Startup Ecosystem in Austria

Markus Wagner 26th of Jan. 2015; @MarkusWagner

CEO - i5growth Inc. (Palo Alto)

Chairmen of Adv. Board - i5invest seed capital (Austria/Vienna)

Board AustrianStartups – Austrian Startup Association (non-profit)

Investment Committee Member – SpeedInvest (seed and Series A fund in Austria)

European Entrepreneurship & Innovation @ Stanford Engineering

…known for Mozart, Sissi & Sound of Music

…known for – Music & Culture

Strong Austrian Brands

and recently known for a lively, liberal culture & tech scene

Austrian Facts & Figures Popula'on:  8,5mln  Capital:  Vienna  (high  diversity  of  industries  and  services)    Vienna  Region:  2,6mln  Language:  German    German  speaking  market:  ~100mln      #1  in  Europe:  lowest  unemployment  rate    #1  worldwide:  quality  of  life  (Mercer  Study  2014)    GDP  per  capita:  #13  (IMF)  Industry  29%,  Service  69%,  Agriculture  1,5%  (Tourism  6%)    ~4hours  drive  radius:  Bra'slava  (45min)  Krakow,  Zagreb,  Budapest,      Munich,  Prague,  Brno,  Ljubljana    Significant  Eastern  and  Balkans  Investor:  finance,  retail,  telecom      Vienna  

4hours  car  drive  radius  

Vienna‘s Biggest Asset: 180.000 students in Vienna (40% int.)

my background (i5invest seed capital / i5growth Inc. / AustrianStartup)

Timeline: Markus, Austrian Startup Scene

2000 2004 2006 2002 2008 2010 2012 2014 1997

3united AG (my first Exit)

Mobile Music Mobile Content &

Community Portals TV, Radio & Print Gambling &

Betting

Mobile Operators

3united key verticals

Mobile Operator Clients

COIN Platform Application Layer Applications & Services

•  Mobile Portal •  Web Portal •  Personalization •  Recommender •  Rich mobile Clients (J2ME/Symbian) •  Radio Station Module •  Merchant Module •  Promotion Engine •  Community Module •  Dual Delivery •  Multi Vendor Content Management •  Multiparty Reporting •  Automatic Meta Data Extraction

•  Dating & Matchmaking •  Web Charging •  Content Download Server •  MMS Feature Proxy •  WAP Application Suite (Entertainment) •  WinnerZone Promotion Engine •  m-Ticketing •  CD/DVD Retail Module •  Information Services (Push/Pull) •  Content •  WAP Portals (on- deck, off-deck) •  CRM Module

•  Votings/TED •  On-Air Chat •  Sweepstakes •  Call-in Shows •  Videotext •  Dating/Flirting •  Content Downloads •  Mobile Media Portal •  Music Recognition •  Message2DJ •  TV/Radio show reminder •  Information Services (Push/Pull) •  Astrology tools •  TV on Mobile •  On-Air Games •  CRM •  Content

•  Mobile Clients Gambling •  Mobile Clients Betting •  Gambling Back-ends •  Application Download Platform •  Transaction Proxy Framework •  Account Admin •  Multiparty Reporting •  Back-end & Payment Integration Mod. •  Provisioning Platform •  Authentication Management •  CRM Platform

•  DRM •  Handset DB •  Rendering

Support

•  Premium Video Delivery •  m-Commerce

Payment

•  Premium MMS •  Premium SMS

COIN Platform Transaction Layer Mobile Multi-Media Middleware & Connectivity

13 Countries

100+ Employees Highly profitable (30%+ EBIT Margin)

2000 2004 2006 2002 2008 2010 2012 2014 1997

Timeline: Markus, Austrian Startup Scene

2000 2004 2006 2002 2008 2010 2012 2014 1997

IncubaSon  /  Company  Building  

AcceleraSon  +  Seed  Capital  

M&A  and  Corporate  Dev.  

i5growth  Inc.  /  innovaSoncenter.eu  

A  group  of  serial  entrepreneurs  who  invest  invest  their  money  and  'me    

Timeline: Markus, Austrian Startup Scene

Overview

We focus on max 2 new companies per year – we aren’t spray & pray investors. We focus on sector expertise, mostly strong IP/technology, international/US markets, rarely copycat business models

WE ARE LONG TERM PARTNERS (through all stages) START-UP MENTORING SEED FUNDING CORPORATE DEVELOPMENT / M&A ADVISORY (portfolio, friends & family network)

Portfolio Overview

#inspire, #innovate, #incubate, #invest, #internationalize

The Austrian Startup

Ecosystem

2000 2004 2006 2002 2008 2010 2012 2014 1997

March.fifteen.  

The    Decline    of  Local  

Series  A/B  

Government  Series  A  Funds  /  Support  

Public  R&D  (Pre-­‐)  Seed.  Support  

Second  Wave  of  Private  Ini'a'ves  

 The  Raise  of    An  Amazing  Startup  Scene    

i5growth  Inc.  /  innovaSoncenter.eu  

Timeline: Markus, Austrian Startup Scene

Investments 1999 – 2013 (in Mio. €)

Development: Share VC only

Austrian Funds

Source: EVCA PEREP_Analytics | AVCO (May 2014)

Private Equity & Venture Capital in Austria

Source: EVCA PEREP_Analytics | AVCO (May 2014)

Private Equity & Venture Capital in Austria

Investments 2013 (in %)

GDP Share: VC only (PE not included) - Companies in Europe

Private Equity & Venture Capital in Austria

Source: EVCA PEREP_Analytics | AVCO (May 2014)

into Austrian Companies: 539,9

€ 88,0 Mio. Investments made by Austrian Funds

20,5

67,5

472,4

€ 539,9 Mio. Investments in Austrian Companies

0,173 % GDP share

0,028 % GDP share

by Austrian Funds: 88,0

Abroad

Czech Republic 7,0 Mio. Bulgaria 6,0 Mio. Poland 5,2 Mio. Germany 1,6 Mio. Turkey 0,4 Mio. Other 0,3 Mio.

