Venture Capital Report Europe 3Q 2015
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 3Q 2015 include: European venture capital fundraising falls from prior quarter; Venture capital investment into European companies improves in consecutive quarters; The number of initial public offerings (IPOs) experienced a decrease from the prior quarter, while the number of mergers and acquisitions (M&As) are on the rise. 2
EUROPEAN VENTURE CAPITAL FUNDRAISING FALLS IN 3Q 2015 FUNDRAISING 13 European venture capital funds accumulated 853 million during 3Q 2015, dropping 58% in capital raised from 2Q 2015 with a 52% decrease in the number of fund closings. Compared with the year ago period, euros raised improved by 5%, despite a reduction in the number of fund closing (from 20 to 13). 50 45 40 35 30 25 European VC Fundraising Based on multiple closings (2012 2015) 2.50 2.00 1.50 The largest fund of the quarter was Lakestar II LP, which raised 350 million, accounting for 41% of the total amount raised for 3Q 2015. 20 15 10 1.00 0.50 5 0 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Amount Raised ( B) 0.76 1.38 0.76 1.03 0.64 2.06 0.55 1.26 0.81 1.26 1.06 2.04 0.85 Number of Funds 15 31 15 17 11 43 22 24 20 28 21 27 13 0.00 3
LARGEST EUROPEAN VC FUNDS RAISED IN 3Q 2015 FUNDRAISING Firm Name Fund Name Amount ( M) Location Offering Status Fund Type Fund Category Closing Type Lakestar LP Lakestar II LP 350.00 Zurich, Switzerland Closed Multi-stage venture capital Venture Capital Final Notion Capital Notion Capital Fund III LP 108.56 London, United Kingdom Open Early-stage venture capital Venture Capital First Runa Capital Runa Capital II 67.85 Moscow, Russia Open Early-stage venture capital Venture Capital First b-to-v Partners AG b-to-v Partners Fund III 63.00 St. Gallen, Switzerland Open Multi-stage venture capital Venture Capital First Nauta Capital Nauta Tech Invest IV 61.87 Barcelona, Spain Open Early-stage venture capital Venture Capital First 4
INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES IMPROVES ONCE MORE IN 3Q 2015 FINANCING European companies raised over 3 billion for 355 deals during 3Q 2015, a minimal increase in the amount raised from 2Q 2015 despite a 5% slide in the number of deals completed. In contrast with the year ago period, both investment and number of completed deals improved, respectively by 31% and 1%. Consumer Services ( 935 million) was the strongest sector of the quarter in terms of attracting investment followed by Healthcare ( 929 million). 3.50 3.00 2.50 2.00 1.50 1.00 Equity Financings into Europe-based, VC-backed Companies (2012 2015) 500 450 400 350 300 250 200 150 0.50 100 50 0.00 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Amount Raised ( B) 1.15 1.26 1.22 1.54 1.78 1.84 1.64 2.42 2.31 2.02 2.80 3.01 3.03 Number of Deals 334 395 379 421 397 487 406 436 353 393 385 375 355 0 5
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2012 2015) NUMBER OF DEALS FINANCING 240 200 160 120 80 40 0 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Seed 56 65 38 37 51 73 37 31 22 29 15 26 23 First 162 196 199 205 208 218 217 219 181 197 196 169 175 Second 53 59 66 89 63 83 65 90 65 75 80 68 73 Later 47 45 54 64 51 83 60 77 62 60 77 96 68 Restart 0 0 0 0 0 0 0 0 0 0 0 0 0 6
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2012 2015) AMOUNT RAISED ( M) FINANCING 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Seed 16 26 20 17 20 30 17 22 13 21 11 16 26 First 299 453 395 422 537 354 514 617 458 444 611 484 806 Second 286 295 253 475 699 398 311 478 218 776 446 481 630 Later 532 458 541 602 464 1,000 677 1,122 898 743 1,680 1,898 1,520 Restart 0 0 0 0 0 0 0 0 0 0 0 0 0 7
