Europe -- 1Q 2014 - Dow Jones

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Venture capital investment into European companies experienced double digit declines ..... Dow Jones VentureSource helps
VentureSource

Europe -- 1Q 2014

VentureSource

The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. Highlights for 1Q 2014 include:

European venture capital fundraising fell nearly two-thirds from 4Q 2013;

Venture capital investment into European companies experienced double digit declines in both capital raised and deals completed compared with 4Q 2013;

While initial public offerings (IPOs) remain flat, an increase in mergers and acquisitions (M&As) during 1Q 2014 helps to exceed the previous quarter in venture-backed exit activity. To view Dow Jones VentureSource’s U.S. data for 1Q 2014 , please click here.

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VentureSource

European Venture Capital Fundraising Falls Significantly from 4Q 2013; Yearly Trend Continues

FUNDRAISING

A total of 20 European venture capital funds accumulated €640 million during 1Q 2014, equating to a decline of 63% in euros raised from 4Q 2013. The number of funds also fell sharply during the quarter to 20 from 34 in 4Q 2013, an overall drop of 41%.

Despite the amount raised falling 14%, the number of venture funds completing closings in 1Q 2014 improved by 43% from the 14 funds in 1Q 2013. The largest fund of the quarter was Life Sciences Partners’ Health Economics Fund , which raised €112 million and accounted for 18% of the total amount raised during 1Q 2014.

European VC Fundraising (2011 – 2014)

€ 2.50

40

Based on multiple closings 35 € 2.00 30 25

€ 1.50

20 € 1.00

15 10

€ 0.50 5 0

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

€ 0.00

Amount Raised (€B) € 0.43 € 0.63 € 0.42 € 2.15 € 0.98 € 1.12 € 0.76 € 1.09 € 0.74 € 0.99 € 0.50 € 1.72 € 0.64 Number of Funds 14 18 10 35 17 20 15 28 14 16 10 34 20

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Largest European VC Funds Raised in 1Q 2014

VentureSource FUNDRAISING

Firm Name

Fund Name

Amount (€M) Closed in 1Q

Location

Offering Status

Fund Type

Fund Category

Life Sciences Partners BV

LSP Health Economics Fund

€112.00

Amsterdam, Netherlands

Closed

Late-stage venture capital

Venture Capital

Earlybird Venture Capital GmbH & Co.

Earlybird Digital East Fund

€79.96

Berlin, Germany

Open

Early-stage venture capital

Venture Capital

Acton Capital Partners

Burda Digital Ventures Fund II

€79.96

Munich, Germany

Open

Late-stage venture capital

Seventure Partners SA

Health for Life Capital Fund

€62.00

Paris, France

Open

Emertec Gestion

Emertec 5

€50.00

Grenoble, France

Open

Closing Type

Final

First

Venture Capital

First

Multi-stage venture capital

Venture Capital

First

Early-stage venture capital

Venture Capital

First

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VentureSource

Investment into European Venture-backed Companies Experiences Decline from 4Q 2013

FINANCING

European companies raised €1.4 billion for 336 deals during 1Q’14, a decline of 21% in the number of deals and 14% in capital raised from the previous quarter. In contrast with 1Q’13 figures, despite deal flow decreasing by 2%, investments improved by 23%.

Consumer Services and Business and Financial Services were the quarter’s strongest sectors, respectively attracting a 30% and 27% share of total amount invested.

Equity Financings into Europe – based, VC-backed Companies (2011 – 2014)

€ 2.00

450

€ 1.80

400

€ 1.60

350

€ 1.40

300

€ 1.20 250 € 1.00 200

€ 0.80

150

€ 0.60 € 0.40

100

€ 0.20

50

€ 0.00

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

0

Amount Raised (€B) € 1.40 € 1.24 € 1.23 € 1.44 € 1.07 € 1.47 € 1.13 € 1.22 € 1.16 € 1.80 € 1.28 € 1.65 € 1.43 Number of Deals 299 393 303 356 331 355 314 350 344 402 361 427 336

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VentureSource FINANCING

Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 – 2014) Number of Deals

200

160

120

80

40

0 Seed

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 19 36 30 42 28 36 47 54 26 32 46 65 29

First

145

187

162

158

157

178

151

178

187

200

185

192

189

Second

62

86

51

62

62

62

55

59

62

87

59

76

59

Later

58

56

50

71

71

55

45

39

53

63

51

80

49

Restart

0

1

2

3

0

0

0

0

0

0

0

0

0

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VentureSource FINANCING

Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 – 2014) Amount Raised (€M)

€ 1,000 € 900 € 800 € 700 € 600 € 500 € 400

€ 300 € 200 € 100 €0 Seed

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 €8 € 16 € 20 € 22 € 11 € 23 € 12 € 20 € 12 € 15 € 16 € 22 € 14

