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November 01, 2006
Funding The Burn : Heavily Capitalized European Startups
Now there's a headline we haven't been able to write for a good five years. That is because during the bubble European VCs heavily funded some incredibly weak cash-burning startups and then reacted in subsequent years by doing what has come to be called drip-feeding the venture. (They also did that pre-bubble but for a different reason, lack of capital.)
But things are changing for the better, and without going into the reasons for that, let'slook at what corporate finance boutique Go4Venture has to say this morning in its monthly newsletter.
Go4Venture Shows That This Year VC Investment Is Above 2005 and 2004 Levels.
Go4Venture's analysts provide deal profiles for InsideContactless, Rebtel, Operax, concluding that they are heavily capitalized now. Some quotes:
With this round, Inside Contactless has raised in excess of EUR 50 million, making it part of the fairly small league of heavily capitalised European VC-based companies. ...
And this:
Since its start in 2000, Operax has been through a number of financing rounds raising a total of EUR 30 million, which makes it a substantial investment by European standards. ...
And that:
By amassing $20 million in a Series A within 9 months of starting, Rebtel Networks must be establishing a new record for a European startup – or pretty close. But then again it demonstrates that in internet and mobile services VCs value momentum, particularly for companies set up by successful entrepreneurs.
Go4Venture didn't mention them because it was only looking at September but you could also put Icera Semiconductor ($60M+) and Sulake Labs (which is at $137M and counting) in the list too.
The biggest difference between then and now, is that it's not the "A" round (Rebtel excepted) that gets the big money, it's the B and C rounds, where there is revenue growth, evidence of penetration of a global market, and management is strong.
Posted on November 1, 2006 09:42 AM | Posted to Venture Capital | Permalink
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