Sweet Capital's Pippa Lamb on UK-US trade deal, European venture gaps, and the Nordics as a tech hub

to be with you. Yeah. Somehow we missed you at Hillen Valley. It was a crazy day, but uh, it was good seeing you there nonetheless. You guys were overrun. the hottest spot at the at the conference. So, a tiny room in the corner. Everyone was beating down the game, too. It was good. It was It was a crazy day.

Those guys did a a great job. But fantastic. Yeah. So, my name is Peppa Lam. I am a partner at Sweet Capital. Uh we are a private uh investment fund. Clue is in the name. Sweet Capital. My colleague started gaming company uh Candy Crush uh most famously King.

com which they sold to Activision and then subsequently Microsoft. I run a uh huge game. I run the uh private investment fund uh for those founders and we sit between the US and Europe and invest sort of broadly multi-stage.

Again, we're private capital so we can sort of uh invest across a whole wide range of sectors and I'd say we're about 70% uh US allocation at this point. Got it.

Um my background I actually started out my career working for the British government on uh trade relations between the west, UK, US and China which obviously quite topical today. Uh and I then sort of moved into equity research covered large cap uh China tech US tech JP Morgan for five years.

So pretty much just doing publiclix uh covered a lot of macro um which obviously is now you know increasingly relevant to sort of the tech world and and private investing now but been in venture and and private investing for about five six years now. So yeah great to be here with you guys. Yeah.

How are the founders thinking about investing in gaming technology? I feel like every successful founder they sell their company and they're either like I'm never doing that industry again. and I know too much about what can go wrong, so I want to stay away from it.

Or they're like, I'm an expert and I'm going to dominate the next generation of uh of generational companies that that that come up in the industry I know so much about. Obviously, there's a lot of value ad there. So, what's their what's their what's their feeling on gaming startups right now?

And are you doing any deals in that area broadly? So, I'd say I'd say it goes both ways. So, there are five founders of King. So, I'd say a couple of the founders are like, "Get me back in. I'm ready for more gaming.

" In fact, one of our colleagues is actually started started a new company as soon as his non-compete pretty much ended with Activision and Microsoft last year. So, he's straight straight back in it. Um, he's uh he's operating sort of in stealth at the moment, but he's kind of straight back into operating.

So, very much uh bullish on gaming. And I'd say on the other side, it's a little bit of a range between wanting to invest alongside more the gaming ecosystem, not so much p purely on publishers. I think that um obviously King and Candy Crush were such an incredible Zeitgeist and and Breakout success.

I think Match 3 and sort of casual gaming really rode the the kind of mobile transition that we saw uh be so large for them and when they were coming up. I think obviously the gaming industry has moved a lot and of course uh you know my colleagues are still you know very interested in what's happening.

I think a lot of what's happening obviously around AI uh and sort of the broader broader ecosystem um you know still extremely tapped in. So we do look at gaming deals.

Um, but I'd say that, you know, it was partly the thing that you allude to about having, you know, knowing too much that has meant that we've, you know, with the private investing we do on the side, we've really moved out of purely doing gaming.

Um, we did also also have a non-compete for quite a long time with Activision. So, we were sort of forced in my earlier years to do sort of the gamification of adjacent sectors versus, you know, competing immediately uh with with their former company. Yeah.

How did you guys react to the to the news last week around the app store and uh the changes to uh the app stores payment or the forced changes to the app store's payment policies.

Look, I think that uh you know, I don't want to speak for them, but they certainly had you an ongoing uh very interesting relationship with uh with Apple throughout the course of of I guess the as Candy Crush was coming up.

I think also you know they really began at a time of sort of the internet portal you know they really had to deal with how you know they were dealing with you know Facebook at the time matter um and also Apple so I think that you know broadly um you know we're we're hopeful around um changes coming out but I think that certainly the the issues that we faced you know as operators certainly are um you know the world is drastically different now we're we're no longer really at the fight to try and win mobile um which was really you know how they were having to come up at the time.

So so I think I think it's too early to say um but it's certainly something that you know my colleagues are tracking very closely and certainly Sebastian Kitson who I mentioned is has started his own new company is is actually facing now directly as as they launch their first game. So so let's see.

Yeah, gaming is such an interesting venture category because I feel like over the last like five years there's been a ton of breakout games like but they none very few of them were like true venturebacked like seed series A from main funds like Fortnite came out of Epic Games. It's like a 30-year-old company.

Roblox had this venture story but all the early backers they became rich off of Roblox and Roblox was kind of like their main win.

