Europe & Israel 2Q16 - VC Deal Done

Venture Capital in Europe & IsraelVenture Investment Data: Second Quarter, 2016

Prepared by Gil Dibner

Skyline of Rome, home of over 900 churchesblog

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

publically 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

• Seed investment is still under-reported, but I got a bit better at capturing it in the fourth quarter. Rounds smaller than $500K are generally excluded from this analysis

• 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

2@gdibnerblog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies

http://www.twitter.com/gdibner



Quarterly pace of venture investment• In 1Q16, Europe & Israel saw

$4.0 billion flowing into 470 venture transactions

• This set a new quarterly record for both numbers

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


1,703 1,916 2,873 3,139 3,248 2,856 3,751 4,001

122

204

270 271286

357

463 470

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

0

50

100

150

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300

350

400

450

500

Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2

2014 2015 2016

Am

ou

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inve

ste

d (U

S $

M)

Nu

mb

er

of

inve

stm

en

ts

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• All three months of the

second quarter were strong, with particular strength in April and May

@gdibnerblog: yankeesabralimey 4Syndicate for European & Israeli Enterprise Companies

90

5

97

1

997

79

1

78

7

1,5

61

1,5

17

56

8

1,1

64

1,0

83

1,0

59

71

4

1,6

61

1,0

52

1,0

38

1,367

1,4

50

1,185

92 75 103 78 95 98 11965 102 111 124 122 164 149 150 149 159 162

0

200

400

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800

1,000

1,200

1,400

1,600

1,800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2

2015 2016

Nu

mb

er

of

inve

stm

en

ts

VC Investments in Europe & Israel, January 2015 - June 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+)

• Four mega-rounds took place in Europe this quarter – all of them consumer-oriented businesses:

• Cabify, Spanish on-demand taxi app,, raised $120M in April

• Global Fashion Group, a German online fashion retailer, raised $340M in April

• Farfetch, a British online fashion retailer, raised $110M in May

• Gett, an Israeli on-demand taxi app, raised $300M in May

• Adjusting for mega-rounds, 2Q16 was slightly below 1Q16


285 354 368 507 602 609556

716 567559

731 686

1,154 8131,513 1,187

1,669 1,643

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500


2015 2016

Am

ount

Inv

este

d (

US

$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• 1H16 total investment volume

in Europe & Israel was up

27% over 1H16 (excluding

seed deals, where data is

more spotty)

• Early venture volume grew by

90% - almost doubling

• Venture volume grew by 11%

• Growth volume grew by 68%

• Mega round volume dropped

by 26%


6391,211

1,272

1,417

1,968

3,311

1,937

1,442

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2015 2016

Tota

l VC

inve

stm

en

t (U

S $

M)

VC investment volume in Europe and Israel by bracket

(1H16 vs 1H15)

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




Number of investments, by bracket• Excluding seed deals, the

total number of VC investments per quarter was 260 in 2Q16, just about the same as the 263 in 1Q16


6083 77 85 93

139 153 14930

26 4262 44

46

61 56

13

2633

26 38

35

45 51

3

1

6

6 4

3

4 4

0

50

100

150

200

250

300


2014 2015 2016

Nu

mb

er

of

VC

inve

stm

en

ts

VC investment volume in Europe and Israel by bracket

Mega (>100) Growth (20-100)

Venture (8-20) Early Venture (2-8)




Corporate VC activity, by bracket• Excluding seed deals, the

total number of corporate VC investments jumped to 57 in 2Q16

• Once again, corporate VC activity in Europe & Israel hit the highest level since this data set was started


6 4 5

16

7

2219 21

43

9

12

7

12

6

15

44

7

8

7

720

18

3

1

3

3

0

10

20

30

40

50

60


2014 2015 2016

Nu

mb

er

of

VC

inve

stm

en

ts

Corporate VC investment volume in Europe and Israel by bracket

Mega (>100) Growth (20-100)

