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

Go4Venture Advisers LLP is authorised and regulated by the Financial Conduct Authority (FCA)Published by Go4Venture Research, the Equity Research unit of Go4Venture Advisers LLP
Go4Venture Advisers LLP is authorised and regulated by the Financial Conduct Authority (FCA)
© Go4Venture Advisers 2015
Go4Venture Advisers
European Venture & Growth Equity Market
Monthly Bulletin | December 2014
Technology / Media / Telecoms / Internet / Healthcare / Cleantech / Materials
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with independent corporate finance advice to help them
evaluate, develop and execute growth strategies
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Equity Capital Markets (ECM)
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 Pre-IPO advisory
Mergers & Acquisitions (M&A)
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 Buyside / Buy and build
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Visit www.go4venture.com/Bulletin to read past Bulletins

December 2014
© Go4Venture Advisers 2015 Page 1
Contents
This Month in Brief 2
Investments
1.1 - Headline Transaction Index (HTI) 5
1.2 - Large Transactions Summary 6
1.3 - Large Transactions Profiles 7
M&A Transactions
2.1 - M&A Activity Index 19
2.2 - Top 5 Global TMT M&A Transactions Summary 20
2.3 - Headline European VC & PE-Backed M&A Transactions Summary 21
2.4 - Headline European VC & PE-Backed M&A Transaction Profiles 22
List of Acronyms 27
About this Bulletin
The Go4Venture Advisers’ European Venture & Growth Equity Market Monthly Bulletin provides a
summary of corporate finance activity among emerging European TMT companies:
 Investments, i.e. Venture Capital (VC) and Private Equity (PE) financings, including growth equity,
financing rounds with single secondaries components (recapitalisations); and
 M&A Transactions where the sellers are VC and PE-backed European companies, including all
majority transactions with no new investment going into the business (e.g. acquisitions,
Management Buyouts (MBOs) and other buyouts).
Investment activity is measured using Go4Venture’s European Tech Headline Transaction Index (HTI),
which is based on the number and value of transactions reported in professional publications.
M&A activity is measured using data from a combination of external sources, primarily Capital IQ,
with complementary reporting from 451 Group, PitchBook and VentureSource.
Europe is defined as Western, Central and Eastern Europe, excluding Israel.
For more details, please refer to the Methodology Note available on our website.
Please note that no part of the Bulletin can be reproduced unless content is duly attributed to Go4Venture
and the details of republishing are notified to g4vBulletin@go4venture.com.

December 2014
This Month in Brief
Dear Clients and Friends,
Welcome to the latest edition of the Go4Venture Monthly European Venture & Growth Equity Market
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.
2015: The Sky Is The Limit
Best wishes for 2015!
2014 finished on a high, with record fund-raising for December, considerable IPO activity (at least in the
US) and sustained M&A activity. And all the signs are that 2015 is starting with a bang – see, for
instance, the January announcement of Andreessen Horowitz leading the $58mn funding round for
Transferwise (which we will cover in our next issue). At the same time, we continue to notice growing
signs of indiscriminate optimism, which will inevitably lead to a re-rating of private investment
valuations.
Investments
Compared to 2013, the Headline Transaction Index (HTI) was up more than 40% in value in 2014,
reaching an all-time high of €5.4bn - even though the number of transactions recorded was down
nearly 15%. The growing size of fund-raisings was reflected by a record number of Landmark
transactions (at least €20mn) in 2014: 56 – by comparison, the highest number of Landmark
transactions reached in the last cycle was 29 in 2008 (approximately half of the 2014 tally).
December was representative of the activity in 2014 as a whole, with five Landmark deals (vs. two
in December 2013), led by the mega funding of just over €200mn for Netherlands-based Payment
System Provider (PSP) Adyen. Interestingly, all Landmark deals were either Fintech or infrastructure
plays (big data or collaboration).

December 2014
Elsewhere, the news was all about the excitement taking hold of the tech investment market.
Notable points include:
 The IPO markets were incredibly active in December (at least in the US). In a month when
markets usually quieten down, we instead had a number of notable IPOs – including
Hortonworks, Lending Club and New Relic. What is remarkable is that markets are becoming
less discriminate, backing for instance Hortonworks just because it is a cloud play, despite
rather paltry financials (revenues of $41.5mn, losses of $101.5mn for the twelve months ended
September 30, 2014).
 In fact, as the Financial Times pointed out, we now have the paradoxical situation in which
private valuations are starting to exceed public market valuations. A prime example was
Box’s IPO at a haircut to its last private fund-raising.
 It is becoming increasingly difficult to understand price formation. Late investors are being
offered preferences (protecting them from an IPO at a lower valuation than the pre-IPO round)
which are not public (or at least not widely publicised). The names of investors are now
commonly undisclosed (e.g. the last round funding of Shazam).
 We are seeing the return of ‘me-too’ investments. Consider Uber raising another $1.6bn
(from Goldman’s private clients), along with Didi Dache (backed by Tencent) raising $700mn or
Kuadi Dache (sponsored by Alibaba) raising $600mn.
 New companies are commonly valued at a multiple over established players, something
reminiscent of the 1999-2000 debate over the New vs. Old Economy (the New Economy of
course collapsed soon after). The case in point in December was Xiaomi (the Chinese mobile
handset maker) raising $1.1bn at a valuation of $45bn, making it the world’s highest-valued
technology startup, and 3x as valuable as Hong Kong listed Lenovo (which has a similar share
of the Chinese smartphone market).
This euphoria is of course benefitting Europe, making US investors optimistic enough to come to
Europe, and encouraging European investors to be bolder – see, for instance, Paris-based Partech
experimenting at the seed stage with Partech Shaker and, at the same time, expanding its remit with a
new €200mn growth equity fund, whilst building on its Franco-American roots through a presence in
San Francisco.
Exits
From an M&A standpoint, December was a solid month, once again driven more by the Private
Equity (PE) end of the market than venture.
In fact, PE firms were involved as buyers in three of the Top 5 Global TMT M&A Transactions.
And in Europe specifically, the two venture exits resulted from investment by two direct
secondary funds covering the VC industry, namely Azini in the UK and Verdane in the Nordics.
It is worth noting that direct secondary funds have been quite active, particularly since the 2008-
09 economic crisis. Usually founded as funds dedicated to buying entire portfolios of other funds,
many have now expanded their remit to single direct secondaries (i.e. buying other funds’ position in a
single company, rather than entire portfolios). This is driven by fewer portfolios changing hands, and
secondaries funds developing company management skills over the years – making it reasonably easy
for them to move to the single asset business. In fact, many not only buy existing positions but are also
able to invest new money if need be.

December 2014
The two December exits were very different cases:
 Azini exiting incadea at a €170mn total company valuation was, in fact, what is referred to as
a “quick flip” – an exit shortly after the investment was made (in this particular case, a matter of
weeks). incadea was an investment in a publicly-listed company: Azini is somewhat unique in
this respect, providing “an early liquidity option for historical investors and shareholders in
illiquid private and small-cap public companies”, unlike most secondaries funds which focus on
venture funding of private companies alone.
 More classically, Wireless Maingate selling to Sierra Wireless for €74mn allowed Verdane
Capital to exit a position acquired in 2008 from Brainheart, a $200mn European venture capital
fund dedicated to wireless investments (vintage 2002) set up by successful entrepreneur Ulf
Jonströmer (who founded AU-System).
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
Where to Meet the Go4Venture Advisers Team in February 2014 – see
www.go4venture.com/contact
 February 3-4 – Eindhoven, Netherlands – Global Government Venturing Summit 2015
 February 12 – London, UK – EISA Chairman’s Reception at the House of Lords
 February 25-26 – San Clara, CA – Linley Data Center Conference 2015
For more details about the Headline Transaction Index (HTI), please visit our website.

December 2014
1.1 Headline Transaction Index (HTI)
Go4Venture HTI Index by Deal Value
Source: Go4Venture Advisers HTI Database
Go4Venture HTI Index by Cumulative Deal Value
December 2013 2014 Var. Year-to-Date 2013 2014 Var.
Large Transactions # 12 12 0% Large Transactions # 127 166 31%
€mn 155 432 178% €mn 2,899 4,680 61%
Other Transactions # 17 29 71% Other Transactions # 334 232 (31%)
€mn 42 102 142% €mn 889 753 (15%)
All Headline
Transactions
# 29 41 41%
All Headline
Transactions
# 461 398 (14%)
€mn 196 533 172% €mn 3,788 5,432 43%
Of Which: Of Which:
Landmark Transactions # 2 5 150% Landmark Transactions # 35 56 60%
€mn 60 359 498% €mn 1,866 4,069 118%
Definitions
Large Transactions: ≥ £5mn / €7.5mn / $10mn
Other Transactions: < £5mn / €7.5mn / $10mn
Landmark Transactions: subset of Large Transactions ≥ €20mn / £13mn / $27mn
0
100
200
300
400
500
600
700
800
900
1,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ValueofTransactionsperMonth(€mn)
2011 2012 2013 2014
0
1,000
2,000
3,000
4,000
5,000
6,000
CumulativeValueofTransactions(€mn)
2011 2012 2013 2014
Includes Rocket Internet (€768mn)

December 2014
1.2 Large Transactions Summary
(≥£5mn / €7.5mn / $10mn)
Ranked by Round Size (€mn, including estimates) in Descending Order, then Alphabetically
# Company Sector Round €mn Description Investors
1 Adyen (Netherlands)
www.adyen.com
Software B 203.0 Provider of a web-based
payments system
Felicis Ventures, General Atlantic,
Index Ventures, Temasek Holdings
2 Blue Yonder (Germany)
www.blue-yonder.com
Software A 60.9 Provider of big data analytics
and predictive applications
Warburg Pincus
3 Huddle (UK)
www.huddle.com
Internet
Services
D 41.4 Operator of a cloud-based
content management and
collaboration platform
DAG Ventures, Eden Ventures,
Hermes GPE, Jafco Ventures, Matrix
Partners, Zouk Capital
4 Atom Bank (UK)
www.atombank.co.uk
Internet
Services
Late
Stage
31.7 Operator of digital-only banking
services
Polar Capital, Woodford Investment
Management
5 eToro (UK)
www.etoro.com
Internet
Services
Late
Stage
21.9 Provider of a social currency,
commodity and index trading
platform
Anthemis Group, BRM Capital, Cubit
Investments, Ping An Ventures, SBT
Venture Capital, Social Leverage,
Spark Capital, Venture51
6 Helpling (Germany)
www.helpling.de
Internet
Services
A 13.8 Operator of a domestic cleaning
booking platform
Mangrove Capital, Phenomen
Ventures, Point Nine Capital
7 Home24 (Germany)
www.home24.com
Internet
Services
A* 12.9 Operator of an online furniture
shopping platform
Holtzbrinck Ventures, Investment AB
Kinnevik, JP Morgan, REWE Group,
Rocket Internet, Zimmermann
Investment
8 Nexthink (Switzerland)
www.nexthink.com
Software D* 11.8 Developer of an end-user IT
analytics platform
Auriga Partners, Mannai
Corporation, VI Partners
9 ShopWings (Germany)
www.shopwings.de
Internet
Services
A 10.0 Operator of an online grocery
shopping and delivery platform
Tengelmann Ventures
10 Novelda (Norway)
www.xethru.com
Hardware A 9.7 Developer of radar-based
technology for use in sensors
Alliance Venture, Investinor,
SpareBank 1
11 Sonnenbatterie (Germany)
www.sonnenbatterie.de
Cleantech B 7.6 Manufacturer of lithium-based
storage systems for solar
electricity
Chrysalix SET, eCAPITAL, Munich
Venture Partners
12 MarketInvoice (UK)
www.marketinvoice.com
Internet
Services
B 6.3 Peer-to-Peer lending platform
for working capital financing
Northzone
Key
Bold indicates lead investor(s)
* Internal round

