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NewMedia Spark reduces staff

During the six months to September 30, the technology VC has cut 35 jobs and written down the value of its investment by E60m.

NewMedia Spark, the London-based technology investment boutique, has tightened its belt in response to what it continues to perceive as “extremely difficult market conditions.”

As part of a results announcement for the six months to November 30, the firm said it had reduced its headcount from 55 to 35 fulltime professionals after cutting jobs in London, Stockholm and Berlin. The reduction is to reduce operating costs from over £7m per year to £4.5m. Plans to open offices in India and Spain were put on hold.

The firm also said it had written down the value of its investment portfolio of 71 companies by £37.7m (E60m). Total net assets stood at £161.3m, of which £35m was held in cash. Five investee companies were closed during the period, and another four valued at nil, with Spark saying it had lost confidence in their ability to generate a return on investment.

Michael Whitaker, CEO, commented: “Spark remains in a fundamentally sound position. We are one of the few quoted companies specialising in VC investment in the TMT sector to have emerged from the extremely challenging market conditions of the last eighteen months.”

During the period under review, Spark acquired venture capital investment companies Spütz and GlobalNet. Taking control of the former gave the firm a 1 per cent stake in Deutsche Börse, which Spark is expected to sell for around £20m.