The authors of this reportData sources and transparency
■ Dealroom.co is a proprietary global database providing business intelligence on innovative companies and venture capital
■ Basic access to the database is free. Throughout this report, links are provided to relevant underlying data
■ Data is maintained daily, sourced through a combination of: processing of public news-flow, data feeds, web scraping, crowd-sourced contributions (verified by Dealroom) and manual research
■ Dealroom’s clients include world-leading Silicon Valley firms, VC and buyout firms, multinationals and governments. Dealroom’s software, database and bespoke research help to stay at the forefront of innovation and identify growth & strategic opportunities
Notes on methodology
■ Venture capital funding excludes debt, lending capital, grants and ICOs
■ Secondary rounds, buyouts, M&A and IPOs are treated as exit transactions (excluded from funding data, but included in exit data)
■ Europe excludes Israel, unless specified otherwise
About this report
Daryia Paliksha
Analyst
Irina Anihimovskaya
Analyst
Marco Squarci
Manager Operations
Yoram Wijngaarde
Founder & CEO
For feedback or questions please get in touch
If you like this report, please share!
3
Julien Puls
Data Scientist
Summary
4
Record
investment
▪ Venture capital investors are betting on Europe at record levels: €19.2 billion was invested (€22.1 billion including Israel)
▪ The number of investment rounds declined by 12% to 3,513 (including Israel 3,753). But that decline is likely to diminish once all smaller rounds have been accounted for. Dealroom tracked 4,828 funding rounds in total, however this includes debt, ICOs, grants, and other excluded rounds
▪ This presentation includes a reconciliation with different reported investment figures and methodologies on page 9 and 10
Growth
drivers
▪ 2017 saw 17 rounds over €100 million (Improbable, Delivery Hero, Farfetch, Deliveroo, …), compared with 13 rounds in 2016
▪ However, even when excluding the 10 largest rounds investment still grew by 30%
▪ UK investment grew by 87% to €7.1 billion, more than Germany, France and Sweden combined. But France is #1 by number of VC-backed rounds
▪ U.S. investment is still 8x higher per inhabitant, indicating plenty of growth opportunity in Europe
Investing
trends
▪ Deep tech (1), fintech, and healthcare were the leading investment themes of 2017, approaching combined €8 billion investment. Decreased new activity in SaaS, content, marketing & advertising, travel, booking platforms, ecommerce
▪ There is a noticeable trend to fewer larger rounds: fewer but larger early stage rounds, and increase in larger follow-on rounds above €5 million
Sources of
capital
▪ Fundraising by European venture firms slowed down in 2017, but is still at historically high levels with plenty of capital is available to be invested
▪ The UK is no longer the undisputed capital of European venture capital. Continental Europe is catching up, while France is almost on par already
▪ Investment activity has grown roughly proportionally across funds and corporate investors in 2017
▪ Asia is becoming a significant investor in European tech, thanks to a handful of mega-rounds
Venture
backed exits
▪ Number of exits grew to 294, but there were far fewer meaningful exits compared with previous years (€12bn realised in 2017, vs. €35bn in 2016)
▪ Acquirers of European tech are still most likely to come from within Europe, followed by USA
▪ However, an extremely strong pipeline of European exits on the horizon (Spotify, Farfetch, Adyen, Klarna, Deliveroo, Auto1 Group, …)
1. Container term which includes robotics, artificial intelligence, autonomous driving & delivery, space-flight, aviation, computer vision, speech recognition, AR/VR.
Dealroom data: trusted by world-leading publications
5
An overview of Dealroom featured articles is available in this blog post
1. Venture capital investment
2. Growth drivers
3. Investing trends
4. Sources of capital
5. Venture backed exits
Contents
Venture capital investors are betting on Europe at an unprecedented pace
7Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
Investment in € billions
€ 1.0B € 1.4B € 1.0B € 1.5B € 1.7B € 2.4B € 2.7B € 2.2B € 3.2B € 3.2B € 4.0B € 3.2B € 4.1B € 4.2B € 3.0B € 3.5B € 4.0B € 5.1B € 5.5B € 4.6B
€ 0.2B
€ 0.1B € 0.5B
€ 0.3B € 0.4B
€ 0.2B
€ 0.5B
€ 0.4B
€ 0.5B € 0.5B
€ 0.4B
€ 0.6B
€ 0.6B € 0.9B
€ 0.7B
€ 0.5B
€ 0.5B
€ 0.7B
€ 0.9B
€ 0.8B
€ 1.2B € 1.5B € 1.5B
€ 1.8B € 2.1B
€ 2.7B
€ 3.2B
€ 2.6B
€ 3.6B € 3.7B
€ 4.4B
€ 3.8B
€ 4.7B € 5.0B
€ 3.7B € 4.1B
€ 4.5B
€ 5.8B
€ 6.4B
€ 5.4B
407
487 522 535
592 629
609 576
735
672
732
891
1,016
966
919
1,077
950
845
957
761
451
519
568 590
650 680 668
628
815
737
799
973
1,098
1,045
990
1,127
1,010
899
1,024
820
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015 2016 2017
Europe excl. Israel Israel
Nr. of rounds excl. Israel Incl. Israel
Decline in number of rounds reflects:1. a trend towards large deals (big tech) 2. time lag: some smaller rounds appear
with a 12-24 month delay
8
Click below to view data & underlying
rounds online. Click on the chart columns to
see rounds in each year. View to quarterly
vs. annually.
