Annual European Venture Capital Report

2017 edition

February 2018

Intelligent global database to identify & track growth opportunities and innovative companies

The authors of this reportData sources and transparency

■ Dealroom.co is a proprietary global database providing business intelligence on innovative companies and venture capital

■ Basic access to the database is free. Throughout this report, links are provided to relevant underlying data

■ Data is maintained daily, sourced through a combination of: processing of public news-flow, data feeds, web scraping, crowd-sourced contributions (verified by Dealroom) and manual research

■ Dealroom’s clients include world-leading Silicon Valley firms, VC and buyout firms, multinationals and governments. Dealroom’s software, database and bespoke research help to stay at the forefront of innovation and identify growth & strategic opportunities

Notes on methodology

■ Venture capital funding excludes debt, lending capital, grants and ICOs

■ Secondary rounds, buyouts, M&A and IPOs are treated as exit transactions (excluded from funding data, but included in exit data)

■ Europe excludes Israel, unless specified otherwise

About this report

Daryia Paliksha

Analyst

daryia@dealroom.co

Irina Anihimovskaya

Analyst

irina@dealroom.co

Marco Squarci

Manager Operations

marco@dealroom.co

Yoram Wijngaarde

Founder & CEO

yoram@dealroom.co

For feedback or questions please get in touch

If you like this report, please share!

3

Julien Puls

Data Scientist

julien@dealroom.co

Summary

4

Record

investment

▪ Venture capital investors are betting on Europe at record levels: €19.2 billion was invested (€22.1 billion including Israel)

▪ The number of investment rounds declined by 12% to 3,513 (including Israel 3,753). But that decline is likely to diminish once all smaller rounds have been accounted for. Dealroom tracked 4,828 funding rounds in total, however this includes debt, ICOs, grants, and other excluded rounds

▪ This presentation includes a reconciliation with different reported investment figures and methodologies on page 9 and 10

Growth

drivers

▪ 2017 saw 17 rounds over €100 million (Improbable, Delivery Hero, Farfetch, Deliveroo, …), compared with 13 rounds in 2016

▪ However, even when excluding the 10 largest rounds investment still grew by 30%

▪ UK investment grew by 87% to €7.1 billion, more than Germany, France and Sweden combined. But France is #1 by number of VC-backed rounds

▪ U.S. investment is still 8x higher per inhabitant, indicating plenty of growth opportunity in Europe

Investing

trends

▪ Deep tech (1), fintech, and healthcare were the leading investment themes of 2017, approaching combined €8 billion investment. Decreased new activity in SaaS, content, marketing & advertising, travel, booking platforms, ecommerce

▪ There is a noticeable trend to fewer larger rounds: fewer but larger early stage rounds, and increase in larger follow-on rounds above €5 million

Sources of

capital

▪ Fundraising by European venture firms slowed down in 2017, but is still at historically high levels with plenty of capital is available to be invested

▪ The UK is no longer the undisputed capital of European venture capital. Continental Europe is catching up, while France is almost on par already

▪ Investment activity has grown roughly proportionally across funds and corporate investors in 2017

▪ Asia is becoming a significant investor in European tech, thanks to a handful of mega-rounds

Venture

backed exits

▪ Number of exits grew to 294, but there were far fewer meaningful exits compared with previous years (€12bn realised in 2017, vs. €35bn in 2016)

▪ Acquirers of European tech are still most likely to come from within Europe, followed by USA

▪ However, an extremely strong pipeline of European exits on the horizon (Spotify, Farfetch, Adyen, Klarna, Deliveroo, Auto1 Group, …)

1. Container term which includes robotics, artificial intelligence, autonomous driving & delivery, space-flight, aviation, computer vision, speech recognition, AR/VR.

Dealroom data: trusted by world-leading publications

5

An overview of Dealroom featured articles is available in this blog post

1. Venture capital investment

2. Growth drivers

3. Investing trends

4. Sources of capital

5. Venture backed exits

Contents

Venture capital investors are betting on Europe at an unprecedented pace

7Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

Investment in € billions

€ 1.0B € 1.4B € 1.0B € 1.5B € 1.7B € 2.4B € 2.7B € 2.2B € 3.2B € 3.2B € 4.0B € 3.2B € 4.1B € 4.2B € 3.0B € 3.5B € 4.0B € 5.1B € 5.5B € 4.6B

