THE 2014 EUROPEAN TECH REPORTA data-driven review of 2014’s financing activity to VC-backed European Tech companies.

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TABLE OF CONTENTS

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Highlights 4Financing Trends 6Germany BreakdownUK Breakdown

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2014 EU TECH HIGHLIGHTS

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2014: $5.7B ON 855 DEALS - EU TECH FUNDING UP 78% YOYInvestment activity in VC-Backed European tech companies reached a four-year high in both deals and dollars in 2014. Funding saw 78% growth YoY, reaching $5.7B, while deals also slightly ticked up to 855.

HIGH-TECH GRUENDERFONDS IS MOST ACTIVE EU TECH VCEarly-stage fund High-Tech Gruenderfonds was the most active VC in EU Tech in 2014. Index Ventures and Accel Partners rounded out the top 3. Both Index and Accel participated in BlaBlaCar’s $100M Series C which was among the year’s largest European financings.

UK & GERMANY LEAD EUROPEAN TECHThe UK tech scene continued to attract the highest number of deals in Europe with deal activity growing 80% since 2011. Germany was the only other country to break 100 deals in 2014, as Berlin continues to be a budding tech hub in Europe.

IS ITALY THE NEXT EU TECH HUB? DEALS GROW 208%No other EU country has seen more growth in tech deals over the past two years than Italy. During 2011 – 2012, Italy saw under 30 venture-backed deals, but this climbed to over 70 in the past two years. Switzerland and Finland, which is home to Rovio Entertainment, rounded out the top 3 in terms of growth with deals climbing by nearly 170% in both countries.

SEED DEAL SIZES HIT NEW HIGHS IN ‘14Both the average and median seed deal size reached four-year highs in 2014, as the median deals size grew 29% YoY while the average deal size ticked up 10%. After a drop-off in 2012, deal sizes have increased for two years straight as the seed investment bug takes hold in Europe.

ECOMMERCE COMPANIES RAKE IN VC DOLLARS4 of the 7 most well-funded EU tech companies were in eCommerce. German unicorn Delivery Hero is the most well-funded, having raised $1.22B total including $523M across three rounds in 2014.

GERMAN TECH INVESTMENTS SKYROCKETInvestments into VC-backed German tech companies more than doubled YoY as they totaled $1.28B in 2014 versus just $578M in 2013. Q3’14 reached an 18-quarter high for dollars invested at $555M, driven largely by Delivery Hero’s $350M Series G.

UK TECH INVESTMENTS TOP $1.6B IN 2014Investment into VC-backed UK Tech companies topped $1.6B in 2014, up 78% YoY. Despite two straight declining quarters for deal activity at the end of the year, deals finished slightly up YoY at 225. Q3’14 saw the most financing of any quarter in the past four years behind a $170.7M investment into online retailer The Hut Group.

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2014 EU TECH FINANCING TRENDS

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2014: $5.7B ON 855 DEALS - EUROPEAN TECH FUNDING UP 78% YOYInvestment activity in VC-Backed European tech companies reached a four-year high in both deals and dollars in 2014. Funding saw 78% growth YoY, reaching $5.7B, while deals also slightly ticked up to 855. The increase in mega-financings which we’ve observed globally also served to buoy Europe’s financing total.

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2014 BREAKS THE $1B QUARTER BARRIERVC-backed European Tech companies raised $1B+ in all four quarters in 2014, a level of funding not hit in the three years prior. The increased funding activity was helped by at least one $100M+ deal per quarter. Q2 and Q3 both topped $1.5B as food delivery startups Takeaway.com and Delivery Hero raised nine-figure financings.

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HIGH-TECH GRUENDERFONDS IS MOST ACTIVE EU TECH VCEarly-stage fund High-Tech Gruenderfonds was the most active VC in EU Tech in 2014. Index Ventures and Accel Partners rounded out the top 3. Both investors participated in BlaBlaCar’s $100M Series C.

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Rank Investor Rank Investor

1 High-Tech Gruenderfonds 10 Alven Capital

2 Index Ventures 10 Kima Ventures

3 Accel Partners 13 Point Nine Capital

4 German Startups Group 13 DN Capital

5 Octopus Ventures 13 Earlybird Venture Capital

5 Balderton Capital 16 Partech Ventures

7 Northzone Ventures 17 LVenture

7 Creandum 17 Caixa Capital Risc

9 Sunstone Capital 17 Beringea

10 Notion Capital 17 Holtzbrinck Ventures

Most Active Venture Capital Investors in EU Tech: 2014

UK & GERMANY LEAD EUROPEAN TECHThe UK tech scene continued to attract the highest number of deals in Europe, as deals have grown 80% since 2011. Germany was the only other country to break 100 deals in 2014, as Berlin continues to be a budding tech hub in Europe.

