Venture Capital Report Europe 1Q 2016
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 1Q 2016 include: European venture capital fundraising amount improved significantly from prior quarter and reached a new high; Venture capital investment into European companies declined from 4Q 2015; The number of mergers and acquisitions (M&As) experienced an increase from the last quarter, while the total M&A raised amount decreased significantly; The number of initial public offerings (IPOs) and total amount raised dropped dramatically form 4Q 2015. 2
EUROPEAN VENTURE CAPITAL FUNDRAISING ROCKETS IN 1Q 2016 FUNDRAISING 25 European venture capital funds reached a new high of 2.85 billion during 1Q 2016. Compared with 4Q 2015, total capital raised more than doubled, and the number of fund closings climbed 19%. Compared with the same period last year, euros raised improved by 169%, and the number of fund closing increased 14%. Index Ventures VIII LP was the largest fund of this quarter, which raised 511.53 million, accounting for 18% of the total amount raised in 1Q 2016. 45 40 35 30 25 20 15 10 5 European VC Fundraising Based on multiple closings (2013 2016) 3.00 2.50 2.00 1.50 1.00 0.50 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Amount Raised ( B) 0.76 1.03 0.65 1.89 0.65 1.26 0.81 1.26 1.06 1.96 0.86 1.36 2.85 Number of Funds 15 17 12 41 23 24 20 27 22 26 13 21 25 0.00 3
LARGEST EUROPEAN VC FUNDS RAISED IN 1Q 2016 FUNDRAISING Firm Name Fund Name Amount ( M) Location Offering Status Fund Type Fund Category Closing Type Index Ventures Index Ventures VIII LP 511.53 Geneva, Switzerland Closed Early-stage venture capital Venture Capital Final Rocket Internet AG Rocket Internet Capital Partners Fund 390.63 Berlin, Germany Open Late-stage venture capital Venture Capital First Endeavour Vision SA Endeavour Medtech Growth LP 250.00 Geneva, Switzerland Closed Multi-stage venture capital Venture Capital Final Medicxi Ventures Medicxi Ventures I 210.00 London, United Kingdom Closed Early-stage venture capital Venture Capital Final Creandum Creandum IV 180.00 Stockholm, Sweden Closed Early-stage venture capital Venture Capital Final 4
INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES DECLINED IN 1Q 2016 FINANCING European companies raised 2.4 billion through 411 deals during 1Q 2016, a 29% decline in the amount raised from the prior quarter as well as a 12% drop in the number of deals. Compared with the same period last year, both investment amount and the number of deals decreased, 17% and 2% respectively. Healthcare was the strongest sector of the quarter in terms of attracting investment. 4.50 4.00 3.50 3.00 2.50 2.00 1.50 Equity Financings into Europe-based, VC-backed Companies (2013 2016) 500 450 400 350 300 250 200 150 1.00 100 0.50 50 0.00 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Amount Raised ( B) 1.23 1.54 1.78 1.97 1.64 2.43 2.33 2.03 2.91 3.84 3.35 3.40 2.42 Number of Deals 394 435 413 499 413 452 366 416 419 416 396 467 411 0 5
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2013 2016) NUMBER OF DEALS FINANCING 280 240 200 160 120 80 40 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Seed 42 41 60 76 40 32 28 39 28 38 33 32 34 First 205 217 212 223 220 227 183 201 212 183 191 250 193 Second 66 85 66 85 63 92 66 76 78 76 79 89 94 Later 54 65 51 81 60 77 62 59 79 99 76 69 79 Restart 0 0 0 0 0 0 0 0 1 0 0 1 0 6
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2013 2016) AMOUNT RAISED ( M) FINANCING 2,500 2,000 1,500 1,000 500 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Seed 21 18 24 33 19 22 15 29 31 24 36 25 25 First 401 433 535 489 514 625 469 446 614 554 821 773 649 Second 255 464 708 402 300 477 220 775 443 946 574 607 772 Later 541 600 462 989 680 1,122 901 734 1,752 2,179 1,873 1,534 962 Restart 0 0 0 0 0 0 0 0 1 0 0 1 0 7