€ 393 Second € 260 Later € 677 First

Restart

€0

€ 383

€ 572

€ 406

€ 291

€ 446

€ 279

€ 430

€ 382

€ 417

€ 457

€ 350

€ 398

€ 313

€ 206

€ 360

€ 292

€ 256

€ 304

€ 330

€ 226

€ 478

€ 307

€ 383

€ 301

€ 423

€ 320

€ 607

€ 463

€ 676

€ 528

€ 436

€ 532

€ 877

€ 449

€ 879

€ 616

€0

€ 69

€ 15

€0

€0

€0

€0

€0

€0

€0

€0

€0

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VentureSource FINANCING

Equity Financings into Europe-based, VC-backed Companies, Median Equity Deal Size (€M) (2011 – 2014)

€ 2.50

€ 2.00

€ 1.50

€ 1.00

€ 0.50

€ 0.00

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 Median Equity Deal Size (€M) € 1.50 € 1.50 € 1.55 € 1.50 € 1.53 € 1.91 € 1.20 € 1.33 € 1.58 € 1.53 € 1.03 € 1.48 € 1.80

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VentureSource

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (1Q 2014)

FINANCING

The Consumer Services sector received the largest allocation of investment during 1Q’14 (30%), accumulating €422 million through 101 deals. The figures represent a respective decline of 39% and 23% from 4Q’13.

Business and Financial Services placed second in terms of equity financing, taking a 27% share of all 1Q’14 investment. The sector raised €385 million across 104 deals, an increase of 54% in capital raised despite an 8% dip in deal flow. The sector’s investment total is the largest for a single quarter since 3Q’01.

Healthcare ranked third, with companies gathering a 23% share of the total amount invested during the quarter. The sector received €327 million across 42 deals, a fall of 25% in deals completed, and 14% in capital raised from 4Q’13.

1Q’14 Industry Breakdown By Amount Raised

1Q'14 Industry Breakdown By Number of Deals 13%

Business and Financial Services 19%

Business and Financial Services 27%

1% 31%

2%

Consumer Goods

Consumer Goods

Consumer Services

Consumer Services 23%

12%

2%

Energy & Utilities 4%

2%

Energy & Utilities Healthcare

Healthcare 4% Industrial Goods & Materials

30%

Industrial Goods & Materials

30% Information Technology

Information Technology

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Top 5 Deals into European VC-backed Companies (1Q 2014)

VentureSource FINANCING

Location

Industry Group

Industry Segment

Industry Code

Brief Description

Close Date

Round Type

Raised (€M)

Sweden

Business and Financial Services

Financial Institutions and Services

Payment/ Transactional Processing

Provider of a payment solution for ecommerce stores in Europe.

3/16/2014

Acquisition Financing

€90.00

Takeaway.com Netherlands BV

Consumer Services

Travel and Leisure

Restaurants/Food Provider of online food Service ordering services.

3/31/2014

Later

€74.00

Macquarie Capital Inc., Prime Ventures NV, Individual Investors,

Delivery Hero Holding GmbH

Consumer Services

Consumer Information Services

Co. Name

Klarna AB

Glycotope GmbH

Germany

Germany

Novimmune SA Switzerland

Healthcare Biopharmaceuticals

Healthcare Biopharmaceuticals

Round Investors (* denotes lead)

Atomico, General Atlantic LLC, Management*, Sequoia Capital

Shopping Facilitators

Provider of an online food ordering platform.

1/13/2014

5th

€64.29

Insight Venture Partners*

Biotechnology Therapeutics

Provider of new technologies to optimize the glycosylation of biopharmaceuticals.

3/11/2014

Later

€55.00

ELSA Eckert Life Science Accelerator GmbH, Jossa Arznei GmbH*

Biotechnology Therapeutics

Developer of antibodybased drugs for the treatment of inflammatory diseases, immune-related disorders, and cancer.

2/18/2014

Later

€49.10

Rosetta Capital Ltd.*, Individual Investors

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VentureSource FINANCING

Most Active Investors for Europe-based, VC-backed Companies by Deals Completed (1Q 2014)

35 30 30

25

20

15

9

10

8

7

6

5

0 Internet Initiatives Development Fund

High-Tech Gruenderfonds Management GmbH

Index Ventures

SEED Capital Management I/S

Jenson Funding Partners LLP

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Equity Financings into Europe-based, VC-backed Companies, by Country (1Q 2014)

VentureSource

The U.K. remained the favoured destination for equity financing in 1Q’14 with a 26% share of investment into European VC-backed companies. The country received €372 million across 84 deals, a drop of 19% from 4Q’13 in both deal flow and capital raised.

FINANCING

Germany placed second with a 17% share of investment, raising €246 million across 42 deals, a decline of 39% in euros raised and 37% in deal flow from the previous quarter. Sweden consolidated third spot, raising €171 million, representing a 12% share of investment. France placed fourth with an 11% share, raising €164 million during 1Q’14. It was the country’s lowest quarterly investment total since 3Q’12.

