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Europe & Israel: Venture Capital Data (1H18)

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A data-driven look at VC investment trends across Europe & Israel in 1H18. Provided by Gil Dibner of Angular Ventures.

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Europe & Israel: Venture Capital Data (1H18)

  1. 1. Venture Capital in Europe & Israel Venture Investment Data: 1H18 Navagio Beach, or Shipwreck Beach, is an exposed cove on the coast of Zakynthos, in the Ionian Islands of Greece, one of 6,000 Greek Islands. © Angular Ventures 2018 In compliance with applicable UK regulations, Angular Ventures is an Appointed Representative of Sapia Partners LLP (550103), a firm authorised and regulated by the Financial Conduct Authority (FCA).
  2. 2. Angular is a specialist venture capital firm, built to back a very specific type of company: • Enterprise-oriented. If your business requires consumer adoption, it's not for us. We back companies that sell products and services to other companies. • Deep technology. We are firm believers in the value of meaningful barriers to entry, and we know there are a lot of ways to define and construct those barriers. • Born in Europe or Israel. We know that great innovation can come from anywhere. Our focus is on companies born on the "right" side of the Atlantic, specifically in Europe or Israel. • Global ambition. While it's possible to build a great business without targeting a global opportunity, we are exclusively focused on companies that are chasing a truly global opportunity. In most cases, this means a focus on US market entry from day one. • Outstanding founding teams with domain expertise. We believe that great founders are the main driver of success for any entrepreneurial venture. We like "well-rounded" founders, but tend to prefer founders that are "angular," bringing unique technical or domain expertise to bear. • Early stage. We like to be very early. We are not religious about being first, but most of our investments are into companies that have raised less than $1M before we engage. 2Subscribe to the Angular Ventures weekly
  3. 3. Notes & more • 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 • ICOs included on a selective basis; crypto companies are classified into verticals by their end value proposition About this data: A special thank you to Andrew Poesaste (@poetential) for help with data gathering. He’s looking for a full-time VC gig in London and he’s awesome. 3Subscribe to the Angular Ventures weekly
  4. 4. Top 10 deals by region in 1H18 (US $M) France & Benelux IsraelIberia UK & Ireland DACH Nordic 4Subscribe to the Angular Ventures weekly 58 76 80 92 110 115 125 132 206 250 Global Processing Services Liberis Culture Trip E-Leather Circle BenevolentAI Intercom Oxford Nanopore Atom Bank Revolut 0 100 200 300 51 53 58 65 70 70 71 160 160 560 WISeKey Dreamlines Frontier Car Group Smava SolarisBank Sonnen Design Offices N26 Number 26 Auto1 0 200 400 600 30 30 34 41 41 45 46 50 50 62 175 Area9 Lyceum Qapital Iceye Small Giant Games Small Giant NA-KD Tactotek Starship Technologies Pipedrive KRY Taxify 0 50 100 150 200 10 10 12 20 21 23 24 29 40 160 Nextail Badi Red Points PLD Space TravelPerk Unbabel Hawkers OnTruck Spotahome Maximobility (Cabify) 0 50 100 150 200 50 50 59 60 60 66 75 96 200 250 CityScoot Klaxoon Recommerce Openclassrooms Scality Front Ledger Back Market Voodoo Tradeshift 0 50 100 150 200 250 300 36 44 50 51 60 60 80 100 150 300 Algosec BigID Moovit TripActions BlueVine Claroty Gett eToro Behalf Landa Digital Printing 0 100 200 300 400
  5. 5. Top 10 deals by type in 1H18 (US $M) Systems SaaSEnterprise Consumer Financial Commerce 5Subscribe to the Angular Ventures weekly 100 110 160 160 160 175 200 206 250 560 eToro Circle Number 26 N26 Maximobility (Cabify) Taxify Voodoo Atom Bank Revolut Auto1 0 200 400 600 65 70 76 100 110 150 160 160 206 250 Smava SolarisBank Liberis eToro Circle Behalf Number 26 N26 Atom Bank Revolut 0 50 100 150 200 250 300 29 34 38 45 50 53 53 56 59 96 Geld Fuer Flug Chronext Gousto NA-KD TourRadar Pharmacy2U Dreamlines Made.com Recommerce Back Market 0 20 40 60 80 100 120 51 54 58 60 60 66 115 125 132 153 WISeKey Concentra Analytics Global Processing Services Claroty Scality Front BenevolentAI Intercom Oxford Nanopore UiPath 0 50 100 150 200 35 35 36 38 50 51 70 75 132 300 Exotec Evergaz Dreem Almotive Starship Technologies WISeKey Sonnen Ledger Oxford Nanopore Landa Digital Printing 0 100 200 300 400 35 37 42 50 50 51 54 66 115 125 Dutch Finance Lab Amplience ContentSquare Celonis Pipedrive TripActions Concentra Analytics Front BenevolentAI Intercom 0 50 100 150
