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Venture Capital in Europe & Israel
Venture Investment Data: Third Quarter 2017
Prepared by Gil Dibner
Leadenhall Market in...
The data
• The data in this report consists entirely of data I’ve gathered manually based on
publicly available, free sour...
Top 10 deals by region in 2017 YTD (US $M)
France & Benelux IsraelIberia
UK & Ireland DACH Nordic
Prepared by Gil Dibner f...
Top 10 deals by type in 2017 YTD (US $M)
Systems SaaSEnterprise
Consumer Financial Commerce
Prepared by Gil Dibner follow ...
Quarterly pace of venture investment
• In 3Q17, Europe & Israel saw
$5.4 billion flowing into 455
venture transactions
• 2...
Monthly pace of venture investment
• Looked at on a monthly
basis, the strength of 2Q and
3Q are even more
pronounced
• Ma...
Mega-rounds skew the investment totals
• This analysis breaks down VC
investments into brackets by size:
• Seed (less than...
Strong year-over-year growth
• All size brackets except seed
saw YoY increases in 3Q17
compared to 3Q16
• Growth volume in...
Number of investments, by bracket
• Excluding seed deals, the
total number of VC
investments per quarter was
very constant...
No impact of Brexit on deal volume…
• Looking just at UK VC deal
volume, there’s so far no
evidence that Brexit caused
any...
…and no impact on dollars invested in the UK
• An average of $819M per
quarter was invested in the
UK in the 18 months bef...
Corporate VC activity, by bracket
• Excluding seed deals, the
total number of corporate VC
investments rose to 60 in
3Q17,...
Corporate VC activity, by country
• During 3Q17, the UK saw the
highest number of corporate
VC investments, with 17
• Isra...
Average round size
• This average excludes seed
rounds and mega rounds, so
it reflects all rounds done in
Europe & Israel ...
Total venture investment by country, 3Q 2017
• The UK saw the most VC
investment in 3Q17, with
$1.7B raised
• Israel came ...
Rule Britannia!
Total venture investment by country, 3Q15 to 3Q17
• To get a better sense of VC
volumes in various countri...
Total venture investment by country, 3Q15 to 3Q17
• To get a better sense of VC
volumes in various countries,
this analysi...
Total venture investment by region
• When VC investments across
Europe are aggregated into
regions, UK & Ireland, Israel,
...
Rounds by bracket & region
• To get a better sense of deal
volume, this analysis excludes
seed deals which are often
poorl...
Participation rate of US VC firms, by bracket
• In the first quarter, US VCs
participated in 9% of the VC
financing rounds...
US VC firm participation rate drops in 4Q
• From 4Q16 to 3Q17, US VCs
participated in about 12% of
the rounds that took pl...
Participation of US VC firms by country
• In 3Q17, US VCs firms were
active in 9 different European
countries
• US VC firm...
Participation of US VC firms by country
• This chart shows US VC
activity within Europe
• The overwhelming bulk of US
VC a...
Dimension Categories Explanation/Example
1. Target market
Consumer, SMB, Enterprise, Government,
Telecom, OEM
What sort of...
• Excluding mega-rounds,
investment activity increased
uniformly across target
markets
What target markets are attracting ...
• When Israel is excluded from
the sample, 45% of all VC
dollars in Europe went to
enterprise-oriented
companies in 3Q
• I...
Breakdown by region & target market
• Regional differences are very
apparent when VC
investment are categorized
by target ...
Distribution of investment rounds by country
• Across Europe & Israel, 45%
of VC investment rounds
were in consumer compan...
Growth rounds by target market
• Enterprise companies
accounted for just under half
of the later-stage market in
Europe & ...
• Fintech was the most popular
vertical across Europe &
Israel, with 48 investments in
the category
• Marketing tech was a...
• This graph shows the change
in the number of investments
by vertical from 3Q16 to 3Q17
• Entertainment, health,
employme...
• Finance was once again the
most frequently funded
vertical
• Marketing (mostly for
enterprise, but some SMB)
took second...
• This chart shows the ten most
commonly funded verticals
across Europe & Israel by
quarter
The most popular verticals in ...
• Investors continue to favor
financial, and lifestyle
• Travel bounced back in 3Q
• Entertainment (non-gaming)
showed new...
• Marketing, security, and
infrastructure showed
continued strength
• Ad tech, employment/HR,
and fintech verticals show a...
