2011 in Review: A Year of Innovation, Record Net Cash and The Cultivation of Enterprise 3.0

Posted by | December 30, 2011

As 2011 comes to a close, it offers us an opportunity to look back at the major milestones and key events of the year. While 2011 will be remembered for the life of Steve Jobs, the launch of Google Plus, the European debt crisis, and catchphrases like “occupy,” it was also a notable year for the venture capital industry with the emergence of some innovative new trends in both the life sciences and technology industries. Here’s our take:

A New Class of Innovators

In 2011, we saw a wide range of innovation and milestones at Safeguard Scientifics.

  • We celebrated 40 years of trading on the NYSE by ringing the closing bell and launching a commemorative website.
  • We took advantage of capital deployment opportunities in large and rapidly growing markets via ThingWorx, PixelOptics, NovaSom, PutneyMedivo and most recently Crimson Informatics and Hoopla Software.
  • We realized two significant exit transactions with the $750 million acquisition of Advanced BioHealing by Shire (a 25% premium to the mid-point range as ABH was preparing to price its IPO), and a $90 million acquisition of Portico Systems by McKesson. Taking into consideration all of our wins and losses since we began executing our strategy in January 2006, Safeguard realized an aggregate 2.4x cash-on-cash return—that’s TWICE the venture capital average for the same period. Today, Safeguard sits on an historical record net cash position exceeding $200 million.
  • We paid off our remaining 2004 convertible debt in March 2011. Thanks to less debt and more cash from well-timed and valuable exits, our Debt to Equity ratio now stands at 1:8—a balance sheet statistic as strong as they come!

Social Media Meets the Enterprise

This was a year when Twitter and Facebook played a vital part in revolutions throughout Egypt and Tunisia. Social media also hit us close to home, as the enterprise opened up its doors to the value of these electronic networks. Social media finally made its way into corporate IT departments, as Enterprise 3.0 took shape. In 2011, the adoption of social mediamobile technology, cloud computingInternet of Things, and big data drove changes that will continue to transform industry in the years to come. Safeguard believes that Enterprise 3.0 is revolutionizing the future of technology. To mirror this vision, Safeguard deployed capital in new partner companies ThingWorx, MedivoCrimson Informatics, and Hoopla Software.

The Proliferation of Mobile

Employees have been asking to bring tablets and smartphones to work for a few years now, and the IT industry fully realized the capability of mobile in 2011, the year mobile IT was born. In 2011, smartphones and tablets proved that they weren’t just for techies, as more and more people began to interact and depend on these devices. They continue to change how we connect and interact with businesses, people, and even places. Big data and the Internet of Things play into this trend as well. As these concepts evolve, our devices will get smarter and our understanding will continue to evolve.

Life Sciences and Technology Converge

One of our basic financing strategies revolves around opportunities that exist where life sciences and technology are converging. In 2011, we consolidated our life sciences and technology deal teams to better leverage our resources and capitalize on this important area. Our new partner company Medivo is a great example of how we can leverage our expertise to capitalize on opportunities in the convergence between diagnostics and healthcare IT, as well as the consumerization of healthcare through the power of the Internet.

In 2011, both the technology and life sciences industries experienced the emergence of potentially disruptive new products and services that are harnessing the power of the Internet, increased mobility, the accelerating pace of a changing social media landscape, and the convergence of healthcare and technology. Safeguard has made a concerted effort to understand and help shape partner companies and the opportunities these exciting developments offer.

Here’s to 2012—have a Healthy and Happy New Year!

To read more of our “Week in Review” series, please use the following feed: www.safeguard.com/WeekInReview.

(Visited 83 times, 1 visits today)

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,