  6. 6. On track for a record year • 2018 appears to be on pace as another record- setting year in EU+IL venture • Over $12.6B was invested in 975 opportunities in the first half of 2018 • Compared to the first half of 2017, dollar volume was up 29%, but the number of deals was down by 2% • These numbers, and the rest of this deck, do not reflect the $1B in debt raised by Spotify in March, 2017 6,012 7,844 9,835 12,690 541 949 998 975 0 200 400 600 800 1,000 1,200 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2015 2016 2017 2018 NumberofInvestments Amountinvested(US$M) VC Investments in Europe & Israel (first six months of each year, 2015-2018) Invested amount (US $M) Number of investments 6Subscribe to the Angular Ventures weekly
  7. 7. The first two quarters of 2018 were very strong • The first and second quarters of 2018 were both record-setting quarters in terms of dollars invested • In terms of the number of deals done, 1Q18 was the slowest quarter since 3Q16, with “only” 440 deals done. • 2Q18, however, was a record-setting quarter with 535 deals done, surpassing the previous record of 527 in 1Q17 7Subscribe to the Angular Ventures weekly 835 1,703 1,916 2,873 3,139 3,252 2,857 3,730 4,114 3,122 3,520 4,072 5,763 5,609 4,907 6,170 6,520 0 100 200 300 400 500 600 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2014 2015 2016 2017 2018 Amountinvested(US$M) VC Investments in Europe & Israel Invested amount (US $M) Number of investments
  8. 8. Monthly pace of venture investment • Looked at on a monthly basis, the strength of 2Q18 is even more pronounced • June 2018 was a record- setting month in terms of the number of investments • The impact of summer and winter holidays on deal volume is easy to spot 8Subscribe to the Angular Ventures weekly 905 971 997 791 787 1,561 1,518 571 1,164 1,084 1,059 715 1,657 1,051 1,021 1,401 1,452 1,261 725 1,101 1,296 1,458 1,170 893 1,671 943 1,458 861 3,014 1,888 2,013 757 2,840 1,926 1,543 1,438 2,451 1,558 2,160 1,727 2,390 2,403 0 50 100 150 200 250 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 Amountinvested(US$M) VC Investments in Europe & Israel Invested amount (US $M) Number of investments
  9. 9. Even without mega-rounds, volumes are up • 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 ($100M+) • Readers of this report know that I used to put the logos of the mega-rounds into this chart – but there are just too many for that to be practical • Even without the mega- rounds, however VC investment volumes were up massively in 2Q18 compared to previous quarters 9Subscribe to the Angular Ventures weekly 708 759 733 710 734 753 919 650 921 950 873 1,001 1,081 1,523 1,196 1,395 1,567 2,507 2,126 2,157 2,530 784 778 2,339 1,358 861 2,066 1,400 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 AmountInvested(US$M) Pace of VC Investment in Europe and Israel Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)
  10. 10. Strong year-over-year growth in most brackets • Seed investment was down 33% from 1H17 to 1H18 • All other categories, however, showed growth: • Early venture was up 12% • Venture was up 39% • Growth was up 58% • Mega-rounds were up by 11% 10Subscribe to the Angular Ventures weekly 393 2621,492 1,671 1,872 2,604 2,962 4,686 3,117 3,466 0 5,000 10,000 15,000 20,000 2017 2018 TotalVCinvestment(US$M) VC investmentvolume in Europe and Israel by bracket (1H2018 vs 1H2017) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)
  11. 11. Number of investments, by bracket • Excluding seed deals, the total number of VC investments per quarter was relatively constant since 1Q17…until 2Q18 when the venture and early venture categories exploded 11Subscribe to the Angular Ventures weekly 77 85 94 140 153 157 144 182 195 185 171 181 186 220 42 62 44 46 61 57 64 53 77 77 75 83 86 122 33 26 38 35 44 52 40 35 40 44 66 57 61 66 6 6 4 3 4 4 1 6 6 9 5 6 11 7 0 50 100 150 200 250 300 350 400 450 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 NumberofVCinvestments VC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  12. 12. 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 45 VC deals per quarter in the 18 months before the referendum • There were an average of 74 VC deals per quarter since the referendum 12Subscribe to the Angular Ventures weekly 0 10 20 30 40 50 60 70 80 90 100 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 NumberofVCinvestments VC investmentvolume in the UK by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Pre- Brexit avg = 45 Post-Brexit avg = 74