Then Among Us and Bellatro were these huge successes, but they were kind of just like random indie developers who just kind of got lucky and weren't really like financialized in like the oh we bu we're building a team and then a lot of the game companies like pivoted like Slack was originally a game company and so if you go into Silicon Valley they eventually push you into B2B SAS uh if you're a gaming company.

Uh but anyway, I mean we could talk about gaming all day but I I want to hear your take on the UK US trade deal that was the first one to fall last week. you had a great breakdown on X about it. I'd love you to take me through kind of like what was your expectation?

How do you process the news and and what do you see going forward with that particular trade deal?

And maybe before you dive into that, even kind of the on on the ground opinion in the UK, how how UK citizens have viewed this whole trade debacle given that they they have a we have a the US has a trade surplus with the UK, right? Yeah. Yeah. It's it's funny.

I know I know our friend Ryan from Flag Sport tweeted you know um the UK is the only country to have a trade surplus or the US to have a trade surplus with the UK.

So it doesn't bode well for other countries right if we manage to like you know that is that is the beginning point but I think yeah of the top 10 uh countries that the US has a trading partner with the UK is is the only one that um they don't have a trade deficit with. So, so let's see.

Yeah, look, I think it's a I sort of find myself putting back my macro hat on again these days so much because we had uh finally this trade first trade agreement between the US and the UK announced last week and of course this morning with the news coming out of Geneva of how the US and China are hopefully going to move towards closer bilateral trade dialogue.

So I think first on the UK piece, I know that sort of from behind the scenes that this has really been something that has been in the minds of the UK government ever since sort of midFebruary when we had or end of February when we had that very sort of um you know very productive and and positive meeting between Prime Minister Karma and President Trump at the White House.

I think that there has been on both sides a real determination to work towards a some sort of uh bilateral trade agreement that you know went beyond the liberation day board where I think we were you know at 10% with with some of the lowest countries.

So this has been in the works for for weeks um certainly I guess yeah a few months since then and I think the the reception has been broadly positive. You know I think that of course there are still talks to be had. I know Ambassador Peter Mandlesson has said that this is this is a not a still picture.

I think he said it's a movie that the trade will continue. The trade talks will continue.

Um but if you look at the headlines it brings down to the the average I think tariff to somewhere between 1 and 2% that is the aim which of course is is hugely beneficial um for both when we were really sort of stuck at the the 10%. So, I'd say it's been broadly very positive um obviously markets reacted well to it.

Um and it really hits some of the key points um around uh sort of steel and autos which I think are in both sides views potentially a blueprint for how the US is going to engage with other trade partners.

Um, I think that, uh, where I would like to see things move next is really expanding this into a broader dialogue around UK and US tech partnerships.

I think that that is certainly something that we should keep our eyes peeled on over the coming weeks and something that, you know, I think there's a lot of interest on the UK, UK side about really firming up um, our relationship with, you know, US big tech.

We already have a fantastic working relationship um with many you know large tech companies in the US but I think we could really push the needle on some of the sectors that have become issues of national security be it you know AI uh defense uh robotics and and and stuff like that.

So yeah, broadly broadly positive and I think it's been interesting to watch how we've seen uh you know the UK public and and also UK big industry react to you know the new administration and what the White House is doing.

Do you think um the UK will be kind of a net importer or exporter of venture capital uh over the next few years? Um obviously there's a lot of LPs there that would love to invest in American companies. There's also new projects to invest in uh UK- based entrepreneurs and new startups.

So where what is the trade balance look like from a venture capitalist perspective? I think it depends who you ask. I think that traditionally we have struggled in the UK and I say we obviously I'm British. I do I have I have personally as a microcosmic spent about 70% of my AUM on the US.

So I think it's clear sort of how I voted with with our our wallets. But I think certainly if you if you look at Europe, there has traditionally been a issue with getting scaled capital to the preipo stage.

So you know you had a lot of this homegrown seed capital and sort of you know of course US counterparts setting up their UK offices be it Axel who's done very well there in index who are you know still big firms in the US but they really found their footing in Europe.

Um and then in recent years you had you know SEOA come in, you had uh you know Andrea Horowitz do a big crypto play um NEA and many others.

So I think that there is certainly continue to be sort of a w you know the UK has really wanted to welcome US venture capital but of course it has also raised the question as to why isn't there more homegrown you know European and and and US uh funding at that later stage.

So I think you know in some ways the industry is just more nent there. So the law has taken time to scale up these these funds. Um but yeah I mean I personally think that we should continue to try and push for for greater um collaboration on the capital side um at those later stages as well.

Do you think that the UK is a a good kind of launch pad for investing in the Nordics broadly? because the Nordics seem to be a little bit of violation of the narrative that Europe isn't producing generational companies.

