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December 2012



Technology / Medtech / Internet / Digital Media / Telecoms / Cleantech


Monthly European TMT Private
Investments and M&A Transactions
Bulletin – December 2012
Published by Go4Venture Research, the Equity Research unit of
Go4Venture Advisers LLP.




                 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

   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


      Go4Venture Advisers LLP is authorised and regulated by the
                 Financial Services Authority (FSA).




 © Go4Venture Advisers LLP, 2013                                                Page 1
                                                 
December 2012

Contents

This Month in Brief                                                                               3

Private Investments
1.1 - Headline Investment Index (HTI)                                                             6
1.2 - Large Headline Investment Summary                                                           7
1.3 - Large Headline Investment Profiles                                                          8


M&A Transactions
2.1 - M&A Activity Index                                                                          18
2.2 - Top 5 Global TMT M&A Transactions Summary                                                   19
         Headline European VC & PE-Backed M&A Transactions:
2.3 - Summary                                                                                     21
2.4 - Profiles                                                                                    22
List of Acronyms                                                                                  24




About this Bulletin
The Go4Venture Monthly European TMT Private Investments and M&A Transactions Bulletin
provides a summary of corporate finance activity among emerging European TMT
companies:
          Private 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, MBOs and other buyouts).
Investment activity is measured using Go4Venture’s European Tech Headline
Transactions 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    at
www.go4venture.com/research/hti.htm.
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 g4vbulletin@go4venture.com.




 © Go4Venture Advisers LLP, 2013                                                                              Page 2
                                                              
December 2012


This Month in Brief

Dear Clients and Friends,

Welcome to the latest edition of the Go4Venture Monthly European TMT 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.



2013: Thinking Ahead

As expected, 2012 finished on a high, with total investment up 26% compared to 2011, both in value and
by number of transactions. December, typically a quieter month, was well ahead of December 2011 by
something like 50%. This suggests an acceleration of the pace of investment in European technology
venture as noted since August 2012. By contrast, the M&A market continued to slide down.

Investment

As we have been banging on about for some time, this increasing investment in technology reflects
tectonic shifts in European venture. Not only can venture financing and venture capital (VC) fund activity
not be seen as one and the same any longer (as VCs would lead you to believe) but we are also facing a
fundamental re-evaluation of what venture investing means.

Traditionally, and in the layman’s view of the word, venture is defined as high risk/high reward, early-stage
investment. The model comes from Silicon Valley where the maturity of the eco-system makes early-stage a
reasonably predictable activity. In Europe however, this part of the market is now left to business angels,
government-subsidised funds, and a handful of the larger VCs which can afford to subsidise this largely
money-losing activity to feed their larger later-stage funds. VCs have largely deserted early-stage and are
now focusing their attention on expansion capital.

We elaborated on the theme during a seminar on Growth Capital hosted earlier this month at lawyers Taylor
Wessing. As pointed out then, the move to growth equity has been accentuated by the poor IPO and M&A
exit market which has resulted in a large pool of VC-backed companies seeking further investment. As a
result approximately half of the “venture” activity (as tracked for instance by our own Headline
Transactions Index) is essentially late-stage companies, either profitable or not far from break-even. In
short the venture market now firmly incorporates what, for the lack of a better word, could be described as
“mini private equity”. The term is actually quite apt, as private equity (PE) firms, in the absence of debt
leverage, are themselves moving to growth equity where growth rather than financial engineering is the
actual driver of value creation.

December is fully representative of this trend with 5 late-stage and 5 Series B transactions – no real
Series A in the early-stage sense of the term. Even for the Series B companies, two of them have been
around since 1993 (BRAIN) and 1990 (Objectway) respectively. The other 3 are internet companies able to
demonstrate strong growth despite operating in an ex-growth macro environment.




 © Go4Venture Advisers LLP, 2013                                                                    Page 3
                                                  
December 2012

In short the venture market has been turned on its head - or perhaps the model is returning to its pre-internet
bubble roots. To make it simple, except for outstanding internet plays which have their own out-of-the-
ordinary economics, it takes a much longer time to get VCs involved. From now on the first steps of any
company will have to be bootstrapped, funded by family, friends and fools (the FF&F of good old times) or
simply by the founders themselves. And even internet companies (despite – or perhaps because – of their
low initial investment, high velocity and potentially huge rewards) need to produce real metrics before VCs
are prepared to commit.

At the other end, VCs find that they themselves may need to wait much longer before being able to exit.
Increasingly liquidity and exit have become two distinct events. One could say that for the VC model to
survive, the whole food chain needs to be reorganised, with VCs agreeing to take out business angels (and
sometimes employees), and PE and other later stage investors buying out smaller VCs. As usual, the US is
showing the way, with for instance Evernote’s investor merry-go-round in its December 2012 $85mn
financing (75% secondary) or Twitter’s latest round at $9bn valuation (50% secondary). In the new venture
model, VC-backed companies will need to go through various recapitalisations before getting to a
substantial exit outcome. In such a market, larger VCs who can speed up execution through increased
investment, and/or have sufficient dry powder to surf over several rounds will be the winners. Successful
VCs will have to become more like Sequoia Capital which raised $2.5bn in 2012 alone over 5 funds covering
early-stage in US, China and Israel as well as growth capital in the US and globally.

The corollary is that we can expect considerable suffering at the early-stage end of the market. The
wave of capital light internet plays has created a vast pool of seeded companies which will find it difficult to
get to Series A. Some speak of the upcoming Series A crunch. Even VCs with decent Series A plays are
getting increasingly concerned about the refinancing risk and lament the lack of syndication partners as
they are now increasingly reliant on their companies being refinanced (or not) by fewer, larger VCs cherry
picking at will and increasingly dealing among themselves. Good times ahead for Tier 1 funds and
established advisers such as Go4Venture.

Exits

December was again a poor month for tech M&A overall, and European VC/PE-backed companies in
particular. Part of it is the paucity of exit activity, part of it reflects the challenge of tracking what is, after all,
still a small market and therefore poorly covered by independent researchers. December exemplifies those
challenges.

On the one hand, Trivago was a big European success when it sold for close to €0.5bn to Expedia,
something like 5x historical revenues and assuredly a huge premium to the money invested (which we
estimate at c. 11x). A trade sale over €100mn is not so common in European venture (our threshold for
reporting is $50mn - approximately €35mn): half a billion euros and a “ten bagger” is an exceptional event.

At the other end, we had the news that WHEB, a London-based cleantech investor, had sold its stake in
Friedola Tech to Silverlake Kraftwerk as reported in our November 2012 newsletter. Somehow further
information was released in December and we learnt that WHEB made c. 2x their money on their €10.8mn
investment 2.5 years earlier. A solid return for WHEB, but too small to be reported.




 © Go4Venture Advisers LLP, 2013                                                                               Page 4
                                                       
December 2012

Somewhere in between was the news of Ireland-based security software specialist Vordel being sold to
publicly-quoted Axway (EPA:AXW) for the dreaded “unreported amount”. Vordel was a client of
Go4Venture Advisers for their late-stage financing in June 2007 so we know that the transaction hit our
reporting threshold and more. But corporates don’t like to mention figures, and neither do VCs sometimes,
because the figure is either too high or too low. Which is a real shame because in this case Vordel investors
did rather well from the investment.

One wishes the venture industry was more proactive in broadcasting it successes.



Enjoy the reading. Please direct any questions or comments to g4vbulletin@go4venture.com. If you do not
wish to receive future HTI updates from us, please send an email with the title “unsubscribe” to
g4vbulletin@go4venture.com.



The Go4Venture Team




 © Go4Venture Advisers LLP, 2013                                                                    Page 5
                                                  
December 2012


1.1 - Headline Investment Index (HTI)

      Go4Venture HTI Index by Deal Value
                                         500
                                                                 2009               2010
                                         450
 Value of Transactions per Month (€mn)




                                         400                     2011               2012

                                         350

                                         300

                                         250

                                         200

                                         150

                                         100

                                          50

                                           0
                                                    Jan    Feb      Mar       Apr          May       Jun      Jul     Aug    Sep    Oct     Nov     Dec



        Go4Venture HTI Index by Cumulative Deal Value
                                         3,500

                                         3,000                    2009          2010
    Total Value of Transactions (€mn)




                                                                  2011          2012
                                         2,500

                                         2,000

                                         1,500

                                         1,000

                                          500

                                               0
                                                     Jan    Feb         Mar   Apr          May          Jun   Jul     Aug    Sep    Oct    Nov      Dec




                                                   December                   2011           2012                   Year-to-Date           2011      2012
                                                   Landmark Deals #                1                 4              Landmark Deals #           24         37
                                                                  €m           117.6             174.3                             €m     1,153.9    1,423.5
                                                   Headline Deals #                2                 5              Headline Deals #           58         77
                                                                  €m            25.6              55.1                             €m       650.6      896.6
                                                   Small Deals    #               18                25              Small Deals    #          243        300
                                                                  €m            54.3              65.4                             €m       703.5      843.7
                                                   All Deals      #               21                34              All Deals      #          325        414
                                                                  €m           197.5             294.7                             €m     2,508.1    3,163.8




© Go4Venture Advisers LLP, 2013                                                                                                                           Page 6
                                                                                                    
December 2012

1.2 - Large Headline Investment Summary
(>£5mn / €7.5mn / $10mn)

       Company                    Sector        Round   €mn       Description                      Investors
  1    BRAIN (Germany)            Industrial      B      60.0     Specialises in the discovery     MIG Fonds, MP Beteiligungs.
       www.brain-biotech.de       Biotech                         of enzymes and other
                                                                  bioactives.
  2    Beauty Trend (Germany)     Internet       Late   55.2      Operator of a subscription-      Holtzbrinck Ventures,
       www.glossybox.de           Services      Stage             based service which delivers     Investment AB Kinnevik,
                                                                  selected beauty products to      Rocket Internet.
                                                                  male and female customers
                                                                  on a monthly basis.

  3    Biocartis (Switzerland)    Diagnostics    Late   34.5      Developer of a molecular         Benaruca, Debiopharm,
       www.biocartis.com                        Stage             and immunodiagnostics            Individual Investors, Johnson
                                                                  platform.                        & Johnson Development,
                                                                                                   Korys, Philips, PMV, RMM
                                                                                                   (Rudi Mariën), Valiance.

  4    feelunique.com (Jersey)    Internet       Late   24.6      Online beauty products           Palamon Capital Partners,
       www.feelunique.com         Services      Stage             retailer.                        Sirius Equity.
  5    Auctionata (Germany)       Internet       B      15.3      Operator of an online            Bright Capital, e.ventures,
       www.auctionata.com         Services                        auction house and sales          Holtzbrinck Ventures, Kite
                                                                  portal for art, antiques and     Ventures.
                                                                  collectibles.
  6    CloudPay Solutions (UK)    Software       Late   12.2      Provider of payroll software     Pinnacle Ventures, Rho
       www.cloudpay.net                         Stage             and services.                    Ventures, Unknown Strategic
                                                                                                   Investor.
  7    Trustpilot (Netherlands)   Internet       B      10.0      Operator of a platform for       Index Ventures, Northzone
       www.trustpilot.com         Services                        sharing of reviews of e-         Ventures, SEED Capital
                                                                  tailers - effectively a social   Denmark.
                                                                  review service.
  8    Objectway (Italy)          Software       B      10.0      Provider of software and         Futurimpresa.
       www.objectway.it                                           technology services for the
                                                                  financial markets.
  9    Mebelrama (Russia)         Internet       B          7.6   Online retailer of furniture     Rocket Internet.
       www.mebelrama.ru           Services                        and household goods.
 10    ECO Plastics (UK)          Cleantech      Late       7.4   Recycler of plastics.            Ludgate Investments, SAM
       www.ecoplasticsltd.com                   Stage                                              Private Equity.


Source: Go4Venture

Key
Bold indicates lead investor(s)
* Internal round
** Led by existing investors




 © Go4Venture Advisers LLP, 2013                                                                                          Page 7
                                                        
December 2012

 Company                Sector       Round   €mn    Description                               Investors
 BRAIN (Germany)        Industrial     B     60.0   Specialises in the discovery of enzymes   MIG Fonds, MP
 www.brain-biotech.de   Biotech                     and other bioactives.                     Beteiligungs.


                                       Biotechnology      Research        and     Information    Network      (BRAIN)
                                       (Germany), a company which specialises in enzyme and bioactive
discovery, raised €60.0mn in a Series B round led by MP Beteiligungs with support from MIG Verwaltung.
The money will be used for a combination of acquisitions and organic growth.

BRAIN is a so-called ‘white biotech’ company. In other words, it concentrates on industrial applications of
biotechnology rather than those in the healthcare and pharmaceutical industries. It makes its money from the
discovery and development of enzymes and bioactive compounds for the chemical, food and cosmetics
industries.

BRAIN was founded as an independent research organisation in Darmstadt, Germany in 1993. The firm’s
                                                                                                       ®
approach to discovering new enzymes and bioactives has been to develop a BioArchive . This library
consists of metagenomes – genetic materials recovered from environmental samples – and other biological
material. The firm then uses a proprietary technology platform to screen this library for anything useful.

Since 99% of all microorganisms from habitats such as soil samples cannot be cultivated, these non-
cultivated organisms have yet to be tapped as sources of new enzymes and bioactives. This is of great
commercial importance at a time when amino acid substitutions of existing molecules are rapidly becoming
patented. The other advantage is that rather than adapting chemical processes to use sub-optimal catalysts,
BRAIN’s library can be used to find better ones.

To date BRAIN’s primary modus operandi has been a series of over 80 joint ventures and strategic
partnerships with firms such as BASF, Ciba, Henkel, RWE, Sandoz and Schering.

BRAIN has now taken the strategic decision to become a fully integrated industrial company through a
combination of acquisitions and organic growth – a buy-and-build approach for which this round provides the
war chest. Some of the money will also be used for further development of BRAIN’s technology platforms.

In addition to its commercial expansion, BRAIN is also part of two collaborations funded by the German
Ministry of Education and Research (BMBF) – NatLifE 2020 and ZeroCarb FP. Led by BRAIN, NatLifE is a
collaboration of 22 industrial and academic partners developing healthier food and cosmetics. ZeroCarbFP –
a similar collaboration of 21 partners led by RWE Power – aims to use micro-organisms to recycle carbon-
rich industrial waste into useable raw materials.

This round was led by MP Beteiligungs which also participated in BRAIN’s €12.5mn first round in January
2007. MP is a family office making investments on behalf of the Putsch family which runs an automotive and
aircraft seating company, the RECARO Group.

MIG Verwaltung (€80mn (2013), AUM €800mn) provides management services for the MIG funds which are
public venture capital funds. The MIG funds have a total volume of more than €800mn and provide venture
capital to young, un-listed companies located in Germany, Austria and Switzerland.




