An overview of European & Israeli Venture Capital investment data for the fourth months ended September 2014

1. Venture Capital in Europe & Israel Venture Investment Data: June to September 2014
Prepared by Gil Dibner @gdibner
blog: yankeesabralimey
View from Mont Blanc, highest point in Europe

2. The data
•
In June, I decided I wasn’t happy with available data sources on VC rounds in Europe & Israel, and that I’d need to build my own
•
The data in this report consists entirely of data I’ve gathered manually based on publically available, free sources
•
No paid data sources or API calls were harmed in the making of this dataset, every investment was manually classified
•
This allows analysis of some aspects of the data I consider important – aspects that don’t appear in other data sources
•
Seed investment is probably grossly under-reported in this approach
@gdibner
blog: yankeesabralimey 2

3. The pace of venture investment
•
During the four months ended September, 2014, there were 157 reported venture investments across Europe & Israel
•
A total of $2.106B was invested in Europe & Israel during this period, an average of $526M per month
•
Average pace seems to be around 40 investments per month
•
There was a summer slowdown in August in the number of transactions
449
478
565
614
44
41
32
41
0
100
200
300
400
500
600
700
800
900
1,000
0
5
10
15
20
25
30
35
40
45
50
Jun
Jul
Aug
Sep
Amount invested (US $M)
Number of investments
VC Investments in Europe & Israel, June-September 2014
Invested amount (US $M)
Number of investments
@gdibner
blog: yankeesabralimey 3

4. 70
97
57
65
108
103
60
168
262
171
342
26
100
104
350
0
100
200
300
400
500
600
700
Jun
Jul
Aug
Sep
Amount Invested (US $M)
Pace of VC Investment in Europe and Israel, Jun-Sep 2014
Mega (>100)
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
Seed (<2)
Three mega-rounds skew the investment totals
•
This analysis breaks down the investments into brackets by size:
•
Seed (less than $2M)
•
Early venture ($2-8M)
•
Venture ($8-20M)
•
Growth ($20-100M)
•
Mega ($100M+)
•
Three mega-rounds took place in Europe in the past four months:
•
French ride-sharing marketplace BlaBlaCar raised $100M
•
Spanish voting software company Scytl raised $104M
•
German food delivery company DeliveryHero raised $350M
•
Adjusting for mega-rounds, investment volume was lowest in September
@gdibner
blog: yankeesabralimey 4

5. Number of investments, by bracket
•
Based on the way I’m gathering data, seed deals are likely to be the under- reported
•
On this slide, Europe’s summer holiday effect comes into sharpest relief
•
Angel and venture investments, which take the least time to close, were at their lowest in August
•
Growth investments, which take longer to close, were at their lowest in September – probably reflecting the fact that deal teams were on holiday in August
9
6
3
4
17
21
14
17
10
8
5
16
8
5
7
1
0
5
10
15
20
25
30
35
40
45
50
Jun
Jul
Aug
Sep
Amount Invested (US $M)
Number of investments in Europe and Israel by bracket, Jun-Sep 2014
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
Seed (<2)
@gdibner blog: yankeesabralimey 5

6. Average round size, by bracket
•
Within each bracket, round sizes have remained relatively stable
4.1
4.6
4.1
3.8
10.8
12.9
11.9
10.5
32.7
34.2
48.9
26.0
0
10
20
30
40
50
60
Jun
Jul
Aug
Sep
Amount Invested (US $M)
Average investment size in Europe and Israel by bracket, Jun-Sep 2014
Seed (<2)
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
@gdibner blog: yankeesabralimey 6

7. Total venture investment by country, June-September 2014
•
Germany led Europe with the total amount of venture dollars invested. This figure includes DeliveryHero
•
This analysis does not include Russia, Turkey, Ukraine, or other FSU states
US $M
Germany, 642.4
UK, 461.1
Israel, 443.3
Spain, 160.9
France, 124.8
Sweden, 96.4
Finland, 45.8
Ireland, 42.0
Norway, 30.0
Netherlands, 29.6
Denmark, 9.3
Czech, 7.2
Iceland, 6.0
Poland, 3.0
Switzerland, 2.0
Portugal, 1.5
Italy, 0.5
@gdibner blog: yankeesabralimey 7

