European News Briefs, March 2013

LONDON

Reassessing the Transatlantic VC Gap

The European venture industry may have a lower historical success rate than that of the United States, but that is almost entirely due to a weaker trade sale environment, new research has shown.

From 1980 to 2011, of 23,000 venture-backed companies in the United States, 39% were successfully exited, compared with a hit rate of 25% for about 12,000 European companies that received venture funding since 1995.

However, when venture deals from the same year were compared, American companies were only 9% more likely to succeed.

The study, by the London School of Economics, shows that there was no difference in the probability of an IPO exit on either side of the Atlantic Ocean, although U.S.-based VC firms enjoy more options for trade sales.

The research also argued that American VCs were more likely to back serial entrepreneurs, who tended to perform better in both regions.

COPENHAGEN

Nordic Portfolio Changes Hands

Copenhagen-based Nordic Venture Partners offloaded its Danish VC portfolio to Oslo-based secondaries investor Verdane Capital.

It was Verdane’s first foray into the Danish market, after having snapped up portfolios elsewhere in Scandinavia.

Prior purchases include funds from Helsinki-based Eqvitech and Stockholm-based firms Brainheart Capital and Småföretagsinvest.

The Nordic Venture Partners portfolio is comprised of one Finnish and three Danish companies, held under the firm’s debut fund.

Investors in Nordic Venture Partners I included pension fund ATP, PensionDanmark, Danske Bank and Sampension.

PARIS

Orange Expects a U.S. Partner by June

French telecom company Orange is seeking a U.S. partner for video sharing site Dailymotion, despite exercising its option to fully acquire the company.

Orange paid €62 million ($77 million) for 49% of Dailymotion in early 2011, as part of a deal that gave it until 2013 to buy the rest of the YouTube rival.

It is now believed to have done so, although at a lower valuation than in 2011. AFP reports that it expects to find a U.S. partner for the website before June.

London-based, Advent Venture Partners, U.S. firms Atlas Ventures and Partech International and Paris-based Idinvest Partners (formerly AGF Private Equity) have invested €50 million ($68 million) in Dailymotion since 2006.

MUNICH

Stylight Hails Dream Funder

Fashion website Stylight has cut a multi-million euro deal with Seven Ventures, the venture arm of German television broadcaster ProSiebenSat.1.

Stylight CEO Benjamin Günther described Seven Ventures as “our absolute dream investor,” due to its financial backing and the advertising platform that its parent television channel provides.

Seven Ventures joins Munich-based Holtzbrinck Ventures and Muelheim-based Tengelmann Ventures as a stakeholder in Stylight, both of which invested in the company’s Series A round in late 2010.

LONDON

Musicmetric Scores Extra Funding

Venture capital continues to pour into big data in 2013, with London-based Semetric securing an additional £3 million ($4.7 million) for its Musicmetric analytics platform, which tracks artist performance and download rates for the music industry.

The two firms that the round included existing backer Pentech Ventures, a London-based technology investor, and Imperial Innovations, which concentrates on London and Oxbridge university spin-offs.

Semetric has now raised £4.7 million ($7.4 million) and although the company didn’t emerge from academia, its management has strong links to Imperial College London.

The funding will support product development and expansion across Europe and into the United States.

PARIS

Appgratis Finally Priced

After four years’ self-financing, mobile app business Appgratis has raised $13.5 million in its first institutional funding round.

The firm’s first investors are Paris-based Iris Capital and Orange Publicis.

Although Appgratis’ management was loath to take VC money for some time, global growth in mobile Internet and the need to add more staff necessitated a fundraising drive.

“I’m always advising fellow entrepreneurs not to take external money and to build their businesses with their passion and bare hands [but] … market growth is outpacing everyone,” Appgratis founder Simon Dawlat wrote on his blog.

LONDON

Lowering the Mid-Market

Much of the buyout activity in the United Kingdom last year was characterised by declining deal size as the average value of lower mid-market acquisitions fell to £33 million ($52 million) from £39 million ($61 million) in 2011.

In 2012, almost half of all buyouts in the United Kingdom fell in the lower mid-market bracket of £10 million to £100 million ($16 million to $157 million). Of the 79 such deals, 66 were worth less than £50 million.

However, deal volume was 12% down in 2011 and Lyceum Capital, the private equity firm that released the data, did not say what share of the total buyout market sub-£100 million purchases constituted in previous years.

LONDON

Pro Bono Consolidation

The London-based organizations the Private Equity Foundation and Impetus Trust, two of the biggest names in venture philanthropy, have merged.

The PEF is funded by some of private equity’s biggest buyout houses, including Apax Partners, Bain Capital, BC Partners, The Blackstone Group, Cinven and Kohlberg Kravis Roberts & Co., while firms such as CVC Capital Partners and Isis Equity Partners invested in Impetus projects in 2012.

Daniela Soares, CEO of the merged entity, told VCJ that Impetus and the PEF have had strong fundraising years throughout the economic downturn.

The new body will be called Impetus – the Private Equity Foundation, and will continue the mission of its originators to improve opportunities for disadvantage people, particularly the young, by investing in charities and providing them with management advice.

Compiled by Alex Derber