Europe & Israel investment
Investment in € billions
In 2017 a record €19.2 billion in venture capital was invested in Europe (€22bn incl. Israel)
€ 5.0B
€ 9.1B
€ 13.6B € 14.8B
€ 19.2B
€ 1.1B
€ 1.6B
€ 1.9B
€ 2.7B
€ 2.9B
€ 6.1B
€ 10.6B
€ 15.5B
€ 17.6B
€ 22.1B
1,951
2,406
3,030
3,978
3,513
2,128
2,626
3,324
4,260
3,753
2013 2014 2015 2016 2017
Europe (excl. Israel) Israel Nr. of rounds excl. Israel Incl. Israel
Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
▪ Dealroom excludes ICOs, grants, secondary rounds, debt,
lending capital from funding amounts
▪ Based on Dealroom data, but excludes biotech and Israel
▪ Otherwise, methodology consistent with Dealroom
▪ Includes debt rounds such as Auto1 €360 million. Dealroom
excludes such debt rounds from totals
▪ Tech.eu’s includes secondary rounds such as Com Hem and
Klarna. Includes debt rounds such as Auto1
▪ Includes debt rounds such as OVH €400 million debt round.
Dealroom excludes such debt rounds from totals
▪ Methodology mostly consistent with Dealroom
▪ Includes ICOs such as SIRIN Labs. Prioritises Israel location
(e.g. SIRIN Labs). Includes secondary rounds such as Klarna,
debt round such as Auto1 Group
Not available Not available ▪ European data not found
$ 21B
$ 19B
$ 19B
$ 24B
$ 18B
$ 16B
$ 16B
$ 24B
$ 22B
$ 22B
$ 27B
$ 21B
$ 19B
$ 20B
Europe Israel
4,524
3,449
3,306
3,150
2,483
2,250
1,541
4,828
3,699
3,556
3,400
2,733
2,500
1,941
Dealroom
Atomico
Pitchbook
Tech.eu
CB Insights
VentureSource
Gil Dibner
Crunchbase
Comparing 2017 European venture capital reports: differences in scope & methodology
9
Number of rounds tracked Reported US$ investment Key differences
Source: Israel added for comparative purposes. If Israeli data not provided, Dealroom numbers are used.1. Total number of rounds tracked including debt, lending capital, ICOs and grants.
(1)
€ 4.3B
€ 8.0B
€ 11.8B € 13.6B
€ 17.1B
$ 4.7B
$ 8.8B
$ 13.0B $ 15.0B
$ 18.8B
0.7
1.1
1.8
1.2
2.1
0.7
1.2
1.9
1.3
2.3
1.1
1.6
1.9
2.7
2.9
1.2
1.7
2.1
3.0
3.2
€ 6.1B
€ 10.6B
€ 15.5B
€ 17.6B
€ 22.1B
$ 6.7B
$ 11.7B
$ 17.0B
$ 19.3B
$ 24.3B
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Europe (excl Biotech) Biotech Israel
$18.8B compares with $19.1B predicted back in Nov 2017 in Atomico’s State of European Tech report.
Tom Wehmeier, Partner & Head of Research at Atomico:“Europe's entrepreneurial, talent, community and capital foundations are strong. In fact, European tech today is the healthiest it has ever been. As Dealroom.co's data shows, investors from Europe and beyond are backing the region's entrepreneurs at record levels.”
Atomico’s State of European Tech 2017: excluding biotech US$ 18.8 billion was invested
10Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital, grants.
