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May 20, 2009

Football Social Net Footbo Raises $1M

Hard to keep us back from the nexus of soccer and technology, so we are here to inform you that London-based Footbo has raised $1M from Pitango Venture Capital.

The site is exactly what you would expect if you have been to any nice built from the ground up sports site. It has Facebook app, team and player profiles, scores, fantasy, yadda, yadda, yadda. Its the kind of site that any father would be proud of.

Are these good businesses? Sure if they can grow and restrain themselves from having to raise further funding and get to $1M in revenues or thereabouts its fair play to see them funding a buyer at $10M. There are a number of larger competitors out there so it would be great to see Footbo add some features or partnerships that will make a difference.

We understand that a big problem with soccer sites is that visitors want and expect to see video clips of recent games and that the leagues will destroy you if you take any liberties. That gives huge advantage to sites like ESPN that can gain access to those clips.

View - site

Posted at 05:31 AM | TrackBack | Permalink

August 27, 2008

Euro Venture Investing Declines

Venture capital firms in Europe invested in 167 young companies in the second quarter, 42% fewer than in the period last year. Venture dollars invested declined 35%, to $1.3B. The quarter was the worst since at least 2000, when VentureSource started tracking European data.

But yes there are optimists. Mark Tluszcz, co-founder of Mangrove Capital Partners, told the New York Times "The slowdown was a short-term phenomenon. “As I look for deals and talk to people, I have never seen a time in Europe when there are so many good, young companies being started,” he said. “I’m not overly worried.”

Read - Europeans Retreat on Venture Investing

Posted at 07:14 AM | TrackBack | Permalink

January 17, 2008

A View From Paris on French VC Trends

We checked in with Pascal Mercier of Aelios Finance, a corporate finance advisory firm in Paris, for his view on early stage venture trends in France.

Aelios did 20 transactions last year, many of which are listed on its website.

One thing notable is the size of the early stage rounds it helped to raise for companies like Kayentis, AirinSpace, BlueKiwi, and 24:00h (all of which we've covered in these pages). It also advised Criteo on its €7M round announced this week with Index Ventures as the lead investor.


Here is what he said on capital available in France...

The French venture funds raised a very high amount of capital last year. The FCPI- type of funds typically raise about €30M every year, but in 2007 we saw firms raising €50M and €70M. Regular “LP GP” funds, such as Ventech or Alven raised large amount of Capital also based on their good performances. [FCPI investors receive a tax break and are similar to VCTs in the UK].

That Means It is Easier for Founders to Raise Capital?
Yes but even with a lot of liquidity in the market, there are still high hurdles to qualify for capital.

What are VCs Looking For?
Internet related ventures. They know that France has some great entrepreneurs in the Internet industry, and a good ecosystem with a lot of success stories.

The software sector is another story.

Within the Internet category, online advertising-related ventures are of interest, as are companies that can provide Web 1.0 companies with next generation or Web 2.0 innovation. A typical transaction that illustrates the point is Expedia's acquisition of TripAdvisor. They paid a lot of money for that startup.

And music industry related Internet ventures. It's the size of the market that is attractive and the knowledge that business models are changing. There will be new business models.

Another area where we see interest from investors is in companies that provide Web and eCommerce know-how to brands.

Just three years ago, it was taboo for good brands to sell via the Internet. Now Dior and Louis Vuitton are online. The others will follow and many are too small to do it themselves.

Beyond the Internet?
Everybody, including early VCs are looking for cleantech investments, but they need to find companies that have a capital requirement cycle similar to the life of a VC fund. There are not a lot of such ventures, typically they are long on R&D, and are selling into markets with very long product design or implementation schedules. As a result we don't have many such transactions, yet. Biotech and medtech remain good business areas.

How would you characterize the past two years [of venturing] in France?
2006 was the year of online video
2007 was eCommerce

And how do you see the coming year?
2008 will be more ecommerce and advertising innovation, particularly firms that can make advertising less costly than it is now.

Posted at 08:17 AM | TrackBack | Permalink

November 05, 2007

Top 100 Women in Finance List - Just One For the VC Crowd

Triangle Venture Capital's founder and general partner Ulrike W. Fricke was named one of the Top 100 Women of Finance in Europe in this year's round up in Brummell magazine. She's the only early stage VC who we eyeballed in the list.

(Published semi-regularly by efinancial news Brummell is a bit like Vogue magazine-for-financier types in that the ads are almost as good as the content.)

We always try to scan the names of investment allstars, or envy lists, and other high-flyer rankings that financial publications over here put out each year to see how venture capital is faring. We figure if early stage VC fund managers make a strong showing compared to investment bankers and private equity firms then it's a sign that the asset class is on the upswing.

However, for the past five or six years European VC typically only gets a token winner or two. As we've said before it's one of the least loved asset classes institutional investors can buy into (although it may have moved up a few rungs by now, replaced by funds that invest in financial instruments for less than AAA debt).

Enough of the sideline kibbitzing. We think one reason this early stage, German-oriented fund founder made the list is that last year she was able to sell the firm's vintage 1999 to 2001 portfolio to an undisclosed institutional investor, pointing out at the time that returns on the porftolio were in the 'upper quartile' compared to its peers in the US and here.

Since so few VC tech funds actually generated cash returns for the years 1999 and 2001 it was an achievement.
What is particularly interesting from the alarm:clock euro's point of view is that Fricke's fund managers seem to be good at helping startups generate revenue streams. Of that portfolio Triangle sold, the "most successful ones will were making €8-10M annually.

Recent investments for this modestly sized venture firm include iPharro, which has developed video search tech but is currently pushing its tech as an alternative to DRM in video.

Triangle also invested in xaitment, which sells tools for games developers to create more lifelike opponents - it calls them bots - for virtual worlds and simulation games.

This startup recently opened a Silicon Valley office and recruited Katja Reitemeyer as CEO. She moved from Germany to Silicon Valley a few years ago to lead sales in the US for NXN Software (a Euro VC-backed company), which was acquired Avid Technologies

Both startups are hiring.

View Triangle Venture

Posted at 06:47 AM | TrackBack | Permalink

October 24, 2007

Skype's Michael Jackson Joins Mangrove Capital

The latest issue of Mangrove Capital's newsletter (pdf)features the news that Michael Jackson one of the members of the early management team of Skype has switched to the investment side of the table, joining the Luxembourg-based venture firm. Mangrove, in case you need reminding, was also an early investor in Skype.

He says he might be old-fashioned but he likes tech companies that are selling something. He headed up Skype's tech operations and is a former Tele2 exec.

[via]

Posted at 10:37 AM | TrackBack | Permalink

September 18, 2007

Euro VC Fund News: PTV Primes The Pump While Viadeo's and MXP4's Backer Raises €150M

French firm Ventech , which you may recognize as the backer of startups we have covered here like business socnet Viadeo, and MXP4, has closed its third fund on target at €150M.

It says it will continue to invest in early stage companies operating in the IT (software, hardware and communications, and applications and services) and biotechnology sectors in Continental Europe.

New LPs contributed nearly half of the fund's capital, which is an indicator of investor confidence in the firm's ability to generate returns. Ventech has already made several investments from its new fund, including Crocus (supplier of DRAM products and technologies), MXP4 (digital interactive music format), Skyrecon (security solutions software) and Viadeo (business social networking).

Prime Technology Ventures, announced a first closing on its third fund on €60M. The target of the fund is €150M. The early stage North-West European-oriented investor said that its existing LPs, such as Adams Street Partners, Feri, Parcom Ventures (the private equity arm of ING Group) and a number of family offices are on board.

Its first investment with the new money is in Vespro, the company behind Greetz, which offers printing on demand service for personalized greeting cards. Other recent new investments include the video clip advertising innnovator Adjustables, which we have covered, soc net startup Netdialog (also covered in these pages) and Palringo.

In the last 12 months the firm said it successfully exited investments in Global Collect, Human Inference, MarketXS, Tridion and Watermark, which explains the LP interest in the new fund, no doubt.

Posted at 08:12 AM | TrackBack | Permalink

September 16, 2007

Euro VC Fund News: New Italian and Finnish Early Stage Funds Attract Buyout Pros

Two new tech venture funds for Europe reveal some interesting contrarian activity among founding general partners.
It looks like a few buyout investment pros in Europe are leaving LP-money-magnet buyout funds to the less LP-favoured asset class: early stage European VC.
Read on to find out more about a few that prove that not all PE pros are in it for the fat management fees.

In Italy a brand new partnership called Innogest Capital has two founders that hail from the buyout sector: Marco Pinciroli, formerly of BC Partners, and Claudio Giuliano, formerly a senior associate at Carlyle Group [via realdeals.co.eu]. They’ve just closed an €80M fund for Italian tech ventures called Innogest. And in Finland, Contor Venture Partners has attracted one of the founding partners of Eqvitec.

It is positive news that Innogest actually closed a first time fund in Europe. Its portfolio firms include HT Srl (€1.5M raised) whose products and services are aimed at government agencies and law-enforcement to combat computer crime, and “TheBlogTV” with the same amount of capital.

You can get some insights into the tech zeitgeist in Northern Italy where this fund is active on Torino Wireless.

Finnish Contrarian Move

Pinciroli and Giuliano are not the only private equity pros to leave the money-heavy asset class. Jari Mieskonen is now a managing partner at Conor Venture, also a new Euro VC fund targeting the early stage.

He was a founding partner at Eqvitec, which has been moving away from the early stage roots, a result of growing its funds' size and adding mezzanine finance.

Conor is in fundraising mode on its first time fund, and has made a few investments that we’ve covered here: Aitos and digital billboard ads startup Virtual Advertisting Systems.

Expect to see a more active approach to building tech startups from Conor when it comes to things like mergers, acquisitions for growth, and building syndicates of investors from this team. He believes that European VC has been too passive in the past. He said: "We intend to look at merger opportunities sooner rather than later... We are about bringing in the resources a venture needs other than money."

A lot of VCs in Europe assert that they do more than hand over cash. There are indeed a few that have added value, based on what we see as outsiders. And we have our keyboard at the ready to point it out when we see it.

View Conor Venture Partners
View Innogest

Posted at 08:50 AM | TrackBack | Permalink

August 20, 2007

Euro VC Fund News - Eden Ventures and Neuhaus With Oman Fund

We know you need to know where VCs are investing, but it is also useful to keep up with who has new money to invest and what the investor types are up to.

UK early stage venture capital fund Eden Ventures announced that it had closed its new (and first) at £75M, which was above its target. It took them a good two years to get there after announcing an initial first closing.

Although it is a first-time fund, the team has been investing as business angels together for years. Eden's most recent claim to the top tier is its return on selling Cramer Systems to Amdocs.

We've got some of its portfolio firms like Truphone, VoiceVault, and Apertio in our news archives, but we also note some more recent Web 2ish investments like online user reviews site Revoo; Volutio, the company behind IKordo, which it says is a personal organizer, and online storage startup, Mobyko; and Exabre which recently launched The Filter, a music playlist site that exploits its recommendation tech.

Hamburg-based Neuhaus Partners is named to manage a €100M venture capital fund that will invest in Oman-based companies, reports the Times of Oman, and several other local press sources.

Posted at 06:15 AM | TrackBack | Permalink

June 13, 2007

VC World's Sad Secrets And Glossing EVCA Stats

Marc Andreessen's new blog has run a good three part series on VC that Jason Ball, an early stage investor in London says reveals one of the top 5 dirty little secrets of VC and a tip on who the best VCs are. We'll let you read his post to find out what it is.
How VCs Really Spend Their Time

And over on Nic Brisbourne's blog, who is also in London and part of a VC firm, picks apart fundraising reports from the European Venture Capital Association, which should really be called the European Buyout Association. He discusses one of the things that used to frustrate this blogger when covering Euro VC as a journalist, the EVCA stats were practically useless if your beat was technology and early stage investment.
Lies Damn Lies And Venture Statistics

Posted at 04:18 AM | TrackBack | Permalink

April 04, 2007

How To Make A Good VC Deal - Venture Hacks

A lot of readers have been asking for insights into raising venture capital and intelligence on who the better VCs are.
Our readers don't feel like being lunch.

Image source: killsometime.com

Preferred is something more like this ...

The whale shark feeds mainly on plankton, as opposed to small fish and surfing startup founders.
Image source: nationalgeographic.com

One response to those requests is to boost that line of questioning in our interviews. But we also are looking out for new information sources. The VC Ratings blog, which is written by experienced venture market journalists, has plans afoot to start delivering more in that line, we note.

In the meantime, one of our regular readers, a serial entrepreneur with a new-not-yet funded venture, wrote in hailing a new blog called Venture Hacks with topics like Term Sheet Hacks and Create a Board That Reflects the Ownership of the Company. It's co-creator describes it as a "tell all" site that helps entrepreneurs get on an even footing with their better-informed counterparts when negotiating an investment.

We checked it out and think that it's looking good. It's not been around long so the volume of posts is fairly shallow, though. One of the authors is an entrepreneur. The other is an "entrepreneur in residence" at Atlas Venture - a role that invovles scouting for investsments, advising the VC firm on investments and startups, and sometimes take an operational role at a portfolio company - so he is not exactly an outsider.

Nevertheless, so far, the tips, advice, and insider views are useful, or as our colleague wrote "as good as it gets".

We say that the comments are also well worth reading too.

View Venture Hacks

Posted at 07:10 AM | TrackBack | Permalink

March 27, 2007

Novintel and C-squared Raise VC Funding

CapMan made an investment in, and acquire 3i Group’s stake in, Finland-based custom market intelligence company Novintel. No financial terms were disclosed.

Meanwhile, over in the UK, C Squared raised £250,000 from The Capital Fund. C Squared is a publisher and event organizer for the advertising industry. It publishes Cream Magazine, M&M Europe and runs the Venice Festival of Media.

View - Novintel site
View - C Squared site

Posted at 07:24 AM | TrackBack | Permalink

March 14, 2007

OpenCoffee Geneva Genf Genève

(image starbucks.com)
David Rimer from Index Ventures sent us an email today to say that he's hosting a "completely open" event for entrepreneurs, techies, and investors types in Geneva on March 23rd, from 10 until 12 noon at the Starbucks de Rive.

He said the invitation is open to anyone interested in entrepreneurship -- "be they startups, freelancers, small business owners, inventors, VCs, or anybody who wants to be any of those things."

There is a sign up page meetup325

Posted at 02:24 PM | TrackBack | Permalink

Your Twenty Questions For Vinod Khosla

We know some of you have been wondering when other Silicon Valley venture investors, besides Sequoia, Oak, and Highland, will be boosting their European dealflow. You can ask Vinod Khosla yourselves, as the super-investor has agreed to respond to twenty questions from alarm:clock readers.

So go ahead, send us the questions that you would to ask. We think it is like being an NYU film student and getting to have coffee with Martin Scorsese.

Please email your questions, anonymously if you like, to comments@thealarmclock.com.

Here are some recent articles on Khosla Ventures:

Read - Alternative fuel is attracting venture capital, Thursday, February 02, 2006 (Wall Street Journal)
Read - Khosla Ventures' Range Fuels lands $76M grant (San Jose Business Journal)

Posted at 06:22 AM | TrackBack | Permalink

March 06, 2007

Earlybird Venture's Mathies On Exits, Oktoberfest Bashes, And Convergence Of Another Sort

Our last early stage VC interview with Sofinnova was a big hit so this week we have a German exemplar of the early stage sort, Earlybird Venture.

Like Sofinnova Partners, it tends to go in at the seed stage, but Earlybird is a much younger firm, just starting to raise its second large-sized fund (€200M) for the European market. Its last fund closed just as the boom became a bust, missing out on the "insane" valuations of that era, nevertheless it has since managed to accompany several of its startups to the stock market delivering returns to its LPs and creating some new famous founders.

Rolf Mathies, Managing Partner, runs us through the firm's exits (more IPOs than trade sales), and he also delivers some advice on avoiding Blackberry-addicted board members and how Web 2.0 is already too old for this early stage investor.

There's only one area that this Rousseau-quoting venture capitalist is not so open about, how the firm sources investments. It's the only question we asked that he declined to answer. We'll keep trying to find the answer for you. In the meantime enjoy the interview.

Any air travel tips for fellow VCs and entrepreneurs that read the alarm:clock?
Well, we have three locations, Hamburg, Munich and Menlo Park -- we want to be close to the companies and help as well in the US -- so we are in the air a lot.

But as an early stage firm we limit the number of board seats we have in order to have time to spend with the firms. I recall board meetings with two board members being on the phone calling in from somewhere with bad connections, or in the middle of a security check at an airport, and being constantly under time pressure and stress.

Clearly this does not help the quality of the decision-making and it is no fun for others that have been present in person. My tip is beware of VC board members that always call in from somewhere and only answer e-mails in cryptic short hand from blackberries. Look at the numbers of boards they are sitting on. More than 6 usually is not helpful.

Do your partners gossip around the coffee machine (euro style) or is it the water cooler (US style)?
Although the quality of the beans in our US office does not match the Italian roast in Europe, we have been able to convert them to espresso talk

When Earlybird has a reason to celebrate, like when you floated Interhyp or sold Element 5 to Digital River, where do you go?
Coincidentally Interhyp floated the day we had our yearly company event at the Octoberfest in Munich... this created a bad hang-over the next day.

You have 13 women that work at Earlybird, only one is a partner and she is in the healthcare sector. Why aren't there more women in tech VC?
We are very glad that we added a woman, Gayathri Radhakrishnan [pictured right], this month in the Tech sector ! It is a well known fact in the public stock sector that woman are better investors (more brain, more gut, less macho) so my guess is this will change in the future.

Interhyp and Tipp24 are two Internet ventures that you backed and then floated. But we haven't seen you invest in any of the Xing.coms, Wikios, or DaWandas of the newfangled Web 2.0 world. Why not?
The last two years we have been focussing very much on our portfolio and on exits, not doing too many new deals. Our thinking is that once a sector is hot you better get out of that sector. It is too late for an early stage VC [such as Earlybird is].

We hear your fundraising for your second large-sized VC fund is going well. What did you differently than the myriad of funds that were raised around the same time circa 2000?
Although we missed the lucky exits at insane valuations in 2000 we focused our portfolio on profitability and capital efficiency.

Therefore with the help of our (patient) LP´s we could wait until the window for IPO´s was open, listing 6 companies across Europe (Tipp24, Interhyp, Wilex in Frankfurt, Noemalife in Milan, Esmetec in Switzerland, Entelos on Aim).

Now we have more companies that have been profitable for more than two years [that are] in preparation to list: Amaxa and Hemoteq.

Interhyp alone returned the fund close to 2x making a 40x return. These kind of returns are expected to be benchmarked with US early stage VC´s. High write-off ratio but high multiples.

Do you still like the idea of trans-Atlantic investing - will you do it in your next fund?
In the US there is a huge capital overhang. We have less deals and less talent in Europe but even lass capital creating a huge supply/demand imbalance. That’s the reason we focus on sourcing in Europe but some companies might relocate there headquartes to the US. As Alantos and BridgeCo in our portfolio [have done].

Early stage investors in Europe are few and far between. You've co-invested with Sofinnova a couple of times. It's our impression that there are not a lot of other true early stage investors for you to co-invest with. What's your view?
VC is a very people centric business, it takes time to build trust and have success together but we hope that more good funds will be established because lack of capital is the biggest problem in Europe.

US VCs are under the impression that Europe is under-served with venture capital. What do you think?
See above – it really is a fact

It is a great time for to be selling companies, or floating them, you should know. Tell us a bit about finding the exit. Is the IPO an exit at all?
The IPO´s of our profitable companies all have been partial exits with 20-30% secondary portion in the IPO creating true liquidity for us.

But IPO´s of emerging companies take some more patience at high public awareness (Esmertec).

Still, raising enough capital at ok valuations is the life-blood of our industry. Without efficient capital markets (as was the case in 2001-2003) then our business model does not work.

Do you ever use the so-called dual track, aiming for an IPO but being open to M&A offers at the same time?
Dual Track rarely works with young companies as the process is so different. If you are down the road with an IPO it is often too late for a trade sale buyer.

Some of our companies have been approached by buyers right before the IPO but the valuations they offered were too low and growth companies with great management have their reason to be a successful public company eventually buying others.

Not the large eat the small but the fast the slow..

What kind of companies are you going to be (hopefully) taking public in five years' time? In other words, what kind of tech companies are you looking for now - stage, technology, geography?
We are focussing on early stage tech companies. Tech being applied across all industries.

Convergence in big markets is the buzz word. Is a biotech company creating new ways to produce biofuel/bioreactors - it could be a Life Science company or a Tech company too -embedded systems software or communication. We look for entrepreneurs that create a paradigm shift in large markets.

An example of Earlybird's convergence thinking is its recent investment in Vital Sensors, which develops a wireless heart and vascular system using microsensors. The Hannover-founded company is now based in the US.

Do you have certain process that you undertake before and after making an investment in technology venture? Do you organize events for your portfolio firms to get together ?
We do have all of this but every portfolio company is very special and it is tough to standardize process in early stage. Ultimately all of our portfolios are relatively small, it makes sense to syndicate and collaborate with other VC´s. For example we organized with Sofinnova and others the European Research day.

What is a dealbreaker for Earlybird?
Technology innovation just because of innovation prodicing marginal customer benefit in small markets. In particular in Germany some techies don´t have the view of their potential customers

What should an entrepreneur do if he wants to meet one of Earlybird's partners to discuss a new venture?
Best is to outline his idea and his track record in a quick and focused e-mail to any partner .- Rousseau said “ sorry I have written you such a long letter – I had no time to write you a short one”. The best ideas are easy to understand if explained by a good founder and the impact is clear from the beginning.
Thank-you for the interview.

Posted at 08:22 PM | 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 | TrackBack | Permalink

January 29, 2007

Why Amadues' Hauser Thinks Euro VC Is Like Goldilocks And More (Interview)

At $100M, the UK organic displays company Plastic Logic raised this month one of the largest rounds of venture capital in Europe for some time. So we asked for an interview with Amadues Capital Partners' Hermann Hauser, an early investor in the company, to find out how the syndicate was built, which led to a discussion about his track record, and what kind of companies Amadeus is looking to invest in now, and why he thinks European venture is having a Goldilocks moment.

...Our report is below the jump.

On The Plastic Logic Syndicate
Plastic Logic did not use a corporate finance advisor to raise its $100M round. Hermann Hauser said that he brought in two US venture firms to Plastic Logic's equity, namely Oak Investment Partners and Tudor Investment Corporation. The two new investors acquired a 30 percent stake in the venture and are now the largest shareholders, followed by Amadeus.

The Amadeus co-founder tapped existing relationships that he has with partners at those firms to close the deal. For example, Oak co-invested with his firm on Virata, which floated and was then acquired Globespan, now called Conexant. "It generated $200M for an Oak fund," Hauser said.

It is that kind of track record that attracts venture industry peers to his portfolio, while others point to it as proof that valuable tech companies can be created in Europe.

For example, Benchmark Capital Europe general partner George Coelho said (during an interview with this reporter last year for an article printed in another publication):

"There are great local success stories. Look at Hermann Hauser who has built three billion dollar companies."

The three firms are ARM in Cambridge UK, Virata (now called Conexant) and Cambridge Silicon Radio (CSR).

A more recent exit, although not quite a billion dollar deal, was achieved when portfolio firm Solexa was acquired by Illumina for $600M. "That is a great valuation for a company that is pre-profit," said Hauser. (a:c euro notes that Illumina now has the top rank in Forbes 25 Fast Growing Technology companies published this month)

His firm first invested in Solexa, a genetic analysis equipment company, back in 2001 at a $40M valuation. We remember wondering if Solexa's backers would ever get their money back on their investment, even if its equipment was ultra-fast in comparison to rivals. During the tech downturn the hype had all gone out of DNA sequencing. Most investors were not buying.

And yet the UK company's backers pumped in another $7M when they merged it with NASDAQ-traded Lynx Therapeutics, Inc of Hayward, Calif. in a stock swap valued at the time of the deal in 2005 at $55 million. It turns out to have been a smart move.

With Plastic Logic, Hermann Hauser is hoping to exceed his past achievements.

"I believe, Plastic Logic could be a $10B company," said Hauser.

Where to invest now?
Hauser said Amadeus is looking for companies with disruptive architectures that exploit trends in the market like Web 2.0 and wireless adoption, pointing to examples from the past and current portfolio, to illustrate what he means by that statement.

- CSR had a single chip Bluetooth system [when its rivals were delivering 2-chip solutions],
- Icera Semiconductor has a software-defined baseband chip [making systems its embedded in more flexible and able to handle changes in industry standards], and
- Plastic Logic has innovative, simple - albeit slower- polymer semiconductor technology that is being applied to displays that can be produced at a disruptive price.