Venture (8-20) Early Venture (2-8)




Corporate VC activity, by country• During the second quarter of

2016, Israel again saw the highest number of corporate VC investments, with 25

• The UK saw 10 corporate VC investments during that period

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

• Corporate VCs participated in three mega rounds


7 63 2 1 2

8

3

1

11

1

9

1

3

3

1 1

1

1

10

5

10

15

20

25

30

Isra

el UK

Ger

man

y

Fra

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Swed

en

Swit

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d

Ita

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Bel

gium

Net

her

lan

ds

Num

ber

of in

vest

men

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Number of corporate VC investments in Europe and Israel by bracket

(2Q16)





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

• From February to June 2015, average round sizes across all venture rounds were hovering between $10M and $12M

• The third quarter saw consistently higher average round sizes – between $13M and $14.5M on average

• In the fourth quarter, however, the trend reversed itself, with average round sizes dropping to $11M in October, $10.5M in November, and $9.2M in December

• 1Q16 was mixed: January saw a return to the large average round sizes of 3Q15, but February & March saw a return to the recent trend

• In 2Q16, round sizes started to creep up towards the $12M level


11.1

17.6

6.8

11.711.3

12.7

15.8

11.211.9

11.1

10.1

11.4

13.913.2

14.6

11.110.5

9.2

13.4

11.1

9.9

11.111.611.7

4

6

8

10

12

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16

18

20

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun


2014 2015 2016

Am

ount

Inv

este

d (

US

$M)

Average investment size in Europe and Israel

(Round sizes of 2-100M)




Total venture investment by country, 2Q 2016

• Israel leapt ahead of the UK and Germany to take the top spot in 2Q16 fundraising, with over $1.3B raised

• Germany was second, with $728M, ahead of the UK


1,364728

653355

211153

113108

6256

424038

271898722111

Israel

Germany

UK

France

Spain

Netherlands

Sweden

Belgium

Finland

Ireland

Switzerland

Italy

Poland

Norway

Austria

Portugal

Denmark

Estonia

Serbia

Czech

Luxembourg

Greece

Slovakia

0 200 400 600 800 1,000 1,200 1,400 1,600

Total VC investment volume by country, 2Q16 (US $M)




Total venture investment by country, 3Q14 to 2Q16

• 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

• Israel has shown continued growth for the past four quarters

• The UK saw a distinct downturn in investment volume, but only compared to 1Q

• Germany has been consistently third, followed by France and Sweden


315

567543

475

628

699

963

1,064

369

267

719

437

621444

892

543

180

284

389

209

379339 333

388

29

163118

232 279225 281

355

74123

89 112

140

84

140113


0

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Tota

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inve

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S $

M)

Total VC investment, 3Q14 - 2Q16 (top 5 countries, excluding mega-rounds)

Israel

UK

Germany

France

Sweden




Total venture investment by country, 3Q14 to 2Q16

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

• The “second five” countries for VC investment were Finland, Denmark, Spain, Ireland, and the Netherlands

• Note that in recent quarters, investment trends across these countries have been whipsawing intensely

• In 2Q16, the Netherlands and Spain saw strong increases in volume



2014 2015 2016

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(US

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Total VC investment, 3Q14 - 2Q16

(countries ranked 6-10, excluding mega-rounds)

Spain

Netherlands

Finland

Ireland

Denmark




Average venture round sizes, by region• Until this quarter, the data

had been generally supporting the idea that average round sizes across Europe were converging

• Data from 2Q (like data from 1Q) does not support this conclusion


Benelux, 4.5

Benelux, 18.9

DACH, 12.5

DACH, 11.1

France, 9.2 France, 8.9Iberia, 9.4

Iberia, 12.0Israel, 11.5

Israel, 14.6

Nordic, 8.0

Nordic, 5.5

UK & Ireland, 11.2UK & Ireland, 11.6

0.0

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4.0

6.0

8.0

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14.0

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20.0

Qtr4 Qtr2

2015 2016

Ave

rage

rou

nd s

ize

(US

$M)

