DOCSLIB.ORG

Globalizing Venture Capital Global Venture Capital Insights and Trends Report 2011 Foreword

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Globalizing Venture Capital Global Venture Capital Insights and Trends Report 2011 Foreword Globalizing venture capital Global venture capital insights and trends report 2011 Foreword Amid the fragile economic recovery and highly volatile capital Contrary to the popular perception that global VC investment markets of 2011, the venture capital (VC) sector is becoming has been concentrated primarily in the frothy digital media increasingly globalized. A shift toward the emerging markets sector, VC funding has been quite evenly spread across sectors can be seen in geographic VC patterns and the growth of new and life-cycle stages and has progressed at a reasonable pace. global VC hotbeds. Although the United States will likely remain Worldwide, the VC universe continues to shrink as limited at the leading edge of VC-backed innovation for many years to partners focus on top performers or forego VC altogether. come, US VC fund-raising continues its decade-long decline. However, the sector’s continued long-term consolidation is Elsewhere, in China, India and other emerging markets, vibrant viewed as good for the sector, with fewer players investing innovation hotbeds and entrepreneurial talents are arising, and smaller amounts in companies that will reach profitability faster investors are focused on less risky, later-stage deals, at least than they do today. Large corporations striving to maintain for now. market leadership are partnering with VC firms to access Although unrealistic valuations may dampen future returns, external innovation and a pipeline of new products and services. China’s VC industry reached record heights in 2011 and will This report explores these themes in our articles and soon surpass Europe as the second-largest venture hub for interviews, including: fund-raising in the world. Both China’s and India’s strong VC industries are expected to continue their rapid growth • Interviews with top VC investors and entrepreneurs from and development as they capitalize on strong GDP growth, around the globe growing domestic consumption and a dynamic entrepreneurial • “Paradigm shifts in venture capital,” our keynote article with ecosystem. At the same time, due to Europe’s sovereign debt insights on VC investment, IPO, M&A and valuations, based on crisis and its muted medium-term growth potential, Europe’s VC data from 2005 to 2011 industry has lost some of its robustness. • Key trends in the global digital media and biotechnology Globally, companies are staying private longer, due to large sectors and from global corporate venturing corporations seeking proven business models prior to an acquisition and investors that prefer companies with a proven • An in-depth analysis of the key global VC hotbeds of the US, profitability path both before and after the IPO. As angel China, Europe, India and Israel investors have become major investors in early-stage start-ups, We hope you find Globalizing venture capital, our ninth annual particularly in the US, the competition has nudged VCs toward report on venture capital, to be a source of valuable insight. later-stage, high-growth ventures. We look forward to working together with you on the global Broadly speaking, the more mature VC markets of the US and challenges and opportunities that lie ahead. Europe favor earlier–stage investments, while the emerging markets of China and India generally prefer later-stage companies. In China and India, IPOs represent the vast majority Maria Pinelli of exits for VC-backed companies. But in the US, Europe Global Vice Chair and Israel, the main exit route for VC-backed companies is Strategic Growth Markets acquisitions (M&A), representing more than 90% of all exits. Furthermore, VC firms are also selling companies to private equity firms as a third path to liquidity. 2 Globalizing the VC industry Contents 04 Global VC trends 05 Paradigm shifts in venture capital 10 Key global venture insights (2005–11) 14 Global VC hotbeds Americas United States 15 VC trends 18 VC interviews: Lawrence Lenihan, FirstMark Capital, and Jeffrey Glass, Bain Capital Ventures 20 Entrepreneur interview: Barry Silbert, SecondMarket Brazil 21 VC interview: Clovis Meurer, CRP Companhia de Participações Asia China 22 VC trends 25 VC interview: Gary Rieschel, Qiming Venture Partners India 26 VC trends 28 VC interview: Sudhir Sethi, IDG Ventures India Japan 29 VC interview: Toshihisa Adachi, Itochu Technology Ventures/JVCA Greater Europe Europe 30 VC trends 33 VC interview: Simon Cook, DFJ Esprit LLP Israel 34 VC trends 36 VC interview: Daniel Cohen, Gemini Israel Funds Russia 37 VC interview: Yan Ryazantsev, Russian Venture Company/OJSC 38 Global VC hot topics 39 Global corporate venturing trends 44 Global digital media trends 48 Global biotechnology trends 51 Biotech VC interview: Hans Peter Hasler, HBM BioVentures 52 Entrepreneur interviews: Gil Shwed, Check Point Software Technologies Ltd., and Olivia Lum, Hyflux Ltd. 54 Global