Top Ten Digital M&A Deals For 2010 Editor’s note: As the capital markets heat up and the economy continues to rebound, the deal flow is starting to open up again. We’ve already given you our top ten IPO candidates for 2010. In this guest post, Kelly Porter, an M&A expert at Woodside Capital Partners, proposes ten digital media deals he’d like to see. Digital media M&A activity is expected to pick up in 2010—big acquirers have significant cash on their balance sheets, share prices are up, and many good acquisition candidates are on the landscape. 1. YouTube arguably holds the highest potential of Google’s major growth initiatives, capturing about 38% of video viewing on the web and serving more than 1 billion streams daily. 2. Cisco’s pursuit of enterprise communications is important, and LinkedIn would be a natural and powerful extension of this strategy. 3. As many music services struggle, Pandora has reportedly skyrocketed to 40 million registered users and is adding 600,000 new users per week. 4. 5. 6. 7. 8. 9.
Done deal: Critical Path acquires Shozu, CEO Chris Wade stays on Our earlier report about Critical Path buying mobile services startup ShoZu turns out to have been right on the money. Tomorrow morning, both companies will jointly announce that they have come to an agreement for Critical Path to acquire all of ShoZu for an undisclosed sum. We’re trying to get a hold of the price the London company, which was backed by $36 million in venture capital, sold for. The release is below, but here are more details, including some deal terms: ShoZu was founded back in 2001 and essentially enables people from around the work to connect with other people by exchanging video, pictures and commentary between mobile devices and social networks, photo sharing sites and information resources. Critical Path’s Memova suite of applications and services is also built to let people communicate and share with each other, but its strategy consists of offering its software as a white-label solution for mobile carriers and ISPs rather than targeting consumers directly.
The Dark Side of the Late 2009 M&A Surge With the year—and decade—coming to a close, the business press has been awash with stories about just how lousy the ‘00s were. As Paul Krugman details in the New York Times, it was a decade with a tiny amount of job creation, and the first decade on record where private-sector jobs shrunk. The typical family got no economic boost at all. And when the volatility rollercoaster ended there was also no appreciation in home prices and zero gains on stocks. That pain was felt by venture capitalists as well. Dow Jones VentureSource is releasing its year-end liquidity numbers for 1999 this morning and no surprise—it’s just another data point nail in the coffin. At a high level you can put a good spin on the facts: In the fourth quarter acquisitions rebounded mightily. But as frequently happens in quarter-to-quarter surveys, that $100 million number was skewed greatly by a few large deals, most notably, Zappos’s $1.2 billion purchase by Amazon. 1. 2. 3. I’m not blaming investors.
Eyeka raises €3 million for crowd-sourcing ad campaigns [France] Eyeka, which connects brands and creative consumers, has raised €3 million in a second round of financing. The company already had €5 million in backing in 2006 with Ventech, DN Capital and SFR Developpement, while the company was focused on a platform to enhance pictures and videos management from mobiles. For this new round, previous investors are joined by French VC I-Source. This new round is to accelerate their international development and develop new product. Essentially speaking it’s a platform for corwd-sourcing ad campaigns for ad agencies and brands. Eyeka is one of the leaders in the new wave of the “consumer engagement” business, as it’s being called. Eyeka is based in Paris and Singapore (20 employees and 5 employees) and they’ve announced [PDF] that they’ll soon open an office in London. Eyeka CEO François Petavy announced in an interview they could have reached break-even but preferred to accelerate and invest.
Valuing early stage companies | Startable - Healy Jones' & Prasa Since this is my first post as a former venture capitalist I thought it might be interesting to answer a one of the more… opaque issues in venture financing. Two of the most frequent questions I got as a VC from entrepreneurs were “how much is my company worth” and “how do venture capitalists value my company?” The truth is that the answer has nothing to do with DCF’s or other business school theories, but instead is based around what the VC thinks/needs to return to their fund from that particular investment. Series A valuations Series A* valuations are usually based on percentages – as in, how much of the company does the venture capital fund want to own. Getting a higher valuation Strange as it sounds, this does imply that the more you raise the higher the valuation. Have a name-brand management team. The rational So why are valuations dependant mainly on percentage of the startup owned? The VCs are also thinking about how much of the company is owned by the management team.
