Deutsche Börse Venture Network

The road to IPO and beyond Private and public growth companies in DACH

January 2021 Key takeaways

The DACH’s tech ecosystem is DACH is home to promising exit European public markets offer worth a combined €264 potential (IPO and M&A), both deep pools of liquidity, largely billion, half publicly listed. tech unicorns and SMEs. untapped potential.

This includes only startups & scaleups Positive snowball effects are building in There is still largely untapped potential founded since 2000, and has seen DACH’s maturing tech ecosystem. A in public markets. This route has combined value grow 4.4x since 2015. larger than ever new cohort of rising become much more accessible to tech Valuations on public markets have stars is emerging, run by more companies, and not just unicorns. The grown by 7.5x. This includes not only experienced operators, backed by more historically siloed private and public large caps like Delivery Hero but also experienced VC firms, with access to markets are starting to converge. publicly listed SMEs. more sophisticated capital markets.

Deutsche Börse Page / 2 Venture Network Table of contents

1 Funding landscape DACH

2 Private high-growth companies

3 Tech exit landscape DACH

4 VC-backed public companies

5 Tech IPO potentials

Deutsche Börse Page / 3 Venture Network 1 Funding landscape DACH https://docs.google.com/spreadsheets/d/1snRPAxaiAsaAMLXsugyMMEpovd74dPm-hESvn3qXIfI/edit?usp=sharing

The DACH tech ecosystem is now worth a combined €264 billion, fuelled by and an accumulation of tech talent.

€264B Combined enterprise value of DACH tech companies founded after 2000 Top 5 private companies: €15B █ Public █ Private Private companies €140B combined value

3.1x

Top 5 public companies: €89B €62B Public companies 7.5x €124B combined value €45B

€17B 2015 2020

Deutsche Börse Page / 5 Source: Dealroom.co. Public valuations based on Bloomberg data. Private valuations based on press statements during last round. Valuations taken 31st December 2015 & 2020. Venture Network Positive snowball effect: a much larger new cohort of rising stars is emerging, fuelled by past ecosystem success, and with access to Recycled capital, talent DACH. larger public capital markets. Stronger public and private capital markets New pools of experienced operator talent Important early exits for Abc the ecosystem Abc and angels building new companies identify and realise select the Successful exits minimal strongest Current unicorns IPOs and M&A form forces

Rising stars [Capital [Capital Abc Supply] Demand] Abc New pools of venture capital with access to more late-stage capital and IPO market

Anc Abc More VC and generate explore the Growth Capital forms at human multiple context boundaries

Deutsche Börse Page / 6 Venture Network

High profile exits

Current unicorns

Potential future unicorns

Rising stars

Skills, talent, capital Conversion rates - 2010 to 2015 Seed rounds: minimum of eur 4m for the first round following the seed

Seed-funded European Graduation rates between rounds ▊ U.S. ▊ Europe startups are just as likely Europe 49% 50% to reach a billion dollar USA 48% status as their US peers. 40%

Seed to unicorn conversion rate 30% 30%

25%

20% 15% Over 1% of seed funded companies 1.2% 1.2% 1.1% achieve $1B+ 9% valuation 10% 10% 3% 1.1%

6% 1.2% 3% 2nd 3rd 4th 5th 6th Unicorn DACH EU USA round round round round round Round after Seed round (which is considered 1st round)

Deutsche Börse Page / 7 Source: Dealroom.co for DACH and Europe. CB Insights for USA. Cohort analysis, qualifying Seed round between 2010 and 2013. Venture Network

Conversion rates

# Round after Seed First round mini in eur m # Companies Cohort 1 2 3 4 5 1 2443 tech 49% 24% 11% 4.9% 2.0% 1 672 deep 58% 30% 13% 5.5% 1.8% 1 158 bio 57% 22% 8% 1.9%

2 2063 tech 40% 20% 9% 3.8% 1.7% 2 546 deep 49% 23% 9% 3.7% 1.5% 2 136 bio 50% 19% 6% 1.5% 24.0% 11.6% 5.9% 2.5% 1.3% 4 1692 tech 27.0% 12.5% 5.7% 2.4% 1.2% 4 415 deep 32% 15% 6% 2.4% 1.0% 4 113 bio 40% 13% 3% 0.9% 2016 2017 2018 2019 2020E

European VC investment reached near record levels in 2020 despite challenging macro conditions, as bet on pandemic-accelerated digital adoption.

European annual venture capital investment Largest European deals in 2020 (round size) █ DACH █ Europe

€38.3B €38.0B

€26.3B €650M €600M €500M €22.0B

€16.9B €500M €400M £300M

€9.0B €7.9B £252M $310M $300M €5.4B €3.2B €4.8B 2016 2017 2018 2019 2020

Deutsche Börse Page / 8 Source: Dealroom.co. Individual round currencies as reported. Venture Network https://app.dealroom.co/transactions.rounds/f/locations/anyof_Germany?showStats=yearly

Excluding mega-rounds, DACH venture capital reached another record in 2020, more than doubling investment in five years.

DACH venture capital investment Notable DACH deals in 2020 (round size) █ Rounds <€250M █ Rounds >€250M

€9.0B €7.9B €2.9B* €0.5B €255M $250M $240M €5.4B Auto1 €255M €4.8B €0.7B Tier €250M €0.7B Lilium €240M €3.2B €150M €133M $130M €7.4B Auxmoney €150M €6.1B GetYourGuide €133M €4.7B €4.1B €3.2B Spryker €130M $107M $100M $100M Joynext €107 Omnio €100M 2016 2017 2018 2019 2020 N26 €100M

Deutsche Börse Page / 9 Source: Dealroom.co. *Flixbus, GetYourGuide and Frontier Car Group together amounted to €1.5B. Individual round currencies as reported. Venture Network Rounds larger than €50M

DACH is home to some of Europe’s most prominent VC investors for early and growth capital. 60% of rounds by these investors back DACH startups.

