annual european venture capital report - dealroom.cothe journey to series a in europe the future of...

November 2018

2018 full year reportAnnual European Venture Capital Report

February 2019

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Europe’s most comprehensive source for data on innovative companies and venture capital investment

3

77% more European data than the #2

2,745

3,384

5,929

Number of rounds tracked in 2018

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4

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The Journey to Series A in Europe The State of European Food TechThe Future of Online Marketplaces

In partnership with FiveSeasons Ventures Open PDFIn partnership with Schibsted, Point Nine, Speedinvest Open PDFIn partnership with Atomico and LocalGlobe Open PDF

1. Venture capital investment

2. Key trends & drivers

3. Exits

Contents

6

7

In 2018, a record €28 billion invested in European and Israeli

startups (€21 billion excluding Israel & Biotech)

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital, grants.

Investment in € billions

European biotech

European venture capital (this number is what most VCs focus on)

Israel

€ 6.5B

€ 9.9B

€ 14.3B € 15.5B

€ 20.2B € 21.2B

€ 1.2B

€ 1.6B

€ 2.4B € 2.4B

€ 3.2B € 3.4B

€ 1.2B

€ 1.4B

€ 1.8B € 2.0B

€ 2.5B

€ 3.3B

€ 8.9B

€ 12.9B

€ 18.5B € 19.9B

€ 25.8B

€ 27.8B

2013 2014 2015 2016 2017 2018

€ 7.5B

€ 11.3B

€ 15.8B

€ 17.5B

€ 21.8B

€ 24.7B

€ 8.9B

€ 12.9B

€ 18.5B

€ 19.9B

€ 25.8B

€ 27.8B

2013 2014 2015 2016 2017 2018

TOP 10 INVESTMENTS ROUNDS 2018 LOCATION ROUND

Auto1 GroupFull-stack marketplace for used cars

Germany€ 460M

GROWTH EQUITY$3.0B valuation

LetgoPlatform for buying and selling second hand goods

Spain$ 500MSERIES E

$1.5B valuation

NuCom GroupPlatform for consumer services and lifestyle brands in Europe

Germany€ 450M

GROWTH EQUITY$1.8B valuation

OutSystemsLow-code platform: build enterprise apps quick and fast

Portugal$ 360M

GROWTH EQUITY$1.0B valuation

Landa Digital PrintingDigital technology for the packaging and publishing markets

Israel$ 300M

GROWTH EQUITY$1.8B valuation

About YouFast growing e-commerce retailer for fashion

Germany$ 300M

GROWTH EQUITY$1.0B valuation

RevolutDigital banking alternative

United Kingdom$ 250MSERIES C

$1.7B valuation

GreensillFinancial services firm specialising in Supply Chain Finance

United Kingdom$ 250M

GROWTH EQUITY$1.6B valuation

BioNTechPersonalized cancer immunotherapies

Germany€ 225MSERIES A

VoodooCasual games developer for mobile

France$ 200M

GROWTH EQUITY

Of that €28 billion, 11% came from the 10 largest rounds (compared with 15% last year)

Source: Dealroom.co. Includes Israel. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

top 3 deals

top 10

8

Investment in € billions

Number of rounds below €3M Number of rounds €3M and over

Overall, the number of rounds is increasing. Due to reporting lag, smaller (pre) seed rounds are reported with delay

Source: Dealroom.co. Excludes Israel. As reported. 9

Reporting lag effect

1,184

597

338

–

500

1,000

1,500

2,000

2,500

2013 2014 2015 2016 2017 2018

€ 0-1M € 1-2M € 2-3M

401

360

375

280

–

100

200

300

400

500

2013 2014 2015 2016 2017 2018

€ 3-5M € 5-10M € 10-20M € 20M+

Selected rising stars that defined 2018, by country

$1B+

$500-1B

$250-500M

$0-250M

UK Germany France Nordics Netherlands Spain Israel CEE

Source: Dealroom.co. Companies valued €200M to €1B. 10

Framer

The UK, Germany, France and Israel continue to account for 68% of total investment

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

11% YoY growth

87%

17%

10%

(35%)

(10%)

(11%)

(17%)

