Balderton Capital – News articles

What are Harry Briggs thoughts on investing in Stockholm start-ups?

Fri, 10 May 2013 00:00:00 +0000

What is a VC like Balderton looking for in a nordic start-up? At what stage is it good to initiate contact with Harry? What drives the disproportionate number of exiting tech start-ups in the Nordic region. What did Balderton see in TicTail (in which they invested early stage)?

http://gamechange.se/video-what-are-harry-briggs-thoughts-on-investing-in-stockholm-start-ups/

Quickly does it

Thu, 18 Apr 2013 00:00:00 +0000

FOR many shop owners, e-commerce remains a riddle. Each step, from creating an online shopfront that lures in customers to taking payment for goods, can flummox retailers selling their wares online. In many cases, intimate knowledge of such technical wizardry as Perl, PHP and MySQL databases is needed.

Enter Tictail, a ten-month-old Swedish start-up, which aims to radically simplify the process for businesses to go online. It takes no more than a few minutes before a new virtual store is ready to accept orders. Owners only need to follow a few simple steps, link their shop to a PayPal account, and set a price for their items.

The idea of automating the set-up of an online store came to Carl Waldekranz, the firm’s 26-year-old founder, when he was involved in marketing Spotify, the popular music-streaming start-up. He likens Tictail to the clean, intuitive interface used by Tumblr, a blogging platform popular with teens. Retailers, Mr Waldekranz argues, are more concerned with the products they sell than learning about technical trifles such as search engine optimisation (SEO).

His hunch seems to be correct. During its short life, Tictail has already attracted 10,000 users (and 75% of them have recommended the service to friends). So far, Sweden is its biggest base and America number two. Seed funding of €1.2m, secured in late 2012, is allowing the firm to try to boost growth in Western Europe.

All this is admirable, but not in itself extraordinary. Other products and websites also let users set up simple online shops. Etsy, a community-driven marketplace, for instance, is popular among makers of twee knick-knacks such as crocheted tea cosies. Where Tictail differentiates itself, is its continuing support for shop owners.

Tictail has a “feed”—a stream of messages—that acts as an automated adviser. Among other things, it coaxes and cajoles shop owners to tweet about their latest lines. And it reminds them to follow up with customers to ensure their packages arrived in good order—important in any customer-facing industry, but often overlooked in the rush to keep a young business afloat.

The service also aims to build loyalty and repeat custom through social-media features. Customers can “subscribe” to a store, meaning they will get messages informing them of any new products put on sale. Later this year, owners will also be able to add extensions, such as the ability to hand out discount codes to their store—which will be a way for Tictail to make money: it will charge a fee for the use of such extensions.

Like every ambitious entrepreneur, Mr Waldekranz has big plans for his product: he wants Tictail not only to become the world’s most used, but its most loved e-commerce platform, with millions of users worldwide. Whether he will get there remains to be seen, but lowering the barrier to entry for online retailing will certainly push many bricks-and-mortar businesses to move into the virtual world.

Intune Networks Wins Red Herring Top 100 Europe Award

Mon, 15 Apr 2013 00:00:00 +0000

Red Herring’s Top 100 Europe list has become a mark of distinction for identifying promising new technology companies.

“Selecting startups that show the most potential for disruption and growth is never easy,” said Alex Vieux, publisher and CEO of Red Herring. “We looked at hundreds and hundreds of candidates from all across the continent, and after much thought and debate, narrowed the list down to the Top 100 Winners. Each year, the competition gets tougher but we believe Intune Networks demonstrates the vision, drive and innovation that define a Red Herring winner.”

Red Herring’s editors were among the first to recognize that companies such as Facebook, Twitter, Google, Yahoo, Skype, Salesforce.com, YouTube, and eBay would change the technology landscape.

Ian Jenks, Intune's CEO, said, 'Intune have developed a highly disruptive switching system that will revolutionise the way we build networks. Winning the Red Herring award is a great endorsement of the impact this technology is about to have on the networking world.'

Red Herring’s editorial staff evaluated the companies on both quantitative and qualitative criteria, such as financial performance, technological innovation, management quality, overall business strategy and market penetration. This assessment was complemented by a review of the track records and standings of similar startups in the same verticals. Red Herring pride themselves on being able to 'see past the “buzz” and make the list a valuable instrument of discovery and advocacy for the most promising new business models in Europe.'

