2016 European Venture Capital Report January 2017 About this report About Dealroom.co ■ Founded in 2013 in Amsterdam, Dealroom has become Europe’s leading venture capital database, tracking over 500,000 high-growth companies and 10,000 investors in Europe and beyond ■ Dealroom provides a 360° view by combining research with big data and machine learning, plus contributions from over 10,000 local market experts ■ Customers (funds, corporates, banks, consultants) use its online tools and bespoke research to stay ahead of developments and for decision-support 10,000+ contributors (founders, VCs, …) Automatic data feeds and web crawlers Market insights from industry insiders and journalists Analytics and growth signals on 500,000+ companies Scope of this report ■ This report covers venture capital funding in Europe and Israel (including Russia and Turkey). Includes: angel & seed rounds, VC series, growth equity, converts ■ Excluded are: private equity buyouts, M&A, private placements, lending capital ■ Throughout this presentation, footnotes reference to relevant online resources found on https://app.dealroom.co “verified open-data” model Authors Yoram Wijngaarde (Founder & CEO) Formerly tech & media M&A at Lehman Brothers and NOAH Advisors Julien Puls (Data analyst & researcher) Formerly at CMB Capital Université Jean Moulin, Lyon Special thanks to for massive contributions to the data Curation & research by Dealroom’s team Manually verify data and enrich content Machine learning and natural language processing Predict company activity, identify growth trends 2 Contents 1. Headline stats in Europe 2. Identified trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data Record € 16.2B venture capital raised by European companies in 2016. Funding up 12%, rounds up 32% Amount raised (€ M) 2016 was a record year, despite peaking during first quarter By comparison, venture capital funding in the U.S. declined about 10% (CB Insights/PitchBook) The chart shows top-8 rounds separately in grey and table below shows top-8 round in each year Number of rounds 3,376 (+32%) Funding grew 12% (or 11% when excluding top-8 megarounds) Number of deals grew an impressive 32% over 2015 (an acceleration of pace versus previous year) Top 8 rounds (€ M) 2,566 € 16.2M (+12%) € 14.4M 2,120 Top-8 rounds 1,853 € 10.1M 1,290 € 4.2M 2012 Deezer (€ 118M) Conduit (€ 91M) € 4.9M 2013 2014 2015 2016 Spotify (€ 227M) Supercell (€ 118M) Rocket Internet SE (€ 405M) Delivery Hero (€ 318M) Delivery Hero (€ 496M) Spotify (€ 478M) Spotify (€ 909M) Global Fashion Group (€ 330M) Spotify (€ 91M) Truphone (€ 107M) Adyen (€ 227M) Landbay (€ 300M) Jumia (€ 300M) CureVac (€ 80M) AVITO.ru (€ 68M) Agendia (€ 59M) Mimecast (€ 56M) Luxoft (€ 55M) Powa Technologies (€ 69M) Mobli (€ 55M) Auris Medical (€ 46M) Ulmart (€ 46M) AVITO.ru (€ 46M) Ozon (€ 136M) Gett (€ 136M) The Hut Group (€ 120M) borro (€ 102M) Adaptimmune (€ 95M) FanDuel (€ 250M) Zencap (€ 230M) BlaBlaCar (€ 182M) Kreditech (€ 182M) Global Fashion Group (€ 150M) Gett (€ 273M) Deliveroo (€ 250M) OVH (€ 250M) Payoneer (€ 164M) Skyscanner (€ 154M) Source: Dealroom.co. Includes Israel. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding Top-8 rounds 4 Q4: €3.8 billion raised by European companies. Number of rounds in Q4 were second highest ever Amount raised (€ M) Top 8 rounds (€ M) Number of rounds during Q4 were close to an all-time high. Number of rounds 883 636 499 467 498 544 561 530 € 3,618M 485 € 3,552M 648 561 786 721 € 4,627M € 4,310M € 3,848M 871 836 € 4,238M € 3,535M € 3,513M € 3,799M 389 € 2,478M € 2,116M € 2,015M Funding peaked during Q1, in € terms. € 1,569M € 1,331M € 1,118M € 888M Q4 ranks as #5 highest quarter ever. Top-8 rounds Q1 Q2 Q3 Q4 Q1 2013 Top-8 rounds Truphone € 107M AVITO.ru € 46M Hybris € 27M 3V € 23M Game Insight € 23M Ostrovok € 23M Farfetch € 18M NewVoiceMedia € 18M Supercell € 118M Auris Medical € 46M Ulmart € 46M Symphogen € 41M NumberFour € 35M Opsona € 33M GenSight € 32M ResearchGate € 32M Powa € 69M Shazam € 36M Evotec € 36M Crocus € 34M NewVoiceMedia € 32M Delivery Hero € 27M WiThings € 27M ObsEva € 26M Q2 Q3 Q4 Q1 2014 Spotify € 227M Mobli € 55M Arria NLG € 37M ADC € 36M Funding Circle € 34M Wilocity € 32M Merus € 31M Biocartis € 30M Klarna € 90M Delivery Hero € 80M NovImmune € 60M SoundCloud € 55M Hoccer € 50M Avantium € 46M Hailo € 46M Kaltura € 43M Ozon € 136M Takeaway € 94M Delivery Hero € 77M Sarenza € 74M Westwing € 72M Farfetch € 60M iZettle € 50M HelloFresh € 46M Rocket € 405M Delivery Hero € 318M Gett € 136M The Hut Group € 120M Adaptimmune € 95M BlaBlaCar € 91M ironSource € 77M Biocartis € 65M Q2 Q3 Q4 Q1 Q2 2015 Adyen € 227M Powa € 73M Blue Yonder € 68M Cell Medica € 60M Truecaller € 55M Ascendis € 55M Huddle € 46M StoreDot € 46M Delivery Hero € 496M HelloFresh € 110M SIGFOX € 105M Foodpanda € 104M WorldRemit € 91M Verne Global € 89M Farfetch € 78M TransferWise € 53M Spotify € 478M INFINIDAT € 136M Funding Circle € 136M Home24 € 120M Auto1 Group € 107M Delivery Hero € 100M Foodpanda € 91M Wallapop € 91M FanDuel € 250M BlaBlaCar € 182M GFG € 150M Reward Gtwy € 144M Letgo € 91M Prodigy € 91M CeQur € 91M Kreditech € 83M Q3 Q4 OVH € 250M Deliveroo € 250M OurCrowd € 66M Sabio € 60M Darktrace € 58M LINKBYNET € 50M Jumia € 50M Silent Circle € 46M Payoneer € 164M SIGFOX € 150M Devialet € 100M Gett € 91M Voyager Labs € 91M Carrick € 86M HelloFresh € 85M Sonnenbatterie € 77M 2016 CureVac € 100M Atom Bank € 98M Deliveroo € 91M Ebury € 76M Symphogen € 68M ObsEva € 55M Cybereason € 54M TransferWise € 53M Spotify € 909M Jumia € 300M Skyscanner € 154M Cool Blue € 140M Deezer € 100M MindMaze € 91M Starling Bank € 58M WISeKey € 55M Source: Dealroom.co. Note: blue font indicates biotech. