The State of the Market for Series B & C Rounds in …...The State of the Market for Series B & C...

technology investment banking

silverpeakib.com

© Silverpeak LLP 2019 Silverpeak LLP is authorised and regulated by the Financial Conduct Authority

London | Paris | Milan | San Francisco

The State of the Market

for Series B & C Rounds in

European Tech Companies

October 2019

Souradeep Roy

t: +44 (0) 20 7529 5406

e: [email protected]

Matthew Lacour

t: +44 (0) 20 7529 5409


Pietro Strada

t: +44 (0) 20 7529 5402


© Silverpeak LLP 2019 London | Paris | Milan | San Francisco

Contents01 // SILVERPEAK OVERVIEW

02 // EUROPEAN TECH VENTURE ENVIRONMENT: RECENT TRENDS

03 // EUROPEAN TECH B-ROUNDS: A POSITIVE FUNDING ENVIRONMENT

04 // EUROPEAN TECH C-ROUNDS: ALL SEEMS WELL


SILVERPEAK OVERVIEW

1.

London | Paris | Milan | San Francisco© Silverpeak LLP 2019

01 // A COMPANY SNAPSHOT

Silverpeak advises outstanding growth technology

companies on M&A and financing transactions

4

strong

senior team

deals and assignments completed

countries with

feet on the ground

office locations

Regulated by the Financial Conduct Authority


01 // THE SILVERPEAK SENIOR TEAM

7

NATIONALITIES

PIETRO

STRADA

Managing

Partner

PADDY

MCCGWIRE

Managing

Partner

JEAN-MICHEL

DELIGNY

Senior

Advisor

JANE

MARTIN

Operating

Partner

DAVID

BELL

Director

DAVID

FORD

Director

MATTEO

POZZI

Director

SIMON

WALKER

Chairman

ALEX

DE GANDT

Director

We have a truly international DNA with our senior team having over 150

years of deal-making experience

PREVIOUS COMPANIESDEGREES

5


01 // WE ARE FOCUSED EXCLUSIVELY ON THE TECHNOLOGY SECTOR

INTERNET &

DIGITAL MEDIA

ENTERPRISE

SOFTWARE & SAAS

HEALTHTECH FINTECH MOBILITYENABLING

TECHNOLOGIES

BUSINESS

SERVICES


Local support and truly global reach

LARGER

FINANCINGS

EXITS ACQUISITIONS STRATEGIC

ISSUES

We advise on a wide range of transactions

01 // WHAT WE ADVISE ON

7


01 // RECENT TRANSACTIONS

Denotes Silverpeak transaction

GB | GB

December 2018

Investment by

Digital bank

IT | NL

December 2018

Sale

Fingerprint scanners & software

November 2018

Investment led by

High performance integrated

optoelectronic communication

devices & modules

NL | NL

Developer of Sensor fusion, AI, robotics & control

technologies

July 2018

Investment by

IT | IT

Family offices &

individual investors

DE | DE

October 2017

Sale

(majority stake)

POS payment specialist

GB | IE

December 2018

Sale

Clinical speech recognition services & software

GB | GB

October 2018

MBO

Public bus smart ticketing &

cloud management platform

FR | FR

November 2018

Investment by

M2M cybersecurity forthe industrial internet

GB | US

October 2017

Sale

Mobile payment & analytics platform

DE | DE

September 2017

Sale

(majority stake)

Data management software

US | LU

January 2018

Investment in

Social media analytics& monitoring software

DE | DE

October 2017

Sale

(majority stake)

SaaS business e-commerce middleware platform

DE | DE

July 2018

Sale

SaaS knowledge management solutions

US | GB | FR

April 2018

Investment by

Software for multi public cloud data management

8

US Strategic


EUROPEAN TECH VENTURE ENVIRONMENT RECENT TRENDS

2.

© Silverpeak LLP 2019

Overall VC investment in European tech companies is on track to

reach a new high in 2019, having already hit €20B in 2019YTD

B & C rounds in 2019 totalled €4B and are set to exceed last year’s

amount

General trend towards larger deals, with median B rounds at

€16.5m and C rounds at a staggering €39.1m

The UK is showing some signs of a downturn with lower amounts

raised in H1-19 vs H1-18; H2-19 is too early to call

Of the 10 the largest B rounds so far in 2019, 6 were fintech

companies

The largest C rounds were dominated by French companies,

producing 5 out of the top 10 largest rounds (compared to UK’s

2)in 2019

EUROPEAN TECH B & C-ROUNDS REMAIN HEALTHY

2019 is turning out to

be a great year for

European tech private

companies, supported

by a strong flow of

capital.

