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Michel Wendell - Nexit Ventures - Finland - Stanford Engineering - Mar 5 2012
1. Nexit Ventures
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Bridging Mobile Opportunities
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
2. Nexit Ventures
Michel Wendell
1
ï§ Grew up in Finland, spent half my life elsewhere
ï§ EE degree
ï§ Started businesses from scratch in four countries
ï§ Held every corporate job outside of finance and HR
ï§ In the Valley since 1996
ï§ Entrepreneur â Nexit is my start-up
ï§ Cherish life, family, nature, arts, food â hate airplanes and dishonest people
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
3. Nexit Ventures
Executive Summary
2
ï§ Focus on mobile and wireless
â Software, enabling technology, service and content opportunities
â The convergence between communication, computing and content
ï§ Activities are targeted to the Mobile hot spots
â Offices in Helsinki, Stockholm and Silicon Valley
â Majority of the investments in the Nordic area
â Most of the rest in the US west coast
â Networking, business development in China, Korea and Japan
ï§ Majority of the capital to be deployed in series B and C financings
â Initial investments will be typically done in series A and B financings
ï§ Raised about $200M in two funds, fund structure on Guernsey
ï§ 6 person investment team, all operational and relevant industry background
ï§ Hands-on, partnering with the entrepreneurs
ï§ Investment size; $500k-$5M, total up to $10M
ï§ We invest in people, innovation and market opportunity
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
4. Nexit Strategy
Bridging Mobile Opportunities
3
The Nexit Bridge â connecting the mobile hot spots
ï§ Bridging Nordic mobile companies to Silicon Valley markets and exit
opportunities
ï§ Providing US based mobile companies with a Nordic market insight,
customer access, and technology resources
ï§ Access to lead mobile operators and handset manufacturers in Asia
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
5. Market Overview
Mobile & Wireless Market
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The history of computing can divided into four distinguishable waves
ï§ Every wave has lasted roughly 10 years
ï§ Each wave has been significantly larger (revenue & market cap) than the previous one
ï§ The initial growth has been faster than in any preceding wave
ï§ All waves have produced significant new players and generated major wealth for their investors
Now the fifth wave â the Mobile Internet â is upon us
Source: Morgan Stanley, Nexit
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
6. Market Overview
Mobile & Wireless Market
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Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
7. Mobile Technology Hot Spots
Nordic Wireless Knowledge
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ï§ Finland and Sweden on top of the global R&D spending
â Sweden and Finland are the only two EU countries spending more than 3
percent of gross domestic product (GDP) on research and development
â Investments in knowledge â the sum of investments in R&D, software and higher
education â are highest in the United States, Sweden and Finland.
ï§ In The Nordic countries high tech business has a strong wireless flavor
â R&D skills: The Nordic investment in knowledge is largely focused on mobile
technologies and wireless telecommunication, led by companies such as Nokia
and Ericsson
â Business skills: Individuals leaving Nokia and Ericsson (including the top
management) are generating a continuously growing world class quality deal flow
in mobile space
Eurostat 2006, OECD 2003
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
8. Hot Spots in Financial World
Entry in EU â High Value Exit in US
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USD $M The Nexit bridge to high value exits
50
47 $M
45
ï§ Median entry valuations
exit substantially lower in the EU
40
in all VC investment stages
35
30
ï§ Median M&A exit valuations
substantially higher in the US
25 23 $M
20 ï Arbitrage: entering with low
15 $M
15 European valuations and exiting
entry with high US valuations
10
5 $M
5
0
Median VC pre Median M&A
money valuation Europe US
valuation
Source: DowJones VentureSource Reports
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
9. Hot Spots in Financial World
The Acquisition power resides in US
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North America dominates the high tech market
â North America represents 30% of the global GDP
but over 60% of the value of public technology companies
â North American companies make ~3/4 of high tech acquisitions
ï Utilizing the North American M&A market is crucial for high tech VC
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
10. Hot Spots in Financial World
M&A Activity
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Source: Capital IQ, SEC, Thompson Reuters, Nexit Ventures.
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
11. Hot Spots in Financial World
Wireless M&A Activity
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Source: Rutberg & Company, Nexit Ventures.
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
12. Nexit Strategy
Bridging Mobile Opportunities
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Flip from Finland to US
Flip from Finland to US Partial exit: NTT DoCoMo
~ 75% revenue from US
Acquired by ON2/Google
US mgmt/bizdev - FIN R&D
High Growth, profitable
~ 90% revenue from US
Acquired by HP Acquired by nVidia
[NYSE:HPQ] Acquired by Sybase [NSDQ:NVDA]
[NYSE:SY]
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
13. Strategy Execution
Investment Strategy
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Typical portfolio company profile
ï§ Companies with global ambitions and products that can compete globally
ï§ Management teams with experience and execution power
ï§ Target that over 50% of the companies will be originated from the Nordic area,
most of the rest in the US, a few in Asia or Europe
ï§ Nexit should contribute concrete added value for the portfolio company:
Our deep domain knowledge and global network combined with active hands on
involvement can be used to better monitor and further accelerate the development
Nexitâs investment strategy execution
ï§ Benchmarking the deal flow globally (teams, technology, market opportunity)
ï§ Strong involvement in companyâs strategy, supporting execution and business
development, early international growth
ï§ Connecting to global partners and customers for faster growth
ï§ Positioning and building networks for international high value exits
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
14. Nordic VC Scene
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Typical portfolio company profile
ï§ Over the past 5 years there has been about $5B in VC investments in the Nordic
area in 3700 deals ($32B in VC investment in the US in 2011 in 3200 deals,
almost 40% from Silicon Valley)
ï§ Roughly 75% of the money in the Nordics came from governmental sources
ï§ There are probably 20 active VCs, down from almost 100 in 2000
Deal flow
ï§ We see 400-600 mobile/wireless plans per year
ï§ 50% Nordic, 40% US
ï§ We make 0-2 new investments per year
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com
15. 14
Thank You!
Kiitos!
Tack!
Helsinki Stockholm Silicon Valley CONFIDENTIAL www.nexitventures.com