Startup & Venture Capital in DACH 2018 - Frontline Ventures
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Startup & Venture
Capital in DACH 2018
1
DACH: IN REVIEW
SECTION 1
The DACH region is home to 100m affluent internet users…
IT’S A HIGHLY ATTRACTIVE ECONOMIC 2017 DATA
REGION FOR STARTUPS TO ADDRESS
€48,630
€31,960 €28,960
€13,940
€9,140
One of the fastest growing EU Market developed for tech-
economic regions with strong spend due to high mobile & GDP p. capita Purchasing power p. capita
economic indicators internet penetration
87.7% 85.7%
67.6%
52.8% 50.6%
45.9%
Large homogenous market with • Differences in culture
≈100m of population speaking amongst DACH countries
the same language • CH is not part of the EU
Internet penetration Smartphone penetration
DACH EU WORLD
Sources: International Monetary Fund; Eurostat; Gfk
… making it attractive for international VCs to dedicate resources
INTERNATIONAL VC FUNDS WITH LOCAL PRESENCE IN THE
REGION OR GERMAN-SPEAKING TEAM MEMBERS FOREIGN VC INVESTORS INVESTING IN DACH
*
*
European
investors
*announced early 2018
Non-
European
investors
Source: Crunchbase, dealroom.co
…and also producing top-tier VC funds with global capabilities
INVESTMENTS OF DACH-BASED VCs INVESTMENTS OF DACH-BASED VCs DACH INVESTORS AMONGST THE
IN THE REST OF EUROPE IN THE REST OF THE WORLD MOST ACTIVE INVESTORS ABROAD*
% OF INVESTMENTS ABROAD
50%
38%
25%
13%
DACH investors UK investors
French investors
2013 2014 2015 2016 2017
Source: Crunchbase, dealroom.co; *adapted from dealroom.co: German Venture Capital climate: a sneak preview, August 2018
Many new venture funds have been raised in DACH
500
€1,000M
TOTAL FUNDS RAISED IN 2017 AND EARLY 2018
=
Funds domiciled in DACH
400
€310M €306M
300
200
€196M €180M
€150M €148M
€132M
€115M €100M
100
€86M €82M €80M €75M
€50M €40M €36M €35M €25M €20M €13M €10M €5M
Rocket Internet
High-Tech Gründerfonds
HV Holtzbrinck Ventures*
NRW.Bank
Project A
Henkel Ventures
Mangrove Capital Partners
Capnamic Ventures
Target Global
Redalpine
UPC Partners
Rewired
Point Nine
Speedinvest Fintech
Fly Ventures
Finleap
42CAP
Speedinvest Network Effects
Capital300
Crypto Fund
Apex Ventures
**First Momentum Ventures
Digital + Partners
Sources: publicly available news sources; EY Venture Capital and Startups in Germany 2017; venturebeat.com: link; **First Momentum: €1.4M raised, 5M goal
10+ debut funds have been launched in the last 18 months
€35M €130M + €350M €25M €10M €150M
TBA €25M €20M €100M TBA
CHF16M €100M €41M €50M TBA
Sources: EY Venture Capital and Startups in Germany 2017; Swiss Venture Capital Report 2018; Crunchbase
…which fuel upstream funding for DACH startups
Incubators Seed Series A - B Late Stage
Investors
with local
presence
Investors
based outside
DACH
Note: approximation, many investors participate across different stages
…contributing to a growing DACH startup ecosystem
€300M €125M
€
€2.9B >€5B
€200M
>€200M
€80M
>€10B
>€120M
>€800M
>€300M €1.5B
€220M
>€350M
€80M >€7B €1B
€90M
€1B >€100M
€100M
>€3B >€400M
>€200M
>€4B
€7B €80M €100M
Authors´ choice: notable companies in the DACH region, based on current or last valuations; private market valuation, best estimate based on public data
Successful exits set new benchmarks for the region
DACH CAN PRODUCE BIG EXITS FUTURE POTENTIAL
ZOOM-IN:
IPOs ACQUISITIONS
GERMANY´S NEWEST UNICORN*
€130M
Series B - $50M raised
from Accel and 83North
Raised at IPO $1.1B Valuation at IPO at $1B valuation