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding GFG € 330M Gett € 273M Cabify € 109M Farfetch € 100M Letgo € 91M SoundCloud € 87M Jumia € 75M SIRIN Labs € 66M 5 Slowdown in UK and Germany, but strong growth across most parts of Europe Decline in UK and Germany (Europe’s most mature VC markets) Amount raised (€ billion) UK funding is down €0.6B, or 16% Rocket Internet (a key driver for Germany) did fewer big rounds in 2016 (Jumia in France). € 3.2B € 2.9B 545 € 1.5B Spotify is a big driver in Sweden, but number of rounds also rose to level close to Germany’s. € 0.6B € 245 0.6B 288 353 € 1.0B 380 165 € 0.5B 118 2012 2013 2014 2015 2016 Germany € 0.6B 167 € 0.8B 180 243 € 0.5B € 0.5B 88 2012 2013 2014 2015 2016 France € 2.4B 725 € 1.6B 590 € 1.2B 410 United Kingdom 1,021 € 2.7B € 1.8B 520 2012 2013 2014 2015 2016 € 3.4B € 2.7B 644 542 1,289 France has highest number of rounds this year: 590 € 2.0B € 2.0B € 1.3B € 1.3B Growth mostly driven by Switzerland, Norway, Finland, Spain, Italy, Ireland, Belgium and parts of Central & Eastern Europe (see next slide). Number of rounds € 4.0B € 3.8B € 3.2B Remainder of Europe is catching up rapidly across a very distributed group of countries. Israel continued strong growth 132 241 166 € 1.6B €452 1.1B € 0.5B 231 € 0.2B 57 2012 2013 2014 2015 2016 366 760 € 0.3B 42 163 82 2012 2013 2014 2015 2016 Israel Source: Dealroom.co. Includes Israel. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding Sweden 2012 2013 2014 2015 2016 Other 6 Growth in most parts of the rest of Europe, as local funding options have generally expanded Rest of Europe € 812M € 623M € 611M € 590M € 4.0B € 528M € 403M€ 403M € 336M € 278M € 326M 201 € 148M 98 87 24 43 132 104 € 144M € 114M 185 172 147 42 2012 2013 2014 2015 2016 Switzerland 2012 2013 2014 2015 2016 Spain 56 43 € 228M € 176M 39 € 217M € 147M € 114M 96 € 69M 36 2012 2013 2014 2015 2016 Netherlands € 3.4B € 242M € 167M 113 34 2012 2013 2014 2015 2016 € 295M € 102M € 96M 83 45 € 324M 154 129 1,289 € 367M € 364M € 328M € 271M 61 68 73 € 48M 37 2012 2013 2014 2015 2016 Russia Finland 49 1,021 62 31 29 2012 2013 2014 2015 2016 € 2.4B Ireland 725 Amount raised (€ billion) Number of rounds € 321M € 1.6B 452 € 244M € 1.1B € 210M € 162M 65 35 2012 2013 2014 2015 2016 Denmark € 29M € 31M 17 17 € 83M € 66M € 66M € 67M € 60M 112 32 € 99M € 98M € 97M € 78M 28 € 156M € 141M € 131M 760 56 75 72 29 2012 2013 2014 2015 2016 Belgium Source: Dealroom.co. 81 76 € 24M € 26M € 6M 39 2012 2013 2014 2015 2016 Italy € 81M 95 61 24 14 12 2 2012 2013 2014 2015 2016 Norway € 7M 18 € 29M € 24M € 20M 12 13 20 26 2012 2013 2014 2015 2016 Austria € 3M € 6M € 10M 9 7 7 20 € 44M 27 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Portugal Other 7 Contents 1. Introduction: headline stats in Europe 2. Insights: understanding the key trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data 43% drop in B2C funding in Germany & UK. Many B2C markets adequately funded, focus on execution. B2B B2C (UK & Germany only) (UK & Germany only) UK Amount raised (€ billion) Germany Amount raised (€ billion) 43% drop: many B2C opportunities (e.g. food, home services) have simply been adequately funded. Now focus is on execution. Still, many B2C markets very VC-active (e.g. banking, IOT, AR/VR, …). Number of rounds € 4.6B 497 431 423 413 366 277 359 € 2.2B € 0.4B € 1.0B € 1.0B € 0.2B € 0.3B € 0.7B € 0.7B 2012 2013 € 1.8B 2014 € 2.4B € 0.8B € 1.6B 2015 Business € 2.6B € 2.2B 2016 406 255 € 2.6B 336 € 1.3B € 1.6B € 0.6B € 1.6B € 2.4B € 0.8B € 0.8B € 0.3B € 0.3B € 0.5B € 0.5B 2012 2013 € 2.2B € 1.3B € 1.1B 2014 2015 2016 Consumer Source: Dealroom.co. More info: https://app.dealroom.co/funding-rounds/f/locations/anyof_Germany_United%20Kingdom 9 2016 saw largest ever European cohort of early stage startups funded. Later stage rounds slowed down Early stage: strong pipeline Later stage € 6.3B Growth is mainly driven by early stage & mid stage rounds 1,748 € 5.4B 1,301 € 4.0B € 3.8B 967 621 € 1.7B € 0.9B 245 € 0.5B € 0.6B 2013 2014 2015 Angel & Seed 2016 879 2012 317 2013 € 1.1B 378 2014 € 2.7B 567 € 1.3B € 1.2B € 0.9B 2012 € 3.8B € 3.7B 996 € 2.7B € 0.3B Slowing down of mega rounds, but number of rounds still growing . 2015 Series A / Early VC 2016 € 1.5B € 1.4B 104 129 2012 2013 390 € 1.1B 173 2014 215 2015 60 50 89 2012 2013 2014 Series B, C Amount raised (€ billion) 260 266 2016 484 € 1.7B € 1.6B € 1.4B 178 198 € 0.4B 2015 2016 2012 Series D+ € 0.6B 2013 2014 305 285 2015 2016 Other Number of rounds Source: Dealroom.co. More info: https://app.dealroom.co/funding-rounds/f/rounds/anyof_SEED_SERIES%20A_SERIES%20B_SERIES%20C 10 However, fewer startups (%) are reaching the next funding round stage (which should be expected) % of startups reaching next funding round 2009 cohort 2010 cohort 2011 cohort 2012 cohort 2013 cohort 100% 90% COHORT 2009 2010 2011 2012 2013 80% 70% 60% 50% 40% 30% 20% About 20-30% of seeded companies also do series-A round. Thereafter, follow-on rate is about half for each stage SEED 100% 100% 100% 100% 100% SERIES A SERIES B SERIES C SERIES D 33% 16% 7% 4% 31% 16% 9% 5% 22% 12% 3% 22% 9% 21% 8% Recent years saw more European than ever startups, but a smaller proportion reaching the next funding round stage This is likely due to a combination of increased competition and higher risk appetite by VCs Not reaching series-A does not necessarily equal failure. Reasons may be that company became profitable Especially beyond series-A/B companies often do not need additional funding 31% 16% 21% 9% 10% 5% 8% – Seed Series A Series B Series C Series D Note: the average time between rounds is roughly 18 months. Therefore, it takes an average of nearly three years to move from Seed to Series B. For this reason, the data only includes cohorts from 2013 and earlier. Source: Dealroom.co. 11 Round sizes have come back down in 2016, which indicates that valuations have probably as well Seed rounds Series A rounds Average Average € 0.7M Median € 0.7M € 5.0M € 5.4M € 4.5M € 0.6M € 0.5M € 5.7M Median € 0.5M € 3.7M € 3.6M € 3.6M € 3.6M 2014 2015 2016 € 0.4M € 0.3M € 2.5M € 2.5M 2012 2013 € 0.3M € 0.2M € 0.1M 2012 2013 2014 2015 2016 Series B rounds Series C rounds Average Average € 13.5M Median € 13.4M € 11.8M € 9.2M € 10.0M € 8.2M € 5.9M 2012 2013 € 23.1M € 21.1M € 15.9M € 7.8M € 5.6M € 26.3M Median 2014 Source: Dealroom.co. 2015 € 13.5M € 9.1M 2016 € 19.1M € 18.2M 2015 2016 € 17.0M € 10.9M € 10.0M 2012 2013 2014 12 Contents 1. Introduction: headline stats in Europe 2. Insights: understanding the key trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data VCs are allocating more capital to B2B models, after being more B2C focused during 2014-2015 B2B overweight € 2.7B B2C Models B2C overweight B2B Models € 2.3B € 2.2B € 2.0B€ 2.0B € 1.9B € 1.8B € 1.4B € 0.6B € 0.5B € 0.4B € 0.3B Q1 € 0.4B Q2 Q3 € 1.4B € 1.2B € 1.1B € 0.9B € 0.8B€ 0.8B € 0.6B€ 0.6B € 1.4B € 1.3B € 0.9B € 0.9B € 0.7B € 0.6B € 1.7B € 1.7B € 1.2B € 0.7B € 1.8B € 1.8B € 1.8B Historically, a remarkably equal allocation between B2B and B2C. Capital invested from 2012 to 2016: € 23.2B into B2C €23.9B into B2B € 2.0B € 0.7B € 0.6B € 0.5B € 0.4B € 0.4B Q4 Q1 2012 Q2 Q3 2013 Source: Dealroom.co. Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 14 Getting to Europe’s online consumers has become even more competitive. Differentiation remains key Consumer verticals (€M funding) Wellness € 7,137M Consumer angles (€M funding) € 7,276M € 7,137M Deal comparison Gaming 1,424 Healthcare Financial 263 377 Travel Music Fashion Food € 2,285M € 1,971M € 4,552M 605 530 458 503 2012 2013 1,401 € 4,552M 2,609 691 1,044 683 355 225 612 225 918 1,205 1,371 2015 1,449 1,327 803 2,163 € 2,285M 581 763 2014 Subscription eCommerce € 1,971M 140 323 242 Manufacturing 636 601 36 322 136 209 127 196 304 216 139 398 255 903 82 185 343 568 772 Marketplace 178 235 319 € 7,276M 578 850 Home 442 7 114 135 98 62 225 322 Other 1,193 297 198 367 153 433 757 483 110 312 273 429 408 1,275 522 425 2012 2013 991 2016 Source: Dealroom.co. More info: https://app.dealroom.co/markets/industries/funding 2014 1,200 1,497 2015 1,833 2016 15 Small businesses & enterprises, and deep tech talent are the two other European battles heating further B2B verticals (€M funding) Deep tech(1) (€M funding) Other € 7,871M Security Internet of things Artificial Intelligence Semiconductors Jobs € 6,652M 1,320 Marketing 327 Financial 640 Healthcare 188 247 934 932 € 4,782M Software VR / AR € 2,032M Drones / Aerospace 792 Other € 1,682M 238 685 357 90 443 915 705 1,086 192 815 1,352 € 2,494M € 2,052M 269 120 113 460 346 95 188 439 438 478 625 2012 2013 € 762M 52 125 429 512 609 1,038 € 527M 504 341 256 352 1,209 2,215 2,149 1,285 2014 2015 2016 € 225M 294 123 41 5 29 27 59 1 106 66 2012 2013 41 3 212 550 288 77 2014 2015 2016 1. more information: https://app.dealroom.co/companies/f/tags/deep%20tech Source: Dealroom.co. 16 Europe’s high-growth industries: funding heatmap Capital invested (€ millions) Market vertical Number of rounds 2012 2013 2014 2015 2016 TOTAL 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2012 2013 2014 2015 2016 Enterprise software 522 650 1,335 2,261 2,207 6,974 654 587 432 534 Enterprise software 213 326 429 515 653 Financial 341 490 1,396 1,741 1,995 5,963 566 504 373 Healthcare 483 655 1,013 1,869 1,842 5,862 223 639 Food 242 144 1,222 1,391 1,048 4,048 396 Music 323 306 143 608 1,340 2,719 Fashion 323 219 925 783 1,224 Transportation 199 187 530 843 Travel 240 206 627 Security 127 127 Energy 23 Home TOTAL 2,136 2016 Q1 2016 Q2 2016 Q3 2016 Q4 219 155 144 135 552 Financial 124 179 256 293 426 1,278 125 100 95 106 355 625 Healthcare 72 115 123 207 330 847 65 95 70 100 130 351 171 Food 41 66 104 109 163 483 49 40 36 38 1,053 147 28 112 Music 33 48 29 44 44 198 13 11 9 11 3,474 356 578 187 103 Fashion 64 104 109 120 147 544 30 37 41 39 1,373 3,132 166 568 224 414 Transportation 41 66 121 164 248 640 65 55 65 63 673 1,132 2,878 291 498 104 239 Travel 84 103 127 139 173 626 54 45 34 40 411 674 918 2,257 237 320 281 80 Security 41 53 69 100 132 395 35 42 33 22 31 381 275 513 1,222 97 113 123 180 Energy 11 26 20 32 106 195 29 21 23 33 152 152 364 642 553 1,862 195 98 103 156 Home 32 45 55 79 116 327 26 30 23 37 Hosting 51 54 92 28 322 547 – – 300 22 Hosting 9 9 9 6 12 45 1 – 6 5 Jobs / recruitment 12 41 48 153 285 539 80 81 61 62 Jobs / recruitment 26 33 39 67 115 280 24 34 29 28 Gaming 119 343 214 411 266 1,353 104 46 69 48 68 44 67 92 318 19 23 29 21 Gaming 47 Education 38 58 193 179 253 721 137 49 30 37 Education 39 69 57 76 98 339 27 27 18 26 Real estate 152 58 111 117 229 667 121 55 41 12 Real estate 17 16 40 51 73 197 22 26 17 8 Wellness 7 57 111 419 195 788 50 49 56 40 Wellness 15 37 50 74 55 231 14 17 17 7 Sports 54 51 152 489 190 936 96 39 32 24 Sports 17 26 32 51 93 219 33 26 25 9 Events 22 42 99 119 65 348 7 5 24 29 Events 21 32 32 30 49 164 10 14 10 15 48 27 Dating 0 0 9 31 8 Horizontals & other (overlap) 755 1,036 696 677 220 TOTAL 4,184 4,906 10,072 14,382 16,177 Angle / problem solve 3 (205) 4,627 5 (273) 4,238 – – Dating 1 7 6 9 4 3 1 – – 339 359 Horizontals & other (overlap) 342 425 369 333 247 20 37 62 128 3,513 3,799 TOTAL 1,290 1,853 2,120 2,566 3,376 883 836 786 871 2012 2013 2014 2015 2016 TOTAL 2012 2013 2014 2015 2016 Enterprise software 522 650 1,335 2,261 2,207 6,974 654 587 432 534 Enterprise software 213 326 429 515 653 2,136 219 155 144 135 Deep tech 225 527 762 1,682 2,032 5,228 757 439 322 513 Deep tech 76 169 238 362 398 1,243 113 107 87 91 Marketplace 397 380 1,646 2,973 1,842 7,238 267 749 579 247 Marketplace 116 172 245 279 389 1,201 91 115 107 76 Marketing 466 460 833 962 1,051 3,772 303 205 317 227 Marketing 139 183 220 258 345 1,145 91 75 91 88 Internet of things 57 91 111 498 862 1,619 139 246 43 434 Internet of things 14 37 82 127 186 446 42 54 29 61 Content 287 432 349 695 668 2,430 127 124 188 230 Content 124 177 174 199 235 909 61 67 49 58 Deal comparison 204 126 254 360 505 1,448 293 100 77 36 Deal comparison 50 75 72 80 93 370 25 24 25 19 Directories 201 113 856 1,307 451 2,928 17 56 293 85 Directories 39 47 73 63 84 306 16 22 18 28 Semiconductors 113 188 90 188 258 837 44 42 90 82 Semiconductors 12 20 13 24 34 103 6 9 9 10 Consumer productivity 13 66 145 67 225 516 75 69 66 15 Consumer productivity 14 29 53 65 86 247 19 34 25 8 Other (overlap) 1,699 1,874 3,692 3,389 6,077 1,952 1,622 1,106 1,397 Other (overlap) 493 618 521 594 873 200 174 202 297 TOTAL 4,184 4,906 10,072 14,382 16,177 4,627 4,238 3,513 3,799 TOTAL 1,290 1,853 2,120 2,566 3,376 883 836 786 871 Revenue source 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2012 2013 