THE STATE of the EUROPEAN VR INDUSTRY INTRODUCTION a New World of VR Ventures

THE STATE OF THE EUROPEAN VR INDUSTRY INTRODUCTION A new world of VR ventures

Virtual reality (VR) has enjoyed an unexpected comeback since Facebook Our findings show that gaming remains an important market, proven by the bought Oculus in July 2014. Amid high expectations, high-end, tethered large number of companies receiving funding, from across the region. head mounted displays (HMDs) such as Oculus Rift and HTC Vive, and Content creators in Europe also started experimenting with the relatively mobile HMDs like Samsung Gear VR and Daydream, finally came to new format, learning to capture with a 360° camera and sharing immersive market in 2015 and 2016. stories.

The logical result was a sharp increase in the number and size of VR But, as with attempts at VR in the past, this resurgence has struggled to funding rounds in 2016. The sector has had a strong start in 2017, with captivate mainstream audiences and is seemingly relying on early adopters Improbable’s staggering €443.7 million funding round in Q2, the largest and gamers. Many startups specialising in infrastructure and tools have ever venture financing round for a private British company. emerged to tackle poor market penetration and have successfully secured funding. Other more mature VR companies in the fields of user input, 3D For this report, we partnered with virtual reality (VR) experts LucidWeb tools and reality capture have been acquired. to dive into funding and exits numbers on VR companies from Europe, Israel and Turkey. We focused on the period of Q1 2015 to Q2 2017. To keep the report focused, companies specialising only in augmented reality (AR) were not included, but considering the growing importance of AR and These numbers were gleaned from Tech.eu’s comprehensive database of mixed reality (MR) for VR companies, they are likely to be included in the funding rounds and exits across the European region. The database is next edition. compiled from our meticulous monitoring of hundreds of news sources in multiple languages. The report also features insights from the recent We’ve worked hard to make this report as comprehensive and valuable as European Virtual Reality Landscape, a joint project of The Venture possible. Please refer to the end of this report for methodology and Reality fund (The VR Fund) and LucidWeb. disclaimers.

Note: The analysis of The VR Fund does not take into consideration Israeli For any questions or comments regarding the report we invite you to email based companies, Tech.eu does include them. [email protected]. INTRODUCTION Expert perspectives

“Despite many recent advances, the industry simply needs more time to mature. The consumer demand will naturally start increasing as we remove unnecessary friction in using bulky devices, improve the underlying technologies, and create better cross-platform experiences. While VR gaming is still attractive to many investors, we see opportunities in technologies that enable more people to relate to the mixed reality, and to access more relevant information in the right context.”

Ekaterina Gianelli, Investment Director at Inventure http://inventure.fi/ @ekagianelli

“We can see that most past VR-related investments are in gaming, again confirmed by the additional nDreams round announced in July 2017. I believe that is going to change and we should see more and more technology investments in computer vision IP & tools, to feed into mixed reality platforms. We can also see that most big investors are non-European companies, and although the big technology firms’ venture funds such as Alcatel, Siemens etc are still lagging behind, there should be an increase of investments in European IP/tech from those in the coming year, especially due to AR’s current high- growth potential.”

Thomas Gere, Founder & CEO of Realities Centre http://realitiescentre.com @Tom_Gere INTRODUCTION Expert perspectives “We see that the industry continues to mature, especially on the content side. There was a slow-down between Q3 2016 and Q2 2017, which was a rationalisation from venture capitalists, demonstrating that VR forecasts made in 2013-2015 were not realistic, and that consumer pull was still lacking.”

“Now, we see a second wave of interest in VR from both B2C and B2B, as sales numbers of HMDs continue to grow. The ecosystems in Amsterdam and Berlin are becoming more active and dynamic, and our members and startups are starting to mature and establish revenue streams. Of course, it is still challenging, but Europe has an advantage over the US and Asia in high-end content creation and we need to push this advantage to grow our European VR/AR industry and market size, and materialise this opportunity. Hardware prices going down and more headsets arriving to market will definitely boost the already existing need for amazing content, so this and next year, I see this as an opportunity for Europe to put our continent on the map as the world's leading content provider for immersive media.”