Most prominent DACH VCs by typical investment entry point, and top 5 DACH companies in portfolio by valuation

Seed Series A

Dach/total

Point nine: 35/116 GFC 65/303, Rocket 56/140 HV 140/192 Lakestar 29/72 Delivery Hero, Mambu , TIER, Marley Zalando, HelloFresh, Personio, Delivery Hero, Zalando, HelloFresh, XING, GetYourGuide, Sennder, Spoons, Contentful Citydeal, Westwing Rocket Internet, Flixbus Omio, Marley Spoon Cherry: 48/79 Speedinvest: 62/140 TargetGlobal: 26/95 Acton: 43/75 Project A: 41/73

HTG: 462/522 AUTO1 Group, FlixBus, wefox, TIER, Bitpanda, Delivery Hero, AUTO1 Group, Mytheresa, Mambu, Zooplus, Earlybird: 81/167 Flaschenpost, Spryker, Infarm TourRadar, Billie wefox, Omio, Clark Finanzcheck, HomeToGo TEV: 41/64 1019/1735

Sennder, Lampenwelt, Spryker Commercetools, Rigontec, Amal N26 group, Interhyp, nfon, Isar Delivery Hero, Zalando, Westwing, Systems, Trade Republic, Homeday Therapeutics, nfon, Mister Spex Aerospace, Forto Scalable Capital, Ottonova

Deutsche Börse Page / 10 Source: Dealroom.co prominence rank 2021. Venture Network has raised the second highest levels of investment of any European city since 2016, with 5 DACH cities amongst the top 20.

VC investment since 2016 per European city

London €33B Berlin €12B Paris €12B Stockholm €6.6B €3.0B €22B €2.8B Dublin €2.2B Zurich €1.8B Barcelona €1.8B Madrid €1.5B Hamburg €1.4B DACH Oxford €1.4B €30B Austria Cambridge €1.4B Switzerland €0.9B Helsinki €1.4B €7.0B Bucharest €1.2B Bristol €1.1B Milan €0.8B Oslo €0.7B Tallinn €0.7B Zug €0.7B Manchester €0.7B Espoo €0.7B Deutsche Börse Page / 11 Source: Dealroom.co. European venture capital investment since 2016. Venture Network 2 Private high-growth companies Public DACH is a distributed tech ecosystem, with over 40 unicorn tech companies born across the entire region. Hamburg

Public

Bremen

Munster Berlin

Public Public

Public

Public Mainz Dusseldorf Public

Tubingen Göppingen Munich

Public Schaffhausen

Sankt Gallen Rüschlikon Vienna

Lausanne Hünenberg Zug Zurich Deutsche Börse Page / 13 Venture Network Source: Dealroom.co. Unicorn companies, founded since 1990 that reached USD $1 billion valuation. Rounds larger than €50M

Four DACH cities rank in the European top 10 hubs for creating potential future unicorns, and Switzerland ranks fourth in Europe.

Number of potential future unicorns (company valued €200M-€800M) per country and city

United Kingdom 135 London 82

France 63 Paris 40

Germany 61 Berlin 31

Switzerland 23 Munich 11

Spain 15 Dublin 10

Netherlands 13 Cambridge 9

Ireland 12 Amsterdam 7

Sweden 9 Barcelona 7

Finland 9 Stockholm 6

Belgium 8 Zug 5

Denmark 8 Zurich 5

Deutsche Börse Page / 14 Source: Dealroom.co. Venture Network Three DACH cities are among the European top 10 hubs by potential future unicorns, Switzerland punches well above its weight Late-stage capital is still a challenge in DACH and in Europe. Unicorns are highly dependent on international investors as they scale. split for DACH unicorns by private round (2000-2020)*

5% 6% 11%

21% 28% Asia 30% 23% 30%

3% 42% 28% 25% USA and Canada 35%

31%

67% 26% Cross-border European 35% 47% 23%

33% 25%** Domestic 12% 13%

Seed Series A Series B Series C Megarounds Megarounds plus €1-4M €4-15M €15-40M €40-100M €100-250M €250M+

Source: Dealroom.co. Rest of the world negligible - 1% for megarounds. *>75% invested in 2015-2020, timeframe extended to capture seed rounds Deutsche Börse Page / 15 **Flixbus Series F, About You Growth Equity, N26 Series C, BioNtech Series B, Tricentis Series B Venture Network

Investor split for DACH unicorns by private round size (2015-2020)

8% 10% 15% 21% Asia 30% 29% 28%

42% 35% USA and Canada 30% 15% 100% 27%

26% Cross-border European 48% 34% 24%

33%

20% 14% Domestic 8% Seed Series A Series B Series C Megarounds Megarounds plus €1-4M €4-15M €15-40M €40-100M €100-250M €250M+ European VCs continue to raise record levels of new funds, but still cannot keep up with demand. Startups have to look beyond Europe to raise growth capital.

Capital raised by European startups vs. European VCs █ New European VC funds █ Gap funded by additional investor groups

€38.3B €38.0B

Gap funded by additional investor groups, international venture capital, corporates, such as: €26.3B €22.0B

€16.9B

New funds raised by European €17.2B venture capital firms in 2019-2020 €12.8B €13.4B €9.4B €8.2B

2016 2017 2018 2019 2020

Deutsche Börse Page / 16 Source: VC funds data Dealroom.co; public markets data McKinsey 2019. Venture Network Rounds larger than €50M

Public markets offer a deep pool of European capital to draw from. European public markets: public markets outweigh all capital €13T raised by European venture funds, by over 130:1.

Funds raised by European VCs: €0.1T

Deutsche Börse Page / 17 Source: VC funds data Dealroom.co; Public markets data, European Capital Markets Institute 2019, EU27 and UK. Venture Network 3 Tech exit landscape DACH

Realising returns - IPO and M&A are the main exit routes for venture-backed startups (and their An abundance of global Venture Capital In 2015, 11% of global venture capital was since the last financial crisis has lead to invested into European startups. By 2019, investors). the rise of larger late-stage private this was up to 16%.