A Demo Of The Plastic Logic Display

The latter two are recent investments, others include CacheLogic, benefitting from a new wave of video, audio and Web 2.0 type applications, IPTV gearmker Edgeware in Sweden, and Liquavista which is commercializing disruptive display technology for mobilephones.

This kind of top down approach is one way Amadeus shapes dealflow, the other is to be open to working with "proven entrepreneurs" to be able to back their next generation ideas, he said.

On Being European ---
Hauser is positive on the European market right now. He told the a:c euro it is a "Goldilocks environment". In other words, it's not too hot and not too cold; it's not too hard, nor too soft. And it isn't too big, nor too small - it's just right.

He also said that Europe still has to "prove itself":

"We never had any problem with technology, but there has been an issue about the quality of management. But that has changed. In Amadeus I, 15 percent of the portfolio had an experienced entrepreneur founder. In Amadeus II, it was 47 percent and in current investments it is now running at 90 percent," said Hauser, adding "We can now attract top management from around the world."

Globalization is expanding the scope and increasing opportunity for European ventures. Hauser said:

"It is an absolute must to achieve in the lead market, whether it is in the US, Europe, or Asia. In the past the US was the hurdle, still is for PC oriented startups, but when it comes to other technologies, mobile and wireless, for example, Europe and Asia are the key markets."

Posted at 09:00 AM | TrackBack | Permalink

January 23, 2007

3i Finds The Mobile Sector Exit

We’ve posted here several times about the hazards of VC investment in the wireless and mobile sector. Over the past few years we’ve seen lots of money going in and very little coming out. But we noticed that 3i has been divesting often enough that the activity stood out in the flow of news we eyeball at the a:c euro.

We checked that impression with Go4Venture, the technology oriented corporate finance firm, whose data resources are better than ours. Xavier de Lecaros-Aquise, analyst at Go4Venture, wrote back: "It seems your hunches are correct. Not only has 3i been very successful in doing so … it turns out they have been the most active too.”
Here is a list of trade sales and IPOs that we requested from 3i
• Trade Sale: Bitfone to HP USdollars $160m
• Trade Sale: Mobile365 to Sybase USdollars $300m
• Trade Sale: Sychip to Murata USdollars $140m
• IPO: Eleksen GBP £18m
• Trade Sale: UbiNetics 3G business to CSR USdollars $48m
• Trade Sale: UbiNetics test and measurement business to Aeroflex GBP £46m
• Trade Sale: Xenicom to Andrew Corp USdollars $11.5m
• Trade Sale: Trigenix to Qualcomm euro €36m
• IPO: CSR euro €301m
• Trade Sale: Magic4 to Openwave euro €82.6m
• Trade Sale: K-Mobile to American Greetings

In the meantime, the sale of NordNav and Cambridge Positioning Systems to Cambridge Silicon Radio was announced. The NordNav deal gave 3i and InnovationsKapital "up to 8 times" their total investments in the company.

With all that in mind, the following Q&A with Ian Lobley, a senior partner on its VC team, should be of interest to some of you. The interview was done via email and telephone.

a:c euro – How did you manage to find the exit, when many of your peers haven’t?
IL – We’ve had a good run over many years. We’ve been investing in the market for 15 years, across the mobile value chain, investing in software, components, handsets, download platforms and operators….

a:c euro – So have some of your peers in the Nordics and France and they are not yet getting good-sized trade sales or IPOs.
IL: I think that some other investors had a narrower focus in certain areas of mobile, eg ringtones.

a:c euro - How do you interest the big name buyers, like HP, which acquired Bitfone?
IL: Trade sales don't happen in a vacuum - typically there are long term relationships preceding the deals. Helping to get those relationships for our portfolio is one thing we do, for example. Bitfone was an HP partner.

a:c euro – Which area delivered 3i the best returns ?
IL – Investments around the semiconductor area, CSR, Sychip, Ubinetics – have been a great area for us. But middleware and software to the handsets has been good too: Magic4, Trigenix, and Bitfone. Even content, K-mobile was a content company.

a:c euro – Your positive comments on middleware and content are surprising.
IL- It’s true that the most frustrating and challenging wireless model is anything where the operator is part of the value chain – especially marketing content via the operator, or where the success depends on getting into the handset. But even there we have startups that have done it and when they do it and overcome the initial barriers, they can do very well – Magic4 is a great example of this.

a:c euro – Where are you investing now?
IL – DiBcom, chip company for mobile TV where it is market leader; ScreenTonic, mobile ads – it's French and offers a full-set of tools and a platform for mobile phone advertising – its customers are the operators and advertisers; Nujira, which makes components to improve significantly the efficiency of wireless base stations. This allows dramatic reductions in power consumption and, for example makes, Wimax base stations work at unprecedented levels of efficiency.

a:c euro – We haven't heard of Nujira.
IL- It’s founders are ex-Symbionics which was acquired Cadence back in 1998. Nujira is delivering something that network equipment makers’ customers want : a cellular basestation that consumes less power and gives off less heat so meeting one of the operators’ environmental targets. You don’t need air conditioning in the basestation cabinet for one thing and the total cost of ownership is slashed. But it also enables a much smaller basestation, small enough to mount on a pole – so called remote radio heads. There is a press release about it here

a:c euro – What’s your approach to new mobile sector investments?
IL – we are trying to build on our success over 15 years; thoughtful and cautious!

a:c euro – thanks for the interview.

Posted at 09:57 AM | TrackBack | Permalink

January 22, 2007

Billions Of Reasons To Invest In Alt Energy And Dotcoms

Wonder why Silicon Valley VCs are eyeing cleantech? It could be the IPOs - few other areas areas for VC type investment are generating billion dollar valued companies.

Throughout 2005 to mid 2006, alt energy IPOs delivered four companies with market caps of greater than a billion dollars, namely REC (Norway), Q-Cells (Germany), Conergy (Germany), and Sunpower (us), according to Bankinvest New Energy Solutions, which is currently raising its second alt energy VC fund.

The a:c euro, which is not raising a new fund, adds that in the meantime France's Energies Nouvelles completed yet another multi-billion euro IPO on the Euronext.

And while we're on the topic of value creation, there's Betfair, which is a three billion dollar reason that VCs are interested in Internet ventures again. (See our earlier post Web 2.0 VC Dealmaking On The Upswing)

"Betfair is one of the largest Internet success stories that few of us in the US know much about. This is because Betfair is a UK-based company that operates the world’s largest online betting exchange and does not accept bets from US consumers...

So begins a recent post on Betfair in Startup Review. The article is worth reading for several reasons:
1) it provides details on money-in and money-out (more correctly said, partially out),
2) insight into how the founders grew the biz, and
3) it is a story about "how a non-VC funded Internet startup can win against a better-funded VC-backed start-up in the same market".

Read - Web 2.0 VC Dealmaking On The Upswing (a:c euro)
Link - Bankinvest Alt Energy Presentation (pdf)
Read - Betfair Case Study Target Niche And Expand (startup review blog)

Posted at 01:40 PM | TrackBack | Permalink

January 19, 2007

Rare Peak At Euro VC Exit Multiples

An unitended pun in the headline of this one. We managed to spell "peek" wrong. We don't often see exit multiples on European VC deals - typically the numbers are only revealed when a new VC fund is being raised. But a couple, both Nordic, by the way, crossed our screen this week.

NordNav (trade sale to Cambridge Silicon Radio) According to a statement issued by 3i, investors in NordNav stand to make a tidy return on their investment. InnovationsKapital and 3i expect to generate "up to 8 times" their total investment. 3i confirmed that since it co-led the first investment round in Nordnav in May 2005, it will generate a similar return to InnKap. The folks at InnovationsKapital also had a good exit on the Carmen Systems trade sale last year, a 9X return, according to its press materials.

TradeDoubler - VCratings did some digging and found that Arctic Ventures - a no longer operating Nordic VC firm - stands to generate a far greater than 10X multiple on its investment in TradeDoubler, which is an acquisition target right now. Apparently, the Arctic Ventures porfolio was rolled into Argnor (which seems to have been rolled into Braveheart and Argo).

Artic Ventures' current stake in TradeDoubler worth $90 million is three times the size of its original fund closing in 1999 ...

Read - Defunct Arctic Ventures profits from TradeDoubler sale (vcratings)
Read - Swedish GPS Startup ... (3i)
Read AOL's $900M Offer For Sweden's TradeDoubler (Techstocker)

Posted at 06:48 AM | Permalink

January 18, 2007

Europe's Tower Of Babelgum

Last year we were putting up posts pitting a European market-leader-wannabe versus a US wannabe, this year it's rivalling European startups, the latest being Babelgum versus Joost [via Nice Ventures and The Equity Kicker blogs], two early entrants aiming to offer P2P TV.

It brings to mind the observations of Danny Rimer of Index Ventures voiced at LeWeb3 a few weeks ago where he said that he sees a "danger" in Euro VCs funding too many startups all chasing the same opportunity. See Vpod.tv's excellent video of the VC panel via myblog link below.

Bascially Rimer was saying that it is worrisome enough that they are funding several competing ventures that want to be the European market leader in a particular application, but if they want to decent exits, it is especially foolhardy to back startups competing in the same country. (Rather than referring to the tower of Babylon and subsequent rivallries in the headline, maybe we should have referred to the medieval towers of Bologne and what they signified.)

It might be an issue for some VCs (depending on the size of their funds) -- and may signfiy some deterioration in the clubby nature of European dealmaking that we've been seeing in recent years -- but it is not stopping experienced founders with track records in their sectors from starting up new companies where they see opportunities.

Two of several areas that are proving to be magnets for serial entreprenurs are:
1) discounting the mobile network operator, e.g. FON, Rebtel, Jajah, and Truphone
2) delivering TV and video content over IP e.g. Joost/Venice Project, VideoJug, Kewego, TVBlob, and Babelgum.

Read - Broadband Television Not As Big As I Though (the equity kicker)
Read - Babelgum To Follow Long Tail Theory (niceventures blog)
Link LeWeb3 VC panel video (Ouriel myblog) Danny Rimer's comments are located at timestamp 12:29 and 18:44

Posted at 12:50 PM | TrackBack | Permalink

January 11, 2007

Esprit Won't Buy Dinner But Cook Serves Up More On Europe's VC Market

Why the US venture market could shrink by 35 percent in the coming years and what it takes to create a 10X return in Europe, are just some of the the opinions Simon Cook of Esprit Capital revealed in a Q&A by email with the a:c euro.

Every VC has his or her opinions, so why did we want to get Cook's? The main reason is that he was responsible for one of our most read posts and one of the most clicked links in the last quarter of 2006.

The post in question was a summary and analysis of Euro VC exits since the bubble burst. Readers from well beyond Europe hit the outlink on that one, suggesting that money-in (investments), which has been our focus at the a:c euro, is only half as interesting to our readers as money-out (exits).

That should not have surprised us, but it did, and has us thinking about our future focus. But that is another story. Below the jump, you'll find the results of our email exchanges: more details on European IPOs in 2006, how to read the tea leaves in trade sales statistics, insight into the way that Esprit works with other VCs and with founders, and, um, how the firm doesn’t pay for celebratory dinners...

a:c euro questions in bold text. In square brackets the a:c editor's notes.

Is it the coffee machine (Euro style) or water cooler (US style) that is networking central at Esprit?

We are big believers in an open plan office so we overhear what we are all working on every day – that's how we can put ideas and people together. For example, when two of the team were discussing buy.at [an affiliate marketing startup], Nic Brisbourne overheard and mentioned he had worked with the perfect chairman, Bruce McClaren of advertising.com fame. These days we have to read Nic's blog to find out what he's thinking!

VCs spend a lot of time in airports. Which is your favourite airport in Europe ?
Not sure of my favourite airport, but my favourite place to meet travellers is WAYN [an Esprit portfolio firm].

When Esprit has a reason to celebrate, like when Alphamosaic was acquired by Broadcom, or when Fillfactory was acquired by Cypress Semiconductor - where do you book a table?

Wherever the bankers and lawyers wish to take us - they usually pick up the bill.

Esprit's recent investment in Web 2.0 startup WAYN has been getting some positive reviews from blogging VCs, such as Fred Destin of Atlas and Brad Feld over in the US. Isn't that kind of unusual? Where is that notorious rivalry between VC firms?

Whilst we are competitive on deals with our European VC partners, we also work very closely with them, much in the same way the founding firms of US VCs have done. If we don't get involved in the first round then there is always the chance that another round might come up that we want to be part of. It therefore, makes good sense to respect each other over the long term. For example, Esprit led the series B for an Atlas company, Displaylink [formerly known as Newnham Research].

We haven't seen too many venture-backed IPOs in Europe and the UK in the past few months. What is the problem?

We have seen some very successful businesses float this year in Europe: 22 with market caps of greater than $100m including Parrot, Optos, Modelabs, Magix, Trolltech but these are spread across many local exchanges.

Too many exchanges in fact. We need to have a single platform for growth capital companies in Europe so that we create a robust investor and analyst base. We also need to ensure that the right type of companies float and, at the right time. This will ensure that IPO investors will see some positive results over time.

Too many companies IPO before they are ready and this will put investors off especially if the companies disappoint and are too immature to have floated.

When it comes to M&A, the activity has been somewhat subdued, especially if you look at the chip sector. In a recent interview with this reporter, Stuart Paterson of Scottish Equity Partners said that "relative to the number of [chip] companies being financed, we should see 5 to 10 exits a year, for the ecosystem to be self-sustaining..." Do you agree?

It's not really measured by the number of exits but by cash returns. CSR may have returned over a billion dollars to its investors who stayed in and sold at the peak.

Those profits can be reinvested in dozens of start-ups and still leave good profits for LPs. There have been about 100 semiconductor exits in last three years with about 25% in Europe vs around 300-400 investments (again 25% in Europe), so it looks pretty healthy.

The iPod has proven that the PC form factor isn't the way forward and we believe more technology will be packaged as chips in future rather than sold as software.

US venture capital firms are under the impression that European tech ventures are "underserved" - ie. the amount of capital and resources available to support innovative companies is not yet at a critical mass. What do you think?

It is true that the European market is much smaller than the $24b US VC market. But a $4b market [the amount recently raised by European venture funds] isn't subscale; we are in the growth phase as the market comes into its own like US venture did in the 90s.

The fact is, we are now building global businesses in Europe and as Europe has generated about one-third of the best exits in the last few years with one-sixteenth of the capital, we are doing something right.

The average $100m+ exit in Europe and US in 2004/2005 was $251m, but only took $40m [of VC money] in Europe versus $70m in the US, so we are capital efficient.

Based on exit statistics and capital invested, I hypothesize that Europe can grow 35% and US should shrink 35%.

Your investment in Fillfactory was one of two greater-than-10X semiconductor VC exits for Europe since the bubble burst. Tell us a bit about it?

Fillfactory was a spin out of about ten engineers and scientists from IMEC, a leading micro electronics research centre in Belgium. The team's expertise was in the then fast growing CMOS sensor arena, and at Fillfactory they applied this to image sensors in applications ranging from producing the world's first high resolution professional digital camera, wafer-scale sensors for mammography, and space qualified image sensors.

This high-end business was profitable from the outset, unusual for a high tech start-up. CEO Luc de Mey was a very strong leader of Fillfactory and Esprit's contribution as one of the two VC board members was as a sounding board and mentor as well as facilitating the sale process.

And how's your portfolio right now?

We are very excited by a number of the next generation semiconductor businesses we have backed this past year including Siconnect, Displaylink [formerly known as Newnham Research], Lime, Xanadu and XMOS. It takes a number of years to build great companies though, so it's too early to say yet how successful they will be.

How do you source investments?

We spend a lot of time researching growth sectors and looking for successful companies in Europe who we then approach and explain the merits of taking on board an equity partner to. We also build a lot of new companies through seed investments with key institutions such as Cambridge Consultants, Qinetic, Universities etc.

What kind of companies are you looking for?

Esprit can invest at any stage but we want to back global companies which will require a minimum of about $10m of funding over time. We cover all areas of IT, semiconductors, software, new media and telecoms, plus a focus on healthcare such as medtech and diagnostics. We invest across Europe. We always take a board seat and work closely with our portfolio companies, often with a syndicate partner.

Esprit's Bob Hook (left to right) Sanjeev Sakar, Nic Brisbourne, Catrina Holme
You just won a tender put out by Cambridge Consultants (CCL) to manage its spinout activity after a four year gap. Its two biggest spinoff success stories are Cambridge Silicon Radio (CSR) and Alphamosaic. Is there a historical connection between the two organizations?

CCL has created many successful spin-offs in the past, but did this on an ad hoc basis with various investors. After a few years of inactivity, CCL are now focused on a more formal process of start-up creation and we are proud to be their exclusive partner.

The Esprit team has many connections to CCL spinoffs: Bob Hook was involved in the spin-out of Xaar; Alan Duncan with Alphamosaic and myself with CSR. CCL was also an original investor with Bob Hook when he started his first VC fund in 1985.

What should an entrepreneur do if he wants to meet one of Esprit Capital's partners to discuss a new venture?

Send an email; pick up the phone. We love to meet entrepreneurs of all ages but they must be ambitious!

Do you have a certain process that you undertake before and after making an investment in a technology venture?

We carry out a comprehensive due diligence process before we invest, as we have a duty to do so. Its other peoples' money that we are investing and therefore, we have to be careful and make solid investments. However, if it's a sector we have researched before and have great knowledge of we can move very quickly. We use a network of industry execs to help us and speed the process up.

Do you organize events or workshops for all your portfolio firms executives to get together?

We do hold regular workshops for our portfolio and other companies. Recently, we held an event that looked at new ways to monetize web traffic through performance based models.

The Equity Kicker Nic Brisbourne’s blog
Relevant a:c euro Links
Cook Shows The a :c euro The Exit
Newnham Connects With VCs

Hot Betas: NAVX, WAYN And…

Posted at 10:43 AM | TrackBack | Permalink

November 29, 2006

Esprit's Simon Cook Shows The a:c euro The Exit(s)

The other day we wrote that we wanted to hear more about "money out" as opposed to "money in" from the tech sector here.

Well, we got a response from Simon Cook (image right), the CEO of Esprit Capital Partners, the London-based company that was formed in July 2006 from the merger of Prelude Ventures and Cazenove Private Equity.

He sent us his presentation from the Super Investor conference, which delivers what we'd been looking for (we have a link for readers to download it below).

New Media / eCommerce Exits


Chip Sector Exits
The company logos in the images above and below are VC-backed exits, not investments, achieved since the bubble burst. The ones circled in red are billion euro companies now. At the risk of stating the obvious, semiconductors and new media/ecommerce companies are finding the exit and that's why VCs continue to invest with confidence in those areas.

There is a series of slides within the presentation that Simon Cook calls the Countdown - basically a detailed comparison between European and US venture performance since the bubble burst. It's a bit more witty than your usual investor confab presentation and it shows that with the exception of Google, European ventures are not doing too badly on the exit front.

The Message Is That European VCs Are Duking It Out With US VC For Limited Partner Commitments
Link - Celebrating European Venture Capital Success Presentation (pdf file at Esprit)

Posted at 03:32 PM | TrackBack | Permalink

November 15, 2006

Nordic VC Backs Polar Rose's Visual Search Innovation

Malmö, Sweden-based Polar Rose has raised a nice sized Series A round of $5.1 m (€4 m, SEK 37 m) from Nordic Venture Partners to make a business out of its facial recognition technology applied to searching and identifying images on the Web.

Details on the firm's commercial service are sketchy. But knowing Nordic Venture Partners from interviews over the years and recent conversations with its partners, the company is meant to make money and it is being built for a global market.

What we know so far is that it's software can do some three-dimensional processing of images (3D extrusion) and applies cutting-edge facial recognition algorithms. This combined with labeling and input from users - to sort and add context to images -- is the basis of the service.

Here's what Polar Rose tells potential users:

Polar Rose works with any public photo. No matter if you're using flickr, 23, Kodak gallery, or any other website, Polar Rose lets you discover people in pictures. Learn who people are, and help improve results by tagging pictures together with other users.

Read - Euro Rivals For Riya (a:c euro)

Posted at 06:29 AM | TrackBack | Permalink

November 09, 2006

One More Euro VC That Blogs

Paul Jozefak, who is a partner at Hamburg-based Neuhaus Partners has a blog now and it is called Babbling VC, Random thoughts of a Slovak-American VC in Germany. It is new, but there are some good posts in there for entrepreneurs and the venture community to dig into.

He joins the slow growing list of European VCs that are already at it, listed below.

The Equity Kicker (Nic Brisbourne, Esprit)
Fred Destin (Atlas Venture)
Technofile By Max Bleyleben (Kennet)
Christian Leybold (BV Capital)
Techbytes by Jason Ball (London Seed Capital)
If we missed anyone, drop us an email.

Posted at 09:31 AM | TrackBack | Permalink

November 06, 2006

Former Wanadoo Chief Joins Sofinnova Partners

Europe's venture firms are bulking up with new additions from industry. Accel Partners and Fidelity Ventures have been expanding, and now Sofinnova Partners has announced that Olivier Sichel, the former Chairman and CEO of Wanadoo (France Telecom group) has been named as partner.

Interestingly, Sichel said he made the move from industry to venture because he believes that the venture capital sector is about to undergo a new round of restructuring similar to what telecoms went through ten years ago.

Sichel said he joined Sofinnova Partners because of the "quality of its teams, its broad field of activity and its European leadership .... When I joined the telecom industry ten years ago, it was about to undergo a major restructuring. I’m convinced today that venture capital will undergo a similar transformation over the next decade.”

On Sofinnova's side, Olivier Protard, Managing Partner said:
“[Sichel's] nomination confirms our strategy of putting senior partners with solid operational experience at the service of the companies we invest in.”

The 39 year old built up an an ecommerce business unit within France Telecom back in the late nineties, and then left to become chairman of publicly traded Wanadoo where he restructured the directories and Interent services company.

When it merged with with France Telecom in a mixed public offer in April 2004, the company’s operating profit had quadrupled and its value increased to €13 billion from about €6.5B when he joined.

Posted at 07:39 AM | TrackBack | Permalink

November 03, 2006

Flickr Tells VCs Who's Talking To Who

Paul Fisher, a London-based corporate finance adviser who blogs, points out at the end of a post on user generated content that VCs don't have to ask founders "who else are you talking to", they just have to go to Flickr.

We checked to see if he's right and ran a couple of searches in Flickr for BV Capital, Atlas Venture, Esprit, 3i, and Accel, some of the VCs that are into Internet investing at the moment and therefore more likely to use or appear in an online photo sharing site.

Sure enough, you can get a pretty good idea of who's been talking to who. A bit of digging is required though to find out the context and which startups are involved. We doubt that anyone is that relentless in their search for the information edge to do the digging. But it is an interesting development.

Besides, visiting a VC's office doesn't mean a lot - they are always boasting about dealflow, meeting hundreds of entrepreneurs a year for every one deal they close. One told me last week his team of four looks at 500 companies a year. That's a lot - we get dizzy when the number of companies gets anywhere near that level and we're just covering the news, not considering making an investment.
Read - Islandoos and don'ts for sucessful social software (Paul Fisher's blog)

Posted at 03:23 PM | TrackBack | Permalink

November 01, 2006

Irish Startup With Way To Pay Before You Buy Online To Save

Atlas and Benchmark have teamed up to back a €20M expansion round for 3V Transactions, an Irish startup that's developed a prepaid card scheme for consumers.

3V was founded in Dublin in 2004 to target what it says is a €500B European prepaid market and was until recently majority owned by Alphyra, the Irish payment processing company. Update: And its tech is patented, according to Fred Destin of Atlas Ventures (blog link below).

Why a startup has an opportunity to do this kind of thing and not an established credit card, or traveller's cheque company, or even a wily mobilephone company, just shows how complacent these industries have become.

Yes, Visa is working with 3V on this one, but as we see it, Visa will not be getting the lion's share of the opportunity. It will be the startup, an Irish bank (permanent tsb), as well as Alphyra.

Note that Alphyra, is also in the Benchmark portfolio. The venture firm financed an MBO back in 2003. (Benchmark may have become famous for an early stage investment in eBay but in Europe, the firm does a lot of growth, late stage, and buyout investing. )

So Benchmark benefits twice from incumbents not connecting with a ball that has been in their court for over six years when online shopping started to grow and Europe's online payment startups were ailing and failing.

We can see this being popular for buying cheap flight tickets online. We've been flying Easyjet lately - the alarm:clock network is a thrifty organization. Since Easyjet breaks out the amount of the fees charged you can clearly see who's gouging.

