2016 European Venture Capital Report

January 2017

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Founded in 2013 in Amsterdam, team across Europe

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enrich content in growth areas

Predict company activity, identify

trends and areas of growth

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Open data: the winning model

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With over 12,000 contributors throughout Europe, Dealroom

captures more venture capital activity than any other data provider in

Europe.

Record € 16.2B venture capital raised by European companies in 2016. Funding up 12%, rounds up 32%

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2012 2013 2014 2015 2016

€ 4.2M € 4.9M

€ 10.1M

€ 14.4M€ 16.2M

1,290

1,853 2,120

2,566

3,376

Amount raised (€ M) Top 8 rounds (€ M) Number of rounds

Top-8 rounds

(+32%)

(+12%)

Source: Dealroom.co. Includes Israel. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

United Kingdom Germany France Israel Sweden Other

€ 1.3B€ 1.3B

€ 3.2B

€ 3.8B

€ 3.2B

€ 0.6B€ 0.6B

€ 2.0B

€ 2.9B

€ 2.0B

€ 0.5B€ 0.6B€ 0.8B

€ 1.5B

€ 2.7B

€ 0.5B€ 0.5B

€ 1.2B

€ 1.8B

€ 2.7B

€ 0.2B€ 0.3B€ 0.5B

€ 1.0B

€ 1.6B

€ 1.1B

€ 1.6B

€ 2.4B

€ 3.4B

€ 4.0B

410

542

644 545 520

165 245

288 353 380

118 167 180

243

590

88 132 166

241 231

57 42 82 163

366 452

725 760

1,021

1,289

Amount raised (€ billion) Number of rounds

Slowdown in UK and Germany, but strong growth across most parts of Europe

6Source: Dealroom.co. Includes Israel. Excludes private equity, M&A and buyouts. More data on: https://app.dealroom.co/markets/countries/funding

UK & Germany: 43% drop in B2C funding. Many B2C markets adequately funded, focus on execution.

7Source: Dealroom.co. More info: https://app.dealroom.co/funding-rounds/f/locations/anyof_Germany_United%20Kingdom

B2C (UK & Germany only)

B2B (UK & Germany only)

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016Business Consumer

€ 0.7B € 0.7B

€ 1.8B € 1.6B € 1.6B

€ 0.5B € 0.5B€ 1.1B

€ 2.2B

€ 1.3B€ 0.2B € 0.3B

€ 0.4B € 0.8B € 0.6B

€ 0.3B € 0.3B

€ 1.6B

€ 2.4B

€ 1.3B

€ 1.0B € 1.0B

€ 2.2B € 2.4B€ 2.2B

€ 0.8B € 0.8B

€ 2.6B

€ 4.6B

€ 2.6B 277

366 431 423

497

255

359 413

406 336

UK Amount raised (€ billion) Germany Amount raised (€ billion) Number of rounds

Largest ever European cohort of early stage startups

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2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016Angel & Seed Series A / Early VC Series B, C Series D+ Other

€ 0.3B€ 0.5B€ 0.6B€ 0.9B

€ 1.2B€ 0.9B

€ 1.3B€ 1.7B

€ 2.7B

€ 3.8B

€ 1.1B€ 1.4B

€ 2.7B

€ 3.7B€ 4.0B

€ 1.5B€ 1.1B

€ 3.8B

€ 6.3B

€ 5.4B

€ 0.4B€ 0.6B

€ 1.4B€ 1.6B€ 1.7B 621

967 996

1,301

1,748

245 317

378

567

879

104 129 173 215 266

60 50 89 178 198

260 390

484

305 285

Amount raised (€ billion) Number of rounds

Early stage Later stage

Source: Dealroom.co. More info: https://app.dealroom.co/funding-rounds/f/rounds/anyof_SEED_SERIES%20A_SERIES%20B_SERIES%20C

Seed Series A Series B Series C Series D –

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

31%

16%

9% 5%

21%

8%

2009 cohort 2010 cohort 2011 cohort 2012 cohort 2013 cohort% of startups reaching next funding round

Fewer startups (%) are reaching the next funding round stage (to an extend this should be expected)

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

2013 and earlier.

COHORT SEED SERIES A SERIES B SERIES C SERIES D2009 100% 33% 16% 7% 4%2010 100% 31% 16% 9% 5%2011 100% 22% 12% 3%2012 100% 22% 9%2013 100% 21% 8%

Recent years saw more European than ever startups, but a smaller proportion reaching the next funding round stage

This is likely due to a combination of increased competition and higher risk appetite by VCs

Not reaching series-A does not necessarily equal failure. Reasons may be that company became profitable

Especially beyond series-A/B companies often do not need additional funding

About 20-30% of seeded companies also do series-A round. Thereafter, follow-on rate is about half for each stage

9Source: Dealroom.co.

