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February 28, 2007
Advent Backs Startup To Put Fizz In Consumer Feedback
Advent Ventures' Frederic Court wrote in to tell us his firm has invested in $5M in Fizzback, a three year old UK startup specialized in instant customer feedback via SMS (text messaging) and mobile email.
Court will join the company's board under the chairmanship of Robin Klein who was an early investor in the company - along with son Saul (the same two were early investors in Mind Candy, which is now backed by Index, Accel and NewMedia Spark).
Early customer wins, such as the UK's bus travel operator National Express, convinced the VCs to fork over the funding. Reading between the lines, the deal gives the VC exposure to the booming online advertising and consumer Internet market, two big favourites amongst venture capitalists at the moment, as Court wrote:
"We think this can be big as it is opening a whole new market to the company by helping big companies listen to their customers -- as opposed to just talking to them through advertising.
With Fizzback, customer feedback from the mobile channel is accessed via a web browser in a hosted environment. The cash will be used to launch the Fizzback service across new markets and to hire up.
Read Fizzback : Fizzy investment performance on the way for Advent ? (fred destin blog)
View - Fizzback site
Posted at 08:10 AM | Posted to News And Updates | TrackBack | Permalink
Mercateo Expecting Sales of €44M And Maybe A Buyer
Germany's Mercateo put out a press release today with some eye-catching sales growth. In 2006 it had sales of €23.7M and is expecting that to grow to €44M this year - no disclosure on the size of its margins though.
It claims 250K customers, with new conversions daily, mainly in the small and medium sized business market that use its platform to buy things like printer cartridges, warehouse shelving, and nails. It has something nice features, like the Best Basket, which does a price comparison for items that users have already selected and put in their shopping basket with the goal of offering the shopper a better deal.
The company employs 90 and was founded way back in 1999, making it another first generation dotcom survivor (See our post on the acquisition of France's Netclub for another recent example).
In 2003 two managers, Sebastian Wieser und Peter Ledermann, bought the company back from early investor, E.ON, a Germany energy concern, and subsequently raised a small amount of VC from Target Partners.
We don't know Mercateo yet, but a press announcement like this typically means that the company is planning a so-called corporate finance event - in other words Mercateo's owners are either looking for a buyer or looking to raise fresh capital. Depending on its level of profitability it could even be that an IPO a possibilty.
View Mercateo site
Posted at 07:48 AM | Posted to News And Updates | TrackBack | Permalink
Dotcoms Do Better On US Stock Markets
We stumbled across this chart over on Jeremy Fain's Tech It Easy blog that compares the PE ratios of enterprise software companies to Internet stocks in Europe, China, and the US.
What the chart also illustrates is that the US public markets put a much higher valuation on dotcoms than the Euro markets.
We already had a good idea that this was the case after following Vistaprint (not covered in the above chart) for a while.
The European-founded online business printing company (financed by French VCs and angels) has traded on NASDAQ since Sept 2005 and currently has a PE ratio of almost 70 and a market cap of $1.6B.
But one area of technology where the public markets are providing a NASDAQ level to European tech companies is alt energy.
Q-Cells headquarters clan in the solar panels that enable its €3.6B mkt cap
This kind of valuation means that such companies have larger amounts of cash to invest, acquire rivals with, and to expand more quickly.
We've written about Q-Cells, which just raked in another half a billion euros as a result of an oversubscribed bond issue this week, and Conergy in Germany - but you could also look at REC Group, the Norwegian solar cell startup that controls much of its own supply chain, which has a PE ratio of 154.
So the quick conclusion looks to be that floating a dotcom in the US - even with the constraints of SOX -- is the thing to do if possible -- and get that alt energy startup onto a stock market in Europe.
Read - Web 2.0 Stocks Twice As Expensive (jeremy fain blog)
Posted at 05:20 AM | Posted to Being European | TrackBack | Permalink
Match.com Buys France's Number 3 Dating Site Netclub
Online dating company Match.com announced acquiring what it said is France's number three dating site, Netclub, and eDodo, a quick growing social networking site in China that it hopes to convert to dating. Financial terms weren't disclosed.
Match.com said in announcement yesterday that the addition of eDodo and Netclub (which is nine years old) would add more than 4 million subscribers to its 15 million.
The deals mark a shift in the Dallas-based company's strategy. For years the company — part of Barry Diller's IAC/InterActiveCorp conglomerate — has sought to grow its subscriber base and add premium features without acquisitions. .... EDodo only has about 180,000 paid members, but Safka said the romance-centric site — which features instant messaging, personalized profiles and videos — is adding roughly 3,000 subscribers daily.
Posted at 05:05 AM | Posted to News And Updates | TrackBack | Permalink
ACAL Funded For Friendlier Fuel Cell Tech
Runcorn, England-based ACAL Energy Ltd., has raised £1.6M in early stage venture capital from the Synergis Seed Fund, along with other UK investors Rising Stars Growth Fund (RSGF), The North East Co-Investment Fund Limited Partnership and the Carbon Trust.
ACAL Energy is targeting so-called PEM fuel cells with its cathode tech, which it says works at low-temperatures and does not require precious metals for catalysis. Its cathodes can be adapted to work with any fuel source including hydrogen, methanol, ethanol and sodium borohydride, it says.
Its website suggests its ambition is the laptop battery market and the automotive market, two huge markets that have delivered much hope as potential markets for fuel cells -- but so far have remained quite impervious to penetration.
Read - Science|Business Fuel cell start-up ACAL raises £1.6M
Posted at 04:46 AM | Posted to News And Updates | TrackBack | Permalink
February 27, 2007
Rockpool Games Acquired For Up To £7.7M
Sci Entertainment has acquired UK-based Rockpool Games, a developer of games and content for mobiles, for its Eidos New Median division. The deal, worth up to £7.7M by 2010 included the acquisition of an IP holding company, Ironstone Partners, and SoGoPlay, a casual mobile games developer.
Worms Is A Winner At Rockpool
MocoNews sees the purchase as part of a bid by Eidos to move into the casual and mobile gaming markets.
The acquisition will see SCi acquire the company's Manchester studios along with 36 staff who will continue current development work. All three companies will become an integral part of the Eidos New Media division, building additional resource and adding expertise of an internal development team, said Sci.
