25 July 2013

Q3’s early angel investment beneficiaries include online furniture retailer

This year looks to be shaping up nicely for business angel investors, with value advances recorded in both Q1 and Q2 2013, according to Zephyr, the M&A database published by Bureau van Dijk. The market has done well to build on the EUR 716 million which was invested across 342 deals in the final quarter of 2012. Q1 showed a drop in volume to 327 transactions, but value made up for this, climbing 22 per cent to EUR 874 million. The second quarter fared better still, with both volume and value advancing to 373 deals worth EUR 1,202 million. By value, this represents the best result in the entire period under review, which dates back to the start of 2006. Of these 373 transactions, 93 worth EUR 129 million involved investments into western European targets. In line with the global pattern, there was increased investment in the region in Q2, up 59 per cent on the EUR 81 million recorded in Q1.

So far in July there have been 10 European angel deals with values ranging from EUR 380,000 to EUR 11 million. The top ranked transaction was some way ahead of its nearest rival and involved UK-based online performance marketing and lead generation technologies developer Ocapo receiving EUR 11 million from Northzone Venture, its chief executive Chris Hong and Boost&Co. Another deal which was notable as being an unusually high value investment for an angel investment was Germany-headquartered online second-hand clothing marketplace Kleiderkreisel’s EUR 5 million round from Accel Management, Schmidt Projekt-Services and Alexis de Belloy.

Something worth observing is the fact that the month’s top deals so far include an Italian online home furnishings retailer. Start-up LovetheESign has received a EUR 1 million round of funding from lead investor United Ventures as well as Novus Ventures and members of the Barberis Canonico family. Of the total amount, EUR 750,000 was provided by United Ventures. The company intends to use the proceeds to consolidate its existing presence on the Italian market, while simultaneously expanding into other countries. LovetheESign has registered more than a million visits to its website in just eight months, according to Dow Jones Newswires. The firm partners with 220 manufacturers and has access to a product range numbering around 5,000, which include pieces produced by young designers, as well as more established brands. It also offers items at a discount of up to 60 per cent to the market price.

Other worldwide online home furnishings retailers to have benefitted from angel investments in the last few years include US-based One Kings Lane, which received an undisclosed injection from Kleiner Perkins Caufield & Byers, First Round Capital and Reid Hoffman in December 2009. In addition, in 2011 luxury home furnishings e-commerce platform operator Bespoke Global received an undisclosed round from angel network Golden Seeds and other undisclosed investors. Spanish online fashion décor retailer Besignful also benefitted from the interest of angels in September last year, bringing in an unknown amount from Cabiedes & Partners, Kibo Ventures and private angel investors.

According to Zephyr, the furniture retail industry’s largest angel investment deal by value since the beginning of 2006 took the form of a round of funding by UK-based Made.com Design, which secured EUR 3 million from ProFounders Ventures Management, Jaïna Capital, Brent Hoberman and John Hunt in March 2010. The company planned to use the proceeds to launch its service across its home market. Made.com claims to supply designer furniture at discounts of as much as 70 per cent and aims to cut out the middleman between the manufacturer and buyer.

Going forward, those watching angel investment results will be hopeful that the positive signs shown in 2013 to date can be sustained for the remainder of the year and beyond. It is difficult to make any predictions or identify any indications for the future given that Q3 is still in its infancy. As at the 17th July, there had been a total of 10 European transactions involving angel investors, worth an aggregate deal value of EUR 22 million. Half of this amount is attributable to one deal; the aforementioned EUR 11 million round secured by marketing technology platform operator Ocapo from Northzone Ventures, Boost&Co and Chris Hong. A few more transactions of a similar level would ensure growth in the sector continues on its current trajectory.

© Zephyr