Oct
07
2019
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83North closes $300M fifth fund focused on Europe, Israel

83North has closed its fifth fund, completing an oversubscribed $300 million raise and bringing its total capital under management to $1.1BN+.

The VC firm, which spun out from Silicon Valley giant Greylock Partners in 2015 — and invests in startups in Europe and Israel, out of offices in London and Tel Aviv — last closed a $250M fourth fund back in 2017.

It invests in early and growth stage startups in consumer and enterprise sectors across a broad range of tech areas including fintech, data centre & cloud, enterprise software and marketplaces.

General partner Laurel Bowden, who leads the fund, says the latest close represents investment business as usual, with also no notable changes to the mix of LPs investing for this fifth close.

“As a fund we’re really focused on keeping our fund size down. We think that for just the investment opportunity in Europe and Israel… these are good sized funds to raise and then return and make good multiples on,” she tells TechCrunch. “If you go back in the history of our fundraising we’re always somewhere between $200M-$300M. And that’s the size we like to keep.”

“Of course we do think there’s great opportunities in Europe and Israel but not significantly different than we’ve thought over the last 15 years or so,” she adds.

83North has made around 70 investments to date — which means its five partners are usually making just one investment apiece per year.

The fund typically invests around $1M at the seed level; between $4M-$8M at the Series A level and up to $20M for Series B, with Bowden saying around a quarter of its investments go into seed (primarily into startups out of Israel); ~40% into Series A; and ~30% Series B.

“It’s somewhat evenly mixed between seed, Series A, Series B — but Series A is probably bigger than everything,” she adds.

It invests roughly half and half in its two regions of focus.

The firm has had 15 exits of portfolio companies (three of which it claims as unicorns). Recent multi-billion dollar exits for Bowden are: Just Eat, Hybris (acquired by SAP), iZettle (acquired by PayPal) and Qlik.

While 83North has a pretty broad investment canvas, it’s open to new areas — moving into IoT (with recent investments in Wiliot and VDOO), and also taking what it couches as a “growing interest” in healthtech and vertical SaaS. 

“Some of my colleagues… are looking at areas like lidar, in-vehicle automation, looking at some of the drone technologies, looking at some even healthtech AI,” says Bowden. “We’ve looked at a couple of those in Europe as well. I’ve looked, actually, at some healthtech AI. I haven’t done anything but looked.

“And also all things related to data. Of course the market evolves and the technology evolves but we’ve done things related to BI to process automation through to just management of data ops, management of data. We always look at that area. And think we’ll carry on for a number of years. ”

“In venture you have to expand,” she adds. “You can’t just stay investing in exactly the same things but it’s more small additional add-ons as the market evolves, as opposed to fundamental shifts of investment thesis.”

Discussing startup valuations, Bowden says European startups are not insulated from wider investment dynamics that have been pushing startup valuations higher — and even, arguably, warping the market — as a consequence of more capital being raised generally (not only at the end of the pipe).

“Definitely valuations are getting pushed up,” she says. “Definitely things are getting more competitive but that comes back to exactly why we’re focused on raising smaller funds. Because we just think then we have less pressure to invest if we feel that valuations have got too high or there’s just a level… where startups just feel the inclination to raise way more money than they probably need — and that’s a big reason why we like to keep our fund size relatively small.”

Jun
11
2018
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Workday acquires financial modelling startup Adaptive Insights for $1.55B

Workday, the cloud-based platform that offers HR and other back-office apps for businesses, is making an acquisition to expand its portfolio of services: It’s buying Adaptive Insights, a provider of cloud-based business planning and financial modelling tools, for $1.55 billion. The acquisition is notable because Adaptive Insights had filed for an IPO as recently as May 17.

Workday says that the $1.55 billion price tag includes “the assumption of approximately $150 million in unvested equity issued to Adaptive Insights employees” related to that IPO. This deal is expected to close in Q3 of this year.

IPO filings are known to sometimes trigger M&A. Most recently, PayPal announced it would acquire iZettle just after the latter filed to go public. Skype was acquired by Microsoft in 2011 while it was waiting to IPO after previous owner eBay said it would spin it off.