● An abundance of global Venture Capital companies. Private capital has been In 2019, European startups raised €39 since the financial crisis has enabled enabling startups to reach greater scale Biggest European VC-backed Biggest European VC-backed billion, compared with €116 billion in North before going public. As a result, private tech IPOs 2015-2020* M&A 2015-2020* startups to reach greater scale before America and €66 billion in Asia. In other unicorn numbers - privately-owned words, North American VC investment is 3x An initial public offering (IPO) refers to the process of (M&A) describe the going public. companies valued at over $1B - have consolidation of companies or assets, through financial higher than in Europe, compared to 5x higher offering shares of a private corporation to the public in a exploded. Europe alone has now new stock issuance. transactions. in 2015. Meanwhile, comparing the produced over 200 unicorns. ● But private investors will always need ● Dozens of companies, many now global valuations of the top-5 VC backed companies from the last decade, the brand names, have found exit success to realise their returns. M&A and IPO difference is only 2.2x (see page 9). But private investors will always need to Market cap at IPO: Market cap at IPO: Transaction value: Transaction value: are the typical routes for startup afterrealise being their born return. and M&A raised and inIPO Europe. are the €26.9B €10.2B €7.8B (corporate) €5.9B (corporate) typical routes for startup founders and The increase in Europe was partially the founders and investors to exit their investors to exit their positions. result of Chinese investment collapsing. The positions. collapse of investment in China provides a lesson to Europe: it takes time to build an Market cap at IPO: Market cap at IPO: Transaction value: Transaction value: Dozens of companies, many now global ecosystem and quick gains are also quickly €7.1B €5.1B €4.5B (PE) €4.3B (corporate) brand names, have found exit success ● Despite a challenging and uncertain lost. after being born and raised in Europe. start to 2020, European tech By number of venture capital rounds greater companies, like fashionette and This generation of European tech than €2 million(1), Europe has increased its Market cap at IPO: Market cap at IPO: Transaction value: Transaction value: companies are becoming publicly-traded share as well. In 2019, 26% of those rounds €5.3B €5.3B €3.9B (PE) €3.9B (Corporate) flaschenpost continued to successfully global market leaders. Where the US has were raised by European startups, up from exit in 2020. produced Netflix, Europe has Spotify. 18% in 2015. UberEats is met with Delivery Hero. And Stripe competes with Adyen. Market cap at IPO: Market cap at IPO: Transaction value: Transaction value: €4.4B €3.1B €3.6B (Corporate) €2.7B (Corporate)

Deutsche Börse Page / 19 Source: Dealroom.co. *Companies founded after 2000 Venture Network

Amount raised: Amount raised: €8.4B €2.2B

Amount raised: Amount raised: €2.1B €1.0B

Amount raised: Amount raised: €1.0B €0.9B

Amount raised: Amount raised: €1.0B €0.9B

Germany ranks second in Europe for realising returns As well as attracting the most startup investment, the UK, Germany and In 2015, 11% of global venture capital was invested into European startups. By 2019, from venture-backed startups and scaleups. France have also found success in this was up to 16%. realising investment returns through hundreds of venture-backed exits Number of venture-backed exits (IPOs and M&A) since 2016 In 2019, European startups raised €39 ● The UK, Germany and France attract since 2015. billion, compared with €116 billion in North the most investment in Europe, and America and €66 billion in Asia. In other 579 United Kingdom realise the most venture-backed exits. These exits are further fuelling words, North American VC investment is 3x higher than in Europe, compared to 5x higher Germany 381 entrepreneurial activity in these in 2015. Meanwhile, comparing the regions, as talent, expertise and France 341 ● Successful exits fuel further local valuations of the top-5 VC backed capital are recycled into the companies from the last decade, the 183 entrepreneurial activity as talent, ecosystem. difference is only 2.2x (see page 9). Sweden 182 expertise and capital are recycled into The increase in Europe was partially the the ecosystem. Founder, employee and investor Spain 116 returns from these exits will be funding result of Chinese investment collapsing. The Switzerland 70 the next generation of startups and collapse of investment in China provides a lesson to Europe: it takes time to build an ● Founder, employee and investor exit scaleups in Europe. Denmark 68 ecosystem and quick gains are also quickly returns will fund the next generation of lost. Italy 64 European startups. Among DACH’s most valuable tech Ireland 59 exits since 2015 are Veeam, Avaloq, By number of venture capital rounds greater TeamViewer and Flaschenpost than €2 million(1), Europe has increased its Finland 49 ● IPO and M&A are also not mutually share as well. In 2019, 26% of those rounds Belgium 40 were raised by European startups, up from exclusive. In particular, companies that 18% in 2015. Austria 27 exit to a Private Equity acquisition, remain on a potential IPO track .

Deutsche Börse Page / 20 Source: Dealroom.co. Venture Network European tech exits number in the hundreds every year, consistently realising 10s of billions in value.

2020 was a record year for venture-backed DACH exit value, led by Zug-based In 2015, 11% of global venture capital was Veeam’s €4.5B acquisition. invested into European startups. By 2019, this was up to 16%.

In 2019, European startups raised €39 Value realised from venture-backed Number of venture-backed exits (IPOs billion, compared with €116 billion in North exits (IPOs and M&A) in DACH and M&A) in DACH America and €66 billion in Asia. In other words, North American VC investment is 3x higher than in Europe, compared to 5x higher in 2015. Meanwhile, comparing the valuations of the top-5 VC backed companies from the last decade, the difference is only 2.2x (see page 9).

The increase in Europe was partially the result of Chinese investment collapsing. The collapse of investment in China provides a lesson to Europe: it takes time to build an €9.9B 118 ecosystem and quick gains are also quickly lost. 101

By number of venture capital rounds greater 75 (1) €5.6B 67 65 than €2 million , Europe has increased its share as well. In 2019, 26% of those rounds €3.3B were raised by European startups, up from €2.9B 18% in 2015. €1.5B

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Deutsche Börse Page / 21 Source: Dealroom.co. Venture Network Contrary to popular belief, European startups are most likely to be acquired by European buyers, both by strategic acquirers as well as Private Equity firms.