• Services displaced SaaS as
the most funded business
model in 3Q17, representing
24% of all VC dollars
• SaaS took 22% of...
• Services and SaaS remained
the top two business models
by funding volume
• Software rebounded in 3Q
• Systems maintained...
• This graph provides a quick
overview of the ten most
commonly funded segments
across the top ten countries
for those seg...
• Finance was the most
commonly funded category
in Israel, with 57 investments
in 2017
• Real estate, marketing, and
lifes...
• Security was the most
commonly funded category
in Israel, with 32 investments
in 2017
• Automotive jumped to
second plac...
• Fintech was the most
commonly funded category
in Sweden, with 19
investments in 2017
• Entertainment and electronics
wer...
• Lifestyle was the most
commonly funded category
in Israel, with 31 investments
in 2017
• Electronics and finance were
ne...
• Finance was the by far most
commonly funded category
in Germany, with 24
investments in 2017
• Consumer lifestyle was ne...
• Education was the most
commonly funded category
in Ireland, with 3 investments
in 2017
A closer look at Irish venture in...
• Gaming was the most
commonly funded category
in Finland, with 8 investments
in 2017
• Industrial and electronics
were ne...
• Consumer lifestyle was the
most commonly funded
category in Spain, with 9
investments in 2017
• Financial was second
• L...
• Financial was by far the most
commonly funded category
in Switzerland, with 6
investments in 2017
• Interestingly, there...
Focus on Health Tech
• 2017 is witness to a dramatic
rise in the number of health
tech investments across
Europe and Israe...
Focus on Employment/HR
• 2017 is also seeing an
increase in Employment/HR
startup investment
• Activity in France and the ...
Focus on Data
• The UK, France, and Israel
continue to see investment
into data startups (big data,
analytics, and databas...
Based in , I was previously a partner at . Before that, I helped run the
European seed program for . I moved to London aft...
Thank you
blog
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Europe & Israel 3Q17 Venture Capital Review

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Today, I’m happy to release a data-driven review of VC investment trends in Europe and Israel in the third quarter of 2017.

Some key highlights:

Overall, dealflow volume continues to hit new highs
Total VC investment volume into Europe and Israel was $5.5B in 3Q17 and $5.8B in 2Q17 (a record)
The number of deals peaked in 1Q17 at over 500 and has been trending gently downward, but still at very high levels.
Deal size is trending up again
In the past two quarters, there were 13 mega-deals (over $100M)
There is still zero evidence that Brexit has impacted the UK venture environment. Both deal numbers and investment volumes are up since the Brexit vote
In both 3Q and 2Q, the UK led the region in investment volume. Israel was in second place
France continues to boom, with 4 quarters of consecutive growth in investment volume
After six quarters of consecutive growth, Swedish VC investment volume declined in 3Q
Fintech was the yet again most frequently funded vertical, with 48 investments in 3Q. Marketing was second (31) and Electronics tied with Lifestyle for third (26)
The categories that showed the most growth in frequency from 3Q16 to 3Q17 were Entertainment (+171%), Health (+133%), and Employment/HR (+111%)
The categories that showed the most decrease in frequency from 3Q16 to 3Q17 were industrial (-50%), communication (-46%), and Fashion and Adtech (both down 43%).
You’ll find all that and more in the 52-page report, so download it here or view it on Slideshare below. I’d recommend also taking a look at the more detailed 2016 year in review report, which can be found here.

As always, I welcome your comments, questions, and feedback. Please let me know if there are additional slices of data you think I should add into the report.

