23 December 2013

Finnish reservation service is one of few December angel investments

December has been a quiet month for angel investment in Western Europe, according to data from Zephyr, the M&A database published by Bureau van Dijk. After an impressive showing in November, when EUR 67 million was invested across 29 deals, both volume and value have plummeted to their lowest levels for some time this month. So far in December there have been six transactions with an aggregate value of EUR 5 million, representing a 79 per cent decline in terms of volume and 93 per cent by value. As the Christmas period looms it seems unlikely that either the quantity or combined size of investment will increase much between now and the end of the year. If volume does not climb, December will represent the lowest deal volume since January 2011 and the lowest value since August 2012.

It is not surprising that of the six angel deals worth an aggregate EUR 5 million this month, none have unusually large considerations. Those recorded by Zephyr range from a high of just under EUR 3 million to a low of EUR 170,000, although there were also two investments with undisclosed values. December’s poor showing is further highlighted by the fact that the top ranked injection would not even make it into the top 25 of the year as a whole. The month’s most notable transaction involved French developer of mobile network integrator technology E-Blink, which brought in just under EUR 3 million from angels Alain Rolland and Christian Bittar, as well as BPI Groupe, 360 Capital Management, Seventure Partners and I-Source Gestion. The firm said proceeds of the round would be used to continue its international development and expansion. Second place was also achieved by a French business, as 3D model web publishing group Sketchfab secured USD 2 million in a round led by Balderton Capital and also including Partech Ventures, Borealis Ventures, David Cohen and existing angel investors.

As with last month, a Finnish company cracked the top deals by value. MyNextRun is headquartered in Helsinki and operates as an online ticket retailer for a range of running events, including marathons, half-marathons and 10k races, among others. The firm, which is headed by chief executive Sami Granfors and was established in 2010, has more than 200 partners in over 35 countries, with a repertoire of around 15,000 events at its disposal. Earlier this month it raised EUR 170,000 from Dreadnought Finance, Reaktor Polte, Teknologian Kehittämiskeskus and undisclosed angel investors. The business said proceeds of the injection would be used to add new social features to its existing service while simultaneously expanding its presence throughout Europe. Granfors believes enhancing the social aspect of the site will make it more accessible and relevant to its target audience and bring it into line with that side of the sport, connecting runners and additional events.

The investment is somewhat unusual in that online reservation services is not an area that has been targeted a lot by angel investors over the last few years. Indeed, according to Zephyr there have been just eight cases worldwide where angels ploughed funds into the sector since the beginning of 2006. The most valuable of these took the form of a EUR 19 million injection into Russian online hotel booking service Emertra. Investors included Accel Management and General Catalyst Partners, as well as Yurii Milner, Eric Blechford, Brad Gerstner, Steve Hellman, Sherwin Pishevari and Edward Kaufman. Only three of the eight deals were European, including the MyNextRun investment. The others were both French. Train ticket retailer Capitaine Train secured over EUR 1 million from Index Ventures, CM-CIC Capital Privé and various business angels including Oleg Tscheltzoff. Low cost bus booking portal operator Frogbus also raised EUR 800,000 from the Business Angels Network de Catalunya.

The E-Blink and Sketchfab deals were worth the most and came ahead of London-headquartered relocation website and mobile applications developer and operator Move Guides, which secured over EUR 1 million from Notion Capital Partners and New Enterprise Associates. The investment was in addition to a seed funding round in July involving Kevin Eyres, Sherry Coutu, Sean Park, Dale Murray, Alex Viall, and Tom Hulme. Move Guides was one of two UK-based companies which received an equity injection in December, though angels also invested in a Swiss and German company over the period under review.

In conclusion, the inevitable winding down of 2013 has taken its toll on European angel activity in December. Volume and value both declined, contributing to the unpredictable and fluctuating results over the last 12 months. However, it may be possible that angels are simply gearing up for a big 2014 and saving their pennies to invest in the new year. Similarly, one large investment between now and the end of December could still prop up results, so if any investors have a large enough appetite everything could change.

© Zephyr