Reviewing market trends for VCs to invest.

1. European VC Megatrends 2020 & Top startups to
invest in Travel, Media, Mobility and Healthcare
(answering VC Concerns).
Reviewing alterations within ever-changing Investment Market.
by Aliona Schastlivtseva
- Jan 2020 -

2. !2
1. MEGATRENDS

3. Megatrend (1): Family Offices finally get out of their shells
Sources: Dealroom analysis 2019
" The amount of private wealth invested directly into European
startups has grown almost five-fold over the past five years,
according to research by Dealroom for Talis Capital, as
individuals join the gold-rush for tech in a search for growth
assets.
" Of the $34bn worth of funding that went into European startups
last year, $5bn was direct investments from private wealth,
meaning family offices or rich individuals actively participating
in investment rounds.
" European Family Offices are being second after Asia-Pacific
family offices with more than 73% making direct investments
into enterprises. In the context of continued heightened
uncertainty about interest rates and returns, family offices are
planning to invest more into alternatives and consider more
hands-on approaches for the next year, according to Private
Equity International Report 2019.

4. Megatrend (2): Corporate funds get activated and they play big. More M&A
activities in Europe are expected.
Sources: Pitchbook report
• Investment in VC-backed companies provides corporations
the opportunity to learn about emerging spaces before
plunging large expenditures into organic development
projects.
• European share of the M&A deal flow has been around 30%
of the global M&A deal flow in terms of cases, but only 18%
in terms of dollar value. Corporates in Europe are expected
to get activated.
• The share of Corporate Venture Capital kept growing and
CVCs were involved in over 20% of all VC deals
• More than a fifth of European deals included a corporate
investor, particularly in the €10 million to €25 million bucket
where CVC participation was up 23.9% compared to 2017.
• 264 new CVCs invested for the first time in 2019, up 35%
year-over-year. In total, 773 CVCs placed bets, with GV
taking the top spot, followed by Salesforce Ventures.
• CVC firms spanned across a variety of verticals, from
logistics and shipping (Maersk Ventures), to auto and
mobility (Porsche Ventures), to cryptocurrency exchanges
(Coinbase Ventures).
Most Active CVCs in the World

5. Megatrend (3): Consolidation of capital - from VCs to startups. Megadeals
have mega-priority.
• The venture industry is highly fragmented, with more than 200 VC Funds
based in Europe, not counting in global VC firms with offices in the Old
World. Since 2015 though, the number of VC felt a lot and now reaches the
level of 2017.
• This year while the number grows smaller, the size of these vehicles is
expanding; the median fund size reached an all-time high of €123.2 million in
2018, a 59.3% rise from the previous year.
• With more funds becoming bigger, startups are now expected to raise larger
funds
• This is less good news for smaller startups, which would not be seeking the
check sizes delivered by a €500 million fund, limiting their access to capital.
To follow, startups are now forced to raise larger funds and stay private
longer.
• On the startup side, Crunchbase data for the past decade shows that peak
startup creation came in 2015. Since then, numbers have halved.
• Startups require more capital to achieve escape velocity with the ever-
present, growing threat from technology incumbents. Startups are moving
into new industries competing with larger incumbents.
• In 2019 European startups have been fueled with cash due to unicorns
constantly fundraising and US Venture companies being actively involved.

6. Megatrend (4): VCs are more than ever involved into company building
activities. Funds with special expertise always win.
" “Lean startups” that rely more on company-building services offered by
their investors are not “lean” for venture firms that must build out service
capacity in talent acquisition, sales, product marketing and finance to
accelerate venture growth.
" Today, staff devoted to supporting startup development often exceeds
investment professionals in large venture firms.
" A few boutique investment banks and private equity firms have withstood
the scale and capital advantages of bulge bracket firms. Similarly, seed
and early-stage venture firms will resist SoftBank-style institutionalization.
" Venture firms with expertise in specific technologies, industry sectors or
geographic markets will still produce superior returns.
" Europe is among few places where microfunds still on the raise and those
companies have the largest playground to support their founders.