PE/VC Country Attractiveness Index 55 Contacts and acknowledgements Global venture capital insights and trends report 2011 3 Global VC trends 4 Globalizing the VC industry Paradigm shifts in venture capital As the economic pendulum swings toward the rapidly the first time in three years, the median fund size rose to developing economies, the venture capital sector is US$140.0 million. experiencing its own paradigm shifts, reflecting an By contrast, the story for European venture funds was one of increasingly globalized world. struggle, recording the worst volume since 2004. European The globalization of venture capital is taking many forms, fund-raising declined 11% to US$3 billion (amount closed) ranging from global fund-raising and cross-border investment, for 41 funds.4 In contrast to the US, European funds showed to exits on foreign stock exchanges or by foreign acquisition, to a distinct preference for early stages. (Of the 41 funds that VC firms opening offices overseas and helping their portfolio closed, 27 early-stage funds took US$2.1 billion of the total companies access markets in new regions. US$3 billion closed.) This article analyzes the trends in fund-raising for VC funds, Rapid growth of fund-raising in China and India the different investment patterns between the mature and emerging venture markets, the associated exit mechanisms by The Chinese VC market is growing rapidly. In 2011, China geography and, finally, the new funding sources going forward. saw 382 new VC funds raise a record US$28.2 billion for investments into Chinese VC-backed companies.5 This Top-tier VC funds dominate in the West represents 2.53 times of the amount raised in 2010. Twenty of the new funds raised US$100 million or more. as VC consolidation continues The growth capital venture space in India is getting Global “dry powder” is US$117.7 billion (capital committed to overcrowded. With about 400 VC funds in operation, this glut VC firms but not invested yet) and remains at a level similar to has driven up valuations, prompting concerns by many private the past few years, as VCs invest at a pace that is reflected by equity investors.6 Yet there is still plenty of room for early-stage 1 their fund-raising volume. VC funds, especially in the almost empty pre-revenue space. In 2011, 376 VC funds were fund-raising globally, trying to raise US$53.6 billion.2 Between 30% and 50% of all the funds Growing VC trend toward in the fund-raising stage are unlikely to make it at all or will do international investment so at a substantially reduced size. VC funds closing in 2011 had a buoyant start but dropped off in the second quarter.3 The next five years (2011–15) should see a major shift in The top-tier VC firms close much faster than the average fund. geographic venture investment patterns and substantial growth 7 The average fund-raising takes 12 to 18 months, while the in the new global VC hotbeds. top decile of funds in the key VC hotbeds manage to close in Currently, the vast majority of VC firms invest just in their 3 to 5 months. own local home markets; however, more will be investing In the US, fewer funds are raising more capital. US venture internationally in the near future. Currently, only about 20% of funds that closed during 2011 had 5% more capital than those 4 This compares unfavorably to US$2 billion for 26 funds in 2010 and US$2.9 billion for closed in 2010, hitting US$16.2 billion. However, the number 26 funds in 2009. of funds that closed plummeted 12% to 135 funds, and for 5 Zero2IPO (January 2012), which covers international and local VC firms in China. 6 According to The Economic Times in India (26 September 2011), Marquee Silicon Valley VC Accel Partners has scrapped plans to raise a US$400 million India-focused growth capital 1 PREQIN, March 2012. fund. Likewise for corporate investors, such as the Jubilant Group, which has shelved its fund 2 PREQIN, January 2012. sponsorship idea. 3 Of the 20 that closed in 2Q 2011 with US$5.8 billion, the largest five had 66%, or 7 According to the National Venture Capital Association (June 2011) nine-country survey, with US$3.8 billion. 1Q 2011 had reached 2008 levels with 47 funds at US$10 billion. 347 Venture Capital Firms. Global venture capital insights and trends report 2011 5 Amount raised, by hotbed, 2011 (US$m) Number of rounds, by hotbed, 2011 2 9 5 , 2 1 $ 8 1 7 3 0 8 2 , 0 6 3 3 , 0 7 8 4 6 8 , , $ 3 4 7 2 2 3 4 7 0 5 3 2 $ 7 2 2 0 $ 6 4 9 6 9 , , , , $ 3 3 5 6 9 1 1 1 1 $ $ $ $ $ $ $ $ $ 977 369 367 286 274 217 150 141 120 119 101 59 37 35 VC Investments by development stage (as % of US amount), by region, 2006–11 Start-up Product development 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Europe US China India Revenue (pre-profit) Profitable 100% 100% 90% 80% 80% 70% 60% 60% 50% 40% 40% 30% 20% 20% 10% 0% 0% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Source: Dow Jones VentureSource, 2012 6 Globalizing the VC industry Global VC trends | Paradigm shifts in venture capital VC firms in Brazil, India, Israel and the UK invest outside their levels and is almost even with 2008 amounts.
