Silverpeak Q4 2022 Benchmark report: Further stabilisation and the first signs of growth

Welcome to the latest edition of the Silverpeak Benchmark report – a review of public Application Software company valuation metrics in Europe, UK and the US, broken down by SaaS, Vertical and Horizontal. By reviewing median values, our aim is to provide a robust industry reference benchmark.

Report highlights

  • In Q4, software stocks were more resistant to macroeconomic factors than expected, as can be seen by the stabilisation in our dataset. During this past quarter, we saw ongoing geopolitical instability, rising energy prices and supply chain disruptions from Q3 as a result of the continued Russia-Ukraine conflict.
  • Our data shows that EV/Revenue multiples not only stabilised in Q4 but showed significant growth in certain categories and sectors such as UK companies (+12%) and security companies (+17%). After decreasing by 22% QoQ on average over Q1 and Q2, the software markets have steadily normalised and returned to levels similar to pre-2020 levels.
  • Market sentiment continues to place higher importance on profitability as opposed to forecast revenue growth, which can be seen by the 7% average increase in EV/EBITDA multiples over Q4.

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Silverpeak advises ClearSpace SA on $29m financing round

Silverpeak, the mid-market technology specialist representing European growth businesses in M&A and financing transactions, has acted as the exclusive financial advisor to Swiss space robotics leader, ClearSpace SA, in a $29m financing round.

ClearSpace is focussed on in-orbit services and space debris removal, having won a €110m mission contract from ESA, plus further projects with UKSA and Intelsat, amongst others. Their advanced guidance, navigation and control (GNC) technology enables proximity and rendezvous operations in space, opening up significant new market areas.

This financing round was led by OTB Ventures and Swisscom Ventures, with participation from Lakestar, Luxembourg Future Fund, In-Q-Tel, Happiness Capital and 600 T Space Investments. As part of the financing, the company has also established an operational presence in Luxembourg to benefit from the strong space and satellite focus there.

Silverpeak was engaged due to the team’s deep understanding of the new space market dynamics as well as its connections with international deeptech and growth investors. The dedicated team worked closely with ClearSpace to develop financial plans, target suitable investors, negotiate the terms of the round and project-manage the investor syndicate and deal process through to closing.

ClearSpace founders, CEO Luc Piguet and CTO Muriel Richard, said “Silverpeak understood what we are trying to achieve and got that message across to investors, whilst also providing invaluable support throughout the process. We are delighted to now welcome onboard the new investors for our continued journey to improve space sustainability”

David Ford, partner at Silverpeak, said “As one of the leading space sector advisers, we are delighted to have worked with the ClearSpace team on this transaction. ClearSpace is doing a spectacular job of delivering the technology needed for the large, future in-orbit servicing market.”

 

You can read more about this transaction and ClearSpace’s missions in the following articles SpacenewsTech.eu and Sifted

Q3 2022 | Series B&C rounds – the state of the market for European tech companies

Welcome to the latest edition of the Silverpeak B&C Rounds report – a review of Series B&C investment rounds into European technology companies. The dataset covers total capital invested, average deal sizes, frequent investors, investments by country, among other statistics. The aim of this report is to provide readers with a good understanding of the fundraising environment for technology companies in Europe.

Report highlights

  • Series B&C deal activity exhibited a substantial slowdown QoQ , with total deal value falling to 2.27bn, 66%, the same as Q3 2019 which was, however, a record at the time. Deal count reduced to 59, 41%.

 

  • In Q3 only one fund led 2 or more Series B or C rounds ECBF leading 2 Series B rounds. In Q1 and Q2 17 funds led 2 or more series B and 6 led 2 or more Series C.

 

  • Overall, median deal sizes are getting smaller.  Series B and C experienced a QoQ decrease of 27% and 41%, respectively to €23m and €44m median value.

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Silverpeak advises Irish hoteltech pioneer, Avvio, as it joins forces with US private equity backed Sceptre Hospitality Resources (SHR)

Silverpeak, the mid-market technology specialist that represents European growth businesses in M&A and financing transactions, has acted as the exclusive financial advisor to the shareholders on the sale of Avvio, including institutional investor Calculus Capital.

This move brings together two of the industry’s most dynamic, entrepreneurial companies and follows Serent Capital’s investment in SHR in 2020. Serent Capital sponsored the acquisition of Avvio through SHR to create a technology powerhouse for independent hotels and chains with unrivalled customer support across the world.

Headquartered in Limerick, Ireland, and founded in 2002 Avvio has been a pioneer in hotel technology for 20 years. In 2017 it launched the world’s first AI powered booking engine, allora.ai. Today allora.ai provides technology to over 500 hotels around the world and powers over £400m in transactions every year.

