It looks like Monday will be when we find out if how many staff go from eBay’s offices globally and the UK/European offices specifically. Last month reports started to emerge that eBay was poised to cut 1,500 jobs, or 10% of its workforce globally, according to an article in Barron’s weekly. It cited a report published by investment-research firm Wedge Partners.
My sources tell me the process will start on Monday next week and that the lay-offs will take in staff at PayPal, but not Skype, the eBay-owned property. The move may be a short-term one to please a turbulent stock market. An official eBay spoksperson told me today: “We don’t comment on rumours.”
However, if the lay-offs go ahead, the significance of this is that eBay may end up shutting down some local offices in Europe (though almost certainly not the sites).
Having local eBay offices in Europe is often a good thing for start-ups as eBay is not afraid to advertise on new sites or integrate new services on the platform from start-ups. Not to mention that these local offices will often evangelise e-business to SME’s and consumers. We’ll see on Monday, but it’s not looking good. eBay has just one job going in London right now, despite a significant presence.
In adjacent but related news today VC and M&A investment is down across the whole “digital media” sector according to a quarterly report by industry analysts at StrategyEye. Specifically, they say, advertising, mobile content, gaming, social media, search and online media are all affected.
The first three months of this year saw a 38% decline in the number of deals, and a 81% decline in the value of M&A and VC investment in the digital media sector. The decline in venture capital activity in terms of number of deals was down 48% to 151 and the value of the deals was down 58% to USD1.64bn. In the M&A market, activity declined (by number of deals) from 49% to 106 and the value of deals by 82% to USD36bn. StrategyEye tracked 121 M&A, 161 Venture Capital and 253 Partnership deals across the sector in Q3 2008, at a total value of USD45bn.
What does all this add up to? A much, much colder climate for startups and existing online players. However, it is usually downturns like this when the real companies start to emerge and fight their way through the tough times. Historically, by the time things improve, they are in a good position to race ahead of the pack. So, good news for some, especially those who have money to play with over the next two or so years. There is also another plausible trends - eBay start with payoffs may start to swell the startup ranks.
The shifting sands of London’s networking events is shifting again, and re-shaping into something approaching stability. The Social Media Cafe, or The Tuttle Club as regulars like to call it, is moving from its birthplace in an upstairs room in The Coach and Horse pub in London’s Soho (see my bad photo of the last event today) to a fascinating new location: The Institute of Contemporary Arts.
What is Social Media Cafe? Original founder Lloyd Davis originally said it was: “a place to meet, hook up, get groups together, socialise, train people, co-work etc… a confluence of the creative, tech and entrepreneurial tribes who are currently gathering around social media and online social networking.”
So, from Friday 10th October, the Tuttle Club will hold its Friday meetups at the ICA in The Mall. The plan means they will be able to expand beyond the 40 person limit. The ICA has capacity for up to 200 people. Admission will be through the “back door” in Carlton House Terrace at 10am and the networking runs to midday. The SMC will also be able to do more around the “intersection of contemporary art and social media” and move into early evening events. Thanks go to to Alastair and his staff at the Coach and Horses for their hospitality over the last few months. The prime movers behind Tuttle have been Mike Atherton, James Whatley, James Scroggs of Spinvox and of course Lloyd Davis. Well done guys.
Meanwhile, over at London OpenCoffee - a regular weekly meetup for investors and tech startups - they too have a new home courtesy of Tim Barnes who runs “Innovations @ UCL“. It will now be every Thursday between 1000-1200 (as before) in the foyer in UCL’s stunning new Roberts building, Torrington Place, corner Malet Place. It think it’s a Costa Coffee.
And if you have a tech/startup-related event then a good way to get on the TechCrunch radar is to add it to our TechCrunch Euro Startups Events group on Upcoming.
Lastly, I am thinking of starting a regularly weekly meetup for startups somewhere near “Silicon Roundabout“. Feel free to suggest venues in the comments.