Load more

Recommended publications
  • Financing Transactions 12
    MOBILE SMART FUNDAMENTALS MMA MEMBERS EDITION AUGUST 2012 messaging . advertising . apps . mcommerce www.mmaglobal.com NEW YORK • LONDON • SINGAPORE • SÃO PAULO MOBILE MARKETING ASSOCIATION AUGUST 2012 REPORT MMA Launches MXS Study Concludes that Optimal Spend on Mobile Should be 7% of Budget COMMITTED TO ARMING YOU WITH Last week the Mobile Marketing Association unveiled its new initiative, “MXS” which challenges marketers and agencies to look deeper at how they are allocating billions of ad THE INSIGHTS AND OPPORTUNITIES dollars in their marketing mix in light of the radically changing mobile centric consumer media landscape. MXS—which stands for Mobile’s X% Solution—is believed to be the first YOU NEED TO BUILD YOUR BUSINESS. empirically based study that gives guidance to marketers on how they can rebalance their marketing mix to achieve a higher return on their marketing dollars. MXS bypasses the equation used by some that share of time (should) equal share of budget and instead looks at an ROI analysis of mobile based on actual market cost, and current mobile effectiveness impact, as well as U.S. smartphone penetration and phone usage data (reach and frequency). The most important takeaways are as follows: • The study concludes that the optimized level of spend on mobile advertising for U.S. marketers in 2012 should be seven percent, on average, vs. the current budget allocation of less than one percent. Adjustments should be considered based on marketing goal and industry category. • Further, the analysis indicates that over the next 4 years, mobile’s share of the media mix is calculated to increase to at least 10 percent on average based on increased adoption of smartphones alone.
    [Show full text]
  • View October 2012 Report
    MOBILE SMART FUNDAMENTALS MMA MEMBERS EDITION OCTOBER 2012 messaging . advertising . apps . mcommerce www.mmaglobal.com NEW YORK • LONDON • SINGAPORE • SÃO PAULO MOBILE MARKETING ASSOCIATION OCTOBER 2012 REPORT The 2012 Mobile Election In 2008, when Obama was first elected as President, smartphones were just gaining popularity and tablets were R&D blueprints somewhere in Silicon Valley. Fast-forward to 2012, President Obama tweets on average 29 times a day and both parties have mobile apps explaining their policies. The election is a perfect indicator of the power of mobile and how it transformed the campaign process. As reported in VatorNews, one in ten Americans “dual-screened” the presidential debates on their TVs and on their mobile devices. Additionally, 35% of smartphones owners used their mobile device to fact check what was being said during the debates. Fundraising also received a technological face-lift. Obama initiated a mobile messaging campaign to encourage donations via SMS. And both Obama and Romney used Square at fundraising events for people to donate with their credit cards. By the 2016 elections, who knows what type of advancements we will make with mobile. According to a survey conducted by Mojiva, 85% of respondents would consider using their mobile device to vote on Election Day. Imagine mobile voting in a cab or on the treadmill or while you wait for coffee in Starbucks. The impact of mobile on the elections is not only apparent but should serve as inspiration for marketers aiming to move closer to consumers. With mobile, both Obama and Romney made a connection with constituents that was rich, dynamic and contextually relevant.
