2016 European Venture Capital Report
January 2017
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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
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