You have Spotify, Skype, there's tons of stuff out of Sweden and Estonia and there seem to be pockets of like really entrepreneurial cultures there even if it doesn't fit like the traditional Euro narrative. So, is that an interesting angle to like go set up in the UK and then deploy into the Nordics broadly?

Okay, first of all, I want to know if my colleagues have been texting you because four of my four of my founders are Swedish, the other is Italian. So, this is definitely like a setup. Um, but but yeah, look, I'm I'm a we're a big fan of obviously investing in the Nordics.

Um, I think that my general view and you know, John, I saw a lot of you last at the end of last year when around the US election. I was I was on the ground in the US for for a couple of months during that ramp up.

And I think I remember on election night um being at a sort of election watch party and a lot of people were saying to me, okay, well this is great, you know, in many ways for the US tech uh US tech scene, but how will this impact the UK and Europe?

And I was the one going around saying, look, this is a fantastic uh chance for you know the UK and you know the US's closest allies to also benefit from some of these um hopefully blockages that are moving especially within the tax sector.

So my view is that you know the UK is still a fantastic place from which to welcome you know tech companies as a gateway to broadly Europe. Um I do think the Nordics are definitely a sweet spot. So King obviously basically also being a part of that. The the Nordic gaming community is huge.

Um well they didn't even make this list.

I'm looking at this list cursor client on my SQL my Spotify or Skype or yeah King I mean King invest listed on the on the New York Stock Exchange but you know its headquarters were in London but it's co-ounders were a lot of them are Swedish but certainly we we um you know our second office really is is is Stockholm so yeah big fan of that and I think that it's it's proof that both in the Nordics and also in Eastern Europe you've had some really breakout sectors including gaming So yeah, I what about what about foundation models?

Is there is has anybody kind of raised around like we're the UK open AI, let's raise this is got to be worth a billion, right? Got to be worth at least a billion. Yeah. So we haven't So yeah, we haven't had our own sort of foundation model in that sense.

I think that's that's something that the UK is is seriously considering and and as we think about the theme of sovereign capital and secure capital and how the UK is actually going to be able to compete at that level of the sort of AI ecosystem of course across the channel in France we have Mistral um and you know famously we you know we've had incredible generational AI talents on the engineering side in the UK for a long time but you know deep mind deep mind was t- mine was started in the UK and and obviously moved over to to Google.

So I think that certainly as the UK government thinks about this next generation of AI companies um and sort of technology companies in general it's certainly something that is very top of mind for how both you know DIT the department of science and technology um the foreign office so um and also number 10 think about these things.

So, have you thought specifically about like expatriating entrepreneurs? I mean, just go find the best entrepreneurs. Uh, set them up with the first round, take a huge chunk of the company and then say, "Hey, go to San Francisco. That's where you need to be. Go build the company.

" Because there is like the the aperture widens when all of a sudden you're talking about yes, American companies, but founded by European entrepreneurs, then you're in the trillions of dollars of market cap, right? Yeah.

I sure I mean if you we already look at companies that get that then we get we sort of we can draw a line nowhere.

I mean stripe in theory has British like you know founders or you know oh Irish Irish let's not I know I know I don't get I am a separatist personally I am againstation I I think what's important though is is you know is keeping I think for the UK government would be also keeping its homegrown talent in the UK.

I think that's obviously um you know a very uh sore spot as to why deep mind you know did leave and I think that the UK in my view needs to look at itself and consider what are the requirements that you really need to build uh you know multi- trillion dollar market cap companies in the UK and Europe more broadly.

But you know I I think that there is if you look at this current administration there has been a lot of you really encouraging signs.

Um early at the beginning beginning of this year, we had the AI um an AI act that um PM signed off on where you know 20 new ideas around how to enable um AI progress in the UK specifically um were were announced and and adopted and that really came from a lot of great work from you know collaborators in the venture capital industry in the UK.

um friend of mine Matt Clifford who has been advising number 10 on you know really the opportunity around AI and AI security.

Um so yeah let's let's see um but I think that my hope is is stepping out more broadly that the conversation between the UK and the US can also start a bit of a blueprint for how the US starts to work with some of the other other allies on on tariffs and also on tech partnerships. That's great.

Well, thank you so much for joining us. Fantastic. Our UK official UK correspondent. Yes. Let's get a sound effect. Let's get an air horn for you. We need the music. Honored to do that, guys. Yeah. Uh yeah, we'd love to have you back soon. We'll talk to you soon. Good to see you. Awesome. Thanks, guys. Good to see you.

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