December 2014
Adyen
Netherlands | www.adyen.com
# Sector Round €mn Description Investors
1 Software B 203.0 Provider of a web-based
payments system
Felicis Ventures, General Atlantic, Index
Ventures, Temasek Holdings
Adyen (Netherlands), a provider of a web-based payments system, raised €203.0mn in a Series B round led by
General Atlantic with support from fellow new investor Temasek Holdings, with participation of investors Felicis
Ventures and Index Ventures. The money will be used for expansion in Asia and the US, as well as implementing the
company’s new mobile Point-of-Sale (PoS) system Shuttle.
When we last saw Adyen in our June 2014 Bulletin it had just raised €12mn from Felicis Ventures and Index Ventures.
Just like other payment platforms we have seen recently like The Currency Cloud Group and iZettle (whose fundraisings
we covered in April and May 2014, respectively), the advantage of using Adyen is that it obviates the need to deal with a
plethora of banks and other service providers. Instead, merchants can use a single firm for all their payment processing
needs.
Adyen can process payments in 187 different currencies using 250 different payment methods such as credit cards and
online payments, via mobile devices and PoS for merchants with physical stores. This breadth of coverage gives Adyen
a competitive advantage in countries where consumers have unusual payment preferences. Merchants may find that
Adyen is the only viable option in these countries and, once they have chosen Adyen in these countries, it doesn’t make
sense to use a different system elsewhere.
The result of this is that Adyen has over 3,500 different merchants using its platform, including well-known tech
companies like Airbnb, Facebook, Google, Groupon, Showroomprive and Spotify. More traditional companies have also
adopted Adyen’s system, including Germany’s second-largest airline by chartered passengers airberlin, US-based
provider of business management software for the beauty and wellness industries Mindbody, low cost Irish airline
Ryanair, and global telecoms carrier Vodafone.
In 2014, Adyen posted revenues of €185mn. Not only was this a two-fold increase in turnover compared with the
previous year, but it also gave the company a profit of €10mn. The company expects to process over €25bn in payments
over the next twelve months. Whereas 50% of last year’s payment volumes came from Europe and 30% from the US
with Asia and Latin America accounting for only 10% each, Adyen aims to increase the amount of business it does in
Asia and the US. To this end, some of Adyen’s 240 staff are based in Boston, San Francisco, Sao Paulo and Singapore,
as well as in the firm’s five European offices.
Investors
This round is the latest in a number of recent payment platform investments that featured in our Bulletin including Trustly
in November 2014 and Tradeshift in February 2014. It is, however, the largest investment in a payments platform that we
have covered to date and brings total funding for Adyen up to €230mn valuing the business at €1.3bn.
The transaction was led by global private equity group General Atlantic (€755mn (2013); AUM €10bn). Well known for
backing of Alibaba and Facebook, General Atlantic provides growth equity from its eleven offices in China, Europe, India
and the US. Unusually, General Atlantic has a disproportionately high number of wealthy families amongst its backers –
very much in line with the way it was set up in the ‘80s by successful businessman and philanthropist Charles Feeney.
General Atlantic’s investments are in five broad sectors – business services, consumer and retail businesses, financial
services, healthcare and technology. The firm’s approach is based on identifying industry macro-trends – a research
effort to which it devotes significant effort – and has allowed it to build up a €10bn portfolio (as of December 2013).
With much of the growth in the €1.2tn online shopping market expected to come from emerging markets in China and
Latin America, it is not surprising that General Atlantic was joined by Temasek Holdings (AUM €181bn). Also a new
investor in this round, Temasek is owned by the Singaporean Government and targets Singapore, as well as Asia. Even
older than General Atlantic, having been founded in the early ‘70s, Temasek’s investment preferences are thematic
rather than sector-based, such as transforming economies and deepening competitive advantages. Despite the firm’s
focus on Singapore and Asia, it also has offices in Europe, Latin America and the US.
Like General Atlantic, Temasek has an unusual structure. Wholly owned by the Minister of Finance (a legal personality in
Singapore), the firm’s size and credit rating enabled it to enhance its capital efficiency and raise additional capital
through the issue of bonds. At over €162bn, Temasek’s portfolio dwarfs that of most VC or PE funds.
Silicon Valley’s Felicis Ventures (€97mn (2014); AUM €178mn), which led the firm’s €12mn Series B round in June
2014, and Index Ventures (€400mn (2014); AUM €3.0bn) have both returned for this round.
As we have noted in a number of similar contexts, new entrants in fintech are not weighed down with legacy
infrastructure, which means that not only can they do things more efficiently, but if they get it right, they can grow
extremely rapidly as in this case. While it was founded back in 2006, Adyen did not raise external investment until 2011.

December 2014
Blue Yonder
Germany | www.blue-yonder.com
2 Software A 60.9 Provider of big data analytics and predictive
applications
Warburg Pincus
Blue Yonder (Germany), a provider of big data analytics and predictive applications, raised $75.0mn (€60.9mn) in a
Series A round from Warburg Pincus.
Blue Yonder was founded in 2008 by Professor Michael Feindt, a Professor at the Karlsruhe Institute of Technology and
former researcher at DESY and CERN. The firm has developed algorithms for making predictions from large data sets,
which it offers as a SaaS platform.
Being able to make predictions based on big data has utility across a number of sectors although, so far, the majority of
Blue Yonder’s customers have been in manufacturing and retail. Manufacturing applications include optimising
production lines based on inputs from monitoring sensors and predictive maintenance for the automotive industry. In
retail, Blue Yonder’s system facilitates demand forecasting and recognition of purchasing trends leading to more efficient
inventory planning, as well as the implementation of dynamic pricing to maximise sales.
Customers in manufacturing and retail include Bauhaus, Bosch, EAT, Next, the Otto Group, Schwab, Tengelmann and
Vodafone. The firm has recently expanded into other verticals such as logistics and transport with customers including
Eurotunnel and Lufthansa Systems.
Unsurprisingly given its founders background, the secret sauce in Blue Yonder’s products is a combination of Bayesian
statistics and neural networks that was originally used in accelerator physics. Developed in 1999, the company’s
algorithm was first used as a way to sift through the large amount of data produced by particle accelerators in order to
identify events corresponding to particles of interest.
Given the traction of ‘big data’ as a sector and the increasing availability of commercially relevant large data sets, we
may see more of this sort of investment. So here’s a quick primer. Bayesian statistics is the statistics of figuring out the
probability of something given a particular condition rather than purely on the basis of just observing how frequently that
something happens independently of everything else. A simple example in the context of Blue Yonder’s clients would be
the probability that an automotive engine is about to fail given everything we know about it from sensor logs transmitted
to the manufacturer. Kevin Boone released a clear overview of Bayesian statistics on its website.
Of course it would be very hard to code up a custom Bayesian solution for every commercial problem. Instead, Blue
Yonder uses neural nets which can be ‘trained’ to use a computational approach, analogous of the neurons in a brain to
come up with answers based on a large number of inputs.
While Blue Yonder’s platform might seem esoteric, its commercialisation follows a well-trodden path with a now
traditional SaaS business model. White papers and industry awards are used to raise awareness of the firm’s platform.
Sales are made primarily through a network of partners and resellers including Talend, which featured in our December
2013 Bulletin when it raised €29.2mn in a late-stage round from investors including Balderton, Bpifrance and Silver Lake.
In the future, Blue Yonder sees opportunities in combination with the Internet of Things (IoT). Blue Yonder’s technology
will certainly be relevant if the IoT ever takes off, but there is already plenty of scope even if one were to limit oneself to,
for example, digital marketing. Outside of Germany – known for the quality of its education system – Blue Yonder may
find itself limited more by the supply of so-called data scientists than by any shortage of applications.
Investors
Warburg Pincus (€3.2bn (2014); AUM €47bn) is a global private equity investor with 180 investment professionals
working from offices in Brazil, China, Europe, India and the US. Over half of Warburg’s investments are made outside the
US.
As one of the oldest investors to feature in our Bulletin – the firm was founded in 1966 and can trace its history back to
the banking activities of E.M. Warburg & Co. in the 1930s – Warburg has invested over €41bn in more than 720
companies and celebrated its 100
th
IPO in 2005.
Stage-agnostic, the firm currently invests across a wide range of sectors – as well as TMT the firm backs consumer,
healthcare, industrial, financial and services businesses, and invests in real estate. Last time the firm appeared in our
Bulletin was in November 2007 when it invested €22mn in a Series B round in provider of micro-seismic fracture
monitoring and stimulation evaluation systems Spectraseis. However, to date it has invested over €12bn in TMT
worldwide with 13 technology investments this year alone. Warburg Pincus has previous experience in the enterprise
software arena. For example, in 1996, the firm backed (for an undisclosed amount) Kognitio (originally WhiteCross),
which now presents itself as a provider of supercomputing for data science.