Valuation at IPO $4.8B $161M
• The global market leader in process
€74M €70M mining software
• Created by three students in Germany,
entirely bootstrapped for 5 years
Valuation Raised at IPO $352M
at IPO $97M Valuation at IPO $1.9B
€112M $105M
*As of 06.2018
Source: pitchbook.com; cbinsights.com; *businessinsider.de: linkDACH is now home to unicorns and unicorn-investors
DACH VCs WITH UNICORNS IN
UNICORNS
THEIR PORTFOLIOS
Valuation Founded Unicorn Years until Top 1B+ Exits Top Unicorns
Year Unicorn Still in Portfolio
€ 3bn 2012 2015 3
€ 2.3bn 2008 2018 10
€ 2bn 2014 2017 3
€ 1.5bn 1999 … …
€ 1.4bn 2000 2015 5
€ 1bn 2011 2015 4
€ 1bn 2011 2018 7
€ 0.9bn 2012 2016 4
€ 0.9bn 2008 2018 10
Source: *Adapted from blog.dealroom.co: linkLeading international accelerators educate a new generation of founders
NON-CORPORATE CORPORATE
accelerators
from DACH
Local
accelerators with
*
International
presence in
DACHDACH has the largest developer pool in EU (>1M)
GERMANY & SWITZERLAND AMONGST
# OF PROFESSIONAL DEVELOPERS BY COUNTRY EUROPE´S TOP 10 DESTINATIONS OF CHOICE
FOR TECH TALENT
Germany
Germany 837,000 % OF ALL INTERNATIONAL MOVERS
(MOVING WITHIN & INTO EU)
UK 814,000
France 467,000 UK 21.5%
Netherlands 310,000 Germany
Germany 13.8%
Italy 293,000 France 9.1%
Netherlands 7.4%
Spain 268,000
TOP 5 FASTEST
GROWING TECH Spain 7.3%
Poland 255,000
WORKER POPULATIONS
% GROWTH YoY
Ireland 6.1%
Sweden 176,000
Ireland 5.3 Switzerland
Switzerland 4.1%
Switzerland
Switzerland 144,000
Netherlands 4.6 Poland 3.9%
Germany
Germany
Austria
Austria 93,000 4.2
Sweden 3.3%
Switzerland
Switzerland 4
Finland 83,000 France 3.6 Czech Republic 2.5%
€0 €1.5 €3 €4.5 €6
€0 €225000 €450000 €675000 €900000 €0 €5.5 €11 €16.5 €22
Sources: Atomico The State of European Tech 2017The highest level of international VC investment in Europe
VC DEALS WITH INVOLVEMENT
VC INVESTMENT PER CAPITA IN 2017 2
FROM INTERNATIONAL INVESTORS1 2017
Indicates a lack of domestic availability of
capital in the DACH region
74%
80
70% Israel $304
66% 64%
60
USA $250
49% Sweden $135
43% UK $120
40
Switzerland $113
DACH*
DACH (Average) $64
20%
Austria $42
20
Austria
Netherlands $41
0
France $40
DACH Austria Switzerland
Austria Switzerland Germany Sweden UK France
(average) Germany
Germany $38
Europe $30
0 100 200 300 400
Sources: Crunchbase; dealroom.co, link; Swiss Venture Capital Report 2018…highlights room for growth for domestic investors
FOREIGN INVESTMENTS IN SEED FOREIGN INVESTMENTS SELECT TRANSACTIONS
& EARLY STAGE FINANCING IN LATE STAGE FINANCING IN DACH IN 2017 / 2018
Series C
DACH UK DACH UK
$160M
70
67% 90
85%
72% 71%
53 68
45% 54%
35
30% 45
13%
18
23
0
0
Series D
$75M
Foreign investors US investors* Foreign investors US investors*
A lot of reliance on US funding even Heavy dependence on foreign later
at early stages stage financing
Source: Crunchbase; *as % of total investmentDependency on US funding creates a transatlantic talent bridge
FROM DACH TO DACH
US startups US startups using
relocated from DACH as their
DACH launchpad
US tech firms with VC funds looking at
founders from DACH
DACH market
US VC funds with
Especially East-Coast
senior team
members from VCs interested in
DACH DACH marketTop deals in 2017 driven largely by international investors
380
€380M €360M
304
228
€145M €145M
152
€120M €110M
€80M
76
€50M
0
May 2017 May 17 Mar/Aug 17 Jan 17 Mar 17 May 17 Sep 17 Feb 17
Key investors
