Go4Venture Advisers
European Venture & Growth Equity Market
Monthly Bulletin | May 2014
Technology / Media / Telecoms / Internet / Healthcare / Cleantech / Materials
About Go4Venture Advisers
Providing innovative, fast-growing companies and their investors
with independent corporate finance advice to help them
evaluate, develop and execute growth strategies
www.go4venture.com
Equity Capital Markets (ECM)
Mergers & Acquisitions (M&A)
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Growth equity financings and secondaries
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Buyside / Buy and build
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© Go4Venture Advisers 2014
May 2014
Contents
This Month in Brief
2
Investments
1.1 - Headline Transaction Index (HTI)
5
1.2 - Large Transactions Summary
6
1.3 - Large Transactions Profiles
7
M&A Transactions
2.1 - M&A Activity Index
21
2.2 - Top 5 Global TMT M&A Transactions Summary
22
2.3 - Headline European VC & PE-Backed M&A Transactions Summary
23
2.4 - Headline European VC & PE-Backed M&A Transaction Profiles
24
List of Acronyms
27
About this Bulletin
The Go4Venture Advisers’ European Venture & Growth Equity Market Monthly Bulletin provides a
summary of corporate finance activity among emerging European TMT companies:

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Investments, i.e. Venture Capital (VC) and Private Equity (PE) financings, including growth equity,
financing rounds with single secondaries components (recapitalisations); and
M&A Transactions where the sellers are VC and PE-backed European companies, including all
majority transactions with no new investment going into the business (e.g. acquisitions,
Management Buyouts (MBOs) and other buyouts).
Investment activity is measured using Go4Venture’s European Tech Headline Transaction Index (HTI),
which is based on the number and value of transactions reported in professional publications.
M&A activity is measured using data from a combination of external sources, primarily Capital IQ,
with complementary reporting from 451 Group and VentureSource.
Europe is defined as Western, Central and Eastern Europe, excluding Israel.
For more details, please refer to the Methodology Note available on our website.
Please note that no part of the Bulletin can be reproduced unless content is duly attributed to Go4Venture
and the details of republishing are notified to g4vBulletin@go4venture.com.
© Go4Venture Advisers 2014
Page 1
May 2014
This Month in Brief
Dear Clients and Friends,
Welcome to the latest edition of the Go4Venture Monthly European Venture & Growth Equity
Bulletin, featuring our proprietary Headline Transaction Index (HTI) of investment activity, as well as
a quick summary of VC & PE-backed TMT M&A exits of $50 million or more.
European Venture Crossing the Chasm
The trend we were describing in our last Bulletin – fewer, but bigger, later-stage transactions –
continued unabated this month. The difference is that we can also report a building momentum
behind exits, both on the IPO and M&A fronts, with one >$100 million trade sale (LaFourchette
selling to TripAdvisor) featuring in this issue. Of course if we can now discuss exits as well as
European investments (i.e. output as well input), this makes a world of difference. In short, we feel
that European venture is going over the tipping point: actual returns for investors – which will
mean returning investors, and new investors.
In fact returns are getting better, as reported last month, with net IRR (of funds in which the
European Investment Fund is invested) going up from approximately 2% for funds with a
vintage of 2000 onwards, to 5% for 2005 and later funds and 10% for funds set up since 2008.
Investments
Just like last month, May saw a smaller number of Headline Transactions Index (HTI) deals than last
year, but the total value of these transactions was significantly higher: in fact, as of end of May 2014
year-to-date, the market is about a third above last year. If one counts only the Landmark
Transactions (more than €20 million), the number was double the same month last year (4 vs. 2)
and, in cumulative year to date figures, the total number of Landmark Transactions is already
about two-thirds of the whole of last year (22 as of the end of May 2014 vs. 35 in calendar 2013).
And a peek at the figures for June 2014 show a similar trend, with 7 Landmark Transactions so
far counted and a market well ahead of June last year.
The usual two key drivers are at work: late-stage and internet:
•
•
Late-stage situations – Series C and later financings represented more than half the
investments featured as Large HTI Transactions (>£5mn / €7.5.mn / $10mn) in May. But we
did have 3 Series A rounds of more than €8 million as well.
Internet in its various guises – e-commerce, payment services, mobile apps, marketplaces
and, of course, Software-as-a-Service (SaaS), a never ending transition in the enterprise
software sector. But we also had this month 3 transactions in the hardware space: semis, but
also chips and servers for bitcoins, and even music hardware.
In short, as well as sure bets on late-stage and momentum internet plays, the market is gaining
confidence, and slightly earlier-stage and funkier investments are being made, either by
trusted hands of the venture industry (this month Balderton and Index – walking in steps when
investing in Roli and Sinch), or newcomers trying to get into the action (a range of investors in
BitFury which we had not seen before)
© Go4Venture Advisers 2014
Page 2
May 2014
From a country standpoint, the larger countries are getting their fair share, with France making a
strong showing after a lull during 2013-Q4 and 2014-Q1. Interestingly, except for the outlier
Crocus (financed with Russian State investor Rusnano), the two other French transactions are a
company flipped to the US (Dashlane), and US investor Accel Partners taking the lead on
PeopleDoc. Funnily enough, an analysis we prepared last month for La French Tech (a French
government organisation set up to promote France as a tech investment destination country) shows
that French startup companies are comparatively undercapitalised, in particular because they find it
difficult to attract UK/US investors - which is probably correlated with their relatively poor exit
showing.
The positive signs for venture as a whole, and European venture in particular, are
accumulating:
•
•
US venture is getting back to health with more than $10 billion invested in 2014-Q1, only the
second time since 2001 that venture investment exceeded this level in a single quarter
(according to Dow Jones VentureSource mentioned in the Wall Street Journal).
Europe is slow going but European Central Bank (ECB) President Draghi repeated its
“whatever it takes” feast with a “Are we finished? The answer is no” earlier this month,
probably putting the threat of deflation away, which leaves innovation as essential as before
to drive European recovery longer term.
Even if it makes the job of entrepreneurs seeking funding more difficult, the options for funding are
getting broader: yes, the Tier 1 funds are obsessed (rightly) about internet plays, but there are plenty
of sometimes more specialised funds to tap; corporates are much more active; and of course
crowdfunding is gaining momentum. For data on Funding Outside VCs – What Are The
Alternatives? follow the link to the presentation we delivered in Barcelona last month at This Way
Up, a gathering of more than 200 European startup CEOs.
Exits
Last month was a modest one in terms of exits, with one exception: restaurant online reservation
system LaFourchette acquired by TripAdvisor for a rumoured $140 million according to
TechCrunch. This is quite an event since (as our readers will know) the threshold we use is $50
million and, even then, we struggle with the paucity of good news to report. Contrary to IPOs which
are (by definition) public, M&A exits are often secretive, the seller hesitating to mention the price if
it is too low, and the buyer not keen to mention terms in case they may be seen as having
overpayed.
As an industry we need to get better at publicising M&A exit terms. The good news is that GPs
increasingly mention the numbers to the press (if it is a good exit), but this is by no means the rule.
Recently, we had an investor complaining that their company’s exit of more than $100 million was
not mentioned in our Bulletin; but then the press release specifically mentioned “the terms are
undisclosed” and clearly no one had access to the information, either officially or unofficially.
The other two transactions highlighted in this bulletin are really growth equity plays – for
companies which have been private equity plays all along, rather than venture deals graduating to
become growth equity situations: Geo Networks selling to Zayo Group; and Bull selling out to Atos,
an all public company affair, except that Ardian (then AXA) and Bpifrance (the French State’s private
equity and VC arm) had invested before.
© Go4Venture Advisers 2014
Page 3
May 2014
From an IPO standpoint, the news is quite contrasted but positive on the whole:
• Yes, the public markets for tech are in retreat and some of the previous darlings pretty
seriously battered (among those mentioned before: AO.com, Asos, Blur Group).
• On the other hand, great IPO candidates have come to the market or are getting ready:
o Markit (a finance product information business started in the UK in 2001, and
nurtured by its own client-shareholders since then) has made it to Nasdaq with a
market cap of close to $5 billion;
o Rocket Internet (the Samwer Brothers global cloning factory) is shooting for a €3
billion valuation); and
o Viadeo (a France-based recruitment social network which has 60 million users –
where LinkedIn has 300 million) is ready to IPO (even if the market cap announced –
of the order of €200 million – is only a fraction of LinkedIn’s own €15 billion
valuation).
Overall, as we are preparing to break for the Summer recess, the mood is more optimistic. In
fact, if one looks at our comments of last year (where we were very tentative about the extent of the
recovery), there is a big difference: exits are starting to filter through.
Enjoy the reading. Please direct any questions or comments to g4vBulletin@go4venture.com. If you
do not wish to receive future HTI updates from us, please send an email with the title "unsubscribe"
to g4vBulletin@go4venture.com.
The Go4Venture Team
Where to Meet the Go4Venture Advisers Team in July – see www.go4venture.com/contact


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July 1 – London, UK – HBS Angels of London - Pitch Event
July 2 – Luxembourg, Grand Duchy of Luxembourg– Launch of EIF new mandate - the
Luxembourg Future Fund
July 3-4 – Luxembourg, Grand Duchy of Luxembourg – ICT Spring 2014
For more details about the Headline Transactions Index (HTI), please visit our website.
