an overview of the vc market and vækstfonden
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An overview of the VC market and Vækstfonden
12 March 2010Uffe Arlø Theilade, Investment Director, Vækstfonden
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Agenda
onsdag 19. april 2023 2
1. The idea and rationale for VC2. An introduction to Vækstfonden3. VC in Denmark4. Market developments and challenges
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Types of finance (risk profiles)
Debt
Quasi-equity
Equity
Traditional companies Technology companies
Debt
Equity
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VC Funded Companies in Denmark
20% growth in employment
40% export growth
50% growth in R&D
R&D expected to account for 1.5% of GDP in 2010
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VC-backed companies in the US
- $ 1,800 billion revenue
- 16% of GDP
- 10 mil jobs
- 40% of all IPOs
- 3 x R&D activity
- 3 x tax payment
- 2 x export
/ sideonsdag 19. april 2023 9
Who We Are
• Vækstfonden is a government backed investment fund
• Investment focus on Danish early stage companies - both through direct investments and fund-of-funds
• Total asset base around EUR 350 million
• 85 % committed to early stage companies and venture capital funds
• Largest Danish investor within the ICT and life science spaces
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• Annual investments of DKK 500 million in 25-30 companies – direct as well as through VC funds
• Loan guarantees on the rise
• Co-funded more than 3,500 companies to the tune of DKK 6.5 billion
Funding Activity
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Targeted Financing
Global Growth Companies
InternationalGrowth Companies
Regional Growth Companies
Local Growth Companies
Fund of Funds
Growth Capital
Business Angel Matching
Loan Guarantees
5 15 70+
5
15
1Potential Revenue
Million Euro
Funding NeedMillion Euro
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Vækstvirksomheder - 50 mia. kr.
Private ventureselskaber
Andre private finansieringskilder
Vækstfonden Private investorer
4 mia. kr. 6 mia. kr.
10 mia. kr. 40 mia. kr.
Vækstfonden’s leverage effect
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Main Attractors in the Danish Market
• Strong Research Base
• Entrepreneurial Culture
• Flexible Labour Market
• Dynamic Technology Clusters
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VC-backed companies’ attraction of foreign capital (relative to GDP; 2007)
0,00%
0,05%
0,10%
0,15%
0,20%
0,25%
DK S FIN UK IRL NL NO CH E B F P D A I EL
Nationale investorer Udenlandske investorer
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Geographic Distribution of VC Investment
• Large concentration around Greater Copenhagen
• Generally centered around universities and research institutes
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Top 3 Industries in Denmark
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Life Sciences ICT Energy andenvironment
Business andindustrial services
2007 2008
% of Total Amount Invested
/ sideonsdag 19. april 2023 21
Annual Capital Raisings By VC Funds
0
100
200
300
400
500
600
700
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
DK
€ Million Total Capital Under ManagementDK: € 2,983 Million
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0
500
1000
1500
2000
2500
3000
3500
4000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
År
Mio
. kr.
- 60%
- 40%
- 20%
0%
20%
40%
60%
80%
100%
120%
140%
I alt (venstre akse) Årlig tilvækst (højre akse)
Total VC Investment activity in Denmark
/ sideonsdag 19. april 2023 23
..Due to Follow-On Investments
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008
Ny- investeringer Opfølgningsinvesteringer
New Investments Under Pressure
/ sideonsdag 19. april 2023 24
0
20
40
60
80
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008
Seed Start- up Ekspansion Ikke oplyst
Seed Investment at All Time Low
/ sideonsdag 19. april 2023 26onsdag 19. april 2023 26
The Global Financial Crisis Puts Exit Markets in Reverse
Source: VentureXpert
0
100
200
300
400
500
600
2000 2001 2002 2003 2004 2005 2006 2007 2008
Nu
mb
er
of
Exit
s
IPO Trade Sale
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IPO Valuations Particularly Hard Hit
Source: VentureXpert
/ sideonsdag 19. april 2023 28onsdag 19. april 2023 28
Entry Valuations Falling
Source: VentureXpert
/ sideonsdag 19. april 2023 29onsdag 19. april 2023 29
Holding Periods Rising Steadily
-
1
2
3
4
5
6
7
8
2000 2001 2002 2003 2004 2005 2006 2007 2008
Hold
ing p
eri
od (
years
)
Global Nordic countriesSource: VentureXpert and Vækstfonden
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• Raising money for new ventures increasingly difficult
• New venture capital funds need to be raised
• Danish VCs under pressure to deliver attractive exits
• Exit timing is crucial
Key Points
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