Venture Capital Report
Europe | 1Q | 2016
VENTURE CAPITAL REPORT VENTURE CAPITAL REPORT
The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.
Highlights for 1Q 2016 include: • European venture capital fundraising amount improved significantly from prior quarter and reached a new high; • Venture capital investment into European companies declined from 4Q 2015; • The number of mergers and acquisitions (M&As) experienced an increase from the last quarter, while the total M&A raised amount decreased significantly; • The number of initial public offerings (IPOs) and total amount raised dropped dramatically form 4Q 2015.
VENTURE CAPITAL REPORT 2 EUROPEAN VENTURE CAPITAL FUNDRAISING ROCKETS IN 1Q 2016 FUNDRAISING
European VC Fundraising 25 European venture capital funds reached a new high of Based on multiple closings (2013–2016) €2.85 billion during 1Q 2016. Compared with 4Q 2015, total 45 € 3.00 capital raised more than doubled, and the number of fund 40 closings climbed 19% . € 2.50 35 • Compared with the same period last year, euros raised 30 € 2.00 improved by 169%, and the number of fund closing 25 increased 14%. € 1.50 20 • Index Ventures VIII LP was the largest fund of this quarter, which raised €511.53 million, accounting for 15 € 1.00 18% of the total amount raised in 1Q 2016. 10 € 0.50 5
0 € 0.00 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Amount Raised (€B) € 0.76 € 1.03 € 0.65 € 1.89 € 0.65 € 1.26 € 0.81 € 1.26 € 1.06 € 1.96 € 0.86 € 1.36 € 2.85 Number of Funds 15 17 12 41 23 24 20 27 22 26 13 21 25
VENTURE CAPITAL REPORT 3 LARGEST EUROPEAN VC FUNDS RAISED IN 1Q 2016 FUNDRAISING
Offering Firm Name Fund Name Amount (€M) Location Fund Type Fund Category Closing Type Status
Early-stage venture Index Ventures Index Ventures VIII LP € 511.53 Geneva, Switzerland Closed Venture Capital Final capital
Rocket Internet Capital Partners Berlin, Late-stage venture Rocket Internet AG € 390.63 Open Venture Capital First Fund Germany capital
Geneva, Switzerland Multi-stage venture Endeavour Vision SA Endeavour Medtech Growth LP € 250.00 Closed Venture Capital capital Final
London, Early-stage venture Medicxi Ventures Medicxi Ventures I € 210.00 Closed Venture Capital United Kingdom capital Final
Stockholm, Early-stage venture Creandum Creandum IV € 180.00 Closed Venture Capital Final Sweden capital
VENTURE CAPITAL REPORT 4 INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES DECLINED IN 1Q 2016 FINANCING
European companies raised €2.4 billion through 411 deals during 1Q Equity Financings into Europe-based, 2016, a 29% decline in the amount raised from the prior quarter as VC-backed Companies (2013–2016) well as a 12% drop in the number of deals. € 4.50 500
• Compared with the same period last year, both investment € 4.00 450 amount and the number of deals decreased, 17% and 2% € 3.50 400 respectively. 350 € 3.00 • Healthcare was the strongest sector of the quarter in terms of 300 € 2.50 attracting investment. 250 € 2.00 200 € 1.50 150
€ 1.00 100
€ 0.50 50
€ 0.00 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Amount Raised (€B) € 1.23 € 1.54 € 1.78 € 1.97 € 1.64 € 2.43 € 2.33 € 2.03 € 2.91 € 3.84 € 3.35 € 3.40 € 2.42 Number of Deals 394 435 413 499 413 452 366 416 419 416 396 467 411
VENTURE CAPITAL REPORT 5 EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2013–2016) – NUMBER OF DEALS FINANCING
280
240
200
160
120
80
40
0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Seed 42 41 60 76 40 32 28 39 28 38 33 32 34 First 205 217 212 223 220 227 183 201 212 183 191 250 193 Second 66 85 66 85 63 92 66 76 78 76 79 89 94 Later 54 65 51 81 60 77 62 59 79 99 76 69 79 Restart 0 0 0 0 0 0 0 0 1 0 0 1 0
VENTURE CAPITAL REPORT 6 EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2013–2016) – AMOUNT RAISED (€M) FINANCING
€ 2,500
€ 2,000
€ 1,500
€ 1,000
€ 500
€ 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Seed € 21 € 18 € 24 € 33 € 19 € 22 € 15 € 29 € 31 € 24 € 36 € 25 € 25 First € 401 € 433 € 535 € 489 € 514 € 625 € 469 € 446 € 614 € 554 € 821 € 773 € 649 Second € 255 € 464 € 708 € 402 € 300 € 477 € 220 € 775 € 443 € 946 € 574 € 607 € 772 Later € 541 € 600 € 462 € 989 € 680 € 1,122 € 901 € 734 € 1,752 € 2,179 € 1,873 € 1,534 € 962 Restart € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 1 € 0 € 0 € 1 € 0
VENTURE CAPITAL REPORT 7
EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (2013–2016) – MEDIAN EQUITY DEAL SIZE (€M) FINANCING