Daan Kip Founder & CEO VRBASE vrbase.co @DaanKip INTRODUCTION Expert perspectives

“One of the major drivers of the VR industry in Europe is its booming gaming sector, with well- known publishers like CCP Games, nDreams and Resolution Games.”

“In this report, we also see the strength of the competition from European VR startups focusing on User Input, Tool Development and Hardware. France and Sweden are taking the lead in terms of the highest number of VR startups that successfully received funding since Q1 2015, closely followed by the United Kingdom.

As a Silicon Valley-based venture fund, we have been closely monitoring the exciting innovations and entrepreneurial activities across Europe. We already made one investment in a Finnish company, Vizor, and plan to do more in the next 12 months.”

Marco DeMiroz Co-Founder & General Partner The Venture Reality Fund thevrfund.com @marcodemiroz INDEX

Introduction & Expert perspectives 2-5 Top investors by amount 17 Index 6 Top rounds in key VR categories 18-22 Key takeaways 7-8 Notable VR funding rounds 23-28 VR funding analysis 9 VR exits analysis 29 Key funding trends 10 Key exit trends 30 Funding by quarter 11 Exits by quarter 31 Funding by stage 12 Exits by country 32

Funding rounds by size of investment 13 Exits by category 33

Funding rounds by country 14 Largest disclosed exits 34

Top 10 funding rounds 15 Notable VR exits 35-38 Funding by VR category 16 Methodology and disclaimers 39-40 KEY FUNDING TAKEAWAYS KEY EXIT TAKEAWAYS VR FUNDING ANALYSIS KEY FUNDING TRENDS

Improbable breaks records Most financing deals under €5 million

The UK saw its biggest ever venture financing round for a While VR remains a fairly young technology (although early headsets private company in May 2017 when Improbable, which offers date back to the mid-90s), most seed investments have been modest a platform for third parties to build virtual worlds, raised an since the beginning of 2015, with only a few stand-out deals. impressive €443.7 million. The company raised three of the largest VR rounds during the period we looked at in this The category ‘3D Tools’ sees largest investment volume, ‘Games’ and report: January 2015 to May 2017. The company has ‘User input’ the highest number of deals significantly raised the bar for European VR investments. We separated all the deals into the VR categories used by The VR Fund. Sweden leads the way Perhaps unsurprisingly, ‘3D Tools’ was the category that saw the biggest investment over the period thanks to Improbable, while With hot VR companies like Starbreeze and Crunchfish ‘Games’ and ‘User input’ had the highest number of deals at 16 and 15, securing significant funding rounds, Sweden had the most respectively. But an impressive number of non-gaming VR companies deals at 18. The Scandinavian country, which boasts several in Europe attracted large funding rounds, such as MindMaze with its other innovative VR companies that attracted funding, was innovative healthcare system. The company received a €90.9 million closely followed by France, which saw 15 deals since the investment in February 2016, and is currently valued at $1 billion (€892 beginning of 2015. million). ANALYSIS Funding by quarter (Q1 2015 - Q2 2017) • Due to the record-breaking Improbable funding round, Q2 2017 outstripped any quarter since we started tracking by VR category in 2015, with a whopping $502 million (€440 million).

• Q2 2015 saw the lowest number of deals, as well as the lowest investment volume in the period, at €4.4 million.

• Prior to the most recent quarter, Q1 2016 had the highest funding amount at €129.6 million, thanks to major rounds raised by MindMaze and Starbreeze.

• 2016 saw the highest number of deals with 48, 128.6% more than 2015, which only had 21. Period Deals Investment volume 2015 21 €122.2 million • The impressive Q2 2017 stands in stark contrast to 2016 48 €201.6 million the previous quarter, which only saw €9.5 million, the INSERT % CHANGE TABLE lowest amount raised since Q2 2015. Change +128.6% +65% 2016 H1 21 €115.9 million 2017 H1 19 €490.5 million Change -9.5% +214.6% ANALYSIS Funding by stage (Q1 2015 - Q2 2017) • Early VC and seed funding make up the majority of deals over the period.