Veröffentlicht in: Technologie
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Europe & Israel 3Q17 Venture Capital Review

  1. 1. Venture Capital in Europe & Israel Venture Investment Data: Third Quarter 2017 Prepared by Gil Dibner Leadenhall Market in the City of London. The market dates from the 14th century, but the current structure dates to 1881. blog
  2. 2. The data • The data in this report consists entirely of data I’ve gathered manually based on publicly 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. More importantly, it allows me to exclude deals that are really not “venture capital” rounds but tend to get included by others • Seed investment is under-reported and adds a lot of noise to the data set, so I exclude deals under $500K • The analysis is limited to ICT categories and excludes life sciences • The analysis excludes Turkey and FSU countries • All currencies converted into USD using monthly average exchange rates Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 2
  3. 3. Top 10 deals by region in 2017 YTD (US $M) France & Benelux IsraelIberia UK & Ireland DACH Nordic Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 3 60 66 75 75 100 102 190 385 397 502 Babylon Health Revolut Darktrace Kobalt Funding Circle Atom Bank Neyber Deliveroo FarFetch Improbable 0 200 400 600 50 50 53 70 90 120 128 165 404 423 Market Logic NewStore ResearchGate SoundCloud Lilium Kreditech Lampenwelt.de Tricentis Auto1 Delivery Hero 0 100 200 300 400 500 24 25 27 27 30 50 64 88 120 481 StarCounter Min Doktor 24 Storage MariaDB Yubico Collibra iZettle ForgeRock Snow Software Klarna 0 200 400 600 50 50 53 57 62 69 72 75 107 173 Leap Motion Protix Algolia Shadow Vestiaire Collective Oodrive Manomano Actility Picnic Showroomprivee 0 50 100 150 200 60 65 70 75 75 76 84 85 100 250 StoreDot Innoviz SentinelOne WalkMe Kaminario Vroom Trax Valens CyberReason Via 0 100 200 300 10 10 11 12 20 22 28 35 100 175 OnTruck Fever Logtrust Scytl Verse CornerJob Fintronic TypeForm Cabify LetGo 0 50 100 150 200
  4. 4. Top 10 deals by type in 2017 YTD (US $M) Systems SaaSEnterprise Consumer Financial Commerce Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 4 107 120 128 173 175 250 385 397 404 423 Picnic Kreditech Lampenwelt.de Showroomprivee LetGo Via Deliveroo FarFetch Auto1 Delivery Hero 0 100 200 300 400 500 41 45 48 50 58 66 100 102 120 190 Zopa 10x Future Technologies Younited Credit Receipt Bank Credit Peers Revolut Funding Circle Atom Bank Kreditech Neyber 0 50 100 150 200 33 39 40 62 76 107 128 173 385 397 Fritchi CarWow Lesara Vestiaire Collective Vroom Picnic Lampenwelt.de Showroomprivee Deliveroo FarFetch 0 100 200 300 400 500 75 75 75 75 84 88 100 120 165 190 481 502 Kobalt Kaminario WalkMe Darktrace Trax ForgeRock CyberReason Snow Software Tricentis Neyber Klarna Improbable 0 200 400 600 20 20 20 21 23 30 33 50 53 64 75 90 Intuition Robotics Healthwatch Highcon Vulog Ultrahaptics Volocopter Airobotics Rimac Arralis iZettle Kaminario Lilium 0 20 40 60 80 100 50 50 50 53 69 75 75 120 165 481 Market Logic Collibra Receipt Bank Algolia Oodrive Kobalt WalkMe Snow Software Tricentis Klarna 0 200 400 600
  5. 5. Quarterly pace of venture investment • In 3Q17, Europe & Israel saw $5.4 billion flowing into 455 venture transactions • 2Q17 was a record-breaking quarter in terms of the amount invested • The number of deals declined in 3Q and 2Q from a record number in 1Q • These numbers, and the rest of this deck, do not reflect the $1B in debt raised by Spotify in March Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 5 835 1,703 1,916 2,873 3,139 3,252 2,857 3,730 4,114 3,122 3,520 4,072 5,790 5,476 0 100 200 300 400 500 600 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 Amountinvested(US$M) VC Investments in Europe & Israel Invested amount (US $M) Number of investments
  6. 6. Monthly pace of venture investment • Looked at on a monthly basis, the strength of 2Q and 3Q are even more pronounced • May 2017 was a record- setting month in terms of investment volume • September 2017 was a record-setting month in terms of the number of deals Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 6 905 971 997 791 787 1,561 1,518 571 1,164 1,084 1,059 715 1,657 1,051 1,021 1,401 1,452 1,261 725 1,101 1,296 1,458 1,170 893 1,671 943 1,458 861 3,014 1,887 2,013 751 2,712 0 20 40 60 80 100 120 140 160 180 200 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 Amountinvested(US$M) VC Investments in Europe & Israel (January 2015 - September 2017) Invested amount (US $M) Number of investments