  13. 13. …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 $1,145M per quarter was invested in the UK since the referendum 13Subscribe to the Angular Ventures weekly 74 70 98 79 136 108 133 150 189 162 180 151 247 213 165 166 96 128 172 148 181 113 159 247 224 184 150 356 459 180 405 209 532 273 202 191 149 514 755 586 442 652 210 150 275 478 192 110 275 202 899 633 391 338 365 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 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 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 = $1,204M
  14. 14. Corporate VC activity, by bracket • Excluding seed deals, the total number of corporate VC investments rose to 73 in 2Q18, a new record • Corporate VC investments continue to trend towards later stage, but seem to be starting to skew earlier 14Subscribe to the Angular Ventures weekly 6 4 5 16 7 22 19 23 19 27 25 26 23 25 20 26 4 3 9 12 7 12 6 16 19 5 17 17 18 19 27 31 4 4 7 8 7 7 20 18 6 9 12 11 18 18 14 14 3 1 3 3 3 2 3 1 3 2 0 10 20 30 40 50 60 70 80 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2014 2015 2016 2017 2018 NumberofVCinvestments CorporateVC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  15. 15. Corporate VC activity, by country • During 1H18, Israel saw the highest number of corporate VC investments, with 37 • Germany saw 23, followed by the UK with 22 • Corporate VCs were active in 19 European countries 15Subscribe to the Angular Ventures weekly 9 6 8 7 3 3 18 7 9 5 7 4 3 0 5 10 15 20 25 30 35 40 Israel Germany UK France Sweden Norway Switzerland Netherlands Iceland Spain Denmark Belgium Ireland Finland Hungary Italy Portugal Estonia Austria Numberofinvestments Number of corporate VC investments in Europeand Israel by bracket (1H18) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
  16. 16. 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 $10-12M and there is seems to be little pattern other than mean reversion • Early 2015 saw higher- than-average deal sizes • Late 2016 and early 2017 saw lower-than-average deal sizes • Late 2017 seemed to be characterized by higher- than average deal sizes – a trend that solidified in 2018 16Subscribe to the Angular Ventures weekly 4 6 8 10 12 14 16 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2014 2015 2016 2017 2018 AmountInvested(US$M) Average investmentsize in Europe and Israel (Round sizes of 2-100M, and 6-month trailingaverage)
  17. 17. Total venture investment by country, 2017 • The UK saw the most VC investment in 1H18, with $2.8B raised • Germany was second with $2.3B raised • Israel came in third with $2.1B raised • France was a close fourth, with $2.0B 17Subscribe to the Angular Ventures weekly 2,816 2,292 2,112 1,998 552 498 366 361 283 260 251 153 143 121 116 111 96 39 37 31 21 8 7 6 5 4 1 UK Germany Israel France Spain Sweden Ireland Netherlands Estonia Switzerland Finland Romania Norway Belgium Denmark Austria Italy Hungary Malta Portugal Iceland Greece Slovenia Bulgaria Poland Luxembourg Latvia Total VC investmentvolumeby country, 1H18 (US $M)
  18. 18. Venture dollars per capita (2017) $0.35 $0.46 $0.51 $0.57 $0.84 $1.16 $1.21 $1.40 $1.51 $1.66 $1.84 $2.70 $6.02 $12.04 $15.57 $16.97 $18.44 $24.31 $29.99 $30.58 $32.42 $34.57 $34.75 $36.34 $42.06 $44.90 $49.02 $54.82 $65.02 $88.04 $98.55 $172.59 $447.17 Serbia Latvia Greece Bulgaria Lithuania Czech Slovakia Slovenia Hungary Italy Romania Poland Portugal Croatia Malta Spain Belgium Austria Switzerland Denmark Netherlands Norway Germany France Estonia Cyprus Iceland Finland Ireland UK Luxembourg Sweden Israel VC dollars per capita in 2017 (US$) USA(2016)=$213.96 $1.00 $10.00 $100.00 $1,000.00 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 VCDollarsperCapita(LogScale) Population Venture Capital Investment per Capita (bubble size indicates total VC investment) Israel Sweden UK France Germany Holland Italy Spain Belgium Switz. Ireland Finland Lux. Estonia Norway Cyprus Iceland Denmark Croatia Portugal Romania HungarySlovenia Slovakia Poland Czech Austria Malta 18Subscribe to the Angular Ventures weekly