PIETRO STRADAMANAGING PARTNER

Note: 2019 YTD is up to 30/09/19, includes rounds with undisclosed values

02 // KEY TAKEAWAYS

10 London | Paris | Milan | San Francisco


02 // SUMMARY OF ALL ROUNDS TECH DEALS IN EUROPE

11

3,657

4,733

3,696

3,557

2,415

4,5804,435

3,578

2,719

2015 2016 2017 2018 2019 YTDFirst half-year Second half-year

2019 looks on track to reach new highs for VC investmentTotal VC Financing Amounts (€b) and Deal Count by Half-Year, 2015-2019 Q3

1,000 Deal count in each period

Source: Pitchbook Definition: Primary industry → Information Technology; all verticals

Total amount invested

Note: 2019 YTD is up to 30/09/19

575

€450m€613m

€702m

€486m

€1,220m

€842m

€1,606m

€1,130m

€1,684m

€661m

€259m

€495m

€694m

€449m

€273m

€762m

€731m

€648m

€1,450m

€710m

50

69 6971

68

76

103

86

106

48

0

20

40

60

80

100

120

0

500

1,000

1,500

2,000

2,500

3,000

3,500

H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 H2'18 H1'19 Q3'19

Series C

Series B

Total # deal

Source: Pitchbook

02 // EUROPEAN TECH VENTURE ENVIRONMENT

B & C rounds on an upward trend in value


Series B & C Total Financing Amounts (€m) and Deal Count by Half-Year, 2015-2019 YTD

Source: Pitchbook


Note: includes rounds with undisclosed values

Median C round values are pulling away, B rounds flattish


Median size (in €m) of Series B & C rounds by Half-Year, 2015-2019YTD

Source: Pitchbook



7.4

10.0

11.9

7.3

11.5 12.0

14.6 14.9

20.0

16.516.7

18.5

20.1

13.1

20.018.9

20.8

34.4

32.8

39.1

H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 Q3 2019

Series B

Median

Series C

Median


€178m €182m€237m

€125m

€732m

€312m

€528m

€427m €443m

€231m

€100m

€236m €115m

€157m

€69m

€451m

€292m

€185m

€325m

€110m

20 20

18

21

26

29

3132

30

14

0

5

10

15

20

25

30

35

0

100

200

300

400

500

600

700

800

900

H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 H2'18 H1'19 Q3'19

Series C

Series B

Deal Count


UK Series B & C investment showing signs of a slowdown


Series B & C Total Financing Amounts (€m) and Deal Count by Half-Year in the UK, 2015-2019 YTD

Source: Pitchbook




AI and Fintech remain the most active in B&C series rounds


Volume of B&C rounds by vertical 2018-2019 YTD

Source: Pitchbook


44

24

24

20

19

17

10

10

6

4

4

35

36

20

10

10

12

10

2

2

3

3

0 10 20 30 40 50 60 70 80

Other

AI

FinTech

Mobile

E-Commerce

Industrials

CleanTech

Big Data

MarTech

HealthTech

Digital Health

2018

2019


© Silverpeak LLP 2019 London | Paris | Milan | San Francisco16

Selected B & C Round Fundraisings in the mobility sector, 2015-2019 Q3

INV

ESTM

EN

T

BY

Series B

SEP. 2019

€51.5m

As at the 30th of September 2019

Series B

AUG. 2019

€14.2m

Series C

JUL. 2019

undisclosed

Series B

JUN. 2019

€7.0m

Series B

MAY 2019

€33.9m

Series B

APR. 2019

€13.4m

Series B

FEB. 2019

€20.0m

Series B

FEB. 2019

€24.5m

Series B

FEB. 2019

€20.0m

Series B

OCT. 2018

€10.5m

Series B

FEB. 2018

€40.0m

Series B

JAN. 2018

€31.2m

Series C

JAN. 2018

€32.0m

Series C

SEP. 2017

undisclosed

Series C

AUG. 2016

€10.0m

Series C

APR. 2016

€105.9m

Series B

OCT. 2015

€10.7m

Series B

JUL. 2015

€36.3m

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

INV

ESTM

EN

T

BY

2019 Q4 UPDATE

€77.2m

€54.5m

€35.9m



EUROPEAN TECH B-ROUNDS

3.

A POSITIVE FUNDING ENVIRONMENT


03 // EUROPEAN TECH B-ROUNDS

18

What is a Series B?

Source: Fundz

While a Series A funding round is to really get the team and product developed, a Series B

Funding is all about taking the business to the next level, past the development stage.

