Venture Capital Report - Dow Jones & Company · 14/09/2017 Later Stage €75.00 Samsung Strategy &...

V E N T U R E C A P I T A L R E P O R T

Venture Capital Report Europe | 3Q | 2017


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 2017 include:

•  Both the number of funds and amount raised by European venture capital funds decreased compared to the previous quarter.

•  Venture capital investment into European companies fell by 25% from 2Q 2017 in terms of amount raised, but was up 48% year-on-year.

•  The number of and amount raised through M&As fell 30% and 43%, respectively, compared with the previous quarter.

•  Exits via IPOs saw a steep drop in the third quarter compared to 2Q 2017, both in terms of amount raised and number of IPOs.

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EUROPEAN VENTURE CAPITAL FUNDRAISING EXPERIENCES SIGNIFICANT DROP IN 3Q 2017

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FUNDRAISING

European VC Fundraising Based on multiple closings (2014–2017) 20 European venture capital funds raised

€1.58 billion during 3Q 2017. Compared with 2Q 2017, total

capital raised experienced a 48% drop, and the number of

fund closings decreased by 41%.

Compared with the same quarter last year, amount raised

increased by 24%, despite closing 13% fewer funds.

Partech International Ventures VII, which raised €400 million,

was the largest fund of the quarter, accounting for 25% of the

total amount raised in 3Q 2017.

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Amount Raised (€B) € 0.83 € 1.40 € 1.30 € 2.03 € 1.20 € 1.70 € 2.85 € 2.57 € 1.27 € 2.08 € 2.23 € 3.04 € 1.58

Number of Funds 22 29 24 27 19 27 29 25 23 24 19 34 20

€ 0.83

€ 1.40 € 1.30

€ 2.03

€ 1.20

€ 1.70

€ 2.85

€ 2.57

€ 1.27

€ 2.08 € 2.23

€ 3.04

€ 1.58

0

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10

15

20

25

30

35

40

€ 0.00

€ 0.50

€ 1.00

€ 1.50

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€ 2.50

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€ 3.50


LARGEST EUROPEAN VC FUNDS RAISED IN 3Q 2017

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FUNDRAISING

Firm Name Fund Name Amount (€M) Location Offering Status

Fund Type Fund Category Closing Type

Partech Ventures Partech International

Ventures VII €400.00 Paris, France Closed

Early-stage Venture Capital

Venture Capital Final

Cathay Innovation Cathay Innovation Fund €280.05 Paris, France Closed Multi-stage

Venture Capital Venture Capital Final

Mangrove Capital Partners Mangrove V Fund €148.78 Luxembourg City,

Luxembourg Closed

Early-stage Venture Capital

Venture Capital Final

BlackFin Capital Partners SAS BlackFin Tech Fund 1 €100.00 Paris, France Open Multi-stage

Venture Capital

Venture Capital First

Abingworth LLP Abingworth Bioventures VII LP €88.11 London,

United Kingdom Open

Multi-stage Venture Capital

Venture Capital Interim


INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES PARES BACK GAINS IN 3Q 2017

European companies raised approximately €3.29 billion through

513 deals in 3Q 2017.

In comparison to the same quarter last year, the amount

companies raised increased by 48%, while the total number of

deals closed fell by some 5%.

Quarter-over-quarter figures show both the amount raised and

number deals declining by 25% and 7%, respectively.

The quarter’s decline in the number of deals continued the year-to-date downward trend in this area. Moreover, the correction in the

amount raised by European venture-backed companies in 3Q 2017

might suggest last quarter’s spike was more of an anomaly and

not fully representative of how the rest of the year’s equity

financings could develop.

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FINANCING Equity Financings into Europe-based,

VC-backed Companies (2014–2017)

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Amount Raised (€B) € 2.39 € 2.09 € 2.92 € 4.11 € 3.43 € 3.56 € 2.85 € 3.21 € 2.23 € 3.51 € 2.97 € 4.39 € 3.29

Number of Deals 402 473 497 516 471 591 543 598 539 608 610 554 513

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700

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€ 3.00

€ 3.50

€ 4.00

€ 4.50


EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2014–2017)

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FINANCING

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Seed 43 51 43 61 47 56 58 55 51 63 71 80 79

First 193 230 244 225 219 300 241 292 261 272 253 225 186

Second 72 83 87 82 89 102 106 105 103 121 146 110 118

Later 58 58 81 110 75 78 84 91 74 94 76 80 84

Restart 1 1 1

0

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80

120

160

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280

320 Number of Deals


EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (3Q 2014–3Q 2017)