  19. 19. Venture dollars as a percentage of GDP (2017) • This graph shows 2017 venture dollars invested as a percentage of GDP • Israel leads at 1.16% of GDP followed by Sweden at 0.34%, Estonia at 0.24%, and the UK at 0.23% • All of the other countries at below 0.20% • Latvia and Greece are the lowest, with VC at 0.003% of GDP • In US, by comparison, VC was 0.37% of GDP in 2016, slightly higher than Sweden Serbia Latvia Greece Bulgaria Lithuania Czech Slovakia Slovenia Hungary Italy Romania Poland Portugal Croatia Malta Spain Belgium Austria SwitzerlandDenmark Netherlands Norway Germany France Estonia Cyprus Iceland Finland Ireland UK Luxembourg Sweden US 2016 Israel 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 0 20,000 40,000 60,000 80,000 100,000 120,000 VCasapercentageofGDP GDP per Capita 19Subscribe to the Angular Ventures weekly
  20. 20. Total venture investment by country (top 5) • To get a better sense of VC volumes in various countries, this analysis excludes mega-rounds • With this filter, volumes and rankings are more consistent • The UK overtook Israel in 2Q17 and has maintained the lead since • German, French, and Israeli VC increased dramatically into 2018, with France leaping into second place • Swedish VC investment volume grew dramatically in 4Q17, but slowed a bit into 2018 20Subscribe to the Angular Ventures weekly Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 0 200 400 600 800 1000 1200 1400 TotalVCinvestment(US$M) TotalVC investment,2Q16 - 2Q18 (top 5 countries, excluding mega-rounds) UK Israel France Germany Sweden
  21. 21. Total venture investment by country (6-10) • 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 • Finland hit a record in 1Q18, and Switzerland hit its record in 2Q18 21Subscribe to the Angular Ventures weekly Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 0 50 100 150 200 250 TotalVCinvestment(US$M) TotalVC investment,2Q16- 2Q18 (countries ranked 6-10, excluding mega-rounds) Spain Ireland Netherlands Switzerland Finland
  22. 22. 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 • The UK and Ireland account for 25% of total investment volume, DACH 21%, Israel 17%, and France 16% • Other regions do produce meaningful VC investments, but the volumes are still low 22Subscribe to the Angular Ventures weekly UK & Ireland, 3,182.7, 25% DACH, 2,663.6, 21% Israel,2,111.7, 17% France, 1,998.4, 16% Nordic,1,313.2, 10% Iberia,582.8, 4% Benelux,485.7, 4% East.Eur., 202.7, 2% South.Eur., 148.7, 1% TotalVC investmentby region, 1H18 (US $M, includes megarounds)
  23. 23. Rounds by bracket & region • Including seed deals, the UK and Ireland saw 235 venture deals in 1H18 • France came in second with 217 • The Nordics were third with 144 23Subscribe to the Angular Ventures weekly 50 53 44 16 9 20 18 107 100 60 49 47 19 13 42 44 24 37 50 30 19 15 30 21 0 50 100 150 200 250 UK & Ireland France Nordic DACH Israel Benelux Iberia South. Eur. East. Eur. Numberofinvestments Number of investments in Europe and Israel by bracket, 1H18 Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<.5-2)
  24. 24. Participation rate of US VC firms, by bracket • During 1H18, US VCs participated in 11% of the VC financing rounds in EU and Israel • As usual, US VCs are much more likely to participate in later rounds 24Subscribe to the Angular Ventures weekly 3% 7% 16% 26% 39% 97% 93% 84% 74% 61% 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? (1H18) No Yes
  25. 25. US VC firm participation rose slightly in 1H18 • During 2017, US VC firms participated in 8.9% of European & Israeli VC deals • In 1H18, this rose to 11.2% 25Subscribe to the Angular Ventures weekly 15% 17% 13% 17% 16% 11% 9% 11% 14% 8% 8% 8% 9% 10% 11% 11% 85% 83% 87% 83% 84% 89% 91% 89% 86% 92% 92% 92% 91% 90% 89% 89% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2014 2015 2016 2017 2018 PercentageofRounds Did US VC firms participatein EuropeanVC rounds? (3Q14-2Q18 No Yes
  26. 26. Participation of US VC firms by country • In 1H18, US VCs firms were active in 17 different European countries • US VC firms were most active in Israel, where they participated in 33 investment rounds • The UK saw 24 US investments • US VCs invested in 11 French companies and 10 German companies 26Subscribe to the Angular Ventures weekly 33 24 11 10 5 4 4 3 3 0 5 10 15 20 25 30 35 Israel UK France Germany Ireland Denmark Spain Estonia Sweden Austria Netherlands Belgium Finland Romania Norway Portugal Italy NumberofVCinvestments Rounds with a US VC involved (1H18)
  27. 27. 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, and the Nordics 27Subscribe to the Angular Ventures weekly 0 10 20 30 40 50 60 70 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 NumberofVCinvestments Investments with US VC participation Israel UK & Ireland DACH Nordic France Iberia Benelux East. Eur. South. Eur.