2014 2015 2016 TOTAL 2012 2013 2014 2015 2016 TOTAL Subscription 1,302 1,681 3,228 4,871 5,761 16,843 2,516 1,192 1,146 907 Subscription 461 667 813 986 1,050 3,977 322 280 210 238 Commission 1,116 869 3,366 4,492 3,632 13,476 904 1,254 840 635 Commission 295 400 558 571 733 2,557 209 226 142 156 Manufacturing 709 1,058 1,728 2,709 3,049 9,254 521 913 497 1,118 Manufacturing 113 199 226 348 518 1,404 120 128 112 158 eCommerce 538 447 1,307 1,569 2,170 6,030 697 855 353 264 eCommerce 136 210 208 250 344 1,148 110 99 72 63 Freemium 606 827 594 1,280 1,795 5,102 1,318 196 185 96 Freemium 138 184 212 254 175 963 63 42 39 31 Classified listing 176 157 349 766 379 1,827 75 214 58 32 Classified listing 36 59 84 101 74 354 23 26 14 Advertising 178 224 290 339 174 1,206 31 73 40 30 Advertising 79 109 96 95 84 463 31 24 17 12 (443) (358) (789) (458) 393 718 Other (overlap) 32 25 (77) (39) 398 5 11 180 202 3,513 3,799 TOTAL 1,290 1,853 2,120 2,566 3,376 883 836 786 871 Other (overlap) TOTAL End-user focus (1,645) (783) 4,184 4,906 10,072 14,382 16,177 2016 Q1 2016 Q2 2016 Q3 2016 Q4 TOTAL (1,435) 4,627 4,238 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 11 2012 2013 2014 2015 2016 TOTAL 2012 2013 2014 2015 2016 TOTAL Consumer 1,971 2,285 4,552 7,137 7,276 23,221 2,686 2,159 1,130 1,301 Consumer 573 840 906 1,070 1,295 4,684 346 361 277 311 Business 2,052 2,494 4,782 6,652 7,871 23,851 1,704 1,847 1,974 2,347 Business 622 877 1,010 1,272 1,762 5,543 469 405 415 473 Other 161 127 738 593 1,030 237 232 409 152 Other 95 136 204 224 319 68 70 94 87 TOTAL 4,184 4,906 10,072 14,382 16,177 4,627 4,238 3,513 3,799 TOTAL 1,290 1,853 2,120 2,566 3,376 883 836 786 871 Source: Dealroom.co. More info https://app.dealroom.co/markets/cities/funding 2016 Q1 2016 Q2 2016 Q3 2016 Q4 17 Europe by city: a diversified group of tech hubs Capital invested 2012-2016 (€ millions) Market vertical London Paris Tel Aviv-YafoBerlin Stockholm AmsterdamBarcelona Madrid Dublin Number of rounds 2012-2016 Helsinki Moscow Zurich Geneva London Paris Tel Aviv-YafoBerlin Stockholm AmsterdamBarcelona Madrid Helsinki Moscow Enterprise software 1,544 399 690 396 130 193 137 16 239 40 15 19 86 Enterprise software 462 141 130 130 64 111 54 38 Dublin 62 36 16 Zurich 15 Geneva Financial 2,331 358 239 366 643 275 51 71 54 11 12 122 – Financial 349 108 49 87 83 40 34 21 22 20 12 8 – Healthcare 458 433 93 36 206 114 69 14 215 81 6 99 73 Healthcare 72 58 14 22 29 21 22 5 21 19 5 11 3 14 Food 856 516 19 2,384 33 109 19 20 4 13 19 1 – Food 104 64 10 80 12 6 12 20 4 6 9 4 – Music 281 413 14 245 1,917 1 7 2 14 3 23 4 8 Music 56 28 6 29 29 3 2 3 7 4 3 2 5 – Fashion 720 673 16 656 68 6 59 15 – 32 74 – – Fashion 142 67 11 50 30 14 15 25 1 8 7 – Transportation 229 583 633 432 32 22 20 169 95 28 263 – – Transportation 75 63 25 63 18 14 18 24 6 6 20 – – Travel 651 513 566 436 1 53 50 145 11 7 151 2 – Travel 126 81 11 74 2 24 38 24 10 6 30 3 1 Security 163 94 764 66 30 188 105 13 85 6 3 9 121 Security 54 23 90 14 12 5 7 5 15 3 5 4 5 Energy 292 64 – 77 21 121 5 1 33 16 – – – Energy 18 12 – 8 8 10 2 3 8 4 – – – Home 191 210 7 449 25 16 7 – 13 2 249 – – Home 49 38 5 65 14 8 13 1 2 6 6 – – Hosting 107 5 – 26 – 3 – – – 27 – – – Hosting 12 1 – 3 – 2 – – – 3 – – – Jobs / recruitment 169 64 4 25 5 2 40 86 8 4 – 23 – Jobs / recruitment 66 22 2 25 12 10 18 14 3 13 – 3 – Gaming 297 62 44 97 119 23 48 19 4 233 6 – – Gaming 74 22 13 35 35 5 11 17 5 42 2 1 – Education 155 48 10 76 13 9 14 1 1 7 264 4 – Education 96 36 4 45 15 19 4 8 2 4 12 3 – Real estate 313 35 – 74 1 – 7 7 2 – 166 2 – Real estate 73 22 – 13 3 2 14 2 3 – 6 5 – Wellness 456 38 1 47 23 4 12 25 17 30 2 11 – Wellness 56 9 1 27 12 8 11 6 3 8 3 4 – Sports 104 37 49 30 2 1 1 1 8 3 1 2 – Sports 33 9 9 4 5 3 6 1 6 5 1 1 – Events 197 15 14 90 2 5 0 55 2 1 8 0 – Events 55 19 9 19 1 6 1 16 5 3 7 1 – Dating 10 22 – 0 – – – 0 – – – – – Dating 12 6 – 4 – – – 1 – – – – – Horizontals & other (overlap) 1,799 408 16 445 89 387 54 229 169 (222) 90 12 Horizontals & other (overlap) 505 316 117 177 117 61 36 87 49 49 46 30 4 TOTAL 11,324 4,990 3,179 3,717 1,234 1,038 714 1,034 713 1,040 388 301 TOTAL 2,489 1,145 506 974 501 372 318 321 234 245 190 95 32 Angle / problem solve London 5,720 Helsinki Moscow Helsinki Moscow Enterprise software 1,544 399 690 396 130 193 137 16 239 40 15 19 86 Enterprise software 462 141 130 130 64 111 54 38 62 36 16 15 14 Deep tech 743 253 589 200 97 103 11 11 102 26 8 25 – Deep tech 226 69 101 73 33 39 16 20 26 14 6 13 – Marketplace 2,140 616 647 2,302 50 139 416 143 15 32 56 27 – Marketplace 286 128 42 157 29 37 75 55 8 16 21 11 – Marketing 1,390 720 433 274 122 73 21 10 80 103 11 3 11 Marketing 299 150 79 113 47 44 27 20 21 18 14 8 2 Internet of things 55 103 131 58 50 3 1 2 33 – – 22 – Internet of things 31 21 22 26 30 9 4 7 6 – – 10 1 Content 658 437 410 160 156 27 18 20 42 15 58 67 – Content 260 123 78 83 63 48 17 17 24 20 9 13 – Deal comparison 449 101 51 121 39 50 79 37 26 13 51 3 – Deal comparison 85 34 7 42 14 21 19 23 8 11 15 4 – Directories 805 67 1 1,697 9 128 18 54 1 42 24 4 – Directories 69 28 1 53 10 21 14 28 1 11 9 5 – Semiconductors 4 25 20 7 6 2 2 – 108 39 – – – Semiconductors 2 6 4 2 2 1 2 – 18 5 – 5 – Consumer productivity 129 65 44 78 48 15 – 12 5 18 0 4 – Consumer productivity 41 20 21 20 14 8 1 8 7 11 4 2 – Other (overlap) 3,407 2,203 162 427 3,010 501 336 408 384 385 816 215 203 Other (overlap) 728 425 21 275 195 33 89 105 53 103 96 9 15 TOTAL 11,324 4,990 3,179 5,720 3,717 1,234 1,038 714 1,034 713 1,040 388 301 TOTAL 2,489 1,145 506 974 501 372 318 321 234 245 190 95 32 Revenue source London Paris (286) Tel Aviv-YafoBerlin Helsinki Moscow Helsinki Moscow 121 135 161 215 Subscription 922 365 286 304 166 215 95 77 108 83 46 32 11 Commission 4,234 1,267 965 2,640 645 473 472 294 68 137 384 131 – Commission 703 306 80 291 104 93 112 92 33 42 42 11 4 Manufacturing 852 809 238 304 295 144 65 29 225 154 12 126 73 Manufacturing 90 100 31 58 47 31 19 8 33 28 10 22 4 eCommerce 1,006 866 42 1,196 129 29 303 20 18 6 335 10 – eCommerce 222 115 21 153 46 24 42 48 7 15 20 3 – Freemium 790 327 391 461 2,144 51 90 64 