Go4Venture Bulletin - Venture & Growth Equity Market Report Europe, August 2014

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Published by Go4Venture Research, the Equity Research unit of Go4Venture Advisers LLP

Go4Venture Advisers LLP is authorised and regulated by the Financial Conduct Authority (FCA)

© Go4Venture Advisers 2014

Go4Venture Advisers European Venture & Growth Equity Market

Monthly Bulletin | August 2014

Technology / Media / Telecoms / Internet / Healthcare / Cleantech / Materials

About Go4Venture Advisers

Providing innovative, fast-growing companies and their investors with independent corporate finance advice to help them

evaluate, develop and execute growth strategies

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Equity Capital Markets (ECM)

Equity private placements

Growth equity financings and secondaries

Pre-IPO advisory

Mergers & Acquisitions (M&A)

Sellside

Buyside / Buy and build

Valuation services

Visit www.go4venture.com/Bulletin to read past Bulletins

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Contents

This Month in Brief 2

Investments

1.1 - Headline Transaction Index (HTI) 5

1.2 - Large Transactions Summary 6

1.3 - Large Transactions Profiles 7

M&A Transactions

2.1 - M&A Activity Index 15

2.2 - Top 5 Global TMT M&A Transactions Summary 16

2.3 - Headline European VC & PE-Backed M&A Transactions Summary 17

2.4 - Headline European VC & PE-Backed M&A Transaction Profiles 18

List of Acronyms 19

About this Bulletin

The Go4Venture Advisers’ European Venture & Growth Equity Market Monthly Bulletin provides a summary of corporate finance activity among emerging European TMT companies:

Investments, i.e. Venture Capital (VC) and Private Equity (PE) financings, including growth equity, financing rounds with single secondaries components (recapitalisations); and

M&A Transactions where the sellers are VC and PE-backed European companies, including all majority transactions with no new investment going into the business (e.g. acquisitions, Management Buyouts (MBOs) and other buyouts).

Investment activity is measured using Go4Venture’s European Tech Headline Transaction Index (HTI), which is based on the number and value of transactions reported in professional publications.

M&A activity is measured using data from a combination of external sources, primarily Capital IQ, with complementary reporting from 451 Group and VentureSource.

Europe is defined as Western, Central and Eastern Europe, excluding Israel.

For more details, please refer to the Methodology Note available on our website.

Please note that no part of the Bulletin can be reproduced unless content is duly attributed to Go4Venture and the details of republishing are notified to [email protected].

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This Month in Brief

Dear Clients and Friends,

Welcome to the latest edition of the Go4Venture Monthly European Venture & Growth Equity Bulletin,

featuring our proprietary Headline Transaction Index (HTI) of investment activity, as well as a quick

summary of VC & PE-backed TMT M&A exits of $50 million or more.

Feeding Frenzy?

“When the ducks say “quack quack”, you feed them” Anonymous banker explaining their role in price formation (c. 2001)

Summer has come and gone, and we resume work taking stock of the most active August month on

record. And all this at a time when the macro environment is turning negative, with geopolitical risk at

its highest for some time, emerging economies slowing down, Europe stalling, and the US (and UK)

planning to raise interest rates. No wonder some of the investment transactions are starting to raise

eyebrows – because contamination is now touching public markets, as exemplified by the Alibaba and

Rocket Internet IPOs. And the best VCs are starting to take note, with Bill Gurley of Benchmark Capital

widely quoted saying “the venture-capital community […] is taking on an excessive amount of

risk right now – unprecedented since ‘99”.

Investments Of course, numerically August is impacted by the incredible €768mn raised by Rocket Internet in

the run-up to its IPO, no less than 20% of the total recorded by the Headline Transactions Index

(HTI) last year. This is for a company whose 11 “proven winners” had €727mn in revenues in 2013 (a

three times increase) but EBITDA losses of €436mn. Remember that not so long ago, IPO’ing an

unprofitable company was an obvious no-no.

However, please note also the good showing of the other 6 companies profiled – which, in the

middle of the summer recess, managed to raise over €100mn, i.e. close to €20mn each (the

“Landmark” threshold we defined in the early 2000s when we started the Bulletin). So, beyond the

headlines, there is a general level of activity which is – simply put – frothy.

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Of course, this concerns mostly internet, mobile and software. In other areas, more traditional

metrics prevail and one could argue that the internet phenomenon is crowding out venture

funding, with corporates, business angels and punters (see crowdfunding) stepping in to replace VCs

busy elsewhere.

Uncomfortable signs of the unsustainable are creeping in, as shown by the following examples

(diarised by TechCrunch):

Incubators’ exuberance, with a brand name like Techstars having to introduce “an equity back

guarantee”.

Crowdfunding platforms showing strain, for instance:

o Kickstarter changing its terms and conditions to remind users that the contract is

between parties, not with Kickstarter;

o Indigogo’s poor internal controls as documented by Pando; and

o Crowdcube allowing in EasyProperty’s fund-raising at a £66mn valuation for a business

with no revenues (but a great brand).

Dockers raising $40mn that it won’t need to spend until next year.

Delivery Hero’s $350mn round (to be written up in our next issue), led by Vostok Nafta, an

investment fund which normally focuses on Russia and the other CIS states.

Uber raising $1.2bn in June (bringing the total to $1.5bn), at a $17bn pre-money valuation but

with a pref guaranteeing a 25% annual return to investors (according to the FT), when in fact

the company is experiencing slowing growth (according to FutureAdvisor).

What does this bode for the market for the rest of the year? We are of two minds:

On one hand, we have not seen yet the terrible investment mistakes of the late 1990s

(Boo.com, Pets.com, Webvan), so this bullish phase could continue for a while; however

On the other hand, the big negative statements from Marc Andreessen, Bill Gurley and Brad

Feld (amongst others) are having an effect, and we are hearing more market participants

getting ready for the big sell-off.

We’ll watch the trend with attention because this negative sentiment is by definition self-fulfilling. In any

case, we believe that this time round it will be more a question of mispricing – so we expect a

correction, rather than a collapse. And investors may go back towards traditional IP-led innovation,

rather than disappearing altogether. In this era of poor returns, investors need growth.

Exits

On the exit front, M&A was unsurprisingly quiet with a few transactions slipping from August to

September. The only transaction of note in the growth and venture world was Moneycorp selling out to

private equity firm Bridgepoint. The sellers were Royal Bank of Scotland (RBS) and Adams Street (via

its acquisition of RBS’ stake in the RBS Special Opportunities Fund).

It is also worth mentioning AnaFocus, sold for $46mn (€34mn), just short of our $50mn

threshold. The deal is unusual because of the seller’s geography (Spain), sector (semiconductor) and

backer (local early-stage investor Bullnet Capital). The company was acquired by UK-headquartered

e2v Technologies, a specialist developer of RF power, hi-rel semiconductors, and high performance

imaging solutions. A good example of a capital-efficient European company (Bullnet had invested

c. €2.5mn) eventually getting sold at 3x revenues.