 © Go4Venture Advisers LLP, 2013                                                                              Page 8
                                                      
December 2012

 Company               Sector     Round    €mn    Description                                Investors
 Beauty Trend          Internet     Late   55.2   Operator of a subscription-based service   Holtzbrinck Ventures,
 (Germany)             Services    Stage          which delivers selected beauty products    Investment AB Kinnevik,
 www.glossybox.de                                 to male and female customers on a          Rocket Internet.
                                                  monthly basis.

                                           Beauty Trend (trading as Glossy Box) (Germany), operator of a
                                           subscription-based service which delivers selected beauty products
                                           to male and female customers on a monthly basis, raised €55.2mn
in a Late Stage round from Holtzbrinck Ventures, Investment AB Kinnevik and Rocket Internet.

Glossy Box operates a member’s club whereby subscribers receive a selection of beauty products every
month. Beauty Trend buys in bulk and provides the manufacturers of beauty products with a new sales
channel with low customer acquisition costs, whilst minimising Beauty Trends’ own costs. In return Glossy
Box’s customers get an easy way to follow trends and explore new products.

When the service launched in March 2011 it was only available for women. After twelve months, however,
the firm expanded to cover men and teenagers of both sexes, as well as introducing products targeting
mothers. Operating at the same price point – €15 a month in all cases – subscribers get five products in the
ladies’ selection and between six and eight in the selection for gentlemen. Subscriptions can be cancelled at
any time, although fixed term subscriptions of three and six months are also available. Even at this price, one
or two premium brands can be included in each selection by varying the sample sizes.

Beauty Trend has grown rapidly and now has over 300 employees serving some 200,000 subscribers in 16
countries (Austria, Brazil, Canada, China, France, Germany, Israel, Italy, Japan, Korea, Netherlands,
Poland, Spain, Sweden, the UK and the USA), generating revenues of €36mn a year.

This is not the first time that Holtzbrinck Ventures, (€180mn (2011)), Investment AB Kinnevik and the
Samwer Brothers’ Rocket Internet (AUM €850mn) vehicle have worked together. In our June issue we
covered their participation in a €39mn investment in online furniture shopping club Westwing Home & Living
led by Summit Partners with support from Access Industries. Prior to that, the team worked alongside
eVenture Capital Partners (now e.ventures) in a €10mn Series B round for online collective buying portal City
Deal, in March 2010. As is well known, Rocket’s principal investor is Kinnevik so Kinnevik-Rocket
collaborations are effectively Kinnevik following its money to later stages.

Holtzbrinck and Kinnevik have also worked alongside each other on similar e-commerce plays: in 2011
Holtzbrinck and Kinnevik made an undisclosed investment in Russian fashion e-tailer Lamoda (which had
originally been incubated by Rocket Internet); in October 2012, Kinnevik partially bought out Holtzbrinck,
Rocket and Tengelmann Ventures’ from their investment in fashion e-tailer Zalando for €287mn.

Rocket’s presence in this relatively large deal is worthy of interest as there are obvious synergies with the
firm’s newly revamped fashion strategy.

Listed Swedish investor Kinnevik, which we described more fully in our June issue, has just won an appeal
with the Swedish Administrative Court of Appeal in a tax dispute. Kinnevik may now treat the gain on the
sale of its shares in financial services company Invik in 2007 as tax free. With profits from the disposal of
about €29mn, this is material and may be partly responsible for the recent rise in the firm’s share price.




 © Go4Venture Advisers LLP, 2013                                                                              Page 9
                                                    
December 2012

 Company              Sector     Round      €mn    Description                           Investors
 Biocartis            Diagono      Late     34.5   Developer of a molecular and          Benaruca, Debiopharm,
 (Switzerland)        stics       Stage            immunodiagnostics platform.           Individual Investors,
 www.biocartis.com                                                                       Johnson & Johnson
                                                                                         Development, Korys,
                                                                                         Philips, PMV, RMM (Rudi
                                                                                         Mariën), Valiance.

                          Biocartis (Switzerland), a developer of molecular diagnostic and biomarker
                          detection platforms for personalised medicine, raised CHF42.0mn (€34.5mn) in a
                          Late Stage round led by existing investor PMV with support from existing investors
                          Benaruca,       Debiopharm,       Johnson      &    Johnson,   Korys,   Royal    Philips
                          Electronics and Valiance, as well as new investor RMM.

This is the third time that Biocartis has appeared in our bulletin. Previous investments we have covered
include €10mn in November 2009, €30mn in April 2010 and €71mn in November 2011. Just like the now
relatively unfashionable semiconductor industry, building diagnostic platforms for personalised medicine
requires significant investment to ramp-up to commercial success. Another company in a very similar space,
Curetis, has also been written up in our bulletin twice. It appeared in December 2009 and October 2011 and
also contributed to our Headline Transaction Index (HTI) with a €6mn round in May 2011, even though the
round was too small to warrant a write-up.

Biocartis launched its Dynamic Multi-Analyte Technology (DMAT) platform for biomarker analysis in early
December. As Biocartis’ press release states, this means Biocartis has moved from being a pure
development company to a commercial organisation. The DMAT platform is, however, initially available for
research use only; not only is the research marketplace smaller than the ultimate clinical marketplace but it
can also be extremely sensitive to price.

Nevertheless, this latest round will be used to launch the firm’s Apollo diagnostics platform (for which the firm
hired a platform development project manager last year), to increase the variety of oncology tests the firm
can supply and to grow the commercial arm of the firm.

Much of the press coverage of this investment focusses on the fact that it brings total investment in Biocartis
to about €150mn. This must be seen in the context of the total market size. According to Business Insight,
the global market for molecular diagnostics in oncology was about $0.4bn in 2010 and one of the fastest
growing segments of the $4bn global molecular diagnostics market.

Also of interest is the fact that this is very nearly an internal round. Indeed, the only new investor, RMM, is a
family office representing the chairman of Belgian biogenetics company Innogenetics Rudi Mariën, who may
well have been one of the individual investors who also participated in the previous round.

Most of this round’s investors – Debiopharm, Johnson & Johnson, Korys (the family office of the Colruys
family which specialises in cleantech, consumer goods, retail and life sciences), Philips Electronics and co-
investment specialist Valiance (€30mn (2010), AUM €230mn) – also participated in the €71mn November
2011 round. The exception is Benaruca, a Luxembourg-incorporated investment vehicle represented by
Dutch lawyer Peter Verhaeghe, which first participated in Biocartis’ €35mn April 2010 round.




 © Go4Venture Advisers LLP, 2013                                                                          Page 10
                                                      
December 2012

 Company                Sector     Round     €mn    Description                       Investors
 feelunique.com         Internet     Late    24.6   Online beauty retailer.           Palamon Capital Partners,
 (Jersey)               Services    Stage                                             Sirius Equity.
 www.feelunique.com

                                             Feelunique.com (Jersey), an online retailer of beauty products,
                                             raised an estimated £20.0mn (€24.6mn) in a Late Stage round
                                             from Palomon Capital Partners and Sirius Equity.

Feelunique is the second investment in the beauty sector in this issue. Just as we saw a plethora of online
investments in fashion e-tailing from about 2007, the beauty sector seems to be heating up. Growth slowed
for the global beauty industry in the wake of the global recession but, according to research firm Sanford C.
Bernstein, not only is the global market now worth well over €250bn, it is also growing at over 5% a year.
Furthermore, it appears that the consumer beauty dollar – or in our case euro – is finally moving online.

Feelunique was founded in June 2005 as Island Cosmetics with each of its two founders contributing half of
the initial £80k funding. Launching in October of the same year, the firm grew by spending on advertising,
making losses for the first two years, during which time the two founders took no salary. Though it took time
to convince well-known brands that their products should be sold through feelunique, a deal with Clarins
which took four and a half years to secure provided a range of well-known cosmetics that formed the
foundation of feelunique’s online store.

Feelunique now has 125 staff working at its headquarters and logistics centre in the Channel Islands and
stocks over 18,000 products from more than 500 brands. Last year its turnover exceeded €35mn, having
grown at over 57% in the first half, well in excess of the company’s original forecast of c. €30mn. As part of
its quest to become a household name the firm has opened a salon, a spa and a club hotel, as well as
physical outlets in Jersey and Guernsey.

Founder and Jersey-born CEO Aaron Chatterley has had a variety of jobs, building a web development
company which he sold for £5.5mn in 2000 just before the dot com bubble burst. Notoriously, he got the idea
for Feelunique from needing to buy moisturiser while hungover at Dublin airport and realising that men can
find it intimidating to buy cosmetics in department stores.

This round, which is partly a secondary deal, values feelunique at £26mn (€30mn) and gives investors
Palomon Capital Partners (€670mn (2005)) and Sirius Equity a majority stake.

European growth investor and transaction leader Palomon targets services businesses. It strongly
emphasises its pan-European outlook, with a distribution of investments roughly matching that of the
European venture industry as a whole; it makes investments of €15-80mn. Note that as well as service
businesses which depend on technology such as software services, media and communications businesses,
the firm also invests in non-technology companies such as business services, healthcare, financial services,
leisure and retail.

As well as private equity and early stage venture investments, the firm also participates in recapitalisations,
turnarounds, buyouts and deleveraging transactions. In September 2012, Palamon Capital made a 3.4x
return on the sale of Swedish coffee chain Espresso House to Norwegian private equity firm Herkules.

Palomon was supported in this round by specialist luxury goods and branded retail investor Sirius Equity.
Founded in 2008, Sirius’ investments to date include LK Bennett and Italian sportwear brand Jeckerson. This
is their first investment in a pure online retailing play.


 © Go4Venture Advisers LLP, 2013                                                                      Page 11
                                                       
December 2012

 Company              Sector     Round    €mn    Description                           Investors
 Auctionata           Internet     B      15.3   Operator of an online auction house   Bright Capital, e.ventures,
 (Germany)            Services                   and sales portal for art, antiques    Holtzbrinck Ventures, Kite
 www.auctionata.com                              and collectibles.                     Ventures.

                                            Auctionata (Germany), operator of an online auction house and
                                            sales portal for art, antiques, collectibles and vintage luxury
                                            goods, raised €15.3mn in a Series B round from new investors
Bright Capital and Kite Ventures, supported by existing investors e.ventures and Holtzbrinck Ventures.

Founded in January 2011, the development of Auctionata’s sales and auction portal was supported by an
undisclosed round from well-known early stage investor Holtzbrinck Ventures and automotive dealer the
Raffay Group in December 2011.

Like a traditional auction house, Auctionata has a team of experts (c. 250) who value any item offered for
auction. Unlike a traditional auction house, this team is both global and virtual. Although its focus is
European, this expert network extends as far as Singapore, South Africa, South America and the USA. The
firm has a physical presence in New York as well as at its home in Berlin.

Low value items are valued on the basis of photographs and information on provenance from the owner,
whereas more valuable items need to be looked at in person. Currently, Auctionata offers free estimates for
the first five items sold. By virtue of its expert opinions, Auctionata is able to offer a twenty-five year
guarantee of authenticity.

Unlike eBay but just like a traditional auction house, the firm operates regular general auctions together with
ad hoc themed sales and a fixed price shop. Launched in September 2012, the site completed its first live
auction in December 2012 with revenues of €350k. Auctionata’s 70 employees currently curate over 3,600
items in the firm’s online store and aim to increase this to over 10,000 items by the end of Q1 2013.

Existing investor Holtzbrinck Ventures (€180mn (2011)), which appears elsewhere in this issue with a €55mn
investment in Beauty Trend, last appeared in our bulletin in June 2012 with a €39mn round for online
furniture shopping club Westwing. Founded in 2000 as the venture arm of the Georg von Holtzbrinck
Publishing Group, early stage internet specialist Holtzbrinck is now on its fourth fund and has made c. 100
investments over its lifetime, some 50 of which are in its current porfolio.

Fellow existing investor e.ventures is also an early stage specialist. The firm started life as BV Capital in
1998 but rebranded as e.ventures in the summer of 2012 to emphasise the firm’s global footprint and the fact
that it operates funds in Europe (e.ventures Europe), the US (BV e.ventures), Russia (e.ventures Russia),
South America (Redpoint e.ventures) and Asia (Infinity e.ventures).

New investor Bright Capital (€270mn (2012)), is another firm with a global perspective. Stage agnostic,
Bright operates five funds and targets cleantech and new materials businesses as well as digital
opportunities. Bright made its debut in our bulletin with an €8mn round for wastewater treatment firm
Epuramat in August 2012.

Kite Ventures confines itself to Russia and Europe. It also appeared in our August 2012 issue when it led an
€80mn round for Delivery Hero.




 © Go4Venture Advisers LLP, 2013                                                                                Page 12
                                                     
December 2012

 Company              Sector     Round    €mn    Description                                  Investors
 CloudPay Solutions   Software     Late   12.2   Provider of payroll software and services.   Individual Investors, Rho
 (UK)                             Stage                                                       Ventures, Unknown
 www.cloudpay.net                                                                             Investors.

                           CloudPay Solutions (UK), a provider of payroll software and services, raised
                           $16.0mn (€12.2mn) in a Late Stage round from new investor Pinnacle Ventures
                           and existing investor Rho Ventures, with support from a further undisclosed
strategic investor. The money will be used to augment the firm’s technical, service and sales capabilities.

Originally known as Patersons, CloudPay started developing its payroll outsourcing technology back in 1996,
well before this model was dubbed Software as a Service (SaaS). The firm last featured in our December
2008 bulletin when it received a €23mn round from Rho Ventures. This round was also to be used for the
expansion of sales, operations and customer support.

By this stage in its history, CloudPay had launched in the UK and expanded into the rest of Europe but had
only just begun opening international offices – in China, France, Singapore and the US. Alongside a
partnership with IBM dating from 2006 and winning Siemens as a client in 2008, the Rho investment seems
to have achieved the desired objective of stimulating international growth: in 2009 the firm won a major new
client with over 10,000 employees in over 70 countries. The firm also expanded its offering both organically
with the advent of full US payroll processing capability, as well as through synergistic partnerships with other
SaaS vendors such as HR management services vendor Workday, business execution software specialist
SuccessFactors and ERP firm NetSuite.

In 2012 Patersons changed its name to CloudPay, to match the product name it had adopted in 2011.
Following a mezzanine round in October 2011 (also provided by Rho Ventures) to support a multi-country
expansion, specialist SaaS consulting firm Montclair Advisors named CloudPay as one of its SaaS Top 250
by bookings and revenue growth rate in November 2012.

For new investor Pinnacle Ventures, this investment marks its debut in our bulletin. Pinnacle’s investment is
another example of a trend our readers will be familiar with – US investors backing European companies.
Based in Silicon Valley and investing in healthcare as well as technology, Pinnacle is somewhat unusual in
running both equity and debt funds.