€ 0.2B

€ 0.1B € 0.5B

€ 0.3B € 0.4B

€ 0.2B

€ 0.5B

€ 0.4B

€ 0.5B € 0.5B

€ 0.4B

€ 0.6B

€ 0.6B € 0.9B

€ 0.7B

€ 0.5B

€ 0.5B

€ 0.7B

€ 0.9B

€ 0.8B

€ 1.2B € 1.5B € 1.5B

€ 1.8B € 2.1B

€ 2.7B

€ 3.2B

€ 2.6B

€ 3.6B € 3.7B

€ 4.4B

€ 3.8B

€ 4.7B € 5.0B

€ 3.7B € 4.1B

€ 4.5B

€ 5.8B

€ 6.4B

€ 5.4B

407

487 522 535

592 629

609 576

735

672

732

891

1,016

966

919

1,077

950

845

957

761

451

519

568 590

650 680 668

628

815

737

799

973

1,098

1,045

990

1,127

1,010

899

1,024

820

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013 2014 2015 2016 2017

Europe excl. Israel Israel

Nr. of rounds excl. Israel Incl. Israel

Decline in number of rounds reflects:1. a trend towards large deals (big tech) 2. time lag: some smaller rounds appear

with a 12-24 month delay

8

Click below to view data & underlying

rounds online. Click on the chart columns to

see rounds in each year. View to quarterly

vs. annually.

Europe & Israel investment

Investment in € billions

In 2017 a record €19.2 billion in venture capital was invested in Europe (€22bn incl. Israel)

€ 5.0B

€ 9.1B

€ 13.6B € 14.8B

€ 19.2B

€ 1.1B

€ 1.6B

€ 1.9B

€ 2.7B

€ 2.9B

€ 6.1B

€ 10.6B

€ 15.5B

€ 17.6B

€ 22.1B

1,951

2,406

3,030

3,978

3,513

2,128

2,626

3,324

4,260

3,753

2013 2014 2015 2016 2017

Europe (excl. Israel) Israel Nr. of rounds excl. Israel Incl. Israel

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

▪ Dealroom excludes ICOs, grants, secondary rounds, debt,

lending capital from funding amounts

▪ Based on Dealroom data, but excludes biotech and Israel

▪ Otherwise, methodology consistent with Dealroom

▪ Includes debt rounds such as Auto1 €360 million. Dealroom

excludes such debt rounds from totals

▪ Tech.eu’s includes secondary rounds such as Com Hem and

Klarna. Includes debt rounds such as Auto1

▪ Includes debt rounds such as OVH €400 million debt round.

Dealroom excludes such debt rounds from totals

▪ Methodology mostly consistent with Dealroom

▪ Includes ICOs such as SIRIN Labs. Prioritises Israel location

(e.g. SIRIN Labs). Includes secondary rounds such as Klarna,

debt round such as Auto1 Group

Not available Not available ▪ European data not found

$ 21B

$ 19B

$ 19B

$ 24B

$ 18B

$ 16B

$ 16B

$ 24B

$ 22B

$ 22B

$ 27B

$ 21B

$ 19B

$ 20B

Europe Israel

4,524

3,449

3,306

3,150

2,483

2,250

1,541

4,828

3,699

3,556

3,400

2,733

2,500

1,941

Dealroom

Atomico

Pitchbook

Tech.eu

CB Insights

VentureSource

Gil Dibner

Crunchbase

Comparing 2017 European venture capital reports: differences in scope & methodology

9

Number of rounds tracked Reported US$ investment Key differences

Source: Israel added for comparative purposes. If Israeli data not provided, Dealroom numbers are used.1. Total number of rounds tracked including debt, lending capital, ICOs and grants.

(1)

€ 4.3B

€ 8.0B

€ 11.8B € 13.6B

€ 17.1B

$ 4.7B

$ 8.8B

$ 13.0B $ 15.0B

$ 18.8B

0.7

1.1

1.8

1.2

2.1

0.7

1.2

1.9

1.3

2.3

1.1

1.6

1.9

2.7

2.9

1.2

1.7

2.1

3.0

3.2

€ 6.1B

€ 10.6B

€ 15.5B

€ 17.6B

€ 22.1B

$ 6.7B

$ 11.7B

$ 17.0B

$ 19.3B

$ 24.3B

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Europe (excl Biotech) Biotech Israel

$18.8B compares with $19.1B predicted back in Nov 2017 in Atomico’s State of European Tech report.

Tom Wehmeier, Partner & Head of Research at Atomico:“Europe's entrepreneurial, talent, community and capital foundations are strong. In fact, European tech today is the healthiest it has ever been. As Dealroom.co's data shows, investors from Europe and beyond are backing the region's entrepreneurs at record levels.”

Atomico’s State of European Tech 2017: excluding biotech US$ 18.8 billion was invested

10Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital, grants.

