EUROPEAN INNOVATION FINANCING - Clipperton FinanceEUROPEAN INNOVATION FINANCING H1 2017 UPDATE CONTRIBUTORS In collaboration with Thibaut Revel Partner Martin Vielle Vice President

EUROPEAN INNOVATION FINANCING

H1 2017 UPDATE

CONTRIBUTORS

In collaboration with

Thibaut Revel

Partner

Martin Vielle

Vice President

About Clipperton

Clipperton is a European independent corporate finance advisory firm

exclusively dedicated to the Technology space, advising innovative companies

on M&A transactions, debt financings and equity offerings. With offices in

London, Berlin, and Paris and an international reach, Clipperton is a European

leader in Technology financial advisory. Over the past 15 years, the team has

successfully completed more than 200 high profile transactions globally.

About Digimind and WhoGotFunded

Digimind is a SaaS intelligence software company based in Paris, Boston and

Singapore, providing advanced information management platforms and

technologies that perform massive data collection, automatic intelligence

extraction and visualisation. Using its unique web mining expertise, Digimind

developed WhoGotFunded.com, the world's most comprehensive funding

database, discovering over 100 fresh funding deals every day in real time all

across the world.

Clipperton European Innovation Financing Update –January 2017

2www.clipperton.net©2017 Clipperton Finance Limited – All Rights Reserved

Strong H2 at $6B investment

value in EU Tech.

2016 Full Year at $12B+ is

flattish in value vs. 2015: slight

decrease in absolute USD terms

but fully flat once corrected from

currency effects (lower GBP vs.

USD in particular).

Increasing volume of smaller

deals (<$30m) offsetting a

decline in large rounds.

Resilience of the EU ecosystem

confirmed so far, with mixed

geographical dynamics:

momentum in France and Spain /

Portugal vs. slowdown in the

Nordics.

Pick-up of the activity of large

traditional PE funds in Tech

(KKR, Goldman...) raising their

game to capture a significant

share of the large deals, while

corporates remain hot in sectors

such as automotive tech and life

sciences.

xxxxxxx

Introduction ………………………………………………………..Innovation Financing Overview ………………………….. Geographical and Sectorial Views ……………………….Top Deals by Geography ……………………………………..Top Deals by Sector ……………………………………………..Methodology & Disclaimer ………………………………….

P.2P.3P.4P.5P.6P.7

EDITORIAL

The party is not over in the European tech

landscape as 2016 ended with a level of tech

investment at $12B almost on par with

2015 record level, once currency effects are taken into

account.

Our H1 2016 report pointed out the increasing reliance on

the UK growth engine, and the strength of the UK

market is confirmed with 24% yearly growth for UK

transactions in nominal terms (before a negative currency

effect of (12%)). However, H2 2016 was a bit lower than

H1 in the UK, and the dynamics will have to be monitored

closely as the real impact of the Brexit is still ahead of us.

France enjoyed a great H2 2016 with a lion's share of the

top deals (OVH, Sigfox, Devialet) and Q4 very close to the

UK level ($870m vs. $970m).

Beyond topline figures, a remarkable new driving force lies

in the growing appetite of tier-one Private Equity

platforms for the tech space. KKR has made landmark

minority investments in OVH (hosting) and Darktrace

(cyber), while several big players announced new

significant funds dedicated to technology and growth

equity (KKR Next Generation Technology Growth Fund,

BridgePoint, EQT, etc.). On the other hand, our data

highlights a real slow-down in large rounds in 2016

despite the strong activity by large PE and Corporates;

potentially a healthy pause in the European 'unicorns'

phenomenon.

CONTENT

“Headlines

Thibaut RevelPartner at Clipperton



OVH FR $279m Hosting Services

Deliveroo UK $275m Food Delivery

Sigfox FR $162m IoT Network

Oxford Nanop. UK $126m DNA Sequencing

Devialet FR $115m Audio Equipment

ADC Therap. DACH $105m Cancer Therapies

Kymab UK $100m Antibody Tech.

Carrick Therap. IR $95m Cancer Therapies

Hellofresh DACH $93m Food Delivery

Sonnen DACH $85m Energy Storage

Following a record vintage in 2015 (especially H1)the eco-system remained solid in 2016 with twosemesters at c.$6B. While USD figures show a 6%decrease vs. 2015, this hides a less negative trendafter taking into account currency effects (USD vs.GBP). The number of transactions is clearly on therise (+40% yoy in 2016) suggesting fewer large dealsbut a handful of start-ups which will seekacceleration rounds in the next 12 to 18 months.