© Go4Venture Advisers 2014
Page 4
May 2014
1.1 Headline Transaction Index (HTI)
Go4Venture HTI Index by Deal Value
2011
2012
2013
2014
Value of Transactions per Month (€mn)
800
700
600
500
400
300
200
100
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Oct
Nov
Dec
Source: Go4Venture Advisers HTI Database
Go4Venture HTI Index by Cumulative Deal Value
Cumulative Value of Transactions (€mn)
2011
2012
2013
2014
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Source: Go4Venture Advisers HTI Database
May
Large Transactions
#
€mn
Other Transactions
#
€mn
All Headline Transactions
#
€mn
2013
2014
12
14
202
328
33
24
103
68
45
38
306
396
Of Which:
Landmark Transactions
Year-to-Date
Large Transactions
Other Transactions
All Headline Transactions
2013
#
2014
53
71
€mn
954
1,545
#
137
88
€mn
399
281
#
€mn
190
159
1,353
1,826
Of Which:
#
€mn
2
4
84
215
Landmark Transactions
#
€mn
11
22
376
983
Definitions
Large Transactions: > £5mn / €7.5mn / $10mn
Other Transactions: < £5mn / €7.5mn / $10mn
Landmark Transactions: subset of Large Transactions > €20mn / £13mn / $27mn
© Go4Venture Advisers 2014
Page 5
May 2014
1.2 Large Transactions Summary
(>£5mn / €7.5mn / $10mn)
Ranked by Round Size (€mn, including estimates) in descending order
#
Company
Sector
Round
€mn
Description
Investors
1
Ozon (Russia)
www.ozon.ru
Internet
Services
Late
Stage
109.1
Provider of a B2C ecommerce portal
AFK Sistema, Mobile TeleSystems
(MTS)
2
Crocus Technology (France)
www.crocus-technology.com
Hardware
Late
Stage
43.7*
Developer of Magnetic
Random Access
Memories (MRAM)
Idinvest Partners, Innovation Capital,
NanoDimension Management,
RUSNANO, Sofinnova Ventures,
Ventech
3
iZettle (Sweden)
www.izettle.com
Internet
Services
C
40.0
Developer of a mobile
payments system for taking
credit and debit card
payments
Creandum, Dawn Capital, Greylock
Partners, Index Ventures, Intel
Capital, Northzone Ventures, SEB
Private Equity, Zouk Capital
4
Silent Circle (Switzerland)
www.silentcircle.com
Software
C
21.8
Developer of private
communications apps
Cain Capital, Individual Investors
5
Dashlane (France)
www.dashlane.com
Internet
Services
C
16.0
Password and digital wallet Bessemer Venture Partners,
management app
FirstMark Capital, Individual
Investors, Rho Ventures
6
Runtime Collective (UK)
www.brandwatch.com
Internet
Services
Late
Stage
16.0
Trading as Brandwatch,
designs and develops
social media monitoring
tools and solutions
Highland Capital Partners, Nauta
Capital
7
BitFury (Netherlands)
www.bitfury.org
Hardware
A
14.6
Provider of
semiconductors, servers,
and datacenter solutions to
the bitcoin and
cryptocurrency industry
Binary Financial, Crypto Currency
Partners, Georgian Co-Investment
Fund, Individual Investors,
Queensbridge Venture Partners,
ZAD Investment Company
8
PeopleDoc (France)
www.people-doc.com
Software
B
12.7
SaaS HR data
management platform
Accel Partners, Alven Capital,
Kernel Investissements
9
Auxmoney (Germany)
www.auxmoney.com
Internet
Services
C
11.6
Online peer-to-peer (P2P)
lending marketplace
Foundation Capital, Index
Ventures, Individual Investors,
Partech Ventures, Union Square
Ventures
10 Odoo (Belgium)
www.odoo.com
Software
B
10.0
Provider of open source
business software
Management, Societe Regionale
d'Investissement de Wallonie,
Sofinnova Partners, XAnge Private
Equity
11 Roli (UK)
www.roli.com
Hardware
A
9.3
Provider of music hardware Balderton Capital, FirstMark
and software
Capital, Index Ventures, Universal
Music
12 Sinch (Sweden)
www.sinch.com
Telecom
Software
A
8.7
Provider of a
communications platform
to add messaging and
voice calls in mobile apps
Balderton Capital, Index Ventures,
Rebtel
13 Ticketscript (Netherlands)
www.ticketscript.com
Software
C
8.6**
Provider of self-service
ticketing software
FF&P Private Equity
14 E-Leather (UK)
www.eleathergroup.com
Cleantech
B
6.1
Manufacturer of hightechnology composition
leather
Environmental Technologies Fund
(ETF)
Source: Go4Venture Advisers HTI Database
Key
Bold indicates lead investor(s)
* Internal Round
** Go4Venture Advisers Client
© Go4Venture Advisers 2014
Page 6
May 2014
Ozon
Russia | www.ozon.ru
#
Sector
1
Internet
Services
Round
€mn
Description
Investors
Late Stage
109.1
Provider of a B2C e-commerce
portal
AFK Sistema, Mobile TeleSystems (MTS)
Ozon (Russia), a provider of a B2C e-commerce portal, raised $150.0mn (€109.1mn) in a Late Stage round from AFK
Sistema and Mobile TeleSystems (MTS). This round values the company at $700mn (€511mn) and the money will be
used for acquisitions and further development of the firm’s logistics and delivery operations. Ozon also intends to expand
into other Commonwealth of Independent States (CIS) countries such as Kazakhstan, Latvia and Lithuania, as well as to
pursue global partnerships.
Often described as a Russian Amazon, Ozon is a multi-product e-tailer of books, DVDs, electronics, games and
software. One of the CIS’ earliest e-commerce businesses, set up only seven years after the fall of the Soviet Union,
Ozon is now the third biggest internet group in the region, behind internet search firm Yandex and e-mail, social
networking and gaming sites provider Mail.ru.
When we last saw Ozon in our September 2011 issue, the firm had just promoted former BCG executive Maelle Gavet to
CEO and raised $100mn (€88mn) in a Series C round led by Ru-net with participation from Alpha Associates, Index
Ventures and Rakuten. Under Gavet’s leadership, part of this money was used to diversify the firm’s product range –
much like Amazon. Unlike Amazon, however, much of the round was used to expand the logistics operation which Ozon
had set up in 2002. The state-run postal service was still not reliable and there was no private sector alternative.
In some ways Amazon and Ozon are very similar. Both started as online bookstores and used acquisitions to diversify
their product ranges. For example, Amazon bought online retailer for shoes and apparel Zappos.com for $930mn
(€620mn) in July 2009 and Ozon bought the Russian equivalent of Zappos, Sapato.ru, for an undisclosed amount, in
February 2012. In other ways the two firms differ. While Amazon has been pushing proprietary e-readers, tablets and
now phones, Ozon has been developing a travel and a logistics business. Further, Amazon will often compete with
retailers who use its platform whereas Ozon does not, much like its Japanese equivalent (and shareholder) Rakuten.
This is because the markets in which they operate differ. Firstly, there are cultural differences: even though CIS
consumers have been able to use PayPal on Russian sites (including Ozon) since September last year, c.75% of
customers still pay cash on delivery. This and the need for a logistics network make it hard for new entrants such as
Amazon, which opened a representative office in Moscow in April 2013. Secondly, their markets differ in size and
maturity: in North America and Europe, c.70% of a total population of just under 900mn have internet access compared
with c.56% of a 280mn population in the CIS. Moreover, online accounts for less than 3% of the total retail market in the
CIS, compared with 5-7% in Europe and the US.
Currently, Amazon still dwarfs Ozon with 2013 revenues of $61bn (€45mn) compared with only $750mn (€547) for Ozon.
However, the relative immaturity of the CIS market means that Ozon has considerable scope for growth. According to
CEO Maelle Gavet, Ozon wants to secure 80% of the Russian market within ten years. One way to finance this would be
through an IPO like Mail.ru (listed on the LSE in 2010 for a €5.5bn market cap) and Yandex (which listed on the Nasdaq
in 2011 for €8.9bn). Alternatively, the company could be acquired by a firm such as Amazon, which is struggling to enter
the rapidly growing CIS market.
Investors
AFK Sistema (MCX: MTSS) and MTS (NYSE:MBT) each contributed $75mn (€55mn) for 10.8% stakes.
Strategic investor MTS is a telecoms group providing mobile and fixed line telephony, broadband internet and pay TV
services. Its reputation as a quality service provider has led to significant brand recognition – in 2008 MTS became the
first and only Russian company to feature in the FT’s BRANDZ™ league table of the top 100 global brands.
As part of the deal, Ozon will form a sales partnership with MTS. Ozon gets acess to MTS’ telecoms expertise,
broadband network and m-commerce know-how, while MTS gets to sell and deliver its phones, tablets and consumer
electronics using Ozon’s e-commerce platform and logistics operation. MTS is 51% owned by AFK Sistema – the
largest public holding company in Russia which has interests in banking, oil and gas, technology and telecoms.
According to VentureSource, Ozon’s round has been the largest in the Russian e-commerce space, followed by the
$130mn (€99mn) investment in fashion e-tailer Lamoda / KupiShoes, which featured in our June 2013 Bulletin.
Baring Vostok, which first backed Ozon with a $3mn (€2.2mn) Series A round in 2000, remains the majority
shareholder.
© Go4Venture Advisers 2014
Page 7
May 2014
Crocus Technology
France | www.crocus-technology.com
#
Sector
2
Hardware
Round
€mn
Description
Investors
Late Stage
43.7*
Developer of Magnetic
Random Access Memories
(MRAM)
Idinvest Partners, Innovation Capital,
NanoDimension Management, RUSNANO,
Sofinnova Ventures, Ventech
* Internal Round
Crocus Technology (France), a developer of Magnetic Random Access Memories (MRAM), raised $60.0mn (€43.7mn)
in a Late Stage round from Idinvest Partners, Innovation Capital, NanoDimension Management, RUSNANO,
Sofinnova Ventures and Ventech.
This is the fifth time that Crocus Technology (Crocus) has appeared in our bulletin, the most recent being a €34mn latestage round in July 2013 . It is Crocus’ seventh investment round and brings the total amount raised to c. €200mn. As
readers may recall, Crocus has been developing a non-volatile form of RAM based on magnetic storage elements, rather
than the electric charges or currents used in the conventional solid state memory of USB sticks and Solid State Drives
(SSDs). Chips produced using Crocus’ MRAM technology will be smaller, faster and consume less power than
conventional non-volatile (flash) RAM.
Crocus first planned to release its second generation products in late 2009, but this date has been repeatedly pushed
back, for two reasons. Firstly, while there are technical limits to component density and speed in flash RAM (and industry
pundits have been saying the end is nigh for over a decade), researchers have continually pushed the scale from 60nm at
the beginning of the century to 20nm or better today. Secondly, MRAM is only one of a number of possible replacement
technologies. Others include Ferroelectric RAM (F-RAM), Phase Change RAM (PCRAM) and Resistive-change RAM
(ReRAM) and there are over 8,600 patent families in this area worldwide. Until it is clear which technology will win,
nobody wants to commit to any particular one by investing in a plant – which presents a problem for a fabless
semiconductor company like Crocus. The backing of RUSNANO in May 2011 and the setting up of an MRAM
manufacturer in Russia (Crocus Nano Electronics (CNE), a joint venture between Crocus Technology and RUSNANO),
together with a partnership with independent semiconductor manufacturer TowerJazz, have solved this problem. It took
slightly longer than the forecasted two years, but this round should enable CNE to complete its 300mm-wafer MRAM plant
in Moscow’s Technopolis and produce 500 wafers a week by the end of this year. The plant has already manufactured
small volumes of wafers for Crocus.
While the lengthening runway and transition from fabless to manufacturer has been both protracted and expensive, there
are finally signs that this is beginning to pay off. Since early 2014, there has been a steady stream of supply, licensing
and manufacturing agreements – with Brazilian smart-card firm Valid, semiconductor IP firm ARM and TowerJazz.
Perhaps one of the most promising signs is that Crocus is now having to defend the 154 patents in its IP portfolio, and
has initially been successful.
Crocus delivered on its forecast that it would generate €9mn of revenues last year. If it continues to deliver on publicly
announced goals, and CNE and TowerJazz start volume production by the end of the year, then the firm may indeed
meet its target of becoming profitable in 2015. It will have two main businesses. Firstly, it will supply memory for security
applications such as high-end smart cards and m-commerce. Its second business will be embedded microcontrollers for
licensing to OEMs.
Investors
This internal round includes all of the investors who participated in Crocus’ previous round. Paris-based lower mid-market
private equity and venture capital firm Idinvest Partners (€214mn (2014); AUM €4.2bn), Paris-based (with Silicon Valley
offices) venture capital firm Innovation Capital (€100mn* (2014); AUM €450mn), US-based nanotechnology focused
venture capital firm NanoDimension Management (€45mn (2007)), Russian nanotechnology investor RUSNANO
(€400mn** (2012)), the US sister firm of Paris-based venture capital firm Sofinnova Partners Sofinnova Ventures
(€321mn (2011); AUM €1bn) and Paris- and China-based venture capital firm Ventech (€100mn*** (2012); AUM €380mn)
were all described in our previous coverage.
* The fund is still open; €40mn has been raised to date, out of a targeted €100mn
** The fund is still open; €150mn has been raised to date, out of a targeted €400mn
*** The fund is still open; €75mn has been raised to date, out of a targeted €100mn
© Go4Venture Advisers 2014
Page 8
May 2014
iZettle
Sweden | www.izettle.com
#
Sector
3
Internet
Services
Round
€mn
Description
Investors
C
40.0
Developer of a mobile
payments system for taking
credit and debit card payments
Creandum, Dawn Capital, Greylock
Partners, Index Ventures, Intel Capital,
Northzone Ventures, SEB Private Equity,
Zouk Capital
iZettle (Sweden), a developer of a mobile payments system for taking credit and debit card payments, raised €40.0mn
in a Series C round led by Zouk Capital with participation by fellow new investors Dawn Capital and Intel Capital and
existing investors Creandum, Greylock Partners, Index Ventures, Northzone Ventures and SEB Private Equity.
