A comprehensive analysis of Tech and Venture Capital in DACH for 2019/2020

1. THE 2019/2020 DACH REPORT:
AN ANALYSIS OF TECH AND
VENTURE CAPITAL
November 2020

2. THE
MACRO
VIEW
2

3. WEALTHY & EDUCATED: “DACH” IS AN ECONOMIC POWERHOUSE
3
Germany (D), Austria (A) and Switzerland (CH) are home to 100 million people, including the wealthiest and best educated
in Europe - as well as a disproportionate amount of developers.
Sources: DACH Map; US Map; GDP data Eurostat and US Bureau of Economic Analysis; Developers, Atomico
DACH represents 13% of the European population
and 20% of its professional developers.
DACH at $5.2 trillion GDP in 2019 No. of Professional Developers in EuropePurchasing power adjusted GDP per capita, in €, 2019
DACH,
1,166,800
Rest of
Europe,
4,933,200
47.5
39.6
37.6
33 33 32.6 31.3
€ 0
€ 5
€ 10
€ 15
€ 20
€ 25
€ 30
€ 35
€ 40
€ 45
€ 50
Switzerland Austria Germany France Euro 19 United
Kingdom
EU 28
Thousands

4. $0.00 $100.00 $200.00 $300.00 $400.00
Cambridge
UCL
Oxford
Ecole polytechnique
(lausanne)
ETH Zurich
Innsbruck
Imperial college
University of Turin
Trinity College Dublin
Nottingham University
TU München
0
0.01
0.02
0.03
0.04
Switzerland Sweden Austria Denmark Germany France United
Kingdom
0 500 1000 1500 2000
Germany
France
UK
Switzerland
Netherlands
Russia
Italy
Sweden
Finland
Austria
LEADING R&D AND IP GENERATION IN EUROPE
4
DACH countries lead Europe in R&D spent and filed patents. Swiss spin-outs are 2nd most capitalized in Europe.
Sources: Patents and Top Unis, Atomico State of European Tech 2019; R&D Spending: Eurostat
Total number of patents (1000's) filed by country Top European universities by total capital raised ($m) by spinoffs in
2019
R&D spending as a % of GDP, 2017

5. 1,673
981
558
492
416
0 500 1,000 1,500 2,000
Basel
Zurich
Lausanne
Baar
Zug
9,516
2,798
1,114
300
253
0 2,500 5,000 7,500 10,000
Berlin
Munich
Hamburg
Tübingen
Düsseldorf
527
61
19
13
10
0 200 400 600
Vienna
Graz
Linz
Klosterneuburg
Wattens
75%
25
%
55
%
45
%
28
%
72
%
5896
3237
2346
1110
1029
573
560
519
455
385
382
345
310
265
257
0 2000 4000 6000
London
Berlin
Paris
Stockholm
Munich
Amsterdam
Barcelona
Bucharest
Baar
Madrid
Cambridge
Copenhagen
Zurich
Utrecht
Helsinki
Source: Dealroom.co as of 09/2020
Top city share of total
deal volume
Deal Volume by City 2015-2019 (in EUR M)Deal Volume by City 2015-2019 (in EUR M)
WITH ACTIVITY SPREAD ACROSS BUSTLING HUBS
5
DACH houses 3 of Europe’s top 10 tech hubs. Multiple hubs are worth watching.
Covid is likely to
increase
regional
fragmentation

6. THE IMPACT
OF COVID-19
6

7. M&A SPEND IS BACK TO PRE COVID LEVELS…
7
Covid has shortened the M&A spend cycle. Despite total deal count falling, Q4 spend is picking up due to the
€1.2b acquisition of Flaschenpost by Dr Oetker in November.
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
0
5
10
15
20
25
30
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Totalspent$b
dealcount
quarter
deal count Cumulative $b spent
Deal count and cumulative deal value $b in the last 2 yrs
Sources: Pitchbook.com search on 04.11.20 of all M&A of VC backed companies
Eu Startups Blog on Flaschenpost acquisition
COVID Impact

8. ..AND VC SPEND IS AT AN ALL TIME HIGH (!)
8
Total VC deal spend in DACH has reached its peak at $2.6b in Q2 this year. Interestingly, valuations crashed-
which means VCs aren’t spending less, they are just getting more value for their money.
0
5
10
15
20
25
30
0
0.5
1
1.5
2
2.5
3
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
valuations$m
TotalVCspend$b
quarter
Total VC spend $b Median post money valuation $m
Evolution of total VC spend in DACH and post money valuations
Sources: Pitchbook.com search on 04.11.20 of all VC backed companies
COVID Impact

9. DACH VCS CONTINUE TO RAISE LARGE FUNDS
9
Established, emerging and new fund managers in DACH have been able to raise new funds in 2020.
$100m $100m $53m
$50m
$250m $150m $120m $60m
$80m
$190m$50m
$82m $170m$678m
$70m
$180m
$600m