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All the rest of the activity was on the IPO side, with 3 key tech IPOs lined up for September:

Alibaba – which was described as “a tasty dish (just don’t ask how it’s made)” and “a textbook

example of a successful IPO: priced at $68 a share, opening at $92.70 a share” (i.e. we are

back to the times where a 36% first day pop-up is a sign of success);

Rocket Internet – which eventually cut short its bookbuilding period and doubled the amount of

its planned raise to €1.5bn; and

Zalando – the largest German tech offering since the 2000 listing of Deutsche Telekom.

In this environment it is going be difficult to keep calm. Just like the VC market takes a beating every

time public markets go down (even though different time horizons should make these two markets

uncorrelated), it is difficult to resist contamination of earlier-stage valuations when late-stage goes up:

at worst, you don’t get it (ref. the New Economy of the late 1990s); at best, you are a party pooper who

doesn’t know how to enjoy the good times.

Enjoy the reading. Please direct any questions or comments to [email protected]. If you do

not wish to receive future HTI updates from us, please send an email with the title "unsubscribe" to

[email protected].

The Go4Venture Team

Where to Meet the Go4Venture Advisers Team in October 2014 – see www.go4venture.com/contact

October 8-10, Madrid, Spain – The South Summit

October 9, London, UK – EISA Autumn Technical Seminar

October 12-14, Lausanne, Switzerland – CEO Collaborative Forum Fall Meeting

October 16, London, UK – The FinTech50 2015 starts … here

For more details about the Headline Transactions Index (HTI), please visit our website.

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1.1 Headline Transaction Index (HTI)

Go4Venture HTI Index by Deal Value

Source: Go4Venture Advisers HTI Database

Go4Venture HTI Index by Cumulative Deal Value

Source: Go4Venture Advisers HTI Database

August 2013 2014 Var. Year-to-Date 2013 2014 Var.

Large Transactions # 4 7 75% Large Transactions # 88 117 33%

€mn 86 878 921% €mn 2,032 3,298 62%

Other Transactions # 17 14 (18%) Other Transactions # 241 141 (41%)

€mn 43 35 (19%) €mn 645 433 (33%)

All Headline Transactions

#

21 21 0%

All Headline Transactions

#

329 258 (22%)

€mn 129 878 581% €mn 2,677 3,731 39%

Of Which: Of Which:

Landmark Transactions # 1 4 300% Landmark Transactions # 23 40 74%

€mn 57 847 1,386% €mn 1,300 2,707 108%

Definitions

Large Transactions: > £5mn / €7.5mn / $10mn

Other Transactions: < £5mn / €7.5mn / $10mn

Landmark Transactions: subset of Large Transactions > €20mn / £13mn / $27mn

0

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2011 2012 2013 2014

Includes Rocket Internet (€768mn)

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1.2 Large Transactions Summary (>£5mn / €7.5mn / $10mn)

Ranked by Round Size (€mn, including estimates) in Descending Order, then Alphabetically

# Company Sector Round €mn Description Investors

1 Rocket Internet (Germany) www.rocket-internet.com

Internet Services

Late Stage

768 An incubator which acts as a conglomerate, building internet businesses based on proven models and launching them outside the US and China.

PLDT, United Internet

2 Alfresco Software (UK) www.alfresco.com

Software Late Stage

33.8 Developer of Enterprise Content Management (ECM) software.

Accel Partners, Mayfield Fund, Sageview Capital, SAP Ventures

3 GoEuro (Germany) www.goeuro.com

Internet Services

C 25.0 Aggregator of European air, bus, car rental and rail information which operates a price comparison and travel optimisation site.

Battery Ventures, Hasso Plattner Ventures, Lakestar, NEA

4 Smaato (Germany / US) www.smaato.com

Software Late Stage

20.0 Mobile advertising Real-Time Bidding (RTB) exchange and Supply Side Platform (SSP).

Aeris Capital, EDBI, Singapore Press Holdings

5 Tobii Technology (Sweden) www.tobii.com

Hardware Late Stage

10.9 Provider of eye tracking solutions for Human Computer Interaction (HCI) and research.

Swedish National Pension Fund

6 Quinyx (Sweden) www.quinyx.com

Software B 10.5 Developer of SaaS workforce management tools.

Alfvén & Didrikson

7 Purplebricks (UK) www.purplebricks.com

Internet Services

B 10.0 Operator of an online real estate agency.

Alchemy Partners, DN Capital, Woodford Equity Income Fund

Source: Go4Venture Advisers HTI Database

Key

Bold indicates lead investor(s)

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Rocket Internet Germany | www.rocket-internet.com

# Sector Round €mn Description Investors

1 Internet Services

Late Stage

768 An incubator which acts as a conglomerate, building internet businesses based on proven models and launching them outside the US and China.

PLDT, United Internet

Rocket Internet (Germany), an incubator of internet businesses, raised €333mn from PLDT and €435mn from United

Internet in successive Late Stage rounds one week apart. The PLDT investment will be used to develop mobile and

online payment technologies, and services for emerging markets. The United Internet investment will be used to build

new businesses, and maintain majority stakes in existing ones, following Rocket’s forthcoming IPO.

As readers will know from previous write-ups in August and May 2013, Berlin-based Rocket Internet was co-founded by

the Samwer brothers in January 2007. The brothers’ first success was setting up a version of eBay (Alando) in Germany

in 1999, and selling it to eBay for €45mn three months later. This was followed by mobile content platform Jamba, which

was sold to Verisign for €225mn in 2004. With their new found wealth, the brothers started analysing the US market for

successful innovative business models, and building new companies based on these models in Germany (Frazr/Twitter,

MyVideo/YouTube and StudiVZ/Facebook).

Rocket formalised this process and developed a cookie cutter approach to analysing markets (such as the US) for new

internet business models showing signs of traction, and then rolling them out elsewhere – initially in Europe and later in

emerging markets (with the exception of China). The rationale is that, while China and the US together account for

roughly a third of global GDP, over three quarters of the world’s population lives elsewhere but shares the same basic

needs.

Thirty years ago, Rocket would have been described as a conglomerate with 53 businesses employing 20,000 people

and combined (pro forma) revenues for 2013 in excess of €0.75bn. The glue which binds Rocket’s companies together

includes both the proprietary technology platforms which they have developed (and share throughout the group), as well

as the favourable terms they are able to negotiate with suppliers such as Google, Rackspace, Salesforce, etc. (by virtue

of their collective bargaining power). Typically, Rocket takes an equity stake of 80-90% at launch with 10% ear-marked

for management.

Operating across e-commerce, marketplaces and financial technology in over a hundred different countries, Rocket is

well diversified – one of the traditional advantages of being a conglomerate. It is also structured like a conglomerate with

a number of regional holding companies (Africa, Asia Pacific, Latin America and MENA) encapsulating local market

knowledge and, as its businesses grow, facilitating additional financial support from Rocket co-investors, local strategic

partners and others.

Rocket has made a number of successful exits. Technically, one of the most successful is likely to be Zalando. In

October 2012, Rocket shareholder Kinnevik bought Zalando shares from Holtzbrinck Ventures, Tengelmann and Rocket

itself for €287mn. In July 2013, Kinnevik exercised its option to buy another 3.5% of Zalando for €100mn, while Anders

Holch (who owns Danish fashion company Povlsen), also bought a 10% stake-leaving Zalando owned almost entirely by

Rocket shareholders and planning an IPO of its own, raising as much as €0.5bn at a valuation of €5.3bn.