For a ticket from Basel to Paris return, we pay an additonal 20 percent of the ticket price - due to a minimum transaction fee and an additional percentage of the purchase price - just for the privilege and convenience of using MasterCard. Debit cards are the cheapest option with Easyjet but it doesn't have many signed on yet.

We definitely think there's opportunities to undercut the fees that credit card companies charge, but the alternatives have to be easy, transparent, and widely accepted.

Read - 3V secures E20m in funding for expansion (Business World)
Read - 3V Newest From (Fred Destin blog Atlas Ventures)

Posted at 04:39 PM | TrackBack | Permalink

Ekahau's Location-Enabled Wireless Play Raises $16M

Finland's Ekahau has raised $16M to expand its wireless sensor network solutions business from strategic and VC investors. The company was founded in 2000, and has developed a range of software and hardware to support tracking and finding of items inside a WiFi network.

From what we can see, it has made some headway in the healthcare market. We figure it helps emergency room personnel answer the question: where did the morning crew leave the darned defibrillator?
Read - Ekahau Secures $16 Million in Additional Funding (press rel.)

Posted at 09:44 AM | TrackBack | Permalink

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 at 09:42 AM | TrackBack | Permalink

Mobilephone Software Firm Picsel Nabs £25M

The UK's Picsel Technologies, a software company that develops a suite of products to create, publish, and display content on mobilephones, has just raised £25M from undisclosed investors, we learned today reading Library House' weekly free newsletter, which also said Picsel's sales are up to £13M now.

According to its website, Picsel secured first round funding in 2001 totalling $11m from SOFTBANK Europe Ventures and BancBoston Capital. It raised a second round a year later of $6m from a consortium of Japanese investors, including Yasuda Enterprise, CSK Ventures, Mizuho Bank and the Morito family.

More recently, the firms says, Picsel secured a large scale non-equity loan agreement with Malaysia Debt Ventures Berhad (MDV), the finance arm of the Malaysian Government.

It was co-founded and is led today by Imran Khand in 1998 after he founded two other undisclosed ventures. Before that he was involved in economic development activities with the Scottish government.

Read LibraryHouse Newsletter Issue 33

Posted at 09:14 AM | TrackBack | Permalink

October 26, 2006

Accel Enters Alternate Reality

Mind Candy,a UK based interactive media startup that produces alternate reality games, has raised $7 million from new investor Accel Partners which joins existing investors Index Ventures and NewMedia Spark, less than a year since raising a $3M first round. According to CNET, it had also raised at least $1.5M prior to that in an angel round.

The cause of the anticipated cash burn is that Mind Candy is launching a "major expansion" adding products to be announced in early 2007.

Mind Candy runs real world treasure hunts. The clues are printed on cards (that people pay for) and the search is augmented by events, websites, text messages, TV, and print. As for its business model, there are a few clues about how it could generate sales -but we haven't solved that mystery yet. One thing we know is that It is not using a sponsorship model, like some of the other alternate reality games we've read about.

Its game clues sound pretty cerebral. Check out this excerpt from an interview by Rick_32 Footsteps_Healy with folks from MindCandy :

32: There are four cards as yet unsolved. A question on each:

On Riemann - Some number theorists have conjectured that Riemann's General Hypothesis (the problem to be solved on this card) may in fact be impossible to prove. Others are actively working on disproving the hypothesis. Do you have any thoughts on this, and how it will affect solves for the card?

Dan: Our main aim with this card was to undermine the majority of encryption systems used worldwide. This way, we could covertly divert massive funds to our Swiss bank account.

32: Yeah, but the problem there is that the cryptographical uses of the Riemann Zeta Function are so far fairly obscure, and the hypothesis mostly concerns number theory and not cryptography. And distracting number theorists isn't exactly a route to fantastic riches, Clay Mathematics Institute prizes nonwithstanding. So how does the Riemann Zeta Function undermine encryption systems?

Read -Mind Candy Announces $7M in Funding (press rel.)
Read - $3M For Sente's Lost Cube (the a:c)

Posted at 06:36 AM | TrackBack | Permalink

October 20, 2006

Euro vs US Venturing: Investment Gap Still Huge - Does It Matter?

When it comes to putting money to work, the US outperforms Europe, by a ratio of five to one, but when it comes to getting money back European VCs argue that the same may not be true.

The latest numbers on VC investment from CalibreOne, the trans-Atlantic headhunter for tech companies, show that US VCs continue to invest 5 times the amount of money that Euro VC invest. (see image right)

Luckily for the European venture market the amount of money going into the sector does not necessarily come out at the same ratio, at least since 2003, and as long as you don't count Google.

We are referring to the study conducted by TLcom Capital (a slimmed-down version of which we now have available for readers below - thanks to TLcom). Earlier this year, the venture firm published a report that shows that Europe is delivering some US-style homeruns.

It says that 43 percent of the exits recorded by DowJones VentureSource between 2003 and 1Q2006 that generated 5 times money were European companies, and 51 percent of exits generating 10 times or more multiples were also European

We say it's not time to break out the Bollinger yet - afterall Google is still a huge US venture-success-story - better to grab a can of RedBull and get in gear to make this trend a long term one.

Download - TLcom European Exit Study
Read -CalibreOne Index 3Q06

Posted at 06:23 AM | TrackBack | Permalink

October 18, 2006

eCourier - Parcel Delivery In Color

Logispring, a specialized venture firm backed by TNT, the parcel post and logistics giant, as well as Booz Hamilton, has invested £2 million in eCourier, a two year old express parcel and post delivery startup to fund its international expansion.
The company was founded by Tom Allason, CEO, and Jay Bregman, who is the first CTO we've seen that's done time a Harvard Law School, as well as Dartmouth and the London School of Economics.

Allason writes that while working at a shipping firm, "courier-related stress routinely surpassed that of managing trading vessels and new-building projects" - which doesn't say a lot for eCourier's rivals.

The firm's founders have basically put the whole customer-courier interaction thing online, from order entry to courier allocation, route definition, tracking, alerting, and payment and it delivers it all up in a what looks like a state of the art web service.

If the demo reflects how the service really works then it's taking good advantage of self-service and artificial intelligence tech.

Couriers Gets Optimized Routing and Traffic Info In Real Time

It makes the DHL and FedEx's once innovative and pioneering parcel delivery gadgetry look old-fashioned, kind of like watching black and white TV.

Couriers Are Equipped With Nifty PDAs - But Give Them A Touch Screen - It's Too Easy To Lose a Stylus

Read - Logispring invests in eCourier, London’s most innovative same-day courier company(press rel.)

Posted at 11:50 AM | TrackBack | Permalink

October 12, 2006

Silicon Fjord Gets Main-stream Media Attention

BusinessWeek shouts out to Scandinavia's "Silicon Fjord" providing evidence to prove that the investment climate there is warm.

+ Swedish companies alone raised $1.07B in startup and growth capital last year, according to the European Venture Capital Association. That nearly matches the peak set in 2001 and is more than twice the amount raised in the trough year of 2003.

+ Rebtel, a Swedish company that offers free mobile phone calls using Voice over Internet Protocol (VoIP) raised $20M from Index Ventures and Benchmark Capital.

+ Trolltech booked sales of $17.7M in 2005 and listed on the Oslo Stock Exchange earlier this year.

Read - Tech Stars Brighten Northern Skies (Business Week)

Posted at 05:32 PM | TrackBack | Permalink

October 05, 2006

Inge's Ultrafiltration Snags First Tranche Of Third Round

German startup, Inge AG, a developer of ultrafiltration technology for the treatment of water (drinking, industrial and waste water) has raised €2.7M in a first closing of a third round, targeting €6M.

The filters reliably remove bacteria, viruses and microorganisms from water.
Read - 2,7 Mio. Euro für inge (venture capital magazin )

Posted at 01:18 PM | TrackBack | Permalink

October 02, 2006

FruitLounge Funded To Fill Channels With KaChing TV

Dutch venture capital firm, Van den Ende & Deitmers, which manages about €150M in two funds and counts several former Endemol execs as GPs, is backing the international expansion of Fruitlounge Media, an interactive TV company that resulted from the merger of broadcast design agency The Fruitlounge and Marketgraph, a software developer for game shows and quizzes.

The investors acquired a 30 percent stake in the company for an undisclosed amount. Fruitlounge says it generates approximately 1,200 hours of television each month. (For readers that don't recognize the name, Endemol is the company that created the Big Brother reality tv show concept - whose popularity we still don't quite get.)

Pay Per Call TV and SMS Quizzes Are Also Created By Fruitlounge To Fill TV Channels
This kind of TV programming generates sales from the audience that participate in TV programs by sending text messages and premium voice calls, typically sharing the revenues with telcos.

Some of its titles include Streetcam, Perfect Match, Date Factor, Lelang Jitu, Klop! and Indonesia versus Celebrity, none of which we've eyeballed from our base in Switzerland. And it has a music production studio for third parties, as well as its own use.

A Hostess Follows Fruitlounge's Website Visitors From Page To Page
We think that the Hostess service should come with an "OFF" button.

Read - Van den Ende & Deitmers Invests in Fruitlounge Media (press rel.)

Posted at 03:48 PM | TrackBack | Permalink

October 01, 2006

Scottish Equity Partners With $300M In New Capital To Invest

We are going to have to update our table of recent Euro VC fundraisings, now that SEP (Scottish Equity Partners) has announced closing on its $300M SEP III fund. This is good news for semiconductor, software, healthcare, and advanced energy technology companies in the UK region.

You have to know that it is not easy to raise a VC fund in this part of the world, so when you see a fund raking in more than it expected, you know they are on to something good.

SEP issued a statement with quotes from its LPs, which is not a very common thing to do and shows its chops. We like the quote from F&C about the VC team's "dogged Scottish tenacity".

“SEP has come through the difficult years for venture capital very well. Its highly successful fundraising is evidence of real energy and dogged Scottish tenacity which has also been deployed equally effectively in its portfolio of investments.”

Hamish Mair, Director, Head of Private Equity Funds, F&C Asset Management Plc.

In other words, when SEP makes a commitment to a startup, they are like a bulldog and not likely to let go, or sell the company, at the first signs of adversity. Since your a:c euro reporter is Scottish by birth, it kind of rings a bell.

Read - Who's Got Money (a:c euro)

Posted at 04:39 PM | TrackBack | Permalink

NeoGuide's Colonoscopy 2.0, One For Andy Kessler's Sweet Spot

With Andy Kessler's new book The End of Medicine, which is about his search for scalable technologies for early detection of the world's three biggest killer diseases, fresh in our minds, we note Advent Venture Partners latest investment in a company called NeoGuide Systems, developing a newfangled imaging system for scoping the colon for signs of cancer. The London-based VC has led a $25M round in this US based company.
Read -Colonoscopy 2.0 (alarm:clock)

Posted at 07:37 AM | TrackBack | Permalink

September 29, 2006

New Money For JobTV24

Some well-known investors and entrepreneurs have pumped an undisclosed amount of capital into JobTV24, a German satellite TV channel and web platform all about, um, jobs, according to PeopleAndDeals. New investors are Aurelia Private Equity, Roland Metzger (founder of Jobpilot.de), Tim Schwenke and Daniel Wild (founders of getmobile AG) and Falk F. Strascheg, who founded VC firm TechnologieHolding and sold it 3i, and now invests as a business angel, as well as running Extorel, a fund of fund.

Read- Frische Finanzierung fuer jobtv24 (peopleanddeals)

Posted at 05:17 PM | TrackBack | Permalink

September 28, 2006

VCs Back Qype's Web 2.0 Local Search Play

Qype, a Hamburg, Germany-based local online search startup, wrote in to say that it has raised a first round from Advent Venture Partners and Partech International, as well as angel investors. The size of the round was undisclosed but it is meant to be enough to roll out across Europe.

Since Qype is one of the new breed of tightly run web startups, the hopes that one funding round might suffice to cover Europe may be more than wishful thinking.

Founded in early 2006 by Stephan Uhrenbacher, who established travelchannel.de and also had senior positions at lastminute.com and online pharmacy, DocMorris, Qype launched in April. Since then we've written about it a couple of times, mainly because of its low-budget approach to developing an Web-based online directories service. We recommend its corporate blog for Web entrepreneurs.

Alexa Offers An Indication Of How Qype Compares To Incumbent GoYellow, Which Has Taken A More Expensive Marketing Route

Qype recently added a Boolean-like search feature. Some typical searches shown here.
• “Nichtraucher + Restaurant” findet 30 Empfehlungen
• “Lecker + Pizza” findet 80 Beiträge
• “zuverlässig + Werkstatt” leider nur zehn.
• “Kinder + Sonne” findet fast 50 Empfehlungen.
• “günstig + Hotel” findet 30 Empfehlungen

The firm’s blog explains how it works, pointing out that there are 80 recommendations for Tasty and Pizza, 50 recommendations of place to enjoy the outdoors with your kids, and 30 tips on cheap hotesl and no-smoking restaurants. But there are only 10 tips on reliable auto repair shops, which means either there are not the many mechanics that people would recommend, or they don’t want to put it out there who the good ones are for fear of never being able to get an appointment.

Then again it could also mean that it never occurred to Qype users to write about the topic.
Read - The New Tightness of Euro Founders (a:c euro)
Read- Qype and Wiki Receive Early Stage Attention (a:c euro)

Posted at 09:06 AM | TrackBack | Permalink

September 27, 2006

Embedded Sensor-Maker DeepStream Raises GBP8M

3i has switched on to the rapid growth at Welsch startup Deepstream Technologies, a developer of embedded sensor components that offer the systems that host them significant energy savings. The UK venture firm led an £8M series B round, joining early investor Doughty Hanson Technology Ventures.

DeepStream, which is based in Bangor, Wales, has won customers in the building automation market that use its sensor components in lighting switches. The plan is to use the new capital to expand its range of products for new markets in energy management, medical and appliance sectors, as well as expanding its operations to increase capacity.

The startup was founded in early 2003 under another name and bootstrapped itself until it got a £1.2M government grant to be spread out over three years. A few months later Doughty Hanson invested and the startup was re-named DeepStream. It now employs about 50 people and has raised total equity, debt and government grant funding of £25m, including this new VC round.

Read - 3i leads financing, joining Doughty Hanson to invest in DeepStream Technologies (press release)

Posted at 08:44 PM | TrackBack | Permalink

September 26, 2006

Why Rebtel Raised So Much VC

The short answer probably would be, because it could. But we asked Index Ventures, which invested alongside Benchmark Capital's European fund in Rebtel's $20M A round, why a company offering global mobile calls at local rates, a service that has already launched with a system that routes much of its cellular voice service over IP networks, needed such a large first round.

Rebtel's Founders Hjalmar Winbladh (l) and Jonas Lindroth (r)
Did the size mean that the VCs took a big majority stake? They are not saying.

Does it need a lot of capital to market the service? We could understand FON, another Index Ventures investment, needing to raise a double digit million first round, afterall it is subsidizing its Wifi routers at €15 a pop. But as far as we know, Rebtel doesn't have that kind of expense, beyond the cost of buying a bunch of phone numbers in each of the countries in which it's active.

So we asked Index's Danny Rimer what's up. He answered:

It's a globally operating company and we want to grow into multiple territories quickly. And we want the management team to have enough capital to focus on the opportunity, and not have to go out in six to twelve months to raise another round of financing.

Rimer also said that some of the capital would be used to develop value-added services that will make using Rebtel more attractive.

We've been eyeing Rebtel since Innovate Europe earlier this year when vpod.tv’s Rodrigo Sepulveda Schulz got

Chris Shipley, the organizer of the event, on video saying that the hottest company this year was Rebtel.

We figure that Benchmark and Index are counting on Rebtel’s founders, Hjalmar Winbladh and Jonas Lindroth, having a greater risk-taking appetite with Rebtel than the norm.

The founders might be eager to develop a longer lasting success than with an earlier venture, Sendit. The two co-founded in 1994 the mobile messaging software firm and took it public. It was then acquired by Microsoft Corp. in 1999, which did not do much with it afterwards.

In the meantime, Windbladh was involved with StartupFactory, a Swedish early stage venture firm that was active between 2000 and 2003 that backed some interesting early stage companies (it was acquired by its cornerstone LP, Investor AB, in 2004).

Rebtel's service is going to be a boon to mobilephone users that travel or that have people they want to communicate with frequently located abroad and don't want to go the WiFi Voip route.

It's complicated compared to state of the art PC-to-PC calling but the high rates charged for mobile international calls will probably give users a lot of motivation to go through the contortions.

The only real hurdle we see to this enjoying rapid take up is that users have have to pay to use it up front. Part of Skype's popularity, for example, was because it was free and you could use it immediately without digging out the credit card or tapping the PayPal account.

There are now several well-funded startups poised to make cellphone use cheaper, with a few more in the pipeline - like Swiss startup Vipera, which is currently focusing on making data service cheaper, and it has not raised venture capital yet.

Read - Rebtel's Mobile Calls At Local Rates (alarm:clock)
Read - Rebtel Dials UP $20M (press release)

Posted at 12:04 PM | TrackBack | Permalink

September 25, 2006

VCs Load Up On Swedish Networking Software

VCs can't seem to get enough of Swedish software companies churning out broadband network management code. Three deals have been announced in the last week, the latest being bandwidth management specialist Operax, which raised $15 million in its third round of funding, according to LightReading.

The other two are Telepo, developer of a mobility-enabling software platform targeted at businesses, and NetAdmin, which offers Internet Service Providers and network operators software to manage the devices and components in their networks regardless of the hardware manufacturer.

Operax software is hot because it offers a standards-based way to prioritze gaming and video traffic within an IP network, say the trade pub's editors.

The six year old company is headed up by Anders Lindén (CEO) and Olov Schelén (CFO and co-founder)

Read - Operax Scores $15M (LightReading)
Read - Telepo Funding By Accel (alarm:clock euro)
Read - NetAdmin Net Management Neutraliy Backed By Eqvitec (alarm:clock euro)

Posted at 08:29 AM | TrackBack | Permalink

Telepo Real Mobility With Nokia Phones

On the back of satisfying the toughest customer in the mobilephone market, namely Nokia, Telepo has raised €4M from Accel Partners in exchange for a minority stake.

The 3-year old startup's software converges fixed and wireless VOIP services for businesses all the way out to the smartphone, typically Symbian devices. It is profitable, had sales of €3M last year and expects to double that figure this year, according to co-founder and CEO Lars-Michaël Paqvalén, who was an early investor in Hotsip (acquired by Oracle) and its CFO for a while.

Before that, he was co-founder and CFO at Gambro AB and CEO of Hansa Business Solutions.

Companies like IBM host Telepo's software to sell as a service to businesses that want to add mobility to enterprise applications and to save on the costs of mobilephone use.

Nokia has also acquired licenses for Telepo's software, which enables some nice productivity and cost-saving features, such as over the air configuration, least cost routing, and seamless switching between WiFi, GSM, and fixed networks (users do not have to remember to change the phone settings to use a WiFi network, for example, the software does it for them automatically).

Posted at 07:30 AM | TrackBack | Permalink

September 21, 2006

Barcelona's Southwing Financed - Bluetooth Bonanza

Showing that not just France and the UK can create quick growing Bluetooth startups, Barcelona-based Southwing has raised €5M from funds managed by Riva Y Garcias, to finance expansion plans and for continued R&D. The investors sent us the news this morning.

Founded in 2000, Southwing makes Bluetooth headsets and hands-free kits for cars. Like Parrot SA in France, which makes the same category of Bluetooth product and recently floated, Southwing is also reporting strong growth. It had sales of €9.5M in 2005, a figure that is expected to double this year. Headquarters are in Barcelona, with offices in France, UK, Germany and USA and the company has 45 employees.

It has earlier investors, namely Nauta Capital and Debaeque Venture Capital. The new investor said it acquired a minority stake.

Posted at 10:17 AM | TrackBack | Permalink

New Investor For Rotundus' Rolling Robocop

Looks like mobile robots are rolling out a niche for themselves in the building security market. We came across news this week on the Aerospace Corporation website announcing its taking a stake in Swedish startup Rotundus AB to give itself what it calls a "front seat" in the security market. The amount invested was undisclosed.

Ångström, which has contracts with a Canadian satellite manufacturer and Swedish space equipment manufacturers, said it would be delivering microcomponents to two year old Rotundus whose mobile robots are aimed at both space exploration and industrial security surveillance.

The Rotundus Rolling Eyeball

Its apparently robust, motorized surveillance robots were originally developed for Mars exploration, but are now also being honed to deliver security functions at power plants, airports, ports and military sites, the same market that another Euro startup, Berlin-based Robowatch, is targeting with its mobile robots.

Ångström Aerospace looks like it was set up to spin off technology, mainly micro-electromechanical subsystems used in spacecraft and unmanned vehicles, from Swedish research institutes. It has backing from Uppsala University, which owns a stake in Rotundus. RP Ventures, a Swedish venture firm, is also a shareholder in Rotundus.

We like this kind of high-tech wizardry, but we know it’s going to be a challenge to create anything bigger than a niche market for this one, especially considering that the startup's primary strategic investor so far is not an established name in the security surveillance industry.

Read - Ångström Aerospace Corporation acquires an equity stake in the mobile security robot company Rotundus (press release)
Read - German firm bring robocops to makret (a:c euro)

Posted at 07:11 AM | TrackBack | Permalink

Vendor-Neutral Broadband Management Gets Cash To Expand

Nordic venture capital firm, Eqvitec has invested $6M (SEK 44 million) in Netadmin, a Swedish developer of broadband networking management software. The new capital in what looks like a first round is meant to finance the Linkopig-based startup's international expansion.

Founded in 2004, Netadmin is commercializing software originally developed in-house by Wasadata System AB, a Swedish ISP. It claims some 40 installations at operators and city networks running in Sweden and Denmark, with GothNet and TeliaSonera being some of its early customers.

The company's new backer said Netadmin's advantage over competing appolications is that it is equipment-vendor-neutral. It claims compatibility with Cisco, HP, D-Link, AlliedTelesyn, Nortel, and Alcatel gear.

It enables operators to manage, supervise, handle billing data, and make changes to the network, but also to configure components down to the end-user's gear, typically set-top boxes and home gateways.

Read - EQVITEC PARTNERS: Eqvitec Technology Fund III invests SEK 44 million in Netadmin
(press release)

Posted at 07:06 AM | TrackBack | Permalink

Spreading Of Netnoldege's PAIN Financed

French startup Netnoledge has developed software to make Internet file transfers and communications more secure based on the public key encryption (PKI) protocols. It is the kind of software that enables privacy, authentification, integrity and non-repudiation (PAIN) of data and email exchanges via the Internet.

Screenshot From Netnoledge Showing Non-repudiable Transfers In Progress
The two year old company, which is a Delaware-registered company with offices in Sceaux, France, announced that it raised a first round of financing from DGME FINANCES of an undisclosed amount this week. The new money is for R&D and to expand its efforts in the UK and German markets.

A couple of Swiss banks and French research institutes are the types of organizations that are its early customers, according CEO and founder Michel Doric. He told us that Netnoledge launched the product in February and he's forecasting for end of 2007 sales of €5M.

We checked with one of our VC contacts who has had some healthy liquidity events, as they say, with security software companies over the last ten years and he confirms that PKI and security software in general is still a "vibrant" market.

And that it is indeed possible for a PKI company to reach the kinds of revenues Doric is forecasting if, for example, it manages to get a few large institutions as customers.

PKI has been around for a while and there are products on the market from names like Entrust and DigiCert. What makes this one different is its claim that it is the only one to offer a solution where no third party certificate authority is required.

We don't know the other products well enough in this market to validate that, but what we do see is that Netnoledge is smart in the way that it is securing early stage cashflow.

It is making it easy for companies large and small to make a decision to buy. Customers are offered three ways to purchase: traditional software licensing, full rental model, or subscrition to a hosted PKI platform from Netnoledge.

The latter two sales models mean that it can sign customers up without having to wait until several layers of management in the customer organization agree to write a big cheque for a full-blown client-server software license. That strategy can give startups that all-important inflow of cash to keep it going until it makes some long term licensing deals.

The company founder told the alarm:clock euro that Netnoledge had been self-financed until DGME stepped in. It is currently building up channel partners and OEM deals several countries, including the US.

Read - NETNOLEDGE réalise une première levée de fonds auprès de DGME FINANCES (prminds)

Posted at 06:39 AM | TrackBack | Permalink

September 19, 2006

Analog Devices Buys Denmark's VC-backed AudioAsics

Analog Devices announced that it acquired AudioAsics A/S, which makes low-power microphone and audio signal conditioning chip designs for approx $19M in cash. An additional $8M is payable to the shareholders if the Roskilde, Denmark-based startup meets milestones.