10 209 182 11 8 Freemium 287 66 76 101 60 56 27 36 13 38 14 11 5 Classified listing 496 133 3 394 10 4 383 91 3 1 237 1 – Classified listing 99 39 3 55 11 8 37 15 2 2 12 2 – Advertising 544 287 89 104 81 50 19 13 26 39 52 9 – Advertising 168 74 22 55 34 18 18 7 15 12 7 8 – (605) (691) (137) (675) (3) (573) 103 195 46 (297) (61) 4 Other (overlap) 80 (13) (43) 33 (73) (32) 38 23 25 39 6 8 714 1,034 713 1,040 301 TOTAL 506 974 501 372 318 321 234 245 190 95 32 End-user focus London Paris Tel Aviv-YafoBerlin 1,038 Stockholm AmsterdamBarcelona Madrid Dublin 388 Zurich London 1,145 Paris Tel Aviv-YafoBerlin Stockholm AmsterdamBarcelona Madrid Dublin Zurich Geneva Helsinki Moscow Helsinki Moscow Consumer 4,816 2,382 1,042 4,624 2,573 324 562 313 138 316 775 106 82 Consumer 1,094 490 153 537 235 139 141 156 68 89 108 34 10 Business 5,487 2,295 2,072 1,024 995 861 404 311 869 342 151 277 216 Business 1,159 575 333 385 213 200 142 143 155 103 52 56 20 Other 1,021 313 65 72 149 50 72 90 27 55 114 5 2 Other 236 80 20 52 53 33 35 22 11 53 30 5 2 TOTAL 11,324 4,990 3,179 5,720 3,717 1,234 1,038 714 1,034 713 1,040 388 301 TOTAL 2,489 1,145 506 974 501 372 318 321 234 245 190 95 32 Source: Dealroom.co. More info: https://app.dealroom.co/markets/cities/overview Geneva 2,489 Dublin Geneva 489 1,234 Stockholm AmsterdamBarcelona Madrid Zurich 99 (2) Tel Aviv-YafoBerlin Dublin 278 3,717 Paris Stockholm AmsterdamBarcelona Madrid 486 5,720 London Tel Aviv-YafoBerlin 2,320 3,179 Geneva Paris 1,296 4,990 Zurich London 1,587 (1,907) Dublin Geneva 1,993 11,324 Stockholm AmsterdamBarcelona Madrid Zurich 4,007 TOTAL Tel Aviv-YafoBerlin Dublin Subscription Other (overlap) Paris Stockholm AmsterdamBarcelona Madrid Zurich Geneva 18 Contents 1. Introduction: headline stats in Europe 2. Insights: understanding the key trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data €8.4 billion (1) in new capital raised by European VCs in 2016 (+33%) which may fuel 2017 and beyond 33% growth in new capital raised by European VCs U.S. funds contribute roughly 20-25% of total capital to European companies. This % share has been stable in recent years. Growth funds increasingly participate in large venture rounds Corporate investing is rapidly on the increase (see next slide) Combined with existing funds, more than enough to support investment levels similar to or higher than 2016 of €16.2 billion Y € 16B+ Corporate investing Company funding X ~ € 4B € 8.4B € 6.3B 2015 2016 Capital raised by European funds 1. Source: Yannick Roux, Atomico, InvestEurope. U.S. Funds Growth funds Other sources (= uses of funds) 20 Corporate investment activity continued its rise, both via corporate venturing and balance sheet investing Corporate investing by € amount funded (1) Corporate investing by number of rounds Corporate venture fund Corporate venture fund Corporate direct € 4.9B 12.2% 545 30% of corporate investors are U.S. based (while only 13% of fund investors are U.S. based). The share of European corporate deals is rapidly increasing though. 7.5% 314 5.6% € 3.7B 15.1% 16.0% 13.4% € 1.3B 160 104 € 0.6B 69 2012 2013 25.4% % of total European rounds % of total European rounds 5.3% 30.0% Corporate direct 16.1% 2014 2015 2016 2012 € 0.8B 2013 2014 2015 2016 1. Total gross amount raised in rounds with corporate involvement. Source: Dealroom.co. Rocket Internet is not counted here as corporate investor. More info: https://app.dealroom.co/investors/f/investor_type/anyof_corporate%20venture%20fund_corporate 21 About 25% of venture capital is sourced from U.S. based funds, mainly in later rounds U.S. investment into Europe by number of rounds U.S. investment into Europe by amount Number of rounds Estimated amount raised from U.S. (€M) % of total European rounds 12.7% 12.9% % of total European funding € 3.6B 436 24.4% 10.9% 9.4% 326 8.8% Roughly 13% of rounds now have U.S. fund involvement. 22.3% 19.3% 17.4% € 2.5B U.S. investors contribute around 25% of funds (1). For corporate rounds, this % is now about 30%. 231 € 3.2B 22.6% 163 121 2012 2013 2014 2015 2016 € 0.8B € 0.9B 2012 2013 Online resources: https://app.dealroom.co/investors/f/country_experience/Europe/locations/United%20States Source: Dealroom.co. 1) Assumes rounds with multiple investors are qually allocated. Based on investor HQ location. 2014 2015 2016 22 2016 European investor heatmap Verticals Number of rounds Enterprise Financial Healthcare Food Music Fashion Transport Angle Travel Security Energy Home Jobs Gaming Education Real estate Wellness Sports Mktplace Marketing eCommerce Deep Tech Total IoT Content Comparison Directories Rounds (€ millions) Bpifrance 13 4 10 9 2 3 7 9 – 2 7 1 1 4 4 – 4 13 14 9 6 5 6 2 2 94 € 647M IDInvest Partners 4 3 1 1 – – 3 1 – – – – – – – – – 1 2 1 – 1 1 1 – 17 € 358M Index Ventures 3 5 2 2 2 1 3 1 – – – – 2 – 1 1 – 5 1 4 – – 2 – – 23 € 350M Salesforce Ventures 5 2 – – – – 1 – – – – – – – – – – – 6 – 4 2 – – – 13 € 269M e.ventures 1 7 1 1 – 1 – – 2 – – 1 – 1 3 – – 2 – 2 2 2 1 – – 16 € 260M Intel Capital 5 – – – – – 2 – – – 1 – – – – – 1 – – – 5 3 2 – – 13 € 260M Accel Partners 6 3 – – – – 1 – 1 – 1 2 – – – – – 4 1 1 2 – – 1 – 13 € 258M Bessemer Venture Partners 5 1 1 – – – 2 – 3 – – 1 – – – – – 1 3 – 3 2 1 – – 16 € 227M HV Holtzbrinck Ventures – 6 – 1 – 2 1 2 1 1 3 – – – 2 – – 4 – 4 – – – – – 17 € 205M Sunstone Capital 7 3 5 – – – – 1 – – – 1 3 – 1 – 1 – 2 1 6 1 1 – – 23 € 201M Balderton Capital 3 5 – 1 1 2 1 – 1 – 1 – – – – – – 2 1 2 3 – 2 2 1 19 € 195M Wellington Partners 2 – 4 – 1 – 1 1 – 1 2 – – – – – 1 2 – 1 2 – 1 1 – 13 € 192M Sequoia Capital 7 – 1 – – – 2 – 2 – 1 – – – – – – 1 2 1 5 – 2 – – 14 € 187M Northzone 1 4 – 1 1 1 1 1 – – – 2 1 1 – – – 3 1 3 – – 1 1 – 14 € 185M Partech Ventures 4 2 3 – – 1 2 3 2 – 1 – – – – – 1 6 1 2 – – – – 1 17 € 155M BNP Paribas 3 2 – 1 – – 1 – – 1 – – – – – – 1 – 5 – 2 – 2 1 – 15 € 153M BNP Paribas 3 2 – 1 – – 1 – – 1 – – – – – – 1 – 5 – 2 – 2 1 – 15 € 153M Global Founders Capital 6 6 1 1 – 1 3 1 – 1 – 2 1 – 2 1 – 6 4 2 1 – 1 – – 25 € 130M Octopus Investments 1 4 1 – – 2 1 1 1 – 1 – – – 1 2 – 2 1 2 3 – 1 – – 12 € 113M Target Global 2 4 1 2 – – 1 1 