  28. 28. Three-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? How is value delivered to customers? What are customers paying for? For example: Consumer + Travel + Marketplace AirBnB is a travel-related marketplace for consumers 28Subscribe to the Angular Ventures weekly
  29. 29. What target markets are attracting the most VC investment in Europe & Israel? • Both consumer and enterprise investments increase in 2018, with a dramatic spike in enterprise in 2Q18 29Subscribe to the Angular Ventures weekly 1,244 1,097 1,002 1,056 1,369 1,551 1,490 1,739 1,963 1,640 1,269 962 1,650 1,345 1,820 1,879 1,785 2,186 270 283 220 264 377 508 187 219 447 255 406 545 240 378 415 0 1,000 2,000 3,000 4,000 5,000 6,000 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 TotalVCinvestments(US$M) European& Israeli venture financing by target market 2Q16 to 2Q18 (excluding mega-rounds, US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  30. 30. The enterprise/consumer tug-of-war continues • When Israel is excluded from the sample, over 50% of all VC dollars in Europe went to consumer-oriented companies in 1H18 30Subscribe to the Angular Ventures weekly 58% 53% 45% 46% 58% 42% 51% 56% 47% 33% 32% 29% 36% 32% 44% 37% 34% 33% 3% 7% 8% 12% 6% 8% 13% 5% 8% 10% 5% 5% 7% 4% 7% 6%6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 Europeanventure financing by target market 2Q16 to 2Q18 (excluding Israel, percent of US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  31. 31. Breakdown by region & target market • Regional differences are apparent when VC investment are categorized by target market 31Subscribe to the Angular Ventures weekly 1,425 1,799 498 985 705 427 1,397 565 937 730 386 128 223 420 0 500 1,000 1,500 2,000 2,500 3,000 3,500 UK & Ireland DACH Israel France Nordic Iberia Benelux East. Eur. South. Eur. Totalamountinvested(US$M) Investment in Europe and Israel by target market by region 1H18 (US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer
  32. 32. Distribution of investment rounds by country • Across Europe & Israel, 39% of VC investment rounds were in consumer companies in 1H18; 44% were in enterprise companies 32Subscribe to the Angular Ventures weekly 21% 30% 36% 42% 44% 45% 47% 50% 58% 48% 44% 42% 44% 45% 33% 33% 5% 9% 10% 7% 5% 10% 9% 11% 11% 11% 9% 5% 6% 8% 6% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Israel Benelux France DACH UK & Ireland Iberia Nordic South. Eur. Investment in Europe and Israel by target market by country 1H18 (Number of investments) Consumer Enterprise SMB OEM Telecom Government Agriculture
  33. 33. Growth rounds by target market • Later stage rounds in Europe & Israel were roughly evenly split between consumer and enterprise in 1H18 33Subscribe to the Angular Ventures weekly 43% 44% 34% 37% 45% 32% 35% 46% 40% 50% 44% 32% 50% 36% 48% 56% 42% 44% 5% 12% 7% 4% 6% 6% 3% 10% 5% 5% 20% 7% 13% 14% 8% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 Investment in Europe and Israel by target market (Rounds over $20M, number of investments) Agriculture Telecom OEM SMB Enterprise Consumer
  34. 34. Finance still leads, security is strong • Fintech was the most popular vertical across Europe & Israel, with 109 investments in the category in 1H18 • Security came in second at 61 • Data was third at 45 34Subscribe to the Angular Ventures weekly 6 6 6 12 16 16 16 17 17 19 22 22 23 24 27 27 28 29 31 31 32 34 38 38 38 39 41 42 43 45 61 109 ERP Sports Imaging Social Adtech Payments Communications Agtech Gaming CRM Fashion Legal Infrastructure Automotive Travel Productivity Development Entertainment Food Industrial Energy Education Real Estate Marketing Logistics Health Electronics Employment Lifestyle Data Security Financial European& Israeli venture financing by target market 1H18 (top 30 categories, number of investments)
  35. 35. Growth rates by vertical • This graph shows the change in the number of investments by vertical from 1H17 to 1H18 • Data, Real Estate, Productivity, and Security saw the biggest increases • IT Infrastructure, lifestyle, market, and automotive saw the biggest declines 35Subscribe to the Angular Ventures weekly Infrastructure, -50% Lifestyle,-41% Marketing, -27% Automotive,-25% Employment,-21% Health,-19% Electronics,-15% Travel, -4% Financial,-1% Entertainment,0% Food, 7% Logistics,12% Education, 26% Development,33% Energy, 33% Industrial,35% Security,42% Productivity,42% Real Estate, 46% Data, 55% -60% -40% -20% 0% 20% 40% 60% 80% Change in the number of venture investments (1H18 vs 1H17, 20 most popular categories)
  36. 36. Which verticals for which segments? • Consumer finance was once again the most frequently funded vertical, with 68 investments • A close second was enterprise security, with 57 investments • Enterprise data was third, with 43 investments • Consumer lifestyle was a close fourth, with 42 36Subscribe to the Angular Ventures weekly Logistics Real Estate Marketing Health Electronics Employment Lifestyle Data Security Financial 0 20 40 60 80 100 120 European& Israeli venture financing by target market 1H18 (number of investments, top 10 verticals) Consumer Enterprise SMB OEM Government
