25 August 2015

UK firm targeted by angels in August

So far August has not exactly been a bumper month for European angel investment, according to Zephyr, the M&A database published by Bureau van Dijk. At the time of writing there have been 16 deals worth an aggregate EUR 46 million signed off in the month to date, marking a significant decline in both volume and value on July, when EUR 361 million was invested across 56 transactions. Nevertheless, there are still 11 days to go until the end of the month and as such, it is likely that more angel injections will be agreed prior to the start of September. Whether or not these additional deals are enough to push investment levels closer to July’s showing depends on the individual values of those transactions. It is worth noting that July was a particularly high month in terms of aggregate deal values; in fact, the EUR 361 million invested was higher than any other month in the entire period under review, dating back to the beginning of 2006. When monthly investment value is considered, July’s nearest rival is May 2014, when EUR 134 million was invested. Other high-performing periods include June 2015 (EUR 120 million), March 2015 (EUR 127 million), February 2015 (EUR 124 million) and November 2014 (EUR 105 million).

In spite of August’s failure to reach the same lofty heights as July, there have still been a number of significant European angel investments signed off during the period. The most notable of these was a Series B round by German online deposits marketplace platform operator SavingGlobal. The firm brought in EUR 20.00 million from Index Venture Management, Yuri Milner, Tom Stafford and Ribbit Capital which it said will be used to grow and expand on an international scale as at present the service is only available in its home country. Others to have taken advantage of the interest of angel investors include UK-based MarketInvoice, which operates an online platform used to follow up on outstanding invoices. Earlier this week it received GBP 6.00 million in a round led by Northzone Ventures with the participation of angel Paul Forster and his family office. These deals are larger than the typical angel injection, but plenty of smaller investments have also taken place in the month to date.

Unsurprisingly, a significant number of software firms were targeted in the month under review, with targets including Finland-based Solu Machines, UK-headquartered Loyalty Bay and French player Bobler. However, this was by no means the only industry to have piqued the interest of angels during July. One UK-based anatomical medical meniscus replacement equipment developer and researcher, Orthonika, was targeted early this month. The company secured EUR 150,000 as part of a seed round from undisclosed angels. The deal represents the launch of the business, which has been spun out from Imperial College London to develop a novel knee meniscus replacement. The university collaborated with medical engineered substrates designer and maker Sierra Medtech to start the company and begin developing its product, which will be a full substitution system for the knee meniscus. So far Orthonika has created a number of prototypes since beginning work in 2009 and hopes to obtain both regulatory approval and clinical application in the future.

This is far from the first time a commercial physical and biological research company has been targeted by angel investors in the last few years; between the start of 2006 and the present day there have been 333 such transactions announced worldwide, according to Zephyr. The largest of these involved a Chinese target as Immuno-oncology drugs developer BeiGene (Beijing) brought in EUR 59 million from initial angel and strategic investors, as well as new investors Hillhouse Capital Management and CITIC Private Equity Funds Management, in November 2014. The target said it intended to use the proceeds to proceed towards clinical development of its products while also introducing two or three new drug candidates in 2015. The largest European biological and physical research sector angel investment took the form of a EUR 34 million injection in UK home haemodialysis medical equipment developer Quanta Fluid Solution led by Air Liquide lnvestissements d'Avenir et de Demonstration and also including Seventure Partners, Wellington Partners, Seroba Kernel Life Sciences, NBGI Private Equity, b-to-v Partners and IMI.

To sum up, at first glance August may look somewhat disappointing in terms of European angel investment, but it is important to note that July was something of a blockbuster month and is not necessarily comparable to those which preceded it. This, combined with the fact that there is still time for more investments by the end of the month means the situation is most likely more promising than it may first appear.

© Zephyr