An InvestorNet survey - December 2012 A large number of VC funds are investing in the chemical/biochemical sector, Under the current financial climate it has proven difficult to attract genuine interest in the creation of a BIOCHEM sector ed pan-european investment fund. In particular because it has not been possible to substantiate that the BIOCHEM project has identified a large potential deal flow, which have funding requirement which could not be met from already active investors in the chemical sector. Hence we have examined the current funding sources available for projects which would be investor ready and represent normal sound return on investment potentials, and which are stemming from the BIOCHEM sector. We also have examined if the BIOCHEM scene should have special characteristics, that makes it unlikely for sound projects to attract funding from VC funds, which have prior experience and track record from the chemical/biochemical sector. It has also been of interest to analyze, if the investment of the identified funds should make it particular difficult in certain countries to attract investors for such projects. The survey The data for the survey has been generated from the EVCA database and from national VC association databases. It does not intend to represent a comprehensive overview of all European VC funds, which are investing in or have invested in technologies/projects having the same characteristics as typical BIOCHEM projects. The criteria to include a VC fund in the survey have been that the fund has a track record of investing in projects/companies from the chemical/biochemical sector, and hence has expertise and a proven interest in investing in the sector. Whether the fund has actually invested in a BIOCHEMICAL company/project is of less interest, as normal investment criteria are not connected to a specific technology, but more an industrial sector, where the team of the fund has knowledge of trading pattern, business models, competitors and competing technologies.. The survey has identified more than 30 professional VC funds from all over Europe that have been or are actively investing in projects/companies from the same industrial sector as is being addressed by the BIOCHEM project. 27 of these funds are also active in the seed/early stage sector. In total the funds identified represents hundreds of millions of EUR in investments capacity. Almost all the funds are engaged in cross boarder investments. Country Number of funds located Of which also invest cross border Of which also invest in early stage/seed Total fund size of funds identified, incl funds for later stage investments (million EUR) Austria 2 2 1 77 Bahamas 1 1 1 1.200 Belgium 1 1 1? Czech Republic 1 1 43 Finland 2 2 2 985 France 2 1 2 650 Germany 4 4 4 835 Italy 1 1 1? Netherlands 3 3 3 1.350 Russia 1 1 1? Spain 1 1 1 160 Sweden 1 1 1? Switzerland 1 1 1 110 United Kingdom 14 14 8 115.000 Total 35 34 27 120.000 Number of portfolio companies from Chemical/Biochem sector identified 80
Some of the funds represented in this survey, e.g. BASF venture, also make fund of fund investments in funds with a similar sector as BASF. These investments are made partly to complement their own investment activity, their deal flow, and enlarge their professional range of competences. Eg. when BASF Venture was approached for an investment in specific renewable energy technology. They identifies the investment opportunity as potentially interesting, but they referred the company to contact their partner Chrysalix 1 in Canada, which had more specialized knowledge related to this particular technology. This is a typical approach by large professional funds. Conclusion The conclusion is, that rightly approached, the Venture Capital industry represents a large number of funds already active in the same sector, that was originally intended to be the of the BIOCHEM fund. Hence it does not seem that difficulties to attract funding for new BIOCHEM projects is caused by lack of funding possibilities available which was the original raison d ëtre behind the proposal to create a specialized BIOCHEM fund. The difficulties seem more connected to the lack of attractiveness (from a purely financial point of view) of the projects presented. The current financial crisis has created big barriers for any attempt to create a new fund structure, in particular, if it cannot be argued that there exist a funding gap for this particular sector, and it has been demonstrated that there exist a large unmet funding demand from BIOCHEM related projects with a high growth potential. The survey demonstrates, this particular sector is already well served by current active funds. Hence the biggest problem facing the prospective BIOCHEM projects right now is not lack of funds available, but lack of good cases which represent a business potential which can justify the risk to be taken by a potential investor. 1 Established in 2001, Chrysalix Energy Limited Partnership, Vancouver, Canada, is an early-stage venture capital fund with a special on the fuel cell industry. Limited partners are Ballard Power Systems, Shell Hydrogen, Westcoast Energy, BOC-Group and BASF Venture Capital. Chrysalix Energy Limited Partnership II, based in Vancouver, Canada, is an early-stage venture capital fund with a special on new energy technologies.
Selected VC funds active in the Chemical/Biochemical sector and examples of portfolio companies from the sector: Name Country Geographical 360 Venture Capital France France /Italy and partners all Europe Early stage Seed Start-up 100,000,000
3i UK World wide Expansion development, Large buyout Mid market buyout Privatisation, Public to private Replacement, Turnaround 16,700,000,000
3TS Capital Partner Czech Republic Central and eastern Europe Expansion & buyout & other early stage 43 million
Advent International PLC UK Canada, Europe, India, Japan, Latin America, Singapore, Turkey, United States of America Expansion development, Large buyout ( Mid market buyout 15,100,000,000
Ahlström Capital Oy Finland Central and Eastern Europe, Europe, Russia, Turkey Expansion development, Mid market buyout Other early stage, Small buyout Turnaround - restructuring 295,000,000
Ambienta SGR S.p.A. Italy Europe Expansion development, Mid market buyout?