Number of Deals in 1Q' 2014 by Country (Top 4)

Amount Raised in 1Q 2014 by Country (Top 4)

25%

26% United Kingdom

36%

United Kingdom

34%

France

Germany

Germany

Sweden

Russia

France

Rest of Europe

Rest of Europe

15% 17% 11% 12%

12%

12%

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VentureSource

Venture Exits in Europe Experience Overall Uptick in 1Q 2014

LIQUIDITY

A total of 42 venture-backed M&As took place in Europe during 1Q’14, an increase of 14% from 4Q’13 and 24% from 1Q’13.

The largest M&A of 1Q’14 was for Oxford-based NaturalMotion Ltd., a 3-D character animation technology provider, which was acquired by Zynga Inc. for €383 million.

Eight venture-backed IPOs took place during 1Q’14, the same as 4Q’13 and joining it as the highest quarterly figure since 2Q’10. Companies raised € 449 million during 1Q’14, the largest figure for a single quarter since 2Q’07.

Exit Opportunities for European VC – backed Companies (2011 – 2014)

1Q'14 4Q'13 3Q'13 2Q'13 1Q'13 4Q'12 3Q'12 2Q'12 1Q'12 4Q'11 3Q'11

2Q'11 1Q'11 0 IPOs

1Q'11 3

M&As

50

10 2Q'11 3Q'11 7 3 56

50

20 4Q'11 2

1Q'12 6

30 2Q'12 3

3Q'12 2

40 4Q'12 5

1Q'13 1

50 2Q'13 4

3Q'13 3

45

35

42

28

43

34

35

40

60 4Q'13 8 37

70 1Q'14 8 42

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VentureSource

Top 3 M&As in Europe (1Q 2014)

LIQUIDITY

Company Name

NaturalMotion Ltd.

Activaero GmbH

Location

Oxford, U.K.

Brief Description

Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

Software

Information Technology

1/30/2014

Acquisition

€383.08

Zynga Inc.

Drug Delivery

Biopharmaceuticals

Healthcare

3/13/2014

Acquisition

€130.00

Vectura

General Media/Content

Media and Content

Consumer Services

3/11/2014

Acquisition

€119.53

Warner Bros. Television Group

Provider of 3-D character animation technology which combines biology and Graphics/Publishing computer science to Software create animations for electronic entertainment and simulations.

Provider of controlled Gemuenden, breathing drug delivery Germany technologies.

Eyeworks Holding Amsterdam, B.V. Netherlands

Industry Segment

Industry Code

Provider of television (TV) production services.

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VentureSource

European VC-backed IPOs (2011-2014)

LIQUIDITY

Eight IPOs were completed during 1Q’14, equalling that of 4Q’13 and representing the highest number of venture-backed IPOs in a quarter since 2Q’10 when 10 were completed. During 1Q’14, IPOs raised €449 million, up 23% on 4Q’13 and the largest quarterly amount since 2Q’07 when 18 IPOs took in €467 million. The largest European VC-backed IPO of 1Q’14 was King Digital Entertainment’s March listing on the New York Stock Exchange. The company raised a total of €253 million, representing 56% of the total amount raised by European venture-backed companies for the quarter.

European VC-backed IPO Activity (2011 - 2014)

€ 500.00

9

€ 450.00

8

€ 400.00

7

€ 350.00

6

€ 300.00 5 € 250.00 4 € 200.00 3

€ 150.00 € 100.00

2

€ 50.00

1

€ 0.00

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

0

Raised (€M) through IPO € 259.71€ 355.76 € 65.15 € 18.66 € 157.40 € 26.76 € 52.08 € 142.99 € 19.22 € 71.56 € 25.51 € 364.20€ 448.63 Number of IPOs 3 7 3 2 6 3 2 5 1 4 3 8 8

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VentureSource

Top 3 IPOs in Europe (1Q 2014)

LIQUIDITY

Company Name

Country

Brief Description

Industry Code

Industry Segment

Industry Group

Close Date

Raised through IPO (€M)

Exchange/ Symbol

King Digital Entertainment PLC

Ireland

Provider of entertainment and games for the mobile world.

Entertainment

Consumer Information Services

Consumer Services

3/26/2014

€253.19

NYSE: KING

uniQure BV

Netherlands

Developer of gene therapies for genetic or acquired diseases.

Biotechnology Therapeutics

Biopharmaceuticals

Healthcare

2/5/2014

€68.06

NASDAQ: QURE

Provider of research tools to support translational Drug Development genomics research and Biopharmaceuticals Technologies the development of personalized medicines.

Healthcare

3/27/2014

€48.52

AIM: HZD

Horizon Discovery Group PLC

United Kingdom

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VentureSource ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers 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 surveys 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. About Dow Jones

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