€ 3.00
€ 2.50
€ 2.00
€ 1.50
€ 1.00
€ 0.50
€ 0.00 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Median Equity Deal Size (€M) € 1.50 € 1.54 € 1.03 € 1.40 € 1.50 € 2.00 € 1.74 € 2.10 € 2.00 € 2.68 € 2.31 € 2.03 € 2.56
VENTURE CAPITAL REPORT 8 EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (1Q 2016) FINANCING 1Q'16 Industry Breakdown Business and Financial Services By Number 25% Consumer Goods 28% Healthcare received the largest allocation of investment during 1Q 2016, raising of Deals €754.05 million through 62 deals. The sector attracted a 31% of the total amount Consumer Services Energy & Utilities invested and a 15% of all deals completed for the quarter. 1% 4% Business and Financial Services ranked the second highest proportion of Healthcare 15% investment. The sector garnered €712.1 million across 116 deals, an increase of Industrial Goods & Materials 1% 24% 5% in deal number and a less than 1% drop in amount invested from 4Q 2015. Information Technology Consumer Services represented the third, receiving €476.92 million across 97 deals. The sector’s investment figure represents 20% of the total equity financing 1Q’16 Industry Breakdown Business and Financial Services into European VC-backed companies for 1Q 2016. 17% By Amount 29% Consumer Goods 1% Raised Consumer Services
Energy & Utilities
1% Healthcare
31% Industrial Goods & Materials 20% 1% Information Technology
VENTURE CAPITAL REPORT 9 TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (1Q 2016) FINANCING
Industry Industry Industry Brief Close Round Raised Round Investors Co. Name Location Code Segment Group Description Date Type (€M) (* denotes lead) Developer of drugs designed to Imperial Innovations Group PLC*, Pfizer Venture Mission Cambridge, Biotechnology improve the management of life- Investments, Roche Venture Fund, Sofinnova Therapeutics United Biopharmaceuticals Healthcare 2/2/2016 3rd € 84.35 Therapeutics threatening diseases, particularly Partners, SR One Ltd., Woodford Investment Ltd. Kingdom cancer. Management LLP*
London, Biotechnology Provider of biopharmaceutical Second Perceptive Bioscience Investments Ltd., Woodford Autolus Ltd. United Biopharmaceuticals Healthcare 3/3/2016 € 56.23 Therapeutics solutions. Round Investment Management LLP Kingdom
London, Provider of an accommodation Student.com Hotels / Expa Capital, Horizons Ventures Ltd., Individual United Travel and Leisure Consumer Services marketplace for students 10/2/2016 First Round € 55.80 (UK) Ltd. Gambling Investors, Vy Capital Management Co. Ltd.* Kingdom studying abroad.
London, Provider of a mobile image Blippar.com Recreational / Information Second United Software recognition and augmented 2/3/2016 € 50.22 Khazanah Nasional Berhad* Ltd. Home Software Technology Round Kingdom reality platform.
5AM Venture Management LLC*, HealthCap Solna, Biotechnology Developer of drugs for the Aprea AB Biopharmaceuticals Healthcare 9/3/2016 Later € 46 Venture Capital*, Sectoral Asset Management Inc., Stockholm Therapeutics treatment of cancer. Versant Venture Management LLC*
VENTURE CAPITAL REPORT 10 MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (1Q 2016) BY DEALS COMPLETED FINANCING
16 16 15
14
12 12
10 9
8 7 7 7 7
6
4
2
0 Bpifrance High-Tech German Startups Jenson Funding Bayern Kapital Idinvest Partners HV Holtzbrinck Index Ventures Investment Gruenderfonds Group Berlin GmbH Partners LLP GmbH Ventures Adviser Management GmbH & Co. KGaA GmbH
VENTURE CAPITAL REPORT 11 EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES BY COUNTRY (1Q 2016) FINANCING Number of Deals in 1Q 2016 United Kingdom by Country 29% 27% (Top 4) France
The United Kingdom remained as the most favoured destination for equity Germany financing during 1Q 2016, receiving €974 million across 111 deals. The country 5% 23% took 40% of all equity financing from 1Q 2016. 21% Netherlands 18% Germany ranked second. It reached a total €463 million through 75 deals, Rest of Europe representing a 19% share of European financing. A 33% decrease in capital invested and 13% drop of the number of deals from last quarter. Amount Raised France occupied third position raising €354 million, 15% of the total for the in 1Q 2016 United Kingdom 22% by Country quarter. Sweden placed fourth based on raising €99 million during 1Q 2016. Germany (Top 4) 40% 4% France
19% 15% Sweden
19% Rest of Europe
VENTURE CAPITAL REPORT 12 EUROPE 1Q 2016 VENTURE EXIT ACTIVITY LIQUIDITY