7. Megatrend (5): DACH Area is European leading hub. Fintech, Energy,
Proptech, Mobility and Consumer Health are among leading sectors to
invest in.
" “While the UK and Ireland are still in pole position in the venture capital industry in Europe,
the DACH region recorded the strongest relative growth in deal activity in 2018, making up
15.8% of all transactions. The area saw a record amount of funding, due mostly to more
late-stage rounds, particularly in Germany, pointing to a healthy and mature ecosystem.
" Germany is not only leading the way for startups in the DACH region, but also for VC
investors. Firms hailing from the country closed nine funds in 2018, totaling 85% of all
capital raised in the area. Having secured around €1.6 billion in commitments, Germany
comes in third in the continent, behind the UK and France.
" Top sectors to invest in 2020 would be similar to last year: Fintech, Energy, Proptech,
Enterprise Software, Food, Transport & Logistics, Marketing Tools
" Digital disruption is an on-going, long-term trend with AI and Machine-learning being key for
this enablement
Top sectors by VC investments in Europe in 2019
(in bln.USD)
Sources: Pitchbook report, Statista

8. !8
2. ANSWERING VC’ NEEDS:
“Diamonds-in-the-rough”

9. VCs preferences of where to invest are rapidly evolving. In Oct 2019
TechCrunch asked senior VC executives what is their current focus. The
range of interests hints at the expanse of Europe’s startup ecosystem
right now, with VCs focused on everything from fintech, agtech, and B2B
marketplaces to health, audio, travel, and transportation. In this part we
are going to answer some of VC needs suggesting gems of startup scene
to consider...

10. ➢Luis Hanemann, Partner at e.Ventures:
“We see multiple trends emerging, in the B2C segment we see Audio is booming
and is right for disruption. It’s amazing to see the development in the space. ”*
*Company has already invested in Blinkst and Podimo
➢Possible startups to invest in:
❖Trint (London, UK; Series A) - Allows news websites to capture full value of
their AV content. Searchable, editable transcripts in minutes.
❖Audion (Paris, France; Series A) - adtech company that develops proprietary
technology to automate, customize and measure digital audio advertising
❖Koo! (Stockholm, Sweden; Series A) - audio-based social networking site.
Users can create and share content and stay connected to their friends while
doing other things, without looking down at their phones.

11. ➢David Rosskamp, Partner at June Fund:
“We spend a lot of time thinking around large macro themes and investing into them in a
structured way. One central field of attention has been the agricultural world, in particular
the flow of goods and information. We see a need in digitizing these flows, in providing
transparent access to agricultural supplies and in empowering millions of small-scale
farmers. So June has invested in agricultural trading networks from Europe to Africa. It
clearly matches our investment thesis: global, network-driven enterprises that the world
needs. We have similar investments in healthcare or decentralized networks, to name a
few.”
➢Possible startups to invest in:
❖AgFlow - (Geneva, Switzerland; Series A) - leading provider of independent, real-time
trade intelligence for the agricultural markets.
❖Medicus - (Vienna, Austria; Series B) - Converts health data with their cryptic numbers
and medical language into a visual experience with easy-to-understand

12. ➢Dr. Fabian Heilemann, Partner at Earlybird:
“At Earlybird we believe that the first wave of innovation within Logistics, being rather of
a transformative nature, e.g. digital freight marketplaces and forwarder models, has
reached its peak. We are now particular excited w.r.t the second wave of LogTech
innovation, which we expect to have a truly disruptive impact on the industry. It is our
conviction that the availability of structured data, but also the increasing maturity of for
example distributed ledger technologies, entail the opportunity for digital service
providers to expand their technology driven lead over incumbent players. Whereas
competitive forces in Logistics today are mainly adhere to scale effects, we think that
next generation of logistics companies will leverage technology to drive profitability.”
*Company invested in Freighthub
➢Possible startups to invest in:
❖Seven Senders (Berlin, Germany; Series B) - A logistics startup connecting
merchants with local premium carriers.

13. ➢Jan Miczaika, Partner at HV Holtzbrinck Ventures:
“Over the past 20 years we’ve seen a significant shift in the focus of Berlin-based startups.
Originally there was a strong focus on e-commerce and marketplaces. Today this is
significantly broader. Berlin is a fintech hotspot, a global proving ground for mobility
concepts, the HQ for digital B2C champions and has strong growth in B2B/SaaS. Berlin is
also highly relevant for Blockchain, which fits extraordinarily well with the anarchical spirit of
the city. I personally am most interested in companies with a strong data angle, across both
B2C and B2B.”
➢Possible startups to invest in:
❖Liqid - (Berlin, Germany; Series B) - Private wealth and asset management services.
❖Tillhub - (Berlin, Germany; Series B) - Develops and distributes a cloud-based iPad
cash register system
❖Bitwala - (Berlin, Germany; Series C) -the bank of the blockchain economy
❖Grover - (Berlin, Germany; Series B) - electronics rental/subscription