943 deals between $1m and $10m announced in 2016, an increase by more than 50% vs. 2015.

$3.6 billion were invested in this segment, i.e. the same amount as for deals between $10m and $30m. This

phenomenon is particularly strong in H2 2016 for deals between $1m and $5m: +84% in volume and +91% in

value vs. H1 2015, with $1.1 billion invested across 426 transactions.

Acceleration rounds (between $10m and $30m) are also on a positive trend in H2: +19% in value vs. 2015,

while the >$30m segment is decreasing.

TOTAL AMOUNT INVESTED IN EUROPE

MEDIAN DEAL VALUEDISTRIBUTION BY ROUND SIZE - VOLUME

Confirmed trend: strong momentum for $1-10m rounds

Sources: Clipperton – WhoGotFunded

Top 10 deals in H2 2016

171

469

144 16997

275

701

242204

72

<= $1m $1-5m $5-10m $10-30m > $30m

2015

2016

$2

.0B

$1

.7B

$1

.9B

$2

.2B

$2

.7B

$2

.6B

$3

.6B

$3

.9B$1

.0B

$1

.1B $1

.8B

$1

.9B

$4

.2B

$3

.2B

$2

.3B

$2

.3B

$2.9B $2.8B

$3.7B$4.1B

$7.0B

$5.9B $5.9B$6.2B

H12013

H22013

H12014

H22014

H12015

H22015

H12016

H22016

Deals equal or below $30m

Deals above $30m

$2.5m

$2.8m$2.6m

$2.0m

$3.0m$2.8m

$2.6m

$3.2m

$3.0m

$4.2m

$3.3m$3.0m

$4.0m

$3.6m

$2.0m

$3.0m

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4



Momentum in France:

+26% in value H2 2016 vs. H2 2015

2016 = record year: +22% vs. 2015, twice the

amounts of 2014

3 deals in the European top 5: OVH, Sigfox and

Devialet

+9%

+22%

-24%

-29%/+5%*

.

Focus: take-off of technology investment in Spain & Portugal

UK

Nordics

DACH

FranceThe UK seemed to pause in H2:

Decrease by 1% in value vs. H2 2015 but -12%

vs. H1 2016. However deal volume is on the

rise: +60% in H2 vs. last year

Solid semester in DACH:

$1.3 billion invested in H2 2016 (+11% yoy

growth) and +67% in transaction volume

Strong activity in Spain and Portugal:

2.5 times the number of deals in H2 2016 vs. H2

2015 (see below)

GEOGRAPHIES – 2016 vs. 2015

2015 2016

2015 2016

2015 2016

2015 2016

*Adjusted for Rocket Internet’s$1.2B investments in H1 2015

$3.7B $4.1B

$2.2B$2.7B

$1.4B $1.1B

$2.5B

$2.6B

$3.8B

Spain is showing signs of a real uptake and might well be one of the hottest hubs for innovation in Europe. Volumeof transactions is clearly on the rise: +150% in H2 2016 vs. H2 2015 according to our data. If traction in terms ofamounts invested is yet to materialize, a handful of positive trends suggest that it will soon be the case:

Macroeconomic environment: if the post-recession recovery remains fragile by some aspects, Spain’s GDPgrew by 3.3% in 2016, above anticipations.

Start-ups creation is increasing, notably driven by the emergence of a new generation of entrepreneurs and bythe high number of developers in the country. In 2016, Barcelona and Madrid stood as #5 and #6 hubs inEurope in number of start-ups behind London, Berlin, Paris and Amsterdam according to a report from MobileWorld Capital Barcelona.

New VC funds have launched recently (e.g. Samaipata, KFund) and participate to a financing eco-system wherebusiness angels and accelerators are very active. Simultaneously, a growing number of Spanish start-ups havegained interest from international investors (e.g. Cornerjob, Source{d} or Verse).

A group of start-ups have raised large amounts in the recent years such as Scytl, Wallapop, Cabify, Packlinck orJob & Talent and a handful of successful exits act as role models including Trovit (acquired by NextCo), LaNevera Roja (Rocket Internet) or more recently Privalia (Vente Privee) and Ticketbis (Ebay).