Source: EY Venture Capital and Startups in Germany 2017, link; Crunchbase, dealroom.coFewer VC deals in DACH, more capital per deal
DACH VC INVESTMENT ACTIVITY ZOOM-IN: CONTINUED GROWTH
in GERMAN VC ECOSYSTEM in 2017
Total volume invested Decreasing Average volume
at all-time high since number of deals invested per deal at As the German VC ecosystem matures,
past decade record high there are more large deals that dominate
VC investments
# of VC rounds 729 €3.8B
683
Total VC investment volume 581 €3.1B 601
499 €2.6B GERMAN VC INVESTMENT ACTIVITY
355 €2.0B
275 280 €1.4B
170 187 €1.1B # of VC rounds Total VC investment volume
€0.9B €0.8B
€0.6B €0.7B
475 €3.0B €2.9B
500
460 451
430
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 €2.5B 397
363
322 €2.0B
375
€6.3m
7
Average investment per deal per year 255
€4.5m 220
5.25
205
250
€1.2B €1.2B
€3.5m €3.7m €3.4m €3.6m €1.1B
€3.3m €3.1m
3.5
€2.9m €2.8m
€0.7B
125
€0.6B
1.75 €0.4B
0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Crunchbase; dealroom.co; Gil Dibner Slideshare; PitchBook European Venture ReportIn last 4 years the av. seed round volume more than doubled in DE
GERMAN SEED VC ACTIVITY 2017 HIGHLIGHTS
# of Seed rounds
Total Seed investment volume • The lowest number of seed deals in
240
224
238
219
Germany since 2013
197
• However, ever-increasing average size of a
180
137 141
120
78 €131M seed round
73 €109M €109M
60
€79M
€53M
€15M €16M
€34M • >100% growth in investment volume per
round from 2014 to 2017
0
2010 2011 2012 2013 2014 2015 2016 2017
800
€773k
Average investment volume per Seed round
600
€598k
€458k
400
€353k POSSIBLE EXPLANATIONS
€248k €269k
€192k €219k
• Increased competition for good deals
200
0 • Less founding activity
2010 2011 2012 2013 2014 2015 2016 2017 • Companies skip stages: Seed is the new Series A
Source: blog.maxniederhofer.com: link; *KPMG Venture Pulse Q4 2017, link;A trend that is in line with European VC activity
EUROPEAN VC INVESTMENT ACTIVITY DACH vs. EUROPE
• Similar to Europe, in 2017 DACH saw
VC investment Average investment Late-stage deals
activity continues to sizes up across all saw the largest
record high total annual investment
grow in Europe deals increase* despite decline in deal volume
4,982 4,936
• Rounds are getting bigger and fewer
# of VC rounds €16.5B €16.9B
4,197 4,360
Total VC investment volume €14.9B • Quality over quantity of deals: more
3,268 €12.0B 3,306
2,682 capital is available for fewer deals more
€8.5B
2,151
€6.9B €6.8B
€8.2B selectively
1,585 1,590
€5.4B
€4.2B
• Overall VC activity is suggestive of late-
stage cycle
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
€6.3m
7
Average investment per deal per year
5.25
€4.5m
MEDIAN DEAL SIZE BY STAGE
€3.5m €3.7m €3.4m €3.6m
€3.3m €3.1m
€2.9m €2.8m
3.5
Angel / Seed: €0.7M
Early VC: €2.1M
1.75
Late VC: €5.0M
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: blog.maxniederhofer.com: link; *KPMG Venture Pulse Q4 2017, link;Rapid growth of the DACH ecosystem is yet to translate into VC ROI
HISTORICAL PERFORMANCE OF VC FUNDS (EIF’s PORTFOLIO)*
Country/region Median IRR Upper Quartile IRR Median TVPI Upper Quartile TVPI
Europe** 0.26 % 11% 1.02 1.35
Germany 0.05 % 9.36 % 1.00 1.24
Switzerland 5.68 % 10.21 % 1.23 1.47
United Kingdom 6.65 % 13.81 % 1.18 1.60
Other*** -3.10 % 3.15 % 0.86 1.32
US**** 7.49 % 17.14 % 1.31 1.80
*Based on investments in VC funds of EIF resources from 1997-2015. Based on EIF data, by team location (not the same as geographic focus or domicile of the investment fund.