Investment in € billions Investment in US$ billions
37% annual growth
26% growth from 2016
Total Europe = €19.2 bn
1. Venture capital investment
2. Growth drivers
3. Investing trends
4. Sources of capital
5. Venture backed exits
Contents
€ 4.1B
€ 7.3B
€ 11.1B€ 12.6B
€ 16.4B
€ 5.0B
€ 9.1B
€ 13.6B€ 14.8B
€ 19.2B
2013 2014 2015 2016 2017
Mega-rounds were a key growth
driver, but not the only factor
12Source: Dealroom.co. Excludes crowdfunding only rounds, buyouts, secondary transactions, debt, lending capital. Excludes Israel.
Click below to view data &
underlying rounds online
Number of rounds (heatmap)
2017 saw 17 rounds over €100 million,
compared with 13 rounds in 2016.
Click image below to explore the largest
rounds of 2017:
Europe & Israel investment
Spotify (€ 250M) Rocket Internet SE (€ 445M) Delivery Hero (€ 546M) Spotify (€ 500M) Improbable (€ 502M)
Zalando (€ 154M) Delivery Hero (€ 350M) Spotify (€ 526M) Global Fashion Group (€ 363M) Delivery Hero (€ 426M)
Supercell (€ 130M) Adyen (€ 250M) Landbay (€ 330M) Deliveroo (€ 275M) Farfetch (€ 397M)
Sungevity Netherlands (€ 125M) Ozon (€ 150M) Zencap (€ 253M) OVH (€ 275M) Deliveroo (€ 385M)
Truphone (€ 118M) Jumia Group (€ 150M) Kreditech (€ 200M) Jumia Group (€ 248M) Truphone (€ 337M)
Powa Technologies (€ 76M) Jumia Market (€ 150M) BlaBlaCar (€ 200M) Skyscanner (€ 169M) Gryphon Group (€ 238M)
AVITO (€ 50M) The Hut Group (€ 132M) Auxmoney (€ 165M) SIGFOX (€ 165M) OakNorth Bank (€ 203M)
Ulmart (€ 50M) Borro (€ 112M) Global Fashion Group (€ 165M) Cool Blue (€ 154M) Letgo (€ 175M)
Groupe Santiane (€ 44M) BlaBlaCar (€ 100M) Reward Gateway (€ 158M) Future Finance (€ 132M) SoundCloud (€ 170M)
Arria NLG (€ 40M) Klarna (€ 99M) Funding Circle (€ 150M) Oxford Nanopore (€ 126M) Tricentis (€ 165M)
Investment in € billions
30% growth YoY excluding top-10 largest rounds
€ 1.3B
€ 2.6B
€ 4.2B € 3.8B
€ 7.1B
€ 0.7B
€ 2.0B
€ 3.2B
€ 2.0B
€ 2.8B
€ 0.8B € 1.1B
€ 1.5B
€ 2.9B € 2.5B
€ 0.4B € 0.5B
€ 1.0B € 1.2B € 1.2B
€ 1.8B
€ 2.8B
€ 3.7B
€ 5.0B
€ 5.5B
€ 1.1B
€ 1.6B € 1.9B
€ 2.7B € 2.9B
765
389
703
356
1,540
240
–
400
800
1,200
1,600
2,000
€ 0B
€ 2B
€ 4B
€ 6B
€ 8B
€ 10B
'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17
Main city (€B) Total country (€B) Nr. of rounds
UK investment grew by 87% to €7.1 billion, more than
Germany, France and Sweden combined
13Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel & Biotech.
UKLondon
GermanyBerlin
FranceParis
SwedenStockholm
Rest of EuropeAll main cities
IsraelTel-Aviv
UK investment accounted for 37% of Europe’s total of €19.2 billion. In previous years this was around 28% of total
Drop in rounds in Italy, Switzerland, Ireland, Belgium
But… France has overtaken the UK
by number of VC-backed rounds
14Source: Dealroom.co. Excludes crowdfunding only rounds, buyouts, secondary transactions, debt, lending capital. Includes Israel.