  37. 37. The most popular verticals • This chart shows the ten most commonly funded verticals across Europe & Israel by quarter 37Subscribe to the Angular Ventures weekly Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 0 50 100 150 200 250 300 350 European& Israeli venture financing by vertical market (number of investments, top 10 verticals) Data Health Logistics Electronics Lifestyle Employment Security Infrastructure Marketing Financial
  38. 38. Consumer VC investment trends • Investors continue to favor consumer fintech, lifestyle, gaming and consumer electronics 38Subscribe to the Angular Ventures weekly Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 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
  39. 39. Enterprise VC investment trends • Marketing and security showed continued strength • Most of the growth from 2016 to 2017 was in infrastructure, fintech, and data • CRM and Adtech declined from 2016 to 2017 39Subscribe to the Angular Ventures weekly Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 0 20 40 60 80 100 120 140 160 180 European& Israeli venture financing by enterprise verticals (number of investments, top 10 verticals) Financial Industrial Health Employment Development Data Infrastructure Adtech Security Marketing
  40. 40. Services displace SaaS • SaaS returned to the top spot in 1H18, with 26% of the invested amount. • Services were a close second, representing 24% of all VC dollars • Systems – complete physical products – took fifth place at 10% of all venture dollars • Commerce represented 11% and marketplaces were 8% 40Subscribe to the Angular Ventures weekly SaaS, 2,401, 26% Services, 2,255, 24% Software, 1,138, 12% Commerce, 971, 11%Systems, 921, 10% Marketplace, 720, 8% Media, 355, 4% Components, 271, 3% Materials, 122, 1% Semiconductors, 69, 1% European & Israeli venture financing by target market 1H18 (in US $M) (excluding mega-rounds)
  41. 41. Services and SaaS are dominant • Services and SaaS remained the top two business models by funding volume 41Subscribe to the Angular Ventures weekly 0 200 400 600 800 1000 1200 1400 1600 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2016 2017 2018 European& Israeli venture financing by business model (top seven, in US $M, excluding mega-rounds) Services SaaS Software Commerce Marketplace Systems Media
  42. 42. EU+IL VC Cheat Sheet (1H18) • 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) • Israeli enterprise security software • Marketing SaaS en France • Enterprise data SaaS in the UK and Israel • Consumer food commerce in the UK, Germany, and France • Enterprise employment/HR SaaS in the UK and France • And some other stuff….  42Subscribe to the Angular Ventures weekly
  43. 43. A closer look at UK venture in 1H18 • Finance was the most commonly funded category in the UK, with 30 investments in 1H18 • Data, health, and employment were next 43Subscribe to the Angular Ventures weekly Education Security Development Travel Real Estate Lifestyle Employment Health Data Financial 0 5 10 15 20 25 30 35 UK venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB Government
  44. 44. A closer look at German venture in 1H18 • Finance was the by far most commonly funded category in Germany, with 11 consumer investments and 15 total investments in 1H18 • Automotive was next with six • Productivity, lifestyle, logistics, and real estate were tied for third 44Subscribe to the Angular Ventures weekly Data Development Energy Fashion Employment Electronics Industrial Food Real Estate Logistics Lifestyle Productivity Automotive Financial 0 2 4 6 8 10 12 14 16 German venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM Government
  45. 45. A closer look at Israeli venture in 1H18 • Security was the most commonly funded category in Israel, with 34 investments in 1H18 alone – more than three times that of the next most frequent category - finance 45Subscribe to the Angular Ventures weekly Logistics Entertainment Electronics Real Estate Agtech Infrastructure Data Automotive Health Financial Security 0 5 10 15 20 25 30 35 40 Israeli venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM Agriculture
  46. 46. A closer look at French venture in 1H18 • Employment, finance, and marketing were tied for first place in France, with 15 investments each • Productivity and logistics rounded out the top three 46Subscribe to the Angular Ventures weekly Real Estate Energy Food Lifestyle Electronics Education Logistics Productivity Marketing Financial Employment 0 2 4 6 8 10 12 14 16 French venture financingby target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM
  47. 47. A closer look at Swedish venture in 1H18 • Fintech was the most commonly funded category in Sweden, with 10 investments in 1H18 • Lifestyle, fashion, entertainment, and gaming were also important categories in Sweden 47Subscribe to the Angular Ventures weekly Energy Education Electronics Health Security Industrial Gaming Entertainment Fashion Lifestyle Financial 0 2 4 6 8 10 12 Swedish venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM