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




Total venture investment by region, 2Q16

• 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, 1,363.8, 34%

DACH, 787.5, 20%

UK & Ireland, 709.6, 18%

France, 355.1, 9%

Benelux, 262.9, 7%

Iberia, 220.8, 5%

Nordic, 217.5, 5%

South. Eur., 43.2, 1% East. Eur., 40.5, 1%

Total VC investment by region, 2Q16




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, Israel led in the number of announced deals, with 73 investments announced

• The UK came in second with 50, and DACH came in third with 40


31 2824 23 26

7 5 5

20

11

7 67

21 1

21

10

86

4

1

1

1

1

1

0

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Israel UK &Ireland

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

Num

ber

of in

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ts

Number of investments in Europe and Israel by bracket, 2Q 2016





Participation rate of US VC firms, by bracket• Year to date, US VC firms

participated in 11% of the venture rounds in Europe

• US VCs participated in none of the European rounds, 10% of early venture rounds, 33% of venture rounds, and 39% of growth rounds

• As in the first quarter, US VCs did not participate in any of Europe’s four mega-rounds in 2Q16


0%10%

34%39%

100%90%

66%61%

100%

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)

Pe

rce

nta

ge

of

rou

nd

s

Did US VC firms participate in European VC rounds? (2Q16)

No Yes




US VC firm participation hits a new low• Excluding seed rounds, US VC

firm participation in European & Israeli venture rounds rose in 2Q16 to 21%


16%24% 20% 22% 21% 17% 16%

21%

84%76% 80% 78% 79% 83% 84%

79%

0%

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30%

40%

50%

60%

70%

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90%

100%


2014 2015 2016

Pe

rce

nta

ge

of

Ro

un

ds

Did US VC firms participate in European VC rounds?

(3Q14-2Q16)

No Yes




Participation of US VC firms by country• In 2Q16, US VCs firms were

active in 12 different European countries

• US VC firms were most active in Israel, where they participated in 27 investment rounds out of 83 (33%)

• The UK saw 9 investments with US VC participation out of 74 total rounds (12%)


27

9 7 2 2 1 1 1 1 1 1 10

10

20

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100

Isra

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Esto

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C in

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In which countries are US VCs most active?

2Q, 2016

No US VC involved US VC involved




Participation of US VC firms by country• This chart shows US VC

activity within Europe throughout 2015 and 1H16

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


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

Israel, 27

UK & Ireland, 10

UK & Ireland, 13UK & Ireland, 9 UK & Ireland, 8

UK & Ireland, 12

UK & Ireland, 10

DACH, 8

DACH, 6

DACH, 4DACH, 9

DACH, 6

DACH, 8

Nordic, 2

Nordic, 3

Nordic, 5

Nordic, 5

Nordic, 5

Nordic, 1

Benelux

Benelux

Benelux

Benelux

Benelux

0

10

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60


2015 2016

Num

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C in

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Investments with US VC participation

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




Dimension Categories Explanation/Example

1. Target marketConsumer, SMB, Enterprise, Government,

Telecom, OEM

What sort of customer does the

company target?

2. Vertical market

Adtech, 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 make

money? What are customers paying

for?

Segment descriptor Consumer + Travel + MarketplaceAirBnB has built a travel-related

marketplace for consumers

Three-dimensional approach to sector mapping

• Excluding mega-rounds, investment activity increased in consumer and decreased in enterprise enterprise in 2Q compared with 1Q

22@gdibnerblog: yankeesabralimey

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

Syndicate for European & Israeli Enterprise Companies

475 595980 850

1,177930 1,078 1,229

494

798

953

814

9071,112

1,6781,580

78

133

121

153

275135

224 91

78

114

47

106

182

150

166 186

0

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2,000

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3,000

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2014 2015 2016

Tota

l VC

inve

stm

ents

(U

S $

M)