  7. 7. Mega-rounds skew the investment totals • This analysis breaks down VC investments into brackets by size: • Seed (less than $2M) • Early venture ($2-8M) • Venture ($8-20M) • Growth ($20-100M) • Mega ($100M+) • 13 mega-rounds took place in Europe in 2Q17 and 3Q17 • Snow Software (Sweden, $120M) • Cabify (Spain, $100M) • Kreditech (Germany, $120M) • Improbable (UK, $502M) • Showroomprivee (France, $173M) • Delivery Hero (Germany, $423M) • Auto1 (Germany, $404M) • CyberReason (Israel, $100M) • Farfetch (UK, $397M) • Klarna (Sweden, $225M & $250M) • Via (Israel, $250M) • Neyber (UK, $152M) • Deliveroo (UK, $385M) • Adjusting for mega-rounds, 3Q17 was a record quarter at $4.2B Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 7 592 708 759 741 707 752 650 921 941 873 1,336 1,196 1,395 1,567 2,473 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2016 2017 AmountInvested(US$M) Pace of VC Investment in Europe and Israel Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)
  8. 8. Strong year-over-year growth • All size brackets except seed saw YoY increases in 3Q17 compared to 3Q16 • Growth volume increased by 85% • Mega-round volume increased by 359% Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 8 167 159 592 707 752 873 1,336 2,473275 1,263 0 1,000 2,000 3,000 4,000 5,000 6,000 Qtr3 Qtr3 2016 2017 TotalVCinvestment(US$M) VC investmentvolume in Europe and Israel by bracket (3Q17 vs 3Q16) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)
  9. 9. Number of investments, by bracket • Excluding seed deals, the total number of VC investments per quarter was very constant for the past three quarters: 318 in 1Q, 315 in 2Q, and 315 in 3Q • The mix, however, seems to be shifting towards later- stage rounds Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 9 77 85 94 140 153 157 144 182 195 186 170 42 62 44 46 61 57 64 53 77 76 75 33 26 38 35 44 52 40 35 40 44 65 6 6 4 3 4 4 1 6 6 9 5 0 50 100 150 200 250 300 350 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 NumberofVCinvestments VC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  10. 10. No impact of Brexit on deal volume… • Looking just at UK VC deal volume, there’s so far no evidence that Brexit caused any slowdown whatsoever in VC activity • There were an average of 15 VC deals per month in the 18 months before the referendum • There were an average of 23 VC deals per month since the referendum Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 10 0 5 10 15 20 25 30 35 40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 NumberofVCinvestments VC investmentvolume in the UK by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Pre- Brexit avg = 15 Post-Brexit avg = 23
  11. 11. …and no impact on dollars invested in the UK • An average of $819M per quarter was invested in the UK in the 18 months before the referendum • An average of $1,092M per quarter was invested in the UK since the referendum Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 11 74 70 98 79 136 108 133 150 189 162 178 165 166 96 128 172 148 181 113 159 247 224 459 180 405 209 532 273 202 191 149 514 755210 150 275 478 192 110 275 202 899 538 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 NumberofVCinvestments VC investmentvolume in the UK by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Pre-Brexit avg = $819M Post-Brexit avg = $1,092M
  12. 12. Corporate VC activity, by bracket • Excluding seed deals, the total number of corporate VC investments rose to 60 in 3Q17, tying 2Q16 for the record • Corporate VC investments continue to trend towards later stage Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 12 6 4 5 16 7 22 19 23 19 27 25 27 23 4 3 9 12 7 12 6 16 19 5 17 16 18 4 4 7 8 7 7 20 18 6 9 12 11 18 3 1 3 3 3 2 3 1 0 10 20 30 40 50 60 70 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 NumberofVCinvestments CorporateVC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  13. 13. Corporate VC activity, by country • During 3Q17, the UK saw the highest number of corporate VC investments, with 17 • Israel saw 16 corporate VC investments during the quarter • Germany came in third, with 7 • Sweden and France tied for fourth place, with 4 each Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 13 6 2 5 2 2 6 6 3 5 7 2 2 0 2 4 6 8 10 12 14 16 18 UK Israel Germany Sweden France Switzerland Finland Norway Spain Croatia Ireland Estonia Netherlands Numberofinvestments Number of corporate VC investments in Europeand Israel by bracket (3Q17) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  14. 14. Average round size • This average excludes seed rounds and mega rounds, so it reflects all rounds done in Europe & Israel between $2M and $100M • With very few exceptions, most months saw average round sizes of $10-12M and there is seems to be little pattern other than mean reversion • Until now, 3Q15 was the only systematic outlier to this trend, with average round sizes of $14M • 3Q17 saw average round sizes jump up to $13M, from lows of sub-$10M in 4Q16 and 1Q17 Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 14 4 6 8 10 12 14 16 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 AmountInvested(US$M) Average investmentsize in Europe and Israel (Round sizes of 2-100M, and 6-month trailingaverage)