    [Show full text]
  • Security and Privacy of Users' Personal Information on Smartphones
    Security and Privacy of Users’ Personal Information on Smartphones by Veelasha Moonsamy Bachelor of IT Honours (BIT Hon) Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Deakin University December, 2014 Abstract The recent surge in the popularity of smartphones has shifted the focus of malware attackers from the desktop platform onto that of the smartphone platform. Smart- phones, which are hand-held devices with significantly more computational power than traditional mobile phones, store a wide range of personally identifiable infor- mation about their users in order for smartphone applications to function properly. As a result, malware authors are able to acquire private and confidential information about the victims by successfully deploying their attacks. Such information could be later used for blackmailing or trading in underground markets. Thus, the challenge of smartphone malware detection is directly related to the increasing number of smartphone users and applications available. As the number of smartphone malware continues to rapidly increase, there is an urgent need to deploy detection and classification frameworks that can cope with the large volume of suspicious applications and efficiently detect and classify malware. In this thesis, I consider the Android platform as a case study because it is an open-source platform and has the highest number of malicious applications. I begin by proposing a pattern mining algorithm to generate contrasting permission patterns that can distinguish clean from malicious applications. The permission patterns were then used to identify malware. I propose a linear classifier that uses permission patterns as features. These patterns are unique to malicious applications only and can also be used to conduct a high-level malware triage.
    [Show full text]
  • Entrepreneurial Ecosystems Around the Globe and Early-Stage Company Growth Dynamics
    Entrepreneurial Ecosystems Around the Globe and Early-Stage Company Growth Dynamics January 2014 Project Team Steering Committee World Economic Forum: Members: Michael Drexler, Senior Director, Head of George Foster, Konosuke Matsushita Investors Industries, World Economic Professor of Management at the Graduate Forum USA School of Business, Stanford Maha Eltogby, Director, Head of Private University (Project Co-Leader) Investors, World Economic Forum USA Dan Isenberg, Professor of Entrepreneurship Practice, Babson Stanford University: Executive Education, Babson College George Foster, Konosuke Matsushita Habib Haddad, Chief Executive Officer, Professor of Management at the Graduate Wamda School of Business, Stanford Calvin Chin, Chief Executive Officer, Transist University (Project Co-Leader) Randa Ayoubi, Chief Executive Officer, Carlos Shimizu, Project Manager and Rubicon Group Holding Instructor at the Graduate School of J. Michael Cline, Managing Partner, Business, Stanford University (Project Accretive LLC Co-Leader) Linda Rottenberg, Co-Founder and Chief Steve Ciesinski, Vice President of Strategic Executive Officer, Endeavor Business Development at SRI International and Lecturer at the Graduate School of Thomas Speechley, Partner, The Abraaj Business, Stanford University Group, United Arab Emirates Antonio Davila, Professor and Head of the Arvind Sodhani, President, Intel Capital and Entrepreneurship Department and Executive Vice-President, Intel Corporation Entrepreneurship and Innovation Center at Maria Pinelli, Global Vice Chair
    [Show full text]
  • Fall 2019.Pdf
    VOLUME 45 ISSUE 4 FALL, 2019 Commissioner’s Corner: New Emergency Michelle Elder Contact Tool Hello Huntington Woods! Since being appointed in Janu- The Huntington Woods Public Safety ary 2019 as your newest City Commissioner, I’ve met staff Department is introducing a new service from all city departments, have regularly participated in the for residents to assist first responders. monthly city commission meetings, engaged with govern- Residents that fill out an Alert Form for ment officials from neighboring cities, met new residents, The Elder Family Dispatchers can have important infor- hosted three “Meet up with Michelle” and had the pleasure mation on file so dispatchers can relay it of connecting with many of you. I learned quickly many of you are concerned about in- quickly to first responders. The proj- frastructure, housing and community values. This process helped shape my top policy priorities, which I am excited to share the City Commission has made progress in: ect was developed by the City’s Senior Advisory Committee to identify seniors 1. Improve our city’s infrastructure and services. Power outages are frustrating and we and other vulnerable residents in an have been advocating for a more permanent solution. Meanwhile, our sewer system emergency and to ensure Public Safety improvements are in process with a three-phase plan: can respond appropriately to calls for • Pipelining, funded by a $17/quarter/household fee, began this summer to rein- service. By providing additional emer- force some of the sewer mains. gency information to 9-1-1, the City can • Pipe replacement, paid for by a bond which was approved by voters in November help residents faster in an emergency.