Most valuable European acquisitions 2020 Share of M&A exits by buyer region Target company HQ Amount Acquirer Type 5% 4% 4% 5% 3% Asia Switzerland €4.5B PE North 20% 19% 24% 26% 27% America Switzerland €2.0B Corporate

1% 1% 1% Spain €1.4B PE 1% 1% Rest of World Estonia €1.4B PE

UK €1.1B Corporate

76% 74% Europe Germany €1.1B Corporate 71% 67% 69% UK €0.5B PE

Belgium €0.5B Corporate

Poland €0.4B Corporate 2016 2017 2018 2019 2020 Ireland €0.4B Corporate

Deutsche Börse Page / 22 Source: Dealroom.co, Atomico State of European Tech 2020. Venture Network DACH startup value is among the most likely to stay in Europe on exit, and German tech companies are much more likely to choose a domestic IPO.

Venture-backed DACH exits, companies with IPO routes of tech companies valued >€100M €100M+ funding (2010-2020), by deal count (2010-2020), by deal count IPO Acquired by IPO 41% in Europe outside Top 3 sectors European buyer Europe

Acquired by 30% Germany Transportation, food, US buyer 87% 13% telcom

European 16% Switzerland Enterprise software, IPO 33% 67% travel, security

Acquired by Health, energy, Asia buyer 9% France 90% 10% semiconductors

US IPO 4% UK Fintech, enterprise 79% 21% software, food

Deutsche Börse Page / 23 Source: Dealroom.co, and Atomico State of European Tech 2020. IPOs exclude biotech companies. Austria not significant percentages due to small number of large exits. Venture Network

IPO IPO Outside Top 3 sectors Europe* Europe* (ex. biotech)

France Health, energy, 90% (83%) 10% (17%) semiconductors

Germany Transportation, food, 87% (40%) 13% (60%) telcom

UK Fintech, enterprise 79% (18%) 21% (82%) software, food

Switzerland Enterprise software, 33% (36% ) 67% (64%) travel, security

Austria 100% **(0% ) 0%** (100% ) Despite London’s lead in VC investment, Amsterdam and Frankfurt are ahead for hosting public European tech. European exchanges in general are the favoured venues for European tech listings.

Exchange Market cap % total Listing venue for European tech Euronext Amsterdam (ENXTAM) €251B 27% companies by market cap Deutsche Börse Group, Frankfurt (XETRA) €239B 26%

Euronext Paris (ENXTPA) €119B 13%

London Stock Exchange (LSE) €101B 11%

Nasdaq Global Select (NasdaqGS) €67B 7%

New York Stock Exchange (NYSE) €49B 5%

Warsaw Stock Exchange (WSE) €29B 3%

OMX Nordic Exchange Stockholm (OM) €27B 3%

SIX Swiss Exchange (SWX) €25B 3%

Bolsas y Mercados Españoles (BME) €19B 2%

Deutsche Börse Page / 24 Source: S&P Global - Atomico State of European Tech 2020. As of 31 October 2020. Excluding Prosus. Venture Network

“There's a lot of room in the economy for Zebras, not just unicorns.” In 2015, 11% of global venture capital was Yaron Valler, General Partner at Target Global invested into European startups. By 2019, this was up to 16%. How have things changed relating to public and private funding And for ultra-high-net-worths, they obviously have an interest in of tech companies in the last few years ? making money, but they also want to be involved in things that In 2019, European startups raised €39 drive the world, things that are intellectually interesting, and billion, compared with €116 billion in North The main difference is the maturity of the sector. If you look at the things that are cool. It's the ultimate luxury item to say you America and €66 billion in Asia. In other first tech bubble in 2000, there was no connection between strict invested in the Seed round of Uber or Delivery Hero. In the end words, North American VC investment is 3x financial parameters and how these companies were valued. everyone wants to build a monument to be remembered by. higher than in Europe, compared to 5x higher Eyeballs were used as a measure of a company’s value. Now the in 2015. Meanwhile, comparing the business models have been validated. The argument today is about What about European public markets? valuations of the top-5 VC backed the multiples. The question is whether these companies can companies from the last decade, the continue to grow at the same rate or will they peter out? The market I think Frankfurt is becoming a very important market. London has difference is only 2.2x (see page 9). will answer that question, but I don't see a bubble. always been an import market. You're seeing markets like Frankfurt not only driving very significant capital, but they're also The increase in Europe was partially the Why are investors now taking more interest in European tech? very innovative. There's so much openness to exploring new result of Chinese investment collapsing. The ideas, like SPACs. The fact you can dual list is making the markets collapse of investment in China provides a We have moved from picks and shovels, to making things that more efficient and driving a lot of capital into the market. lesson to Europe: it takes time to build an interest real people. Why can retail investors invest in tech? Because ecosystem and quick gains are also quickly they understand it now. If you want to invest in Cisco you need to How do you see IPOs of small caps as a viable exit strategy for lost. understand what Cisco does. But everyone understands what non-unicorns? By number of venture capital rounds greater Delivery Hero does. We see in the last 10-15 years, tech went from Yaron Valler than €2 million(1), Europe has increased its something quaint, applicable to a small fraction of the population to Micro caps are a cool idea. The question is when does a company General Partner something so widely disseminated that is interesting to everyone. transcend the barrier of the market being able to responsibly share as well. In 2019, 26% of those rounds Tech is not something only enabling, but something servicing. It's analyse it? We need to be careful not to do away entirely with the were raised by European startups, up from becoming a legitimate industry. barrier between public and private markets, particularly lower 18% in 2015. down the value chain. But in principle I think it's a very good idea. It’s also one of the most resilient sectors. Just look at the last year. If There's a lot of room in the economy for Zebras, not just unicorns. you're home, you still shop, you just shop on Amazon. You still eat, Visit Target Global on you just use Wolt. Tech is a hedge to a crisis. dealroom.co Deutsche Börse Page / 25 Venture Network 4 VC-backed public companies

Europe’s public investors have become more tech savvy and sophisticated, and are In 2015, 11% of global venture capital was willing to take a longer term view on profits. Tech has become an established asset. invested into European startups. By 2019, this was up to 16%. Market cap In 2019, European startups raised €39 (1 year ago vs. today) billion, compared with €116 billion in North America and €66 billion in Asia. In other $60B words, North American VC investment is 3x higher than in Europe, compared to 5x higher in 2015. Meanwhile, comparing the $50B valuations of the top-5 VC backed companies from the last decade, the

Digital acceleration difference is only 2.2x (see page 9). $40B Meeting or beating The increase in Europe was partially the

estimates, driven by result of Chinese investment collapsing. The accelerated digital $30B collapse of investment in China provides a adoption among lesson to Europe: it takes time to build an

households, small ecosystem and quick gains are also quickly lost. businesses and large $20B Investor risk appetite enterprises By number of venture capital rounds greater Technology increasingly seen as a than €2 million(1), Europe has increased its $10B prudent long-term investment, share as well. In 2019, 26% of those rounds instead of risky were raised by European startups, up from 18% in 2015.