8. Average venture round sizes, by country
•
French companies seem to raise the largest early venture rounds, but the smallest venture rounds
•
DACH venture rounds are, on average, 50% larger than French venture rounds
Benelux, 2.5
Benelux, 12.0
DACH, 4.2
DACH, 12.7
France, 4.9
France, 8.2
Iberia, 4.7
Iberia, 9.0
Israel, 4.1
Israel, 11.9
Nordic, 4.4
Nordic, 11.0
UK & Ireland, 4.1
UK & Ireland, 10.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Early Venture (2-8)
Venture (8-20)
Amount Invested (US $M)
Average investment size in Europe and Israel by bracket, Jun-Sep 2014
Benelux
DACH
France
Iberia
Israel
Nordic
UK & Ireland
@gdibner
blog: yankeesabralimey 8

9. Total venture investment by region, June-September 2014
•
By region, DACH leads in terms of total venture investment dollars, driven by DeliveryHero
•
When the data is grouped by region, the significance of the Nordic region becomes apparent
•
Note that Israel and the Nordics rank ahead of Iberia and France, despite the existence of one mega- round in both Iberia and France
DACH, 644.4
UK & Ireland, 503.1
Israel, 443.3
Nordic, 187.5
Iberia, 162.4
France, 124.8
Benelux, 29.6
East. Eur., 10.2
South. Eur., 0.5
@gdibner blog: yankeesabralimey 9

10. Total venture investment by region, June-September 2014 (excluding mega-rounds)
•
When the data is presented excluding the three mega- rounds, UK & Ireland rises to the top of the regional ranking
•
Israel is in second place, nearly equaling the UK & Ireland in total venture capital invested
•
DACH and the Nordics are in the third and fourth slots
•
Even with Scytl’s mega- round removed from the analysis, Iberia is in fifth place, with nearly double the invested capital of both Benelux and France
UK & Ireland, 503.1
Israel, 443.3
DACH, 294.4
Nordic, 187.5
Iberia, 58.4
Benelux, 29.6
France, 24.8
East. Eur., 10.2
South. Eur., 0.5
@gdibner blog: yankeesabralimey 10

11. Rounds by bracket & country
•
UK & Ireland was the most active region in terms of the number of deals
•
Impressively, Israel had more venture rounds than the UK, and almost as many growth rounds
•
The Nordic region saw more investment rounds than DACH, driven primarily by much higher numbers of early venture and venture rounds
11
9
4
7
5
2
1
1
1
31
24
16
6
5
6
1
2
12
16
9
5
2
1
4
9
8
4
7
1
0
10
20
30
40
50
60
70
UK & Ireland
Israel
Nordic
DACH
France
Iberia
Benelux
East. Eur.
South. Eur.
Number of investments
Number of investments in Europe and Israel by bracket, Jun-Sep 2014
Mega (>100)
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
Seed (<2)
@gdibner blog: yankeesabralimey 11

12. Investment by region, by bracket
•
In terms of dollars invested, UK & Ireland and Israel were by far the two biggest draws for venture capital, each with around $150M invested per month
•
The DACH and Nordic regions formed a clear second tier, each with around $90M invested per month
•
It’s interesting to note that Israel skews significantly more early-stage than UK & Ireland
•
Similarly, the Nordics skew significantly more early- stage than DACH
127
98
25
71
28
124
190
64
99
48
346
283
250
171
30
350
104
100
0
100
200
300
400
500
600
700
800
UK & Ireland
Israel
DACH
Nordic
Iberia
Benelux
France
East. Eur.
South. Eur.
Total amount invested (US $M)
Investment in Europe and Israel by bracket by country, Jun-Sep 2014 (ranked excluding mega-rounds)
Mega (>100)
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
Seed (<2)
@gdibner blog: yankeesabralimey 12

13. Participation rate of US VC firms, by bracket
•
US VC firms are active in the European and Israeli VC markets
•
US VC firms participated in 20% of the rounds that took place in the four months ended September 2014
•
US VCs participated in only 10% of seed and early venture rounds, and in less than one quarter of venture rounds
•
US VCs get far more active in the later stages: over half of growth rounds, and two of three mega-rounds during this period had US VC participation
90%
90%
78%
45%
33%
10%
10%
22%
55%
67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seed (<2)
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Mega (>100)
Total amount invested (US $M)
Did US VC firms participate in European & Israeli VC rounds?
Yes
No
@gdibner
blog: yankeesabralimey 13

14. Participation of US VC firms by country
•
US VCs firms were active in 10 different European countries
•
US VC firms were most active in Israel, where they participated in 19 investment round, more than twice as many as either Germany or the UK
19
7
6
3
2
2
40
17
54
11
11
8
3
3
12
6
2
2
2
0
10
20
30
40
50
60
70
Number of VC investments
In which countries are US VCs most active? June to September, 2014
No US VC involved
US VC involved
@gdibner blog: yankeesabralimey 14