December 2014
Huddle
UK | www.huddle.com
3 Internet
Services
D 41.4 Operator of a cloud-based content
management and collaboration
platform
DAG Ventures, Eden Ventures, Hermes GPE, Jafco
Ventures, Matrix Partners, Zouk Capital
Huddle (Ninian Solutions) (UK), an operator of a cloud-based content management and collaboration platform, raised
$51.0mn (€41.4mn) in a Series D round led by Zouk Capital with support from new investor Hermes GPE and existing
investors DAG Ventures, Eden Ventures, Jafco Ventures and Matrix Partners. The money will be used to expand the
development team and compete with alternatives in Europe and the US.
Huddle’s collaboration and project management tools include virtual whiteboards, phone conferencing and task and
people management tools. Notably, it also integrates with existing corporate systems such as LDAPs (Lightweight
Directory Access Protocols).
This is the third time Huddle has appeared in our Bulletin. Its last feature was in May 2012 for its €19mn Series C round.
Ever since the firm’s May 2012 Series C round, however, there has been speculation about if and when Huddle will go
public. An IPO initially scheduled for September 2012 was pulled
citing unfavourable market conditions. Since then, Huddle has
increased its turnover but gross margins have decreased from
85% to 78% and Profit After Tax (PAT) has gone from a loss of
115% of revenue to 170% of revenue.
Huddle has also spent significantly on its back end and on programs for training users. The company now faces the
problem that it is not as unique as it used to be – strong competition exists in the form of Microsoft’s Office 365 (which
recently teamed up with Dropbox) and Silicon Valley’s Box. With cloud-storage now offered for free by a number of major
providers, market leadership will be heavily influenced by the services and products which go on top. Huddle has stated
that some of this round will be used to double the development team in Hubble’s Silicon Roundabout HQ.
The company now has more than 100,000 private sector clients and moving forward has stated intentions to focus on
the public sector. The company’s current public-sector clients include 80% of government departments in the UK, four
US federal agencies, the NHS and NASA. Huddle is growing rapidly, with sales to enterprise customers tripling year-on-
year and seven of Huddle’s ten largest deals also being signed in 2014.
Investors
This round brings total investment in Huddle to just over €75mn with a valuation of €215mn to €260mn on a 6.9x
turnover multiple. This can be compared with competitors Box – which has raised €400mn of venture funding and has
also been planning an IPO, and Dropbox – which has raised c. €500mn excluding debt.
December saw three IPOs in the enterprise technology space – Hortonworks and New Relic (both which closed higher
than their initial Public Offering Price (POP) and Workiva. Furthermore, Huddle competitor Box, which recently landed
GE as a client and updated its S-1 with improved revenue figures, certainly looks to be going the IPO route. One may
thus ask why Huddle has just raised more private money rather than going straight for a listing.
Huddle co-founder Andy McLoughlin has said that one of the reasons for this additional round is that they want to avoid
being acquired. This is a very realistic possibility – not only is Dropbox cash rich and acquisitive but Microsoft has a
relatively new CEO, acquired enterprise social networking firm Yammer for €1bn in 2012 (moving it into the Office 365
development team) and has plenty of cash for acquisitions in this space.
Transaction leader Zouk Capital (€263mn (2014); AUM €585mn) is a growth capital investor with offices in London and
Singapore. Founded in 1999, the firm has had a strong cleantech bias and specifically targets companies involved in
renewable energy and resource efficiency. Fellow new investor Hermes GPE (€414mn (2014); AUM €13.2bn) is a
combined private equity and infrastructure investor with offices in London and Singapore as well as an office in Boston.
Returning investors for this round were technology and life sciences investor DAG Ventures (€260mn (2012); AUM
€1.6bn), early-stage investor Eden Ventures (€87mn (2007); AUM €675mn) which has enterprise software as a target
sector, JAFCO Ventures (€225mn (2014); AUM €650mn) which led Huddle’s previous round and global VC firm Matrix
Partners (€336mn (2014); AUM €2.7bn).
€mn 2012 2013 2012 2013
Revenues 4.0 6.3
Gross Profit 3.4 4.9 85% 78%
PAT (4.6) (10.7) -115% -170%

December 2014
Atom Bank
UK | www.atombank.co.uk
4 Internet
Services
Late
Stage
31.7 Operator of digital-only banking
services
Polar Capital, Woodford Investment Management
Atom Bank (UK), an operator of digital-only banking services, raised £25.0mn (€31.7mn) in a Late Stage round from
Polar Capital and Woodford Investment Management. The money will be used in particular to implement a biometric
customer recognition system.
Most of the Fintech startups we cover seek to exploit a particular weakness in the traditional banking system. Peer-to-
Peer lenders, for example, seek to exploit the slowness and poor underwriting arising from legacy IT and credit-scoring
systems. The contention is that the existing banking system is so tied up with regulatory constraints, existing procedures
and market practice, legacy IT systems that it is ripe for disruption.
Rather than targeting a particular niche or specific gap in the market arising from the inadequacies of the legacy banks,
Atom Bank takes this argument to its logical conclusion and seeks to replace them. The firm is being set up by Anthony
Thomson and Mark Mullen. Mr. Thomson spent over a decade as Chief Executive of financial services marketing and
communications group CFM before setting up London-based Metro Bank in 2007. Mr. Mullen is the former CEO of
HSBC internet and telephone banking subsidiary First Direct.
Atom expects to launch in the second half of 2015 with a full range of products. Unlike Metro, Atom intends to be entirely
digital. Instead, services will be offered predominantly through smartphone apps. With outsourced infrastructure, no
branch network and no legacy systems, Atom’s operating costs are expected to be around 30% of turnover compared
with the industry average of over 50%. Even Atom’s office location in Durham was chosen with a view to reduce
overheads. Higher margins should result in higher returns for shareholders.
One of the key issues for a digital only bank is client security and for this reason Atom is currently working on integrating
biometric user-recognition into its systems.
Atom Bank is being hyped in the press as the UK’s first ‘digital-only bank’, which is complete nonsense. When internet
penetration in the UK first reached critical mass towards the end of the 1990s, British life assurance company the
Prudential launched the internet bank Egg – which expanded into France in 2002 as ‘La Carte Egg’. Despite later
controversy involving the cancelling of ATM cards and mis-selling of PPI (Payment Protection Insurance), Egg was
highly successful, with over 1mn credit card accounts when its consumer finance assets were sold to Barclays in 2011.If
anything, the timing is even better now than at the end of the 1990s. Broadband penetration is almost universal,
smartphone use is ubiquitous and service from existing banks is appalling at a time when they are blamed for the post-
2008 recession. According to the British Bankers’ Association (BBA), footfall in bank branches is dropping at 10% a year
with the use of mobile banking apps to make transactions doubling year-on-year.
While Atom’s management team have previous experience and a successful track record, they may not be the only new
banks opening in the near future. While it can take a long time to gain a banking license – Metro took two years – and
this can be a significant barrier to entry, the British regulatory authorities (the FCA and PRA) have been tasked with
increasing competition in the retail banking industry and almost thirty new organisations are now seeking banking
licenses. The most prominent of these are Tesco Bank and Virgin Money.
Investors
This is the third time that UK-based Woodford Investment Management (AUM €10.3bn) appears in our Bulletin in 2014
following a €9.7mn Series A round in Gigaclear in July 2014, a €10mn Series B round in Purplebricks in August 2014
and a €13mn Series B round in Genomics in November 2014. While technology investments accounts for only 1-2% of
this fund, three appearances in our Bulletin in less than twelve months strongly suggest that Woodford intends to
continue in this asset class. Woodford’s backing is particularly significant in this case as, when Woodford’s Head of
Investment (Neil Woodford) was responsible for Invesco Perpetual’s equity income funds, he shunned the banking
sector for over a decade.
Woodford was supported by specialist fund manager Polar Capital (LSE:POLR), as well as a number of notable
individual investors including former Managing Partner of Alchemy Jon Moulton and former Chair of Goldman Sachs
Asset Management Jim O'Neill.

December 2014
eToro
UK | www.etoro.com
5 Internet
Services
Late
Stage
21.9 Provider of a social currency,
commodity and index trading
platform
Anthemis Group, BRM Capital, Cubit Investments,
Ping An Ventures, SBT Venture Capital, Social
Leverage, Spark Capital, Venture51
eToro (UK), a provider of a social currency, commodity and index trading platform, raised $27.0mn (€21.9mn) in a Late
Stage round co-led by Ping An Ventures and SBT Venture Capital with support from existing investors Anthemis
Group, BRM Capital, Cubit Investments, Social Leverage, Spark Capital and Venture51. The money will be used to
support expansion in China and Russia.
eToro is a platform for trading Contract for Differences (CFDs), commodities, equities, forex and indices. Unlike many
trading platforms, the firm makes its money primarily on spreads rather than fees. Indeed, fees are only charged for
equity trades – typically 10 basis points (1% change = 100 basis points) with a minimum of 1% for equities. Fees are
also charged for making withdrawals. Users are allowed to trade on margin (with a leverage of up to 400x) and can
access the eToro platform from their smartphones.
eToro’s distinguishing feature is that its platform has a social aspect, allowing traders to connect with each other and
copy the trades of other investors. When we last saw the firm in March 2012, it had just raised €11mn for international
expansion, particularly in the US. Since then, eToro has doubled its user base from two million to four million.
While such growth may seem pedestrian in comparison with some of the growth rates we have seen in other sectors, for
many Fintech businesses regulation provides a significant barrier to entry which slows growth. Over the last two years,
eToro has successfully obtained regulatory approval from the Australian Securities and Investments Commission (ASIC)
and the National Futures Association (NFA), thus allowing both Asian and American investors to use the firm’s platform.
Investors
This sixth round of funding for eToro brings total funding to just under €50mn. In addition to the €21.9mn of equity, a line
of credit has also been provided by Silicon Valley Bank although details were not disclosed.
The round was co-led by Ping An Ventures (PA Ventures) (€140mn (2012)) and SBT Venture Capital. PA Ventures is a
relatively new VC fund, having been set up with €140mn of investment capital by China’s Ping An Insurance Group in
2012. The firm has a very broad investment remit, with sectors of interest ranging from TMT to finance and healthcare.
Despite its youth, PA already has a portfolio of well over thirty investments. Unsurprisingly PA concentrates almost
entirely on China and claims to be the first VC fund in China’s financial services industry.
SBT is a Fintech specialist providing growth capital to revenue-generating companies seeking growth capital. Although
partnered with Russia’s biggest bank (Sberbank), SBT is headquartered in London and most of its eight investments
have been in Europe or the US. This investment is unusual for the firm, which usually aims for new technologies or
disruptive business models rather than simply seeking to take an existing business model to new territories. In this case,
however, the firm clearly seeks to leverage its relationship with Sberbank to help eToro expand in Russia. With backing
from PA and SBT, we expect to see eToro expand into both China and Russia fairly rapidly.
Well-known US investor Spark Capital (€300mn (2014); AUM €1.5bn), which first backed eToro in January 2011 and led
the firm’s two most recent rounds has again returned. Spark has normally invested in early-stage deals with a preference
for getting in as one of the first venture investors. However, in 2014 Spark raised a €320mn growth fund. While primarily
intended to catch mid-stage deals that Spark had occasionally come across but been forced to let go, the fund will also
allow the firm to back its own portfolio companies for longer in cases such as eToro. Also a participant in eToro’s
previous round, BRM Capital (€80mn (2000); AUM €200mn) targets IT companies with ties to Israel where eToro now
has a significant operational presence.
Anthemis Group and Venture51 (€20mn (2015); AUM €50mn) both also backed eToro’s last round but were not reported
at the time. Luxembourg-based Anthemis, is another specialist in growth capital for Fintech companies. Based in
California, Venture51 and Social Leverage (€5mn (2013)) are both early-stage technology investors. Venture51 is
unusual in that it targets investments that fall between seed money and Series A. Cubit Investments is an incubator and
early-stage investor based in Israel.