Read - SCi Entertainment PR
Read - MocoNews - Unhealthily Obsessed with Mobile Content - Eidos Buys Rockpool For Up To 7.7 Million Pounds
Posted at 06:45 PM | Posted to News And Updates | TrackBack | Permalink
SecurActive Raises €1.5M For LAN and WAN Surveillance
SecurActive, which is on version 3 of its LAN/WAN security appliance software, has raised €1.5M from three French investors, UFG Private Equity, Ile de France Développement (IDFD) and ESFIN Participations.
The new capital will be used by the startup push internationally and invest in product development.
We assume growing its export activities will mean supporting other languages, because right now it is only in French. The online demo shows off a mature product that delivers a lot of useful information about network usage, such as how much bandwidth is being used for VOIP, Bittorrent, HTTP, or Exchange, as well as spying security breaches.
It's hard to believe that equipment vendors are not yet delivering software like this with their network gear, but since SecurActive has plenty of customers in France, such as AGF, Air Liquide, Suez, DCN, La Poste, and Sopra - it would seem the hardware guys are not doing so.
SecurActive was founed in 2004 by Gilles Huguenin and Boris Rogier-Waeselynck.
View SecurActive site
Posted at 06:23 PM | Posted to News And Updates | TrackBack | Permalink
alarm:clock euro Puzzler Winner Neuhaus' Jozefak
The answer to last week's puzzler question:
Name the firm that three of Atlantic Bridge's partners, along with former Amadeus Capital Partners' investment profi Hitesh Mehta, announced -- but failed to raise an early stage European venture capital fund back in 2004.
is
Abbey Road Ventures
The first by a wide margin with the correct answer was Paul Jozefak who writes the Babbling VC blog and is a managing partner at Neuhaus Partners in Germany. He used to run SAP's European venturing activities.
Posted at 06:01 PM | Posted to quiz | TrackBack | Permalink
Online Erotica Shop Files For IPO In France
If broadband is a boon to selling shoes online and music downloads, it can also be one for sex toys and soft core porn goes the IPO argument of France's Dreamnex.
Founded in 1999 and funded by private investors, Dreamnex operates the SexyAvenue.com ecommerce site for adult content (subscription-based) and gadgets. It has filed for an IPO in France, according to Reuters.
The company, which has been called the "Amazon.com of pleasure" by French tech journos, is profitable since 2001 and acquired two smaller rivals in 2004.
No details yet on how much is expected to be raised or the final date for the floatation.
According to the firm's website it is doing about €31M in sales with a net income of about €3.5M.
A Reuters report said that the startup's 172-page IPO application made the pitch to regulators with statements about the market's potential, seeking to "demonstrate that despite its image as a nation of lovers, France has a lot of catching up to do when it comes to pleasure-boosting gadgets", pointing out that "only 20 percent of French women own a vibrator compared with almost 50 percent in the United States".
Its CEO Patrice Maca told regulators that a "change in mentalities, the acceptance of sex toys and the arrival of broadband Internet have boosted our growth".
Read - French sex website seeks to charm investors | Reuters.it
View Dreamnex site
Posted at 05:15 PM | Posted to News And Updates | TrackBack | Permalink
February 26, 2007
French VC Schmitt From Sofinnova Partners' On Early Stage And Jeroboam Logistics
Today we have a good Q&A with Jean Schmitt, managing partner of Paris-based Sofinnova Partners. He gave us a surprising amount of detail on how Sofinnova invests, where and why, the things it does to help entrepreneurs, and what will kill a tech deal.
The Q&A also reveals that Sofinnova isn't cheap when it comes to celebrating - it's the jumbo 3l Jeraboam-size champagne for celebrations. But you'll have to contact Schmitt yourselves to get the address of the most fantastic and unusual restaurants in Paris -- that's one tip he is not giving away.
The French venture firm is an early stage investor in European tech and life science company. Schmitt is one of its partners that focus on tech deals.
You have investments in Blyk, Accent, and Inside Contactless, located in Finland, Italy and Southern France, respectively -- which means a lot of air travel. Which is your favourite airport in Europe and do you have any tips about travel?
You are right, lots of travel and sometimes it’s simply insane! My favourite airport is the one that I have not visited yet - I love the feeling of being in a place I don't know, being late for check in, running with two pieces of hand-luggage, while I'm trying to insert a meeting on my Blackberry.
Seriously, we are investing in the best companies, wherever they are. For example, I'm also on the board of Esmertec in Switzerland and UPEK in Berkeley USA.
The trick is to structure the boards and the management teams early, have effective committees (compensation, audit, strategy) with clear responsibilities.
The second trick is to have a supportive family; I’m a former entrepreneur , it just looks like my previous life, nothing like an early retirement. [a:c euro Ed. Schmitt founded several companies and sold his last one, LP InfoWare, to Gemplus in 2000]
Do your partners gossip around the coffee machine (euro style) or is it the water cooler (US style)?
Coffee of course. But not just any type of coffee machine: an espresso machine, Italian style, since the arrival of two Italians in the Sofinnova team.
When Sofinnova has a reason to celebrate, like when you floated Vistaprint on NASDAQ or when Parrot floated on Eurolist at very healthy valuations, where do you book a table?
The central point for Sofinnova is to celebrate these successes with the entrepreneurs and their teams, celebrating our successful partnership with them.
We start by sending a gigantic bottle of champagne to the company --pretty complex logistics to deliver a Jeroboam from Europe, I can tell you!
We also mark occasions in time, key dates like our anniversary -- we are approaching our 35th: we have huge parties with many of our friends, at fantastic and unusual places in Paris. By the way, if you need a good restaurant address in Paris, let me know!
How do you source investments?
We read all sorts of business and scientific newspapers in order to detect new ideas at an early stage; we also attend and sponsor many professional conferences. We receive also around 850 unsolicited IT business plans per year from all sorts of sources.
Most importantly, we pick up our phones and get in touch with people - this is the way we found opportunities such as Varioptic or Sensitive Object.
Moreover the best deals are the ones you find after an extensive search in an area you believe is of interest. For example, our active interest in the area of « security and convenience for consumers” led to investments in UPEK or Inside Contactless.
Another example is Blyk which came from our search for an investment in both the sectors of mobile advertising and disruptive MVNOs: the Blyk approach of a free MNVO financed by advertising, alongside with an exceptional team led by Pekka Ala Pietila, former President of Nokia Mobile, made an excellent investment proposition.