2.5x 5.0x 7.5x 10x 12.5x 15.0x 17.5x 20x

EV/Revenue LTM (current) (1 year ago vs. today) Deutsche Börse Page / 27 Venture Network

Jun-18 55.4 334% 17.7x 7.7x 11.5

Apr-18 48.0 111% 6.0x 2.8x 12.0

Jun-17 28.2 410% 15.4x 9.8x 6.1

Sep-14 24.8 407% 3.1x 1.7x 6.3

Nov-17 11.7 648% 3.4x 1.6x 6.0

Oct-15 7.1 125% 13.2x 19.0x 16.7

Mar-15 6.4 126% 19.5x 13.8x 18.6

Jan-13 5.9 1,000%+ 39.6x 50.4x 18.7

More than just value creation: IPOs are a platform for In 2015, 11% of global venture capital was revenue growth and job creation. invested into European startups. By 2019, Going public marks just the beginning this was up to 16%.

Revenue growth for many companies in the European In 2019, European startups raised €39 since IPO ● An IPO can provide a platform to tech sector. billion, compared with €116 billion in North America and €66 billion in Asia. In other continue and accelerate growth. words, North American VC investment is 3x 7x As demonstrated by success stories higher than in Europe, compared to 5x higher 2,432 +601% +15K such as Delivery Hero and HelloFresh, in 2015. Meanwhile, comparing the ● The largest digital companies in 6x an IPO provides a platform to valuations of the top-5 VC backed 3,631 +301% +2,724 Europe have boosted revenue and accelerate growth. companies from the last decade, the difference is only 2.2x (see page 9). headcount since going public. 5x 7,848 +292% +11,387 The largest digital companies in The increase in Europe was partially the ● Public market capital is used to fuel Europe have boosted revenue and result of Chinese investment collapsing. The collapse of investment in China provides a 4x headcount since going public through 681 +95% +777 continued organic high-growth and lesson to Europe: it takes time to build an inorganic growth through strategic continued growth and strategic ecosystem and quick gains are also quickly acquisitions. lost. 9,576 +92% +754 3x acquisitions.

By number of venture capital rounds greater 630 +74% +211 Delivery Hero and Zalando have each than €2 million(1), Europe has increased its 2x ● Delivery Hero and Zalando have each increased headcount 100x since IPO, share as well. In 2019, 26% of those rounds created more than 10k new jobs since the type of hockey stick growth were raised by European startups, up from 298 +13% -41 18% in 2015. IPO. investors look for at a much earlier

+250 500 1K 2.5K 5K 10K 15K +20K stage. Headcount growth since IPO (Indicative scale for clarity) Deutsche Börse Page / 28 Source: Dealroom.co. Venture Network Public tech companies gain geographically diverse shareholder structures, and attract capital from around the world.

Major global shareholders

Other Germany Other Germany 9% 11% 10% 13% Germany UK Luxembourg 20% 19% 7% Luxembourg 12% 20% Delivery Hero Luxembourg 7%

IPO 2019 IPO 2018 IPO 2017

USA Guernsey UK USA 32% USA Other 41% 19% 29% 24% Zalando 46% 24% Germany Germany

6% 11% UK 13% USA USA

38% UK 29% 17% 12% Zalando, 11% HelloFresh, 7% Home24

South IPO 2017 IPO 2014

Africa Other 20% Sweden 19% 24% Other 7% HelloFresh, 5% TeamViewer 22%

Deutsche Börse Page / 29 Source: Bloomberg 30 Dec 2020. Venture Network Foodpanda, Woowa Brothers, Glovo, Rappi

Case Study: Delivery Hero demonstrated the power of being a public company. It was able execute a complex restructuring, pursue a robust M&A strategy, while $30B raising from deep (private and public) pockets.

€28B valuation $25B

$4B acquisition of $20B South Korean Post IPO, additional value Woowa creation of over €23B IPO on Frankfurt Stock Exchange €4.4B valuation $15B Before, during and after the IPO, Sale of German Delivery Hero was pursuing operations to expansion via global acquisitions. Acquisition spree, including: Takeaway.com 2015: Talabat for €150M (Middle East) During the IPO the company was $10B 2016: Foodpanda for $500M (Asia & CEE) still -20% EBITDA negative and Seed investment from 2017: Carriage for $100M (Middle East) German VCs including Point finding its footing in some Nine/Team Europe and markets. Public markets showed willingness to take long-term $5B others view.

