Accel and Benchmark have completed a $12 million investment into Israeli start-up Zlango. Maybe I’m just not getting it, because immediate thoughts are:

[Update]

So I asked Judy (Gibbons) of Accel this afternoon about the Zlango investment. She gave me a plausible explanation of the capital deployment and revenue model. I don’t think Accel would thank me for discussing here, but she’s addressed my key questions: why $12 million and where’s the revenue model.

 

Accel and Benchmark have completed a $12 million investment into Israeli start-up Zlango. Maybe I’m just not getting it, because immediate thoughts are:

[Update]

So I asked Judy (Gibbons) of Accel this afternoon about the Zlango investment. She gave me a plausible explanation of the capital deployment and revenue model. I don’t think Accel would thank me for discussing here, but she’s addressed my key questions: why $12 million and where’s the revenue model.

 

Accel and Benchmark have completed a $12 million investment into Israeli start-up Zlango. Maybe I’m just not getting it, because immediate thoughts are:

[Update]

So I asked Judy (Gibbons) of Accel this afternoon about the Zlango investment. She gave me a plausible explanation of the capital deployment and revenue model. I don’t think Accel would thank me for discussing here, but she’s addressed my key questions: why $12 million and where’s the revenue model.

 

Continue reading “Zlango- Benchmark and Accel’s latest deal [Updated]” →

Library House posted  an interesting chart today on their World Rankings, providing the following chart:

California is the king of the hill, followed by Massachusetts, then the UK.

By default, that means London and surrounding areas (which represents about 60% of all UK investment activity).

It’s amazing to see the spread between investment amounts in the UK and California – 9:1.

The average amounts invested per company are roughly 2:1. That matches nicely with Simon’s numbers which suggest Europe is building $100 million companies for half the cost.

Continue reading “UK Third Behind California and Massachusetts” →

Library House’s latest Venture Cast newsletter highlights the problems raising funds from UK Pension Funds and their lack of participation in venture capital. It’s worth noting that Index’s recently announced fifth fund only highlights BP Pension Fund amongst the LPs. The basis for the poor participation levels are the historic venture returns in the UK:

… the return statistics don’t look good. Where buyout funds averaged 18.5 per cent a year over 10 years for funds raised since 1996, and mid-market funds returned 9.6 per cent, venture funds were down by an average of 2.5 per cent a year during the period, according to the British Venture Capital Association.

As every prospectus will tell you, past performance is no indicator of future performance. Just because UK venture has performed poorly compared to buy-outs and mid market funds historically over the past ten years, doesn’t mean it’s not a great time to be investing in venture here.

As Simon Cook of Esprit pointed out earlier this year,

The average European exit has taken $40m of VC backing –almost half the average $70m that the US VCs have put in to build the same value companies.

For exits over $100m in market cap, better than 1 in FOUR of the winners are in Europe despite 80% less investment.

For those $100m+ exits where the exit market cap is better than fives times the capital invested, or the ‘home runs’ which are the feature of the US VC industry that makes it so successful over 1 in THREE are in Europe despite 80% less investment.

Of these $100m+ exits, the average exit is $251m BOTH in the US and Europe -so there seem to be no discount for European companies.

Couple these stats with the AIM vs NASDAQ debate and you can begin to paint a compelling picture for European LPs.

Continue reading “European LPs- Wither Pension Funds?” →