Qosmos in the deep packet inspection, spin off from a French public lab is from the same family of long time searched for best of breed technology companies.
We've seen some pretty large-sized venture rounds in the past couple of months for semiconductor and some startups in the telecoms area. Is this healthy for the VC market?
Investments in Europe are still smaller in terms of total size of rounds and number of VCs per round than the ones in the US. Consequently, I believe that Europe is not "overheating".
Both in Europe and US, in order to build significant and global companies, we need to put a lot of money to work. Surely, fabless, semiconductor, telecom hardware companies require large funding to enter into the game.
Other companies, supposed to be more capital effective (such as web 2.0 companies), should raise less money...in theory.
I have the feeling this is a great time for VCs to be selling companies or floating them, but not so great to be investing, at least not as good as it was 12 to 18 months ago. Are valuations climbing in Europe? Is there more competition ?
Yes, there is some competition for investment in companies that are already well established - it is to be expected (and it is the case) that valuation will climb when companies reach later stages.
The surprising development is that some venture capitalists are becoming more inclined to go after later stage than early stage investments, even if they are marketing as early stage investor.
Our metrics show that seed and very early stage funding are getting more difficult. It might be even more difficult if you are not following the fashion. The big mistake is to follow fashions set by VCs, not by the market…
US VCs are under the impression that Europe is under-served with venture capital. What do you think?
Absolutely. Initially, when I joined Sofinnova end of 2001, I felt it great : so many great entrepreneurs and high level technologies, and so few VCs! Now, I tend to mitigate this way of thinking. We need to have lots of entrepreneurial VCs to become an industry, an asset class, not only a few success stories.
However, I am confident about the future; with time, LPs will figure out that European VCs are as or even more capital effective. Returns in Europe are spread among more funds, generating a safer overall return.
You are one of the few VCs that has invested in new human machine interface technologies, Sensitive Objects, what’s it like trying to grow one of these ventures and is finding OEMs a challeng?
Generally speaking, technology aims to make our life better, but sometimes it can definitively add too much complexity… I think that we need now to innovate more in order to increase ease of use of the technology, and reach a larger consensus and customer base.
We did a few investments into this direction, including Upek (fingerprint sensors), Wyplay (the “easy to use” media center you dream of for your living room) or Sensitive Object, provider of tactile user interfaces (touchscreens, wire free electric switches).
Sensitive Object is what I would call a “by the book” investment. We seeded the company on one basic patent and an outstanding researcher, out of the ESPCI in Paris (the school where Nobel Prize Pierre and Marie Curie use to teach and research). Then we turned this acoustic patent into a technology acoustic platform, and finally into products. The whole project is managed by a world class team and a strong board.
Today the company is selling thousands of clean keyboards for the medical industry. It's delivering its first breakthrough touchscreens (markedly cheaper for large displays, more reliable, brighter, etc.) and the first electric switches with no wires or batteries. The company has been fully funded by Sofinnova so far.
Concerning OEMs, there is no difficulty when the product is a great breakthrough as in the case of Sensitive Object or Varioptic [a liquid lens for cameraphones]…
UPEK was recently funded to expand into the US market. How is that going?
UPEK is a truly global company. General Management and hardware R&D are in the US, software R&D is in Prague, manufacturing in Singapore and sales are on all continents.
The company is now the leader in its market, which is the silicon based fingerprint subsystems and the consumer authentication software by fingerprint recognition.
It represents the type of company I like a lot: outstanding technology, truly global, on a relatively small, fragmented and very fast growing market. In addition, a lot of people get to enjoy the company's product under their fingers in new laptops from IBM Lenovo, Toshiba, Sony, Acer and more. By the way, if you don’t have one, buy a new laptop!
Finally, it is also a spin off from STMicroelectronics, which is another proof of maturity of the European venture market; we can spin off great companies from great large companies, where technologies are often hidden and management is well trained with true corporate values.
Since we liked it once, we did it again: one year later we spun off another company from STMicroelectronics, Accent, in Italy.
Do you have certain process that you undertake before and after making an investment in technology venture? Do you organize events or workshops for all your portfolio firms executives to get together ?
Yes, there are standard processes before investment; a strong due diligence is a support for a go/no go decision, but it is also the unique occasion to learn about the company upside down. We will never do that afterwards.
So before investment, we interview almost all employees in the company, we do extensive reviews of IP and technology, we work with the management on their strategy, including their future M&A strategy (on the buy side); we also introduce the companies to potential customers, just to check the company's ability to sell.
After the investment, the board organization and the installation of the right processes / reporting are critical. One would think that this is overkill: on the contrary I think that you don’t prepare a company for prime time early enough. It is not one year before an IPO that you start putting an ERP and the right financials systems, but almost from day one.
Regarding best practices sharing, we organize every year technology advisory boards, inviting key technology influencers and top managers, as well as our CEOs.
We also have our well-known CEO day, organized with Sofinnova Ventures, our US colleagues. The mix of CEOs from all continents, with different background being in life sciences or IT, and with some key executives from the industry is extremely rich. The “family” ambiance we are maintaining is also a key differentiator for Sofinnova.
What kind of companies are you looking for - stage, technology, geography? Which partner does what kind of deals ?
We are looking for Early stage investments (from seed to round B). We like to be lead or co lead investors, always rather active on the board. In terms of geography, we don’t care, if the company is great.
In the IT team, we are four partners, with particular areas of focus and interest, but open to invest in all domains. Olivier Protard and Olivier Sichel, former CEO of Wanadoo who just arrived at Sofinnova, are currently more focused on software, both on the technology, corporate and internet sides; Alain Rodermann and myself are now more focused on technology breakthrough and hardware, such as semi-conductors, materials, and more and more consumer sub-systems or systems. Mobile internet is taking off among all of us as well.
What is a dealbreaker for Sofinnova?
A dealbreaker is a great technology with no market, a great vision with no executable plan.
Sounds obvious, but looking at some startups out there, you would be surprised.
Surely dealbreakers are not either an incomplete team (we can always find complementary management-technology skills to build a first class team) or the finalisation of a technology development (engineers are able to solve almost any difficult technology issues). But there is no way to create a market.
What should an entrepreneur do if he wants to meet one of Sofinnova's partners to discuss a new venture?
He should simply send us his executive summary or even a quick email through our website; not need for a 100 pages business plan. He should just tell us what is new about his business or technology and who he is.