December 2014
Helpling
Germany | www.helpling.de
6 Internet
Services
A 13.8 Operator of a domestic cleaning
booking platform
Mangrove Capital, Phenomen Ventures, Point
Nine Capital
Helpling (Germany), an operator of a domestic cleaning booking platform, raised $17.0mn (€13.8mn) in a Series A
round from Mangrove Capital, Phenomen Ventures and Point Nine Capital. The money will be used to support
continued expansion and consolidate the firm’s presence in existing cities, particularly through local advertising.
Founded in Berlin in March 2014, Helpling runs a platform for booking domestic cleaning services. Helpling guarantees
that all cleaners are insured and have references as well as providing a secure method of payment. The checking of
references is far more stringent than anything a private individual is likely to do and includes a telephone interview,
cleaning test, criminal record check and verification of the cleaner’s papers and business license. Obvious benefits are
internet-based disintermediation and the normal ‘local commerce’ benefit of a cheap internet portal for small businesses.
Incubated by Rocket Internet, Helpling is pursuing Rocket’s now familiar rapid roll-out strategy. It has a presence in 150
cities in eight different countries across Australia, Europe and Latin America. Like many other local commerce
businesses, Helpling’s success will depend on achieving critical mass in each city where it is active. We saw this very
clearly in the battle for dominance amongst take-away food ordering portals. As discussed in our September 2014
coverage of Delivery Hero, large sums of venture capital were deployed in order to capture and keep each new city.
There is, however, an important difference between home cleaning services and takeaway food. Whereas takeaway
food restaurants all have a physical presence and are difficult to hide from the taxman, many cleaners operate in the
black economy. Moreover, while it may take time to build up a client base through word of mouth, once they have a full
schedule, good cleaners rarely have any gaps. There is a danger, therefore, that the best cleaners will not use the
platform and that the platform’s margins may simply increase the cost of cleaners who are merely good.
Notwithstanding these reservations, there is plenty of competition in the market. The best known competitor is Y-
combinator backed HomeJoy which was set up in San Francisco in the summer of 2012 and which has so far raised
almost €35mn. In Europe, there is London-based Hassle which launched in May 2014 and has raised €5mn from Accel
and Ventech. Smaller local competitors include Housekeep and Mopp, which both launched in 2013 and are targeting
the London market. Peer-to-Peer task outsourcing service TaskRabbit also has a number of cleaners using its platform.
The good news is that Mopp was sold to US-based TaskRabbit clone Handy in September last year for an undisclosed
sum believed to a little under €10mn. Handy had previously raised around €40mn in venture funding in two rounds from
General Catalyst Partners and Highland Capital Partners.
However, Homejoy has recently put its operations in Canada and France ‘on hold’ saying publicly that it is choosing to
focus on its operations in Berlin, Hamburg and London. The former two will put it in direct competition with Helpling. It is
conceivable that Homejoy is simply choosing to focus on cities which can deliver profitability most quickly and cost-
effectively. However, the firm only entered the French market a few months ago and a recent interview with the firm’s
CEO did not show a deep understanding of either the European market or competition in Europe.
Investors
Luxembourg-based technology investor Mangrove Capital (€100mn (2013); AUM €150mn) likes to back companies at
an early-stage, often prior to product launch, and even participate in the creation of new companies. For successful start-
ups, however, the firm is able to follow its money with up to €20mn per investment. Mangrove is unusual in that it splits
its activities equally between Europe and emerging markets such as India and Russia.
A relative newcomer, only having been set up in 2012, Phenomen Ventures (€240mn (2013); AUM €240mn) is an early
stage investor focussing on businesses in the CIS. Phenomen’s previous investments include a €15mn round for
Foodpanda in February 2014, so not only does Helpling have an entry into the CIS but this will be facilitated by a backer
who already has a good understanding of local commerce and the kind of venture-backed land-grab that is likely to
ensue.
Berlin-based early stage investor Point Nine Capital (€45mn (2013)) is another veteran of the war between takeaway
food portals, having participated in Delivery Hero’s €80mn Series B in August 2012.
Despite Helpling being a Rocket protégé, Rocket itself has not participated in this round. Notwithstanding our
reservations above, however, this trio of investors has a combination of local knowledge, business model expertise and
time in the trenches that is particularly well suited to taking Helpling elsewhere in the world. This transaction can be seen
as a milestone for ‘local commerce’. It is the first transaction to feature in our Bulletin where one of the investors
(Delivery Hero chairman Lukasz Gadowski) has previous experience with the business model.

December 2014
Home24
Germany | www.home24.com
7 Internet
Services
A* 12.9 Operator of an online furniture
shopping platform
Holtzbrinck Ventures, Investment AB Kinnevik,
JPMorgan, REWE Group, Rocket Internet,
Zimmermann Investment
* Internal round
Home24 (Germany), operator of an online furniture shopping platform, raised €12.9mn in a Series A round led by
Rocket Internet with support from Holtzbrinck Ventures, Investment AB Kinnevik, JP Morgan, REWE Group and
Zimmermann Investment. The money will be used to consolidate the firm’s position in Europe and Latin America, and
to fuel further expansion.
Just as clothing sales have moved online following a plethora of fashion portals and shopping clubs in the last half-
decade, the same is now happening with home furnishings. Indeed, this is not the first major investment in a furniture e-
tailer that we have seen in our Bulletin: in March 2014 Westwing Home & Living raised €72mn in a late-stage round. See
also Made.com’s 63% jump in 2014 sales to £42.8mn (€65.9mn) ahead of a planned IPO rumoured to be for more than
£100mn (€135mn) and the sub $15mn (€12mn) firesale of the previously billion-dollar Fab.com.
Home24 was founded in Berlin in 2009 and launched its online store in 2011. It sells quality furnishings at reasonable
prices to the mid-market. The range of products it offers (more than 150,000 from over 800 manufacturers) is
significantly greater than its online competitors. Moreover, the firm also sells own-brand products such as Furnlab,
Jack&Alice, Mørteens and Smood.
Over its first 4-5 years, the firm built up its platform and then expanded from Germany into Austria, Brazil (under the
name of Mobly) France and Holland. During 2014, the pace of expansion increased dramatically with a pan-European
roll-out across Belgium, Italy and Switzerland, and the opening of the firm’s own warehouse in Berlin.
The numbers also increased dramatically. In 2012, Home24 had 50,000 items in its catalogue, half a million customers
and net revenues of €62mn. Sales reached €100mn roughly one year later (61% growth) and the firm now offers over
three times as many products to over one million customers. Between 2012 and 2014, the firm doubled the number of
orders it took (from 100,000 to 200,000) and most of the firm’s KPIs now seem to be trending in the right direction.
Getting here has not been easy. In 2012, Home24 has had to deal with the loss of customer data from phishing and
migrating from well-known e-commerce platform Magento to a proprietary system. This was so problematic that the
firm’s site had to be taken down briefly. While the firm still uses a third party for its logistics operations, its e-commerce
operations are now certified by German engineering firm TÜV Süd and reviewed on the Trusted Shops platform.
A feature of Home24’s business model that is common amongst fashion e-tailers is offering not just free delivery but also
free returns for the first 30 days. The idea is that this gives customers the confidence to buy and hence increases
turnover. However, even though the firm’s mean basket size (a little over €200) is larger than might be expected in the
fashion world, it is more expensive to deliver furniture than clothes and Home24 is not yet profitable.
While Home24 cites return rates of under 10%, this could still have a significant impact on the bottom line. Even if costly,
however, this strategy will help the firm grow and compete with better known bricks-and-mortar furniture retailers, such
as Ikea, who are now expanding online.
Investors
In many ways this investment is the strongest indication yet that it is business as normal for the post-IPO Rocket Internet
(DE:RKET). As transaction leader, Rocket not only contributed €10mn of the total but was supported by its traditional
collaborators Holtzbrinck Ventures (€285mn (2015); AUM €645mn) and Investment AB Kinnevik (AUM €7.2bn).
What is not normal for Rocket is the amount of information made public. Previously Rocket focused more on running its
companies than on disseminating information to the press so information had to be gleaned indirectly from Kinnevik and
other sources. Rocket’s new-found public status greatly increases transparency. This deal leaves Home24 with a
valuation of €815mn – a bit shy of the Samwer brothers’ usual billion-dollar benchmark – and Rocket with a 49.8% stake
valued at €406mn. What is less clear is what Rocket intends to do next as it also owns a significant stake in Westwing.
Although Westwing operates as a shopping club for a curated selection of products, it is very much in the same sector. It
is also not entirely clear how many rounds of financing Home24 has had so far as they took place prior to Rocket’s IPO.
What is known is that all the investors in this round were already shareholders, making it a late-stage internal round.
Other investors were Germany-based venture capital firm Zimmermann Investment, as well as investment bank
JPMorgan and European merchant, retailer, tourism and travel company the REWE Group, which have both backed
Rocket companies before, just not as often as Holtzbrinck and Kinnevik.