**EU+Switzerland. ***Other includes Austria, Belgium, Ireland, Luxembourg, Norway, Spain, Turkey, the USA. As of 30.06.2017.
****Based on data compiled from US venture capital funds 1997-2015. Data as of 31.12.2017.
Sources: EIF Research & Market Analysis, Working Paper 2016; European Investment Fund Venture Capital Portfolio 2017; Cambridge Associates, US Venture Capital Index and Selected Benchmark
Statistics 2017Effects of BREXIT on DACH are yet to be realised
HOWEVER, FIRST ANECDOTAL EVIDENCE IN FAVOUR OF BERLIN,
AMONG OTHER DACH DESTINATIONS
“The massive cut pushed the country out of its
spot as the main recipient of EU venture funding, which
is the single largest source of early-stage capital on
the continent”, FT
“There is a decrease that comes as much
from a decrease in demand as well as
complexity of concluding the operations and deals
because of the uncertainty from Brexit”, FT
Sources: Financial Times: link & link; pwc: link; Forbes: linkZoom-in: Berlin is now an established global tech hub
VC FUNDING ROUNDS 2012-2017 BERLIN ECOSYSTEM METRICS
Berlin hub remains very High interest from corporates
cosmopolitan on a global scale, compared to European counterparts
attracting a lot of foreign VC capital
Ecosystem value: $31B
Global median: $4.1B
% of rounds with foreign investors % of rounds with no foreign investors
1
Early-stage funding per startup: $483k
0.75
Global average: $252k
67%
Female founders: 13%
0.5
49% 48% 46%
38% Global average: 16%
29%
0.25
26%
0
Stockholm Berlin
Berlin Barcelona Toronto Tokyo Paris Shanghai Software engineer salary: $55k
Global average: $49k
% of rounds with corporate investors % of rounds with no corporate investors
1
The second highest net global resource
0.75
attraction rate in the world at 18%
0.5
63% Only Silicon Valley startups are at a 3% higher
0.25
29% value.
0
25% 17% 16% 16% 12%
Tokyo Shanghai Berlin
Berlin Stockholm Paris Barcelona Toronto
Sources: CB Insights Global Tech Hub Report; Global Startup Ecosystem Report by Startup Genome3 DACH Cities in the Top 10, by Deal Volume
Deal Volume by City: H1 2018
US$200M
US$150M
US$100M
US$50M
US$0M
London Paris Zug Berlin
Berlin Cambridge Dublin Zurich
Zurich Helsinki Copenhagen Oslo Stockholm Oxford Amsterdam
Sources: VentureBeatIts maturing ecosystem makes it attractive for fundraising
Berlin draws 46% of all VC … and 70% of total VC volume
rounds in Germany and 32% in Germany, and 32% of total
of all VC rounds in DACH… vc volume in DACH
TOP DACH FEDERAL STATES / CANTONS BY # OF VC ROUNDS, 2017 Increasing costs of living
Berlin
Berlin 233
Bavaria 76
Zurich 58
Nordrhein-Westfalen 39
Hamburg 39 Fierce competition for talent
Vienna 41
0 60 120 180 240
TOP DACH FEDERAL STATES / CANTONS BY FUNDING VOLUME
Berlin
Berlin €2,969m
Bavaria
In global comparison, still very
€407m
Vienna €396m
Vaud €260m attractive and continues to attract a
Zurich €238m lot of talent and business
Hamburg 0
€230m
750 1500 2250 3000
Source: EY Venture Capital and Startups in Germany 2017; Vienna: Crunchbase: data excludes debt financing, grants, secondary transactions, ICOs.INVESTORS: DACH
SECTION 2The local movers and shakers: The “go to” guys of DACH Authors´choice, based on the holistic assessment of VC activity in the region, number of rounds and investment per round in 2017, as well as portfolio assessment
Firms keep raising bigger funds - more capital available
€400M
[Vintage]
2015
€350M
c k Ve n t u re s 2018
Holtzbrin
€300M 2015
r
sta
€250M
ke
La
Fund Size
€200M 2011 2013 2018
2015
a r l y b ird
2008 Acton E
€150M 2017
2012 2013
je ct A 2017
P ro 2015 2008
€100M 2015 v
c bt
o Creathor
a mi t 2017
p n ves 2004 2011
Ca d i n
e ine
€50M Sp e 2007 Point N
2013 2015
2007
€0M 2011
1st Generation 2nd 3rd 4th 5th 6th 7th
Source: Selected funds with German operation; not including special/side vehicles; data from Crunchbase & interviewsA wealth of corporate VCs in the DACH region
Fund Stage Focus Notable Investments