It is not necessary to explain us that the mobile internet market is exploding, that the operators need to grow their ARPU, and that Linux is the future… or to assault us with all the analysts’ quotes and graphs.
Just clear and simple. We will build the business plan together during the due diligence process with them if we are convinced of their potential.
Thanks for the interview
Posted at 07:36 PM | Posted to Venture Capital | TrackBack | Permalink
Huge London Deal In Works?: Viacom Might Buy LastFM
Dealbreaker has been reporting that Viacom is negotiating with LastFM on a $450M purchase and Vecosys says it was the talk of a recent confab in London that LastFM spoke at. LastFM recently signed a deal with Warner Music Group giving the internet radio station the rights to play WMG's entire music catalog.
LastFM monitors the music that each user listens to and accordingly recommends music that the user might enjoy. The site also allows music fans with similar tastes to communicate and share their playlists.
The site also provides an ad-supported stream of the music from the hundreds of independent labels it has deals with. It tends to get great user reviews.
Financial backers include VC Joi Ito together with Reid Hoffman, CEO of LinkedIn and Stefan Glänzer, CEO of 20six Weblog Services AG in the UK.
Read - The Rumor Mill: LastFM Being Picked Up By Viacom (Dealbreaker)
Posted at 04:36 PM | Posted to Media | TrackBack | Permalink
February 24, 2007
Italy's Dada Acquires Stake in Blog Publisher Blogo.it - Latest In String of Small Acquistions
The company behind Italian blog network Blogo.it has taken on a strategic investment from Dada Spa, a quick growing Italian web, Internet, and mobile service provider.
Blogging Entrepreneurs - You Just Can't Beat Europe For Stylish Founders And Digs.
The amount invested is €720K we believe -- for a 30 percent stake -- and an option to acquire 100 percent in two year's time (Please take our numbers as tentative for the time-being. We had to interpret a bizarre Google translation of the Italian press article that we linked to below).
The company behind Blogo is called E-Box S.r.l. and it has four founders and no employees. It claims 50 bloggers in its network and ad and sponsorship revenues of about 420K euros last year. The network generates 16M page views and about 3.3M visits (quoting Audiweb/Nielsen, stats for early 2007).
Maybe one of our Italian-speaking readers will let us know if we got the numbers right?
The deal implies a valuation of the two year old Blogo.it network of €2.3M.
In the Blogo.it corporate blog, the quote below shows the founders know what their getting themselves into now they've taken on outside capital:
The concrete results for the founders of Blogo.it will be very straightforward: after two years of working until late evening, now is the time for working until dawn, to complete existing projects and start working on new initiatives.
The deal is the latest in a string of small-sized acquisitions for Dada (CEO Angelo Falchetti pictured right), founded way back in 1995, which makes it a bubble era survivor, by the way.
Besides the Blogo.it stake, the company acquired in the past year Spanish Nominalia, domain registrar, UPOC Networks, a US Internet and mobile value added service provider, and it paid €4.5M for Tipic the NY-based company behind Italian blog and social networks operator Splinder, as well as Motime.
It does €112M a year in annual sales (2006) with a 13.5 percent margin and is listed on the Italian Stock Exchange. Its market cap is about €298M at the moment.
Read - blogo.it » Dada entra in Blogo.it
Read - Repubblica.it | Finanza
Posted at 07:02 AM | Posted to News And Updates | TrackBack | Permalink
February 23, 2007
Xchanging Planning IPO
Xchanging, a London–based business process outsourcing company founded in 1998 with the backing of General Atlantic, is considering an IPO, reports Financial Times. The offering would be on the LSE and would possibly value Xchanging at around £500M.
If the company floats at that valuation, it would be a good return for the investors and the founder, but also a success story that begs the question: how many opportunities to create billion dollar companies like this have been missed in the past 7 or 8 years because VCs in Europe were drip-feeding the venture.
The firm's story reveals an unusal level risk-taking on the side of its VC-backer General Atlantic, even if one could argue that it isn't a pure tech venture, it's an IT services company. It financed the founder, David Andrews, with £60M to startup when all he had was a business plan. Other VCs in Europe tabled offers for sums of about €1M, according to a feature story in Financial News published in 2005.
Xchanging got a further commitment of £50M a few years later and has completed a couple of acquisitions of smaller rivals and a joint venture it was involved in.
In the meantime, it went from zero to £260M in annual sales by 2005 and employs 3,000 in 10 countries.
Since August of last year the company has disclosed almost a billion dollars worth of back-office outsourcing contracts (since there are some undisclosed amounts for new contracts it may even have pushed it above that figure).
View Xchanging site
Read - General Atlantic May Float UK Unit (ft)
Read - No Limit To Xchanging Ambition (financial news)
Posted at 07:45 AM | Posted to News And Updates | TrackBack | Permalink
Alt Energy's Stellar Returns - Size Matters, says Eurosif
Your a:c euro reporter has been calling out the positive returns in alt energy investing for a while now. A Eurosif study provides more fodder for that positive view and reveals some meaty figures on the European market.
The report, based on a survey of 23 funds active in the sector, says that VC-like returns are expected by those investing in the sector and in some cases are already happening. It's not about providing charitable donations.
And there are a couple of good case studies with exit multiples that show that green investing is not always about newfangled power generators or electric cars.
But pension funds and foundations are leaving the funding of green VC funds in Europe to high-networth individuals and family offices. We've posted here before that pension fund apathy and that of the well-paid folks that advise them, so-called gatekeeprs, are underfunding alt energy investment in the region and this report makes it clear.
Maybe it's a form of the short-termism that Paris-based Sofinnova's Jean Bernard Schmidt talked about recently at an institutional inestor confab (see Short-termism link below).
Other nuggets are listed below.
Last year was a boom year with €158M invested by those surveyed
The good news, about €1.58B was raised by 2006 for alt energy investing in Europe. The bad news, it's a drop in the bucket compared to the €72B raised mainly by private equity houses in the region.
Early returns are stellar --
Of the 57 portfolio companies sampled, five had completed an IPO and three had been sold to a trade buyer. This group of companies had produced an average annualised return of 476% for their investors.
> Schmack Biogas delivered its VC backer 10 times money at its IPO and they still have some share left
> SimplySwitch delivered its VC backer 22 times money.
