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Venture Capital Report

Europe | 4Q | 2014

Venture Capital Report The following report presents Dow Jones VentureSource’s quarterly findings for

European venture capital fundraising, investment, valuation, and liquidity. The included

charts and graphs offer a comprehensive view of the trends currently affecting the

venture capital market.

Highlights for 4Q 2014 include:

European venture capital fundraising experiences uptick from 3Q 2014, but suffers declines in both

fund closings and euros raised for the 12 month period;

Venture capital investment into European companies falls from 3Q 2014, but improves by a quarter year

over year;

Despite an overall fall in exit activity, the total amount raised through venture-backed Initial public

offerings (IPOs) reached its highest point since 2Q 2000.

2


FUNDRAISING

3

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Amount Raised (€B) € 2.17 € 0.98 € 1.18 € 0.76 € 1.19 € 0.76 € 1.03 € 0.50 € 1.81 € 0.69 € 1.03 € 0.70 € 0.93

Number of Funds 36 17 21 15 29 15 17 10 37 23 20 15 18

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€ 2.50 European VC Fundraising (2011 – 2014) Based on multiple closings

European Venture Capital Fundraising Experiences Uptick in 4Q 2014

18 European venture capital funds accumulated €927 million during 4Q 2014, an increase of 33% in euros

raised and 20% in the number of funds with closings from 3Q 2014.

Despite the uptick in fundraising from 3Q 2014, the number of funds with closings during 4Q 2014 fell by 51%

compared with the same period last year, while euros raised fell by 49%.

The largest fund of the quarter was Principia SGR’s Fund III which raised €160 million, accounting for 17% of

the total amount raised for 4Q 2014.

Overall, the number of fund closings in 2014 was down by 4% to 76 from the year prior, while the total amount

raised by venture funds fell by 18% from 2013 to €3.4 billion.


FUNDRAISING

4

Largest European VC Funds Raised in 4Q 2014

Firm Name Fund Name Amount

(€M) Closed in 4Q

Location Offering Status

Fund Type Fund Category Closing Type

Principia SGR Principia Fund III €160.00 Milan, Italy Open Multi-stage

venture capital

Venture Capital First

Infocomm Investments Pte. Ltd.

Infocomm European Technology Fund

€158.43 Singapore, Singapore

Closed Early-stage

venture capital

Venture Capital Final

Northzone Ventures AS Northzone VII €100.00 Oslo, Norway Closed Early-stage

venture capital

Venture Capital

Final

Forbion Capital Partners Forbion Capital Fund III €92.00 Naarden,

Netherlands Open

Multi-stage venture capital

Venture Capital

First

Advent Venture Partners LLP

Advent Life Sciences Fund II LP

€70.24 London, United

Kingdom Closed

Multi-stage venture capital

Venture Capital

Final


FINANCING

5

Equity Financings into Europe –

based, VC-backed Companies

(2011 – 2014)

Investment into European Venture-backed Companies Falls in 4Q 2014

European companies raised €1.8 billion for 332 deals during 4Q 2014, a fall of 24% in the amount raised from

3Q 2014 despite just five fewer deals being completed.

In contrast with the year ago period, investment improved by 1% despite a 28% reduction in the number of

completed deals.

In 2014 as a whole, European venture-backed companies attracted €7.9 billion across 1460 deals, a decline of

11% in deals completed from 2013 but an improvement of 25% in euros invested.

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Amount Raised (€B) € 1.46 € 1.06 € 1.56 € 1.15 € 1.24 € 1.21 € 1.57 € 1.75 € 1.76 € 1.54 € 2.26 € 2.32 € 1.77

Number of Deals 374 347 375 326 373 371 420 384 461 387 404 337 332

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FINANCING

6

Equity Financings into Europe-based, VC-backed Companies, by Round Class

(2011 – 2014)

Number of Deals

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Seed 45 38 38 53 61 35 34 52 67 32 24 19 23

First 168 161 192 155 187 197 207 197 207 210 203 176 171

Second 62 63 60 55 57 64 89 63 81 67 87 60 64

Later 73 70 55 46 43 53 65 51 81 56 73 65 55

Restart 3 0 0 0 0 0 0 0 0 0 0 0 0

0

40

80

120

160

200

240



(Year over Year, 2004 – 2014 )

Number of Deals

FINANCING

7

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Restart 14 9 10 12 5 3 2 6 0 0 0

Later 437 482 339 385 316 290 304 238 214 250 249

Second 289 283 242 267 274 251 268 261 235 297 278

First 519 541 643 845 712 598 669 664 695 808 760

Seed 66 55 93 100 99 93 97 134 190 188 98

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FINANCING

8

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Seed € 23 € 17 € 23 € 15 € 26 € 20 € 14 € 19 € 27 € 16 € 17 € 11 € 14