15. US VC firms follow Tier 1 firms
•
US VC firms are three times more likely to participate in rounds alongside Tier 1 investors
88%
68%
12%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No tier 1 fund involved
Tier 1 fund involved
Number of VC Invesments
US VC involved
No US VC involved
@gdibner blog: yankeesabralimey 15

16. A 3-dimensional approach to sector mapping
Dimension
Categories
Explanation/Example
1. Target market
Consumer, SMB, Enterprise, Government, Telecom, OEM
What sort of customer does the company target?
2. Vertical market
Adtech, Communications, Data, Development, Durables, Education, Electronics, Employment, Energy, Fashion, Financial, Food, Gaming, Health, HMI, Industrial, Infrastructure, Lifestyle, Logistics, Marketing, Media, Productivity, Real Estate, Security, Sports, Storage, Transportation, Travel, Water
What type of problem does the company solve?
3. Business model
Commerce, Components, Content, Marketplace, SaaS, Semiconductors, Services, Software, Systems,
How does the company make money? What are customers paying for?
Combined segment descriptor
Consumer + Travel + Marketplace
AirBnB has built a travel-related marketplace for consumers 16

17. What target markets are attracting the most VC investment in Europe & Israel?
•
Consumer-oriented companies accounted for more than half of the VC investment in Europe & Israel
•
Enterprise-oriented companies accounted for roughly one third of the VC investment in Europe & Israel
Consumer, 1,140, 54%
Enterprise, 641, 31%
Government, 113, 5%
OEM, 89, 4%
SMB, 107, 5%
Telecom, 17, 1%
European & Israeli venture financing by target market
June to September, 2014 (in US $M)
@gdibner
blog: yankeesabralimey 17

18. Breakdown by region & target market
•
VC investments in DACH very dominated by consumer-oriented companies
•
The Israeli VC landscape is dominated by non- consumer companies
•
UK & Ireland and Nordic region very diversified
650
242
99
148
49
123
26
206
430
106
20
20
25
106
56
104
40
46
0
100
200
300
400
500
600
700
800
DACH
UK & Ireland
Israel
Nordic
Iberia
France
Benelux
East. Eur.
South. Eur.
Total amount invested (US $M)
Investment in Europe and Israel by target market by country June to September 2014 (US $M)
OEM
Government
Telecom
SMB
Enterprise
Consumer
@gdibner blog: yankeesabralimey 18

19. Distribution of investment rounds by country
•
Across Europe & Israel, 43% of VC investment rounds were in consumer companies
•
More than half the financing rounds in DACH & Iberia were in consumer companies
•
Enterprise accounted for nearly two thirds of investments in Israel, and over one third of investments across most other regions
31%
39%
47%
50%
54%
55%
70%
100%
100%
61%
42%
41%
33%
31%
36%
19%
8%
17%
8%
9%
4%
5%
9%
6%
8%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
East. Eur.
Israel
UK & Ireland
Nordic
Benelux
France
Iberia
DACH
South. Eur.
Investment in Europe and Israel by target market by country June to September 2014 (Number of investments)
Consumer
Enterprise
SMB
Telecom
Government
OEM
@gdibner blog: yankeesabralimey 19

20. Investments by target market by stage
•
The majority of growth and venture rounds were in consumer-oriented companies
•
While nearly two-thirds of (reported) seed rounds went into consumer-oriented companies, only one third of early venture rounds were in consumer- oriented companies. This portends a disproportionate significant “Series A crunch” in consumer
•
Over half of early venture rounds in Europe were in enterprise- oriented companies
•
These findings are made more significant by the exclusion of Israel, which has long had an enterprise focus. The point here is that European venture is likely to become more diversified away from consumer
63%
39%
52%
57%
22%
51%
36%
19%
9%
14%
7%
6%
10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seed (<2)
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Investment in Europe (excluding Israel) by target market by stage bracket
June to September 2014 (Number of investments)
Consumer
Enterprise
SMB
Telecom
Government
OEM
@gdibner blog: yankeesabralimey 20

21. Will the DACH region stay focused on the consumer?
•
DACH is clearly a region with a record of strong consumer- oriented investment
•
Drilling into the data, however, we see that while all of the venture rounds and almost all the growth rounds were in consumer-oriented companies, at the early venture stage, the picture changes
•
Half of early venture investments in DACH were in enterprise-oriented companies
•
It’s too early to tell if this will turn into a long-term trend
•
DACH seed-stage investors do still seem to prefer consumer- oriented startups
71%
33%
100%
86%
14%
50%
14%
17%
14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seed (<2)
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Investment in DACH by target market by stage bracket
June to September 2014 (Number of investments)
Consumer
Enterprise
Government
OEM
@gdibner blog: yankeesabralimey 21