Number of VC rounds (excl. crowdfunding rounds)
Click below to view data &
underlying rounds online
Number of rounds (heatmap)
Click below to view data &
underlying rounds online
- Click on amounts to see underlying rounds
- Switch between quarterly vs. annually
- Switch amounts vs. volume
Europe & Israel investment
United Kingdom
France
Germany
Sweden
544
674 692 724
672
387
186 225
298
629
688
353
–
100
200
300
400
500
600
700
800
2013 2014 2015 2016 2017
United Kingdom Germany France Sweden
Caveat: some smaller rounds appear with a 12-24 month delay. This can impact numbers by 10-15% (indicative)
$368
$250
$136
$120
$82
$61
$42
$41
$40
$38
$31
$30
$26
$24
$21
$18
$2
$2
$1
$0
Israel
USA
Sweden
United Kingdom
Ireland
Finland
Austria
Netherlands
France
Germany
Denmark
Europe (excl. Israel)
Belgium
Norway
Spain
Asia
Russia
Italy
Portugal
Turkey
U.S. investment is still 8x higher per inhabitant,
indicating plenty of growth opportunity in Europe
Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital, ICOs.1. Average of Pitchbook and CB Insights.
Venture capital investment per capita in 2017 (US$)
Opportunity in Italy: investment of $100 million, in a country of over 61 million people.
15
▪ Europe has roughly 700 million inhabitants. Investment of €19 / $21 billion implies $30 per capita
▪ USA annual investment is roughly $80 billion (1) and with 320 million inhabitants this implies $250 per capita
▪ Asia has roughly 4.5 billion inhabitants and $80 billion invested in 2017
Across Europe, investment activity is gradually
increasing, as local funding options are expanding
16Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel.
Number of VC rounds (excl. crowdfunding rounds)
€ 0.0B € 0.1B
€ 0.2B € 0.2B
€ 0.3B
€ 0.0B € 0.0B
€ 0.1B
€ 0.1B
€ 0.2B
€ 0.0B € 0.1B
€ 0.2B
€ 0.2B € 0.2B
€ 0.0B € 0.0B
€ 0.1B € 0.1B
€ 0.2B
€ 0.0B € 0.0B € 0.0B
€ 0.1B
€ 0.2B
€ 0.1B € 0.1B € 0.1B
€ 0.1B
€ 0.1B
–
20
40
60
80
100
120
–
€ 0.1B
€ 0.2B
€ 0.3B
€ 0.4B
'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17
Belgium Norway Denmark Austria Poland Italy
Amount funding Nr. of rounds
€ 0.2B € 0.4B
€ 0.5B € 0.6B
€ 0.9B
€ 0.3B € 0.5B
€ 0.6B
€ 1.0B
€ 1.7B
€ 0.2B
€ 0.6B € 0.5B
€ 0.9B
€ 0.6B
€ 0.2B € 0.2B € 0.2B
€ 0.6B
€ 0.4B € 0.2B
€ 0.4B € 0.2B
€ 0.3B € 0.2B € 0.2B € 0.1B
€ 0.2B € 0.3B € 0.3B
–
50
100
150
200
250
–
€ 0.5B
€ 1.0B
€ 1.5B
€ 2.0B
'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17
Spain Switzerland Netherlands Ireland Russia Finland
Amount funding Nr. of roundsIncludes Roivant’s €1bn Softbank round
1. Venture capital investment
2. Growth drivers
3. Investing trends
4. Sources of capital
5. Venture backed exits
Contents
Deep tech, fintech, and healthcare were the leading investment themes of 2017
Source: Dealroom.co.1. Values overlap as companies can be included in more than one investment theme (e.g. both fintech and SaaS, or deep tech and biotech). 18
Amount invested, 2017 (1) Number of rounds, 2017 (1)
€ 4.1B
€ 4.1B
€ 3.8B
€ 3.4B
€ 3.2B
€ 2.5B
€ 2.4B
€ 2.1B
€ 1.8B
€ 1.7B
€ 1.4B
€ 1.2B
€ 1.1B
€ 1.1B
€ 1.0B
€ 0.9B
€ 0.8B
€ 0.8B
€ 0.8B
€ 0.7B
€ 0.7B
€ 0.7B
€ 0.7B
€ 0.6B
€ 0.6B
€ 0.6B
€ 0.6B
€ 0.6B
Deep Tech
Fintech
Healthcare
Marketplace
Artificial intelligence
Analytics
Biotech
SaaS
Manufacturing
eCommerce / Trading
Food
Transportation
Back office
Marketing
Developer tools
InternetOfThings
Home
Gaming
Telecom
Classified listing
Booking
Fashion
Travel
Security
Energy
Insurance
Virtual reality
Cleantech
557
556
423
410
362
360
328
303
292
259
242
204
197
177
176
164
162
158
150
143
133
125
118
110
110
105
104
102
Deep Tech
Fintech
Healthcare
Marketplace
Manufacturing
SaaS
Analytics
Marketing
Artificial intelligence