10. COVID-19 impact DACH startup & size of last round
Consumer engage in more speculative trading and
investing in volatile markets 1
Students learn school/university courses online
Remote work collaboration tools
Shift towards E-commerce & efficient logistics3
consumers seek more liquidity through debt. They
are also more likely to default on loans 1
Hospitals & clinics seek to increase efficiency and
reach patients remotely 2
Financial crime is rife 1
Growth of telemedicine and consumer wellness 2
Remote employee management tools for HR &
Finance teams
TO DEPLOY CAPITAL IN “COVID-READY” STARTUPS
10
Several home-grown startups are addressing key COVID-related shifts in the market and raised funds in 2020
1. Blog: ‘8 Top fintech trends in a post covid world’
2. Speedinvest blog: ‘Covid-19 and the future of telemedicine in the German speaking world’
3. Blog: ‘how covid is impacting ecommerce’
$15m
$9m
$12m
$16m
LBO
$5m
$2m
$15m
$11m
$6m
$31m
$4m
$18m
$60m
$9m
$73m
$78m
$15m
$12m
$56m
$11m
$6m
$6m $14m
$21m

11. DIVING INTO
THE DACH
ECOSYSTEM
11

12. THE PRE-SEED ECOSYSTEM IS GROWING FAST
12
DACH is now home to numerous local and international pre-seed funds, micro funds, accelerators
and incubators.
Local International
Acceleratorsand
incubators
microVCs&preseed
investors

13. AND ATTRACTING GLOBAL FUNDING DOWNSTREAM
13
Seed in DACH is dominated by local and European funds. Growth capital is mainly international, with
growing interest from the US and Asia.
Investors with a
local presence
in DACH
Investors based
outside DACH
Corporate
Venture Capital
Seed Series
A-B
Growth
Stage
Source: Crunchbase.com, Pitchbook.com (Retrieved September 2020)

14. SNAPSHOT: THE LARGEST STARTUP VALUATIONS IN DACH
14
Winners have maintained and surpassed their valuations in the last 12 months, despite Covid.
€419M
€2.3B
€5.3B
€1.8B
€1.5B
€1.1B
€909M
€800
M
€16B
>€2.5B
€20.5B
€7.1B
€3.2B
€4.5B
€1B
€909M
€909M
€818M
€558M
€455M
€455M
€909M
€397M
€464M
€300M
€6.4B
€300M
€436M
€780M
€436M
€436M
€273M
€360M
€355M€164M
€273M
€182M
€227M
€3B
€370M
Note: notable companies in the DACH region, based on current or LTM valuation; private market valuation, best estimate based on public data.
Source: Crunchbase.com, Pitchbook.com (Retrieved September 2020). Bubble size only roughly proportional to valuation.

15. DACH UNICORNS ARE TAKING FLIGHT
15
A growing number of DACH VCs count unicorns in the portfolio or have exited
companies at + $1 billion valuations.
VCs Top $1b+ exitsUnicorns still in portfolio

16. CORPORATE Stage Focus
Late
stage
Insurtech, mobility, connected health,
wealth management
Series A Health, mobility, smart home, fintech
Seed, growth
Emerging tech with strong IP, B2C &
B2B
Seed, growth Fintech and insurtech
Series A-B
Travel, health, home & living, beauty,
ecommerce, retail
Seed,
series A
B2B enterprise software
SAP is DACH corporate with largest # LP commits to VC funds
THROUGH IT ALL, CORPORATES REMAIN A KEY SOURCE OF FUNDING
Both on the LP and CVC side, corporates are a key source of capital for top tier local and global companies.
Source: Pitchbook.com search Sep 2020
Corporate Stage Focus

17. WHAT’S HOT
2019/2020
17

18. B2B SOFTWARE:
• 148 financing rounds in 2019
• $1b of total invested volume
• Good stage-mix in the ecosystem
leads to strong cross-pollination
HEALTHCARE:
• 133 rounds in 2019.
• $0.4b of total invested volume
• New reimbursement rules for health apps are encouraging a
whole wave of new startups
ECOMMERCE:
• 3 successful IPOs worth
approx. $8b at time
of public offering.
• 2 unicorns
MOBILITY:
• 26 financing rounds in 2019
• $1.3b of total invested volume
FINTECH:
• 48 financing rounds in 2019
• $1.2b of total invested volume
• Industry consolidates as number
of deals begin to stabilise
Established sectors in Germany Emerging sectors in Germany
GERMAN HEALTHCARE AND B2B SOFTWARE ON THE RISE
18
Mobility is well established. Ecommerce has renewed momentum from Covid. Fintech is consolidating.
Sources: pitchbook , last updated october 2020.

