SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 76 - December 7, 2012: - Big Bang Year-End for European VC Investment - Perception, PR and Italy’s PE Market - European Buyout Funds Find the Exits - Cleantech Predictions for 2013 - Two More Highly Valued Internet Startups Secure Funding - US Online Brokerage Targeted by Buyout Funds - Quote of the Week: India PE Backslides

1. DIGEST 76
SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 76
1 Big Bang Year-End for European VC
Investment
• Go4Ventures’ Latest Analysis
1 Perception, PR and Italy’s PE Market
• Unquote Looks at Italy
European Buyout Funds Find the
2 Exits
Cleantech Predictions for 2013
2 • Kachan Consulting Looks Ahead
Two More Highly Valued Internet
3 Startups Secure Funding
4 US Online Brokerage Targeted by
Buyout Funds
4 Quote of the Week: India PE Backslides
December 07, 2012

2. BIG BANG YEAR-END FOR EUROPEAN
VC INVESTMENT
The volume of European venture financing climbed for the third month in a row, putting the total for
2012 ahead of 2011 by a good 25%, according to the latest Go4Venture newsletter. Despite a worrying
flat-lining in VC exits, October proved to be a record month for investments, says Go4Venture. There
were seven deals of greater than EUR 20 million.
The current drivers
• VCs are investing in later and larger rounds in order to achieve the kind of absolute returns that will
enable them to stay relevant in the eyes of increasingly cautious LPs
• US-based VCs are providing the financial firepower for large and growth stage VC transactions in
Europe, namely Accel Partners, Canaan Partners, Redpoint Ventures, Stripes Group. Many of the
newly funded companies were initially funded by European-based funds such as A Plus Finance,
Balderton, CM-CIC, Creathor Venture, Eden Ventures, Idinvest and Index Ventures.
• Growth equity financing is the hot trend in Europe rather than early stage venture
PERCEPTION, PR AND ITALY’S PE
MARKET
A report on the Italian PE market was published by unquote this week suggesting the region has a
public relations problem. Investors are apparently concerned about investing in Italy, despite the
country's relatively good long-term track record of returns.
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3. Much of the uncertainty is perception, argues one local
industry insider. Italy tends to get grouped together with
southern European neighbors such as Spain or even
Greece. But the economies are not comparable, say
industry insiders quoted in the report. Its primary surplus
is one of the highest in Europe and the country has a
“reasonably stable banking system” that has not needed
outside help. High public debt is the nation’s real problem.
As a result of the public perception, fund managers in Italy
have to improve communication, transparency and
professionalism, said the report. Perhaps the PE industry
should take a look at how appealing the Italian tourism
Image source: Tourism in Italy website
board makes travelling, winemaking tours, dining, and
hiking.
EUROPEAN BUYOUT FUNDS FIND THE
EXITS
European VC may be having trouble finding the exit as reported by Go4Ventures above, but PE funds
are on a roll. This week Charterhouse and CVC started the process of selling their energy-metering firm
Ista, in what reporters are saying may be one of the biggest private equity transactions in Germany next
year with a price tag of up to about EUR 3 billion, according to Reuters. Elsewhere, a single issue of PEI
daily newsletter, reported several mid-market PE exits, including Avista Capital Partners sale of Anthony
International for USD 603 million, rumored to be a 2.1x return multiple. Dunedin sold one of its portfolio
firms for a 3x multiple, as while High Road also made an exit, as did EQT sold Gambro. Norwest also
exited an agricultural processing company for USD 1 billion, according to PEI.
CLEANTECH PREDICTIONS FOR 2013
December is always the month when consultants, bloggers, and magazine editors publish their
predictions for the upcoming New Year. This week cleantech consulting firm Kachan & Co. offered its
predictions about cleantech venture investment. It says to expect investment to decline even further
than it did. This year’s estimated 680 billion is down by more than 25% from 2010 and 2011 volumes.
The consultancy also said there are some long-term risks coming in solar, wind, electric vehicles and
elsewhere. At issue is the lack of cost-efficient grid-scale power storage technology which is essential to
smooth out intermittent power production (due to weather, seasons etc.) inherent in wind and solar
power generation.
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4. Other predictions include a
return of the combustion engine
due to innovations which will put
electric vehicle markets at risk,
and a bold forecast for progress
in clean coal tech. All in all there
are thirteen predictions for
cleantech in 2013 from Kachan.
Image source: Kachan and Co.
TWO MORE HIGHLY VALUED INTERNET
STARTUPS SECURE FUNDING
This week two large rounds were
announced for Internet platform
providers, specifically Evernote and
1stdibs (first dibs). Evernote, which runs a
notes-recording and publishing platform,
confirmed that it raised USD 70 million in a
deal that valued the web-based notes
company at a billion dollars, according to
TechCrunch. The Series D round for the
software company is meant to fund
international expansion that will include
China, some M&A activity, and the
development of business-oriented
accounts, as well as better technical and
customers support features.
Elsewhere, the high-end antiques marketplace 1stdibs raised USD 100 million this year from Benchmark
Capital, Spark Capital, and Index Ventures, according to PE Hub. The investors hope that 1stdibs can
increase profits by improving the underlying technology and business processes. Today the platform
connects buyers and sellers and they transact offline, and handle things like logistics themselves. The
founders say the plan to add support for logistics and payments and other services for the high end
market niche that the 11 year old web service company has successfully established.
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5. US ONLINE BROKERAGE TARGETED BY
BUYOUT FUNDS
This week’s deal of the week is the bid to acquire Knight Capital Group. The USD 1.1 billion buyout has
attracted at least two buyers, both are private equity-backed, namely Getco, which is backed by
General Atlantic Partners, and Virtu, a rival trading company backed by Silver Lake Partners and now
Cerberus Capital Management , according to press reports.
QUOTE OF THE WEEK:
INDIA PE BACKSLIDES
"There are too many India-focused
private equity funds. It is like a
cottage industry. There will be a
shake-up”
Who said it: Sameer Sain, co-founder of Everstone Capital, an India-focused private equity firm with
assets worth over USD 1.6 billion
In Context: Sain was quoted in an article reporting declining LP allocations to Indian PE funds and a fall
in the number of private equity investments in the region this year. Activity was down by 25% and India
now lags compared to Brazil and Russia. Indian private equity investment deals are valued at USD 3.98
billion in the second part of the year, down from USD 5.2 billion in the first half of the year. Three
reasons were given by Sain for the current trend in India - negative headlines on local political and
regulatory situation, unimpressive return on investments and a precarious global economy.
Where we found it: India Times
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