eCommerce / Trading
Transportation
Content
Home
Food
Back office
InternetOfThings
Travel
Energy
Education
Booking
Cleantech
Biotech
Security
Real estate
Advertising
Jobs Recruitment
Sports
Gaming
Decreased new activity in SaaS, content, marketing & advertising, travel, booking platforms, ecommerce
Source: Dealroom.co. 19
Investment activity in 2017 vs. annual average in 2014-’16
€ 2.4B
€ 2.3B
€ 2.2B
€ 1.8B
€ 1.5B
€ 1.0B
€ 0.8B
€ 0.6B
€ 0.6B
€ 0.6B
€ 0.5B
€ 0.5B
€ 0.4B
€ 0.4B
€ 0.4B
€ 0.3B
€ 0.2B
€ 0.2B
€ 0.2B
€ 0.1B
€ 0.1B
€ 0.0B
€ 0.0B
€ 0.0B
(€ 0.0B)
(€ 0.1B)
(€ 0.1B)
(€ 0.4B)
(€ 1.0B) – € 1.0B € 2.0B € 3.0B
Deep Tech
Fintech
Artificial intelligence
Healthcare
Analytics
Biotech
Developer tools
Marketplace
Back office
Gaming
Insurance
Virtual reality
SaaS
Transportation
InternetOfThings
Telecom
Manufacturing
Security
Marketing
Home
Cleantech
Food
Travel
Classified listing
Energy
eCommerce / Trading
Booking
Fashion
144
129
48
33
28
25
24
21
19
18
14
10
9
7
3
(2)
(4)
(4)
(10)
(24)
(31)
(42)
(45)
(47)
(52)
(82)
(91)
(132)
(200) (100) – 100 200
Healthcare
Fintech
Energy
Real estate
Home
Sports
Transportation
Cleantech
Food
Back office
Jobs Recruitment
Security
Gaming
Artificial intelligence
Biotech
Manufacturing
Deep Tech
InternetOfThings
Education
Travel
Booking
Analytics
eCommerce / Trading
Marketing
Marketplace
Advertising
Content
SaaS
Amount invested: increase / (decrease) Number of rounds: increase / (decrease)
Trend towards larger deals leading to disconnect in trends
by number of rounds vs. amount invested. Example: SaaS
saw fewer deals but still more capital.
€ 1.2B
€ 2.9B
€ 4.2B
€ 3.4B € 3.2B
2013 2014 2015 2016 2017
New wave of investment in Fintech, Health, Deep Tech dwarfs 2014-2015 investment in B2C marketplaces
Investment into B2C verticals such as Fashion,
Wellness, Taxi, Travel peaked at €4 billion.
Companies focusing on execution & consolidation ...
Source: Dealroom.co.Note: Some companies are included in more than one industry vertical, leading to some double counting of investment data by industry.1. Container term which includes robotics, artificial intelligence, autonomous driving & delivery, space-flight, aviation, computer vision, speech recognition, AR/VR. In this chart, deep tech excludes fintech and health tech to avoid double counting.
… whereas investment into FinTech, HealthTech,
Enterprise and Deep Tech is already
approaching double that amount at €8 billion
20
Food
FashionWellness
TravelContent
€ 1.5B
€ 2.9B
€ 5.0B
€ 5.7B
€ 7.6B
2013 2014 2015 2016 2017
Deep Tech (1)
Health
Fintech
Where is the smart money investing, relative to the market?
21
Click image below to review Europe’s
most prominent venture capital
investors and their investment activity
Most prominent investors
71
75
43
69
24
54
37
21
44
23
30
16
19
10
28
9
18
11
Deep Tech
Fintech
Healthcare
Marketplace
Manufacturing
SaaS
Analytics
Marketing
Artificial intelligence
eCommerce / Trading
Transportation
Content
Home
Food
Back office
InternetOfThings
Travel
Energy
Rounds by Europe’s top 30 investment firms (2)
Investment themes of top investors are broadly in line with market, but
some notable deviations:
Entire European market (1)
Source: Dealroom.co. 1. Same data as previous page.2. As per Dealroom’s investor prominence ranking: Index, Holtzbrinck, Balderton, Northzone, Lakestar, Sequoia, Accel, Insight,
Rocket, Intel, 83North, Atomico, Goldman Bessemer, IDInvest, Partech, SVB, Naspers, Greylock, Creandum, Benchmark, 360 Capital Partners, DN Capital, HTGF, General Atlantic, Wellington, Mangrove, Acton, Octopus, TA Associates.
Median round sizes have come back up in 2017
(and valuations likely increased too)
22Source: Dealroom.co.