Workday itself went public in 2012 and currently has a market cap of nearly $27 billion.

The deal will give Workday another string to its bow, in its attempt to become the go-to place for all for back-office services for its business customers: the company plans to integrate Adaptive Insights’ tools into its existing platform.

“Adaptive Insights is an industry leader with its Business Planning Cloud platform, and together with Workday, we will help customers accelerate their finance transformation in the cloud,” said Aneel Bhusri, Co-Founder and CEO, Workday, in a statement. “I am excited to welcome the Adaptive Insights team to Workday and look forward to coming together to continue delivering industry-leading products that equip finance organizations to make even faster, better business decisions to adapt to change and to drive growth.”

The two have been working together as partners since 2015.

In the case of Adaptive Insights, which says it has ‘thousands’ of customers, its growth mirrors that both of cloud services and specifically about how business intelligence has developed into a distinct software category of its own over the years, with not just the CFO but an army of in-house analysts relying on analytics of a business’ data to help make small and big decisions.

“The market opportunity here is huge as the CFO has become a power player in the C-Suite,” CEO Tom Bogan told TechCrunch when it raised $75 million in 2015, when it first passed the billion-dollar mark for its valuation. Bogan previously also held a role as chairman of Citrix. “As a former CFO myself, I have seen this first hand and it is accelerating.” Other examples of this force includes Twitter’s Anthony Noto catapulting from CFO to COO (and is now a CEO running SoFi). Around 25 percent of CEOs at Fortune 500 companies are former CFOs.

Adaptive Insights had raised $175 million prior to this.

Bogan will stay on and lead the business and report directly to Bhusri.

“Joining forces with Workday accelerates our vision to drive holistic business planning and digital transformation for our customers,” said Bogan, in a separate statement. “Most importantly, both Adaptive Insights and Workday have an employee-first and customer-centric approach to developing enterprise software that will only increase the power of the combined companies.”

More generally, while we have certainly seen a much wider opening of the door for tech IPOs this year, there is also an argument to be made for continuing consolidation it enterprise IT, in particular with regards to cloud services that might have small or potentially negative margins.

Adaptive Insights was not immune to that: the company in its public listing filing said that its previous fiscal year brough tin $106.5 million in revenues, up 30 percent from the year before, but it also posted a loss of $42.7 million in the same period. That was narrower than the $59.1 million it posted in 2016. Combined with the bigger trend of all-in-one platforms packing a bigger punch with businesses, it might have meant that Workday’s offer was too compelling to refuse. 

This looks like Workday’s biggest acquisition yet, but the company has been on a spree of sorts: just last week it announced the acquisition of RallyTeam to beef up its machine learning.

Dec
13
2017
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Commerce platform iZettle raises $47M at a $950M valuation

 iZettle — the commerce platform based out of Stockholm that competes against companies like Square, Paypal and SumUp to provide card transactions using smartphones and tablets as well as related accounting services — has raised another €40 million ($47 million) as it approaches a $1 billion valuation. CEO and co-founder Jacob de Geer told TechCrunch the money will go towards… Read More

Jan
10
2017
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iZettle raises $63M more at a $500M valuation to expand from mobile payments

izettle_6sept_001 The world of mobile payments continues to consolidate and mature, and today one of the leading players among European mobile payments startups has raised a significant round of money to help keep itself on top. iZettle, the Swedish company that offers a card reader that works with your smartphone or tablet, plus a suite of financial services for the small businesses, is announcing that it… Read More

May
08
2014
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As Square Struggles, European Payments Rival iZettle Takes Another $55.5M In Funding

izettle phones As mobile payment startup Square faces reports that it’s delaying an IPO amid growth problems and other pressures, iZettle, the Swedish mobile payments company that has been referred to as the Square of Europe, has raised another €40 million ($55.5 million). In an interview, CEO and founder Jacob de Geer said the funding will be used to continue building out its business, namely… Read More

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