Disney’s corporate venturing unit Steamboat Ventures capped off another bigexit last week with portfolio company GoPro, the US-based maker of sports cameras, floating on Nasdaq.
It raised $427m in what the Wall Street Journal said was likely to be the biggest consumer electronics IPO on record,
John Ball, managing partner of Steamboat Ventures, said: “These are the days VCs live for. It is hugely rewarding to see the outcome for everyone who was involved.”
Ball added: “From Steamboat’s perspective the GoPro investment was a “soup to nuts” fit with our investment strategy, leveraging Steamboat’s US-China cross-border capabilities, leading to a great working relationship between GoPro and Disney’s ESPN, and providing a very attractive financial return:
The deal marks a significant return for Steamboat, which recently raised money from other limited partners to come in alongside Disney, which had previously been the firm’s sole fund backer. Ball said: “Steamboat does not disclose the specifics of its individual investments, but let’s just say that everybody who invested in GoPro is very happy. For Steamboat, the investment will more than return our entire Fund V, which we closed early at $85m partly because of the significant value appreciation of the existing portfolio and due to a GoPro distribution in 2012.”
Steamboat managed to back the company even though it had not necessarily wanted to raise outside capital. “We had heard about what Nick Woodman and his team were up to at GoPro and were very impressed, but Nick for the longest time had not considered raising VC financing. GoPro was already profitable and did not necessarily need to raise outside capital. Yet Nick saw the opportunity to grow the business more aggressively and put together a syndicate of value-added investors, including Steamboat with our ESPN relationship and presence in China, and Riverwood Capital, run by Michael Marks, former CEO of Flextronics, who provided a wealth of experience and contacts in consumer electronics and outsourced manufacturing in Asia.”
Ball said the primary strategic link to Disney to date has been, “the immersive fan experience that the usage of GoPro cameras provided for ESPN’s X Games. The sophistication of the GoPro Hero 3+ camera has allowed ESPN to capture and stream amazing live video at broadcast-TV quality. This is an unbelievable advance for a $399 camera, when you previously needed $10,000+ video capture equipment, and frankly the fans find GoPro’s video even more enjoyable and compelling to watch.”
Steamboat is also eyeing successes in China, where it has a strong presence.“YY is a great example of our investment strategy in China, so far returning 50x our capital and still counting. Two more companies in our current China Fund V portfolio are on track for IPOs in the next 18 months, Chukong and 51Fanli, with Chukong due at the end of this year and 51Fanli in 2015.”
Referring to a report last year that Steamboat had pulled back from the US, Ball described this as: “Rather an exaggeration. What was interpreted as leaving the US was in fact a big push in China.” Steamboat continues to make investments in the U.S. and has two partners in California, Alex Hartigan, in San Francisco, and Liping Fan, in LA. Ball moves between the US and China, where Steamboat has two partners in its Shanghai office – Perry Chui and Jennifer Yan.