Used in the US since the 1960s, until the late 1990s venture debt was practically unheard of in Europe.
According to a BVCA report in 2010, this is slowly changing. At its peak just before the credit crunch, venture
lending accounted for about 10% of venture funding in the UK and 6% in the rest of Europe. The largest
venture debt (as distinct from factoring) loans are made to internet, biotech and semiconductor companies.
Given the current preponderance of late stage investments and associated lack of mid-stage equity, venture
debt is often used as a way to extend an investee company’s cash runway.

Existing investor, US-based Rho Ventures first backed CloudPay when it was the sole provider of a €25mn
round in December 2008. Having started life as a family office in 1981 the firm has evolved into a private
equity firm running three funds – Rho Ventures, Rho Ventures Canada and fund-of-funds investor Rho Fund
Investors. Stage agnostic, Rho Ventures is currently investing from its $510mn sixth fund which targets new
media, IT, telecoms, energy and healthcare deals where total commitments over the lifetime of an ivestment
can be up to $50mn.


 © Go4Venture Advisers LLP, 2013                                                                                Page 13
                                                    
December 2012

 Company              Sector     Round    €mn    Description                                Investors
 Trustpilot           Internet     B      10.0   Operator of a platform which facilitates   Index Ventures, Northzone
 (Netherlands)        Services                   the sharing of reviews of e-tailers -      Ventures, SEED Capital
 www.trustpilot.com                              effectively a social review service.       Denmark.

                                          Trustpilot (Denmark), operator of a platform which facilitates the
                                          sharing of reviews of e-tailers – effectively a social review service,
                                          raised €10.0mn in a Series B round led by Index Ventures with
support from Northzone Ventures and SEED Capital. The money will be used to enter the US market.

Founded in Denmark in 2007, Trustpilot’s business model is best explained by the company’s stated aim of
creating ‘the best, most trustworthy website for consumers to share their online shopping experiences and
make it the global standard in customer reviews’.

Reviews are obtained in one of two ways: firstly, having registered with Trustpilot using either their e-mail
address or Facebook login, consumers can submit reviews; secondly, e-tailers and other businesses selling
through the web can invite their customers to submit reviews using Trustpilot’s platform. This is how the firm
makes its money. Fees scale with the number of domains, the number of orders per month that can be
reviewed and whether or not the client wishes to use additional features such as technical support or
integration with Facebook.

Since the firm was founded in 2007, the platform has processed 7mn reviews of more than 100,000
merchants, 1.5mn of which have been in the last twelve months. Over 1.3mn people read the reviews on
Trustpilot every month. Well-known customers include Vistapring, Telia, Toys’R’Us and Spartoo. Currently
present in 18 countries with a stronger position in France, Germany, Italy, the Netherlands and the UK,
Trustpilot now intends to enter the US using the funds raised in this round.

It has been a busy year for transaction leader Index Ventures (€350mn (2012), AUM €2.0bn), which has
appeared in our bulletin an average of once a month throughout 2012. In our October issue the firm
appeared no less than three times with investments in Zendesk, HouseTrip and Secret Escapes.

This is perhaps not surprising as the original premise for Index’s US founders was to export the Silicon
Valley mindset to Europe. A decade on, the bet on Europe seems to be paying off and, when Index
announced its €350mn early stage technology fund in June 2012, the firm repeated something that we have
been saying for some time – namely that European start-ups are finally coming of age. At the time, Index’s
portfolio included over 20 European companies of significant size and combined 2011 revenues of €1.3bn.

Almost as prolific is Northzone Ventures (€130mn (2011), AUM €410mn), which led Trustpilot’s €3.3mn
Series A round back in November 2011 and last appeared in our bulletin in June as part of a €25mn round
for iZettle.

Much less well known is SEED Capital (€200mn (2013)), which provided two rounds of seed funding for
Trustpilot in November 2008 and December 2010. SEED Capital is Denmark’s largest seed fund and, as it is
backed by public as well as private money, is able to pursue earlier stage opportunities more aggressively
than many venture firms. The firm invests in IT, cleantech and life sciences companies and will follow its
money in later rounds if a seed investment is successful. From the 400 or so business plans the company
receives every year it aims to back a dozen or so.


 © Go4Venture Advisers LLP, 2013                                                                            Page 14
                                                     
December 2012

  Company                Sector     Round   €mn    Description                           Investors
  Objectway (Italy)      Software     B     10.0   Provider of software and technology   Futurimpresa.
  www.objectway.it                                 services for the financial markets.

                                    Objectway (Italy), a provider of software and technology services for the
                                    financial markets, raised €10.0mn in a Series B round from Futurimpresa.
                                    The money will be used for European expansion, particularly in the UK.

ObjectWay was founded in 1990 as ‘Praksis Engineering and Computer Science’ to develop applications for
the institutions of the European Commission. Adopting an object-orientated approach to development, which
was cutting edge in the early 1990s, the firm changed its name to ObjectWay in 1997. Following a brief foray
into technology transfer, which still exists in the form of the ObjectWay University, the firm landed its first
banking clients in 2000. It went on to receive financial backing from Italian Jupiter Venture SA (now known
as JVcapital) in 2002.

Since this time the firm has developed two core lines of business – financial software and technology
solutions. The financial software business provides applications to large tracts of the financial services
industry covering sales of financial and insurance products, advisory services, fee and revenue management
software, as well as supplementary applications such as salesforce management and more market
orientated software for securities processing and asset management. The technology solutions business
offers custom software to support banking processes – examples include enterprise portals, Business
Process Management (BPM) software and Business Intelligence (BI) applications – by piggybacking on the
expertise developed in building the firm’s off-the-shelf software.

ObjectWay has achieved all this though a combination of organic growth and acquisitions. Acquisitions have
included Eurotech in 2004, a business division acquired from MET Sistemi in 2005 which added 40 banks to
the customer base, and a division of Computer Sharing Finance in 2005. The firm now has more than 450
employees in Bari, Brindisi, Milan and Rome and a 2011 turnover of €25mn with an EBITDA margin in
excess of 20%. In addition to a plethora of mid-tier financial services clients, ObjectWay’s customers include
well-known names such as Allianz, Citibank, Credit Suisse, Deutsche Bank and ING Direct.

ObjectWay has already expanded into France, Ireland, Portugal and Spain and this round will be used for
further European expansion, particularly in the UK. It is likely that such expansion will involve ObjectWay’s
technology vendor partners which include Computer Associates, IBM, Microsoft, Oracle and TIBCO.

Futurimpresa, owned by the Chambers of Commerce of Milano, Bergamo, Brescia and Como, is a quasi-
regional fund centred on the Lombardy plains. Together, these Chambers of Commerce represent about
10% of all Italian companies. Futurimpresa takes minority stakes in Lombardian SMEs with a turnover of
€10-50mn with an investment time-horizon of 5-6 years and a preference for capital structures with no debt.

This investment will give ObjectWay a post money valuation of €30mn and comes in the form of staged
payments which could take Futurimpresa’s equity holding up to a maximum of 30%. The first payment stage
has been used to finance the acquisition of the AMS Group, which specialises in outsourcing services for
asset management companies and financial intermediaries, and of Thomson Reuters subsidiary Eximius,
which provides software for private client wealth management. Interestingly for the future of the company,
ObjectWay’s founder Luigi Marciano managed to buy out investor JVcapital in 2006.




 © Go4Venture Advisers LLP, 2013                                                                         Page 15
                                                     
December 2012

 Company               Sector     Round    €mn    Description                                  Investors
 Mebelrama (Russia)    Internet     B       7.6   Online retailer of furniture and household   Rocket Internet.
 www.mebelrama.ru      Services                   goods.

                                           Mebelrama (Russia), an e-tailer of furniture and household goods,
                                           raised $10.0mn (€7.6mn) in a Series B round from Rocket
                                           Internet. The money will be used to expand the firm’s product
range, move into a new warehouse and build a distribution network.

Mebelrama was founded in September 2011 by Manuela Stoll and Nino Ulsamer, the Russian co-founders of
another of Rocket’s portfolio companies – Westwing. Mebelrama also received support from Rocket in the
form of a $4-6mn Series A round in December 2011.

Like many furniture and household goods e-tailers, Mebelrama has moved rapidly to offer a range of over
15,000 products. Just as with other companies operating successfully in Russia, however, Mebelrama’s
business model has some features specifically tailored for local market conditions. For example, in a country
where credit card payment over the web is still rare Mebelrama offers a 5% discount for prepayment.

The firm also intends to build its own distribution network to give it independence from the vagaries of the
Russian postal system. This is the same strategy as that adopted by another Russian e-tailer in Rocket’s
portfolio – Lamoda. It will be interesting to see whether the various logistics operations in Rocket’s Russian
portfolio are ultimately consolidated and spun-out.

According to co-founder Stoll, the firm aims to reach a turnover of $100mn within three years and possibly
more depending on expansion into the rest of Eastern Europe.

Regular readers may have been following Rocket Internet’s (AUM €850mn) bid to build a billion dollar e-
commerce company in either furniture or fashion – or possibly both. Previous coverage of this saga has
included a €39mn investment in Westwing Home & Living in June 2012, a €13mn round for fashion e-tailer
Zalando in August 2012 and a €47mn round for Russian fashion e-tailer Lamoda.ru in September 2012.

The online fashion industry is slightly more mature than the furniture e-tailing business – again readers will
be familiar with our coverage of the wave of fashion deals going back to about 2007. For this reason, Rocket
Internet’s strategy is more visible in the online fashion sector and is described in our coverage of Zalando
where we also outline the JP Morgan–Rocket partnership’s fashion investments outside Europe. These
totalled some hundreds of millions of Euros, even excluding the pair’s more recent investment in Asian
fashion e-tailer Zalor which closed in September.

The strategy seems both clear and simple – global domination. This will not, however, be entirely
straightforward, at least not in Russia where the furniture and home e-tailing market is evolving rapidly.
Ironically, there may be significant competition from venture-backed clones of furniture e-tailing businesses.

These include HomeMe.ru, which raised a $5mn first round in May from AddVenture, ABRT and
Luxembourg’s Mangrove Capital Partners, and Apartama which raised $1mn in October from Russian
investor Aurora Venture Capital. There is also a new entrant called The Furnish targeting the premium end of
the market. In addition, clicks-and-mortar firm Enter.ru, which is backed by Russian consumer electronics
giant Svyaznoy, will have furniture as one of its core offerings.



 © Go4Venture Advisers LLP, 2013                                                                                  Page 16
                                                      
December 2012

 Company                  Sector       Round    €mn    Description                        Investors
 ECO Plastics (UK)        Cleantech      Late    7.4   Recycler of plastics.              Ludgate Investments, SAM
 www.ecoplasticsltd.com                 Stage                                             private Equity.

                                      ECO Plastics (UK), a recycler of plastic bottles, raised £6.0mn (€7.4mn) in
                                      a Late Stage round from new investor SAM Private Equity together with
                                      existing investor Ludgate Investments, as well as additional debt facilities
                                      from the Close Brothers Group. The money will be used tactically for
short-term value added expansion opportunities.

When we last saw ECO Plastics in July 2011 it had just raised €27mn (€11mn of equity and €16mn of debt)
from Coca Cola, Ludgate Investments and debt provider the Close Brothers Group. The money was to be
used in a joint venture with Coca Cola Enterprises (CCE) to construct a £15mn facility which would increase
the firm’s production of bottle-grade recycled plastic from 15,000 to 40,000 tonnes a year.

Christened ‘Continuum’ and built on the firm’s existing site in Lincolnshire, this new facility was opened by
the UK Environment Minister in May 2012. More importantly, ECO Plastics was able to say that it had been
completed on time and on budget. The additional capacity allows the firm to produce 150,000 tonnes of
mixed plastics a year (including 40,000 tonnes of bottle-grade rPET) and makes the firm’s Lincolnshire plant
the largest plastics reprocessing facility in the world.

To put this into context the UK recycles roughly 420,000 tonnes a year. Not only is this a huge increase from
the mere 25,000 tonnes that were being recycled when the firm started out, but legislation such as the EU
Waste Framework Directive and governmental policy such as the UK Department for the Environment, Food
and Rural Affairs’ (DEFRA’s) Waste Action Plan is driving further growth.

In the UK, DEFRA’s target of increasing plastics recycling by 5% a year has encouraged local authorities to
increase kerbside collection of recycling. Commercially, this means that ECO Plastics has been able to
expand from three products to eleven and is expected to reach a turnover of £40mn in 2012, more than
double the previous year’s £18.5mn. It is not yet clear how much of this was due to extra recycling for the
Olympics.

The CCE joint venture is not the only project ECO Plastics has been involved with over the last year and a
half; in February 2012 the firm also received a £1.2mn loan from not-for-profit organisation WRAP (Waste &
Resources Action Programme). Supported by Government funding, WRAP was set up in 2000 and has a
mandate to help increase recycling. The money will be used to extend ECO Plastics’ existing bottle sorting
and processing facility, increasing overall capacity by a further 15,000 tonnes and improving the firm’s ability
to process rigid plastic packaging such as tubs, pots and trays.

Ludgate Investments (AIM: LEF.L) is a publicly-listed specialist investor focussing on resource efficiency that
was founded in 2001. Ludgate’s total invesment in ECO Plastics now amounts to just under £6mn. Having
listed on the AIM market in August 2007, Ludgate’s portfolio of 13 companies is currently valued at about
£42mn.

Switzerland-based SAM Private Equity, which is owned by Rabobank, is a cleantech specialist. Founded in
1995, the firm has been owned by Dutch asset management firm Robeco since 2007. The firm does not
make primary investments but invests in funds or co-invests alongside other private equity managers.
Unusually the firm also makes secondary fund investments, buying out portfolios from other firms.