Investment in € billions Investment in US$ billions

37% annual growth

26% growth from 2016

Total Europe = €19.2 bn

1. Venture capital investment

2. Growth drivers

3. Investing trends

4. Sources of capital

5. Venture backed exits

Contents

€ 4.1B

€ 7.3B

€ 11.1B€ 12.6B

€ 16.4B

€ 5.0B

€ 9.1B

€ 13.6B€ 14.8B

€ 19.2B

2013 2014 2015 2016 2017

Mega-rounds were a key growth

driver, but not the only factor

12Source: Dealroom.co. Excludes crowdfunding only rounds, buyouts, secondary transactions, debt, lending capital. Excludes Israel.

Click below to view data &

underlying rounds online

Number of rounds (heatmap)

2017 saw 17 rounds over €100 million,

compared with 13 rounds in 2016.

Click image below to explore the largest

rounds of 2017:

Europe & Israel investment

Spotify (€ 250M) Rocket Internet SE (€ 445M) Delivery Hero (€ 546M) Spotify (€ 500M) Improbable (€ 502M)

Zalando (€ 154M) Delivery Hero (€ 350M) Spotify (€ 526M) Global Fashion Group (€ 363M) Delivery Hero (€ 426M)

Supercell (€ 130M) Adyen (€ 250M) Landbay (€ 330M) Deliveroo (€ 275M) Farfetch (€ 397M)

Sungevity Netherlands (€ 125M) Ozon (€ 150M) Zencap (€ 253M) OVH (€ 275M) Deliveroo (€ 385M)

Truphone (€ 118M) Jumia Group (€ 150M) Kreditech (€ 200M) Jumia Group (€ 248M) Truphone (€ 337M)

Powa Technologies (€ 76M) Jumia Market (€ 150M) BlaBlaCar (€ 200M) Skyscanner (€ 169M) Gryphon Group (€ 238M)

AVITO (€ 50M) The Hut Group (€ 132M) Auxmoney (€ 165M) SIGFOX (€ 165M) OakNorth Bank (€ 203M)

Ulmart (€ 50M) Borro (€ 112M) Global Fashion Group (€ 165M) Cool Blue (€ 154M) Letgo (€ 175M)

Groupe Santiane (€ 44M) BlaBlaCar (€ 100M) Reward Gateway (€ 158M) Future Finance (€ 132M) SoundCloud (€ 170M)

Arria NLG (€ 40M) Klarna (€ 99M) Funding Circle (€ 150M) Oxford Nanopore (€ 126M) Tricentis (€ 165M)

Investment in € billions

30% growth YoY excluding top-10 largest rounds

€ 1.3B

€ 2.6B

€ 4.2B € 3.8B

€ 7.1B

€ 0.7B

€ 2.0B

€ 3.2B

€ 2.0B

€ 2.8B

€ 0.8B € 1.1B

€ 1.5B

€ 2.9B € 2.5B

€ 0.4B € 0.5B

€ 1.0B € 1.2B € 1.2B

€ 1.8B

€ 2.8B

€ 3.7B

€ 5.0B

€ 5.5B

€ 1.1B

€ 1.6B € 1.9B

€ 2.7B € 2.9B

765

389

703

356

1,540

240

–

400

800

1,200

1,600

2,000

€ 0B

€ 2B

€ 4B

€ 6B

€ 8B

€ 10B

'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17

Main city (€B) Total country (€B) Nr. of rounds

UK investment grew by 87% to €7.1 billion, more than

Germany, France and Sweden combined

13Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel & Biotech.

UKLondon

GermanyBerlin

FranceParis

SwedenStockholm

Rest of EuropeAll main cities

IsraelTel-Aviv

UK investment accounted for 37% of Europe’s total of €19.2 billion. In previous years this was around 28% of total

Drop in rounds in Italy, Switzerland, Ireland, Belgium

But… France has overtaken the UK

by number of VC-backed rounds

14Source: Dealroom.co. Excludes crowdfunding only rounds, buyouts, secondary transactions, debt, lending capital. Includes Israel.

