September 4, 2017
UK shaving products retailer among those targeted by angels in August
August has so far been a fairly quiet month in terms of deals targeting European companies and involving angel investors. According to Zephyr, the M&A database published by Bureau van Dijk, there have been 14 deals worth a combined EUR 21 million announced in the month to date. At the time of writing there are still ten days to go until the end of the month, meaning it is still possible that more European angel injections will be signed off by the end of August. Nevertheless, there will be some way to go if volume and value are to reach similar levels to July 2017, when EUR 157 million was invested across 52 deals. The only month which performed better this year is March, when dealmaking worth EUR 168 million was recorded. On a quarterly basis results are more promising. Since the start of Q3 66 European angel investments worth a combined EUR 178 million have been signed off. If dealmaking continues on this trajectory value should surpass the EUR 252 million generated in Q2 and the EUR 251 million from Q3 2016, although it may fall short of Q1’s EUR 407 million.
The lack of a very large European angel investment has undoubtedly held value down in the period under review. The most valuable injection announced during August was worth just under EUR 4 million, which, while fairly large for an angel investment, is still considerably smaller than some of the top deals signed off in recent months. This transaction involved a UK company as online shaving products retailer Cornerstone Brands received a round of funding from Calculus Capital, alongside undisclosed angels. As part of the deal’s announcement the parties noted that Cornerstone intends to broaden its product range during the remainder of 2017 with a view to moving into new areas of the toiletries segment, such as shampoo and dental care. Established in 2013, Cornerstone’s customer base numbers around 140,000 across the UK, who it supplies with shaving products via an online subscription service. Founder Oliver Bridge set up the business as a result of his dislike of shopping for toiletries and the process of shaving in general, which he felt was both uncomfortable and expensive. Cornerstone has raised two previous rounds of funding; the first was in June 2015, when it announced plans to bring in GBP 500,000 via a crowdfunding platform. This was followed by a USD 1.70 million injection from undisclosed angels in November 2016.
Perhaps unsurprisingly, companies in the cosmetics, beauty supplies and perfume stores segment have not been frequently targeted by business angels in recent years; in all, 15 such deals have been announced worldwide since the beginning of 2006, with the newly-announced Cornerstone investment being the largest by some distance. Second place was taken by a EUR 780,000 injection by undisclosed angels into US-headquartered skincare and beauty products retailer Glisten, which completed in July 2013. This was closely followed by Dollar Shave Club securing EUR 760,000 from Shervin Pishevar, Dennis Phelps and David Honig, alongside the likes of Kleiner Perkins Caufield & Byers and Forerunner Ventures, who co-led the March 2012 round. Other companies in the sector to have piqued the interest of angel investors since the beginning of 2006 include US make-up and perfume retailer Beautylish, online personal hygiene products player 3FLOZ and Canadian business Well.ca.
Naturally, the software sector accounted for the lion’s share of European angel investment in August; of the month’s 14 announced deals, 13 involved companies involved in the tech field – the Cornerstone deal was the only exception. In all, three other European deals involving angel investors were announced in the sector during the month under review and featured the likes of Doozer Real Estate Systems, Mylittlejob and Glint Pay.
To conclude, although August has so far been a fairly quiet month in terms of European angel investment, there have still been a few sizeable deals announced. Further dealmaking on this level will be required if value is to maintain the levels recorded in both June and July.