With permanent access to capital 0 market (equity and ) the 2011 May Jun Sep Dec Jan Jan company is able to continue to pursue bold acquisitions (Woowa) Founded by Niklas Östberg, Around $1 billion raised from 2017 2017 2017 2018 2020 2021 and investments (Rappi, Glovo). Kolja Hebenstreit, Markus Rocket, Insight, Target Global, Fuhrmann, Lukasz Gadowski Vostok and others Another $1 billion invested by Naspers/Prosus before and just after the IPO (primary and secondary transactions respectively) significantly strengthening its balance sheet Deutsche Börse Jan 2018 Page / 30 Source: Dealroom.co. Venture Network €225M Series A 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Case Study: IPOs aren’t just for unicorns, but increasingly for scaling SMEs - NFON doubled its valuation in two years after going public. $30B

€300M valuation $25B

Private funding

$20B 2008, Seed funding: High-Tech

Gründerfonds IPO on Frankfurt Stock Exchange Post IPO, additional value

€166M valuation creation of over €140M Two Series A investment: 2010, Early VC: High-Tech

$15B €4M from Earlybird, MIG, High-Tech Gründerfonds (2010) Gründerfonds, Earlybird Revenue growth around 25% €4M from Earlybird, MIG, High-Tech Gründerfonds, Ventures, MIG Verwaltungs AG annually. BayernLB Capital Partners (2012)

€10M Series E from 2012, Early VC: High-Tech NFON now has more 30,000 $10B BayBG, Earlybird Gründerfonds, Earlybird Seed investment from company clients in 15 European Ventures, MIG Verwaltungs AG, German VCs including countries. BayernLB Capital Partner High-Tech Gründerfonds

Issue proceeds were invested in $5B 2013, Early VC: High-Tech the extension of NFON's Gründerfonds international business and R&D.

2015, Series E, €10M: Earlybird 0 2007 Mar Dec Jan Ventures, BayBG Founded by Marcus Otto in Undisclosed Late VC 2015 2018 2021 Munich investment from Milestone Venture Capital, High-Tech Gründerfonds

Deutsche Börse Page / 31 Source: Dealroom.co. Venture Network

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Scale 30 (SMEs) outperformed the DAX in In 2015, 11% of global venture capital was Top 10 of Scale 30 by 2020, with a faster and steeper pandemic invested into European startups. By 2019, this was up to 16%. volume recovery, driven by tech companies. In 2019, European startups raised €39 billion, compared with €116 billion in North Mynaric AG America and €66 billion in Asia. In other Formycon AG Scale 30 (SMEs) vs. DAX (large cap) indices ● Not all tech companies go public with billion dollar words, North American VC investment is 3x since March 2020 pandemic low status - small caps have been proving successful, higher than in Europe, compared to 5x higher Mensch und Maschine in 2015. Meanwhile, comparing the Software SE +117% and popular. valuations of the top-5 VC backed companies from the last decade, the difference is only 2.2x (see page 9). 2G Energy AG The Naga Group ● The Scale 30 Index of small and medium-sized HELMA Eigenheimbau Cliq Digital enterprises outperformed the Index in the last The increase in Europe was partially the AG Media and Games Invest year. result of Chinese investment collapsing. The collapse of investment in China provides a DATAGROUP SE EQS Group lesson to Europe: it takes time to build an Exasol AG IBU-tec advanced materials ● Post-Covid shock recovery was faster and steeper ecosystem and quick gains are also quickly Mynaric lost. Media and Games +40% for scaling small caps in Scale 30 than the major Formycon German stock index. By number of venture capital rounds greater Invest plc than €2 million(1), Europe has increased its Exasol Nynomic AG and others share as well. In 2019, 26% of those rounds Deutsche Rohstoff AG ● Since the Covid-low in Spring, Scale 30 has were raised by European startups, up from recovered +117% compared to +40% for the DA . 18% in 2015. 65% Scale 30 DAX

Deutsche Börse Page / 32 Source: Deutsche Börse. Jan 20 2021. Venture Network

+113% since pandemic low +30%

0%

-30%

Jan Mar Jan 2020 2020 2021

Going public offers ongoing access to equity and

debt capital - four German public tech companies In 2015, 11% of global venture capital was invested into European startups. By 2019, raised €9.7B in post-IPO funding in 2020 alone. Tech companies have been returning this was up to 16%. to public markets on a surging scale, to In 2019, European startups raised €39 raise post-IPO equity funding, while billion, compared with €116 billion in North Significant Post-IPO tech capital raise by German tech valuations in the tech sector have also America and €66 billion in Asia. In other

companies, in 2020 traded at all-time highs. words, North American VC investment is 3x ● Tech companies have been accessing higher than in Europe, compared to 5x higher in 2015. Meanwhile, comparing the public markets in scale, to raise A convenient and cost effective capital valuations of the top-5 VC backed post-IPO equity funding. raising mechanism for public companies from the last decade, the companies, tech companies are difference is only 2.2x (see page 9).

● Cost-effective deep international accessing deep international capital Post-IPO Equity: €1.0B Post-IPO Equity: €2.7B Combined capital raised The increase in Europe was partially the Convertible: €3.3B Convertible: - capital markets enable accelerated markets to accelerate organic and result of Chinese investment collapsing. The Total: €4.3B Total: €2.7B in 2020 collapse of investment in China provides a organic and inorganic growth. inorganic growth. Post-IPO Equity: €5.4B lesson to Europe: it takes time to build an ecosystem and quick gains are also quickly Convertible: €4.3B Funding tends to be closely tied to ● Post-IPO funding tends to be closely lost. Total: €9.7B specific strategic opportunities such as tied to specific strategic opportunities By number of venture capital rounds greater Post-IPO Equity: €0.6B Post-IPO Equity: €1.1B company acquisitions or infrastructure than €2 million(1), Europe has increased its Convertible: €1.0B Convertible: - such as company acquisitions or expansion, providing investors with a Total: €1.1B share as well. In 2019, 26% of those rounds Total: €1.6B infrastructure expansion. vision for returning a profit. were raised by European startups, up from 18% in 2015.