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UK & GERMANY ACCOUNT FOR 44% OF ALL EU TECH DEALS IN 2014The UK and Germany accounted for nearly half of all tech deals done in 2014, as well as 52% of all dollars invested. The Netherlands was the only other country to top $500M invested, behind a $250M Series B to Amsterdam-based payments firm Adyen.

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Country Deals Dollars ($M) Country Deals Dollars ($M) Country Deals Dollars ($M)

United Kingdom 225 $1,698.0 Ireland 25 $145.3 Portugal 5 $7.1

Germany 154 $1,279.3 Belgium 12 $56.1 Luxembourg 4 $26.7

France 63 $379.4 Switzerland 11 $84.6 Turkey 4 $1.4

Russia 62 $323.9 Scotland 9 $29.9 Bulgaria 3 $8.4

Spain 48 $254.5 Austria 8 $13.4 Ukraine 3 $4.5

Sweden 42 $398.9 Estonia 7 $4.8 Latvia 3 $3.3

Finland 40 $90.6 Lithuania 6 $32.8 Cyprus 2 $15.6

Italy 40 $48.4 Norway 6 $12.2 Hungary 2 $2.4

Netherlands 33 $544.3 Czech Republic 5 $30.8 Greece 2 $2.3

Denmark 25 $145.9 Poland 5 $25.7 Malta 1 $54.6

EU VC-Backed Tech Deal & Dollar Distribution by Country: 2014

IS ITALY THE NEXT EU TECH HUB? DEALS GROW 208%No other EU country has seen more growth in deal volume over the past two years than Italy, as the country previously saw under 30 deals from 2011 – 2012 vs. over 70 in the past two years. Switzerland and Finland, which is home to Rovio Entertainment, rounded out the top 3 with deal growth above 170%.

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Where is all this data from?The CB Insights platform has the details on each and

every deal in 2014. That includes all of the 2,821 financings in this report.

Some of our happy customers

GROWTH & PE DEAL SHARE DOUBLES IN 2014While early-stage deals dominated the share of deals (as should be expected), there was increased interest at the later stages as the percentage of growth equity and private equity rounds into VC-backed tech companies doubled in 2014 accounting for 6% of all deals.

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ABSENCE OF BILLION DOLLAR DEALS LEADS TO EVEN DOLLAR SHAREUnlike the US, which saw a massive increase in mega-deals, Europe was a bit more measured (although there were still many mega-financings). This resulted in funding share to European tech companies being relatively evenly spread in 2014. However, late-stage (Series D – E+) deals did hit four-year highs behind Delivery Hero’s financings.

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SEED DEAL SIZES REACH HIGHS IN 2014Both the average and median seed deal size reached four-year highs in 2014, as the median size grew 29% YoY while the average deal size ticked up 10%. After a drop-off in 2012, deal sizes have increased for two years straight.

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SERIES A DEAL SIZES FOLLOW SEED TRENDSeries A deal sizes followed a similar trend to the seed stage, as both median and average figures hit four-year highs. The average Series A size jumped to $5.8M partially due to a pair of anomalies namely the $30M+ financings to WorldRemit and Blockchain.

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ECOMMERCE COMPANIES RAKE IN VC CASH4 of the 7 most well-funded EU tech companies were in eCommerce. German Unicorn Delivery Hero is the most well-funded, having raised $1.22B total including $523M across three rounds in 2014. 2015 looks to continue the trend as Both Delivery Hero closing on an additional $563M from Rocket Internet and Spotify rumored to be raising $500M.

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Company Headquarters Focus

Delivery Hero Germany Internet eCommerce

Spotify Sweden Internet Software (Music)

Klarna Sweden Internet Payments

Ozon.ru Russia Internet eCommerce

Privalia Spain Internet eCommerce

Adyen Netherlands Internet Payments

Lamoda Russia Internet eCommerce

Most Well-Funded VC-Backed EU Tech Companies

2014 COUNTRY BREAKDOWN -GERMANY

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GERMAN TECH INVESTMENTS SKYROCKETInvestments into VC-backed German Tech companies more than doubled YoY as they totaled $1.28B in 2014 versus just $578M in 2013. Q3’14 reached an 18-quarter high for dollars invested at $555M, driven largely by Delivery Hero’s $350M Series G. Deal activity also hit highs in Q4 amid a slew of early-stage investments.

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DELIVERY HERO DOMINATES GERMAN TECHBerlin dominated German Tech, with food delivery startup Delivery Hero accounting for 3 deals and $523M in financing. Munich saw the second highest total for both deals and dollars behind home furnishing startup Westwing Home & Living’s $98.8M Series B. NETVACATION led Hamburg, raising a $24.9M Series C in November.

