: For a smart glass to know where objects are located, to recognize people or hands and simultaneously create a map of the space various sensor data must be continuously processed to achieve that And today you need GPS or other powerful processes for such data processing.

00:41:37: those simply aren't suitable.

00:41:39: these small end-devices a large NVIDIA GPU on a smartwatch, Smart Glass.

00:41:45: Imagine that!

00:41:45: That would also not look quite so comfortable for the neck and that is one of reasons why many smart glasses simply still looks more like prototypes than normal glasses.

00:41:56: We looked at this closely from technological perspective.

00:42:00: Mosaic develops integrated circuits that process visual data position data and further sensor signals directly to the device.

00:42:09: The company describes its approach with the sentence, turning space into signal.

00:42:14: So concretely, the platform combines several building blocks spatial perception on a small and power saving energy efficient chip object recognition and tracking audio processing as well as simultaneous localization and mapping or SLAM for short.

00:42:32: A device can thereby determine it's position build and classify objects in its environment temporarily, and also spatially.

00:42:40: From that very concrete use cases emerge.

00:42:43: a pair of glasses can for example recognize where the key was last seen?

00:42:47: And whether phone is lying again or also quite spontaneously create floor plan over room and smartphone could continuously evaluate it's front camera low power mode then start recording when certain event object is recognized.

00:43:04: Other fields of application can be autonomous systems, robotics navigation and so on.

00:43:10: And the most important difference compared to a pure chip provider for mosaic they do not only deliver silicon.

00:43:17: The Chip They Are Developing has software layer integrated which device manufacturers build.

00:43:23: With that the ODMs don't have develop their entire perception functionality themselves from scratch but instead build on mosaic tech

00:43:32: And the traction is remarkable.

00:43:34: For a pre-seed hardware case, early commercial development is noteworthy.

00:43:39: Mosaic states that it has already achieved relevant revenues from engineering contracts in first year.

00:43:45: These are so called NRE contracts meaning non recurring engineering Customers pay for development and integration work.

00:43:53: That is initially a sensible model because the company thereby works closely with ODM partners, understands real requirements and at the same time generates first revenues.

00:44:04: In long term however revenue profile is supposed to shift away from individual engineering projects towards scalable product revenues through chip sales.

00:44:14: With that business models strongly resembles classic semiconductor start-ups.

00:44:18: in companies The early phase is heavily driven by the development projects.

00:44:30: nine point three million Swiss francs pre-money, and we were able to briefly speak with the lead investor.

00:44:54: With Founderful there was Antonia Albert principal in The Lead.

00:44:58: many thanks for your information on your investment rationale which I am allowed to share here with the listeners.

00:45:03: this now comes from Founderfull!

00:45:05: The team is exceptional.

00:45:07: Moritz & Alfio are two ETH doctoral graduates with extraordinary depth in SOC architecture.

00:45:14: When founders bring this level of technical expertise and have already successfully executed real development contracts in the first year, that is a signal one should not ignore.

00:45:24: They trust each other thanks to well-grounded academic and industrial background are great in collaboration.

00:45:32: So here's six out of six for the team from Founderful.

00:45:35: And they also said something about timing & market.

00:45:38: The Timing In The Market Is Ideal.

00:45:41: Spatial Computing Just Becoming Reality.

00:45:43: Smart glasses are on the verge of a breakthrough, but the decisive hardware bottleneck remains energy consumption and with it—the form factor.

00:45:53: Mosaic solves exactly this problem — real-time perception at a fraction of the energy requirement needed

00:45:58: today."The

00:46:00: next generation of wearable devices needs exactly this chip," says Founderful.

00:46:05: And finally they also told us something about The Business Model.

00:46:11: Mosaic is not only selling a chip, but a complete solution.

00:46:14: That facilitates adoption and creates a repeatable cumulatively growing revenue stream that's tied to every device shipped!

00:46:22: Many thanks Antonia for your inputs.

00:46:25: Very exciting to read that... ...and we are curious how Mosaic develops.

00:46:31: So the strategic direction is clear?

00:46:34: The company wants to go from first engineering traction, two scalable chip deployments and further develop its software stack.

00:46:41: They are in the process of expanding their team with several positions and simultaneously building the chip –the implementation–and the developer

00:46:50: tools.".

00:46:51: And the bull case is strong and also clear.

00:46:53: if smart glasses and other always-on devices actually come to the mass market then such chips are needed that enable visual intelligence at minimal energy consumption.

00:47:03: Mosaic could position itself as a fundamental perception layer in exactly these devices.

00:47:08: The bear case is typical for semiconductor startups, the development cycles are long hardware roadmaps can shift and the path from a pilot project to high volume series production Is demanding and long added?

00:47:21: To that is the dependency on a few large device manufacturers And their product decisions.

00:47:27: and then still my conclusion.

00:47:29: Mosaic is quite an exciting Swiss deep tech case.

00:47:32: The company is genuinely solving a concrete technical problem and has clear commercial logic, not every AI application only needs more computing power especially with wearables.

00:47:44: there the winner could also be one who gets by significantly less energy.

00:47:48: so I have definitely put firmly on my radar to follow us.

00:47:53: So that was Burn Rate, the VC Insider podcast.

00:47:57: if you want to support our podcast subscribe to our newsletter and share it in your network.

00:48:02: we will see you for episode one hundred next week.

00:48:04: many thanks.