melt waterwhich first made its name in media monitoring and has since become active in business intelligence using AI and big data analysis techniques, is welcoming new investors. VardhanThe Norwegian private equity firm, which earlier this year closed a more than $1 billion fund to invest in the expansion of high-tech companies, acquired an 11% stake in Meltwater, valuing the company at €542 million. 92 million dollars), with a stock value of approximately 542 million euros (approximately 592 million dollars). $65 million. But that’s not the only sticking point in the deal.
The investment will be made through Verdan, which will acquire a significant stake in Fountain Venture, an investment vehicle controlled by Meltwater’s founder and current chairman, Jørn Risegen.
Meltwater was listed on the Norwegian Stock Exchange until early this year.Mr. Risegen oversaw the company’s taking private. early this year The remaining stake was held through Fountain in a deal with two private equity firms, Alter and Merlin. (This go-private deal was the last disclosed valuation and the one currently cited by Meltwater.) Verdhan invested in Fountain Venture rather than directly in Meltwater. This is because, in partnership with Fountain, we plan to jointly invest in startups active in the following areas in the future. love.
Joakim Kaempferd, president of Verdun, said the partnership will also allow the company to acquire a stake in HR firm Jobilon, but Meltwater has much larger assets.
“The trade here is really a portfolio trade,” he said. “We have acquired Mr Jorn’s investment company and have an implied direct stake in Meltwater and Nordic recruitment company Jovilon, with Meltwater being the largest asset in our portfolio.” Jovilon’s current ARR is approx. 5 million euros, but Meltwater, which was founded in Norway but is now headquartered in San Francisco, has an ARR of about 500 million euros, he added.
The deal highlights several important themes in Europe’s technology industry and the world of venture capital.
The first is the fact that tech companies continue to put significant pressure on their valuations. Meltwater’s current market cap is just under $600 million, which is actually less than the funding the company raised over the years (more than $700 million) when it was a private startup. pitch book data), and less than half of its valuation when it went public in December 2020 at more than $1 billion.
The second is the nature of the trade at the moment and the efforts investors are making to avoid risk. The European market is particularly tight at the moment. Venture capital firm Atomico conducts deep research into Europe’s funding landscape each year (along with a number of third-party research firms and other companies participating in the ecosystem), and estimates that funding will be halved in 2023. It turned out that That has fallen to just $43 billion, with private equity firms participating more heavily in deals to make up for the decline from VCs.
In this context, it is noteworthy that Verdane chose to invest in Fountain Venture rather than directly in Meltwater. This would give Verdan a stake in Meltwater, as well as Jovilon and any other stake that Fountain and Lysegen might be interested in. Then you lose the leverage of focusing on just one business. Verdane itself has only recently begun spreading its wings into investing in startups across Europe and beyond. Partnering with a partner to help lead the way is a much lower-risk approach to more ambitious initiatives.
From a technology perspective, companies like Meltwater are at a crossroads these days. The company’s roots lie in humans physically sifting through stacks of newspapers every day, cutting out the parts that mention company names, collating them, and sending them to their customers so they can better track their status. It probably came from business. It was featured in the media.
The decline of print media digitized that effort, but then the rise of social media turned it into a broader game, sentiment analysis, where words became structured and usually unstructured data. Ta. The influx of a whole new set of tools to glean insights from data has turned a media challenge into a technical challenge. Meltwater built his AI in-house and acquired a series of companies in his analytics integration efforts. (The most high-profile of these acquisitions was undoubtedly DataSift, a groundbreaking company that was an early Twitter friend of his and used to monetize Twitter’s firehose.) has worsened.)
But now it has a much bigger competitive threat. Companies like OpenAI and generative AI innovations will once again change the game from a search (consumer and business) perspective and how all kinds of business intelligence work is performed.
Unsurprisingly, Lyseggen said Meltwater’s focus feels like a throwback to what is essentially a solved problem, although it could well be made more efficient by competitors. Despite this, we believe there are further opportunities for our company.
“I see OpenAI’s ChatGPT as the ‘Netscape moment’ that ushered in this new era,” he said. This is interesting. Although Netscape isn’t part of what we use today, it certainly changed the way the world searches for information. “AI is changing the game as players challenge the old guard. We think Meltwater’s tech stocks are already the most modern and AI-centric of its category. We’re going to continue to do that and we’re really looking forward to it. We’re working very hard.” Meltwater today announced that it produces approximately 1 billion daily transactions for its communications, marketing and PR clients. announced that they were analyzing the document.
Source: techcrunch.com