Exit Opportunities for European VC–backed Companies (2013–2016)
1Q'16 50 venture-backed M&As took place in Europe 4Q'15 during 1Q 2016, a 28% increase from 4Q 2015. The 3Q'15 number is 6% lower than that of 1Q 2015. 2Q'15 1Q'15 However, total amount raised through European VC- 4Q'14 backed M&As in 1Q 2016 is only €3.7 billion. A 45% drop 3Q'14 from the prior quarter and 16% lower than the same 2Q'14 1Q'14 period last year. 4Q'13 5 venture-backed IPOs took place during 1Q 2016, a 3Q'13 64% and 58% decrease from 4Q 2015 and 1Q 2015 2Q'13 1Q'13 respectively. 0 10 20 30 40 50 60 70 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 IPOs 1 5 3 9 9 21 16 10 12 15 8 14 5 M&As 37 40 43 44 56 42 50 49 53 44 49 39 50
VENTURE CAPITAL REPORT 13 TOP 3 M&As IN EUROPE (1Q 2016) LIQUIDITY
Brief Industry Close Round Amount Paid Company Name Location Industry Segment Industry Group Acquirer Description Code Date Type (€M)
Provider of collaboration Uxbridge, Communications Information Acano Ltd. infrastructure and conferencing Software 29/1/2016 Acquisition € 651.04 Cisco Systems United Kingdom Software Technology software.
London, Provider of predictive text entry Communications Information TouchType Ltd. Software 2/2/2016 Acquisition € 232.51 Microsoft Corp. United Kingdom software. Software Technology
CityFibre Provider of dark fibre networks in London, Internet Service Communications Information Infrastructure towns and cities outside London 14/1/2016 Acquisition € 126.52 KCOM Group Plc United Kingdom Providers and Networking Technology Holdings Plc on a shared infrastructure basis.
VENTURE CAPITAL REPORT 14 EUROPEAN VC-BACKED IPOs (2013-2016) LIQUIDITY
Both the number of deals and amount raised via IPO during 1Q 2016 dropped significantly from the prior quarter. € 2,500.00 25 • 5 venture-backed companies went public during 1Q 2016, 64% decrease from the last quarter. € 2,000.00 20 • IPOs raised €110 million during 1Q 2016, a decline of 82% from the €608 million raised in 4Q 2015. € 1,500.00 15 The largest European VC-backed IPO of 1Q 2016 was Shield Therapeutics Ltd. The company raised €45.69 € 1,000.00 10 million for its offering on AIM. € 500.00 5
€ 0.00 0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Raised (€M) through IPO € 19.22 € 89.24 € 25.51 € 366.10 € 691.24 € 529.53 € 447.47 € 2,249.97 € 417.40 € 533.10 € 699.69 € 608.00 € 110.05 Number of IPOs 1 5 3 9 9 21 16 10 12 15 8 14 5
VENTURE CAPITAL REPORT 15 TOP 3 IPOs IN EUROPE (1Q 2016) LIQUIDITY
Brief Industry Close Raised through Exchange/ Company Name Location Industry Segment Industry Group Description Code Date IPO (€M) Symbol
Shield Developer of late-state, secondary Biotechnology United Kingdom Biopharmaceuticals Healthcare 12/2/2016 € 45.69 AIM: STX Therapeutics Ltd. care-focused pharmaceuticals. Therapeutics
Provider of drugs, bioactive natural Biotechnology compounds, and proprietary Research & enzymes for businesses in the 9/2/2016 FWB: BNN Information Germany Pharmaceuticals Biopharmaceuticals Healthcare € 31.50 chemical, pharmaceutical, food, and Network AG cosmetics industries.
Blue Prism Group Provider of Robotic Process Business Applications Information United Kingdom Software 18/3/2016 € 15.59 LSE: PRSM PLC Automation (RPA) software. Software Technology
VENTURE CAPITAL REPORT 16 ABOUT US
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service provider find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones’ proprietary research and are contained in VentureSource. This data was collected through survey of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.
VENTURE CAPITAL REPORT 17 ABOUT DOW JONES
Dow Jones is a global provider of news and business information, delivering content to consumers and organizations around the world across multiple formats, including print, digital, mobile and live events. Dow Jones has produced unrivaled quality content for more than 130 years and today has one of the world’s largest newsgathering operations globally. It produces leading publications and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulation; Factiva, Barron’s, MarketWatch, Financial News, DJX, Dow Jones Risk & Compliance, Dow Jones Newswires and Dow Jones VentureSource. Dow Jones is a division of News Corp [NASDAQ: NWS, NWSA; ASX: NWS, NWSLV].
MEDIA CONTACT: Sophie Bent +44 (0) 203 426 1381 [email protected]
VENTURE CAPITAL REPORT 18