20 August 2013

Foap looks to international expansion following angel round

The first two quarters of 2013 produced positive angel investment results, with increases recorded in both periods, according to Zephyr, the M&A database published by Bureau van Dijk. If the results of July and August to date are anything to go by, the third quarter looks to be well on its way to continuing this trend. At Q3’s halfway point, there have been 156 transactions worth EUR 655 million, representing more than half of the EUR 1,243 million posted in Q2. Should results continue on this trajectory, the third quarter would be the third consecutive period of improvement. Of the deals recorded so far in Q3, 31 worth EUR 52 million are attributable to targets in Western Europe. Results for the region have also been on the up, with values climbing from EUR 81 million in the opening three months of 2013 to EUR 129 million in Q2. Volume also increased from 72 to 95.

In August so far there have been seven European angel deals worth EUR 15 million. Considerations for these rounds range from EUR 120,000 to EUR 10 million. The transaction which headed the field took the form of undisclosed venture capitalists injecting just over EUR 10 million into Swiss flat solar thermal panels maker TVP Solar via a Series B investment. However, the high consideration was not representative of the general picture in Europe. The second-placed deal trailed some way behind with a value of just EUR 2 million, and involved UK-headquartered wireless applications developer Blu Wireless Technology securing investment which it hopes to use to reach its goal of becoming the leading supplier of baseband system IP to manufacturers in the 60GHz sector.

A notable transaction placed third by value as Swedish iPhone photography sales application developer Foap secured just over EUR 1 million from Maxwell Ventures and Industrifonden, as well as a number of undisclosed international private investors and Magnus Wilkne, director of custom watches manufacturer Fewsome Europe. Commenting on the investment, Foap’s co-founder David Los said it was the firm’s most important to date, adding that the proceeds will be used to maintain the growth recorded by the business so far and build upon its existing expansion. He added that Foap intends to establish a presence in the US and hopes to take the first steps to doing so following the round. Founded in 2011 and based in Malmo, Foap operates a marketplace which enables users to upload and sell their photos online via an iPhone application. It also offers stock photo services for buyers and enables photographers to sell the same image multiple times.

Unsurprisingly, a number of software developers worldwide have benefitted from the interest of angel investors in recent years. According to Zephyr, the top ranked investment between 2006 and the present day saw New York-headquartered Relationship Science, a developer of business development tools, bring in almost EUR 42 million from the Hearst Corporation and former New York Stock Exchange director Kenneth Langone in January 2010. A further significant injection resulted in aerospace mobile applications developer Kymeta receiving EUR 39 million from high profile backers such as Microsoft founder Bill Gates, as well as Lux Capital Management, Liberty Global, Osage Partners and the Kresge Foundation.

Closer to home, Unruly Media, a UK-based operator of an online video marketing platform, brought in EUR 19 million at the beginning of 2012 from Amadeus Capital Partners, Van den Ende & Deitmers and Business Growth Fund. The transaction represented the largest ever funding round for a private business in the social video sector and proceeds were used for the company’s international expansion. Unruly Media works with brands and their agencies to forecast the impact of their videos, with a view to tracking them and having them shared across paid, owned and earned media.

In conclusion, the promising signs shown globally in Q3 so far will likely result in some cautious optimism among those keeping their eyes on angel investment figures in 2013. Although we are only halfway through the quarter at the time of writing, interested parties will be hopeful such levels can be sustained over the next month and for the remainder of this year. As of the 18th August, there have been seven European transactions involving angel investors, with a combined value of EUR 15 million. However, of this amount, two-thirds is due to the TVP Solar deal. If the ever-present smaller investments can continue to be supplemented with a few more deals at this level, it should go some way to keeping angel investment at a stage where it can continue to increase.

© Zephyr