Europe & Israel 2016 VC Year in Review

Venture Capital in Europe & IsraelVenture Investment Data: 2016 Year in Review

Prepared by Gil Dibner

Millau Viaduct, France – Highest bridge in EuropeLength: 2.5 km; Maximum clearance: 270 meters blog

https://twitter.com/gdibner

http://www.angel.co/gdibner/syndicate

https://www.linkedin.com/in/gildibner

http://yankeesabralimey.tumblr.com/

The data• The data in this report consists entirely of data I’ve gathered manually based on

publicly available, free sources• No paid data sources or API calls were harmed in the making of this dataset, every

investment was manually classified• This allows analysis of some aspects of the data I consider important – aspects that

don’t appear in other data sources. More importantly, it allows me to exclude deals that are really not “venture capital” rounds but tend to get included by others

• Seed investment is under-reported and adds a lot of noise to the data set, so I exclude deals under $500K

• The analysis is limited to ICT categories and excludes life sciences• The analysis excludes Turkey and FSU countries• I’m converting all currencies into USD using monthly average exchange rates

Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 2





Top 10 deals by region in 2016 (US $M)

France & Benelux IsraelIberia

UK & Ireland DACH Nordic


35

35

37

38

47

50

75

108

109

150

Drivy

Zenly

Finanzcheck

Navya

Teads

Showpad

Tradeshift

Devialet

Deezer

SigFox

0 50 100 150 200

60

70

70

72

76

89

96

100

180

300

Lumus

Via

Zerto

Sirin

ForeScout

BlueVine

Skybox Security

Voyager Labs

Payoneer

Gett

0 100 200 300 400

20

21

21

25

33

35

36

38

49

88

The Future…

Swap.com

Visedo

Vivino

AlphaSense

Klarna

Neo4j

M-Files

StarBreeze

Apptus

0 20 40 60 80 100

49

54

70

85

90

90

100

100

216

374

Movinga

Brillen.de

SoundCloud

Sonnen Group

Hello Fresh

Heliatek

Innogames

MindMaze

GoEuro

Global Fashion Group

0 100 200 300 400

5050505254

606570

110170

192275

MUBIIntercom

HighQNutmegBlippar

Student.comDarktrace

StarlingFarFetch

FutureFinanceSkyscanner

Deliveroo

0 50 100 150 200 250 300

7

8

8

12

22

38

42

55

56

120

TravelPerk

Coverwallet

Verse

ABA English

Veniam

CornerJob

Jobandtalent

OutSystems

Hawkers

Cabify

0 50 100 150





Top 10 deals by type 2016 (US $M)

Systems SemiconductorEnterprise

Consumer Financial Commerce


54

55

65

70

75

76

88

96

100

180

Blippar

OutSystems

Darktrace

Zerto

Tradeshift

ForeScout

Apptus

Skybox Security

Voyager Labs

Payoneer

0 50 100 150 200

108

109

110

120

170

192

216

275

300

374

Devialet

Deezer

FarFetch

Cabify

FutureFinance

Skyscanner

GoEuro

Deliveroo

Gett


0 100 200 300 400

36

37

40

43

45

52

70

75

89

170

Tandem

Finanzcheck

Number26

EZBob

World Remit

Nutmeg

Starling

Tradeshift

BlueVine

FutureFinance

0 50 100 150 200

29

35

38

45

50

50

72

85

100

108

Airobotics

Formlabs

Navya

Egym

Phinergy

Roboteam

Sirin

Sonnen Group

MindMaze

Devialet

0 20 40 60 80 100 120

45

50

54

56

90

110

192

216

275

374

Home24

Vroom

Brillen.de

Hawkers

Hello Fresh

FarFetch

Skyscanner

GoEuro

Deliveroo


0 100 200 300 400

15

17

17

20

20

25

25

30

35

38

Kandou Bus

Oryx

MultiPhy

ColorChip

Valens

Autotalks

Satixfy

GraphCore

Acco

Celeno

0 10 20 30 40





Quarterly pace of venture investment• In 4Q16, Europe & Israel saw

$3.5 billion flowing into 450 venture transactions

• This represents a slight improvement from 3Q16 and 4Q15 levels, but well below 2Q16

• In total, there was $14.5B of venture investment into Europe & Israel in 2016 in 1,795 transactions

• These numbers, and the rest of this deck, do not reflect the $1B in debt raised by Spotify in March

Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 52,873

3,139

3,252

2,857

3,730

4,114

3,122

3,519

0

100

200

300

400

500

600

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2015 2016

Amou

nt in

vest

ed (U

S $M

)

VC Investments in Europe & Israel

Invested amount (US $M) Number of investments

http://www.wsj.com/articles/spotify-raises-1-billion-in-debt-financing-1459284467





Monthly pace of venture investment

• Looked at on a monthly basis, the slight pick up in 4Q was due mostly to a strong October

