23 May 2014

European angel investment value climbs against a drop in volume in May

According to data from Zephyr, the M&A database published by Bureau van Dijk, lower European angel investment deal volume was made up for by an increase in aggregate deal value in May. So far this month there have been 14 transactions with a combined worth of EUR 62 million, compared to 22 with a value of EUR 36 million in April. At the time of writing there are 11 days remaining in the month, meaning there is still time for volume to catch up and even surpass April’s result. Even if this does not happen, consolation can be taken from the fact that aggregate value has reached its highest level for some time. The last time considerations exceeded this amount was in November 2013, when dealmaking of EUR 73 million was recorded, although this was spread across a higher volume (30 deals), suggesting more elevated individual considerations this time around. By contrast, the last time volume plumbed similar depths was in August 2012, when there were just 9 recorded deals with an aggregate value of EUR 4 million.

The high aggregate value for May could be due to the fact that the year’s largest European angel investment deal to date occurred this month. UK-headquartered FarFetch UK, an online clothing retailer, secured USD 66 million as part of a fourth round of funding led by Vitruvian Partners and also including Advent Venture Partners, the Condé Nast Publication and angel Richard Chen, a partner at Chinese venture capital investor Ceyuan. Commenting on the round, FarFetch chief executive José Neves said it will enable the company to work towards its omni-channel proposition and accelerate the development of its Russian, Japanese and Chinese local language sites while continuing its engineering developments. The month’s second largest transaction took the form of German cryotherapy system maker CryoTherapeutics extending its first funding round. Following the extension the group has raised EUR 6.50 million from NRW.Bank, High-Tech Gründerfonds Management and Peppermint Venture Capital, with additional participation from business angels the Getz Brothers and Rainer Christine.

One of May’s European angel investments was a GBP 800,000 injection for a UK-based developer of technology designed to manage tooth decay. Edinburgh-headquartered Calcivis brought in a round from Scottish Investment Bank and Archangel Informal Investment. At the same time as that injection, it received a GBP 500,000 Biomedical Catalyst award to fund its development programme. Calcivis said the funding would be used to continue development of its Caries Activity Imaging System, which is designed to detect the demineralisation of teeth by using an intraoral camera to take images of free calcium ions which may lead to cavities. Chief executive Adam Christie added that the injection will help bring the company’s product towards full commercialisation. Calcivis was founded in 2011 to bring the product, co-designed by the University of Dundee and Lux Innovate, to market. It previously raised a GBP 1.20 million funding round from the same two parties in October 2012.

However, Calcavis is far from the only biotechnology research firm to have secured angel investment over the last few years. The most valuable injection into the sector within Europe since 2006 took place in March 2012, when Belgian biopharmaceuticals developer Promethera Biosciences received EUR 17 million via a Series B round from the venture capital investment arm of Shire, Boehringer Ingelheim Venture Fund, Mitsui Global Investment, ATMI, and Sambrinvest, as well as existing investors Vesalius Biocapital, SRIW, Vives-Louvain Technology Fund, Life Science Research Partners, NivelInvest, Luxembourgeoise and several angel investors. Another Belgian business, Bone Therapeutics, also secured a significant amount in January 2013 when it received almost EUR 8 million from Nausicaa Ventures, BAMS Angels Fund I, Life Sciences Research Partners VZW, Société Régionale d'Investissement de Wallonie and Sambrinvest.

To sum up, May 2014’s promising value result, combined with lower volume, suggests higher individual considerations for the month, something borne out by the fact that of the 14 deals recorded, seven are worth more than EUR 1 million and the top transaction tipped the scales at almost EUR 48 million. Naturally this deal accounts for a large portion of the total deal value, but other transactions of a similar size would ensure the coming months are able to sustain this level of investment.

© Zephyr