April 27, 2018
French electrical instrument manufacturer targeted by angel investors in April
Q1 2018 ended positively in terms of European angel investment, notching up the most value for a first quarter on record, according to Zephyr, the M&A database published by Bureau van Dijk. In total, there were 168 deals worth a combined EUR 459 million with participation from angels and featuring Western European targets announced in Q1 2018, representing an increase of 7 per cent by value and a decrease of 7 per cent by volume from the 181 deals worth EUR 430 million signed off in Q1 2017. Value in the three-month period was also significantly higher than Q1 2016 (EUR 325 million), Q1 2015 (EUR 352 million) and Q1 2014 (EUR 130 million). However, on a quarter-on-quarter comparison, value fell 29 per cent, from EUR 643 million in Q4 2017, while value was up 17 per cent from 144 deals over the same timeframe. As 2018 has begun encouragingly, many will be hoping that Q2 can also surpass the corresponding timeframe in 2017. Just 24 days into Q2 2018, there have already been 32 angel investment deals worth a combined EUR 96 million signed off in Western Europe, which already represents 37 per cent of total Western European angel investment in Q2 2017 (EUR 260 million). If dealmaking continues on this trajectory for the next two months, value would be likely to surpass Q2 2017’s result and could help advance 2018 towards becoming a record year for angel investment.
The largest Western European angel investment announced in April so far involved Partech Partners, Index Ventures, Portag3 Ventures, Open CNP and Xavier Niel investing EUR 23 million in France-based online employee health insurance provider Alan. This was followed by Gus Castello, Andrea Partners, Fountain Healthcare Partners, Samba Tech and Panakes Partners making a EUR 20 million injection into Italian wristed micro-surgical instruments manufacturer Medical Microinstruments. These two deals were the only transactions to surpass EUR 10 million in the four weeks under review; however, there are still six days until the end of April at the time of writing, giving more time for sizable investments to be made in the region.
Interestingly, while countries such as the UK, Italy, Belgium, Spain and the Netherlands were targeted in the top deals, the majority of the month’s largest transactions featured data processing and software publishing companies, with the exception of a handful of targets, including France-based fuel cell test equipment manufacturer Pragma Industries, which raised EUR 2 million in funds from Les Business Angels des Grandes Ecoles. Other interesting targets included French drones control software provider Uavia and Netherlands-based laser-based monochrome inkless printing group Tocano.
This is a relatively unusual area for angels to invest in; there have only been seven angel investments into the electrical instrument manufacturing industry announced worldwide since the start of 2006, with the aforementioned EUR 2 million injection into Pragma Industries being the largest. It was followed by an EUR 1 million investment in US-based circuit level electrical hosted data service provider OutSmart Power Systems by Bainco International Investors, Clean Energy Venture Group and Manifold Products in 2009. Pragma Industries was also targeted in the fourth-largest deal in the sector, with Oséo, Finaqui, Les Business Angels des Grandes Ecoles and Capitole Angels investing less than EUR 1 million in 2009. The third-largest transaction also involved a French company as smart electricity meter Smart Impulse received EUR 1 million from business angels and Vinteor.
In conclusion, 2018 has started positively and Q2 2018 is on track to exceed the same timeframe last year if the opening 24 days of the quarter are any indication. With Q1 already exceeding expectations and becoming the largest first quarter on record, a small number of sizeable injections into Western Europe could help accelerate dealmaking and push the year towards becoming one of the most significant 12-month periods in terms of angel investment.