• December was seasonally weak in 2015 and 2016

• As would be expected, European & Israeli VC investment trends show seasonal slowdowns in summer (July, August) and winter (December)


905

971

997

791

787

1,561

1,518

571

1,164

1,084

1,059

715

1,657

1,051

1,021

1,401

1,452

1,261

725

1,101

1,296

1,457

1,170

893

0

20

40

60

80

100

120

140

160

180

200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jan

Feb

Mar

Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c

Jan

Feb

Mar

Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c


2015 2016

Amou

nt in

vest

ed (U

S $M

)

VC Investments in Europe & Israel(January 2015 - December 2016)

Invested amount (US $M) Number of investments





Mega-rounds skew the investment totals• This analysis breaks down VC

investments into brackets by size:

• Seed (less than $2M)• Early venture ($2-8M)• Venture ($8-20M)• Growth ($20-100M)• Mega ($100M+)

• Six mega-rounds took place in Europe in 4Q16

• Devialet (France, $108M)• GoEuro (Germany, $146M)• Innogames (Germany, $100M)• Sigfox (France, $150M)• Payoneer (Israel. $180M)• Voyager Labs (Israel, $100M)

• Adjusting for mega-rounds, 4Q16 was about $110M less than 3Q16, the second quarterly decline in a row


354 371 510 602 635 592 707716 567

559730 695 752 651

8131,513 1,187

1,650 1,6791,336 1,197

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2015 2016

Amou

nt In

vest

ed (U

S $M

)

Pace of VC Investment in Europe and Israel

Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)





Strong year-over-year growth

• 2016 saw 20% more venture investment than 2015

• Early venture deal volume increased 67%, venture volume increased 18%, growth volume increased 26%.

• Mega-deal volume was down 18%


437 7261,520

2,536

2,397

2,828

4,667

5,862

3,100

2,534

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2015 2016

Tota

l VC

inve

stm

ent (

US $

M)

VC investment volume in Europe and Israel by bracket(2015 vs 2016)

Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)





Number of investments, by bracket

• Excluding seed deals, the total number of VC investments per quarter was 275 in 4Q16, a new record level since I started tracking this data


77 85 94

140 153 157 14418142

62 44

4661 57

64

53

33

26 38

35

44 5240

35

66 4

3

4 41

6

0

50

100

150

200

250

300


2015 2016

Num

ber o

f VC

inve

stm

ents

VC investment volume in Europe and Israel by bracket

Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)





No evidence of a Brexit effect on deal volume

• The biggest story in the UK in 2016 was, undoubtedly, the Brexit referendum on June 23

• Looking just at UK VC deal volume, there’s so far no evidence that Brexit caused any slowdown whatsoever in VC activity

• There were an average of 14 VC deals per month in 2H15 (pre-Brexit referendum)

• There were an average of 19 VC deals per months in 2H16 (post-Bredit referendum)


0

5

10

15

20

25

30

Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c

Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2014 2015 2016

Num

ber o

f VC

inve

stm

ents

VC investment volume in the UK by bracket






Corporate VC activity, by bracket

• Excluding seed deals, the total number of corporate VC investments stayed flat at 44 in 4Q16 compared to 3Q16

• Overall, there were 196 corporate VC investments in Europe & Israel in 2016 compared to 123 in 2015, an increase of 59%


6 4 516

7

22 19 23 1927

43

9

12

7

12

6

1619 5

44

7

8

7

720

18

69

3

13

3

3

0

10

20

30

40

50

60

70


2014 2015 2016

Num

ber o

f VC

inve

stm

ents

Corporate VC investment volume in Europe and Israel by bracket






Corporate VC activity, by country

• During 2016, Israel saw the highest number of corporate VC investments, with 70

• The UK saw 39 corporate VC investments during the year

• France and Germany each saw 21 corporate VC investments in 2016

• 13 other countries saw corporate VC activity across Europe, but at much lower levels


22 1910 8 6 5

22

9

25

10

7 6

0

10

20

30

40

50

60

70

80

Isra

el UK

Ger

man

y

Fran

ce

Swed

en

Switz

erla

nd

Spai

n

Italy

Belg

ium

Finl

and

Denm

ark

Nor

way

Icel

and

Esto

nia

Net

herla

nds

Pola

nd

Port

ugal

Num

ber o

f inv

estm

ents

Number of corporate VC investments in Europe and Israel by bracket(2016)






Average round size• Previously, I presented this

broken down by bracket, but I think the data is more meaningful when taken in aggregate.

