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Index Ventures!
Giuseppe Zocco!Co-founder,!Index Ventures!!!European Entrepreneurship & Innovation!Stanford Engineering!
Monday, February 24, 2014 !
Index Ventures!
Index Ventures !
– Active since 1996!
– Geneva, London, San Francisco!
– Active in multiple tech hubs!
– 120 companies in 20 countries, 39 cities, employing 20k people worldwide!
– Create (seed), develop (venture), accelerate (growth) !!
2!Stanford Engineering!
Index Ventures!
Who we look for !
– European born, building global category leaders!
– US companies with breakout international potential!
– Regional heroes!
– Tech and business model innovation!
– + scalability + originality + missionary + product DNA !
3!Stanford Engineering!
Index Ventures! 4!
Seed is the new A
Stanford Engineering!
Index Ventures!
Seed is the new A!
– Seed is fundamental to a healthy ecosystem!
– It can also produce great rewards e.g. Climate!
– Why we helped start Seedcamp in 2007!
– New models: Angellist, Kickstarter and Funding Cirlce!
– Pushes us to look earlier !!
5!Stanford!
Index Ventures! Stanford! 6!
Reshaping every sector of the economy
Index Ventures!
VC Backed cos are reshaping every sector of the economy!
– Web+cloud+saas+fb=!
– aws+ios+android+hadoop=!
– new frontiers beyond communications / media / entertainment !
– Agriculture, Healthcare, Financial Services, Education, Work, Fashion !
7!Stanford !
Index Ventures!
Massive increase in economic relevance of VC-backed companies !
– Share of economy!
– Share of employment; new employment!
– Index portfolio alone in 2013: ! Generated EUR 4bn revenue! Grew 75%! Created 12k new jobs !
!
8!Stanford !
Index Ventures! 9!
The US venture opportunity
Stanford!
Index Ventures! Presentation Title Date! 10!Section Title!
Index Ventures!
European Unicorns 2013!
11!Stanford !
Index Ventures!
VC is a risky business!
– We are all expert at killing deals!
– But need to keep thinking about what could go right?!
12!Stanford !
Index Ventures!
Focus on the game-changers, leads to outsized returns !
13!Stanford !
Index Ventures!
Risk with reward !
14!
– Power law: 62% of investments 1x and less but winners are massive!
– For example; ASOS, Climate Corp, Criteo, MySQL, Playfish, Pure Storage, Skype, Supercell!
– …but big exits can take time!
Stanford !
Index Ventures!
VC is not a local business!
– Index made 30 early and later stage investments since early 2012!
– + 40 seed deals!
15!
San Francisco
Amsterdam
London
Dusseldorf Copenhagen
New York
Tel Aviv
Aachen
Chicago
Prague
Paris
Los Angeles
Helsinki
Stanford !
Index Ventures! Stanford! 16!
It’s a global business!
Index Ventures!
N. American v. European VC!
Europe $4.7bn 11%
North America $32.5bn 79%
RoW $3.9bn 10%
$4.1bn
$29.5bn
$4.7bn
$32.5bn
0
5
10
15
20
25
30
35
Europe North America
$bn Invested
2012 2013
857
4,267
1,064
4,499
0
1,000
2,000
3,000
4,000
5,000
Europe North America
# of Deals
2012 2013
Geographic Split of VC Investment (2013)! $bn Invested in Europe and N. America (2013)!
No. of Deals in Europe and N. America (2013)!
Source: CB Insights!
Stanford!
Index Ventures!
European VC is Growing, Relatively!
18!
-‐
50
100
150
200
250
300
350
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2010 2011 2012 2013
$ Ve
nture Ca
pital Invested (reb
ased
to 100)
Europe Funding US Funding
+215%!
Total $ of Venture Capital Invested Over Time (Rebased to 100)!
+95%!
Source: CB Insights!
Stanford!
Index Ventures!
Investments Are Across Stages!
19!
$119m
$605m
$490m
$1,106m
$833m
$237m
$368m
235 241
69 69
24
4 2 $0m
$200m
$400m
$600m
$800m
$1,000m
$1,200m
0
50
100
150
200
250
300
$0-‐1m $1-‐5m $5-‐10m $10-‐25m $25-‐50m $50-‐100m $100-‐250m
Num
ber o
f Deals
Amount Invested No of Deals
2013 VC Investments into European Companies by Stage!
Source: CB Insights!
Stanford!
Index Ventures!
And Across Geographies!
20!
0
50
100
150
200
250
300
350
$0m
$200m
$400m
$600m
$800m
$1,000m
$1,200m
$1,400m
$1,600m
UK Germany France Sweden Netherlands Ireland Italy Belgium Spain Denmark
No. of D
eals
Total A
mou
nt In
vested
$ Invested # of Deals
2013 VC Investments into European Companies, Top Countries!
Source: CB Insights!
Stanford!
Index Ventures!
Types of approaches!
– New entrants attacking entrenched incumbents!
– Lifeline for incumbents!
– New entrants creating a market !!
21!Stanford !
Index Ventures!
Embrace Risk !
22!
!– It’s a lot cheaper to fail now!
– Too much capital is chasing fast IRR rather than big multiple!
– Focus on enabling innovation!
Stanford!
Index Ventures!
Giuseppe Zocco!Co-founder,!Index Ventures!
February 24, 2014 !