 © Go4Venture Advisers LLP, 2013                                                                         Page 17
                                                       
December 2012

2.1 - M&A Activity Index
                       Disclosed Global & European TMT M&A Transactions
                                                         European Deals 2011 (€mn)                   European Deals 2012 (€mn)
                       600                               Global Deals 2011 (€mn)                     Global Deals 2012 (€mn)                                  35,000
                                                         # of Global Deals 2011                      # of Global Deals 2012

                       500                                                                                                                                    30,000




                                                                                                                                                                         Deal Value per Month (€mn)
# of Deals per Month




                                                                                                                                                              25,000
                       400
                                                                                                                                                              20,000
                       300
                                                                                                                                                              15,000
                       200
                                                                                                                                                              10,000

                       100                                                                                                                                    5,000

                        0                                                                                                                                     0
                                Jan      Feb      Mar        Apr      May         Jun          Jul    Aug         Sep        Oct         Nov         Dec
                             Source: Capital IQ; Go4Venture Analysis



                       Disclosed European VC & PE-Backed TMT M&A Transactions
                       >£30mn / €35mn / $50mn
                                                                                                           Value of Deals 2011 (€mn)
                                                                                                           Value of Deals 2012 (€mn)
                        20                                                                                                                                    4,500
                                                                                                           # of Deals 2011
                        18                                                                                 # of Deals 2012                                    4,000

                        16




                                                                                                                                                                        Deal Value per Month (€mn)
                                                                                                                                                              3,500
# of Deals per Month




                        14
                                                                                                                                                              3,000
                        12
                                                                                                                                                              2,500
                        10
                                                                                                                                                              2,000
                         8
                                                                                                                                                              1,500
                         6
                                                                                                                                                              1,000
                         4

                         2                                                                                                                                    500

                         0                                                                                                                                    0
                                                      (1)                   (2)         (3)
                                Jan      Feb       Mar       Apr      May         Jun          Jul    Aug         Sep        Oct         Nov         Dec
                             Source: Capital IQ, The 451 Group, VentureSource (including transaction value estimates); Go4Venture Analysis
                             (1) Includes NDS acquisition by Cisco Systems for €3.8bn
                             (2) Excludes Skype acquisition by Microsoft, but includes Landis+Gyr acquisition by Toshiba for €1.8bn
                             (3) Includes Elster acquisition by Melrose for €2.3bn


Disclosed European VC & PE-Backed TMT M&A Transactions (2012)
> £30mn / €35mn / $50mn
                                                     Jan       Feb     Mar        Apr         May    Jun       Jul      Aug        Sep         Oct     Nov        Dec

Monthly Number #                                      3         2     3            2           4       3     5           6          3           3       4          1
        Value  €mn                                   159      1,117 4,459         398         372    2,553 1,412        511        895         319    1,270       479
        Median €mn                                   54        558   623          199         89      210   150         65         322         69      263        479

Cum.                          Number #                3         5     8    10    14    17     22     28     31     34     38     39
                              Value  €mn             159      1,275 5,734 6,133 6,505 9,058 10,469 10,980 11,875 12,194 13,464 13,943
                              Median €mn             54        60    205   199   135   153   152    127    121    118    105    104




      © Go4Venture Advisers LLP, 2013                                                                                                                                                     Page 18
                                                                                              
December 2012

2.2 - Top 5 Global TMT M&A Transactions Summary
Ranked by Price (€mn) in descending order (includes announced and/or completed deals)
                                                                       Price     Rev.
   Target & Acquirer                                 Target Sector    (€mn)     (€mn)               P/R     Noteworthy Sellers
1 Eloqua (US NASDAQ:ELOQ)                             Application       730       69               10.6x    Bessemer, Bay, JMI
      www.eloqua.com                                   Software                                             Equity.

    Oracle (US NASDAQ:ORCL)
       www.oracle.com

Oracle, a diversified provider of enterprise software and IT hardware, will acquire Eloqua, a provider of business-to-business
(B2B) marketing automation Software as a Service (SaaS). Founded in 1999, Eloqua was an early player in marketing automation
and a pioneer of delivering cloud software. It has grown organically through its history to become the world's largest marketing
automation software provider, with 70,000 users. Eloqua's SaaS product has functionalities that allow marketers to develop and
promote brands, improve the discovery of their company, optimise click-through rates on websites and leverage social media for
marketing purposes. The acquisition of Eloqua will strengthen Oracle's position in the marketing automation market, expected to
grow at 8.2% annually through to 2015. Oracle is already active in this space, having acquired the intellectual property assets of
Market2Lead, another early marketing automation software provider, in May 2010. Furthermore, it seeks to integrate several
adjacent products into a unified SaaS offering; Eloqua, together with Vitrue, the social marketing SaaS company acquired for
€241mn in May 2012, will form the basis of Oracle's Customer Experience Cloud, a serious competitor to Salesforce.com's similar
offering. The last marketing software deal covered in the HTI was Teradata's €117mn acquisition of eCircle in the May 2012
issue. The marketing software market is undergoing significant growth and transformation with both major players consolidating
their positions (as evidenced by Salesforce.com's acquisition of Radian6 for €241mn in March 2011, Oracle's acquisition of Vitrue
and Google's acquisition of Wildfire in July 2012) and new entrants coming to market (as evidenced by startups such as
Conversocial, Awerness and Attensity).

2   TNS (US NYSE:TNS)                                  Communication         671         422       1.6x     -
      www.tnsi.com                                       Services

    Siris Capital (US)
        www.siriscapital.com

Siris Capital, a US private equity firm, will take private TNS, a provider of transaction network services. Launched in 1990, TNS's
core business is the provision of transaction, trading and telecoms services based on a global backbone network, an alternative
secure network that carries TNS's clients' data. TNS serves customers in over 60 countries. Having raised €67mn in a March
2004 IPO, TNS has increased revenues by over 12% per annum since then. Since going public, TNS has made 11 acquisitions,
the two largest of which were the Communications Services group of VeriSign for €183.3mn in March 2009 and Cequint, a value-
added technology provider to mobile network operators, for €87.7mn in September 2010, both aimed at building out its telecoms
business. TNS had previously been the subject of an attempted management buyout backed by Parthenon Capital in 2006, but
the proposed deal was rejected by shareholders. Siris Capital was founded in 2011 by private equity industry veterans Frank
Baker, Peter Berger and Jeffrey Hendren when they spun-out of Steve Cohen's SAC Capital Advisors. TNS is the second
acquisition Siris has made in the telecommunications space, following the acquisition of a majority stake in communications
equipment provider Tekelec.

3   Intermec (US NYSE:IN)                                Supply Chain        528         618       0.9x     -
       www.intermec.com                                  Optimisation

    Honeywell (US NYSE:HON)
      www.honeywell.com

Honeywell, an aerospace, automation, logistics, materials and transport conglomerate, will acquire Intermec, a provider of
automated data capture and management systems. Intermec provides barcode scanners, printers, Radio Frequency ID (RFID)
systems, rugged mobile computers and supply chain optimisation software. Intermec's hardware products are used in logistics
and manufacturing for the management of production and transit information; barcode and RFID readers allow customers to
centralise information on, and track products and equipment as they progress along the supply chain. Intermec's software allows
for efficient analytics of supply chain data. Intermec also provides many technologies as white-label devices for integration by
original equipment manufacturers (OEM)'s. Founded in 1966, Intermec, has faced difficult times since the global financial crisis,
failing to return revenues to pre-crisis levels and reporting a net loss since 2009. Honeywell, itself expecting reduced profitability
in 2013, has stated that the acquisition of Intermec will strengthen its offering in rugged computing and voice recognition
technologies, a strategic move reflecting the shift in defence expenditure away from aerospace and armoured systems toward
man-portable field technology. The deal also brings Honeywell into the new markets of RFID, voice and data management, part of
the consolidating Automatic Identification and Data Capture (AIDC) industry (consider Motorola's acquisition of Intermec
competitor Psion for €159.5mn in July 2012).

© Go4Venture Advisers LLP, 2013                                                                                            Page 19
                                                             
December 2012

                                                                             Price      Rev.
      Target & Acquirer                                  Target Sector       (€mn)     (€mn)       P/R     Noteworthy Sellers
 4    Trivago (Germany)                                     Internet          479       100        4.8x    Insight Venture
         www.trivago.com                                   Content &                                       Partners, Howzat Media,
                                                          Commerce                                         European Founders
      Expedia (US NASDAQ:EXPE)                                                                             Fund, Team Europe
        www.expedia.com                                                                                    Ventures.

 Expedia, a diversified online travel company, will acquire 62% of Trivago, a hotel booking search provider. Trivago provides an
 engine that searches multiple hotel booking sites, aggregates the data and presents the consumer with the lowest price for rooms
 that meet their requirements. Trivago generates revenue from the partnered hotel booking websites when consumers click
 through to a booking website. Trivago was founded by two ex-entrepreneurs and an investment banker in Dusseldorf, with its
 website going live in 2005. Between 2008-2012, Trivago has doubled revenues annually and now operates search engines in 27
 countries. The acquisition of Trivago can be seen as strengthening both Expedia's European and metasearch activity, especially
 in light of competitor Priceline's €1.4bn acquisition of Kayak, which was highlighted in the November 2012 HTI. Trivago will
 continue to operate out of Dusseldorf and be managed by its founders, who own the remaining stock.

 5    Peer 1 Hosting (Canada TSX:PIX)                    IT Infrastructure   462         106       4.4x    Clairvest Group, Gibralt
        www.peer1.com                                                                                      Capital, TCIB.

      Cogeco (Canada TSX:CCA)
        www.cogeco.ca

 Cogeco, provider of a high-speed fibre optics network, will acquire Peer 1 Hosting, a provider of cloud hosting and colocation
 services. Peer 1 provides a variety of cloud hosting solutions, including public cloud hosting and hybrid cloud hosting, with its 19
 data centres in Europe and North America being connected by a proprietary fibre-optic network. Peer 1 also offers colocation
 services to its customers, housing their servers in Peer 1's facilities while providing power, connectivity and security. Peer 1 was
 founded in 1999 with a focus on serving small and medium business customers, most notably hosting YouTube before its
 acquisition by Google. Between 2001-2012, Peer 1 made five acquisitions, expanding into the US by acquiring Texas-based
 competitor ServerBeach for €6.1mn in October 2004 and into the UK by acquiring London-based competitor NetBenefit for
 €30.9mn in June 2012. Peer 1 is Cogeco's second acquisition of 2012, following its July acquisition of Atlantic Broadband for
 €1.6bn. The acquisition of Peer 1 is expected to strengthen Cogeco's colocation offering, as well as providing several
 opportunities to cross-sell Peer 1's other offerings. There has been a recent trend of telecoms and cable companies acquiring
 cloud hosting infrastructure, as telcos seek to expand their traditional service offering, for example CenturyLink's acquisition of
 Savvis in April 2011 for €2.1bn and Time Warner's acquisition of NaviSite in February 2011 for €240.7mn. We have also seen
 consolidation of cloud hosting providers, for example the acquisition of Star by Claranet as profiled in the November 2011 HTI.

Source: Capital IQ, The 451 Group; Go4Venture Analysis

Key
Bold indicates name of Target
Italic indicates name of Acquirer
P/R – Price / Last 12 Months Revenues




 © Go4Venture Advisers LLP, 2013                                                                                          Page 20
                                                               
December 2012

2.3 - Headline European VC & PE-Backed M&A Transactions
Where transaction value is available (>£30mn / €35mn / $50mn), includes announced and/or completed deals
                                                          LTM
                                  Target       Price      Rev.              Funding
 # Target & Acquirer              Sector       (€mn)     (€mn)      P/R      (€mn)        P/F    Noteworthy Sellers
 1 Trivago (Germany)             Internet       479       100       4.8x      45*       10.6x Insight Venture Partners,
        www.trivago.com         Content &                                                        Howzat Media, European
                                Commerce                                                         Founders Fund, Team
    Expedia (US                                                                                  Europe Ventures.
    NASDAQ:EXPE)
       www.expedia.com

      * Estimated funding


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

Key
Bold indicates name of Target                                                  P/R – Price / Last 12 Months Revenues
Italic indicates name of Acquirer                                              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 their investment.




 © Go4Venture Advisers LLP, 2013                                                                                        Page 21
                                                                   
December 2012

                                                                         LTM
                                              Target        Price        Rev.          Funding
 #   Target & Acquirer                        Sector        (€mn)       (€mn)   P/R     (€mn)     P/F    Noteworthy Sellers
 1   Trivago (Germany)                       Internet        479         100    4.8x     45*     10.6x   Insight Venture
        www.trivago.com                     Content &                                                    Partners, Howzat
                                            Commerce                                                     Media, European
     Expedia (US NASDAQ:EXPE)                                                                            Founders Fund, Team
       www.expedia.com                                                                                   Europe Ventures.
     * Estimated funding
Source: Capital IQ, The 451 Group, VentureSource; Go4Venture Analysis

Trivago (Germany), provider of a hotel booking search engine, will be majority (62%) acquired by Expedia
(US NASDAQ:EXPE) for €479mn in cash and stock. The primary sellers include the venture capital firms
Insight Venture Partners, Howzat Media, European Founders Fund and Team Europe Ventures by
reverse chronological order of known first investment.

                                        Germany-based Trivago offers a search engine that indexes and aggregates
                                        hotel price data from a range of hotel booking sites. The company’s website
                                        allows users to screen for the lowest priced rooms meeting their requirements,
                                        without checking individual hotel booking websites. Trivago partners with the
                                        booking websites it indexes, and generates revenue when users click through
                                        from its search results. Trivago was founded in Dusseldorf by the two ex-
entrepreneurs behind amiro.de (a consumer web portal that merged with Ciao in February 2000) and an
investment banker, its site going live in 2005. Since its inception it has expereienced strong organic growth
and currently has hotel booking search engines operating in 27 countries both within and outside of Europe,
doubling its revenue annualy since 2008, to approximately €100mn in 2012. All four sellers invested directly
in Trivago over several rounds. In April 2011, Insight Venture Partners acquired 25% of the company in a
€40mn Round D. Howzat Media acquired its stake in January 2008, when it invested €0.8mn in Trivago in its
B Round and European Founders Fund acquired 10% of the company in its October 2007 A Round for an
undisclosed sum. Team Europe Ventures became involved through an undisclosed investment.

                                       Founded in 1996 as a division of Microsoft and listing on the NASDAQ in
                                       November 1999, Expedia is an international online travel agency. It owns over
                                       100 brands, the most visible of which is Expedia.com, but also including
                                       Hotels.com, Egencia and eLong. The company operates in two segments:
                                       Egencia / Business Travel and Leisure (9% and 91% of 2011 revenues,
                                       respectively). Expedia.com provides full travel agency services, including hotel,
flight, rental car and tour booking, as well as travel insurance. Expedia has websites in 60 countries across
six continents.

Trivago is expected to strengthen Expedia’s position in European hotel booking markets, where it faces
competition from US competitor Priceline (which had acquired Kayak in the US as featured in our November
2012 HTI and whose booking.com has 55% market share of hotel bookings in Europe), as well as
Tripadvisor which indexes both Expedia’s and Priceline’s sites. Expedia stands to benefit from Trivago’s
strong search technology and established partner network. The Trivago brand will continue to operate out of
its Dusseldorf headquarters, managed by its founders who own the remaining 38% of the company.




 © Go4Venture Advisers LLP, 2013                                                                                    Page 22
                                                                  
December 2012

Insight Venture Partners (€1.1bn (2010); AUM €2.4bn), is a global private equity and venture capital firm
covering venture, growth capital and buyout deals and specialising in the technology, media,
telecommunications and medical technology sectors. Investment sizes range between €2-150mn. Founded
in 1995, Insight is headquartered in New York. Insight featured in our September 2012 HTI for leading an
investment in Mimecast, in our June 2012 HTI for co-leading an investment in B2B-Center and in our March
2012 HTI for its attempted acquisition of Quest Software (ultimately acquired by Dell). Prior to that it featured
in our April 2011 and March 2011 issues with investments in collective buying site Groupalia and social
shopping site Privalia, respectively.

