Venture Capital Report Europe | 4Q | 2016

VENTURE CAPITAL REPORT

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 4Q 2016 include:  • 

European venture capital fundraising increased slightly both compared to the prior quarter and to the same quarter in 2015;

• 

Venture capital investment into European companies increased significantly from 3Q 2016;

• 

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

• 

While the number of initial public offerings (IPOs) increased slightly, the total amount raised decreased noticeably from 3Q 2016.

VENTURE CAPITAL REPORT

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EUROPEAN VENTURE CAPITAL FUNDRAISING REBOUNDS IN 4Q 2016 FUNDRAISING

19 European venture capital funds raised €1.60 billion during 4Q 2016. Compared with 3Q 2016, total capital raised experienced a slight increase, while the number of fund closings decreased by 21%. • 

• 

Compared with the same quarter last year, euros raised remained stable, while the number of fund closings decreased by 17%. Scottish Equity Partners LLP’s SEP V fund, which raised €307 million, was the largest fund of the quarter, accounting for 19% of the total amount raised in 4Q 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 € 1.97

35

€ 2.00

€ 1.73

30

€ 1.60

€ 1.54 € 1.37

25

€ 1.50

€ 1.10

€ 1.09

20

€ 1.42

€ 1.33

€ 1.00

15 10

€ 0.50

5 0 Amount Raised (€B) Number of Funds

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

€ 2.74

€ 1.09

€ 1.73

€ 1.10

€ 1.97

€ 1.37

€ 2.14

€ 1.33 € 1.54

€ 2.79

€ 2.71

€ 1.42

€ 1.60

46

25

24

20

29

24

26

25

24

24

19

17

23

VENTURE CAPITAL REPORT

€ 0.00

3

LARGEST EUROPEAN VC FUNDS RAISED IN 4Q 2016 FUNDRAISING Firm Name

Fund Name

Amount (€M)

Location

Offering Status

Fund Type

Fund Category

Closing Type

Scottish Equity Partners LLP

SEP V

€ 307.06

Glasgow, United Kingdom

Closed

Multi-stage venture capital

Venture Capital

Final

Alven Capital SA

Alven Capital V

€ 250.00

Paris, France

Closed

Multi-stage venture capital

Venture Capital

Final

Statoil ASA

Statoil Energy Ventures

€ 186.25

Stavanger, Norway

Closed

Multi-stage venture capital

Venture Capital

daphni SAS

Daphni Purple

€ 150.00

Paris, France

Closed

Early-stage venture capital

Venture Capital

Abingworth Management Inc.

Abingworth Bioventures VII LP

€109.08

London, United Kingdom

Open

Multi-stage venture capital

Venture Capital

Final

Final

First

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INVESTMENT INTO EUROPEAN VENTURE-BACKED COMPANIES INCREASED IN 4Q 2016 FINANCING European companies raised approximately €2.93 billion from 539 deals in 4Q 2016, a 35% increase in the amount raised as well as a 9% rise in the number of deals when compared to the previous quarter. • 

• 

Compared with the same period last year, the amount companies raised decreased by 16%, whereas the number of deals grew by 1%. Information Technology, netting €866.41 million, was the strongest sector of the quarter in terms of amount raised, while Business and Financial Services, with 143 transactions, 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

50 4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

4Q'16

Amount Raised (€B) € 2.03 € 1.55 € 2.43 € 2.37 € 2.11 € 2.86 € 3.99 € 3.50 € 3.48 € 2.65 € 3.20 € 2.17 € 2.93 Number of Deals

530

433

471

385

453

459

468

432

535

473

527

494

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539

5

0

EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY ROUND CLASS (2013–2016) – NUMBER OF DEALS FINANCING 320 280 240 200 160 120 80 40 0

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

Seed

82

45

38

34

46

34

50

38

45

45

30

36

4Q'16 40

First

238

229

235

191

221

231

201

209

274

221

273

242

234

Second

92

64

94

67

76

81

80

83

96

101

96

100

106

Later

80

61

78

62

61

80

106

78

78

85

91

73

88

Restart

0

0

0

1

0

0

1

0

0

0

1

0

1

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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

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

Seed

€ 32

€ 25

€ 24

€ 17

€ 32

€ 31

€ 39

€ 31

€ 35

€ 39

€ 22

€ 47

€ 47

First

€ 515

€ 483

€ 621

€ 495

€ 482

€ 636

€ 575

€ 939

€ 782

€ 730

€ 894

€ 665

€ 1,037

€ 442

€ 921

€ 609

€ 603

Second

€ 432

€ 307

€ 479

€ 223

€ 773

Later

€ 986

€ 696

€ 1,124

€ 902

€ 780

€0

€0

€0

€1

€0

Restart

€ 1,682 € 2,289 € 1,874 € 1,604 €0

€1

€0

€0

4Q'16

€ 771

€ 660

€ 444

€ 533

€ 1,076

€ 1,572

€ 902

€ 1,178

€0

€2

€0

€1

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EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES (2013–2016) – MEDIAN EQUITY DEAL SIZE (€M) FINANCING € 3.00