Despite these exits, a 2013 TechCrunch interview quoted Oliver Samwer as saying: “Our biggest mistake we made in

the first 10 years was to not build the biggest business, but to sell businesses too early.” More recently, he stated that

Rocket is an investment for those with a “long-term investment horizon” and not “for those that want short-term success

and results in three months”.

According to its prospectus, Rocket now aims for its businesses to break even 6-9 years after launch. As a public

company, Rocket has stated in its prospectus that it will maintain a beneficial ownership of more than 50% going forward

and has recently increased its stakes in a number of portfolio companies.

As part of the preparations for its IPO in Frankfurt, Rocket has been tidying up its shareholding structure as well as

creating pre-IPO financing events to support the IPO valuation:

Early August, Philippines Long Distance Telephone (PLDT) company announced a $445mn (€333mn)

investment in Rocket, valuing the company at $4.5bn (€3.3bn). The €333mn PLDT investment is intended to

finance development of mobile payment systems for the emerging markets (where most of the population has

little access to banks, debit or credit cards, but mobile phone penetration is high as telecoms companies opted

to roll-out wireless networks rather than more expensive wire-line equivalents). Through its subsidiary, Smart

Communications, PLDT handled about €3.4bn of financial transactions in 2013 via its mobile money systems

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including mobile payments platform eMoney. As well as providing relevant local knowledge, building a

payments platform with PLDT as a local strategic partner should help Rocket’s e-commerce businesses

(including Lazada and Zalora), in Southeast Asia, where mobile penetration far exceeds the use of credit cards.

A week later, United Internet came in with an investment in the form of €333mn in cash plus United’s holding in

the Samwer brothers’ VC firm Global Founders Capital Funds valued at just under €102mn. Interestingly, the

business was then valued at $5.7bn (€4.2bn). There was no explanation for the $1bn increase in valuation in a

week, other than high demand for the stock.

Alongside these two rounds, early-stage German venture firm and long-term Rocket co-investor Holtzbrinck

Ventures (HV) exchanged its stake in seven of Rocket’s businesses (Dafiti, HelloFresh, Home24, Jabong,

Lamoda, Namshi and Westwing) for a stake in Rocket Internet itself. Note that many of these were among

Rocket’s ‘proven winners’.

The IPO itself is expected to raise €0.5bn at a valuation up to €6.7bn. The offering will consist entirely of new shares with

all existing shareholders locked in for 12 months and unable to treat the IPO as a liquidity event. The bankers on the

deal – Berenberg, BofA Merrill Lynch, Citigroup, J.P. Morgan, Morgan Stanley and UBS-started their book on September

24th

. It was scheduled to run until October 4th

but, owing to investor demand, the target was raised to €1.5bn and the

close brought forward to October 1st for institutional investors.

The FT has raised some concerns over corporate governance. Specifically: “Rocket paid a €290mn cash dividend into a

fund owned by the Samwer brothers (Rocket’s founders and majority owners). And Rocket failed to benefit meaningfully

from its biggest incubator success, the e-commerce company Zalando.”

Possibly more importantly in the short term, the FT has also questioned the valuation. Adding up the valuations of

Rocket’s portfolio businesses, the €800mn of cash on its balance sheet and a putative €1.5bn from the IPO values the

firm at €4.5-5.0bn. This is consistent with the valuation after United’s investment only a month ago. But the IPO has been

priced at a range of up to €6.7bn. There seems to be a missing billion or two.

Investors

Early-stage German venture firm and long-term Rocket co-investor Holtzbrinck Ventures (HV) (€177mn (2011)) is a

successful venture firm in its own right with over a hundred investments and 40 exits to its name. This deal is not just a

way for the Samwer brothers to reward HV for its long-term support (which dates back to studiVZ even before they set

up Rocket) with pre-IPO stock and a successful exit. The quid pro quo is that the deal enables Rocket to maintain larger

stakes in the companies it has built ahead of its planned IPO.

Strategic investor the Philippine Long Distance Telephone Company (PLDT) (PSE:TEL) is the largest telecoms company

in the Philippines – a country whose GDP ranks alongside Denmark, Hong Kong and Singapore. It provides a full range

of wireless, wired and ISP services and made 2013 revenues of $3.8bn (€2.8bn) with a market cap of around $15bn

(€11.2bn).

United Internet (Xetra:UTDI) is a diversified German internet services provider, which started out as an ISP in 1998, and

now owns well known web-host 1&1 and made revenues of €2.7bn in 2013. 75% of its customer base is still in Germany,

with the rest in Europe and North America. United’s collaboration with Rocket gives it exposure to the rapidly growing

emerging markets which may provide a source of earnings growth to satisfy its shareholders.

Following the two investment rounds and the share swap, Rocket remains majority owned by the Samwer brothers’

venture fund Global Founders Capital Fund (€150mn (2013)), which holds 52% of the company. The rest of the cap table

is comprised of Emesco (a subsidiary of AB Kinnevik) with 18%, United Internet (XETRA :UTDI) with 10%, Access

Industries (the industrial group owned by Russian-born American industrialist Len Blavatnik) and the PLDT with a little

over 8% each, and Holtzbrinck Ventures with 2.5%.

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Alfresco Software UK | www.alfresco.com

# Sector Round €mn Description Investors

2 Software Late Stage

33.8 Developer of Enterprise Content Management (ECM) software.

Accel Partners, Mayfield Fund, Sageview Capital, SAP Ventures

Alfresco Software (UK), a developer of Enterprise Content Management (ECM) software, raised $45mn (€33.8mn) in a

Late Stage round led by Sageview Capital with support from existing investors Accel Partners, Mayfield Fund and

SAP Ventures. The money will be used for hiring sales personnel in the US and Western Europe, as well as in

marketing and R&D.

Alfresco was set up early in 2003 by Documentum co-founder John Newton and former Business Objects COO John

Powell, with developers from Documentum and Oracle. Starting with an on-premise Document Management System

(DMS) for the enterprise market on a Java platform, the firm has developed a range of products covering document

management, collaboration tools, Business Process Management (BPM) and compliance. Customers can now choose

between on-premise deployment or SaaS implementation (either via private hosting or the public cloud). Alfresco also

offers mobile versions of its user interface to cater for the enterprise trend towards BYOD (Bring Your Own Device).

Alfresco’s software is primarily open source, as licenced under the GNU Lesser General Public License – which enables

the company to keep proprietary parts of its source code, and conforms to the language agnostic Content Management

Interoperability Services (CMIS) standard for content management systems operating over IP networks. This standard is

administered by the web standards body OASIS – a not-for-profit consortium whose participants include Adobe, EMC,

HP, IBM, OmniDocs, Oracle and SAP, as well as other ECM providers. The firm makes its money from consulting,

support and training (like other open source software suppliers), as well as through monthly subscriptions on a per user

basis for the commercial expansion of the product.

By 2013, the firm had six offices in Australia, Germany, Japan, the UK and the US with annual revenues to February

2013 of just under €40mn from 1,300 customers (over half of which were in the US) and 7mn users. According to

Gartner, the global ECM market is worth $5bn (€3.7bn) and growing at c.9% per annum. Particularly strong in

government, healthcare and high-tech, Alfresco is growing over 3x as fast as the ECM market and now has 1,800 active

customers with 11mn users worldwide.

