French medical technology maker among February’s angel investment targets

After a promising start to 2016, angel investment activity featuring targets based in Western Europe tailed off somewhat in the second half of the year. While both Q1 and Q2 surpassed their corresponding timeframes in 2015, Q3 and Q4 were unable to sustain these levels and fell somewhat short, according to Zephyr, the M&A database published by Bureau van Dijk. 2017 has started slightly better; in the first six weeks of the year some 76 deals worth EUR 173 million have been announced. If both volume and value continue on this trajectory Q1 is likely to improve on Q4 on both fronts and value should also surpass the EUR 298 million invested in Q1 2016 and Q1 2015. However, many will be hoping for an even more pronounced improvement and this will depend on the size of the individual transactions announced over the coming weeks. As always, a few deals can have a big impact on overall dealmaking levels. This is evidenced by the fact that the year’s largest European angel investment to date accounts for 15 per cent of total investment for the period.

That deal was worth EUR 26 million and featured a French target as Doctolib, which develops software to allow users to locate health practitioners and book medical appointments online, received a Series D round of funding from Piere Kosciuski-Morizet, Nicolas Brusson, Accel Management and BPI Groupe in late January. According to reports on the matter, proceeds of the deal had been earmarked for the recruitment of 150 new staff and to enable the firm to establish a presence in Germany.

As such, February represents yet another case in which a software company is targeted in the month’s largest European angel investment. The sector is by far and away the most frequently targeted by angels and in comparison, only a relatively small number of deals involve businesses in other industries. One notable exception this month involved a French company as Codesna, which has developed technology designed to conduct mathematical analysis of heart rate variability with a view to helping users manage their stress levels, received a round of funding. The firm has announced a planned EUR 400,000 injection. Of this amount it hopes to attract EUR 150,000 from crowdfunding investors using the Booster-health platform, with the remainder to be contributed by business angels and regional funds. Codesna said proceeds of the deal will be used to accelerate its growth and increase sales. The firm claims to own the most advanced technology in mathematical analysis of heart rate variability, enabling it analyse physiological markers to deliver results on the balance of the Autonomic Nervous System, particularly the effect of chronic negative emotions on the body.

Codesna is not the only medical instrument manufacturer to have piqued the interest of angel investors in recent years; on the contrary, some 93 such deals have been recorded worldwide since the beginning of 2006. The most valuable of these was worth just under EUR 40 million as vitrectomy surgery tools maker Medical Instrument Development Laboratories received a round of funding from OrbiMed Advisors, Frontline BioVentures, SB China Venture Capital, Sungent BioVenture and Allen Chao in October 2014. This was followed by another funding round, this time for California-headquartered cardiac medical devices manufacturer Twelve, which secured just under EUR 33 million from nine undisclosed US-based individuals in April 2015. Other medical instrument makers to have been targeted by angel investors since the beginning of 2006 include Invuity, CSA Medical and Cylex, all of which are headquartered in the US.

In conclusion, 2017 is off to a reasonable, if not record-breaking, start after a disappointing 12 months in 2016. January generated significant dealmaking levels in terms of European angel investments and February looks likely to perform well too. If angels continue to take part in large deals it will go some way towards boosting value back towards the highs recorded previously.

© Zephyr