On a less positive note, Spain still lacks a regulation framework favorable to start-ups. La Ley de Emprendedoresenforced in 2013 has set the grounds of a legal environment fostering innovation but remains weak on taxincentives for entrepreneurs. Perhaps one of the biggest upsides for a full-fledged emergence of the Spanish start-up scene



Deliveroo $275mGeneral Catalyst, DST Global, Bridgepoint, Greenoaks Capital

Oxford Nanopore $126mIP Group, Woodford IM, GT Healthcare

Kymab $100mWoodford, Malin Corp., ShenzenHepalink, Ori Healthcare, other

Darktrace $65mKKR, Summit Partners, TenEleven Ventures

ByBox $49m Lloyds Development Capital

Artios Pharma $33mImperial Innovations, Merck Ventures, Abbvie Ventures, others

Nutmeg $32mPentech Ventures, Balderton, Schroders, Armada IG, Convoy IS

Graphcore $30mAmadeus, Robert Bosch, Samsung Catalyst, C4 Ventures, Draper Esprit

Exclaimer $27m Livingbridge

Transferwise $26mAndreessen Horowitz, ValarVentures

The universe of investors in innovation is diversifying

FRANCE

UNITED-KINGDOM

OTHER COUNTRIES

DACH

Top Deals per Geography – H2 2016


AMOUNTCOMPANY INVESTORS AMOUNTCOMPANY INVESTORS

AMOUNTCOMPANY INVESTORS AMOUNTCOMPANY INVESTORS

OVH $279m KKR, Towerbrook

Sigfox $135mSalesforce Ventures, Total, Alto Invest, Swen CP, existing investors

Devialet $115mGinko Ventures, Renault, Sharp Corp, Korelya, Roc Nation, other

Linkbynet $56m Keensight Capital

Navya $33m Valeo, Keolis, Group8

Wynd $32m Sodexo, Orange Digital Ventures

Ecovadis $32m Partech

Blablacar $24m Baring Vostok

Molotov $23mLetterOne, Sky Group, TDF, Idinvest, Business Angels

Alkemics $23mIndex Ventures, Serena Capital, Partech, SEB Alliance, Cathay

ADC Therap. $105mAuven Therapeutics, The Wild Family Office, AstraZeneca

Hellofresh $93m Rocket Internet, Baillie Gifford

Sonnen $85meCapital, MVP Managament, SET Ventures, GE Ventures, Inven, other

GoEuro $70m KPCB, Silver Lake, Kraftwerk

Silent Circle $50m Santander Bank

Heliatek $46mInnogy SE, Engie, BNP Paribas, CEE Group, existing investors

Sonarsource $45m Insight Venture Partners

Lifewatch $44m Aevis Victoria

Iomx Therap. $42mMPM Capital, Sofinnova, Wellington Ventures, Merck Ventures

Smava $34mRuna Capital, Verdane Capital, Mojo Capital

Carrick Ther. (IR) $95mLightstone V., Google V., Cambridge Innovation, Woodford Investment

Genomics M. (IR) $40mARCH Ventures, Google Ventures, Polaris, Ireland Strategic Fund

Nova Lumos (NL) $40mPembani Remgro Infrastructure, VLTCM, ICV

Oxthera (SE) $33mKurma Partners, Sunstone Capital, Idinvest, Flerie, other

Global Fash. (LX) $33m Rocket Internet, Kinnevik

Urbanvolt (IR) $32m Susi Partners

Cornerjob (SP) $25m eVentures, Northzone, TV Azteca

Aqua Comms (IR) $25mNational Pensions Reserve Fund, Cartesian Capital

7 Pharma (DK) $23m SR One

Netwatch (IR) $21mBDO Development Capital, Bank of Ireland

Private Equity shows vivid interest for technology: a few landmarks deals saw large PE firms investing in mature technology assets: KKR and Towerbrook in OVH, BridgePoint in Deliveroo, or Lloyds Development Capital in ByBox and Micrefinch.

1

NEW VCs

Direct investment by Corporates is on the rise: a handful of rounds involved strategic investors in 2016, particularly in France where notable examples include Sigfox (Total and Salesforce), Devialet (Renault, Foxconn and Sharp), Navya (Valeo, Keolis), Wynd (Sodexo, Orange) or Molotov (Sky Group, TDF).