Number of VC rounds (excl. crowdfunding rounds)

Click below to view data &

underlying rounds online

Number of rounds (heatmap)

Click below to view data &

underlying rounds online

- Click on amounts to see underlying rounds

- Switch between quarterly vs. annually

- Switch amounts vs. volume

Europe & Israel investment

United Kingdom

France

Germany

Sweden

544

674 692 724

672

387

186 225

298

629

688

353

–

100

200

300

400

500

600

700

800

2013 2014 2015 2016 2017

United Kingdom Germany France Sweden

Caveat: some smaller rounds appear with a 12-24 month delay. This can impact numbers by 10-15% (indicative)

$368

$250

$136

$120

$82

$61

$42

$41

$40

$38

$31

$30

$26

$24

$21

$18

$2

$2

$1

$0

Israel

USA

Sweden

United Kingdom

Ireland

Finland

Austria

Netherlands

France

Germany

Denmark

Europe (excl. Israel)

Belgium

Norway

Spain

Asia

Russia

Italy

Portugal

Turkey

U.S. investment is still 8x higher per inhabitant,

indicating plenty of growth opportunity in Europe

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital, ICOs.1. Average of Pitchbook and CB Insights.

Venture capital investment per capita in 2017 (US$)

Opportunity in Italy: investment of $100 million, in a country of over 61 million people.

15

▪ Europe has roughly 700 million inhabitants. Investment of €19 / $21 billion implies $30 per capita

▪ USA annual investment is roughly $80 billion (1) and with 320 million inhabitants this implies $250 per capita

▪ Asia has roughly 4.5 billion inhabitants and $80 billion invested in 2017

Across Europe, investment activity is gradually

increasing, as local funding options are expanding

16Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, lending capital. Includes Israel.

Number of VC rounds (excl. crowdfunding rounds)

€ 0.0B € 0.1B

€ 0.2B € 0.2B

€ 0.3B

€ 0.0B € 0.0B

€ 0.1B

€ 0.1B

€ 0.2B

€ 0.0B € 0.1B

€ 0.2B

€ 0.2B € 0.2B

€ 0.0B € 0.0B

€ 0.1B € 0.1B

€ 0.2B

€ 0.0B € 0.0B € 0.0B

€ 0.1B

€ 0.2B

€ 0.1B € 0.1B € 0.1B

€ 0.1B

€ 0.1B

–

20

40

60

80

100

120

–

€ 0.1B

€ 0.2B

€ 0.3B

€ 0.4B

'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17

Belgium Norway Denmark Austria Poland Italy

Amount funding Nr. of rounds

€ 0.2B € 0.4B

€ 0.5B € 0.6B

€ 0.9B

€ 0.3B € 0.5B

€ 0.6B

€ 1.0B

€ 1.7B

€ 0.2B

€ 0.6B € 0.5B

€ 0.9B

€ 0.6B

€ 0.2B € 0.2B € 0.2B

€ 0.6B

€ 0.4B € 0.2B

€ 0.4B € 0.2B

€ 0.3B € 0.2B € 0.2B € 0.1B

€ 0.2B € 0.3B € 0.3B

–

50

100

150

200

250

–

€ 0.5B

€ 1.0B

€ 1.5B

€ 2.0B

'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17

Spain Switzerland Netherlands Ireland Russia Finland

Amount funding Nr. of roundsIncludes Roivant’s €1bn Softbank round

1. Venture capital investment

2. Growth drivers

3. Investing trends

4. Sources of capital

5. Venture backed exits

Contents

Deep tech, fintech, and healthcare were the leading investment themes of 2017

Source: Dealroom.co.1. Values overlap as companies can be included in more than one investment theme (e.g. both fintech and SaaS, or deep tech and biotech). 18

Amount invested, 2017 (1) Number of rounds, 2017 (1)

€ 4.1B

€ 4.1B

€ 3.8B

€ 3.4B

€ 3.2B

€ 2.5B

€ 2.4B

€ 2.1B

€ 1.8B

€ 1.7B

€ 1.4B

€ 1.2B

€ 1.1B

€ 1.1B

€ 1.0B

€ 0.9B

€ 0.8B

€ 0.8B

€ 0.8B

€ 0.7B

€ 0.7B

€ 0.7B

€ 0.7B

€ 0.6B

€ 0.6B

€ 0.6B

€ 0.6B

€ 0.6B

Deep Tech

Fintech

Healthcare

Marketplace

Artificial intelligence

Analytics

Biotech

SaaS

Manufacturing

eCommerce / Trading

Food

Transportation

Back office

Marketing

Developer tools

InternetOfThings

Home

Gaming

Telecom

Classified listing

Booking

Fashion

Travel

Security

Energy

Insurance

Virtual reality

Cleantech

557

556

423

410

362

360

328

303

292

259

242

204

197

177

176

164

162

158

150

143

133

125

118

110

110

105

104

102

Deep Tech

Fintech

Healthcare

Marketplace

Manufacturing

SaaS

Analytics

Marketing

Artificial intelligence

eCommerce / Trading

Transportation

Content

Home

Food

Back office

InternetOfThings

Travel

Energy

Education

Booking

Cleantech

Biotech

Security

Real estate

Advertising

Jobs Recruitment

Sports

Gaming

Decreased new activity in SaaS, content, marketing & advertising, travel, booking platforms, ecommerce