December 2014
Nexthink
Switzerland | www.nexthink.com
8 Software D* 11.8 Developer of an end-user IT analytics
platform
Auriga Partners, Mannai Corporation, VI
Partners
* Internal round
Nexthink (Switzerland), a developer of an end-user IT analytics platform, raised $14.5mn (€11.8mn) in a Series D
internal round led by Auriga Partners with support from the Mannai Corporation and VI Partners.
The EPFL (École Polytechnique Fédérale de Lausanne) is becoming something of a power house of entrepreneurial
activity. Two EPFL spin-outs have featured in our Bulletin in the last couple of years – hardware firm Kandou’s €7.6mn
Series A round in March 2012 and software development platform Typesafe’s €11.3mn Series B round in August 2012.
The EPFL also has strong links to molecular and immunodiagnostics platform developer Biocartis, which featured in our
September 2014 for raising a €64.5mn late-stage round, owing to its presence in the institution’s science park and the
fact that its founder Dr Rudi Pauwels spent a three year sabbatical there.
Founded in 2004, Nexthink is another EPFL spin-out and arose from research that used AI (Artificial Intelligence)
techniques to monitor computer systems. One of the independent peer-reviewers, an IT Director of a Swiss watchmaker,
commended the innovative nature of the research and expressed a strong interest in purchasing the product if it were
commercially available. The company was formally established in 2006.
Based on two patents, one for real-time visualisation and the other for using AI and self-learning to determine abnormal
behaviours, Nexthink’s software provides real-time visibility and analytics on the usage of a company’s IT infrastructure
from an end-user perspective, with the aim of enabling companies to be proactive in addressing problems. This is in
contrast to the traditional, reactive approach of monitoring IT services from the data centre.
The software captures data on end-user events such as application usage, bandwidth, changes in the IT infrastructure,
error messages and crashes, as well as potential security risks. This enables IT departments to monitor the performance
of their infrastructure, ensure compliance with IT policies, detect security threats in real time, manage their IT Help Desk
and analyse the likely impact of new IT projects. According to Nexthink its product helps resolve help desk issues 60%
faster and reduces the number of incidents handled by up to 35%.
It is impressive that the need for this sort of product was identified before corporate IT departments embraced SaaS and
started migrating to the cloud, prior to BYOD (Bring-Your-Own-Device) becoming a significant issue and well in advance
of the current trend towards software-defined dynamic provisioning of IT infrastructure. With IT departments now also
expected to manage links to third party cloud-computing applications and storage, as well as a plethora of networks and
systems used by employees who wish to bring their own hardware for work, a tool like Nexthink is almost indispensable.
As is conventional for enterprise software sales, Nexthink uses a network of channel partners to sell its product and 95%
of revenues go through this route. Its partners include CIO Plus (Ireland and the UK), Cloud Sherpas (Australia, Canada
and the US) and Ontrex (Austria, Germany and Switzerland). In addition to its channel partners, Nexthink also works
with half a dozen ‘alliance partners’ to ensure that its R&D pipeline is compatible and exhibits synergy with new
developments.
Investors
Led by Paris-based life sciences and technology investor Auriga Partners (€174mn (2006); AUM €406mn), this latest
round brings total investment in Nexthink to €25mn. Auriga typically seeks to invest a minimum of €1mn, with the
intention of making follow-on investments over subsequent rounds, to reach a total commitment of c. €5mn. In
technology, Auriga is particularly interested in big data, cloud computing and SaaS, mobile and open source software.
The company first invested in Nexthink as part of its €2.3mn Series A round and has made follow-on investments in
every subsequent round. Previous investments by Auriga that have featured in our Bulletin include BonitaSoft in
September 2011 and Amplitude Systèmes in January 2012.
India’s Mannai Corporation is an industrial conglomerate with interests in air travel, the automotive industry, medical
equipment and jewellery. Nexthink is of strategic importance to the firm’s Computer and Office Systems (COS) business
which provides IT services, telecoms equipment and office automation products. It first invested in Nexthink in 2011.
Swiss incubator VI Partners (AUM €100mn) supports life sciences, IT and materials technology businesses. Supported
by half a dozen Swiss blue chips and four of the Swiss banks as well as McKinsey and the ETH Zurich, VI was one of
the earliest incubators set up when it was founded in 2001.

December 2014
ShopWings
Germany | www.shopwings.de
9 Internet
Services
A 10.0 Operator of an online grocery shopping and delivery
platform
Tengelmann Ventures
ShopWings (Germany), operator of an online grocery shopping and delivery platform, raised €10.0mn in a Series A
round from Tengelmann Ventures.
Started within the Samwer brothers’ famous incubator and launched only a few months ago, ShopWings is vintage
Rocket Internet – taking a business model proven in the US, analysing and learning from it, and then rolling it out very
rapidly across Europe with plenty of financial support.
The business model in question is that of San Francisco-based Instacart. It allows consumers to shop at multiple grocery
stores through a single portal, for delivery within 24 hours. Set up in 2012, Instacart operates in more than a dozen
different municipal areas clustered around major cities. Originally incubated by Y Combinator, the firm has so far raised
€240mn from investors including KPCB and Sequoia Capital, including a €190mn Series C at a €1.7bn valuation earlier
this month. This year the firm expects revenues of more than €85mn – a ten-fold increase on 2013.
ShopWings allows customers to select from its range of products, sourced from local grocery stores, via their website. It
then applies an algorithm to detect whether there is matching stock in the stores within close proximity of the buyer’s
location. A shopper is then dispatched to source the buyer’s basket of goods. Delivery on the service is levied at €4.90,
with a guaranteed drop time of within two hours of ordering. ShopWings began operating solely in Munich in October
2014 and is in the process of expanding across Germany, with Western Europe earmarked as the next stage.
ShopWings is already recruiting contract shopping staff through the web site Ein-kaufer.de to facilitate its service. The
senior management team is comprised of Christoph Harsch and Florian Jaeger who founded online wine marketplace
Mywineportal.com who both bring substantial experience of e-commerce to the table. In the long term, it will be
interesting to see whether the ShopWings team will go for a rapid exit or whether they focus on continued expansion.
Competition in this market is already on the rise. In the US, Instacart has already been cloned by San Francisco based
HelloEnvoy – an upscale version of Instacart offering dedicated personal shoppers, but charging a subscription for
delivery rather than making a margin on the food or charging per delivery. More threateningly, Amazon has launched its
AmazonFresh service in the US, leveraging its existing global logistics operation. Even Uber is reported as having
spoken with KPCB about collaboration with Instacart. If this business model continues to succeed, it seems inevitable
that these players will take a keen interest in the European market.
Investors
Additionally to the €13.8mn round in Helpling, this is the second transaction in this Bulletin where the firm was incubated
by Rocket Internet, but Rocket itself did not participate. Rocket-backed furniture e-tailer Home24 also appears in this
issue for raising a €12.9mn Series A round, but with Rocket as a participating investor. While Rocket has just raised
significant capital, as we pointed out in our coverage of the firm’s IPO, this requires careful stewardship as running a
conglomerate of startups is very capital intensive.
Strategic investor the Tengelmann Group, via its corporate venture capital fund Tengelmann Ventures, has been a long-
term collaborator with Rocket. Tengelmann is one of the DACH region’s largest multi-sector retailers with practical
experience of running supermarkets (under the Kaiser’s Tengelmann brand) and operations in 18 different countries. It
also possesses startup experience, having pioneered e-commerce in Europe with the first online discounter, Plus Online,
in 2001. The firm last featured in our April 2014 and March 2014 issues for its participation in German takeaway food
portal Delivery Hero and German online furniture shopping club Westwing Home & Living’s €62mn and €72mn late-
stage rounds, respectively.
While this could be viewed as a local commerce deal, it differs from the takeaway food portal business model which has
become the paradigm for this sector. For each new city that ShopWings expands into, there will be significant advertising
expenditure and local staff recruits. However, most local staff will be temporary workers acting as shoppers, thus not
expensive to hire. Unlike takeaway food, it will not be necessary to sell to a multitude of takeaway food restaurants in the
area. One central agreement with each of the major supermarkets should be enough. This means that, with only a
relatively low cost of entry into each new city, it will be easier to achieve break-even. For this reason, there will not be the
same pressure to take and hold each individual city and we do not expect to see quite such a frantic venture-fuelled war
for territory, but that is not to say that we expect Rocket to go slowly. As one of the firms listed as ‘concepts’ in Rocket’s
pre-IPO prospectus, ShopWings is a golden opportunity for Rocket to show the public markets what it can do.

December 2014
Novelda
Norway | www.xethru.com
10 Hardware A 9.7 Developer of radar-based
technology for use in sensors
Alliance Venture, Investinor, SpareBank 1
Novelda (AKA XeThru) (Norway), a developer of radar-based technology for use in sensors, raised $12.0mn (€9.7mn)
in a Series A round led by Investinor with support from fellow new investor SpareBank 1 and returning investor
Alliance Venture.
Novelda has developed a low energy radar system designed specifically for close range applications. The radar system’s
basic functionality is detecting presence, proximity, size and motion. It operates at frequencies of less than 10GHz (radio
waves towards the microwave end of the spectrum), can be incorporated in sensors half the size of a credit card and has
a range of 30m and resolution of a few millimetres. Also, owing to the high bandwidth of which its system is capable,
Novelda’s sensors can separate objects which are close together (to the order of millimetres). Novelda’s technology is
based on a System-On-a-Chip (SOC) which is only 0.25cm
2
in size and notably uses less radio energy than is
accidentally wasted by TV sets or vacuum cleaners.
Real-world applications of Novelda’s technology include use in sensors for security systems and home automation.
Additionally (due to its high resolution) Novelda’s technology can be used for applications such as gesture recognition
systems, monitoring a patient’s breathing in hospitals and robot vision. Furthermore, the technology is also able to
perform Ground Penetrating Radar (GPR) to a depth of one metre (the company has thus indicated that it could be used
for mine work).
Novelda is initially planning to sell its technology in two ways. Firstly, directly as a development kit (called the XeThru X2
Inspiration Kit). This includes a pre-programmed movement sensor, as well as software and a range of other sensor
modules. Secondly (and more importantly from a commercial perspective), Novelda is targeting OEMs through a value-
added reseller program. To date, the firm has recruited resellers in China, Italy, Russia, South Korea, Sweden and the
US.
Novelda marks the second university spin-out in this issue, the first being Nexthink. It was founded in 2004 by Oslo
University Associate Professor Dag Wisland and serial entrepreneur Eirik Naess-Ulseth.
Investors
Transaction leader Investinor (€74mn (2013); AUM €74mn) contributed €6.2mn of this round’s €9.7mn total. The firm is
an evergreen fund backed by the Norwegian Government which was set up in 1990. It provides both venture capital and
growth equity funding and aims to support Norwegian firms looking to expand internationally. It is not a technology
specialist and has also backed aquaculture, biotech and oil and gas businesses in the past.
As a quasi-public sector organisation, Investinor prefers not to take a majority stake and seeks to syndicate its
investments with other investors. The firm has exited from a number of companies covered in our Bulletin including
silicon wafer recycler Metallkraft (profiled in February 2010) which it sold to Capricorn Venture Partners in 2012 and
electric car manufacturer Think (profiled in August 2009) which it sold to US-based Ener1 in 2011.
Fellow new investor SpareBank 1 (MING:OL) is a regional Norwegian Bank listed on the Oslo Stock Exchange. A
relatively small bank (with c. 13,000 customers), SpareBank primarily caters to clients such as farmers, retail customers,
the self-employed and SMEs (as opposed to large corporates).
There has been very little external investment prior to this round. What little there was – a €750k seed round in
September 2008 – was provided by Alliance Venture (€56mn (2014); AUM €564mn) which also participated in this
round.
Founded in 2001, Alliance is an early-stage / seed investor which targets companies within the oil and gas and TMT
sectors. This investment was made from the firm’s €40mn second fund (a 2006 vintage) which is now almost fully
invested. The firm last featured in our July 2011 bulletin for its participation (alongside Investinor) in PoLight’s (provider
of autofocus lenses for camera phones) €12.8mn Series B round.

