March 24, 2020
Swedish boatmaker among March’s European targets of angel investment
March looks likely to decline on February’s result in terms of the volume and value of announced angel investment deals targeting companies based in Western Europe, according to Zephyr, the M&A database published by Bureau van Dijk. At the time of writing, there have been 24 such deals worth a combined EUR 43 million announced in the month so far. However, it is worth noting that there are currently still 11 days to go until the end of March, meaning the figure could increase somewhat over the coming weeks.
In terms of volume, March’s result represents a 56 per cent decline on the 55 deals signed off in February, while value slipped 85 per cent from EUR 279 million over the same timeframe. Last month’s result was up on January’s 44 deals worth EUR 212 million. It is worth noting that March 2019 was also a quiet month, relative to January and February of last year, with volume and value declining to 47 and EUR 189 million, respectively. The situation is likely to have been exacerbated this year by the spread of the Covid-19 coronavirus, which has been severely impacting on financial markets and dealmaking activity worldwide in recent weeks.
The most valuable European angel investment to have been announced worldwide during March is worth almost EUR 11 million and took the form of a Series A injection in UK mobile smart wallet application provider Argent Labs. The round was led by Paradigm, a fund managed by Sequoia Capital Operations, and also included participation from angel Robert Leshner and Index Ventures, Creandum Advisor and Firstminute Capital.
The month’s second-largest deal was valued at EUR 5 million and targeted a Swedish manufacturer of electric boats. This is fairly notable as boat builders are not typically the most popular targets for angel investors, which tend to be more drawn towards the software industry. In fact, Zephyr shows that only seven deals involving angels investing in boat builders have been announced worldwide since the start of 2006. This month’s transaction involved Lidingo-headquartered Xshore receiving a EUR 5 million investment from Peter Dahlberg. As a result of the deal, Dahlberg becomes the firm’s second investor, after founder Konrad Bergström. Proceeds of the transaction have been earmarked for continuing the development of Xshore’s high-speed 5.80 and 8.00 metre boats while simultaneously hiring new staff and improving its new facilities in Stockholm, with the ultimate goal of expanding to the UK and throughout Europe. Bergström has cited the increasing trend towards sustainability as an encouraging factor for the company.
Other boatbuilders to have been targeted by angel investors since the start of 2006 include China-based Zhuhai Yunzhou Intelligent Technology, Spanish player Bound 4 Blue and France-headquartered Iguana Yachts, although the Xshore deal is the largest angel investment in the sector on record.
As such, as we move into an increasingly uncertain period, it is difficult to predict how badly dealmaking activity will be affected, and for how long. However, we are almost sure to see declines for the foreseeable future given the ongoing spread of Covid-19 and the associated slowdown in activity this will cause. What the longer-term economic implications will be remains unclear, but March could prove to be the beginning of a period of decline.