Founded in 2011, card payments firm iZettle has expanded rapidly from its Stockholm base. It now has offices in Berlin,
London, Madrid, Mexico City and Sao Paulo and operates in Denmark, Finland, Germany, Norway, Spain, Sweden and
the UK in Europe, and Brazil and Mexico in Latin America. Shortly after iZettle’s Series B round in June 2012, American
Express added an undisclosed amount to the €25mn already raised. Supported by Banco Santander following a €5mn
strategic investment last June, the firm is expanding aggressively in Latin America starting with Brazil and Mexico.
Competition includes American firms Square and Stripe, mPowa (covered in our August 2013 issue), Paymill (covered in
our January 2013 issue), Rocket Internet-backed Payleven and SumUp (covered in our August 2012 issue). All of these
companies charge lower commissions than traditional point-of-sale (POS) suppliers and hence need high sales volumes
for their business model to work. Success in this industry is therefore a battle for transaction volume.
Unfortunately the small merchants for which this technology was designed have been slow to adopt it. One way to
encourage adoption is to demonstrate that the system is secure. According to iZettle the fraud rate with its chip-and-pin
system is only 2bps (0.02% of all transactions by number) compared with 6-8bps for offline credit card processing. For
the magnetic stripe technology, which predates floppy disks but is still the norm in the US, fraud rates reach 30bps. As
we noted even as far back as our September 2011 coverage of iZettle’s Series A round, chip-and-pin technology is
standard outside the US, which makes it difficult for US firms like Square and Stripe to expand beyond North America.
Another way to encourage customer adoption is to bundle payments with other services. iZettle has now added free
sales overview apps for businesses to spot opportunities and loyal customers. In a similar vein, the company will also
look at using part of this round for acquisitions, such as CRM software firms or customer loyalty schemes. One of the
most effective practitioners of this strategy is US software firm Intuit, which has not only integrated its GoPayment
system with well-known SaaS accounting software QuickBooks, but also acquired appointments booking firm Full Slate
last October (for an undisclosed amount) and order and inventory management platform Lettuce for $30mn (€22mn) in
May 2014. It also just announced that it will be adding ZenPayroll to its Apps.com platform.
User adoption rates might be slow, but they do seem to be increasing. In the UK you can buy iZettle’s hardware in highstreet electronics store Maplin, and PayLeven’s in builders’ merchants like Jewson and Screwfix.
Investors
Having raised a total of $100mn (€73mn), iZettle has not disclosed its valuation. According to founder and CEO Jacob de
Geer, however, it is nowhere near the $5bn (€3.6bn) valuation of US competitor Square which has raised $440mn
(€321mn). Moreover, iZettle has only 150 employees for its nine markets compared with Square’s 700-800 for only three.
Further, Square has just been forced to postpone its IPO indefinitely. Even with such august names as KPCB and
Sequoia backing Square’s $5bn (€3.6bn) valuation, it seems unlikely that the public markets will support that valuation for
a company with no profits and 2013 revenues of $100mn (€73mn).
London-based transaction leader Zouk Capital (€230mn (2011); AUM €400mn) normally invests in cleantech. It has two
growth equity cleantech funds and one renewable infrastructure fund focused on solar energy. iZettle is Zouk’s first
investment outside of cleantech.
Founded in 2006, London-based Dawn Capital (€75mn (2013); AUM €240mn) is a stage-agnostic TMT investor which
has made more than hundred investments to date.
Readers will be familiar with the other new investor – Intel Capital (€80mn (2012); AUM €1.7bn) and the returning Series
A and Series B investors Creandum (€135mn (2013)), Greylock Partners (€740mn (2013); AUM €2.2bn), Index Ventures
(€400mn; AUM €3bn), Northzone Ventures (€200mn (2013); AUM €280mn) and SEB Private Equity. American Express,
which has not returned for this round, is also an investor in competitor SumUp.
© Go4Venture Advisers 2014
Page 9
May 2014
Silent Circle
Switzerland | www.silentcircle.com
#
Sector
4
Software
Round
€mn
Description
Investors
C
21.8
Developer of private
communications apps
Cain Capital, Individual Investors
Silent Circle (Switzerland), a developer of private communications apps, raised $30mn (€21.8mn) in a Series C round
co-led by Cain Capital and Ross Perot Jr. The money will be used to further accelerate growth, meet the demand for
its privacy-focused smartphone Blackphone, and relocate its headquarters to Switzerland.
Silent Circle was founded in 2011 by Jon Callas (Apple’s Whole Disk Encryption system creator), Mike Jake (former
Navy SEAL) and Phil Zimmermann (the creator of Pretty Good Privacy (PGP), claimed to be the most widely used email encryption software in the world, and of Z-Real-time Transport Protocol (ZRTP), a protocol for negotiating
cryptographic keys). The firm has developed a range of products for secure communication including encrypted voice
and SMS for mobiles, a secure VoIP app, and enterprise solutions which bundle the above products in various
combinations together with secure file transfer. Both individual and corporate subscriptions are available with pricing
comparable to their less secure competitors. The company’s current client base includes customers in over 130
countries, 23 of the global Fortune 50 enterprises and governments from 11 nations.
In a Switzerland-based joint venture with Spanish mobile phone developer Geeksphone (known for producing a multiOS mobile handset), Silent Circle has also developed a secure mobile phone called the Blackphone. Looking
superficially like the HTC One, with specs comparable to other current smartphones and featuring PrivatOS, a custom
privacy-enhanced operating system built on Android/Linux, the phone comes unlocked with a two year subscription to
Silent Circle and include a full suite of privacy-enabled applications, including Silent Phone and Silent Text. At €461, the
Blackphone is priced to compete with a high end smartphone plus a subscription to Silent Circle. Blackphone devices
went-up for pre-order in February and began shipping to customers in June 2014.
With phone hacking by the British Press and American surveillance of German Chancellor Angela Merkel both in the
media, the public is becoming aware of phone hacking. This may encourage some suspicious early adopters to buy
Silent Circle’s products.
However, Silent Circle’s primary markets will be the public sector (i.e. government) and the corporate world in industries
where security is an issue – investment banking, oil and gas, etc. In this respect, Silent Circle targets the same
corporate niche that RIM used to dominate. With RIM’s future so uncertain, this is a clear opportunity for Silent Circle.
Silent Circle has just relocated from the Caribbean island of Nevis to Switzerland, with representative offices in
Washington DC and London.
Investors
Five years ago or so, it was noteworthy when European start-ups moved to the US. It is now common. Silent Circle is the
first time in our bulletin that we have seen a company that was founded and incorporated in the US move to Europe,
Switzerland.
Investment co-lead Ross Perot Jr. should not be confused with his father H.Ross Perot Sr. – the Texan IT billionaire, twotime US presidential candidate and serial entrepreneur who founded IT equipment and services company Electronic Data
Systems (EDS), which he sold to General Motors for €1.8bn in 1984. Ross Perot Jr. is a successful businessman and
billionaire in his own right, in a completely different industry to his father – real estate. He is well-known for developing
and owing Fort Worth Alliance Airport and the surrounding area, as well as for gaining majority ownership of the Dallas
Mavericks NBA basketball team (sold in 2000 to entrepreneur Mark Cuban for c.€210mn).
Notably, Perot Sr. has a long track record in related areas and specific expertise concerning the need for secure
communications in government – such as his involvement in staging a hostile takeover for CIA and military contractor
Collins Radio Company in 1969.
Perot’s Jr. co-leader in this investment is Cain Capital (no website). Cain is a US-based small investment advisory firm
acting for a limited number of high net worth individuals and pooled investment funds.
Following this round, Former BT Chairman and CEO Sir Peter Bonfield and current Dell executive Anurag Jain will both
join Silent Circle’s board.
© Go4Venture Advisers 2014
Page 10
May 2014
Dashlane
France | www.dashlane.com
#
Sector
5
Internet
Services
Round
€mn
Description
Investors
C
16.0
Password and digital wallet
management app
Bessemer Venture Partners, FirstMark
Capital, Individual Investors, Rho Ventures
Dashlane, a password and digital wallet management app, raised €16.0mn in a Series C round led by Bessemer
Venture Partners with support from returning investors FirstMark Capital and Rho Ventures. Co-founder and super
angel Bernard Liautaud from Balderton Capital also participated.
Founded in December 2009 and currently having more than 2mn users, Dashlane’s main purpose is to solve the
problem of remembering multiple passwords, commonly faced by today’s online users. It further provides additional
room to keep information related to usernames, credit cards and other payment methods, while also offering an auto-fill
feature that allow users to add personal information that they have to repeatedly enter when completing online forms.
Dashlane’s first product was released in Q1 2012, following two and a half years in stealth mode and a three month
private beta. User information was encrypted using AES-256 (Advanced Encryption Standard 256). This is a standard
established by the US National Institute of Standards and Technology (NIST) in 2001. It is based on an algorithm
developed by Belgian cryptographers Joan Daemen and Vincent Rijmen. The company released version 2.0 in June
2013 – apart from a facelift, they added support for 2-step/3-field logins and two-factor authentication. Interestingly, on
the basis of user feedback they dropped the gamification aspect of their system, despite gamification currently being so
popular in the corporate world.
Despite its New York headquarters, Dashlane is a European company. Not only is its cryptography algorithm Belgian,
but it is a spin-out from the École Centrale de Paris – a sort of Sorbonne for engineering. The prototype was developed
by three students (Alexis Fogel, Guillaume Maron and Jean Guillou). Dashlane is also co-founded by well-known French
businessman Bernard Liautaud, who co-founded business intelligence company BusinessObjects in 1990 – which after
listing on the Nasdaq in 1994, was acquired by SAP for $6.8bn (€5bn) in 2007. M. Liautaud is also a General Partner at
Balderton Capital in London.
While Dashlane faces fierce competition from other password management applications (such as LastPass, KeePass,
PasswordBox and RoboForm), Dashlane’s advantages include its easy-to-use interface and its cloud syncing option.
Investors
This round brings total investment in Dashlane to about $30mn (€22mn) with a post money valuation of $100mn
(€75mn). The money will be used for new hires to expand language support (beyond English and French), as well as to
develop new products in the identity management and security space.
The transaction was led by Bessemer Venture Partners (€1.2bn (2011); AUM €3bn). Bessemer was founded in 1911 as
the family office of Carnegie Steel co-founder Henry Phipps and is named after the British inventor of the steel
manufacturing process which made him rich. One of the oldest investors to appear in our bulletin, it has so far exited
completed over 110 companies via IPO. Bessemer is a truly global investor with seven offices in the US, Brazil, India,
Israel, Russia and the US. The seventh office is a virtual one located within the popular construction game Minecraft.
Another sign of the firm’s willingness to innovate is the fact that it publishes an ‘anti-portfolio’ – a list of successful
companies it decided to pass on at the time and the invariably good reason why. With recent profitable exits like
LinkedIn, Skype and Staples, Bessemer can afford to be open about its mistakes.
The firm targets companies in the sectors of cleantech, cloud computing, cyber security, financial services, healthcare,
infrastructure, mobile and online retail. It is also keen on investing in companies based in Brazil, India, Israel and Russia.
The firm has yet to make an investment in China.
Returning investor FirstMark Capital (€165mn (2013); AUM €1.5bn) is an early-stage technology investor set up in 2008.
Based in New York, the firm is currently investing from its third fund, which targets software and internet businesses.