  48. 48. A closer look at Spanish venture in 1H18 • Real estate tech was the most funded category in Spain, with six investments • Logistics was second, with five 48Subscribe to the Angular Ventures weekly Fashion Lifestyle Security Marketing Sports Payments Travel Legal Logistics Real Estate 0 1 2 3 4 5 6 7 Spanish venture financingby target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB
  49. 49. A closer look at Swiss venture in 1H18 • Financial was again the most commonly funded category in Switzerland, with 4 investments in 1H18 49Subscribe to the Angular Ventures weekly Food Development Health Employment Logistics Automotive Security Fashion Agtech Data Energy Marketing Lifestyle Electronics Financial 0 1 2 3 4 5 Swiss venture financingby target market 1H18 (number of investments, top verticals) Consumer Enterprise OEM Agriculture
  50. 50. A closer look at Dutch venture in 1H18 • Logistics and energy were the two most funded categories in the Netherlands, with three investments each in 1H18 50Subscribe to the Angular Ventures weekly Industrial Infrastructure Communications Lifestyle ERP Real Estate Financial Travel Entertainment Payments Health Agtech Fashion Legal Development Employment Energy Logistics 0 1 2 3 4 Dutch venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM Agriculture
  51. 51. A closer look at Finnish venture in 1H18 • Fintech and employment were tied for first place, with four investments each in 1H18 • Gaming was third, with three 51Subscribe to the Angular Ventures weekly Adtech Health Industrial Imaging Infrastructure Food Real Estate Electronics Travel Collaboration Agtech Development Energy Education Gaming Employment Financial 0 1 2 3 4 5 Finnish venture financingby target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM Agriculture
  52. 52. A closer look at Irish venture in 1H18 • Fintech was the most commonly funded category in Ireland, followed by marketing, entertainment, and electronics, which were tied for second place 52Subscribe to the Angular Ventures weekly Health HMI Data Employment Food Productivity Legal Security Electronics Entertainment Marketing Financial 0 1 2 3 4 Irish venture financing by target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM
  53. 53. The Nordic VC market in 1H18 • Like elsewhere in Europe, the Nordics were focused on fintech • Entertainment and gaming took second and third place 53Subscribe to the Angular Ventures weekly Fashion Data Energy Security CRM Development Industrial Health Lifestyle Education Gaming Entertainment Financial 0 5 10 15 20 25 Nordic venture financingby target market 1H18 (number of investments, top verticals) Consumer Enterprise SMB OEM
  54. 54. The Nordic VC market by country • Not surprisingly, Sweden saw the most actively among Nordic nations across most verticals – with particular strength in financial, lifestyle, gaming, and entertainment 54Subscribe to the Angular Ventures weekly
  55. 55. Venture capital in Southern & Eastern Europe • Fintech and food were the most financed vertical in Southern and Eastern Europe • Italy showed strength across a range of consumer categories 55Subscribe to the Angular Ventures weekly
  56. 56. Focus on SaaS • Marketing was yet again the most frequently funded SaaS vertical in 1H18, with 34 investments • Data was second with 30 • Employment and productivity were next 56Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 30 35 40 Financial Legal Infrastructure Health Development CRM Productivity Employment Data Marketing SaaS VC investmentin Europe and Israel by vertical and target market, 1H18 (top 10 verticals) Consumer Enterprise Government SMB
  57. 57. Focus on Services • The lion’s share of the services investment landscape is consumer financial services • There are, however, many more verticals where “services” companies are emerging – most of these in the consumer category 57Subscribe to the Angular Ventures weekly 0 10 20 30 40 50 60 70 Health Lifestyle Security Payments Communications Entertainment Real Estate Education Gaming Logistics Financial Services VC investment in Europe and Israel by vertical and target market, 1H18 (top 10 verticals) Consumer Enterprise SMB
  58. 58. Focus on Marketplaces • The most frequently funded marketplace category in 1H18 was financial marketplaces, mostly aimed at consumers or SMBs • Lifestyle, real estate, and employment were also important marketplace categories 58Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 Education Electronics Adtech Food Fashion Automotive Travel Logistics Employment Lifestyle Real Estate Financial MarketplacesVCinvestmentin Europe and Israel by vertical and target market, 1H18 (top 10 verticals) Consumer Enterprise SMB
