Venture Capital Report - Dow Jones

Venture Capital Report Europe | 3Q | 2016

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 3Q 2016 include: • 

European venture capital fundraising declined noticeably from the prior quarter and just slightly compared to the same quarter in 2015;

• 

Venture capital investment into European companies decreased significantly from 2Q 2016;

• 

The number of mergers and acquisitions (M&As) was one deal lower, but the total amount raised in M&As experienced a significant increase from the previous quarter;

• 

The number of initial public offerings (IPOs) remained stable and the total amount raised increased significantly from 2Q 2016.


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EUROPEAN VENTURE CAPITAL FUNDRAISING FALLS IN 3Q 2016 FUNDRAISING

20 European venture capital funds raised €1.23 billion during 3Q 2016. Compared with 2Q 2016, total capital raised experienced a significant decline, and the number of fund closings decreased by 17%. • 

• 

Compared with the same quarter last year, euros raised declined by 8%, while the number of fund closings increased by 18% Northzone Ventures AS, which raised €300 million, was the largest fund of the quarter, accounting for 24% of the total amount raised in 3Q 2016

European VC Fundraising Based on multiple closings (2013–2016) 50

€ 2.79

€ 2.74

€ 3.00

€ 2.71

45 € 2.50

40

€ 2.14

35 € 1.73

30

€ 1.59 € 1.37

25 20 15

€ 2.00

€ 1.68

€ 1.00

€ 0.85

€ 1.33

€ 1.50

€ 1.23

€ 1.10

€ 1.00

10

€ 0.50

5 0

3Q'13

4Q'13

Amount Raised (€B) € 0.85 € 2.74 Number of Funds

12

46

€ 0.00

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

€ 1.00

€ 1.73

€ 1.10

€ 1.68

€ 1.37

€ 2.14

€ 1.33

€ 1.59 € 2.79

€ 2.71

€ 1.23

24

24

20

28

24

26

17

24

20

24

25


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LARGEST EUROPEAN VC FUNDS RAISED IN 3Q 2016 FUNDRAISING Firm Name

Fund Name

Amount (€M)

Location

Offering Status

Fund Type

Fund Category

Closing Type

Northzone Ventures AS

Northzone VIII

€ 300.00

Oslo, Norway

Closed

Early-stage venture capital

Venture Capital

Final

Via Venture Partners

Via Venture Partners Fond III K/S

€ 134.38

Hellerup, Denmark

Closed

Multi-stage venture capital

Venture Capital

Final

Russian Venture Company

National Technology Initiative Fund

€ 106.74

Moscow, Russia

Open


Venture Capital

PSA Peugeot Citroen

Groupe PSA Fund

€ 100.00

Paris, France

Closed


Venture Capital

Santander InnoVentures

Santander InnoVentures Fund

€89.77

London, United Kingdom

Open


Venture Capital

First

Final

Interim


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INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES DECREASED IN 3Q 2016 FINANCING European companies raised approximately €2.10 billion from 464 deals in 3Q 2016, a 32% decrease in the amount raised as well as a 3% decline in the number of deals when compared to the previous quarter. • 

• 

Compared with the same period last year, the amount companies raised decreased by 39%, whereas the number of deals grew by 9% Consumer Services was the strongest sector of the quarter in terms of amount raised, while Business and Financial Services completed the largest number of deals

Equity Financings into Europe-based, VC-backed Companies (2013–2016) € 4.50

550

€ 4.00

500 450

€ 3.50

400 € 3.00

350

€ 2.50

300

€ 2.00

250 200

€ 1.50

150 € 1.00

100

€ 0.50 € 0.00 Amount Raised (€B) Number of Deals

50 3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

€ 1.77 € 2.00 € 1.62 € 2.40 € 2.35 € 2.09 € 2.82 € 3.98 € 3.46 € 3.43 € 2.60 € 3.07 € 2.10 415

522

427

464

379

439

443

451

425

509

442

478


464

5

0

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

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

Seed

64

81

44

38

32

45

33

47

37

42

42

27

3Q'16 32

First

212

236

224

233

189

211

228

197

204

265

209

251

228

Second

65

88

64

92

67

76

78

78

83

94

97

90

99

Later

50

81

61

77

62

61

78

104

77

75

80

83

72

Restart

0

0

0

0

1

0

1

1

0

1

0

1

0


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

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

Seed

€ 25

€ 32

€ 24

€ 24

€ 16

€ 32

€ 31

€ 35

€ 30

€ 32

€ 39

€ 20

€ 45

First

€ 510

€ 512

€ 472

€ 603

€ 488

€ 468

€ 630

€ 567

€ 917

€ 765

€ 707

€ 802

€ 601

€ 436

€ 919

€ 584

€ 604

€ 770

€ 657

€ 436

€ 1,581

€ 1,072 € 1,559

€ 925

Second

€ 706

€ 411

€ 307

€ 474

€ 220

€ 766

Later

€ 469

€ 988

€ 696

€ 1,123

€ 903

€ 778

€0

€0

€0

€0

€1

€0

Restart

€ 1,650 € 2,303 € 1,876 €1

€1

€0

€1

€0

€2

3Q'16

€0


7

EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (2013–2016) – MEDIAN EQUITY DEAL SIZE (€M) FINANCING € 2.50