Fellow returning investor Rho Ventures (€380mn (280); AUM €1.1bn) is a stage-agnostic TMT, healthcare and energy
investor. Also based in New York, Rho Ventures invested in Dashlane’s first two rounds in September 2011 and
September 2012 alongside Firstmark.
Bernard Liautaud also contributed to this round, as well as in the firm’s €5mn first round in 2011.
© Go4Venture Advisers 2014
Page 11
May 2014
Runtime Collective
UK | www.brandwatch.com
#
Sector
6
Internet
Services
Round
€mn
Description
Investors
Late Stage
16.0
Trading as Brandwatch,
designs and develops social
media monitoring tools and
solutions
Highland Capital Partners, Nauta Capital
Runtime Collective (UK), a designer and developer of social media monitoring tools and solutions, raised €16.0mn in a
Late Stage round led by Highland Capital Partners with support from returning investor Nauta Capital.
Runtime Collective was incorporated in December 1999. Initially operating as a software and database consulting firm,
in 2005 the firm won a government contract to build a web-crawler. At this point the firm began to raise money and build
a scalable business. This crawler ultimately became the foundation of Brandwatch’s current business – monitoring
blogs, websites and social media, cleaning and analysing the results and delivering customer and competitor insight to
brand owners. With €0.4mn of seed funding, the firm launched version 1.0 of its product in 2007. By 2010, Runtime had
become known as Brandwatch and, in 2012, its first institutional round of $6mn (€4.4mn) led by Nauta Capital allowed
the firm to build out its infrastructure and set up offices in Germany and the US.
Brandwatch operates in a rapidly maturing industry which has many competitors (e.g. Converseon, DataSift, Hootsuite,
Socialbakers, Synthesio, Tracx, and Webfluenz). Both Socialbakers and Synthesio featured recently in our Bulletin for
raising €19mn in a Series C round (February 2014) and €14.5mn in a Series B round (March 2014), respectively.
We had also covered DataSift’s €31mn Series C round in December 2013. The space is already seeing signs of
consolidation, with social media management company Hootsuite having recently bought analytics company and
Brandwatch competitor UverVU for between €11mn and €14mn early this year.
Brandwatch’s secret sauce is that, thanks to its government work, it has its own proprietary web-crawler. This means
that, unlike most of its competitors, Brandwatch’s analysis does not depend on external data feeds – which gives it
control over how it scans the web for its clients. In the future this would also make it relatively easy to include internal
corporate data – an area for which Brandwatch says it has seen significant demand. Today Brandwatch monitors 80mn
sites in 27 languages for c. 1,000 clients including British Airways, Dell, Pepsico, Verizon and Whole Foods. The firm
has been generating revenues since 2006 and claims that it is nearing break-even. The money from this round will be
used to double the size of the engineering team, triple its IT infrastructure and accelerate the inclusion of new data
sources, particularly social platforms in Asia. This will enable the firm to expand its product range and target clients in
the Far East.
Investors
Founded in 1988, transaction leader Highland Capital Partners (HCP) (€250mn (2014); AUM €2.7bn) has offices spread
across China, Europe and the US. Since its inception, it has raised more than €2.2bn over nine funds, and invested in
c.200 companies. Sector-agnostic but with a heavy technology bias, HCP prefers to invest early but will back a company
all the way up to and including growth capital.
Investing in Europe since 2007, HCP has often featured in our bulletin for investments in companies such as
NewVoiceMedia, Outfittery, Prescription Eyewear, Privalia, Spartoo and Wooga. This month, however, HCP announced
the final close of its €250mn tech growth fund. This will be the firm’s first independent European fund and will focus on
internet and software businesses with revenues in the tens of millions that are either profitable or nearing break-even.
The rationale is that European deals are often under-capitalised, meaning that companies can get to their fifth or sixth
round with only a small amount of total investment. With the US market prone to over-capitalising firms too early (see the
discussion of Square in our earlier coverage of iZettle) and making exits difficult, this makes Europe an attractive hunting
ground. The fund has already made nine investments since its first close.
Early-stage technology investor Nauta Capital (€105mn (2011); AUM €170mn) led Brandwatch’s fifth round in 2012.
From its offices in Spain, the UK and the US, Nauta targets wireless and mobile companies, the enterprise software and
security market and e-commerce / internet businesses. Currently investing from its €105mn 2009 fund, the firm prefers
Series A rounds but will make seed investments. Typical transaction sizes range between €0.5mn and €7mn.
Nauta has a number of successful companies in its portfolio, including BaseKit (website building platform), Groupalia
(deal site providing discounted flash sales), Privalia (online-fashion outlet) and Scytl (provider of electronic voting and
election management systems).
© Go4Venture Advisers 2014
Page 12
May 2014
BitFury
Netherlands | www.bitfury.org
#
Sector
7
Hardware
Round
€mn
Description
Investors
A
14.6
Provider of semiconductors,
servers, and datacentre
solutions to the bitcoin and
cryptocurrency industry
Binary Financial, Crypto Currency
Partners, Georgian Co-Investment Fund,
Individual Investors, Queensbridge
Venture Partners, ZAD Investment
Company
BitFury (Netherlands), a provider of semiconductors, servers, and datacentre solutions to the bitcoin and
cryptocurrency industry, raised $20.0mn (€14.6mn) in a Series A round from Binary Financial, Crypto Currency
Partners, Georgian Co-Investment Fund, Queensbridge Venture Partners and ZAD Investment Company.
Founded in 2011, BitFury designs and sells hardware – low power Application Specific Integrated Circuits (ASICs) and
circuit boards for mining Bitcoin (where users make available their computing power for the verification and recording of
payments in the Bitcoin public ledger, known as the “block chair”; and, in return, are rewarded with bitcoins). These
components are sold both retail and to OEMs alongside complete Bitcoin mining systems either pre-assembled or in kit
form. For example, the HexFury ASIC bitcoin-mining USB stick uses BitFury chips.
BitFury also provides hosted and managed bitcoin mining services to professional mining companies from datacentres in
Finland, Iceland and the Republic of Georgia. While BitFury could just use excess capacity to mine bitcoin on their own
behalf, they actually operate the world’s largest bitcoin mining pool (ghash.io), which has roughly a third of the world’s
bitcoin mining power.
This round will be used to open a new data centre in Amsterdam later this year, as well as expanding its Georgia centre
to be the largest in the world. Crucially, in a market where the way bitcoin works means it becomes increasingly difficult
to mine, part of the round will be used to accelerate production of ASICs and servers. BitFury’s competitors include
Butterfly Labs, CoinTerra, HashFast and KnCMiner. The company had revenues of €22mn in 2013, with €154mn
forecast for 2014, and has stated that it aspires to be the world’s first bitcoin-related IPO, planning to go public in the US
next year. According to the Georgian Co-Investment Fund, this deal gives BitFury a pre-money valuation of €184mn.
Investors
This is one of the largest of a number of recent investments in companies providing Bitcoin services. It is larger than the
€12.5mn Series B round for bitcoin consumer finance company Circle Internet Financial, made by well known investment
firms Accel and General Catalyst Partners. It is much larger than the €4mn Series A round that bitcoin exchange
Payward raised from respected early-stage European technology investor Hummingbird in March. While not as large as
this month’s €22mn round raised by payment processing firm BitPay from Index Ventures, as far as we know this is the
largest European investment in this sector so far.
The Georgian Co-Investment Fund (AUM €4.5bn) is a private equity firm backed by a number of institutional investors
and holding companies from the Middle East, North Africa and Turkey. The firm invests across a wide range of sectors –
agriculture, energy, hospitality, logistics, manufacturing and real estate. Technology companies make up only c.5% of its
portfolio. The fund is also constrained to invest at least 80% of its capital within Georgia.
Binary Financial is a specialist investment manager which acts as a broker for bitcoin transactions. Based in San
Francisco, Crypto Currency Partners is a specialist investor focusing on bitcoin and other digital currencies such as
dogecoin, litecoin and Mastercoin.
Queensbridge Venture Partners is a US-based venture capital firm set up by a mixture of individuals with finance
backgrounds and personalities from the entertainment and movie industries. Well-known hip-hop artist Nasir Jones (also
known as Nas), is among the founders.
The largest and best known of the other investors is ZAD Investment Company (AUM €730mn), the family office of one
of the Al-Saud princes (Prince Abdullah bin Turki bin Abdulaziz Al-Saud). ZAD is a naturally conservative investor and
invests in highly diversified assets – real estate, liquid securities and private equity – while reserving the opportunity to
participate in ‘special situations’. While naturally focusing on Saudi Arabia and the other GCC (Gulf Co-operation
Council) States, ZAD will invest elsewhere in the world to maintain diversity.
Since this round closed, there has been some adverse press relating to BitFury CEO’s involvement with Ukrainian filesharing website Ex.ua. It is not yet clear how this will affect the company.
© Go4Venture Advisers 2014
Page 13
May 2014
PeopleDoc
France | www.people-doc.com
#
Sector
8
Software
Round
€mn
Description
Investors
B
12.7
SaaS HR data management
platform
Accel Partners, Alven Capital, Kernel
Investissements
PeopleDoc (France), provider of a SaaS HR data management platform, raised €12.7mn in a Series B round led by
Accel Partners with support from existing investors Alven Capital and Kernel Investissements. The money will be
used to increase headcount from 60 employees to c.200 by the end of the year. The firm also intends to open new
offices in the Germany, the UK and possibly Japan.
Founded in 2007 as Novapost, PeopleDoc is one of a wave of HR software providers that have emerged over the past
decade. All these aim to replace legacy corporate systems with cloud-based equivalents that have a lower total cost of
ownership (because IT departments no longer need to manage their own servers). Some of these are venture-backed
and have featured in our bulletin (e.g. TalentSoft for its September
2013 €19.8mn late-stage round).
With the core HR software market growing at only a few percent a year, intense competition, and the replacement of
legacy systems often a discretionary purchase, all of these SaaS vendors have to distinguish themselves in some way.
PeopleDoc’s unique selling point is that, rather than totally replacing existing business processes, it organises all types
of existing documents in a secure system which enforces compliance and has an auditable workflow. It also allows
documents to be signed electronically using DocuSign’s technology. In other words, PeopleDoc makes what people are
already doing more efficient and cheaper, while still remaining compliant with relevant legislation.
The other way PeopleDoc tries to get an edge over the competition is by partnering with (i) vendors of HR software and
(ii) companies providing outsourced HR services. Starting in 2010, the firm signed Aderhis, Cegid, e-Paye, HR Access,
HR Path and to use PeopleDoc for document digitisation services. The following year Logica-CGI, Meta4,
NorthgateArinso and Sage joined the firm’s expanding list of partners.
In 2013, PeopleDoc had revenues of €8mn (up 100% from the previous year). The firm’s 150-strong customer base
includes well known firms such as Canal+, Dow Chemical, Motorola, Starbucks, Total and Ubisoft. This client list belies
the fact that PeopleDoc’s system was originally developed for corporate clients in the service and industrial verticals.
Having opened offices in New York and Boston at the end of 2013, this list is growing rapidly.
Investors
Well known transaction leader Accel Partners (€356mn (2014); AUM €5.6bn) has had a number of investments in our
Bulletin, some of the most memorable being Funding Circle in October last year, Spotify in July 2011 and Supercell in
May 2011. It is amongst the few truly global investors with offices in India and China, as well as London and Silicon
Valley.