European & Israeli venture financing by target market

3Q14 to 2Q16 (excluding mega-rounds, US $M)

Government

Telecom

OEM

SMB

Enterprise

Consumer




• When Israel is excluded from the sample, 59% of all VC dollars in Europe went to consumer-oriented companies

• OEM-oriented companies continued to show surprising strength, accounting for 5% of all VC dollars in Europe


Consumer investment leads Europe


62%

36%

56%63% 62% 57% 53% 59%

18%

49%

34% 22% 24% 31% 35%32%

6%10%

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

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market

3Q14 to 2Q16 (excluding Israel, percent of US $M)

Government Telecom OEM SMB Enterprise Consumer




• When the sample set is limited to rounds under $20M, the ratio of consumer to enterprise investments shifted back to where it has been in the past

• Consumer investments as a percentage of rounds accounted for 47% of early rounds


Early-stage consumer deals come back


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

38%47%

41%

37% 50%47% 39% 36%

47%40%

3%

9%2%

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

2% 2% 2% 3% 7% 5% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market

3Q14 to 2Q16 (excluding Israel, rounds up to $20M, percent of US $M)





Breakdown by region & target market• Once again, almost all

regions except Israel saw more consumer investment than enterprise/SMB investment

• Benelux also saw more enterprise investments than consumer


553645

337204

48153 104

734

111

299

94

18866

61

0

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1,000

1,200

1,400

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Israel DACH UK & Ireland France Benelux Iberia Nordic

Tota

l am

ou

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inve

ste

d (

US

$M

)

Investment in Europe and Israel by target market by region

2Q, 2016 (US $M)





Distribution of investment rounds by country• Across Europe & Israel, 46%

of VC investment rounds were in consumer companies in 2Q16


62%

57%

55%

56%

51%

46%

34%

23%

38%

26%

36%

37%

28%

40%

41%

65%

0%

13%

7%

7%

13%

6%

19%

4%

0%

3%

0%

7%

6%

6%

6%

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

South. Eur.

France

DACH

Iberia

Nordic

UK & Ireland

Benelux

Israel

Investment in Europe and Israel by target market by country

2Q16 (Number of investments)

Consumer Enterprise SMB OEM Telecom Government




Growth rounds by target market• From 4Q14 to 2Q15, there

was an upward trend towards consumer-oriented companies in growth investing, but this trend reversed itself in 3Q15 and continued into 1Q16

• In 2Q, this trend reserved itself for the first time in four quarters


56%

37%46%

56%

43% 39% 37%44%

25%

41%

46% 25%

38%50% 51%

49%

6%7%

5%

9% 12%3% 6%

2%6% 11%

6%7% 5% 6% 5%

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)





• Fintech was yet again the most popular vertical across Europe & Israel, with 40 investments in the category

• Electronics (which includes consumer devices) was second, with 28

• Marketing dropped to third, with 26

• Security was fourth, with 23


Finance returned to being the top vertical


Financial, 40

Electronics, 28

Marketing, 26Security, 23

Lifestyle, 22

Employment, 22

Travel, 22

Adtech, 20

Infrastructure, 20

Communications, 17

Real Estate, 16

Productivity, 16

Health, 16

Education, 15

Industrial, 15

Entertainment, 14

Fashion, 14Logistics, 14

Food, 13

Energy, 12

Data, 11

CRM, 9

Development, 8

Social, 8

Gaming, 8

Payments, 7

ERP, 6


2Q 2016 (number of investments)




• This graph shows number of investments in the top 10 verticals across 2Q15 and 2Q16

• All of the top ten verticals increased in frequency


How have the most popular verticals grown?