About Intune Networks Limited (www.intunenetworks.com)

Intune Networks has developed a brand-new networking technology, allowing telecom operators to scale networks in a way that is simpler to operate, uses fewer components and is far more efficient than any previous system.

Intune has invented a new way of forwarding packets over long distances, creating a distributed optical switch that can switch packets across hundreds of kilometres. Intune's technology uses tuneable LASERs to switch the packets across its system. This reduces network complexity and increases connectivity by making bandwidth instantly available to any point in the network.

Intune are a venture-backed company headquartered in Dublin, Ireland, with offices in the United States and additional research and development facilities in Belfast, UK.

Casual-game Developer Big Fish Celebrates 10 Years and 2 Billion Downloads

Wed, 27 Mar 2013 00:00:00 +0000

It’s hard to last a decade as a game developer. It’s even harder to find continued growth in the competitive field.

Casual-game developer Big Fish recorded its most successful year on record in 2012. The company generated over $220 million in revenue for the year and reached two billion total game downloads since it started in 2002.

“Last year was a successful [transition] for Big Fish,” chief executive officer Paul Thelen said in a statement. “We achieved nearly 20 percent top-line-bookings growth last year and anticipate our growth rate to accelerate throughout 2013 and 2014, largely due to our new lines of business that are now at a meaningful scale.”

Big Fish started early last decade primarily as a casual developer of PC and web games. In the last few years, the developer expanded into mobile and free-to-play.

“Mobile is our fastest growing platform and now accounts for 30 percent of total company bookings,” said Thelen. “A year ago we transitioned from a premium ‘games you own’ business model to providing more choices to our customers on how and where they want to play. More than half of our mobile bookings now come from a free-to-play business model.”

Big Fish develops its own games internally, but it also has exclusive partnerships with 140 developers around the world. The company has a huge stable of over 3,000 games, and it plans to continue pumping out new releases at a rapid pace.

“Customers continue to respond to our ever growing catalog of high-quality games and platform flexibility,” Big Fish chief financial officer Dave Stephenson said. “Virtually every one of our 3,000-plus PC and Mac games made money in 2012, and our consumer base continues to expand as they increasingly turn to us for great games to play on their iPhones, iPads, Kindles and Android tablets and phones.”

http://venturebeat.com/2013/03/27/casual-game-developer-big-fish-celebrates-10-years-and-2-billion-downloads/

5 Consumer-Driven Technologies That Will Reshape Society

Thu, 31 Jan 2013 00:00:00 +0000

Technology consumers, not companies, are driving nothing less than revolutions based on demand for alternatives to expensive dinosaur institutions. Seth Priebatsch of LevelUp predicts which will be the next titans to fall.

Technology is changing relentlessly. It always has been, but the time scale is far more compressed these days. Faster development techniques (SDKs, APIs, Frameworks), massive low-investment distribution networks (iTunes, Google Play) and near-instant fabrication (Makerbot and more) have decreased the time it takes to travel from idea to functional product.

All this means that shifts can happen faster. We’re witnessing the collapse of decades-old constructs around us almost daily. But what we don’t realize is that technology consumers, not companies, are driving these revolutions based on their casual demands. It’s not a bad thing, it’s just that people often don’t understand how much power they have until everything’s changed around them. Sometimes the changes are so gradual, people don’t even recognize the technology revolutions they create.

Most of the time “the way it’s always been” needs to be disrupted, since it’s "super old school," by which I mean centralized and generally wildly inefficient. And if there’s anything people can’t stand in a 24-7, always-on society, it’s inefficiency. Trust me, I’m one of those people (I wrote this article while learning to kite-board. It wasn’t easy.)

We’re on the brink of busting up the status quo through a citizen-engineered revolution the likes of which we’ve never seen. Here are the top 5 constructs that are being retired and rebuilt by technology even as you scroll.

1. Retired: The higher-education lecture hall. Gone are the days where you pay tens of thousands of dollars to sit in a room with thousands of other people, only to be talked at. In-person classes at universities are adapting to become more interactive in format, rather than a really expensive place to fall asleep.