2 – – 1 – – – – – 5 1 – 2 2 – – 1 13 € 109M High-Tech Gruenderfonds 6 4 10 1 – 1 – – 3 3 1 1 – 2 – 1 2 1 3 1 5 2 – – – 42 € 94M Inventure 4 – 1 1 – 1 2 1 – – – – – – – – – 2 1 – 5 2 – – 1 13 € 82M Point Nine Capital 4 7 – 1 – – 5 1 1 – – – – – – – 1 6 – – 3 2 1 2 1 18 € 79M Xavier Niel 3 2 1 1 – – 3 – – – – 1 – 1 – – – 2 1 1 2 1 1 – 2 14 € 76M Kima Ventures 7 4 1 7 1 – 5 1 1 – 2 1 – 1 – – 1 7 4 2 5 1 3 1 3 34 € 71M Seed Capital 3 3 2 3 – – – 1 2 – – 2 – 1 – – 2 – 3 3 1 1 1 2 – 22 € 70M Speedinvest 3 11 – – – – 2 1 – – – – – – – 1 1 1 – – 4 2 2 – – 20 € 68M Localglobe 3 4 1 1 – 1 3 2 1 – – 2 – 2 3 – – 3 1 – 4 1 2 – – 21 € 62M 360 Capital Partners 2 3 – 4 – 1 2 1 – – 2 – – – – 1 – – 1 6 1 1 – – – 15 € 60M Seedcamp 3 5 – 1 – – 2 1 – – – 1 – – 1 1 1 1 – – – – 1 – 1 17 € 60M TA Ventures 3 2 – 3 – – 2 – 1 – – 2 – – – – 1 5 1 2 – – – – 1 14 € 59M Caixa Capital Risc 1 1 3 – – – 1 3 – – 1 2 1 1 – – – 4 2 2 – – 1 – – 15 € 57M MAIF Avenir – 2 – – – – 4 4 – – 3 – – – 1 – – 7 – – – – 1 – 1 13 € 57M Passion Capital 1 6 – 1 – – – – 2 – – – – 1 2 1 – 3 1 1 3 – – – – 13 € 54M 500 Startups 6 4 – 2 – 1 – – – – 1 – 1 2 1 1 1 3 4 3 3 – 3 1 1 22 € 54M INE Ventures 5 3 – 1 – – – 1 – – – – – – – 1 – 1 2 – 3 – 1 – 1 13 € 51M Bayern Kapital 3 – 6 – – – 2 1 1 – – – – – – – – – – – 4 1 1 – – 16 € 37M Crowdcube – 4 – 1 – 3 – – – 1 1 – – 2 1 2 2 3 1 1 – – 1 – 1 17 € 27M Scottish Investment Bank 6 – 3 1 – – 1 – – 2 – – – 1 – – – – 2 – 4 – – – – 16 € 21M Enterprise Ireland 8 3 2 – – – – 1 – – – – – 2 2 1 – 1 3 1 – – 1 1 1 16 € 19M Almi Invest 6 2 3 – – 2 – – 1 2 – – – – – 1 2 – 3 1 2 1 – 1 – 24 € 18M Project A Ventures 1 – 2 2 – 2 1 1 1 – – – 1 1 1 1 – 3 2 5 – – 1 – 1 14 € 13M Credit Agricole 3 2 – 1 – – 1 – – – 1 – 1 – 1 1 – 2 3 1 1 3 – 1 – 13 € 12M TOTAL 162 135 66 53 8 26 70 42 29 15 30 23 12 23 27 17 24 112 88 65 98 36 47 19 20 Source: Dealroom. Online resources: https://app.dealroom.co/investors. 23 Contents 1. Introduction: headline stats in Europe 2. Insights: understanding the key trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data UK: € 3.2B raised in 2016, a 16% drop. While Brexit is a major cause for concern, it’s likely not the driver Annually 644 410 The Hut Adaptimmune Virtus Fanduel Reward Gateway Funding Circle 185 Deliveroo Skyscanner Farfetch € 1,395M € 1,346M Farfetch F2G Nexeon 161 148 520 € 3,780M 142 130 € 3,174M 111 Truphone Powa Arrria € 1,281M 144 142 € 1,067M € 961M 124 123 126 126 126 Deliveroo Sabio Darktrace € 874M 108 106 € 790M € 748M Mimecast Justeat Oxford Nano 140 137 122 € 3,190M Fanduel Reward Gateway Prodigy 175 545 542 The Hut Adaptimmune Powa Quarterly € 705M € 684M 85 € 531M € 528M € 517M € 367M € 343M € 337M € 332M € 325M € 317M € 280M € 260M € 1,282M Given timing of Brexit (June 2016), an unlikely driver of VC slow-down. More likely drivers: saturation in some B2C markets 2012 2013 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 Amount raised (€M) Top 3 rounds (€M) Total number of rounds Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview 2013 Amount raised (€M) 2014 Top 3 rounds (€M) 2015 2016 Total number of rounds 25 London remains the epicenter in European tech. High density of scale-ups, and strong follow-on rate London Rest of UK Amount raised (€ billion) € 2.7B Number of rounds € 470 2.3B € 2.2B 394 380 • Funding data doesn’t capture all the companies with major London presence but official HQ abroad (U.S., Israel, …) • London is indisputably the place to be for many high-growth companies, given depth of talent pool, early adopter market, and venture capital pockets • Highest density of scale-ups anywhere in Europe. World-class epicenter for deep tech (AI, VR, robotics, …) 331 € 279 1.0B 2012 2013 2014 2015 € 0.3B 131 € 162 0.4B 174 151 2012 2013 2014 2015 2016 Annual by round Amount raised (€M) Seed rounds Series A, B, C, early rounds Late rounds 542 Total number of rounds 644 € 3,190M € 3,780M 545 Strong follow-on trend of early VC rounds (A, B, C), which is arguable the best sign of a strong ecosystem with high quality scale-ups 185 520 € 3,174M 130 111 108 106 223 € 1,282M 212 177 97 2013 2014 2015 175 148 142 122 189 2016 € 1,067M € 961M 161 123 € 748M 85 271 2012 € 1.0B Quarterly by round 410 € 1,281M € 1.1B € 0.9B € 0.9B € 531M 140 144 142 137 € 790M 124 € 684M € 874M 126 126 126 € 705M € 528M € 517M € 337M€ 367M € 332M€ 343M€ 325M€ 317M € 280M € 260M 57 48 21 85 2016 Q1 Q2 Q3 2012 Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview Q4 Q1 Q2 Q3 2013 Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 26 Germany: € 2.0B raised in 2016, a 32% drop due to lack of Rocket mega-rounds, and limited replacement Annual Delivery Hero Global Fashion Home24 Top 3 rounds (€M) Amount raised (€M) Total number of rounds 245 165 Rocket Internet Delivery Hero Westwing 288 Quarterly 380 353 € 2,909M Global Fashion SoundCloud HelloFresh In recent years, Germany has been characterized by mega rounds, thus heavily skewing the results. Rocket backed Jumia is based in Paris. € 1,985M € 1,981M Rocket Internet Delivery Hero FoodPanda 45 44 44 67 € 583M 2012 2013 2015 165 € 593M 74 € 788M € 653M € 564M € 460M € 413M € 433M € 324M € 259M 2013 2014 2015 2016 Round types - quarterly € 2,909M € 1,259M € 1,001M € 1,985M 380 € 1,981M 353 288 44 188 154 € 583M 2014 2015 32 45 44 50 65 67 74 63 72 74 € 397M € 324M 68 102 104 89 € 653M € 564M 58 € 433M 114 € 788M 98 94 74 € 460M€ 413M € 324M € 259M € 210M € 188M€ 169M € 142M€ 143M € 100M € 97M€ 126M 35 29 10 122 70 Q1 2013 94 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 110 89 2012 Global Fashion SoundCloud 68 58 € 397M € 324M Round types - annual 245 74 50 2012 Amount raised (€M) Seed rounds Series A, B, C, early rounds Late rounds Total number of rounds 98 € 1,001M 72 € 210M € 188M € 169M € 143M € 142M € 126M € 100M € 97M 2014 € 1,259M 63 32 € 593M 102 104 89 74 65 114 Delivery Hero HelloFresh FoodPanda 2016 Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview Q2 Q3 2012 Q4 Q1 Q2 Q3 2013 Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 27 Germany: a shift from B2C to B2B market opportunities Berlin Rest of Germany Amount raised (€ billion) Number of rounds € 2.1B 179 190 157 94 € 0.3B 2012 173 € 1.5B € 0.9B € 0.4B 2013 71 € 0.3B 2014 2015 2016 207 Outside of Berlin, funding in the rest of Germany funding has continued growing 2012 88 174 98 € 0.5B 2013 2014 159 151 149 € 1.6B 125 € 1.3B 105 90 120 66 2013 2016 198 Number of B2B rounds increased 33% 177 2012 2015 B2B € 2.2B € 0.3B € 0.8B € 0.2B B2C € 0.3B € 1.1B 2014 2015 2016 Consumer Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview € 0.2B € 0.3B 2012 2013 € 0.6B € 0.6B 2015 2016 € 0.4B 2014 Business 28 France: an incredible run in 2016, also after adjusting for mega rounds like Jumia, Deezer and Sigfox Annually Quarterly 185 Seed rounds tripled from 104 to 320 rounds in 2016 France finished the year very strong in final quarter 590 Jumia Deezer Jumia OVH Linkbynet € 2,739M Sigfox Devialet Genfit 140 131 134 Jumia Blablacar Sigfox Scality Blablacar Sarenza Neoen Deezer 118 € 500M € 720M 243 € 1,481M Serenza 180 € 771M 32 € 599M 29 2013 Subtop 2014 Top 3 2015 2016 Total number of rounds 29 28 € 203M 33 Blablacar 48 47 € 111M € 96M€ 90M 2012 € 581M Blablacar Deezer 167 € 836M Blablacar OVH (1) Sigfox 51 42 54 61 71 57 € 429M 46 41 € 320M € 279M € 236M € 225M € 191M € 171M € 162M € 162M € 148M 39 € 753M € 302M € 75M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 Subtop 2014 Top 3 2015 2016 Total number of rounds Online resources: https://app.dealroom.co/markets/countries/funding Source: Dealroom.co. Note 1: likely large part secondary. 29 France is firing on all cylinders: seed rounds tripled, early stage doubled, in a country-wide phenomenon Paris Amount raised (€ billion) Rest of France € 1.7B Number of rounds € 0.9B € 0.4B 84 2012 Number of rounds outside France tripled in 2016. Growth was very distributed among over 150 cities. Many cities with 1 or 2 rounds for the first time in 2016. 297 293 € 0.6B € 0.5B € 0.3B 109 2013 146 118 2014 2015 € 0.1B 34 2016 2012 Annual by round Amount raised (€M) Seed rounds Series A, B, C, early rounds Late rounds Total number of rounds 2012 € 599M 167 € 2,739M Number of seed rounds grew 3x The number of early VC rounds grew 2x € 0.3B 58 62 2013 2014 97 2015 2016 185 The year 2016 finished strong, with a jump in seeded companies, resulting in by far the largest cohort of French startups, ever. 590 140 131 134 € 836M € 753M € 720M € 771M 180 320 243 2014 € 581M 32 104 2015 60 2016 29 € 111M€ 96M € 90M Q1 Q2 42 Q3 71 61 94 € 429M 54 € 320M 57 € 302M 41 46 € 279M € 236M € 225M 51 39 29 33 28 € 203M € 162M€ 171M€ 191M€ 148M 2012 Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview 48 47 210 88 51 2013 € 0.3B Quarterly by round € 1,481M € 500M 118 € 1.1B 76 € 162M € 75M Q4 Q1 15 Q2 Q3 2013 Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 30 Israel: consistent growth across the board. Growth across round types. Strong in deep tech and security Annual Quarterly 72 Top 3 rounds (€M) Amount raised (€M) Total number of rounds 241 231 61 55 € 2,704M 166 88 € 509M 2012 € 1,189M € 528M 2013 43 € 1,837M 132 Gett ironSource Kaminario 2014 Infinidat Checkmarx Cybereason Gett Payoneer Voyager Labs 30 21 25 24 € 158M € 98M 43 € 406M 39 € 654M€ 657M € 548M € 505M € 423M € 879M Gett Infinidat Checkmarx 38 Gett Payoneer Voyager Labs € 514M € 378M € 303M € 273M € 190M € 85M € 96M € 106M 2013 2014 2015 2016 Round types - quarterly € 879M € 1,837M € 1,189M 241 € 654M€ 657M 231 166 115 77 49 2013 Gett ironSource 53 € 2,704M Amount raised (€M) Seed rounds Series A, B, C, early rounds Late rounds Total number of rounds 2012 39 60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 Round types - annual 132 € 528M 27 € 241M € 167M 2012 € 509M 88 32 46 18 € 88M 2015 69 63 2014 2015 158 € 548M€ 514M € 505M 72 € 423M 63 69 € 406M 61 55 € 378M 53 46 € 303M 43 38 43 € 241M€ 273M 39 € 190M 25 30 27 32 24 18 € 158M 21 € 167M € 98M € 88M € 85M € 96M€ 106M 60 39 28 42 31 2016 5 Q1 Q2 Q3 2012 Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview Q4 Q1 Q2 Q3 2013 Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 31 Nordics: strong growth in early rounds across Nordic countries in 2016. Sweden leads (not just Spotify) Sweden Denmark, Finland, Norway, Iceland 366 “The community is increasingly joined up and there are lots of local funding options. Hence a big rise in companies being seeded.” - Neil Murray (TheNordicWeb) Fewer big rounds in other Nordic countries, strong growth in number of rounds. € 1,599M 285 = same scale = Spotify € 988M 174 Spotify 163 € 561M Spotify € 226M € 333M Klarna Truecaller iZettle Klarna 82 M-files Rovio Vivino € 763M Bonesupport Klarna iZettle Saltside 57 113 Ascendis Pharma Rovio 117 Trustpilot 69 € 392M € 172M Supercell Symphogen Plain Vanilla Games 2012 2013 Verne Global Symphogen Trustpilot € 654M 2015 2016 € 333M 42 2012 2013 Subtop 2014 Top 3 2015 2016 Total number of rounds Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview Subtop 2014 Top 3 Total number of rounds 32 Nordics: the year ended strongly with lot of seed and series-A rounds in final quarter Sweden Denmark, Finland, Norway, Iceland Remarkable surge in number of rounds mainly driven by seed rounds in 112 € 1,053M Spotify 90 82 99 Mainly driven by surge in both seed and series-A rounds in 2016 82 = same scale = 71 € 602M Trustpilot 58 54 Spotify Verne Global Supercell iZettle Klarna Truecaller 40 42 39 34 30 Spotify 22 14 € 80M € 34M Q1 19 11 10 € 98M Q3 2012 9 3 € 15M Q2 € 241M € 57M € 4M Q4 Q1 Q2 23 19 22 18 € 182M € 152M 11 € 118M€ 109M € 197M € 194M 2013 Subtop 19 Q1 Q2 Q3 2014 Top 3 Q4 Q1 18 28 Q3 Q4 2015 Q1 Q2 Q3 28 Q4 2016 Total number of rounds Source: Dealroom.co. More info: https://app.dealroom.co/markets/countries/overview Q1 € 33M Q2 Symphogen 28 € 289M € 220M 19 € 213M Q3 2012 € 69M € 66M € 62M € 52M € 45M Q4 Q1 Q2 Q3 2013 Subtop Q4 Q1 € 93M Q2 € 114M € 127M€ 126M € 100M € 63M Q3 2014 Top 3 € 208M € 192M € 154M € 73M Q2 19 40 34 33 13 € 119M € 109M € 82M € 230M € 14M Q4 30 26 € 31M Q3 61 58 Q4 Q1 Q2 Q3 2015 Q4 Q1 Q2 Q3 Q4 2016 Total number of rounds 33 Contents 1. Introduction: headline stats in Europe 2. Insights: understanding the key trends and drivers 3. Top verticals