Financial, 24Financial, 40

Marketing, 22

Marketing, 26Electronics, 8

Electronics, 28

Li festyle, 12

Li festyle, 22

Securi ty, 10

Securi ty, 23

Travel , 11

Travel , 22

Adtech, 12

Adtech, 20

Health, 16

Health, 16

Employment, 6

Employment, 22

Infrastructure, 6

Infrastructure, 20

0

50

100

150

200

250

300

Qtr2 Qtr2

2015 2016

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




• Finance was the most frequently funded vertical, with over half of the investments aimed at consumer finance

• Electronics leapt to second place, with an emphasis on consumer electronics (connected devices)

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

• Security took fourth place with a heavy emphasis on enterprise security


Which verticals for which segments?


Communications

Adtech

Infrastructure

Employment

Lifestyle

Travel

Security

Marketing

Electronics

Financial

0 5 10 15 20 25 30 35 40 45


2Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom




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

• Electronics has shown consistent growth


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




• Lifestyle, which is admittedly a bit of a catch-all general consumer category, continues to show tremendous strength in terms of VC volume

• Finance was the second-most funded consumer category

• Travel and electronics are showing recent strength

• Gaming declined in 2Q


Consumer VC investment trends



2014 2015 2016

0

20

40

60

80

100

120

140

160

European & Israeli venture financing by consumer verticals


Social

Travel

Health

Fashion

Food

Electronics

Logistics

Gaming

Lifestyle

Financial




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

• Security and adtech also remain stable but significant

• Enterprise infrastructure investments declined in 2Q

• Industrial-oriented startups and employment related (HR) startups seem to be consistently increasing as an area of focus


Enterprise VC investment trends



2014 2015 2016

0

20

40

60

80

100

120

140

160

180

European & Israeli venture financing by enterprise verticals


CRM

Financial

Industrial

Employment

Development

Data

Infrastructure

Adtech

Security

Marketing




• Security retained the top spot in Israel, with 11 investments

• Marketing, infrastructure, and adtech were next


A closer look at Israeli venture in 2Q16:CyberNation


Logistics

CRM

Productivity

Health

Financial

Employment

Electronics

Communications

Adtech

Infrastructure

Marketing

Security

0 2 4 6 8 10 12

Israeli venture financing by target market


Consumer

Enterprise

SMB

OEM

Telecom




• For the first time in six quarters, fintech not the number one category in the UK

• Enterprise employment (HR) startups took the top spot

• Adtech, which was third in 1Q, disappeared from the top ten in 2Q


Closer look at UK VC:Fintech fatigue?


Food

Fashion

Marketing

Travel

Real Estate

Education

Energy

Electronics

Productivity

Infrastructure

Lifestyle

Financial

Employment

0 2 4 6 8 10 12

UK venture financing by target market

2Q, 2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Government




• Fintech and industrial tied for the most popular categories in Germany, with five investments each

• Real estate and edtech took the third and fourth spots


The German VC market in 2Q16


Adtech

Infrastructure

Communications

Gaming

CRM

Electronics

Data

Fashion

Logistics

Employment

Sports

Social

Payments

Lifestyle

Travel

Security

Entertainment

Development

Education

Real Estate

Industrial

Financial

0 1 2 3 4 5 6

German venture financing by target market


Consumer

Enterprise

SMB




• Fintech was the most commonly funded vertical in the Nordics, with 11 investments

• Electronics was next, with 8 investments split between consumer and OEM companies


As usual, Nordic VC was unconventional


Food

Infrastructure

Entertainment

Marketing

Gaming

Industrial

Education

Productivity

Adtech

Energy

Health

Electronics

Financial

0 1 2 3 4 5 6 7 8 9 10 11 12

Nordic venture financing by target market


Consumer

Enterprise

SMB

OEM

Government




• SaaS was the most funded business model in 2Q16

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

• This continued into 2016, with services taking 22% of the venture dollars invested in Europe & Israel in 1Q16