Series C rounds
Seed rounds Series A rounds
Series B rounds
€ 0.5M€ 0.6M
€ 0.7M
€ 0.9M
€ 0.7M
€ 0.2M
€ 0.3M
€ 0.4M€ 0.5M € 0.5M
2013 2014 2015 2016 2017
Average
Median
€ 11.0M
€ 14.0M € 13.5M€ 11.8M
€ 20.1M
€ 6.5M€ 7.9M
€ 10.0M
€ 8.0M
€ 11.8M
2013 2014 2015 2016 2017
Average
Median
€ 5.7M € 5.8M
€ 7.1M
€ 5.9M
€ 8.0M
€ 2.9M
€ 4.0M€ 3.6M € 3.6M
€ 5.5M
2013 2014 2015 2016 2017
Average
Median
€ 12.3M
€ 27.4M€ 28.8M
€ 22.8M € 23.5M
€ 10.0M
€ 18.2M€ 20.9M
€ 14.3M€ 12.5M
2013 2014 2015 2016 2017
Average
Median
See next slide for data by country
See next slide for data by
country
–
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016 2017
€ 0-2M € 0-2M in UK and Germany € 2-5M
–
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017
€ 5-10M € 10-20M € 20-50M € 50M+
Rounds up to €5M Rounds above €5M
Some smaller rounds appear with a 12-24
month delay
Number of rounds below €5 million stabilising, growth is driven by larger rounds
Source: Dealroom.co. Excludes Israel. 23
Noticeable decline in €0-2M rounds in UK and Germany since
2014 (also see next slide)
Early stage median round sizes have increased,
especially seed rounds in the UK and Germany
24Source: Dealroom.co.
Seed
rounds
Series A
rounds
€ 5.1M
€ 6.9M€ 6.4M € 6.3M
€ 5.7M€ 5.2M
€ 0.0M
€ 2.0M
€ 4.0M
€ 6.0M
€ 8.0M
United Kingdom Germany France Spain Sweden Netherlands
€ 0.6M
€ 1.2M
€ 0.5M€ 0.4M € 0.4M € 0.5M
€ 0.0M
€ 0.5M
€ 1.0M
€ 1.5M
United Kingdom Germany France Spain Sweden Netherlands
2012 2013 2014 2015 2016 2017
Median rounds sizeBigger single rounds may have taken place
of several smaller rounds (Potential explanation for decline in €0-2M seed
rounds in UK and Germany)
27%
13%
4%1%
24%
7%0%
20%
40%
60%
80%
100%
SEED SERIES A SERIES B SERIES C SERIES D
% of startups reaching next funding round
2011 cohort 2012 cohort 2013 cohort 2014 cohort
About 25-30% of seeded companies also graduate to
series-A round. About 15% graduate to series B
Graduation rates:
Note: not reaching series-A does not mean that company failed. Some
companies become self-sustaining and/or exited.
2014 cohort likely will still improve, especially Series B
25Source: Dealroom.co. Europe only. 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 2014 and earlier.
COHORT SEED SERIES A SERIES B SERIES C SERIES D
2011 100% 27% 13% 4% 1%
2012 100% 28% 13% 3%
2013 100% 27% 12%
2014 100% 24% 7%
1. Venture capital investment
2. Growth drivers
3. Investing trends
4. Sources of capital
5. Venture backed exits
Contents
Fundraising by European venture
firms slowed down in 2017, but is
still at historically high levels
27Source: Dealroom.co.
€ 4.6B
€ 6.8B
€ 13.0B
€ 9.9B € 9.1B
€ 13.6B
€ 14.8B
€ 19.2B
2014 2015 2016 2017
VC fundraising Investment
The UK is no longer the undisputed capital
of European venture capital. Continental
Europe’s venture capital industry is catching
up to the UK.
Click below to see how France is nearly on
par with the UK, while other countries are
also on the rise:
VC fundraising by country
Plenty of new capital is available to be invested in 2018 and beyond. Investable capital is also
less concentrated around the UK, more distributed across Europe than ever before.