AudioAsics' tech is expected to improve sound quality in MP3 players, cell phones and PDAs that rely on Analog Devices chips. It was founded in 2003 with funding from Danish investors Vaekstfonden, SEED Capital Denmark, and Hvista. The founders will stay on post-acquisition and Analog Devices will invest in its operations in Denmark and Bratislava, the firms said in a statement.

Read - Analog Devices Acquires Audio IC Specialist, AudioAsics (press release)

Posted at 07:13 AM | TrackBack | Permalink

Baytech Backs Open Source Alternative To Microsoft Exchange Server

Open-Xchange, an open source messaging and collaboration server software startup based in Tarrytown, NY has raised a first round from Baytech Venture Capital in Munich. The investment in the company, which is rooted in Olper and Nurenberg, was announced last week.

The startup's software enables businesses and organizations to replace Microsoft Exchange Server for an open source alternative, as an example. It says it offers eleven different collaboration applications (calendars, document sharing, contacts etc.) and supports hot-desking and mobile access. It's targeted at the small and medium sized company.

What The User Sees On Their Open-Xchange Personal Portal Page

Baytech's Jochen Walter, told the a:c euro that the firm's product competes on scalability, greater integration features, and usability. His firm's opinion is that they are backing the market leader in the open source exchange and collaboration market.

We don't know how right he is on that because we haven't seen any trade rankings. There are certainly several competing open source packages, Zimbra, mentioned by Walter, but also OpenGroupware.org, exchange4linux and EGroupWare/PhpGroupWare, as well as commercial software from Scalix IBM/Lotus, Tobit, and Novel, according to Wikipedia (german version).

Given its competitive environment, this startup has appointed a board members that sounds like (on paper anyway) that could help it pull ahead. Take for example, Lee Dayton, a former IBM VP who particiapted in the Lotus, Tivoli, and Sequent acquisitions.

An angel investor, according to Computerwoche, and another board member is Richard Seibt, who after a stint as CEO of SUSE Linux eventually became European manager after it was acquired by Novell. He's also a former IBM man who is on the board at United Interent, a publicly traded German Internet service provider, and on the board of another venture-backed open source startup, Collax, which makes a Linux operating system that is meant to be easier to use than other Linux distribution on the market .

Another former SUSE exec, Rafael Laguna de la Vera, is chairman of the board. He was brought in as CEO of SUSE shortly before Novell acquired the company and left once the deal was done. And to help with future rounds, there is Bob Young, a former investment banker turned fund of fund manager that is in an LP in some big name US venture funds.

The startup raised a seed round when it was founded in 2005 from Laguna de la Vera, Young, and Seibt, according to Computerwoche.

The founders hail from Netline Internet Service, a German web-hosting firm. As we understand it they developed much of the software when Novell/SUSE was supporting it in open source development. After Novell acquired SUSE Linux, a German open source startup in late 2003 for $210M in cash, Novell eventually decided to use and market another software package for collaboration and email applications, and the Netline people started up Open-Xchange.

Read - Open-Xchange Closes Venture Funding(press release open-xchang)

Read- Open-Xchange hat weiteren Investor (computerwoche)

Posted at 05:23 AM | TrackBack | Permalink

September 17, 2006

Tech Venture Rebound - Tornado Insider Stats

Tornado Insider, which publishes a database tracking technology investment in Europe, notes that for the first time in the six years it has been in business, healthcare/biotech's share of the total amount of venture capital raised by startups declined in relation to other categories.

In other words, of the total €3.1 billion raised by high-tech companies this year to-date, the proportion of capital flowing to companies in the Information Technology, Communications, and other categories, has improved.

The news was in a free weekly newsletter from Tornado Insider, so it tantalizingly leaves out a breakdown of the figures for all investment categories. Neither did it state what percentage ICT actually raised this year compared to previous years.

It did say that the decrease in share by life science companies is apparent when measured by both the number of deals done and the volumes raised by life science companies. This year 26.5% of the total number of deals made were biotech/healthcare companies, down from 29% In the years 2004 and 2005.

In terms of volume raised, biotech/healthcare funding represented 35 % of the capital raised this year, down from 42% (in 2005) and 37% (in 2004).

It also said that early stage investment increased and it confirmed the increasing VC interest in online services.

"The big winners are Internet companies with 9% of all deals – up from 6% in 2005."

Read - Chasing the €4B Mark (tornado insider)

Posted at 01:09 PM | TrackBack | Permalink

September 15, 2006

Survey Says: VCs Invest in Bloggers to Gain Media Influence

We ran a reader poll on the alarm:clock this week asking why VCs are investing in blogs. The results of are in.

Why VCs Invest in Bloggers?

Easy Single - 37%

Gain Media Influence - 43%

Blogging Is Tech Play - 20%

Posted at 07:46 AM | TrackBack | Permalink

September 14, 2006

Softbank Invests In Asknet's Japanese Market Expansion

Asknet, an online software distribution platform company, has sold a 10 percent equity stake to Softbank BB Corp of Tokyo. The investment was part of an increase in Asknet's capital. Further terms were undisclosed.

The two had announced a joint venture to cover the Japanese market a month ago.

Asknet is a spinoff from the University of Karlsruhe that was founded in 1995. It claims to be the number two independent supplier of integrated shop solutions for software producers. It also operates its own software download site.

Sales in 2005 were €35M. It is backed by German VCs, including AdAstra, HVB, and Süd Private Equity. Institutional investors plus Softbank own 65 percent of the company. Before this round it raised €12M in total, we believe.

Posted at 06:36 PM | TrackBack | Permalink

September 13, 2006

Why Are VCs Investing In Content?

Over at sister site, the alarm:clock, we're asking why VCs are investing in blogs - they are content companies not technology ventures. What started it was Seeking Alpha, a stock market expert blog, announcing that Benchmark Capital has invested. It is the latest in a string of blog deals. We are not sure yet how much Benchmark has invested. But we can't figure out how investors hope to make VC-like returns. Our colleagues have a couple of theories and put up a dpoll so readers can vote on which one makes sense or leave a comment.

Read - Why Do VCs Invest In Bloggers? (a:c)

Posted at 09:38 AM | TrackBack | Permalink

Google Europe's New M&A Man And Accel's ex-Yahoo Exec Hire

Fred Destin, a partner at Atlas Ventures, reports in his eponymous blog that Accel is adding Simon Levene to its team - announced in August but we missed it - along with some details on Google Europe's new M&A man, Anil Hansjee, most recently of GPBullhound, and some other corporate moves.

Read -Anil Hansjee and Russ Cummings latest in series of Corporate to VC moves (fred destin)
Read - Yahoo exec Simon says he will join Accel (pewnews)

Posted at 09:11 AM | TrackBack | Permalink

Photonics Startup Oxxius Raises $10M For Tiny Laser Tech

Lannion, France-based Oxxius, a manufacturer of ultra-small yellow, violet, and blue lasers, has raised $ 10 million in a second round, led by existing investor Sofinnova Partners, along with new investors AXA Private Equity, and San Francisco-based Sofinnova Ventures.

The new money is to be used to develop the commercial and industrial operations of the company. Its aims is to be a first-tier laser provider to instrumentation manufacturers serving the biophotonics, spectroscopy, and related markets. Using Oxxius lasers will enable its customers to make smaller, more energy-efficient, analytical and measurement instrumentation.

Read -Laser specialist to ramp up production and strengthen market position. (webitpr)

Posted at 06:59 AM | TrackBack | Permalink

September 12, 2006

Raumobil's New Platform For Wannabe Logistics Providers

Earlier this month Raumobil, a German startup running an onlie platform for buying and selling storage space, transport, and lodgings for consumers and businesses, raised an undisclosed amount of seed financing from the High Tech Gründerfonds.

With the new money it will be developing its mobilephone software that enables heavy-users to buy and sell in real time, plan routes, and calculate travel times.

The Raumobil plaform lets users offer to share a ride, pick up eBay items, or rent out their hobby rooms for storage, for example. It can also be used by small and medium-sized transporters, hotels, couriers, or storage providers to post ads to sell excess capacity.

Right now the platform is oriented towards the German market, but judging by the list of countries in its search form, its planning on marketing the platform internationally.

In an interview with VDI, the founders say that the service is free throughout its pilot beta launch but will charge between € 1 to €1.50 per transaction. The moblie function will be sold as a yearly subscription for around €25 a year.

The company is the brainchild of Michael Böttger and Oliver Wolf, two former product developers from Germany's popular Web.de portal who self-funded the development until September.

Posted at 09:15 AM | TrackBack | Permalink

September 10, 2006

eWave Enables MMOGs-For-Mobilephones - VCs Sign On

The High-Tech Gründerfonds, a €262M fund created by KfW bank, the government, Siemens, BASF and Deutsche Telekom, has invested €600K in eWave Interactive, an eight month old startup that sells enabling software for hosting massive multiplayer online games (MMOGS) on mobilephones.

The company is a spinoff of 10 year old Navus, a developer of specialized software. Both firms have same founder.

The new capital wil be used to hire staff to code new product features, and to establish itself in the market. It already has a deal with e-sports in Hamburg, which makes Flash-based browser games onto its mobilephone platform. Over the next year it will grow the business in its home market and prepare to enter the Asian market and expects to raise capital to make that move.

The startup's products include
-- eWave GameServer is a comprehensive platform for massively multiplayer mobile games using GPRS or UMTS.
-- eWave LicenceServer is a powerful tool for copyright protection of video and mobile games.
-- eWave Synapse is a next generation AI engine based on argumentation technology.

Read - Geschäftsideen im Wettbewerb (Uptech Network news)

Posted at 07:40 PM | TrackBack | Permalink

September 07, 2006

Rugged Dealmakers In Europe

We didn't make it to the recent Benelux TechTour, but we did look at the photos after VC blogger Fred Destin pointed them out.

Offroading A Minor Challenge Compared To Dealmaking In Europe For Michele Galo (pilot) and John Chapman (navigator)

Galo is an associate at Sardis, a London boutique investment bank specializing in technology deals and Chapman is a partner at TVM in Munich who's specialized in enterprise software, but also advises portfolio firms on M&A activitie.(Image source: European TechTour)

At first we thought it was a founder/VC backer team, and thought it seemed like an apt visual metaphor. Or maybe not. Who want's to be the blindfolded pilot or a navigator that's not in control.

Anyway, if nothing else we can say that the European TechTours are different than your usual pitch fests that bring together VCs, corporates, and entrepreneurs. They usually involve planes, trains, boats, and other exotic venues for the company presentations.

We hope to make it to cover the European Tech Tour that will take place in Scotland in December - and hope that there's no requirement to eat haggis and do the Lilt in a kilt.

Read - Upcoming TechTours
Read - Benelux Tech Tour (fred destin blog)

Posted at 04:12 PM | TrackBack | Permalink

Triple A First Round For Ubiquisys

UbiquiSys, cellular communications hardware company, has raised a $12m Series A round from Accel Partners, Advent Ventures and Atlas Venture.

This deal comes almost a year after the Swindon-based company raised seed financing from Atlas and Advent.
We think it’s only coincidence and not a requirement for investment that the VC firm’s name begin with an “A”.

The Ubiquisys ZoneGate Box Is Targeted At Consumers With Cellphones And A Broadband Connection

UbiquiSys expects to have its boxes in market trials in 2007 and the new capital is meant to finance that effort.

For cellcos, and ultimately their subscribers, the company's products solve a problem with using 3G phones at home where costs of providing indoor cellular coverage have been prohibitive on the side of cellco, and the battery power consumption has turned off consumers (apparently it takes a lot of power to get signalling from 3G basestations).

What is more, it will enable VOIP services from cellcos.The idea is that cellcos will better be able to compete with the emerging WiFi and wireless VOIP innovations emerging on the market if they have such systems to sell.

It sounds like a good idea since 3G is being deployed in many large sized markets and cellcos need something to fight off the growing number of startups in the Wifi/VOIP area.

There is another startup we've covered that has similar gear, 4G Systems over in Germany, which was founded back in 2002 and has some early stage financing behind it too, although its core features concentrate more on cellular data services, as we understand it.

Posted at 02:04 PM | TrackBack | Permalink

September 06, 2006

InsideContactless Raises $25M For New Markets

Sofinnova-backed INSIDE Contactless, a fabless semiconductor company, has just raised a large sized round to add to its sales and marketing operations in Asia and the US, plus invest in getting its product into two high volume markets, things that consumers increasingly have on them at all times: a cellphone and bank cards.

The startup said on Monday that it had raised $25M in a deal that brought in two new US-based venture-firms, Granite Global Ventures and EuroUs Venture. Earlier investors, including Sofinnova Partners, now the largest shareholder, along with Israel-based investors, Vertex Venture Capital, Vertex Management, GIMV of Belgium, and France's Siparex Ventures, also particpated.

It just raised $10M a year ago. Its core business has been in inventory tags and contactless smartcards for access systems. Now its getting into debit and credit cards, with chips that supplement the magnetic stripe to enable wireless for contactless transactions.

It also develops chips targeted at mobilephones to enable users to buy bus and subway tickets, cinema tickets, redeem coupons, and the like by waving the phone at wireless readers.

The cellphone is going to be getting more handy if InsideContactless has its way.

Industry trade publication, Card Technology, published an interview with the startup's CEO Rémy de Tonnac who said that the firm had not planned to raise this much money, but did so to be ready in case market predictions should prove correct.

“Those two markets, in which we are positioned, are on the verge for explosion,” he says. “We have to be ready; we have to invest in the product roadmap.” ... “Initially, the plan was not to raise that much money,” he says. “(We think) probably it is better to do a larger round now, so we can move aggressively.”

Inside says it will ship 25 million contactless chips this year, not counting inventory tags, up from about 20 million last year, according to Card Technology, adding that the company will not profitable until 2008.

This deal is the second French RFID firm to raise a significant amount of VC money this year, both tapping an international syndicate of investors to help take the risky big step into the US and other glogal markets. The other one was Tagsys, which is targeting its chips at tracking, tracing, and authentification applications.

Read - InsideContactless Feature (Card Technology)
Read - Tagsysm Moves To US Raised VC (a:c euro)

Posted at 09:28 AM | TrackBack | Permalink

September 05, 2006

Miyowa More Mobile Instant Messaging

Miyowa, a 3-year old French provider of mobile messaging services, has raised €3M from Techfund and Sophia Europlab. Update: TechCrunch wrote in to say that they broke the news yesterday about Miyowa's funding, before the firm issued its communique, which we received this morning. See link to TechCrunch's scoop below.

Miyowa runs mobile instant messaging services for the likes of MSN Live Messenger in France, Skyrock (a French radio station with a large blogging community), and Silicon Valley-based mobile games developer, Digital Chocolate. It also supports Hotmail, the MSN email service, on the mobilephone. Its services are a key part of the business model of France's new MVNO operator CGBC, which runs the TEN brand, and is backed by AXA Private Equity.

Miyowa's plan is to use the capital to develop better mobile "community" services.

This one looks a lot like Mangrove-backed Nimbuzz. Although positioned differently, Miyowa offers pretty much the same things, except it's doing it as a white label service. Another potential competitor would be Swiss startup Vipera, backed by business angels, but Vipera is not as far into commercialization as either of these two.

Rodrigo has a video clip of an interview he did with Miyowa's founder. See link below.
Read - La société française Miyowa lève 3 millions d’euros (TechCrunch Francaise)
Read - Pascal Lorne (Rodrigo Sepulveda Schulz blog)
Read - IM mobile : le français Miyowa lève 3 millions d'euros (NetEconomie )

Posted at 02:19 PM | TrackBack | Permalink

September 02, 2006

Whos's Got Money For Euro VC? Partech and Neuhaus Join The List

Jean-Marc Patouillaud of Partech International, based in Paris, was telling us last week that his firm's fundraising for its latest fund ( targeting $300M) is going well. It has had a first closing on $150M and is on track towards closing target.

We also heard from Neuhaus Partners in Hamburg (the former Dr Neuhaus Techno Nord) that it is also on track towards raising $100M with cornerstone investors in place. Both have stirred up interest from new institutional investors, limited partners, this time around. (Image Source: European Central Bank)

Why is this news on a tech venture blog? Because founders looking to raise capital and VCs looking for co-investors need to know which VC firms in Europe actually have capital to invest over the next five years or so.

As most of our readers know European VC is the least loved sector of the alternative asset class. As a group, the track record has not been stellar in the past. It is very difficult for GPs here to raise capital from limited partners.

So when a venture firm here raises a new fund in this new cycle it registers on our radar. We keep track of it, and we've got a nice table below that gives an overview of the state of the venture market here.

It's not like in the US market where VCs can coast on their "brands" and past performance for one or two funds of less than stellar performance before limited partners pull the plug. Dan Primack, editor of the PE Week newsletter and a contributor to Buyout magazine, uses the baseball metaphor to describe the phenomenon, saying that typically after "three strikes" a VC firm is out.

Click image for a full-sized view of recently raised VC funds
We sourced the data for the table from recent interviews with venture firms and press releases, so if we’ve left anyone out, let us know by either posting a comment, or sending us an email.

This kind of information is hard to come by for entrepreneurs, as BV Capital's Christian Leybold points out in a recent post on his blog.

There are a few things to note before consumption. The funds here are the ones that have raised large sized funds from institutional investors in what is a typically highly competitive process. But it is not comprehensive, there are smaller funds that do seed and early stage investing in tech startups in each country in Europe. We don't have visibility on all of them so we left that category out for the time being.

The funds marked with an asterisk * are still in fundraising mode and have not announced a closing on their targets yet, so we posted how much they have raised so far.

In the Country column we published the countries where we’ve seen these investors close deals in our work as a journalist.

One caveat, some of the funds like Index Ventures, Banexi, Sofinnova and Innkap also invest in biotech/medtech - so not all of that capital is targeted at software and tech ventures.
Read - Venture Capital FAQ Part II: Do’s and Don’ts to get the right VC meeting (Christian Leybold bloggingvc blog)
Read - Crescendos Two Strikes And Why It Matters (siliconbeat blog)

Posted at 07:32 AM | TrackBack | Permalink

August 30, 2006

Euro Seen As Expensive By US VCs

Even after all these years of Euro being the standard currency in Europe Union (except for the UK and a couple of the Nordic and new EU countries) there are still some strange notions about it. A new one we heard yesterday is that US VCs think of it as "expensive" when considering a European investment.

The Euro : Colorful, Controversial, Practical (And Less Currency Conversion Makes Our Jobs As Journos Easier)

It came up during a phone interview yesterday with Nicolas von Bülow of Clipperton Finance, a corporate finance boutique that is specialized in tech and media deals, while working on a feature story for one of our freelance markets.

He said he often has to help the US investors get over the perception that the Euro is "expensive". He said, "For some reason, they think the Dollar and the Euro should be on par. Why should it? What's that all about?"

Indeed, instead of looking at that, all the US VC has to do is look at the valuations, which are still lower over here than in the hotter US market. Clipperton recently put together good-sized syndicates for two semiconductor startups here: Sequans, specialized in Wimax, and Dibcom, specialized in mobile TV.
Read - Sequans raises $24m in financing led by Kennet Venture Partners (clipperton)
Read -DiBcom raises €24.5M round led by Partech International (clipperton)

Posted at 02:02 PM | TrackBack | Permalink

August 28, 2006

French and US VCs Team Up For New Travel Search Startup

DoHop, Kayak, and travel shopping comparison engines inside some of the larger portals have a new venture-backed competitor on the scene now that Sofinnova Partners and Walden International have invested €8M in Travel Meta Search, a recently formed search engine business for airline tickets, hotel rooms, car rentals, and the like. The company was created this year when Coelis, which runs the Tazzoo travel site, and Fare.Net, based in Singapore merged. It's targeting the East Asian and Indian users, as well as European users.

Posted at 09:23 AM | TrackBack | Permalink

August 23, 2006

Two More Euro VCs-That-Blog

Two partners hailing from European venture capital firms have started up new blogs, commenting on deals done, growing technology businesses, and they sometimes deliver the occasonal bit of gossip on the comings and goings at VC firms on this side of the Atlantic before the private equity journals do.

They are: Fred Destin (r), a partner at Atlas Venture, whose blog byline is "A VC in Europe: How I Learned to Stop Worrying and Love Entrepreneurs", and Nic Brisbourne (l), a partner at Esprit Capital Partners (the name of the combined technology investment firms Cazenove Private Equity and Prelude Ventures) whose blog is called the Equity Kicker.

Link: The Equity Kicker (Nic Brisbourne, Esprit)
Link: Fred Destin (Atlas Venture)
Read: More Euro VC Blogs (a:c euro)

Posted at 06:56 AM | TrackBack | Permalink

Grouper Acquisition, A Quick Flip For T-Online Ventures

Sony has acquired Grouper Networks, which runs a popular video sharing site that exploits peer-to-peer technology, for $65M, a deal that gives a European corporate venture capital fund a quick exit on one of its recent investments.

According to ipdemocracy blog, T-online Ventures invested $1.75M last December, as part of a total of $5.25M Grouper raised since founding in 2004.

The venture capital arm of Deutsche Telecom is not exactly known for cultivating the fine art of the quick flip, but in the case of its investment in Grouper, a Silicon Valley-baesd , it got one.

VC Ratings blog has some good background on other deals in this category.

The price Sony paid is not bad for the amount of VC reportedly raised and the time to exit, but the size of the deal will not be wowing other venture capital firms, who need to eventually sell their investments in consumer oriented video publishing sites for a lot more than that, at least 5 times, in order to make an impression on their fund's performance - depending on the size of their fund, that is.

Read - Sony Buys Online Video Sharing (vc ratings)
Read - Upstart Grouper Lands Funding from Deutsche Telekom (ipdemocracy)

Posted at 06:39 AM | TrackBack | Permalink

August 17, 2006

In The VC World You Can't Say Cherchez La Femme

VentureWire Alert is reporting today the number of women running venture backed companies is on the decline, sourcing its sister research company, VentureOne, whose database is fairly definitive, we hear.

The percentage of venture-backed companies with female chief executives has fallen from roughly 8% in 1999 to about 5% in 2005, while the percentage of companies with women in management at a level of vice president or higher has fallen from 41% to 33% during that same period.

Through the first half of 2006 the downward trend continued, with less than 4% of the CEO jobs at venture-backed companies going to women, and the percentage with female top managers falling to about 30%. Both figures would be 10-year lows, according to the study.

We guess that the data makes it one place where when buckets of money are lost, you cannot say, "cherchez la femme".

Read - Meanings and origins of phrases (phrases.org)

Posted at 03:53 PM | TrackBack | Permalink

August 14, 2006

Mangrove's Tluszcz On Opps In Eastern Europe And Mobile Services

Mangrove, the young venture capital fund that is best known for being a Skype early backer is quite secretive about its activities, but one of its partners, Mark Tluszcz, has started to write occasionally on the corporate blog of its portfolio firm AllPeers (software company developing a Firefox plug-in for better media filesharing).

The blog, aptly named Peer Pressure, also has a New Business Models category that we like to read.

So far, Tluszcz has posted short items about investment opportunities in Eastern Europe, mentioning portfolio firm, AllPeers, which is based in Prague (with a North American and a French founder), but also stating that his firm is "about to invest" in Quintura, a search startup that has R&D in Russia.

That is him in this short video from vpod.tv founder Rodrigo Sepulveda Schulz, which we were allowed to publish here earlier this year.

Another area he's interested in is businesses that want to take a chunk off the cost of mobile communications, particularly in the areas of roaming, messaging, and video file transfers.

We agree with him on the latter point. There's a host of companies zooming in on this opportunity, some that we've already mentioned here, and more that we have not been able to get around to profiling yet.

Read - Mobile Communications Expensive (peer pressure blog)
Read - Look East and You Could Find…. (peer pressure blog)
Find New Business Model Posts on Peer Pressure (peer pressure blog)

Related a:c Euro Posts
Read - Startups Sink Fangs Into Cellcos
Read - Rebtels Global Mobile
Read Truphone Backer Touts Free Mobile

Posted at 06:32 AM | TrackBack | Permalink

August 03, 2006

The UK's Clubby VC Market

Library House has published a meaty report on the UK venture capital market, tracking among other things every VC-backed company in the country. (See the link below to get the full report). The graphic showing how VCs syndicate their deals, or co-invest with each other, is useful for a quick overview of who to you need to know in the UK.

As we read it, Atlas, Quester, and 3i are the biggest investors in the UK market and they frequently co-invest with each other, but also with fund managers coming out of the US, namely Benchmark and Accel, both of which have recently raised their second funds for investing on this side of the Atlantic.

Institutional Investors with More Than 20 Deals in the Venture-Backed Portfolio
The thickness of the lines connecting the VCs firms shows the frequency of co-investments. The colouring of the node reflects the number of deals - increasing from yellow to red.