• It’s worth noting that the huge Improbable funding round was a series B round, which makes it all the more impressive considering investments of that size are usually made at a much later stage.

• A steady stream of seed rounds between 2016 Q2 and 2016 Q4 positioned 2016 as a standout year for European VR funding. ANALYSIS Funding rounds by size of investment (Q1 2015 - Q2 2017)

• The majority of VR funding deals have fallen firmly in the under €5 million category, with several low-value deals being offered to seed- stage companies.

• Only one deal since Q1 2015 came in at over €100 million, Improbable’s €443.7 million financing round.

• MindMaze’s €90.9 million round was close to making it into the >100 million category, but instead joins Starbreeze, CCP Games, Ultrahaptics and a previous Improbable investment in the €20 million - €100 million category. ANALYSIS Funding by country (Q1 2015 - Q2 2017) • Sweden leads the way for number of deals, at 18. The country is home to Starbreeze and Crunchfish, each of which secured a number of funding rounds since the beginning of 2015.

• The Scandinavian country was closely followed by France, which had 15 deals, including Habiteo, a company developing VR for the real estate industry.

• Despite the UK being the base of the company with the highest amount of funding overall (Improbable), the country had only the third highest number of deals at a still respectable 14. ANALYSIS Top 10 funding rounds (Q1 2015 - Q2 2017) • Improbable had far and away the largest funding round to date with a staggering €443.7 million. The company has also seen several other large investments since the beginning of 2015, including one of €27 million and another of €20 million.

• Although it stands at €352.8 million less than Improbable’s record-breaking funding round, MindMaze raised a respectable €90.9 million for its innovative VR healthcare system.

• Video-game industry mainstay Starbreeze attracted a healthy €36 million round in January 2016, and another of €8 million the following June. The company plans to develop its VR offering after the success of ‘John Wick Chronicles’ earlier this year. ANALYSIS Funding by VR category (Q1 2015 - Q2 2017)

• Unsurprisingly, ‘3D Tools’ leads the way as the VR 600000000 20 category with the most money raised thanks to Improbable’s giant deal in May 2017.

16 • If not for Improbable, ‘Hardware’ would be the 450000000 front-running category by size of investment due to MindMaze’s €90.9 million investment. But as it stands, it comes a distant second. 12

300000000

• ‘Games’ and ‘User input’ received the highest Billions number of deals, with companies like Starbreeze, CCP 8 Games and Ultrahaptics all attracting large amounts.

150000000 • While being a much-talked-about use for VR, 4 tourism saw only two deals since the beginning of 2015, with only €2 million going to Argentoratum, a tourism app for the city of Strasbourg. 0 0 ANALYSIS Top investors (Q1 2015 - Q2 2017) • Investing €443.7 million into the UK’s Improbable safely positions Japanese telecoms giant SoftBank as the number one investor in European VR since 2015. It was one of the biggest investments ever made into an early- stage European tech firm.

• Bankrolling Swiss healthcare innovators MindMaze twice, for a total investment of €98.6 million, makes Hinduja Group another important investor on the European VR scene.

• SmileGate’s €36.4 million investment in Starbreeze makes it the investor with the third- largest investment in the period. ANALYSIS Top rounds in key VR categories: 3D Tools

Startup Country Round type Amount Quarter Date Investors Andreessen Horowitz, Chris Dixon; Improbable United Kingdom SERIES A €19,643,413 2015 Q1 1-Mar-2015 Localglobe Spotscale Sweden SEED €909,090 2015 Q3 1-Jul-2015 Almi Invest, MOOR