Investment activity has grown roughly proportionally across funds and corporate investors in 2017
1. U.S based funds = Funds only. Excludes investment by U.S. corporates (Microsoft, GE, …).
Investment funds Corporate venturing Angels, crowdfunding, other
28
€ 4.6B
€ 8.1B
€ 9.8B
€ 11.9B
€ 14.9B
€ 1.4B € 2.2B
€ 5.0B € 4.8B
€ 6.4B
€ 0.2B € 0.3B € 0.7B € 0.8B € 0.7B
–
500
1,000
1,500
2,000
2,500
–
€ 4.0B
€ 8.0B
€ 12.0B
€ 16.0B
€ 20.0B
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Investment Number of rounds
74%
22%
3%
76%
20% 3%
63%
32%
4%
68%
27%
5%
68%
29%
3%
Investment Fund Corporate Other
Investment in € as % of total
2013 2014 2015 2016 2017
€ 3.6B
€ 6.0B
€ 9.5B
€ 11.0B € 11.1B
€ 2.2B
€ 3.4B
€ 4.9B € 4.6B
€ 6.6B
€ 0.1B € 0.8B € 0.9B
€ 1.4B
€ 3.4B
€ 0.2B € 0.4B € 0.2B € 0.5B
€ 1.0B
2,520
450
147 12 –
500
1,000
1,500
2,000
2,500
3,000
–
€ 2.0B
€ 4.0B
€ 6.0B
€ 8.0B
€ 10.0B
€ 12.0B
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Investment Number of rounds
Asia is becoming a significant investor in European tech, thanks to a handful of mega-rounds
Europe USA Asia Rest of World
29
59%
36%
1% 3%
56%
32%
7% 4%
62%
32%
6% 1%
63%
26%
8% 3%
50%
30%
15% 4%
Europe USA Asia RoW
Investment in € as % of total
2013 2014 2015 2016 2017
Source: Dealroom.co.
Number of unique active investors growing, but not as fast as in 2016
Source: Dealroom.co. Investors who participated in at least one VC round in that year. Excludes Israel.1. Annual growth between 2012 and 2016. 2. Growth from 2016 to 2017.
Number of firms with one or more investments per year
30
126 170 263 437
547 480
682
905
1,341
1,495
51
66
74
97
80
657
918
1,242
1,875
2,122
2013 2014 2015 2016 2017
Corporate Investment Fund Accelerator, crowdfunding, other (excl. angel investors)
+33% (1)
+44% (1)
+11% YoY (2)
+25% YoY (2)
Click image below to review over
9,000 active professional investors
Investors
Graph excludes angel investors. Number of angel investors nearly quadrupled from 335 in 2016 to 1,278 in 2017. However, this is partially driven by better data
collection by Dealroom.
1. Venture capital investment
2. Growth drivers
3. Investing trends
4. Sources of capital
5. Venture backed exits
Contents
32
The number of exits grew in 2017, but
far fewer meaningful exits, compared
with previous years
Source: Dealroom.co. Excludes Israel. Note: Realised value is based on % sold. Unrealised value is based on remaining % unsold.
€ 7.0B
€ 14.5B
€ 21.8B
€ 35.0B
€ 12.0B
€ 11.1B
€ 38.1B € 37.4B
€ 55.6B
€ 29.9B
83
122
230
274 294
–
60
120
180
240
300
360
–
€ 10.0B
€ 20.0B
€ 30.0B
€ 40.0B
€ 50.0B
€ 60.0B
2013 2014 2015 2016 2017
Realised exit value (€B) Unrealized value (€B) Number of exits
Click image below to view exits data &
underlying rounds. Click on the chart
columns to see rounds in each year. Switch
to quarterly vs. annually.
VC Backed exits in Israel and EuropeVC backed exits in Europe (excl. Israel)
33
Healthy ratio of capital returned vs. invested. But to sustain
growth in VC activity, exits will need to increase even further
Source: Dealroom.co. Excludes Israel.1. On average, VC backed companies do three VC rounds before the exit. Each round involves circa 15-25% dilution.
2013 2014 2015 2016 2017
(€ 5.0B) (€ 9.1B)
(€ 13.6B) (€ 14.8B) (€ 19.2B)
€ 11.1B
€ 38.1B € 37.4B
€ 55.6B
€ 29.9B
Investment (€B) Total firm value of exits (€B)
How much exits should we expect? A rule of thumb:
At the time of exit, VC ownership is typically 60-70% (1)
Assume a 2x target return on capital for the VC industry.
This implies that the target ratio of exits to VC investment shouldapproach 3x, in order to achieve target VC return of 2x.