22. Investment rounds by vertical
•
Financial (“fintech”) startups drove the highest number of VC rounds
•
Deep diversity across Europe
Financial, 19
Infrastructure, 13
Electronics, 13
Marketing, 8
Data, 8
Adtech, 8
Food, 8
Security, 7
Media, 7
Lifestyle, 6
Development, 5
Communications, 5
Gaming, 5
European & Israeli venture financing by target market June to September, 2014 (number of investments)
@gdibner blog: yankeesabralimey 22

23. Which verticals for which markets?
•
SMB-focused companies were concentrated in only two verticals: financial and marketing
•
Most other verticals saw investment into both consumer- and enterprise- oriented businesses
Industrial
Children
Sports
Water
Education
Storage
Transportation
Energy
Durables
HMI
Logistics
Fashion
Real Estate
Productivity
Travel
Health
Employment
Development
Communications
Gaming
Lifestyle
Media
Security
Marketing
Data
Food
Adtech
Infrastructure
Electronics
Financial
0
2
4
6
8
10
12
14
16
18
20
European & Israeli venture financing by target market June to September, 2014 (number of investments)
Consumer
Enterprise
Government
OEM
SMB
Telecom
@gdibner
blog: yankeesabralimey 23

24. What business models are attracting the most VC investment in Europe & Israel?
•
In terms of dollars invested, commerce is the clear leader, with over one- quarter of the invested capital
•
Software (21%) and SaaS (13%) are significant, as one would expect
•
Marketplace business models take third place, with 19% of invested capital
Commerce, 574, 27%
Software, 444, 21%
Marketplace, 403, 19%
SaaS, 262, 13%
Services, 230, 11%
Systems, 135, 7%
Semiconductors, 29, 1%
Components, 23, 1%
Media, 5, 0%
European & Israeli venture financing by target market June to September, 2014 (in US $M)
@gdibner blog: yankeesabralimey 24

25. US VC interest is concentrated in specific business models
•
US VC firms investing in Europe & Israel focused mainly on SaaS, software, and services
•
Media, components, and semiconductors attracted little interest from local VCs, and no interest at all from US VCs
2
4
4
7
11
15
2
5
6
20
12
25
24
46
35
0
10
20
30
40
50
60
Semiconductors
Components
Media
Systems
Commerce
Marketplace
Services
Software
SaaS
VC Investments in Europe & Israel
June to September, 2014
US VC involved
No US VC involved
@gdibner blog: yankeesabralimey 25

26. The most popular segments in Europe
•
The 153 investments in Europe & Israel fell into 87 distinct segments
•
Of these, 70 fell into 22 segments of 3 or more companies
•
The top four segments, each with 6 investments, were:
•
Consumer food commerce
•
Consumer financial services
•
Enterprise security software
•
Enterprise infrastructure software
0
1
2
3
4
5
6
7
Enterprise Adtech Marketplace
OEM Electronics Systems
Consumer Electronics Systems
Consumer Lifestyle Marketplace
Enterprise Development SaaS
Consumer Real Estate Marketplace
Enterprise Financial SaaS
Consumer Travel Commerce
Consumer Media Services
Enterprise Infrastructure SaaS
Enterprise Financial Software
Consumer Gaming Software
OEM Electronics Components
Enterprise Data SaaS
Enterprise Marketing SaaS
Enterprise Security Software
Consumer Food Commerce
Enterprise Infrastructure Software
Consumer Financial Services
Investment in Europe and Israel by segment by country June to September 2014 (segments with 3 or more investments)
UK & Ireland
Israel
DACH
Nordic
France
Iberia
Benelux
South. Eur.
East. Eur.
@gdibner
blog: yankeesabralimey 26

27. The most popular segments in Europe & Israel for US VC firms
•
Across Europe & Israel, US VC firms invested in 15 enterprise companies, 12 consumer companies, and 1 government-oriented company
•
All four consumer commerce companies that attracted investment from US VCs were from the DACH region
0
1
2
3
4
5
6
7
8
Software
Software
Systems
Marketplace
Services
Commerce
Marketplace
Services
Software
SaaS
Government
Consumer
Enterprise
US VC Investments in Europe and Israel by segment by country
June to September 2014
Israel
Germany
UK
Spain
France
Ireland
Netherlands
Norway
Portugal
Sweden
@gdibner blog: yankeesabralimey 27

