25 February 2016

Food retailer among angel targets in February

February is off to a fairly slow start by volume and value of European angel investment, according to Zephyr, the M&A database published by Bureau van Dijk. So far there have been 23 deals worth a combined EUR 25 million announced during February, although there are still eight days to go until the end of the month at the time of writing. In terms of volume the figures represent a 51 per cent decline on the 47 deals signed off in January, while value dropped 84 per cent from EUR 157 million over the same timeframe. However, at this stage in January results did not look promising. Declines in both volume and value were recorded as 19 angel investment deals worth EUR 81 million had been recorded ten days before the month’s end. Despite the slow start January actually performed quite well, with investment of EUR 157 million notched up across 47 deals. This highlights the important of the closing weeks of a month with regard to aggregate volume and value. Nevertheless, it remains to be seen whether the coming days will bring enough transactions to push figures to the same level as January, or February 2015, when there were 56 deals worth EUR 125 million. There have, admittedly, been a number of months over the course of the last year when aggregate angel investment value was fairly disappointing, such as January 2015 (EUR 43 million), April 2015 (EUR 45 million) and August 2015 (EUR 72 million).

Almost half of all European angel investment announced in February is attributable to two large investments. The month’s most valuable transaction is worth EUR 7 million and took the form of a funding round by German luxury watch wholesaler Watchmaster ICP. The injection was led by Piton Capital and also involved Cherry Ventures, David Schneider and Robert Gentz. Although the business is not yet even a year old, this represents its third funding round. That deal was followed by a EUR 6 million investment in UK-headquartered single cell analysis drug developer Sphere Fluidics, which came from 24Haymarket, Park Walk Advisors and London Business Angels, with the participation of undisclosed corporate and angel investors. There were also a number of angel investments worth EUR 1 million and one worth EUR 2 million signed off during the month.

As always, software companies were the main target of angel investment in February, but there were also a few cases of businesses in different sectors receiving injections. One example involves an Italian retailer of speciality food products. Foggia-headquartered Foodquote, which trades as Foodscovery, brought in EUR 800,000 in a round led by Editoriale Il Fatto and also including Digital Magics, Finanziaria Regionale Abruzzese, Claudio Di Zanni and Rosario Di Donna. As a consequence of the deal, the latter two angel investors now hold stakes of 2.6 per cent and 0.8 per cent, respectively. The firm bills itself as a way to buy the best Italian food directly from producers. This is not the company’s first round of funding; it secured seed funding of EUR 25,000 back in November 2014 from Axel Springer Plug and Play Accelerator. The company’s website enables users to search by categories including beverages, dairy and seafood, as well as by region and price, to find the products they need, which are then ordered and shipped directly through the website.

This is not the first time an electronic shopping company has been targeted by angel investors, with a number of such deals having been signed off since the beginning of 2006. The most valuable of these was announced in April 2014, when US-headquartered beauty care products retailer Birchbox received EUR 43 million in a second round of funding led by Viking Global Investors and also including First Round Capital, Accel Management and Comcast Ventures, as well as Sam Lessin, among others. Other notable transactions in the industry include a EUR 15 million round by Russia-headquartered Privat Treid led by Accel Partners and including Mangrove Capital Partners, ARLAN, Direct Group and Oliver Jung. Others targeted over the course of the year include Cyprus-based Blacksquare, UK-headquartered MedicAnimal and Russian player ClickAndPay.ru.

In conclusion, although February may have started slowly, there is still time for a more promising result to be generated. If enough angels decide to dig deep before the end of the month results could increase very quickly, as evidenced by the difference made by just a few days in January.

© Zephyr