19. Consolidating sectors in Austria Emerging sectors in Austria
AUSTRIA SHOWCASING FINTECH AND ENTERPRISE SOFTWARE
19
Austria has a small ecosystem with winners in several sectors, including fintech, enterprise SaaS, Prop
Tech, B2C
FINTECH & CRYPTO:
• $77m invested over 11 rounds in 2019/2020.
• Bitpanda’s $52m series A was Europe’s largest A round in 2020.
• Round led by Peter Thiel’s Valar ventures.
ENTERPRISE SAAS:
• $100m in 26 rounds in 2019/2020.
• Strong technical talent pool has enabled several deep tech successes: Anyline
($12M Series A in 01/2020, Mostly.ai (4.5M Series A in 03/2020) and
Bitmovin $65m raised to date.
• Dynatrace - the most overlooked Decacorn in Europe - was founded
in Austria.
INDUSTRIAL & PROPTECH:
• $45m invested over 22 round in 2019/2020.
• Driven by Planradar’s $33m series A with participation from Tier 1 international investors:
Insight Partners and e.ventures.
• Austria has strong industrial/construction SMEs backbone-likely to generate more
winners.
B2C & B2B MARKETPLACES:
• Sector is nascent with a few breakout rounds in 2020:
• Refurbed’s $17m series A with US investor FJ labs participating.
• GoStudent: edtech platform GoStudent, who raised $9M Series A.

20. BioTech & MedTech wins Fintech & Crypto consolidates Emerging enterprise SaaS winners
SWISS ENTERPRISE SOFTWARE GETS HOT, HOT, HOT!
20
Whilst biotech and fintech continue to show signs of success, large rounds in enterprise SaaS has put
Switzerland in the spotlight
• $1b invested across 51 companies.
• Life science & genetics startups account for +40% of
company count.
• Driven by strength of Swiss IP and pharma HQs.
• Large rounds in 2020: Sophia Genetics ($100M+
Series F in Oct), Arvelle Therapeutics ($222M in May)
and Polares Medical ($ 40M Series B in June).
• $0.6b invested in 49 companies.
• Startups supported by strong banking ecosystem.
• +50% of investments are crypto/blockchain.
• Largest rounds in 2019: Bitcoin Suisse
($47m Series B) and Metaco ($18m series A).
• $0.5b invested into 72 companies. Large rounds in
2020 include:
• Scandit: $80M Series C in May with Atomico and
Salesforce ventures
• Frontify:: $22M Series B in Jan with Blossom capital
and EQT participating
• Beekeeper: $60M Series B in July with Keen ventures,
Samsung NEXT and btov.
Source: Dealroom.co search in Oct 2020, Crunchbase, Genomeweb, Tech.eu All data is for 2019 & 2020.

21. ZOOMING IN
ON
DACH B2B
21

22. These funds have made early investments in local B2B SaaS companies that ended up raising
Series C+ rounds.
LOCAL VCs EUROPEAN VCs
SPOTLIGHT: BULLISH EARLY BACKERS OF DACH B2B WINNERS
22

23. London
DublinAmsterdam
Paris
Stockholm
Helsinki
Frankfurt
Madrid
Utrecht
Brussels
Prague
Arlborg
Copenhagen
Berlin
Hamburg
Cork
Milan
Lisbon
Barcelona
Rotterdam
Manchester
Innsbruck
Vienna
Munich
Oslo
Warsaw
Bucharest
Gothenburg
Zurich
1
10
100
1,000
1 10 100 1,000 10,000
Senior hires
across all
companies
sampled
Total hires made across all companies sampled
Large talent pools
with excellent
availability of Senior
Talent
Emerging locations
Smaller talent
pools with good
availability of
Senior Talent
Hires made in European cities by US B2B Software Companies
THE US WANTS A SLICE OF THE DACH B2B TALENT PIE
23
Abundant and highly qualified talent has made Germany in particular a popular beachhead for
European operations.
B2B US companies with DACH office
Sources: Frontline’s European expansion report released in June 2020, Pitchbook.com
Hiring patterns (number and seniority) of US tech companies when landing in Europe. Taken from Frontline’s european expansion report.

24. OUTLOOK
24

25. EARLY STAGE GROWTH:
The growth in pre seed and seed
stage funds and incubators will
accelerate the growth of local start-
ups at the early stages.
DIGITAL HEALTH BOOM:
German regulatory shifts (DVG)
are unleashing a digital health boom
that is only just beginning.
FIERCE COMPETITION:
intense competition for hot deals
by repeat founders at all stages,
as new growth capital enters from
Asia and the US.
VALUATIONS INFLATE:
Seed and series A valuations
continue to grow in line with
European trends.
FRAGMENTATION:
COVID is driving fragmentation
and remote work, so more very
early-stage start-ups will come
from non-obvious places.
CAREFUL CVCs:
Corporate VCs acting more
carefully as their corporate
backers deal with COVID
aftermath.
B2B SaaS:
will gain serious ground due to
tremendous strength of DACH
R&D and a new wave a successful
repeat entrepreneurs.
DACH
2021
WHAT’S NEXT? SOME GUESSES AMID THE CHAOS.
25
It’s difficult to make predictions on the brink of the second COVID-19 wave.
We feel fairly confident about these.

26. Krishan Allen
LinkedIn, Twitter
CONTRIBUTORS
26
Lead author: Héléna Cavell
Linkedin, Twitter
Yang Tran
Linkedin, Twitter
Felix Fein
Linkedin
Felix Faltin
Linkedin