Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 1 of 10
���� January 2007
The Go4Venture Monthly Venture Capital Bulletin is a publication commenting on the latest results from our European Technology VC Headline Transactions Index®.
Go4Venture’s European Tech VC Headline Transactions Index is based on the number and value of transactions reported in professional publications. The Index is compiled on a monthly basis as an early indicator of the evolution of the market for venture capital funding for European information technology companies.
For more details please refer to the Methodology Note available at the bottom of this link:
www.go4venture.com/research/hti.htm
Monthly European Technology Venture Capital Bulletin
January 2007
About Go4Venture
Go4Venture is a London-based corporate finance advisory firm focused on providing European technology
entrepreneurs and their investors with impartial advice to help them develop and execute growth strategies.
Our services encompass:
• Strategic advisory and valuation• Financing strategies
• Buy and build strategies• Exit strategies (trade sale and IPO advisory)
We are particularly well-known for our international equity private placement services, where we have developed a reputation second to none in Europe among international VCs.
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 2 of 10
���� January 2007
Headline Transactions IndexHeadline Transactions Index
January fund-raising reaches record HTI level
Fund-raising
surged this month by 61% versus January last year
Plastic Logic raises a whopping €75.7 million
• €233 million of fundings were announced in January driving the Headline Transaction
Index 61% above the same month in the previous year.
• The January figure, includes several fundings e.g. Truphone and Plastic Logic, to
name just two, which were only announced in early January, though they were closed in
2006.
• Plastic Logic is the biggest European Fundraising to date with €75.7 million.
0
50
100
150
200
250
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Valu
e o
f T
ran
sacti
on
s
(per
mo
nth
- €
mn
)
2004 2005 2006 2007
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cu
mu
lati
ve T
ran
sacti
on
Valu
e (€ m
n)
2004 2005 2006 2007
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 3 of 10
���� January 2007
Note: Bold indicates lead or co-lead investor(s) Source: Go4Venture
Steelpoint Capital Partners, Intel Capital, Quester
Secure content compliance solutions
17.5Series BEnterprise Software
Workshare (UK)
www.workshare.com
Wellington Partners, Eden Ventures, Independent News
and Media, Burda Digital
Ventures
Mobile VoIP network provider
18.0Series ASoftware, Telecom
Truphone (UK)
www.truphone.com
Amadeus Capital Partners,
Accel Partners, TVM Capital, Adara Venture Partners
Wireless fixed broadband
access equipment
18.7Late
Stage
Telecom
Hardware
Cambridge Broadband
Networks (UK)
www.cambridgebroadband.com
Individual InvestorsProvider of targeting
services for advertising,
content, and e-commerce
7.6Series AInternet
services
Wunderloop (Luxembourg)
www.wunderloop.com
Dansk Kapitalanlaeg,
InnovationsKapital AB, IVS A/S, Olicom, TVM Capital
Solutions for manufacturing
and packaging optical modules
9.0Late
Stage
Telecom
Hardware
Hymite (Denmark/Germany)
www.hymite.com
Qualis SCASearch engine software for B2C and B2B markets
12.0Series CEnterprise Software
Exalead (France)www.exalead.com
Arts Alliance, LongAcrePartners. Nordic Venture
Partners
Wireless entertainment content
7.4Series CMobile Content
Player X (UK)www.playerx.com
3i Group, Amadeus Capital,
Cambridge Angels, Cambridge
Capital Group, Cambridge
Gateway Fund
Power amplifier technology
for the wireless
communication industry
7.5Late
Stage
HardwareNujira (UK)
www.nujira.com
Technology CapitalRollable electronic displays21.0Spin-OffDisplay Technology
Polymer Vision (The Netherlands)
www.polymervision.com
Mitsui Private Equity, ACT
Venture Capital, Alta Berkeley,
Apax Partners, BlueRun Ventures, Cheyne Capital
Management, GLG Partners,
Plutus Capital Management
Company targeting fabless
semiconductor Digital Radio
and Digital TV
38.6Late
Stage
Semi-
conductors
Frontier Silicon (UK)
www.frontier-silicon.com
Oak Investment Partners,
Tudor Ventures, Amadeus
Capital Partners, Bank of
America, BASF Venture Capital,
Cambridge Display Technology, Cambridge Research &
Innovation, Intel Capital, Merifin
Capital, Morningside Group,
Nanotech Partners, PolyTechnos Venture-Partners,
Quest For Growth
Developer of manufacturing
technology to print
electronics on plastic
substrates
75.7Late
Stage
Semi-
conductors
Plastic Logic (UK)
www.plasticlogic.com
Stage Description ParticipantsSize
€mn
SegmentCompany
Top Headline VC TransactionsTop Headline VC Transactions
11 deals above our €7.5 million threshold
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 4 of 10
���� January 2007
• Plastic Logic (UK), a fabless semiconductor company raised a record €75.7
million for a European start-up in its fourth round of financing. The current round
is led by Oak Investment Partners and Tudor Investment Corporation.
