European News Roundup, September

LONDON

Recovery at Hand

After plumbing the depths last year, Europe’s venture capital market has rebounded this year.

Second-quarter VC investment leapt to €1.1 billion, up from a record low of €735 million in Q2 2009, reports Dow Jones.

IT and health care led the resurgence, each accounting for roughly a third of total investment, and covering 155 of the 289 VC deals completed.

The news was particularly encouraging for the IT sector, which brushed off a lean 2009 with a 69% increase in investment, up to €334 million.

Individual deals have also grown this year, with their median size up a quarter to €1.65 million.

The United Kingdom remained the hub of VC activity, attracting €338 million of investment, followed by France at €221 million and Germany at €186 million.—Alex Derber

DEESIDE, WALES

Recycler Hopes to Reel In VC

Plastic bottle recycler Closed Loop is chasing £30 million of funding to open a second plant in Deeside, Wales.

The company is targeting venture capital firms and high-net worth individuals for the investment, which will allow it to open a 50,000-tonne-per-year operation. UBS is advising on the fund-raising, which Closed Loop hopes to complete by autumn.

Closed Loop’s present plant in Dagenham, London, can recycle up to 35,000 tonnes per year of plastic bottles.

“That is at the smaller scale of what’s doable, but 50,000 is a more natural size,” says Closed Loop Marketing Manager Nick Cliffe. —Alex Derber

LONDON

Index Bags Specialised Shopping Site

Spotting a finger on the pulse of personalised shopping, Index Ventures has led a £7.5 million investment in Notonthehighstreet.com.

Joining the Series C round was U.S. firm Greylock Partners. The investment will allow Notonthehighstreet, founded in 2006, to expand its team, enhance its website and undertake new business initiatives.

The company sources fashion, house wares and gift items from more than 1,600 small businesses to offer customers unusual and hard-to-find products.

“Notonthehighstreet.com [has] the future capability to support thousands of small businesses in Britain and abroad,” said Greylock Partner Laurel Bowden. —Alex Derber

MOSCOW

Medvedev Issues Wake-up Call

Russia needs to revolutionise its venture capital industry, President Dmitry Medvedev has said.

“The trend of Russian companies’ increasing expenditure on research and development has already become obvious, but we have little venture capital,” Medvedev told a government meeting, according to news service RIA Novosti.

Of the 108 venture funds in Russia, only 43 with combined capital of $2 billion actually function, Medvedev said.

“This is not a large figure for a country like ours in comparison with funds existing in other developed countries,” Medvedev added.

To encourage VC funds, the president outlined changes to legislation that would mitigate losses from failed investments.

“Otherwise venture capital will never appear in Russia because every time people demand a report and if the result is negative, there will be problems,” the president concluded. —Alex Derber

LONDON

Balderton Backs PayPal Competitor eWise

Internet payment specialist eWise will surf into new markets after securing $12.1 million in a round led by London-based Balderton Capital. Dharmash Mistry of Balderton has taken a seat on the eWise board.

Other backers in the round included Total Technology Ventures of Atlanta, Ga., Patagorang, an investment fund led by eWise Director Roger Allen, and individual investor Stanley Shuman, managing director of U.S. investment bank Allen & Co.

Denver, Colo.-based eWise had previously raised a combined $1.8 million from Total Technology Ventures in a 2008 series B round and a 2009 series C, according to Thomson Reuters (publisher of VCJ).

The new investment will help the PayPal competitor launch an e-payments network in the United Kingdom and underpin growth of an online personal financial management division in the United Kingdom, China and Asia Pacific.

In the United States, eWise will accelerate the roll out of “secure vault payments,” which enable payment for online purchases through customers’ own bank accounts. —Alex Derber

BERLIN

EU Approves Cancer Treatment by VC-backed Nanotech Startup

After 20 years of development, a venture capital-backed nanotechnology company has received European Union approval for its nanoparticle brain cancer treatment.

MagForce Nanotechnologies, which is majority owned by Frankfurt-based investor Nanostart, said its Nano-Cancer therapy is the first nanoparticle-based cancer treatment to enter the market.

The treatment involves injecting tumours with iron-oxide nanoparticles that generate heat when subjected to a magnetic field, thereby destroying cancer cells.

Clinical trials showed that the new technology doubled patient survival times when compared with current treatments.

Nanostart has invested roughly €15 million in MagForce since 2004 and presently holds 77% of its shares.—Alex Derber

PARIS

Banexi, Eden Give Reevoo.com Positive Review

Electronics review site Reevoo.com has closed on a series B round for an undisclosed amount from Paris-based Banexi Ventures, Bath, England-based Eden Ventures and business angel Andrew Phillipps. The company is expected to use the new capital to expand across Europe and add functionality to its website.

The 5-year-old product review site, which is based in London, displays purchaser reviews of electronic goods such as laptops and televisions.

Reevoo had previously raised £7 million.

“The expansion into Europe clearly shows Reevoo’s growth potential and the added value which the business offers to retailers and manufacturers on a pan-European scale,” Banexi Partner Philippe Herbert said. —Alex Derber

FIFE, SCOTLAND

Longbow Sees the Light

Ambicare Health has secured £1.7 million in additional funding to expand distribution of its cancer treatment product.

Longbow Capital led the round in the Fife, Scotland-based company, with additional funds coming from the Scottish Venture Fund, DC Thomson and individuals. This marks Longbow’s second investment in Ambicare, following a £2.5 million round in early 2008, when the company was called Lumicure.

The investment provides working capital and will underpin the roll out of the Ambulight photodynamic therapy product, a light-emitting sticking plaster used to treat non-malignant skin cancer.

The Ambulight PDT is portable, which allows patients to receive photodynamic treatment without having to attend hospital. —Alex Derber

STOCKHOLM

IGC Leads BlueArc Round

Swedish firm Investor Growth Capital (IGC) has led a $20 million round in San Jose, Calif.-based data management provider BlueArc.

The new funding brings BlueArc’s total venture funding to about $213 million. Besides IGC, 11 other investors joined in the new round, including Apax Partners Worldwide and Celtic House Venture Partners, according to Thomson Reuters. BlueArc said the round was oversubscribed.

The company, founded in 1998, sells unified network storage systems to data-intensive businesses, and IGC cited its ability to outperform the market as key to the investment. —Alex Derber