The Pitch Deck that raised Europe’s biggest-ever Seed round 😳
$105M was put into 4-week-old startup with no product to take on OpenAI 💸
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Last week, 4-week-old artificial intelligence startup Mistral AI raised $105 million in Europe’s biggest-ever Seed round to take on OpenAI.
Co-founded by Google GOOGL 0.00%↑ and Meta META 0.00%↑ alums, the Paris-based AI startup is currently valued at a whopping $260 million 🤯
Given the current AI hype, this might not be that big of a shocker. But everything changes when you realize that Mistral AI has:
no product
no website (technically they do, but not sure this is considered a website…)
its first few employees started work only days ago
Following the announcement, I said that this is either a sign of an insane AI bubble or a brilliant example of how European startups are getting more ambitious.
Hundreds of people on LinkedIn seemed to support the former and saw it as a sign of AI hype leaving VCs unable to sort the wheat from the chaff.
But is it actually the case? Let’s find out.
The $100M Pitch Deck
Today Sifted has managed to obtain the pitch deck that helped Mistral secure $105M. Well, it’s actually more of a Google doc yet it was enough to convince investors like Lightspeed, French billionaire Xavier Niel and former Google CEO Eric Schmidt to open up their wallets.
Just a 7-page strategic memo is an interesting read that’s full of jargon and buzzwords (you will find the link below). But what matters here is HOW Mistral did it.
Here are the 3 essential things that led to Europe’s biggest-ever seed round:
Riding on the hype. The deck opens with a reminder of how hot and transformative the generative AI technology is right now. But more important is the emphasis that products like OpenAI’s ChatGPT have been developed by a few small teams globally. To make it even more sticky, the deck notes that the small number of people with experience in building large models like GPT-4 is the limiting factor to creating new economic actors in the field.
Creating FOMO. Despite all the innovation, most of the breakthroughs were made by very few actors that control nearly all of the market. And more importantly, all major actors are currently US-based, thus leaving Europe behind. In other words, the deck indirectly says that this could be investors’ (one and only) chance to help build a serious contender to OpenAI. In Europe. And then there’s a cherry on top 🍒 - the deck argues that most of the value in the emerging generative AI market will be located in the hard-to-make technology, ie. the generative models themselves. Mistral arguably has the best team right now to build these models.
Killing Em with Kindness. The Team. It’s always about the Team, and Mistral’s team is second to none - composed of lead researchers from DeepMind and Meta, that was probably the last page where most of the VCs stopped reading and decided to invest. Remember - more often than not an investment in a startup is a bet on a team rather than the product. Because the team builds and executes.
The Lesson 🧠
In fact, when you really think about it, the last point is probably the most paramount one. As someone rightly told me, the investment in Mistral AI was made based on slide 4 and the founders’ previous roles. Everything else is noise.
Read the full memo here.
P.S. even if you don’t have the rarest team on Earth, don't worry - you can always use this to successfully raise money:
It’s a proven breakdown of how to tell a compelling story. Because remember - your pitch deck is basically a sales document, and given investors have limited time and a short attention span, you have to make first impressions last.
One last thing…
It includes:
A global investor database that has a list of 6,200+ investors (angel investors, venture capital (VC), incubators and accelerators, private equity (PE), family offices, banks & more!)
A list of 50,000+ startup resources from the world's most proven network to turn ideas into fundable startups (it helped launch over 5,000 companies across 200+ cities and 6 continents).
Commandments for raising money in a challenging market (the 8 key takeaways every founder and startup CEO must know today) & more!
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