Improbable United Kingdom SERIES A €26,677,338 2015 Q3 15-Jul-2015 Horizons Ventures Initial Capital, Inventure, Lifeline Umbra Finland SERIES A €3,090,909 2015 Q4 1-Oct-2015 Ventures Oy Artomatix Cloud Ireland EARLY VC €1,500,000 2016 Q3 1-Aug-2016

Aspic Technologies France SEED €600,000 2017 Q1 1-Jan-2017 A-Volute

Artomatix Cloud Ireland EARLY VC €2,100,000 2017 Q1 1-Mar-2017 Enterprise Ireland, Horizon 2020 The Venture Reality Fund, Inventure, Vizor Finland SEED €2,093,000 2017 Q2 19-Apr-2017 Boost VC, Lifeline Ventures Oy, Sisu Game Ventures Improbable United Kingdom SERIES B €443,728,638 2017 Q2 1-May-2017 SoftBank

Mindesk Italy SEED €670,000 2017 Q2 2-May-2017 Venture A11, Invitalia Ventures ANALYSIS Top rounds in key VR categories: Games

Startup Country Round type Amount Quarter Date Investors nDreams United Kingdom SEED €300,000 2014 Q2 1-Apr-2014 nDreams United Kingdom EARLY VC €2,545,454 2015 Q1 1-Jan-2015 Mercia Fund Management Solfar Studios Iceland SEED €460,000 2015 Q2 1-Apr-2015 Creandum, Initial Capital, Partech Resolution Games Sweden SERIES A €5,454,545 2015 Q3 1-Aug-2015 Ventures, GV (Google Ventures) CCP Games Iceland LATE VC €27,272,727 2015 Q4 1-Nov-2015 New Enterprise Associates, Novator Solfar Studios Iceland SEED €2,000,000 2015 Q4 1-Nov-2015 Inventure, Shanda Games, Reaktor nDreams United Kingdom EARLY VC €2,727,272 2015 Q4 1-Dec-2015 Starbreeze Sweden GROWTH EQUITY €36,363,636 2016 Q1 1-Jan-2016 SmileGate Artech (Magic France SEED €499,999 2016 Q2 1-Apr-2016 Finaben Experience) Starbreeze Sweden LATE VC €7,996,090 2016 Q2 16-Jun-2016 Acer Starbreeze Sweden LATE VC €4,800,000 2016 Q3 1-Aug-2016 Svrvive Sweden SEED €1,650,165 2016 Q3 1-Aug-2016 Mats Carlsson, Back in Black Capital Luden Russia EARLY VC €900,000 2016 Q4 1-Oct-2016 Sistema nDreams United Kingdom EARLY VC €2,200,000 2016 Q4 1-Nov-2016 Mercia Fund Management

Logtown Sweden EARLY VC €600,000 2017 Q1 1-Feb-2017 Alexander Björkman, Thomas Björkman ANALYSIS Top rounds in key VR categories: User input

Startup Country Round type Amount Quarter Date Investors

Manus Machina Netherlands SEED €600,000 2015 Q1 1-Feb-2015 Woodford Investment Management, IP Ultrahaptics United Kingdom SERIES A €12,120,000 2015 Q4 1-Nov-2015 Group PLC Actronika France SEED €1,200,000 2016 Q2 1-Apr-2016 Seventure Partners

Manomotion Sweden SEED €1,500,000 2016 Q3 1-Aug-2016 KTH Holding

Univrses Sweden SEED €636,364 2016 Q3 1-Aug-2016 Paca Investissement, ACG 3DRudder France EARLY VC €1,400,000 2016 Q3 1-Sep-2016 Management, Credit Agricole Crunchfish Sweden EARLY VC €6,800,000 2016 Q4 1-Oct-2016

Univrses Sweden EARLY VC €800,000 2016 Q4 1-Oct-2016

Remoria VR Italy SEED €700,000 2017 Q1 1-Jan-2017 LVenture Group, Invitalia Ventures ANALYSIS Top rounds in key VR categories: Reality capture

Startup Country Round type Amount Quarter Date Investors VideoStitch France SEED €363,636 2015 Q1 1-Jan-2015