Out in right field is Oxford Seed Capital, an early stage investor, which as Library House informed us this morning is actually the most active investor in the UK in the last 12 months, Library House has tracked 56 investments, but it generates few co-investments with the more active VCs in the UK.

We don't know Seed Capital's portfolio well enough to say if the reason for the low co-investment activity is that its startups are unattractive, or if it is just too early stage (for the active VCs), or if it is not networking enough with the right people. We'll keep our ears open on the topic and hopefully write an update soon.

Read - Beyond the Chasm:The Venture-Backed Report - UK - 2006 (registration required but report is free)

Posted at 11:12 AM | TrackBack | Permalink

July 31, 2006

Mobile Music Download Startup Targetize Says Tech Validated, Wants To Raise More Money

In its latest press release, Targetize, based in Herzelia, Israel, reports its first big European client for its Anysong application, namely Universal Mobile Music's service which now runs on KPN's Dutch mobile network.

Targetize also said its looking for $5M in a new round of financing at a “higher valuation” than last time from private investors and VCs.

Read - Music Industry Giant Select Targetize Mobile Search and Discovery Solution (prnewswire)

Posted at 07:01 AM | TrackBack | Permalink

July 30, 2006

Euro VCs Force Change

Go4Venture always has some interesting analysis of European venture capital trends in its monthly newsletter. The latest highlights some style changes among certains VCs as a survival strategy. The corporate finance advisory also notes that the adoption of private equity strategies by some VCs for tech firms is now an established trend and it has created a new category for Go4Venture's analysts to track.

Venture Capital Investment Activity In June Was Similar To May's Level Of Activity

Here's what else the corporate finance advisory firm has to say:

European tech VC's (or rather VC's operating in Europe) are experimenting in new areas of investment, seeking of course higher returns, but also newer, larger areas to invest in. VC's are under the pressure as well from their investors to deliver meaningful returns, not only in terms of RoI [return on investment] but also absolute returns. After all, in the alternative investment class, they are competing with other types of private equity, hedge funds a wide variety of investment strategies. At stake is the future of European VC as an asset class – no less.

Trends in European Venture Capital
More investment in media companies (Go4Venture calls it "content" )

VC's are acting on the convergence of content (on the back of media moving to "digital only" platforms), telecom services and IT. Digi TV Plus and Sports Media are good examples

Investment in social networking that is difficult to categorize but more of a leveraging of tech than a disruption by technical innovation.

VC's exploring technology’s pervasiveness i.e. VC's are investing in sectors leveraging technology where technology can re-invigorate traditional business models (distribution, retailing, financial services, next generation telecom services), but also creating new services not otherwise possible (e.g. online auctions, marketplaces and these days social networking). The investment in Ipnotic Telecom is representative of this trend.

Go4Venture sees an increase in in alt energy and med tech. This makes sense to us as both have proven to provide good exits for backers in recent times. But the surprise is investments in bioinformatics - it is a category that has so far delivered a steady stream of flops in the European market - with only one survivor that is on the a:c euro radar.

VCs are also getting into entirely new fields such as alternative energies (Microgeneration offers a world of new opportunities) or environmental technologies (“cleantech”). It is also worth noting the increased interest in medical technology and bioinformatics, two areas of life sciences that traditional VC's believe they understand because they are close enought to traditional "tech" (hardware and software).

Buyout strategies by VC continues as a trend

Finally, VCs are increasingly becoming traditional private equity players, with buyout type investments which cover a mix of later stage, public to private and use of leverage. This trend is also partly fed by public markets which have become more demanding, both in terms of the financial performance required of new applicants and the costs and regulation associated with a listing. Another driver is the increasing use of “buy and build” strategies as a way to accelerate revenue growth and generate greater absolute returns. As this type of investments are becoming a feature of the European landscape, we will start tracking them (separately) from next month on. For an example in June, see Springwater Capital acquiring M+W Zander.

Posted at 03:25 PM | TrackBack | Permalink

July 24, 2006

Backers Of Global IP Sound Invest In Paradial

Paradial, an Oslo based Internet protocol (IP) communications software developer (VOIP, Videoconferencing and Instant Messaging software) has signed up with Kistefos Venture Capital for a $3.5M round of investment to expand.

The startup's founders wanted Kistefos on board because its parent company is backing Global IP Sound, the hot audio processing software company that supplies the likes of Skype, Nortel Networks, WebEx, Yahoo!, AOL, and EarthLink.

Paradial was founded in 2001 by key members of Ericsson's IP telephony development team. It supplies components to video conferencing vendors and messaging service providers. Its patented RealTunnel technology crosses firewalls, which, the company claims, is "probably the most comprehensive solution in the marketplace". The startup also develops multi-party conferencing and click-to-call solutions.

Read - Kistefos Venture Capital invests in Paradial (paradial)

Posted at 03:33 PM | TrackBack | Permalink

IPO Market In Europe Generates Buzz

IPOs and trade sales - that generate so-called liquidity in the venture market - were robust in the first half, according to the latest release from VentureOne and Regent Associates in the UK.

The news is generating some media buzz. (Image source: Taittinger)
Read - Nasdaq's Loss is Europe's Gain (dealflow at businessweek)
Read Venture-backed European IPOs in Q2 up on previous quarter (altassets)
Read -Regent data reveals continued M&A activity (ovum)

Posted at 07:11 AM | TrackBack | Permalink

Irish FX software company buys itself back from VC - touts quick growth

Foreign exchange trading platform vendor, Cognotec, was in the news in Ireland this weeked. Its founder bought his firm back from venture backer Softbank -- at a much lower price than the Japanese company paid for its stakes acquired in 1999 and 2000, reports Times Online.

The report suggests that the deal takes place just as the firm returns to profitability after several years of losses due to investment in product development.

The current valuation of Cognotec is $33M, according to the same source, which also reports Cognotec's operating profit at $3.7M on annual revenues of $28.1M last year.

Read - SoftBank takes €32m hit as it abandons Cognotec (times online)
Read - London is top global centre for foreign exchange and Ireland's Cognotec is a global leader in FX e-commerce (finfacts)

Posted at 05:19 AM | TrackBack | Permalink

July 20, 2006

3i-Backed Insenys And The Yacht Tom Perkins' Carry Built

We dream of driving supercars, but others like superyachts, especially Silicon Valley tech venture magnates who have the wherewithal to buy them. VC Ratings' posted about the Maltese Falcon, the superyacht that belongs to Tom Perkins', a founding partner of venerable VC firm Kleiner Perkins in a post entitled What You Do With All That Carry.

Interestingly, 3i plays a part in this story - it is one of the backers of Insensys, the energy technology company charged with building the vessels high-tech masts which contribute to a bit of ecological karma.

Images source: Ken Freivokh Design
Read -
Insensys Celebrates Successful Completion of the Maltese Falcon Project (press release)
Read - $100 million yacht sails into view (mercury news)
Read - What you do with all that carry (vcratings)

Posted at 01:34 PM | TrackBack | Permalink

July 19, 2006

French Video Codec Startup Taps Starbucks' VC

The US-based venture capital company that backed Starbucks and Costco has invested €3M in Actimagine, a French (now a Delaware company) startup that has developed a software video codec used by brand-name consumer electronics manufacturers such as Nintendo and Fisher Price to run movie clips on their devices.

The new capital is to secure the three year old company's sales channel in North American and Asian markets.

The Actimagine team has done what a lot have tried and failed to do, commercialize a non-standard video codec. It is a lean (fits on a 128MB memory card) all software solution that runs primarily with ARM chips. It also offers a content management system for movie and games contenet developers.

The firm's software can be used to store and playback movies from a memory card, as well as games.
It is now apparently winning licensing deals in the smartphone segment, it mentions Nokia and Sony Ericsson, due to its ability to enable handsets equipped with "standard batteries" to run "more than 7 hours of video playback without recharging".

Interesting to note that recently funded Mobitween, also French, uses Actimagine's content management software to develop Flash games for mobilephones.

Read - Video on Mobile: Actimagine Raises 3M Euro From GRP Partners (businesswire)
Read - Flash Games Mobitween Funding (a:c euro)

Posted at 08:55 AM | TrackBack | Permalink

July 18, 2006

France's Wanimo Petshop Pings VCs

Online pet shop Wanimo just raised €2M its first round of VC from Alven Capital and Entrepreneur Venture, reports Journal du Net. As the folks over at Dogster (a community website for dog lovers - a kind of Friendster for puppies) know its a great time to be offering services for pet owners. It is something that the founders of six year old Wanimo know too.

The etailer was launched back in 2000 with about half a million in angel finance. Its founder, Isabelle Vidal, told the JDN that her company now employs five and had a turnover of €2.7M in 2005. It hit breakeven in January and expects to grow by 70 percent this year.

The a:c euro notes that Wanimo was mentioned in a post here about a startup competition in Paris in late April. The JDN report suggests that the firm raised its VC money within a few weeks of that event.

Read - Wanimo lève 2 millions d'euros (Journal Du Net)
Read - Paris Startups With Winning Ways (a:c euro)

Posted at 06:50 AM | TrackBack | Permalink

July 17, 2006

Sofinnova Gets Italian Accent

Sofinnova Partners informed us today that it has led a €10.6M round of VC investment in Accent, an Italian spin off from ST Microelectronics and Cadence Design Systems.

Accent provides microelectronics design services and is an IP vendor. Some of the products it has contributed to include a golf ball with a homing device, a motorcycle jacket with built-in airbag, and an alarm that signals low tire pressure. It also has several telecommunications designs for broadband comms and cellphones.

The new capital will be used to add sales team personnel in the UK, US and Israel, and to start design operations in "cost-effective" areas such as Eastern Europe, China, Singapore or India.

Posted at 04:05 PM | TrackBack | Permalink

Mirics Handles Alphabet Soup Of Digital Broadcast

We posted a while ago about some research into the plethora of standards emerging for broadcasting content to mobilephones and portable media device and how startups that made the wrong choice could be at risk. In the meantime, startup chip company Mirics has turned the standards battle into an opportunity, developing a smart radio frequency chip that can receive several competing protocols, such as DVB-H, T-DMB, ISDB-T, DAB-IP, MediaFlo, DAB, DRM and even AM/FM, it claims.

It just raised a first round of financing from Pond Ventures of an undisclosed amount. It was also seed funded by Pond.

An insight into what its VC has been doing to help the firm grow was in the press release.
--- many of the key hires Mirics made were introduced by Pond.
--- Pond introduced the firm to a "significant" number of customers and partners in the US, Europe
--- spent a "lot of quality time" with us helping us drive the strategy forward.

This is what all early stage VCs should be doing. If they're not, then all the startup gets in exchange for its equity is expensive money.

Read - Pond Ventures announces its first major investment in the mobile broadcast market (Press Release)
Read - Standards Battle For Mobile TV Puts Startups In The Crossfire (a:c euro)

Posted at 03:17 PM | TrackBack | Permalink

Euro VC Down Slightly in 2Q06; Deal Size Increases

CalibreOne, the executive search firm specialized in tech ventures, has published its second quarter VC funding totals.

The amount invested in European technology firms was down from the first quarter but still higher than the last two quarters in 2005.


Deal size was up slightly, mainly due to some large sized second/third rounds (e.g. WeeWorld, CavendishKinetics, BridgeCo, Mobeon, Nanoradio, Waveon, Siano and SmartFuel Cells)

The effect on the increased VC investment is that startups are hiring "more and more searches for European companies looking to establish US operations" and because Calibreone operates in the US as well, it notes that US companies are also investing heavily in expanding into Europe.

Mobile technology is the strongest growth sector, but increasing activity is noted in enterprise software - particularly managed services providers, and media.
Read - CalibreOne Index 2Q 2006

Posted at 06:37 AM | TrackBack | Permalink

July 16, 2006

Accel's Euro Fund Backs British eBay Used Car Powerseller

Autoquake, an eBay powerseller specialized in used cars, has raised $6M in VC from Accel's European fund, according to The Times of London.

Autoquake assists sellers in listing autos on the online auction site by taking photographs of each vehicle and writing up descriptions and specs.

The service has been getting free publicity by helping England's celebrity's hawk their used vehicles, such as famous footballer David Beckham's first trophy car (the BMW show here) on eBay - which sold for £6M.

The investment manager from Accel that closed the deal is Judy Gibbons, reports the British paper. An ex-Microsoft UK executive, Gibbons joined Accel early this year -- she has been busy getting her message out to entrepreneurs by speaking on panels and podiums at investors events and making investments in online services. We hear she was also responsible for leading the latest round in the Scottish company behind the WeeMee personal avatar service. The WeeMees are available through popular portals and chat services such as the MSN portals in Europe.

Read -Beckham car firm wins $6m (The Times)

Posted at 08:21 AM | TrackBack | Permalink

July 13, 2006

Paris VC Cluster

It might not be Sand Hill Rd in terms of the amount of capital ready to plop on startups, but the Mairie du 8eme (District 8 or 8th Arrondissement) is certainly the center for VC in France.

The Chausson Finance corporate advisory team pinpointed the location of much of France's VC community using GoogleMaps and as you can see, the majority of VCs are located within the 2km squared district near the Arc De Triomphe.

It's a much tighter cluster compared to Switzerland, for example, which despite being a lot smaller than France would require visits to at least three cities to meet the moneymen.

We highlighted Spef Ventures, currently France's most active VC investor.

Read - Le 8ème arrondissement : la silicon valley française ?

Posted at 07:42 AM | TrackBack | Permalink

July 12, 2006

Vis-a-Pix' Video Search Tech Finds Early Stage VC

Fraunhofer Institute spinoff Vis-à-pix GmbH has raised an undisclosed amount of early stage finance from Munich Venture Partners. The firm has developed some video and visual search algorithms that it has turned into a line of products for security and safety markets (people counters for crowd control, baggage and vehicle detectors ) but it is also planning to develop the video search tools for media and video content analysis and archiving videos, according to its documentation.

Read - Von Fraunhofer initiierter High-Tech-Fonds investiert erstmals in Fraunhofer Spin-Off (press release)

Posted at 06:19 PM | TrackBack | Permalink

My-Hammer Nails Holtzbrinck Networxs

In May Holtzbrinck NetworXs AG, the new media arm of German newspaper and magazine publisher George von Holzbrinck, took an undisclosed equity stake in My-Hammer AG, an auction platform for home hardware and tools. We just learned of the deal today.

The size of the investment was not disclosed but the German press says that publicly traded Internet holding company, Abacho AG, maintains a majority interest. My-Hammer hosts about 6,000 auctions daily in Germany with a volume of €10M. The new capital is to enable expansion of the platform into Switzerland and Austria.
Read -
holtzbrinck networXs AG erwirbt Beteiligung an der Auktionsplattform My-Hammer.de

Posted at 06:14 PM | TrackBack | Permalink

July 11, 2006

Swedish VC's Investment In Tradera's Slideware Paid Off

Provider Venture Partners apparently made 4.5X money on its vintage '99 investment in Tradera, the Swedish auction site acquired by eBay in April, according to Unquote's Private Equity Europe magazine (Issue 77 June 06).

eBay paid SEK365 for Tradera.com which had sales of SEK 50M in 2005. It was profitable and it had achieved a growth rate of 250 percent in the last year or so.

An interesting nugget of background info on this deal story is that Provider invested in 1999 when the founders only had a 30 page Powerpoint presentation to pitch. That was during the bubble era. A slideware-only Internet venture would be able to raise capital these days - startups have to show some "traction"- traffic or usage - before the VCs will take a meeting. At least they would for the VCs that we cover.

Read - Unquote's Private Equity Europe magazine
Read - eBay Acquires Tradera.com (a:c euro)

Posted at 06:28 AM | TrackBack | Permalink

Hymite Makes Optical MEMS More Attractive

Investors have ponied up another €8M for Danish/German startup Hymite. This is the firm's third round. Its early backers are Sweden's Innovationskapital and TVM in Germany.

Hymite has developed ways to manufacture and package micron-sized electro-mechanical devices, mainly optical networking devices, such as transceivers, with a greater degree of automation.

Using some of the same processes we see in the chip industry, it churns out robust devices with a standardized shape and size (form factor) that enables them to be retrofitted into existing optical networking subsystems and components, as well as being used to make new sub-system designs cheaper.

We are assuming that the VCs put in the new money to finance ramping up for customer demand since this is a third round. But it is only an assumption. It does not have any newsflow of design in wins or contract announcement on its press relations pages, but it does have an Intranet link on its homepage for customer use.
Read - Themis Equity Partner: TVM führt erfolgreich bei Hymite A/S die dritte Finanzierungsrunde durch (gsc research)

Posted at 05:51 AM | TrackBack | Permalink

July 10, 2006

Japanese Investor Goes Strategic On HabboHotel

Sulake Corporation, the company behind the Habbohotel, the animated chat service for teens, has taken on an investment from Movida Group - a joint venture by SoftBank BB Corp. and Asian Groove, it said today in a statement issued by 3i (an earlier investor).

The Finnish company received €6M to expand the Habbo characters, as well as merchandise and mobile games into the Japanese market and other East Asian countries. Movida said it will take a hands on approach and help Sulake make a success of its online businesses in the Asia region.

Posted at 05:55 PM | TrackBack | Permalink

VCs Go Large On CoreOptics Latest Round

Optical networking hardware maker, CoreOptics Inc., has raised $28M from new and existing investors, bringing the company’s total funding to $68M since being founded in Nuremberg Germany in January 2001. That is a pretty large sized round of VC for a Europe optical component manufacturer. It must be hitting its milestones on target and on time.

Its backers include GIMV, Quest for Growth, Crescendo Ventures, TVM Capital, High Tech Private Equity, Atila Ventures and others.

Coreoptics' chips and subsystems are found inside optical networking gear for 10Gig and 40Gig connections.

Posted at 05:47 PM | TrackBack | Permalink

July 07, 2006

Mobitween Taps Angels, Has New Biz Model For Flash Games

Mobitween, a developer of Flash games for mobile devices has raised a first round of financing from private investors, "all mobile entertainment industry veterans", according to CEO and founder Philippe Chassany. He told us that he will use the proceeds, under €1M, to accelerate its international development mainly within Europe and North America. If all goes well, a round of venture capital will be raised to enter the US market within the year.

Founded in 2004, Mobitween has developed a platform that has enabled it to churn out over 100 simple Flash (from Adobe) games.

Chassany is early to market with his Flash games as they run only on the higher end (more powerful) smartphones, but several sales agreements with mobile operators suggests there is at least some early market demand.

One thing Chassany mentioned is his plan to try out an innovative business model for games sales. Typically, games developers get squeezed pretty tightly in the agreements with mobile network operators.

He is naturally not telling us what the biz model is, but if he has one that works then it could enable a winner here.
Read- Mobitween Funding (press release)

Posted at 12:13 PM | TrackBack | Permalink

July 06, 2006

Blogs Do The Due Diligence On Metacafe

Metacafe, a video sharing portal, has announced raising $15M, bringing in new investor Accel to join existing investor Benchmark Capital. The VCs are investing from their European funds.

One thing about the advent of blogs, venture capital investors get a lot of free due diligence work, unfortunately for them it comes after the deal's been done. ( We noted the phenomenon when Index and co. announced investing in FON and we're seeing it now with this deal.)

The criticism is mainly to do with questioning the need to fund another video sharing site, the quality and unoriginality of the content (video clips), and the level of smut.

Read - Video Sharing Site Gets (paid content)
Read -
Metacafe Gets $15 Million in Funding as Movie Sex Scenes (first adopter)
Read - Metacafe Gets $15 million for Video-Sharing Site (mashable)

Posted at 04:02 PM | TrackBack | Permalink

Parrot Gives Europe Another Bluetooth IPO Winner

We're a couple of days late in reporting this but it's worth noting that French Bluetooth gearmaker, Parrot, successfully listed on the Euronext last week. The venture backed firm now has a market cap of €236M.

Parrot's founder and CEO, Henry Seydoux, is now a multi-millionaire, at least on paper, as he owns a good 35 percent of the company's shares, while the VCs together have about 17 percent.

This makes a second successful venture-backed IPO in the Bluetooth wireless sector for Europe. The first biggie was Cambridge Silicon Radio, which now has a market cap of £1.54B.

Read- Parrot to IPO (a:c euro)

Posted at 12:01 PM | TrackBack | Permalink

July 05, 2006

Kontera Adds Lehman Bros To Sequoia

Red Herring is reporting that Kontera, whose software is a lot like Intellitxt, which you can see in action on sites like OReilly's LinuxDevCenter or Hoovers Companies Database, has raised $7 million in venture funding from Sequoia Capital and Lehman Brothers Venture Partners in the past year.

This company is one of several that Lund Kenner has seed funded, although it is not mentioned in the Red Herring report.

However, some other interesting details are there that show the clubby-ness of the VC world:

Kontera, which has 40 employees, previously disclosed that Sequoia had invested in its first round, but did not specify terms of the deal. Sequoia’s Israel office invested $4 million about a year ago, and Lehman Brothers joined that round by adding $3 million in June, the company and its investors told RedHerring.com.

Sequoia’s other advertising and marketing investments include AdBrite and PopularMedia.

Lehman, on the other hand, wanted to do its first deal in the advertising space and looked to frequent partner Sequoia to get in on a deal, said Tom Banahan, managing director of Lehman.

Read - Kontera’s In-Text Ads Get Cash (red herring)

Posted at 10:55 AM | TrackBack | Permalink

Benchmark's Klaus Hommels Stakes Out Consumer Internet

Klaus Hommels, a well-known business angel who backed Skype (one of the many it seems) and is currently backing OpenBC, for example, is getting some press these days now that he made what some see as a surprising move to join a venture firm, Benchmark Capital as a venture partner last month.

Hommels has had gigs over the years at BV Capital, Apax Partners, two VC firms, and at AOL Europe.

Now he's getting his message out with interviews in the mainstream business press about where he'd like to see dealflow, specifically, consumer Internet and so-called platforms (just like almost every other VC that has raised a fund in this new cycle- except for Scottish Equity Partners, Pond Ventures, Eden Ventures, Atlantic Bridge and Northzone Ventures who stick to their areas of specialization).

He likes Stardoll.com, the online celebrity dressup site, due to its ability to attract over a million users without spending a lot on marketing. And he also likes companies such as myvideo.de and metacafe because he believes that television broadcasters will eventually acquire them.

Read - "Viele Fernsehsender wollen sich Online-Communities kaufen" (FAZ)
Read - The Best European Business Angel (Bruno Giussani's Lunch Over IP blog)

Posted at 06:20 AM | TrackBack | Permalink

July 03, 2006

Norway's TH!NK With New Investor

Electric car startups in Silicon Valley have garnered some VC interest now that the price of oil has made alt energy a viable investment category again. It is also true in Europe, although it's not the brand name VCs jumping in just yet.

For example in Norway the TH!NK car company just got itself some new money and investors.

TH!NK was founded back in 1973 and had some success in the late nineties, but wobbled through the early part of this decade as it was bought and sold by several different investors, including the Ford Motor Co. over the years.

In March the firm announced that InSpire Ventures has taken a majority stake in the firm and funded a management buyout.

The company whose vehicles are targeted at mainstream drivers (as opposed to the Tesla which is a high end electric car) and now expects to launch a new model in Norway in 2007 and selected international markets in 2008. Its first model hit the road in 1999.

The investor is new to us but seems to have a good track record. InSpire was founded by Jan-Olaf Willums, an environmental technologist with VC, political, and business experience. InSpire backed a couple of successful ventures, including artificial intelligence IT company Computas, Avenir acquired by Ementor, and Solenergy, a Photovoltaic company which became part of REC, whose IPO last year was the largest ever seen on the Oslo stock exchange, according to the firm.

Read - Think is taken over by Norwegian Investor Group (press release Th!nk)
Read - Silicon Valley's Tesla vs Smart (a:c)

Posted at 12:39 PM | TrackBack | Permalink

July 02, 2006

Q-Cells Invests In Swiss Solar Startup

Solar cell manufacturer -- Q-Cells, which had one of Europe's best venture-backed IPOs last year with a current market cap of € 2.4B -- has invested €7M in Swiss startup Flexcell (formerly known as VHF Technologies) to finance the younger firm's first production line. It's a minority stake with the potential to go to 51 percent if production quotas are met.

This is a diversification move for Q-Cells whose solar cells are made from ingots of silicon, sawn finely into wafers and then cut and assembled into cells. This type of photovoltaic produces the most electricity but it relies on a steady and reasonably priced supply of so-called polycrystalline and monocrystalline silicon ingots.

