EY French Venture Capital Barometer · EY French Venture Capital Barometer S1 2019 | 7 Methodology The EY Venture Capital Barometer for France includes the equity financing transactions

EY French Venture Capital BarometerS1 2019

2 | EY French Venture Capital Barometer | S1 2019

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#FrenchTech is soaring – now we need to man the exits!

The first half of 2019 will yet again go down as a record-breaking six months. First and foremost, the sums invested in French Tech start-ups totalled €2.8 billion spread over 387 rounds, up 43% and 16% respectively compared to the preceding half-year. To further illustrate this phenomenal rise, the funds raised in the first half of 2019 alone amounted to over €200 million more than those raised in the whole of 2017: €2.8 billion, compared to the 2017 figure of €2.6 billion!

This acceleration must be analysed in the light of the very strong increase in financing rounds exceeding €50 million, which accounted for 37% of the total funds raised during the first half of the year in terms of value (compared to 18% for the preceding half-year). At this juncture, we should salute the emergence of a new champion: Meero, a photo-retouching platform, which managed to raise €205 million – the largest private fund-raising initiative in the entire French sector!

The emergence of these very significant financing rounds has also had the effect of propelling several scale-ups, including Doctolib and Ivalua, to the door of the exclusive unicorn club, bringing our potential contenders to seven.

However, French Tech is not the only tech sector that is prospering. We had perhaps underestimated the United Kingdom’s ability to continue to set the pace in Europe. At the end of last year, the country’s tech sector was flagging, recording only a marginal increase of 6% in value.

However, a completely different trend has emerged over the course of the first half of 2019, with investments already totalling €5.3 billion, up 76% compared to the preceding half-year, and 19 potential unicorns. This represents a real boost. Conversely, Germany seems to be lagging behind, with investments only up slightly (4%) and, most alarmingly, a significant decrease in the number of rounds being recorded (down by 20%).

Today, the main challenge facing French Tech no longer solely concerns its ability to attract investments from wealthy sources – it is very likely that investments will total €5 billion by the end of the year – but also its ability to deliver returns on those investments, with capital gains to investment funds. Up to now, French Tech has not been as proactive as our European and international counterparts regarding this issue, and exit deals (mergers & acquisitions, initial public offerings) have been rare (greater than €300 million).

There are a number of reasons for this weakness: a less active stock market, the dearth of large French corporate companies on the market, but also, and above all, the fact that a number of companies are still too small to be able to compete on equal terms with our rivals. In the coming semesters, all eyes will be on French start-ups: their ability to complete significant exit deals will guarantee not only their success, but also that of FrenchTech.

Franck SebagEY Partner In charge of the Fast Growing Companies sector Western Europe & Maghreb

3EY French Venture Capital Barometer | S1 2019 |

1st semester 2nd semester

2016

€1.00 billion

(297 deals)

€1.20 billion

(277 deals)

€2.21 billionfor 574 deals

2015

€0.76 billion

(240 deals)

€1.05 billion

(244 deals)


2017

€1.22 billion

(301 deals)

€1.35 billion

(304 deals)


2018

€1.95 billion

(333 deals)

€1.67 billion

(312 deals)


2019

€2.79 billion

(387 deals)


Amounts raised by start-ups in France

+21%

+24%

+61%

+43%

+12%

+16%

+32%

+14%

+22%

+41%

€2.79bn in funds raised in 387 deals with an average deal size of €7.2m.


Investments by sector

Fintech €209 million 28 deals

Life Sciences €308 million 43 deals

Software 103 deals€793 million

Internet Services €968 million 101 deals

€227 million 28 dealsCleantech

Top 5 investments (and list of main investors)

€110.5 millionYNSECT

Astanor Ventures, Bpifrance Investissement, Ecotechnologies, Idinvest Partner, Picardie Investissement, Crédit Agricole Brie Picardie, Caisse d’Épargne Hauts de France (CEHDF), Talis Capital, Finasucre, Compagnie du Bois sauvage, Happiness Capital, Quadia, Demeter Partners, Family Offices

Cleantech

Eurazeo Growth (formerly Eurazeo Croissance), Primes Ventures, Avenir Growth capital, GR Capital, Global Founders Capital (GFC), Aglae Ventures, Alven Capital, White Star Capital, Idinvest Partners

€205 millionMEERO

WYND €72 million

Natixis, Sofina, BNF Capital, Sodexo VenturesSoftware

€150 millionDOCTOLIB

General Atlantic, Bpifrance Investissement, Eurazeo Growth (formerly Eurazeo Croissance), Kernel Investissements, Accel Partners, Kerala Ventures, Business Angel(s)

Internet Services

Internet Services

Internet Services

€110 millionMANO MANO

Eurazeo Growth (formerly Eurazeo Croissance), Idinvest Partners, Aglae Ventures, Bpifrance Investissement, General Atlantic, Partech Ventures, Piton Capital, Business Angel(s)


Investments by maturity stage

Average amount invested (€5.9 million)

S1 2018Total investments

Average amount invested (€7.2 million)

S1 2019Total investments

€169 million

€169 million€143.9 million4 deals 1 deal

€576 million

€561 million

€13.7 million€18.5 million 41 deals41 deals

€760 million

€9.1 million€14.8 million 61 deals€558 million

57 deals

€842 million

€3.2 million€2.9 million 178 deals178 deals

€577 million€509 million

€1.7 million€1 million 52 deals107 deals

€87 million€103 million

Series B

Series C and above

Investments on the basis of funds raised by tranche

2019 (S1) 2018 (S1) Variation 19/18

Funds raised (€M)

Number of deals

Funds raised (€M)

Number of deals

Funds raised (€M)

Number of deals

€0-5M 428 279 395 248 +8% +13%

€5-10M 269 41 180 27 +49% +52%

€10-20M 410 34 450 36 -9% -6%

€20-50M 624 21 596 18 +5% +17%

More than €50M 1,059 12 331 4 +220% +200%

Total 2,789 387 1,952 333 +43% +16%

For the first half of 2019, deals exceeding €100 million represent €576 million in total, for 4 deals.

