25 February 2014

Irish sports nutrition firm among top angel investments in February

Angel investment activity in Western Europe continues to look promising as we move towards March, according to data from Zephyr, the M&A database published by Bureau van Dijk. January surpassed December in terms of both volume and value, and February looks close to reaching a similar level, although at the time of writing there are still ten days left of the month. So far in February there have been 17 transactions worth an aggregate EUR 32 million, which at present represents a 41 per cent drop in volume and a 29 per cent decline in value on last month. In terms of value, it looks unlikely that figures will reach the heights of November 2013 (EUR 72 million) or June 2013 (EUR 77 million), but a reasonable showing is still likely, especially considering that February has already surpassed the admittedly disappointing results for December 2013, when there were 18 transactions worth a combined EUR 11 million.

Values for the 17 Western European angel deals recorded in February to date by Zephyr range from a high of EUR 6 million to a low of EUR 45,000. In addition, one of the deals posted did not have a disclosed value. The month’s top transaction, which involved UK-based private members sportswear retailer SportPursuit bringing in EUR 6 million from DFJ Esprit and angel investors including William Reeve and Alex Chesterman, represents the fourth-largest transaction of the year to date. Interestingly, of these top four investments, three have targets based in the UK. The month’s second-largest deal saw Swedish online store development platform operator Tictail receive USD 8 million via a series A investment led by Thrive Capital and also including Creandum Advisor, Project A Ventures and Balderton Capital, as well as Nick D’Aloisio and other undisclosed individuals. Other companies to have received significant angel injections in February include website building application provider Basekit Platform, Swedish search engine marketing software firm Campanja and Maison Seven, which sells clothing and footwear online.

February’s top deals included a fundraising by an Irish sports nutrition goods manufacturer. Dublin-headquartered Elivar secured EUR 700,000 from Enterprise Ireland, Halo Business Angel Network and other undisclosed investors. The company said proceeds of the injection will be used to continue the development of its product range, while it also hopes to use some funds to expand throughout Europe, in addition to its existing presence in the UK and its home country. Elivar was established in 2011 by former international rowers Donal Hanrahan and Len Dunne to produce nutrition products specifically targeting the over-35 age group, who they felt were not represented by existing nutrition products for endurance athletes. According to the Irish Times, the company hopes to add 10 staff to its workforce within the food science, production, ecommerce, marketing and finance areas by the end of 2015.

Elivar is notable for being active within the sports nutrition marketplace, which has not traditionally been an area frequently targeted by angel investors. In fact, it appears that this is the only time angels have opted to plough funds into a firm within the sector since the beginning of 2006. Alison Cowzer, managing director of Halo Business Angel Network’s Food Syndicate said the investor had been impressed by the company’s founders and their extensive market research and knowledge of the business’ growth potential. Cowzer added that the fact such a clear niche has been identified was another reason for the decision to invest.

Although sports nutrition has not benefitted from a huge number of angel investments, the broader food manufacturing sector has been targeted more often. Most notable is the fact that the industry’s largest injection between 2006 and the present day on a global scale occurred earlier this month, when San Francisco-headquartered plant-based egg substitute manufacturing start-up Hampton Creek Foods brought in almost EUR 17 million in a series B round led by Horizons Ventures and also including Khosla Ventures, AME Cloud Ventures, Collaborative Fund and Eagle Cliff Partners, as well as individuals such as Ali Partovi, Hadi Partovi, Jessica Powell, Scott Banister and Ash Patel. The sector’s largest European investment involved Italian organic food kit maker Chef Dovunque, which received EUR 1.20 million from Vertis SGR and undisclosed business angels. The firm said proceeds would be used for its continuing commercial development and international expansion.

In conclusion, February looks like it may reach a similar value level to January after the usual slump around Christmas. After some fluctuation in 2013 the markets may begin to stabilise, but it is likely a more accurate picture will start to become clear by the end of the first quarter.

© Zephyr