Flexcell's manufacturing process is different. It uses a gas form of silicon which is applied to a surface in a thin film. They are much cheaper to make and can even be applied to non-rigid surfaces (a couple of examples from Flexcell are show here), but they are less efficient and so are targeted at apps that Q-Cells is probably not yet addressing.

Flexcell was founded in 2000 at the Ecole d'Ingénieurs du Canton de Neuchâtel, in the heart of the country's watchmaking (and wine) country. Although it has been around for a while, it had yet to find either a VC or a strategic partner that could expedite the industrialization of its innovation. So this deal with Q-Cells is a good one. The German company has quite the track record in solar cell manufacturing and business development

Read - Giant Solar company Q-Cells invests in new Swiss technology (flexcell press release)

Posted at 08:08 AM | TrackBack | Permalink

June 28, 2006

Fuel Cell Startup Pemeas Raises Internal Round

German fuel cells startup, Pemeas, has has raised € 6M in an internal round, according to FuelCellWorks. The report says that the capital will be used to support market development in the area of portable electronics, back-up power and stationary fuel cell systems.

Pemeas says it is the only commercial supplier of a membrane electrode assembly (MEA) that can be operated at temperature between 120°C and 200 °C.
The MEA is used inside polymer electrolyte membrane (PEM) fuel cells. Founded just two years ago as a spinoff of Hoechst Chemical Group, the firm has raised €26M to date.

Read -PEMEAS raises € 6 million to support continued growth in the fuel cell market (FuelCellWorks)

Posted at 03:37 PM | TrackBack | Permalink

Austrian RFID Firm Raising $15M

Austria's Identec Solutions, which makes RFID-based tracking and tracing solutions, is raising another $15M in a deal led by RFID Invest AG of Lichtenstein. It is to use the capital for investing in R&D efforts in the area of system development, standardization, and global markets.

It also wants to invest in new applications for its long range RFID gear, such as the one undertaken with Boeing and FedEx, which it says involved equipping MD-10 freight aircraft with active RFID tags to track the longevity and manage parts inventories. Until now, Identec has mainly been involved in vehicle tracking and container tracking projects.
Read - RFID Provider IDENTEC SOLUTIONS Secures Financing Package (press release)

Posted at 03:04 PM | TrackBack | Permalink

June 24, 2006

France's vpod.tv Taps Varsavsky Investment

vpod.tv announced in its blog that FON founder Martin Varsavsky has invested an undisclosed amount in the online video publishing-on-demand company. In May, the startup announced that Innovacom had committed $5M to its first round of financing.

As a result of the Varsavsky investment, the Spanish vpod.tv R&D team will move into offices in the same building as FON in Madrid. Besides running FON and writing plots for screenplays, Varsavsky has also taken seed round stakes in Netvibes, an RSS and personal homepage software developer, and Wikio, a French news search and ranking software startup.

Read - Martin Varsavsky joins vpod.tv as an angel investor (vpod.tv blog)
Read -vpod.tv Founder On The Business of Online Video (alarm:clock euro)
Read - FON Founder Plots World Of Warcraft: The Movie (alarm:clock euro)

Posted at 06:14 AM | TrackBack | Permalink

June 23, 2006

How To Work With European Entrepreneurs

Via the Infectious Greed blog we learned that Index Ventures co-founder Neil Rimer has penned an article entitled Five Tips For Working With European Entrepreneurs for the Dailyii.com.

It's an interesting read. The essence of his strategy: be willing and able to back a geographically distributed startup company, and structure deals to meet the risk profile of European entrerpreneurs.

Read - Derisking Entrepreneurship (Infectious Greed by Paul Kedrosky)
Read - Five Tips For Working With European Entrepreneurs (dailyii.com)

Posted at 08:09 AM | TrackBack | Permalink

Tim Draper Adds To Zopa's Growth Cash

Unquote has the scoop today that Zopa, an online borrowing and lending exchange, has added $5M in funding from Tim Draper, founder of Draper Fisher Jurvetson, and the Rowland Family, to back its expansion into the US market and build up its UK business.

The startup recently announced raising $15M from new investor Bessemer Venture Partners, which joined Benchmark Capital and Wellington Partners, its first round investors.

Read- Zopa gains additional $5m backing for transatlantic launch (Unquote News published by Incisive Media)
Read - London's Zopa Takes €15M (alarm:clock)

Posted at 06:25 AM | TrackBack | Permalink

June 22, 2006

Samwers' European Founders Fund: Interview

As regular readers know, from time to time the alarm:clock euro profiles early stage ventures. But we also want to cover those who work with and advise seed stage firms, and today it is the European Founders Fund getting the treatment.

We spoke to Oliver Samwer (m) who along with his brothers, Marc (l) and Alexander (r), are the "founders" named in the fund. This was the first interview the recently minted venture investment team has ever given.

In case some readers are not familiar with recent European venture history, the Samwers are so-called serial entrepreneurs. They founded online auctioneer Alando in 1999, which six months later was acquired by eBay for $50M during the bubble.

Subsequently, they established the mobilephone ringtone and content company, Jamba, which was acquired by Versign for $273M.

In business as investors for about nine months now, the European Founders Fund has enetered the equity of 7 startups, 4 in Europe, and 3 in North America, and is looking to add 5 or 6 more in the coming year.

Current portfolio firms include Hitflip.de, a Peerflix clone, e-Sport.de, a developer of browser-based games, and Myphotobook.de, a Berlin-based publisher of books based on digital photo albums.

In many ways, the setup and approach is similar to the Scandinavian early stage investor Lund/Kenner, which we profiled in April (See link below).

Both offer capital for early stage ventures, but what makes them different is the level of advice and industry contacts provided by the prinicpals.

Typically, venture capital firms tend to operate more or less at a strategic level, often interacting only during board meetings.

With this team, it's daily contact, and its operational rather than strategic advice, according to Samwer.

It does not insist on a board seat when investing. "We're not the board meeting types, and prefer to work at the operational level with founders," said Samwer.

For these reasons, the team handles 3 or 4 active investments at any given time. "We can help wireless and Internet startups, particularly those with a consumer focus but also B2B, to be more successful. We do that by building the business model with them, showing how to convert customers using free services to premium services, how to grow in the European online market, search optimization, help to meet the right people to make deals with portals, and matchmaking with partners both online and offline," said Samwer.

This business development advice is key. The three venture-backed US firms that have accepted an investment from the European Founders Fund did so because they felt it would help them to enter the European market, said Samwer.

It seems to be a formula that helps them close. "Every investment opportunity we have approached, we got into, and our offer was accepted," he added.

Because of that hands-on approach, the most important aspect in making investment decisions for Samwer is the management team of the startup. "If the chemistry is right, we will invest," said Samwer.

Chemistry, or an affinity between the founders and the investors, is important because the Samwers work closely with their investees during the early phase of investment. "We are in daily contact with founders. They come to us with ideas and problems. We help them address the issues," said Samwer.

The value of their experience is noted by venture capital investors as some are starting to bring in the European Founders Fund in order to help develop portfolio companies.

For example, about six months after Index Ventures invested in Oanda, the Delaware-registered company behind fxtrade.com which is managed by teams in Zurich and Toronto, Samwer's fund was invited to participate in the investment.

"We are helping Oanda with the development of the European market for its foreign exchange trading services," he said.

Established nine months ago, the European Founders Fund is called a fund, but its activity is more like a business angel. It is a partner for entrepreneurs looking to develop their business model and develop online and wireless services.

The Samwer's are investing their own money, rather than capital raised from a set of limited partners as VCs do, and they only invest where there is a potential to help at an operational level with entrepreneurs.

Since the firm does not have a website and has no plans to put one up here's a summary.

Quick Facts About European Founders Fund
- Deal Size = 500K to 2M
-Offer=advice and contacts on expanding and developing new markets for
online services.
-Sector Allocation= Software: consumer-oriented wireless and Internet
businesses, including exchanges, networks, and online services. Also open to
B2B.
-Geographic= North America and Europe
-Market opportunity= greater than €100M
-Stake size=Open to minority investments
-Board seats=Not necessary
-Liquidation preference=Yes
-Portfolio Companies: Oanda (fxtrade.com), Myphotobook.de, e-sport.com, Hitflip.de plus 3 other undisclosed ventures.
-Contact: oliversamwer @ yahoo.de

Read: Lund Kenner Stakes Out The Early Stage (alarm:clock euro)

Posted at 03:29 PM | TrackBack | Permalink

Famous Founders Join VC Ranks

It looks like a few European serial entrepreneurs have made enough money to start investing in tech ventures in Europe and beyond. We count three sets that are deploying some of their cash on a more formal basis - as opposed to angel investing, which is already quite common.

European VC Attracts Some Famous Founders

There's the European Founders Fund, established by the Samwer brothers in Germany who together co-founded online auction house Alando.de, acquired by eBay and Jamba!, a mobilephone ringtone and content business, acquired by Verisign for €273M). They are investing their own money in early stage ventures, particularly Internet and wireless startups (due to their knowledge of the sectors). We'll be profiling the European Founders Fund soon based on an exclusive interview with Oliver Samwer, the firm's managing partner.

Then there is Amaya, which Red Herring says is currently raising a fund to invest in Europe and India. It's got some famous founders signed on as limited partners, including Brent Hoberman, co-founder of LastMinute.com; Stefan Roever, co-founder of Brokat Technologies, and Morten Lund, an early investor in Skype and co-founder of security software startup Bullguard.

The third worth mentioning is Daniel Aegerter, the Swiss entrepreneur who sold his startup Tradex to Ariba during the bubble for $5.6 billion dollars. Aegerter is one of the anchor investors of the Munich Venture Fund, which recently invested in 10tacle, a German games developer. He is also principle of Armada Investment Group, which keeps a fairly low profile, but has invested in Oanda (fxtrade), Overture Networks, and Skyway, all three are based in North America.

Read- Europe Targets India

Posted at 09:00 AM | TrackBack | Permalink

June 21, 2006

WiFi Bunny Maker Taps Banexi Ventures

Violet, the company behind the Wifi bunny known as Nabaztag, has raised an undisclosed amount of VC from Banexi Ventures. The Nabaztag is a bit of a phenomenon, where supply has not been able to meet demand, which is one reason the firm needed VC.

It Has Spawned a Community Of Owners That Write About And Make Videos Of Their Bunny In Action

How the company describes the smart bunny:

Nabaztag means “rabbit” in Armenian. Violet’s Nabaztag is an object connected to the Internet via WIFI,
which reacts with sound, movement and colors to informations exchanged on the Web...[It receives and relays] market updates, weather forecast, traffic reports, email alerts and reading of emails (Nabaztag offers text-to-speech function), reading of RSS feeds from any online site, alarm-clock, broadcasting etc.

Read- Thanks to Banexi Ventures Partners, Nabaztag is ready to conquer the world !(press release)
Read - What It Takes To Sell WiFi: Bunnies and Social Routers (a:c euro)

Posted at 06:18 PM | TrackBack | Permalink

June 20, 2006

Wifi Telco Founder Looks To Raise VC For Expansion

Ben Van Dongen, a 42 year old Dutch entrepreneur, just might be running the leanest alternative telco in Europe.

He says his two year old company is already profitable, employs just 3 people, and has more than 3,500 broadband subscribers in Amsterdam. Its second city network is being built in Barcelona using the free cash flow from the Dutch business.

The soon to be launched iZingo brand (the company is called Hotspot Holding based in Amsterdam) is positioned as a wireless broadband Internet access provider, targeting the consumer and small business market.

It is not a hotspot service provider business model, points out the founder, it's a telco business model with juiced up WiFi as the carrier.

Pictured here with members of his team: Gert Bos (l) and Carl Harper (r), Van Dongen (m) is poised to take a piece of the growing broadband Internet access market, enabling things like wireless VOIP, wherever he decides to deploy one of his WiFi networks.

Having proven that the business model works, Van Dongen is looking to grow internationally. He will be raising venture capital to do so.

Here are his thoughts on the competition that we jotted down in a recent interview.

What about Wimax - isn't this the market that Wimax operators want to target?

"Forget Wimax, it's not going to be a mass market application until 2012 -- reasons: there are three Wimax frequencies and no end user devices yet.) Compare that to Wifi, which has one standard worldwide and today 600 million enduser devices," said Van Dongen.

This sounds like a challenging of the way that FON and France's Ozone, are attacking the WiFi telco model?
"It's better than FON, because the subscriber does not need a fixed broadband connection to the Internet in addition to a WiFi card.

The entrepreneurs said: "You buy broadband Internet for less then DSL and you can use it anywhere you want (at home, in your ofice, at hotspots or outside)."

What about muni wifi?
"It is different than muni-wifi business - [iZingo] operates without any government or state subsidies. "

The a:c notes that a robust architecture has been enabled that can support a range of broadband and voice services built using wireless mesh technology from a hot Dutch startup called Hopling Technologies.

This is 42 year old Van Dongen's third WiFi startup. He also founded Picopoint Technologies in 2002, a supplier of software to manage subscribers, billing, and management of WiFi networks and roaming onto WiFi networks and Wjoy in 2004, a traditional hotspot operator, both still in business.

Posted at 11:39 AM | TrackBack | Permalink

Israel's Infinity Venture Capital Finds The Exit

Out of Israel comes the news that Infinity Venture Capital, which manages $250M in VC, has made 11 exits in the past year.

Here's a partial list that was published in Globes in a story reporting EMC's acquisition of ProActivity, one of Infinity's portfolio firms.
- Identify Software to BMC Corp. (NYSE:BMC) for $150 million
- Shopping.com to eBay inc. (Nasdaq:EBAY) for $640 million,
- Sightline Technologies to Stryker Corporation (NYSE:SYK) for $150 million,
- Saifun Semiconductors Ltd. IPO on Nasdaq

As one of our editors used to say, "any fool can invest a couple of hundred million" dollars, so when we see a VC making bets and finding the exit, we point it out.

Read-EMC buys Israeli co ProActivity (Globes)

Posted at 05:31 AM | TrackBack | Permalink

June 19, 2006

Nanoradio Ramps Up Tiny WiFi Chips

On the back of design in wins with undisclosed "tier 1" manufacturers, Sweden's Nanoradio, specialized in wireless LAN chips, is ramping up.

Nanoradio was founded to target the emerging market for low power wireless chips, increasingly in demand by makers of mobilephones, wireless headsets, MP3 players and digital cameras.

Such chips have to be super low in power consumption so batteries don't run down too quickly. And it appears that Nanoradio's two chip solution fits the bill.

The financing for the ramp up to volume production has just been announced with an $11.5M Series B internal round. The venture-backers hold a majority stake in the two year old company founded by Pär Bergsten (this is his second venture after a career at Ericsson).

Read- Nanoradio Completes (press release)

Posted at 09:37 AM | TrackBack | Permalink

June 16, 2006

French Memory Chip Innovator Taps VC

Participating in a startup workshop a couple of years ago at the IMD, a Swiss business school, may have helped memory chip startup Crocus Technology to raise a whopper of a first round.

Maybe that or the fact that it stands to take a chunk of the multi-billion memory business with its disruptive chips. Either way, according to PE Week Wire, the French magnetic random access memories (MRAM) maker, has raised $17 million in Series A funding.

Both Sofinnova Ventures in Paris and Sofinnova Partners in the US invested, along with French funds: Ventech, CDC Entreprises Innovation, AGF Private Equity, Sofinnova Partners, as well as Switzerland's NanoDimension

Read - IMD Startup Competition (imd website)
Read - Crocus Funding (pe week wire)

Posted at 04:03 PM | TrackBack | Permalink

June 15, 2006

Swedish Online Storage With A Difference

Sweden's Storegate, an online backup and storage provider, has raised an undisclosed amount of venture funding from Industrifonden. To get that VC on board, three year old Storegate has to have something that makes it stand out from the large number of competitors in this category.

One thing that it does differently, besides selling directly, it sells to: banks, telcos, and insurance companies, who in turn market and/or promote the service to their customers.

Another thing that looks useful is support for sharing and backing up mobilephone contact lists and multimedia files.

Read -Industrifonden supports Storegate (tornado insider)

Posted at 11:39 AM | TrackBack | Permalink

June 14, 2006

QuNano's Out To Disrupt Bright LED Chip Biz

Sweden's QuNano has raised venture capital to make high-brightness light emitting diodes (HBLED) on plain old silicon, rather than the more expensive substrates typically used for this type of semiconductor device.

It's modified CMOS process along with its own nanowire layering technology could be quite disruptive. The pitch is that within a couple of years Qunano could be mass producing LEDs, typically used as backlights and flashes in mobilephones, in long-life flashlights, and traffic lights (to name but a few apps), a lot more cheaply than the incumbents, such as Cree, Lumileds, Osram Opto, and Toshida.

According to its backers, Qunano owns what it calls a nanowire platform technology. The LED market is just the first that it is targeting.

Read - Qunano announces (press release)

Posted at 08:03 AM | TrackBack | Permalink

June 13, 2006

Employee Monitoring In a Box

In what 3i is calling a home-grown solution, it is, along with Scottish Equity Partners and SGAM Alternative Investments, investing in a £3M Series A round for Chronicle Solutions.

The five year old startup makes a server-grade appliance, which captures and indexes all types of user activities in a network in real time, including email, Instant Messanger, WebMail, Blogs and VOIP calls.

Looks innocent, watches and records everything you do

Read - 3i backs Chronicle with £3m financing and CEO (3i press release)

Posted at 05:32 PM | TrackBack | Permalink

Euro VCs Back BridgeCo's Move To LA

BridgeCo, a Swiss startup specialized in digital home networking chips and middleware, has raised a series D round of $23M, led by two new investors, Advent Venture Partners and Wellington Partners, both European fund managers.

They were joined by all of BridgeCo’s Series C investors: Benchmark Capital, Cipio Partners (formerly Infineon Ventures), Earlybird Venture Capital, Fidelity Ventures and Intel Capital.
The company also announced the opening of their new global headquarters in Los Angeles. The capital injection is to be used to "accelerate market adoption and product development activities".

All but one of the firm's original founders have left the company and it has recently appointed Gene Sheridan as CEO who hails from an executive role in the communications unit of International Rectifier, a power semiconductor manufacturer. The move to LA is meant to tap the market proximity, the "entrepreneurial leadership talent, expansion, and exit opportunities" provided by that locale.

Read- BridgeCo Raises $23M in Latest Venture Finance Round

Posted at 02:48 PM | TrackBack | Permalink

June 09, 2006

The Bunker For Your Sensitive Data

We might all be dead but the web site will still be running. A British company which offers secure web hosting located in top secret, radiation-proof bomb shelters has raised $1M in what it is calling a pre-IPO round.

The Bunker Secure Hosting has raised £1M from Foresight Venture Partners. They acquired 20 percent of the company. The deal was announced last month. We just found out about it today.

The Bunker acquired a refurbished nuclear proof bomb shelter back in 2004 that had been the object of about £100M worth of refurbishment for data storage, as well as a few other sites. Its got some of the original Apache SSL authors on managing its technical team.
Read -Foresight Invests in High Security IT Data Fortresses (newsblaze)

Posted at 03:09 PM | TrackBack | Permalink

June 08, 2006

Fangtek Raises VC For New Audio Chip Work

Fangtek. Ltd, a developer of MIDI and MP3 audio chips, has raised $12M in a Series C round. The Shanghai-based company will use the capital to invest in the development and production of new audio processors based on emerging standards, such as MP4 and TV-out, for the mobile device markets.

The financing was led by Qiming Venture Partners, as well as international VCs. DFJ ePlanet Ventures, IDG Technology Venture Investment, New Frontier LG Venture Fund and Kibo Technology Advancing Capital.

Read - Fangtek Successfully Concludes Financing Round of US$12 Million

Posted at 03:21 PM | TrackBack | Permalink

June 07, 2006

Acacia Eyes Mobile Video And Online Communities

The IDG Ventures European team has bought out the interest of its lone sponsor, renamed itself Acacia Capital Partners, is now readying itself to make four or five new investments, as well as work with existing portfolio companies.

Ajay Chowdhury, managing partner, spoke to the alarm:clock euro about where he sees opportunity for investment in the region. "We are very impressed by what YouTube has achieved. We're interested mobile TV and shared video files," he said.

We asked him to be bit more specific. "We think that video clips will end up being downloaded for a few cents each. As the files are shared, another few cents can be generated. We want to invest in ways to enable revenue generation [in these types of applications], such as micropayments technology," said Chowdhury.

Online communities with user generated content are also a target in a "big way", but Chowhury said that he prefers to back teams that already have established a large community of interest. For example, he pointed to portfolio firm Shazam, a wireless music discovery company, which is adding more interactive features for its 5 million strong community.

Because of the age of the fund, new investments will tend towards the later stage. But will look to early stage again with the next fund.

Acacia Capital Partners raised the capital to buy out the $100M fund from IDG from a syndicate of LPs, including Switzerland-based Partners Group and Access Capital Partners. They did it without any corporate finance advisors (which says something positive about its partners' dealmaking ability). It has so far invested about $50M of the original fund.

Posted at 11:40 AM | TrackBack | Permalink

June 06, 2006

inLive Mass Audience Participation

inLive Interactive Ltd., an interactive TV application developer, has raised €5M in a third round of financing to accelerate roll-out across Europe and to check out markets in USA and Asia. The deal was led by Arts Alliance and 3i, which is a new investor.

Viewers Dial A Number To Participate In Real Time Survey. This Example Asks Who Do You Prefer Schroeder or Merkel
The startup, founded in 2005 raised earlier rounds from Arts Alliance and business angels. Its software is developed at its corporate headquarters in Tel Aviv. Its solutions are distributed to German-speaking Europe from Munich, Germany.

Posted at 01:27 PM | TrackBack | Permalink

June 03, 2006

French Rival For OpenBC

Viaduc has tapped two French VCs for €5M to internationalize its business-oriented social networking platform.

Founders are Dan Serfaty and Thierry Lunati, a team that also founded Internet startups Caramail and Lokace, acquired by Lycos and Tiscali respectively.

It's big in France with over a half a million users and the new capital is for platform development and expansion of the model into a couple of other countries, but the startup is not saying which ones.

We hear from Viaduc's corporate finance advisor, Chausson Finance, that 8 VCs wanted a piece of the Viaduc transaction. The founders selected two, AGF Private Equity and Ventech.

The deal gives OpenBC its second well-funded rival in the European market. The other is UK-based Soflow, which is backed by Clifford Holding and Mel Morris, a business angel.

OpenBC has a head start on European rivals.

Posted at 11:24 AM | TrackBack | Permalink

June 02, 2006

Spanish VoiceTrust Rival Starts Up

For a university spinoff, Spain's Agnitio has managed to stir up the interest of not only the Spanish, but also Chilean, Columbian, German, and Korean police and justice departments.

Not because it is up to something sinister, but because the two year old spinoff of Spain's Universidad Politécnica de Madrid develops voice identification and voice verification software.

Intelligence agencies and police forces are signing up to trial and in some cases buy its voice verification software, which they use in the same way that they use fingerprints to confirm the identity of a suspect.

And in another market, Spain's BBVA, one of the country's largest banks, is using a product from Agnitio to authenitcate employees that have to reset their passwords.

The password reset business puts it in direct competition with VoiceTrust, which so far has been pionnering that market niche. The German startup recently raised a €2M round of finance from some well-known German business angels.

Agnition has raised seed financing from a Spanish venture fund, Webcapital, which belongs to finance group, Riva Y Garcia in Barcelona.

The public sector is one market they could exploit with this tech. Longer term we could imagine a mass market if oice identification and verification solutions get adopted by the likes of online banks and enterprise network access managers.

It would be less cumbersome and cheaper than issuing chipcards and electronic password generators to end users. With that in mind, we expect that we'll be hearing more about Agnitio.

Read - Webcapital Toma participacion (Yahoo Finanzas)

Posted at 08:00 AM | TrackBack | Permalink

June 01, 2006

Benchmark Europe Backs Netvibes Rival

Benchmark Europe is showing no hesitation to back clones of popular Web 2.0 applications. Last week it announced an investment in Bebo, a MySpace wannabe, and this week it's the web "homepage" firm Pageflakes, which is pretty close in look and functionality to Netvibes, based in France.

The undisclosed amount of capital will be used to accelerate the technology platform and product development.

Pageflakes, which is based in Germany, has to catch up to Netvibes, at least according to the Alexa sample.

Read - Pageflakes Secures (press release)

Posted at 11:21 AM | TrackBack | Permalink

May 31, 2006

Fuel Cell Component Startup Gets Seeded

Fuel cell component company Bac2, based in Southampton, UK, has secured £0.5M seed funding to enable it to further develop its components for fuel cells, which it calls ElectroPhen.

It is also getting a government grant of £0.25M. The startup's tech offers a cheaper and easier to manufacture alternative to existing fuel cell components, it says.

