Array
(
    [Error] => fclose(): supplied argument is not a valid stream resource
    [File] => /home/apache/bndb06_2.23.14/classes/NewsletterProduct.class.php
    [Line] => 296
)

London calling

That London is now considered by many to be the world’s pre-eminent financial centre is surely astonishing. The US economy is several orders of magnitude bigger than that of the UK and yet New York, by many measures, currently plays second fiddle to London.

It is less clear whether entrepreneurs benefit from London’s dominance in global markets or whether the benefits are confined to those in financial circles – essentially the investment banks. There would, after all, seem to be some obvious disadvantages of launching a business in London, not least that it is hugely expensive to rent property and hire employees.

Those factors have clearly not stopped people setting up companies though. And funding has been plentiful in London and the south-east of England, where 110 deals were completed in the last year (November 1, 2006 to yesterday). Considering that there were 800 deals in the whole of Europe over that period, London is clearly a magnet for venture capital.

But for VCs, the decision to invest is directly linked to the likelihood of a successful exit - and this is where London really shows its mettle. Over the last year, there have been 73 exits for investors in London-based companies, a conversion rate (using a crude formula) of 66 per cent.  It is interesting to see how that compares with the North-east and North-west of England, the regions furthest from London’s stock markets. There were 18 deals in the North-east, but just three exits. In the North-west, there were 45 deals and 13 exits. So these two commercially active areas had a ratio of exits to deals of no more than one in four.

Can we say with any certainty that the paucity of exits in the north of England relates to the area’s geographical remoteness from London’s markets? If we look elsewhere in Europe, there does seem to be a connection between the existence efficiently functioning markets and venture-backed exits. In Germany, for example, where stock markets are often mistrusted, there were 236 deals but a paltry 39 exits. Austria was little better with 23 deals and just five exits. France, where a market-led approach is gathering momentum, saw 164 deals and 39 exits, a conversion rate approaching one in four. But even this compares with unfavourably with Ireland, where the markets have been expanding for the best part of a decade. In Ireland, there have been 22 deals in the last year and 11 exits, a ratio of one to two. This suggests an exit environment that is, albeit on a smaller scale, almost as dynamic as London’s.

Since London’s streets appear to be paved with gold these days, it hardly needs a cheerleader. But we think this data may add a little more lustre to the city anyway.

The Week's Deals

Light Blue Optics, the UK-based developer of holographic laser projection technology, has raised $26m (€18.2m) in series A funding from 3i Group, Capital-E, Earlybird Venture Capital and NESTA Ventures. Founded in 2004, Light Blue Optics has developed technology that allows full colour, high-quality video images to be projected onto flat or curved surfaces. These have a range of applications including automotive displays, digital signage and consumer electronics. The funding is to be used to accelerate the company's product development and commercialisation programme following the recent release of engineering samples to key customers and strategic development partners.

SkillsMarket, the UK-based provider of software to the recruitment industry, has raised £3m (€4.3m) from Foresight Venture Partners, Octopus Ventures, Richard Koch and other private investors, according to Recruiter magazine. The funding is intended to finance a planned expansion of iProfiles, the company's online CV product. The software is designed to allow jobseekers to display their CVs, with changes replicated across all databases held by iProfiles recruiters, and then enable recruiters to compile candidate shortlists using searchable criteria.

Complete Network Technology, the Ireland-based telecoms company, has raised €4m from Oyster Capital. The funding is to be used to further develop the company's fibre network around Dublin and to take on extra sales staff to support that growth. Complete Network Technology specialises in the provision of secure and available network infrastructure products, converged networks and Metro and Wan bandwidth solutions.

CellCentric, the UK-based biotechnology company operating in the area of epigenetics, has raised $4.3m (€3m) from Morningside Technology Ventures, Takeda Research Investment, Providence Equity Partners and NESTA Ventures in the first close of a two stage funding round. Epigenetics is the study of the control mechanisms that guide the function and fate of individual cells, a field which has the potential to change traditional approaches to many healthcare areas, including cancer therapeutics and tissue regeneration. The funding will be used to increase target validation and small molecule development work, as well as to support CellCentric’s patent portfolio.

The Week's Exits

Surface Therapeutics, the UK-based developer of treatments for dermatological diseases, has been acquired by Serentis for an undisclosed amount in shares. Serentis is a UK-based biopharmaceutical company developing a clinical-stage pipeline of products in the areas of dermatology, wound care and topically applied products. Serentis plans to invest in the development of Surface Therapeutics' lead compounds that target new mechanisms for the treatment of atopic dermatitis.

Interwise, the US and Israel-based global provider of voice, web and video conferencing services, is to be acquired by [[AT&T]] for approximately $121m (€84.8m) in cash. Following the acquisition, which is expected to close in the fourth quarter, the company will operate as a business unit within AT&T Global Business Services. AT&T expects the acquisition will allow it to more quickly develop and bring to market capabilities to address the evolving collaboration needs of businesses.

Seemage, the France-based company involved in creating 3D interactive product documentation, has been acquired by Nasdaq-listed Dassault Systemes. Financial terms of the deal were not disclosed.

People Moves

Babelgum co-founder and former chief executive Erik Lumer has left the company and taken on the chief executive role at UK-based RawFlow, another peer-to-peer TV company. Mr Lumer has more than 15 years experience as a business consultant and technology innovator in the telecoms and internet sectors.

Moberg Derma, the Sweden-based developer of pharmaceutical products for common skin diseases, has appointed Tommy Nilsson as its new chief executive. Peter Wolpert, the company’s former chief executive and one of the company’s founders, will now become vice chairman of the board, focusing on international partnerships and investor relations.

Most Accessed Companies

Fon Technology, the Spain-based wifi sharing community, has attracted a lot of attention this week. The company this week announced a partnership with BT to cover the entire UK with BT FON hotspots. The deal means that more than more than 3 million of BT’s Total Broadband customers will be invited to join the global community of people sharing their wifi. Investors in Fon include Google, Sequoia Capital, Index Ventures, Skype Communications, Atomico Investments, Coral Capital and Digital Garage.

Joost, the Netherlands-based internet TV company, has also attracted a lot of attention. News this week at Joost includes a partnership with ITN’s online division in a move that will provide the Joost platform with news, sport and entertainment content. Also this week, Joost has been released to the public, allowing anyone to download and run the service that had been in a private beta since early this year.