Howzat Media (€7.6mn (2007)), is a British venture capital firm founded in 2005 by the former management
of Cheapflights, a travel search website, as well as the founding team of Stellant Partners, a management
consultancy firm. It specialises in seed and venture capital investments, as well as incubating very early-
stage companies. Howzat aims to invest globally in online media, information technology and travel-related
companies.

European Founders Fund (AUM €75mn), is a German venture capital firm founded in 2007 set up by the
Samwer brothers, founders of the incubator Rocket Internet, previously founders of alando (the German
online auction room sold to eBay for €52.0mn in June 1999), and well-known European copycat investors. It
invests in China, Europe and the US, focusing on companies with internet, software and wireless
technologies. Investments for seed stage companies range between €100k-1mn, €1-3mn for venture stage
companies and €3-8mn for companies in the growth stage. The firm featured in our September 2012 HTI for
its €322mn sale of Jobs.ch to Ringier and Tamedia, as well as in our April 2011 and March 2010 issues for
its investments in Borro.

Team Europe Ventures (€6mn (2007)), is the venture capital arm of German incubator Team Europe. It
focuses on seed and venture capital deals. The firm only invests in internet-related companies, with a
geographical focus on German-speaking countries and wider Europe. Investment sizes range between €25-
500k. Founded in 2008, the firm is headquartered in Berlin. Team Europe was featured in our September
2012 HTI for its connection to Brille24, in our August 2012 HTI for its investment in Delivery Hero and in our
October 2011 HTI for its connection to madvertise.




 © Go4Venture Advisers LLP, 2013                                                                       Page 23
                                                    
December 2012

List of Acronyms
Financial Terms:
AUM: Assets Under Management
FYE: Fiscal Year-End
LTM: Last 12 months
mn: million
P/E: Price to Earnings ratio
P/F: Price to Funding ratio
PIPE: Private Investment in Public Equity


Business Terms:
AIDC: Automatic Identification and Data Capture
B2B: Business-to-Business
BI: Business Intelligence
BPM: Business Process Management
DMAT: Dynamic Multi-Analyte Technology
OEM: Original Equipment Manufacturer
PET: Polyethylene Teraphthalate
RFID: Radio-Frequency Identification
SaaS: Software as a Service




 © Go4Venture Advisers LLP, 2013                            Page 24
                                                  
December 2012




Go4Venture Advisers LLP


48 Charles Street                                                                  +44 (0)20 7529 5400
Berkeley Square                                                           g4vbulletin@go4venture.com
London
W1J 5EN




Disclaimer


This report has been prepared and issued by Go4Venture Advisers LLP who are
authorised and regulated by the Financial Services 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.


Copyright: 2012 Go4Venture. All rights reserved




                              Registered address: 10 Wellington Street, Cambridge, CB1 1HW Incorporation number OC336611

                                              Authorised and Regulated by the Financial Services Authority




 © Go4Venture Advisers LLP, 2013                                                                                                 Page 25
                                                                   

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Vc's quit early stage financing