Silverpeak worked closely with management and shareholders on this transaction, leading a global twin-track private equity and strategic process accompanied by a full suite of vendor due diligence; reaching out to an international audience within a highly competitive process. Silverpeak supported management on the refinement of their business plan and operating model, shaped the equity story, negotiated key transaction terms and skilfully navigated the shareholders through an increasingly complex and evolving economic backdrop.

The eventual acquirer optimally allowed for an exit event as well as participation for management as part of a wider hotel technology group. Headquartered in Houston, Texas, SHR is a revenue generating platform that helps hotels to execute their best revenue generation strategies through its tightly integrated central reservation system (CRS), customer relationship management, and revenue management systems. It supports over 1,500 independent, group, casino and long-stay hotels, manages over 6 million reservations, sells 19 million room nights and drives £2 billion revenue per year through its Windsurfer CRS.

Frank Reeves, CEO & Co-Founder of Avvio Limited, said, “Silverpeak understood what we wanted and delivered a great buyer paying an attractive price. Throughout the process Silverpeak’s team were passionate about the Avvio business and sector whilst providing wise counsel, problem solving and strategic positioning. Our dedicated Silverpeak team were impressive from day-1 and quickly established a strong, collaborative relationship with us. I was impressed by their global reach to all the relevant strategic buyers and private equity bidders, and they designed a process that allowed me to continue as an investor in the business going forward“.

Sean Finnan, Chairman of Avvio Limited, said, “I found the Silverpeak team energetic on the details and thoughtful on the strategic approach which led to a very positive outcome for all concerned. Would definitely recommend them to anyone evaluating partners for a company sale”

Paddy MccGwire, Managing Partner at Silverpeak, said “Avvio is an exceptional hotel software business led by co-founder CEO Frank Reeves, with strong international growth.  We ran a global twin-track PE and strategic sale process, selecting Texas headquartered SHR,, as they were not only a great strategic  fit, but also provided an opportunity for the CEO, Frank, to roll some of his proceeds into the combined business”.

 

For moe information please contact:

Paddy MccGwire pm@silverpeakib.com

Christopher White cw@silverpeakib.com

Matthew Gemmell mg@silverpeakib.com

 

 

European deeptech – the next wave

Acquirers and investors have been circling Europe’s vibrant deeptech sector for several years now. Yet as the economic picture clouds, how is this affecting appetite for dealmaking in this area?

Software and SaaS deals may have dominated the headlines for a decade or so, but over the past three to four years, another corner of the technology space – deeptech – has been garnering increasing amounts of attention from strategic acquirers and financial investors. Silverpeak analysis shows, for example, that venture capital (VC) funds have raised an estimated €4bn of capital for investment in European deeptech since 2021.

Encompassing areas such as fundamental artificial intelligence, semiconductors, spacetech, medtech, IoT and additive manufacturing, deeptech aims to solve complex scientific and engineering problems. Companies in the sector benefit from defensible IP and their value creation potential for shareholders is significant, but their growth path and time to market is longer than for many other types of technology business, such as those in software or e-commerce. The complexity of the technologies and the problems they address naturally means that R&D time horizons are more extensive and incubation is more capital-intensive. These companies also therefore need investors and advisors with specialist knowledge.

For those with the expertise and patience required to exploit deeptech’s potential, companies in the sector offer attractive investment and acquisition opportunities. As a result, we continue to see strong European deeptech deal volumes, even as the economic outlook has become more challenging.

Strategic interest

Our analysis shows that, while large deals are notably absent in 2022, European deeptech M&A activity in the sub-$1bn deal value range this year has remained largely consistent with historical levels. The third quarter saw deals in this bracket worth an aggregate $1.89bn, which suggests a run rate for H2 of $3.65bn. This is on a par with the value recorded in H2 2021 ($3.64bn), which was a time of exceptionally strong dealmaking in the technology sector more generally.

This demonstrates that there is clear appetite among strategic acquirers for European deeptech companies at the middle and lower end of the deal size spectrum. Buyers may consider these smaller deals as less risky, given the risk of recession. They may also see segments of the deeptech sector as an answer to some of the issues businesses face today – automation and robotics could relieve pressures stemming from labour shortages and rising wages, for example. Further, for US buyers in particular, European deeptech targets offer access to skilled workers that tend to have higher retention rates and lower average salaries than their peers in the US.

Enter the venture funds

However, VC investment is where we see the biggest shift in the deeptech deals market today. There is now a deep pool of investors targeting this space in Europe – our analysis shows that 236 investors participated in deeptech A, B and C rounds in the first nine months of 2022, with nine of these participating in at least three rounds in the sector.

