3. Eyjafjallajökul (The Icelandic Volcano) Proved to
be s upt e
be Disruptive
The disruption caused by the Icelandic volcanic ash cloud could have
cost airlines across Europe up to €2.5bn1
1) Source: EU Transport Commissioner
15. With Better and Better Internet Access...
Helped by spread of broadband, internet penetration and cheaper
p y p , p p
usage fees
Internet Household Penetration1
95
75
55
%
35
15
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
North America EMEA Asia Pacific Latin America
95
Internet Advertising Spend2 86.7
75.0
75 65.7
59.9 58.5 60.2
$bn
51.8
55
US$
38.7
35 26.8
17.9
15
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
North America EMEA Asia Pacific Latin America Other
Source: PriceWaterHouseCoopers 2008, Wilkofsky Gruen Associates
1. Includes broadband and dial‐up
2. Includes wired and mobile advertising
16. ...Resulting in Online Advertising Spend
O e ta g ad t o a
Overtaking Traditional Media
ed a
In spite of the overall economy downturn 2009 set record revenue of
€1.5 billion for the German online advertising industry
US Advertising Spending Share by Media (% of total)
20
Newspapers
18
Internet
16
Local and national TV
14
Customer publishing
12
Cable TV
10
Broadcast network TV
Broadcast network TV
8
Terrestrial radio
6
2007 2008 2009 2010 2011 2012 Consumer magazines
g
Source: eMarketer, September 2009
17. We all Remember the Well Publicised Internet
Company Failures...
Co pa y a u es...
Boo.com – Online Sports Retail Webvan – Online Grocery & Delivery
Founded 1998 Founded 1999
Bankrupt 2000 Bankrupt 2001
Source: GP Bullhound, Capital IQ
18. ...However, Times Have Changed...
Online Grocery Shopping & Delivery Online Designer Private Sales – vente‐
Service ‐ Tesco.com privee.com
2009 Revenue: $3.0 billion 2009 Revenue: $1.0 billion
Source: GP Bullhound, Capital IQ
19. Market Indices Have Taken a hit Recently but Have
Rebounded Since Early 2009…
ebou ded S ce a y 009
OMX Stockholm 30 (76%)
270 Germany DAX (63%)
G DAX
Paris CAC 40 (44%)
Dow Jones Composite Average (71%)
220 NASDAQ Composite
NASDAQ Composite (89%)
FTSE 250 (82%)
(% increase since low)
170
120
70
Jan 03
Jan‐03 Jan 04
Jan‐04 Jan 05
Jan‐05 Jan 06
Jan‐06 Jan 07
Jan‐07 Jan 08
Jan‐08 Jan 09
Jan‐09 Jan 10
Jan‐10
Source: Capital IQ
20. Internet Companies Have Witnessed a Recovery...
As the recession takes its toll consumers have migrated online,
g ,
evidenced by rallies in internet company shares1 since 2009
450
MSCI Europe
400 European Internet Index
350
300
250
200
150
100
50
0
Jan‐05 Jan‐06 Jan‐07 Jan‐08 Jan‐09 Jan‐10
Source: Capital IQ
1 Internet Index: United Internet, Meetic, Moneysupermarket.com, Net Entertainment, XING, TradeDoubler, ASOS
23. Commitments to European VC Funds Have
S o ed...
Slowed...
12
10
bn)
8
Funds Raised ($b
6 2010
$11.2 Projected
$10.4
4
$7.3
$3.6
$5.0
2
$1.2
0
2006 2007 2008 2009 2010 YTD
2010 YTD
Source: Venture Source
Source: Dow Jones VentureSource
24. ...And European Venture Investments Continues
its Decline
ts ec e
0.7 IT Companies 200 3.5 IT Companies 400
―Europe ―US
180 350
0.6 3.0
160
300
unt Invested (€bn)
unt Invested (€bn)
0.5 140 2.5
Nu
Nu
250
umber of Dea
umber of Dea
120
0.4 2.0
100 200
0.3 1.5
80 150
Amou
als
Amou
0.2 60 als 1.0
100
40
0.1 0.5 50
20
0.0 0 0.0 0
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
1
3
1
3
1
3
1
1
3
1
3
1
3
1
Source: Venture Source
No. of Deals Amount Invested
25. UK Leads European Investment
Investment in Europe by Country, Q1 2010
p y y
6%
3%
4%
32% United Kingdom
France
17% Germany
Scandanavia
Netherlands
Spain
Others
18%
20%
Source: Venture Source, all sectors
26. Internet VC Funding Remains Stable
European Internet Software and Services and E commerce Private
European Internet Software and Services and E‐commerce Private
Placements1
8 Number of Deals Median Deal Size ($M) 60
7
50
n Deal Size ($m)
6
Nu
40
umber of D
5
4 30
Deals
Median
3
20
2
10
1
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2005 2006 2007 2008 2009 2010
Source: Capital IQ
1 Disclosed funding round size of more than $1m
27. IPO Markets Opening up Slowly…
Forty‐three venture‐backed companies are currently filed for an
y p y
40 initial public offering with the SEC
35 European IPOs European IPOs
30 US IPOs
26 Q4 2009
25
Number of IPOs
25
20 18
16
15
11 12
N
9 8
10
6 6
5 3 3 2 3
1 1 1 1 Q1 2010
Q1 2010
0
0
0 0 0 0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2007 2007 2007 2010
Source: Venture Source, all sectors
29. European Exit Volumes Begin to Increase...But
Deal Sizes Remain Low...
ea S es e a o ...
70 Number of Deals Median Deal Size ($M) 300
60 250
dian Deal Size ($m)
50
Number of Deals
200
40
150
30
100
Med
20
10 50
0 0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006 2007 2008 2009 2010
Source: Capital IQ
1. Median deal size excludes deals with no disclosed transaction value; data from all sectors, only private venture backed companies
30. ...But a Number of Recent Deals Point Toward a
Recovery
eco e y
Sale – September 2009, $200m Sale – September 2009, $3bn
Enterprise Value / Revenues = 5.7x Enterprise Value / Revenues = 3.2x
S l O b 2009 $183
Sale – October 2009, $183m S l O t b 2009 $299
Sale – October 2009, $299m
Enterprise Value / Revenues2 = 7.9x Enterprise Value / Revenues = 5.5x
Sale – November 2009, $400m Sale – May 2010, $580m
Enterprise Value / Revenues1
Enterprise Value / Revenues = 5.3x
= 5 3x Enterprise Value / Revenues = 3.2x
Enterprise Value / Revenues = 3 2x
Source: GP Bullhound, Capital IQ
1.Unconfirmed revenues of $75m
2.Based on 2008 revenues of $23m
31. ... And Recent High Profile Internet Deals Point
Toward Renewed Investor Appetite in the Sector...
o a d e e ed esto ppet te t e Secto ...
Private Placement May 2009
Private Placement – May 2009 Private Placement August 2009
Private Placement – August 2009
Investment valuing Facebook at $10bn Investment valuing Spotify at $250 million
Private Placement – September 2009 Acquisition of Remaining Stake – April 2010
Investment valuing Twitter at ~$1bn Valuing company at $530 million
Source: GP Bullhound, Capital IQ