Source: Dealroom.co. 19

Investment activity in 2017 vs. annual average in 2014-’16

€ 2.4B

€ 2.3B

€ 2.2B

€ 1.8B

€ 1.5B

€ 1.0B

€ 0.8B

€ 0.6B

€ 0.6B

€ 0.6B

€ 0.5B

€ 0.5B

€ 0.4B

€ 0.4B

€ 0.4B

€ 0.3B

€ 0.2B

€ 0.2B

€ 0.2B

€ 0.1B

€ 0.1B

€ 0.0B

€ 0.0B

€ 0.0B

(€ 0.0B)

(€ 0.1B)

(€ 0.1B)

(€ 0.4B)

(€ 1.0B) – € 1.0B € 2.0B € 3.0B

Deep Tech

Fintech

Artificial intelligence

Healthcare

Analytics

Biotech

Developer tools

Marketplace

Back office

Gaming

Insurance

Virtual reality

SaaS

Transportation

InternetOfThings

Telecom

Manufacturing

Security

Marketing

Home

Cleantech

Food

Travel

Classified listing

Energy

eCommerce / Trading

Booking

Fashion

144

129

48

33

28

25

24

21

19

18

14

10

9

7

3

(2)

(4)

(4)

(10)

(24)

(31)

(42)

(45)

(47)

(52)

(82)

(91)

(132)

(200) (100) – 100 200

Healthcare

Fintech

Energy

Real estate

Home

Sports

Transportation

Cleantech

Food

Back office

Jobs Recruitment

Security

Gaming

Artificial intelligence

Biotech

Manufacturing

Deep Tech

InternetOfThings

Education

Travel

Booking

Analytics

eCommerce / Trading

Marketing

Marketplace

Advertising

Content

SaaS

Amount invested: increase / (decrease) Number of rounds: increase / (decrease)

Trend towards larger deals leading to disconnect in trends

by number of rounds vs. amount invested. Example: SaaS

saw fewer deals but still more capital.

€ 1.2B

€ 2.9B

€ 4.2B

€ 3.4B € 3.2B

2013 2014 2015 2016 2017

New wave of investment in Fintech, Health, Deep Tech dwarfs 2014-2015 investment in B2C marketplaces

Investment into B2C verticals such as Fashion,

Wellness, Taxi, Travel peaked at €4 billion.

Companies focusing on execution & consolidation ...

Source: Dealroom.co.Note: Some companies are included in more than one industry vertical, leading to some double counting of investment data by industry.1. Container term which includes robotics, artificial intelligence, autonomous driving & delivery, space-flight, aviation, computer vision, speech recognition, AR/VR. In this chart, deep tech excludes fintech and health tech to avoid double counting.

… whereas investment into FinTech, HealthTech,

Enterprise and Deep Tech is already

approaching double that amount at €8 billion

20

Food

FashionWellness

TravelContent

€ 1.5B

€ 2.9B

€ 5.0B

€ 5.7B

€ 7.6B

2013 2014 2015 2016 2017

Deep Tech (1)

Health

Fintech

Where is the smart money investing, relative to the market?

21

Click image below to review Europe’s

most prominent venture capital

investors and their investment activity

Most prominent investors

71

75

43

69

24

54

37

21

44

23

30

16

19

10

28

9

18

11

Deep Tech

Fintech

Healthcare

Marketplace

Manufacturing

SaaS

Analytics

Marketing

Artificial intelligence

eCommerce / Trading

Transportation

Content

Home

Food

Back office

InternetOfThings

Travel

Energy

Rounds by Europe’s top 30 investment firms (2)

Investment themes of top investors are broadly in line with market, but

some notable deviations:

Entire European market (1)

Source: Dealroom.co. 1. Same data as previous page.2. As per Dealroom’s investor prominence ranking: Index, Holtzbrinck, Balderton, Northzone, Lakestar, Sequoia, Accel, Insight,

Rocket, Intel, 83North, Atomico, Goldman Bessemer, IDInvest, Partech, SVB, Naspers, Greylock, Creandum, Benchmark, 360 Capital Partners, DN Capital, HTGF, General Atlantic, Wellington, Mangrove, Acton, Octopus, TA Associates.

Median round sizes have come back up in 2017

(and valuations likely increased too)

22Source: Dealroom.co.

