22 November 2013

Finnish funding round helps November values rise on last month

The peaks and troughs across angel investment in Western Europe throughout 2013 show no signs of abating, as November witnessed yet another fluctuation in the value of deals, according to data from Zephyr, the M&A database published by Bureau van Dijk. After declining 53 per cent in October to EUR 18 million, an increase has already been recorded for November, with around 10 days to go before the month has even ended. In total there have been 19 deals worth a combined EUR 57 million in November to date. Although values have climbed, volume has actually dropped for the second consecutive month from 25 to 19. However, there is still a chance that more deals could occur and remedy the situation by the end of the month. As Q4 nears its end though, it remains some way behind the previous quarter in terms of both volume and value.

In Q4 2013 to date there have been 44 angel investment deals with a combined value of EUR 75 million. Of those which occurred in November, considerations ranged from EUR 150,000 to EUR 30 million. The month’s top deal so far involves Swiss molecular diagnostics equipment manufacturer Biocartis bringing in EUR 30 million in a fifth round of funding from a wide range of investors including Johnson & Johnson, the Wellcome Trust, Philips Venture Capital and Debiopharm, as well as family offices of Dr Paul Janssen, Luc Verelst, Rudi Pauwels and existing shareholders and employees. The firm’s chief financial officer, Hilde Windels, said proceeds would contribute towards its goal of becoming a fully-integrated global diagnostics player. Second place was taken by Swiss business process mobile application developer coresystems, which received EUR 11 million via a series A round from undisclosed German and Swiss investors to continue its international expansion.

Notable among the deals recorded by Zephyr in November to date was a funding round targeting a Finnish company. Turku-headquartered Walkbase, which develops analytics software designed to give retailers an insight into the shopping behaviour of their customer base, secured EUR 3 million through a first round of funding from Sberbank Rossii’s corporate venturing arm SBT Venture Capital and Mr Olli-Pekka Kallasvuo. The group said it would use the proceeds to reinforce its sales, marketing and customer-insight teams and also hopes to continue toward its goal of becoming the leading marketing optimisation service in Russia, as well as throughout the Europe, Middle East and Africa regions. Founded in 2009, Walkbase claims to be a pioneer in indoor positioning and has produced software which tracks the movement of customers with Wi-Fi-enabled phones around any given store on an individual level to establish trends and patterns. Sberbank said that in addition to its investment, it intends to adopt the technology at its 18,000 retail branches.

The company is far from being the only data processing business to secure investment over the last few years, with the industry attracting quite a lot of attention from business angels. According to Zephyr, the largest data processing angel investment deal by value since January 2006 occurred in June of this year when German small business process mobile and online application platform operator NumberFour brought in EUR 29 million from angels including Andreas von Bechtolsheim, Klaus Hommels, Lars Hinrichs and Simon Levene. Also participating were T-Venture Holding, Allen & Company, Index Venture Management and Lakestar, among others. At the time, chief executive Marco Borries said the injection would serve to help the company toward its goal of helping more than 200 million people to run their businesses.

There are a number of other German companies in the top 10, which also includes targets from the UK, France, Denmark, Finland and Switzerland. Among others to have benefitted from the generosity of angels are Germany-based online used clothing marketplace Kleiderkreisel, Zynstra, a UK-headquartered business efficiency app developer and French mobile film guide software firm Cinémur. More notable was Danish analysis platform company Game Analytics, which brought in almost EUR 2 million from angels including Huffington Post chief executive Jimmy Maymann, Anil Hansjee, Tommy Ahlers and René Rechmann, as well as CrunchFund, Sunstone Capital and other undisclosed angels.

To sum up, Q4 looks like it may bring some disappointment for those watching angel investment figures in Western Europe, with likely declines on Q3, marking the second consecutive drop in both volumes and values. In addition, over half of the EUR 57 million invested in the fourth quarter to date is attributable to the aforementioned Biocartis transaction and a further EUR 11 million is due to an investment in Switzerland-headquartered coresystems. On one hand, this means outside of these two deals, funding levels have been noticeably low. However, it also highlights that only one or two transactions are needed if angel investment is to reach the same heights as in previous quarters.

© Zephyr