  15. 15. Total venture investment by country, 3Q 2017 • The UK saw the most VC investment in 3Q17, with $1.7B raised • Israel came in second place, with $1.3B raised • Sweden saw the third-highest amount of venture investment, with $658M • France was a close fourth, with $645M Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 15 1,736 1,281 658 645 422 136 110 107 89 81 50 40 28 26 23 9 8 6 5 4 4 3 2 2 1 UK Israel Sweden France Germany Ireland Finland Norway Spain Switzerland Croatia Netherlands Italy Cyprus Denmark Austria Belgium Hungary Portugal Estonia Poland Serbia Malta Iceland Czech Total VC investmentvolumeby country, 3Q17 (US $M)
  16. 16. Rule Britannia! Total venture investment by country, 3Q15 to 3Q17 • To get a better sense of VC volumes in various countries, this analysis excludes mega- rounds • With this filter, volumes and rankings are more consistent • The UK leapt into first place, ahead of Israel which also saw a strong increase over 2Q • Sweden’s steady rise (seven quarters of uninterrupted growth) reversed itself in 3Q Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 16 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 0 200 400 600 800 1000 1200 1400 TotalVCinvestment(US$M) TotalVC investment,3Q15 - 3Q17 (top 5 countries, excluding mega-rounds) Israel UK France Germany Sweden
  17. 17. Total venture investment by country, 3Q15 to 3Q17 • To get a better sense of VC volumes in various countries, this analysis excludes mega- rounds • The “second five” countries for VC investment in 2016 were Spain, Ireland, the Netherlands, Finland, and Switzerland Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 17 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 0 20 40 60 80 100 120 140 160 TotalVCinvestment(US$M) TotalVC investment,3Q15 - 3Q17 (countries ranked 6-10, excluding mega-rounds) Spain Ireland Netherlands Switzerland Finland
  18. 18. Total venture investment by region • When VC investments across Europe are aggregated into regions, UK & Ireland, Israel, the Nordics, France, and DACH are the clear and consistent leaders • Other regions do produce meaningful VC investments, but the volumes are still low Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 18 UK & Ireland,1,872 Israel,1,281 Nordic,904 France, 645 DACH, 512 South.Eur., 110 Iberia,94 Benelux,48 East.Eur., 11 TotalVC investmentby region, 3Q17
  19. 19. Rounds by bracket & region • To get a better sense of deal volume, this analysis excludes seed deals which are often poorly reported • Excluding seed deals, the UK and Ireland saw 92 venture deals in the third quarter • France came in second with 54 • Israel was right behind France with 53 Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 19 44 34 17 32 21 10 7 2 3 21 12 16 11 11 1 25 8 19 5 5 1 2 1 2 0 10 20 30 40 50 60 70 80 90 100 UK & Ireland France Israel DACH Nordic Iberia Benelux South. Eur. East. Eur. Numberofinvestments Number of investments in Europe and Israel by bracket, 3Q 2017 Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  20. 20. Participation rate of US VC firms, by bracket • In the first quarter, US VCs participated in 9% of the VC financing rounds in EU and Israel • As usual, US VCs are much more likely to participate in later rounds • Unlike previous quarters, however, more mega-rounds happened without US VCs Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 20 2% 4% 12% 32% 20% 98% 96% 88% 68% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Seed (.5-2) Early Venture (2-8) Venture (8-20) Growth (20-100) Mega (>100) Percentageofrounds Did US VC firms participatein EuropeanVC rounds? (3Q17) No Yes
  21. 21. US VC firm participation rate drops in 4Q • From 4Q16 to 3Q17, US VCs participated in about 12% of the rounds that took place in Europe • This rate is the lowest since I’ve been tracking the data, but it appears to be stable • This analysis excludes seed and mega-rounds Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 21 15% 23% 17% 20% 20% 16% 16% 21% 21% 12% 12% 12% 12% 85% 77% 83% 80% 80% 84% 84% 79% 79% 88% 88% 88% 88% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 PercentageofRounds Did US VC firms participatein EuropeanVC rounds? (3Q14-3Q17) No Yes
  22. 22. Participation of US VC firms by country • In 3Q17, US VCs firms were active in 9 different European countries • US VC firms were most active in Israel, where they participated in 15 investment rounds • The UK saw 11 US investments • US VCs invested in 4 French companies and 3 German companies Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 22 16 11 4 3 2 1 10 2 4 6 8 10 12 14 16 18 Israel UK France Germany Ireland Finland Norway Switzerland Sweden NumberofVCinvestments Rounds with a US VC involved (3Q17)
  23. 23. Participation of US VC firms by country • This chart shows US VC activity within Europe • The overwhelming bulk of US VC activity is generally in Israel, the UK & Ireland, DACH Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 23 0 10 20 30 40 50 60 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 NumberofVCinvestments Investments with US VC participation Israel UK & Ireland DACH Nordic France Iberia Benelux East. Eur. South. Eur.
