Is it morning in European tech? ACCIÓ, Barcelona, 6 July 2017
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Record 5.5 billion raised by European companies (incl. Israel) during the second quarter of 2017 6.0B 5.5B 5.0B 4.0B 3.5B 3.8B 3.7B 4.2B 3.7B 4.4B 4.3B 3.7B 4.1B 4.4B 3.0B 2.0B 1.0B 0.8B 1.4B 1.2B 1.2B 1.0B 1.4B 1.1B 1.8B 2.0B 2.3B 2.5B Preliminary data as of 1 July 2017. Please keep an eye on blog.dealroom.co for final Q2 report 0.0B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 2017 Source: Dealroom.co. Excludes buyouts, secondaries, debt, lending capital. Includes Israel. 3
During the last 12 months, a record 17.8 billion was raised by European companies (incl. Israel) 17.7B 18.0B 15.3B 16.0B 16.6B 16.5B 16.1B 16.5B 16.0B 13.5B 14.2B 14.0B 12.2B 12.0B 10.4B 10.0B 9.6B 8.0B 6.0B 4.6B 4.7B 4.8B 4.7B 5.3B 6.3B 7.2B 4.0B 2.0B 0.0B Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 2017 Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel. 4
UK, Germany and France are the leading tech hubs, followed by Sweden, Spain, Netherlands 2.5B UK London Germany Berlin France Paris Spain BCN & Madrid Rest of Europe 2.0B 2.1B 1.5B 1.5B 1.0B 0.9B 0.7B 0.5B 0.0B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017. 2015 2016 2017. 2015 2016 2017. 2015 2016 2017. 2015 2016 2017 London Berlin Paris Barcelona & Madrid Rest of Europe 0.2B Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel. Note: Preliminary data as of 1 July 2017. Please keep an eye on blog.dealroom.co for final Q2 report. 5
Paris has been a rising star in venture capital since 2016 London Paris Berlin Stockholm Amsterdam Barcelona Madrid 3.5B 600 3.0B Amount invested ( billions) Number of rounds 500 2.5B 2.2B 400 2.0B 1.5B 1.7B 300 1.0B 833M 910M 200 0.5B 0.0B 100 258M 227M 123M '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. 6
Barcelona and Madrid: two strong ecosystems Barcelona Madrid Rising stars Exits Investors Funding 31 29M 41 96M 69 220M 85 93 318M 258M 47 56 19M 31M 49 64 106M 112M 53 227M '12 '13 '14 '15 '16 '12 '13 '14 '15 '16 Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel. 7
The largest venture capital rounds in 2017 so far UK Germany France Spain Other Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel. Note: Preliminary data as of 1 July 2017. Please keep an eye on blog.dealroom.co for final Q2 report. 8
Evolution of investment themes in Europe Peaked in 2015: Food, Fashion, Wellness, Taxi Growth areas: FinTech, HealthTech, Deep Tech (1) 5.0B 5.5B Stable funding: Enterprise/SaaS, Travel Tech, Gaming 0.9B 0.7B 0.4B 0.1B 0.3B 0.2B 0.1B 2.7B 3.5B 0.8B 0.3B 0.1B 0.4B 0.9B 0.7B 2.9B 0.5B 0.2B 0.8B 1.2B 1.4B 0.6B 2012 2013 2014 2015 2016 Food Fashion Wellness Transportation 1.0B 1.5B 2.9B 0.7B 1.2B 1.8B 1.1B 1.7B 0.5B 0.4B 1.5B 0.4B 0.4B 0.6B 0.1B 1.9B 1.8B 1.8B 2012 2013 2014 2015 2016 Deep tech FinTech Healthcare 0.9B 0.7B 2.7B 3.2B 2.4B 0.6B 0.6B 0.3B 1.9B 2.0B 1.6B 0.2B 0.1B 0.9B 0.5B 0.9B 0.5B 0.7B 0.2B 0.2B 2012 2013 2014 2015 2016 Travel Enterprise Gaming 1. Includes artificial intelligence, deep learning, robotics, aviation, semiconductors, augmented reality, virtual reality, computer vision. 9
Sources of venture capital funding in Europe Corporate 6x growth Investment funds 3x growth Angel, crowdfunding 5x growth Amount invested Number of rounds 12.0B 10.0B 8.0B 6.0B 4.0B 2.0B 1.8B 1.2B 0.8B 4.4B 4.7B 3.7B 4.0B 8.3B 11.2B 10.4B 0.1B 0.2B 0.3B 0.6B 0.6B 3,500 3,000 2,500 2,000 1,500 1,000 500 0.0B 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 1. U.S based funds = Funds only. Excludes investment by U.S. corporates (Microsoft, GE, ). 10