It is not all rosy. There are companies that don't make it, as the report shows, and many that have not appreciated in value since initial investment. Not surprising since most of the VCs in the study have only been putting money into the sector for a few years. Let's hope they don't all start investing with a short-term strategy, that is, investing for the quick flip or backing only late stage deals.
One of the findings of the study is intriguing: larger funds had better IRRs (The Internal Rate of Return is a metric used by buyout and VC firms to measure returns over time and can be applied to a single investment or a fund - we are not informed which is the case for the following quote).
Funds that had attracted more than €100 million of capital earned IRRs more than ten times those of funds that were under €100 million.
Read - Short-termism damages EU economy (reuters)
View Eurosif Report (pdf)
Posted at 06:40 AM | Posted to Alternative Energy | TrackBack | Permalink
Boungiorno On A Buying Spree To Grow Mobile Portfolio
Moconews drew our attention to Boungiorno's ongoing small-ticket acquisition spree, with the news that the Italian mobile content and distribution platform company had acquired Dutch mobile marketing company HotSMS for €4.3M.
That prompted us to take a look at it what it's been up to. Buongiorno, whose market cap is €335M (about a quarter of the company still belongs to founder Mauro Del Rio) made its first big acquisition when it bought Italian music download provider Vitaminic, a high-flier of the European bubble era.
And since then acquired European businesses such as GSMbox, Freever, DioraNews, as well as forming a JV with Mitsui to reach the Russian and East Asian market. Last year it bought Calif-based RocketMobile for $17M.
This year, in addition to the HotSMS deal, it also acquired Inventa for $2M and Chinese eDonga for $2.7M.
Boungiorno is making these moves in order to become a "digital marketing services" leader and add know-how for mobile video, that means the firm will not only deliver content but also SMS and MMS-based marketing services to a global market.
It is certainly not overpaying to make that strategic move. It will be interesting to see the results over time. It does about €192M in annuals sales, right now.
Read - Buongiorno Buys Dutch Mobile Ad Firm (moconews)
View Site
Posted at 05:36 AM | Posted to Wireless | TrackBack | Permalink
February 22, 2007
ProSiebenSat.1 Acquires Majority Of Price Comparison Site Operator
ProSiebenSat.1, the German TV broadcaster has acquired a majority stake in Karlsruhe-based Solute GmbH for an undisclosed amount. The company has two founders who started it up in 2004 after holding exec positions at Web.de. It does not appear to have raised VC.
Solute runs billiger.de, which claims to be the second largest (and by the looks of it an oldie) price comparison engine in Germany with 34 million page impressions a month.
Read - People and Deals - Prosieben Steigt Bei Solute
Posted at 07:44 PM | Posted to News And Updates | TrackBack | Permalink
Dawanda Does A Deal With Holtzbrinck Ventures And Spreadshirt
Berlin-based Dawanda has raised a small amount of capital from Holtzbrinck Ventures Fast Forward (see our post on it via link below) program to grow its very nicely designed online platform for people to sell their crafts and handmade items. Spreadshirt AG, Leipzig, also owns a share in the company after Dawanda acquired its subsidiary sozeug.net, paid for with Dawanda shares.
If you know about Etsy, Dawanda is similar.
But this one has, of course, a European style.
And some Berlin edgyness
REad - Holtzbrinck Steigt Bei Dawanda ... (peopleandeals)
Read - Fast forward (alarm:clock euro)
Posted at 06:53 PM | Posted to News And Updates | TrackBack | Permalink
Norway's TH!NK Raises Capital For Electric Car
Norwegian electric care maker TH!NK GLOBAL got commitments for $50M in funding and accepted $25M, reports CNET. The company says that later in the spring it will try to raise an additional $50M.
Read -Cute Electric Carmaker TH!NK Raises (alarm:clock)
Posted at 05:40 PM | Posted to Alternative Energy | News And Updates | TrackBack | Permalink
Web 2.0 In Hungary And Anti-Social Networking
Estonian founders are not the only ones in Eastern Europe building Web 2.0 communities. Hungary has a hive of hot beta activity too. T-Mobile recently acquired IWIW, the oldest and largest social networking site in Hungary for about $4.7M.
keptelenseg.hu an anti-social network.
Population --9,981,334
Capital-- Budapest
Distance between Vienna and Budapest -- 320 km
Here are some links to find out more about the Hungarian trends.
Read - MoMB: Beta Quotient: Hungary - The Blog
Read - webkettő's list of Web 2.0
Read - Top Web Apps in Hungary according to Read/Write Web
Read - orangelog.eu: Web 2.0 in Hungary
Posted at 06:19 AM | Posted to Being European | TrackBack | Permalink
Epcos Buys Aktiv Sensors For Pressure Sensor Prowess
There is ongoing consolidation in the MEMS sensor market, something your a:c euro correspondent has been tracking in her freelance work. And it continues with the news yesterday that Epcos, the German components manufacturer, has acquired AKTIV SENSOR GmbH for an undisclosed amount. AKTIV makes piezo- pressure sensors, transmitters, customer specific solutions in silicon.
AKTIV SENSOR is a 15 year old company is located in Stahnsdorf south of the german capital Berlin. No VC as far as we could see and it does about €5M in sales annually, employing 60 people.
Read - Epcos press rel.
Read - MEMS competition on the upswing (eetimes)
Posted at 06:07 AM | Posted to News And Updates | TrackBack | Permalink
February 21, 2007
Spotzer Raises Second Round For Ad Platform
We had an email from Andrew Klein today noting a change of contact info and that Spotzer Media Group, the Dutch ads biz disrupting company he joined as CEO in December was in launch mode. Curious, a trip to Spotzer's website revealed that last week Spotzer announced raising a second round of financing that your a:c reporter missed.
The size of the second round was not announced but it included investments by individual investors from the US and Europe, as well as DutchView, Holland’s largest post production company.
Spotzer’s pitch is that companies can purchase affordable and highly targeted advertising-time on television, websites and mobile devices. We interviewed the founders last year and the link to it is below. One of Spotzer's backers also has a post about Klein's track record, which includes starting Spring Street Brewing Company, Wit Capital, Soleil Securities, and SkyBridge Capital.