• This average excludes seed rounds and mega rounds, so it reflects all rounds done in Europe & Israel between $2M and $100M

• With very few exceptions, most months saw average round sizes of $10-12M and there is seems to be little pattern other than mean reversion

• 3Q15 is the only systematic outlier to this trend, with average round sizes of $12-15M throughout the quarter

• Round sizes seemed to dip in 4Q16, with November seeing the lowest average round size since September 2014


4

6

8

10

12

14

16

18

20

Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c


2014 2015 2016

Amou

nt In

vest

ed (U

S $M

)

Average investment size in Europe and Israel(Round sizes of 2-100M)





Total venture investment by country, 4Q 2016

• Israel saw the most VC investment in 2016, with $3.9B raised

• The UK came in second place, with $3B raised

• Germany saw the third-highest amount of venture investment, with $2.3B


3,9743,033

2,2701,795

712419

382305300

280199

128122107103

835647453635

187555442111

IsraelUK

GermanyFrance

SwedenSpain

IrelandNetherlandsSwitzerland

FinlandBelgium

DenmarkNorway

ItalyPortugal

PolandAustriaSerbia

LuxembourgIcelandEstonia

BulgariaCzech

SloveniaGreece

LatviaLithuaniaSlovakiaAlbania

HungaryRomania

Croatia

Total VC investment volume by country, 2016 (US $M)





Total venture investment by country, 3Q14 to 4Q16• To get a better sense of VC

volumes in various countries, this analysis excludes mega-rounds

• With this filter, volumes and rankings are more consistent

• The biggest change in 4Q16 was a dramatic decline in Israeli VC volume, down to the lowest quarterly level in the past two years, but still just clinging to its first-place rank

• What is most notable important about this chart is the consistent gradual growth in Germany, France, and Sweden


315

567 543475

628699

963

1,064

877

490

369

267

719

437

625 444

871

553 544

487

180

284

389

209

379340 335

392460

463

29

163118

232 279224 279

367339 443

74123 89 112

14084

139 151198 224


200

400

600

800

1000

1200

Tota

l VC

inve

stm

ent (

US $

M)

Total VC investment, 3Q14 - 4Q16 (top 5 countries, excluding mega-rounds)

IsraelUKGermanyFranceSweden





Total venture investment by country, 3Q14 to 4Q16

• To get a better sense of VC volumes in various countries, this analysis excludes mega-rounds

• The “second five” countries for VC investment in 2016 were Finland, Ireland, the Netherlands, Spain, and –somewhat surprisingly -Switzerland

• After two very solid quarters, the Netherlands seemed to revert back to lower levels

• Switzerland edged out Denmark to round out the top ten



2014 2015 2016

0

20

40

60

80

100

120

140

160

180

Tota

l VC

inve

stm

ent (

US $

M)

Total VC investment, 3Q14 - 4Q16(countries ranked 6-10 in 2016, excluding mega-rounds)

Spain

Ireland

Netherlands

Switzerland

Finland





Average venture round sizes, by region

• For a while, I had been seeing a trend towards convergence in the sizes of rounds across the geography

• In 2016, this trend seems to be holding

• Most regions saw average round sizes flat or slightly down

• The DACH region saw a significant increase in average round size in 4Q16 compared to 4Q15


Benelux, 4.7

Benelux, 7.5

DACH, 14.9

DACH, 16.2

France, 8.2France, 7.6Iberia, 7.2

Iberia, 9.1

Israel, 15.9

Israel, 11.8Nordic, 11.5

Nordic, 7.0

UK & Ireland, 8.5UK & Ireland, 8.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Qtr4 Qtr4 Qtr4

2014 2015 2016

Aver

age

roun

d si

ze (U

S $M

)

Average investment size in Europe and Israel (rounds of $2-100M)





Total venture investment by region

• When VC investments across Europe are aggregated into regions, UK & Ireland, Israel, DACH, France, and the Nordics are the clear and consistent leaders

• Benelux, Iberia, Southern Europe, and Eastern Europe do produce meaningful VC investments, but the volumes are still low


Israel, 3,974

UK & Ireland, 3,415

DACH, 2,626

France, 1,795

Nordic, 1,322Benelux, 549

Iberia, 523

South. Eur., 167

East. Eur., 114

Total VC investment by region, 2016





Rounds by bracket & region

• To get a better sense of deal volume, this analysis excludes seed deals which are often poorly reported

• Excluding seed deals, the UK and Ireland saw 63 venture deals in the fourth quarter

• France took second place, with 55

• The Nordics had a very busy quarter, with 49 deals, up from 30 in 3Q

• Israel dropped to fourth place, with only 43 deals, down from 62 in 3Q


42 38 39

23 199 5 3 3

1210 6

11

7

13

1

9

54

7

8

1 1

2

2

2

0

10

20

30

40

50

60

70

UK &Ireland

France Nordic Israel DACH Iberia Benelux East. Eur. South. Eur.