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City Deals Dollars ($M) Company Amount ($M) Quarter Round

Berlin 91 $952.1 Delivery Hero $350.0 Q3'14 Series G

Munich 28 $195.0 Westwing Home & Living $98.8 Q2'14 Series B

Hamburg 5 $25.6 Delivery Hero $88.0 Q1'14 Series E

Karlsruhe 2 $12.2 Delivery Hero $85.0 Q2'14 Series F

Hennigsdorf 2 $4.3 Foodpanda $60.0 Q3'14 Series C

Darmstadt 2 $0.6 Soundcloud $60.0 Q1'14 Series D

Top German Tech Cities: 2014 Top German Tech Deals: 2014

CRM SEES MOST ACTIVITY IN GERMAN TECHWhile Delivery Hero and Foodpanda propped up Food & Grocery investment activity, CRM saw the most deals. Quandoo saw the most funding of any German CRM company in 2014, raising a cumulative $33M across Series B and C financings from Holtzbrinck Ventures and DN Capital.

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Subindustry Deals Dollars ($M)

Customer Relationship Mgmt 12 $55.7

Marketplace 10 $35.5

Food & Grocery 9 $658.0

Advertising, Sales & Marketing 7 $6.8

Home Furnishings & Improvement 6 $105.0

Travel (internet) 6 $41.9

Education & Training 6 $16.4

BI, Analytics & Performance Mgmt 6 $12.7

Top German Tech Subindustries: 2014

MID-STAGE MATCHES PREVIOUS HIGHSMid-stage (Series B and C) financings accounted for 20% of all deals to VC-backed German Tech companies, matching 2011’s high. Early-stage activity fell slightly YoY to 69% of all deals in 2014.

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DELIVERY HERO DOMINATES DOLLAR SHAREDelivery Hero drove Series E+ deals to account for 41% of all dollars invested in VC-backed German Tech companies in 2014. Early-stage dollar share (Seed & Series A) fell drastically to a four-year low of 12%.

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HIGH-TECH GRUENDERFONDS IS BY FAR THE MOST ACTIVE VC IN GERMAN TECHEarly-stage investor High-Tech Gruenderfonds had over 35 investments in German Tech companies in 2014. German Startups Group was the second most active VC while Target Partners rounded out the top 3.

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Rank Investor Rank Investor

1 High-Tech Gruenderfonds 9 Mangrove Capital Partners

2 German Startups Group 9 Iris Capital

3 Target Partners 11 T-Venture

4 Bayern Kapital 11 e.ventures

5 Point Nine Capital 11 Paua Ventures

5 IBB Beteiligungsgesellschaft 11 DN Capital

5 Earlybird Venture Capital 11 Hasso Plattner Ventures

5 Holtzbrinck Ventures

Most Active VC Investors in German Tech: 2014

2014 COUNTRY BREAKDOWN - UK

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UK TECH INVESTMENTS TOP $1.6B IN 2014Investment into VC-backed UK Tech companies topped $1.6B in 2014, up 78% YoY. Despite two straight declining quarters for deal activity, deals finished slightly up YoY at 225. Q3’14 saw the most financing of any quarter in the past four years behind a $170.7M investment into online retailer The Hut Group.

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LONDON LEADS UK TECHLondon dominated both in deals and dollars, accounting for 65% of all funding and 67% of all deals to VC-backed UK tech companies. Despite this, 2 of the 6 largest deals were in non-London based companies, including The Hut Group (Northwich) and NewVoiceMedia (Hampshire).

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City Deals Dollars ($M) Company Amount ($M) Quarter Round

London 150 $1,110.2 The Hut Group $170.7 Q3'14 Private Equity

Cambridge 5 $25.5 Powa Technologies $80.0 Q4'14 Series B

Bristol 4 $40.2 FarFetch $66.0 Q2'14 Series D

Wiltshire 3 $32.4 Funding Circle $65.0 Q3'14 Series D

Cheshire 3 $13.5 Huddle $51.0 Q4'14 Series D

Manchester 3 $7.3 NewVoiceMedia $50.0 Q3'14 Series E

Top UK Tech Cities: 2014 Top UK Tech Deals: 2014

BI LEADS ALL SUBINDUSTRIES BY WIDE MARGINUK BI, Analytics & Performance Management companies raised 18 rounds of financing totaling $135.9M, the largest of which was a $41M Series C to eCommera. Payments companies raised the highest amount of funding, at $194.4M behind Powa Technologies’ $80M Series B.

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Subindustry Deals Dollars ($M)

BI, Analytics & Performance Mgmt 18 $135.9

Advertising, Sales & Marketing 10 $36.0

Marketplace 10 $184.8

Customer Relationship Mgmt 9 $59.7

Payments 8 $194.4

Asset & Financial Mgmt & Trading 6 $75.0

Accounting & Finance 6 $55.2

Apparel & Accessories 6 $55.2

HR & Workforce Management 6 $28.4

Music 6 $23.8

Real Estate 6 $20.1

Education & Training 6 $9.7

Top UK Tech Subindustries: 2014

SEED FUNDING COOLS IN 2014Seed deal share fell in 2014, as 36% of all deals to VC-backed UK Tech companies were done at the seed stage versus 53% in 2013. Series A deals reached a four-year high at 30%, while the rest of stages remained relatively range-bound.

