O'Sullivan scoops €30m from bicycle startup sale to Uber
The former 'Dragons' Den' entrepreneur Sean O'Sullivan made more than €30m from an initial €1m bet on a bike-sharing company that has been sold to Uber for close to €200m.
O'Sullivan, whose SOSV venture fund is one of the most active in the world in financing early-stage startups, took an early punt on Jump Bikes in 2014, supplying most of the company's €1m startup capital. It took part in a second €8m funding round in January this year with eight other investors bringing its total investment to €4m.
In April, Uber bought Jump for close to €200m.
"We got a huge return on it," said O'Sullivan. "We owned 20pc of Jump, which was purchased by Uber for a couple hundred million dollars. That's an example of where we put a lot money in and got even more money out."
SOSV currently has €300m under management. The company invests in 150 startups each year, plumping between €50m and €70m into the firms. It has invested in over 700 startups to date.
SOSV focuses on a variety of technologies, including medical devices, robotics, life sciences and hardware.
The company was also an early investor in Bitmex, the largest Bitcoin trading platform in the world, whose three founders are now estimated to be billionaires.
SOSV has invested in accelerator-backed startups in Cork, San Francisco, China and other countries. It employs almost 100 at its different office locations.
O'Sullivan said that SOSV recently took a decision to move a biotechnology accelerator facility from Cork to London because of greater market opportunities in the UK capital.
"In some cases, Ireland does not have the same opportunity for the startups we serve as London does," he said.
"That was a bummer to us to realise that we're able to fund the startups much easier when they're being shown in London. They're getting funded more rapidly in London for much higher amounts of money. We have to do what's best for our startups."
O'Sullivan also said that it may soon be less attractive to form a startup in Ireland relative to the UK because Britain is currently ramping up "aggressive" new tax incentives for investors and startup founders. "The UK is doing some very aggressive things to make startup investing attractive, pouring money into startups and big tax deductions," he said. "There are now some stunningly big incentives."
One of SOSV's recently created funds is IndieBio, a €25m pot set up to seek out promising young firms in the biotechnology sector.
The company recently placed a substantial investment in Synthex, a San Francisco based biotechnology startup that O'Sullivan says could advance medical science in some forms of cancer. "We've taken an outsized bet on that, they're raising a new round of $30m [€26.4m]," he said.
"It's a very promising cancer therapeutic that has come out of our Indie Bio programme.
"It has shown positive results on early stage trials for pancreatic cancer and there are some very good indications for other, normally fatal cancers." O'Sullivan said that SOSV is moving to increase the amount placed in individual startups next year. "Every year we put in about €50m," he said. "But our new fund will rise to around €70m per year even though we're keeping the same number of startups."
O'Sullivan was an early investor in Netflix and Amazon and also counts Apple in his portfolio. SOSV also backed Harmonix, the company behind the hit video game 'Guitar Hero'.
The 54-year-old Irish American entrepreneur, who lives between Cork and New Jersey, originally co-founded and built the street-mapping company MapInfo, which went on to net him almost $20m through a $200m public flotation in the mid-1990s. Since then, he has focused on early-stage startups.