Round sizes have come back down in 2016, which indicates that valuations have probably as well

10Source: Dealroom.co.

2012 2013 2014 2015 2016

€ 0.5M€ 0.5M

€ 0.6M

€ 0.7M € 0.7M

€ 0.1M€ 0.2M

€ 0.3M€ 0.3M

€ 0.4M

AverageMedian

Series C rounds

Seed rounds Series A rounds

2012 2013 2014 2015 2016

€ 3.7M

€ 4.5M€ 5.0M

€ 5.7M€ 5.4M

€ 2.5M € 2.5M

€ 3.6M € 3.6M € 3.6M

AverageMedian

2012 2013 2014 2015 2016

€ 7.8M€ 9.2M

€ 13.5M € 13.4M€ 11.8M

€ 5.6M € 5.9M

€ 8.2M

€ 10.0M€ 9.1M

AverageMedian

2012 2013 2014 2015 2016

€ 15.9M€ 13.5M

€ 21.1M

€ 26.3M€ 23.1M

€ 10.9M € 10.0M

€ 17.0M€ 19.1M € 18.2M

AverageMedian

Series B rounds

Corporate investment activity continued its rise, both via corporate venturing and balance sheet investing

111. Total gross amount raised in rounds with corporate involvement.

Source: Dealroom.co. Rocket Internet is not counted here as corporate investor. More info:

https://app.dealroom.co/investors/f/investor_type/anyof_corporate%20venture%20fund_corporate

Corporate investing by number of rounds Corporate investing by € amount funded (1)

2012 2013 2014 2015 2016

69 104

160

314

545

5.3% 5.6%

7.5%

12.2%

16.1%

Corporate venture fund

Corporate direct

% of total European rounds

2012 2013 2014 2015 2016

€ 0.6B € 0.8B

€ 1.3B

€ 3.7B

€ 4.9B

15.1% 16.0%

13.4%

25.4%

30.0%

Corporate venture fund

Corporate direct

% of total European rounds

30% of corporate investors are U.S. based (while only 13% of fund

investors are U.S. based). The share of European corporate

deals is rapidly increasing though.

€9.7 billion (1) in new capital raised by European VCs in 2016 (+50%) which may fuel 2017 and beyond

121. Source: Yannick Roux, Atomico, InvestEurope.

50% growth in new capital raised by

European VCs

In 2016, U.S. funds invested roughly €3.6 billion into

European VC rounds. U.S. consistently contribute about 20-25% of total

European VC.

Growth funds increasingly

participate in large venture rounds

Corporate investing is rapidly on the

increase (see next slide)

Combined with existing funds, more than enough to support investment levels similar to or

higher than 2016 of €16.2 billion

2015

2016

U.S

. Fun

ds

Gro

wth

fun

ds

Corp

orat

e in

vest

ing

Indi

cati

ve

2016

fun

ding

Capital raised from LPs by Eu-ropean funds

Other sources available firepower

deployed

€ 6.3B€ 9.7B

€ 4.0B € 2.0B € 2.0B € 17.7B € 16.0B

USA

United Kingdom

France

Israel

Germany

Sweden

Spain

Netherlands

Ireland

Finland

Russia

Belgium

Italy

Norway

Denmark

Austria

Portugal

Turkey

€ 3.2B

€ 2.7B

€ 2.7B

€ 2.0B

€ 1.6B

€ 0.6B

€ 0.4B

€ 0.4B

€ 0.3B

€ 0.3B

€ 0.2B

€ 0.2B

€ 0.2B

€ 0.1B

€ 0.1B

€ 0.0B

€ 0.0B

How much headroom is there still in European VC?Funding per capita indicates there is still room

131) USA data is a Dealroom estimate based on CB Insights and PitchBook data.Source: Dealroom.co.

USA

Russia

Germany

Turkey

France

United Kingdom

Italy

Spain

Netherlands

Belgium

Portugal

Sweden

Austria

Israel

Denmark

Finland

Norway

Ireland

325M

147M

82M

79M

67M

65M

61M

47M

17M

11M

10M

10M

9M

9M

6M

6M

5M

5M

Population = VC funding per capita÷ 2016 VC funding

€ 70-75B (1) // Israel

USA

Sweden

Ireland

Finland

United Kingdom

France

Norway

Denmark

Germany

Netherlands

Belgium

Spain

Austria

Portugal

Italy

Russia

Turkey

€ 313

€ 231

€ 160

€ 77

€ 59

€ 49

€ 41

€ 30

€ 25

€ 24

€ 24

€ 22

€ 13

€ 9

€ 4

€ 3

€ 2

€ 0