Our data suggests that these investors have altered their investment approach against the backdrop of a challenging economic environment in many markets. In 2021 – a more bullish period than the one we are experiencing today – Series C rounds in European deeptech companies totalled $1.47bn, with a median deal size of $44m. However, for the first nine months of 2022, Series C activity slowed to just €369m, with median deal size falling to $20m.

VC investors are instead doubling down on earlier-stage opportunities. The year so far has been particularly strong for Series A rounds in European deeptech companies: at $795m, the first six months of 2022 saw the highest value – by some margin – of half-yearly Series A rounds to date, and H2 looks set to be equally robust, with $360m in Q3 alone. This compares with a full-year total of $538m in 2019 and $970m in 2021. Further, the median A-round deal size has risen substantially this year: in 2019 and 2020, this was $9m and in 2021, $11m; yet the median for the first nine months of 2022 stood at $14m.

So why are we seeing this pattern emerge among VC investments? One potential explanation is that larger companies are cutting costs at a time of more difficult economic conditions in a bid to preserve the capital they have raised to date. This will naturally reduce the size of the rounds they are looking to raise. At the same time, VCs are more cautious about investing large sums in more mature companies for the simple rationale that the path to exit may be more challenging in the near-term.

Yet on a more upbeat note, the other reason for more early-stage rounds is that VCs are playing a longer game: they are financing and supporting a bedrock of emerging deeptech companies that will continue to develop through a likely recession. Under this scenario, these businesses would reasonably be expected to start generating revenues as the economic cycle turns to a more positive outlook.

Deeptech innovations fostered today will bring about a new period of profound technological transformation in a variety of fields that could, among other things, accelerate medical breakthroughs, help stem climate change or solve supply chain problems in a de-globalising world. Our analysis demonstrates that there is a strong appetite among VC firms for investment in these early-stage opportunities today and that this will help to build the foundations for future transformation.


Silverpeak is a mid-market technology specialist representing European growth businesses in M&A and financing transactions. Our experience of working with European deeptech businesses includes investment rounds and acquisitions by leading international strategic buyers, institutional investors and VC firms. Our eight most recent deeptech deals had an aggregate enterprise value north of $700m and a cumulative transaction value of over $300m.

If you would like further information, please contact us: Pietro Strada, Managing Partner ps@silverpeakib.com

 

 

 

 

 

Silverpeak has advised Vaarst on the extension of their Series B financing round, bringing the fundraising total to over $26m.

Silverpeak has advised the Vaarst management team on the extension of their Series B financing round, bringing the fundraising total to over $26m. The advanced capabilities of the company’s 3D SLAM computer vision and autonomous robotics technology that enable subsea ‘digital twin’ creation, plus the growth in the ‘blue-economy’ sector has attracted additional investors including the Strategic Development Fund and Future Planet Capital and has driven additional participation from existing investors.

Silverpeak, the mid-market technology specialist that represents European growth businesses in M&A and financing transactions, acted as the exclusive financial advisor to Vaarst and its sister company Rovco in extending the round from the initial $20m raised.

Vaarst is a leading provider of subsea 3D computer vision and SLAM technologies; supporting offshore wind, wave and tidal, scientific, and maritime security sectors. It also uses ground-breaking AI-based technology to revolutionise how energy companies manage subsea infrastructure and improve asset integrity.

Rovco delivers Vaarst technology into the energy transition space, mainly focused on its use for subsea surveys in the offshore wind sector where it is a market leader in the UK, and also in oil field decommissioning and subsea cable laying.

Vaarst and Rovco had already accelerated their global expansion plans following the first close of the Series B raise in March, entering the US market through the strategic appointment of Mitch Johnson, their new Americas Director. Its existing customers now include Iberdrola, SSE and Deepocean, and the company has recently signed a contract with Van Oord to perform subsea investigation works on Dutch offshore wind farm Hollandse Kust Noord.

Silverpeak was engaged due to its expertise in the deeptech and software sectors, as well as extensive knowledge of the international investor market. The company was positioned as an autonomous robotics leader in the global blue technology sector and attracted a range of international financial investors as well as strategic counterparties with a strong interest in renewable energy and ESG-focused investments.

David Ford, Partner at Silverpeak, leading the process said “We are delighted to be the ongoing /retained advisers to the Vaarst and Rovco teams as they accelerate their global growth plans. The additional investment announced here demonstrates Vaarst’s technology lead in the marine robotics marketplace, and also the ability of the Rovco team to execute complex offshore contracts effectively.”