10%

43%

2018 number of rounds2018 VC investment by country

1,034

615

552

298

294

265

230

208

154

128

126

97

93

77

65

43

43

34

32

United Kingdom

France

Germany

Spain

Sweden

Israel

Netherlands

Italy

Switzerland

Finland

Ireland

Russia

Norway

Denmark

Belgium

Austria

Poland

Estonia

Hungary

€ 7.7B

€ 4.4B

€ 3.7B

€ 3.3B

€ 1.4B

€ 1.2B

€ 1.2B

€ 0.6B

€ 0.6B

€ 0.5B

€ 0.5B

€ 0.5B

€ 0.5B

€ 0.4B

€ 0.3B

€ 0.2B

€ 0.2B

€ 0.1B

€ 0.1B

United Kingdom

Germany

France

Israel

Spain

Switzerland

Sweden

Ireland

Netherlands

Italy

Finland

Denmark

Belgium

Portugal

Russia

Norway

Estonia

Cyprus

Austria

11

Growth is driven by rounds larger than €10 million

Source: Dealroom.co

€ 3.4B € 4.5B € 5.2B € 6.8B € 7.2B € 6.5B

€ 1.2B

€ 1.5B

€ 3.8B

€ 2.9B

€ 6.4B

€ 6.3B

€ 8.9B

€ 12.9B

€ 18.5B € 19.9B

€ 25.8B

€ 27.8B

–

€ 5B

€ 10B

€ 15B

€ 20B

€ 25B

€ 30B

2013 2014 2015 2016 2017 2018

$ 0-10M $ 10-25M $ 25-50M $ 50-100M $ 100M+

Investment in € billions

€0-10M segment not growing in last three years and growing by 11%CAGR since 2013

€10M+ segment growing by 25% CAGR since 2013

12

Investment in € billions

Similar trend across big three. But Germany was especially impacted by a few mega rounds (Auto1, NuCom, About You)

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants. 13

€ 1

.9B

€ 1

.7B

€ 1

.6B

€ 7.7B

€ 4.4B

€ 3.7B

€ 3.3B

€ 1.2B

€ 7.6B

–

€ 2B

€ 4B

€ 6B

€ 8B

€ 10B

'13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18

United Kingdom Germany France Israel Sweden Rest of Europe

= 24%

= 39% = 29%= 16%

= 21%

Spain, Italy, Belgium and Denmark experienced biggest

increase in funding

14Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

€ 0.5B

€ 0.2B

€ 0.5B

€ 0.1B

€ 0.0B

€ 0.5B

–

10

20

30

40

50

60

–

€ B

€ B

€ B

€ B

€ 1B

€ 1B

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Belgium Norway Denmark Austria Poland Italy

Investment (in € billions) Number of rounds (> €2M)

€ 1.4B € 1.2B

€ 0.6B € 0.6B

€ 0.3B € 0.5B

–

25

50

75

100

–

€ 1B

€ 1B

€ 2B

€ 2B

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Spain Switzerland Netherlands Ireland Russia Finland

Investment (in € billions) Number of rounds (> €2M)

Investment in € billions

15

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1. Venture capital investment

2. Key trends & drivers

3. Exits

Contents

16

Increased investment focus on transportation (mobility), robotics and security

Absolute

change vs.

last year

(in €B)

% change

vs. last year

(number of

rounds)

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.Note: industries, business models and keywords can and do overlap.

By industry vertical Business model By keyword

48%

19% 13% 12% 10% 9% 9% 7%

3% 3% 1%

(4%) (6%) (9%)(12%)

(16%)(20%)

39%

25%

13%

(10%)(17%)

25% 20%

12%

2%

(10%)

(18%)

€ 1.1B

€ 0.5B € 0.4B € 0.4B € 0.3B € 0.2B € 0.2B

(€ 0.0B) (€ 0.0B) (€ 0.1B) (€ 0.2B) (€ 0.3B) (€ 0.3B) (€ 0.3B)

(€ 0.4B) (€ 0.5B)

(€ 0.8B)

€ 1.5B

€ 1.2B € 1.0B

(€ 0.2B) (€ 0.4B)

€ 0.4B € 0.4B € 0.1B

€ 0.0B

(€ 0.4B)

17

But Health, Fintech and Enterprise Software continue to be the most invested industries

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.Note: industries, business models and keywords can and do overlap.