Sources of venture capital funding in Europe (cont d) United States 3x growth Europe 4x growth Other 6x growth Amount invested Number of rounds 12.0B 10.0B 8.0B 6.0B 4.0B 2.0B 0.0B 1.2B 1.7B 3.1B 4.0B 3.8B 3.0B 3.3B 6.7B 10.8B 9.8B 2.0B 1.4B 0.3B 0.3B 0.6B 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 11
Room to grow: funding per capita indicates Europe is still underfunded in terms of venture capital Israel USA Sweden Ireland Finland United Kingdom France Norway Denmark Germany Netherlands Belgium Spain Austria Portugal Italy Russia Turkey 77 59 49 41 30 25 24 24 22 13 9.2 4.3 2.7 2.0 0.4 117 231 2016 funding per capita 313 Source: Dealroom.co. 12
Europe is catching up with the U.S. by number of venture capital rounds 12,000 Number of VC rounds 10,000 8,000 6,000 4,000 6.2x smaller 2.2x smaller U.S. Europe 2,000 2012 2013 2014 2015 2016 U.S. Europe (Excl. Israel) Source: Dealroom.co. 13
Exits: returning capital to investors
An increasingly diverse group of acquirers and investors is buying European tech companies Asian U.S. European IPOs Not VC-Backed exits VC-Backed exits 55.5B 55.8B 3.5B 40.2B 15.4B 9.4B 11.0B 50.1B 18.4B 14.3B 2.9B 11.9B 6.5B 7.4B 5.7B 2.4B 28.8B 26.1B 27.0B 1.8B 17.7B 16.0B 25.2B 11.1B 10.0B 13.1B 9.0B 9.5B 3.0B 3.6B 6.0B 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Source: Dealroom.co 15
UK and Germany have returned the most capital back to investors Capital returned (2014-2016) Notable exits Anticipated exits United Kingdom 30.9B Just Eat, Betfair, CSR, Markit, Skyscanner, Betfair, Zoopla, Biovex, Momondo Photobox, Mimecast, Bebo, Swiftkey, Magic Pony, DeepMind Funding Circle, Farfetch, Deliveroo, Fanduel, The Hut Group Germany 22.8B Rocket, Zalando, Trivago, HERE, Hybris, TeamViewer, Unify, CityDeal, Delivery Hero Auto1 Group, HelloFresh, Global Fashion Group, Check24, Flixbus Finland 9.7B Supercell? Israel 7.9B Playtika, Wix, Valtech Infinidat, Gett Netherlands 5.1B Takeaway.com, Bol.com Adyen France 2.8B CRITEO, Fotolia, Showroomprivee Vente Privee, Sigfox, Jumia, Blablacar Russia Italy 2.4B 1.4B Avito? TeamSystem, Yoox, Gruppo MutuiOnline? Sweden 1.2B King.com Spotify, Klarna Spain 1.1B SocialPoint, Softonic, edreams, Privalia, Idealista, Wallapop Letgo, Cabify Source: Dealroom.co 16
Healthy ratio of capital returned vs. capital invested: Europe is able to sustain a thriving ecosystem Ratio of capital returned invested Venture capital invested Capital returned Capital returned 34.1B 37.1B Indicative amount of exits required to achieve 2x return on venture capital 23.5B Capital invested ( 5.0B) ( 10.4B) ( 15.3B) ( 16.5B) 2006 to 2013 2014 2015 2016 2017 & beyond Source: Dealroom.co 17
Key drivers of success and failure for European tech
Impact of Brexit? Source: National Geographic. 19
United States: eroding its brand as haven for the young, smart and ambitious 20
Political climate in United States 21
Political climate in United States 22
What happens when we lose trust in institutions Israel USA Sweden Ireland Finland United Kingdom France Norway Denmark Germany Netherlands Belgium Spain Austria Portugal Italy Russia Turkey 77 59 49 41 30 25 24 24 22 13 9.2 4.3 2.7 2.0 0.4 313 231 160 2016 funding per capita Source: Dealroom.co. 23
Meanwhile in France 24
Ingredients for attracting talent: opportunity equal opportunity trust in institutions
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