• Marketplaces – businesses that serve a price discovery function – were just 9%

• Commerce accounted for just 8% of the dollars invested


SaaS above all


SaaS, 992, 32%

Services, 691, 22%

Software, 420, 13%

Systems, 294, 9%Marketplace, 281, 9%

Commerce, 239, 8%

Components, 117, 4%

Media, 60, 2%

Semiconductor, 35, 1%

Materials, 1, 0%

European & Israeli venture financing by target market2Q16 (in US $M) (excluding mega-rounds)




• Reversing last quarter’s trend, SaaS jump ahead of services, but both categories show continued strength

• Commerce seems to have bottomed out and showed a bit of renewed strength in 2Q

• Marketplace investment continued to show gradual gains


In 2Q, SaaS set a record


0

200

400

600

800

1000

1200


2014 2015 2016

European & Israeli venture financing by business model

(top five, in US $M, excluding mega-rounds)

Services

SaaS

Software

Commerce

Marketplace




• Enterprise marketing SaaS was again the most popular segment for VC investment in 2Q16 with 22 investments across the region

• Consumer financial services were next, with 21 investments

• In a first, consumer electronics systems were the third most popular category with 18 investments


Enterprise marketing & consumer fintech


0 5 10 15 20 25

Consumer Lifestyle Commerce

Consumer Education Services

Enterprise Employment SaaS

SMB Financial Services

Enterprise Security Software

Consumer Travel Commerce

Consumer Fashion Commerce

Consumer Electronics Systems

Consumer Financial Services

Enterprise Marketing SaaS

Number of VC investments

Investment in Europe & Israel by segment by country2Q16 (top 10 segments)

UK & Ireland France

Nordic Israel

DACH South. Eur.

Benelux Iberia

East. Eur.




• Across Europe & Israel, US VC firms invested in 37 enterprise companies, 15 consumer companies, 1 OEM company, and 1 telecom-oriented company

• Enterprise SaaS & Software attracted by far more US VC interest than any other space

• Consumer services were, again, the third-most often backed sector by US VC firms


What business models attract US VC investments?


0 2 4 6 8 10 12 14 16 18 20

Components

Media

Marketplace

SaaS

Systems

Commerce

Services

Marketplace

Systems

Services

Software

SaaS

OE

MT

ele

com

Con

sum

erEn

terp

rise

US VC Investments in Europe and Israel by end market,

business model, & country, 2Q16 (excludes seed & mega-rounds)

Israel

UK & Ireland

DACH

Benelux

France

East. Eur.

South. Eur.

Nordic

Iberia




Show me the SaaS• As usual, the most popular

vertical by far for SaaS investments across the geography was marketing

• Employment (HR) SaaS was in second place

• Productivity SaaS applications, data analytics, and infrastructure SaaS were tied for third place

• CRM SaaS dropped to eighth place

• Development tools dropped to tenth place


0 5 10 15 20 25 30

Development

Communications

CRM

Security

Adtech

Infrastructure

Data

Productivity

Employment

Marketing

SaaS VC investment in Europe and Israel

by vertical and target market, 2Q16 (top 10 verticals)

Consumer Enterprise Government SMB Telecom




Services investing in 2Q16• This graph shows the top ten

verticals within the services category in 2Q16 across Europe & Israel

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

• Education services (edtech) was the second most funded services category

• Gaming services dropped from second to sixth


0 5 10 15 20 25 30 35 40

Food

Lifestyle

Real Estate

Entertainment

Health

Gaming

Communications

Payments

Logistics

Adtech

Education

Financial

Services VC investment in Europe and Israel

by vertical and target market, 2Q16 (top 10 verticals)

Consumer Enterprise SMB




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.44

Gil DibnerTo invest in the best European & Israeli enterprise startups,

consider backing me on here. Lots of exciting stuff in the

pipeline – and you’ll be in pretty good company.

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

http://yankeesabralimeysignup.myinstapage.com/


Thank youblogPrepared by Gil Dibner

https://twitter.com/gdibner


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


Europe & Israel 2Q16 - VC Deal Done

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