Deutsche Börse Page / 33 Source: Dealroom.co. Venture Network

Top public DACH: Infineon Delivery Action Pharma Zalando Biontech Crissp Hellofresh Temenos Rocket Internet Scout24 TeamViewer “With the successful stock market debut in 2020, our goal of becoming the leading online platform for premium and luxury fashion accessories in Europe has come a whole lot closer.” Daniel Raab, CEO of fashionette In 2015, 11% of global venture capital was invested into European startups. By 2019, Fashionette went public in October 2020, what were your main How did the investor structure of fashionette change pre- and this was up to 16%. reasons for going public despite the COVID pandemic? post-IPO? In 2019, European startups raised €39 The key element of our strategy is to continue to focus on this While pre-IPO the main shareholder GENUI and the Management billion, compared with €116 billion in North profitable growth path at above-market rates. With the proceeds of held together 100% of the shares, Post-IPO the shareholding of America and €66 billion in Asia. In other the IPO, we now have the financial flexibility to accelerate the GENUI amounts to around 36.6%, the Management Board (Daniel words, North American VC investment is 3x scaling of our business model to further European countries. The Raab and Thomas Buhl) are now holding 5.2% of the shares and higher than in Europe, compared to 5x higher timing of the IPO was perfect despite the COVID pandemic, 58.2% of the shares are attributable to the free float. in 2015. Meanwhile, comparing the especially given the momentum we are currently seeing in the retail valuations of the top-5 VC backed shift from offline to online. By expanding our market position in our What is the difference in raising capital in the private market? companies from the last decade, the existing markets and penetrating other European markets. Despite the greater awareness in general, the main difference is difference is only 2.2x (see page 9). Fashionette has a wealth of experience and is pursuing a targeted definitely the number of investors. This is much greater in the case process with focus on high-opportunity European acquisition of a public listing. In addition, you also get input from investors The increase in Europe was partially the targets. from very different perspectives. A public listing enables result of Chinese investment collapsing. The collapse of investment in China provides a What is it like being a public company, and how did you companies an independent and long-term orientation to drive a sustainable organic and inorganic growth strategy. lesson to Europe: it takes time to build an experience the IPO ceremony at the Frankfurt Stock Exchange? ecosystem and quick gains are also quickly

Going Public in the European SME growth segment "Scale" and the What advice can you give to founders thinking about an IPO? lost. inclusion in trading of fashionette shares was definitely an Daniel Raab unforgettable highlight in our Company’s history. It was exciting to Contact Deutsche Börse Venture Network and Deutsche Börse at By number of venture capital rounds greater CEO of fashionette (1) follow the first price determination of our shares live on the trading an early stage! The entire Deutsche Börse team is a reliable than €2 million , Europe has increased its floor of the Frankfurt Stock Exchange. Our IPO has given an partner in the process, from the selection of suitable IPO sponsors share as well. In 2019, 26% of those rounds enormous boost to brand awareness and the fashionette platform. to the start of trading. In addition, seek early contact with the were raised by European startups, up from As a result, we were able to increase our new customer growth by management boards of companies that have recently completed 18% in 2015. 93% in the month after the IPO - far above the industry average. In an IPO. addition, the perception by potential partners, suppliers and service Visit fashionette on providers has also increased significantly. dealroom.co Deutsche Börse Page / 34 Venture Network 5 Tech IPO potentials

There are 20 private tech startups in the DACH unicorn club and 90+ potentials. In 2015, 11% of global venture capital was invested into European startups. By 2019, this was up to 16%.

In 2019, European startups raised €39 billion, compared with €116 billion in North HQ: Berlin HQ: Berlin HQ: Munich HQ: Sankt Gallen HQ: Munich HQ: Berlin HQ: Berlin America and €66 billion in Asia. In other Valuation: €6.5B Valuation: €3.2B Valuation: €2.3B Valuation: €2.2B Valuation: €1.8B Valuation: €1.7B Valuation: €1.5B words, North American VC investment is 3x Total funding: €1B Total funding: €0.7B Total funding: €0.3B Total funding: €0.1B Total funding: €0.5B Total funding: €0.2B Total funding: €0.2B higher than in Europe, compared to 5x higher Founded: 2012 Founded: 2013 Founded: 2011 Founded: 2001 Founded: 2011 Founded: 2011 Founded: 2015 in 2015. Meanwhile, comparing the valuations of the top-5 VC backed companies from the last decade, the difference is only 2.2x (see page 9).

The increase in Europe was partially the result of Chinese investment collapsing. The HQ: Munich HQ: Munich HQ: Berlin HQ: Berlin HQ: Hamburg HQ: Hamburg HQ: Munich collapse of investment in China provides a Valuation: €1.5B Valuation: €1.5B Valuation: €1.1B Valuation: €1.1B Valuation: €1.0B Valuation: €0.9B Valuation: €0.9B lesson to Europe: it takes time to build an Total funding: €0.2B Total funding: N/A* Total funding: €0.7B Total funding: €0.2B Total funding: €0.2B Total funding: €0.3B Total funding: €0.3B ecosystem and quick gains are also quickly Founded: 2015 Founded: 1999 Founded: 2009 Founded: 2015 Founded: 2011 Founded: 2014 Founded: 2015 lost.

By number of venture capital rounds greater than €2 million(1), Europe has increased its share as well. In 2019, 26% of those rounds +90 potential were raised by European startups, up from HQ: Lausanne HQ: Berlin HQ: Schaffhausen HQ: Berlin HQ: Zurich HQ: Hamburg future unicorns 18% in 2015. Valuation: €0.9B Valuation: €0.9B Valuation: €0.9B Valuation: €0.9B Valuation: €0.8B Valuation: €0.8B valued at €200M- Total funding: €0.1B Total funding: €0.4B Total funding: €0.1B Total funding: €0.4B Total funding: €0.2B Total funding: €0.2B €800M Founded: 2012 Founded: 2012 Founded: 2002 Founded: 2018 Founded: 1999 Founded: 2007

Deutsche Börse Page / 36 Source: Dealroom.co. *Check24 funding total undisclosed. Venture Network

