Europe 4Q 2014
The following report presents Dow Jones VentureSource s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. Highlights for 4Q 2014 include: European venture capital fundraising experiences uptick from 3Q 2014, but suffers declines in both fund closings and euros raised for the 12 month period; Venture capital investment into European companies falls from 3Q 2014, but improves by a quarter year over year; Despite an overall fall in exit activity, the total amount raised through venture-backed Initial public offerings (IPOs) reached its highest point since 2Q 2000. 2
FUNDRAISING European Venture Capital Fundraising Experiences Uptick in 4Q 2014 18 European venture capital funds accumulated 927 million during 4Q 2014, an increase of 33% in euros raised and 20% in the number of funds with closings from 3Q 2014. Despite the uptick in fundraising from 3Q 2014, the number of funds with closings during 4Q 2014 fell by 51% compared with the same period last year, while euros raised fell by 49%. The largest fund of the quarter was Principia SGR s Fund III which raised 160 million, accounting for 17% of the total amount raised for 4Q 2014. Overall, the number of fund closings in 2014 was down by 4% to 76 from the year prior, while the total amount raised by venture funds fell by 18% from 2013 to 3.4 billion. European VC Fundraising (2011 2014) Based on multiple closings 40 35 30 2.50 2.00 25 20 1.50 15 1.00 10 5 0.50 0 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Amount Raised ( B) 2.17 0.98 1.18 0.76 1.19 0.76 1.03 0.50 1.81 0.69 1.03 0.70 0.93 Number of Funds 36 17 21 15 29 15 17 10 37 23 20 15 18 0.00 3
Largest European VC Funds Raised in 4Q 2014 FUNDRAISING Firm Name Fund Name Amount ( M) Closed in 4Q Location Offering Status Fund Type Fund Category Closing Type Principia SGR Principia Fund III 160.00 Milan, Italy Open Multi-stage venture capital Venture Capital First Infocomm Investments Pte. Ltd. Infocomm European Technology Fund 158.43 Singapore, Singapore Closed Early-stage venture capital Venture Capital Final Northzone Ventures AS Northzone VII 100.00 Oslo, Norway Closed Early-stage venture capital Venture Capital Final Forbion Capital Partners Forbion Capital Fund III 92.00 Naarden, Netherlands Open Multi-stage venture capital Venture Capital First Advent Venture Partners LLP Advent Life Sciences Fund II LP 70.24 London, United Kingdom Closed Multi-stage venture capital Venture Capital Final 4
Investment into European Venture-backed Companies Falls in 4Q 2014 European companies raised 1.8 billion for 332 deals during 4Q 2014, a fall of 24% in the amount raised from 3Q 2014 despite just five fewer deals being completed. In contrast with the year ago period, investment improved by 1% despite a 28% reduction in the number of completed deals. In 2014 as a whole, European venture-backed companies attracted 7.9 billion across 1460 deals, a decline of 11% in deals completed from 2013 but an improvement of 25% in euros invested. Equity Financings into Europe based, VC-backed Companies (2011 2014) 2.50 2.00 1.50 1.00 0.50 0.00 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Amount Raised ( B) 1.46 1.06 1.56 1.15 1.24 1.21 1.57 1.75 1.76 1.54 2.26 2.32 1.77 Number of Deals 374 347 375 326 373 371 420 384 461 387 404 337 332 500 450 400 350 300 250 200 150 100 50 0 5
Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 2014) Number of Deals 240 200 160 120 80 40 0 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Seed 45 38 38 53 61 35 34 52 67 32 24 19 23 First 168 161 192 155 187 197 207 197 207 210 203 176 171 Second 62 63 60 55 57 64 89 63 81 67 87 60 64 Later 73 70 55 46 43 53 65 51 81 56 73 65 55 Restart 3 0 0 0 0 0 0 0 0 0 0 0 0 6
Equity Financings into Europe-based, VC-backed Companies, by Round Class (Year over Year, 2004 2014 ) Number of Deals 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Restart 14 9 10 12 5 3 2 6 0 0 0 Later 437 482 339 385 316 290 304 238 214 250 249 Second 289 283 242 267 274 251 268 261 235 297 278 First 519 541 643 845 712 598 669 664 695 808 760 Seed 66 55 93 100 99 93 97 134 190 188 98 7
Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 2014) Amount Raised ( M) 1,200 1,000 800 600 400 200 0 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Seed 23 17 23 15 26 20 14 19 27 16 17 11 14 First 433 298 537 289 449 403 418 526 349 441 563 510 403 Second 355 278 257 300 291 229 479 697 391 319 468 207 683 Later 604 448 673 531 449 543 639 458 937 642 1,039 877 647 Restart 15 0 0 0 0 0 0 0 0 0 0 0 0 8
Equity Financings into Europe-based, VC-backed Companies, Median Equity Deal Size ( M) (2011 2014) 2.50 2.00 1.50 1.00 0.50 0.00 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Median Equity Deal Size ( M) 1.41 1.50 1.90 1.20 1.22 1.50 1.52 1.00 1.40 1.58 2.00 2.00 2.30 9
Equity Financings into Europe-based, VC-backed Companies, by Industry Group (4Q 2014) Business and Financial received the largest allocation of investment during 4Q 2014 (32%), accumulating 557 million through 80 deals. The sector remained the most attractive sector despite investment dropping by 41% from 3Q 2014. Deal flow remained flat. Healthcare rose to second in terms of equity financing, taking a 30% share of all 4Q 2014 investment. The sector raised 535 million across 60 deals, an increase of 64% in capital raised and 25% in deals completed from the previous quarter. Consumer was pushed down to third, with companies in the sector gathering 18% of the total amount invested for the quarter. The sector received 327 million across 96 deals; a fall of 53% and 3% from 3Q 2014 in capital invested and deal flow respectively. 4Q'14 Industry Breakdown By Number of Deals 4Q 14 Industry Breakdown By Amount Raised 21% 24% Business and Financial Consumer Goods 1% 15% 32% Business and Financial Consumer Goods 2% Consumer Consumer 18% 2% Energy & Utilities Healthcare 30% 2% Energy & Utilities Healthcare 4% 29% Industrial Goods & Materials 2% 18% Industrial Goods & Materials (0.5%) Information Technology Information Technology 10
Equity Financings into Europe-based, VC-backed Companies, by Industry Group (2014) 2014 Industry Breakdown By Number of Deals 2014 Industry Breakdown By Amount Raised ($B) 38 260 406 Business and Financial Consumer Goods Consumer 1% 12% Business and Financial 31% Consumer Goods Consumer 220 44 432 56 Energy & Utilities Healthcare Industrial Goods & Materials 22% 3% 29% 2% Energy & Utilities Healthcare Industrial Goods & Materials Information Technology Information Technology 11
Top 5 Deals into European VC-backed Companies (4Q 2014) Co. Name Location Industry Group Industry Segment Industry Code Brief Description Close Date Round Type Raised ( M) Round Investors (* denotes lead) Adyen BV Netherlands Business and Financial Financial Institutions and Payment/ Transactional Processing Provider of an Internet payment system for international merchants. 16/12/2014 Second 199.60 Felicis Ventures, General Atlantic LLC*, Index Ventures, Temasek Holdings Pvt. Ltd. Verne Global Iceland Information Technology Electronics and Computer Hardware Data Storage Provider of renewable energy-powered data centers. 31/12/2014 Second 78.24 General Catalyst Partners, Novator Partners, Stefnir*, Wellcome Trust Powa Technologies Ltd. United Kingdom Business and Financial Financial Institutions and Payment/ Transactional Processing Provider of an integrated mobile payments and e-commerce platform. 7/11/2014 Second 63.88 Wellington Management Co. LLP* Cell Medica Ltd. United Kingdom Healthcare Biopharmaceuticals Biotechnology Therapeutics Provider of antigenspecific T-Cell immunotherapy treatments for the treatment of infectious disease and cancer. 25/11/2014 4th 63.87 Imperial Innovations*, Invesco Perpetual, Woodford Investment Management LLP Ascendis Pharma A/S Denmark Healthcare Biopharmaceuticals Drug Development Technologies Developer of long-acting prodrug therapies to address large markets with significant unmet medical needs. 24/11/2014 3rd 47.91 Janus Capital Group, OrbiMed Advisors LLC*, RA Capital Management LLC, Rock Springs Capital Management, Sectoral Asset Management Inc., Sofinnova Partners, Sofinnova Ventures Inc.*, Venrock, Vivo Capital* 12
Most Active Investors for Europe-based, VC-backed Companies by Deals Completed (4Q 2014) 18 17 16 14 12 10 8 6 8 7 6 6 4 2 0 High-Tech Gruenderfonds Management GmbH Truffle Capital SAS Bpifrance Investment Northzone Ventures AS Kima Ventures 13