Num

ber o

f inv

estm

ents

Number of investments in Europe and Israel by bracket, 4Q 2016






Participation rate of US VC firms, by bracket

• In the fourth quarter, US VCs participated in 8% of the VC financing rounds in EU and Israel

• As usual, US VCs are much more likely to participate in later rounds

• US VCs participated in only 1 of 6 mega-rounds in 4Q16


0% 9%17%

23%17%

100%91%

83%77%

83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Seed (.5-2) Early Venture (2-8) Venture (8-20) Growth (20-100) Mega (>100)

Perc

enta

ge o

f rou

nds

Did US VC firms participate in European VC rounds? (4Q16)

No Yes





US VC firm participation rate drops in 4Q

• In 4Q, US VCs participated in about 12% of the rounds that took place in Europe

• This rate is the lowest since I’ve been tracking the data

• This analysis excludes seed and mega-rounds


15%23% 17% 20% 20% 16% 16% 21% 21%

12%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

Perc

enta

ge o

f Rou

nds

Did US VC firms participate in European VC rounds?(Rounds of $2M-$100M, 3Q14-4Q16)

No US VC in the round US VC in the round





US VC firm participation rate vary widely by country

• Rates of US VC participation vary wide across different countries

• On this metric, in 2016, Estonia, Israel, and Portugal leap to the top of the list, with 60%, 34%, and 29% respectively

• Italy and France bring up the rear, with only 6% and 5%


100%

60%

34% 29% 26% 24% 24% 23% 22%13% 11% 10% 10% 8% 6% 6% 5%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bulgaria

Estonia

Israel

Portugal

Switzerland

Ireland

Netherlands

Germ

any

Poland

UK

Sweden

Finland

Spain

Norw

ay

Belgium

Italy

France

Perc

enta

ge o

f Dol

lars

Inve

sted

Did US VC firms participate in European VC rounds?(2016)

No US VC in the round US VC in the round





Participation of US VC firms by country

• In 2016, US VCs firms were active in 17 different European countries

• US VC firms were most active in Israel, where they participated in 80 investment rounds

• The UK saw 31 US investments

• US VCs invested in 26 German companies

• France and Sweden both saw 9 US VC investments in 2016


80

31 26

9 9 7 50

10

20

30

40

50

60

70

80

90

Isra

el UK

Ger

man

y

Fran

ce

Swed

en

Switz

erla

nd

Net

herla

nds

Irela

nd

Spai

n

Esto

nia

Finl

and

Port

ugal

Pola

nd

Bulg

aria

Belg

ium

Italy

Nor

way

Num

ber o

f VC

inve

stm

ents

Rounds with a US VC involved(2016)





Participation of US VC firms by country

• This chart shows US VC activity within Europe throughout 2015 and 2016

• The overwhelming bulk of US VC activity is generally in Israel, the UK & Ireland, DACH

• In 4Q, there was only 1 US VC investment in the UK & Ireland

• The Nordics, however, continued to show strength –rising to 6 US VC investments in 4Q16


Israel, 12 Israel, 14 Israel, 14 Israel, 14 Israel, 16

Israel, 27 Israel, 25

Israel, 12

UK & Ireland, 10

UK & Ireland, 14UK & Ireland, 10 UK & Ireland, 8

UK & Ireland, 11

UK & Ireland, 11UK & Ireland, 12

UK & Ireland, 1

DACH, 8

DACH, 6

DACH, 4 DACH, 9DACH, 6

DACH, 8 DACH, 8

DACH, 11

Nordic, 2

Nordic, 3

Nordic, 5Nordic, 5

Nordic, 5

Nordic, 4

Nordic, 6

Iberia, 3

Iberia, 4 Iberia, 3

Iberia, 2

France, 3

France, 2

France, 2

France, 3 France, 3

Benelux, 5

Benelux, 3 Benelux, 3

0

10

20

30

40

50

60


2015 2016

Num

ber o

f VC

inve

stm

ents

Investments with US VC participation

Israel UK & Ireland DACH Nordic Iberia France Benelux East. Eur. South. Eur.





Dimension Categories Explanation/Example

1. Target market Consumer, SMB, Enterprise, Government, Telecom, OEM

What sort of customer does the company target?

2. Vertical marketAdtech, Communications, Data, Development, Durables, Education, Electronics, Employment, Energy, Fashion, Financial, Food, Gaming, Health, HMI, Industrial, Infrastructure, Lifestyle, Logistics, Marketing, Media, Productivity, Real Estate, Security, Sports, Storage, Transportation, Travel, Water

What type of problem does the company solve?

3. Business modelCommerce, Components, Content, Marketplace, SaaS, Semiconductors, Services, Software, Systems,

How does the company makemoney? How is value delivered to customers? What are customers paying for?

For example: Consumer + Travel + Marketplace AirBnB has built a travel-related marketplace for consumers

Three-dimensional approach to sector mapping






• Excluding mega-rounds, investment activity decreased in both consumer and enterprise, continuing a trend from 3Q

• Investment activity has been continued to trend up in OEM-oriented companies –with volumes nearly doubling in 4Q compared to 3Q

What target markets are attracting the most VC investment in Europe & Israel?