€ 2.00

€ 1.50

€ 1.00

€ 0.50

€ 0.00 Median Equity Deal Size (€M)

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

€ 1.00

€ 1.17

€ 1.30

€ 1.50

€ 1.50

€ 1.71

€ 1.79

€ 2.11

€ 2.00 € 2.00

€ 2.18

2Q'16

3Q'16

€ 2.00 € 2.00


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EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2016) FINANCING

Consumer Services received the largest allocation of investment during 3Q 2016, raising €776.30 million through 126 deals. The sector attracted 37% of the total amount invested and a 27% share of all deals completed in the quarter.

3Q'16 Industry Breakdown By Number of Deals

Business and Financial Services 26%

Consumer Goods Consumer Services Energy & Utilities

1%

Business and Financial Services ranked second in terms of euros invested. The sector garnered €452.87 million across 127 deals, a 2% decline in the number of deals and 36% drop in the amount invested when compared with 2Q 2016. Information Technology placed third, receiving €387.70 million via 120 deals. The sector’s investment figure represents 19% of the total equity financing into European VC-backed companies for 3Q 2016.

27%

3% 12% 2%

Healthcare Industrial Goods & Materials

27%

Information Technology

3Q’16 Industry Breakdown By Amount Raised

19%

Business and Financial Services 22%

2%

Consumer Goods 2%

Energy & Utilities Healthcare

15% 3%

Consumer Services

Industrial Goods & Materials 37%



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TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (3Q 2016) FINANCING

Co. Name

Location

Industry Code

Industry Segment

Industry Group

Brief Description

Close Date

Round Type

Raised (€M)

Round Investors (* denotes lead)

Roofoods Ltd. (Deliveroo)

London, United Kingdom

Shopping Facilitators

Consumer Information Services

Consumer Services

Provider of a food delivery platform.

05/08/2016

5th

€ 245.02

Bridgepoint Advisers Group Ltd.*, Digital Sky Technologies Ltd.*, Felix Capital, General Catalyst Partners*, Greenoaks Capital Management LLC

GoEuro Corp.

Berlin, Germany

Shopping Facilitators

Consumer Information Services

Consumer Services

Provider of a travel planning platform for different types of transportation.

30/09/2016

5th

€ 62.74

Atomico, Battery Ventures, Goldman Sachs Group Inc., Kleiner Perkins Caufield & Byers*, Lakestar LP, New Enterprise Associates Inc., Silver Lake Management LLC*

€ 42.00

AQTON SE, BASF Venture Capital GmbH, BNP Paribas SA, eCAPITAL entrepreneurial Partners AG, Engie SA, High-Tech Gruenderfonds Management GmbH, Innogy Holdings*, Innogy Venture Capital GmbH, Lampe Beteiligungsgesellschaft, TU Dresden

Heliatek GmbH

Dresden, Germany

Power Supplies

Electronics and Computer Hardware


Developer of organic solar cells.

21/09/2016

iOmx Therapeutics AG

Munich, Germany

Biotechnology Biopharmaceuticals Therapeutics

Healthcare

Provider of cancer therapeutics based on novel immune checkpoint targets.

22/09/2016 First Round

€ 40.00

Merck Ventures BV, MPM Capital*, Sofinnova Partners*, Wellington Partners

InflaRx GmbH

Jena, Germany

Biotechnology Biopharmaceuticals Therapeutics

Healthcare

Developer of therapeutics in the field of inflammation.

21/07/2016

€ 31.00

Beteiligungsmanagement Thuringen GmbH, Staidson Hong Kong Investment Company*, Undisclosed Investors

5th

4th


10

MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (3Q 2016) BY DEALS COMPLETED FINANCING 16 14 12 10 10

10 9 8

8

8

8

7

7

Kima Ventures

Sunstone Capital A/ S

6 4 2 0

High-Tech Bpifrance Global Founders Gruenderfonds Investissement SAS Capital Management GmbH

SOSV

ALMI Invest

Bayern Kapital GmbH


11

EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES BY COUNTRY (3Q 2016) FINANCING Number of Deals in 3Q 2016 by Country (Top 4)

United Kingdom 23% Germany

40%

The United Kingdom remained the most favoured destination for equity financing during 3Q 2016, receiving €737.96 million across 112 deals. The country attracted 35% of all equity financing in 3Q 2016. Germany, ranked second, raised €525.71 million through 74 deals. Despite a 5% decrease in capital invested and a 9% drop in the number of deals from last quarter, Germany still garnered a 25% share of all European financing in 3Q 2016. France occupied third position raising €269.36 million, or 13% of the total amount raised for the quarter. Ireland placed fourth based on raising €89.58 million during 3Q 2016.