VideoStitch France SEED €2,090,909 2015 Q3 1-Jul-2015 Alven Capital, Kima Ventures Oleg Tscheltzoff, Partech Ventures, 360 GIROPTIC France EARLY VC €4,090,909 2015 Q4 1-Dec-2015 Capital Partners, SOSventures Sphericam Czech Republic EARLY VC €4,500,000 2016 Q2 1-Apr-2016 Kingnet

Zeroparallax Sweden SEED €200,000 2016 Q3 1-Sep-2016 Almi Invest

Giraffe360 Latvia SEED €500,000 2016 Q4 1-Nov-2016 Wolfprint Estonia SEED €454,545 2016 Q4 1-Dec-2016 Seedinvest ANALYSIS Top rounds in key VR categories: Hardware

Startup Country Round type Amount Quarter Date Investors Finance Birmingham; Ascension Give Vision United Kingdom SEED €284,092 2015 Q1 15-Feb-2015 Ventures Limited; Millhouse Capital MindMaze Switzerland SEED €7,700,000 2015 Q1 1-Mar-2015 Hinduja Group MindMaze Switzerland LATE VC €90,909,090 2016 Q1 1-Feb-2016 Hinduja Group Give Vision United Kingdom SEED €68,182 2016 Q1 16-Feb-2016 Wayra Internet Initiatives Develompent Antilatency Russia SEED €1,911,000 2017 Q2 25-May-2017 Fund - IIDF - FRII

Top rounds in key VR categories: Enterprise

Startup Country Round type Amount Quarter Date Investors Habiteo France SERIES A €3,000,000 2015 Q2 1-Jun-2015 Serena Capital InVRsion Italy SEED €600,000 2016 Q2 1-Apr-2016 Habiteo France SERIES B €3,000,000 2016 Q2 1-Jun-2016 Serena Capital Meero France EARLY VC €4,100,000 2017 Q2 17-Jun-2017 Bernard Arnault, Xavier Niel NOTABLE VR FUNDING ROUNDS Improbable A UK VR company focussing on large-scale simulations in the cloud, enabling virtual worlds of “unprecedented scale and complexity.”

The company offers a platform for third parties to build virtual worlds with its flagship product SpatialOS.

Improbable was founded in 2012 by Herman Narula, Rob Whitehead, and Peter Lipka, and has grown to almost 200 Name of company Improbable employees in London and San Francisco. Location London, UK Their mission is to “power previously unmakeable games and VR type 3D tools answer previously unanswerable questions that lead to a better functioning world.” Founded in 2012 Employees Around 200 Improbable raised €443.7 million from SoftBank in May 2017, Total funding €490 million the largest-ever venture financing round for a private British company, making its total raised €490 million. Although a Main investors SoftBank, Andreessen Horowitz, valuation was not officially disclosed, the funding is thought to Horizons Ventures have made the company worth over $1 billion (€892 million). Last funding round €443.7 million (May 2017) NOTABLE VR FUNDING ROUNDS Mindmaze Healthcare and human emotion take a leap into the future at MindMaze, a Swiss VR company specialising in neuro-imaging and signalling.

The company’s MindMotion product is designed for patients who have lost physical movement from a stroke or trauma and is currently being used in 35 facilities throughout Europe. It recently received approval in the United States by the Food and Drug Administration. Name of company MindMaze Also in development at MindMaze is MASK, a headset that Location Lausanne, Switzerland reads neuro signals to depict player emotions in virtual reality. VR type Hardware

Founded by Tej Tadi, MindMaze has locations in Switzerland, Founded in 2011 France, and San Francisco. The company received a €90.9 Employees 51-100 million early round investment in February 2016 and is valued Total funding €98.6 million at $1 billion (€892 million). Main investors Hinduja Group Last funding round €90.9 million (Feb 2016) NOTABLE VR FUNDING ROUNDS Starbreeze Starbreeze is one of the oldest video-game development studios in Europe.