14. ➢Pawel Chudzinski, Partner at Point Nine Capital:
“Marketplaces have transformed how consumers access products and services across
many categories vs. in B2B this process feels like 10-15 years behind. We see more and
more startups pursue marketplace opportunities across various b2b categories and we
want to discover them as early as possible. We are industry agnostic, but the industries
in which we have been spending most time recently were probably supply chain and
logistics, and financial services (incl. crypto). We also expect a rise in sustainability
focused startups and we started diving into this space as well – mainly from the SaaS
and marketplace angle.”
➢Possible startups to invest in:
CRX Markets - (Munich, Germany; Series B) - Financing for small and medium business
endeavors
Minespider - (Berlin, Germany; Seed) - Blockchain protocol for end-to-end mineral supply
chain certification

15. ➢Ciaran O’Leary, Partner at Blueyard Capital:
“BlueYard is a thesis driven early stage firm that backs founders with transformative
ideas that decentralize markets and empower humanity. Today BlueYard is focused on
the reinvention of the internet for permission-less innovation through decentralized web
protocols and services that can untangle the server-side monopolies (e.g. p2p protocols
and networks), the ability to use nature / biology itself paired with breakthrough
engineering and computation to solve humanity’s largest planetary challenges, the re-
thinking of the knowledge worker stack by liberating users and data from the current
tools designed in the 1980s and the separation of state and money through
algorithmically transparent and programmable money.”
➢Possible startups to invest in:
❖Fireflies.ai - (San Francisco, USA; Seed) - generates automated meeting notes
from phone conversations

16. ➢Jan Borgstädt, Partner at JOIN Capital:
“We are deeply entrenched in identifying technologies that lay the foundation of our
industrial future – or what we call the Neue Industry. I look for companies whose
founders have deep technical knowledge to build transformative tools that augment
human capabilities in essential processes. Think about the construction industry, and
how advanced modeling tools and software can revolutionize the backbone of the way
our civilization is built. Or the automation of processes such as circuit mapping and
production planning. These are among the trends that excite us right now.”
➢Possible startups to invest in:
❖The Urban Intelligence (United Kingdom; Series A) - aggregating and analysing
planning and other built environment data to develop a platform that can suggest
the most economically, socially and environmentally sustainable locations for
development based on evidence.

17. ➢Christoph Schuh, Partner at Lakestar:
“Berlin is the tech ecosystem where we have done the most investments out of our
existing portfolio of more than 50 companies. For example Travel & Mobility is the
space where we are very much interested and active. We’ve invested into Berlin-
based travel tech companies like GetYourGuide, HomeToGo and Omio and we’re
still looking for new stars. At Lakestar, we also like B2B plays where industries are
in transformation and tech can enable a new level of efficiency for the ecosystem.
So we also invested into the Berlin based logistic player Sennder, the #1 digital
freight forwarder in Europe. Actually, we also look into industry disruption in 3.0/4.0/
RPA space and others.”
➢Possible startups to invest in:
❖Comtravo - (Berlin, Germany; Series B) - Utilises AI and natural language
processing to manage booking and travel information for business

18. ➢Anton Waitz, Partner at Project A:
“At Project A, we think and work in industry deep dives. That means we pick 5-6
industries at the time on which we spend most of our energy and where we do the
majority of our investments. It’s interesting to see how recently our deep dives have let
us think about some of the most fundamental questions in life: How will we work in 10
years time (Deep Dive: Business Software/Process Automation)? How will we reside
(Deep dive: Real Estate)? How will we move us (Mobility) and things (Logistics)? How
will we produce (Industry 4.0)? And how will we stay healthy (Digital Health)? I guess it
shows how deep digitization has reached the very basics of our life – and how exciting
our job actually is!”
➢Possible startups to invest in:
❖Fliit - (Berlin, Germany; Early VC) a platform to make food logistics easy, efficient
and free of worries for everyone.
❖Pflege.de - (Hamburg, Germany; Series B) - Service portal for elder care and elder
housing in Germany

19. ➢Filip Dames, Partner at Cherry Ventures:
“We believe the next years will show successful companies in industries which have
traditionally been very hard to tackle for startups. For example, we’re just at the very
beginning of seeing the effects of technology innovation in healthcare or manufacturing,
two spaces we actively investing in with Cherry. Data, leveraged through AI or intelligent
user interfaces can have a huge impact on solving problems in these industries. In
Berlin, we’re excited to see that the city is becoming more and more a home for deep
tech companies, attracting technical talent from around the world.”
➢Possible startups to invest in:
❖TeleClinic - (Munich, Germany; Series A) - offer digital health advice for individuals
and employees
❖BigRep - (Berlin, Germany; Series B) - Develops 3D printers that can print objects in
a 1:1 scale