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| Issue 67 Tuesday, 17th July 2007 |
www.libraryhouse.net
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This Week:
Regulars:
VentureCast Universe
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Dear Subscriber,
How do you call the top of a market? Many professional investors say only a fool tries to time markets – their more modest aim is not to pile in at the very top or to cash out when markets hit their nadir. Even the most experienced and able of people get this wrong. In 1996, investors who listened to Alan Greenspan, former chairman of the US Federal Reserve, and took fright at his “irrational exuberance” speech, would have missed out on a doubling of the domestic stock market. Likewise, predictions of doom in residential property have abounded for years. The “savvy” homeowners who sold up, rented and sat waiting for a downturn to buy back into the market at cheaper prices are, well, still waiting.
So how should we judge the frenetic activity in the Web 2.0/social networking sector? It is either an extremely frothy sector or one that has limitless growth potential, depending on who you believe. One barometer that worked well during 1999-2000 was the rush to set up web-based firms by people who had no prior experience of web technology or even of running a business. Journalists were particularly active – a fair few of Fleet Street’s finest disappeared to San Francisco or to a friend’s garage in search of instant fame and wealth. This end-of-era rush proved misguided – most of those outfits folded within months. It is hard to think of a single one that survived even past the first year.
The latest rush for the exits by senior journalists – the Financial Times’ personal finance editor, for one, leaves this week to pursue an internet project - should, then, give the wider investing community pause for thought. Just as the Wall Street financier in 1929 realised the game was up when elevator boys started giving him stock tips, perhaps journalists believing they can conjure the next Myspace out of thin air are a sign of an overheating market.
One mitigating factor here is that the cost of launching a Web 2.0 start-up is considerably lower than for a new internet-based firm during the boom-bust years. No longer are tens of millions sought to develop new technology, build huge teams and to implement expansive marketing campaigns. This time, existing technology predominates and word-of-mouth is the main marketing tool.
Some VCs are prepared to risk small amounts of capital on the offchance that Mr or Mrs Journalist is on the cusp of something big. But the chances of success are slim. The social networking incumbents – Facebook, Youtube, Myspace, Google – could be hard to dislodge even at this early stage in the development of the sector. So while it may seem like a harmless punt for VCs, in aggregate there is likely to be a lot of money finding homes built on shaky foundations. Sometimes, the phrase “nothing ventured, nothing gained” is stretched to the limits of its meaning.
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Think Nordic (Th!nk), the Norway-based producer of battery-powered cars, has raised $60m (€43.7m) from British Hazel Capital, CG Holding, Canica, Capricorn Venture Partners, DFJ Element, RockPort Capital Partners, Wintergreen Advisers, Alf Bjørseth, Andre Heinz, Christian Stabell Eriksen, Jan-Olaf Willums, Petter Stordalen, Petter Sundt and Reidar Langmo. The funding will allow the company to start production of its new TH!NK city model in Q3 2007, with production expected to reach 250 cars a month within one year.
BioVex, the US and UK-based biotechnology company developing targeted treatments for cancer and the prevention of infectious diseases, has raised $22m (€16.1m) in the first close of its series E funding round. The deal was led by Triathlon Medical Ventures Partners and included ABN AMRO Capital, Avalon Ventures, Crédit Agricole Private Equity, GeneChem Management, Innoven Partenaires, New Science Ventures and Scottish Equity Partners. The funding will be used to allow the completion of phase II studies of the company's lead cancer product, and to take its lead infectious disease candidate, a vaccine for genital herpes, through to phase II trials.
CureVac, the Germany-based biopharmaceutical company developing a new approach to cancer immunotherapy using messenger RNA, has raised €13m in the second closing of its series B funding. Participants in the deal, which brings the total raised in this round to €35m, were DH Capital and OH Beteiligungen, which are both owned by the family of SAP co-founder Dietmar Hopp. CureVac will use the additional funding to extend clinical development of its cancer therapeutics to various undisclosed indications.
U4EA Technologies, the US and UK-based provider of integrated access technology for converged communications, has raised $16m (€11.7m) from IIU Nominees. The company also announced the hiring of Ken Epps as chief executive (see People Moves below). The company says the funding will be used to meet the growing needs of its existing customers, to provide products that will expand the market opportunity beyond hosted VoIP, and to build wireless capabilities into its product portfolio.
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.
Servecast, the Ireland-based provider of live and on-demand video management and streaming services for broadband and mobile platforms, has been acquired by Nasdaq-listed Level 3 Communications for $45m (€33m). Founded in 1998, Servecast offers publishing and distribution tools for video rights holders to monetise their digital assets. Investors in the company include a number of high-profile individuals including Formula 1 racing team owner, Eddie Jordan.
Swe-Dish Satellite Systems, the Sweden-based designer and manufacturer of portable and transportable satellite communications systems, has been acquired by US-based DataPath for an undisclosed amount. Datapath, which provides satellite and wireless communications networks globally, will operate Swe-Dish as a wholly owned subsidiary, retaining its management team, corporate name and product brands.
Arkoon Network Security, the France-based provider of enterprise information, communications, and infrastructure security products, has raised €3.2m through an IPO on Euronext. Arkoon targets large corporations, public entities, and medium sized businesses throughout Europe and the Middle East.
U4EA Technologies, the US and UK-based provider of integrated access technology for converged communications, has appointed Ken Epps as chief executive. Mr Epps has more than 20 years of voice, data and video communications experience, most recently as chief executive of global communications software provider BayPackets.
Prosurgics, the UK-based image-guided surgical robotics company, has appointed Paul Moraviec as its new chief executive. Previous chief executive David McTurk remains with the company as a director. Mr Moraviec joins Prosurgics from Abbott Laboratories, where he was vice president of international commercial operations for the Abbott Diabetes Care Division.
Tevet Process Control Technologies, the Israel-based supplier of products for the semiconductor processing industry, has promoted company founder, Ofer Du-Nour, to the position of chief executive, and promoted Peter Gillespie to the position of president. Yuval Wasserman, Tevet’s former chief executive has resigned from Tevet to pursue other interests.
Dailymotion, the France-based video sharing website, has attracted a lot of attention recently. Dailymotion, which claims to be the world's largest independent video sharing site, recently launch a US site and announced plans to implement monetisation strategies for both content partners and for itself. The company was launched within a few months of its main competitor YouTube, which was sold to Google last year for $1.65bn (€1.3bn). Website analysis company Alexa currently rates Dailymotion as the worlds 54th most visited site, compared to Youtube’s ranking of 4th.
Sulake, the Finland-based developer of the online communities and virtual worlds, has also attracted a lot of attention. Sulake's most well-known site, Habbo Hotel, is an avatar-based virtual world that has about 7.5 million unique users worldwide across 29 countries. Sulake plans to build a portfolio of online products which offer a wide range of social interaction services and entertainment for different target groups; as part of this strategy it recently entered the social networking market through the acquisition of Finland-based IRC-Galleria.
There are now 38210 companies in VenturePedia, 10898 investors, and 54046 contacts.
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