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| Issue 88 Tuesday, 11th December 2007 |
www.libraryhouse.net
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This Week:
Regulars:
VentureCast Universe
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Dear Subscriber,
Recent analysis for the 2007 Cambridge Cluster report revealed that Berlin is the 3rd most significant cluster in the European Web sector, behind only London and Paris, in terms of total venture capital committed. In fact of all the venture deals completed in the Berlin cluster in 2007, 20 per cent were in web-based companies - a higher percentage than any other cluster studied.
Why is Berlin seeing growth in the Web sector?
The increasing investor interest in Berlin’s Web and Mediatech sectors is being mirrored throughout Europe in many other ‘soft’ centres of innovation. A major driver of this is the current boom in Web 2.0. European Web companies’ growth, in turn, is partly due to the failure of some “global” web companies – based predominantly in the US – to cater for local needs. A number of German-language clones of US Web companies have become extremely successful before the US company had adapted its product to the German market. StudiVZ, for example, was the most popular social network in Germany as of Q3 2007, beating out US incumbents MySpace and Facebook - despite being hardly known outside of Germany.
The cluster report also highlighted the link between population size and the vibrancy of specific sectors in a cluster. The main finding was that a cluster with a large population was more likely to excel in soft innovation sectors like Web whereas for hard innovation, an excellent university was much more important. Populous clusters are also more likely to have media giants based in them, generating the creative hubs in which media-based start-ups can thrive. With a metropolitan area of nearly 6m residents, Berlin certainly has the capacity to maintain its place as one of the leading soft innovation clusters in Europe.
Which companies are active in the Berlin Web scene?
The Berlin cluster benefits from a mix of experienced companies and young start-ups eager to make their mark on the Web sector.
Founded in 2000, Questico is an online question and answer portal that allows users to connect with experts on a variety of topics by telephone. In 2006 it was judged as one of the top 10 fastest growing companies in Germany by Deloitte. In July of this year the company expanded its coverage into the UK with the launch of an English-language portal.
Qiro, a mobile community and news service that utilises automatic localisation features, was founded in November 2006 and has raised seed funding from Business Angels, High-Tech Grunderfonds and IBB Beteiligungsgesellschaf. Tripsbytips, a German-language clone of British travel social network WAYN, raised an undisclosed first round of funding in Q3 2007 from Burda Digital Ventures.
Another observation from the recent report was that successful companies contribute to a vibrant entrepreneurial environment by providing, among other things, experienced workers and advisors, investment capital and inspiration for budding entrepreneurs. With Berlin-based student social network, StudiVZ, being acquired by Holtzbrinck in Q1 2007 for €85m following only a modest external investment of €300k from the European Founders Fund a year earlier, Berlin-based Web entrepreneurs certainly have the motivation to create further successes.
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PregLem, the Switzerland-based biopharmaceutical company, this week announced the close of its series B funding round at €22.5m, bringing the capital raised by the company in the past year to €41m. PregLem focuses on the development and commercialisation of innovative therapeutic compounds addressing benign gynecological conditions and infertility. The latest funding will be used to develop a molecule for the pre-operative treatment of uterine myoma, licensed from HRA Pharma, a France-based company. The round was led by Sofinnova Ventures and existing investors, Sofinnova Partners and [[MVM Life Science Partners]], also participated.
MyStrands, the US- and Spain-based developer of social recommendation technologies, has raised $24m (€16m) in a second closing of its series B round, led by BBVA and involving existing investor Debaeque. The funding will be used for product development and business expansion. MyStrands has built a social-recommender engine designed to allow content, products, services and ads to be personalised to the end-user.
Streamezzo, the France-based software provider, has raised €15m from AXA Private Equity, I-Source Gestion, National Technology Enterprises Company, Qualcomm Ventures and Sofinnova Partners. The company has developed software to enable interactive mobile services to be delivered rapidly and cost-effectively. The investment will be used to grow the company internationally.