The investment round was lead by London Seed Capital in conjunction with the London Business Angel Network (LBA) and the LBA EIS Tracker Fund III.

Founder and Technical Director Graham Murray Holding The ElectroPhen Product

Posted at 06:17 PM | TrackBack | Permalink

Qlayer Virtualizes Servers To Storage

Qlayer has raised a first round of venture capital from Big Bang Ventures. Its co-founder and CEO, Kristof De Spiegeleer, also founded web hosting company Dedigate (which was acquired by Terremark last August) and DataCenterTechnologies (acquired by Veritas/Symantec early last year). Interestingly, the founder tapped the same VC this time around.

The Belgian firm, founded in 2005, says it brings together three virtualization technologies into a "single easy to use platform": server virtualization, network virtualization and storage virtualization.

Read- Big Bang Ventures II invests in Qlayer(press release)

Posted at 05:48 PM | TrackBack | Permalink

May 30, 2006

Doughty Hanson: European VC Interview Series

Which tech entrepreneurs in Europe are having the largest impact on the most people, India's emergence as a source for exit-oriented M&A in the software sector, and why European VCs are feeling a bit more positive again, are some of the things revealed in our latest in the European VC series of interviews.

This time Nigel Grierson, Managing Director of Doughty Hanson Technology Ventures, gets the treatment.

Q. Your firm just sold Azure Solutions to an Indian company, Subex. Do you think that we will see more Indian and Chinese tech companies making acquisitions in Europe?

A - It was the largest software company acquisition by a listed company in India. It was the right deal at the right time.

Asia is figuring out how to engage with the western world. Actually, I should rephrase that and say the western world is figuring out how to engage with many countries in Asia, including China.

Either way, the chasm [between the regions] is narrowing.

So with funds available and a new found excitement to become global, I think it is inevitable companies from these economies will look to buy.

Big deals such as Huawei buying Marconi and Lenovo buying the IBM PC division demonstrated this and I think an upward trend is inevitable over the long term.

For the VC-backed company, my advice is – get a strategy early which figures out how your business model captures value from this trend.

Q. One more question on M&A trends. We've seen Alcatel and Lucent merge, Cisco has not done an acquisition over here for quite some time, and Intel is about to undergo a restructuring. This does not look for very good for VCs looking to sell firms to those buyers. What do you think?

A – There have been quite a lot of acquisitions in the last two years, so I am not sure I would agree with this view.
As we experienced with the acquisition of our portfolio company Alphamosaic by Broadcom, acquirers are increasingly able and willing to execute deals internationally. If there is a high quality asset that fits the need to add capability, there will always be a willingness to make an acquisition.

The revival of the stock markets across Europe enabling IPOs again is a catalyst for a healthy M&A market, as capital from a public listing is a competitive alternative to M&A, with the result that you get improved pricing of assets.
Q. How are you generating dealflow, anything new or innovative to attract founders in Prague, Porto, or even Geneva.

A - Most of deals come from our proprietary network of contacts. In fact 80% of the investments we have made were sourced through this network. We are also currently sitting on some ideas for which we are seeking outstanding entrepreneurs to take and run with.

Q. Can you be a bit more specific on that?
A. Our areas of focus for investment are semiconductor, cleantech, web software and telecommunications. So, you can guess the areas in which our ideas-in-waiting reside.

Q. Which companies/entrepreneurs in Europe do you think are having the biggest impact on the most people right now, and why?
A - You can't ignore the immense success of Skype of course. Free telecommunications has to be a very disruptive business thesis, as voted for by over 50 million people to date. And of course there are icons such as Trevor Baylis [inventor], James Dyson [inventor] and Hasso Plattner [SAP].

Then there are people who intend to have an impact in the future, three examples:

Mike Harris and Tom Ilube have a history of changing people's lives. They developed First Direct Banking and Egg Internet Bank to change the way millions of people use banks.

Now they are challenging the status quo once again with their new venture, garlic [Doughty Hanson portfolio company]. garlik will allow individuals to get control over the information that exists about them on the web and in the digital domain generally.

garlik enables the consumer to fight back against abuse of personal information.

Peter Malcolm of Orchestria [Doughty Hanson portfolio company] is developing software that stops you sending e-mails that, with hindsight you wish you hadn't.

Orchestria is a massive aid to hundreds of thousands of people in the financial services industry where e-mail mistakes have cost money and careers.

Q. Skype, or the “Skype exit”, and the high valuations given to Internet companies in recent M&A deals are the main reasons for VCs interest in the sector again. What is your take on the opportunities?
A - Consumer media consumption is shifting towards the Internet and mobile. This is to the detriment of traditional TV and print - hence the shift in the economics and potential creation of wealth.

When markets are in transition there are new winners and losers. Being positioned to capture a market in change is effectively how Skype captured so much value.

There is a new world of wide open Internet audiences, with massive bandwidth and available technologies. And the old world seems to be ill-prepared for the changes ahead.

At the same time, the development of a second generation Internet economy based on some really exciting technologies and business models (generically referred to as Web 2.0) has the ability to make this transition happen quickly.

So, it seems like the mantra for a while is ‘Be quick or be dead’.

Q - Doughty stopped making new investments during the downturn. Do you think that it was the right thing to do? Couldn’t you have bought in at more favourable valuations back then than now?
A - When it is hard to predict the timing of the upswing, it is hard to be sure that it’s the right to time to put your investors’ money to work. I believe we made the right decision to restrain our investments then.

In my thirty years in the technology industry, the arctic winter at the beginning of the 21st century was probably the longest and deepest downturn I have experienced.

Q. If I look at your portfolio, I see software-as-a-service, next-generation mobile content, SDR wireless chips, as being in favour. Will you continue to invest along these lines?
A – If you take semiconductors as a specific example, there is constant innovation and new ideas. So as micro-sectors emerge and become saturated (WiFi silicon for example), new ones emerge.

The trick is to visualise what will be big in four years’ time and get ahead of the curve.

So, I do not see our macro focus changing but the micro areas typically have a window of about 18 months - after which you might be too late to catch the winner.

Even though there are a number of major obstacles to overcome, the television experience over the Internet presents an opportunity to be a winner or a loser.

Or is it the Internet experience in the television environment? Either way you can visualise the recreation of the massive wealth created by the development of the Internet in the last 10 years being created all over again.

And there will be entrepreneurs who can monetise the opportunity in new ways and incumbents who will lose out. I guarantee it. Interview me again in 10 years and let’s review the new winners and losers scorecard. I know who my money is on!

Posted at 07:48 AM | TrackBack | Permalink

VC Deals: Germany And France Outdo UK In April

The largest transactions in Europe in April were completed by two French and one German startup (listed in the table below), says corporate finance boutique Go4Venture in its latest newseltter.

Go4Venture also said that VC investment in Europe is ahead on a cumulative basis compared to the same period last year with a €555M total transaction value to the end of April 2006 as compared with €476 million at the same point last year. But April activity was down onprevious months.

Read- Monthly European Technology Venture Capital Bulletin (go4venture)

Posted at 05:27 AM | TrackBack | Permalink

May 29, 2006

Fuel Cell Startup P21 Raising New Capital

P21 GmbH, a developer of fuel-cell based emergency power generators, is looking to raise up to €10M to finance international sales growth, according to an article in Manager Magazin.

The startup was founded in 2001 as a management buy-out from the Mannesmann/Vodafone group. It targets the telecommunications and IT sector and markets its fuel cells as uninterruptible power supplies. Backed by Target Partners, Conduit Ventures, Techfund Europe, the firm raised a €6M first round in 2004.

It was seed financed by angel investor Eberhard Faerber, who founded IXOS, a software firm that was acquired by OpenText, and tbg.

This bit of info was found in a feature story that tapped investor, founder, and LP opinons on the current state of the VC industry in Germany. If you don't read German, the verdict is that the turnaround point has been reached. Stats show that investors are putting money into startups again, and exits are improving. LPs are cautiously optimistic about the prospects for VC investment in Germany and Europe. And few VCs are excited about state-backed investment funds - with four out of five thinking that the money will be wasted backing the wrong kind of firms.

Read - Ein Breiter Strom (manager magazin)

Posted at 11:12 AM | TrackBack | Permalink

May 28, 2006

VC-backed Setanta To Raise More Cash

Publicly mulling plans to offer major sports content over free satellite channels and broadband to reach the magic audience numbers it requires to break-even, Setanta is putting the word out that it will need to raise more capital.

The pay TV group that recently ended BSkyB's dominance of live Premier League coverage confirmed yesterday it would screen matches on Freeview and broadband internet services as well as on cable and satellite.

Michael O'Rourke and Leonard Ryan, founders and joint chief executives of Setanta, dismissed suggestions from analysts that the company had overpaid for the rights and announced plans to launch a fresh round of fundraising for the company, which is 40% owned by venture capital firm Benchmark.

Setanta starts fund raising and seeks new investor (The Guardian)

Posted at 11:32 PM | TrackBack | Permalink

May 26, 2006

OLED-T Takes Over Elam-T Assets And Gets Financed

OLED-T, a UK startup that has taken over the assets of ELAM-T, a display materials developer, has raised £3.8M in a deal led by E-Synergy, reports eetimes. Aberdeen Asset Management, Foresight Venture Partners and Gartmore Investment Management have also invested as part of the funding round.

The company makes materials for OLED displays that it claims have a longer life than competing materials. Capital will be used to fund an R&D facility to scale up chemicals production and hire staff

Read - OLED materials specialist gets funds, adds CEO (eetimes)

Posted at 01:21 PM | TrackBack | Permalink

May 24, 2006

Paris-based Galileo Back Open Source Startup

French blog, Altaide, alerted us to a €2.1M venture capital injection into open source software startup Talend by Galileo Partners.

We would describe Talend's flagship product as open source data integration software, a form of middleware. It is ideally used in datawarehousing, grid computing, and datamart environments.

Looking at a recent presentation by Talend, it clearly aims to compet with commercial software venors Informatica, Sunopsis and DataMirror. MySQL is a reseller of Talend's software.

Read Press release from Talend (Chausson Finance blog)
Read Talend une star ( Altaide blog)

Posted at 10:55 AM | TrackBack | Permalink

May 23, 2006

France's Tagsys Moves To US, Raises Pre-IPO Round

French RFID systems developer, Tagsys, which recently moved its HQ to the US East Coast, is expected to announce today that it has raised $35M in what it hopes to be its last round before going public.

The round was led by JPMorgan Partners and brought in one other new investor, Cazenove Private Equity, as well as the previous investors Elliott Associates and Endeavour. Terms of the deal were not disclosed, but Bernard Vogel chairman of Tagsys' board and managing partner at Geneva-based Endeavour, the startup's earliest investor, told the alarm:clock euro that it was a 3-digit million valuation, which was an up round over the previous one.

Vogel added that this round is the pre-IPO round, expected to take place within 12 to 18 months.

Tagsys Customer, Pfizer, Is Using RFID To Combat Fake Viagra Floggers

The reason investors are bullish on this 5 year old company is that it has been winning some pretty hefty sized sales and hardware integration contracts, in particular it won the first commercial rollout for RFID labels in the pharmaceutical industry with Viagra-making Pfizer.

It has also recently won a deal with Pfizer-rival GlaxoSmithKline, according to Vogel. The RFID pharma market is a hot one now that the regulatory authoritiy for the drug industry in the US, the FDA, has mandated all drug companies to use the tagging systems instead of barcodes.

"This is the breakthrough that the RFID sector has been working towards - the first high-volume application for item level RFID tags," commented Bernard. What he means by "item level tags" is the RFID labels that go on every single bottle of pills.

All The Places RFID Tags Are Used

Companies like Alien Technology, which recently filed for an IPO, deliver RFID technology too, but their core business has been tags for tracking and tracing palettes and containers. The item level application is a higher volume one and explains investor interest in Tagsys.

Tagsys is on a roll for the time being, but there are lots of competitors in this market as RFID has been attracting quite a bit of VC money (see a roundup of recent Euro RFID deals in the link below). And Alien Technology is not sitting on the sidelines: it recently announced a tech partnership with Vue Technologies to enable it to address the item level tagging market.

If all goes according to plan, the IPOs of both these companies should make for some lively competition and some serious money flowing into an emerging tech market.

Read -Alien Technology Valued At (a:c)
Read- VC Euros flowing to RFID startups (alarm:clock euro)

Posted at 09:00 AM | TrackBack | Permalink

May 22, 2006

vpod.tv Founder On The Business of Online Video

Rodrigo Sepulveda Schulz is the co-founder of vpod.tv, a nine month old European online video publishing and distribution service provider. We talked to him about his business model and the firm's strategy after he announced a €5.1M first round commitment from Innovacom*.

Anyone who has been to a tech ventures event in Europe in the past year will recognize the gregarious Sepulveda Schulz and his ubiquitous slab of electronics.

First point, although the functionality of vpod.tv is similar to that of YouTube and Google's venture in this area, the French entrepreneur is not planning on taking them on in the US market. The focus is Europe.

It's not as weak an approach as it sounds at first hearing. Kellkoo, an online shopping directory, took that approach and it managed to achieve a valuation of €500M by the time Yahoo acquired it in 2004. It was also backed by Innovacom, among others, pointed out Schulz.

Second point, vpod.tv has a viable business model. It is set up to support three revenue streams. For the consumer market it will insert super short ads into selected videos via its own ad serving technology. The startup hired a team from TVMadrid to do the development, confirmed Schulz.

Publishing and distribution of videos is free for consumers but users have to agree that vpod.tv will insert ads into their content, either at the beginning, middle, or the end. A revenue sharing model is the plan.

Not all video pulbishers will want to have ads inserted into their content, goes the theory, so they will pay not to have ads. The payment scheme is not being disclosed yet but will be a based on a volume/traffic/file size calculation. vpod.tv already has a first customer in this category, a FilmFestival.com, an organization with 40,000 members.

A third category of sales is targeting online retailers to encourage them to make their own videos of products and product demos. "We can offer ecommerce sites time and costs savings," said Schulz.

The startup has a peer-to-peer technology partner to save on its bandwidth costs and is working with a US-based content distribution network, also to manage bandwidth, but it is not disclosing either name yet.

Services like vpod.tv and its rivals are set up to be easy for mobilephone users to shoot send and publish videos.

But a spoke in the wheel for this concept is the cost of using wireless networks for video file transfers. "The price for GPRS is outrageous," comment Schulz. He believes that new MVNO will focus on data service and offer some smart packages for consumers that want to use the networks for video file transfers, which should boost the use of his company's video platform.

In the meantime, the founder is travelling Europe and the US to sign customers and advertisers for vpod.tv, aiming to win a chunk of advertising sales away from traditional television and broadcasting channels.

Update: At least two rivals exist in the French market with a similar approach to video publishing online, Banex Ventures-backed Kewego, and DailyMotion.

(*Ed. We reorted earlier that the Innovacom invests on behalf of France Telecom, but that was not correct. FT owns a share in the management firm Innovacom. And Innovacom has a mandate to manage an older Orange Ventures portfolio. But the firm's funds are invested and raised independently of the telco.)

Posted at 11:22 AM | TrackBack | Permalink

Benchmark Europe Backs Classmates Clone Bebo

Saying they are trying to pick the next Yahoo, Benchmark Capital has taken a $15M stake in Classmates.com clone Bebo, based in the UK with the plan to take it to the US. No disclosure on terms but we note that the founders still own the largest stake in the company.

According to a report in the Guardian, Bebo has been winning market share in the UK from MySpace and is now the number two to MySpace's number one.

As alarm:clock, our sister site, has been reporting there is plenty of competition already in the US market. We're wondering what it is that makes Benchmark think this British upstart has a chance. Its London team has at least one partner with a strong television industry background. And both of the big exits in this field have been driven by TV companies, Friends Reunited was bought be ITV and MySpace by Fox Interactive - is that the direction they will go with this one? And as for saying they want to back the next Yahoo, we say: who doesn't?

Read - Setanta backers spend $15m in search for the next Yahoo (Guardian)

Posted at 05:38 AM | TrackBack | Permalink

vpod.tv Takes On Cash For Online Video Biz

vpod.tv, a startup based in Paris that hosts and publishes videos has a €5M commitment from Innovacom, which does VC investments for France Telecom and mobile network operator, Orange. We'll be updating this post after our scheduled interview with the founders later today. In the meantime Om Malik has some thoughts on the startup.

Read - Fellow Blogger, Broadband Fanatic (om malik)

Posted at 05:29 AM | TrackBack | Permalink

May 19, 2006

Secretive Mangrove Seeks Search Startups

Mangrove Capital, one of Skype's first round investors, is a very secretive fund -- doesn't publish its portfolio and doesn't do PR -- so vpod.tv's interview at the Innovate Europe conference this week with founding partner Mark Tluszcz (who's in a decidedly upbeat mood) is a bit of a scoop.
What's he looking for? A better search technology.
No fear of risk there, folks.

Link - vpod.tv Interview with Mark Tluszcz

Posted at 07:36 AM | TrackBack | Permalink

May 18, 2006

Bashing European VC

One of the blogs we read, Infectious Greed, has a post entitled Trashing Euro VC, which compares historical performance of the two regions. We've seen versions of that slide a few times over the years. It's particularly popular on panels populated by limited partners where European VC bashing is the norm.

But the barrage of snarky one-liners has slowed a bit. Here's what a few LPs were saying this week at the DowJones Limited Partners Summit in Zurich:

Kathryn Abbott, Managing Director, Horsley Bridge.:

If you’re looking at past track records you’re not going to invest in Europe. We don’t invest based on geography [no forced allocation to a geographic region]. If the top 25 performing VC fund managers were based in Poland that’s where we’d invest.

It’s a bit contrarian to look at Europe right now, but we think it is a nice time to invest... Some post-bubble vintage funds are performing in line with their US peers. That’s never happened before.

Rho Fund Investors, Gordon Hargraves:

European VC is interesting now…based on portfolio companies. There have been some interesting exits. No excess liquidity in the market. It’s undercapitalized and there is less competition for deals...
… Among the few managers that can execute, the dealflow is there.

It's not a sea change of opinion because these LPs we've quoted are pretty specialized and are known for targeting VC. They are the type that back qualified first-time funds, and they like niche styles. They'll be following the money, though, not the rhetoric.

Read - Trashing Euro VC (Infectious Greed blog)

Posted at 07:22 AM | TrackBack | Permalink

May 17, 2006

Sound-tracks For Online Slideshows And Blogs

Calif-based Sonific has raised seed financing from US and UK based business angels of less than $2.5M. It is a media deal but because a lot of our readers have blogs, we’ve looked into it a little more closely than normal. Plus its founder is a European who lives part of the time in Basel.

Sonific's founder is Gerd Leonhard, an author and entrepreneur specialized in the muisc business. His last venture was LicenseMusic.com, a "typical dotcom", he said, one that is however still in business. He started up Sonific last year to provide licensed music to blog owners, people that photo albums online or websites that want to provide background music to their visitors.

A link from the site takes visitors to the catalog of music of mainly indepedent and lesser known musicisans (that want to become better known) on sale from Sonific. If a visitor purchases a track, the blog owner receives a share of the sales. The affiliate marketing scheme is not going to be available for at least the next four months, said Leonhard, but the Sonific service is to go live within the next two. It's a global market, with strong prospects in East Asia, according Leonhard.

Link - Example of music integration as banner-ad in blog.

Posted at 01:52 PM | TrackBack | Permalink

May 16, 2006

Yoggie Raises $1.8M

Yoggie Security Systems, founded by Israel-based serial entrepreneur, Schlomo Touboul, who co-founded Finjan Software, has raised a $1.8M startup round. The firm said the financing round could be "extended".

The investor group is comprised of New York-based Early Bird Capital; a group of private investors from Silicon Valley, headed by Silicom Ventures; and a group of Israeli private investors.
The funds were raised to complete R&D and support marketing and sales efforts.

Yoggie is in stealth mode. It was founded in October 2005.

Read - Yoggie Security Systems completes a $ 1.8M round of investment.
Read Yoggie Profile (Tornado Insider)

Posted at 06:07 PM | TrackBack | Permalink

China's Maxthon Brings In Charles River

Maxthon has raised an undisclosed amount of venture backing in a deal led by new investors Charles River Ventures, along with early investors Lund/Kenner, a Danish seed investor (see link below for a profile) and WI Harper (via GigaOm).

The firm's founder said in his blog that there were several VCs interested in the Series A round, but it chose Charles River because of a common vision about the future of the market it targets. It's not mentioned in the post, but the new investor is also backing Avvenu, a software company that supplies a photo and file sharing plug-in to the Maxthon browser.

Read Charles River Ventures Invests in Maxthon (press release)
Read- Profile of Lund Kenner (a:c euro)

Posted at 05:39 PM | TrackBack | Permalink

Musicbrigade: MTV For The Broadband Crowd

Swedish VC fund Provider Venture Partners has invested about €3.2M in Musicbrigade, a developer of a platform for downloading and distributing music, videos, and audio via the web and mobile devices, buying itself a 28 percent stake in the seven year old venture.

Musicbrigade started out as a music video distributor, an online version of MTV (at least the way it was in the eighties when it was mainly broadcasting music videos). It has 40 different music video channels.

But the Swedish company is now aiming to become a "onestop-shop for all digital music online", including audio and video.

Customers today are mainly in Northern Europe: broadband operators(Bredbandsbolaget, Telenor, Chello, Telewest/NTL, a o), portals (Microsoft Windows Media, On-line Spotlight, ao), mobile operators (3, Telenor/Vodafone, a o) as well as the hardware manufacturer Fujitsu Siemens Computers.

The plan is to use the capital to "substantially increase the presence on the European market".

Read - Provider invests in Musicbrigade (press release)

Posted at 03:17 PM | TrackBack | Permalink

May 15, 2006

Augmenting Reality

Total Immersion, a 6-year old French video graphics software startup has raised €4.5M, according Neteco. For this round Elaia Partners joins early investors iSource Gestion and Partech. The firm's software enables users to combine real time video with 3D graphics or objects. It's opening an office in San Francisco with plans to expands its business among film-makers and TV broadcasters. Men with virtual swords

Read - Specialiste de la realié (Neteco)

Posted at 02:29 PM | TrackBack | Permalink

Chinese YouTube Raises $8.5M

Shanghai-based Toodou.com raised $8.5 million in a Series B financing round, co-led by Granite Global Ventures
and JAFCO Asia. IDG Technology Venture, the Series A round investor, also participated in the round.

Toodou.com is a podcasting and video sharing site that launched about a year ago, employs 20, and wants to hire more with the new capital. No description of the business model provided in the funding announcement.
We note that its video UI does not have the eyesore "play" button that YouTube's clips are stamped with.
Read -Toodou receives second round (press release)

Posted at 10:18 AM | TrackBack | Permalink

May 13, 2006

Hitflip's German Twist On Peerflix Taps Biz Angels

Sven Majunke's VC Facts newsletter reports this week that Hitflip Media Tradiing, which runs hitflip.de, a site that enables consumers to trade their DVD, CDs and Audio Books by post, has raised seed financing from business angels. The money will be used to add new categories, develop its white-label sales, and to add some social networking features. (TJ's Weblog has an interview with the founder where more details about the business can be found.)

The investors are Stefan Immes, CEO of publicly traded IT-Holding net AG and Lukasz Gadowski, founder of Spreadshirt.de, the quick growing online vendor of customized T-shirts. Three other private investors are named, two from a German marketing agency, Arend Lars Iven und Ron Hillmannand, along with Tobias Hundhausen, an accountant.

It looks like Hitflip has a dream-team set of angel investors that can add some value to the venture...maybe they will also spend some money on developing a logo that doesn't look as much like MySQL's.

Read - Interview with founder (TJ's Weblog)
Read - VC / PE - NEWSLETTER 17/2006 (vcfacts.de)

Posted at 08:22 AM | TrackBack | Permalink

May 11, 2006

Plastic Logic Looking For New Capital?

Plastic Logic, a UK company that makes key parts for OLED displays, is going to be investing between $50M and $100M to build a new plastic electronics fabrication plant, according to one of its backers in an article in EETimes.

He did not say how the fab would be financed.

From the EETimes

Plastic Logic (Cambridge, England) has a roughly 12-inch diagonal display prototype working that combines an active plastic logic backplane with an electrophoretic display technology from E Ink (Cambridge, Mass.). The company announced a collaboration with E Ink in December 2004.

Hauser [Hermann Hauser of Amadeus, one of its VC backers] told his audience said that Plastic Logic is performing a detailed investigation of the costs of volume manufacturing of such active backplanes and that it seemed likely that the factory would cost between $50 million and $100 million and would be able to turn out millions of displays a year.