  24. 24. 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? How is value delivered to customers? What are customers paying for? For example: Consumer + Travel + Marketplace AirBnB is a travel-related marketplace for consumers Three-dimensional approach to sector mapping Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 24
  25. 25. • Excluding mega-rounds, investment activity increased uniformly across target markets What target markets are attracting the most VC investment in Europe & Israel? Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 25 1,177 931 1,076 1,244 1,097 1,002 1,056 1,352 1,546 910 1,110 1,654 1,640 1,269 962 1,650 1,361 1,820 275 224 270 283 220 244 182 150 163 187 219 447 255 406 531 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 TotalVCinvestments(US$M) European& Israeli venture financing by target market 3Q15 to 3Q17 (excluding mega-rounds, US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  26. 26. • When Israel is excluded from the sample, 45% of all VC dollars in Europe went to enterprise-oriented companies in 3Q • In 2Q 2017, there was a spike in consumer-focused investments Shifting towards enterprise? Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 26 62% 36% 56% 63% 62% 57% 53% 58% 53% 45% 46% 58% 41% 18% 48% 34% 22% 24% 31% 36% 33% 32% 29% 36% 32% 45% 6% 10% 4% 12% 8% 6% 5% 3% 7% 8% 12% 3% 6%5% 4% 2% 4% 5% 6% 5% 8% 10% 5% 5% 7%6% 6%8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 Europeanventure financing by target market 3Q14 to 3Q17 (excluding Israel, percent of US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  27. 27. Breakdown by region & target market • Regional differences are very apparent when VC investment are categorized by target market • In 3Q17, the Nordics evidenced a strong emphasis on enterprise investments • Unlike previous quarters, Israel was more balanced, with a sizeable percentage of consumer-oriented investments Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 27 875 457 135 308 248 772 575 674 179 174 110 113 224 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 UK & Ireland Israel Nordic France DACH South. Eur. Iberia Benelux East. Eur. Totalamountinvested(US$M) Investment in Europe and Israel by target market by region 3Q17 (US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  28. 28. Distribution of investment rounds by country • Across Europe & Israel, 45% of VC investment rounds were in consumer companies in 3Q17 • Over two-thirds of Israeli venture investments were into enterprise companies • France and DACH skewed towards consumer • The UK, Ireland, and Nordics skewed towards enterprise Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 28 18% 42% 43% 50% 50% 52% 56% 73% 64% 32% 41% 33% 21% 30% 30% 18% 12% 9% 8% 21% 11% 6% 13% 11% 6% 4% 7% 5% 6% 4% 5% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Israel Nordic UK & Ireland Iberia Benelux DACH France South. Eur. Investment in Europe and Israel by target market by country 3Q17 (Number of investments) Consumer Enterprise SMB OEM Telecom Government Agriculture
  29. 29. Growth rounds by target market • Enterprise companies accounted for just under half of the later-stage market in Europe & Israel in 3Q17 Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 29 56% 37% 46% 56% 43% 39% 38% 43% 44% 34% 37% 45% 33% 25% 41% 46% 25% 38% 50% 50% 50% 44% 32% 50% 36% 49% 6% 7% 5% 9% 12% 3% 6% 5% 12% 7% 4% 4% 6% 11% 6% 7% 5% 6% 5% 5% 20% 7% 13% 14% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2014 2015 2016 2017 Investment in Europe and Israel by target market (Rounds over $20M, number of investments) Agriculture Government Telecom OEM SMB Enterprise Consumer
  30. 30. • Fintech was the most popular vertical across Europe & Israel, with 48 investments in the category • Marketing tech was a distant second with 31 • Lifestyle (a catch-all category for consumer commerce) was tied with Electronics for third, with 26 Finance returned to being the top vertical Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 30 4 4 4 5 5 6 6 6 7 8 8 8 8 9 11 12 13 13 15 15 15 17 18 19 19 20 21 22 26 26 31 48 ERP HMI SCM CRM Agtech Gaming Food Legal Communications Industrial Productivity Fashion Adtech Social Development Energy Automotive Payments Travel Data Education Real Estate Logistics Entertainment Employment Security Health Infrastructure Lifestyle Electronics Marketing Financial European& Israeli venture financing by target market 3Q17 (top 30 categories, number of investments)
