Scale-Up Sessions are workshops curated by Endeavor Nigeria for high-impact companies and their founders. This session was run by Victor Basta (Founder & Managing Partner, Magister Advisors).
My recent interview at Target Partners CEO day, focusing on what "exit preparation" really means, the issues CEO's face in preparing for a high value M&A exit, and what to look out for in the 12+ months ahead of this life-changing event.
Last week, German fintech N26 announced it had raised another $170m in its latest funding round, taking its total investment to date to more than $680m, according to Crunchbase, and elevating its valuation to a lofty $3.5bn. That’s for a company that says “profitability is not one of our core metrics”, and whose annual revenue is estimated to be around $17.5m (a healthy price-to-sales ratio of... 200).
In the past five years, there has been a sea change in the funding landscape for European technology. So much so that today many companies are opting to raise ever-larger growth rounds instead of preparing for a more "traditional" M&A exit. While this will enable a larger group of European companies to fund themselves to serious scale for the first time in history, it is already creating significant new challenges for CEO’s and fundamental issues for early backers in the sector.
Monzo has been awarded the ultimate Silicon Valley seal of approval: A $144 million fundraising round led by Y Combinator, the biggest name in startup accelerators. The deal values the British banking app at $2.5 billion, twice what it was worth in the private markets last year. It has been given a license to lose money like never before as it tries to conquer America, the El Dorado for fintech challengers.
Technology is already becoming a major economic driver for the whole of Africa, far more than anyone realises. While Jumia gets headlines, the relative impact of African tech VC is already equivalent to European tech funding only five years ago.
One in four tech startups in London has lost out on investment because of Brexit, according to research released today by Tech London Advocates, the private sector network of more than 7,000 tech leaders and investors.
If you’re hoping to create a unicorn on a budget, look to the European technology sector for inspiration. Despite the well-documented increase in available funding for tech companies across the continent, startups are reaching unicorn status with much lower totals of venture capital than U.S. rivals. In fact, this level of “capital efficiency” is one major attraction for international investors weary of the “burn rate” of many U.S. companies aspiring to valuations of $1 billion+.
As Lyft ($LYFT) started trading on the Nasdaq Friday, Victor Basta, the managing partner of boutique merchant bank Magister Advisors, says the company is being undervalued. That, he says, is why the stock initially surged 20%.
In this guest post Victor Basta, managing director of boutique investment bank Magister Advisors and a specialist in the technology sector, examines the surge in private equity-backed late-stage technology funding, and the implications for the sector.