Founded in 1998 by Magnus Högdahl, the company merged with O3 Games in 2000 and in 2012 started a partnership with OVERKILL Software. Earlier this year, it launched VR title ‘John Wick Chronicles’ based on the popular movie franchise.

In May 2014, Starbreeze went public and in June 2016 Name of company Starbreeze received €8 million in venture funding. The lead investor was Acer. Location Stockholm, Sweden VR type Games In the future, Starbreeze wants to continue developing in-depth immersive VR experiences by integrating new Founded in 1998 technologies. Employees 101-250 Total funding €49 million Main investors SmileGate, Acer Last funding round €8 million (Jun 2016) NOTABLE VR FUNDING ROUNDS CCP Games CCP Games was founded in 1997 by Reynir Hardarson, Sigurdur Arnljotsson and Thorolfur Beck in Reykjavik, Iceland. The company released their first virtual reality game Eve in May 2003, a science fiction game that allowed users to create and maintain their own solar system. The company has since released three more virtual games: Gunjack, Gunjack 2 and Eve: Valkyrie.

CCP Games announced in November 2015, that the virtual Name of company CCP Games reality gaming company had raised €27.3 million for the continuation and support of their products. Location Reykjavik, Iceland VR type Games CCP Games’ future will see the launch of Sparc, a virtual reality sports game. The company is headquartered in Reykjavik, and Founded in 1997 has offices in London and Newcastle, UK; Shanghai, China; and Employees 251-500 Atlanta, US. Total funding €60.2 million Main investors New Enterprise Associates, Novator Last funding round €27.3 million (Nov 2015) NOTABLE VR FUNDING ROUNDS Ultrahaptics Founded in 2013 at the University of Bristol, UK, Ultrahaptics uses ultrasound technology to give users the sensation of touch without physically touching anything.

The company, founded by Sriram Subramanian and Tom Carter, is implementing this innovative tech into cars to allow drivers to operate controls without having to take their eyes off the road. Name of company Ultrahaptics Ultrahaptics’ most recent funding round in May 2017 saw €20.3 million come in, making for a total of €32.8 million from Location Bristol, UK four investors: Cornes Group, Dolby Family Ventures, IP Group VR type User input Pic and Woodford Investment Management. Founded in 2013 The company has been awarded the Royal Academy of Colin Employees 11-50 Campbell Mitchell Award, NMI Innovation Award 2016 and the Total funding €32.8 million WCIT Judges Award for Innovation. Main investors Woodford Investment Management, IP Group PLC Last funding round €20.3 million (May 2017) NOTABLE VR FUNDING ROUNDS nDreams This VR video game developer and publisher based in Farnborough, UK has become one of the largest in Britain.

Founded by former Eidos Creative Director, Patrick O’Luanaigh, nDreams has published several VR games including Danger Goat, Perfect and Bloody Zombies, the latter recently being announced at E3 2017. Their titles are compatible with Oculus Rift, HTC Vive, PlayStation VR, Google Daydream, Samsung Gear VR and Google Cardboard. Name of company nDreams The company’s most recent funding round was €2.2 million in Location Hampshire, UK November 2016 from Mercia Technologies. In total equity VR type Games funding, nDreams has received €7.5 million, with Mercia Technologies as the main contributor. Founded in 2006 Employees 11-50 Total funding €7.5 million Main investors Mercia Technologies Last funding round €2.2 million (Nov 2016) VR EXIT ANALYSIS KEY EXIT TRENDS

Very few disclosed exit values since 2015 US unsurprisingly tops acquirers by country

Over the past two and a half years, we have on record 18 VR With big investors such as Facebook’s Oculus, Apple and Google companies that have been acquired, and two IPOs. However, competing to acquire the European VR companies with the most only five of them disclosed the value of the transaction, innovative technologies, it’s no surprise the United States acquired leaving us with little data for this time period. There have been more than any other country - with 12 of the 20 on record. five VR company exits in the first half of 2017, compared to three in the first half of 2016, and five in the first half of 2015. Tobii’s eye-popping IPO