By industry vertical Business model By keyword

Number of

rounds 2018

Amount (€B)

invested 2018

€ 5.9B € 5.4B € 5.3B

€ 3.7B € 3.3B

€ 1.6B € 1.5B € 1.4B € 1.4B € 1.4B € 1.1B € 0.9B € 0.9B € 0.8B € 0.6B € 0.6B € 0.5B

€ 10.1B

€ 7.3B

€ 5.0B

€ 3.3B € 2.7B

€ 8.1B

€ 3.3B

€ 2.2B € 1.3B

€ 0.8B € 0.3B

923

711 702

377 361 310 298 254 237 201 198 149 123 114 108 91 73

1,758

974

535

319 281

1,424

629

337 249

157 49

18

Selected rising stars that defined 2018, by industry

$1B+

$500-1B

$250-500M

$0-250M

Deep tech Fintech Health Enterprise SaaS Mobility Energy Marketplaces

Source: Dealroom.co 19

Round sizes went up in 2018

20Source: Dealroom.co. Based on self-labelled data.

Series C rounds

Seed rounds Series A rounds

Series B rounds

€ 0.4M€ 0.5M € 0.5M € 0.5M € 0.5M

€ 0.7M

€ 0.6M € 0.7M€ 0.8M

€ 0.8M € 0.8M

€ 1.2M

2013 2014 2015 2016 2017 2018

Median

Average

€ 2.7M

€ 3.6M€ 3.2M

€ 3.6M

€ 5.0M € 5.2M

€ 4.6M € 4.8M € 5.1M€ 5.5M

€ 6.7M€ 7.1M

2013 2014 2015 2016 2017 2018

Median

Average

€ 5.9M€ 6.6M

€ 9.6M

€ 8.1M

€ 9.6M

€ 13.0M

€ 7.6M

€ 9.4M

€ 12.2M

€ 10.5M

€ 13.2M

€ 16.4M

2013 2014 2015 2016 2017 2018

Median

Average

€ 8.5M

€ 15.0M € 14.5M € 15.6M

€ 10.9M

€ 18.2M€ 9.3M

€ 17.6M€ 18.9M € 18.8M € 18.0M

€ 22.8M

2013 2014 2015 2016 2017 2018

Median

Average

Increase partly due to reporting lag, which

means it will disappear as smaller rounds are reported. Read more on seed

funding data analysis on our blog.

Early stage round sizes are up, although some of that is

driven by reporting lag for smaller rounds

21Source: Dealroom.co

Seed

Series A

United Kingdom Germany France Spain Sweden Netherlands

–

€ 0.2B

€ 0.4B

€ 0.6B

€ 0.8B

€ 1.0B

€ 1.2B

€ 1.4B

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Average Median

–

€ 1.0B

€ 2.0B

€ 3.0B

€ 4.0B

€ 5.0B

€ 6.0B

€ 7.0B

€ 8.0B

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Average Median

Venture capital investment into Europe has been increasing from all sides

Europe USA Asia Rest of World

Source: Dealroom.co

€ 3.8B

€ 6.1B

€ 8.9B

€ 10.4B

€ 13.0B

€ 14.4B

€ 2.2B€ 3.0B

€ 4.0B € 3.7B

€ 5.4B

€ 6.6B

€ 0.1B € 0.4B € 0.7B € 1.0B

€ 2.5B € 2.2B

€ 0.6B € 1.0B€ 1.6B € 1.6B

€ 2.1B€ 2.9B

–

500

1,000

1,500

2,000

2,500

3,000

3,500

–

€ 2B

€ 4B

€ 6B

€ 8B

€ 10B

€ 12B

€ 14B

€ 16B

2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

Investment (in € billions) Number of rounds (> €2M)

22

Investment funds accounted for more than 60% of capital backing European ventures

1. U.S based funds = Funds only. Excludes investment by U.S. corporates (Microsoft, GE, …).

Investment funds Corporate venturing Angels, crowdfunding, other

€ 5.2B

€ 8.0B

€ 11.1B€ 12.2B

€ 15.4B

€ 17.7B

€ 1.3B€ 1.9B

€ 2.8B € 3.3B

€ 6.6B€ 7.5B

€ 0.4B € 0.6B € 1.1B € 1.4B € 1.8B € 1.6B

–

500

1,000

1,500

2,000

2,500

3,000

3,500

–

€ 4B

€ 8B

€ 12B

€ 16B

€ 20B

2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

Investment (in € billions) Number of rounds (> €2M)

23

Sources of investment into European startupsAmount of capital invested in Europe by source

24Source: Dealroom.co.