Rebuilt: With massively open online courses, welcome to the 21st century lecture hall. Your classmate might be logging in from Abu Dhabi, bringing an entirely new viewpoint to the conversation. Universities like Harvard, MIT, and Stanford have started offering courses for free online, breaking down walls and giving educational opportunity to everyone, regardless of zip code or what’s in your bank account. (Perhaps I would have stuck around college a bit longer if I had something like this!)

2. Retired: The old way of designing and manufacturing physical stuff. By the time you had designed and prototyped a technical innovation in the past, chances are Apple would have already changed the shape of their iPhone (or connector or something). We needed more control and a way to innovate faster.

Rebuilt: 3-D printing. From technology hardware to medical devices, with 3-D printing, anything can be prototyped and printed in a matter of hours. The Economist calls 3-D printing a “click-to-manufacture” economy, which is quite cool because it brings us back to the basics of invention --bringing ideas to life and making things better, fast.

3. [Hopefully Soon-to-Be] Retired: Our dependence on oil for energy. It takes a long, long time to break down something as longstanding, and with as many private sector and government interests, as the energy industry. But it’s happening, as people opt for more control over our energy dependence.

Rebuilt: Electric cars and charging stations are becoming more and more prominent in cities around the country. Soon, you won’t have to worry about how far you can make it without a charge, as plugs replace pumps nationwide.

4. Retired: Our payment infrastructure. We’re relying on incredibly out-of-date technology, as well as credit card companies that charge merchants the largest invisible tax on our economy: interchange. Every purchase you make with a credit card costs a merchant a fraction of that purchase, which up until now, they’ve just chalked up as a loss.

Rebuilt: Merchants are realizing that it shouldn’t cost money to move money. Instead of paying a tax for nothing in particular, merchants are exploring mobile payment platforms that offer some sort of real value beyond just the transaction (in the form of getting new customers in the door and keeping the ones they have). Consumers and merchants are experiencing the simple yet powerful benefit of saving money.

5. Retired: The digital divide. It used to be that rural areas simply didn’t have as good of access to the Internet as urban areas. That was a major problem. Luckily we don’t have to rely on the speed of broadband anymore to solve this problem.

Rebuilt: Mobile infrastructures are leveling the playing field, giving more equal access to the Internet in countries and areas of the United States that fell within the realm of the digitally divided. Add to this trend the much lower cost of mobile devices and tablets (versus a desktop or laptop device) and the opportunity to access technology becomes that much more possible.

So, what do you say? This year, let’s break down some new walls just because we can. After all, changing the status quo is the number one thing that gets engineers like me excited. Let’s power a revolution of consumer choice.

Seth Priebatsch is the creator of social gaming site SCVNGR and the mobile-payment platform LevelUp.

Shining a Spotlight on Venture Capital

Wed, 30 Jan 2013 00:00:00 +0000

European tech entrepreneurs often look enviously at their U.S. counterparts when it comes to their venture capital backers. European VCs are parsimonious and risk-averse, they complain, compared with the deals of their U.S. counterparts.

But do their complaints stack up? The Dow Jones VentureSource report on the state of European venture capital goes a long way to answering those two charges. If you don't want to read any more the answers are: yes and possibly.

The usual health warnings have to be applied to this extremely rich report (Dow Jones is the parent company of The Wall Street Journal). The way the data are categorized in the survey is by market sector, not whether a company is a tech company. A wide net has been cast to try to pick up all tech companies, including e-commerce and services, so it is possible that, for example, retail figures will include bricks-and-mortar deals as well. Furthermore, semiconductor deals have been excluded from the figures.

Finally, while data are available back to 2000, the early years have not been included as the VC industry was still reeling from the bursting of the dot-com bubble. Year Zero is 2003.

There is also the caveat that the nature of VC deals is shifting and the old demarcations between seed funding and the next level up, Series A funding, may be less clear. "The borders between seed and series A have really fudged," said Ciaran O'Leary, a Berlin-based partner at Earlybird Venture Capital. "If a startup has maybe a few thousand users and is generating cash, but they only want to raise $700k, is that a seed, or a series A, round?"

With those caveats in mind, are European tech deals lower value? The answer is yes—and by quite a lot. While the average seed round is broadly the same in the U.S. and Europe, there is a substantial difference in all other rounds.