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SERIES A DOLLAR SHARE FOLLOWS DEALSSeries A investments took 23% of all funding dollars to VC-backed UK Tech companies in 2014, the highest amount of the past four years. The increase in dollar share was driven by a pair of large financings to WorldRemit ($40M) and Blockchain ($30.5M). Series C dollar share fell drastically to 9% after 2013 was anchored by truphone’s $118M financing.

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OCTOPUS VENTURES IS MOST ACTIVEOctopus Ventures was the most active VC investing in UK Tech in 2014. Octopus’ investments included Zynstra, Certivox, and Adbrain among others. Index Ventures was second, while Notion Capital, AccelPartners, and Balderton Capital tied for third.

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Rank Investor Rank Investor Rank Investor

1 Octopus Ventures 8 Eden Ventures 13 Albion Ventures

2 Index Ventures 10 DN Capital 13 Dawn Capital

3 Notion Capital 10 Mercia Fund Management 13 Amadeus Capital Partners

3 Accel Partners 10 Kima Ventures 13 DFJ Esprit

3 Balderton Capital 13 Midven 13 Passion Capital

6 Beringea 13 Qualcomm Ventures 13 Episode 1 Partners

7 MMC Ventures 13 Oxford Capital Partners

8 SparkLabs Global Ventures 13 Connect Ventures

Top VC Investors in UK Tech: 2014

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Where is all this data from?The CB Insights platform has the details on each and

every deal in 2014. That includes all of the 2,821 financings in this report.

Some of our happy customers

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“Designed by a VC insider who truly knows the space and understands end-user needs.”

Greg BaeInvestments & Biz DevComcast Ventures

Jack LeeneyPortfolio ManagerTelefonica Ventures

“CB Insights are changing the way investors access private company information.”

Kevin DiestelInvestorSapphire Ventures

“We've found CBI to have the best data for the most accurate market view.”

“They have the best quality data in the market for anyone looking to get an inside look at private company financings.”

Ian SigalowPartnerGreycroft Partners

“CB Insights' intuitive user interface, analytical capabilities, and detailed investment information create a very powerful tool for our team's research needs.”

Nate D’AnnaCorporate DevelopmentCisco

“We track dealflow, understand valuation multiples, analyze industry trends and identify comparable companies. It is great to see CB Insights innovating in the venture capital data space.

Will PorteousGeneral PartnerRRE Ventures

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METHODOLOGY – WHAT’S INCLUDED? WHAT’S NOT?We encourage you to review the methodology and definitions employed by us to better understand the numbers presented in this report. If you have any questions about our definitions or methodological principles, we encourage you to reach out to us directly.

What is included?• Equity financings into Europe-based VC-backed companies. • Fundings of only private companies. Public companies of any kind on any

exchange (including Pink Sheets) are excluded from our numbers even if they received investment by a venture firm(s)

• Companies must be headquartered in Europe (including Russia). Our geographic data is based on the country where the company receiving investment is headquartered. If a company has a satellite office/presence in multiple cities or was founded in a particular city but has moved its HQ, our results reflect only this HQ address.

• Only include the investment made in the quarter for tranched investments. If a company does a second closing of its Series B round for $5M and previously had closed $2M in a prior quarter, only the $5M is reflected in our results.

• Round #s reflect what has closed –not what is intended. If a company indicates the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount which has closed.

• Only verifiable fundings are included. Fundings are verified via (1) various federal & state regulatory filings (2) direct confirmation with firm or investor or (3) press release.

• Funding close date matters. Fundings are provided based on funding close date and not on announcement date.

What is not?• No contingent funding. If a company receives a commitment for $20M subject to

hitting certain milestones but first gets $8M, only the $8M is included in our data.• No business development/R&D arrangements whether transferable into equity now,

later or never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity financing nor is it from venture capital firms. As a result, it is not included.

• Buyouts, Consolidations and Recapitalizations. All three of these of transaction types are commonly employed by private equity firms and are tracked by CB Insights. However, they are excluded for the purposes of this report.

• Private placements. These investments also known as PIPEs (Private Investment in Public Equities) even if made by a venture capital firm(s) are not included.

• Debt/loans of any kind. Venture debt or any kind of debt/loan issued to emerging, startup companies even if included as an additional part of an equity financing is not included. If a company receives $3M with $2M from venture investors and $1M in debt, only the $2M is included in these statistics.

• Government funding. Grants, loans, equity financings by the federal government, state agencies or public -private partnerships to emerging, startup companies are not included.

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