Spotify, founded by the former Tradedoubler team, is understood to have raised €15.3m from Northzone Venture Partners at a monster €71.6m pre-money valuation. The service is still in private beta.
Northzone themselves have declined to comment, but Creandum, another of Sweden’s top VCs, is also understood to have taken part in the funding round. Spotif have released no statement but they recently held a large party in Stockholm. Make of that what you will.
The Stockholm-based Spotify can essentially be summed up, in the words of one blogger, as a kind of hybrid of Skype, last.fm, the iTunes Store and Bittorrent. A lightweight iTunes-like application streams songs via encrypted P2P technology. The service is ad-financed, hence the comparison with Last.fm.
My colleagues over at TechCrunch.com have done some great number crunching and come up with a list of startups in CrunchBase that have raised at least $25 million over the past two years. The next two years are generally being referred to as another “nuclear winter” when startups will find it very hard to raise cash. They came up with a list of 160 startups, with Facebook topping the list with $455 million raised over the last two years (the bulk of its total $496M). However, although many of those firms are largely operating in Europe (even though their service may be global), they were not split out from the US firms. So I have done my best to weed out the “European” ones.
Interestingly enough, there are two secondary ticket markets in there, Seatwave and Viagogo. SpinVox, at the top, is fast heading towards becoming a kind of over-arching platform for processing voice into text and putting it anywhere. Adconian plays into the fashionable performance ad space. JumpTap is in the hot mobile search space. DailyMotion and Videojug are in video, and increasingly professional content, while badoo has that multi-lingual social network juice. Only one mobile player so far - Nimbuzz.
Please have a look at the original list and leave a comment if I have missed any out, as I am sure I have.
TechCrunch UK is throwing a networking party for European startups called “LateCrunch”, in conjunction with Web 2 Expo Berlin (21-23 October). The event will be on Thursday 23rd October, the last night of the Expo, and it’s going to be the official “after-party” for Web 2 Expo. It will start at 10pm and go until 5am. We want this to be a cool, fun event for people to hang out with each other, meet startups and create the real beginnings of an amazing tech scene across Europe. We are releasing the first tranche of tickets today (Tuesday 30th September). We have pre-released a limited amount already, aimed at our targetted list of startups, VCs and entrepreneurs, in order to ensure the party is packed with startups. All further details about the event will appear on TechCrunch UK first. So if you want to be the first to get a ticket then subscribe to the RSS feed, the official Twitter feed @techcrunchuk, and/or Mike Butcher’s (Editor, TechCrunch UK) personal Twitter account @mbites.
When?
23rd October 2008 from 22.00 hours until 5am.
Where?
HomeBase Lounge, Köthener Str. 44, 10777 Berlin, Germany (see fantastic photo by Korbatz, above). For a map of the location, please go here . For recommendations of nearby hotels, please go here.
How do you get in?
Please get a ticket at http://www.amiando.com/latecrunch.html
Attendee identification will be checked at the door. Due to the strong demand for tickets, we regret tickets are not transferable and not refundable. If you use your name to purchase multiple tickets, your guests must arrive with you to check in at the door. There is a small 15 Euro fee for tickets in order to allay costs and prevent no-shows.
Press / Official Bloggers:
To apply for press/blogger status at LateCrunch please contact Rassami Hok Ljungberg (Rassami[AT]rassami.com of Rassami PR, Twitter: @rassami)who will be co-ordinating press attendance with the official Web2Expo organisers.
Sponsors of LateCrunch:
(If you are interested in sponsoring, please contact Petra Johansson on petra.johansson[at]btinternet.com (Twitter: @petrajohansson) of Twisted Tree Events for further information)
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I’m a little late to this, but it is worth noting that events guru Ryan Carson - co-founder of the Carsonified conference and training company which does the rocking FOWA - recently sold his web app DropSend, some two years after putting it on the block.
The buyer is Webminds who, I understand, picked the app up for an undisclosed amount, though I gather it was in the low six figures. I hear Webminds plans to take on the much larger and well funded YouSendIt which has $34 million in backing.