Averaging data from 2003-2012 the average series A deal in the U.S. is $5.3 million. That compares with just $2.1 million in Europe. If we look at just the data for 2012, the difference has narrowed, but that is more due to U.S. rounds getting smaller ($4.4 million) rather than European deals getting much bigger.

That means compared with their U.S. counterparts, European entrepreneurs have to survive on roughly half as much capital, at the most crucial stage of a startup's existence. Given that staffing accounts for roughly 70% of a startup's costs, that means smaller teams in Europe. (This does raise the question—would it be better for the European ecosystem if there were fewer startups? If half as many startups across Europe received the early-stage money, that would mean the remaining ones should, all other things being equal, get U.S.-level funding. That is an argument for another day.)

The picture for second- and later-stage deals is more complicated. Sadly the differential between the value of U.S. and European deals is just as pronounced. The nine-year average on second-round deals in the U.S. is $8.9 million compared with just $3.4 million in Europe. On later stage deals the difference is even greater: $12.8 million in the U.S. to just $5.3 million in Europe. But the data are skewed by some very anemic deals in the start of the reporting period.

If we look instead at more recent data the differences are narrowing as European deals start to pick up in the second half of the period. In 2012 an average U.S. second round deal was actually below the nine year average, at $8.1 million, while in Europe an average 2012 deal had gone up to $5 million. The change in later stage deals is even more pronounced.

From 2010 to 2012 the average European later stage deal size had more than doubled to $11.4 million by 2012, still some way off the $15.6 million that U.S. companies received in 2012, but a quite considerably healthier picture.

Over the nine year period, the slice of the total European funding pie that went to later stage deals grew from 39% in 2003 to 59% in 2012. (A similar, if not as pronounced, trend is visible in the U.S.) Does that mean European VCs are more risk-averse—later-stage deals being typically less risky? Or is something else going on? The data aren't clear. The number of deals has gone down; the size of each deal has gone up.

However, if the complaint is that companies are starved of cash at an early stage, then the same cannot be said of later-stage companies, according to Mr. O'Leary. "I feel way more comfortable that the winners that Europe is producing are getting the necessary capital. European VCs are willing to write larger tickets. We have better companies than we have had before."

The data doesn't show how much of the larger deals are from European VCs and how much from U.S. investors taking an interest in the growing European ecosystem.

According to Barry Maloney, founder of Balderton Capital, the fact that later-stage deals are taking a bigger slice may be a reflection of the maturing Europe startup ecosystem. "The valuation of the European tech companies for later-stage companies, to a certain extent, will be correlated with companies in the U.S. As the U.S. market has risen, the value of deals in Europe become more expensive. We have definitely seen that."

Are European VCs more risk-averse? Possibly. What the survey shows is how well those European companies that have made it have done, surviving on what in comparison to U.S. startups are if not starvation rations, then a diet of tuna sandwiches and value yogurt. Perhaps U.S. entrepreneurs might visit Europe to learn how to do things on a shoestring.

http://online.wsj.com/article/SB10001424127887323701904578274151865019058.html?KEYWORDS=venture+capital

The Hut Buys Cycling Retailer Probikekit.com

Tue, 29 Jan 2013 00:00:00 +0000

The cycling retail boom driven by the success of the London 2012 Olympics has continued after The Hut Group, which is backed by Sir Stuart Rose and Sir Terry Leahy, acquired accessories business probikekit.com.

The Hut, which owns a range of online brands including Zavvi.com and nutrition supplements site MyProtein.com, said in a statement that probikekit.com is an “outstanding brand”.

Probikekit.com was founded by a collection of cycling enthusiasts in the Cumbrian town of Kendal in 1998. It was then acquired by investment group Encore Capital.

The deal with The Hut follows a rise in sales for cycling retailers such as Halfords and Wiggle on the back of the success of Sir Bradley Wiggins, Sir Chris Hoy, and Victoria Pendleton at the Tour de France and London Olympics.

Matthew Moulding, chief executive of The Hut, said: “Following a review of the sector we identified PBK as the outstanding brand for acquisition given its heritage, the breadth and longevity of its supplier relationships and its international customer reach.

“We are very excited about the prospect of combining the specialist know-how of PBK with The Hut’s ecommerce expertise to compete in a sector growing at 15pc a year.”The Hut also confirmed that the family behind River Island has invested in the company.