Read - Spotzer a serial entrepreneur strikes again (pure vc)
Read - Spotzer Europe's answer to spotrunner (a:c)
Posted at 05:37 PM | Posted to News And Updates | TrackBack | Permalink
Garlik Looking To Raise More VC
An interview in The Guardian reveals that Garlik could be out looking to raise some more VC for an international push.
We came across the news (via Library House newsletter this week) in a long interview with Mike Harris.
Harris is one of the co-founders Garlik, the 3i and Doughty Hanson Technology Ventures-backed startup that aims to offer UK users "peace of mind" in the face of the threat of "online identity theft".
It has insights into the firm's founders, its culture -- heavy on the PR and corporate image -- and its freemium business model.
Garlik hopes some of the 40,000 people who have signed up for its free trial service will fork out up to £3 a month for a data check and trawl through personal details.
"... ambitions for Garlik include a possible US launch later this year. In the coming weeks, the company aims to raise more funding from its investors, the venture capitalists 3i and Doughty Hanson, who paid £3m for a 50% share."
Read - Once the Egg head - now Garlik is more to his taste (Guardian online)
Posted at 07:49 AM | Posted to Web 2.0 | TrackBack | Permalink
alarm:clock euro Puzzler
A recent history question for our alarm:clock euro readers this week...
Three of the partners at Atlantic Bridge (Paul Harvey, former Euro head of technology at Goldman Sachs, Brian Long, founder of Irish semiconductor firm Parthus Technologies (floated by Goldman Sachs) and Kevin Dillon, former Microsoft Euro top exec) along with former Amadeus Capital Partners investment profi Hitesh Mehta, announced -- but failed to raise an early stage European venture capital fund back in 2004, a dark time for European venture. What was the name of the firm?
Visual Clue
Send your answer to our a:c euro newsdesk and win fame, if not fortune in this week's quiz question....
Posted at 07:07 AM | Posted to quiz | TrackBack | Permalink
VC-led Consortium Acquires SMS King For €392M
An Irish consortium led by Atlantic Bridge, the VC fund founded by ex-Parthus CEO Brian Long, has acquired LogicaCMG’s Telecoms Products business for €392M in cash.
The division, which employs 1,700 people and does about $450M a year in sales will be called Acision.
Its claim to fame is delivering messaging solutions and services for text and multimedia messaging. It also provides voice and video mail services and payment platforms.
It seems that Atlantic Bridge tapped its venture partner Larry Quinn, the former CEO and chairman of Logica Mobile Networks, to get in on the deal.
Atlantic Bridge stated that the deal was supported by Dermot Desmond’s International Investment and Underwriting (IIU) and US-based Access Industries. It is not clear if these two are also LPs in Atlantic Bridge's fund. This transactions suggests that Atlantic Bridge is going for a later stage and more opportunistic style of investment than what the a:c euro thought.
We recall that it originally had been mulling an early stage approach when it was talking about raising a fund a few years ago. It's not the only one shifting styles in recent times. Benchmark Capital Europe has also done deals like this in the past couple of years too. We suspect it is easier to raise a fund in Europe with this approach than a pure early stage venture approach.
Read - Atlantic Bridge press rel.
Posted at 06:48 AM | Posted to News And Updates | TrackBack | Permalink
Neuf Cegetel Acquires VC-backed Broadband Fiber Telco Erenis
Neuf Cegetel has acquired Erenis, which bills itself as the number one fiber operator in Paris. The size of the transaction was not disclosed. That will be an exit for early investor Net Partners, an Italian VC, as well as the investors that participated in its €22.5M round last year Iris Capital, AGF Private Equity and Crédit Agricole Private
Equity. Caisse des Dépôts came in later in the year with another €4M.
James Enck, a telecoms analysts who publishes the EuroTelcoBlog (one of the oldest and well-read tech blogs in Europe) said that although the amount wasn't disclosed, but he believes it will deliver a "nice return" for the VCs.
Erenis Delivers Capital intensive Fiber-to-the-Building Broadband Service
Read - Four Cool Things (eurotelcoblog)
Read - Fibre optique: Neuf Cegetel met la main sur Erenis Télécoms (Atelier.fr)
Posted at 06:34 AM | Posted to News And Updates | TrackBack | Permalink
Scottish Ateeda Seed-Financed With Peter Denyer As Co-founder
Edinburgh, Scotland-based Ateeda, a semiconductor testing solutions vendor, has secured seed funding to target mixed-signal integrated device manufacturers (IDMs) with its tech.
The company's co-founder and non-executive chairman is Peter Denyer who is well-known in the semiconductor venture market as having an eye for promising startups. He was founder and CEO of CMOS imaging chipmaker Vision Group, which went public in the mid-nineties and was acquired by ST Microelectronics in 1999 and he has been invovled with several promising startups coming out of Scotland (something we learned at the Scottish Tech Tour last year - see our report below).
Other Ateeda funders include the Scottish Seed Fund which is managed by Scottish Enterprise, Scottish Equity Partners, and the University of Strathclyde (one of your a:c euro correspondent's alma maters).
Ateeda was founded in 2006 and is specialized testing mixed signal devices, the "fastest growing" area of the semiconductor industry, according to CEO and co-founder David Hamilton. Its tech is patented and enables chipmakers to use the same equipment to test digital and analog sections of a semiconductor.
It also has Jane Karwoski McCracken as non-executive director. She has a background in startups of all kinds, from life science to online travel and games development. We're not sure if she is also an investor in the seed round.
View Ateeda site
Read - Silicon Valley VC Invests in Scottish (a:c euro)
Posted at 06:16 AM | Posted to News And Updates | TrackBack | Permalink
Google GoYellow.de Anti-Rumor
The German IT and business press this week was buzzing about a potential takeover of GoYellow, which runs an online business directory and ad-funded voice service called PeterZahlt.de, after Welt.de published a speculative piece on the topic. The story quoted un-named industy insiders as saying that Google was mulling taking a significant stake in publicly-traded company behind GoYellow.
It was news that Google declined to comment on.
Google supplies mapping technology to GoYellow's site telephone directory site through its recent acquisition of Swiss geo-software startup Endoxon. PCOnline.de says that GoYellow has an exclusive contract to use Endoxon's tech for the German market.
We think it's unlikely that Google would acquire GoYellow. GoYellow is a cash-burning, money-losing marketing and publicity-heavy company. Sales last year were a little over €3M but it spent more than €20M to generate those sales.