  • 1. December 2012 Technology / Medtech / Internet / Digital Media / Telecoms / Cleantech Monthly European TMT Private Investments and M&A Transactions Bulletin – December 2012 Published by Go4Venture Research, the Equity Research unit of Go4Venture Advisers LLP. 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 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 Go4Venture Advisers LLP is authorised and regulated by the Financial Services Authority (FSA). © Go4Venture Advisers LLP, 2013 Page 1 
  • 2. December 2012 Contents This Month in Brief 3 Private Investments 1.1 - Headline Investment Index (HTI) 6 1.2 - Large Headline Investment Summary 7 1.3 - Large Headline Investment Profiles 8 M&A Transactions 2.1 - M&A Activity Index 18 2.2 - Top 5 Global TMT M&A Transactions Summary 19 Headline European VC & PE-Backed M&A Transactions: 2.3 - Summary 21 2.4 - Profiles 22 List of Acronyms 24 About this Bulletin The Go4Venture Monthly European TMT Private Investments and M&A Transactions Bulletin provides a summary of corporate finance activity among emerging European TMT companies:  Private 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, MBOs and other buyouts). Investment activity is measured using Go4Venture’s European Tech Headline Transactions 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 at www.go4venture.com/research/hti.htm. 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 g4vbulletin@go4venture.com. © Go4Venture Advisers LLP, 2013 Page 2 
  • 3. December 2012 This Month in Brief Dear Clients and Friends, Welcome to the latest edition of the Go4Venture Monthly European TMT 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. 2013: Thinking Ahead As expected, 2012 finished on a high, with total investment up 26% compared to 2011, both in value and by number of transactions. December, typically a quieter month, was well ahead of December 2011 by something like 50%. This suggests an acceleration of the pace of investment in European technology venture as noted since August 2012. By contrast, the M&A market continued to slide down. Investment As we have been banging on about for some time, this increasing investment in technology reflects tectonic shifts in European venture. Not only can venture financing and venture capital (VC) fund activity not be seen as one and the same any longer (as VCs would lead you to believe) but we are also facing a fundamental re-evaluation of what venture investing means. Traditionally, and in the layman’s view of the word, venture is defined as high risk/high reward, early-stage investment. The model comes from Silicon Valley where the maturity of the eco-system makes early-stage a reasonably predictable activity. In Europe however, this part of the market is now left to business angels, government-subsidised funds, and a handful of the larger VCs which can afford to subsidise this largely money-losing activity to feed their larger later-stage funds. VCs have largely deserted early-stage and are now focusing their attention on expansion capital. We elaborated on the theme during a seminar on Growth Capital hosted earlier this month at lawyers Taylor Wessing. As pointed out then, the move to growth equity has been accentuated by the poor IPO and M&A exit market which has resulted in a large pool of VC-backed companies seeking further investment. As a result approximately half of the “venture” activity (as tracked for instance by our own Headline Transactions Index) is essentially late-stage companies, either profitable or not far from break-even. In short the venture market now firmly incorporates what, for the lack of a better word, could be described as “mini private equity”. The term is actually quite apt, as private equity (PE) firms, in the absence of debt leverage, are themselves moving to growth equity where growth rather than financial engineering is the actual driver of value creation. December is fully representative of this trend with 5 late-stage and 5 Series B transactions – no real Series A in the early-stage sense of the term. Even for the Series B companies, two of them have been around since 1993 (BRAIN) and 1990 (Objectway) respectively. The other 3 are internet companies able to demonstrate strong growth despite operating in an ex-growth macro environment. © Go4Venture Advisers LLP, 2013 Page 3 
  • 4. December 2012 In short the venture market has been turned on its head - or perhaps the model is returning to its pre-internet bubble roots. To make it simple, except for outstanding internet plays which have their own out-of-the- ordinary economics, it takes a much longer time to get VCs involved. From now on the first steps of any company will have to be bootstrapped, funded by family, friends and fools (the FF&F of good old times) or simply by the founders themselves. And even internet companies (despite – or perhaps because – of their low initial investment, high velocity and potentially huge rewards) need to produce real metrics before VCs are prepared to commit. At the other end, VCs find that they themselves may need to wait much longer before being able to exit. Increasingly liquidity and exit have become two distinct events. One could say that for the VC model to survive, the whole food chain needs to be reorganised, with VCs agreeing to take out business angels (and sometimes employees), and PE and other later stage investors buying out smaller VCs. As usual, the US is showing the way, with for instance Evernote’s investor merry-go-round in its December 2012 $85mn financing (75% secondary) or Twitter’s latest round at $9bn valuation (50% secondary). In the new venture model, VC-backed companies will need to go through various recapitalisations before getting to a substantial exit outcome. In such a market, larger VCs who can speed up execution through increased investment, and/or have sufficient dry powder to surf over several rounds will be the winners. Successful VCs will have to become more like Sequoia Capital which raised $2.5bn in 2012 alone over 5 funds covering early-stage in US, China and Israel as well as growth capital in the US and globally. The corollary is that we can expect considerable suffering at the early-stage end of the market. The wave of capital light internet plays has created a vast pool of seeded companies which will find it difficult to get to Series A. Some speak of the upcoming Series A crunch. Even VCs with decent Series A plays are getting increasingly concerned about the refinancing risk and lament the lack of syndication partners as they are now increasingly reliant on their companies being refinanced (or not) by fewer, larger VCs cherry picking at will and increasingly dealing among themselves. Good times ahead for Tier 1 funds and established advisers such as Go4Venture. Exits December was again a poor month for tech M&A overall, and European VC/PE-backed companies in particular. Part of it is the paucity of exit activity, part of it reflects the challenge of tracking what is, after all, still a small market and therefore poorly covered by independent researchers. December exemplifies those challenges. On the one hand, Trivago was a big European success when it sold for close to €0.5bn to Expedia, something like 5x historical revenues and assuredly a huge premium to the money invested (which we estimate at c. 11x). A trade sale over €100mn is not so common in European venture (our threshold for reporting is $50mn - approximately €35mn): half a billion euros and a “ten bagger” is an exceptional event. At the other end, we had the news that WHEB, a London-based cleantech investor, had sold its stake in Friedola Tech to Silverlake Kraftwerk as reported in our November 2012 newsletter. Somehow further information was released in December and we learnt that WHEB made c. 2x their money on their €10.8mn investment 2.5 years earlier. A solid return for WHEB, but too small to be reported. © Go4Venture Advisers LLP, 2013 Page 4 
  • 5. December 2012 Somewhere in between was the news of Ireland-based security software specialist Vordel being sold to publicly-quoted Axway (EPA:AXW) for the dreaded “unreported amount”. Vordel was a client of Go4Venture Advisers for their late-stage financing in June 2007 so we know that the transaction hit our reporting threshold and more. But corporates don’t like to mention figures, and neither do VCs sometimes, because the figure is either too high or too low. Which is a real shame because in this case Vordel investors did rather well from the investment. One wishes the venture industry was more proactive in broadcasting it successes. Enjoy the reading. Please direct any questions or comments to g4vbulletin@go4venture.com. If you do not wish to receive future HTI updates from us, please send an email with the title “unsubscribe” to g4vbulletin@go4venture.com. The Go4Venture Team © Go4Venture Advisers LLP, 2013 Page 5 
  • 6. December 2012 1.1 - Headline Investment Index (HTI) Go4Venture HTI Index by Deal Value 500 2009 2010 450 Value of Transactions per Month (€mn) 400 2011 2012 350 300 250 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Go4Venture HTI Index by Cumulative Deal Value 3,500 3,000 2009 2010 Total Value of Transactions (€mn) 2011 2012 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec December 2011 2012 Year-to-Date 2011 2012 Landmark Deals # 1 4 Landmark Deals # 24 37 €m 117.6 174.3 €m 1,153.9 1,423.5 Headline Deals # 2 5 Headline Deals # 58 77 €m 25.6 55.1 €m 650.6 896.6 Small Deals # 18 25 Small Deals # 243 300 €m 54.3 65.4 €m 703.5 843.7 All Deals # 21 34 All Deals # 325 414 €m 197.5 294.7 €m 2,508.1 3,163.8 © Go4Venture Advisers LLP, 2013 Page 6 
  • 7. December 2012 1.2 - Large Headline Investment Summary (>£5mn / €7.5mn / $10mn) Company Sector Round €mn Description Investors 1 BRAIN (Germany) Industrial B 60.0 Specialises in the discovery MIG Fonds, MP Beteiligungs. www.brain-biotech.de Biotech of enzymes and other bioactives. 2 Beauty Trend (Germany) Internet Late 55.2 Operator of a subscription- Holtzbrinck Ventures, www.glossybox.de Services Stage based service which delivers Investment AB Kinnevik, selected beauty products to Rocket Internet. male and female customers on a monthly basis. 3 Biocartis (Switzerland) Diagnostics Late 34.5 Developer of a molecular Benaruca, Debiopharm, www.biocartis.com Stage and immunodiagnostics Individual Investors, Johnson platform. & Johnson Development, Korys, Philips, PMV, RMM (Rudi Mariën), Valiance. 4 feelunique.com (Jersey) Internet Late 24.6 Online beauty products Palamon Capital Partners, www.feelunique.com Services Stage retailer. Sirius Equity. 5 Auctionata (Germany) Internet B 15.3 Operator of an online Bright Capital, e.ventures, www.auctionata.com Services auction house and sales Holtzbrinck Ventures, Kite portal for art, antiques and Ventures. collectibles. 6 CloudPay Solutions (UK) Software Late 12.2 Provider of payroll software Pinnacle Ventures, Rho www.cloudpay.net Stage and services. Ventures, Unknown Strategic Investor. 7 Trustpilot (Netherlands) Internet B 10.0 Operator of a platform for Index Ventures, Northzone www.trustpilot.com Services sharing of reviews of e- Ventures, SEED Capital tailers - effectively a social Denmark. review service. 8 Objectway (Italy) Software B 10.0 Provider of software and Futurimpresa. www.objectway.it technology services for the financial markets. 9 Mebelrama (Russia) Internet B 7.6 Online retailer of furniture Rocket Internet. www.mebelrama.ru Services and household goods. 10 ECO Plastics (UK) Cleantech Late 7.4 Recycler of plastics. Ludgate Investments, SAM www.ecoplasticsltd.com Stage Private Equity. Source: Go4Venture Key Bold indicates lead investor(s) * Internal round ** Led by existing investors © Go4Venture Advisers LLP, 2013 Page 7 
  • 8. December 2012 Company Sector Round €mn Description Investors BRAIN (Germany) Industrial B 60.0 Specialises in the discovery of enzymes MIG Fonds, MP www.brain-biotech.de Biotech and other bioactives. Beteiligungs. Biotechnology Research and Information Network (BRAIN) (Germany), a company which specialises in enzyme and bioactive discovery, raised €60.0mn in a Series B round led by MP Beteiligungs with support from MIG Verwaltung. The money will be used for a combination of acquisitions and organic growth. BRAIN is a so-called ‘white biotech’ company. In other words, it concentrates on industrial applications of biotechnology rather than those in the healthcare and pharmaceutical industries. It makes its money from the discovery and development of enzymes and bioactive compounds for the chemical, food and cosmetics industries. BRAIN was founded as an independent research organisation in Darmstadt, Germany in 1993. The firm’s ® approach to discovering new enzymes and bioactives has been to develop a BioArchive . This library consists of metagenomes – genetic materials recovered from environmental samples – and other biological material. The firm then uses a proprietary technology platform to screen this library for anything useful. Since 99% of all microorganisms from habitats such as soil samples cannot be cultivated, these non- cultivated organisms have yet to be tapped as sources of new enzymes and bioactives. This is of great commercial importance at a time when amino acid substitutions of existing molecules are rapidly becoming patented. The other advantage is that rather than adapting chemical processes to use sub-optimal catalysts, BRAIN’s library can be used to find better ones. To date BRAIN’s primary modus operandi has been a series of over 80 joint ventures and strategic partnerships with firms such as BASF, Ciba, Henkel, RWE, Sandoz and Schering. BRAIN has now taken the strategic decision to become a fully integrated industrial company through a combination of acquisitions and organic growth – a buy-and-build approach for which this round provides the war chest. Some of the money will also be used for further development of BRAIN’s technology platforms. In addition to its commercial expansion, BRAIN is also part of two collaborations funded by the German Ministry of Education and Research (BMBF) – NatLifE 2020 and ZeroCarb FP. Led by BRAIN, NatLifE is a collaboration of 22 industrial and academic partners developing healthier food and cosmetics. ZeroCarbFP – a similar collaboration of 21 partners led by RWE Power – aims to use micro-organisms to recycle carbon- rich industrial waste into useable raw materials. This round was led by MP Beteiligungs which also participated in BRAIN’s €12.5mn first round in January 2007. MP is a family office making investments on behalf of the Putsch family which runs an automotive and aircraft seating company, the RECARO Group. MIG Verwaltung (€80mn (2013), AUM €800mn) provides management services for the MIG funds which are public venture capital funds. The MIG funds have a total volume of more than €800mn and provide venture capital to young, un-listed companies located in Germany, Austria and Switzerland. © Go4Venture Advisers LLP, 2013 Page 8 
  • 9. December 2012 Company Sector Round €mn Description Investors Beauty Trend Internet Late 55.2 Operator of a subscription-based service Holtzbrinck Ventures, (Germany) Services Stage which delivers selected beauty products Investment AB Kinnevik, www.glossybox.de to male and female customers on a Rocket Internet. monthly basis. Beauty Trend (trading as Glossy Box) (Germany), operator of a subscription-based service which delivers selected beauty products to male and female customers on a monthly basis, raised €55.2mn in a Late Stage round from Holtzbrinck Ventures, Investment AB Kinnevik and Rocket Internet. Glossy Box operates a member’s club whereby subscribers receive a selection of beauty products every month. Beauty Trend buys in bulk and provides the manufacturers of beauty products with a new sales channel with low customer acquisition costs, whilst minimising Beauty Trends’ own costs. In return Glossy Box’s customers get an easy way to follow trends and explore new products. When the service launched in March 2011 it was only available for women. After twelve months, however, the firm expanded to cover men and teenagers of both sexes, as well as introducing products targeting mothers. Operating at the same price point – €15 a month in all cases – subscribers get five products in the ladies’ selection and between six and eight in the selection for gentlemen. Subscriptions can be cancelled at any time, although fixed term subscriptions of three and six months are also available. Even at this price, one or two premium brands can be included in each selection by varying the sample sizes. Beauty Trend has grown rapidly and now has over 300 employees serving some 200,000 subscribers in 16 countries (Austria, Brazil, Canada, China, France, Germany, Israel, Italy, Japan, Korea, Netherlands, Poland, Spain, Sweden, the UK and the USA), generating revenues of €36mn a year. This is not the first time that Holtzbrinck Ventures, (€180mn (2011)), Investment AB Kinnevik and the Samwer Brothers’ Rocket Internet (AUM €850mn) vehicle have worked together. In our June issue we covered their participation in a €39mn investment in online furniture shopping club Westwing Home & Living led by Summit Partners with support from Access Industries. Prior to that, the team worked alongside eVenture Capital Partners (now e.ventures) in a €10mn Series B round for online collective buying portal City Deal, in March 2010. As is well known, Rocket’s principal investor is Kinnevik so Kinnevik-Rocket collaborations are effectively Kinnevik following its money to later stages. Holtzbrinck and Kinnevik have also worked alongside each other on similar e-commerce plays: in 2011 Holtzbrinck and Kinnevik made an undisclosed investment in Russian fashion e-tailer Lamoda (which had originally been incubated by Rocket Internet); in October 2012, Kinnevik partially bought out Holtzbrinck, Rocket and Tengelmann Ventures’ from their investment in fashion e-tailer Zalando for €287mn. Rocket’s presence in this relatively large deal is worthy of interest as there are obvious synergies with the firm’s newly revamped fashion strategy. Listed Swedish investor Kinnevik, which we described more fully in our June issue, has just won an appeal with the Swedish Administrative Court of Appeal in a tax dispute. Kinnevik may now treat the gain on the sale of its shares in financial services company Invik in 2007 as tax free. With profits from the disposal of about €29mn, this is material and may be partly responsible for the recent rise in the firm’s share price. © Go4Venture Advisers LLP, 2013 Page 9 
  • 10. December 2012 Company Sector Round €mn Description Investors Biocartis Diagono Late 34.5 Developer of a molecular and Benaruca, Debiopharm, (Switzerland) stics Stage immunodiagnostics platform. Individual Investors, www.biocartis.com Johnson & Johnson Development, Korys, Philips, PMV, RMM (Rudi Mariën), Valiance. Biocartis (Switzerland), a developer of molecular diagnostic and biomarker detection platforms for personalised medicine, raised CHF42.0mn (€34.5mn) in a Late Stage round led by existing investor PMV with support from existing investors Benaruca, Debiopharm, Johnson & Johnson, Korys, Royal Philips Electronics and Valiance, as well as new investor RMM. This is the third time that Biocartis has appeared in our bulletin. Previous investments we have covered include €10mn in November 2009, €30mn in April 2010 and €71mn in November 2011. Just like the now relatively unfashionable semiconductor industry, building diagnostic platforms for personalised medicine requires significant investment to ramp-up to commercial success. Another company in a very similar space, Curetis, has also been written up in our bulletin twice. It appeared in December 2009 and October 2011 and also contributed to our Headline Transaction Index (HTI) with a €6mn round in May 2011, even though the round was too small to warrant a write-up. Biocartis launched its Dynamic Multi-Analyte Technology (DMAT) platform for biomarker analysis in early December. As Biocartis’ press release states, this means Biocartis has moved from being a pure development company to a commercial organisation. The DMAT platform is, however, initially available for research use only; not only is the research marketplace smaller than the ultimate clinical marketplace but it can also be extremely sensitive to price. Nevertheless, this latest round will be used to launch the firm’s Apollo diagnostics platform (for which the firm hired a platform development project manager last year), to increase the variety of oncology tests the firm can supply and to grow the commercial arm of the firm. Much of the press coverage of this investment focusses on the fact that it brings total investment in Biocartis to about €150mn. This must be seen in the context of the total market size. According to Business Insight, the global market for molecular diagnostics in oncology was about $0.4bn in 2010 and one of the fastest growing segments of the $4bn global molecular diagnostics market. Also of interest is the fact that this is very nearly an internal round. Indeed, the only new investor, RMM, is a family office representing the chairman of Belgian biogenetics company Innogenetics Rudi Mariën, who may well have been one of the individual investors who also participated in the previous round. Most of this round’s investors – Debiopharm, Johnson & Johnson, Korys (the family office of the Colruys family which specialises in cleantech, consumer goods, retail and life sciences), Philips Electronics and co- investment specialist Valiance (€30mn (2010), AUM €230mn) – also participated in the €71mn November 2011 round. The exception is Benaruca, a Luxembourg-incorporated investment vehicle represented by Dutch lawyer Peter Verhaeghe, which first participated in Biocartis’ €35mn April 2010 round. © Go4Venture Advisers LLP, 2013 Page 10 
