25 January 2017

Spanish mobile application developer targeted by angels in January

2016 ended on a fairly encouraging note in terms of the aggregate value of angel investment in European companies, although the year as a whole followed the general pattern witnessed in global M&A, in that a decline was registered on 2015. However, although value could not reach the same heights as the previous year, it was still significantly higher than any other year on record, according to Zephyr, the M&A database published by Bureau van Dijk. Thus far 2017 has started fairly quietly; in January 2017 so far there have been 20 European angel investments worth a combined EUR 37 million. This is down on the 37 deals worth EUR 72 million which were announced in December 2016 and down from the 55 deals worth EUR 160 million signed off in January 2016. However, at the time of writing there are still 11 days to go until the end of the month, meaning that there is still a chance of some high value transactions being signed off and boosting both volume and value for the period. Given that many dealmakers may still be in the process of getting back to full speed after the traditionally quiet period over Christmas and New Year, it may take some time for activity to ramp up and provide a better indication of how the year is likely to shape up. Of the EUR 37 million invested so far in January, EUR 12 million is attributable to a single deal, which is the month’s largest overall.

This once again highlights the difference which a few big transactions can make and emphasises the point that if a few more deals of this level are announced between now and the end of the month, it can mean the difference between a disappointing month and a more promising one. January’s largest transaction featured German online mobile network operator connection data platform zeotap, which raised EUR 12 million via a Series B injection from Capnamic Ventures Verwaltungs, Iris Capital Management, New Science Ventures, HERE Global and angels Seth Schuler, Alex Pentland, Mark Grether and Thomas Duhr.

That deal targeted a software company, which is unsurprising as this is by far and away the sector which is most frequently targeted by angel investors. That being said, many of these involve software development, as opposed to software publishing. Nevertheless, transactions in this field make up a significant portion of January’s top deals. Within software, the companies which feature operate in a number of areas and utilise technology to provide solutions for innumerable problems. One example is Spanish company Celicity, which bills itself as something of a gluten-free social network. Essentially the firm’s application can be used by diners who follow a gluten-free diet to easily locate restaurants and eateries which are able to make allowances for their dietary requirements. On 17th January the firm received EUR 275,000 via a funding round led by an undisclosed family office, various unnamed business angels and undisclosed individuals. Of this amount, EUR 140,000 has already been invested, with the balance expected to follow over the course of the next few months.

As already referenced, software publishers are frequently targeted by angel investors; since the beginning of 2006 some 398 such deals have been announced worldwide. The largest of these was signed off in January 2016, when UK-based online mobile city navigational mapping application provider Citymapper received a EUR 36 million Series B injection from Benchmark Capital and Index Venture Management, as well as angel investors Yuri Milner, Tom Stafford and Michael Lynton. This was followed by another deal from the same month, when Babylon Healthcare Services brought in EUR 23 million from an investment group led by Investment AB Kinnevik and also including Hoxton Ventures, Demis Hassabis and Mustafa Suleyman. Other software providers to have attracted the attention of angel investors since the beginning of 2006 include German women’s fertility tracking application maker BioWink and UK text prediction app provider TouchType.

In conclusion, 2017 has started off more slowly than 2016, which, while it saw significant value invested in European angel investment deals, could not keep pace with 2015. That being said, it is still very early days and as we have seen in the past, it only takes a couple of significant injections to change the course of a month or year. Time will tell whether investors are willing to push values back to their former glories again this year.

© Zephyr