In the US, Accel has just raised $475mn (€356mn) for the early-stage Accel XII fund and $1bn (€750mn) for the Accel
Growth III fund. Managing partner Jim Breyer, who famously backed Facebook in 2005, is reducing his commitment to
the firm to focus on his own early-stage investment vehicle Breyer Capital, but Accel XII is just as big as the previous
fund and the Accel Growth III fund is significantly bigger than its $875mn (€656mn) predecessor.
Meanwhile, Accel London has just begun to spend the $475mn fourth fund it raised early last year. Playing a significant
role in the investment of this fund will be venture capitalist Fred Destin. Destin is leaving Boston-based Atlas Venture
and will join Accel London as a partner in September.
According to PeopleDoc CEO and co-founder Jonathan Benhamou, Accel was not the firm with the highest valuation but
it was the best strategic fit, particularly with regard to US expansion.
Currently investing from its fourth fund, France-based returning investor Alven Capital (€75mn (2007); AUM €90mn) led
PeopleDoc’s €13mn Series A round in 2010. It is a seed to mid-stage VC targeting e-commerce, digital media, internet
services, mobile, software and other applied technology businesses. It typically commits between €1mn and €5mn per
round and up to €10mn over the lifetime of a deal, but can also make very small seed investments.
Founded in 2000, Alven has made around 70 investments and has exited more than 40. Most recently, it participated in
a $7.3mn (€5.3mn) Series B round for CommerceGuys (creator of leading open source e-commerce solution Drupal
Commerce), a Go4Venture Advisers’ client.
New investor Kernel Investissements is the investment vehicle of French entrepreneur Pierre Kosciusko-Morizet who, is
best known for PriceMinister which he sold to Rakuten for €200mn in 2010.
© Go4Venture Advisers 2014
Page 14
May 2014
Auxmoney
Germany | www.auxmoney.com
#
Sector
9
Internet
Services
Round
€mn
Description
Investors
C
11.6
Online peer-to-peer (P2P)
lending marketplace
Foundation Capital, Index Ventures,
Individual Investors, Partech Ventures, Union
Square Ventures
Auxmoney (Germany), operator of an online peer-to-peer (P2P) lending marketplace, raised $16.0mn (€11.6mn) in a
Series C round led by Foundation Capital. Fellow new investor Partech Ventures also participated, along with
returning investors Index Ventures and Union Square Ventures. Auxmoney will use the money to grow its team and to
invest in both the infrastructure and software of its lending platform. Auxmoney is now considering international
expansion, primarily by opening up its lending platform to investors from outside Germany.
Founded in 2007 by serial entrepreneurs Raffael Johnen and Philipp Kriependorf, Auxmoney has developed a platform
for peer-to-peer lending to retail consumers. Effectively this is crowd-funding for consumer debt, much like Lending Club
in the US, which was founded at roughly the same time. Without a network of branches and ATMs to support, the cost
base of such P2P lenders is much lower than a bank – so they can charge much lower spreads, i.e. they can offer
borrowers lower interest rates and lenders higher returns. Auxmoney’s platform uses a proprietary credit scoring system,
which uses online social and behavioural data, in addition to just traditional underwriting criteria and
(which 75% of Germans have).
Schufa scores
Roughly 80% of loan applicants are rejected; the remaining 20% are allowed onto Auxmoney’s platform to request loans
of €1-25k repayable over 12-60 months. They are split into five tranches with interest rates matching their risk profile
(2.9%-15.25% at the time of writing, compared with 5.5%-14% early in 2013). Rejecting such a high proportion of
applicants means that, unlike firms such as Wonga which featured in our February 2011 issue, all of Auxmoney’s loans
are prime. To date, Auxmoney has facilitated c. 20,000 loans with a total face value of roughly €100mn. Auxmoney
makes money in two ways. It charges lenders a 1% transaction fee (with a minimum of €1), and it also charges
borrowers if they wish Auxmoney to certify claims they make about their financial status (such as income).
Banks are currently being driven by regulation (such as the Basel II and Basel III capital accords, and MiFID) to both
strengthen their balance sheets and increase costs associated with risk and compliance. P2P lending marketplaces and
listing sites are not subject to such regulation, which gives them an opportunity to significantly disrupt this market. Lead
investor Foundation Capital expects €9bn of such P2P loans to be originated in 2014, up from €2.5bn in 2013 and rising
to €750bn by 2025.
Investors
This round brings Auxmoney’s total funding to c. €22mn – much less than Lending Club, which has raised $390mn
(€290mn), and significantly less than the $190mn (€140mn) raised by Prosper, both of which are based in San Francisco.
However, a number of recent and potentially imminent events mean that Auxmoney’s runway to exit may be significantly
shorter than for its US counterparts.
Now that P2P lending firms have been around long enough to have loan performance data, and the market leaders are
profitable, large financial institutions with deep pockets are getting interested. Last September BlackRock (the world’s
largest money manager with €3tn under management) joined Sequoia in backing Prosper. BlackRock also backed
Lending Club’s most recent round at a valuation of c. €2.8bn, based on over €3bn in loans originated. Significantly,
Lending Club was also able to raise €37mn in debt to go with its €50mn of private equity investment. Additionally,
Lending Club is currently preparing to raise more than $500mn in a US IPO, seeking a valuation of about $5bn.
Founded in 1995, transaction leader Foundation Capital (€208mn (2013); AUM €2bn) is known as a firm run by
entrepreneurs, rather than career bankers or management consultants. While sector-agnostic in principle, it naturally
focuses on industries where its partners have expertise, which tend to be technology-related. Foundation’s initial
investments are typically between $1mn (€750k) and $10mn (€7.5mn).
Fellow new investor Partech Ventures (€30mn (2013); AUM €600mn) targets consumer internet and IT companies
primarily in France and Germany where it now has a Berlin office. It manages seed as well as venture funds, and typically
invests in early institutional rounds.
Well known returning investors Index Ventures (€400mn (2014); AUM €3bn) and Union Square Ventures (€130mn
(2014); AUM €660mn) co-led Auxmoney’s previous round in March 2013. Index also backed British P2P lending service
Funding Circle (as described in our October 2013 issue) and peer-to-peer foreign currency transfer service TransferWise
(with a €4.6mn Series A round in March 2013).
© Go4Venture Advisers 2014
Page 15
May 2014
Odoo
Belgium | www.odoo.com
#
Sector
10
Software
Round
€mn
Description
Investors
B
10.0
Provider of open source business software
Management, Societe Regionale
d'Investissement de Wallonie, Sofinnova
Partners, XAnge Private Equity
Odoo (previously OpenERP and originally TinyERP) (Belgium), a provider of open source business software, raised
€10.0mn in a Series B round from the Societe Regionale d'Investissement de Wallonie (SRIW), Sofinnova Partners
and XAnge Private Equity. The money will be used to help grow its R&D team.
When he founded Odoo in 2005, CEO Fabien Pinckaers was still at university in Belgium. He already had significant
business experience having sold management software to ‘Les Taxis Verts’ aged 13 and set up a not-for-profit web
development shop building e-commerce sites, internet security software with no local installation and, significantly, an
open source reporting engine used by GSK, Renault and SAP.
Odoo was founded as an open source ERP-company to compete with SAP. Pinckaers bought the domain name
SorrySAP.com and by 2008 had developed open source ERP – TinyERP, a Python development framework called
OpenObject and a services firm which made money selling OpenERP and related services to SMEs at a fixed price. In
May 2008, he changed TinyERP’s name to OpenERP and built more modules – giving it the ability to tackle a wider
range of business functions. This gave OpenERP the ability to tackle almost any business function. By Q4 2009 (a little
th
after his 30 birthday) he was running a 100-person company.
Following a €3mn Series A round from Sofinnova Partners, he then recruited a management team for his maturing
company, expanded sales and R&D and turned OpenERP into a software developer selling through a global network of
resellers and service providers.
With c.500 partners across more than 100 countries, OpenERP is one of the most installed pieces of enterprise
management software with c.1,000 downloads a week. Its 25 core modules cover business functions from accounting
and Content Management System (CMS) to HR and Point-Of-Sale (POS), and its 1,500 open source developers have
built over 4,000 additional apps. The firm has 240 employees, offices in Belgium, India and Silicon Valley, 2mn users,
and customers across c.120 countries (including global brands such as Danone).
Together with this round, OpenERP is rebranding as Odoo to reflect the fact that it has moved beyond just ERP, to areas
including CMS, HR and POS. The online version of Odoo will be free for up to 2 users (capturing millions of SMEs who
can’t afford traditional enterprise software) and €15 per application bundle per user per month thereafter. This will be
invoiced directly to clients with partners claiming back their commission later.
Investors
Belgium-based Societe Regionale d'Investissement de Wallonie (AUM €750mn), is a regional fund with a mandate to
promote the economy of the Walloon Region. While it often co-invests with VCs, its mandate means it can take a long
term view. It focusses on the affordable accommodation, cleantech, new technologies and telecommunications sectors.
One of its previous investments is SoftKinetic, a former client of Go4Venture Advisers (when we advised them on their
$13.5mn Series B in September 2010).
Returning investor Sofinnova Partners (€240mn (2012); AUM €1.3bn) led Odoo’s €3mn Series A round in February
2010. Sofinnova was joined in this Series A round by super angel Xavier Niel, active in the telecommunications and
technology industry, who is known for having made his ISP Iliad (Free) into France’s first billion euro company. Francebased and founded over 40 years ago, Sofinnova Partners has financed around 500 early-stage companies. It has now
stopped making investments in IT to focus exclusively on Life Sciences. Indeed, with the exception of Odoo, all
Sofinnova’s 2014 investments are in life science companies, such as RefleXion Medical (medical devices), Crescendo
Biologics (proprietary drug portfolio) and Shockwave Medical (developing the Lithoplasty™ family of balloon dilatation
catheters)
A subsidiary of the French Post Bank regulated by both the French and German authorities, XAnge Private Equity
(€10mn (2014); AUM €400mn) manages a number of VC funds. XAnge Capital 2 targets innovative start-ups, while the
firm’s XPansion fund is a sector-agnostic growth fund. The firm concentrates the vast majority of its investment activity in
France and Germany. The company last featured in last month’s issue, participating in a €7.2mn Series B round for
Currency Cloud, provider of cloud-based APIs and a platform for processing online payments.
© Go4Venture Advisers 2014
Page 16
May 2014
Roli
UK | www.roli.com
#
Sector
11
Hardware
Round
A
€mn
Description
Investors
9.3
Provider of music hardware and software
Balderton Capital, FirstMark Capital, Index
Ventures, Universal Music
Roli (UK), a provider of music hardware and software, raised £7.6mn (€9.3mn) in a Series A round led by Balderton
Capital with support from FirstMark Capital, Index Ventures and Universal Music. The money will be used to tool up
for the commercial manufacture of Roli’s first product – the Seaboard keyboard.
Roli’s Seaboard keyboard is unusual – a product which is not actually solving an existing problem, but is gaining
significant market traction. There was nothing actually wrong with a conventional piano keyboard that needed fixing.
Neither, however, was there anything actually wrong with the harpsichord keyboard which the piano replaced. It was just
that the piano gave musicians the ability to do things they could not do before – play sustained tones thus obviating the
need for decorative notes between the important notes in a melody. Whatever the logic, musicians heard it – and they
wanted one (there is a one year waiting list for the ROLI keyboard). In this case, the things that they could not do before
are producing vibrato, guitar style pitch bends and volume adjustments directly on the keys. Industry plaudits include the
Design Museum's 2014 Design of the Year Award and being included in the SXSW Music Accelerator of 2013.
The key difference between the Seaboard and a regular piano is a patent-pending Sensory, Elastic and Adaptive (SEA)
interface. This is a made from a pressure sensitive material which can be moulded into any shape – in this case the
shape of a conventional keyboard. This SEA interface is the leitmotif behind all the products ROLI has in development.