Amadeus, a seed investor in the company, participated in the round as well as the
other historic investors: Bank of America, BASF Venture Capital, Intel Capital,
Merifin Capital and Quest for Growth. The proceeds will be used to build a new
plant in Dresden, Germany, as well as for the commercialisation of the technology.
Plastic Logic’s technology will enable the creation of electronic books (where the
content may be downloaded wirelessly) and flexible, electronic newspapers.
Ultimately, Plastic Logic promises the shift from silicon based semiconductors
towards plastic based alternative semiconductors.
Plastic Logic is a great example of a European company being nurtured by a VC,
in this case Amadeus Capital partners, since 2000, i.e., over a period of seven
years. The current round is the largest ever VC round raised in Europe.
Oak Capital Partners is a multistage VC fund with a total of $8.4 billion. Tudor
Investment group is an alternative asset fund manager with $16.1 billion under
management. Another sign that we will see VCs more often in competition with
private equity houses and hedge funds. Merifin Capital is a family office with a
long tradition of investing in technology businesses, showing once again that
family offices are making a comeback to VC investments.
• Frontier Silicon (UK), a provider of fabless semiconductor and modular solutions
for multimedia products, raised €23.5 million in a late stage funding led by Mitsui
Private Equity with the participation of ACT Venture Capital, Alta Berkeley, Apax
Partners, BlueRun Ventures, Cheyne Capital Management, GLG Partners and
Plutus Capital Management. Frontier Silicon is a producer of integrated circuit
solutions for mobile television and digital audio applications. In mobile TV, it
differentiates itself with a multi-standard approach based on a flexible software-
defined radio architecture.
Mobile TV is obviously generating considerable interest, even if developments
outside Asia have been hampered by multiple competing standards. Another
prominent startup in the space is Paris-based Dibcom (which raised a €25 million
fourth round in August 2005 at a €45 million pre-money valuation).
Mitsui Private Equity is the European venture arm of the Mitsui Group which has
run successful VC operations in Japan and the US for many years. They focus on
later stage investments (revenues of at least £5 million) where they believe the
Mitsui Group can add value through its distribution network.
Top Headline VC TransactionsTop Headline VC Transactions
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 5 of 10
���� January 2007
Top Headline VC Transactions (cont.)Top Headline VC Transactions (cont.)
• Polymer Vision (The Netherlands), has taken a €21 million investment from
Technology Capital in a first round of financing. Polymer Vision is a spin-out
from the Philips Technology Incubator and is focused on roll-able displays for
mobile devices. Technology Capital will become majority shareholder, while
Philips retains a 20% stake in the business. Polymer Vision ‘s rollable displays are
low-power, and are used to increase the screen sizes on mobile devices while at
the same time offering a clear enhancement by being readable under normal
sunlight.
The Phillips Technology Incubator is a 4 year old in-house effort of the Dutch
technology behemoth to create new businesses based on technologies developed
at its R&D facilities. It has a hands-on approach to transforming research into
businesses, joint ventures and where necessary to attract funding from VCs.
Other ventures nurtured by the Philips Technology Incubator includes Handshake
Solutions, a clockless IC design technology used in ePassports, and Philips 3D
Solutions, which develops a 3D technology which does not require special glasses.
Technology Finance Capital SA, is a Luxembourg-based hedge fund investor.
• Cambridge Broadband (UK), has raised an additional €18.7 million of late
stage funding, following a previous round of €7.5 million a year ago. Existing
investors of the company Amadeus Capital, Accel Partners and TVM Capital were
joined by Adara Venture Partners. Cambridge Broadband tries to capitalize on the
growth opportunity in the cellular backhaul market as well as in the broadband
access market where its flagship product is used to connect WiMAX and cellular
base stations to backbone networks. The company competes with Alvarion and
Aperto Networks.
Cambridge Broadband is another example (in the same month!) of a company
which has been nurtured through the downturn to the current upswing by
Amadeus Capital (together with Accel and TVM). The company has been through
a number of changes, with the appointment, in the last year, of a new CEO, CFO
and new VP Operations, culminating with a new Chairman in February 2007.
Since its inception Cambridge Broadband has collected more than €60 million,
which demonstrates that ultimately successful companies often need deep-
pocketed (and patient) investors.
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 6 of 10
���� January 2007
Top Headline VC Transactions (cont.)Top Headline VC Transactions (cont.)
