Venture capital firm Ventech has sold its stake in digital music company Believe, saying the company’s lack of liquidity has led to it being “chronically undervalued” on the Paris Stock Exchange.
But in February, the company announced it would go private. At the time, its share price was trading around 30% below its IPO price.
Ventech announced Tuesday that it has sold its 12% stake in the company for €15 in cash per share, with a total return of €175 million ($186 million). The sale means Ventech has achieved a 36x multiple on its third fund.
Jean Bourcereau, president and managing partner of Ventech, told Business Insider that Believe had been “chronically undervalued by the market for its lack of liquidity” despite raising €300 million in cash during its IPO.
“It wasn’t really possible to use the Believe stock to accelerate its build-up,” he added.
“The management wanted to size the company, but the stock price and liquidity wasn’t allowing that,” he said. “We began to think, what’s the next logical step for Believe? And we felt it was the time to go private with investors with the means to fulfill its objectives.”
Believe isn’t the only company going private after a stint on the public markets. Last week, Darktrace, a UK cybersecurity company that listed on the London Stock Exchange in 2021, announced it had agreed for private equity giant Thomas Bravo to buy it for $5.3 billion.
Ventech is now launching its 6th fund
There are signs that the VC funding landscape is returning to life after the tech downturn. Ventech has raised an initial closing for its sixth fund, targeted at around €225 million ($241 million).
“We think it’s a good size to make early-stage investments and co-lead at seed and Series A,” Bourcereau said, adding that the firm typically invests in early-stage tech companies in Europe.
The fund will focus on backing companies in four key sectors. It’s eyeing innovations in the industrial software sector, as well as in digital health. It has also looked at companies which enable corporations’ transition to the cloud. Lastly, it will continue to invest in deep tech startups spanning everything from semiconductors to hardware.
Ventech has made initial deals from its sixth fund, backing French startup Firecell and German real-estate management company Einwert. It has also opened a new office in Stockholm to double down on its investments in the Nordics.
“The Nordics as a whole have outperformed the rest of Europe for 25 years,” Bourcereau said. He added that there weren’t many international Series-A investors in the region and that Ventech aimed to build a long-term strategy for investing there through the new fund.