UK leads in the number of VR startups acquired Tobii, which launched an impressive range of VR games at the recent E3 2017 video-game conference in Los Angeles, went public to the It’s not surprising that Europe’s biggest hub for startup activity tune of €221.8 million in April 2015. This was a testament to the was home to the highest number VR exits since 2015. company’s impressing eye-tracking technology, which is set to Acquirers of UK VR companies included the likes of Facebook’s revolutionise VR games in the coming years. Oculus (who acquired Surreal Vision and Two Big Ears) and Snap Inc., Snapchat’s holding company (who acquired Obvious Engineering). ANALYSIS Exits by quarter (Q1 2015 - Q2 2017) • It’s been a fairly quiet period for disclosed exit values, with only two disclosed exits since Q3 2015.

• There was a flurry of European VR exits in Q2 2015. Four exits took place, including the €221.8 million Tobii IPO.

• 2015 saw the exits of seven VR companies, while 2016 had one more at eight.

• 2016 was a year of significantly lower value exits overall, but this can be attributed to the low number of declared values.

Period Deals Investment volume 2015 7 €276.4 million 2016 8 €24.1 million Change +14.3% -91.2% 2016 H1 3 N/A 2017 H1 5 €2.06 million Change +66.6% N/A 1 ANALYSIS Exits by country (Q1 2015 - Q2 2017)

• The United Kingdom was home to the largest number of exits at five, while Sweden was close behind with four.

• Belgium, Germany, Israel, and Switzerland each saw two exits since the beginning of 2015.

• As can be expected, the United States acquired the highest number of VR companies at 12. Top corporations such as Oculus (owned by Facebook), Apple and Google make up the roster of American tech giants vying to own innovative European VR companies.

• Sweden acquired two companies, while the United Kingdom, France and Australia each only acquired one.

1 ANALYSIS Exits by VR category (Q1 2015 - Q2 2017)

• With few disclosed exits, it stands to reason that 250M 8 user input is the VR category with the highest exit values due to Tobii’s €221.8 million IPO. 200M 6

• User input and 3D Tools have the highest number of deals

150M f exits at eight. 4

100M Numbero

• Nozon and Pebbles Interfaces’ acquisitions were the Total value (EUR) only 2 companies in the category with a declared exit 2 M value, 3D tools saw a further six acquisitions since 50 2015. 0M 0 • Interestingly, no hardware or games companies exited, in contrast to the category’s impressive funding.

1 ANALYSIS Largest disclosed exits (Q1 2015 - Q2 2017) • Very few VR companies that exited since 2015 disclosed the size of the transaction.

• While it wasn’t one of the more recent exits, Tobii’s IPO in April 2015 was notable in that it valued the company at €221.8 million. This makes it far and away the highest value VR exit in this report.

• While dwarfed by Tobii’s valuation, Pebbles Interfaces’ €54 million acquisition was notable in that it was one of six companies bought by Facebook- owned Oculus. Its technology, which allows people to see their hands in a virtual world, will be integral to future designs of their hardware.

1 NOTABLE VR EXIT ROUNDS Tobii Founded in 2001, Tobii’s vision is an ideal world where technology works with natural human behaviour.

Tobii Tech (one of the company’s four subsidiaries) develops eye-tracking technology that led the Sweden-based company to win the European Inventor Award in 2015. The technology can detect the attention, focus, and drowsiness of one’s eyes.

In April 2015, Tobii went public and is worth €221.8 million, Name of company Tobii Technology making it the highest value exit since 2015. VR type User input Founded in 2001 Employees Around 400 VC-backed? Yes Value €221.8 million Investors Northzone, Amadeus Capital Partners, Intel Capital NOTABLE VR EXIT ROUNDS Pebbles Interfaces Pebbles Interfaces was founded in 2010 by Nadav Grossinger, Israel Grossinger and Emil Alon to detect body movements and convert them into virtual reality.