and business models 4. Investment sources trends 5. Overviews of top countries 6. Outtakes: additional data About 25% of venture capital is sourced from U.S. based funds. About 35% is sourced domestically Countries attracting most U.S. funding Countries relying most on domestic funding Sourced from USA funds (%) by amount raised Israel Sourced from domestic funds (%) by amount raised Italy 43% Austria Russia 39% Sweden 36% 56% France Israeli startups have been able to source 43% of their funding from USA Ireland 31% United Kingdom United Kingdom 31% Belgium Turkey 66% 51% 47% 46% Denmark 28% 38% Finland 22% Netherlands 36% Spain 22% Germany 36% Netherlands 21% Portugal 36% Germany 20% Portugal 20% Italy 18% France 16% Russia 16% Belgium 14% Denmark Norway 10% 6% Turkey 33% Israel 33% Finland 31% Norway 31% Spain 25% Ireland 25% Online resources: https://app.dealroom.co/investors/f/country_experience/Europe/locations/United%20States Source: Dealroom.co. 1) Assumes rounds with multiple investors are qually allocated. Based on investor HQ location. Higher % of domestic funds can be a sign of a strong local VC funding options (France, Germany, UK) or weak interest from abroad (Italy, Russia). 29% Sweden Austria 66% of funding in Italy is sourced domestically. Lower % of domestic funds can be a sign of weak local VC funding options (Ireland, Austria) or high interest from abroad (Sweden, Spain). 21% 35 How much headroom is there still in European VC? Funding per capita indicates there is still room ÷ 2016 VC funding Population USA 325M Russia 147M USA € 70-75B (1) United Kingdom = VC funding per capita // € 3.2B Israel USA Germany 82M France € 2.7B Sweden Turkey 79M Israel € 2.7B Ireland France 67M Germany United Kingdom 65M Sweden Italy 61M Spain Spain Netherlands 47M 17M € 2.0B € 1.6B € 0.6B € 313 € 231 € 160 € 77 Finland € 59 United Kingdom € 49 France € 41 Netherlands € 0.4B Norway € 30 Ireland € 0.4B Denmark € 25 Belgium 11M Finland € 0.3B Germany € 24 Portugal 10M Russia € 0.3B Netherlands € 24 Sweden 10M Belgium € 0.2B Belgium € 22 Austria 9M Italy € 0.2B Spain € 13 Israel 9M Norway € 0.2B Austria € 9.2 Denmark 6M Denmark € 0.1B Portugal € 4.3 Finland 6M Austria € 0.1B Italy € 2.7 Norway 5M Portugal € 0.0B Russia € 2.0 Ireland 5M Turkey € 0.0B Turkey € 0.4 1) USA data is a Dealroom estimate based on CB Insights and PitchBook data. Source: Dealroom.co. 36 The importance of tech hubs within countries United Kingdom (London Edinburgh) 2.2 France (Paris ) 1.7 Israel (Tel Aviv-Yafo ) 1.6 0.9 0.1 Sweden (Stockholm ) Spain (Madrid Barcelona) 1.1 1.1 Germany (Berlin Munich) Switzerland (Zurich Geneva) 0.2 1.4 0.1 0.1 0.2 Netherlands (Amsterdam Rotterdam) 0.10.2 0.1 Ireland (Dublin ) 0.3 0.1 € 2.7B Ireland € 2.7B Spain 85.3% 40.4% 18.6% 68.3% 5.8% 38.7% 56.3% Norway 43.7% 50.6% 49.4% € 0.4B Germany € 0.4B Finland 41.4% 58.6% 44.2% 4.3% 51.5% Finland (Helsinki ) 0.1 0.2 € 0.3B Israel 40.9% 59.1% Russia (Moscow ) 0.1 0.2 € 0.3B Austria 40.0% 60.0% Belgium (Brussels Gent) 0.0 0.10.2 Belgium € 0.2B Italy (Milan ) 0.0 0.1 € 0.2B Turkey Norway (Oslo ) 0.1 0.1 € 0.2B Russia Denmark (Copenhagen ) 0.1 0.1 € 0.1B Netherlands Austria (Vienna ) 0.0 0.0 € 0.1B Switzerland Poland (Warsaw ) 0.0 0.1 € 0.1B Portugal Portugal (Lisbon ) 0.0 0.0 € 0.0B Italy Turkey (Istanbul ) 0.0 0.0 € 0.0B Poland 0.0 1.0 Source: Dealroom.co. 2.0 3.0 4.0 25.9% 61.3% Denmark € 0.6B 17.7% 41.0% France € 1.6B 14.7% 82.3% United Kingdom € 2.0B € 0.8B 0.7 0.3 0.2 0.1 1.0 Sweden € 3.2B 0.8 6.0% 30.5% 63.5% 34.1% 65.9% 32.7% 67.3% 25.1% 7.1% 38.4% 36.5% 11.1% 81.8% 18.1% 81.9% 8.5% 91.5% 6.9% – 93.1% 25.0% 50.0% 75.0% 100.0% 37 2016 saw largest ever European cohort of early stage startups funded. Later stage rounds slowed down Early stage: strong pipeline Later stage: slow-down Amount raised (€ billion) Number of rounds Seed & angel rounds more lumpy on quarterly scale € 1.8B € 1.7B On quarterly scale, uptrend in Series B and series C disappears 497 451 Largest ever European cohort of new early stage startups funded in 2016. 433 € 1.7B € 1.6B € 1.3B € 1.3B € 1.3B € 1.2B 370 € 1.2B 367 340 € 0.9B € 0.9B € 0.8B € 0.9B 265 231 € 0.6B € 0.3B Q3 € 0.4B € 0.4B € 0.4B € 0.2B € 0.2B € 0.2B € 0.2B Q2 € 1.1B € 1.1B € 1.0B 299 292 Q1 € 1.2B € 1.1B Q4 Q1 Q2 2015 Q3 € 0.3B Q4 106 Q1 2016 Angel & Seed Source: Dealroom.co. 131 Q2 € 0.9B € 0.9B € 0.8B Includes €0.9B Spotify convertible. € 0.8B € 0.7B 182 189 194 € 0.5B 150 148 Q3 2015 Q4 Q1 Q2 Q3 2016 Series A / Early VC Q4 52 61 60 70 42 Q1 Q2 Q3 Q4 Q1 74 Q2 2015 62 60 Q3 Q4 2016 Series B, C 39 44 45 50 61 52 43 42 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 Series D+ Q1 € 0.4B € 0.3B € 0.3B € 0.3B 42 54 59 66 € 65 0.1B Q2 Q3 Q4 Q1 Q2 2015 € 83 0.2B Q3 71 Q4 2016 Other 38 Quarterly trends: Slowdown in UK and Germany, but strong growth in across most parts of Europe… Slowdown in UK and Germany (Europe’s most mature VC markets) Remainder of Europe is catching up rapidly across a very distributed group of countries. Israel continued strong growth Amount raised (€ billion) Number of rounds Includes Delivery Hero, HelloFresh, FoodPanda € 1.3B € 1.3B Includes €0.9B Spotify convertible. € 1.2B € 1.1B € 1.1B € 1.1B € 1.0B€ 1.0B 334 330 € 0.9B € 1.0B € 0.9B € 0.8B € 0.7B € 0.7B € 0.7B 124 140 144 142 € 0.7B€ 0.7B € 0.6B € 0.6B 126 126 126 € 0.3B 102 104 114 98 94 58 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 United Kingdom 185 € 0.5B € 0.4B € 0.4B 89 2015 269 € 0.8B € 0.7B € 0.5B 137 € 0.9B € 0.8B € 0.8B € 0.3B € 0.3B 74 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 Germany € 0.4B € 0.3B 140 131 134 71 54 61 57 2016 France € 0.4B 272 0.7B € 0.7B€223 € 0.6B 290 € 0.7B € 0.5B € 0.5B € 0.4B 61 55 53 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 € 0.5B 257 335 72 63 69 60 39 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 Israel 112 € 0.2B 90 € 0.2B 82 82 € 0.2B € 0.1B 26 40 39 58 € 0.1B € 0.1B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 Sweden Source: Dealroom.co. Includes Israel. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 Other 39
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