If you look at the kind of companies Google has acquired on this side of the Atlantic, they've been strong on braniacs and weak in marketing. Google is hoovering up smart programmers and developers at an incredible pace in London and Zurich to feed its search and advertising machine. And we can't imagine it wanting to get involved in a turnaround situation.
Read - Internetauskunft: Google will offenbar bei Auskunft GoYellow einsteigen (welt.de)
Read - Folgt Endoxon Nun Übernahme von GoYellow? (pconline)
Posted at 05:51 AM | Posted to News And Updates | TrackBack | Permalink
February 20, 2007
London's ScanSafe To Fight Malware Harder With $15M In Fresh Funds
ScanSafe, a London-based Web security-as-a-service firm, has raised $15M in Series B led by Scale Venture Partners with return backer Benchmark Capital. The company sells security and control over Web and IM by scanning traffic in real-time and blocking malware and unwanted content like gambling and porno before it reaches the corporate network. So it competes with the big security companies but does so with a hosted platform twist. ScanSafe reports spyware was up 254% in 2006 while Web viruses declined 32% in 2006.
The company was co-founded by and is led by a pair of brothers who both came out of investment banking - Eldar and Roy Tuvey.
Visit - site
Posted at 05:58 PM | Posted to Security | TrackBack | Permalink
France's CoFluent Raises $2.6M First Round
The backers of CoFluent Design, a Paris-based developer of semiconductor design tools that enable simulation and verification of both hardware and software design flows, wrote in to say they invested in a $2.6M Series A round funding to expand its marketing and sales worldwide. The deal was led by Emertec Gestion, joined by BNP Paribas Private Equity and UFG Private Equity.
Its site has a good old fashioned sales pitch right up front.
Customers include 3G phone manufacturers, not the least challenging type of customer to deliver design tools to. Companies such as Nokia, Altera, and NXP are named as partners and customers.
View site
Posted at 05:05 AM | Posted to News And Updates | Semiconductors | TrackBack | Permalink
Spanish VC Nauta Backs US-based CarrierIQ
The flow of capital between the US and Europe isn't all one way. Sister-site the alarm:clock has the news that Spanish VC Nauta Capital invested €4M CarrierIQ, a wireless diagnostics company based in MountainView Calif.
Its software is targeted at wireless operators (CDMA) and is able to report-- "up to 200 variables by the hundredth of a second" -- on the wireless consumer experience.
Nauta is a new name to the a:c euro. It recently closed a $65M (€50 million) second fund. Its first was raised in 2004 and includes Southwing, Tao, CenterPost (acquired by West Corp) and The Node Company in the portfolio. It has offices in Barcelona and Boston and invests between $3-6 million in first and second stage telecommunications and technology companies with a special focus on wireless. The founders all have a background in wireless sector consulting.
It's a specialist firm in the mobile sector, a style that hasn't been the most stellar one for funds raised in the late nineties, but since they've raised a second fund within a three year period, no easy thing in Europe, they must be doing something different and better.
Read - Cellphone Bean Counter CarrierIQ (a:c)
Read - Barcelona's Southwing Financed (a:c euro)
Posted at 04:46 AM | Posted to News And Updates | TrackBack | Permalink
February 19, 2007
Big Bang for Broadband TV Startup Avinity
Big Bang Ventures and Solid Ventures, two local area VCs, have invested an undisclosed amount in a first round for Avinity, a Dutch developer of interactive TV software targeting Digital TV operators and content providers. The deal was actually announced in late January but we're just covering it now.
This is not the founders' first venture. They also founded NoWiresNeeded, whose products enabled high-speed and secure Wifi communications back in the nineties, acquired by chipmaker Intersil back in 2000, which became part of Conexant. Avinity's founders left Conexant in 2005 to start up Avinity.
Avinity's platform, which has some patents in the works, makes it possible to deliver popular web applications like video blogs, casual games, media portals, and photo sharing to TV screens. It claims support of any kind of settop box.
View Site
Read - Press rel.
Posted at 08:15 AM | Posted to News And Updates | TrackBack | Permalink
Estonian MySpace Founder Makes International Moves
You know we like to keep track of which VC and founders are executing on their plans and living up to their marketing spiels. Rate.ee is an Estonian MySpace clone we've written about here before. Its founder is executing his ambitious plan for growth, announced when he took on some strategic financing last year.
We had an email from Jüri Kaljundi who wrote in to say that Rate.ee, the Estonian MySpace is expanding into Beligum, Netherlands and Latvia, Lituania, as well. And all this on about €1M of capital the firm raised last year.
In a blog post, Kaljundi also sums up the local competition in The Netherlands. Who knew there were so many youth communities there? We didn't.
And also in Kaljund's blog, you can find out why Estonia has a high-density of Hummers.
Read - Estonian Rate Solutions conquers Europe (Kaljundi blog)
Read - Estonian Founder To Expand Popular Youth Portal Internationally (alarm:clock euro)
Posted at 06:10 AM | Posted to Web 2.0 | TrackBack | Permalink
DataLase Taps New Investors In $10M For Packaging ID
Based in Widnes, Cheshire, UK DataLase has raised $10M in new VC funding from BASF Venture Capital and Hotbed and joined by return backer MTI Partners, reports sitster-site alarm:clock
It's developed products for the packaging industry that are cheaper (low power commodity lasers are used in the readers) and easier to implement than competing solutions for authenticating and providing product info.
Read - Color Change Tech Datalase Raises (a:c)
Posted at 05:33 AM | Posted to News And Updates | TrackBack | Permalink
February 18, 2007
alarm:clock euro Puzzler winner Brandsma - Two Other Readers Tie
The answer to last week Valentine's Day Puzzler
Which European VC recently invested in a company that makes an aphrodisiac for women?
was Banexi Ventures Partners in Paris.
It invested in LMD Pharmacognosie which is developing a product called Diapensia, a female libido booster.
First to write in with the correct answer was Marc Brandsma, who was also first last time around.
Brandsma got to know Banexi Ventures when he was raising the first round of funding of VIOLET (the company behind the wifi bunny) last year. He is a partner at Chausson Finance, a Paris-based corporate finance advisory.
Brandsma said that working with Banexi caused him to dig into their portfolio and he remember having been pleased to find a company producing medicines from plants. "Usually it’s more about recombined genes or artificial molecules, " he wrote.
