Apax abandons venture
One of the big names of the VC world, Apax, reportedly announced yesterday that it was withdrawing from the sector. This is hardly a surprise since the vast majority of Apax’s assets are now invested in buyout funds, but it may disquiet those with longer-term memories. After all, Sir Ronald Cohen, co-founder of Apax and its chairman until 2003, always made a virtue of the company’s ability to help small and growing companies. As recently as 1999, venture capital was a central plank of Apax’s strategy, with €600m of a new €1.8bn fund raised that year ear-marked for start-up and growth companies. In 2001, a third of Apax’s €12bn under management was dedicated to venture capital.
But Apax was a rare beast that combined venture and buyout investing. The two asset classes require radically different approaches and it should not be seen as a disaster that Apax is withdrawing from one of them. After all, these days the thrust of buyout deals lies in the financial engineering and many of the exponents are ex-investment bankers. While there is also a good smattering of bankers in the venture world, financial expertise on its own does not get you very far. Venture is more of an art form, where experience, nous and intuition count for more than sheer ability to crunch numbers.
Far from being sorry about a separation between the two disciplines, there ought to be a collective sigh of relief that the distinction has been recognised and drawn. Venture has for too long been confused with the buyout sector in the minds of all but those in the industry, and this move can only help dispel the confusion.
* Last week’s newsletter, “Women not doing it for themselves”, attracted a certain amount of attention. We highlighted Library House data showing that 95 per cent of chief executives at venture-backed companies are men despite quantifiable evidence that women are better managers. Marianne Neville-Rolfe, of P&M Hill Consultants, in Congleton, Cheshire, had this to say: “Your editorial on women in venture backed companies made interesting, if depressing, reading. Perhaps part of the explanation is unwillingness by (largely male) investors in early stage tech companies to trust a woman as a CEO. Which could also explain why women do more with less capital - they find it harder to get. If so, more fool the investors - hopefully you can help shift such sad and old fashioned attitudes.”
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The Week's Deals
Thirty-three companies gained venture funding this week, seven were of undisclosed value. The deals raised a total of €93.4m, which is €3.6m on average.
Power Challenge, the Sweden-based online multiplayer sports games publisher and developer, has raised $8m (€5.9m) from
Benchmark Capital. According to the company, its two principal games, ‘Power Challenge’ and ‘ManagerZone’, attract the most users of any sports games on the web, and are currently adding more than 4,000 new players each day. The investment will be used to fund development of new titles, enhance the quality of existing games and expand the company’s global infrastructure.
mySupermarket, the UK-based shopping and comparison website, has received $6.6m (€4.4m) from
Greylock Partners and
Pitango Venture Capital. MySupermarket is a virtual supermarket that compares the price of groceries across the UK's main online supermarkets, including Ocado, Tesco, Asda and Sainsbury's. The company said that it has rejected investment approaches by a number of grocery companies in order to retain its neutrality. The funds will be used to raise the profile of the site via internet advertising, and also to encourage existing users to use more of the site's functions.
Mitrionics, the Sweden-based developer of technology to aid in the programming of FPGAs (field programmable gate arrays), has raised $6m (€4.4m) from
Creandum,
Grande Ventures and
Teknoinvest. The company’s technology is used by many of the world's leading supercomputing organisations including George Mason University, George Washington University, McGill University, National Cancer Institute and Zuse Institute Berlin. The funding will be used to expand the company’s international sales and support operations and increase research and development efforts.
TraceWorks, the Denmark-based developer of marketing management software for advertisers, has raised €4m from
Nordic Venture Partners. TraceWorks says that its sales have increased by more than 125 per cent every year for the past four years, driven predominantly by growth in Germany, Scandinavia and the UK. The funding will be used for global expansion.
Elsewhere,
Smava, the Germany-based online marketplace for person-to-person lending, raised €4m from
Earlybird Venture Capital and private investors;
TTTech Computertechnik, the Austria-based developer of technology to improve the dependability and reliability of data communication systems in transportation industries, raised €4m from
Athena Wien; and
Avexxin, the Norway-based developer of small molecule therapeutics, raised €3.9m from
Karolinska Development and
Sarsia Ventures.
See below for a complete list of deal headlines.
Did we miss anything? If you think we have missed a deal or know of a deal that is about to close then send us your
deal news.
The Week's Exits
SAP has acquired
Wicom, the Finland-based contact centre and communications services provider, and
Maxware, the Norway-based provider of identity management software. No financial terms of either acquisition were disclosed.
Wicom makes software that allows companies to improve the quality of their customer service, telephone-based sales and other business functions. SAP made the acquisition in order to expand its portfolio of communications software.
With the acquisition of MaXware, SAP plans to upgrade the identity management functionality of its NetWeaver platfom to enable users to manage employee identities inside their own companies as well as with customers, distributors and suppliers.
Buongiorno, the Italy-based mobile media and technology company, has acquired the UK and US agency operations of the mobile marketing group
Flytxt for about €4m ($ 5.4m). Flytxt retains its mobile CRM technology platform.
People Moves
Secerno, the UK-based developer of database security products, has appointed Steve Hurn as its new chief executive. Mr Hurn was most recently senior vice president of worldwide sales at UK-based
Cramer Systems, which was sold last July to NYSE-listed
Amdocs for about $375m (€300m) in cash. At Cramer he increased the company’s sales to more than $100m in four years. Paul Davie, Secerno’s founding chief executive, becomes the company’s new chief operating officer.
Enfucell, the Finland-based developer of environmentally friendly battery technology, has released chief executive Jaakko Happonen because of ‘differences in view’ with the board. Risto Huvila, vice president of sales and marketing has been appointed as acting chief executive while the board selects a permanent replacement.
Elsewhere,
Fastrax, the Finland-based developer of products for global navigation satellite systems, has appointed Taneli Tuurnala as its new chief executive, and
Open-Plug, the France-based supplier of mass market software platforms for the handset industry, has appointed Timo Bruns as chief marketing officer.
Most Accessed Companies
RedMere Technology, the Ireland-based fabless semiconductor company, has attracted a lot of attention this week. RedMere’s products are targeted at emerging consumer multimedia products such as high definition televisions, set-top boxes and personal video recorders. RedMere says that its chipsets satisfy the increases in speed and complexity of data exchange required in these high growth markets. Founded in 2004, the company unveiled its initial product range in January this year. Investors in RedMere include
4th Level Ventures,
Celtic House Venture Partners,
Edgestone Capital Partners,
Enterprise Equity,
Enterprise Ireland and private investors
Image Metrics, the US and UK-based developer of technology for the automated interpretation of images and video, has also received a lot of attention recently. Image Metrics’ video-based technology has applications including allowing film-makers to insert animated characters into films without using traditional time-consuming and expensive methods. The technology is also used in leading video games including several Grand Theft Auto titles, The Warriers and 24. The company spun-off a division last year, called Medical Images, which is developing tools to aid in the evaluation of medical images.
Other companies generating interest recently include
TMO Renewables,
Garlik, and
ShoZu.
There are now 11,904 companies in VenturePedia and 8,190 investors, comprising 4,036 institutional, 3,462 corporate, 530 individual and 162 other. Of VenturePedia's 37,470 contacts, there are 21,364 executive, 8,551 CEOs, 2,845 chair, 1,713 non-executive and 2,997 other.