For more information please contact David Ford, Partner: df@silverpeakib.com

 

 

Silverpeak advises a leading P2P marketplace, Camplify, on its strategic acquisition of PaulCamper

Silverpeak, the mid-market technology specialist that represents European growth businesses in M&A and financing transactions, has acted as the exclusive financial advisor to Camplify Holdings Limited (ASX:CHL) on the acquisition of Germany’s largest peer-to-peer (“P2P”) digital marketplace PaulCamper.

Camplify has grown to become one of the world’s leading P2P digital marketplaces for recreational vehicles (“RVs”). Powered by proprietary technology, the platform seamlessly and transparently connects owners to hirers. The resulting marketplace makes it more accessible for RV enthusiasts whilst simultaneously monetising under-utilised assets for owners.

By delivering a truly scalable marketplace through automation and the network effect, Camplify has seen rapid growth.  During its first full year of trading on the Australian Securities Exchange the business delivered a GTV of 54m AUD and revenues of 16m AUD, an increase on the previous year of over 63% and 95% respectively.

Silverpeak advised Camplify on the strategic acquisition of PaulCamper and continues to work closely with the board as its dedicated financial advisor to support its inorganic expansion across Europe.

Justin Hales, CEO of Camplify Holdings Limited said, “This acquisition doubles the size of the existing Camplify business and strengthens our presence in the European market. PaulCamper is one of Europe’s largest and longest-running platform operators. Silverpeak provided Camplify with expert analysis and advice in a challenging European market, and we value their contribution to our strategic growth objectives. We welcome the PaulCamper team and its community of RV owners and hirers to the global Camplify community. We look forward to helping more people worldwide enjoy van life”.

Paddy MccGwire, Managing Partner at Silverpeak said “This is a very strategic acquisition for Camplify and starts the process of European consolidation that market participants have been expecting. It has been great working with Camplify, a clear-thinking client focussed on creating strategic value. Online marketplaces like Camplify are leading the technological transformation in eCommerce and will play an important role in shaping our future economy”

For more information please contact:

Paddy MccGwire – pm@silverpeakib.com

Christoper White  – cw @silverpeakib.com

Silverpeak Q3 2022 benchmark report: Declining valuations – have we hit the bottom?

Welcome to the latest edition of the Silverpeak B&C Rounds report – a review of Series B&C investment rounds into European technology companies. The dataset covers total capital invested, average deal sizes, frequent investors, investments by country, among other statistics. The aim of this report is to provide readers with a good understanding of the fundraising environment for technology companies in Europe.

Report highlights

  • Q3 has seen inflation reach record highs, driven by various macroeconomic trends, including continued geopolitical instability, rising energy prices, and supply chain disruptions.
  • EV/revenue multiples are beginning to stabilise across the board. We can see the rate of decline this quarter (-9%) is much lower than in Q1 (-23%) and Q2 (-21%) of this year.
  • In 2022, the IPO market for software companies was particularly barren, only witnessing 9 IPOs, which, compared to a record 107 IPOs in 2021, is extremely low.
  • There are even more postive signs in the US where SaaS is starting to see a return to growth.

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SEMINAR | Current trends in tech exits and financing

Silverpeak and Mishcon de Reya co-hosted a seminar on ‘current trends in tech exits and financing’ which was held on Wednesday 23 November 2022, at Mishcon de Reya’s office in London.

Please find below the presentation for practical guidelines and best practices on how to sell or raise finance in the current environment. We will hear the compelling views and experiences of both a CEO and an investor.

Agenda

Trends in M&A and financing

Tax considerations relevant to the current market

My experience of doing a transaction

Top tips for a strategic price

Panel Q&A, Chaired by Paddy MccGwire, Managing Partner at Silverpea

Stuart Chapman, Chief Portfolio Officer at Molten Venture

Pietro Strada, Managing Partner at Silverpeak

John Skoulding, Partner at Mishcon de Reya

 

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Q2 2022 | The state of the market for series B&C rounds in European tech companies

Welcome to the latest edition of the Silverpeak B&C Rounds report – a review of Series B&C investment rounds into European technology companies. The dataset covers total capital invested, average deal sizes, frequent investors, investments by country, among other statistics. The aim of this report is to provide readers with a good understanding of the fundraising environment for technology companies in Europe.

Report highlights

  • €13.4bn was invested in European Tech Series B&C rounds in H1 2022, remaining on par with 2021 highs despite the current global recession
  • Total Series B investment continued to increase for the 7th consecutive half year, while Series C has continued to decline since peaking in H1 2021
  • The UK continues to attract the most Series B&C investment of any country in Europe. The €4.8bn invested in the UK surpasses the next two countries combined: Germany (€2.7bn) and France (€1.7bn)

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