  31. 31. • This graph shows the change in the number of investments by vertical from 3Q16 to 3Q17 • Entertainment, health, employment, and payments saw the biggest increases in VC investment • Industrial, Communications, Adtech, and Fashion saw the biggest decreases Growth rates by vertical Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 31 Industrial,-50% Communications,-46% Adtech,-43% Fashion,-43% Security,-13% Lifestyle,-7% Travel, -6% Marketing, 15% Data, 15% Logistics,20% Infrastructure, 29% Automotive,30% Education, 36% Electronics,37% Financial,45% Energy, 50% Payments,63% Employment,111% Health,133% Entertainment,171% -100% -50% 0% 50% 100% 150% 200% Change in the number of venture investments (3Q17 vs 3Q16, 20 most popular categories)
  32. 32. • Finance was once again the most frequently funded vertical • Marketing (mostly for enterprise, but some SMB) took second place • Consumer lifestyle and electronics (split between consumer and OEM) tied for third place, Which verticals for which segments? Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 32 Logistics Employment Entertainment Security Health Infrastructure Lifestyle Electronics Marketing Financial 0 10 20 30 40 50 60 European& Israeli venture financing by target market 3Q17 (number of investments, top 10 verticals) Consumer Enterprise SMB OEM Telecom Agriculture
  33. 33. • This chart shows the ten most commonly funded verticals across Europe & Israel by quarter The most popular verticals in the past 2 years Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 33 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 0 50 100 150 200 250 300 350 European& Israeli venture financing by vertical market (number of investments, top 10 verticals) Adtech Health Logistics Electronics Lifestyle Employment Security Infrastructure Marketing Financial
  34. 34. • Investors continue to favor financial, and lifestyle • Travel bounced back in 3Q • Entertainment (non-gaming) showed new strength, with a slew of investments in media businesses • Health and gaming declined in 3Q Consumer VC investment trends Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 34 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 0 20 40 60 80 100 120 140 160 180 European& Israeli venture financing by consumer verticals (number of investments, top 10 verticals) Entertainment Travel Health Fashion Food Electronics Logistics Gaming Lifestyle Financial
  35. 35. • Marketing, security, and infrastructure showed continued strength • Ad tech, employment/HR, and fintech verticals show a decline Enterprise VC investment trends Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 35 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 0 20 40 60 80 100 120 140 160 180 European& Israeli venture financing by enterprise verticals (number of investments, top 10 verticals) CRM Financial Industrial Employment Development Data Infrastructure Adtech Security Marketing
  36. 36. • Services displaced SaaS as the most funded business model in 3Q17, representing 24% of all VC dollars • SaaS took 22% of the venture dollars invested in Europe & Israel • Systems – complete physical products – took fourth place at 9% of all venture dollars SaaS above all (but keep an eye on systems) Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 36 Services, 1,020, 24% SaaS, 972, 23% Software, 771, 18% Systems, 365, 9% Commerce, 273, 7% Components, 262, 6% Marketplace, 248, 6% Media, 188, 4% Semiconductors, 108, 3% Materials, 8, 0% European & Israeli venture financing by target market 3Q17 (in US $M) (excluding mega-rounds)
  37. 37. • Services and SaaS remained the top two business models by funding volume • Software rebounded in 3Q • Systems maintained their fourth place ranking Commerce disappears and systems rise Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 37 0 200 400 600 800 1000 1200 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 2015 2016 2017 European& Israeli venture financing by business model (top seven, in US $M, excluding mega-rounds) Services SaaS Software Commerce Marketplace Systems Media
  38. 38. • This graph provides a quick overview of the ten most commonly funded segments across the top ten countries for those segments • In a nutshell: • Consumer financial services (Everywhere, but especially in the UK) • Marketing SaaS in the UK, France, and Sweden • Israeli enterprise security software • Consumer entertainment media • British and French consumer lifestyle • Israeli and British infrastructure • French consumer electronics • And some other stuff….  EU+IL VC Cheat Sheet (1Q17) Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 38
  39. 39. • Finance was the most commonly funded category in Israel, with 57 investments in 2017 • Real estate, marketing, and lifestyle were next A closer look at UK venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 39 Data Education Health Security Infrastructure Employment Lifestyle Marketing Real Estate Financial 0 10 20 30 40 50 60 UK venture financing by target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  40. 40. • Security was the most commonly funded category in Israel, with 32 investments in 2017 • Automotive jumped to second place, tied with marketing • Infrastructure and health tied for third A closer look at Israeli venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 40 Financial Logistics Electronics Development Data Health Infrastructure Marketing Automotive Security 0 5 10 15 20 25 30 35 Israeli venture financing by target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM Agriculture