The main technology the Israeli company has developed allows users to see their own hands and fingers in their field of virtual reality.

Pebbles Interfaces was acquired by Oculus (owned by Name of company Pebbles Interfaces Facebook) for €54 million in July 2015. This was Oculus’ sixth acquisition. VR type 3D tools Founded in 2010 Employees 251 - 500 VC-backed? Yes Acquired by Oculus Price €54 million Investors Oculus, Bosch, SanDisk Ventures NOTABLE VR EXIT ROUNDS Crunchfish Crunchfish is a Swedish VR and AR company founded in 2010 by Paul Cronholm. Its software uses touch-less technology and gesture controls to fully immerse the user.

In May 2017, Crunchfish signed a contract with Beijing’s LLVision to create smart glasses for the professional world. The glasses have been used in hospitals to broadcast operations, as well as by companies performing maintenance. Name of company Crunchfish Crunchfish has also partnered with Epson to produce smart glasses. VR type User input Founded in 2010 Crunchfish was publicly listed on the growth market Nasdaq First North in November 2016, valuing the company at €23.2 Employees 11-50 million. VC backed? Yes Value €23.2 million Investors Joachim Samuelsson, Mohammed Al-Amoudi NOTABLE VR EXIT ROUNDS Nozon Nozon was founded in 1998, specialising in post-production and visual effects as well as computer hardware and content packages. Its flagship technology, PresenZ, offers the “image quality of a sci-fi blockbuster with the immersive feeling of a real-time game engine.”

Nozon has won multiple awards for its film work.

In October 2016, this Belgian VR company was acquired by Name of company Nozom Starbreeze for €7.1 million. The companies agreed on a capped ten-year earn-out for Nozon founders based on PresenZ future VR type 3D Tools financial performance after Starbreeze recoups €2 million of Founded in 1998 its investment. Employees 11 - 50 During the earn-out period, Starbreeze will pay a percentage VC-backed? No of its revenues benefitting from the PresenZ technology. Acquired by Starbreeze Price €7.1 million Investors Starbreeze METHODOLOGY & DISCLAIMERS METHODOLOGY & DISCLAIMERS

From November 2013 onwards, we’ve continuously monitored We have included non-European Union member states such as approximately 120+ sources of news and information across Russia, Turkey, Israel, Norway, Switzerland and others in this multiple European regions and languages. analysis, as we consider them an integral part of the European technology industry, in line with Tech.eu’s overall editorial policy. All transactions have been analysed by the Tech.eu team for the purpose of this report, along with additional transactions that Considering the vastness, fragmentation and breadth of different were not reported by any of the aforementioned sources but languages that defines Europe, it is possible that certain flagged by people from our collective networks. In many cases, transactions were not included in our analysis. We believe, the deal size was not disclosed, but we’ve included estimates for however, that this is as comprehensive a report as possible for VR any transaction reported by a publication that we consider funding and exits since 2015. The date of each transaction is reliable and trustworthy. recorded on the date it was initially reported by an authoritative source, not necessarily the inking of the agreements or listings in For IPOs, we have opted to look at the valuation given by the question. Hence, transactions closed at the end of 2016 may be market at the moment shares were publicly traded for the first included in the data for 2017. time. In addition, when a deal size was disclosed in a currency different from the euro, we’ve converted the amounts around Finally, we would like to add that our system of monitoring the date the transaction was first announced or reported – we sources, and structurally saving data for reports, has greatly cannot guarantee that the converted amount exactly mirrors the improved since we started in November 2013. It is possible that price at the time of closing of an agreement (mainly because that the data set has allowed for better analysis as the past year has date is rarely shared). progressed, and we continually work to improve our data collection and reporting. METHODOLOGY & DISCLAIMERS

We welcome any feedback you may have on our report and methodology. If you’d like to report inaccuracies, flag possible omissions or additions to the data set, or have any other comment to share or questions to ask, please reach out to [email protected] and we will respond as soon as possible.

Thank you for reading our analysis.