• Truphone (UK), has raised €18 million in Series A from lead investor
Wellington Partners. In addition Eden Ventures, Burda Digital Ventures as well
as Independent News Media participated in the round. The company enables
mobile phones with WiFi capability to make free or low-cost calls over VoIP. The
funding will be used to further develop the technology, to extend the service
(which currently only supports Nokia mobile phones) and to provide for a push into
the mass market.
Truphone is another European attempt at disrupting the mobile telecoms space
following other well-known players such as Jajah, Nimbuzz, Rebtel, or Skype.
Truphone is different from the other companies in that it offers direct calls over
WiFi networks bypassing the existing mobile operators’ infrastructure, whereas
companies such as Jajah or Skype function more like call-back services. All these
companies (except Rebtel) support a limited, but steadily growing range of more
recent mobile phones and thus are dependent not only on the shift towards newer
generation handsets, but in the case of Truphone also on the growing ubiquity of
WiFi coverage. Hence perhaps the stated vision of becoming a “worldwide mobile
internet network operator”.
Although announced in January 2007, Truphone is in fact the largest Series A
round of 2006. Lead investor Wellington Partners has transformed itself from a
regional VC into a US-style pan-European investor, following the Index Ventures
formula. Interestingly Wellington are joined by two corporate venturers from the
media world: Burda Digital Ventures and Independent News Media.
• Workshare (UK), a provider of secure content compliance solutions, has raised
€17.5 million in a Series B round led by Steelpoint Capital Partners, with also
the participation of Intel Capital and existing investor Quester Capital Management.
The company was an early entrant in the compliance market and now has a
complete solution combining policy enforcement, content awareness tools and
user education. The company has over 5,500 clients, including 60% of the Fortune
1000 and a bookings annual run-rate greater than €20 million.
Workshare is a good example of a European company which has made a smooth
transition to a US headquarter and been able to grow its business there very
successfully. Moreover, this transition has been made on the back of an initially
fairly small financing (c. €5 million) from UK investor Quester. Which goes against
the traditional wisdom that going to the US is doomed to failure, and that you need
tens of millions to make it happen. As often is the case, skill (and dedication)
matters more than size.
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 7 of 10
���� January 2007
Top Headline VC Transactions (cont.)Top Headline VC Transactions (cont.)
Steelpoint Capital Partners is a US crossover fund which invests between $5 and
$30 million in mid market companies with growth prospects. Steelpoint was
formed in 2003 as a spin-out of Moore Capital Management, a US-based hedge
fund.
• Exalead (France), has raised €12 million in a Series B funding from its historic
backer Qualis. As a result Qualis becomes majority shareholder. Exalead claims
to have the only unified technological platform that gives users a simple way of
accessing any type of file, whether it is stored on the web, a PC or on a
company's servers. The new round of financing will be used to accelerate the
growth of Exalead and the continued development of its new web search engine
(re-launched in October 2006).
Founded in 2000 by some of the original Altavista team, Exalead is a European
search technology company that has developed a different approach to the
established search engines. Exalead uses “clustering, indexing and semantic
mapping” to help users redefine and discover what they are actually looking for.
Starting off to become an Altavista killer, then a Google killer, the company shifted
focus to serve the enterprise market, It is now making a comeback to the web. It is
worth noting that Exalead is involved in the France-led effort to build an alternative
to Google.
Qualis is a diversified industrial holding company whose main technology asset is
Exalead. As of the end of 2005, Qualis’ net asset value was €185 million.
• Hymite (Denmark/Germany), following a restart in 2006, has received a €9
million Series B financing. The funding came from a syndicate of European VCs
comprising TVM Capital (Germany), InnovationsKapital (Sweden) and Dansk
Kapitalanlæg, IVS and Vaekstfonden (Denmark). Hymite develops ultra compact
silicon-based wafer level packaging products for electronics, micromechanical and
optoelectronics components. The main markets addressed are high-brightness
LEDs, as well as MEMS components and RF devices for mobile phones.
Hymite is a survivor of the late 1990s. Funded essentially by TVM from Germany
and local Nordic investors, the company suffered when its complex technical
solutions didn’t find a relevant market. It seems that the company has finally found
its niche in the HB-LED market where demanding heat dissipation constraints
require an approach different from traditional packaging solutions. The bet from
investors of course is that miniaturization and integration capabilities using silicon
wafer level packaging will open new market avenues over time.
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 8 of 10
���� January 2007
Top Headline VC Transactions (cont.)Top Headline VC Transactions (cont.)
• Wunderloop (Luxembourg), has raised €7.6 million in a Series A funding from
Niklas Zenstrom, the Skype Co-founder; Klaus Hommels, “private investor of the
year 2005” and now venture partner with Benchmark Capital; the European
Founders Fund, the investment vehicle of Germany’s well-known Samwer
brothers of Alando and Jamba fame; and Howard Hartenbaum of Draper Richards,
the famous US early-stage VC joining existing investor Michael Keindl, founder of
European advertising company Adlink. Wunderloop is a behavioral advertising
company. Its technology claims to have boosted conversion rates by up to 500%
and their advertising efficiency by 792%.