The Seaboard itself was invented by ROLI founder and CEO Roland Lamb while studying for an MA in Design Products
at the Royal College of Art. Prior to studying at the RCA Mr Lamb was a Zen Buddhist studying Classical Chinese and
Sanskrit philosophy at Harvard, and busking with an electronic keyboard in his spare time. Founded in 2009, ROLI has
so far been selling artisanal versions of its keyboard for between €1,500 and €6,600 depending on size.
Investors
While development of the Seaboard was completed before 2012, the company had access to a small amount of angel
funding in order to set up its workshops and offices and to start producing its keyboards.
Readers may be surprised to hear that familiar investor Balderton Capital (€230mn (2014); AUM €1.4bn), which we
normally see backing more conventional technology companies, has expertise in this sector. For instance, the firm led a
Series A €6.2mn round for digital music and radio content provider 7digital in January 2008 (in 2009, HMV bought 50%
of the company for almost €11mn). Balderton also led a €12mn Series D round for online music publishing and royalty
collection platform the Kobalt Music Group in 2008. Not only did Kobalt feature in last month’s bulletin but, at the time of
going to press, it had just secured an additional €85mn from Balderton and unknown individual investors.
Another very familiar investor – Index Ventures (€400mn (2014); AUM €3bn), is one of very few European investors that
have successfully expanded globally. Index prides itself on the deep sector knowledge it brings to its technology and life
science investments. Index backed a €18.4mn round for wireless home music system firm Sonos alongside KKR in
November last year, and a €44mn round for music distribution platform SoundCloud in October last year at a valuation of
€514mn.
Both these veteran investors are working with Universal Music. The kind of synergy envisioned between these disparate
investors is implicit in the size of the round – one of the biggest ever for a music hardware company. Universal probably
has better judgement on what will work in a music studio, but Index and Balderton have depth of expertise on the
manufacture of such new technology – not to mention ideas they may have for other uses of the SEA interface.
FirstMark Capital (€165mn (2013); AUM €1.5bn) is an early-stage technology firm based in New York. Formed in 2008
and currently investing from its €165mn third fund, the firm aims for seed or Series A rounds between $0.25mn
(€0.18mn) and $10mn (€7.3mn). Normally, however, these are in the US rather than Europe. This is the second time
FirstMark Capital features in this month’s Bulletin, following its investment in Dashlane (see profile #5).
© Go4Venture Advisers 2014
Page 17
May 2014
Sinch
Sweden | www.sinch.com
#
Sector
12
Telecom Software
Round
A
€mn
Description
Investors
8.7
Provider of a communications platform
to add messaging and voice calls in
mobile apps
Balderton Capital, Index Ventures,
Rebtel
Sinch (Sweden), provider of a communications platform to add messaging and voice calls in mobile apps, raised
$12.0mn (€8.7mn) in a Series A round from Balderton Capital, Index Ventures and Rebtel. The money will be used to
add US-based sales and business development staff to the firm’s 40 employees in Stockholm, Sweden and San
Francisco, US.
Sinch was founded in January last year as a spin-out from Swedish VoIP company Rebtel. It provides a simple Software
Development Kit (SDK), which lets mobile developers easily add app-to-app calling, app-to-phone calling, instant
messaging and SMS functionality to their products. All services are completely white-labelled and advertisement-free.
This removes the risk that developers will blame the failure of their apps on poor UI or irritating popups, and move to a
competitor. IP-based services (app-to-app calls and in-app messaging) are free for up to 25,000 users. Thereafter app
publishers pay fixed fees according to the number of active users and messages sent. Services which use the PSTN
(Public Switched Telephone Network) (SMS and app-to-phone calls) are paid for per minute or per SMS.
Many apps are produced by single developers (often moonlighting from their day jobs) and very few acquire the critical
mass needed to be really profitable. Sinch’s pricing structure, where PSTN services are charged up front but IP-based
services are payable in arrears on 30-day terms, plays to the market’s structure. Being free for up to 25,000 users is
also smart as some channels delay paying app publishers until enough downloads have been made to reach a specified
revenue threshold. Of course developers may band together in co-operatives to access bulk-discounts in the higher tiers
of Sinch’s pricing structure. This is also good for Sinch, however, as all the developers in the collective are then tied to
Sinch.
VoIP telecoms company Rebtel was set up early in 2006 by serial entrepreneur Hjalmar Windbladh (whose most recent
venture is Wrapp, which featured in our January 2012 issue) and former Microsoft development lead Jonas Lindroth. To
date, Rebtel’s only external funding was a €20mn Series A round from Benchmark Capital and Index Ventures in
September 2006. By leveraging licensing and partnership deals already negotiated by its parent company, Sinch claims
it can offer its services for a fraction of the cost of rivals such as Layer and Twilio.
Investors
Ever since February 2014, when Facebook paid $19bn for messaging service WhatsApp in the largest ever
acquisition of a VC-backed company, VC firms have been paying a lot of attention to communications apps. The app
economy forecast to exceed €175bn by 2016, and competition from OTT (Over-The-Top) messaging firms like
WhatsApp are expected to reduce global SMS revenues by 20% to €125bn by 2018.
But investing in OTT messaging apps themselves might not be the right answer. Firstly, there are a lot of them – Kakao
Talk (South Korea), Kik (Canada), Line (Japan), Snapchat (US), WeChat (China), etc. – so it is hard to pick winners.
Secondly, although WhatsApp achieved a valuation of €52 per user, there was a significant premium for market
dominance. WhatsApp had 450mn monthly users – more than Facebook (145mn), Gmail (123mn) and Twitter (54mn)
put together. Sinch’s parent, Rebtel, has roughly 25mn users. With so many OTT messaging companies, the user base
of each is likely to be relatively small. OTT messaging apps are particularly tricky for European investors, as so many
originate in Asia, where European investors are less well connected.
Readers will be familiar with well-known investors Balderton (€230mn (2014); AUM €1.4bn) and Index Ventures
(€400mn (2014); AUM €3bn). This is the third time that Balderton appears in this month’s Bulletin and the fourth time for
Index Ventures.
Splitting Rebtel into a telecoms business and an SDK messaging business does two things for its investors. Firstly, it
takes the risk that the SDK may fail out of Rebtel which, with 25mn users, shows signs of having been a reasonable
investment. It also gives investors more diversity for the same money and, in this case, the parts may well be worth more
than the whole. It may also have to do with the fact that Rebtel was financed in 2006 by Benchmark Capital and Index’s
older funds, whereas Sinch has plenty of value creation ahead of itself.
© Go4Venture Advisers 2014
Page 18
May 2014
Ticketscript
Netherlands | www.ticketscript.com
#
Sector
13
Software
Round
€mn
Description
Investors
C
8.6**
Provider of self-serve online
ticketing software
FF&P Private Equity
Ticketscript (Netherlands), a provider of self-serve online ticketing software, raised £7.0mn (€8.6mn) in a round from
FF&P Private Equity. The money will be used to continue international expansion, with a view to becoming the
dominant pan-European player, and for continued product development.
Buying tickets online is now so convenient and familiar that firms such as See Tickets and Ticketmaster have become
trusted household names. The industry is sufficiently mature that a clear segmentation has emerged – primary ticket etailers (e.g. Ticketmaster) sell directly on behalf of event organisers, while secondary marketplaces (e.g. Seatwave,
StubHub, Viagogo) allow individuals to buy and sell tickets from each other.
Ticketscript was founded in 2006 by Dutch serial entrepreneurs Frans Jonker and Ruben van den Heuvel. As an
alternative to traditional primary e-tailers such as Ticketmaster, the company offers a plug-and-play, self-serve solution –
enabling event organisers to retain control of their ticketing, promotions and customer data. With a set-up time of less
than 15 minutes, users can sell tickets through multiple channels – including their own website, Facebook fan page and
a customisable mobile app, as well as Ticketscript’s partners (c. 100 websites and c. 900 physical sales outlets across
Europe). They also benefit from promotional tools (including bulk e-mail and SMS) and a back-end dashboard enabling
access to real-time sales statistics. The solution is free for event organisers, as fees are paid by the ticket buyers.
While Eventbrite has emerged as a clear leader in the US, the market for self-service ticketing software in Europe
remains highly fragmented. Ticketscript primarily competes with smaller local providers, and is unique in that it has an
established presence across five countries – Belgium, Germany, Netherlands, Spain and the UK. In the last year, its
most successful to date, the company powered more than 11 million ticket sales for over 70,000 events. Prior to this
round, it had raised only €3.4mn, from angel investors and individuals.
Investors
Our previous coverage of ticketing companies includes British global rail ticketing platform SilverRail in April 2014 and
Russian online ticketing platform Ticketland in December 2013. Given the maturity of the industry, it is not surprising that
there have been some high profile exits. The first was StubHub, acquired by eBay in 2007. More recently, Cvent, a
provider of event management software for corporates, raised $118mn in its August 2013 IPO.
The sole investor in this Series C round, FF&P Private Equity, is part of Fleming Family and Partners (FF&P) (AUM
€3.4bn). The latter was set up following the demise of Britain’s merchant banks, most of which either went bust or were
sold off in the late 1980s or 1990s. At the start of the millennium, Robert Fleming & Co was one of the last surviving
independent merchant banks and was still a closely held private company – 30% owned by members of the Fleming
banking dynasty. By the time it was sold to Chase Manhattan in 2001, at what later turned out to have been the top of
the market, the deal yielded what at the time was the enormous sum of $7.7bn (€5.8bn). This was a lot of liquidity, even
for the Flemings, so the family set up Fleming Family and Partners (FF&P) to manage their wealth for them.
In 2002 FF&P started to take on clients from outside the family. Later on it added trust, asset management, corporate
finance and private equity to its range of services. Sector-agnostic, FF&P Private Equity targets growth companies in the
UK lower-to-mid market. The firm typically invests between £5mn (€6mn) and £25mn (€30mn) in companies valued
between £10mn (€12mn) and £75mn (€90mn). As well as traditional venture capital deals, FF&P Private Equity will also
do MBOs/MBIs and replacement capital or secondary deals. Indeed, there was a secondary component to this
transaction – with part of the £7mn (€8.4mn) being used to buy out the company’s smaller individual shareholders.
The last appearance of Fleming Family and Partners (FF&P) in our bulletin was for a successful exit. In September 2013
FF&P sold e-invoicing network operator OB10 to Tungsten, the AIM-listed investment vehicle of the Truell brothers, for
€116mn. It currently has 9 more companies in its portfolio, such as CreditCall (credit and debit card processing network)
and Small World (payments services provider).
** Go4Venture Advisers client
© Go4Venture Advisers 2014
Page 19
May 2014
E-Leather
UK | www.eleathergroup.com
#
Sector
14
Cleantech
Round
B
€mn
Description
Investors
6.1
Manufacturer of a hightechnology composition
leather
Environmental Technologies Fund (ETF)
E-Leather, a manufacturer of a high-technology composition leather, raised £5.0mn (€6.1mn) in a Series B round from
the Environmental Technologies Fund (ETF). The firm now intends to expand into the public transport market (bus,
coach and rail companies), and will also use the money from this round to support international expansion.
Every year, tanneries turn one billion animal hides (which account for 10% of an animal’s value) into leather. This
process is incredibly wasteful with only 25% of the raw material ending up as usable leather. 30% of the waste is
accounted for by off-cuts which are burnt or end up in landfill and can make genuine leather prohibitively expensive.