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FINANCING

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Seed € 19 € 32 € 36 € 43 € 38 € 43 € 48 € 46 € 42 € 65 € 79 € 83 € 113

First € 495 € 500 € 654 € 683 € 721 € 803 € 757 € 902 € 740 € 1,116 € 961 € 1,007 € 584

Second € 247 € 830 € 446 € 937 € 643 € 811 € 800 € 580 € 455 € 597 € 755 € 730 € 827

Later € 886 € 681 € 1,690 € 2,295 € 1,981 € 1,452 € 1,053 € 1,607 € 902 € 1,615 € 846 € 1,559 € 1,556

Restart € 2 € 1 € 2

€ 0

€ 500

€ 1,000

€ 1,500

€ 2,000

€ 2,500 Amount Raised (€M)


EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (3Q 2014–3Q 2017)

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FINANCING

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Median Equity Deal Size (€M) € 1.48 € 1.60 € 1.59 € 1.86 € 1.78 € 1.86 € 1.90 € 1.56 € 1.81 € 2.05 € 2.20 € 1.96 € 2.36

€ 0.00

€ 0.50

€ 1.00

€ 1.50

€ 2.00

€ 2.50 Median Equity Deal Size [€M]


EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2017)

Consumer Services received the largest allocation of investment during 3Q 2017,

raising €996 million through 121 deals. The sector attracted 30% of capital raised

by European VC-backed companies in the quarter, and a 24% share of all deals

completed in the quarter.

Business and Financial Services ranked second, raising some €904 million

through 134 deals. The sector attracted 27% of the total amount invested into

European VC-backed companies as well as a 26% share of all deals completed in

the quarter.

Information Technology (IT) placed third in terms of euros invested, raising €641

million, or some 20% of the total amount invested into European VC-backed

companies for the quarter. Additionally, IT, with 136 financing rounds, was

Europe’s most active industry, beating out Business and Financial Services by

two deals.

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FINANCING 3Q 2017 Industry Breakdown By Number of Deals

3Q 2017 Industry Breakdown By Amount Raised

26%

4%

24% 3%

14%

3%

26%

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

27%

3%

30% 2%

14%

4%

20% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare




TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (3Q 2017)

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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. 24/09/2017 Later

Stage €301.79

Accel Partners, Digital Sky Technologies Ltd., Fidelity Management & Research Co.*, General

Catalyst Partners, Index Ventures, T. Rowe Price Group Inc.*

SoundCloud Ltd. Berlin,

Germany

Movie / Music Producers and

Distributors Media & Content Consumer Services

Operator of an online platform to send, receive, and distribute

music. 11/08/2017 Later

Stage €142.94

Atlantic Labs Manager GmbH, Doughty Hanson, Temasek Holdings Pvt. Ltd.*, The Raine Group

LLC*, Union Square Ventures

Lilium GmbH (Lilium Aviation)

Gilching, Germany

Commercial Aircraft

Aerospace & Defense


Developer of small-scale electric aircrafts.

05/09/2017 Second Round

€75.87 Atomico, LGT Group, Obvious Ventures

Management LLC, Tencent Holdings Ltd.

TTTech Computer-technik AG

Vienna, Austria

Software Development

Tools Software


Provider of time-triggered systems.

14/09/2017 Later Stage

€75.00 Samsung Strategy & Innovation Center*

Autolus Ltd. London, United

Kingdom

Biotechnology Therapeutics

Biopharmaceuticals Healthcare Provider of biopharmaceutical

solutions. 26/09/2017 Later

Stage €64.42

Arix Bioscience Investments Ltd., Cormorant Asset Management LLC*, Nextech Invest Ltd., Syncona Partners LLP, Woodford Investment Management

LLP

FINANCING


MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (3Q 2017)

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FINANCING

14

13

12

11

10 10

9 9

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Force Over Mass Capital LLP

Bpifrance Investissement

SAS

Partech Ventures High-Tech Gruenderfonds Management

GmbH

Kima Ventures Sunstone Capital A/S

Balderton Capital Management LLP

Global Founders Capital

Deals Completed


EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES BY COUNTRY (3Q 2017)

The United Kingdom remained the most favored destination for equity

financings in 3Q 2017, attaining some 41% of amount raised and 28% of all

deals. The region received €1.34 billion across 146 deals. The amount invested

was down 35% from last quarter while the deal flow decreased by 12%.

Germany ranked second with €603 million raised through 70 deals. This

represents a 33% decrease in capital invested and a 8% rise in the number of

deals compared to last quarter.

