30 January 2014

Danish marketing consultancy features in January’s top angel investments

2014 has started reasonably promisingly for angel investment in Western Europe, according to data from Zephyr, the M&A database published by Bureau van Dijk. Following December’s disappointing result, when just 13 deals with an aggregate value of EUR 8 million were recorded, the first month of the New Year has already come close to equalling that figure by volume and has actually surpassed the value posted at the end of 2013. So far in January there have been 12 transactions worth a combined EUR 11 million, representing a 38 per cent increase in monetary terms on last month. Admittedly, December did represent the lowest volume and value recorded since August 2012, so an improvement on this is hardly surprising, but at the time of writing there is still over a week of January remaining, meaning that although they are unlikely to reach the heights of November 2013 (EUR 67 million), there is still a chance both volume and value could rocket and leave December in the dust.

Of the 12 Western European angel deals worth an aggregate EUR 11 million recorded by Zephyr so far this month, values range from a high of almost EUR 5 million to a low of EUR 300,000, although there were also three investments with undisclosed values. However, the top ranked injection is still some way behind a number of the deals recorded in 2013, with two valued around the EUR 30 million mark and two around the EUR 15 million mark, showing there is still plenty of cause to expect later months to usurp this one throughout 2014. January’s most notable transaction involved Finnish diabetes management products developer Mendor, which received almost EUR 5 million via a round of funding from Suome Teollisuussijoitus, Finnvera, Ilmarinen Mutual Pension Insurance Company, Biothom and Life Sciences Partners, as well as Risto Siilasmaa and other undisclosed investors. Second place was taken by a French company, as chauffeur driven car services provider Drivon secured just under EUR 2 million from a number of undisclosed institutional and angel investors.

January’s top deals also featured a Danish business. Deskwolf, which provides consultancy services to small and medium-sized companies using Facebook as a marketing tool, received a EUR 1 million injection from existing investor Seed Capital and Vækstfonden, as well as business angels Rasmus Helmich and Peter Elbek. Deskwolf said it would use proceeds of the deal to continue the ongoing development of its product range, as well as its international expansion. The Copenhagen-headquartered firm claims to have tripled its customer base during 2013 and its clients now number 1,000. It advises small businesses, mainly operating in the retail and service industries, on how to effectively utilise Facebook as a marketing tool as they move their limited marketing resources away from more traditional methods including newspaper and directory advertisements to a more measurable technique.

The investment is worth mentioning as European marketing consultancies have not been frequently targeted by angel investors over the last few years, In fact, according to Zephyr this has occurred only twice in Europe since the beginning of 2006. The other company to have benefitted was dailypresent, an Austrian premium branding marketing firm which secured an undisclosed six-figure amount as part of a pre-seed funding round in September last year. Investors included the company’s founders, as well as angels Klaas Kersting and Mr Lorenz Gräf.

Angel investment in the sector has been more common on a global basis; in total there have been 11 injections into companies of this type since January 2006. The majority feature US targets, but there are also two Indian companies in addition to the two European firms already mentioned. The most valuable over the timeframe involved Chicago-based All Campus, a provider of higher education student marketing services which received almost EUR 5 million in an October 2012 round led by Noson Lawen and also including Michael Markovitz, shortly after spinning off from Alloy Education earlier the same year. This deal was followed by a EUR 2 million injection into California-headquartered Big Frame from a number of investment firms and angels Diego Berdakin, Dave Goldberg, Peter Gotcher, Clark Landry, Adam Lilling and Dan Murray.

Targets from outside the US were Mumbai consultancy start-up Red Quanta, in which angels and venture capital firms invested EUR 800,000 in August 2012, and Hyderabad-headquartered GenY Medium, which received an undisclosed sum from Srinath Devireddy.

To sum up, the traditional wind down seen during the Christmas period appears to be picking up again. Value has already increased on December, even though January has over a week left. It remains to be seen whether this month will be able to equal the EUR 20 million invested in January 2013 or the EUR 28 million from January 2012, but things seem to be moving in the right direction again after a disappointing December recorded the lowest aggregate value since August 2012.

© Zephyr