With 2007 at an end, it is a good time to highlight some of the most interesting venture capital deals done over the past year in Europe. In terms of value and number of deals, 2007 investment levels will be down on 2006’s levels but there were plenty of interesting deals in Europe to excite investors, entrepreneurs and commentators alike.

One of the first major deals of the year was the €75m investment into Plastic Logic by a syndicate of investors including Amadeus Capital Partners, BASF Venture Capital, Intel Capital and Tudor Investment Corporation. The funds are being used to construct a manufacturing facility in Dresden, Germany, which the company hopes will be fully completed by early next year. The company is also aggressively recruiting, having recently appointed Richard Archuleta, a former SVP at Hewlett-Packard, as CEO, Konrad Herre as Vice President, Manufacturing for Dresden operations and Klaus Hermann as Director of Quality. This growth coupled with the near-term prospect of commercialisation means that 2008 will be a key year for Plastic Logic.

Another Cambridge-based company, True Knowledge, also raised financing in 2007. In September, the company raised €868k from Octopus Ventures for further product development. The company is developing search technology that allows general knowledge to be understood and processed by computers, allowing questions posed in natural language to be answered intelligently. Although this is a much smaller deal than the other ones highlighted in this article, the company is interesting as search sites capture the majority of online advertising revenues. The company’s service is complementary to current search engines, making True Knowledge a prime acquisition target if its technology is proven.  In November, True Knowledge launched its search product into private beta, allowing an initial group of external users to test the technology and in December, the company opened up its API product for external beta testers. With applications for beta testers numbering in the tens of thousands, considerable press coverage and the company looking to close a substantial venture capital round before Q2 of next year, 2008 is lining up to be a exciting year for True Knowledge.

Although the UK makes up the lion’s share of European venture capital deals, mainland Europe also had its share of interesting deals in 2007.

Think Nordic, an electric car developer based in Norway, received over €60m in two rounds of funding in 2007. Major investors in these rounds included DFJ Element, RockPort Capital Partners, Canica, Capricorn Venture Partners and Wintergreen Advisers. The company recently began production at its manufacturing facility outside Oslo and intends to test its cars over the Norwegian winter. Think Nordic envisions full-scale production will begin in 2008 with 3,500 cars being produced each shift. The company has recently entered into a partnership with Porsche Consulting to bring Porsche’s production experience to the factory in an attempt to ensure its cars are produced efficiently and meet high quality standards.

Dailymotion, the French video-sharing website, raised a considerable €25m second round of funding in Q3 2007 from AGF Private Equity, Advent Venture Partners and previous investors Atlas Venture and Partech International. The company was also busy in 2007, striking partnerships with leading content distributors, including Universal and the Warner Music Group. Obviously YouTube still dominates the online video sector, but if Dailymotion continues its explosive growth in 2008 it may start to reduce YouTube’s dominance. A major factor in Dailymotion’s initial popularity in Europe was the ability to view the site in the various non-English, European, languages. With YouTube adding this functionality in 2007, it remains to seen how this will affect Dailymotion’s growth rates.

2007 provided an interesting mix of deals, with investments into the Mediatech and Cleantech sectors attracting a lot of attention. It will be intriguing to see how companies recently receiving funding in these two sectors develop, with so many of them promising big things for next year.

The Week's Deals

SuperStroy, the Russia-based operator of DIY stores, has raised £16.1m (€21.6m) from Aurora Russia in exchange for a 24.3 per cent stake in its holding company, Grindelia Holdings.  The investment will be used to redeem existing loans and finance expansion in and beyond the Urals region of Russia.  Grindelia operates under the SuperStroy and StroyArsenal brands and aims to have opened 74 stores selling DIY goods by 2010.

Santaris Pharma, the Denmark-based biopharmaceutical company, has raised €20.4m in a round led by new investor Gilde who provided €7.5m.  Existing investors BankInvest, Novo, Forbion, Global Life Science Venture, Sunstone Capital, Seventure, Omega, LD Equity and InnovationsKapital also participated, alongside members of Santaris Pharma’s board and management.  The capital will be used for development of the company’s pipeline of RNA antagonist drug candidates to be used for the treatment of cancer.

Zoomio, the Denmark-based software developer, has raised €5m from Via Venture Partners, Vecata and Teknologisk Innovation together with the company’s management.   The investment will be used to aggressively grow the company and launch in new markets.  The company has developed an automated direct marketing platform and intends to open a new international sales office every six months.

More companies' intelligence at www.libraryhouse.net

The Week's Exits

RLA Group, the UK-based marketing and communications agency, has been acquired by Mission Marketing for an initial payment of £9.5m (€12.7m).  A further £2m (€2.7m) has been deferred, depending on whether RLA met performance targets at the end of 2007.  RLA Group specialises in regional marketing for local and national brands. 

Snacktime, the UK-based vending machine supplier, has completed its IPO on AIM, raising £3m (€4m) with a market capitalisation of £10m (€13.4m).  The company will use the proceeds to fund growth and accelerate vending machine sales in the UK.   Snacktime is the largest operator of snack and chilled-drink vending machines in the UK.

Hybrigenics, the France-based bio-pharmaceutical company, has completed its IPO on the Alternext market, raising €6.1m with a market capitalisation of €87.9m.  The capital will be used for phase II trials of the company’s treatment for prostate cancer and R&D on its drug pipeline.

More companies' intelligence at www.libraryhouse.net

People Moves

Cambridge Biostability, the UK-based developer of temperature-stable vaccines, has appointed Luca Guerzoni as chief executive, replacing Dr David Stone who will remain on the board as a non-executive director.  Mr Guerzoni was managing director for Chiron Vaccines in Italy and had previously held roles at Merck Sharp & Dohme and Sanofi Pasteur MSD.

NovImmune, the Switzerland-based biotechnology company, has appointed Eduard E. Holdener as chairman.  Dr Holdener was previously chief medical officer at Roche and has taken on the role at NovImmune following his retirement.  The company develops treatments for immune-related disorders and inflammation.

More companies' intelligence at www.libraryhouse.net

Selected Recent Updates

PneumaCare, the UK-based medical technology start-up, has told Library House that the company is in the process of raising £750k-1.25m (€1m-1.67m) to support IP protection, clinical testing and product design for its non-invasive lung monitoring product.  Dr Ward Hills, PneumaCare’s co-founder and chief operating officer, revealed that the company intends to begin manufacturing and shipping its product in Q3 2008, in conjunction with a local technology consultancy.  Dr Hills also said that the company aims to be acquired by a large medical device or lung-function monitoring company in Q1 2009.

LastMile Communications, the UK-based wireless network provider, this week informed Library House that it is seeking £10m (€13.4m) to fund its commercialisation and to begin product installation.  Mr James Vinall, the communications manager for business development and investment, said that the installations would target the “not-spots” that conventional broadband has missed, beginning in the UK, Italy and US.   The £10m investment round will consist of £8m (€10.7m) from strategic and institutional investors and £2m (€2.7m) from business angels and private investors.  LastMile also intends to raise an additional £10m in debt financing.

More companies' intelligence at www.libraryhouse.net

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