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (2012 2015) MEDIAN EQUITY DEAL SIZE ( M) FINANCING 3.00 2.50 2.00 1.50 1.00 0.50 0.00 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Median Equity Deal Size ( M) 1.15 1.20 1.50 1.52 1.00 1.37 1.50 1.91 1.77 2.10 2.00 2.41 2.40 8
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2015) FINANCING Consumer Services received the largest allocation of investment during 3Q 2015 (31%), accumulating 935 million through 103 deals. Deal flow rose by 5% from the prior quarter, despite a 33% drop in capital invested. Healthcare placed second in terms of equity financing raising 929 million across 62 deals, an improvement of 101% in capital raised and 13% in deals completed from the previous quarter. Business and Financial services placed third, with companies in the sector gathering 25% of the total amount invested for the quarter. The sector received 746 million across 112 deals; a rise of 12% in capital invested and of 8% in deal flow from 2Q 2015. 3Q'15 Industry Breakdown By Number of Deals 3Q 15 Industry Breakdown By Amount Raised Business and Financial Services 16% Consumer Goods 1% 32% Consumer Services 17% Energy & Utilities 3% Healthcare 2% Industrial Goods & Materials 29% Information Technology 6% Business and Financial Services 25% Consumer Goods Consumer Services 31% 1% Energy & Utilities Healthcare 6% 31% Industrial Goods & Materials (0%) Information Technology 9
TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (3Q 2015) FINANCING Co. Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ( M) Round Investors (* denotes lead) Comuto SA France Transportation Services Travel and Leisure Consumer Services Provider of a car journey-sharing platform. 31/07/2015 Later 180.00 Individual Investors, Insight Venture Partners*, Lead Edge Capital, Vostok New Ventures Ltd. Mereo BioPharma Group Ltd. United Kingdom Drug Development Technologies Biopharmaceuticals Healthcare Provider of specialty biopharmaceutical services. 29/07/2015 First Round 108.08 Invesco Perpetual, Novartis AG, Woodford Investment Management LLP Oxford Nanopore Technologies Ltd. United Kingdom Drug Development Technologies Biopharmaceuticals Healthcare Provider of nanopore technology. 21/07/2015 Later 98.90 IP Group PLC EREN SA Luxembourg Renewable Energy: Other Renewable Energy Energy and Utilities Provider of natural resource efficiency. 30/09/2015 First Round 97.50 Bpifrance Investment, FFP Holdings, Next World Capital, Salvepar SA CeQur SA Switzerland Therapeutic Devices (Invasive) Medical Devices and Equipment Healthcare Provider of an insulin infuser device for people with type 2 diabetes. 1/09/2015 Later 88.38 Arthurian Life Sciences Ltd.*, Endeavour Vision SA, Schroders, VI Partners, Woodford Investment Management LLP 10
MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (3Q 2015) BY DEALS COMPLETED FINANCING 16 14 12 13 12 10 8 8 8 7 6 6 4 2 0 Bpifrance Investment High-Tech Gruenderfonds Management GmbH Balderton Capital Management LLP Index Ventures Alven Capital Inveready Technology Investment Group 11
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES BY COUNTRY (3Q 2015) FINANCING Number of Deals in 3Q 2015 by Country (Top 4) 29% 24% United Kingdom France The United Kingdom was the most favoured destination for equity financing during 3Q 2015, receiving 947 million across 87 deals. The country took 31% of all equity financing for the quarter, despite a 9% decrease in deal flow from 2Q 2015. France placed second, attracting a 19% share of European financing. Investment reached a total 567 million, a 29% rise in capital invested, despite a 22% drop in number of deals. Germany occupies third position raising 428 million, 14% of the total for the quarter. Switzerland placed fourth with a 6% share, raising 194 million during 3Q 2015. Amount Raised in 3Q 2015 by Country (Top 4) 10% 30% 6% 18% 23% 19% 31% 19% Germany Spain Rest of Europe United Kingdom France Germany Switzerland 14% 19% Rest of Europe 12