Equity Financings into Europe-based, VC-backed Companies, by Country (4Q 2014) The United Kingdom was the most favoured destination for equity financing during 4Q 2014, receiving 524 million across 69 deals. The country took in 30% of all investment into European VC-backed companies for the quarter. Germany placed second, capturing 18% of European investment. Investment fell by 73% from the prior quarter to total 322 million. Deal flow remained relatively stable, however, with 66 completed. The Netherlands rose to third position raising 243 million, a 14% share of investment. France placed in fourth position with a 12% share, raising 218 million during 3Q 2014. Number of Deals in 4Q 2014 by Country (Top 4) Amount Raised in 4Q 2014 by Country (Top 4) 33% 21% 20% United Kingdom Germany France Spain Rest of Europe 12% 26% 30% United Kingdom Germany Netherlands France Rest of Europe 8% 18% 18% 14% 14
LIQUIDITY Europe Sees Overall Decrease in 4Q 2014 Venture Exit Activity 42 venture-backed M&As took place in Europe during 4Q 2014, down 9% from 3Q 2014 but one up on the figure for 4Q 2013. The largest M&A for 4Q 2014 was Belgium s Clear2Pay NV, an e-payment solutions provider, which was acquired by Fidelity National Information for 375 million. 55 venture-backed IPOs took place during 2014, tripling the number of listings seen across Europe in 2013. 201 M&As were completed during the course of 2014, a 21% increase on the 166 that took place during 2013. Exit Opportunities for European VC backed Companies (2011 2014) 4Q'14 3Q'14 2Q'14 1Q'14 4Q'13 3Q'13 2Q'13 1Q'13 4Q'12 3Q'12 2Q'12 1Q'12 4Q'11 0 10 20 30 40 50 60 70 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 IPOs 3 6 3 2 5 1 5 3 9 8 21 16 10 M&As 45 38 42 30 46 34 36 41 41 51 42 46 42 15
Top 3 M&As in Europe (4Q 2014) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ( M) Acquirer Clear2Pay NV Mechelen, Belgium Provider of e-payment solutions. Vertical Market Applications Software Software Information Technology 2/10/2014 Acquisition 375.00 FIdelity National Information SuperDerivatives Inc. London, United Kingdom Provider of cloudbased derivatives data and technology for financial and commodity markets worldwide. Financial Data/Information Financial Institutions and Business and Financial 8/10/2014 Acquisition 277.25 Intercontinental Exchange Telerik AD Sofia, Bulgaria Provider of an end-toend platform that combines user interface (UI) tools and cloud services. Software Development Tools Software Information Technology 2/12/2014 Acquisition 209.98 Progress Software Corp. 16
LIQUIDITY European VC-backed IPOs (2011-2014) 10 IPOs were completed during 4Q 2014, a decline of 38% from the previous quarter s total but an increase of one on those completed during 4Q 2013. IPOs raised 2.3 billion during 4Q 2014, more than six times the figure seen in 4Q 2013 and the highest sum since 2Q 2000 when 71 IPOs raised a total of 3.8 billion. The largest European VC-backed IPO of 4Q 2014 was Rocket Internet AG s October listing on the Frankfurt Stock Exchange. The company raised a total of 1.4 billion, accounting for 62% of the total amount raised through European venture-backed company IPOs for the quarter. European VC-backed IPO Activity (2011-2014) 2,500.00 25 2,000.00 20 1,500.00 15 1,000.00 10 500.00 5 0.00 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Raised ( M) through IPO 18.66 157.40 26.76 52.08 142.99 19.22 89.24 25.51 366.10 448.63 529.53 447.47 2,250 Number of IPOs 3 6 3 2 5 1 5 3 9 8 21 16 10 0 17
Top 3 IPOs in Europe (4Q 2014) LIQUIDITY Company Name Country Brief Description Industry Code Industry Segment Industry Group Close Date Raised through IPO ( M) Exchange/ Symbol Rocket Internet AG Germany Operator of an e- commerce focused Incubators/Business venture capital (VC) firm Development and a startup incubator. Business Support Business and Financial 2/10/2014 1,400.00 XETRA: RKET Zalando SE Germany Provider of an e- commerce platform specializing in the retail of brand name shoes. Clothing/Accessory Retailers Retailers Consumer 1/10/2014 526.24 XETRA: ZAL Forward Pharma A/S Denmark Developer of immunomodulatory drugs for the treatment of immune disorders. Biotechnology Therapeutics Biopharmaceuticals Healthcare 15/10/2014 174.67 NASDAQ: FWP 18
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