Ryan says he plans to plough the money from DropSend back into Carsonified, possibly to build more web apps.
Ryan - who for the record I like and I credit with being one of the guys who kicked off Web 2.0 in the UK - and I have had philosophical differences in the past. Hell, we’re going to be on a panel at FOWA together. But I actually agree with his view that web developers can take an alternative route to venture/angel funding and build a Web app from scratch and then sell it, in the process retaining control and owning 100% of the equity. Ryan has proved this himself, clearly. That is great if, like Ryan, you built an app for friends and family money - or even in your spare time? - and then sell it for a couple of times more than it cost to build. Indeed, as Carson has often said, DropSend cost in the region of £50-60,000 to build. And he has continued to try to put his money where his mouth is - apparently building a Web app in 4 days from scratch called Matt which allows you to post to multiple Twitter accounts. But I think there is also an argument to say that having a smaller share of a larger company pie works too - and that can only be achieved with backing. I also think it’s going to be tough to just ‘flip’ a web app in the current market conditions, but I suppose we are all changing our thoughts on that issue daily at the moment.
I guess it depends on your whole approach. Carsonified is famous for giving it’s workers a 4 day week, a new Mac and iPhone when they join and a harmonious work/life balance. ‘Tis a consummation devoutly to be wished. To work; to sleep;
To sleep: perchance to dream of Web apps…
Word reaches me that Kosso from UK video messaging startup Phreadz met up with Seesmic’s ubiquitous CEO, Loic Le Meur this week in London, as the latter passed through on his way to Picnic in Amsterdam. The two platforms have a slight cross-over audience, but Seesmic, with $12 million in funding, is an altogether different beast to Phreadz, a one-man startup that isn’t even out of private alpha yet. Still, it will be interesting to see if anything comes of this encounter.
Picture if you will a room full largely of men in dark blue suits, spread across 50 or more tables in a top London hotel, watching as “urban” dancers move amateurishly to the worst kind of arthouse music imaginable on a stage recently vacated by a Newsnight presenter. Actually, you don’t need to imagine, here’s an actual picture:
Fast forward a day on, to a basement bar off Trafalgar Square where about 150 technologists, entrepreneurs, social media addicts and curious onlookers rub shoulders to network and drink the night away in the name of charity in a virtual spontaneous celebration of Twitter. Here’s a picture for you:
Yes indeed, you couldn’t get a more different view of the London tech scene this week, where I attended on Wednesday the Investor Allstars awards, an annual event organised by GP Bullhound, the research-centric investment bank, and BusinessXL / Vitesse Media at The Hilton Hotel on Park Lane. On Thursday I went to Harvest Twestival, a raucous meetup for Twitter fans and techy early adopters.
Now I don’t want to be too unkind to Investor Allstars. Afterall, even Venture Capitalists deserve to celebrate their industry (I particularly liked the “Deal Envy” award). And congratulations to Index Ventures for being VC of the year two years in a row for their MySQL exit. But a ballroom event with a three course dinner, populated buy some of the wealthiest companies and individuals in the industry could have done with a few more elements - like a bit more fun for instance (there goes my invite to next year’s). Given the budget involved I daresay they could arrange the likes of, well, Stephen Fry or maybe Jerry Seinfeld. At least the setting last year was more interesting - Madame Tussauds. Even the normally jovial Loic Le Meur, who was at my table, seemed to have more fun (ironically enough) Twittering me jokes at the event before he left early to join his Seesmic fans at a pub in Soho. Unfortunatley he missed the dancers, who moved a lot slower than these blurry pictures seem to indicate, believe me.
And the whole “model” for Investor Allstars doesn’t seem to quite work. Usually at these big London events, the model is simple. A company wants to woo another for business, so they buy a table, get the potential client as drunk as possible and have so much fun they win the contract/whatever. With a VC awards dinner the model is in reverse: the startup is the one who needs the money but since they can’t afford to buy a table, they have to rely on the largesse of their investor. In the VC doesn’t win an award, they’ve shelled out for the whole thing and not even won any business out of it. Fail.