980 8501,177

931 1,076 1,244 1,097 1,004

953804

9101,110

1,6541,640

1,269962

275

224

270

182150

163 187

219423

0

500

1,000

1,500

2,000

2,500

3,000

3,500


2015 2016

Tota

l VC

inve

stm

ents

(US $

M)

European & Israeli venture financing by target market3Q14 to 4Q16 (excluding mega-rounds, US $M)

Agriculture

Government

Telecom

OEM

SMB

Enterprise

Consumer





• When Israel is excluded from the sample, 45% of all VC dollars in Europe went to consumer-oriented companies – the lowest level in two years

• OEM-oriented companies continued their rise, accounting for 10% of all VC dollars in Europe in 4Q

• Telecom also showed a resurgence, at 6% in 4Q

• It’s nearly invisible in the graph, but Agtech accounted for 1.5% of total volume in 4Q

Consumer investment leads Europe


62%

36%

56% 63% 62% 57% 53% 58% 52%45%

18%

48%

34% 22% 24% 31% 35%33%

32%

29%

6%10% 4% 12% 8% 6% 5% 3%

7%

8%

5%4% 2% 4% 5% 6% 5% 8%

10%

6% 6%8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market3Q14 to 4Q16 (excluding Israel, percent of US $M)

Agriculture Government Telecom OEM SMB Enterprise Consumer





• When the sample set is limited to rounds under $20M, the ratio of consumer to enterprise investments shifted a bit towards enterprise

• Consumer investments as a percentage of rounds accounted for 41% of early rounds compared to 40% for enterprise

Early-stage consumer deals come back


39%50% 46% 41% 46% 50%

38%46% 46% 41%

41%36% 50%

47% 39% 35%46%

40%32% 40%

9% 7% 9% 6% 9% 5%11% 7%

11%7% 5% 5% 9% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market3Q14 to 4Q16 (excluding Israel, rounds up to $20M, percent of US $M)






Breakdown by region & target market

• In 2016, consumer companies represented the plurality of investments in all regions except for Israel and Benelux


945

1,847 1,709

831537 304

2,4071,179

431

564526

349Enterprise, Iberia,

194

192

343

165

304

182

160

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Israel UK &Ireland

DACH France Nordic Benelux Iberia South.Eur.

East. Eur.

Tota

l am

ount

inve

sted

(US $

M)

Investment in Europe and Israel by target market by region2016 (US $M)






Distribution of investment rounds by country

• Across Europe & Israel, 44% of VC investment rounds were in consumer companies in 2016

• Agtech accounted for 3% of investments in South Europe, and 2% in DACH and Israel

• Nearly two-thirds of Israeli venture investments were into enterprise companies


67%

54%

52%

48%

47%

43%

32%

19%

21%

32%

32%

31%

36%

41%

48%

63%

5%

10%

10%

9%

11%

9%

14%

5%

9%

5%

6%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

South. Eur.

Iberia

France

Nordic

DACH

UK & Ireland

Benelux

Israel

Investment in Europe and Israel by target market by country2016 (Number of investments)

Consumer Enterprise SMB OEM Telecom Government Agriculture





Growth rounds by target market

• The later-stage market in Europe & Israel diversified in 4Q16, with increased focus on OEM companies (20%) and SMB-oriented businesses (12%)


56%

37%46%

56%43% 39% 38% 43% 44%

34%

25%

41%

46% 25%38% 50% 50%

50% 44%

32%

6% 7%

5%

9% 12%3% 6% 5%

12%

6% 11% 6% 7% 5% 6% 5% 5%20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

Investment in Europe and Israel by target market(Rounds over $20M, number of investments)

Government Telecom OEM SMB Enterprise Consumer





• Fintech was the most popular vertical across Europe & Israel, with 178 investments in the category

• Marketing-related startups were the second most popular category with 109 investments in 2016

• Lifestyle (a catchall category for consumer commerce) was the third most popular vertical, with 99

Finance returned to being the top vertical


1414

232324

343839404142434445

4748

5253

566364646565

708181

8699

109178

SCMERPHMI

AgtechAutomotive

SocialEnergy

DevelopmentReal Estate

PaymentsGaming

EducationEntertainment

CommunicationsProductivity

FashionCRMFoodData

HealthIndustrial

AdtechTravel

LogisticsEmployment

InfrastructureSecurity

ElectronicsLifestyle

MarketingFinancial

European & Israeli venture financing by target market2016 (top 30 categories, number of investments)





• This graph shows number of investments in the top 16 verticals across 2015 and 2016

• Most categories showed significant increases, in line with the overall trend

How have the most popular verticals grown?