Series A-B E-commerce, marketplaces and digital ventures
Media
Enterprise software, FinTech, InsurTech, digital
Series A-B
health, asset management
Travel, Health, Home & Living, Beauty &
Series A-B
Accessories, E-Commerce, Retail
Series A Digital media, IT, telecommunications,
CleanTech, FinTech
Telco
Big Data, Analytics, IoT, Cyber Security, Cloud
Late stage
& Network infrastructure, AI
InsurTech, mobility, connected health, wealth
Fin-/Insurtech
Late stage
management, retirement
Series A Health, mobility, smart home, finance
ecosystems and relevant enabling technologies…continue to pursue strategic investments in the region
Fund Stage Focus Notable Investments
AI, blockchain, autonomous machines,
Siemens Seed
“decentralized electrification”
Corporate Investors: Strategic Angle
AI, IoT, AR/VR, mobility, analytics, autonomous
Growth
driving
Autonomous driving, digital car & automotive
Series B cloud, e-mobility, AI, data, security, Industry 4.0,
energy services
Series A Broader IoT space and enabling technologies
Viessmann
IoT, smart home, digital customer access, big
Pre-seed
Viessmann data
METRO Series A-B METRO Group looking for digital solutions
AI, blockchain, IoT and other computational
Series A-B
Signal Iduna business models: B2BSTRENGTHS AND WEAKNESSES
SECTION 3Strengths
Top class engineering and business High attractiveness of key DACH cities: Thriving DACH economy, especially
universities providing constant talent flow Munich, Vienna, Zurich on quality of life - Germany being the economic
Berlin on cost of living “powerhouse”of the EU
Geographically located at the centre of Availability of capital now a plus: you can come DACH is an integral part of the EU: reliability &
continental Europe to Berlin and raise an A-round within days direct access to common marketChallenges
Significant differences within DACH, i.e. cultural, Still high dependency on external capital, Threat of potential “brain drain” as South
cost of living - not a 100% unified market especially for later stage rounds Europe rebounds from economic crisis
Still lower risk tolerance and entrepreneurial Big focus on Berlin, but overall fragmented Deal activity decreasing at early stage by #
activity compared to other markets, startup and VC scene in DACH of deals, but increasing by € per deal: sign
in particular, the UK & the US of less founding activity?WINNING SECTORS
SECTION 4Four sectors where German startups have succeeded
Food Fintech
• 21 financing rounds in 2017 • 58 financing rounds in 2017
• Min. €1.1B of total invested volume • Min. €540M of total invested volume
• 2 successful IPOs with total volume • The biggest influx (€250M in 20
of €691M rounds) in lending segment
Blockchain & Cryptocurrency Flying Cars & Air Taxis
• Berlin as one of the largest crypto
• Continued interest in flying cars
communities
• One of the best-funded electric aircraft
• Big share of applications in the energy
projects based in Germany
sector
Sources: EY Venture Capital and start-ups in Germany 2017; Start-up-Barometer Deutschland 2018FoodTech still important for German ecosystem
Acquired
Dominik Richter Doreen Huber
Founder & CEO Founder & CEO
Formerly Idealab, tripmonkey Formerly Delivery Hero, eKomi,
LSE, WHU Humboldt University of Berlin
Description
Food subscription company that Description Online marketplace for
sends pre-portioned ingredients business catering
to users’ doorstep
Total Funding €320M Total Funding €9M
Founded 2012 Founded 2016
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseFintech big in Berlin, despite FFM being the financial capital
Marko Wenthin, Andreas Bittner Valentin Stalf
Co-Founders Founder
Formerly Deutsche Handelsbank, Formerly Paymill, Rocket Internet
GroupPlatina & Avalon Sourcing, University of St. Gallen
Fondsdepot Bank
Description
A banking platform with a full Description European smartphone-
banking license, allowing companies only online bank
to offer their own financial products.
