Swiss Ventures

Google has acquired Endoxon to "bolster engineering and technical resources for Google" for an undisclosed amount. That means Google is buying it for the people and for the firm's technologies, not the revenues.

Endoxon, a company that employed 75 before the Google deal, had six business units. The US firm is only buying three: the internet, mapping and data processing business units. Its geo technology is behind immo.search.ch and map.search.ch, for example. The other units are being spun off into Mappuls.

This transaction is the seventh Swiss high-tech company to be acquired by US tech buyers like IBM, HP, and Microsoft over the past year or so -- only a couple were venture-backed, which means that Switzerland has a few more tech company founder millionaires now.



The deals could have a positive effect on the tech economy beyond the immediate impact on jobs at the acquired companies. If the founders follow the pattern that has slowly established itself in other parts of Europe, some will now turn to business angel investing, others will be advising venture funds, and one or two hard-core entrepreneurs will be already planning their next venture, which will be more ambitious and faster growing than the first ones.

Your Swiss Ventures reporter will be watching and reporting if there is movement like that afoot.

- Agilient acquired Aqiris a developer of analog/digital analyzers
- HP bought Silverwire, a Zug-based VC-backed photo processing startup
- IBM acquired Geneva-based remote access software firm Rembo
- Microsoft bought VC-backed VOIP software developer media-streams in Zurich
- Synopsys acquired ISE a chip design tool developer
- Semtech acquired VC-backed wireless semiconductor manufacturer Xemics in Neuchatel

Every month Swiss Equity translates and publishes my column on private equity and venture capital in Switzerland. Here is the October issue's content, covering news in September and early October.

Be warned, it's not only about high tech and innovation. The market's much wider than that.

Swiss Equity Private Equity Page

The private equity market in Switzerland this month saw the merger of two mid-market buyout firms merging, and a third, CGS Management, announcing that it is on track to raising its largest fund ever. They both will target similarly-sized companies in Switzerland, Germany, and Austria.

Zurmont Management, which has a stake in publicly traded Swiss machinery company Schlatter, and Madison Management, which has a successful track record in textile, furniture manufacturing, and bathroom fixture investments, have merged to create Zurmont Madison Management.

The new, combined firm intends to raise a SFr 200M private equity fund, which will focus on succession solutions and management buy-outs in Switzerland, Germany and Austria.

It’s targeting medium-size industrial and consumer good companies based mainly in Switzerland, Germany and Austria. It says it offers companies an active partnership with a four to seven year investment horizon.

Pfäffikon-based CGS Management said it has reached a first closing on its second fund, CGS Private Equity Partnership II, on SFr 65M. The target of the fund is SFr 150M, which is more than twice the size of its first fund, raised in 1999 (it was a SFr 60M fund). It is seeking small to mid-cap buyout opportunities in Switzerland and in other European countries.

Meanwhile Zurich-based Capvis keeps up its buyout activity pace with an announcement that it bout a majority stake in ORIOR Food Group, a supplier of convenience and packaged food in Switzerland, from former investor Orior Holding, a subsidiary of Pargesa Holding. The purchase price and the exact size of Capvis's majority stake have not been disclosed. The company has annual sales of CHF300m (approximately €190m).

Two biotechnology startup companies managed to attract large syndicates of international investors to their relatively early stage financing rounds this summer. Athelas, an anti-infectives drug discovery company in Plan-les-Ouates, near Geneva, has undertaken a three-way merger with MerLion Pharmaceuticals in Singapore and Combinatura in Germany.

As a result of the merger, the combined company was able to raise $30M in a round led by Aravis Venture Associates AG, of Zurich and BioOne Capital of Singapore.

In addition, Basel-based company, 4-Antibody AG, raised SFr 6M Series A from Biomedinvest AG, Grazia Equity, Life Science Partners and Mulligan Biocapital in a Series A round.

Jim Pulcrano of Swiss-baed IMD, a leading international business school, wrote in to aks us to remind readers that the 9th editon of its program for startps is underway. The IMD's startup competition is not really a contest, rather it's a program where selected technology startups (that is the competitive part - not every startup that applies gets in) participate in workshop to get advice and coaching from the MBA and Executive MBAs at the IMD.

The IMD offers help with the following ...
-- crack resistant business challenges
-- get fresh thinking to refine and validate business models, or provide some new momentum to fund raising efforts
-- test your concepts and help you develop the most appropriate development routes? Then consider applying for the IMD start-up competition with your company.

It is free because the program is meant to gives hands-on learning experience in entrepreneurship and new ventures for candidates in the IMD's MBA and EMBA classes.

For startups, it provides input and support to improve their chances of funding and success.
Link to Startup Application Page
November 6th 2006: submission of 2-page business plan executive summary, together with a letter explaining why you wish to nominate your company.
November 27th 2006: candidates should be ready to present their project to the 2006 MBA class as part of the selection process. Not all candidates will be asked to do this, and being asked to present does not guarantee selection.

Basel-based Santhera Pharmaceuticals, has raised €10M (with an option to call another EUR 5M - giving it SFr 24M altogether)in its latest round of financing. The firm said the round was oversubscribed and led by existing investor NGN Capital, which brouught in new investors NeoMed Management Schroder Investment Management (Luxembourg) and BioMedinvest. Existing investors also followed on.

Santhera is a specialty pharma company with four potential new drugs in clinical trials to treat severe neuromuscular diseases. Its targeting those with high unmet medical need but also orphan indications with no current therapy.

Geneva-based Addex Pharmaceuticals has also raised a third round of SFr 40M (ca. $32M or €25M) to invest in its development of drugs for Central Nervous System disorders. The round was led by a new investor, SR One (USA and UK), the venture capital arm of GSK, a leading research-based pharmaceutical company, which brought in new investor Roche Venture Fund along with existing investors Sofinnova Partners, Index Ventures, TVM Capital, PolyTechnos Venture-Partners, Bio*One Capital Pte Ltd, Renaissance PME and Varuma AG also participated in the fund raising. Addex has now raised SFr 106M since its formation in May 2002.

Three Swiss software packages have made it into the finals of the IST Prize this year.

Lets Focus - an application used to manage and moderate presentations developed at the University of Ticino for a German software firms called Reflact.

Bison Systems - won a nomination for its "alternative" ERP solution. The company, which has annual sales of about SFr 86M has been around for years and has several IT business units. Its CEO is known as an "awesome sales talent" in Switzerland. But so far VCs have not figured out a way to get a piece this closely held company. There are parts of it that would be interesting for acquirers, particularly its screen video advertising business unit.)

SpeedScript - has won lots of awards for its text entry application for handhelds but the key question for us is how many times has its software, which sells for about $10 a pop, been downloaded? That nugget of info is missing from its homepage.

Winning the prize doesn't necessarily mean these are venture ready investments. The awards are set up to draw attention to software and computing innovation in Europe

Over the years the IST Prize has had few hits and lots of misses with its awards. We do note however that a few finalists from recent years raised venture capital or are already VC-backed, namely Advestigo, now backed by Auriga Partners, and digital imaging startups Let it wave, DxO Labs, and ATEME, all French, as well the UK Skinkers, which is hawking its content push-software (RSS) to publishers. (Go To The Alarm:Clock Euro to find out more about these startups, as we've profiled them all in recent months.)