A number of artificial leathers have been developed. Most are made from plastic (e.g. Koskin, Leatherette and polymeric
imitation leathers) although felt fibres and kelp are also used as raw materials. Environmental concerns, and a
reluctance to wear real leather for ethical reasons, encourage the development of artificial leathers. German start-up
FriedolaTECH (which featured in our November 2012 issue), even manages to make artificial leather from recycled
plastic.
Founded in 2001, E-Leather spent seven years and €15mn in grants and investment to develop and patent an
alternative using the off-cuts which tanneries normally send to landfill. A mechanical process turns this raw material into
leather fibres which are sandwiched around a high performance core using paper-making techniques. Finally, highpressure water jets are used to mesh the layers together in a process known as hydro-entanglement.
Cheaper, lighter, more durable and more consistent than its natural counterpart, this engineered or E-leather even
comes on a roll which reduces cutting waste by an additional 25%. In 2008, the company started commercial production
at its 130,000 sq ft. factory in East Anglia. Targeting the aviation industry first, by 2010 the firm had demonstrated
significant cost savings arising from both reduced upholstery costs and fuel savings (because E-leather is lighter).
Aviation sales accelerated in 2011 and the firm now has some 70 airlines using its product. By 2013, turnover had
reached €10mn – a 20% increase from €8.7mn the year before – although the firm has not yet broken even.
Investors
Set up in 2006, the London-based Environmental Technologies Fund (ETF) (€74mn (2013); AUM € 216mn) was one of
the earliest cleantech funds. Its co-founders were Patrick Sheehan (ex 3i where he had been instrumental in founding the
venture capital practice) and Henrik Olsen (who had previously been a Managing Director at GE Equity).
Unlike most cleantech funds, ETF tends to avoid capital intensive alternative energy investments using wind, solar or
marine power. Instead, it targets companies with technologies that help either improve existing technologies or use
existing resources more efficiently.
In practice this means ETF tends to focus on waste-reduction firms and money-saving companies, which are closer to
market and need less investment to develop commercially viable products. Being closer to market at the outset also
makes it easier to tell the difference between good ideas and technologies for which there will be a genuine demand.
ETF’s maiden fund had a first close at €50mn in November 2006 and a final close at €130mn in March 2008. Aiming to
invest between $5mn (€3.7mn) and $10mn (€7.4mn) of growth capital per transaction this fund made 12 investments
overall.
Those which featured in our bulletin included Chemrec (December
2008), Metalysis (May 2009), Kebony
(November 2009), Tag Energy Solutions (September 2010), 4energy (September 2010) and Nujira
(May2011). ETF also participated in Nujira’s €14.7mn Late Stage round, which featured in our last month’s Bulletin.
ETF recently raised its second fund. Several existing Limited Partners returned and the fund had a first close at €70mn in
September 2013. The fund is also supported by the European Union through the “Competitiveness and Innovation
Framework Programme”.
© Go4Venture Advisers 2014
Page 20
May 2014
2.1 M&A Activity Index
Disclosed Global TMT M&A Transactions
European Deals 2014 (€mn)
Global Deals 2014 (€mn)
# of Global Deals 2014
600
30,000
500
25,000
400
20,000
300
15,000
200
10,000
100
5,000
0
Jan
(1)
Feb
Deal Value per Month (€mn)
# of Deals per Month
European Deals 2013 (€mn)
Global Deals 2013 (€mn)
# of Global Deals 2013
0
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source: Capital IQ; Go4Venture Advisers Analysis
(1) Includes Dell acquisition by Silver Lake for €22.3bn (2013) and WhatsApp acquisition by Facebook for €13.9bn (2014)
Disclosed European VC & PE-Backed TMT M&A Transactions (>£30mn / €35mn / $50mn)
Value of Deals 2014 (€mn)
# of Deals 2014
20
4,500
18
4,000
16
3,500
14
3,000
12
2,500
10
2,000
8
1,500
6
4
1,000
2
500
0
Jan
Feb
Apr (1)
Mar
Deal Value per Month (€mn)
# of Deals per Month
Value of Deals 2013 (€mn)
# of Deals 2013
0
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source: Capital IQ; The 451 Group; VentureSource (including transaction value estimates); Go4Venture Advisers Analysis
(1) Includes ista International acquisition by CVC Capital Partners for €3.1bn (2013)
Disclosed European VC & PE-Backed TMT M&A Transactions (2014)
>£30mn / €35mn /
$50mn
Jan
Monthly
Number #
Value
Median
Cumulative
€mn
€mn
Number #
Feb
Mar
Apr
May
5
4
1
2
3
1,106
240
1,140
259
448
448
258
129
906
215
5
9
10
12
15
Value
€mn
1,106
2,246
2,695
2,953
3,859
Median
€mn
240
39
303
186
228
© Go4Venture Advisers 2014
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Page 21
May 2014
2.2 Top 5 Global TMT M&A Transactions Summary
Ranked by Price (€mn, including estimates) in descending order
#
Target
Acquirer
1
Mercury Payment Systems
(US)
www.mercurypay.com
Vantiv
(US NYSE:VNTV)
www.vantiv.com
Target Sector
Price
(€mn)
Revenues
(€mn)
P/R
Software
1,201
172
7.0x
Noteworthy Sellers: Silver Lake
Mercury Payment Systems, a provider of payment processing platforms, associated hardware and services, will be acquired by Vantiv,
a payment processing platform and services provider. The acquisition will help Vantiv to boost its integrated payment offering and
expand into the small and mid-sized business (SMB) segment.
2
Aeroflex
(US NYSE:ARX)
www.aeroflex.com
Cobham
(UK LSE:COB)
www.cobham.com
Hardware
1,097
477
2.3x
Noteworthy Sellers: Golden Gate Capital, Grosvenor Capital Management, Veritas Capital
Aeroflex, a provider of microelectronics and test systems, was acquired by Cobham, an aerospace and defence systems integrator. The
acquisition will enable Cobham to strengthen its position in the higher-growth commercial markets of microelectronics and wireless civil
communications, as well as to enlarge its customer base for cross-sell of existing products and services.
3
Fullscreen
(US)
www.fullscreen.net
Relativity Media
(US)
www.relativitymedia.com
Software
728
N/A
N/A
Noteworthy Sellers: Lerer Ventures, Comcast Ventures
Fullscreen, the world’s largest network of content creators and publishers on YouTube, was acquired by Relativity Media, a television
and film studio. The acquisition comes three weeks after Relativity Media’s unsuccessful attempt to outbid The Walt Disney Company
for Maker Studio (a network of video creators and publishers on YouTube), which acquired it for $500mn (€363mn). It will enable
Relativity Media to reach a younger audience and increase its customer base with Fullscreen’s 365mn YouTube subscribers.
4
Groupe Bull
(France Euronext:BULL)
www.bull.com
Atos
(France Euronext:ATO)
www.atos.net
IT Services
591
1,261
0.5x
Noteworthy Sellers: Ardian, Bpifrance, Nordinvest
Groupe Bull, a provider of IT services and products, will be acquired by IT services provider Atos. The acquisition will enable Atos to
become Europe’s leading cloud computing supplier (by revenue) and also strengthen its cyber security, data analytics management and
high computing power divisions.
5
LSI (Accelerated Solutions
Division and Flash
Components Division)
(US)
www.lsi.com
Seagate
(Ireland NASDAQ:STX)
www.seagate.com
Semiconductors
327
N/A
N/A
LSI’s Accelerated Solutions and Flash Components divisions, which manufactures solid state hard drives and other storage media, will
be acquired by Seagate, a hard drive peripheral provider. The acquisition will enable Seagate to supplement its flash storage offering,
and provide it with a team that has the expertise to accelerate its product roadmap in the high volume flash storage market.
Source: Capital IQ; The 451 Group; Go4Venture Advisers Analysis
Key
P/R – Price / Last 12 Months Revenues
© Go4Venture Advisers 2014
Page 22
May 2014
2.3 Headline European VC & PE-Backed M&A Transactions
>£30mn / €35mn / $50mn
Ranked by Price (€mn, including estimates) in descending order
#
Target
1
Groupe Bull
(France Euronext:BULL)
www.bull.com
Acquirer
Atos
(France Euronext:ATO)
www.atos.net
Target
Sector
Price
(€mn)
Revenues
(€mn)
P/R
Funding
(€mn)
P/F
IT Services
591
1,261
0.5x
N/A
N/A
Telecom
Services
215
46.5*
4.6x
N/A
N/A
Internet
Services
100e
15
6.7x
12.3
8.1x
Noteworthy Sellers: Ardian, Bpifrance, Nordinvest
2
Geo Networks
(UK)
www.geo-uk.net
Zayo Group
(US)
www.zayo.com
* 2012 Revenues
Noteworthy Sellers: Alchemy Partners
3
LaFourchette
(France)
www.lafourchette.com
TripAdvisor
(US NASDAQ:TRIP)
www.tripadvisor.com
e: estimate
Noteworthy Sellers: Otium Capital, Partech Ventures, Serena Capital
Source: Capital IQ; The 451 Group; VentureSource; Go4Venture Advisers Analysis
Key
P/R – Price / Last 12 Months Revenues
P/F – Price / Total Funding
P/F > 1x indicates an investment where all investors have made a positive return on their investment
P/F < 1x indicates poor returns for some, but early or late investor entrants may still show a positive return on investment
© Go4Venture Advisers 2014
Page 23
May 2014
#
Target
Acquirer
1
Groupe Bull
(France Euronext:BULL)
www.bull.com
Atos
(France Euronext:ATO)
www.atos.net
Target
Sector
Price
(€mn)
Revenues
(€mn)
P/R
Funding
(€mn)
P/F
IT Services
591
1,261
0.5x
N/A
N/A
Groupe Bull (France Euronext:BULL), a provider of IT services and products, will be acquired by Atos (France
Euronext:ATO) for €591mn. The primary sellers are French venture capital firms Ardian and Bpifrance, and
Nordinvest – the investment subsidiary of asset management group Pioneer Investments. Atos specifically cited Bull’s
“highly recognised teams in advanced technologies such as high computing power, data analytics management, and
cyber security” as key motivators, further stating that acquiring Bull is a key step “toward our 2016 Ambition to become a
Tier 1 company and THE preferred European global IT brand”. According to 451Research, the combined entity will
generate c. €400mn in annual cloud computing revenue (which would make it Europe’s leading cloud computing
supplier). This will position the company well to compete with fellow French IT services vendor Sopra, following its
€730mn acquisition of Steria in April 2014.
Target
Founded in 1931, Groupe Bull is an IT services provider.
The company comprises four business divisions: Business
Integration Solutions (consulting and integration services
for IT systems and major projects; 25% of revenue);
Computing Solutions (cloud hosting services, datacentre
infrastructure and outsourced IT operations; 62%);
Innovative Products (primarily high-performance servers,
mainframes and supercomputers; 5%); and Security
Solutions (a range of cyber security products and services;
10%). Bull primarily offers its services to companies within
the defence, finance, health and manufacturing sectors.
The company operates across more than 50 countries but
maintains a strong focus on Europe (c. 85% of revenues
from European operations according to 451Research).
With more than 9,000 employees, the company is
based near Paris, France and recorded 2013 revenues
of c. €1.3bn. Atos’ offer represents a c. 30% premium to
the three-month weighted average share price of Bull
prior to announcement.
Acquirer
Atos was founded in 1997 from the merger of French IT
companies Axime and Sligos. It provides a wide range of
IT services for businesses via its four business divisions:
Consulting & Technology Services (which range from
supporting overall strategy development to providing
technology-specific expertise), Managed Services (such
as managed infrastructure, security/risk management and
workplace management), Specialised Businesses (Atos
operates three specialised businesses: Smart Energy
Solutions, Business Process Outsourcing – specifically
for UK companies in the financial and healthcare sectors,
and Civil & National Security Solutions), and Systems
Integration
(ranging
from
general
application
management to integration of SAP-specific systems).