Total Funding €95M Total Funding €158M
Founded 2016 Founded 2013
Sources: Select startups: authors´ choice, publicly available information from Linkedin, Crunchbase…fueling one of the largest Crypto communities
Zoe Adamovitz Luis Guende
Founder & CEO Founder & Project Lead
Formerly Concise Software, Priori Formerly Unpatent, Stampera,
Data, Humboldt University Berlin European Commission
Project that aims to disintermediate
Description
Blockchain-based and investor- Description the creation & maintenance of
directed platform which bridges the
world of cryptocurrency and equity. organizational structures
Total Funding €12M Total Funding ICO $25M
Founded 2016 Founded 2017
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseThe high-performing sectors in Austria
Fintech Software
• FinTech industry keeps growing • Software startups amongst the
international success stories, having
• Early stage startup ecosystem facilitated by
secured funding from leading
the increase in number of incubators and
international investors
accelerators
Consumer / App
• Runtastic produced the largest Austrian exit
so far (sold to Adidas for €220M - followed
by mySugr acquisition by Roche for €74M
Sources: EY Venture Capital and start-ups in Germany 2017; Start-up-Barometer Deutschland 2018Many up-and-coming players in the FinTech space
Daniel Strieder Andreas Kern
Founder & CEO Founder & CEO
Formerly Payolution, Raiffeisen Formerly Paybox, One Bank,
Investment Johannes Kepler University Linz
Online platform for investment
Description
Digital overdraft not connected to Description strategies of traders and asset
its clients’ banking account and
designed for smartphones managers
Total Funding €5.5M Total Funding €6M
Founded 2015 Founded 2008
Sources: Select startups: authors´ choice, publicly available information from Linkedin, Crunchbase…as well as in SaaS / deep tech
Franz Fuchsberger, Wolfgang Platz Andreas Kern
Co-Founders Founder & CEO
Formerly Compuware, Parametric Formerly Paybox, One Bank,
Technology & Triton, Capgemini, EY Johannes Kepler University Linz
Description Enterprise software testing tools Description Scalable software for network
analysis in the security industry
Total Funding app. €170M Total Funding app. €2M
Founded 2007 Founded 2016
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseConsumer space has generated key exits
Frank Westermann Ferruccio Bottoni
Founder & CEO Founder & MD
Formerly thebrainbehind, Düsseldorf Formerly Sensor Dynamics, Robert
Univ. of Applied Sciences Bosch, Robert Kennedy College
App with integrated medical MEMS technology micro audio
Description devices, simplifies the lives of Description speakers for mobile applications
people with diabetes (“the smallest speaker in the world”)
Total Funding Roche Total Funding €17M
Founded 2012 Founded 2014
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseThe high-performing sectors in Austria
BioTech & MedTech Fintech & Crypto
• CHF76M invested in 30 rounds in 2017 -
• Life sciences and related industries 2x vs. 2016
(healthcare IT & biotech services) • Maturing sector: more evenly distributed
capital availability p/ round
accounted for 64% of the total transaction
• One of the most successful ICO fundraises
volume with CHF595M in 2017
Consumer
• The sector presents an interesting
opportunity and is picking up: a total of 10
financing rounds in 2017
Sources: EY Venture Capital and start-ups in Germany 2017; Start-up-Barometer Deutschland 2018BioTech & MedTech remain key segments
Martijn Cox Ata Tuna Ciftlik
Founder & CEO Founder & CEO
Formerly Eindhoven University of Formerly École polytechnique fédérale
Technology (PhD & AIO) de Lausanne
Tissue diagnostics enabling order-
Description Medical device company enabling Description of-magnitude higher number tissue
natural heart valve restoration
biomarkers checks for each tumor.