Financial, 97 Financial, 145

Marketing, 106Marketing, 95

Lifestyle, 65Lifestyle, 84Security, 60Security, 73Electronics, 49

Electronics, 75Infrastructure, 55

Infrastructure, 66Employment, 42

Employment, 64

Logistics, 45

Logistics, 58

Adtech, 48

Adtech, 55

Health, 51

Health, 45

Travel, 33

Travel, 58

Fashion, 42

Fashion, 43

Data, 37

Data, 43

Productivity, 38

Productivity, 40

Industrial, 23

Industrial, 55

Development, 44

Development, 30

Education, 32

Education, 40

Food, 28

Food, 44

Gaming, 31

Gaming, 36

Communications, 25

Communications, 41

0

200

400

600

800

1,000

1,200

2015 2016

European & Israeli venture financing by vertical market(top 15 verticals, number of investments)





• This graph shows the change in the number of investments by vertical across 2015 and 2016

• Automotive, agtech, and imaging skyrocketed in frequency

• Strong growth was seen in CRM, industrial, energy, storage

• Sport, dating, and music saw substantial declines

Growth rates by vertical


Music, -80%Dating, -75%

Sports, -50%Development, -11%

Durables, -7%Social, -6%

Legal, 0%Marketing, 3%

Fashion, 14%Health, 24%Productivity, 24%ERP, 27%Adtech, 33%Education, 34%Security, 35%Gaming, 35%Logistics, 44%Infrastructure, 47%Data, 51%Payments, 52%Lifestyle, 52%

Employment, 67%Entertainment, 69%Electronics, 76%Communications, 80%Financial, 84%Food, 89%Travel, 97%SCM, 100%Water, 100%

Real Estate, 111%HMI, 130%

Storage, 150%Energy, 171%Industrial, 178%

CRM, 189%Imaging, 400%

Agtech, 475%Automotive, 1100%

Change in number of VC investments by vertical (2016 vs. 2015)





• Finance was once again the most frequently funded vertical

• Consumer lifestyle companies took second place

• Marketing was the third most frequently funded vertical, with enterprise-oriented marketing taking the lion’s share within that category

Which verticals for which segments?


Employment

Industrial

CRM

Food

Data

Logistics

Electronics

Infrastructure

Health

Marketing

Lifestyle

Financial

0 10 20 30 40 50 60

European & Israeli venture financing by target market4Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government





• This chart shows the ten most commonly funded verticals across Europe & Israel by quarter

The most popular verticals in the past 2 years



2014 2015 2016

0

50

100

150

200

250

300

European & Israeli venture financing by vertical market(number of investments, top 10 verticals)

Adtech

Health

Logistics

Electronics

Lifestyle

Employment

Security

Infrastructure

Marketing

Financial





• Investors continue to favor financial and health investments

• Fashion and gaming showed declines

Consumer VC investment trends



2014 2015 2016

0

20

40

60

80

100

120

140

160

180

European & Israeli venture financing by consumer verticals(number of investments, top 10 verticals)

Social

Travel

Health

Fashion

Food

Electronics

Logistics

Gaming

Lifestyle

Financial





• Enterprise marketing seems to have levelled off as an area for VC investment

• There was a marked decrease in security investments in 4Q

• Most other enterprise segments were largely stable

Enterprise VC investment trends



2014 2015 2016

0

20

40

60

80

100

120

140

160

180

European & Israeli venture financing by enterprise verticals(number of investments, top 10 verticals)

CRM

Financial

Industrial

Employment

Development

Data

Infrastructure

Adtech

Security

Marketing





• Security was the most commonly funded category in Israel, with 43 investments in 2016

• Infrastructure, marketing, and finance were next

A closer look at Israeli venture in 2016


Data

Industrial

Development

Adtech

Communications

Electronics

Financial

Marketing

Infrastructure

Security

0 5 10 15 20 25 30 35 40 45 50

Israeli venture financing by target market2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government





• Israeli deal volume declined in 4Q relative to record-setting quarters earlier in the year

• Much of this decline seems to be attributable to the Jewish high holidays which occurred this year in 4Q compared to 3Q in 2015

Pace of Israeli venture in 2016


0

5

10

15

20

25

30

35

Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c


2014 2015 2016

Num

ber o

f VC

inve

stm

ents

VC investment volume in Israel by bracket


2015-2016 monthlyaverage = 18

2015-2016 monthlyaverage = 18

Jewish holy days

Jewish holy days





• Over the past 24 months, Israeli VC investment volume averaged $277M per month

• 4Q trended below that level, but just slightly

Pace of Israeli venture in 2016


0

100

200

300

400

500

600

700

Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

cJa

nFe

bM

ar Apr

May Jun Jul

Aug

Sep

Oct

Nov De

c


2014 2015 2016

Amou

nt o

f VC

inve

stm

ents

(US $

M)

VC investment volume in Israel by bracket


2015-2016 monthlyaverage = $277





• The UK venture landscape was dominated by fintech, and consumer fintech in particular