Series C rounds

Seed rounds Series A rounds

Series B rounds

€ 0.5M€ 0.6M

€ 0.7M

€ 0.9M

€ 0.7M

€ 0.2M

€ 0.3M

€ 0.4M€ 0.5M € 0.5M

2013 2014 2015 2016 2017

Average

Median

€ 11.0M

€ 14.0M € 13.5M€ 11.8M

€ 20.1M

€ 6.5M€ 7.9M

€ 10.0M

€ 8.0M

€ 11.8M

2013 2014 2015 2016 2017

Average

Median

€ 5.7M € 5.8M

€ 7.1M

€ 5.9M

€ 8.0M

€ 2.9M

€ 4.0M€ 3.6M € 3.6M

€ 5.5M

2013 2014 2015 2016 2017

Average

Median

€ 12.3M

€ 27.4M€ 28.8M

€ 22.8M € 23.5M

€ 10.0M

€ 18.2M€ 20.9M

€ 14.3M€ 12.5M

2013 2014 2015 2016 2017

Average

Median

See next slide for data by country

See next slide for data by

country

–

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017

€ 0-2M € 0-2M in UK and Germany € 2-5M

–

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 2017

€ 5-10M € 10-20M € 20-50M € 50M+

Rounds up to €5M Rounds above €5M

Some smaller rounds appear with a 12-24

month delay

Number of rounds below €5 million stabilising, growth is driven by larger rounds

Source: Dealroom.co. Excludes Israel. 23

Noticeable decline in €0-2M rounds in UK and Germany since

2014 (also see next slide)

Early stage median round sizes have increased,

especially seed rounds in the UK and Germany

24Source: Dealroom.co.

Seed

rounds

Series A

rounds

€ 5.1M

€ 6.9M€ 6.4M € 6.3M

€ 5.7M€ 5.2M

€ 0.0M

€ 2.0M

€ 4.0M

€ 6.0M

€ 8.0M

United Kingdom Germany France Spain Sweden Netherlands

€ 0.6M

€ 1.2M

€ 0.5M€ 0.4M € 0.4M € 0.5M

€ 0.0M

€ 0.5M

€ 1.0M

€ 1.5M

United Kingdom Germany France Spain Sweden Netherlands

2012 2013 2014 2015 2016 2017

Median rounds sizeBigger single rounds may have taken place

of several smaller rounds (Potential explanation for decline in €0-2M seed

rounds in UK and Germany)

27%

13%

4%1%

24%

7%0%

20%

40%

60%

80%

100%

SEED SERIES A SERIES B SERIES C SERIES D

% of startups reaching next funding round

2011 cohort 2012 cohort 2013 cohort 2014 cohort

About 25-30% of seeded companies also graduate to

series-A round. About 15% graduate to series B

Graduation rates:

Note: not reaching series-A does not mean that company failed. Some

companies become self-sustaining and/or exited.

2014 cohort likely will still improve, especially Series B

25Source: Dealroom.co. Europe only. Note: the average time between rounds is roughly 18 months. Therefore, it takes an average of nearly three years to move from Seed to Series B. For this reason, the data only includes cohorts from 2014 and earlier.

COHORT SEED SERIES A SERIES B SERIES C SERIES D

2011 100% 27% 13% 4% 1%

2012 100% 28% 13% 3%

2013 100% 27% 12%

2014 100% 24% 7%

1. Venture capital investment

2. Growth drivers

3. Investing trends

4. Sources of capital

5. Venture backed exits

Contents

Fundraising by European venture

firms slowed down in 2017, but is

still at historically high levels

27Source: Dealroom.co.

€ 4.6B

€ 6.8B

€ 13.0B

€ 9.9B € 9.1B

€ 13.6B

€ 14.8B

€ 19.2B

2014 2015 2016 2017

VC fundraising Investment

The UK is no longer the undisputed capital

of European venture capital. Continental

Europe’s venture capital industry is catching

up to the UK.

Click below to see how France is nearly on

par with the UK, while other countries are

also on the rise:

VC fundraising by country

Plenty of new capital is available to be invested in 2018 and beyond. Investable capital is also

less concentrated around the UK, more distributed across Europe than ever before.