Yes, ok, the awards themselves might be important to some, but really any award ceremony is basically to do business in a celebratory atmosphere, no?
So I think the model needs to be changed, which is why I am putting serious thought to creating an event where startups can woo investors at an enjoyable evening dinner, where the costs are not so prohibitive and some actual business might be done at the end of it. what do you think?
Meanwhile, over at Twestival, the scene was completely different. For starters, the gender balance was suddenly more equal - rare at tech events - and, it has to be admitted, everyone was just there to meet other Twitter users. It wasn’t really a business/tech event at all as such. It was just a joyous celebration of the kind of flat-world social media can create. Where anyone can join in and turn up.
But there is an interesting comparison to be made here.
Investor Allstars had a charity element - over 50 tables of 8 people each were asked to donate £10 each to the Prince’s Trust charity. They raised £4,500 compared to £6,000 last year (credit crunch hitting VCs)? I don’t know if any of the profits from the event went to charity, but I daresay each table cost something for the company to buy, and there were plenty of sponsor logos adorning the stage (including those from some media web sites about VC which don’t even have RSS feeds. Doh).
In comparison, Twestival cost quite a lot less arrange - having been put on by volunteers and funded by donations. They received £2,750 in sponsorship from UnLtd World, Huddle, Diffusion PR, Tactile CRM, Winston & Strawn LLP and Just Giving - this paid for venue hire, drinks and food (until the tab ran out). Madhouse Collective volunteers provided staff, website design, camera crew, DJs etc. On the night they collected donations from the 200 “Tweeple” - mostly bloggers / tecchies - that attended the event. Donations were collectied on the door, and they sold raffle tickets to win prizes such as Wii’s, iPods and Flip Camera’s donated by companies including Twitter, Firebox.com, Wubud, Reuters, ITV and 6 Degrees PR. We even had a huge amount of people bringing food and other valuable items to give directly to the homeless charity they were supporting. The whole thing was organised by Amanda Rose (@amandita) and Renate Nyborg (@renatenyborg, Madhouse Collective) and these guys. It event featured a live performance by the guy who sings that dead catchy song about Twitter, reproduced below (I am still singing “You’re no-one if you’re not on Twitter”):
Well, there you have it, two very different events reflecting the diverse nature of the London tech scene. Let’s not be too hard on the VC event, but then one wonders where the real entrepreneurial spirit lies amid the awkward MC of Newsnight Emily Maitlis, versus the raw energy of Twestival…
Meanwhile here are the winners of the Investor Allstars event, for the record:
Venture Capital Fund of the Year: Index Ventures
Exit of the Year: MySQL
VCT/FCPI of the Year: AGF
Service Provider of the Year: Brown Rudnick
Private Investor Network of the Year: Hotbed
VC Personality of the Year: Simon Cook, DFJ Esprit
Equity Gap Fund of the Year: Hightech Gerunderfonds
Deal Envy of the Year: Adconion
Outstanding Contribution of the Year: George Coelho, Good Energies
Jon Moulton’s Triumph Over Adversity Award: Solar Integrated Technology
One of the issues with the development of a tech startup scene in Europe is that we don’t have one single technology cluster in Europe like Silicon Valley. For us, our “Silicon Valley” is a state of mind, not a place. Each country on the continent of Europe has many city centres where startups are spread far and wide. But there is no reason why startups across Europe cannot sometimes come together, network with each other and learn from each other.
So TechCrunch UK is throwing a networking party for European startups in conjunction with Web 2 Expo Berlin (21-23 October). The event will be on Thursday 23rd October, the last night of the Expo, and it’s going to be the official “after-party” for Web 2 Expo. It will start at 10pm and go until 5am, and feature a free bar, so you’d better get into training now. The details about the exact location remain secret for now, but since several hundred people will be coming it won’t be secret for long. We want this to be a cool, fun event for people to hang out with each other, meet startups from across Europe and start to create the real beginnings of an amazing tech scene.