45% 49% 49% 49%

40% 41%

6%

7% 7% 7%

11% 10%

27% 25%

22% 18%

17% 19%

6% 5% 5%

5%

5% 7%

3% 2%

3%

4% 3%

1% 3%

3% 7% 5%

14% 11% 13% 14% 15% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018

Investment fund Corporate Investment fund Corporate Investment fund Corporate Other sources

€1.4B€0.9B

€1.8B

€1.8B

€10.3B

€5.1B

€4.1B

Europe USA and Canada Asia

1. Venture capital investment

2. Key trends & drivers

3. Exits

Contents

25

With €105 billion in exit value, 2018 was a record year for VC-backed exits in Europe and Israel

Source: Dealroom.co. Excludes biotechnology.

Value of exits in € billions

Realised amount (= fully realised amount, i.e. the shares sold)

Unrealised value (= total enterprise value at exit minus realised amount)

€ 17B

€ 40B

€ 48B

€ 70B

€ 42B

€ 105B

€ 0.0B

€ 20.0B

€ 40.0B

€ 60.0B

€ 80.0B

€ 100.0B

2013 2014 2015 2016 2017 2018

26

27

Driven by a number of IPOs

Source: Dealroom.co

NAME ACQUIROR SELLER INDUSTRY LOCATION TRANSACTION EXIT VALUE

SpotifyMusic streaming software

--

Accel Partners, Goldman Sachs, Lakestar, Fidelity, GP

Bullhound…

Music Stockholm$ 9.2 b

IPO$ 29.5 b

AdyenLeading global payments company

--

Index VenturesFelicis VenturesGeneral Atlantic

…

Fintech Amsterdam$ 1.0 b

IPO$ 7.8 b

FarfetchOnline luxury fashion retail platform

--

Advent Venture Partnerse.ventures

Index Ventures…

Fashion London$ 855 m

IPO$ 5.8 b

Yoox Net-a-PorterGlobal Internet retailing partner for leading fashion & design brands

Richemont

360 Capital PartnersBalderton Capital

Net-a-PorterAlabbar Enterprises

Fashion Milan$ 3.0 b

ACQUISITION$ 5.5 b

Sky Betting & GamingLeading operators in the UK’s online betting and gaming market

The Stars GroupSky

CVC Capital Partners

GamingSports

Leeds$ 4.7 b

ACQUISITION$ 4.7 b

Avast SoftwareCybersecurity products for businesses and consumers

--Summit Partners

CVC Capital Partners Security Prague$ 192 m

IPO$ 3.1 b

ZooplaProperty website for the British residential market

Silver Lake Partners

Atlas VentureLocalGlobe

Octopus Investments…

Real Estate London$ 2.9 b

ACQUISITION$ 2.9 b

ElasticSelf-managed and SaaS software for search, security and analytics

--

BenchmarkData Collective

New Enterprise Associates…

Developer tools Amsterdam$ 252 m

IPO$ 2.5 b

SUSEProvider of an Enterprise Linux distribution software

EQT Partners Novell Developer tools Nuremberg$ 2.5 b

ACQUISITION$ 2.5 b

iZettleSecure and easy mobile payment solutions

PayPalCreandum, Index Ventures,

Intel Capital, Northzone, 83North

Payments Stockholm$ 2.2 b

ACQUISITION$ 2.2 b

28

The UK and Sweden were the biggest contributors to

European venture backed exits

Source: Dealroom.co

United Kingdom Germany France Sweden Spain Netherlands

€ 32B

€ 8B

€ 5B

€ 32B

€ 17B

–

5

10

15

20

25

30

35

–

€ 5B

€ 10B

€ 15B

€ 20B

€ 25B

€ 30B

€ 35B

'13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18

Total Firm Value Number of exits (>€50M)

blog.dealroom.co

Yoram Wijngaarde

Founder & CEO

yoram@dealroom.co

Ivan Draganov

Research Analyst

ivan.draganov@dealroom.co

For questions or feedback about this report, or to see how Dealroom can help you, please feel free to contact us.

Lotf Belych

Research Analyst

loft@dealroom.co

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