€ 2.50

€ 2.00

€ 1.50

€ 1.00

€ 0.50

€ 0.00 Median Equity Deal Size (€M)

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

€ 1.31

€ 1.45

€ 1.70

€ 1.55

€ 1.88

€ 1.80

€ 2.09

€ 2.10

€ 2.00 € 2.09

1Q'16

3Q'16

4Q'16

€ 2.00 € 2.00

2Q'16

€ 2.50

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EQUITY FINANCINGS INTO EUROPE-BASED, VC-BACKED COMPANIES, BY INDUSTRY GROUP (4Q 2016) FINANCING

Information Technology received the largest allocation of investment during 4Q 2016, raising €866.41 million through 135 deals. The sector attracted 30% of the total amount invested and a 25% share of all deals completed in the quarter.

4Q'16 Industry Breakdown By Number of Deals

Business and Financial Services 25%

Consumer Services Energy & Utilities

1%

Healthcare ranked second in terms of euros invested. The sector garnered €745.97 million across 81 deals. This deal flow represented 15% of all transactions and 25% of the total amount invested into European VC-backed companies for the quarter. Business and Financial Services placed third, receiving €567.80 million via 143 deals. The sector’s investment figure represents 19% of the total equity financing into European VC-backed companies for 4Q 2016.

Consumer Goods

27%

4% 15% 3%

Healthcare Industrial Goods & Materials

24%

Information Technology

4Q’16 Industry Breakdown By Amount Raised

Business and Financial Services

19%

Consumer Goods

30% 3%

Consumer Services Energy & Utilities

16%

2%

Healthcare Industrial Goods & Materials

5% 25%

Information Technology

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TOP 5 DEALS INTO EUROPEAN VC-BACKED COMPANIES (4Q 2016) FINANCING

Co. Name

Sigfox SA

Location

Labège, France

Oxford Nanopore Oxford, United Technologies Kingdom Ltd.

Industry Code

Industry Segment

Wireless Communications and Communications Networking Equipment

Industry Group

Brief Description

Close Date

Round Type

Raised (€M)

Round Investors (* denotes lead)

Information Technology

Operator of a cellular network.

18/11/2016

5th

€ 150.00

Air Liquide, Alto Invest, Bpifrance Investissement SAS, Elliott Associates LP, Idinvest Partners, Individual Investor(s), Intel Capital, iXO Private Equity SAS, Salesforce Ventures, SWEN Capital Partners, Tamer Group, Total SA

12/12/2016

Later

€ 118.28

GT Healthcare*, IP Group PLC, Woodford Investment Management LLP*

Drug Development Technologies

Biopharmaceuticals

Healthcare

Provider of nanopore technology.

Devialet SA

Paris, France

Consumer Electronics

Electronics and Computer Hardware

Information Technology

Provider of high-end amplifiers and sound amplification technology.

29/11/2016

First Round

€ 100.00

Kymab Ltd.

Cambridge, United Kingdom

Biotechnology Therapeutics

Biopharmaceuticals

Healthcare

Developer of human monoclonal antibody therapeutics.

24/11/2016

4th

€ 94.43

HelloFresh SE

Berlin, Germany

Restaurants / Food Service

Travel and Leisure

Consumer Services

Provider of meal kit delivery services.

20/12/2016

7th

€ 85.00

Bpifrance Investissement SAS, CM-CIC Investissement, Foxconn Technology Group, Future French Champions, Ginko Ventures Sarl*, Korleya Capital, Playground Global LLC, Renault SA, Roc Nation LLC, Sharp Corp. Bill & Melinda Gates Foundation, Malin Corporation plc, ORI Capital Investment Advisory (Hong Kong) Ltd.*, Shenzhen Hepalink Pharmaceutical Co. Ltd., Wellcome Trust Ltd., Woodford Investment Management LLP Baillie Gifford & Co. Ltd.

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MOST ACTIVE INVESTORS FOR EUROPE-BASED, VC-BACKED COMPANIES (4Q 2016) BY DEALS COMPLETED FINANCING 16 14

13

12

11

10

9 8

8

7

7

7

Sunstone Capital A/S

ALMI Invest AB

Internet Initiatives Development Fund

6 4 2 0

High-Tech Gruenderfonds Management GmbH

Bpifrance Investissement SAS

Enterprise Ireland

Localglobe LLP

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

United Kingdom 23% Germany

40%

The United Kingdom remained the most favoured destination for equity financing during 4Q 2016, receiving €754.73 million across 122 deals. The country attracted 23% of all equity financing in 4Q 2016. France, ranked second, raised €603.15 million through 62 deals. With a 96% increase in capital invested and a 17% drop in the number of deals from last quarter, France garnered a 21% share of all European financing in 4Q 2016. Germany occupied third position raising €525.06 million, or 18% of the total amount raised for the quarter. Ireland placed fourth based on raising €220.83 million during 4Q 2016.

