25 June 2015

French tailoring company piques angel interest in June

At the time of writing June looks to have been a disappointing month in terms of European angel investment, according to data from Zephyr, the M&A database published by Bureau van Dijk. So far this month there have been 21 announced deals worth an aggregate USD 32 million, marking a decline in both volume and value on the 43 deals worth EUR 91 million signed off in May. However, it is worth noting that there is still just over a week to go until the end of the month and it is not too late for significant investment to take place and change the course of the results. Last month is a prime example of this. At the time of writing in May, ten days before the month came to a close, it appeared that a drop was likely on both fronts as EUR 33 million had been invested across 20 deals. However, by the end of the month enough investment had been signed off to result in a climb by both volume and value; ultimately EUR 91 million was injected in 43 deals, compared to 35 transactions worth EUR 38 million in April. Many will be hoping that a similar result occurs this month, resulting in a second consecutive increase in both volume and value.

The fact that May is not exactly a record-breaking month does not mean there have not been a number of significant injections over the last few weeks. The most valuable transaction of the month so far is a EUR 10 million round of funding by German market intelligence company Atheneum Partners led by Vogel Business Media and also including Redstone Digital, Senovo and Jens Odewald. This deal accounts for around a third of all European angel investment in May so far. Others to benefit from angel investment include French online photo album retailer Stardust Media and Communication, which brought in EUR 6 million from Serena Capital and A+ Finance, as well as business angels Xavier Niel and Jean-David Blanc. Although these deals would be classed as large for angel investments, there have also been a considerable number with less sizable considerations; the month’s smallest injection to date was worth EUR 140,000.

As usual, a significant portion of May’s angel investment was channelled into software companies, but there are a few deals worth singling out as a result of the target’s industry. For example, French tailoring company My Tailor is Free secured EUR 200,000 in a round of funding from BPI Groupe and undisclosed angels. Although the company’s primary operation is tailoring, it does have a software aspect and proceeds of the transaction have been earmarked to accelerate its ongoing development and the continuing creation of its related technology. My Tailor is Free hopes to enable users to create an avatar matching their dimensions and to create tailored suits using 200 measurement points. Customers can also dress their avatar in specific items of clothing. The company plans to launch the service in December. My Tailor is Free is headquartered in Aix-en-Provence and was established in 2014.

Clothing makers are not traditionally targeted frequently by angel investors, but that is not to say there have not been a number of notable investments announced in recent years. The most valuable such deal between 2006 and the present day completed in July 2011 when US luxury fashion designer Michael Kors brought in a EUR 351 million funding round from Ontario Teachers’ Pension Plan, fashion magnate Tommy Hilfiger and undisclosed members of his inner circle, as well as sovereign wealth funds. Proceeds of the round were to be used to finance the company’s international growth, including the opening of new retail locations throughout Europe and Asia. The second-largest deal of the period actually completed in March of this year when sports and luxury sock manufacturer Stance received EUR 45 million in a third round led by August Capital and also including Kleiner Perkins Caufield & Byers, Menlo Ventures, Shasta Ventures, Sherpa Ventures, Science Media and Mercato Partners. Celebrity investors including the actor Will Smith and basketball player Dwyane Wade also participated.

In conclusion, at present June is looking fairly disappointing in terms of European angel investment activity, but as pointed out, it is too early to definitively state that a decline has taken place as May has proven just how much can happen in a short space of time, particularly given that the end of June represents the end of H1 2015. This could see investors rushing to sign off deals in time for the half-yearly results, but time will tell.
© Zephyr