First € 433 € 298 € 537 € 289 € 449 € 403 € 418 € 526 € 349 € 441 € 563 € 510 € 403

Second € 355 € 278 € 257 € 300 € 291 € 229 € 479 € 697 € 391 € 319 € 468 € 207 € 683

Later € 604 € 448 € 673 € 531 € 449 € 543 € 639 € 458 € 937 € 642 € 1,039 € 877 € 647

Restart € 15 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0

€ 0

€ 200

€ 400

€ 600

€ 800

€ 1,000

€ 1,200


(2011 – 2014)

Amount Raised (€M)


FINANCING

9

Equity Financings into Europe-based, VC-backed Companies, Median Equity Deal Size (€M)

(2011 – 2014)

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Median Equity Deal Size (€M) € 1.41 € 1.50 € 1.90 € 1.20 € 1.22 € 1.50 € 1.52 € 1.00 € 1.40 € 1.58 € 2.00 € 2.00 € 2.30

€ 0.00

€ 0.50

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FINANCING

10

24%

2%

29% 4%

18%

2%

21%

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

4Q'14 Industry Breakdown

By Number of Deals

Equity Financings into Europe-based, VC-backed Companies, by Industry Group

(4Q 2014)

Business and Financial Services received the largest allocation of investment during 4Q 2014 (32%),

accumulating €557 million through 80 deals. The sector remained the most attractive sector despite investment

dropping by 41% from 3Q 2014. Deal flow remained flat.

Healthcare rose to second in terms of equity financing, taking a 30% share of all 4Q 2014 investment. The

sector raised €535 million across 60 deals, an increase of 64% in capital raised and 25% in deals completed

from the previous quarter.

Consumer Services was pushed down to third, with companies in the sector gathering 18% of the total amount

invested for the quarter. The sector received €327 million across 96 deals; a fall of 53% and 3% from 3Q 2014

in capital invested and deal flow respectively.

32%

2%

18% 2%

30%

1%

15% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials(0.5%)


4Q’14 Industry Breakdown

By Amount Raised


406

56

432

44

220

38

260 Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare



Equity Financings into Europe-based, VC-backed Companies, by Industry Group (2014)

2014 Industry Breakdown

By Number of Deals

2014 Industry Breakdown

By Amount Raised ($B)

FINANCING

11

31%

2%

29%

3%

22%

1%

12% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare




FINANCING

12

Co. Name Location Industry Group

Industry Segment

Industry Code Brief Description Close Date Round Type

Raised (€M)

Round Investors (* denotes lead)

Adyen BV Netherlands Business and

Financial Services

Financial Institutions and

Services

Payment/ Transactional

Processing

Provider of an Internet payment system for

international merchants. 16/12/2014 Second

€199.60

Felicis Ventures, General Atlantic LLC*, Index Ventures,

Temasek Holdings Pvt. Ltd.

Verne Global Iceland Information Technology

Electronics and Computer Hardware

Data Storage Provider of renewable energy-powered data

centers. 31/12/2014 Second €78.24

General Catalyst Partners, Novator Partners, Stefnir*,

Wellcome Trust

Powa Technologies

Ltd.

United Kingdom



Services

Payment/ Transactional

Processing

Provider of an integrated mobile payments and

e-commerce platform. 7/11/2014 Second €63.88

Wellington Management Co. LLP*

Cell Medica Ltd. United

Kingdom Healthcare Biopharmaceuticals

Biotechnology Therapeutics

Provider of antigen-specific T-Cell

immunotherapy treatments for the

treatment of infectious disease and cancer.

25/11/2014 4th €63.87 Imperial Innovations*, Invesco

Perpetual, Woodford Investment Management LLP

Ascendis Pharma A/S

Denmark Healthcare Biopharmaceuticals Drug Development

Technologies

Developer of long-acting prodrug therapies to

address large markets with significant unmet

medical needs.

24/11/2014 3rd €47.91

Janus Capital Group, OrbiMed Advisors LLC*, RA Capital

Management LLC, Rock Springs Capital Management, Sectoral

Asset Management Inc., Sofinnova Partners, Sofinnova Ventures Inc.*, Venrock, Vivo

Capital*

Top 5 Deals into European VC-backed Companies (4Q 2014)


FINANCING

13

17

8

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High-TechGruenderfonds

Management GmbH

Truffle Capital SAS Bpifrance Investment Northzone Ventures AS Kima Ventures

Most Active Investors for Europe-based, VC-backed Companies by Deals Completed

(4Q 2014)


FINANCING

14

Amount Raised in 4Q 2014 by Country

(Top 4)

30%

18%

14%

12%

26%

United Kingdom

Germany

Netherlands

France

Rest of Europe

21%

20%

18%

8%

33% United Kingdom

Germany

France

Spain

Rest of Europe

Number of Deals in 4Q 2014 by Country

(Top 4)

Equity Financings into Europe-based, VC-backed Companies, by

Country (4Q 2014)

The United Kingdom was the most favoured destination for equity financing during 4Q

2014, receiving €524 million across 69 deals. The country took in 30% of all

investment into European VC-backed companies for the quarter.