December 2014
Sonnenbatterie
Germany | www.sonnenbatterie.de
11 Cleantech B 7.6 Manufacturer of lithium-based
storage systems for solar electricity
Chrysalix SET, eCAPITAL, Munich Venture
Partners
Sonnenbatterie (Germany), a manufacturer of lithium-based storage systems for solar electricity, raised $9.4mn
(€7.6mn) in a Series B round led by Chrysalix SET and new investor Munich Venture Partners, with participation from
existing investor eCAPITAL. The money will be used to fund increased production and expansion into the US market.
Sonnenbatterie provides smart home energy storage systems for solar electricity. Its product is comprised of a lithium-
ion battery, an inverter to convert the DC supply from the batteries to AC like the domestic supply and software for the
user to manage battery capacity and connected appliances in their home. The software is available as an app for
smartphones, tablets or through a web browser, allowing consumers to remotely manage electricity usage in their home.
As a home photovoltaic system (typically an existing solar panel installation) generates electricity and powers appliances
throughout the day, any excess electricity generated is stored in the Sonnenbatterie. The stored electricity is then
automatically delivered to appliances when a household’s photovoltaic system is incapable of supplying sufficient
electricity to match the household’s demand, for example in the event of adverse weather conditions or at night. If the
Sonnenbatterie becomes fully charged, it can automatically connect to additional electrical appliances using remotely
controlled sockets to try to increase usage. If it is still the case that excess power is available, the electricity is fed back
into the grid and the user receives statutory compensation.
The company’s systems are priced on the basis of energy usage, starting at c. $13k (€11.3k) for a 4.5 kWh system. The
companies systems are available up to a maximum capacity of 60 kWh. To date, the company has sold 4k units across
Austria, Germany, Italy, Luxembourg, Slovakia and Switzerland and has more than a 50% market share in German-
speaking countries.
Sonnenbatterie has seen increasing demand in Germany as a result of government subsidies – €600 grants for domestic
installation with a national budget of €25mn. Unfortunately, the industry’s distribution system, involving substantial
dealing with utility companies, have caused delays in deliveries which have affected Sonnenbatterie. While
Sonnenbatterie currently requires minimum delivery volumes from its partners, which has helped guarantee a certain
level of revenue, in the long term such structures may not be viable. The company has been sold out since September
2014 and is looking to expand capacity. This round should help resolve the company’s bottleneck issues.
Storage is one of the most important enabling technologies for the solar power industry and a key growth market in clean
energy. In these terms, Sonnenbatterie has an edge through its cooperation agreement with German utility company
RWE Effizienz. Furthermore, having entered the US market in March 2014, the company is actively recruiting channel
partners in the US to help distribute its products. Aside from scaling up and managing its international growth, the firm’s
key challenges will be strengthening its consumer brand equity and further cost reduction.
The current market trend is towards integrated appliances for storage combined with smart energy functionality.
Appliance control, demand management and, ultimately, minimisation of energy consumption from the grid are at the
core of the proposition. Sonnenbatterie competes not only with the major inverter manufacturers, e.g. SMA Solar,
Danfoss, but also with large industrials in the electronic components space, such as Schneider Electric, Siemens, and of
course the battery sector. The market is still very fragmented in all of these sectors and competition is high.
Investors
This round was led by new investor Chrysalix SET (€41mn (2007); AUM €41mn). Founded in 2007, Chrysalix SET was
known as SET Venture Partners until January 2012 and originated as a joint venture between Netherlands-based asset
manager Robeco and Canada-based venture capital firm Chrysalix EVC. Headquartered in Amsterdam but investing
across Europe, the firm typically focuses on early stage investments. Nevertheless, Chrysalix SET will invest anywhere
along the value chain – from power production, through distribution and storage to energy use. It has a particular interest
in so-called smart energy solutions. The company recently formalised its international network as the ‘Chrysalix Global
Network (CGN)’. This organisation also includes both Chrysalix EVC in Vancouver, Canada and Grand River Capital
Management Chrysalix in Beijing, China.
Stage agnostic eCAPITAL (€49mn (2010); AUM €100mn) was the sole investor in Sonnenbatterie’s Series A round
(amount undisclosed). Known for its renewable energy and environmental technologies investments, eCAPITAL
classifies its areas of interest as cleantech, ICT, automation and the rather broad category of products and services for
the ‘good life’. This is eCAPITAL’s fifth cleantech investment this year, one of which featured in our September 2014
Bulletin for the firm’s participation in Heliatek’s €18mn Series C round. Munich Venture Partners (€127mn (2012); AUM
€176mn), a new investor in Sonnenbatterie, is one of the largest cleantech investors in Germany and the preferred
venture partner of Europe’s largest application-orientated research organisation the Fraunhofer Institute.

December 2014
MarketInvoice
UK | www.marketinvoice.com
12 Internet Services B 6.3 Peer-to-Peer lending platform for working capital
financing
Northzone
MarketInvoice (UK), operator of a Peer-to-Peer (P2P) lending platform for working capital financing, raised £5.0mn
(€6.3mn) in a Series B round from Northzone. The funds will be used to accelerate expansion of its platform in light of
the booming P2P lending market.
Founded in 2010 and launched in 2011, London-based MarketInvoice is the second P2P invoice factoring business we
have seen in as many months. The other was Paris-based Finexkap which featured last month for its €18.2mn Series A
round.
Like a conventional factoring business, MarketInvoice allows SMEs to sell their invoices to a third party at a discount
before they have been paid, thus improving their cash flow position. However, unlike with a conventional factor,
MarketInvoice determines this discount via a real-time auction between investors using the platform. The investors taking
part in this auction are either self-certified High Net Worth Individuals (HNWIs) or institutional investors such as asset
managers, family offices and hedge funds. As a P2P platform, MarketInvoice is much quicker than conventional factoring
businesses and in many cases funds can be drawn down the same day. Somewhat unusually, MarketInvoice does not
require either debentures or personal guarantees from the companies seeking finance.
In order to be eligible to use the MarketInvoice platform, SMEs must have at least six months of trading history and
revenues of more than €130k. While this is not too big a hurdle, the companies invoiced must also be either “credit
worthy businesses with revenues greater than €20mn per annum, or public sector bodies.”
To date, the firm has arranged factoring for invoices with a nominal value of €390mn. Notably, €260mn of this was
achieved in 2014 – the company’s growth is attributable to the fact that P2P finance platforms are becoming better
known and institutional investors are starting to use new platforms much earlier. Furthermore, the British Government
and some local authorities are starting to actively support such P2P lending platforms as a way to support the economy.
Specifically, since August 2013, the UK Government has been buying invoices as part of the British Business Bank
initiative. Also, the Greater Manchester Combined Authority (GMCA) has agreed to use €2.6mn to buy up to 50% of any
invoices traded by SMEs in the Greater Manchester area.
As a relatively new approach to financing businesses, P2P lenders and invoice factors are sometimes criticised for being
less diligent in their screening of customers and investors (with P2P finance currently more lightly regulated than the
traditional banks). With Government threats of more stringent regulation of the banking sector fresh in everybody’s
minds, a number of P2P finance businesses have come together to form an industry association – the Peer-to-Peer
Finance Association (P2PFA).
Members of this trade body commit to following a set of best practice guidelines for things such as anti-money
laundering, fraud prevention and segregation of client funds (based on the Know Your Customer (KYC) procedures of
the banks and professional services firms). So far, the body has eight members – Funding Circle, Landbay, Lending
Works, LendInvest, Madiston, RateSetter, ThinCats and Zopa.
Investors
This round, which follows on from a €2mn angel round in October 2010, brings total investment in MarketInvoice to more
than €8mn. One of the advantages of P2P businesses is that, once the platform has been built, their growth depends
primarily on the number of investors using the platform rather than additional venture rounds. In principle at least this
should mean that they have a relatively short runway.
That said, US Lending Club required over €250mn in equity as well as debt finance prior to its December €4.7bn NYSE
IPO. The returns, however, were strong with early investors making returns of 50x to 80x. Even later investors, such as
Kleiner Perkins Caufield & Byers (which only came in during the summer of 2012), still made returns of 8.6x.
This is thus a positive indicator for lead investor Northzone (€268mn (2014); AUM €561mn). Northzone is originally a
Nordic focused technology investor, but has broadened its geographic reach in recent years, having opened an office in
London in January 2012 and made numerous investments in UK and US-based companies. The firm is best known for
its investment in Spotify’s Series A round in September 2008. It featured in our Bulletin last month when it led Fyndiq’s
€16mn Series A round. Like a number of other investors, including Spark Capital which featured earlier in this issue with
eToro, Northzone was originally an early-stage investor but now participates in growth equity deals. The company has
just closed its seventh fund with €250mn of committed capital.

December 2014
2.1 M&A Activity Index
Disclosed Global TMT M&A Transactions
Source: Capital IQ; Go4Venture Advisers Analysis
(1) Includes Dell acquisition by Silver Lake for €22.3bn (2013) and WhatsApp acquisition by Facebook for €13.9bn (2014)
Disclosed European VC & PE-Backed TMT M&A Transactions (>£30mn / €35mn / $50mn)
Source: The 451 Group; Capital IQ; PitchBook; VentureSource (including transaction value estimates); Go4Venture Advisers Analysis
(1) Includes ista International acquisition by CVC Capital Partners for €3.1bn (2013)
Disclosed European VC & PE-Backed TMT M&A Transactions (2014)
>£30mn / €35mn / $50mn
Monthly Number # 5 4 1 2 3 7 6 1 5 7 6 5
Value €mn 1,106 1,140 448 258 906 1,083 1,607 266 1,617 876 1,982 1,183
Median €mn 240 259 448 129 215 129 200 266 150 96 256 170
Cumulative Number # 5 9 10 12 15 22 28 29 34 41 47 52
Value €mn 1,106 2,246 2,695 2,953 3,859 4,942 6,549 6,815 8,432 9,308 11,290 12,473
Median €mn 240 39 303 186 228 175 175 195 175 151 163 161
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
100
200
300
400
500
600
DealValueperMonth(€mn)
#ofDealsperMonth
European Deals 2013 (€mn) European Deals 2014 (€mn)
Global Deals 2013 (€mn) Global Deals 2014 (€mn)
# of Global Deals 2013 # of Global Deals 2014
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
2
4
6
8
10
12
14
16
18
20
DealValueperMonth(€mn)
#ofDealsperMonth
Value of Deals 2013 (€mn) Value of Deals 2014 (€mn)
# of Deals 2013 # of Deals 2014
(1)
(1)