  41. 41. • Fintech was the most commonly funded category in Sweden, with 19 investments in 2017 • Entertainment and electronics were next • Lifestyle and gaming tied for fourth A closer look at Swedish venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 41 Energy Payments Employment Health Marketing Gaming Lifestyle Electronics Entertainment Financial 0 2 4 6 8 10 12 14 16 18 20 Swedish venture financing by target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  42. 42. • Lifestyle was the most commonly funded category in Israel, with 31 investments in 2017 • Electronics and finance were next A closer look at French venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 42 Food Health Adtech Marketing Infrastructure Logistics Employment Financial Electronics Lifestyle 0 5 10 15 20 25 30 35 French venture financingby target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  43. 43. • Finance was the by far most commonly funded category in Germany, with 24 investments in 2017 • Consumer lifestyle was next • Food and electronics tied for third A closer look at German venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 43 Automotive Payments Marketing Employment Infrastructure Travel Health Electronics Food Lifestyle Financial 0 5 10 15 20 25 30 German venture financing by target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  44. 44. • Education was the most commonly funded category in Ireland, with 3 investments in 2017 A closer look at Irish venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 44 HMI Industrial Data Logistics CRM Payments Lifestyle Legal Infrastructure Marketing Employment Development Health Financial Communications Education 0 1 2 3 4 Irish venture financing by target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  45. 45. • Gaming was the most commonly funded category in Finland, with 8 investments in 2017 • Industrial and electronics were next A closer look at Finnish venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 45 Data Energy HMI Education Entertainment Marketing Health Electronics Industrial Gaming 0 1 2 3 4 5 6 7 8 9 Finnish venture financingby target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  46. 46. • Consumer lifestyle was the most commonly funded category in Spain, with 9 investments in 2017 • Financial was second • Logistics and health tied for third A closer look at Spanish venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 46 Electronics Education Social Employment Infrastructure Travel Health Logistics Financial Lifestyle 0 1 2 3 4 5 6 7 8 9 10 Spanish venture financingby target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM Telecom Government
  47. 47. • Financial was by far the most commonly funded category in Switzerland, with 6 investments in 2017 • Interestingly, there were two space-related investments in Switzerland A closer look at Swiss venture in 2017 YTD Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 47 Health Communications ERP Food Employment Real Estate Legal SCM Infrastructure Data Electronics Payments Automotive Space Financial 0 1 2 3 4 5 6 7 Swiss venture financingby target market 2017 YTD (number of investments, top verticals) Consumer Enterprise SMB OEM
  48. 48. Focus on Health Tech • 2017 is witness to a dramatic rise in the number of health tech investments across Europe and Israel • This is happening across the geography Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 48
  49. 49. Focus on Employment/HR • 2017 is also seeing an increase in Employment/HR startup investment • Activity in France and the UK was the main driver here Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 49
  50. 50. Focus on Data • The UK, France, and Israel continue to see investment into data startups (big data, analytics, and databases) Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 50
  51. 51. Based in , I was previously a partner at . Before that, I helped run the European seed program for . I moved to London after seven years in during which I worked as a VC with and . I’m originally from . My VC investments include and . Angel investments include and many more. If you found this useful, I hope you’ll subscribe to my blog. 51 Gil Dibner To invest in the best European & Israeli enterprise startups, consider backing me on here. Lots of exciting stuff in the pipeline – and you’ll be in pretty good company.
  52. 52. Thank you blog

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