  59. 59. Focus on Systems • The most funded systems categories were agtech and energy • Overall, electronics – which includes consumer electronic systems as well as devices for enterprise applications – was the most funded vertical 59Subscribe to the Angular Ventures weekly 0 2 4 6 8 10 12 14 16 18 Logistics Space Payments Food Communications Health Automotive Security Industrial Agtech Energy Electronics Systems VC investmentin Europe and Israel by vertical and target market, 1H18 (top 10 verticals) Consumer Enterprise Government OEM Agriculture
  60. 60. Focus on Components • Across Europe & Israel, components investments were focused on general electronics, energy, and industrial • Automotive components declined as an area of investment focus 60Subscribe to the Angular Ventures weekly 0 2 4 6 8 10 12 14 16 Automotive Space Imaging Communications Industrial Energy Electronics Components VC investment in Europe and Israel by vertical market, 1H18 (top 10 verticals)
  61. 61. Focus on Fintech • In 1H18, over $2.2B was invested into fintech • After six consecutive quarters of increase, 2Q18 was the first quarter to see a decline in the volume of fintech investment 61Subscribe to the Angular Ventures weekly 0 200 400 600 800 1,000 1,200 1,400 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 Fintech - VC investment in Europe and Israel (US $M) SMB Enterprise Consumer
  62. 62. Focus on Fintech • Over a long horizon, fintech investment pace has accelerated across all brackets • Mega-rounds accounted for most of the dramatic increase in 1Q18, but growth rounds also grew – especially in 2Q18 62Subscribe to the Angular Ventures weekly 0 200 400 600 800 1,000 1,200 1,400 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2015 2016 2017 2018 Fintech - VC investment in Europe and Israel (US $M) Mega Growth Venture Early Venture Seed
  63. 63. Focus on Automotive • 14 countries saw investments into the automotive tech space in 2015-2018 • Israel led with 31 • France and the UK each saw 19 63Subscribe to the Angular Ventures weekly
  64. 64. Focus on Marketing • VCs invested $445M into marketing tech in Europe & Israel in 1H18, up dramatically form $331M in 1H17 64Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 30 35 0 50 100 150 200 250 300 350 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Marketing - VC investmentin Europeand Israel Amount Number
  65. 65. Focus on Employment • In 1H18, there were 42 investments into employment (HR) companies, totaling $253M • This is down from 1H17, which saw only $324M invested across 53 investments in the space 65Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 30 0 50 100 150 200 250 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Employment(HR) tech - VC investmentin Europe and Israel Amount Number
  66. 66. Focus on Health (1 of 3) • The UK led in the digital health space, with 50 investments • Israel was next, with 38 • France was third, with 33 66Subscribe to the Angular Ventures weekly
  67. 67. Focus on Health (2 of 3) • The most frequently funded category in health tech in 1H18 was enterprise SaaS • Consumer health services was second 67Subscribe to the Angular Ventures weekly 0 2 4 6 8 10 12 14 16 18 20 Marketplace Media Commerce Software Systems Services SaaS Number of investments HealthtechVC investmentin Europe and Israel by business model and target market, 1H18 Enterprise Consumer
  68. 68. Focus on Health (3 of 3) • In 1H18, over $730M was invested across 39 rounds into digital health companies, up significantly from 1H17 68Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 30 35 0 50 100 150 200 250 300 350 400 450 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Health tech - VC investment in Europe and Israel Amount Number
  69. 69. Focus on Electronics (components, systems, & semis) • The majority of “electronics” investments were into OEM components companies • Consumer and enterprise systems were also important categories 69Subscribe to the Angular Ventures weekly 0 2 4 6 8 10 12 14 16 18 Materials Marketplace Commerce Semiconductors Components Systems Systems VC investmentin Europe and Israel by vertical and target market, 1H18 (top 10 verticals) Consumer Enterprise Government OEM
  70. 70. Focus on Developer Tools • The developer tools investment landscape is highly fragmented, but the pace appears to have suddenly spiked after a gradual decline 70Subscribe to the Angular Ventures weekly
  71. 71. Focus on Infrastructure • Developer tooling appears to be steadily declining as an area of investment 71Subscribe to the Angular Ventures weekly
  72. 72. Focus on Data • Data-oriented investments continue to increase through 2018 • The “data” category captures companies whose primary value proposition revives around (big) data, AI/ML/BI tooling, databases, and/or analytics 72Subscribe to the Angular Ventures weekly 0 5 10 15 20 25 30 0 50 100 150 200 250 300 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 2014 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Data - VC investment in Europe and Israel Amount Number
  73. 73. Thank you

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