Such rapid organic growth is impressive, but the quality of the firm’s revenues is not yet up to public market standards.

When Alfresco replaced co-founder John Powell with US-based CEO Doug Dennerline (who had led SaaS HR software

firm SuccessFactors prior to its $3.4bn (c.€2.6bn) acquisition by SAP in 2012), the intention was to list on the NASDAQ

in 2013. However, rather than risk another tech stock heading south post IPO, Dennerline has said that he will postpone

the decision to go public for 2-3 years until a greater proportion of Alfresco’s revenues come from the recurring

predictable subscriptions of its SaaS business (rather than relatively ad hoc training, consulting and support fees).

To this end, Alfresco intends temporally to forego profitability in order to pursue enterprise sales and emphasise its SaaS

products. These are likely to provide annual recurring revenues of six figures per customer, but have notoriously long

sales cycles. The adoption of this sales-focused strategy is likely informed by Mr. Dennerline’s experience at 3Com and

Cisco. As it expands its SaaS business, Alfresco may well find itself competing more often against the likes of Box,

Dropbox and Huddle as they seek to enter the enterprise market. Alfresco does not see these firms as a serious

competitive threat, owing to its superior version control and ability to meet compliance requirements.

Investors

Led by Sageview Capital (AUM €1.5bn), this round brings total investment in Alfresco to over €50mn at a valuation in the

hundreds of millions of euros. Established in 2005 by two former KKR partners, Sageview invests in both private and

public companies in North America and Europe from offices in Stockholm in Sweden, Greenwich on the US East Coast

and Palo Alto in Silicon Valley. The firm’s strategy is to make low-leverage investments in SMEs. Its preferred sectors

are energy, financial and business services, and technology.

Readers will be familiar with global VC Accel Partners (€356mn (2014); AUM €5.6bn). Less well known in Europe is the

Mayfield Fund (€273mn (2012)). One of America’s older VCs, Mayfield is a stage agnostic investor in IT companies. It

focuses on communications, enterprise software and internet services. Despite only having offices in Silicon Valley,

Mayfield has been investing in China and India since 2005 and 2006, respectively, through locally-based partners.

Set up in 1997, SAP Ventures (€488mn (2013); AUM €1.0bn) is structured as an independent vehicle whose investment

preferences match SAP’s strategic interests. The firm typically comes in once a business model or product has been

proven, and typically invests $5-20mn with a preference for leading early growth rounds but a willingness to support

larger, later stage rounds if necessary. SAP is gradually expanding its SaaS business with a series of acquisitions. Aside

from the acquisition of SuccessFactors mentioned above, SAP has just agreed to buy SaaS travel and expenses

software provider Concur Technologies (CNQR) for $7.4bn – its largest ever acquisition according to the 451 Group.

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GoEuro Germany | www.goeuro.com

# Sector Round €mn Description Investors

3 Internet Services

C 25.0 Aggregator of European air, bus, car rental and rail information which operates a price comparison and travel optimisation site.

Battery Ventures, Hasso Plattner Ventures, Lakestar, NEA

GoEuro (Germany), an aggregator of European air, bus, car rental and rail information which operates a price

comparison and travel optimisation site, raised $27.0mn (€25.0mn) in a Series C round led by NEA with support from

existing investors Battery Ventures, Hasso Plattner Ventures and Lakestar. The money will be used to expand the

firm’s coverage into France, Scandinavia and Eastern Europe.

Air travel, car rental and hotel booking have long been covered by price comparison sites making their money by taking

advertising and commission from travel and hotel operators. This business model is now successful worldwide and we

have covered a number of such companies in their early stages. In Europe, however, there is another problem that must

be solved. Unlike North America, much of the Asian market and the former Soviet Union, Europe has a high population

density and a highly fragmented transport infrastructure even though it is almost a quarter of a century since the

Schengen Convention abolished many European border controls.

Founded in 2012, GoEuro aggregates information on air, bus, car rental and rail travel throughout Europe, and allows

users to optimise their travel arrangements (as finding a cheap flight is no good if you then have to spend a small fortune

on taxi fares). GoEuro undertook a closed beta last summer, launched in Spain and the UK last October and came out of

beta at the start of 2014. The firm now operates in Belgium, Germany, Italy, Luxembourg, the Netherlands, Spain and

the UK, providing coverage of over 20,500 railway stations, 10,000 bus stations and more than 200 airports. The

platform does not yet allow users to book tickets directly, but this feature is planned.

There is an obvious reason for the rapid pace of this expansion. Price comparison sites are now a well-known design

pattern and it only takes a relatively small technical team to build the website, but negotiating deals with transport

providers and ensuring travel information is correct takes a lot of effort. For this reason, GoEuro has over 60 employees

negotiating deals and curating travel data. The key to its success will be getting sufficiently comprehensive coverage to

attract enough users, and generate the revenues it needs to cover its cost base, before it runs out of investment. In other

words, can GoEuro carry the costs of its complex data aggregation until it reaches critical mass?

Investors

This round was led by healthcare and technology investor New Enterprise Associates (NEA) (€2bn (2012); AUM

€8.6bn), which last appeared in our Bulletin as recently as June 2014 with a €51.5mn round for ElasticSearch. We have

chosen to call this a Series C round as there have been two previous multi-million euro rounds involving venture

investors. The first was a $4mn round from Battery Ventures (€678mn (2013); AUM €3.4bn) and Hasso Plattner in Q1

2013, which funded GoEuro’s closed beta in 2013.

Also 30 years old and based on both coasts of the US, Battery is a stage agnostic venture firm focusing on e-tail, digital

media, software and services, infrastructure and industrial technologies. Battery is currently investing from its BV IX fund

($750mn), and recently announced the close of its BV X ($650mn) and BV X Side ($250mn) funds. Potsdam-based

Hasso Plattner Ventures was set up in 2005 by SAP chairman and founder Hasso Plattner. The firm backs IT, software

and internet services companies at any stage with investments from €0.25mn to €10mn per round. This round was also

backed by ITA Software co-founder Dave Baggett and JetBlue Airways co-founder John Owen acting as angels.

GoEuro’s second round was an undisclosed multi-million euro investment by Lakestar in January 2014, at the same time

as the company came out of beta. Lakestar was founded by former AOL Germany MD and Benchmark Capital VP Klaus

Hommels. The firm is stage agnostic and targets finance, internet and technology businesses. This second round was

used to support GoEuro’s expansion from two beta countries to being live in seven countries during the first half of this

year.

This is not the first time that such a travel optimisation site has been tried. In July 2008, British start-up and Seedcamp

finalist Zoombu was trying to do exactly the same thing for Western Europe. Again, one of the key business issues was

acquiring enough scale. Zoombu solved this problem by being ‘acqui-hired’ by travel global search engine provider

Skyscanner in January 2011 for an undisclosed sum.

With so many mature travel sites and Google having started to include transport data in its Google Maps service, it is not

unlikely that GoEuro might be offered a similar exit in the near future. The combination of GoEuro’s integrated data with

Google’s ubiquitous map service would be game-changing. Of course there is competition. Other firms in the sector

include Munich-based FromAtoB which raised a seven figure Series A round in November last year, Rome-based

Wanderio which raised a $275k seed round last December, and Berlin-based Waymate.