Total Funding app. €97M Total Funding app. €12M
Founded 2006 Founded 2014
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseConsumerTech produced notable top players
Cristian Grossmann Thibault Duchemin
Founder & CEO Founder & CEO
Formerly Accenture, Chromacon, ETH Formerly AgilOne
Zurich, Carnegie Mellon Univ. University of California, Berkeley
Workplace app that digitizes the Description Patented multi-sensor bracelet,
Description non-desk workforce by connecting which allows women to precisely
OS and communication channels and conveniently predict fertile days
Total Funding app. €11M Total Funding app. €12M
Founded 2012 Founded 2014
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseFinTech especially well-positioned for growth
Erik Voorhees Jeremias Meier
Founder & CEO Founder & CEO
Formerly Coinapult, BitInstant, Formerly iBROWS
Pacabell; University of Puget Sound University of St. Gallen
Web and API platform to provide Description Cloud-based business and
Description instant Bitcoin and Altcoin accounting software for SMEs
conversion
Total Funding €10M Total Funding CHF12M
Founded 2014 Founded 2013
Sources: Select startups: authors´ choice, publicly available information from Linkedin, CrunchbaseZoom in: Strong Swiss Fintech outlook
STRONG YoY INCREASE IN THE # OF INVESTMENT OUTLOOK:
UNDERLYING FAVOURABLE CONDITIONS
ROUNDS AND VOLUME OF VC INVESTMENT BIGGEST INVESTMENT AREAS*
• Regulatory environment to minimize
93% CH
• CHF 129.9m raised in 2017 - more market entry barriers for fintechs
79%
than a 6x rise in comparison to 2016 74% Globally • Strong consumer base creates conditions
• 68 VC funding rounds in 2017 vs, 29 in 51% for thriving B2C sector
2016 29% 32% 29% 30%
• Strength in the export of Swiss fin services
offers potential in the B2B segment
Data analytics Mobile Cybersecurity Robotic process
40% OF FINTECHS IN INTERNATIONAL B2B automation CHALLENGES OF ENGAGEMENT WITH
SECTOR (N=84) FINTECH STARTUPS:
BIGGEST IMPACT ON:
CH Globally 73%
62% 58%
Existing • IT security
cooperation 59%
• Differences in management & culture
btw banks and 45% • Regulatory uncertainty
FinTechs Payments Wealth management Robotic
process automation
0% 15% 30% 45% 60%
Source: Crunchbase; *as % of total investmentOUTLOOK
SECTION 5Recap of 2017 Predictions
Large incubators will shift Zalando will become Germany to surpass the UK
towards VC investing Germany’s first “decacorn” in total VC funding
IPOs of Delivery Hero, Home24*, will After 5 years of B2C growth, Global VCs will continue to hire
continue to fuel the ecosystem B2B startups emerge Germans to target the region
Sources: *Home24 is reportedly planning an IPO in summer 2018, linkRecap of 2017 Predictions
Fewer new EU funds Seed & Series A Interest from non-EU VCs in the German
will enter the market valuations will level off ecosystem will continue to increase
Brexit will continue to accelerate Expect larger deals from Rocket Great companies will come
ecosystem growth in Germany after a 6 month lull from all over Germany!2018 Predictions (N12M)
Last in first out? Corporates late to
Seed rounds are happening at Large incubators will shift GetYourGuide
the venture game - sign of
A-round valuations towards VC investing to prepare for IPO
upcoming market contraction?