December 2014
2.2 Top 5 Global TMT M&A Transactions Summary
Ranked by Price (€mn, including estimates) in descending order
# Target Acquirer Target Sector
Price
(€mn)
Revenues
(€mn) P/R
1 Riverbed
(US NASDAQ:RVBD)
www.riverbed.com
Thoma Bravo
(US)
www.thomabravo.com
Ontario Teachers’ Pension Plan
(Canada)
www.otpp.com
IT Infrastructure 2,922 936 3.1x
Riverbed, a provider of Wide Area Network (WAN) traffic optimisation hardware and software for businesses globally, will be acquired
by private equity firm Thoma Bravo and pension fund Ontario Teachers’ Pension Plan. This acquisition, which is Thoma Bravo’s largest
investment since inception, happens after more than a year of pressure from investor Elliott Management Corp for Riverbed to sell itself
since it reported results missing its own forecasts in its main WAN optimisation business and struggled to integrate network traffic
management software provider Opnet, which it acquired for $1bn (€812mn) in 2012.
2 Spansion
(US NYSE:CODE)
www.spansion.com
Cypress Semiconductor
(US NYSE:CY)
www.cypress.com
Semiconductors 1,312 989 1.3x
Spansion, a flash memory semiconductor manufacturer, will be acquired by System-on-Chip (SoC) semiconductor manufacturer
Cypress Semiconductor. This acquisition is Cypress’ largest since 2002 (according to The 451 Group) and its first since that of
ferroelectric Random-Access Memory (RAM) semiconductor designer Ramtron for €88mn in June 2012. It will enable Cypress to
expand its market share in embedded systems.
3 IPC Systems
(US)
www.ipc.com
Centerbridge Partners
(US)
www.centerbridge.com
Software 974 406 2.4x
Noteworthy seller: Silver Lake Partners
IPC Systems, a provider of VoIP-based financial trade communications software and services, will be acquired by private equity firm
Centerbridge Partners. IPC Systems is one of Silver Lake’s longest-held investments, having been acquired eight years ago (in August
2006) for $800mn (€625mn) from Goldman Sachs. This acquisition follows Silver Lake Partners’ stated intention to sell IPC Systems
and Centerbridge closing a $6bn (€5bn) private equity fund, both in October 2014. Centerbridge will focus on IPC's unified trading
communications and data platform, Unigy, as it seeks ways to boost IPC's $500mn (€406mn) in trailing revenue.
4 Xerox’s IT Outsourcing
Business
(US NYSE:XRX)
www.xerox.com
Atos
(France PAR:ATO)
atos.net
IT Services 852 1,130e 0.7x
Xerox’s IT Outsourcing (ITO) Business, a provider of ITO services, will be acquired by IT services provider Atos. With this acquisition
Atos intends to increase its focus on its Business Process Outsourcing (BPO) and document outsourcing businesses. The deal will
increase Atos’ customer base with Xerox’s blue-chip ITO clients, and strengthen its position in the US. With more than 90% of Xerox's
ITO revenue coming from the US, Atos will almost triple its sales there, and increase its share of global revenue generated in the US
from 6% to 17% (according to The 451 Group).
5 EVRY
(Norway OB:EVRY)
www.evry.com
Apax Partners
(UK)
www.apax.com
IT Services 491 1,513e 0.3x
EVRY, a provider of systems and storage integration services for businesses in Norway, will be acquired by private equity firm Apax
Partners. This acquisition will serve to accelerate EVRY’s strategy of developing bank and finance solutions portfolio, scaling up its
focus on industry verticals in the Nordic countries and support further mergers and acquisitions.
Source: The 451 Group; Capital IQ; PitchBook; Go4Venture Advisers Analysis
Key
P/R – Price / Last 12 Months Revenues
e: 2014 revenues estimate

December 2014
2.3 Headline European VC & PE-Backed M&A Transactions
>£30mn / €35mn / $50mn
Ranked by Price (€mn, including estimates) in descending order
# Target Acquirer
Target
Sector
Price
(€mn)
Revenues
(€mn) P/R
Funding
(€mn) P/F
1 Fotolia
(France / US)
www.fotolia.com
Adobe Systems
(US NASDAQ:ADBE)
www.adobe.com
Internet
Content &
Commerce
649 N/A N/A 162e 4.0x
Noteworthy Sellers: Kohlberg Kravis Roberts, TA Associates
2 Intergenia
(Germany)
www.intergenia.de
Host Europe
(UK)
www.heg.com
Internet
Services
210 30 7.0x N/A N/A
Noteworthy Sellers: Oakley Capital (AIM:OCL)
3 incadea
(Germany AIM: INCA)
www.incadea.com
Dealertrack
(US NASDAQ:TRAK)
www.dealertrack.com
Software 170 44 3.9x N/A N/A
Noteworthy Sellers: Azini Capital Partners
4 Assembléon
(Netherlands)
www.assembleon.com
Kulicke & Soffa Industries
(US NASDAQ:KLIC)
www.kns.com
Hardware 80 68e 1.2x N/A N/A
Noteworthy Sellers: H2 Equity Partners
5 Wireless Maingate
(Sweden)
www.wirelessmaingate.com
Sierra Wireless
(Canada TSX:SW)
www.sierrawireless.com
Internet
Services
74 16 4.6x 17 4.4x
Noteworthy Sellers: Verdane Capital
Source: The 451 Group; Capital IQ; PitchBook; Go4Venture Advisers Analysis
Key
P/R – Price / Last 12 Months Revenues
P/F – Price / Total Funding
P/F > 1x indicates an investment where all investors have made a positive return on their investment
P/F < 1x indicates poor returns for some, but early or late investor entrants may still show a positive return on investment
e: estimated

December 2014
# Target Acquirer Target Sector
Price
(€mn)
Revenues
(€mn) P/R
Funding
(€mn) P/F
1 Fotolia
(France / US)
www.fotolia.com
Adobe Systems
(US NASDAQ:ADBE)
www.adobe.com
Internet
Content &
Commerce
649 N/A N/A 162e 4.0x
e: estimated
Fotolia (France / US), operator of an online stock photography marketplace, will be acquired by Adobe Systems for
$800mn (€649mn) in cash and stock. The sellers are private equity firms Kohlberg Kravis Roberts (KKR) and TA
Associates. This acquisition will enable Adobe to offer a more complete ‘one-stop-shop’ for creative teams and
strengthen its user community.
Target Acquirer
Founded in 2005, Fotolia is a leading online marketplace
for royalty-free creative stock. Through Fotolia, marketers
and designers can purchase lower-cost photos, graphics
and HD video used to design adverts or other content.
Fotolia is currently home to over 34mn pieces of stock
content, double what it offered in 2012, and c.40% more
than its October 2013 count of 24mn. Fotolia is accessible
in 14 languages and 23 countries. It also provides
messaging tools for creative professionals to
communicate.
This deal reflects other combinations in the creative
industry. Autodesk, a 3D design software and online
community provider, acquired stock design marketplace
Creative Market in March 2014 for an undisclosed amount.
Website builder Wix has also strategically partnered with
Bigstock to provide users with stock images for their sites.
Founded in 1982, US-based Adobe Systems is a software
company with three business units: Digital Media, Digital
Marketing and Print and Publishing. Fotolia will be
integrated into Adobe’s Digital Media unit, which currently
offers Adobe Creative Suite, an all-in-one tool for digital
marketers to design creative advertising content, as well
as several related products.
Adobe Systems has more than 11,800 employees and
global revenue of $4.1bn (€3.5bn) in 2014. Its Digital
Media segment had $1.9bn (€1.6bn) of Annualised
Recurring Revenue (ARR) in the same period. It has
completed 47 acquisitions to date, with Fotolia being the
third largest behind that of Omniture (online marketing and
web analytics) and Macromedia (provider of web design
software as well as the Flash protocol) for €1.1bn and
€2.8bn in September 2009 and April 2005, respectively.
Noteworthy Sellers
KKR became involved with Fotolia through a $150mn (€121mn) investment for 50% of the company (with which it
provided another €150mn in senior debt alongside several banks, arranged through KKR Capital, its debt and equity
financing arm) in June 2012. This was in part a secondary transaction which saw management and TA Associates selling
part of their stakes. TA Associates made its initial growth equity investment in May 2009. While the exact size of that deal
was not confirmed, the size was suggested to be between $50mn (€37mn) to $100mn (€74mn) by the Financial Times.
US-based KKR (AUM €74.5bn) is a listed (NYSE:KKR) investment firm specialising in leveraged buyouts. KKR, which
invests globally, also manages investments across multiple asset classes including capital markets, credit, energy,
hedge funds, infrastructure and real estate. The firm last featured in our September 2014 Bulletin for its €950mn sale of
Versatel, a German data, Virtual Private Network (VPN) and voice provider. The sale of Fotolia is the latest of a string of
recent exits for KKR, which according to the Financial Times, are also intended to facilitate raising €3bn for its new
European fund. This happens at the same time as its previous $6bn (€5bn) buyout fund (raised in 2008) ran out of
money. In July 2014, it sold its 35% stake in Wild Flavors (a German natural food ingredient maker), and in March 2014 it
sold its 49.9% stake in Avincis (a helicopter service provider) for 2.5x its initial investment.
Founded in 1968, TA Associates (€1.3bn (2013); AUM €13.2bn) is a private equity firm. With a team of 80 staff split
across offices in Boston, Hong Kong, London, Menlo Park and Mumbai, it has invested in over 440 companies around
the world. It specialises in buyouts and minority recapitalisations of profitable growth companies, in sectors including
business services, consumer, financial services, healthcare and technology. It typically invests between $50mn (€37mn)
and $500mn (€368mn) in equity, and/or between $10mn (€7mn) and $50mn (€37mn) in subordinated debt, in
businesses valued between $150mn (€121mn) and $3bn (€2.4bn).TA Associates last featured in our June 2014 Bulletin
for its €173mn exit of M and M Direct, an online discount apparel and footwear retailer. Before that it featured in March
2012 when it sold hedge fund management software and services provider GlobeOp Financial Services (LSE:GO) to
financial sector software and business process outsourcing provider SS&C Technologies (NASDAQ:SSNC) for €623mn.