How eBuddy’s Mobile Monetization Strategy Helped It Turn A Profi For the past four months, Amsterdam-based eBuddy has turned a profit, CEO Jan-Joost Rueb tells me, by offering advertising-supported services for free in combination with sales of a premium iPhone application. The company, backed by 11.5 million Euros in venture capital from Lowland Capital Partners and Prime Technology Ventures, markets a Web-based social network and instant messaging aggregator that enables people to sign in to their service once and stay connected to people through various platforms in one single interface where all of them are centralized. It also offers a number of ways for people to use the service on their mobile phones, through a mobile web service, a Java-based messenger client and applications for iPhone and Android. (Keep reading if you want to try their premium iPhone app for free, by the way) Rueb informs me that the J2ME client in particular has seen phenomenal success, recently surpassing 50 million downloads.
You Don’t Mean Average, You Mean Median Every quarter, without fail, a bunch of articles appear talking about the venture capital industries investment pace as a result of the PWC MoneyTree report. I used to get calls from all of the Denver / Boulder area reporters about my thoughts on these – that eventually stopped when I started responding “who gives a fuck?” A few days ago I got a note from Steve Murchie about his new blog titled Angels and Pinheads. I’m glad Steve is blogging about this as he’s got plenty of experience and thoughts around the dynamics of angel investors – some that I agree with and some that I don’t. Regardless, my view is that there more there is out there, the better, as long as people engage in the conversation. In his post Mind the Gap he made an assertion that “the VC industry has effectively stopped investing in seed stage ($500K and less) and startup-stage ($2M and less) opportunities.” Steve’s response to the Startup/Seed “Average Deal Size” was “WTF??!” I’m still feeling generous (e.g.
Social Network For Traders Currensee Raises $8 Million Social network for currency traders Currensee has raised $8M in Series B funding led by prior backer Northbridge Venture Partners and joined by new investor Egan-Managed Capital. The company had earlier raised $6 million from Northbridge Venture Partners, but $2 million of the Series A round (raised in October 2009) was converted to Series B terms as part of the deal. Thus, this round brings the total of financing for the company to $12 million. Currensee allows members of its trader network to see each other’s trades and positions, strategies and performance in real-time, enabling them to make more informed decisions. The company says its network boasts traders from over 70 different countries, and that its platform supports over 100 brokers. The company recently launched Currensee Marketplace, released full MT4 support, a Tweet My Trades feature and a partnership with Thomson Reuters IFR Markets. To a degree, the company competes with StockTwits, which has raised $4.6 million to date.
Top Tech Acquisitions Of 2009 We track a lot of acquisitions on CrunchBase. At the beginning of 2009, acquisitions were at a standstill. But as the economy begrudgingly roused itself from recession, the deal flow started to pick up in the summer, and then rebounded more in the third quarter. We’ll update the list if necessary at the end of the year (for instance, we don’t include Yelp in our list because it is not yet final), but it is not likely to change by much. The largest announced deal, Oracle’s $7.4 billion purchase of Sun Microsystems, is still awaiting regulatory approval. Some of the more significant deals in terms of potential market impact include Amazon’s $1.2 billion shoe-buying spree with Zappos (No. 14), Google’s $750 million acquisition of mobile ad network AdMob (No. 20), and Cisco’s $590 million Pure Digital/Flip Video deal (No. 21). The top 30 tech M&A deals are below:
Axel Springer acquires majority stake in kaufDa mobile coupons startup for $40 million kaufDa is one of Germany’s leading “promotion search” sites. What’s that? It helps you look for the best sales and mobile couponing running near where you live. Admittedly it doesn’t sound that exciting a business. The story behind the price is that traditional publishing companies are quite simply terrified of kaufDA. And you can talk up Foursquare et al all you like. Some 30% of traffic is mobile already: kaufDA’s iPhone Navigator App has been installed on over 15% of all iPhones and over 20% of all iPads in Germany. kaufDA’s app hit the No. 1 position of most downloaded apps in Apple’s AppStore for several weeks in the past, both on iPhone and iPad. This location based targetting delivers high-value ad-contacts to retailers and charges on a CPC basis. Launched in January 2009, it was founded in late 2008 by recent college graduates Thomas Frieling, Tim Marbach and Christian Gaiser. Dr.
Amended: Twitter has NOT raised more funding. How Much Is A User Valued Out? GoWalla Worth Nearly $30 Million After Financing. Time To Make Y If you were gettin’ all antsy in the pantsies about yesterday’s launch of the LG Expo and it’s detachable projector accessory, you might be a bit bewildered right now. A full day later, AT&T’s still showing no sign of the handset. WMExperts did a bit of digging, and found out that the Expo has been delayed for at least “a few days” due to shipping issues. When this sort of stuff happens, it’s generally because a cargo ship coming from Asia had to turn around for one reason or another, or otherwise never left the port.