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (2013 2016) MEDIAN EQUITY DEAL SIZE ( M) FINANCING 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Median Equity Deal Size ( M) 1.50 1.54 1.03 1.40 1.50 2.00 1.74 2.10 2.00 2.68 2.31 2.03 2.56 8
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (1Q 2016) FINANCING Healthcare received the largest allocation of investment during 1Q 2016, raising 754.05 million through 62 deals. The sector attracted a 31% of the total amount invested and a 15% of all deals completed for the quarter. Business and Financial Services ranked the second highest proportion of investment. The sector garnered 712.1 million across 116 deals, an increase of 5% in deal number and a less than 1% drop in amount invested from 4Q 2015. Consumer Services represented the third, receiving 476.92 million across 97 deals. The sector s investment figure represents 20% of the total equity financing into European VC-backed companies for 1Q 2016. 1Q'16 Industry Breakdown By Number of Deals 1Q 16 Industry Breakdown By Amount Raised 1% 1% 25% 15% 17% 1% 24% 29% 28% 4% Business and Financial Services Consumer Goods Consumer Services Energy & Utilities Healthcare Industrial Goods & Materials Information Technology Business and Financial Services Consumer Goods Consumer Services Energy & Utilities 1% Healthcare 31% 1% 20% Industrial Goods & Materials Information Technology 9
TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (1Q 2016) FINANCING Co. Name Location Industry Code Industry Segment Industry Group Brief Description Close Date Round Type Raised ( M) Round Investors (* denotes lead) Mission Therapeutics Ltd. Cambridge, United Kingdom Biotechnology Therapeutics Biopharmaceuticals Healthcare Developer of drugs designed to improve the management of lifethreatening diseases, particularly cancer. 2/2/2016 3rd 84.35 Imperial Innovations Group PLC*, Pfizer Venture Investments, Roche Venture Fund, Sofinnova Partners, SR One Ltd., Woodford Investment Management LLP* Autolus Ltd. London, United Kingdom Biotechnology Therapeutics Biopharmaceuticals Healthcare Provider of biopharmaceutical solutions. 3/3/2016 Second Round 56.23 Perceptive Bioscience Investments Ltd., Woodford Investment Management LLP Student.com (UK) Ltd. London, United Kingdom Hotels / Gambling Travel and Leisure Consumer Services Provider of an accommodation marketplace for students studying abroad. 10/2/2016 First Round 55.80 Expa Capital, Horizons Ventures Ltd., Individual Investors, Vy Capital Management Co. Ltd.* Blippar.com Ltd. London, United Kingdom Recreational / Home Software Software Information Technology Provider of a mobile image recognition and augmented reality platform. 2/3/2016 Second Round 50.22 Khazanah Nasional Berhad* Aprea AB Solna, Stockholm Biotechnology Therapeutics Biopharmaceuticals Healthcare Developer of drugs for the treatment of cancer. 9/3/2016 Later 46 5AM Venture Management LLC*, HealthCap Venture Capital*, Sectoral Asset Management Inc., Versant Venture Management LLC* 10
MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (1Q 2016) BY DEALS COMPLETED FINANCING 16 16 15 14 12 12 10 9 8 7 7 7 7 6 4 2 0 Bpifrance Investment High-Tech German Startups Gruenderfonds Group Berlin GmbH Management GmbH & Co. KGaA Jenson Funding Partners LLP Bayern Kapital GmbH Idinvest Partners HV Holtzbrinck Ventures Adviser GmbH Index Ventures 11
