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September 01, 2006
Nokia Acquires VC-Backed Gate5 In Berlin
Nokia has agreed to acquire gate5, a Berlin-based developer of navigation software and services for an undisclosed amount. There is no disclosure on the terms and conditions.
Neither the VC firms that led Gate5's last round or the firm have returned our calls to confirm the details of the transaction.
Update: We confirmed the transaction with Gate5 that said that the deal with Nokia was compelling and gives the startup a chance to get its software into "millions of phones". The whole team at Gate5 will become part of Nokia and the Berlin location and headcount will be expanded as a result of the acquisition.
The acquisiton is a bit of a surprise for us. We saw the firm as an IPO candidate. It had a good position in the navigation market as far as we know and the capital markets have welcomed such companies, for instance TomTom and Parrot, have both had successful floatations in Europe recently.
If its revenues and growth where the same, or better, than its French peer, Webraska, which had annual sales of €15M and net income of €6M, up 100 percent over the previous year, an IPO in Europe would have been possible.
We have written about gate5 for our freelance markets over the years and have seen it go through a few restarts after being founded in Berlin back in 1999. Its last round of VC was in 2004 when Gate5 attracted €6.5 million a deal led by Paris-based Innoven Partenaires. Also on board for that round was Munich-based Target Partners GmbH.
The company, which now employs 70, runs a white label mapping and routing service called smart2go.
Update: Gate5 's founder Christophe Maire is an angel investor in Plazes.com a directory of location-based information generated by its user community. Plazes did not spinoff from Gate5 as we originally wrote.)
We would like to be able to report why Gate5 took the M&A route rather than going public because we suspect there are some lessons to be learned for tech venture founders and for the venture market in general.
Finally, it is worth noting that this is the second startup acquisition that Nokia has made in recent weeks. It also bought Loudeye's European assets, the former OD2, a loss-making music download white label service, for $60M.
The acquisitions show that Nokia is looking to take more control of the revenue-generating applications that run on the more expensive type of mobilephone.
Read - Webraska sees a 100% increase in revenues and record benefits for fiscal year 2005-2006 (webraska)
Read - Nokia acquires gate5 to add robust mapping and navigation to its devices (Nokia Gate5 press release)
Posted on September 1, 2006 06:15 AM | Posted to News And Updates | Permalink
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