Investments 2013 (in Mio. €)

Flow: PE & VC

2,500 Visitors at the Festival 2700 Challenge applications in the last 30 months 50% WESTERN EUROPE 37% EASTERN EUROPE 7% NORTHERN EUROPE 6% REST OF THE WORLD

Startup Ecosystem is booming

Vienna   Austria    

significant  as  well:    Linz,  Graz  

S'll,  you  beYer  should  interna'onalize  early!  

Austrian Ecosystem Exits / Notable Events

Notable  EXITS  (star'ng  by  2010):  •  2010:  fa[oogoo  –  Digital  River  •  2010:  greentube  -­‐  NovomaSc  •  2010:  jajah  -­‐  Telefonica  •  2010:  123people  -­‐  PagesJaunes  •  2011:  RF-­‐iT  SoluSons  –  Enso  Detego  •  2011:  sensordynamics  -­‐  Maxim  •  2011:  silverserver  –  Tele2  •  2011:  redcoon  –  Metro’s  Media  Saturn  •  2011:  dynaTrace  -­‐  Compuware  •  2011:  payoluSon  –  Moneybookers  /  Skrill  •  2011:  checkfelix.com  -­‐  KAYAK  •  2012:  Kununu  -­‐  Xing  •  2012:  Tupalo  –  Herold  /  European  Directories    •  2012:  Arztsuche24  –  Herold  /  European  Directories    •  2012:  Blue-­‐tomato  –  Zumiez  Inc.  •  2012:  paysafecard  -­‐  Skrill  •  2013:  tripwolf  –  German  Publisher    •  2013:  SolveDirect  –  Cisco  •  2013:  RuntasSc  –  Axel  Springer  •  2014:  Immobilien.net  –  ImmobilienScout24  •  2014:  Wikidocs  –  Atlassian    •  2014:  MobFox  –  Matomy  Media  Group  

(MTMY:LSE)  

Notable  Events  (star'ng  by  2012):  

•  2012:  Andreessen  Horowitz/CiS  Ventures  investment  into  Jumio  

•  2012:  Blossom  investment  of  seedcamp  

•  2013:  CodeShip  investment  of  seedcamp  and  Techstars  

•  2013:  Former  Expedia  CEO  invests  in  TourRadar  

•  2014:  CodeShip  receives  US  Series  A  

•  2014:  Foundertalks.org  launches  (brings  YC  alumni  to  Austria  for  experience  exchange)  

•  2014:  Ulmon  investment  of  Global  Founders  Capital  

•  2014:  100%  Austrian  Team  in  YC  patch  

•  2014:  Talenthouse  investment  of  ProSiebenSat.1  Media  AG  

•  2014:  Austrian  team  joins  YC  producthunt.com  (founding  team  member)  

•  2014:  Austrian  flatout  joins  Cisco’s  EIR  program    

•  2014:  Austrian  Crate.io  TechCrunch  Disrupt  Europe  Winner  

•  2015:  ChatGrape  Betaworks  (US)  investment  

Ecosystem Summary

What  is  great?    •  Many  great  entrepreneurs  •  Established  role  models    •  Access  to  German  speaking  market  •  Amazing  Quality  of  Life,  low  Cost  of  Living,  high  Social  Security    

•  Highly  diversified  industry  ver'cals  •  Established  angel  investor  scene    (aaia,  i2)  

•  Public  •  R&D  grants  •  incubators  at  universiSes  •  VC  co-­‐investments    

•  Poten'al  to  become  the  significant  CEE  hub  (central  &  eastern  European  hub)  

•  Ecosystem  has  reached  cri'cal  mass  –  more  &  more  exits,  more  &  more  angels,  more  &  more  &  more  exits,  …  

Challenges  &  Coping  Strategies  

•  Market  size  is  small  à  Companies  keep  dev.  team  in  Austria                and  move  business  unit  to  USA    

•  Not  many  local  series  A/series  B  op'ons    à  Join  internaSonal  accelerators    à  Companies  keep  dev.  in  Austria  and          move  business  unit  to  USA  /  or  flip      à  Fundraising  in  Germany/UK/France  à  Chose  cash  efficient  business  models          (low  burn)  à  Chose  business  models  that  soon  will          generate  revenues  (early  revenues)  à  Start  a  Series  A/B  fund  

•  No  local  M&A  or  IPO  market    à  go  internaSonal,  start  early      

•  No  investment  incen'ves  for  angels  

•  Stock  Op'on  Plans  are  hard  to  implement  

Examples of huge variety of Austrian tech startups/

companies

Example: World market leader for V-shaped book scanner

Example: Next Generation Digital Sheet Music App

Example: Europe’s independent #1 Ski Rental

Example: The World's leading Augmented Reality SDK

Example: Big Data for Media Planning

Example: Europe’s mobile #1 ad platform

hrp://www.cloudswave.com/images/orig/mobfox_for_adverSsers1373364224719.png  

Example: technology leader robust networked safety controls

Example: TechCrunch Disrupt Europe Winner 2014

The  Distributed  Database  

Austria: Highly educated founders with passion – ready

for the global market

Thank you! @MarkusWagner or Linkedin