It is understood that the Lewis family has invested around £9m into The Hut as part of a deal that was first revealed by The Sunday Telegraph. Clive Lewis, deputy chairman of River Island, will also take a seat on the board of the multi-website retailer.

The Lewis family is the latest in a line of high-profile retail investors to back The Hut, which is thought to be preparing for a stock market flotation.

As well as Sir Stuart and Sir Terry, the former chief executives of Marks & Spencer and Tesco respectively, the venture capital firm Balderton Capital has invested in the company.

Angus Munro, chairman of The Hut, said: “Clive’s retailing experience will be invaluable as the group continues to expand its product offering, across third party and proprietary own brands.”

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9835391/The-Hut-buys-cycling-retailer-probikekit.com.html

Kobalt Launches Label Services Division, Preps New Nick Cave & The Bad Seeds Release

Tue, 22 Jan 2013 00:00:00 +0000

Not only did Kobalt sign a deal with Dave Grohl this week, the company is also formally introducing a new Label Services division that will handle digital and physical releases for independent artists as well as Kobalt clients. Though the division has quietly released several albums in recent months, most notably gospel act Larry Callahan & Selected of God's The Evolution II, it will gain major attention next month with the release of Nick Cave and the Bad Seeds' Push the Sky Away, due out Feb. 18 through Kobalt Label Services (KLS) and Cave's Bad Seed Ltd.

The fifteenth studio album by Nick Cave and the Bad Seeds, Push the Sky Away is also Cave's first release without longtime label Mute, with whom he parted ways after Mute parent EMI was sold to Universal. KLS will oversee global distribution of the release via digital retail, direct-to-consumer, physical retail and subscription services, as well as handle all marketing, promotion, advanced data analytics, royalty tracking and synch licensing duties, among other services. The album will be released on CD, limited CD-DVD, vinyl and digital formats, with KLS' marketing efforts focused on boosting Cave's profile in North America and among digital music consumers.

"The opportunity is great with Nick...The last record was barely double digits as far as the percentage of digital in overall sales," says Richard Sanders, president of Kobalt Music Group, of Cave's last Mute record, Dig, Lazarus, Dig!!!.

The release will also be supported by four intimate concerts from Nick Cave & The Bad Seeds in London (Feb. 10), Paris (Feb. 11), Berlin (Feb. 13) and Los Angeles (Feb. 21), featuring strings and a choir. Each show will feature the screening of a short film about the making of Push the Sky Away from filmmakers Iain Forsyth and Jane Pollard. The shows will likely by streamed by soon-to-be-announced distribution partners.

Cave's navigation of the D.I.Y. route for the first time is also aided by his manager, ATC's Brian Message, who also guided his client Radiohead through its groundbreaking pay-what-you-want release of 2007's In Rainbows. "Brian's very forward thinking, and working with Radiohead and Sarah Brightman and others to do things differently," Sanders says. "He isn't afraid of the D.I.Y. model and he was comfortable with our model."

Added Message in a statement, "The Push The Sky Away album campaign represents the start of a new, exciting and inspiring chapter for Nick, both creatively and in business. The skills and expertise KLS has to offer across the globe, especially in the digital space, gives us a service provider that best fits our expanding requirements."

KLS is the latest example of a non-record label adding its own label-services divisions, from distributors like RED to publishers like Primary Wave and Nashville's Sea Gayle to management companies like The Collective. But Sanders wants Kobalt's to be industry leading by putting up "a fairly substantial capital investment from our part" for marketing and distribution to a rev-share that's "certainly far better than the 85/15 you'd get from a major label or a major indie. Clients retain 100% control, and the terms are quite short. It's one record for three years. Completely customizable to either a local release or a regional release or territory-by-territory release."

http://www.billboard.com/biz/articles/news/digital-and-mobile/1518872/exclusive-kobalt-launches-label-services-division-preps

Balderton Invests In Rentify

Fri, 11 Jan 2013 00:00:00 +0000

London, January 11th 2013 Rentify, the UK's leading software platform for landlords, has secured a £2 million Series A investment from Balderton Capital, the leading venture capital investor in Europe.

Launched in 2012, Rentify helps landlords to market, manage, and make money from their properties, and has already delivered exceptional growth. Since founding, the Software as a Service platform has attracted 60,000 users with over £100million of rental properties passing through Rentify’s systems.