Typically before these funding rounds occur, the company has completed significant

milestones and now its time to really build upon that success with additional investment.

Series B is to pour the gas on for growth with a larger investment round.

At this stage, the company has shown the ability to reach and surpass well planned goals,

so now its time to double down and get a better sense of where things can really go.

Note: For the purpose of this analysis, Series B is any fundraising announced as Series B on Pitchbook


€479m

€613m€702m

€486m

€1,223m

€842m

€1,606m

€1,130m

€1,684m

€661m

45

51

47

51

56

50

83

68

75

32

0

10

20

30

40

50

60

70

80

90

0

200

400

600

800

1,000

1,200

1,400

1,600

H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 H2'18 H1'19 Q3'19

Total financing amounts

Deal count

19

B-Rounds in 2019 look on track for moderate growth YOYSeries B Total Financing Amounts (€m) and Deal Count by Half-Year, 2015-2019YTD

Source: Pitchbook




41%

26% 25%

13%7%

16%

29%

22%

22%

13%

30%29%

32%

33%

33%

12%15%

17%

26%

41%

1% 1%4% 5% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 2019 YTD

> €50m

€20-50m

€10-20m

€5-10m

< €5m

20

There is a continuous trend towards larger B-Round dealsBreakdown of Series B rounds by value

Source: Pitchbook Note: 2019 YTD is up to 30/09/19



OUTLIER DEAL

€464mMay 2017

19.5

16.5

23.2

10.6

24.8

17.8

20.5

16.6

22.5

20.7

11.6

16.2

22.5

9.3

12.6

13.8

15.414.9

20.0

16.5

H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 Q3 2019

Average size

Median size

21

The median size of B-Rounds is on an upward trendMedian and Average size (in €m) of Series B rounds by Half-Year, 2015-2019YTD

Source: Pitchbook



28%

18%

15%

7%

7%

United Kingdom

Germany

France

Switzerland

Netherlands

8%

55%

16%

25%

297%

28%

22%

17%

6%

5%

United Kingdom

Germany

France

Switzerland

Spain

16%

5%

20%

20%

60%

22

The top three countries make up over 60% of the total value

and number of European Series B rounds

# of Series B-Rounds by country(2019 YTD)

Value of Series B-Rounds by country(2019 YTD)

31

20

16

8

8

€674m

2019 YTDCompared to 2018 YTD

€534m

€399m

€137m

€127m

2019 YTDCompared to 2018 YTD

% change in # of deals % change in total value of deals

Note: 2019 YTD is up to 30/09/2019Source: Pitchbook


London | Paris | Milan | San Francisco© Silverpeak LLP 2019 23

UK, France and Germany take the top three spots in 2019Total volume and value of Series B funding rounds in the most active European countries in 2019YTD

31

16

UNITED KINGDOM

€674m

20

FRANCE

€399m

GERMANY

€534m

4

DENMARK

€127m

8

ITALY

€50m

#Total number of Series

B funding rounds

Total value of Series

B roundsSource: Pitchbook

110

66

65

54

52

50

49

49

41

39

1

2

3

4

5

6

7

8

9

10

Rank Company Country Deal Size (€m)

4IRELAND

€84m8

NETHERLANDS

€94m

5

SWITZERLAND

€137m




SWITZERLANDNETHERLANDSIRELAND

NORWAYHUNGARYCZECH.REPBELGIUMAUSTRIA

FRANCE

GERMANY

DENMARK SPAINITALY

Source: Pitchbook

PORTUGAL

UNITED KINGDOM


Note: Selected companies


There is a large pool of “serial” B-round investors97 investors who participated in more than two Series B funding rounds in 2018-2019YTD

3 4 5 6 7 8 10+

43

17

16

54

2

7

Source: Pitchbook

9

3




48 investors have led more than one round between 2018

and 2019 YTD

2 3 4 5+

7

2

1227




EUROPEAN TECH C-ROUNDS

4.

ALL SEEMS WELL


04 // EUROPEAN TECH C-ROUNDS

28

What is a Series C?

Source: CFI

A Series C round is the fourth stage of a company’s financing, and typically the last

stage of venture capital financing.

However, some companies opt to conduct more rounds, such as series D, E, etc.

Companies that aim to obtain series C funding are no longer start-ups.

They are usually established, successful companies in their late stages of

development, with solid revenues and profits.

Their core products or services generate strong demand in the marketplace, attracting

a substantial customer base.