Fred Destin from Atlas Venture tipped the winning answer too. His answer came in about the same time as that of another valued alarm:clock euro reader, Alexis Vassilopoulos, a soon to graduate MBB-student at the IESE in Spain who speaks five European languages and has interest in interactive TV.
Posted at 08:54 AM | Posted to quiz | TrackBack | Permalink
Another US VC Backs An Early Stage Austrian Venture - DynaTrace
Austria's dynaTrace software Inc., has raised an A round of $5M from Bain Capital Ventures. The deals is the second one for Austria where a US VC is taking an early stage stake and without a local investor to co-invest. The other was Sequoia's investment in low-budget voice service provider JaJah.
It's an "A" round, but dynaTrace's founders have already developed the first couple of products, namely tools used to test the performance of enterprise and web applications. They've got resellers in Germany and have the marketing basics in place.
According to a report in Austrian business journal boerse express, the startup had five offers from VC, and they chose Bain Capital Ventures because of its willingness to "transfer its know-how". The negotiating team spent three months with dynaTrace and delivered "worthwhile input". The team-spirit was a key factor in the decision to go with Bain. It also helped them open offices in Boston and hire a startup team there.
There are other products like this in the market, but the Austrian firm's edge, it says, is its lead in enabling the measurement and locating error and latencies in multi-layer apps, the kind that include web services, database applications, and applications in a distributed environment. It uses something it calls sensors embedded at the edge of application layers that monitor and deliver test results quickly. Another attraction, is that the tool can be installed and configured for testing "five times faster" than anything else on the market, the firm said.
The company was founded in 2005, employs 18, and has started to penetrate the German market.
dynaTrace founders (left to right) Sok-Kheng Taing (CMO) former Marketing and ebusiness Manager at Büro Handel and Büroprofi GmbH ; Bernd Greifeneder (CEO), formerly CTO of ARC, acquired by Seque (now part of Borland); and Hubert Gerstmayr (CFO)
Read - Bain Capital entdeckt junges Linzer Unternehmen : boerse-express.com - the business place to be
Posted at 07:53 AM | Posted to News And Updates | TrackBack | Permalink
February 15, 2007
Omniture Acquires Another VC-backed Venture: TouchClarity
Orem, UT-based Omniture has acquired London-based TouchClarity in a deal worth $51.5M. TouchClarity sells automated behavioral targeting software offered as software-as-a-service. It allows companies to optimize their web sites using behavioral targeting and has won a fair number of UK clients.
This is its second acquisition of a VC-backed Euro venture this year. The other was Instadia in Denmark.
Read - Omniture Buys London's TouchClarity for $51.5M (alarm:clock)
Read - Omniture buys Instadia (a:c euro)
Posted at 07:07 PM | Posted to News And Updates | TrackBack | Permalink
Streamezzo Acquires Kamayo - Is Blancquart On A Roll?
Paris-based mobile and digital media solutions startup Streamezzo has acquired two-year old Kamayo, a French developer of mobile applications, particularly those that support TV and music delivery. Kamayo has been using Streamezzo’s technology in customer projects.
This is the kind of service and portal you can offer with Streamezzo's content technologies
Streamezzo delivers its products and services to mobile network operators and media providers.
Alain Blancquart is CEO of Streamezzo. Regular readers will recognize his name: Blancquart headed up Swiss-based Esmertec as it acquired several rival mobilephone software startups in Europe, the US, and East Asia, and he was the CEO for its IPO. With this acquisition done, we're wondering if Blancquart is planning to do the same thing again with Streamezzo. Both Esmertec and Streamezzo have in common Sofinnova Partners as a VC.
Site- Streamezzo
Read - Esmertec Rollup Machine (swissventures blog)
Posted at 06:31 PM | Posted to News And Updates | TrackBack | Permalink
Hello Tallinn, Hello Sophia! Index Ventures Is Calling
Less than two years after closing its fourth fund, Index Ventures has raised its fifth. This time it's a €350M fund, which is $50M more than the last one.
That makes three European VC firms that have raised their second funds post-bubble, at a time when many of their peers are still trying to close their first post-bubble fund.
The other two are Northzone and Benchmark Capital Europe. It just shows that capital will flow pretty quickly - even to European venture funds- not the most popular category in the eyes of LPs- if the VCs can show returns.
The alarm:clock euro talked to Bernard Dalle to find out what the VC firm plans to do differently with this fund, e.g. Eastern Europe is on the map, and his view that some Euro VCs think they’re private equity investors.
Dallé said that it was a quick closing and oversubscribed. Not surprising considering Index’ big Skype deal and its handling of Betfair, however it wasn’t just its own investments that made investors want to get into its new fund.
“You shouldn’t lose sight of the creation of a critical mass of companies like CSR, Q-Cells and TomTom. It wasn’t the case for Europe when we raised our last fund. These are billion dollar companies, but there’s also been some greater than $100M ones like Cramer.
Europe is the attraction, but Index has also invested in several US companies.
The LPs are happy to be exposed to the deals we do across the Atlantic -- the deal ones we did because of our network, but our focus is Europe, and now Eastern Europe too.
Index has been talking about the potential of investing in Eastern Europe since you raised the last fund, but the only deal you closed there so far has been Allpeers.
True. But we are currently looking closely at a couple of investments. We were opportunistic until now. But we have a more structured approach. We’ve met with VCs and entrepreneurs in Estonia, Prague, Russia. Index is starting to be visible there and getting to know the players.
It seems to us that it’s a good time to be selling companies, rather than investing.
It is a good time to be selling. There’s a solid IPO market, particularly in Europe and good M&A. As for investing, investors may be chasing opportunities that are over-priced. Where it gets pricey is with consumer Internet companies that have revenues. But early stage deals are still reasonable [reasonably valued] – where value can still be added by our team. A result of the value that we offer, we are able to get reasonable terms and conditions. This is not private equity. We're looking for smart, hungry entrepreneurs that could be doing their first ventures.
Index Ventures, which has offices in Geneva, London, and Jersey, is focussed on Europe tech and life science companies, but its LP agreements say it can invest globally.
It also has named Saul Klein as a venture partner on the tech investment side. Vecosys blog has more about his track record.
Read - Saul Klein leaves Skype to turn “gamekeeper” at Index (vecosys)
Read press rel.
Posted at 07:35 AM | Posted to News And Updates | TrackBack | Permalink