We sent out our Fund I subscriptions on March 13, 2000 to prospective investors who had pledged $120M.
The next day and during the next 4 weeks, Nasdaq dropped 1,600 points from a high of 4,906.
Facing melting portfolios, our prospective investors started rescinding their pledges.
We stuck to our beliefs and pushed our fundraising to the limit, and through Grit & Determination still managed to close our Fund I at $20M by October 19, 2000.
We invested in optical component startups, fabless chip companies, domain name portfolios.
Valuations were attractive, building them was hard work.
Surviving the Telecom nuclear winter of 2003-2005, we managed to have 6 successful M&As and a $700M IPO, out of a total of 12 investments, but not without pivoting and restructuring many of them before their exit.
A few examples:
Asip was merged with T-Networks to become Apogee, then merged into Cyoptics, before being acquired by Pirelli Optical group, now a Cisco subsidiary.
New.net was pivoted from a domain name extension to a prolific traffic ad network and was sold to Idealab & VendareMedia.
Neopad was restructured from a single product to become Nexplanar, a CMP solutions provider
Nanonexus and Sequoia Communications – we tried but failed to save them…you can’t win everytime.
RF Magic was reorganized and merged into Entropic Communications, with the combined entity going public on Nasdaq.
After we raised our $80M Fund II in 2006, we had invested in 18 portfolio companies by August 2008, ranging from infrastructure, software & IT services, to CRM.
On September 15, 2008, Lehman filed for bankruptcy, creating an unprecedented Global Economic Recession. Banks, Telecoms, Major Ad agencies started canceling or curtailing contracts with our companies.
Our portfolio started melting in value, our companies were struggling. By December 2008, we devised a plan to convert our fund into a holding company and acquire all of the minority interests in our portfolio companies.
The plan was to convert all of them to wholly owned subsidiaries that we would then merge into the holding company, hence creating Finatech, a Technology & IT Services Group, selling solutions rather than standalone products.
The process was grueling, unbearable, and unimaginable. It almost killed us. With hard work and luck, by June 2010, we landed on our feet – yes you read it right, we integrated 18 companies at once – having significant consolidated revenues, negotiated major cross-solution contracts with our top customers, cut overhead and FTEs from 700 to 400, and built a solid EBITDA.
While the sector’s revenue growth was -8% during that period, ours grew by +13%.
We successfully sold our shares in March 2013, and soon thereafter launched our Fund II-b with a focus on FinTech, Blockchain, Gaming and IoT.
After the 18-company integration at Finatech, we were called by investors, board of directors and CEOs of companies in the cleantech sector, which by 2011 was being subjected to an unprecedented assault from Chinese solar companies.
Prices were dropping by 50% every 6 months and stood below the production costs of many western producers.
From March 2011 to February 2012, we helped turn around Photowatt, the World’s oldest solar cell manufacturer in France, with $200M in revenues.
Facing a hostile French labor law environment, production was outsourced to China and Poland, while short cycle product lines were moved to Tunisia.
High content R&D was kept in Lyon, and constituted the jewel of the company’s standing in the sector’s value chain.
As a result, Photowatt was successfully acquired by global energy leader EDF in February 2012.
Ensued another cleantech company in New Jersey from February 2012 to June 2013.
Petra Solar successfully signed a utility contract in 2010, but was stalling by 2012.
Brought in by the Board of Directors composed of Venture Capitalists, we reorganized the company around specific targets & milestones, cut expenses by 25%, streamlined R&D initiatives.
We developed a core focus strategy & vision based on IP renewal, and we sourced and negotiated a new IP acquisition.
We improved presence in the Middle East by signing major contracts, country partners, and densifyed the sales pipeline.
As a result, the company was cruising by June 2013 to $60M in revenues, was debt-free and had accumulated $50M in excess cash in the bank. Not a bad time, to bring in a new CEO from the sector.
By June 2013, FRAM Group, a 50 year-old family-owned hospitality and tour operator, had exhausted its $100M in cash reserves fighting the paradigm shift of internet travel and the consequences arising from the 2010 Eyjafjallajökull volcano eruptions.
Its $300M in revenues no longer comandeered significant margins and banks were reluctant to extend credit.
We helped restructure the company by restructuring non-core subsidiaries and selling them to strategic buyers who maintained revenue flow to the company.
With a $70M cash inflow and a realigned organization, the Company was back on track by October 2014 and was acquired by the Karavel Group in November 2015.
Today we continue to be hard at work, doing what we love most
Identifying and Investing alongside Founders & CEOs of growth technology SMEs through our Fund 2017.
Visit our Portfolio and SPV pages and see the multitude of Startups & SMEs we impacted over the last 18 years!