August 2014

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Smaato Germany / US | www.smaato.com

# Sector Round €mn Description Investors

4 Software Late Stage

20.0 Mobile advertising Real-Time Bidding (RTB) exchange and Supply Side Platform (SSP).

Aeris Capital, EDBI, Singapore Press Holdings

Smaato (Germany), operator of a mobile advertising Real-Time Bidding (RTB) exchange and Supply Side Platform

(SSP), raised $25.0mn (€20.0mn) in a Late Stage round led by Singapore Press Holdings, with support from existing

investors Aeris Capital and EDBI. The money will be used to add self-service functionality to Smaato’s platform.

Despite being incorporated in the US rather than in Germany, we have chosen to cover this investment in our Bulletin

because the firm has had offices in both Hamburg and San Francisco since its inception in 2005. More interestingly, the

firm’s two co-founders are both German nationals who have lived for a long time in and around Silicon Valley. CEO

Ragnar Kruse is a serial entrepreneur who went to school in Munich, while co-founder and Chief Alliances Officer Petra

Vorsteher has always worked on building international alliances, initially between IT companies in the US and Europe,

and is a board member of Hamburg@work – a German trade organisation for TMT.

As with any start-up, the track record of the founders is hugely important and, once again, this is a German story. Both

Kruse and Vorsteher worked for B2B e-commerce solutions provider Intershop, which gave them e-commerce

experience throughout the dot-com boom. They also took part in growing the firm from a start-up to a publicly listed

company – initially on the Neuer Markt in 1998 and subsequently in a $108mn NASDAQ listing in 2000.

Initially, Smaato provided targeted, in-application ads through a platform called SOMA™ (Smaato Open Mobile

Advertising). It acted as an SSP to help app developers and publishers optimise the monetisation of their users and

content through advertising. Smaato’s timing was perfect as the firm was able to grow alongside the mobile advertising

market on increasingly capable smartphones.

The mobile advertising industry is extremely attractive, having grown by over 100% to reach $18bn in 2013 and

expected to exceed $30bn in 2014. This growth is mirrored by Smaato, which has increased the number of publishers

using its RTB exchange for mobile ads from 12,000 at the time of its $3mn Series D round in 2011 to more than 78,000

publishers today – a CAGR of c. 45%. 65% of these are publishers are app developers and 35% publish content through

mobile sites. Smaato’s target market has so far been primarily mid-tier publishers but, now that it is profitable, the

company wants to target higher-end publishers too.

Smaato is able to place these ads through over 100 different ad networks and more than 180 buy-side platforms (more

commonly called Demand Side Platforms in this context and referred to as DSPs) and distribute them through its own ad

server. This serves more than 90bn ads per month (compared with only 20bn in 2011 – a CAGR of 35%) to over 450mn

unique users and visitors across the US, EMEA and APAC regions, and allows for both campaign management and

analytics.

Smaato already has over 100 employees in five offices (on both coasts of the US, Germany, as well as Jakarta and

Singapore in the Far East). It has also started to grow through acquisition, having acquired mobile DSP adsmobi for an

undisclosed sum in the summer of 2013.

Investors

Although Smaato’s growth came initially in the US and then in Europe, much of the growth is now expected to come from the APAC region, explaining the interest how investors such as Singapore Press Holdings (SPH) (SGX:T39) which led this round. SPH is Singapore’s largest media company earning revenues of just under $1bn from a portfolio of classified ads, financial portals, magazines, mobile apps, newspapers and other digital media.

Apart from the obvious strategic benefits to a digital puslisher, SPH intends to use Smaato's technology for private ad exchanges to automate its direct sales relationships with premium brand advertisers. This will give Smaato an entry point into its desired higher end publishers.

SPH was supported by existing investor Aeris Capital – a family office originally based in Switzerland but now with an office in the US. Aeris financed Smaato’s $3.6mn Series A round in 2008 and $4.5mn Series B round in 2009 almost entirely alone (there was a small amount of co-investment from legal services firm Wilson Sonsini Goodrich & Rosati).

For the Series C and D rounds, both of which took place in 2011, Aeris was joined by Singaporean life sciences and

technology VC EDBI. In technology, EDBI focuses on venture, growth and later stage investments in the advertising,

cleantech and mobile sectors, and was a natural partner at the start of Smaato’s expansion into the Asian market.

Smaato is continuing its growth in this region and has recently announced a partnership with Indosat – the region’s

second largest wireless carrier.

August 2014

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Tobii Technology Sweden | www.tobii.com

# Sector Round €mn Description Investors

5 Hardware Late Stage

10.9 Provider of eye tracking solutions for Human Computer Interaction (HCI) and research.

Swedish National Pension Fund

Tobii Technology (Sweden), a provider of eye tracking solutions for Human Computer Interaction (HCI) and research,

raised SEK 100.0mn (€10.9mn) in a Late Stage round from the Swedish National Pension Fund. The money will be

used to finance the acquisition of US-based communications company Dynavox, and to support the firm’s expansion into

new markets.

We last saw Tobii in our March 2012, issue with a late-stage round of €15.9mn from Intel Capital. Up until that time Tobii

had focused on three market segments, which have grown into its three business units – assistive technology for the

disabled, analysis for UI design, web-site design and marketing, and OEM solutions for industry. However, the money

from this round is to be used to help the company develop mass market applications. For the past two years, Tobii has

been developing cheaper, simpler versions of its technology for use in consumer electronics, and also trying to enter the

gaming industry.

In terms of hardware, Tobii has launched Tobii REX™ – a device that clips on to the bottom of a monitor and allows

gaze-interaction for Windows 7 and Windows 8 PCs. This is now available for €595 and is also sold through specialist

gaming hardware vendor SteelSeries, with whom Tobii has a partnership agreement. In August of this year, Tobii

announced that games developer Overwolf had added eye-tracking to 600 of its games. There is also a smaller version

for laptops and tablets. To encourage OEMs to use its products, Tobii opened an office in Silicon Valley in October 2013.

On the software front, Tobii undertook a JV with Tiitoo, whose Natural User InterAction (NUIA) middleware incorporates

eye-tracking, gestures and speech recognition into user interfaces, to add eye-tracking as a means of control in well

known game Minecraft. Of course with no user base, it is difficult to persuade developers to write games incorporating

eye-tracking. In order to encourage them, Tobii launched its Gaze partner program, which makes the hardware and a

SDK (called EyeX) available to developers for only €99. These started shipping in May 2014.

When we last saw Tobii, the most up-to-date figures available gave Tobii’s turnover as €21mn for the 2009 financial

year. In 2014 revenues are expected to approach €50mn, primarily from the disability and advertising analysis segments.

The firm has also roughly doubled headcount from 340 employees to around 650.

Investors

Sweden, which was the first country in the world to introduce universal pensions, still has an unusual system comprised

of a nationalised pension scheme, compulsory occupational pension schemes and voluntary schemes. The nationalised

scheme is financed by deductions from income of 16% which are paid into Autonomous national Pension (AP) funds

which are self-regulating and free from government intervention. Traditionally comprised of four funds (AP1-4) which

each received one quarter of the 16% deductions, the Swedish pension system was reformed in the late nineties and

now includes AP6 (AUM €2.5bn), which invests in private companies both directly and through funds.