And what’s the name of this event? “LateCrunch“.
We will release the first tranche of tickets on Tuesday 30th September at midday/noon BST/GMT. The details will appear here on TechCrunch UK first. So if you want to be the first to get a ticket then subscribe to the RSS feed, the official Twitter feed, or my personal Twitter account.
Attention Sponsors! We already have eight sponsoring companies for this event, and their names will be revealed on Tuesday. Some very interesting names! But there is still time to have your company associated with this amazing new event. So please email our event organiser Petra Johansson for the details about sponsor packages.
It’s a good time to be in Berlin - and there are lots of other things happening as part of Berlin Web Week.
More than $580m was invested into online advertising companies in the first half of 2008, according to new research to be released today, obtained exclusively by TechCrunch UK. Europe accounted for $258m of this, or 45% of the total.
The research has been put together by venture capital house Advent Ventures and will be revealed in a speech today by partner Paul Fisher in a speech at 2pm at the Ad:Tech conference in London. It was put together using data from Venturesource, RealDeals and proprietary research.
Fisher will point out that this $580m figure is pretty remarkable, since European VC typically only accounts for around 20% of the USA on an industry-wide basis. Although the Advert research only counts for the first half of this year and there is no informatoin on what happened last year to compare it to, the research appears to show a great deal of strength in the European market for advertising models.
Advent found that the largest sub-sector of investment both by value and volume was into online advertising networks. This includes traditional networks like Adconion which raised $64m as well as next generation widget ad networks like RockYou which raised $35m. Founded in 2004, Adconion Media Group is an independently owned, performance-driven online ad network which delivers online ads using its proprietary technology that it claims provides better results for advertisers and optimal revenue for publishers. Backers of Adconian include Index Ventures and Wellington Partners.
RockYou (originally named RockMySpace) creates and distributes widgets where people can express themselves, thus creating a stealth ad network. As a result RockYou has over 10 million registered users and gets over 150 million widget views from over 200 countries per day. RockYou’s main competitor is Slide. RockYou has backers which include First Round Capital, Lightspeed Venture Partners, Sequoia Capital and Partech International.
The second largest sector Advent turned up was ad technology platforms like AdJug (ad exchange) OpenX (ad serving) Coull (video ad serving) and KeyBroker (campaign management). UK-based Coull has a video platform which enables video owners to identify and tag objects within online videos, and customise user experiences around interacting with those objects to drive consumer engagement with brands.
The largest two deals were also European: ECI Partner’s investment into i-level, and Index and Wellington’s into Adconion.
Advent’s research doesn’t include Qype as it was announced too late to qualify as a first half investment, however, it has invested in British company Fizzback to the tune of $5m in February this 2007. Fizzback offers “real-time” customer engagement tools via email, SMS or mobile email. It’s also invested in Zong, a mobile payment system for monetising Web audiences. Zong has $12.5m in total funding from Newbury Ventures and Advent.
Advent also turned up “five investments” into companies which are measuring advertising effectiveness although isn’t revealing specifically which companies it noticed, other than to say “we are very interested to see European companies tracking, measuring, analyzing, and quantifying online advertising effectiveness.”
What’s the message startups can take away from this? The simple message is that if you build an advertising platform you may well attract investment, however, other media/tech startups relying on advertising (that’s all the consumer social networks BTW) will do well to look closely at these emerging ad platforms and see how best they can work with them.
It looks like Monday will be when we find out if how many staff go from eBay’s offices globally and the UK/European offices specifically. Last month reports started to emerge that eBay was poised to cut 1,500 jobs, or 10% of its workforce globally, according to an article in Barron’s weekly. It cited a report published by investment-research firm Wedge Partners.
TechCrunch UK is throwing a networking party for European startups called “LateCrunch”, in conjunction with 
Aventiv created 
Exclusively for startups, the fee-free 
I’m a little late to this, but it is worth noting that events guru Ryan Carson - co-founder of the 