EUROPE 3Q 2015 VENTURE EXIT ACTIVITY LIQUIDITY Exit Opportunities for European VC backed Companies (2012 2015) 43 venture-backed M&As took place in Europe during 3Q 2015, a 2% increase from 2Q 2015 but a 12% drop from 3Q 2014. A total of 2.7 billion were raised through VC-backed M&As in 3Q 2015, a decrease of 27% from the previous quarter and a 9% drop compared to 3Q 2014. 8 venture-backed IPOs took place during 3Q 2015, a 47% decrease from the prior quarter and a 50% decrease in listings for VC-backed companies from the year ago period. 3Q'15 2Q'15 1Q'15 4Q'14 3Q'14 2Q'14 1Q'14 4Q'13 3Q'13 2Q'13 1Q'13 4Q'12 3Q'12 0 10 20 30 40 50 60 70 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 IPOs 2 5 1 5 3 9 8 21 16 10 12 15 8 M&As 34 46 37 39 42 44 56 41 49 47 53 42 43 13
TOP 3 M&As IN EUROPE (3Q 2015) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ( M) Acquirer Idealista S.A. Madrid, Spain Operator of a real estate website in Spain, Italy, and Portugal. Search Portals Consumer Information Services Consumer Services 24/07/2015 Buyout 150.00 Apax Partners LLP Oxitec Ltd. Abingdon, United Kingdom Provider of biotechnology for tackling dengue fever and damaging agricultural pests. Genetically Modified Agricultural Products Agriculture and Forestry Industrial Goods and Materials 04/09/2015 Acquisition 142.08 Intrexon Corp. Powervation Ltd. Blackrock, Ireland Provider of fabless semiconductor solutions. Application-Specific Integrated Circuits Semiconductors Information Technology 23/07/2015 Acquisition 63.33 ROHM Co. Ltd. 14
EUROPEAN VC-BACKED IPOs (2012-2015) LIQUIDITY 8 venture-backed IPOs took place during 3Q 2015, a decrease in number of deals both to the prior quarter and the previous year. 2,500.00 25 IPOs raised almost 700 million during 3Q 2015, an increase of 31% from the 533 million raised in 2Q 2015. VC-backed companies also raised an higher amount through IPOs when compared with the year ago period ( 447 million). The largest European VC-backed IPO of 3Q 2015 was the Flow Traders listing in July. The company raised 521 million for its offering on the Amsterdam Exchange Index. 2,000.00 1,500.00 1,000.00 500.00 0.00 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 Raised ( M) through IPO 52.08 142.99 19.22 89.24 25.51 366.10 448.63 529.53 447.47 2,249 417.40 533.10 699.69 Number of IPOs 2 5 1 5 3 9 8 21 16 10 12 15 8 20 15 10 5 0 15
TOP 3 IPOs IN EUROPE (3Q 2015) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Raised through IPO ( M) Exchange/ Symbol Flow Traders Netherlands Provider of electronic trading services. Institutional Investment Services Financial Institutions and Services Business and Financial Services 10/07/2015 521.19 AEX: FLOW Nabriva Therapeutics AG Austria Developer of pleuromutilin antibiotics. Biotechnology Therapeutics Biopharmaceuticals Healthcare 18/09/2015 81.54 NASDAQ: NBRV Kiadis Pharma BV Netherlands Developer of oncology-related therapeutics. Biotechnology Therapeutics Biopharmaceuticals Healthcare 02/07/2015 32.67 BSE: KDS 16
ABOUT US Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service provider find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides accurate, comprehensive data on venture-backed companies including their investors and executives in every region, industry and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones proprietary research and are contained in VentureSource. This data was collected through survey of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice. 17
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