• Marketing (mostly for the enterprise) was the second-most funded category in the UK

• Consumer lifestyle companies were the third most funded category in the UK

The UK VC market in 2016


CRM

Development

Education

Productivity

Real Estate

Infrastructure

Adtech

Employment

Lifestyle

Marketing

Financial

0 5 10 15 20 25 30 35 40 45

UK venture financing by target market2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Telecom





• Fintech led the German VC eco-system in 2016, with 24 investments

• Consumer travel was next, with 11

• Logistics and fashion (mostly but not exclusively for the consumer) were tied at 9 each

• Enterprise industrial also made a strong showing, with 7 investments in 2016

The German VC market in 2016


Lifestyle

Data

Employment

CRM

Marketing

Real Estate

Industrial

Logistics

Fashion

Travel

Financial

0 5 10 15 20 25 30

German venture financing by target market2016 (number of investments, top verticals)

Consumer

Enterprise

SMB





• As with the UK and Germany, the Nordics also saw more fintech companies funded than any other vertical

• Surprisingly, electronics tied with gaming for second place – split evenly between consumer electronics and OEM-oriented companies

• Health took fourth place with 19 rounds

The Nordic VC market in 2016


Employment

Entertainment

Infrastructure

Industrial

Energy

Lifestyle

Health

Gaming

Electronics

Financial

0 5 10 15 20 25 30 35 40 45

Nordic venture financing by target market2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government





• Not surprisingly, Sweden saw the most actively among Nordic nations across most verticals – with particular strength in financial, gaming, energy and entertainment

• Finland showed particular strength in gaming, health and infrastructure

The Nordic VC market by country


Employment

Entertainment

Infrastructure

Industrial

Energy

Lifestyle

Health

Gaming

Electronics

Financial

0 5 10 15 20 25 30 35 40 45

Nordic venture financing by target market2016 (number of investments, top verticals)

Sweden FinlandDenmark NorwayEstonia IcelandLatvia Lithuania





• Sweden is by far the most active venture market in the Nordics

• Gaming was the single most funded category in Sweden, followed closely by consumer finance and consumer lifestyle

The Swedish VC market in 2016


Food

Adtech

Communications

CRM

Productivity

Logistics

Industrial

Marketing

Entertainment

Health

Energy

Lifestyle

Electronics

Gaming

Financial

0 5 10 15 20 25 30

Swedish venture financing by target market2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Telecom





• Across France, consumer lifestyle, consumer electronics, and consumer travel were the most frequently funded categories

• Enterprise marketing was also significant

The French VC market in 2016


Education

Data

Real Estate

Financial

Food

Logistics

Marketing

Travel

Electronics

Lifestyle

0 5 10 15 20 25 30

French venture financing by target market2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government





• Italy dominated the consumer lifestyle and adtechcategories

• Poland and Italy each saw three electronics investments in 2016

Venture capital in Southern & Eastern Europe in 2016


EmploymentDurables

DataAgtech

ProductivityERP

SocialHealth

FoodFinancial

TravelFashionSecurityLogistics

MarketingElectronics

AdtechLifestyle

0 2 4 6 8 10

Venture financing by target market (S. Eur & E. Eur)2016 (number of investments, top verticals)

ItalyPolandGreeceCzechSloveniaSlovakiaSerbiaCroatiaRomaniaBulgariaAlbaniaHungary





• SaaS was the most funded business model in 2016, representing 27% of all VC dollars

• As software eats the world, services are becoming an increasingly important business model for venture-backed startups

• This continued into 2016, with services taking 24% of the venture dollars invested in Europe & Israel

• Systems – complete physical products – took fourth place at 9% of all venture dollars

• Marketplaces – businesses that serve a price discovery function – were just 6%

SaaS above all (but keep an eye on systems)


SaaS, 3,202, 27%

Services, 2,825, 24%

Software, 1,680, 14%

Commerce, 1,194, 10%

Systems, 1,129, 9%

Marketplace, 742, 6%

Media, 533, 5%

Components, 398, 3%

Semiconductors, 242, 2% Materials, 6, 0%

European & Israeli venture financing by target market2016 (in US $M) (excluding mega-rounds)





• SaaS and Services remained the top two business models by funding volume

• Commerce rose throughout 2016, taking third place in 4Q

• Systems moved up from last place in early 2015 to fourth place in 4Q16

• Marketplaces hit a new low and were in last place for the first time

Commerce resurgent and systems rising


0

200

400

600

800

1000

1200


2014 2015 2016

European & Israeli venture financing by business model(top seven, in US $M, excluding mega-rounds)

Services

SaaS

Software

CommerceMarketplace





• This graph provides a quick overview of the ten most commonly funded segments across the top ten countries for those segments

• In a nutshell:• UK consumer financial services• Israeli enterprise security

software• French consumer electronics• Swedish, Finnish, and British

games• French food commerce• And some other stuff….