Investment activity has grown roughly proportionally across funds and corporate investors in 2017

1. U.S based funds = Funds only. Excludes investment by U.S. corporates (Microsoft, GE, …).

Investment funds Corporate venturing Angels, crowdfunding, other

28

€ 4.6B

€ 8.1B

€ 9.8B

€ 11.9B

€ 14.9B

€ 1.4B € 2.2B

€ 5.0B € 4.8B

€ 6.4B

€ 0.2B € 0.3B € 0.7B € 0.8B € 0.7B

–

500

1,000

1,500

2,000

2,500

–

€ 4.0B

€ 8.0B

€ 12.0B

€ 16.0B

€ 20.0B

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Investment Number of rounds

74%

22%

3%

76%

20% 3%

63%

32%

4%

68%

27%

5%

68%

29%

3%

Investment Fund Corporate Other

Investment in € as % of total

2013 2014 2015 2016 2017

€ 3.6B

€ 6.0B

€ 9.5B

€ 11.0B € 11.1B

€ 2.2B

€ 3.4B

€ 4.9B € 4.6B

€ 6.6B

€ 0.1B € 0.8B € 0.9B

€ 1.4B

€ 3.4B

€ 0.2B € 0.4B € 0.2B € 0.5B

€ 1.0B

2,520

450

147 12 –

500

1,000

1,500

2,000

2,500

3,000

–

€ 2.0B

€ 4.0B

€ 6.0B

€ 8.0B

€ 10.0B

€ 12.0B

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Investment Number of rounds

Asia is becoming a significant investor in European tech, thanks to a handful of mega-rounds

Europe USA Asia Rest of World

29

59%

36%

1% 3%

56%

32%

7% 4%

62%

32%

6% 1%

63%

26%

8% 3%

50%

30%

15% 4%

Europe USA Asia RoW

Investment in € as % of total

2013 2014 2015 2016 2017

Source: Dealroom.co.

Number of unique active investors growing, but not as fast as in 2016

Source: Dealroom.co. Investors who participated in at least one VC round in that year. Excludes Israel.1. Annual growth between 2012 and 2016. 2. Growth from 2016 to 2017.

Number of firms with one or more investments per year

30

126 170 263 437

547 480

682

905

1,341

1,495

51

66

74

97

80

657

918

1,242

1,875

2,122

2013 2014 2015 2016 2017

Corporate Investment Fund Accelerator, crowdfunding, other (excl. angel investors)

+33% (1)

+44% (1)

+11% YoY (2)

+25% YoY (2)

Click image below to review over

9,000 active professional investors

Investors

Graph excludes angel investors. Number of angel investors nearly quadrupled from 335 in 2016 to 1,278 in 2017. However, this is partially driven by better data

collection by Dealroom.

1. Venture capital investment

2. Growth drivers

3. Investing trends

4. Sources of capital

5. Venture backed exits

Contents

32

The number of exits grew in 2017, but

far fewer meaningful exits, compared

with previous years

Source: Dealroom.co. Excludes Israel. Note: Realised value is based on % sold. Unrealised value is based on remaining % unsold.

€ 7.0B

€ 14.5B

€ 21.8B

€ 35.0B

€ 12.0B

€ 11.1B

€ 38.1B € 37.4B

€ 55.6B

€ 29.9B

83

122

230

274 294

–

60

120

180

240

300

360

–

€ 10.0B

€ 20.0B

€ 30.0B

€ 40.0B

€ 50.0B

€ 60.0B

2013 2014 2015 2016 2017

Realised exit value (€B) Unrealized value (€B) Number of exits

Click image below to view exits data &

underlying rounds. Click on the chart

columns to see rounds in each year. Switch

to quarterly vs. annually.

VC Backed exits in Israel and EuropeVC backed exits in Europe (excl. Israel)

33

Healthy ratio of capital returned vs. invested. But to sustain

growth in VC activity, exits will need to increase even further

Source: Dealroom.co. Excludes Israel.1. On average, VC backed companies do three VC rounds before the exit. Each round involves circa 15-25% dilution.

2013 2014 2015 2016 2017

(€ 5.0B) (€ 9.1B)

(€ 13.6B) (€ 14.8B) (€ 19.2B)

€ 11.1B

€ 38.1B € 37.4B

€ 55.6B

€ 29.9B

Investment (€B) Total firm value of exits (€B)

How much exits should we expect? A rule of thumb:

At the time of exit, VC ownership is typically 60-70% (1)

Assume a 2x target return on capital for the VC industry.

This implies that the target ratio of exits to VC investment shouldapproach 3x, in order to achieve target VC return of 2x.