Tobii’s three business units – particularly that catering to online advertising and UI research – constitute a perfectly

reasonable business with a market size big enough to be interesting. Indeed, earlier this year, Tobii was in discussions

with investment banks regarding a possible IPO in Stockholm in the second half of 2014 (valuing the firm at over

$300mn).

If, however, there were wide-scale adoption of Tobii’s technology, this would be almost as game-changing as the

introduction of the mouse and WIMP (Windows, Icons, Mouse and Pointer) OS. Any signs of traction in the $20bn

(€15bn) PC games market would significantly increase the firm’s value – assuming that the investment banks touting for

the IPO business hadn’t already factored gaming revenues into the proposed offer price. Chasing the gaming market is a

high risk punt, but if it comes off the pay-back will be huge.

However, two years is not really long enough to both commoditise the hardware, engage with games developers and

also achieve a critical mass of users. This is probably one of the reasons for the postponement of Tobii’s IPO. Another is

the firm’s acquisition of Dynavox for an undisclosed sum in May of this year. Dynavox provides speech-synthesisers and

symbol-adapted education software for individuals with speech, language and learning difficulties.

Integrating Dynavox and trying to break into the global gaming industry, while simultaneously trying to do an IPO, would

be challenging even for a much larger management team, and impudent for a firm the size of Tobii. Once Tobii has

digested Dynavox, however, an IPO remains an option, particularly as a dispute over IP with SensoMotoric Instruments

(SMI) has just been resolved in Tobii’s favour.

August 2014

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Quinyx Sweden | www.quinyx.com

# Sector Round €mn Description Investors

6 Software B 10.5 Developer of SaaS workforce management tools. Alfvén & Didrikson

Quinyx (Sweden), a developer of SaaS workforce management tools, raised $14.0mn (€10.5mn) in a Series B round

from Alfvén & Didrikson. The money will be used for further international expansion.

This is another example of a sector where legacy enterprise software running on local servers is being replaced by SaaS

solutions. Conventionally, organisations with a large workforce to manage have used software from JDA, Kronos or

Workplace. A typical feature set for such software includes shift-planning, time-recording, absence management,

forecasting and some form of dashboard or analytics.

Founded in 2005, Quinyx provides a SaaS alternative. The firm was set up by Erik Fjellborg while still a student at the

Stockholm School of Economics. Fjellborg experienced traditional employee management software first-hand during a

part-time job at McDonald’s. Not only were the system’s inadequacies (such as an inability to quickly and easily change

shifts) obvious to a fresh pair of eyes, but to ‘digital native’ Fjellborg, the advantages of the internet and the possibility of

cost savings from delegating responsibility to employees for administering their schedules were obvious.

Of course there are many young proto-entrepreneurs with good business ideas. But good ideas are worthless without

execution and few have the ability to follow through, set up and grow a company while still studying – Mr. Fjellborg did

not finish his degree until 2011. Nonetheless, in 2009, Quinyx opened offices in Denmark, Germany and the UK as well

as setting up a new operations centre in Geneva. Smartphone functionality was added in 2011 and the firm has

diversified from the fast food industry into other personnel-intensive sectors such as call centres, construction,

healthcare, retail, hotels and restaurants, as well as the public sector.

Quinyx now has more than 100,000 users and its customers include major corporates such as Burger King, Compass

Group, Deutsche Telekom, Fedex, Santander, Subway and, naturally, McDonald's. With revenues of €4mn in 2013, the

firm expects to do over €5.5mn in 2014 (37% growth).

As with so many opportunities that are worth pursuing, a variety of competitors are also entering the market with SaaS

alternatives to legacy ‘heavy iron’ systems. Examples include Danish firm Planday which received $3.8mn (c.€2.8mn)

from Creandum and RECAPEX in May this year, San Francisco based Shiftplanning which has just received $3.2mn

(€mn) from MHS Capital and Point Nine Capital, and Canadian firm 7Shifts.

Moreover, incumbents have had time to watch SaaS eat into the market share of conventional enterprise software firms

in other sectors. Those with competent management will have been doing something about it. An obvious example is

SAP, whose current offering in this area is the SAP Human Capital Management system. As described in our coverage

of SaaS content management supplier Alfresco above, SAP has gradually been increasing its portfolio of SaaS offerings.

Of course market leadership amongst the new SaaS entrants will be determined by breadth of coverage (can the system

go beyond basic workforce management to include absence management, for example), integration with other existing

systems (such as payroll) and, as always, ease of migration to the new system. While legacy players such as Kronos –

which has 25% of the global market – in principle have plenty of money to develop their own systems, they may be

hampered by the need to maintain backward compatibility with their existing products or migrate existing customers to

new SaaS products. It may be simpler and quicker for them to buy up one of the new entrants.

Investors

The headline figure for this transaction is €10.5mn, but this includes a secondary portion for the buyout of previous

investor Mint Capital (AUM €112mn). The amount was undisclosed, but Mint is known to have put in c. €1.1mn in 2007.

Alfven & Didrikson Invest is a Swedish venture firm founded by three former bankers and management consultants in

2010. The firm targets Nordic SMEs with the potential for scalable, international growth. While sector agnostic in

principle, the majority of the firm’s investments to date have been in healthcare and medical technology.

Angel investor and former Google engineer Magnus Sandberg co-invested as an angel and joins existing angel investor

Per-Olof Myrén, who founded ERP software provider Scala Business Solutions (sold to Epicor in 2004 for €76mn).

It is not unlikely that Quinyx’s exit will ultimately be to a legacy system provider electing to buy a SaaS offering rather

than build its own. It is worth noting, however, that despite his age Quinyx CEO Fjellborg already has some public

company experience as a board member of SaaS accounting software provider Fortnox (which has a market cap of

€50mn).

August 2014

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Purplebricks UK | www.purplebricks.com

# Sector Round €mn Description Investors

7 Internet Services

B 10.0 Operator of an online real estate agency.

Alchemy Partners, DN Capital, Woodford Equity Income Fund

Purplebricks (UK), an online real estate agent, raised £8.0mn (€10.0mn) in a Series B round led by Woodford Equity

Income Fund with support from existing investor Alchemy Partners and DN Capital. The money will be used to

support the firm’s expansion throughout the UK.

Despite more stringent mortgage criteria since 2008, the UK market for residential property sales through estate agents

is still worth about £6bn and growing at 5% a year – not bad for an old-fashioned industry where most of the UK’s 17,000

estate agents are small local businesses only open during office hours! Still highly fragmented, the four largest estate

agents make up less than 15% of the industry despite numerous acquisitions over the last decade.

Online advertising through sites like Primelocation, Rightmove and Zoopla is now the norm, but 95% of residential

property is still sold by bricks-and-mortar estate agents. This is despite online agents providing materially the same

service (valuations using local experts, sales packs, advertising, and so on; the only difference is that vendors conduct

their own viewings) at an order-of-magnitude cost advantage (with a typical price of c.£500 rather than c.£5,000).

The UK’s Office of Fair Trading (OFT) has been reporting on this disparity (and other issues in the industry) for a long

time, and the Government’s response suggests disruptive regulatory and legislative changes favouring new entrants.

