08 August 2014

European angel investment volume and value down for second consecutive month

According to data from Zephyr, the M&A database published by Bureau van Dijk, both the volume and value of European angel investment slipped again in July. So far this month there have been 16 transactions worth an aggregate EUR 27 million, and although the month has not reached its end yet, this represents a decline on the 37 deals worth EUR 51 million in June. The results compare even less well when May is taken into account; there were 42 deals with a combined value of EUR 133 million that month, although it was the highest month in terms of volume and value during the period under review, which dates back to the start of 2006. Results were also down year-on-year; in July 2013 there were 27 European angel investments worth EUR 40 million. It remains to be seen whether the remaining time in July will be enough to push results back towards the level achieved last month, or even earlier in 2014, but it would take a relatively large number of transactions, or a high value deal, in a short space of time.

In spite of the disappointing showing, there have been a few transactions with significant considerations over the month to date. The most valuable targeted a Spanish company. Fuengirola-headquartered online virtual recruitment application operator Jobs and Talent received just over EUR 10 million via a series A round from Qualitas Equity Partners, Kibo Ventures, Fundacion Jose Manuel Entrecanales, Pelayo Cortina and Nicolas Luca de Tena. The month’s second largest deal involved France-based Isorg, a manufacturer of organic and printed electronics devices for photonics and image sensors. The firm secured EUR 6 million from BPI Groupe, Sofimac Partners, CEA Investissement, Grenoble Angels Participations and Savoie Angels in its first funding round. Another notable deal involved a UK company. Bath-headquartered business productivity and risk elimination cloud manager Zynstra also brought in EUR 6 million in a round led by Octopus Investments Ltd and including Richard Brennan, Tom Vari and Jon Craton. Proceeds are to be used for development in the UK, product innovation and entry into the North American market.

The UK and France are generally targeted fairly frequently by angel investors, but there were also some deals recorded with targets in less commonly selected countries. Notably, this month there was a relatively large deal with a Swedish target. Gothenburg-headquartered FishBrain, a fishing-focused application and social network operator, brought in almost EUR 2 million through a Series A investment led by Active Venture Partners and Northzone Ventures, with participation from GP Bullhound Holdings Ltd, Edestra AB (Edastra Venture Capital), and existing investors Mr Mathias Ackermand, Mr Rikard Steiber and Almi Invest AB. The company’s software uses crowdsourced data from anglers, combined with geological and meteorological information, to enable its users to determine the best spots to fish or the optimum bait to use for certain types of fish. The social networking side lets members record trips and post photos of their catch. The investment is not its first; previous investors include ALMI F√∂retagspartner, Industrifonden, Mattias Miksche, Hans Lindroth and Henrik Torstensson. Proceeds of FishBrain’s latest round will be used to accelerate product development and increase marketing to grow its user base.

The data processing industry has been targeted fairly frequently by angel investors, particularly in 2014. In fact, the second and third largest angel investments in the industry worldwide between 2006 and the present day took place this year. The largest deal targeted Brazilian online logistics contracts comparison platform operator Sontra, which raised EUR 240 million from Mola Factory and senior executives from JP Morgan, Bank of America, DHL and NXTP Labs. Other targets include US-based Pet Hub and Pinterest, which describes itself as a visual discovery tool and is used to collect ideas for projects and other areas of interest. The former secured an investment of EUR 186 million in February of this year, while the latter brought in EUR 146 million in May.

To sum up, it has been another disappointing month for angel investment in Europe. However, after May’s record breaking performance anything less is bound to seem underwhelming. Many will be hoping that levels will recover next month and regain some of that former glory, even if they are unable to scale such dizzying heights again immediately.

© Zephyr