  • 11. December 2012 Company Sector Round €mn Description Investors feelunique.com Internet Late 24.6 Online beauty retailer. Palamon Capital Partners, (Jersey) Services Stage Sirius Equity. www.feelunique.com Feelunique.com (Jersey), an online retailer of beauty products, raised an estimated £20.0mn (€24.6mn) in a Late Stage round from Palomon Capital Partners and Sirius Equity. Feelunique is the second investment in the beauty sector in this issue. Just as we saw a plethora of online investments in fashion e-tailing from about 2007, the beauty sector seems to be heating up. Growth slowed for the global beauty industry in the wake of the global recession but, according to research firm Sanford C. Bernstein, not only is the global market now worth well over €250bn, it is also growing at over 5% a year. Furthermore, it appears that the consumer beauty dollar – or in our case euro – is finally moving online. Feelunique was founded in June 2005 as Island Cosmetics with each of its two founders contributing half of the initial £80k funding. Launching in October of the same year, the firm grew by spending on advertising, making losses for the first two years, during which time the two founders took no salary. Though it took time to convince well-known brands that their products should be sold through feelunique, a deal with Clarins which took four and a half years to secure provided a range of well-known cosmetics that formed the foundation of feelunique’s online store. Feelunique now has 125 staff working at its headquarters and logistics centre in the Channel Islands and stocks over 18,000 products from more than 500 brands. Last year its turnover exceeded €35mn, having grown at over 57% in the first half, well in excess of the company’s original forecast of c. €30mn. As part of its quest to become a household name the firm has opened a salon, a spa and a club hotel, as well as physical outlets in Jersey and Guernsey. Founder and Jersey-born CEO Aaron Chatterley has had a variety of jobs, building a web development company which he sold for £5.5mn in 2000 just before the dot com bubble burst. Notoriously, he got the idea for Feelunique from needing to buy moisturiser while hungover at Dublin airport and realising that men can find it intimidating to buy cosmetics in department stores. This round, which is partly a secondary deal, values feelunique at £26mn (€30mn) and gives investors Palomon Capital Partners (€670mn (2005)) and Sirius Equity a majority stake. European growth investor and transaction leader Palomon targets services businesses. It strongly emphasises its pan-European outlook, with a distribution of investments roughly matching that of the European venture industry as a whole; it makes investments of €15-80mn. Note that as well as service businesses which depend on technology such as software services, media and communications businesses, the firm also invests in non-technology companies such as business services, healthcare, financial services, leisure and retail. As well as private equity and early stage venture investments, the firm also participates in recapitalisations, turnarounds, buyouts and deleveraging transactions. In September 2012, Palamon Capital made a 3.4x return on the sale of Swedish coffee chain Espresso House to Norwegian private equity firm Herkules. Palomon was supported in this round by specialist luxury goods and branded retail investor Sirius Equity. Founded in 2008, Sirius’ investments to date include LK Bennett and Italian sportwear brand Jeckerson. This is their first investment in a pure online retailing play. © Go4Venture Advisers LLP, 2013 Page 11 
  • 12. December 2012 Company Sector Round €mn Description Investors Auctionata Internet B 15.3 Operator of an online auction house Bright Capital, e.ventures, (Germany) Services and sales portal for art, antiques Holtzbrinck Ventures, Kite www.auctionata.com and collectibles. Ventures. Auctionata (Germany), operator of an online auction house and sales portal for art, antiques, collectibles and vintage luxury goods, raised €15.3mn in a Series B round from new investors Bright Capital and Kite Ventures, supported by existing investors e.ventures and Holtzbrinck Ventures. Founded in January 2011, the development of Auctionata’s sales and auction portal was supported by an undisclosed round from well-known early stage investor Holtzbrinck Ventures and automotive dealer the Raffay Group in December 2011. Like a traditional auction house, Auctionata has a team of experts (c. 250) who value any item offered for auction. Unlike a traditional auction house, this team is both global and virtual. Although its focus is European, this expert network extends as far as Singapore, South Africa, South America and the USA. The firm has a physical presence in New York as well as at its home in Berlin. Low value items are valued on the basis of photographs and information on provenance from the owner, whereas more valuable items need to be looked at in person. Currently, Auctionata offers free estimates for the first five items sold. By virtue of its expert opinions, Auctionata is able to offer a twenty-five year guarantee of authenticity. Unlike eBay but just like a traditional auction house, the firm operates regular general auctions together with ad hoc themed sales and a fixed price shop. Launched in September 2012, the site completed its first live auction in December 2012 with revenues of €350k. Auctionata’s 70 employees currently curate over 3,600 items in the firm’s online store and aim to increase this to over 10,000 items by the end of Q1 2013. Existing investor Holtzbrinck Ventures (€180mn (2011)), which appears elsewhere in this issue with a €55mn investment in Beauty Trend, last appeared in our bulletin in June 2012 with a €39mn round for online furniture shopping club Westwing. Founded in 2000 as the venture arm of the Georg von Holtzbrinck Publishing Group, early stage internet specialist Holtzbrinck is now on its fourth fund and has made c. 100 investments over its lifetime, some 50 of which are in its current porfolio. Fellow existing investor e.ventures is also an early stage specialist. The firm started life as BV Capital in 1998 but rebranded as e.ventures in the summer of 2012 to emphasise the firm’s global footprint and the fact that it operates funds in Europe (e.ventures Europe), the US (BV e.ventures), Russia (e.ventures Russia), South America (Redpoint e.ventures) and Asia (Infinity e.ventures). New investor Bright Capital (€270mn (2012)), is another firm with a global perspective. Stage agnostic, Bright operates five funds and targets cleantech and new materials businesses as well as digital opportunities. Bright made its debut in our bulletin with an €8mn round for wastewater treatment firm Epuramat in August 2012. Kite Ventures confines itself to Russia and Europe. It also appeared in our August 2012 issue when it led an €80mn round for Delivery Hero. © Go4Venture Advisers LLP, 2013 Page 12 
  • 13. December 2012 Company Sector Round €mn Description Investors CloudPay Solutions Software Late 12.2 Provider of payroll software and services. Individual Investors, Rho (UK) Stage Ventures, Unknown www.cloudpay.net Investors. CloudPay Solutions (UK), a provider of payroll software and services, raised $16.0mn (€12.2mn) in a Late Stage round from new investor Pinnacle Ventures and existing investor Rho Ventures, with support from a further undisclosed strategic investor. The money will be used to augment the firm’s technical, service and sales capabilities. Originally known as Patersons, CloudPay started developing its payroll outsourcing technology back in 1996, well before this model was dubbed Software as a Service (SaaS). The firm last featured in our December 2008 bulletin when it received a €23mn round from Rho Ventures. This round was also to be used for the expansion of sales, operations and customer support. By this stage in its history, CloudPay had launched in the UK and expanded into the rest of Europe but had only just begun opening international offices – in China, France, Singapore and the US. Alongside a partnership with IBM dating from 2006 and winning Siemens as a client in 2008, the Rho investment seems to have achieved the desired objective of stimulating international growth: in 2009 the firm won a major new client with over 10,000 employees in over 70 countries. The firm also expanded its offering both organically with the advent of full US payroll processing capability, as well as through synergistic partnerships with other SaaS vendors such as HR management services vendor Workday, business execution software specialist SuccessFactors and ERP firm NetSuite. In 2012 Patersons changed its name to CloudPay, to match the product name it had adopted in 2011. Following a mezzanine round in October 2011 (also provided by Rho Ventures) to support a multi-country expansion, specialist SaaS consulting firm Montclair Advisors named CloudPay as one of its SaaS Top 250 by bookings and revenue growth rate in November 2012. For new investor Pinnacle Ventures, this investment marks its debut in our bulletin. Pinnacle’s investment is another example of a trend our readers will be familiar with – US investors backing European companies. Based in Silicon Valley and investing in healthcare as well as technology, Pinnacle is somewhat unusual in running both equity and debt funds. Used in the US since the 1960s, until the late 1990s venture debt was practically unheard of in Europe. According to a BVCA report in 2010, this is slowly changing. At its peak just before the credit crunch, venture lending accounted for about 10% of venture funding in the UK and 6% in the rest of Europe. The largest venture debt (as distinct from factoring) loans are made to internet, biotech and semiconductor companies. Given the current preponderance of late stage investments and associated lack of mid-stage equity, venture debt is often used as a way to extend an investee company’s cash runway. Existing investor, US-based Rho Ventures first backed CloudPay when it was the sole provider of a €25mn round in December 2008. Having started life as a family office in 1981 the firm has evolved into a private equity firm running three funds – Rho Ventures, Rho Ventures Canada and fund-of-funds investor Rho Fund Investors. Stage agnostic, Rho Ventures is currently investing from its $510mn sixth fund which targets new media, IT, telecoms, energy and healthcare deals where total commitments over the lifetime of an ivestment can be up to $50mn. © Go4Venture Advisers LLP, 2013 Page 13 
  • 14. December 2012 Company Sector Round €mn Description Investors Trustpilot Internet B 10.0 Operator of a platform which facilitates Index Ventures, Northzone (Netherlands) Services the sharing of reviews of e-tailers - Ventures, SEED Capital www.trustpilot.com effectively a social review service. Denmark. Trustpilot (Denmark), operator of a platform which facilitates the sharing of reviews of e-tailers – effectively a social review service, raised €10.0mn in a Series B round led by Index Ventures with support from Northzone Ventures and SEED Capital. The money will be used to enter the US market. Founded in Denmark in 2007, Trustpilot’s business model is best explained by the company’s stated aim of creating ‘the best, most trustworthy website for consumers to share their online shopping experiences and make it the global standard in customer reviews’. Reviews are obtained in one of two ways: firstly, having registered with Trustpilot using either their e-mail address or Facebook login, consumers can submit reviews; secondly, e-tailers and other businesses selling through the web can invite their customers to submit reviews using Trustpilot’s platform. This is how the firm makes its money. Fees scale with the number of domains, the number of orders per month that can be reviewed and whether or not the client wishes to use additional features such as technical support or integration with Facebook. Since the firm was founded in 2007, the platform has processed 7mn reviews of more than 100,000 merchants, 1.5mn of which have been in the last twelve months. Over 1.3mn people read the reviews on Trustpilot every month. Well-known customers include Vistapring, Telia, Toys’R’Us and Spartoo. Currently present in 18 countries with a stronger position in France, Germany, Italy, the Netherlands and the UK, Trustpilot now intends to enter the US using the funds raised in this round. It has been a busy year for transaction leader Index Ventures (€350mn (2012), AUM €2.0bn), which has appeared in our bulletin an average of once a month throughout 2012. In our October issue the firm appeared no less than three times with investments in Zendesk, HouseTrip and Secret Escapes. This is perhaps not surprising as the original premise for Index’s US founders was to export the Silicon Valley mindset to Europe. A decade on, the bet on Europe seems to be paying off and, when Index announced its €350mn early stage technology fund in June 2012, the firm repeated something that we have been saying for some time – namely that European start-ups are finally coming of age. At the time, Index’s portfolio included over 20 European companies of significant size and combined 2011 revenues of €1.3bn. Almost as prolific is Northzone Ventures (€130mn (2011), AUM €410mn), which led Trustpilot’s €3.3mn Series A round back in November 2011 and last appeared in our bulletin in June as part of a €25mn round for iZettle. Much less well known is SEED Capital (€200mn (2013)), which provided two rounds of seed funding for Trustpilot in November 2008 and December 2010. SEED Capital is Denmark’s largest seed fund and, as it is backed by public as well as private money, is able to pursue earlier stage opportunities more aggressively than many venture firms. The firm invests in IT, cleantech and life sciences companies and will follow its money in later rounds if a seed investment is successful. From the 400 or so business plans the company receives every year it aims to back a dozen or so. © Go4Venture Advisers LLP, 2013 Page 14 
  • 15. December 2012 Company Sector Round €mn Description Investors Objectway (Italy) Software B 10.0 Provider of software and technology Futurimpresa. www.objectway.it services for the financial markets. Objectway (Italy), a provider of software and technology services for the financial markets, raised €10.0mn in a Series B round from Futurimpresa. The money will be used for European expansion, particularly in the UK. ObjectWay was founded in 1990 as ‘Praksis Engineering and Computer Science’ to develop applications for the institutions of the European Commission. Adopting an object-orientated approach to development, which was cutting edge in the early 1990s, the firm changed its name to ObjectWay in 1997. Following a brief foray into technology transfer, which still exists in the form of the ObjectWay University, the firm landed its first banking clients in 2000. It went on to receive financial backing from Italian Jupiter Venture SA (now known as JVcapital) in 2002. Since this time the firm has developed two core lines of business – financial software and technology solutions. The financial software business provides applications to large tracts of the financial services industry covering sales of financial and insurance products, advisory services, fee and revenue management software, as well as supplementary applications such as salesforce management and more market orientated software for securities processing and asset management. The technology solutions business offers custom software to support banking processes – examples include enterprise portals, Business Process Management (BPM) software and Business Intelligence (BI) applications – by piggybacking on the expertise developed in building the firm’s off-the-shelf software. ObjectWay has achieved all this though a combination of organic growth and acquisitions. Acquisitions have included Eurotech in 2004, a business division acquired from MET Sistemi in 2005 which added 40 banks to the customer base, and a division of Computer Sharing Finance in 2005. The firm now has more than 450 employees in Bari, Brindisi, Milan and Rome and a 2011 turnover of €25mn with an EBITDA margin in excess of 20%. In addition to a plethora of mid-tier financial services clients, ObjectWay’s customers include well-known names such as Allianz, Citibank, Credit Suisse, Deutsche Bank and ING Direct. ObjectWay has already expanded into France, Ireland, Portugal and Spain and this round will be used for further European expansion, particularly in the UK. It is likely that such expansion will involve ObjectWay’s technology vendor partners which include Computer Associates, IBM, Microsoft, Oracle and TIBCO. Futurimpresa, owned by the Chambers of Commerce of Milano, Bergamo, Brescia and Como, is a quasi- regional fund centred on the Lombardy plains. Together, these Chambers of Commerce represent about 10% of all Italian companies. Futurimpresa takes minority stakes in Lombardian SMEs with a turnover of €10-50mn with an investment time-horizon of 5-6 years and a preference for capital structures with no debt. This investment will give ObjectWay a post money valuation of €30mn and comes in the form of staged payments which could take Futurimpresa’s equity holding up to a maximum of 30%. The first payment stage has been used to finance the acquisition of the AMS Group, which specialises in outsourcing services for asset management companies and financial intermediaries, and of Thomson Reuters subsidiary Eximius, which provides software for private client wealth management. Interestingly for the future of the company, ObjectWay’s founder Luigi Marciano managed to buy out investor JVcapital in 2006. © Go4Venture Advisers LLP, 2013 Page 15 
  • 16. December 2012 Company Sector Round €mn Description Investors Mebelrama (Russia) Internet B 7.6 Online retailer of furniture and household Rocket Internet. www.mebelrama.ru Services goods. Mebelrama (Russia), an e-tailer of furniture and household goods, raised $10.0mn (€7.6mn) in a Series B round from Rocket Internet. The money will be used to expand the firm’s product range, move into a new warehouse and build a distribution network. Mebelrama was founded in September 2011 by Manuela Stoll and Nino Ulsamer, the Russian co-founders of another of Rocket’s portfolio companies – Westwing. Mebelrama also received support from Rocket in the form of a $4-6mn Series A round in December 2011. Like many furniture and household goods e-tailers, Mebelrama has moved rapidly to offer a range of over 15,000 products. Just as with other companies operating successfully in Russia, however, Mebelrama’s business model has some features specifically tailored for local market conditions. For example, in a country where credit card payment over the web is still rare Mebelrama offers a 5% discount for prepayment. The firm also intends to build its own distribution network to give it independence from the vagaries of the Russian postal system. This is the same strategy as that adopted by another Russian e-tailer in Rocket’s portfolio – Lamoda. It will be interesting to see whether the various logistics operations in Rocket’s Russian portfolio are ultimately consolidated and spun-out. According to co-founder Stoll, the firm aims to reach a turnover of $100mn within three years and possibly more depending on expansion into the rest of Eastern Europe. Regular readers may have been following Rocket Internet’s (AUM €850mn) bid to build a billion dollar e- commerce company in either furniture or fashion – or possibly both. Previous coverage of this saga has included a €39mn investment in Westwing Home & Living in June 2012, a €13mn round for fashion e-tailer Zalando in August 2012 and a €47mn round for Russian fashion e-tailer Lamoda.ru in September 2012. The online fashion industry is slightly more mature than the furniture e-tailing business – again readers will be familiar with our coverage of the wave of fashion deals going back to about 2007. For this reason, Rocket Internet’s strategy is more visible in the online fashion sector and is described in our coverage of Zalando where we also outline the JP Morgan–Rocket partnership’s fashion investments outside Europe. These totalled some hundreds of millions of Euros, even excluding the pair’s more recent investment in Asian fashion e-tailer Zalor which closed in September. The strategy seems both clear and simple – global domination. This will not, however, be entirely straightforward, at least not in Russia where the furniture and home e-tailing market is evolving rapidly. Ironically, there may be significant competition from venture-backed clones of furniture e-tailing businesses. These include HomeMe.ru, which raised a $5mn first round in May from AddVenture, ABRT and Luxembourg’s Mangrove Capital Partners, and Apartama which raised $1mn in October from Russian investor Aurora Venture Capital. There is also a new entrant called The Furnish targeting the premium end of the market. In addition, clicks-and-mortar firm Enter.ru, which is backed by Russian consumer electronics giant Svyaznoy, will have furniture as one of its core offerings. © Go4Venture Advisers LLP, 2013 Page 16 