Growth Equity(Amount raised greater

than €100 million)

Series A

Seed


Δ: variation 2019/2018

For the first half of 2019, the three most significant countries in total accounted for €10.55 billion of investments, i.e. 66% of all investments made in Europe in terms of value.

Comparison of investments in France, the United Kingdom and Germany

VENTURE CAPITAL

€2.90 billion raised 400 deals

GROWTH EQUITY


€5.30 billion raised / Δ +75%

407 deals / Δ +25%

Investments by region

Top 3 French regions

The Île-de-France region accounted for 80% of investments in terms of value for the first half of 2019.

The Auvergne-Rhône-Alpes region remained in 2nd place for the third semester running, with 5% of investments in terms of value, closely followed by the Hauts-de-France region, which came in 3rd place with 4% of investments in terms of value.

€114M

16

€66M

15

HAUTS-DE-FRANCE

€31M

10

€9M

6

GRAND EST

€10M

6

€10M

5

BOURGOGNE FRANCHE-COMTÉ

€137M

35

€142M

21

AUVERGNE-RHÔNE-ALPES

€84M

22

€89M

20

PROVENCE-ALPES-CÔTE D’AZUR

€75M

19

€98M

25

OCCITANIA

€28M

9

€41M

20

NOUVELLE-AQUITAINE

€10M

10

€20M

9

PAYS DE LA LOIRE

€21M

12

€52M

10

BRITTANY

€10M

7

€5M

3

NORMANDY

€2,236M

230

€1,421M

197

ÎLE-DE-FRANCE

€26M

8

€1M

2

CENTRE-VAL DE LOIRE

€2.79 billion

€1.95 billion

387 333

2019 (S1) 2018 (S1)

Number of deals

Funds raised

€8M

3

€0M

0

CORSICA

VENTURE CAPITAL


GROWTH EQUITY



387 deals / Δ +18%

VENTURE CAPITAL


GROWTH EQUITY



214 deals / Δ -20%


Methodology

The EY Venture Capital Barometer for France includes the equity financing transactions of businesses at the set-up stage or during their initial years of existence, with transaction dates between 1 January and 30 June 2019 and published prior to 12 July 2019. Those French companies raised funds from French and/or foreign VCs. The French data presented in this survey is based on data from Dow Jones VentureSource, CFNEWS, Capital Finance and Dealroom.co. The data on Germany and the United Kingdom is based on Dealroom.co. Processing of this data and analysis were based on EY methodology and carried out by EY & Associés. All transactions in excess of €100M have been restated as Growth Equity.

Venture Capital includes all transactions below €100M. In this study we have only taken into consideration transactions in which the amount was disclosed publicly.The Internet services sector encompasses activities such as e-commerce, marketing and performance (lead, listing), geomarketing and mobile applications. The Life Sciences sector includes the biotech and medtech sectors. The Fintech sector includes start-ups using technology to reshape financial and banking services (on-line banking, crowd funding, new payment methods, etc.) The Technology sector encompasses activities such as hardware, semiconductors, etc.

Funds raised in excess of €50M in France, the United Kingdom and Germany

Top 10 investments in Europe

Company Country Sector Amount (€M)

NORTHVOLT Sweden Energy 909

CITIZENM Netherlands Internet Services 750

GREENSILL United Kingdom FinTech 728

DELIVEROO United Kingdom Internet Services 523

UIPATH Romania Software 516

VEEAM Switzerland Software 455

GETYOURGUIDE Germany Internet Services 440

OAKNORTH BANK United Kingdom FinTech 400

N26 GROUP Germany FinTech 273

OVO ENERGY United Kingdom Energy 240

Δ: 2019/18 variation on the total amount raised per semester

€1.05 billion

7 deals

2018 (S1)

€1.53 billion

11 deals

2019 (S1)

Δ +46%

Germany

€1.09 billion

10 deals

2018 (S1)

€3.04 billion

15 deals

2019 (S1)

Δ +178%

United Kingdom

€0.33 billion

4 deals

2018 (S1)

€1.06 billion

12 deals

2019 (S1)

Δ +221%

France

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© 2019 EY & Associés.All rights reserved.Studio BMC France - 1907BMC334.SCORE France No. 2019-040.Photo credit: Unsplash, Shutterstock.ED None.

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This publication is for general information only and is not intended to replace professional accounting, tax or other advice. You should consult your advisors on any specific matters.

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Franck SebagPartner, EY & Associés Tel: +33 (0)1 55 61 31 29 Email: [email protected]

Coralie ConstantMarketing, EYTel: +33 (0)1 55 61 33 61Email: [email protected]

Quentin Hacquard Media Relations, EYTel: +33 (0)1 55 61 35 47Email: [email protected]

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EY French Venture Capital Barometer · EY French Venture Capital Barometer S1 2019 | 7 Methodology The EY Venture Capital Barometer for France includes the equity financing transactions