2

3 New VCs are joining the race while existing ones are raising new vintages

NEW VINTAGES



AMOUNTCOMPANY INVESTORS

OVH $279m KKR, Towerbrook

Deliveroo $275mGeneral Catalyst, DST Global, Bridgepoint, Greenoaks Capital

Sigfox $135mSalesforce Ventures, Total, Alto Invest, Swen CP, existing investors

Devialet $115mGinko Ventures, Renault, Sharp Corp, Korelya, Roc Nation, other

Hellofresh $93m Rocket Internet, Baillie Gifford

Sonnen $85meCapital, MVP Managament, SET Ventures, GE Ventures, Inven, other

GoEuro $70m KPCB, Silver Lake, Kraftwerk

Darktrace $65mKKR, Summit Partners, TenEleven Ventures

Linkbynet $56m Keensight Capital

Silent Circle $50m Santander Bank

ByBox $49m Lloyds Development Capital

Sonarsource $45m Insight Venture Partners

Smava $34mRuna Capital, Verdane Capital, Mojo Capital

Global Fashion G. $33m Rocket Internet, Kinnevik

Navya $33m Valeo, Keolis, Group8

Oxford Nanopore $126mIP Group, Woodford IM, GT Healthcare

ADC Therap. $105mAuven Therapeutics, The Wild Family Office, AstraZeneca

Kymab $100mWoodford, Malin Corp., ShenzenHepalink, Ori Healthcare, others

Carrick Therap. $95mLightstone V., Google V., Cambridge Innovation, Woodford Investment

Lifewatch $44m Aevis Victoria

IT – Top 15 LIFE SCIENCE – Top 5

CLEANTECH – Top 5

Sectors




Heliatek $46mInnogy SE, Engie, BNP Paribas, CEE Group, existing investors

Nova Lumos $40mPembani Remgro Infrastructure, VLTCM, ICV

BBoxx $20mKhosla Ventures, Bamboo Finance, Doen Foundation, Engie, Other

Visedo $16mSuffice International, Sinituote, Emerald Technology, other

Skeleton Tech $15m Firstfloor Capital

x

$2.0B $1.8B

$2.8B $2.9B

$5.5B

$3.9B$4.2B

$4.7B

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016

AMOUNTS INVESTED IN IT – 2013 to 2016

42%

30%

9%5%

14%

Internet & NewMedia

Business Cloud &Software

Hard/Telecom

ConsumerElectronics

Fintech

IT SEGMENTS SPLIT - 2016

$9B

Since we started publishing this report in 2013, the amount invested in IT kept increasing at a sound pace:

+13% CGR per semester, approaching the $5 billion mark on a half year basis in H2 2016.

Investments in IT start-ups totaled $9 billion in 2016, i.e. ¾ of investments in innovation in Europe (same as in

2015). Within the sector, the Business Cloud and Software segment increased its share vs. 2015 (30% of IT

investments vs. 23% in 2015) while Fintech start-ups continues to attract significant amount of VC money (14%

of IT investments in 2016).

Over the same period, Life Science grew by 9%, while Cleantech decreased by 4%.



This report is based on collaborative work and research performed by Digimind and Clipperton Finance. Based on

Digimind’s WhoGotFunded comprehensive financing deals database which is built in real-time through text-

mining technologies, the analysis is focused on European deals with the following characteristics:

Investments completed in a European company (Russia included/ Israel excluded)

The company is considered innovative i.e. with a clear technology or business model innovation –which excludes companies who operate technologies that they have not developed

Investments higher than $500k, in order to exclude “friends & family” seed rounds

Secondary deals (i.e. minority sales of shares to private funds) are included, majority deals are excluded.

Fundraisings through public markets (IPO or public equity financing) are excluded

This represents a list of about 200-400 deals per quarter, which are then allocated to an innovation universe (IT

/ Life Science / Cleantech) and to a sub-segment (e.g. Consumer Internet within IT).

This document has been prepared by Clipperton in collaboration with Digimind. It is communicated solely for the

purpose of information and should not be construed as a sollication or an offer to buy or sell any security or

related financial instrument.

This publication is based of data and information made available to the public and other sources deemed reliable.

While efforts have been made to guarantee maximum exactitude and reliability, neither Clipperton nor Digimind

can be held responsible for omission or errors. The information and analysis accessible in this publication

highlight industry trends in general, and should not be construed as providing any particular recommendations or

analysis for any specific company that is mentioned in the publication. No representation or warranty (expressed

or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the

information contained herein and, accordingly, none of Clipperton’s or Digimind’s officers or employees accepts

any liability whatsoever arising directly or indirectly from the use of this document.

Clipperton Finance Limited is authorised and regulated by the Financial Conduct Authority. Registered No. 570700

Thibaut REVELPartner

[email protected]

Martin VIELLEVice President

[email protected]

8, place de l’Opéra75009 PARIS

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EUROPEAN INNOVATION FINANCING - Clipperton FinanceEUROPEAN INNOVATION FINANCING H1 2017 UPDATE CONTRIBUTORS In collaboration with Thibaut Revel Partner Martin Vielle Vice President