28. Average investment size by target market
•
Growth rounds involving US firms are significantly larger than rounds that do not
•
This effect is especially pronounced for enterprise companies
•
Companies targeting SMBs raise much larger growth rounds than companies targeting consumer or the enterprise
•
At the early venture and venture stages, the involvement of US firms does not imply a larger round
4
4
4
6
2
11
11
8
12
15
34
24
27
47
3
4
11
11
42
39
56
0
10
20
30
40
50
60
Consumer
Enterprise
OEM
SMB
Telecom
Consumer
Enterprise
Government
OEM
Telecom
Consumer
Enterprise
OEM
SMB
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Average round size, US $M
No US VC involved
US VC involved
@gdibner blog: yankeesabralimey 28

29. Average investment size by business model
•
Growth rounds involving US VC firms were larger across the board
•
This was especially true for systems companies
•
Commerce companies were the exception: commerce companies with US backers tended to raise smaller rounds
5
4
5
4
4
3
4
4
4
10
10
10
11
10
11
13
43
23
45
24
26
30
28
32
4
3
12
11
11
8
34
58
35
43
39
56
0
10
20
30
40
50
60
70
Commerce
Components
Marketplace
Media
SaaS
Semiconductors
Services
Software
Systems
Commerce
Components
Marketplace
SaaS
Services
Software
Systems
Commerce
Components
Marketplace
SaaS
Semiconductors
Services
Software
Systems
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Average round size, US $M
No US VC involved
US VC involved
@gdibner
blog: yankeesabralimey 29

30. Focus on fintech: investment volume
•
$364M was invested across Europe & Israel into 24 fintech companies
•
The UK was far and away the leader in terms of dollars invested in fintech startups
•
Other regions, however, are attracting similar levels of investment in early venture and venture stages
21
4
7
4
5
10
14
25
22
156
56
40
0
20
40
60
80
100
120
140
160
180
200
UK
Sweden
Germany
Israel
Spain
Total amount invested (US $M)
Fintech VC investment in Europe and Israel by bracket by region, Jun-Sep 2014
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
@gdibner blog: yankeesabralimey 30

31. Focus on fintech: target markets
•
UK & Ireland lead in terms of the number of fintech companies raising finance
•
Fintech companies in the Nordics and the UK & Ireland are diversified across Enterprise, Consumer, and SMB
•
Fintech financing rounds in DACH and Iberia are consumer-heavy
3
5
2
1
4
1
3
1
3
1
0
2
4
6
8
10
12
UK
Germany
Sweden
Israel
Spain
Denmark
Number of investments
Fintech VC investment in Europe and Israel by bracket by region, Jun-Sep 2014
SMB
Enterprise
Consumer
@gdibner blog: yankeesabralimey 31

32. Focus on enterprise SaaS: investment volume
•
40 enterprise SaaS companies raised $355M
•
The biggest investment volume was in the UK, followed by Israel
•
Growth investments were limited to the UK, Israel, and Norway
28
29
5
10
10
5
6
4
25
43
14
8
10
93
35
30
0
20
40
60
80
100
120
140
160
UK
Israel
Norway
Sweden
France
Ireland
Spain
Germany
Finland
Denmark
Total amount invested (US $M)
Enterprise SaaS VC investment in Europe and Israel by bracket by country
June to September 2014
Growth (20-100)
Venture (8-20)
Early Venture (2-8)
Seed (<2)
@gdibner blog: yankeesabralimey 32

33. Focus on enterprise SaaS: verticals
•
Enterprise Marketing SaaS was the most common segment, with nine companies raising VC money
•
Six companies in the Enterprise Data SaaS raised VC financing, suggesting that the big data trend is alive and well in Europe & Israel
0
2
4
6
8
10
Health
Media
Development
Adtech
Financial
Employment
Productivity
Infrastructure
Data
Marketing
Enterprise SaaS VC investment in Europe and Israel by vertical by country, June to September 2014 (number of investments)
UK
Israel
France
Spain
Sweden
Germany
Finland
Norway
Denmark
Ireland
@gdibner blog: yankeesabralimey 33

34. Focus on consumer electronics systems
•
Despite the widely expected boom in consumer hardware startups, only $40M was invested across Europe into this space
•
Five companies in the space raised money in the UK, Israel, and Sweden
12.2
12.5
8.0
3.7
4.0
0
2
4
6
8
10
12
14
16
18
UK
Israel
Sweden
Amount invested (US $M)
Consumer electonics VC investment in Europe and Israel by bracket by region, Jun-Sep 2014
Early Venture
Venture
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35. About the author
Partner at based in
Previously helped run European seed program for
Worked seven years as a VC in
Investments include
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