Based near Paris, France, Atos is one of Europe’s
leading IT services providers. It has key strategic
partnerships with companies such as HP, IBM, Microsoft,
Oracle, SAP and Siemens, c. 76,000 employees across
52 countries, a market capitalisation of €6.5bn and
2013 revenues of €8.6bn.
Noteworthy Sellers
Readers will be familiar with French private equity firm Bpifrance (€133mn (2014); AUM €1.1bn) which featured in our
April and March bulletins this year for its participation in Voluntis’ €20.8mn late-stage round and Sigfox’s €14.9mn Series
C round, respectively. Sector- and stage-agnostic, Bpifrance only invests in French companies and is supported 50/50
by the French state and the French state bank Caisse des Dépôts.
Ardian (€7.4bn (2014); AUM €21bn) was formed in 1996 as the private equity division of AXA (French investment and
insurance group with a market capitalisation of €43bn). This division was spun out of AXA and rebranded as Ardian in
September 2013. It invests in companies within the business and financial services, consumer goods and services,
healthcare and technology sectors. With c. 300 employees, the firm has 10 offices across Asia, Europe and North
America (in locations including Beijing, Frankfurt, London, New York and Singapore).
Nordinvest is a Hamburg-based investment subsidiary of Pioneer Investments (AUM €179bn) – an asset management
holding company based in Milan, Italy. Founded in 1928, Pioneer Investments has c. 2,000 employees and offices
across 27 countries (including the US, the UK, Singapore, China, France and India).
© Go4Venture Advisers 2014
Page 24
May 2014
#
Target
Acquirer
2
Geo Networks
(UK)
www.geo-uk.net
Zayo Group
(US)
www.zayo.com
Target
Sector
Price
(€mn)
Revenues
(€mn)
P/R
Funding
(€mn)
P/F
Telecom
Services
215
46.5*
4.6x
N/A
N/A
* 2012 Revenues
Geo Networks (UK), an operator of fiber-optic networks and related services in the UK, will be acquired by Zayo Group
for €215mn. The primary seller is investment firm Alchemy Partners. The acquisition will add over 2,100 route miles to
Zayo and provide it with direct access to major cities such as Birmingham and Manchester. It will also connect Zayo with
Ireland, in particular to Dublin – a strategic hub for cloud service providers and data centres – via a subsea system, and
provide it with connectivity to c. 600 on-net buildings.
Target
Founded in 2002 and headquartered in London, Geo
Networks (formerly known as Hutchison Network Services
UK) owns and operates fiber-optic networks in the UK. It
provides dark fiber (unused optical fibers generally built at
the same time as civil constructions for financial reasons) for
use in fiber-optic communication; managed networks, which
include the infrastructure, software and technical support
services to operate and manage an IP-based
communication network; and co-location services. Its
network solutions range from simple point-to-point
connections to enterprise networks. Customers include data
centres, financial institutions, gaming organisations, media
companies and service providers, such as Betfair and
Skipton Building Society.
Geo Networks has received awards including the “Fixed
Network Infrastructure Innovation” award from GTB
Innovation Awards 2013 and the “IT Vendor of the Year”
award from eGR B2B 2012 Awards. It was also listed in the
Deloitte Technology Fast 50 list for 2011, and shortlisted for
the 2010 Sunday Times Tech Track 100: Barclays
Corporate Performance Excellence Award.
Acquirer
Founded in 2007, Zayo operates fiber-optic networks and
provides wholesale telecom and bandwidth services
including colocation hosting and private lines, as well as
internet access for businesses, government agencies
and telecom service providers.
Zayo serves over 290 US metro markets in 10 cities, and
also operates networks in five European countries
including France, Germany, Ireland, the Netherlands and
the UK. It operates a network of around 79,000 route
miles, which reaches c. 15,000 buildings including c. 600
carrier Points-of-Presence (POPs), 650 data centres and
c. 8,000 enterprise buildings. The company also offers 27
carrier-neutral colocation facilities across the US.
Founded and headquartered in the US, Zayo operates in
Europe (since its acquisition of fiber-optic network
provider AboveNet in March 2012 for €1.7bn) where it
has opened headquarters in London and Paris. As of
June 2013, the company employed over 1,130 staff, and
it reached revenues of $988mn (€764mn) for FYE June
2013 (+159% vs. 2012).
Noteworthy Sellers
Alchemy Partners acquired Hutchison Network Services UK from Hutchison Whampoa (SEHK:13) for £62mn (€83mn) in
February 2008. At the same time it was rebranded as Geo Networks. The ownership of Hutchison Network Services UK’
subsidiary fiber-optic network provider, FibreSpeed, was transferred as part of the deal.
It is the first time that Alchemy Partners (€735mn (2014); AUM €2.0bn) features in our Bulletin. It is a UK-based private
equity firm which invests debt and equity in distressed and underperforming businesses across Europe. It has built
experience in the acquisition of distressed debt, operating restructurings and refinancings, and providing equity for
buyouts.
© Go4Venture Advisers 2014
Page 25
May 2014
#
Target
Acquirer
3
LaFourchette
(France)
www.lafourchette.com
TripAdvisor
(US NASDAQ:TRIP)
www.tripadvisor.com
Target
Sector
Price
(€mn)
Revenues
(€mn)
P/R
Funding
(€mn)
P/F
Internet
Services
100e
15
6.7x
12.3
8.1x
e: estimate
LaFourchette (France), an operator of an online and mobile platform for booking restaurants, will be acquired by
TripAdvisor for an estimated €100mn in cash. The primary sellers are investment firms Otium Capital, Partech
Ventures and Serena Capital. The acquisition will increase TripAdvisor’s restaurant portfolio, with over 12,000 new
partners across Europe with whom LaFourchette has built partnerships. The deal will also enable LaFourchette partners
to benefit from TripAdvisor’s global reach and expand into new markets.
Target
Founded in 2007, LaFourchette owns and operates an
online platform for booking restaurants. The company has
developed partnerships with over 12,000 restaurants across
France, Spain and Switzerland. Originally launched in
France as “LaFourchette”, the company has expanded its
operations to Spain via its website “Elternedor” and in the
UK via “TheFork”, and it plans to launch in Belgium in 2014.
The company, which provides special offers enabling up to
50% discounts for restaurant goers, has exceeded 700,000
reservations per month early 2014.
LaFourchette also offers management software (including
booking, data and discount tools) for restaurants to
maximise their online business, for example by optimising
yield occupancy. Additionally, it offers an Application
Programing Interface (“API”) to third-party developers who
want to integrate restaurant bookings into their own product
offerings.
The company employs 190 staff across its offices in Paris
(HQ) and Barcelona, and reached revenues of €15mn (and
profitability) in 2013 according to Challenges.
Acquirer
Founded in 2000, TripAdvisor operates an online travel
agency. It offers advice from travellers and a wide variety
of travel choices and planning features, with links to
booking tools.
TripAdvisor’s branded sites make up the largest travel
community in the world (comScore Media Metrix, Q1
2014), with nearly 260 million unique monthly visitors
(Google Analytics, Q1 2014, excluding China) and more
than 150 million reviews and opinions covering over 4
million businesses and properties across c. 140,000
destinations.
The company operates websites in 39 countries,
including China with daodao.com. Additionally,
TripAdvisor includes TripAdvisor for Business, a
dedicated division that provides the tourism industry
access to millions of monthly TripAdvisor visitors.
Headquartered in Massachusetts, the company employs
over c. 2,100 staff, reached revenues of €693mn FYE
December 2013 (+24% vs. 2012), and had a market
capitalisation of c. €11.5bn as of 27 June 2014.
Noteworthy Sellers
Otium Capital is a France-based venture capital firm, which invests in European companies in the leisure and local
distribution markets, across the internet, mobile booking and software sectors. Otium Capital was LaFourchette’s first
institutional investor, providing it with €1mn of capital for majority ownership in 2008. At the time, the company employed
six staff and generated a few hundred reservations per month.
It is the second time that Partech Ventures (€30mn (2013); AUM €600mn) appears in our Bulletin this month, following its
€11.6mn investment in Auxmoney. See page 15 for more details.
Serena Capital (€150mn (2013); AUM €200mn) is a venture capital firm which typically invests between €3mn and €8mn
in technology-driven French and European companies, primarily in communications and information technologies and
services – including consumer electronics, internet and media, software and telecoms.
© Go4Venture Advisers 2014
Page 26
May 2014
List of Acronyms
Financial Terms
k
used as abbreviation for 1,000 (for example, €1k means €1,000)
mn
million
bn
billion
AUM
Assets Under Management
CAGR
Compound Annual Growth Rate
EBIT
Earnings Before Interest and Tax
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation
ECM
Equity Capital Markets
EV
Enterprise Value
FYE
Fiscal Year-End
IPO
Initial Public Offering
LBO
Leveraged Buyout
MBO
Management Buyout
LTM
Last Twelve Months
M&A
Mergers and Acquisitions
P/E
Price to Earnings ratio
P/R
Price to Revenues Ratio
P/F
Price to Funding ratio
PE
Private Equity
PIPE
Private Investment in Public Equity
VC
Venture Capital
Business / Technical Terms
API
Application Programming Interface
ARPU
Average Revenue Per User
CAA
Civil Aviation Authority’s
CMS
Content Management Software
CRM
Customer Relationship Management
ERP
Enterprise Resource Planning
HR
Human Resources
INR
International Normalised Ratio
© Go4Venture Advisers 2014
Page 27
May 2014
LMS
Learning Management System
MOOC
Massive Online Open Course
MNO
Mobile Network Operator
OEM
Original Equipment Manufacturer
OTT
Over-The-Top
PAYG
Pay-As-You-Go
POP
Points-Of-Presence
POS
Point-Of-Sale
R&D
Research and Development
SDK
Software Development Kit
SEA
Sensory, Elastic and Adaptive
USSD
Unstructured Supplementary Service Data
VITM
Voluntis Insulin Therapy Manager
VoIP
Voice-over-Internet Protocol
© Go4Venture Advisers 2014
Page 28
May 2014
Go4Venture Advisers LLP
48 Charles Street
+44 (0)20 7529 5400
Berkeley Square
g4vbulletin@go4venture.com
London
W1J 5EN
This report was published on June 30, 2014
Disclaimer
This report has been prepared and issued by Go4Venture Advisers LLP
who are authorised and regulated by the Financial Conduct Authority.
All information used in the publication of this report, has been compiled
from publicly available sources that are believed to be reliable, however
no representation, warranty, or undertaking, express or limited is given
as to the accuracy or completeness of the information or opinions
contained in this report. Opinions contained in this report represent those
of Go4Venture Advisers LLP at the time of publication. This research is
non-objective. This document is provided for information purposes only
and should not be construed as an offer or solicitation for investment.
Furthermore, as the information contained in this document is strictly
confidential it may not be reproduced or further distributed.
The value of investments and any income generated may go down as
well as up. Past performance is not necessarily a guide to future
performance. Investors may not get back the amount invested. This
publication is not intended to be relied upon in making any specific
investment or other decisions. Appropriate independent advice should
be obtained before making any such decision.
This report has been compiled by Jean-Michel Deligny, Managing
Director – for and on behalf of Go4Venture Advisers.
Copyright: 2014 Go4Venture Advisers. All rights reserved.
Registered address: 10 Wellington Street, Cambridge, CB1 1HW Incorporation number OC336611
Authorised and Regulated by the Financial Conduct Authority
© Go4Venture Advisers 2014
Page 29