The transaction is particularly noteworthy and it is in some ways unheard of in
European VC: it shows for the first time a group of high profile business angels
(and a US GP!) banding together for an ambitious Series A as an alternative to a
VC round. All these angels are successful entrepreneurs who have created
considerable wealth with their previous startups and therefore have the level of
wealth, connections (and confidence!) to go it alone without a professional VC
alongside them (at least for the time being). This also reflects the fact that the web
is bringing “value creation” opportunities which are not particularly capital
intensive, with a relatively rapid move to profitability possible.
As we all know smart entrepreneurs avoid VCs if they can: the VC money is the
most expensive (both in terms of dilution and the constraints it brings with it) and
therefore should be used with care.
• Nujira (UK), has raised approximately €7.5 million in a Series B internal round
co-led by existing investors 3i and Amadeus Capital. In addition Cambridge
Angels, the Cambridge Capital Group and Cambridge Gateway Fund participated
in the round. Nujira addresses the problem of high-power consumption of mobile
network base stations with its advanced high efficiency power amplifier (PA)
technology. Nujira allows OEMs to design smaller, cheaper and significantly more
power-efficient 3G/WiMAX base stations. The technology is currently evaluated by
more than half of the leading OEMs worldwide. The funding will be used to ramp
up the manufacture of Nujira’s PA modulators and to broaden the product range
for higher RF and voltage equipment.
Once again, it is Amadeus Capital (together with 3i this time) doing the running
with this internal round taking Nujira to the next step. Worthy of note, this is
Amadeus' third investment in January alone – even if all are follow-ons rather than
new investments!
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 9 of 10
���� January 2007
Top Headline VC Transactions (cont.)Top Headline VC Transactions (cont.)
Nujira’s technology is a good example of European excellence in technology with
the often encountered challenge of whether the company is addressing a large
enough market. Hence one of the objectives of the current funding is to broaden
the range of applications to address a wider market.
• Player X (UK), has received €7.6 million in a Series B financing from Nordic
Venture Partners, Long Acre Partners as well as its historic investor Arts Alliance.
The company specialises in games, video and TV for mobiles. It develops,
publishes and distributes mobile entertainment content and counts as its
customers operators, portals and handset manufacturers. The funding comes
weeks after the launch of its mobile TV channel geekTV which exceeded all
revenue expectations in what seems to be a move for aggressive growth.
Player X goes after the same mobile gaming space as two companies, which
previously featured prominently in our newsletter, In-Fusio and Digital Bridges. In-
Fusio received €22 million in the Summer of 2004 led by US VC Insight Venture
Partners, while Digital Bridges received €13.8 million in an internal third round in
November 2004 after having been financed to the tune of € 33 million in 2000 and
2001 by Apax Partners and Argo Global.
Player X’s Series B is noteworthy in that it was led by Scandinavian VC Nordic
Venture Partners (“a venture capital firm with a global perspective”) which once
again confirms our mantra that the world of venture capital is becoming global,
driven by sector specialization. Other NVP investments in the gaming area include
EssNet, a designer and operator of online gaming services, and Funcom, an
independent developer and publisher of computer and console games.
Another originality of this round of financing is Long Acre Partners (LAP)
participating. LAP is a corporate finance house focusing on the European mid-
market media sector. This is one example of investment banks returning to
technology investments.
Published 31st January 2007
Monthly European Technology Venture Capital Bulletin
Page 10 of 10
���� January 2007
For Info: Tech Private Equity TransactionsFor Info: Tech Private Equity Transactions
Note: Bold indicates lead or co-lead investor(s) Source: Go4Venture
Oak Investment Partners,
GebNx360, Knox Lawrence
International
International provider of
Business Process
Outsourcing (BPO) services
including contact center management, finance,
accounting and human
resources outsourcing
320AcquisitionIT ServicesVertex Data Sciences (UK)
www.vertex.co.uk
Type Description ParticipantsSize
€mn
SegmentCompany
Disclaimer
The contents of this publication are for general information and use only and are not intended to address the particular investment or other requirements of any recipient. In particular, the information provided does not constitute any form of advice, representation or recommendation regarding any investments and does not constitute an offer to buy or sell the securities of any company. This publication is not intended to be relied upon in making any specific investment or other decisions. Appropriate independent advice should be obtained before
making any such decision.
Copyright: 2007 Go4Venture. All rights reserved.
Go4Venture
1 Hay HillBerkeley SquareLondonW1J 6DH
+44 (0)20 7958 [email protected]