Dealership software motors onto market
After the excitement of Facebook’s $104bn IPO and the subsequent fall in its shares, something more modest is coming onto London’s alternative investment market.
Incadea, an Austrian company that provides software for BMW and other car dealerships, will raise around £17m on Friday, in a stock market float expected to value the company at £47m.
It’s a lot smaller than Facebook, but it is a rare technology listing in London, where the tech IPO market has been considered closed for a long time.
Why a lower share price is good for Facebook
After the breathless build-up, Facebook’s fizzling stock price is drawing plenty of negative reaction this week. But compared to one alternative scenario – a big first-day “pop”, which many investors seemed to have been betting on – this is far preferable in the long run for both the company and its shareholders.
Facebook has become the public network – no longer a private company, the social network now has shareholders and a ticker symbol (FB) to go with the 900m users of its service.
Its initial public offering was priced at $38 on - the top end of its range, giving the Silicon Valley company a valuation of $104bn. But after opening at $42.05, Facebook’s underwriters had to fight to keep it above its float price, the shares closing at just $38.23, up 0.6 per cent.
For a Facebook “Timeline” of its opening day – from before the opening-bell ceremony at its Menlo Park headquarters through a frantic trading day – read Tim Bradshaw and Chris Nuttall’s live blog after the jump.
European technology funding April
Funding Circle, a UK-based online marketplace where individuals lend directly to small businesses raised $16m of Series B financing from joint investors Index Ventures and US-based Union Square Ventures. This brings the total amount raised by the company to $21m. Launched in August 2010, the company now facilitates around £1m in loans each week. The company is planning to use the funds to double its staff over the next year.
Dragonplay, a Tel Aviv-based games developer raised $14m in a Series A funding from Accel Partners. Dragonplay specializes in makes card, casino and board games for smartphones and social networks and is best known for Live Holdem Poker Pro, which has more than 2m monthly active players. The company will use the investment to expand its portfolio of games.
Needle sews a social-commerce road trip
Needle has been making its point about mobile and social, taking its office-on-wheels around the San Francisco Bay area this week to meet customers, hire staff and hold parties.
Its Airstream motorhome, which I visited as it was parked on Union Square (pictured), has served as a headquarters, recruitment office and promotional vehicle for the Salt Lake City start-up.
Path closed a $30m round of Series B funding on Monday, giving the mobile social network a $250m valuation.
The current round was led by Redpoint Ventures, with several other investors participating, including Sir Richard Branson, head of the Virgin empire, who said he is betting as much on Path’s chief executive, Dave Morin, as his product.
Path was founded as a smaller, more private alternative to Facebook, limiting users to 150 friends, and has since found a cult-like following among Silicon Valley technologists and designers. It had 2m users as of last month.
Other investors who participated in the current funding round include Greylock Partners, Kleiner Perkins, Index Ventures, Mark Pincus, chief executive of Zynga, Yuri Milner, founder of investment firm Digital Sky Technologies, Jerry Murdock, co-founder of Insight Venture Partners, and Allen & Company.
“It is important to us to work with investment partners who share common values around quality and building for the long term,” Mr Morin said. “Our ‘Path’ has only just begun.”
The company said it will use the new financing for international growth and expansion. The round bring Path’s total funding to more than $41m.
With its Instagram purchase, Facebook treads a familiar path
Can you name this start-up?
Some 18 months after launching, it reaches 20m users and may be on the way to owning its category. An established internet giant, which has been trying to break into the same market, jumps in with a takeover offer worth more than $1bn – even though it’s not clear how the start-up will make money. With a market value that has soared to over $100bn, though, the acquirer feels it can afford the risk.
No, this is not Facebook buying Instagram – but the parallels are striking.
There are many laws that help us to make sense of the world: the laws of physics; the law of averages, write George Osbourne, the UK finance minister, and Eric Schmidt, Google chairman. However, one of the more significant is Moore’s law, which forecasts that the processing power of the latest computer chips doubles every two years. This prediction has proved to be unerringly accurate over the past 50 years, and means that the pace of technological innovation is accelerating, not slowing nor flatlining.
However, it is not just the pace of technology progress that is accelerating. The role that technology plays in driving job creation and economic growth becomes more important each day.
Spring cleaning was in the air for Apple this week as the company announced its plan to pay a dividend and institute a share buyback programme. The announcement had many tech commentators putting themselves in the shoes of Apple’s chief executive, Tim Cook, to ask: what else could Apple have done with its cash?
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