dbvn investor sentiment - venture-network.com · the objective of the data-driven sentiment report...
TRANSCRIPT
Investor sentiment on COVID-19 implications
Deutsche Börse Venture Network
21st April, 2020
Key findings
1
▪ 78% of VCs see their portfolio challenged by COVID-19
▪ Number of new VC deals in Q2 expected to drop by 46%
▪ Healthtech vertical with strong momentum and outlook
▪ VCs spend more time with portfolio support and their LPs
▪ Some LPs are expected to reduce their allocation in venture
2
Research design
Invite-only web-based survey – neutrally hosted
Fielded anonymously from 10 to 15 April
Scope: DACH-focused venture capital investors
78 venture investors
contributed to the survey
Objective: Sentiment data on how venture investors react to the COVID-19 crisis
Technically conducted by an independent market research company: CURTH+ROTH
3
0 5 10 15 20 25 30 35 40 45 50
More than €400m
€250m - €400m
€25m - €250m
€1m - €25m
Less than €1m
Majority of survey feedback from fund sizes up to €250m, but also growth funds
Q: What is your fund size or allocation to venture investments?
%
4
22.4
29.3
48.3
0
10
20
30
40
50
60
70
80
90
100
Degree of impairment
78% see that their portfolio is challenged by the COVID-19 crisis
%
Strongly
challenged
Challenged
Little/ not
challenged
Q: How is your venture portfolio challenged by the COVID-19 crisis?
Q: Which of the following industry verticals will be most affected positively/ negatively by
the COVID-19 crisis in the long-term? Please select up to 5 industry verticals.
Travel, real-estate and sports / wellness verticals are the most challenged, healthcare wins
5
5 7 10 7
22 2621
53
41
22
52
38
14
66
7
93
66
4341
2814
9
7
3
3
2
2
0
3
Negatively
affected
Positively
affected
in percentage
points
TravelSports /
wellness Other
Food
Entertainment
Jobs /
recruitment
Financial /
insurance
Enterprise
software
Education
Security
E-commerce
Gaming
Home
Healthcare
2
Real
estate
Q: How did your allocation of time and resources change compared to before the crisis?
50.0
60.4
63.8
55.2
34.5
10.3
19.0
3
36.2
24.1
20.7
29.3
32.8
25.9
15.5
13.8
13.8
15.5
15.5
15.5
32.8
63.8
65.5
82.8
0 10 20 30 40 50 60 70 80 90 100
Fundraising GP/LP
Sourcing
Evaluation of new deals
Community activities
Research
LP communications
Internal topics
Support portfolio companies
Less Same as before More
VCs spend more time with supporting portfolio companies and LP interactions, but less time with new deals and sourcing
6
%
Q: How did you or will you adjust your investment strategy in venture?
Select all that apply
Investors will either support existing investments more or become very selective
53.5
44.8
20.7 19.0
6.9
19.0
0
10
20
30
40
50
60
Cherrypicking
Mainly investin currentportfolio
No newinvestments
Invest in newverticals
Invest inlater stages
No changeInvest in
later stagesMainly invest
in current
portfolio
No new
investmentsCherry
picking only
Invest in
new verticals
No
changes%
7
Q: Did or will you adjust the fund allocation/rate of capital deployment into new investments?
Increase
of 10% or more
No change
Decrease
of 10% or more
57% will not reduce their fund allocations into new investments
13.8
43.1
43.1
0
10
20
30
40
50
60
70
80
90
100
Adjustment of fund allocation
%
8
Q: How many new investments (without follow-ons) did you sign in
Q2 2019 and how many do you expect to sign in Q2 2020?
46% compared to Q2 2019
Number of new deals in Q2 2020 is expected to drop by
9
Q: If you think about the stage in which you primarily invest, what
percentage do you think the valuation will change compared to 2019?
Major decrease in venture valuation compared to 2019. 88% anticipate a negative or strongly negative impact
3%
9%
50%
35%
3%
Positive 1 to 20%
No change
Negative 1 to 20%
Negative 21 to 40%
Negative 41% and more
10
Q: What should founders emphasise more in their startup pitch in the current situation?
Please select up to 5 options.
%
11
%
10 20 40 6030 50 700
VCs recommend founders to emphasise not alone traction, but post-COVID opportunities in their current pitches
Traction / financials / KPIs
Opportunities post-COVID
Business resilience
Profitability
Key risks
Pre- and post-crisis growth projections
Founder / team
Address long-term changes
Storytelling
Competition
Others
Adjust time frame & strategy in fundraising and rethink
how you can grow. Investors tend to support priorities
and will be more careful with new investments.Family Office & HNWI, Switzerland
Show that you fully understand the current
situation and its impact on society, economy and
also investor landscape. Private Equity, Germany
Founders should reflect and understand the full implications of the current situation
“„
12
About the sentiment report A contribution in times of uncertainty
Deutsche Börse is making a large effort to strengthen and expand venture capital financing in
Germany and Europe. At Deutsche Börse Venture Network it has been our mission to create a
strong ecosystem of growth. We believe in the power of innovative ideas – for a better future.
Since 2015 we have been connecting striving start-ups and investors, aiming to improve the overall
funding situation in venture capital. Our growth network currently encompasses about 200 start-ups,
420 investors and multiple partners.
In these times of high uncertainty, caused by the COVID-19 pandemic, a strong ecosystem has
become more important than ever. In addition to the founders’ perspective, which has already been
covered in several surveys, it is crucial to gain understanding of the entire ecosystem. This includes
venture investors and also their limited partners. Therefore, we have conducted a sentiment survey
which takes a closer look at investors and how they react to COVID-19 crisis.
The objective of the data-driven sentiment report is to present aggregated results in order to illustrate
the status quo situation for investors and derive recommendations for founders.
We would like to thank all participants who took part in the survey. Your insightful and valuable
contributions made this report possible. Thank you and stay healthy!
13
www.venture-network.com
Peter Fricke
Head of Deutsche Börse Venture Network
e-mail [email protected]
mobile +49 (0) 171 868 46 44
office FinTech Hub Frankfurt
Get in touch with the project team
Carsten Huth (project lead)
Senior Financing Manager
e-mail [email protected]
mobile +49 (0) 151 634 609 39
office Berlin Hub
Disclaimer
Any information contained herein is subject to change without notice, and is provided without any representation or warranty, express or implied, as to its actuality, accuracy,
completeness, correctness or fitness for any purpose. This publication is provided for convenience purposes only and does neither constitute legal or financial advice nor a binding
commitment of Frankfurter Wertpapierbörse, Deutsche Börse AG or any of its affiliates.
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