Britain’s largest traditional realtor by revenues Countrywide (backed by private equity firm Oaktree Capital) made a

successful IPO in March 2013 when it saw its shares rising by 15% on its first day of trading. However, this was at least

partly due to increased optimism in European IPOs as institutional investors returned, bullish public equity markets and

increasing UK house prices. Stringent competition is emerging.

This includes online agent Purplebricks which was launched in April 2014 by two brothers. Financed by the sale of their

conventional estate agency business to Connells only three years after buying it out of administration, Purplebricks

charges only £599 for sales. Like traditional agents, Purplebricks also has a lettings service (a £4bn market). Being

online not only reduces costs: Purplebrick’s eZie® platform enables vendors to change property details at any time and

landlords to get a real-time overview of their portfolio. More than 50% of Purplebricks activity happens outside office

hours.

Other competitors include well-known online agents 121Move, eMoov, Hatched, Housenetwork, HouseSimple, Tepilo

and The Little House Company. Online agents do not need to be big to be profitable (Tepilo was profitable only three

months after launching its online estate agency), but larger firms can negotiate better advertising deals.

As we have seen before, traditional bricks-and-mortar players may wait to see which online agents are the most

successful and then try to buy them. Waiting to see who will win may mean they have to pay a high price but, particularly

for those with public shareholders demanding returns, there will be little choice once the victors emerge.

Traditional agents may not be the only ones bidding for successful online agencies. Property advertiser Zoopla, which

was set up in 2007 and received £8mn in three rounds of venture funding, floated in London in June. This IPO, which

valued the company at roughly £1bn, raised £370mn for the selling shareholders which included Countrywide – the

traditional estate agent described above – and listed residential property services company LSL.

Even if pure play property advertising firms like Zoopla elect not to pursue vertical integration (owing to conflicts of

interest with their client base), there may be other competition in the bidding war for successful agents. Consisting of

what is now a fairly standard web-platform and a small head office, online estate agencies are relatively cheap to set up.

EasyJet founder Stelios Haji-Ionnou recently set up easyProperty – an online estate agent which raised £1.4mn in

crowd-funding at a valuation of almost £70mn. Thanks to the strength of the ‘easy’ brand, easyProperty has already

pencilled in a tentative IPO for three years time.

Investors

This transaction was led by the Woodford Equity Income Fund (AUM €3.4bn), which we covered in some detail in our

July 2014 issue when it made a €9.7mn investment in rural broadband provider Gigaclear. Woodford paid £7mn for a

30% stake valuing Purplebricks at over £23mn.

Woodford was supported by DN Capital (€80mn (2014); AUM €170mn), which also last appeared in our July 2014

Bulletin with an €18.4mn investment in reservations platform Quandoo. This is a classic deal for DN Capital – it is an

early to growth stage investment, straddles two of the firm’s preferred sectors (e-commerce and software), and allows

the firm to work with a market-leading co-investor. Moreover, just like Quandoo, this is a marketplace business which

uses the internet to disrupt what have hitherto been highly localised businesses.

August 2014

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2.1 M&A Activity Index

Disclosed Global TMT M&A Transactions

Source: Capital IQ; Go4Venture Advisers Analysis

(1) Includes Dell acquisition by Silver Lake for €22.3bn (2013) and WhatsApp acquisition by Facebook for €13.9bn (2014)

Disclosed European VC & PE-Backed TMT M&A Transactions (>£30mn / €35mn / $50mn)

Source: Capital IQ; The 451 Group; VentureSource (including transaction value estimates); Go4Venture Advisers Analysis

(1) Includes ista International acquisition by CVC Capital Partners for €3.1bn (2013)

Disclosed European VC & PE-Backed TMT M&A Transactions (2014)

>£30mn / €35mn / $50mn

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly Number # 5 4 1 2 3 7 6 1

Value €mn 1,106 1,140 448 258 906 1,083 1,607 266

Median €mn 240 259 448 129 215 129 200 266

Cumulative Number # 5 9 10 12 15 22 28 29

Value €mn 1,106 2,246 2,695 2,953 3,859 4,942 6,549 6,815

Median €mn 240 39 303 186 228 175 175 195

0

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# of Global Deals 2013 # of Global Deals 2014

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August 2014

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2.2 Top 5 Global TMT M&A Transactions Summary

Ranked by Price (€mn, including estimates) in descending order

# Target Acquirer Target Sector Price (€mn)

Revenues (€mn) P/R

1 OmniVision Technologies (US NASDAQ:OVTI) www.ovt.com

Hua Capital Management (China) Shanghai Pudong Science and Technology Investment (China) www.pdsti.com

Semiconductor 1,258 1,085 1.2x

Noteworthy Sellers: CEC Capital Management, Fidelity Management & Research Company, Fisher Investments OmniVision Technologies, a provider of digital imaging Complementary Metal Oxide Semiconductor (CMOS) for smartphones and other devices, will be acquired by Hua Capital Management and Shanghai Pudong Science and Technology Investment. While this acquisition fits nicely with Shanghai Pudong Science and Technology Investment’s strategy of controlling listed technology companies, no public information is available on Hua Capital Management.

2 Siemens Health Services (US) www.medical.siemens.com

Cerner (US NASDAQ:CERN) www.cerner.com

Healthcare Technology

975 N/A N/A

Noteworthy Seller: Siemens Medical Solutions US

Siemens Health Services, Siemens’ health information technology business unit, will be acquired by Cerner, a provider of healthcare practice management software and SaaS. This acquisition will enable Cerner to strengthen its R&D, as well as expand its global presence by acquiring a complementary client base.

3 Twitch Interactive (US) www.twitch.tv

Amazon (US NASDAQ:AMZN) www.amazon.com

Internet Services 727 N/A N/A

Noteworthy Sellers: Alsop Louie Partners, Bessemer Venture Partners, Draper Fisher Jurvetson, Take-Two Interactive Software (NASDAQ:TTWO), Thrive Capital, WestSummit Capital, Y Combinator Twitch Interactive, an operator of a live video platform for gamers, will be acquired by Amazon, the global online retailer and hosted services provider. This acquisition, which is Amazon’s second largest to date (behind Zappos) according to The Wall Street Journal, comes as a surprise as in May 2014 Google expressed an intention to acquire Twitch for $1bn (€728mn). It will enable Amazon to strengthen its presence within the gaming industry, while providing Twitch with Amazon’s support in creating new services and tools.

4 DianDian Interactive Technology (China)

Shanghai Zhongji Investment (China SHSE:600634) www.600634.com

Internet Services 720 N/A N/A

Noteworthy Seller: FunPlus DianDian Interactive Technology, a social and mobile gaming (owing popular games such as Family Farm) subsidiary of FunPlus, a global social and mobile gaming company, will be acquired by Shanghai Zhongji Investment, a construction conglomerate. This acquisition will expand Shanghai Zhongji Investment’s portfolio with a profitable and growing gaming and entertainment company.