    [Show full text]
  • Taking Charge of Change
    TAKING WHY HUMAN- CHARGE CENTRIC MARKETING OF IS MORE CHANGE IMPORTANT THAN EVER WITH BCG DIGITAL VENTURES. LTV MAGAZINE – ISSUE 03 / 2020 – FREE COPY COPY 03 / 2020 – FREE – ISSUE MAGAZINE LTV CREDIT SESAME. HEADSPACE. LUDIA. MERCADOLIBRE. 1 MIRRATIV. OTTO. VIBER. BY ADJUST WELCOME Welcome to our third issue of LTV, The senseless death of George With so many fundamental changes MICHAEL MARSICANO Adjust’s magazine by marketers for Floyd, which sparked protests on the agenda, marketers are having marketers. It’s been almost a year and put the Black Lives Matter to constantly rethink what goes into since we launched the publication, movement on everybody’s radar in their strategies to remain on top. It’s COVER ART COVER and I want to thank you for all the 2020, has been cause for reflection a theme we explore throughout this support you’ve shown so far. on both the painful history of issue, starting with our cover story on violence against people of color p.16, on how brands such as Credit We published our last issue back and ways we can work to eliminate Sesame, MercadoLibre and BCG in February, and it’s hard to believe systemic prejudice and racism. Digital Ventures are taking charge of just how much has changed both It’s our belief that companies change and creating human-centric in the mobile ecosystem and the have a huge responsibility to fight marketing that really resonates. We wider world since then. inequality and increase diversity also have a host of brilliant interviews within their businesses. with Otto, Ludia, Headspace and It’s impossible to talk about 2020 Viber, who address how they are without first talking about COVID-19.
    [Show full text]
  • View September 2012 Report
    MOBILE SMART FUNDAMENTALS MMA MEMBERS EDITION SEPTEMBER 2012 messaging . advertising . apps . mcommerce www.mmaglobal.com NEW YORK • LONDON • SINGAPORE • SÃO PAULO MOBILE MARKETING ASSOCIATION SEPTEMBER 2012 REPORT MMA Hosts SM2 The Mobile Marketing Association hosted SM2, a two-day conference and expo during Advertising COMMITTED TO ARMING YOU WITH Week. Media and mobile visionaries took to the stage to voice the advantages, strengths and power of smarter mobile marketing. THE INSIGHTS AND OPPORTUNITIES A key insight coming out of Advertising Week is that mobile has officially emerged as a necessity for marketers to connect more meaningfully with consumers. From AdAge to Digiday, publications YOU NEED TO BUILD YOUR BUSINESS. reported that mobile was finally receiving the spotlight from industry authorities. After reviewing the Study Concludes that Optimal Spend on Mobile Should be conference highlights, I ask myself one question: why now? 7% of Budget Simply put, evidence. The MMA’s Mobile X% Solution as well as other reports authored by Mary Clearly, the implications of this study to our industry are monumental. Meeker, Pew Research, eMarketer, Google, and many others have provided irrefutable evidence on To learn more about the findings in MXS and read the entire report, the value of mobile to drive brand growth and optimize ROI. visit: www.mmaglobal.com/research/MXS. And while some marketers recognized mobile as a powerful channel, other companies unveiled programs and initiatives to transform their entire marketing strategy with mobile at the helm. Some SM2 highlights include: Michelle Peluso, Global Consumer Chief Marketing & Internet Officer, Citigroup, shared vital stats on why Citigroup has embraced mobile, “42% of smartphones owners use mobile banking,” said Peluso.
    [Show full text]