24 November 2016

Danish toymaker features in November’s angel investments

In November 2016 to date there have been 16 European angel investments worth a combined EUR 65 million, according to Zephyr, the M&A database published by Bureau van Dijk. It is worth noting that at the time of writing there are still nine days to go until the end of the month, meaning comparisons with previous months will not be on a like-for-like basis. Nevertheless, the figures are still disappointing when we consider that EUR 132 million was invested across 41 transactions in October. If November’s dealmaking continues on its current trajectory figures for the month will not reach the same levels as in October, which itself registered a decline in both volume and value from 63 deals and EUR 139 million, respectively, in September. However, even if no further European angel investment is recorded in November the month has still already surpassed a number of other recent periods, at least in terms of value; in August 2016 only EUR 26 million was injected by angels while just EUR 41 million was invested in February. November’s result remains disappointing, particularly in a year-on-year comparison; in November 2015 there were 60 European angel investments worth EUR 266 million. In terms of value this was the largest month of the last year, while volume was only surpassed in September 2016, when there were 63 deals. As is always the case when value is disappointing, figures have been held down by the lack of an individual deal with a very high consideration, although November’s largest transaction accounts for more than half of all angel investment in the region over the course of the month.

This deal was worth just under EUR 35 million and involves UK-headquartered individual savings account services provider Nutmeg Saving and Investment. The company secured the injection in a round led by Convoy Financials Holdings and also including Schroder Investment Management, Balderton Capital, Pentech Capital, Armada Investment Group and Nigel Wray. This deal accounts for 54 per cent of all European angel investment in November and is more than three times larger than the second-placed transaction, a EUR 11 million injection in UK personalised food box delivery company SCA Investments from BGF Ventures, Unilever Ventures, Angel CoFund, MMC Ventures and Barclays.

These deals are at the higher end of the angel investment spectrum as angels typically invest in early stage deals which are considerably smaller. There are plenty of examples of deals worth under EUR 1 million each month and generally software and technology companies are frequently targeted. However, at times those operating in more diverse industries pique the attention of angels. One example this month featured a Danish company as SmartGurlz, which manufactures remote-controlled dolls, closed a seed round. The company received EUR 130,000 from angel investor Christian Nielsen, who injected the sum via his fund. SmartGurlz’s range of dolls are equipped with video-enabled, self-balancing robot scooters which can be connected to the user’s tablet via an application and are designed to help with learning and education through the use of video challenges and experiments. The user can then programme the scooter and rider to accomplish the task. The firm’s ultimate aim is to encourage more girls to study within the science, technology, engineering and mathematics fields by introducing them to basic coding. Its devices are Wi-Fi and Bluetooth compatible and have integrated camera, video and live streaming features.

This is not the first time a toy, game or doll manufacturer has been targeted by angel investors in recent years; Zephyr shows there have been 21 such transactions signed off since the beginning of 2006. The most valuable of these was announced recently, in June, when Californian DIY computer kit wholesaler Piper brought in EUR 1.86 million via a seed round from the Trustees of Princeton University, 500 Startups Management Company, New Schools Capital, Jaan Tallinn and Jay Silve. Second place was taken by a USD 1.41 million injection in another US company as educational toy manufacturer Ubooly received funding back in November 2012. 20 investors took part in the round, including Scott McDaniel, Rich Schmelzer and Gavin Lee. Others targeted since the beginning of this year include Japanese interactive wearable smart band maker Moff, UK-headquartered 3D printed toy and doll manufacturer MakieLab and US magnetic storytelling block game producer MakieLab.

In conclusion, November looks to be another quiet month in terms of European angel investment and activity appears to be lessening as we move towards the end of 2016. It will be interesting to see if investors undertake one final push in the run up to the end of the year and whether figures will regain their former glories next year.

© Zephyr