5 SafeNet (US) www.safenet-inc.com

* 2013 revenues

Gemalto (Netherlands ENXTAM:GTO) www.gemalto.com

Security 668 254* 2.6x

Noteworthy Seller: Vector Capital SafeNet, a provider of anti-malware and Digital Rights Management (DRM) systems, encryption, as well as software monetisation solutions, will be acquired by Gemalto, a provider of security hardware and software globally. This acquisition will enable Gemalto to broaden its offer by adding encryption to its product portfolio, and complement its access and identity management solutions.

Source: Capital IQ; The 451 Group; Go4Venture Advisers Analysis

Key

P/R – Price / Last 12 Months Revenues

August 2014

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2.3 Headline European VC & PE-Backed M&A Transactions >£30mn / €35mn / $50mn

Ranked by Price (€mn, including estimates) in descending order

# Target Acquirer Target Sector

Price (€mn)

Revenues (€mn) P/R

Funding (€mn) P/F

1 Moneycorp (UK) www.moneycorp.com

Bridgepoint (UK) www.bridgepoint.eu

Internet Services

266 114 2.3x N/A N/A

Noteworthy Sellers: Adams Street Partners, Royal Bank of Scotland

Source: Capital IQ; The 451 Group; VentureSource; Go4Venture Advisers Analysis

Key

P/R – Price / Last 12 Months Revenues

P/F – Price / Total Funding

P/F > 1x indicates an investment where all investors have made a positive return on their investment

P/F < 1x indicates poor returns for some, but early or late investor entrants may still show a positive return on investment

August 2014

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# Target Acquirer Target Sector

Price (€mn)

Revenues (€mn) P/R

Funding (€mn) P/F

1 Moneycorp (UK) www.moneycorp.com

Bridgepoint (UK) www.bridgepoint.eu

Internet Services

266 114 2.3x N/A N/A

Moneycorp (UK), a provider of multi-channel foreign currency exchange, money transfers and other transaction

processing services, will be acquired by Bridgepoint for £212mn (€266mn) in cash. The sellers are private equity firm

Adams Street Partners and Royal Bank of Scotland (“RBS”).

Target Acquirer

Founded in 1962 – and involved in foreign exchange since

1979 – Moneycorp (the trading name of TTT Moneycorp) is

a provider of multi-channel foreign currency exchange,

money transfers and other transactions processing

services. It offers its services via an integrated online

payments and telephone platform that handles over 35

currencies, for both private customers and SMEs. In 2013 it

carried out 6.4 million transactions worth more than £10bn

(c.€12bn) in 100 different countries. Moneycorp is regulated

by the Financial Conduct Authority. The company also

operates a bureau de change business with 10 stores in the

UK, in addition to over 61 partner airports including Bristol

Airport, Gatwick, Heathrow, London Stansted Airport,

London Southend Airport and Southampton Airport.

With over 945 staff the company reached revenues and

EBIT of respectively €104mn and €11.6mn for calendar

year 2013. Headquartered in London, Moneycorp operates

globally via its offices in the UK, Ireland, Spain and the US.

Founded in 1984, Bridgepoint (€4.8bn (2008); AUM

€12bn) is a private equity firm that invests in buyout

transactions valued between €200mn and €1bn. It

typically invests between €75mn and €400mn in

companies within the business services, consumer,

financial services, healthcare, industry and media sectors.

It also invests via its subsidiary Bridgepoint Development

Capital (AUM €800mn) in growth capital transactions for

businesses with enterprise values up to €150mn.

Bridgepoint operates in Europe with a team of c.80

professionals split across its offices in Frankfurt, Istanbul,

London, Luxembourg, Madrid, Paris, Shanghai,

Stockholm and Warsaw.

While this is the first time Bridgepoint features in our

Bulletin, Bridgepoint Development Capital last appeared

in our June 2014 Bulletin, when it sold UK-based provider

of managed, hosted data center and IT infrastructure

services Pulsant to private equity firm Oak Hill Capital

Partners for $340mn (€250mn).

Noteworthy Sellers

US-based Adams Street Partners (AUM €16bn) is one of the largest private equity firms globally. With offices in Asia,

Europe and the US, it invests in funds, buyouts (as a co-investor), secondary and venture capital transactions. As a

venture capital firm, it invests between $5mn (€3.7mn) and $20mn (€15mn) within the healthcare (biopharmaceuticals,

healthcare IT and services, as well as medical devices) and technology (business services, cleantech, communications,

components, consumer internet, financial technology and software) sectors. Although not an investor in Moneycorp,

Adams Street Partners became involved in the deal when it acquired RBS’s stake in the bank’s private equity fund RBS

Special Opportunities Fund in May 2014 for c.£100mn (€123mn). Adams Street Partners last featured in our Bulletin in

October 2012 when it sold Ancestry.com, a US-based subscription internet service that provides users with detailed

genealogical mapping and associated services.

RBS first invested in Moneycorp in 2006 when it acquired 50% of the Shlewet family’s (Moneycorp’s former Chairman

and Director Bassam Shlewet’s family) stake. In 2011, RBS acquired the remaining shares held by Bassam Shlewet via

its private equity fund RBS Special Opportunities Fund, which it closed in 2007 after raising £1.1bn (€1.6bn). RBS

Special Opportunities Fund, which RBS was in discussion to spin off since June 2013, specialises in equity and

mezzanine debt investments.

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List of Acronyms

Financial Terms

k used as abbreviation for 1,000 (for example, €1k means €1,000)

mn million

bn billion

AUM Assets Under Management

CAGR Compound Annual Growth Rate

EBIT Earnings Before Interest and Tax

EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation

ECM Equity Capital Markets

EV Enterprise Value

FYE Fiscal Year-End

IPO Initial Public Offering

LBO Leveraged Buyout

MBO Management Buyout

LTM Last Twelve Months

M&A Mergers and Acquisitions

P/E Price to Earnings ratio

P/R Price to Revenues Ratio

P/F Price to Funding ratio

PE Private Equity

PIPE Private Investment in Public Equity

VC Venture Capital

Business / Technical Terms

BPM Business Process Management

BYOD Bring Your Own Device

CMIS Content Management Interoperability Services

CMOS Complementary Metal Oxide Semiconductor

DMS Document Management System

DRM< Digital Rights Management

DSP Demand Side Platform

ECM Enterprise Content Management

HCI Human Computer Interaction

NUIA Natural User InterAction

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RTP Real-Time Bidding

SaaS Software-as-a-Service

SSP Supply Side Platform

WIMP Windows, Icons, Mouse and Pointer

August 2014

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Go4Venture Advisers LLP

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[email protected]

This report was published on September 30, 2014

Disclaimer

This report has been prepared and issued by Go4Venture Advisers LLP who are authorised and regulated by the Financial Conduct Authority. All information used in the publication of this report, has been compiled from publicly available sources that are believed to be reliable, however no representation, warranty, or undertaking, express or limited is given as to the accuracy or completeness of the information or opinions contained in this report. Opinions contained in this report represent those of Go4Venture Advisers LLP at the time of publication. This research is non-objective. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment. Furthermore, as the information contained in this document is strictly confidential it may not be reproduced or further distributed. The value of investments and any income generated may go down as well as up. Past performance is not necessarily a guide to future performance. Investors may not get back the amount invested. This publication is not intended to be relied upon in making any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision. This report has been compiled by Jean-Michel Deligny, Managing Director – for and on behalf of Go4Venture Advisers.

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