France 15% 23%

7%

Spain

15% Rest of Europe

Amount Raised in 3Q 2016 by Country (Top 4)

United Kingdom 23% 35% 4%

Germany France

19%

Ireland

13% 25%

Rest of Europe


12

EUROPE 3Q 2016 VENTURE EXIT ACTIVITY LIQUIDITY

Exit Opportunities for European VC–backed Companies (2013–2016)

53 venture-backed M&As took place in Europe during 3Q 2016, a 2% decrease from 2Q 2016. However, the number is 10% higher than that of 3Q 2015. The total amount raised through European VC-backed M&As in 3Q 2016 was €4.24 billion. This represents a 21% increase from the previous quarter and a 90% increase from the same quarter last year. 10 venture-backed IPOs took place during 3Q 2016, the same figure as in 2Q 2016 and a 25% increase from 3Q 2015.

3Q'16 2Q'16 1Q'16 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 3Q'14 2Q'14 1Q'14 4Q'13 3Q'13 0 3Q'13

10 4Q'13

1Q'14

20 2Q'14

3Q'14

30 4Q'14

1Q'15

40 2Q'15

3Q'15

50 4Q'15

1Q'16

60 2Q'16

70 3Q'16

IPOs

3

9

9

21

16

10

12

17

8

15

5

10

10

M&As

43

44

56

43

51

50

56

45

48

39

51

54

53


13

TOP 3 M&As IN EUROPE (3Q 2016) LIQUIDITY

Company Name

Location

Brief Description

Industry Code

Industry Segment

Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

O3B Networks Ltd.

St. Helier, United Kingdom

Provider of global satellite services.

Wireless Telecommunication s Service Providers

Communications and Networking


01/08/2016

Acquisition

€ 650.42

SES SA

Enablon SA

Courbevoie, France

Provider of sustainability management software solutions.

Business Applications Software

Software


01/07/2016

Acquisition

€ 250.00

Wolters Kluwer

Provider of products and accessories for the eyewear market.

Specialty Retailers

Retailers

Consumer Services

30/09/2016

Acquisition

€ 140.00

Essilor International SA

MyOptique Group London, Ltd. United Kingdom


14

EUROPEAN VC-BACKED IPOs (2013-2016) LIQUIDITY

The number of IPOs during 3Q 2016 remained stable in comparison to the prior quarter, whereas the amount raised increased significantly.

€ 2,500.00

25

10 venture-backed companies went public during 3Q 2016, the same number as in the prior quarter.

€ 2,000.00

20

IPOs raised €257.83 million during 3Q 2016, a growth of 40% from the €184.48 million raised in 2Q 2016.

€ 1,500.00

15

The largest European VC-backed IPO of 3Q 2016 was Talend SA. The company raised €84.83 million for its offering on NASDAQ.

€ 1,000.00

10

€ 500.00

€ 0.00 Raised (€M) through IPO Number of IPOs

5

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

0

3Q'16

€ 25.51 € 366.10 € 691.24 € 529.53 € 447.47 € 2,249.97 € 417.40 € 576.70 € 699.69 € 609.55 € 110.05 € 184.48 € 257.83 3

9

9

21

16

10

12

17

8

15

5

10


10

15

TOP 3 IPOs IN EUROPE (3Q 2016) LIQUIDITY

Company Name

Location

Brief Description

Industry Code

Industry Segment

Industry Group

Close Date

Raised through IPO (€M)

Exchange/ Symbol

Talend SA

France

Provider of open source data integration software.

Communications Software

Software


28/07/2016

€ 84.83

NASDAQ: TLND

AC Immune SA

Switzerland

Developer of therapeutics for neurodegenerative diseases.

Biopharmaceuticals

Healthcare

23/09/2016

€ 59.16

NASDAQ: ACIU

GenSight Biologics SA

France

Developer of therapies for mitochondrial and neurodegenerative diseases of the eye and central nervous system.

Biopharmaceuticals

Healthcare

13/07/2016

€ 40.00

Euronext: SIGHT

Biotechnology Therapeutics

Biotechnology Therapeutics


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ABOUT US & METHODOLOGY 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 report cover venture backed companies headquartered in Europe, and are based on aggregate findings of Dow Jones’ proprietary research for VentureSource.

This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. To be included, companies have to receive financing from a venture capital or private equity firm. Our figures do not include companies that have received funding solely from individual, corporate and/or government investors. The data in this report only accounts for equity funding, not convertible debt deals. Figures contained throughout the report are current at time of editorial but 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.


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