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES BY COUNTRY (1Q 2016) FINANCING Number of Deals in 1Q 2016 by Country (Top 4) 29% 27% United Kingdom France The United Kingdom remained as the most favoured destination for equity financing during 1Q 2016, receiving 974 million across 111 deals. The country took 40% of all equity financing from 1Q 2016. Germany ranked second. It reached a total 463 million through 75 deals, representing a 19% share of European financing. A 33% decrease in capital invested and 13% drop of the number of deals from last quarter. France occupied third position raising 354 million, 15% of the total for the quarter. Sweden placed fourth based on raising 99 million during 1Q 2016. Amount Raised in 1Q 2016 by Country (Top 4) 5% 18% 22% 4% 23% 21% 40% Germany Netherlands Rest of Europe United Kingdom Germany France 15% 19% Sweden 19% Rest of Europe 12
EUROPE 1Q 2016 VENTURE EXIT ACTIVITY LIQUIDITY Exit Opportunities for European VC backed Companies (2013 2016) 50 venture-backed M&As took place in Europe during 1Q 2016, a 28% increase from 4Q 2015. The number is 6% lower than that of 1Q 2015. However, total amount raised through European VCbacked M&As in 1Q 2016 is only 3.7 billion. A 45% drop from the prior quarter and 16% lower than the same period last year. 5 venture-backed IPOs took place during 1Q 2016, a 64% and 58% decrease from 4Q 2015 and 1Q 2015 respectively. 1Q'16 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 3Q'14 2Q'14 1Q'14 4Q'13 3Q'13 2Q'13 1Q'13 0 10 20 30 40 50 60 70 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 IPOs 1 5 3 9 9 21 16 10 12 15 8 14 5 M&As 37 40 43 44 56 42 50 49 53 44 49 39 50 13
TOP 3 M&As IN EUROPE (1Q 2016) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid ( M) Acquirer Acano Ltd. Uxbridge, United Kingdom Provider of collaboration infrastructure and conferencing software. Communications Software Software Information Technology 29/1/2016 Acquisition 651.04 Cisco Systems TouchType Ltd. London, United Kingdom Provider of predictive text entry software. Communications Software Software Information Technology 2/2/2016 Acquisition 232.51 Microsoft Corp. CityFibre Infrastructure Holdings Plc Provider of dark fibre networks in London, towns and cities outside London United Kingdom on a shared infrastructure basis. Internet Service Providers Communications and Networking Information Technology 14/1/2016 Acquisition 126.52 KCOM Group Plc 14
EUROPEAN VC-BACKED IPOs (2013-2016) LIQUIDITY Both the number of deals and amount raised via IPO during 1Q 2016 dropped significantly from the prior quarter. 5 venture-backed companies went public during 1Q 2016, 64% decrease from the last quarter. IPOs raised 110 million during 1Q 2016, a decline of 82% from the 608 million raised in 4Q 2015. The largest European VC-backed IPO of 1Q 2016 was Shield Therapeutics Ltd. The company raised 45.69 million for its offering on AIM. 2,500.00 2,000.00 1,500.00 1,000.00 500.00 25 20 15 10 5 0.00 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Raised ( M) through IPO 19.22 89.24 25.51 366.10 691.24 529.53 447.47 2,249.97 417.40 533.10 699.69 608.00 110.05 Number of IPOs 1 5 3 9 9 21 16 10 12 15 8 14 5 0 15
TOP 3 IPOs IN EUROPE (1Q 2016) LIQUIDITY Company Name Location Brief Description Industry Code Industry Segment Industry Group Close Date Raised through IPO ( M) Exchange/ Symbol Shield Therapeutics Ltd. United Kingdom Developer of late-state, secondary care-focused pharmaceuticals. Biotechnology Therapeutics Biopharmaceuticals Healthcare 12/2/2016 45.69 AIM: STX Biotechnology Research & Information Network AG Germany Provider of drugs, bioactive natural compounds, and proprietary enzymes for businesses in the chemical, pharmaceutical, food, and cosmetics industries. Pharmaceuticals Biopharmaceuticals Healthcare 9/2/2016 31.50 FWB: BNN Blue Prism Group PLC United Kingdom Provider of Robotic Process Automation (RPA) software. Business Applications Software Software Information Technology 18/3/2016 15.59 LSE: PRSM 16
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