December 2014
# Target Acquirer
Target
Sector
Price
(€mn)
Revenues
(€mn) P/R
Funding
(€mn) P/F
2 Intergenia
(Germany)
www.intergenia.de
Host Europe
(UK)
www.heg.com
Internet
Services
210 30 7.0x N/A N/A
Intergenia (Germany), a provider of web hosting and server solutions, will be acquired by Host Europe for €210mn in
cash. The seller is UK-based private equity firm Oakley Capital (AIM:OCL), previously an investor in Host Europe
before selling its stake to Montagu Private Equity in September 2010. This acquisition will enable Host Europe to further
consolidate its position in the European managed hosting market. Furthermore, Host Europe has specifically cited
Intergenia’s “complementary product range and position as a market leader in their field” as key drivers for the deal.
Target Acquirer
Founded in 1999 and headquartered in Cologne,
Germany, Intergenia is a provider of web hosting and
server solutions, predominantly to SMEs.
The company provides its products and services through a
portfolio of brands: internet24 (a German ISP), PlusServer,
Server4You, serverloft, Synergetic Technology and
Unmetered.com. These include cloud hosting, domains,
managed hosting and reseller hosting.
Intergenia’s key competitive advantage is its Strasbourg
data centre datadock. The low water temperature (c. 12°C)
and groundwater richness of the area minimise the need
for water cooling and sourcing; typically a significant
operating cost for a data centre. datadock has been
recognised as Europe’s “greenest data centre” and
achieves a PUE (Power Usage Efficiency) of 1.18,
compared to an industry average of 1.62.
The company also organises conferences for the hosting
and cloud services industry via its subsidiary
WorldHostingDays, with more than 6k people attending its
flagship WHD.global event in Germany last year.
Intergenia hosts more than 2mn active websites and c. 40k
customer servers across its two data centres in France
and St. Louis, US. The company employs more than 50
staff across its offices in Germany and the US.
Founded in 1997 and headquartered in London, UK, Host
Europe provides colocation and web application hosting
services to businesses, with a focus on SMEs.
The company offers an end-to-end product suite through
its portfolio of brands: 123-reg, Domainbox,
domainFACTORY, Domainmonster.com, Heart Internet,
Host Europe, RedCoruna and Webfusion. These include
a range of application hosting, cloud hosting, domain
registration, managed hosting and reseller hosting.
Host Europe has primarily grown through acquisitions,
completing eight transactions in the last four years, under
the buy-and-build strategies of its previous (Oakley Capital
and Montagu Private Equity) and current (Cinven) private
equity owners. Most recently, it acquired Sign-up.to in
August 2014, a UK-based email marketing platform, as
part of its expansion into the hosted SaaS application
market.
The company operates more than 6mn domains for c.
1.7mn customers (c. 11% year-on-year growth), and its
123-reg brand is the largest domain registrar in the UK.
Host Europe currently has more than 500 employees
across its offices in Austria, Germany, Spain, Switzerland,
the UK and the US. It reported revenues of €143mn (13%
year-on-year growth) and EBITDA of €54mn (c. 38%
margin) for its fiscal year ending December 2013.
Noteworthy Sellers
Oakley Capital (€288mn (2007); AUM €912mn) is a UK-based mid-market private equity firm that was founded in 2007
by Peter Dubens, best known for consolidating 14 telecoms and internet businesses between 2002 and 2007 to form
Pipex. The firm typically seeks to invest between €20mn and €60mn in companies within the TMT and consumer
products sectors, located in the UK and Western Europe, and with enterprise values of between €40mn and €150mn.
The firm last featured in our Bulletin in March 2011 for its participation in Dutch leisure deal auction platform Emesa’s
€11.9mn late-stage fundraising.
Oakley Capital acquired a 51% stake in Intergenia in November 2011 for £40mn (€46.3mn), having identified the
company as being at an attractive point in its infrastructure investment cycle following the completion of two new data
centres. Interestingly, Oakley Capital was previously an owner of Host Europe, which it sold to Montagu Private Equity in
September 2010 in a €267mn MBO.

December 2014
# Target Acquirer
Target
Sector
Price
(€mn)
Revenues
(€mn) P/R
Funding
(€mn) P/F
3 incadea
(Germany AIM:INCA)
www.incadea.com
Dealertrack
(US NASDAQ:TRAK)
www.dealertrack.com
Software 170 44 3.9x N/A N/A
incadea (Germany) a provider of software and services to the automobile industry, will be acquired by Dealertrack for
€170mn. The seller is UK-based private equity firm Azini Capital Partners. Upon completion of the deal, Dealertrack
intends to de-list incadea from the LSE: AIM with immediate effect. Dealertrack has cited international expansion as this
acquisition’s primary motivator. Specifically, it has stated that acquiring incadea will allow the company to “create a
global footprint with a strong base of installed international customers in Europe, Asia and Latin America; further develop
strong, international relationships and cross-selling opportunities with key OEMs; and expand Dealertrack’s total
addressable market.”
Target Acquirer
Founded in 2000, incadea has c. 500 employees and is
headquartered in Munich, Germany. The company
provides a range of enterprise software and services
exclusively to the automobile industry.
Its software is segmented into CRM systems, Dealer
Management Systems (DMS – software which allows car
dealerships to manage internal processes such as order
processing, purchasing car parts and managing vehicle
inventory), and Business Intelligence. Like most enterprise
software providers incadea’s services include consulting /
project management and training.
The company has operations in 87 countries (its software
is available in 21 languages), serves c. 70,000 end-users
and is used by more than 2,400 automotive dealerships.
Its notable customers include Bosch, BMW, Ford,
Mercedes-Benz, Peugeot, Scania, Toyota and
Volkswagen.
Despite being a German company, Incadea listed on the
London Stock Exchange’s AIM market in May 2012 to
raise £38mn (€50mn), stating “We are an international
provider focusing on Brazil, Russia, India and China.
London is the only market place that has that international
flavour”. With a market cap of £117mn (€154mn), the
company reported LTM revenues (as of June 2014) of
$51mn (€44mn; 21% year-on-year growth) and EBITDA of
$3.5mn (€3.0mn; c. 7% margin).
Founded in 2001, Dealertrack is headquartered in New
York, US and has c. 2,000 employees. The company
provides a range of web-based enterprise software to the
automotive industry.
The company’s offerings are segmented into: Digital
Marketing Software (web-design and digital advertising
software); DMS (offered for both franchised and
independent car dealerships); Lender Solutions (software
for car loan providers, such as digital contract processing
services); Sales, Finance and Insurance Solutions (ERP
systems enabling dealers to optimise in-store / online sales
and financing processes); and Registration Solutions –
online vehicle registration services for dealers.
Notably, the company claims to provide the industry’s
largest online credit application network, which connects c.
20,000 dealers with more than 1,500 lenders.
incadea contributes to Dealertrack’s recent expansion
strategy – the company has made eight acquisitions (all
software providers) in the last two years (one of which,
Dealer.com, we covered in our December 2013 Bulletin).
Interestingly, incadea marks Dealertrack’s only acquisition
of a non-US company in the last 2 years. With a market
cap of $2.1bn (€1.8bn), Dealertrack reported LTM
revenues (as of September 2014) of $743mn (€641mn;
54% year-on-year growth) and EBITDA of $97mn (€84mn;
c. 13% margin).
Noteworthy Sellers
Azini Capital Partners (€86mn (2014); AUM €260mn) is a secondaries private equity firm which last featured in our
September 2013 Bulletin for its role as a seller in Tungsten’s €116mn acquisition of e-invoicing network provider OB10.
Since then the firm has raised its third fund – Azini 3: $100mn (€81mn). Azini specialises in direct portfolio secondary
transactions (for instance it acquired the remaining venture portfolio from Apax in November 2010) and has increasingly
got involved in single direct secondary deals, specifically stating its focus as “acquiring shareholdings in growth-stage
private and small-cap public technology companies from historical investors and shareholders”. The firm currently holds
a portfolio of 10 companies. Notably, this includes music-recognition app provider Shazam, which Azini became involved
in via its acquisition of Lynx Capital Ventures from Bear Sterns in August 2008. Founded in 2005, the company is
headquartered in London, UK.

December 2014
# Target Acquirer
Target
Sector
Price
(€mn)
Revenues
(€mn) P/R
Funding
(€mn) P/F
4 Assembléon
(Netherlands)
www.assembleon.com
Kulicke & Soffa Industries
(US NASDAQ:KLIC)
www.kns.com
Hardware 80 68e 1.2x N/A N/A
e: 2014 estimated revenues
Assembléon (Netherlands), a provider of assembly equipment and services for the backend semiconductor market (the
second part of integrated circuit (IC) fabrication where the individual devices (e.g. capacitors, resistors, transistors) get
interconnected with wiring on the wafer), will be acquired by Kulicke & Soffa Industries for €80mn in cash. The seller
is private equity firm H2 Equity Partners. This acquisition will strengthen Kulicke & Soffa Industries’ position in the
automotive and industrial markets by increasing its product portfolio and customer base.
Target Acquirer
Assembléon (formerly known as Philips EMT until 2001
when it intended to IPO on NASDAQ) was founded in 1984
as an internal supplier of pick-and-place machinery
(machines used to place surface-mount devices onto a
printed circuit board) to the Philips Consumer Electronics
division.
The company now provides a range of assembly
equipment and services for the backend semiconductor
market. This includes high-speed one-machine solutions
combining flip chip mounting (a method for interconnecting
semiconductor devices, such as IC chips) with passive
component placement (a method for placing electrical
components on printed circuit boards) and pick-and-place
process machines. Additionally, it provides software to
improve factories’ productivity, as well as services such as
implementation and optimisation of manufacturing lines.
Its solutions are used in a broad range of applications such
as memory manufacturing, safety-critical applications (e.g.
automotive, medical and military), as well as mobile and
consumer products manufacturing.
The company employs 501 staff across offices in China,
Netherlands and the US, and reached estimated revenues
of c. $90mn (€68mn) in 2014.
Founded in 1951, Kulicke & Soffa Industries
(NASDAQ:KLIC) is a global designer and manufacturer of
semiconductor and LED assembly equipment.
The company provides a range of manufacturing
equipment and tools for high precision manufacturing
applications such as die-stacking (for 3D integrated chips),
copper and gold ball bonding, and packaging for
semiconductors and LEDs.
Customers include automotive electronics suppliers,
contract manufacturers, integrated device manufacturers
and industrial manufacturers providing chips used in
products such as computers, LED TVs, pacemakers,
smartphones and tablets. The company has a blue-chip
customer base including ST Microelectronics
(ENXTPA:STM) and Texas Instruments (NASDAQ:TXN).
Kulicke & Soffa Industries operates manufacturing facilities
in China, Malaysia and Singapore, and employs c. 2,300
staff globally. It reached revenues of c. €428mn in 2014
(6% year-on-year growth) and c. €68mn EBITDA (16%
margin).
Noteworthy Sellers
This is the first time that H2 Equity Partners (€88mn (2011); AUM €500mn) appears in our Bulletin. It is a Netherlands-
based private equity firm targeting mid-sized companies headquartered in the Benelux, Germany and the UK, with sales
of up to €500mn. H2 Equity Partners typically holds its investments between 5 and 7 years, and its current portfolio
includes 14 companies mainly from the distribution (4), services (4) and manufacturing (3) sectors. Additionally to
Amsterdam, the company has offices in London.
H2 Equity Partners became involved in Assembléon in December 2010, when it acquired an 80% stake (for an
undisclosed amount) from Philips Electronics (ENXTAM:PHIA).

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

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

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