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Monthly European Technology Venture Capital Bulletin - May 2008
09/07/2008. Source:Go4Venture.
 Based on Go4Venture's Headline Transaction Index (HTI) index, the VC market is holding up better than Go4Venture expected even if deceleration is creeping in, the firm says in the latest edition of its monthly VC bulletin.
Certainly, as Go4Venture have talked about in the past, Series A rounds continue to be on a downward trend. The market is changing shape with a stronger emphasis on later stage, although this month Go4Venture sees a notable number of large Series B rounds. This is particularly visible when looking at our HTI Large Deals (what Go4Venture defines as investment rounds >€7.5mn, £5mn or $10mn), in which four out of the five large deals for the month, including the landmark €21.8mn deal for digital wireless transmission company Ubidyne, were Series B. The remaining large deal was a later stage round for CoreOptics, valued at €16.1mn. None of the large deals in May were Series A rounds. Go4Venture did not have any Series A or seed investments at this level in April either, although Go4Venture saw them in January, February, and March.
In addition, Go4Venture continue to see increased investment interest in environmental technologies ("Cleantech"). Under this label hide a variety of industries including energy renewables and conservation, water/air/waste treatment, and new materials (including nanotechnologies) often used in the processes. In addition to the fact that two out of the five large investments in the May HTI are cleantech or have a ‘green’ element to their investment story (Ubidyne, Novel Polymer Solutions), other notable market data points in May include:
- George Coelho, an Intel Capital alumni and a Benchmark Europe co-founder, joined Good Energies to focus on solar technologies (rooted in semiconductors). The list of people moving from IT to cleantech is getting longer by the day. Other notable IT VCs who switched to cleantech include Patrick Sheehan, previously at 3i and now with Environmental Technologies Fund (ETF), and James McNaught-Davis who moved from Advent Ventures Partners to WHEB Ventures last year.
- Al Gore's London-based Generation Investment Management firm closed its Climate Solutions Fund on $863mn. Climate Solutions Fund is a crossover fund which aims to finance smaller private companies
- Capricorn Venture Partners held the final close of its Capricorn Cleantech Fund with €100mn in commitments.
- Milan-based Ambienta announced commitments of €124mn (out of a target of €250mn) for its first environmental fund which aims to take 10-15 positions in private companies primarily in Europe. Up to 10% of the fund will be invested in late stage venture capital deals.
Other trends highlighted by May activity:
Growing activity from strategic investors and corporate venture in particular (for those who have a separate corporate venturing department). May examples include:
- Orascom, the Middle Eastern mobile operator, invested $10mn in MyScreen Mobile Inc, a Toronto-based mobile advertising service which is listed in Frankfurt, Germany.
- Docomo invested $7.5mn in Arteris, a supplier of networking-on-chip IP originally from France (now headquartered in San Jose, CA).
- Qualcomm announced a strategic investment in UK femtocell developer ip.access for an undisclosed amount.
The secondary market is still alive and well; in fact Go4Venture expects to see more transactions as VCs learn to play the game (just like private equity funds do) as exits via trade sales or IPOs dry up. A couple of examples in May:
- Atmos (Milan, Italy), took over Enjoy Ventures' minority stake in EnOcen, a German developer of wireless building control systems.
- Headway Investment Partners, a secondary fund, acquired a portfolio of six companies from French VC firm Viveris Management. The deal is Headway's second "tail-end" FCPI transaction. FCPIs are French tax-incentivised funds similar to VCTs in the UK, with strict rules as to the holding period.
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Go4Venture is a London-based independent corporate finance advisory firm focused on providing equity private placement and mergers & acquisition (M&A) services to Europe’s leading technology companies and their investors. Clients include: Growth companies; VC funds; Buyout funds; and IT corporates. More details can be found at www.go4venture.com.
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