Auriga Partners has exited its investment in Neolane to Adobe, the Californian software group, for €600 million.
The Paris-based venture group owned 20 percent of Neolane, making it the largest shareholder in the company. It is to make an overall 33x return on the transaction, and a 65x money multiple on its initial investment, according to Philippe Granger, a partner at Auriga.
Auriga first backed the business in 2002, investing €1.4 million alongside Neolane’s founders and business angel Gilles Quéru. It followed on with a €5 million top-up round in 2006, and then oversaw an additional €25 million capital injection last January. This latest round also involved Battery Ventures, a US technology investor, and XAnge, the buyout arm of La Banque Postale in France.
Neolane provides software to integrate marketing campaigns across multiple media platforms, using an approach similar to that adopted by business-to-business services in other fields, such as customer relationship management or enterprise resource planning. Founded in 2001 with 15 employees, the company now has more than 300 staff and posted sales of €44 million last year.
“When the company started, marketing services providers were mostly focused on ‘pushing emails’, that is launching very simple, untargeted emailing campaigns. We understood that marketing would soon move on from that, and that it would increasingly rely on more sophisticated methods and software,” Granger told Private Equity International.
Granger hopes such success stories will help to rebuild the reputation of European venture capital, which he says has been damaged by poor past performance, the threat of new regulation and negative developments within the technology and IT industries. “It’s been a very long time since I’ve heard anything positive about venture capital,” he said.
He thinks the sector has been in “survival mode” since the burst of the 2001 internet bubble, but points to recent fundraising successes as a sign that it could soon stage a comeback. European-based venture funds raised $3.1 billion last year, above the $2.5 billion collected in 2011, according to PEI’s Research and Analytics division.
Granger expects Auriga to raise its next vehicle in the near future. The firm’s latest fund, Auriga Ventures III, reached its final close on €155 million in 2006.