But DACH is also currently building the larger than ever pipeline of private In 2015, 11% of global venture capital was DACH hubs by number of unicorns invested into European startups. By 2019, scaling companies, and tech IPOs can (€800M+ valuation) this was up to 16%. come from several hubs in DACH. Berlin 11 In 2019, European startups raised €39 Munich 7 billion, compared with €116 billion in North Hamburg 3 America and €66 billion in Asia. In other Basel 3 words, North American VC investment is 3x 20 Zurich 1 higher than in Europe, compared to 5x higher Vienna 1 in 2015. Meanwhile, comparing the unicorns valuations of the top-5 VC backed $1B+ valuation Zug 1 Dusseldorf 1 companies from the last decade, the 500+ companies difference is only 2.2x (see page 9). Series B+, last round €15M+ The increase in Europe was partially the result of Chinese investment collapsing. The 550+ companies DACH hubs by number of potential collapse of investment in China provides a Series A, last round future unicorns (€250M+ valuation) lesson to Europe: it takes time to build an €4-15M ecosystem and quick gains are also quickly Berlin 31 lost. 850+ companies Munich 11 Zug 5 By number of venture capital rounds greater Seed stage, last (1) round €1-4M Zurich 5 than €2 million , Europe has increased its Vienna 4 share as well. In 2019, 26% of those rounds 380+ Basel 2 were raised by European startups, up from 18% in 2015. 22,000+Pre-seed companies startups Hamburg 2 Dusseldorf 1 Pre-Seed stage, <€1M

Deutsche Börse Page / 37 Source: Dealroom Venture Network As software is eating the world, and the time from seed to unicorn becomes ever shorter (e.g. Cazoo), investors move more early stage and private and public investors are becoming less silo-ed.

As investors seek exposure to early stage tech companies, silos break down. Private and public investor groups are becoming more interlinked.

Private equity investing in Crossover funds* increasingly Family Offices want to do venture capital rounds involved VC more direct private investing

European VC rounds with Private Investment in European VC rounds* by Family Office VC & Family Offices have Equity participation by volume selected crossover investors PE asset allocation nearly doubled their asset allocation to PE & €8.7B €3.7B 22% VC: from 14% in 2008 to 22% in 2018. This €6.5B includes both direct and fund (LP) investments. 14% €2.0B Surveys among family €3.3B offices indicate a €3.1B €1.1B €2.2B keenness for more €0.3B €0.5B direct investing, but often lack access to 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2008 2018 quality deal-flow.

*Third Point, Baillie Gifford, Fidelity, T Rowe Price, Coatue, Tiger, Altimeter, AMF, Merian Global, BlackRock, Two Sigma, . Notably excludes Softbank. Deutsche Börse Page / 38 Family Office data source Venture Network

“An IPO is not the end of the journey, but rather the beginning.” In 2015, 11% of global venture capital was Peter Fricke, Head of Deutsche Börse Venture Network invested into European startups. By 2019, this was up to 16%.

In 2019, European startups raised €39 What's the biggest myth about going public? Has investor appetite towards tech listings changed in the last billion, compared with €116 billion in North few years? America and €66 billion in Asia. In other An IPO is not the end of the journey, but rather the beginning of a words, North American VC investment is 3x new growth track. Venture capital or private equity financing, for We see a tech momentum that is led by an appetite for strong higher than in Europe, compared to 5x higher example to enable growth for start-ups or company restructuring, is equity stories. Public market investors look for growing and in 2015. Meanwhile, comparing the typically limited to a certain period, usually with terms of three to resilient tech companies and are comfortable with backing valuations of the top-5 VC backed ten years. The next major step is an IPO as an attractive option for founders on the next stage of their growth journey. Companies like companies from the last decade, the private divestments and a long-term, independent source of equity Zalando, Delivery Hero and other supported this development and difference is only 2.2x (see page 9). and debt financing that is orientated towards the future. Thus, a fostered understanding of the specifics of fast-growing listed tech

public listing provides a platform to continue and accelerate companies on the investor side. The increase in Europe was partially the economic growth. result of Chinese investment collapsing. The How can Deutsche Börse support founders on their road to IPO? collapse of investment in China provides a Why should a founder choose to take their company public? lesson to Europe: it takes time to build an Deutsche Börse supports companies on their journey towards the ecosystem and quick gains are also quickly An IPO boosts public awareness of a company, thus also increasing capital market – long before an IPO, as this significant step requires lost. its appeal to potential employees who are interested in participating careful consideration and preparation. Since an IPO is an exit that

directly in their employer’s business success or in working for a founders can actively plan, structure and work towards in a long Peter Fricke By number of venture capital rounds greater listed company. Going public also attracts considerable attention, term perspective it is not only possible but highly beneficial to start Head of Deutsche Börse than €2 million(1), Europe has increased its both from the media and from investors, which in turn increases the preparations early. company’s brand and product awareness both in the domestic Venture Network share as well. In 2019, 26% of those rounds

market and internationally. A stronger equity base and more were raised by European startups, up from With the Deutsche Börse Venture Network we support private transparency in communication and financial reporting can also 18% in 2015. growth companies from the early stage to the later stage along improve creditworthiness and even serve as a competitive three pillars: capital, network and skill – including capital market advantage, as it strengthens the trust of customers, business expertise. partners and banks in the long term. Visit Deutsche Börse on

dealroom.co

Deutsche Börse Page / 39 Venture Network Contributors Deutsche Börse Cash Market 41

Deutsche Börse Venture Network

We empower ambitious founders to achieve their visions.

Deutsche Börse is making a large effort to strengthen and expand financing options for growth companies in Germany and Europe. At Deutsche Börse Venture Network it has been our mission to create a strong ecosystem of growth - Supporting ambitious founders on their road to IPO and beyond.

Since 2015 we have been connecting striving start-ups and investors, aiming to improve the overall funding situation. Our growth network currently encompasses over 200 start-ups, more than 450 investors and multiple partners.

Peter Fricke

Head of Deutsche Börse Venture Network e-mail [email protected] office FinTech HUB Frankfurt

Carsten Huth VP Venture & Growth Financing e-mail [email protected] office Berlin HUB Global intelligence about promising companies, from startups to unicorns.

Dealroom.co is the foremost data provider on startup, early-stage and growth company ecosystems in Europe and around the globe.

Founded in Amsterdam in 2013, we now work with many of the world's most prominent investors, entrepreneurs and government organizations to provide transparency, analysis and insights on venture capital activity.

Our offerings include data sets via SaaS and API as well as custom reports and bespoke ecosystem platforms.

Yoram Orla Lorenzo Wijngaarde Browne Chiavarini Founder Head of Content Innovation Analyst [email protected] [email protected] [email protected] Deutsche Börse Venture Network

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.

© 2021 Deutsche Börse AG