Amount of capital invested each year has increased dramatically
Ratio of capital returned ÷ invested
€ 2.0B
€ 7.5B
€ 8.7B
€ 8.0B
€ 2.9B
€ 1.2B
€ 3.6B
€ 2.9B
€ 1.2B
€ 3.4B
€ 0.9B € 1.0B € 0.9B € 0.7B
€ 1.1B
€ 0.0B
€ 0.9B
€ 3.0B
€ 1.0B € 1.1B
€ 0.1B € 0.1B € 0.3B
€ 1.2B
€ 2.0B
€ 0.0B € 0.4B
€ 0.0B
€ 5.9B
€ 0.1B
55
66
38 41
15 18
–
20
40
60
80
100
–
€ 2.0B
€ 4.0B
€ 6.0B
€ 8.0B
€ 10.0B
'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17
Realised exit value (€B) Number of exits
34
European exits by target location: 2017 was a relatively slow
year for venture backed exits across the board
Source: Dealroom.co. Excludes Israel.
United Kingdom Germany France Sweden Spain Netherlands
(secondary)
35
Acquirers of European VC-backed companies are still most
likely to come from within Europe, followed by USA
Source: Dealroom.co. Excludes Israel. VC backed exits only.
€ 3.6B € 1.9B
€ 8.1B
€ 29.2B
€ 14.6B
€ 2.4B
€ 7.0B € 7.4B
€ 13.3B
€ 3.5B € 2.8B
€ 0.1B
€ 9.5B € 11.4B
€ 2.7B € 2.2B
€ 29.1B
€ 9.3B € 9.1B € 8.5B
–
25
50
75
100
125
150
175
–
€ 5.0B
€ 10.0B
€ 15.0B
€ 20.0B
€ 25.0B
€ 30.0B
€ 35.0B
'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17
Total firm value of exits (€B) Number of exits
Europe USA Asia IPOs
36
2017 saw an increase in smaller exits, IPO rounds and
secondary exit rounds
Source: Dealroom.co. Excludes Israel. 1. IPOs include also post-IPO followon transactions.
26 5 4 5
43 30
10 8 10
64 44
18 4 13
151
59
14 9 14
178
75
12 8 8
191
–
50
100
150
200
250
$ 0-100M $ 100-250M $ 250-500M $ 500M+ Size not disclosed
47 23
– 10 3
82
7 –
29 4
170
13 8 31
7
214
8 12 35
5
195
21 4
45 28
–
50
100
150
200
250
Acquisition Buyout Merger IPO Secondary
2013 2014 2015 2016 2017
Exits by
type (1)
Exits by
size
However, strong pipeline of European exits on the horizon
37Source: Dealroom.co.
CompanyIndicative valuation
Industry vertical
City Investors
Cabify €1 bn Transportation BarcelonaRakuten, Endeavor Catalyst, The Venture City, GAT Investments, SeayaVentures, Winklevoss Capital, Marc Bell Ventures, The Venture City, Red Swan Ventures, Resolute Partners
Auto1 Group €3 bn Transportation BerlinSoftBank, Target Global, Baillie Gifford, Barclays, Citigroup, Goldman Sachs, BNP Paribas, JPMorgan, DN Capital, DST Global, Piton Capital
Deliveroo €2 bn Food LondonAccel, Index Ventures, General Catalyst Partners, DST Global, Fidelity, T.Rowe Price, Felix Capital. Greenoaks Capital Management
MarketInvoice €1.5 bn Fintech London Northzone, British Business Bank, MCI Capital, Paul Forster
Klarna €2.5 bn Fintech StockholmVisa, Creandum, Northzone, Wellington Management, Sequoia Capital, DST Global, General Atlantic
Adyen >€5 bn Fintech Amsterdam ICONIQ Capital, Index Ventures, General Atlantic, Felicis Ventures, Temasek
Farfetch >€4 bn Fashion LondonJD.com, Temasek, Oleg Tscheltzoff, Fabrice Grinda, e.ventures, DST Global, Felix Capital, IDG Capital Partners, Eurazeo, Vitruvian Partners
FundingCircle €1 bn Fintech LondonAccel, Index Ventures, Rocket Internet, DST Global, Temasek, Baillie Gifford, Union Square Ventures, Ribbit Capital
Spotify €12 bn Music StockholmAccel, DST Global, Goldman Sachs, GP Bullhound, GSV Capital, Fidelity, Kleiner Perkins Caufield & Byers, EquityZen, Northzone
Transferwise €1.5 bn Fintech LondonIndex, LocalGlobe, Kima, Valar, Seedcamp, IA Ventures, The Accelerator Group, Richard Branson, Andreessen Horowitz, Baillie Gifford
Subtotal €30 billion +
Click image below to view the long list of
Europe’s most valuable private companies
Companies valued > €750M
Selected European unicorns