George Spencer, CEO of Rentify, comments: “We are thrilled to be backed by Balderton, who share our passionate belief that many landlords and tenants are not well served by existing services in this market. We want to bring transparency and honesty to a rapidly growing sector that badly needs it.”

The investment will be used to grow Rentify’s central London team and accelerate the development of new products and services for landlords and tenants.

Balderton Capital has a history of investing in long-lasting, innovative, and profitable companies including HouseTrip, Wonga, Betfair and Lovefilm. Tim Bunting, Partner at Balderton Capital comments: “We’re investing in Rentify because it’s an exceptional team and undoubtedly the leading company in this space, having already signed up an impressive number of users in under a year. Rentify fits the bill for Balderton as a fast-growing, disruptive company that is bringing a fresh, new way for doing business to a large and established market. We believe that Rentify will transform the

rental market in the UK.”

- ends -

About Rentify:

Rentify is the UK's leading online service for landlords, helping them to market, manage, and make money from their properties. The company was established in 2011 and their first services went live in 2012.

Rentify currently provides a letting service to landlords which combines marketing, viewing management, contracts, and full referencing on tenants. It also introduced a popular full-management service in October of 2012. For more information, please contact Chris Pateman on 0203 475 5117, or email press@rentify.com

About Balderton Capital

Balderton Capital is one of the leading venture capital firms in Europe. Based in London, Balderton manages $1.9 billion in committed venture capital, and has invested in over 100 companies, principally in Europe but also in the US and Asia. Balderton focuses on the technology sector and notable investments include YOOX Group (the online retailer of leading fashion brands, listed in December 2009), bebo (acquired by AOL for $850m), Betfair (floated on the LSE in October 2010), Icera (sold to Nvidia for $367m), MySQL (acquired by Sun Microsystems for $1 billion), Lovefilm (sold to Amazon in January 2010), The Hut Group (one of Europe’s fast growing online retailers), WorldStores (UK’s largest online furniture & homewares retailer), Wonga (UK’s leading on-line short term lender), KupiVIP (Russia’s first online shopping club) and wooga (Europe’s leading social games developer). For more information, please visit www.balderton.com

Media Contacts

Daniel Smith / Nick Keegan / Josh Feldberg

Rentify

E: press@rentify.com

T: +44 (0) 7886355828 / +44 (0)7967471091 / +44 (0) 7824830304

Ellie Sweeney / Carmen Murray

Powerscourt on behalf of Balderton Capital

E: vpm@powerscourt-group.com / carmen.murray@powerscourt-group.com

T: +44 (0) 207 250 1446

Intune Networks delivers world's first NEBS certified distributed switch

Tue, 08 Jan 2013 00:00:00 +0000

The iVX8000, Intune's unique packet optical switching system, becomes the world's first distributed switch to be NEBS certified for use in carrier networks in the United States

Intune Networks announce NEBS certification for its iVX8000. The system, which is uniquely able to switch and transport packets simultaneously over hundreds of miles, is ideally suited for carriers. It is able to transform distributed data centres into single unified platforms, deliver large-scale video-on-demand services and it will help transform the next-generation of metro networks into software controlled computing platforms.

John Dunne, Intune's Chief Technology Officer said, 'Our customers have highly demanding environments, so their requirements for resiliency and safety are of the highest standard. Achieving NEBS certification is extremely important for our customers in North America, but also an endorsement of our system for major carriers all around the world.'

NEBS (Network Equipment-Building System) standards certify systems as being suitable for use in a typical United States RBOC Central Office. Certification is granted to systems that can pass a rigorous set of safety, spatial and environmental tests including resistance to earthquakes, lightning strikes and fire.

Arthur Smith, Intune's Chief Operating Officer added, 'In my experience, it is noteworthy for any system to achieve NEBS compliance at its first attempt, and it is particularly creditable that our engineers have built such an innovative system that is also so robust.'

The testing was carried out by independent testing laboratory MET. MET is a global test and certification laboratory providing EMC, environmental, product safety and telecom testing. MET's designation as a Verizon certified Independent Test Laboratory for NEBS highlights the recognition of MET certification by all of the US RBOCs. MET also works closely with AT&T and their NEDS standards.

http://www.intunenetworks.com/home/news/latest_pr/nebs/