Sweden 14% 23%

11%

France

12% Rest of Europe

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

United Kingdom 26%

28%

France Germany 19%

7%

21% 18%

Ireland Rest of Europe

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EUROPE 4Q 2016 VENTURE EXIT ACTIVITY LIQUIDITY

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

60 venture-backed M&As took place in Europe during 4Q 2016, a 2% decrease from 3Q 2016. However, the number of exits is 58% higher than that of 4Q 2015. The total amount raised through European VC-backed M&As in 4Q 2016 was €4.31 billion. This represents an 11% increase from the previous quarter and a 28% decrease from the same quarter last year. 15 venture-backed IPOs took place during 4Q 2016, a 15% rise from 3Q 2016 but a 12% drop from last year, 4Q 2015.

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

10 1Q'14 2Q'14

20 3Q'14

4Q'14

30 1Q'15

2Q'15

40 3Q'15

4Q'15

50 1Q'16

2Q'16

60 3Q'16

70 4Q'16

IPOs

9

9

22

16

10

12

17

8

17

6

10

13

15

M&As

44

56

44

51

52

56

44

48

38

53

57

61

60

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TOP 3 M&As IN EUROPE (4Q 2016) LIQUIDITY

Company Name

Skyscanner Ltd.

Location

Brief Description

Edinburgh, Provider of an online flight search United Kingdom engine.

Provider of Ideal Monoclonal Ganymed Antibody (IMAB) therapeutics for Pharmaceuticals Mainz, Germany solid cancers and infectious AG diseases.

Banca ITB SpA

Milan, Italy

Provider of banking services dedicated to Italian tobacconists.

Industry Code

Industry Segment

Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

Search Portals

Consumer Consumer Services Information Services

09/12/2016

Acquisition

€ 1,655.86

Ctrip.com

Biotechnology Therapeutics

Biopharmaceuticals

20/12/2016

Acquisition

€ 422.00

Astellas Pharma Inc.

19/12/2016

Acquisition

€ 153.00

Intesa Sanpaolo SpA

Healthcare

Personal / Financial Institutions Business and Commercial Banking and Services Financial Services

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EUROPEAN VC-BACKED IPOs (2013-2016) LIQUIDITY

The number of IPOs during 4Q 2016 increased slightly in comparison to the prior quarter, whereas the amount raised decreased significantly.

€ 2,500.00

25

15 venture-backed companies went public during 4Q 2016, a 15% increase from the prior quarter.

€ 2,000.00

20

IPOs raised €193.86 million during 4Q 2016, a drop of 60% from the €483.22 million raised in 3Q 2016.

€ 1,500.00

15

The largest European VC-backed IPO of 4Q 2016 was Crispr Therapeutics AG. The company raised €49.82 million for its offering on NASDAQ.

€ 1,000.00

10

€ 500.00

€ 0.00

5

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

1Q'15

2Q'15

3Q'15

4Q'15

1Q'16

2Q'16

3Q'16

0

4Q'16

Raised (€M) through IPO € 366.10 € 691.24 € 542.15 € 447.47 € 2,249.97 € 417.40 € 576.70 € 699.69 € 612.93 € 130.08 € 184.48 € 483.22 € 193.86 Number of IPOs

9

9

22

16

10

12

17

8

17

6

10

13

15

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TOP 3 IPOs IN EUROPE (4Q 2016) LIQUIDITY

Company Name

Location

Brief Description

Industry Code

Industry Segment

Industry Group

Close Date

Raised through IPO (€M)

Exchange/ Symbol

Crispr Therapeutics AG

Switzerland

Developer of genome-editing technologies for the treatment of serious human genetic diseases.

Biotechnology Therapeutics

Biopharmaceuticals

Healthcare

19/10/2016

€ 49.82

NASDAQ: CRSP

Alligator Bioscience AB

Sweden

Developer of antibody-based drugs for immunotherapy of cancer.

Biopharmaceuticals

Healthcare

23/11/2016

€ 35.81

OMX : ATORX

InDex Pharmaceuticals Holding AB

Sweden

Developer of pharmaceuticals to treat immunological diseases.

Biopharmaceuticals

Healthcare

11/10/2016

€ 25.95

NASDAQ: INDEX

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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ABOUT DOW JONES

Dow Jones is a global provider of news and business information, delivering content to consumers and organizations around the world across multiple formats, including print, digital, mobile and live events. Dow Jones has produced unrivaled quality content for more than 125 years and today has one of the world’s largest newsgathering operations globally. It produces leading publications and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulation; Factiva, Barron’s, MarketWatch, Financial News, DJX, Dow Jones Risk & Compliance, Dow Jones Newswires, and Dow Jones VentureSource.

MEDIA CONTACT: Sophie Bent +44 (0) 203 426 1381 [email protected]

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