The VC landscape in Europe - Presentation at Fintech Fusion

The VC landscape in Europe Sia Houchangnia

March 2nd

Seedcamp is a Founder’s First Round Fund.

We invest smart capital into pre-seed and seed stage startups,

providing up to €200k and a lifelong platform of Learning,

Network and Capital to support the most ambitious Founders.

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Some of the top VCs our companies are raising from

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1. The current funding environment

“We need to make the economics work… We have to understand that every round of funding must be treated as our last.”

William Shu Founder Deliveroo

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European Tech Scene Begins to Feel Silicon Valley’s Woes, Mark Scott, The New York Times, February 2016

Public & private markets are interconnected

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Yahoo Finance, March 2016

The story in short…

Upcycle

1. More companies raising large rounds on unproven metrics and fundamentals

2. non VC-expert money coming in (Hedge Funds, Family Offices, Corporates)

3. Private markets valuing companies at 50-100x revenue

4. US investors flying to Europe not just for holidays

Economic slowdown —> market correction

1. Public stock markets falling

2. Tech IPOs trading below issue price

3. Investors raising their expectations

4. Fundraising taking longer and rounds closing at lower valuations

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What the data shows

Venture Pulse Q4 2015, KPMG & CBinsights, January 2016

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2. Where is the capital coming from?

Leading global VC firms

Large European VC firms

Emerging European VC firms

Some of the leading European VC firms

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Selected examples of new funds recently launched

The State of European Tech, Slush & Atomico, November 2015

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The key role of government funding

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The State of European Venture Capital, BCG, October 2015

US money also contributing to fill the gap

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2015 Anual European Venture Industry Report, PitchBook, January 2016


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Selected examples of European investments made by US VC firms

3. The geographic disparities

VC firms all across Europe

€70Maverage size

>800VC firms

80%manage < €100M

Techstars, Investors in Europe, December 2015

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The State of European Venture Capital, BCG, October 2015

…but the capital is not evenly distributed across the continent


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A closer look at the main hubs


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4. What’s next for Europe?

More and more European success stories

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European Unicorns: Do They Have Legs?, GP Bullhound, June 2015

The generational effect


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Increasing number of entrepreneurs turned investors in Europe


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…But still lots of room to grow

Entrepreneurship at a Glance 2015, OECD. August 2015

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We need to have larger funds

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…funding larger rounds

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5. Conclusion

The correction in Europe should not be as bad as the US… Why?

Valuations less inflated than in US and China

Weak EUR & weakening GBP contribute to attract US capital

Very low interest rates in EU pushes pension funds / mutual funds to consider asset classes like VC, which drive higher returns

Government agencies maintaining / increasing their support

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3 things to remember if you fundraise now

1. Keep your burn under control

2. Demonstrate a clear path towards monetization

3. Raise for 18 months

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Thank you

Sia Houchangnia - Investment Team at Seedcamp @SiaHouchangnia

The VC landscape in Europe - Presentation at Fintech Fusion

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Transcript of The VC landscape in Europe - Presentation at Fintech Fusion