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IPO window open despite volatile markets

Who says volatile conditions stop new companies coming to market? Ablynx, a Belgian company that develops and manufactures antibodies, was one of five European venture-backed outfits that launched successful IPOs in the last month. Ablynx’s €243m offering last Tuesday was representative of the type of IPO that is acceptable to investors in stock markets that have swung wildly since the sub-prime crisis broke in August. Ablynx’s single domain antibodies are used in the treatment of auto-immune diseases, thrombosis, cancer and neurodegenerative conditions. The concept is simple (if not the techniques to match it), the products are understandable to a wide audience and the cashflow potential is evident.

The other IPOs in the last 30 days have a similarly unfussy genetic make-up:

• U-blox, a Swiss company that makes computer chips for global positioning systems, raised €191m.

• Codere, a Spanish gaming company operating slot machines, bingo, betting shops, casinos and racetracks, raised €86m.

• Mobotix, a German manufacturer of surveillance camera systems, raised €9.5m.

Although these groups operate in disparate sectors, the similarities between them are striking. They all have clear strategies producing potentially good future cashflow that should be capable of withstanding a mild downturn. This is not an endorsement of the particular companies mentioned, but of an approach that many continental European companies are particularly good at. That is, simple, unflashy, “does what it says on the tin”.

The flipside is that any company with a business model that is not obviously easy to monetise is unlikely to attract assets. Not only would it struggle to come to market, but it is less likely to attract venture backing given the reduced exit opportunity for the foreseeable future.

At the same time, this does mean that brave, or contrarian, investors could be in a position to pick up some bargains in the coming months.

The Week's Deals

Antisense Pharma, the developer of targeted therapies for malignant tumours, has raised €27m from MIG. Antisense is developing drugs to treat cancerous diseases for which treatment options are limited, such as brain tumours and pancreatic carcinoma. The latest investment is to fund the development of the company's lead compound towards approval. The company says preparations for the last clinical trial phase are currently under way.

Innovative Silicon, the US and Switzerland-based developer of ultra-high density memory intellectual property, has raised $25m (€17.2m) in series C funding from Wellington Partners Venture Capital, Auriga Partners, Austin Venture Partners, Highland Capital Partners, Index Ventures and Soitec. Innovative Silicon's technology is designed for embedded system-on-chip, memory protection unit, and portable consumer applications that require low power, high density and high speed.

Neoss, the UK-based dental implant company, has received £10m (€14.4m) in follow-on funding from MMC Ventures. Neoss has created a dental implant system for replacing missing teeth, based on a titanium 'root' in the jaw bone supporting an artificial tooth or bridge. According to Merrill Lynch, the global dental implant market is forecast to reach $2.7bn (€1.8bn) in revenues this year, an increase of 20 per cent from 2006. The company says the market's long term growth potential is supported by the low penetration of dental implants compared with alternative forms of tooth replacement. The latest funding is intended to support the rapid development of Neoss’s global sales efforts.

Speakanet, the Denmark-based provider of business telephone systems, has raised $10m (€6.9m) from current investors Northzone Ventures and Eqvitec Partners and new investor Via Venture Partners. Speakanet's service is designed to replace both traditional and VoIP-based fixed-line office telephone systems with a completely mobile, hardware-free, self-provisioned and web-enabled service. The investment will be used to support customer growth in Denmark and accelerate international rollout.

The Week's Exits

Ablynx, the Belgium-based biopharmaceutical company, has raised €75m in an IPO on Euronext Brussels, valuing the company at €243m. Ablynx is engaged in the discovery and development of a novel class of antibody-derived therapeutic proteins to treat a range of serious human diseases. The funds are to be used to aggressively move forward the company's lead programme, currently in phase I, and rapidly build a strong clinical pipeline.

Cordys, the Netherlands-based provider of business process management suite technology, has acquired Germany-based abaXX Technology for an undisclosed amount. abaXX provides internet-based, platform-independent solutions for information management, portals, customisation and process optimisation. Cordys says the acquisition will enable it to rapidly grow its presence in the German market, with a proven team and strong customer base.

People Moves

Octavian, the Israel-based provider of software to the wealth and investment management industry, has appointed Klod Ghez as president and chief executive. Before joining Octavian, Ghez served as the president and chief executive of Sheer Networks and led its acquisition by Cisco for $122m. Ghez formerly served as vice president for global customers at Amdocs and before that as senior vice president and general manager of the financial products business unit at Computer Associates.

Intelligent Energy Holdings, the UK-based fuel cell power systems company, has appointed Rian Urding as group chief financial officer. Mr Urding's appointment follows that of commercial director and general counsel Thomas Bennett, as Intelligent Energy progresses towards commercialisation of its fuel cell technology. In August 2007, the company told Library House that its prefered exit strategy would be through an IPO.

Finnish Electric Vehicle Technologies (FEVT) has appointed Martti Alatalo as chief executive. FEVT researches and develops energy storage systems based on both current and future energy storing technologies.

Most Accessed Companies

Dopplr, the Finland-based online service for frequent travelers, has attracted a lot of attention this week. Currently in private beta, Dopplr allows users to set up travel pages so they can coordinate meet-ups with friends or business contacts. The service is primarily targeted at people who travel more than five times a year and have friends who do as well. Investors in the company include Martin Varsavsky, Joichi Ito, Reid Hoffman and The Accelerator Group led by Saul Klein.

Oversi, the Israel-based provider of peer-to-peer (P2P) caching and content delivery technology, has also attracted a lot of attention. Oversi's products are designed to enable service providers to deliver more bandwidth on their existing infrastructures, optimise network performance and defer expensive upgrades. The same Oversi platform is also designed to provide a building block for supporting the emerging services of P2P VOD (video on demand) and P2P TV. Oversi has been funded by investors including Cisco Systems, StageOne Ventures, TempoPark Fund, Lab-One Innovations and Carmel Ventures.