  • 17. December 2012 Company Sector Round €mn Description Investors ECO Plastics (UK) Cleantech Late 7.4 Recycler of plastics. Ludgate Investments, SAM www.ecoplasticsltd.com Stage private Equity. ECO Plastics (UK), a recycler of plastic bottles, raised £6.0mn (€7.4mn) in a Late Stage round from new investor SAM Private Equity together with existing investor Ludgate Investments, as well as additional debt facilities from the Close Brothers Group. The money will be used tactically for short-term value added expansion opportunities. When we last saw ECO Plastics in July 2011 it had just raised €27mn (€11mn of equity and €16mn of debt) from Coca Cola, Ludgate Investments and debt provider the Close Brothers Group. The money was to be used in a joint venture with Coca Cola Enterprises (CCE) to construct a £15mn facility which would increase the firm’s production of bottle-grade recycled plastic from 15,000 to 40,000 tonnes a year. Christened ‘Continuum’ and built on the firm’s existing site in Lincolnshire, this new facility was opened by the UK Environment Minister in May 2012. More importantly, ECO Plastics was able to say that it had been completed on time and on budget. The additional capacity allows the firm to produce 150,000 tonnes of mixed plastics a year (including 40,000 tonnes of bottle-grade rPET) and makes the firm’s Lincolnshire plant the largest plastics reprocessing facility in the world. To put this into context the UK recycles roughly 420,000 tonnes a year. Not only is this a huge increase from the mere 25,000 tonnes that were being recycled when the firm started out, but legislation such as the EU Waste Framework Directive and governmental policy such as the UK Department for the Environment, Food and Rural Affairs’ (DEFRA’s) Waste Action Plan is driving further growth. In the UK, DEFRA’s target of increasing plastics recycling by 5% a year has encouraged local authorities to increase kerbside collection of recycling. Commercially, this means that ECO Plastics has been able to expand from three products to eleven and is expected to reach a turnover of £40mn in 2012, more than double the previous year’s £18.5mn. It is not yet clear how much of this was due to extra recycling for the Olympics. The CCE joint venture is not the only project ECO Plastics has been involved with over the last year and a half; in February 2012 the firm also received a £1.2mn loan from not-for-profit organisation WRAP (Waste & Resources Action Programme). Supported by Government funding, WRAP was set up in 2000 and has a mandate to help increase recycling. The money will be used to extend ECO Plastics’ existing bottle sorting and processing facility, increasing overall capacity by a further 15,000 tonnes and improving the firm’s ability to process rigid plastic packaging such as tubs, pots and trays. Ludgate Investments (AIM: LEF.L) is a publicly-listed specialist investor focussing on resource efficiency that was founded in 2001. Ludgate’s total invesment in ECO Plastics now amounts to just under £6mn. Having listed on the AIM market in August 2007, Ludgate’s portfolio of 13 companies is currently valued at about £42mn. Switzerland-based SAM Private Equity, which is owned by Rabobank, is a cleantech specialist. Founded in 1995, the firm has been owned by Dutch asset management firm Robeco since 2007. The firm does not make primary investments but invests in funds or co-invests alongside other private equity managers. Unusually the firm also makes secondary fund investments, buying out portfolios from other firms. © Go4Venture Advisers LLP, 2013 Page 17 
  • 18. December 2012 2.1 - M&A Activity Index Disclosed Global & European TMT M&A Transactions European Deals 2011 (€mn) European Deals 2012 (€mn) 600 Global Deals 2011 (€mn) Global Deals 2012 (€mn) 35,000 # of Global Deals 2011 # of Global Deals 2012 500 30,000 Deal Value per Month (€mn) # of Deals per Month 25,000 400 20,000 300 15,000 200 10,000 100 5,000 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Capital IQ; Go4Venture Analysis Disclosed European VC & PE-Backed TMT M&A Transactions >£30mn / €35mn / $50mn Value of Deals 2011 (€mn) Value of Deals 2012 (€mn) 20 4,500 # of Deals 2011 18 # of Deals 2012 4,000 16 Deal Value per Month (€mn) 3,500 # of Deals per Month 14 3,000 12 2,500 10 2,000 8 1,500 6 1,000 4 2 500 0 0 (1) (2) (3) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Capital IQ, The 451 Group, VentureSource (including transaction value estimates); Go4Venture Analysis (1) Includes NDS acquisition by Cisco Systems for €3.8bn (2) Excludes Skype acquisition by Microsoft, but includes Landis+Gyr acquisition by Toshiba for €1.8bn (3) Includes Elster acquisition by Melrose for €2.3bn Disclosed European VC & PE-Backed TMT M&A Transactions (2012) > £30mn / €35mn / $50mn Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Monthly Number # 3 2 3 2 4 3 5 6 3 3 4 1 Value €mn 159 1,117 4,459 398 372 2,553 1,412 511 895 319 1,270 479 Median €mn 54 558 623 199 89 210 150 65 322 69 263 479 Cum. Number # 3 5 8 10 14 17 22 28 31 34 38 39 Value €mn 159 1,275 5,734 6,133 6,505 9,058 10,469 10,980 11,875 12,194 13,464 13,943 Median €mn 54 60 205 199 135 153 152 127 121 118 105 104 © Go4Venture Advisers LLP, 2013 Page 18 
  • 19. December 2012 2.2 - Top 5 Global TMT M&A Transactions Summary Ranked by Price (€mn) in descending order (includes announced and/or completed deals) Price Rev. Target & Acquirer Target Sector (€mn) (€mn) P/R Noteworthy Sellers 1 Eloqua (US NASDAQ:ELOQ) Application 730 69 10.6x Bessemer, Bay, JMI www.eloqua.com Software Equity. Oracle (US NASDAQ:ORCL) www.oracle.com Oracle, a diversified provider of enterprise software and IT hardware, will acquire Eloqua, a provider of business-to-business (B2B) marketing automation Software as a Service (SaaS). Founded in 1999, Eloqua was an early player in marketing automation and a pioneer of delivering cloud software. It has grown organically through its history to become the world's largest marketing automation software provider, with 70,000 users. Eloqua's SaaS product has functionalities that allow marketers to develop and promote brands, improve the discovery of their company, optimise click-through rates on websites and leverage social media for marketing purposes. The acquisition of Eloqua will strengthen Oracle's position in the marketing automation market, expected to grow at 8.2% annually through to 2015. Oracle is already active in this space, having acquired the intellectual property assets of Market2Lead, another early marketing automation software provider, in May 2010. Furthermore, it seeks to integrate several adjacent products into a unified SaaS offering; Eloqua, together with Vitrue, the social marketing SaaS company acquired for €241mn in May 2012, will form the basis of Oracle's Customer Experience Cloud, a serious competitor to Salesforce.com's similar offering. The last marketing software deal covered in the HTI was Teradata's €117mn acquisition of eCircle in the May 2012 issue. The marketing software market is undergoing significant growth and transformation with both major players consolidating their positions (as evidenced by Salesforce.com's acquisition of Radian6 for €241mn in March 2011, Oracle's acquisition of Vitrue and Google's acquisition of Wildfire in July 2012) and new entrants coming to market (as evidenced by startups such as Conversocial, Awerness and Attensity). 2 TNS (US NYSE:TNS) Communication 671 422 1.6x - www.tnsi.com Services Siris Capital (US) www.siriscapital.com Siris Capital, a US private equity firm, will take private TNS, a provider of transaction network services. Launched in 1990, TNS's core business is the provision of transaction, trading and telecoms services based on a global backbone network, an alternative secure network that carries TNS's clients' data. TNS serves customers in over 60 countries. Having raised €67mn in a March 2004 IPO, TNS has increased revenues by over 12% per annum since then. Since going public, TNS has made 11 acquisitions, the two largest of which were the Communications Services group of VeriSign for €183.3mn in March 2009 and Cequint, a value- added technology provider to mobile network operators, for €87.7mn in September 2010, both aimed at building out its telecoms business. TNS had previously been the subject of an attempted management buyout backed by Parthenon Capital in 2006, but the proposed deal was rejected by shareholders. Siris Capital was founded in 2011 by private equity industry veterans Frank Baker, Peter Berger and Jeffrey Hendren when they spun-out of Steve Cohen's SAC Capital Advisors. TNS is the second acquisition Siris has made in the telecommunications space, following the acquisition of a majority stake in communications equipment provider Tekelec. 3 Intermec (US NYSE:IN) Supply Chain 528 618 0.9x - www.intermec.com Optimisation Honeywell (US NYSE:HON) www.honeywell.com Honeywell, an aerospace, automation, logistics, materials and transport conglomerate, will acquire Intermec, a provider of automated data capture and management systems. Intermec provides barcode scanners, printers, Radio Frequency ID (RFID) systems, rugged mobile computers and supply chain optimisation software. Intermec's hardware products are used in logistics and manufacturing for the management of production and transit information; barcode and RFID readers allow customers to centralise information on, and track products and equipment as they progress along the supply chain. Intermec's software allows for efficient analytics of supply chain data. Intermec also provides many technologies as white-label devices for integration by original equipment manufacturers (OEM)'s. Founded in 1966, Intermec, has faced difficult times since the global financial crisis, failing to return revenues to pre-crisis levels and reporting a net loss since 2009. Honeywell, itself expecting reduced profitability in 2013, has stated that the acquisition of Intermec will strengthen its offering in rugged computing and voice recognition technologies, a strategic move reflecting the shift in defence expenditure away from aerospace and armoured systems toward man-portable field technology. The deal also brings Honeywell into the new markets of RFID, voice and data management, part of the consolidating Automatic Identification and Data Capture (AIDC) industry (consider Motorola's acquisition of Intermec competitor Psion for €159.5mn in July 2012). © Go4Venture Advisers LLP, 2013 Page 19 
  • 20. December 2012 Price Rev. Target & Acquirer Target Sector (€mn) (€mn) P/R Noteworthy Sellers 4 Trivago (Germany) Internet 479 100 4.8x Insight Venture www.trivago.com Content & Partners, Howzat Media, Commerce European Founders Expedia (US NASDAQ:EXPE) Fund, Team Europe www.expedia.com Ventures. Expedia, a diversified online travel company, will acquire 62% of Trivago, a hotel booking search provider. Trivago provides an engine that searches multiple hotel booking sites, aggregates the data and presents the consumer with the lowest price for rooms that meet their requirements. Trivago generates revenue from the partnered hotel booking websites when consumers click through to a booking website. Trivago was founded by two ex-entrepreneurs and an investment banker in Dusseldorf, with its website going live in 2005. Between 2008-2012, Trivago has doubled revenues annually and now operates search engines in 27 countries. The acquisition of Trivago can be seen as strengthening both Expedia's European and metasearch activity, especially in light of competitor Priceline's €1.4bn acquisition of Kayak, which was highlighted in the November 2012 HTI. Trivago will continue to operate out of Dusseldorf and be managed by its founders, who own the remaining stock. 5 Peer 1 Hosting (Canada TSX:PIX) IT Infrastructure 462 106 4.4x Clairvest Group, Gibralt www.peer1.com Capital, TCIB. Cogeco (Canada TSX:CCA) www.cogeco.ca Cogeco, provider of a high-speed fibre optics network, will acquire Peer 1 Hosting, a provider of cloud hosting and colocation services. Peer 1 provides a variety of cloud hosting solutions, including public cloud hosting and hybrid cloud hosting, with its 19 data centres in Europe and North America being connected by a proprietary fibre-optic network. Peer 1 also offers colocation services to its customers, housing their servers in Peer 1's facilities while providing power, connectivity and security. Peer 1 was founded in 1999 with a focus on serving small and medium business customers, most notably hosting YouTube before its acquisition by Google. Between 2001-2012, Peer 1 made five acquisitions, expanding into the US by acquiring Texas-based competitor ServerBeach for €6.1mn in October 2004 and into the UK by acquiring London-based competitor NetBenefit for €30.9mn in June 2012. Peer 1 is Cogeco's second acquisition of 2012, following its July acquisition of Atlantic Broadband for €1.6bn. The acquisition of Peer 1 is expected to strengthen Cogeco's colocation offering, as well as providing several opportunities to cross-sell Peer 1's other offerings. There has been a recent trend of telecoms and cable companies acquiring cloud hosting infrastructure, as telcos seek to expand their traditional service offering, for example CenturyLink's acquisition of Savvis in April 2011 for €2.1bn and Time Warner's acquisition of NaviSite in February 2011 for €240.7mn. We have also seen consolidation of cloud hosting providers, for example the acquisition of Star by Claranet as profiled in the November 2011 HTI. Source: Capital IQ, The 451 Group; Go4Venture Analysis Key Bold indicates name of Target Italic indicates name of Acquirer P/R – Price / Last 12 Months Revenues © Go4Venture Advisers LLP, 2013 Page 20 
  • 21. December 2012 2.3 - Headline European VC & PE-Backed M&A Transactions Where transaction value is available (>£30mn / €35mn / $50mn), includes announced and/or completed deals LTM Target Price Rev. Funding # Target & Acquirer Sector (€mn) (€mn) P/R (€mn) P/F Noteworthy Sellers 1 Trivago (Germany) Internet 479 100 4.8x 45* 10.6x Insight Venture Partners, www.trivago.com Content & Howzat Media, European Commerce Founders Fund, Team Expedia (US Europe Ventures. NASDAQ:EXPE) www.expedia.com * Estimated funding Source: Capital IQ, The 451 Group, VentureSource; Go4Venture Analysis Key Bold indicates name of Target P/R – Price / Last 12 Months Revenues Italic indicates name of Acquirer 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 their investment. © Go4Venture Advisers LLP, 2013 Page 21 
  • 22. December 2012 LTM Target Price Rev. Funding # Target & Acquirer Sector (€mn) (€mn) P/R (€mn) P/F Noteworthy Sellers 1 Trivago (Germany) Internet 479 100 4.8x 45* 10.6x Insight Venture www.trivago.com Content & Partners, Howzat Commerce Media, European Expedia (US NASDAQ:EXPE) Founders Fund, Team www.expedia.com Europe Ventures. * Estimated funding Source: Capital IQ, The 451 Group, VentureSource; Go4Venture Analysis Trivago (Germany), provider of a hotel booking search engine, will be majority (62%) acquired by Expedia (US NASDAQ:EXPE) for €479mn in cash and stock. The primary sellers include the venture capital firms Insight Venture Partners, Howzat Media, European Founders Fund and Team Europe Ventures by reverse chronological order of known first investment. Germany-based Trivago offers a search engine that indexes and aggregates hotel price data from a range of hotel booking sites. The company’s website allows users to screen for the lowest priced rooms meeting their requirements, without checking individual hotel booking websites. Trivago partners with the booking websites it indexes, and generates revenue when users click through from its search results. Trivago was founded in Dusseldorf by the two ex- entrepreneurs behind amiro.de (a consumer web portal that merged with Ciao in February 2000) and an investment banker, its site going live in 2005. Since its inception it has expereienced strong organic growth and currently has hotel booking search engines operating in 27 countries both within and outside of Europe, doubling its revenue annualy since 2008, to approximately €100mn in 2012. All four sellers invested directly in Trivago over several rounds. In April 2011, Insight Venture Partners acquired 25% of the company in a €40mn Round D. Howzat Media acquired its stake in January 2008, when it invested €0.8mn in Trivago in its B Round and European Founders Fund acquired 10% of the company in its October 2007 A Round for an undisclosed sum. Team Europe Ventures became involved through an undisclosed investment. Founded in 1996 as a division of Microsoft and listing on the NASDAQ in November 1999, Expedia is an international online travel agency. It owns over 100 brands, the most visible of which is Expedia.com, but also including Hotels.com, Egencia and eLong. The company operates in two segments: Egencia / Business Travel and Leisure (9% and 91% of 2011 revenues, respectively). Expedia.com provides full travel agency services, including hotel, flight, rental car and tour booking, as well as travel insurance. Expedia has websites in 60 countries across six continents. Trivago is expected to strengthen Expedia’s position in European hotel booking markets, where it faces competition from US competitor Priceline (which had acquired Kayak in the US as featured in our November 2012 HTI and whose booking.com has 55% market share of hotel bookings in Europe), as well as Tripadvisor which indexes both Expedia’s and Priceline’s sites. Expedia stands to benefit from Trivago’s strong search technology and established partner network. The Trivago brand will continue to operate out of its Dusseldorf headquarters, managed by its founders who own the remaining 38% of the company. © Go4Venture Advisers LLP, 2013 Page 22 
  • 23. December 2012 Insight Venture Partners (€1.1bn (2010); AUM €2.4bn), is a global private equity and venture capital firm covering venture, growth capital and buyout deals and specialising in the technology, media, telecommunications and medical technology sectors. Investment sizes range between €2-150mn. Founded in 1995, Insight is headquartered in New York. Insight featured in our September 2012 HTI for leading an investment in Mimecast, in our June 2012 HTI for co-leading an investment in B2B-Center and in our March 2012 HTI for its attempted acquisition of Quest Software (ultimately acquired by Dell). Prior to that it featured in our April 2011 and March 2011 issues with investments in collective buying site Groupalia and social shopping site Privalia, respectively. Howzat Media (€7.6mn (2007)), is a British venture capital firm founded in 2005 by the former management of Cheapflights, a travel search website, as well as the founding team of Stellant Partners, a management consultancy firm. It specialises in seed and venture capital investments, as well as incubating very early- stage companies. Howzat aims to invest globally in online media, information technology and travel-related companies. European Founders Fund (AUM €75mn), is a German venture capital firm founded in 2007 set up by the Samwer brothers, founders of the incubator Rocket Internet, previously founders of alando (the German online auction room sold to eBay for €52.0mn in June 1999), and well-known European copycat investors. It invests in China, Europe and the US, focusing on companies with internet, software and wireless technologies. Investments for seed stage companies range between €100k-1mn, €1-3mn for venture stage companies and €3-8mn for companies in the growth stage. The firm featured in our September 2012 HTI for its €322mn sale of Jobs.ch to Ringier and Tamedia, as well as in our April 2011 and March 2010 issues for its investments in Borro. Team Europe Ventures (€6mn (2007)), is the venture capital arm of German incubator Team Europe. It focuses on seed and venture capital deals. The firm only invests in internet-related companies, with a geographical focus on German-speaking countries and wider Europe. Investment sizes range between €25- 500k. Founded in 2008, the firm is headquartered in Berlin. Team Europe was featured in our September 2012 HTI for its connection to Brille24, in our August 2012 HTI for its investment in Delivery Hero and in our October 2011 HTI for its connection to madvertise. © Go4Venture Advisers LLP, 2013 Page 23 
  • 24. December 2012 List of Acronyms Financial Terms: AUM: Assets Under Management FYE: Fiscal Year-End LTM: Last 12 months mn: million P/E: Price to Earnings ratio P/F: Price to Funding ratio PIPE: Private Investment in Public Equity Business Terms: AIDC: Automatic Identification and Data Capture B2B: Business-to-Business BI: Business Intelligence BPM: Business Process Management DMAT: Dynamic Multi-Analyte Technology OEM: Original Equipment Manufacturer PET: Polyethylene Teraphthalate RFID: Radio-Frequency Identification SaaS: Software as a Service © Go4Venture Advisers LLP, 2013 Page 24 
  • 25. December 2012 Go4Venture Advisers LLP 48 Charles Street +44 (0)20 7529 5400 Berkeley Square g4vbulletin@go4venture.com London W1J 5EN Disclaimer This report has been prepared and issued by Go4Venture Advisers LLP who are authorised and regulated by the Financial Services 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. Copyright: 2012 Go4Venture. All rights reserved Registered address: 10 Wellington Street, Cambridge, CB1 1HW Incorporation number OC336611 Authorised and Regulated by the Financial Services Authority © Go4Venture Advisers LLP, 2013 Page 25 