In a recent Essential Intelligence Weekly article, we reported some of the major findings from Library House’s Q2 2008 Quarterly Briefing. The most significant of these was a 33.6% drop in investment in the most recent quarter across Europe, from €1.43 billion in Q1 2008, to just €949 million in Q2 2008.

This raises the question: are VC-Firms spooked by the credit crunch and the resultant change in economic conditions, and as such holding off on making investments? Or are they being more selective in the types of companies or sectors that they invest in?

To further explore this we interviewed a few VCs to get their perspectives on the current investment landscape and whether this has changed compared to last year.

Some think that there has not been a visible effect of the credit crunch in the VC investment market. Balderton Capital co-founder George Coelho, who recently joined cleantech-focused Good Energies, thinks that nothing has changed, with VCs still being busy in both Europe and the US. With regards to the Cleantech sector, he stated that there also hasn’t been an effect so far, with lots of competition for deals. He also said that although the amount of investment for web companies may be affected, he is not worried about the impact of the credit crunch and economic downturn on the VC field overall.

However, other VC’s are less optimistic. Frederic Court, of Advent Venture Partners, believes that people are now being more cautious, with deals taking more time. He also believes that it could be harder for early stage companies, and companies which raised early round funding 2 years ago and are now seeking to raise funding in the near future.

Interestingly, Mr Court also thinks that the IPO market is closed at the moment, which is supported by Library House data. Many entrepreneurs are also moving to the view that a trade sale is the most likely exit option in the short term.

The increased caution of investors has been apparent from other VCs that we have spoken to. Nic Brisbourne, of DFJ Esprit, also believes that investors are being more cautious in certain sectors, particularly ventures associated with the financial sector. He said that VCs are aware of the general economic climate, and will focus on sectors that are likely to be unaffected by the economic downturn.

The underlying messages were positive, which is testimony to the robustness of the sector. All of the VCs that we spoke to believed that good companies will continue to receive investment, no matter what the economic climate. The view was that whilst there will probably be a slight decline in the VC investment market, as caution takes hold, this won’t be anything like the significant downturn that was witnessed in the financial sector.

All this suggests that VCs are not spooked, but are rather aware of the current economic climate, and are tending to be more selective in the sectors in which they operate, and the deals that they make. It will be interesting to see how this plays out in the coming months and whether Q3 2008 figures show signs of an upturn.

Library House has been commissioned by Merrill DataSite to examine the awareness and knowledge of Virtual Data Rooms in the European VC and Institutional investor community. Merrill DataSite is the leading global provider of turnkey VDR solutions. Merrill DataSite has hosted virtual data rooms for thousands of clients and millions of visitors, representing transactions totalling multiple billions of dollars in asset value.


Library House has constructed a short survey aimed at privately held companies, investment firms, LPs and large corporations. The survey should take you no longer than 10 minutes to complete, but should supply an insight into Virtual Data Room usage.


Merrill Corporation and Library House will donate £5 to the Prince's Trust for every completed survey.


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SpePharm, the France-based pharmaceutical company, has received €16m from TVM Capital, Signet Healthcare Partners and Paul Capital Healthcare. SpePharm acquires, registers and markets specialty medicines, targeting hospitals and focusing on oncology, and supportive and critical care. The investment will be used to fund growth. Concurrent to the funding, the company received €10m in acquisition financing to fund the acquisition of Procter & Gamble’s Dantrium, a hypothermia treatment, for Europe and other markets.

F2G, the UK-based developer of antifungal drugs, has received £6.3m (€7.95m) in funding led by BankInvest Biomedical Venture, with co-investment from Astellas Venture Capital and Merifin Capital. F2G uses its Mycobank genomics technology to identify gene targets in fungi, and is developing FG3622, a small molecule antifungal for use against a wide range of clinically significant mouds. The funding will be used to progress development on the FG3662 and other antifungal agents.

EnOcean, the Germany-based developer of wireless sensors, has raised €4.5m in funding, bringing the total raised by the company to over €20m. EnOcean’s investors include Wellington Partners, 3i Group, Emerald Technology Ventures, Siemens Venture Capital, BayTech Venture Capital and ATMOS. EnOcean has developed wireless sensors which due to new power management techniques and the ability to harvest energy from the environment, do not require batteries removing the need for maintenence.

More companies' intelligence at www.libraryhouse.net

S.I.S Surface Imaging Systems, the Germany-based developer of microscopy components, is to be acquired by Bruker AXS. S.I.S has developed and manufactures scanning probe microscopy systems for use in surface scanning and characterisation. Bruker AXS develops structure analysis systems based on X-ray diffraction, and sees overlap in market and applications between its and S.I.S’ systems. As a result of the acquisition S.I.S will be renamed Bruker Nano. The transaction is expected to close in Q3 2008.

GANYMED Pharmaceuticals, the Germany-based biotech company, has had a majority of its shares acquired by ATS with Ingro Finanz, KfW, Landesbank Baden-Wuerttemberg, Nextech Venture, Varuma, VI Partners, WFT and a number of private investors selling their stakes. GANYMED is developing monoclonal antibody therapeutics against solid cancers, and concurrent to this change is looking to expand its pipeline to include treatments for breast, colorectal, lung, pancreatic and prostate cancers, as well as putting its lead antibody, iMAB362, into clinical trials in Q4 2008.

More companies' intelligence at www.libraryhouse.net

Aquamarine Power, the UK-based wave and tidal energy company, has appointed Martin McAdam as chief executive. Prior to joining the company Mr McAdam was chief operating officer at Airtricity, where he founded its North American operations which were purchased by Eon in 2007. Airtricity was itself acquired in February 2008 by Scottish and Southern Energy.

Proteros Biostructures, the Germany-based company focusing on X-ray protein structure analysis, has appointed Dr. Gerhard Müller as chief scientific officer and managing director of Proteros Fragments, a newly formed, wholly owned subsidiary. Before Proteros, Dr Müller spent three years as vice president, drug discovery at GPC Biotech.

mBlox, the UK and US-based mobile transaction network, has appointed Ken Elmer as chief financial officer with responsibilities leading the global finance, HR and facilities functions of the company. Prior to this, Mr Elmer was senior vice president, finance and administration at Tiburon, a division level chief financial officer at Pacific Bell and Pacific Telesis Group and held chief financial officer positions at Corporation, The MapFactory and TCSI.

More companies' intelligence at www.libraryhouse.net

LaTherm, the Germany-based developer of processes for providing heat to medium sized commercial properties through the use of industrial waste, has informed Library House that that the company would be looking to start its next investment round during September 2008. Mr Kai Petersen, managing director and co-founder, stated that it would be looking to raise €1m, which would be used to ramp production and to engage new clients, and that it had already had had some discussions with a number of venture capital companies. Mr Petersen also disclosed that the company would be looking to exit via a trade sale or an IPO, as both are attractive strategies to the company. He stated that company would be considering an exit in five or more years.

Lead Pharma, the Netherlands-based developer of curative drugs for chronic heart failure, has told Library House that it is currently seeking an investment. Dr Ad van Gorp, chief executive and co-founder, stated that the company expected to close the investment round by December 2008 and that the investment would be used towards finishing the pre-clinical phase of its current targets, to expand its human cell modules and to develop new targets.

More companies' intelligence at www.libraryhouse.net