Arx Equity Partners Limited UK Europe Mid market buyout (15m- 150m equity)) 169,250,000
Avedon Capital Partners Netherlands Belgium, Germany, Netherlands, Luxembourg Expansion development, Mid market buyout (15m-150m equity), Privatisation, Public to private, Replacement 350,000,000
BASF Venture Capital GmbH Germany Canada, China, Europe, Japan, United States of America Expansion development, Other early stage, Start-up 150,000,000
Bright Capital Russia United States of America, China, Israel, Europe Other early stage, Seed, Start-up?
Capricorn Venture Partners Belgium Western Europe Expansion NV development, Other early stage, Seed, Start-up?
Circadia Ventures LLP United Canada, United Tate Lyle ventures Kingdom States of America, Western Europe Other early stage, Start-up 30,000,000
Clessidra SGR S.p.A. Italy Canada, United States of America, Western Europe Expansion development, Mid market buyout Privatisation, Replacement 2,200,000,000
Creathor Venture Germany France, Germany, Switzerland, United States of America, Western Europe Expansion development, Other early stage, Seed, Start-up?
CVC Capital Partners United Australia - New Kingdom Zealand, China, Europe, Japan, Singapore, South Korea, United States of America Large buyout Mega buyout Public to private?
DSM Venturing B.V. Netherlands All Countries Bridge Expansion - development Other early stage Start-up?
ecapital entrepreneurial Germany Germany, United Partners AG States of America, Western Europe Expansion development, Other early stage, Seed, Small buyout Start-up 121,650,000
Emerald Technology Switzerland Australia - New Ventures AG Zealand, Canada, Europe, United States of America, Israel Bridge, Expansion development, Other early stage, Start-up 109,000,000
Equistone Partners Europe United Western Europe Expansion Limited Kingdom development, Mid market buyout Public to private, Replacement 2,700,000,000
ETF Manager LLP United Western Europe Expansion - Kingdom development 132,000,000
Finnish Industry Investment Europe, Western Europe Ltd Finland Bridge Expansion - development Large buyout Mid market Other early stage Privatisation Public to private Replacement Small buyout 690,000,000
gcp gamma capital partners Austria - The VenturePreneurs Austria, Czech Republic, Germany, Hungary, Slovakia, Slovenia, Switzerland Expansion - development Other early stage Seed Start-up 36,273,000 Example of portfolio investment(s) related to the Biochem/Chemical secto
High-Tech Gründerfonds Germany Germany, Central Management GmbH and Eastern Europe Seed Start-up 563,000,000
ICOS Capital Holland Germany, Central and Eastern Europe Seed Start-up 100.000.000
Inventages Venture Capital Bahamas Inc. Australia - New Zealand, Canada, China, Europe, India, Israel, Russia, South Korea, Turkey, United States of America Bridge Expansion -, development, Large buyout Mid market buyout Other early stage, Replacement Seed Small buyout Start-up 1,200,000,000
Invest industrial Advisors United Limited Kingdom Italy, Portugal, Spain, Other Expansion - development Large buyout Mid market buyout Privatisation Public to private Replacement Turnaround - restructuring 3,000,000,000
MML Capital Partners LLP United Kingdom Europe, United Kingdom, United States of America, Western Europe Bridge Expansion - development Large buyout Mid market buyout Other early stage Privatisation Public to private Replacement Seed Small buyout Start-up 579,500,000
Mid Europa Partners LLP United Kingdom Central and Eastern Europe, Europe, Turkey Expansion - development Large buyout Mid market buyout Privatisation Public to private Replacement 3,200,000,000
Montagu Private Equity LLP United Kingdom Central and Eastern Europe, Czech Republic, Denmark, Finland, France, Germany, Netherlands, Norway, Poland, Sweden, United Kingdom, Hungary Large buyout?
Parcom Capital Netherlands France, Germany, Management B.V. Netherlands, Western Europe Expansion - development Mid market buyout 1,000,000,000
PONTIS Capital GmbH Austria Austria, Czech Republic, Hungary, Slovakia, Germany Majority Equity Minority Equity 40,973,395
Silverfleet Capital Partners United LLP Kingdom Austria, Belgium, Denmark, Finland, France, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom
Sofinnova Partners France United States of America, Western Europe Other early stage Seed Start-up 551,681,000
Talde Gestion, S.G.E.C.R., Spain Europe, Spain Bridge Expansion - S.A. development Mid-market buyout Privatisation Public to private Replacement Small buyout 162,000,000
The Carlyle Group United Kingdom Australia - New Zealand, Canada, China, Europe, India, Japan, Latin America, Other, South Korea, United States of America Large buyout Mega buyout Mid market buyout Public to private 74,000,000,000
Volvo Group Venture Capital Sweden AB Australia - New Zealand, Canada, Europe, United States of America, All of Asia Expansion - development Other early stage Small buyout?