25 April 2014

Decline in volume and value recorded for European angel investment in April

The level of angel investment in Western Europe took a tumble in April, according to data from Zephyr, the M&A database published by Bureau van Dijk. Although the month has yet to reach its end it looks unlikely that either volume or value will reach levels recorded in March, which itself represented the second consecutive monthly decline in terms of aggregate considerations. So far in April there have been 9 transactions worth a combined EUR 22 million. This represents a 68 per cent decline in deal volume and a 41 per cent drop in value. The most valuable month of 2014 to date was January, when there was investment of EUR 45 million, but even this was dwarfed by higher results from last year (November 2013: EUR 73 million; June 2013: EUR 77 million). April’s disappointing value result is hardly surprising given the month’s notably low deal volume. The last time such a low figure was recorded was in August 2012, when there were also 9 transactions. The nadir is highlighted further by the fact that the next lowest monthly deal volume of the last two years was 20.

The disappointing figures mean Q2 has not exactly come out of the blocks at a sprint. If results are to come close to matching the 85 transactions worth a combined EUR 127 million recorded in the opening three months of 2014 then a number of high level investments would need to take place over the next couple of months. Given that April has not reached the levels set in previous months, it is surprising to learn that this year’s largest angel investment in Western Europe to date actually occurred this month. UK smartphone power amplifier equipment developer Nujira secured almost EUR 15 million from existing investors including Amadeus Capital Partners, Climate Change Capital, Environmental Technologies Fund, SAM Private Equity, New Energy Solutions Management and undisclosed angels. Although this represents an impressive level of investment, it highlights the low values across the rest of the transactions recorded given that it accounts for 68 per cent of the month’s total value. The second largest deal of this month involved personal belongings tracker application developer Snupps, which is also based in the UK and brought in almost EUR 4 million from Zedan Group chairman Amr Zedan.

Among the investments provided by business angels in April was a EUR 100,000 injection for an Italian company. Rende-headquartered online condominium management platform start-up Condomani secured the funds from Zernike Meta Ventures and POR FESR Emilia-Romagna, as well as individuals such as Marco Bicocchi Pichi, Silvia Goffi, Fabio Chinaglia, Paolo Lasagni, Alessandro Liguori and Marco Bonaro. Proceeds of the round are to be used for the ongoing growth and expansion of the firm’s operations. As a consequence of the investment Marco Bicocchi Pichi will join the board of the company, which was established just last year and runs a social network for building owners and landlords designed to manage various aspects of the job, including accounting and payments, budgets, intervention requests, e-mail and SMS notices. At present the service’s user base comprises owners of around 6,000 buildings across Italy.

Condomani’s funding round sees it join the growing ranks of data processing companies to have benefitted from the interest of angel investors in recent years. The sector’s largest deal within Europe since the start of 2006 involved NumberFour, a Germany-headquartered small business process mobile and online application platform operator. Index Venture Management led a EUR 29 million investment in the company in June 2013, and was joined by fellow investors such as Allen & Company, T-Venture Holding and Lakestar, as well as individuals including Mr Andreas von Bechtolsheim, Mr Lars Hinrichs, Mr Simon Levene, Mr Jerry Yang and Mr Klaus Hommels. Other beneficiaries over the last few years include London-based Funding Circle, which brought in EUR 12 million from Index Venture Management, Union Square Ventures, Jon Moulton, Edward Wray and Charles Dunstone in April 2012.

In conclusion, the second quarter of 2014 has started with a whimper, rather than with a bang. Volume was particularly disappointing when compared with the 28 deals recorded last month, while value was also some way behind the EUR 37 million posted. However, as previous months have shown, it only takes one large investment to change the course of the results and given some of this year’s larger angel investments to date, it is still possible that April  could claw back some of the momentum generated from decent investment levels in previous months.

© Zephyr