Note: For the purpose of this analysis, Series C is any fundraising announced as Series C on Pitchbook

€377m

€495m

€694m

€449m

€273m

€762m €731m€648m

€1,450m

€710m

1718

22

20

14

26

20

18

31

16

0

5

10

15

20

25

30

35

0

200

400

600

800

1,000

1,200

1,400

H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 H2'18 H1'19 Q3'19

Total financing amounts

Deal count



2019 remains a robust year for Series C funding rounds


Series C Total Financing Amounts (€m) and Deal Count by Half-Year, 2015-2019 YTD

Source: Pitchbook

29

OUTLIER DEALS

€230m

€130m

€125m




Slow down in small size deals, hike in mega rounds


Breakdown of Series C rounds by value


26%30% 32%

25%

16%

61% 52%

62%

63%

57%

13%17%

6%13%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 2019 YTD

> €50m

€10-50m

< €10m


The median size has doubled over the last four years


Median and Average size (in €m) of Series C rounds by Half-Year, 2015-2019YTD

Source: Pitchbook


22.2

27.5

31.5

22.5

29.3

36.5

36.0

46.8

43.9

16.7

18.520.1

13.1

20.018.9

20.8

34.432.8

39.1

-5.00

5.00

15.00

25.00

35.00

45.00

55.00

H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 Q3'19

Average size

Median size

37%

20%

18%

7%

6%

United Kingdom

Germany

France

Switzerland

Netherlands

29%

23%

21%

8%

4%

United Kingdom

Germany

France

Switzerland

Netherlands

€142m

€130m


France is attracting larger Series C rounds; its total value

has zoomed past UK’s but with 30% fewer deals


# of Series C Rounds by country(2019YTD)

Value of Series C Rounds by country(2019YTD)

15

12

11

4

2

€811m

€434m

€394m





France dominates the Series C scene in 2019Total volume and value of Series C funding rounds in the most active European countries in 2019YTD

15

11

UNITED KINGDOM

€434m

12

FRANCE

€811m

GERMANY

€394m

2

#Total number of Series C

funding rounds

Total value of Series C

roundsSource: Pitchbook

230

130

125

104

98

79

70

70

62

60

1

2

3

4

5

6

7

8

9

10

Rank Company Country Deal Size (€m)


33

SPAIN

€142m

2

BELGIUM

€86m


04 // SELECTED EUROPEAN TECH C-ROUNDS IN THE LAST 18 MONTHS

34

SWITZERLANDSPAINBELGIUM

IRELANDFINLANDESTONIAAUSTRIA

FRANCE

GERMANY

DENMARK

Source: Pitchbook

LUXEMBOURG

UNITED KINGDOM

MALTA NETHERLANDS SWEDEN

Note: Selected companies



51 investors participated in more than one Series C funding round in 2018-2019YTD

2 4 53

38

9

3

1

There is a growing pool of serial C-round investors

Source: Pitchbook

35

Note: 2019 YTD is up to 30/09/2019


https://www.google.com/imgres?imgurl=https%3A%2F%2Fwww.smartmoneymatch.com%2Fuploads%2Ffiles%2F1524643669.png&imgrefurl=https%3A%2F%2Fwww.smartmoneymatch.com%2FActon%2520Capital%2520Partners%2520GmbH%2Finvestments&docid=EGGnHhbu-G1Y_M&tbnid=sJq8zZRcpZU8nM%3A&vet=10ahUKEwifgu7K-f3kAhXgAGMBHZX2AXwQMwhUKAMwAw..i&w=894&h=126&safe=strict&bih=554&biw=1163&q=acton%20capital%20logo&ved=0ahUKEwifgu7K-f3kAhXgAGMBHZX2AXwQMwhUKAMwAw&iact=mrc&uact=8



The number of repeat Series C lead investors is small

2 3 4

Source: Pitchbook

36

Note: 2019 YTD is up to 30/09/2019

2

1

8

11 investors lead more than one Series C funding round in 2018-2019YTD


technology investment banking

silverpeakib.com

© Silverpeak LLP 2019 Silverpeak LLP is authorised and regulated by the Financial Conduct Authority


Disclaimer

This presentation has been prepared exclusively for internal use and does not carry any right of publication or disclosure to any other party. Neither this presentation nor any

of its contents may be used for any other purpose without the prior written consent of Silverpeak LLP, trading as ‘Silverpeak technology investment banking’ (“Silverpeak”).

The information in this presentation reflects prevailing conditions and our views as of this date, all of which are subject to change. In preparing this presentation, Silverpeak

has relied upon and assumed, without independent verification, the accuracy and completeness of all information available to us or from public sources or which was

otherwise reviewed by us.

37

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The State of the Market for Series B & C Rounds in …...The State of the Market for Series B & C...

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