“We can build our first fab starting now for completion in about 18 months,” Hauser said. He said that after selection of a location, construction would begin in 2007 with a view to volume manufacturing in 2008.

Plastic Logic has raised more than $50M in venture capital to date from US, Chinese, European, and Japanese investors.
Read - Cambridge Startup Mulls Plastic Electronics

Posted at 06:44 AM | TrackBack | Permalink

May 10, 2006

Rushing For The Exit? E&Y Has Some Insights

The alarm:clock euro plowed through a 75 plus page report by Ernst&Young, published last week (you'll note we made a few posts on it to get our time's worth out of the effort). We made a list of the themes for the European market.

Sequoia's slick Info-graphic of its portfolio made the centerfold in the report.
1.VC went global. In case we hadn't noticed, there's a lot of talk about China & India. And if VCs haven't already started investing, or getting portfolio companies to do R&D and S&M (sales & marketing, that is) there, they are at least thinking about it.

2. Exits via IPO in Europe are back. In fact, there's more demand for growth stocks than there are companies selling them. (We still have the feeling that this is a well-kept secret, despite the numbers.)

3. Alternative Energy investing is now in the sights of Pan-European VCs. (They didn't suddenly start worrying about global warming, it is successful IPOs last year, such as Q-Cells, quickening interest.)

4. VCs are open to selling stakes to Private Equity firms as a way of achieving either an exit, or partial exit.

The last point is not just talk. We've noticed it in our coverage of recent transactions. It is not in the E&Y report but some examples of such deals include, Parrot Technologies (navigation s/w), Poliris (online real estate), Datamars (animal tracking RFID), and Carmel Pharma (toxic drug dispensers), sold their shares to late stage venture and private equity investors. The buyers have names like 3i, Invision, and Iris Capital.

Read -Ernst &Young Transition Report May 06

Posted at 02:07 PM | TrackBack | Permalink

French Financial Software Firm Raises €5M

Business Intelligence software company, BI-SAM Technologies, has raised €5M from Galileo Partners and Alven Capital in an all French deal. The financing is to be used to fund international expansion. BI-SAM's software is used by banks and asset managers for portfolio management.

Read - BI-Sam Technologies Lève (Journal Du Net)

Posted at 01:29 PM | TrackBack | Permalink

May 09, 2006

Know The Skype and P2P Share Of Network Traffic

QoSMOS, a French manufacturer of auditing and optimisation tools for IP networks, raised €3.2M from Sofinnova Partners in an internal second round. Founded in 2000, it raised €2M in its first round.

The startup's software, targeted at Telcos, can answer questions like

What is the quality experienced by users of your 3G services?
What is the impact of Peer to Peer on your network?
What is the Skype share of VoIP minutes on your network?
What range of applications is used by your corporate customers ?

QoSMOS is going to use the capital for European market development and product development, namely its flagship product QoSMOS ForMyNet, designed for broadband solutions. It's also doing R&D in advanced protocol recognition.

There is at least one other company that has a similar ability to answer such questions, Sandvine, but the technology is inside a much larger system, we believe. The fact that Qosmos has several OEMs incorporating its software suggests that it has found market demand.

Read - Qosmos announces (press release)

Posted at 09:24 AM | TrackBack | Permalink

Spanish Chip Startup's Gotta Focus

What with Viscom going public in a nice-sized IPO this week, we're sensitive to machine vision startups, so a profile of Anafocus, a Spanish fabless chipmaker, on the IST newsite caught our eye today.

Anafocus is a Spanish startup that has developed a vision system-on-a-chip technology, called Eye-RIS. The first market it is targeting is security applications such as ultra high-speed tracking, in-door surveillance and guidance of unmanned vehicles. The idea is that security cameras equipped with the chips can be programmed to look out for anomalies or certain patterns.

Anafocus has yet to announce a design-in win and last raised VC in 2003 from Bullnet Capital, a tech oriented VC in Spain.

We've reporeted on similar chips over the years and are not sure what makes this different. We think it needs to focus a bit on marketing. Is its advantage cost, power consumption, quality of perofrmance? We are not sure and are not much more enlightened after visiting its website.

Anafocus could be in need of some smart money, or a big strategic partners to take it forward.

Read - Artificial vision technology proves

Posted at 09:01 AM | TrackBack | Permalink

May 08, 2006

VC Backs Sharing Music Tastes

Last.fm, a London-based consumer Internet startup, has raised a first round from Index Ventures and its early business angel investors. No disclosure on the amount, but it was a typical-sized Series A round, the firm’s Austrian co-founder Martin Stiksel told the a:c euro.

Stiksel said that the deal was initiated by Index Ventures, and that the founders had not been actively looking for funding. The VC’s track record with Internet investments is one reason it was taken on as a backer.

We asked Index why it didn’t bring in any co-investors on the deal. Neil Rimer answered (via his assistant) that the round “wasn't big enough for more than one VC investor.”

Judging from the Ikea decor and the hands on office-moving efforts of Last.fm's founders (picture right), this is one of those low-cash-burn ventures.

Indeed, it was founded in 2003 and only raised seed capital last June, when several private investors took stakes. All three had success in the first wave of the consumer Internet and are now on their second or third ventures, namely Joi Ito, who is currently an excutive at Technorati and Six Apart, runs a VC firm, and prior to that built several Japanese Internet ventures; Reid Hoffman, a former PayPal exec and currently CEO of LinkedIn, and Stefan Glaenzer, who co-founded Ricardo.de (auction site) and is CEO of 20six Weblogs.

Last.fm’s business idea is to enable music promotion and to provide music title recommendations for its users by publishing other users’ tastes and listening habits.

It generates sales via advertising, premium services, and selling recommended titles in partnership with Amazon and other etailers.

Its software automatically tracks what people listen to on their audio players then makes sure that the title information is loaded back up into their profiles.

This information is then shared and can be used to create a set of tracks to listen to (the firm calls it creating your own radio station and as its name suggests is meant to disrupt traditional radio broadcasting), or to make new music purchases.

It is not primarily a music file sharing site, so it avoids the issues with copyrights that have hindered the growth other online music ventures. But it’s got a few competitors, mainly Pandora, if the discussion on various web business-oriented blogs is anything to go by. (Among users of Alexa Last.fm's more popular, according to Alexaholic)

Last.fm will use the funding to broaden its product offering, start translating the site into languages other than English, and to expand its business development efforts with the music industry, Stiksel told the a:c euro.

Posted at 10:04 AM | TrackBack | Permalink

Agillic's Cellco Micro Marketing Software

Agillic, a Danish software company has raised about €5M from Amadeus in the UK and Vaeketsfonden, along with private investors, according to Unquote News.

The startup's software is targeted at mobile network operators and MVNO for use by their subscribers and customer relationship management teams. It's a category called Selfcare and Customer LifeCycle Management.

The idea is for the mobile operator to identify market segments, even micro markest segments, and automate customer self-service.

The company was founded in 1999 under the name Wavetech and switched to the Agillic name in 2005 in anticipation of global expansion. Lots of jobs on offer as the firm expects to double in size this year.

Read -Agillic Secures

Posted at 09:16 AM | TrackBack | Permalink

May 07, 2006

Cooling In A Microchip

Infineon, the German chipmaker, has spun off yet another R&D unit. This one leaves the currently restructuring mother-ship with chip technology that forms the heart of a tiny system that can cool, heat, or generate power.

Micropelt spun off from Infineon earlier this year and received startup capital from German investors, including a venture firm, SHS, and several banks in a deal that was announced in March. Infineon and the management team hold a minority stake.

Micropelt GmbH, develops and distributes components (Peltier-based) for cooling and heating, as well as thermo generators, which are manufactured using the same process as used to fabricate computer chips. The startup says that the advantages are small size, high cooling power densities, and a short response time. It has yet to announce a contract win but does have its data sheets, test results, and a design tool available for potential customers.

Applications include cooling fiber optic lasers, power generation in watches, and chip cooling.

Read - SHS takes a stake in the Infineon spin-off and in a development unit of the Agfa group

Posted at 08:26 PM | TrackBack | Permalink

May 03, 2006

Testing The Real-Timing

German startup, Symtavision, whose software tests the performance of real-time systems found in mobilephones and automobiles, has raised a seed round €0.5M from the HighTech Gruenderfonds, a fund that was set up by the State to back the very early stage for university spinoffs.

Symtavision, which was founded in May 2005, is a spin-off from the Technical University of Braunschweig, has had quite a bit of coverage in the German press because its software is being touted as being able to prevent expensive auto industry recalls due to electronics defects, and as enabling getting electronic products timely market entries.

If Symptavision's founders get it right, they just might find BMW, Volkswagen, and Daimler Chrysler knocking on the door. Apparently, the firm has already signed up Samsung's mobilephone unit.

Read - Braunschweiger Symtavision GmbH erhält Beteiligungsfinanzierung vom High-Tech Gründerfonds

Posted at 12:48 PM | TrackBack | Permalink

May 02, 2006

VC backed BitBoys Acquired by ATI

Graphics chip firm BitBoys has been acquired by Canada's ATI Technologies Inc. for up to EUR 35.2 million (about US$44 million). Based in Finland, Bitboys, which recently completed a restructuring and is now focused on graphics processors for mobile devices, had raised several small rounds of venture capital over the years, most recently a €4M injection from Nokia Growth Partners in February. Other investors include Cipio Partners, along with a handful of Nordic investors.

We think it must have been a sweet deal for the latecoming investors, but we're not too sure about the early ones.

Read - ATI Acquires Bitboys

Posted at 11:40 AM | TrackBack | Permalink

Partech: European VC Interview Series

What's the expert view on M&A prospects for venture-backed optical components developers? Where are VCs looking to invest? These are the some of the questioned answered in the first of a series of interviews with European venture capital firms, published by the alarm:clock euro.

Today, Partech, one of the older VC firms in Europe, is getting the treatment. Philippe Crochet, pictured below, who is based in Paris, agreed to do an interview with the a:c euro via email.

He's the Partech investment manager responsible for chips and communications investments (working with Partech partners, Jean Marc Patouillaud and Helmut Schon), which just happen to be two of the hottest sectors in Europe in attracting VC money these days.

Unlike a lot of the larger VCs here, Partech doesn’t invest in life science in addition to tech, it only invests in IT, including Software & Internet, Healthcare IT, and Communications & Components.The firm invests from offices in Paris, San Francisco, and Israel.

We note that Crochet included the URL for portfolio companies in his written reply to our questions. We like that kind of proactive behaviour and have left them in.

How was 2005 for Partech? Just the European market, please.

New investments in 2005 included leading an €24.5M round of investment in Dibcom, a French company working in the area of chipsets for the reception of Digital Television in portable and mobile applications.

DiBcom’s technology has been used by a number of tier 1 customers in the automotive, notebook PC, cell phone, and portable media player (PMP) market segments.

We also took part in the €16M financing round for B3G , a VoIP operator founded in France in 2001. Operating both in France and in Europe, B3G Telecom addresses key telecom operators and telecommunication professionals with a “wholesale” service offer. B3G also addresses the enterprise market with an exclusive indirect channel distribution strategy.

Lastly, we refinanced Realeyes3D, co-leading the round with Atlas. Realeyes3D is a leading provider of advanced image processing applications for camera phones. For example, its technology enables cameraphone to act as mobile scanners. I recommend everyone to try the early beta version on Click to Scan. It’s pretty amazing.

On the exit side, we sold three companies from our European portfolio to US buyers, namely DCT (to Veritas), Meiosys (to IBM) and Dedigate (to Terremark Worldwide).

Mobile TV is an area attracting a bit of attention now, how is Dibcom doing?

We have been pleasantly surprised with the adoption and the momentum of DVB-H and with the launch of the first DVB-H based mobile TV offering in Italy this year. Many other countries will follow. This is a very exciting space.

We noticed the Passave acquisition last month. Are optical networking companies in line for some M&A activity?

During the bubble there it was said that over US$1B was invested in optical programs. This sector totally crashed for years. The survivors that are emerging are starting to see reasonable growth on their optical core businesses.

We are again seeing optical companies coming to the VC market that have revenue growth and can have some semblance of profitability in sight. In addition, the FTTX market is growing and as carriers enter the IPTV market, copper is just not enough bandwidth into a home which is driving demand.

The combination of more revenue, growth in demand, and startups finally getting closer to cash flow breakeven, and cash flow positive, will allow for a more healthier M&A environment.

Not an optical company per se, but we have in our portfolio the only startup remaining in the PON, namely Teknovus, with more than 2 million lines shipped and over 20 carrier wins.

What effect will the Lucent/Alcatel merger have on potential trade sale exits?

Well, it is difficult to tell on the long term although I doubt the combined entity would acquire more companies than the two separate companies. In the short term, the two companies will be certainly too busy with the merger to look for new acquisitions.

There have been few exits for VC-backed chip companies in recent months. Why is that?

First of all, you have to take in account the relative percentage of chip companies amongst VC backed companies. Secondly, there has been a number of nice and significant exits recently.
PMC Sierra has acquired Passave for $300M, Texas Instruments has recently completed its acquisition of Chipcon based in Norway for $200M, Broadcom paid nearly $80M for Sandburst.

Going back a bit further, one should of course mention as well other European successes such as CSR [Cambridge Silicon Radio] IPO or the Alphamosaic (by Broadcom) acquisition.

How is dealflow? And related to that, are you trying any new or innovative ways to attract alpha geeks and/or serial entreprenurs?

I am not sure there are very [many] innovative ways to attract serial entrepreneurs. Relationships take years to be built and we try to manage the best we can an international network created during the 25 years of Partech existence.

As an example, Christophe Bach and Patrice Giami, ISDNet founders, in which Partech was an investor, came back to us when they decided to finance B3G and we very happily decided to join their new venture.

But at the same time, we also try to stay very close to the research centers and keep our eyes very wide open for the new talents to emerge. At the end of the day, I am convinced that only long term professionalism can guarantee a healthy deal flow.

Compare the attitude of entrepreneurs today to two years ago, six years ago, and ten years ago?

This is a very open question. Let’s say that entrepreneurship is definitively stronger in Europe today, with a new generation of young serial entrepreneurs that I find very impressive. I am not sure this is related to the money they may have made during the bubble, but rather a question of mindset and a strong experience and realism from the post bubble years.

Where are you looking to invest now?

Such spaces still include wireless, including various technologies such as 802.11n or HSDPA, but also the wireline reponse, namely broadband access and associated services such as VoIP, IPTV and many others, and eventually convergence. We are also of course still looking at enabling components, anything smaller cheaper, faster and with a lower power consumption.

Posted at 07:17 AM | TrackBack | Permalink

New Embedded Memory Tech Brings In US and German VCs

Dutch fabless semiconductor firm, Cavendish Kinetics, tapped new investors Tallwood Venture Capital from Palo Alto, CA and Munich-based Wellington Partners for its second round raising $15.5M.

Someone said to the a:c recently that there isn't much trans-border dealmaking in Europe, but think about this one. Cavendish, is a 12 year old Dutch firm, commercializing technology developed at the UK's University of Cambridge, and its investors hail from the US, Germany, UK, and Canada. The venture has 10 investors altogether.

The new funds will be used to continue the development of its memory technology which is an alternative to FLASH and EPROMS. Via IP licenses, it sells to fabless semiconductor companies, independant design manufacturer, and CMOS foundries.

Cavendish has three product lines: all CMOS (which means it's standard process for the manufacturing), low power memory chips that can operate in extreme temperature and radiation ambients, and able to operate with standard voltages, which, the firm says, is one thing differentiating it from existing FLASH and EEPROM memories.

Read - Cavendish Kinetics Raises $15.5 Million in Second-Round Funding (press release)

Posted at 06:43 AM | TrackBack | Permalink

May 01, 2006

High Volumes Attract Investors to Ireland's Firecomms

Firecomms, a spinoff from the Tyndall Institute in Ireland, has raised €9.6M in a deal that brings in two new investors, Irish VC, ACT Venture Capital, and laser manufacturer, ALPS. Its early investor, Atlantic Bridge, also came back for this round.

Firecomms makes two kinds of optical components, both targeted at high-volume markets (consumer electroncis and automotive data comms), which it sells to OEMs. These include light emitting diodes and laser chips, known as a VCSELs.

The firm says that its LEDs are much faster than those on the market today, so they can be used for data communications and can replace copper cables in home and car networks, where glass fiber is too expensive to terminate, and copper is heavy and sensitive to electromagnetic interference. Unlike the alternatives, this architecture (based on plastic fiber optics) has a lower installed cost, is not sensitive to electromagnetic interference, is easy to terminate, and is lightweight.

Its VCSELs are targeted at home networks for transporting TV signals up to 50m from a set-top box to a flat screen, as well as for transporting data the short distance from portable PC and mobilephone chips to the LCD screen. Its solution is more robust, lower cost, and able to handle the high speeds now being demanded in these two market segments.

There have been plenty of investments in European VCSEL and LED startups but many struggled and failed to live up to their early potential because they didn't, or could not, (due to the limitations of there photonic components) target high-volume markets (to be fair many were targetting the telecomms sector which completely evaporated when the bubble burst) This one has clearly avoided these traps. With its new strategic investor and a nice amount of capital, we think that Firecomms has promise.

Read -Firecomms Announces a Funding Round of euro 9.6 Million (press release)

Posted at 06:59 AM | TrackBack | Permalink

April 27, 2006

Banexi Backs An Interactive TV Rollup

Banexi Ventures in Paris is backing a low-budget rollup of interactive video and TV startups by the founders of Pulsevision, now called Kewego. The startup announced raising €5M in a second round from Banexi Ventures this week, the acquisiton of one year old Pooxi.com, a French video sharing and aggregator, and in the process it changed its name to Kewego (via Kelblog).

Pulsevision was founded in 2003 by Michel Meyer and Olivier Heckmann, two of the five founders of Multimania which was acquired by Lycos in a deal worth some €220M during the dotcom bubble. It started out developing text messaging applications for interacting with TV broadcasts and channels in France -- the same kind of applications as RedLynx in Finland and 2Way Traffic in Netherlands offer.

It then acquired Tedisys, a developer of digital real-time displays used for advertising and information dissemination. If you live in Europe, you've seen these large plasma or LCD screens delivering ads, info, or promotions at airports, kiosks, and post offices. It's a highly fragmented market, with two or three leading suppliers in each country.

Now it has acquired Pooxi, which aggregates videos across a wide range of topics, for an undisclosed amount. Pooxi is one of three video sharing sites in France. The others are DailyMotion and vpod.tv. Each has its own strengths and weaknesses. Pooxi founded in January 2005 was the oldest, we believe.

We like the ambitious nature of Kewego.

The funding will help KEWEGO acquiring leadership in the Video, Broadcast and TV Industry and developing the next generation of products and services around the concept of TV 2.0.

It's targeting a market slated for quick growth, but it's a highly fragmented market both on the product side and on the supplier side. We believe a consolidation strategy would have plenty of potential targets and the prices are still reasonable, which should give Kewego a chance to carve out a leading place in the European interactive TV market.

You may recall that the same VC backed Kelkoo, which was acquired by Yahoo two years ago for a princely sum after building up a successful Pan European online business. (This might explain why the letters "K" and "o" are being re-used here. If you want to know more about the story of Kelkoo, it has been written up in a book by Julien Codorniou containing interesting insight into the people behind the success story.)

We know that Banexi has a flair for building Pan European ventures and finding good exits - it is one of a handful of venture funds in Europe to not only raise a new fund in the last year, but also to have more money coming at it from LPs in the US and Europe than what it targetted.

We've interviewed Michel Dahan several times and listened to him speak at confabs over here. We recall him describing Banexi's strength:

"What we can do is build companies with complex business models in a complex market," he said. "Europe is multilingual, multicultural. The business culture varies from country to country. Just try negotiating with a Dutch merchant, for example. They are tough. Or try entering the German market, where newcomers are not exactly welcomed. This is the kind of thing that we know."

Read - Pulsevision becomes Kewego (press release)
Read - Michel Meyer 2.0(kelblog)

Posted at 05:02 PM | TrackBack | Permalink

Digital Pen Firm Taps US VCs

Pegasus Technologies, which develops digital handwriting input solutions, has closed a $4.8 million financing round from US venture capital firm Cedar Fund Cedar Fund and two existing Japanese investors, Nippon Venture Capital and the NFP fund, reports Globes.

It's not a down round, similar valuation to last round, according to the online journal, but the early Israel-based investors did not participate in the latest round. Founded in 1992, Pegasus has raised a total of $14 million.

There are only a handful of companies making a go of the digital pen business. In addition to Pegasus, Sweden's Anoto is doing it, as is Taiwann's UC Logics with its LaPazz products. Each has its own quirks, some requiring special paper, while others require special hardware or communications support.
Read - Graphics co Pegasus raises $4.8m

Posted at 04:28 PM | TrackBack | Permalink

Wave Power Startup Readies 2007 Full-Scale Demo

Scotland's AWS Ocean Energy Ltd, which makes an alternative energy generator (grid-connected) that relies on wave power, has raised £2 million in equity funding from RAB Capital, after completing a trial off the coast of Portugal.

On its website, the firm said that the new funding will enable AWS to assemble a "world-class engineering and commercial team, and to complete the design of a full-scale demonstrator to be fabricated in 2007 and commissioned in 2008." An updated version of its Mark Two design will be built which will exploit lessons learned from the "successful testing off the coast of Portugal" last year.

Read - AWS Ocean Energy Press Release (Tornado Insider)

Posted at 05:26 AM | TrackBack | Permalink

April 26, 2006

Streamezzo Taps VCs As Demand For Its Mobile Media Grows

Mobile media content managment system developer, Streamezzo, has raised €11M in a second round of financing, according to Neteco. Sofinnova Partners and sister company, Sofinnova Ventures in the US, participated along with earlier investors. The startup develops content managment software used by mobile network to provide access to mobile TV, radio, and video, as well as phone portal customization. The firm calls it Rich Media.

Streamezzo's software delivers a user interface that is a lot like the programming guides we're used to on Pay TV and digital TV but clearly designed for the cellular phone.

Streamezzo is hiring in the US and has established some partnerships for targeting the Asian market. According to the Neteco article, the startup is experiencing brisk demand from other cellular network operators and that is reason it raised the new capital. Its first round, of €5M, was raised in 2004

Streamezzo's software delivers a user interface that is a lot like the programming guides we're used to on Pay TV and digital TV but clearly designed for the cellular phone.

Streamezzo is hiring in the US and has established some partnerships for targeting the Asian market. According to the Neteco article, the startup is experiencing brisk demand from other cellular network operators and that is reason it raised the new capital. Its first round, of €5M, was raised in 2004.
Read - Neteco lève €11million (Neteco)

Posted at 09:06 PM | TrackBack | Permalink

Cameraphone Lens Innovator Brings In Third Round

France's Iris Capital has led a €16.4 million ($20M) third round for Lyon-based Varioptic, a developer and manufacturer of a new kind of lens for cameras and cameraphones.
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The firm has been executing on its milestones, according to is steady flow of press release, and this round confirms that. It brings the total amount raised to about €28M, plus an undisclosed amount from Japan's NIFVentures. Its seed stage investor is Paris-based Sofinnova Partners

This is the second cameraphone lens deal this month. (See link to Eyesquad funding below.)

Founded in 2003, Varioptic has developed a liquid lens technology that reduces the number of moving parts, doing all the things that conventional lenses can do but consuming less power, being more robust, and lighter. Target market is cameraphones, but the tech can be used in other types of devices too, says the firm.

Varioptic has yet to sign a volume design-in win but claims more than 100 pilot projects with lens module manufacturers and mobilephone-makers.

The last time we talked to Varioptic, the firm was telling us about its sound IP and patent portfolio. That is because there had been some reports in the trade press about a dispute with Philips, which also has a lens with similar technology. We're trying to find out if it has been resolved.

Read - Varioptic Secures (press release)
Read - Eyesquad funding (a:c euro)

Posted at 06:12 AM | TrackBack | Permalink

April 25, 2006

3i and iSource Back Screen Tonic's Mobile Internet Ads Play

Screen Tonic, a five year old French developer of software and services that enable mobilephone advertising, has just raised €5.5M. Its products are targeted at mobile network operators that run mobile portals with ads such as sponsored links, banners and video ads on their mobile website. So far it has been quite successful in the French market. The new capital will be used to go internatioanal.

The 3i partner on the deal thinks that it is just a batter of time before this becomes a lucrative ad channel.

We like the way ScreenTonic has partnered with the major mobile carriers in France offering them the dual opportunity to raise additional revenues and increase mobile internet traffic. We anticipate Mobile Internet Advertising accounting for a significant portion of mobile data business in the future. This is just the beginning for the industry.

Posted at 12:23 PM | TrackBack |