Amount of capital invested each year has increased dramatically

Ratio of capital returned ÷ invested

€ 2.0B

€ 7.5B

€ 8.7B

€ 8.0B

€ 2.9B

€ 1.2B

€ 3.6B

€ 2.9B

€ 1.2B

€ 3.4B

€ 0.9B € 1.0B € 0.9B € 0.7B

€ 1.1B

€ 0.0B

€ 0.9B

€ 3.0B

€ 1.0B € 1.1B

€ 0.1B € 0.1B € 0.3B

€ 1.2B

€ 2.0B

€ 0.0B € 0.4B

€ 0.0B

€ 5.9B

€ 0.1B

55

66

38 41

15 18

–

20

40

60

80

100

–

€ 2.0B

€ 4.0B

€ 6.0B

€ 8.0B

€ 10.0B

'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17

Realised exit value (€B) Number of exits

34

European exits by target location: 2017 was a relatively slow

year for venture backed exits across the board

Source: Dealroom.co. Excludes Israel.

United Kingdom Germany France Sweden Spain Netherlands

(secondary)

35

Acquirers of European VC-backed companies are still most

likely to come from within Europe, followed by USA

Source: Dealroom.co. Excludes Israel. VC backed exits only.

€ 3.6B € 1.9B

€ 8.1B

€ 29.2B

€ 14.6B

€ 2.4B

€ 7.0B € 7.4B

€ 13.3B

€ 3.5B € 2.8B

€ 0.1B

€ 9.5B € 11.4B

€ 2.7B € 2.2B

€ 29.1B

€ 9.3B € 9.1B € 8.5B

–

25

50

75

100

125

150

175

–

€ 5.0B

€ 10.0B

€ 15.0B

€ 20.0B

€ 25.0B

€ 30.0B

€ 35.0B

'13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17 '13 '14 '15 '16 '17

Total firm value of exits (€B) Number of exits

Europe USA Asia IPOs

36

2017 saw an increase in smaller exits, IPO rounds and

secondary exit rounds

Source: Dealroom.co. Excludes Israel. 1. IPOs include also post-IPO followon transactions.

26 5 4 5

43 30

10 8 10

64 44

18 4 13

151

59

14 9 14

178

75

12 8 8

191

–

50

100

150

200

250

$ 0-100M $ 100-250M $ 250-500M $ 500M+ Size not disclosed

47 23

– 10 3

82

7 –

29 4

170

13 8 31

7

214

8 12 35

5

195

21 4

45 28

–

50

100

150

200

250

Acquisition Buyout Merger IPO Secondary

2013 2014 2015 2016 2017

Exits by

type (1)

Exits by

size

However, strong pipeline of European exits on the horizon

37Source: Dealroom.co.

CompanyIndicative valuation

Industry vertical

City Investors

Cabify €1 bn Transportation BarcelonaRakuten, Endeavor Catalyst, The Venture City, GAT Investments, SeayaVentures, Winklevoss Capital, Marc Bell Ventures, The Venture City, Red Swan Ventures, Resolute Partners

Auto1 Group €3 bn Transportation BerlinSoftBank, Target Global, Baillie Gifford, Barclays, Citigroup, Goldman Sachs, BNP Paribas, JPMorgan, DN Capital, DST Global, Piton Capital

Deliveroo €2 bn Food LondonAccel, Index Ventures, General Catalyst Partners, DST Global, Fidelity, T.Rowe Price, Felix Capital. Greenoaks Capital Management

MarketInvoice €1.5 bn Fintech London Northzone, British Business Bank, MCI Capital, Paul Forster

Klarna €2.5 bn Fintech StockholmVisa, Creandum, Northzone, Wellington Management, Sequoia Capital, DST Global, General Atlantic

Adyen >€5 bn Fintech Amsterdam ICONIQ Capital, Index Ventures, General Atlantic, Felicis Ventures, Temasek

Farfetch >€4 bn Fashion LondonJD.com, Temasek, Oleg Tscheltzoff, Fabrice Grinda, e.ventures, DST Global, Felix Capital, IDG Capital Partners, Eurazeo, Vitruvian Partners

FundingCircle €1 bn Fintech LondonAccel, Index Ventures, Rocket Internet, DST Global, Temasek, Baillie Gifford, Union Square Ventures, Ribbit Capital

Spotify €12 bn Music StockholmAccel, DST Global, Goldman Sachs, GP Bullhound, GSV Capital, Fidelity, Kleiner Perkins Caufield & Byers, EquityZen, Northzone

Transferwise €1.5 bn Fintech LondonIndex, LocalGlobe, Kima, Valar, Seedcamp, IA Ventures, The Accelerator Group, Richard Branson, Andreessen Horowitz, Baillie Gifford

Subtotal €30 billion +

Click image below to view the long list of

Europe’s most valuable private companies

Companies valued > €750M

Selected European unicorns