European News Briefs, April 2013

FRANCE

EU Changes Law to Encourage Investment in Small Companies

The European Parliament voted in March to change European Union rules to make it easier for venture funds to invest in startup businesses across the 27-country bloc.

The change, which introduces a special EU “passport” for funds that invest in new small enterprises, is part of a broader push to make European law more growth-friendly by cutting the regulatory burden on some types of investment or lending.

By lifting the requirement on venture capital funds to apply for approval to operate in each EU country where they are active, it should become easier for such groups to invest and raise funds across the European Union.

Michel Barnier, the French politician and the European commissioner in charge of financial regulation, called on investors to “seize the new opportunities as a matter of urgency.”

His remarks underscore the sense of alarm among political leaders as the euro zone remains in economic recession, in the face of falling investment and slack consumer spending.

In addition to the bleak economic outlook, small businesses are finding it difficult to borrow from banks, which are reigning in lending after the collapse of a credit bubble.

“These new EU initiatives will increase opportunities for innovative startups or social businesses to find capital,” Barnier said in a statement. “Better funding for smaller companies is key for Europe’s economy.”

BARCELONA

European Tech Scene Awaits Cisco Cash

Europe’s technology exit market will receive a huge boost if Internet networking giant Cisco follows through on plans to spend part of its $46 billion cash reserves on the continent.

Cisco CEO John Chambers told the Financial Times that his company would prioritize investment in Canada and Europe over the United States, due to unfavourable tax policy in its home market.

“In terms of our overall approach we’re going to go wherever the startups are and where the governments are that really want us,” Chambers told the FT at the Mobile World Congress trade show in Barcelona.

“I’m very bullish about Scandinavia and Germany, and currently I’m an optimist about what’s going on in the U.K.,” he added.

In the past decade, Cisco has proved to be the most active of all technology trade buyers. Last year’s spending spree included $5 billion for NDS Group, a British software company owned by News Corp. and London-based private equity firm Permira.

MUNICH, GERMANY

No More Baby Steps for Windeln

A toddler no longer, 3-year-old baby products website Windeln.de has wrapped up its third round of institutional funding.

The €15 million ($19.3 million) round was supported by existing backers Acton Capital Partners and DN Capital, as well as new investors 360 Capital Partners and MCI. London-based DN Capital and Munich-based Acton participated in both of Windeln’s previous fundings.

The deal adds to a small German presence in Warsaw-based MCI’s Central and Eastern Europe-focused portfolio, and also marks a departure for Luxembourg-based 360 Capital, which tends to invest in France on Italy.

Nonetheless, it might not be long before Windeln enters more familiar territories. The company already claims to have one-fifth of the German baby products market and is intending to expand next into Switzerland, according to newspaper Wirtschaftswoche.

EINDHOVEN, NETHERLANDS

Inkef Inks Brain Gain Deal

Sapiens Steering Brain Stimulation is thinking big after extending its Series A round to €24 million ($31 million) via Amsterdam-based Inkef Capital.

Inkef has added €7.5 million ($9.6 million) to the €16.5 million ($21.3 million) raised in 2011 from Paris-based Edmond de Rothschild Investment Partners, Amsterdam-based Life Sciences Partners, Munich-based Wellington Partners and British health charity the Wellcome Trust.

Inkef is part of ABP, the Netherlands’ largest pension fund, and it provides seed and growth capital to Dutch high-tech companies.

LONDON

Techstars Shines on London

Startup accelerator Techstars has taken its first step outside the United States with the launch of a London office.

“In September when I visited London, it was clear to me that something had changed there,” wrote Techstars founder David Cohen on his blog.

He added that the United Kingdom government’s Tech City program, plus startup incubators like Google Campus, had attracted more talent and “provided visibility to what was happening in London.”

Techstars’ sixth office will be managed by Jon Bradford, founder of the Springboard accelerator that Techstars has merged with.

Although Techstars’ London office is new, it has already backed several European companies, including London-based Memrise and Paris-based Doctrackr.

The first 10 companies to be accepted by Techstars will each receive €15,000 ($20,000) plus €70,000 ($90,000) in a convertible debt note.

MOSCOW

Runa Makes UBank Transfer

Moscow-based tech investor Runa Capital has credited mobile payment facilitator uBank with an $8 million Series A round, its second finance investment in February.

Users of uBank, which comes preinstalled on many smartphones in Russia, can transfer money from their phones by attaching credit and debit cards to their account, and uBank will now seek to extend its reach in Russia, the CIS region and beyond.

Runa’s portfolio now numbers 20 businesses and has added companies from Russia, Germany and Israel since the start of the year.

STAVANGER, NORWAY

Trac ID Tags Northzone

Spotify investor Northzone has tuned into a new technology opportunity in the energy industry.

Trac ID Systems, which uses radio frequency identification (RFID) to facilitate logistics and stock management in the oil and gas sector, has raised €3 million ($4 million) from Oslo-based Northzone and Statoil Technology Invest, the venture arm of Norway’s state oil company.

Statoil uses the RFID products and the new funding will help Trac ID deliver its contract for the oil giant and drive global sales.

Northzone is currently investing a €130 million technology fund it raised in 2010.

EDINBURGH, SCOTLAND

Door Open at Archangels’ Scottish Stable

After one exit in 2012, Scottish business angel syndicate Archangels could see several more this year, the organization’s CEO tells VCJ.

“There’s definitely more interest in our portfolio now than there has been in the past few years,” John Waddell says.

Archangels buys into early-stage Scottish businesses and tends to invest from £500,000 to £800,000 ($755,000 to $1.2 million). Its portfolio numbers 26 companies and covers most sectors except for hospitality, leisure and property.

Most recently, in February, Archangels and the Scottish Investment Bank partnered in a £3.3 million ($5 million) funding of Lux Assure, an oil industry services company.

Compiled by Alex Derber