EU+IL VC Cheat Sheet


0 10 20 30 40 50 60 70 80 90

Enterprise CRM SaaS

Consumer Food Commerce

Consumer Gaming Media

Consumer Fashion Commerce

SMB Financial Services

Consumer Electronics Systems

Enterprise Security Software

Consumer Lifestyle Commerce

Enterprise Marketing SaaS

Consumer Financial Services

Number of VC investments

Investment in Europe & Israel by segment by country2016 (top 10 segments, top 10 countries)

UK FranceIsrael SwedenGermany SpainItaly NetherlandsFinland Belgium





Once again, but this time more SaaS!

• During 2016, the most popular vertical by far for SaaS investments across the geography was marketing

• CRM (which includes sales tooling) was a distant second

• Productivity and developer tools were tied for third


0 10 20 30 40 50 60 70 80 90 100

Security

Financial

Adtech

Employment

Infrastructure

Data

Development

Productivity

CRM

Marketing

SaaS VC investment in Europe and Israelby vertical and target market, 2016 (top 10 verticals)

Consumer Enterprise Government SMB Telecom





Services investing in 2016

• This graph shows the top ten verticals within the services category in 2016 across Europe & Israel

• Financial services were far and away the most frequently funded vertical – mostly for consumers and SMBs

• Education services (edtech) was in (distant) second place, followed by logistics and adtech


0 20 40 60 80 100 120 140 160

Infrastructure

Marketing

Communications

Health

Entertainment

Payments

Adtech

Logistics

Education

Financial

Services VC investment in Europe and Israelby vertical and target market, 2016 (top 10 verticals)

Consumer Enterprise Government SMB Telecom





Focus on Industrial

• 2016 saw a dramatic rise in the number of industrial-oriented investments across Europe and Israel

• These investments concentrated in Israel (16), France (13), the UK (11), Germany (10), and Sweden (9)


0

2

4

6

8

10

12

14

16

18

Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2014 2015 2016

Num

nber

of i

nves

tmen

ts

Industrial - VC investment in Europe and Israel

Lithuania Poland Iceland Norway Finland IrelandSpain Denmark Switzerland Belgium Netherlands SwedenGermany UK France Israel





Focus on consumer systems

• 2016 also saw a substantial rise in the volume of consumer systems investments across Europe and Israel

• $564M was invested into this category in 2016 across 74 rounds, up from $189M across 39 rounds in 2015


0

5

10

15

20

25

0

20

40

60

80

100

120

140

160

180

200


2014 2015 2016

Num

ber of investmentsAm

ount

inve

sted

(US $

M)

Consumer Systems - VC investment in Europe and Israel

Amount

Number





Focus on agtech

• 2016 also saw growth in the number of agtechinvestments across Europe and Israel

• There were 23 deals in the space in 2016, up from 4 in 2015

• In 2016, there were 5 agtechdeals in Israel and 3 in each of the UK, France, and Switzerland


0

1

2

3

4

5

6

7

8

9


2015 2016

Num

nber

of i

nves

tmen

ts

Agtech - VC investment in Europe and Israel

Austria Croatia Ireland Estonia GreeceSpain Netherlands Sweden Norway SwitzerlandUK France Israel





Focus on agtech

• $86M was invested into agtech startups across Europe and Israel in 2016, up from $13 in 2015


0

1

2

3

4

5

6

7

8

9

0

5

10

15

20

25

30

35

40

45


2014 2015 2016

Num


ount

inve

sted

(US $

M)

Agtech - VC investment in Europe and Israel

Amount

Number





Focus on automotive

• 2016 also saw 23 automotive deals across Europe & Israel, up from 2 in 2015

• France led in this category, with 6 investments, all in 2016

• The UK was second, with 5


0

2

4

6

8

10

12

14


2015 2016

Num

nber

of i

nves

tmen

ts

Automotive - VC investment in Europe and Israel

Italy Finland Switzerland Sweden NetherlandsGermany Israel UK France





Focus on automotive

• $187M was invested into automotive startups across Europe and Israel in 2016, up from $27 in 2015


0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140


2015 2016

Num


ount

inve

sted

(US $

M)

Automotive tech - VC investment in Europe and Israel

Amount

Number





Based in , I was previously a partner at . Before that, I helped run the

European seed program for . I moved to London after seven years in

during which I worked as a VC with and . I’m originally from .

My VC investments include and . Angel investments include and many more.

If you found this useful, I hope you’ll subscribe to my blog.60

Gil Dibner

To invest in the best European & Israeli enterprise startups,

consider backing me on here. Lots of exciting stuff in thepipeline – and you’ll be in pretty good company.

https://twitter.com/gdibner/lists/announced-portfolio/members

http://yankeesabralimeysignup.myinstapage.com/


Thank youblog





Technology

Europe & Israel 2016 VC Year in Review