France came in third, raising €504 million in 78 deals. It attracted 11% more

capital than last quarter, through a similar level of deals.

Switzerland, garnering €146 million across 30 deals, was just two financings

shy of being in the Top 4 outright for both amount raised and number of deals.

Instead, Russia, with 31 deals, rounded out the Top 4 for number of financings.

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FINANCING Number of Deals in 3Q 2017 by Country (Top 4)

Amount Raised in 3Q 2017 by Country (Top 4)

23%

19%

28%

15%

14% 6%

37%

United Kingdom

France

Germany

Russia

Rest of Europe

41%

18%

15%

4%

22% United Kingdom

Germany

France

Switzerland

Rest of Europe


EUROPE 3Q 2017 VENTURE CAPITAL EXIT ACTIVITY

During the quarter, 46 venture-backed M&As took

place in Europe, a 30% quarter-on-quarter drop and a

39% drop compared to the same quarter last year.

The total amount raised through European VC-backed

M&As in 3Q 2017 was €1.8 billion, representing a 43%

decrease from last quarter and a 52% decline from 3Q

2016.

Eight European venture-backed companies completed

initial public offerings in the quarter, indicating M&As

continue to be the preferred exit strategy for venture-

backed companies.

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LIQUIDITY

Exits for European VC–backed Companies (2014–2017)

0 10 20 30 40 50 60 70 80 90 100

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

1Q'17

2Q'17

3Q'17

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

IPOs 16 11 12 17 8 17 7 11 13 17 10 17 8

M&As 60 59 63 53 64 45 67 66 75 74 62 66 46


TOP 3 M&As IN EUROPE (3Q 2017)

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Company Name Location Brief

Description Industry

Code Industry Segment Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

Contorion GmbH Berlin,

Germany

Operator of an e-commerce site for industrial and trade supplies in the maintenance repair and operations (MRO) parts sector.

Shopping Facilitators

Consumer Information Services

Consumer Services 26/07/2017 Acquisition €120.00 Hoffmann SE

Cobalt Light Systems Ltd.

Abingdon, United Kingdom

Manufacturer of laser-spectroscopy systems for pharmaceutical analysis,

research, security, and biomedical analysis

Electronic Components

/ Devices

Electronics & Computer Hardware


07/07/2017 Acquisition €45.59 Agilent Technologies

Inc.

The Social Travel Club Ltd. (Love

Home Swap)

London, United Kingdom

Operator of an international vacation home exchange

website.

Travel Arrangement /

Tourism Travel & Leisure Consumer Services 31/07/2017 Acquisition €45.59

Resort Condominiums

International Ltd.

LIQUIDITY


EUROPEAN VC-BACKED IPOs (3Q 2014-3Q 2017)

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LIQUIDITY

During 3Q 2017, both the number of IPOs and the amount

raised fell significantly in comparison to the prior quarter.

Only eight venture-backed companies went public in the

quarter, down markedly from the 18 IPOs in 2Q 2017. This

figure represents 53% fewer IPOs than last quarter and 38%

fewer than the same quarter last year. Furthermore, the

€207.60 million raised through the quarter’s IPOs

constituted a 72% and 57% decline compared to last quarter

and 3Q 2016, respectively.

The largest European VC-backed IPO during the quarter was

NuCana PLC, which raised €84.34 million at a valuation of

€450.07 million for its offering on NASDAQ.

3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17

Raised (€M) through IPO € 447.47 € 2,264.11 € 417.40 € 576.70 € 699.69 € 612.93 € 155.78 € 227.64 € 483.22 € 202.04 € 357.82 € 749.81 € 207.60

Number of IPOs 16 11 12 17 8 17 7 11 13 17 10 17 8

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TOP 3 IPOs IN EUROPE (3Q 2017)

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LIQUIDITY

Company Name Location Brief

Description Industry

Code Industry Segment Industry Group

Close Date

Raised through IPO (€M)

Exchange: Ticker

NuCana PLC United Kingdom Provider of biopharmaceuticals for

anti-cancer therapies. Biotechnology Therapeutics

Biopharmaceuticals Healthcare 28/09/2017 €84.34 NASDAQ: NCNA

Nightstar Therapeutics Ltd.

United Kingdom Developer of gene therapies for

retinal dystrophies, such as choroideremia (CHM).

Biotechnology Therapeutics

Biopharmaceuticals Healthcare 28/09/2017 €63.26 NASDAQ: NITE

Rovio Entertainment Ltd.

Finland Provider of entertainment products. Recreational / Home

Software Software


29/09/2017 €30.00 HEL: ROVIO


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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