More companies' intelligence at www.libraryhouse.net
Mindscape, the France-based provider of multi-media and interactive content, has been valued at €59m following its IPO on Euronext's Alternext market, which raised €11.6m. The company hopes to generate 50 per cent of its revenues internationally, through the sales, publication and distribution of its educational and lifestyle games and software.
Loyalty Management, the UK-based owner and operator of the Nectar reward scheme, was acquired this week by Aeroplan, the Canada-based loyalty-marketing group, for £350m (€485m), plus £18m (€25m) in working capital adjustments. Sir Keith Mills, founder of Loyalty Management, will make £161m (€223m) from the deal.
Glowria, the France-based DVD rental service, was acquired this week by Netgem, a Euronext-listed technology company developing IPTV solutions. Glowria offers white-label video on demand services as well as mail-order DVD rental. The acquisition was financed through the issue of Netgem shares at €3.50 each and values Glowria at €17.7-18.9m. As a result of the deal, Glowria’s shareholders will own 14-14.6 per cent of Netgem’s capital.
More companies' intelligence at www.libraryhouse.net
Metalysis, the UK-based electrochemical company, this week appointed Mark Bertolini as chief executive. Mr Bertolini has previously held senior management roles with Eurofilter, BAE Systems, Vickers Aerospace and Hampson Aerospace. Metalysis owns the exploitation rights to an electrochemical reduction process known as FFC Cambridge, developing the technology to win tantalum, titanium and other metals from the oxide.
Enfucell, the Finland-based battery developer and manufacturer, has appointed Juha Koskinen as chief executive. Mr Koskinen has been a member of Enfucell’s board of directors since June 2007 and replaces interim-chief executive, Risto Huvila, who has taken on the role of chief operating officer. Mr Koskinen has previously been chief executive of Sanmina and, before that, held a variety of positions at Siemens over a 17-year period.
More companies' intelligence at www.libraryhouse.net
France-based YESforLov, founded by chief executive Christian Palix, this week spoke to Library House about the company’s international strategy for its range of intimate products and cosmetics. The company recently received €1.5m from 123Venture and business angels Amal Amar and Denys Chalumeau, which it intends to use to begin shipping products to Europe in April 2008. A €2m funding round is due to open in six months time to fund further expansion into Russia, the US and China. YESforLov is seeking an experienced international brand manager to join the company early in the new year, as part of its plan to build a strong brand worldwide. Mr Palix said the company aims to have revenues of €10m before seeking an exit, which will probably take the form of a trade sale in around five years to a cosmetics firm such as Clarins or L’Oreal.
Sweden-based OxThera is a clinical-stage biotechnology company focused on developing orphan drugs to treat and prevent hyperoxaluria and kidney stones. This week, president Jon Heimer told Library House that OxThera’s recent €2.55m funding from new investor Malmsten Invest and existing investors Industrifonden, Healthcap Venture Capital, Q-Med and SLS Venture represented a second closing of the June funding round, bringing the company’s series B funding to a total of €18.5m. The investment will be used for clinical trials of the company’s lead product - an oral treatment for primary hyperoxaluria, a recessive disorder which can cause renal failure. Pivotal studies on the product began in Europe and the
WindSim is a Norway-based developer of software designed to optimise energy production from wind turbines. This week, chief executive and co-founder Arne Gravdahl revealed to Library House that Sarsia Innovation had recently invested €500k into the company for a 20 per cent stake. Sarsia has the option of following this investment with an additional €500k within two years, although Mr Gravdahl said that industrial partnerships could potentially be more beneficial to the company, which would be seeking partners in two to three years. The company intends to use the recent funding to hire additional staff for software development and sales and marketing. Mr Gravdahl told Library House that he intends to step down as chief executive and move to the position of chief technology officer if the right candidate is found as a replacement.
More companies' intelligence at www.libraryhouse.net
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