Germany placed second, capturing 18% of European investment. Investment fell by

73% from the prior quarter to total €322 million. Deal flow remained relatively stable,

however, with 66 completed.

The Netherlands rose to third position raising €243 million, a 14% share of investment.

France placed in fourth position with a 12% share, raising €218 million during 3Q

2014.


LIQUIDITY

15

Exit Opportunities for European

VC – backed Companies

(2011 – 2014)

Europe Sees Overall Decrease in 4Q 2014 Venture Exit Activity

42 venture-backed M&As took place in Europe during 4Q 2014, down 9% from 3Q 2014 but one up on the

figure for 4Q 2013.

The largest M&A for 4Q 2014 was Belgium’s Clear2Pay NV, an e-payment solutions provider, which was

acquired by Fidelity National Information Services for €375 million.

55 venture-backed IPOs took place during 2014, tripling the number of listings seen across Europe in 2013.

201 M&As were completed during the course of 2014, a 21% increase on the 166 that took place during 2013.

0 10 20 30 40 50 60 70

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

2Q'14

3Q'14

4Q'14

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

IPOs 3 6 3 2 5 1 5 3 9 8 21 16 10

M&As 45 38 42 30 46 34 36 41 41 51 42 46 42


LIQUIDITY

16

Top 3 M&As in Europe (4Q 2014)

Company Name

Location Brief Description Industry Code Industry Segment

Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

Clear2Pay NV Mechelen,

Belgium Provider of e-payment

solutions.

Vertical Market Applications

Software Software


2/10/2014 Acquisition €375.00 FIdelity National

Information Services

SuperDerivatives Inc.

London, United

Kingdom

Provider of cloud-based derivatives data

and technology for financial and

commodity markets worldwide.

Financial Data/Information


Services


8/10/2014 Acquisition €277.25 Intercontinental

Exchange

Telerik AD Sofia, Bulgaria

Provider of an end-to-end platform that

combines user interface (UI) tools and cloud services.

Software Development Tools

Software Information Technology

2/12/2014 Acquisition €209.98 Progress

Software Corp.


LIQUIDITY

17

European VC-backed IPO Activity

(2011 - 2014)

European VC-backed IPOs (2011-2014)

10 IPOs were completed during 4Q 2014, a decline of 38% from the previous quarter’s total but an increase of

one on those completed during 4Q 2013.

IPOs raised €2.3 billion during 4Q 2014, more than six times the figure seen in 4Q 2013 and the highest sum

since 2Q 2000 when 71 IPOs raised a total of € 3.8 billion.

The largest European VC-backed IPO of 4Q 2014 was Rocket Internet AG’s October listing on the Frankfurt

Stock Exchange. The company raised a total of €1.4 billion, accounting for 62% of the total amount raised

through European venture-backed company IPOs for the quarter.

4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Raised (€M) through IPO € 18.66 € 157.40 € 26.76 € 52.08 € 142.99 € 19.22 € 89.24 € 25.51 € 366.10 € 448.63 € 529.53 € 447.47 € 2,250

Number of IPOs 3 6 3 2 5 1 5 3 9 8 21 16 10

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LIQUIDITY

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Company Name

Country Brief Description Industry Code Industry Segment Industry Group

Close Date Raised

through IPO (€M)

Exchange/ Symbol

Rocket Internet AG

Germany

Operator of an e-commerce focused

venture capital (VC) firm and a startup incubator.

Incubators/Business Development

Business Support Services


2/10/2014 €1,400.00 XETRA: RKET

Zalando SE Germany

Provider of an e-commerce platform

specializing in the retail of brand name shoes.

Clothing/Accessory Retailers

Retailers Consumer Services

1/10/2014 €526.24 XETRA: ZAL

Forward Pharma A/S

Denmark

Developer of immunomodulatory

drugs for the treatment of immune disorders.

Biotechnology Therapeutics

Biopharmaceuticals Healthcare 15/10/2014 €174.67 NASDAQ: FWP

Top 3 IPOs in Europe (4Q 2014)


ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and partnership opportunities, perform comprehensive due diligence, and examine trends in venture capital investment, fund-raising, and liquidity. It provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry, and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

About Dow Jones

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