BREXIT fuels founding activity in GFC to implode: DACH market to see
Funding / VC market adjustment
DACH region by foreign exodus of team in the UK more unicorn exits
becomes much more likely
entrepreneurs + lack of large bets via IPO
Sources: *Home24 is reportedly planning an IPO in summer 2018, linkHow last year´s “hidden champions” have performed since
Flying cars Bank of banks Bus travel platform App retargeting
$100M+ (Series B) €95M+ (Series B) €7M+ (Series A) $4M (Series A)
Large scale data analysis Data driven publishing house Video game coaching Home cooking mail service
€5.5M (Series A) $5M (Series A) $12M (Series B) $27.5M (Series B)
SME Lending Video sharing network OKR API based CMS
Seed Round $15M+ (Series B) Seed Round $44M+ (Series C)
Banking for freelancers Office management software Cloud banking platform App for your tax
€2M (Seed) $11M+ (Series A) $13M+ (Series B) $15M (Series A)Hidden champions to watch in 2018 (N12M)
Platform for bilateral energy Full service fulfillment Global marketplace lending platform for Marketplace for refurbished
trading platform for e-commerce small business loans electronics
Software solutions for new driving
Computer vision & machine learning Scalable software for network analysis
Digital insurer experience: AR/ augmented surrounding
models for autonomous vehicles in the security industry
view monitoring, etc.
Decentralized system that allows to transact
A platform for decentralised applications & Machine learning solutions for
on a global network while maintaining data SaaS for automated accounting
side chains written in JavaScript robotics and process control
ownership
Platform for property owners to find
Online community for professionals in hotel
Online seafood marketplace Online provider of solar systems brokers, provides real estate appraisal,
industry land valuation, leasing.
Sources: Author´s choiceDACH 2018 outlook
DACH TECH HUBS DEMONSTRATE STRONG DACH COMPANIES HAVE ATTRACTED MORE CAPITAL
PERFORMANCE IN 2018 IN 2018 YTD THAN THROUGHOUT 2017
2018 TOTAL VC INVESTMENTS TO DATE
2017 TOTAL VC INVESTMENTS
UK 4.2B
5.8B
• In terms of cumulative amount invested in DACH
Germany 2.9B
companies, 2018 is outperforming 2017 so far 2.9B
France 2.4B
2.4B
• Mega rounds continue to have a large impact on
Israel 1.9B
the overall funding environment: responsible for 3.9B
the large amount of capital invested in 2018 thus Spain 1B
0.8B
far 0.5B
Switzerland 0.3B
• Deep tech and health investments have so far Netherlands 0.4B
0.6B
been underrepresented in Germany in 2018, while 0.3B
Finland
SaaS and marketplace investments are 0.3B
overrepresented Denmark 0.2B
0.2B
0.1B
Austria 0.2B
€0 €1.5 €3 €4.5 €6
Source: dealroom.co, German Venture Capital climate: a sneak preview, August 2018Authors and Contributors
Mathias Ockenfels Thomas Olszewski
Linkedin Medium angel.co Twitter Medium Quora
Stephan von Perger Yuliya Kvetko Carolina Küng
Linkedin @innovatorsroom Linkedin angel.co Medium LinkedinAPPENDIX
SECTION 6ADDITIONAL SLIDES SELECTED SLIDES FROM 2016-2017 PRESENTATION
Early stage companies to watch in 2017
Flying cars Bank of banks Bus travel platform App retargeting
Large scale data analysis Data driven publishing house Video game coaching Home cooking mail service
SME Lending Video sharing network OKR API based CMS
Banking for freelancers Office management software Cloud banking platform App for your tax return
Author´s choiceFour sectors where German startups have succeeded
Fintech AdTech
• Big data, data analytics, data mgmt,
• Credit related and consumer business SEO
• Large market for consumer finance • E-commerce companies as customers
• Population which travels a great deal • High small- & mid-cap M&A-activity
eCommerce Leisure
• Fashion, auctions, and food delivery • E-sports, gaming, travel, and music
• Largest market for fashion in Europe • Travel culturally important
• Lean and cost competitive, low margin • Large number of consumersFunding Trends (ex-mega rounds)
Sweden France
Germany UK 892
900
719
675
Millions of Euros
621
543 555
487
437 444
450
461 463
443
389 379 388
284 355 361
339 333
225 180 267 279 281
232 225 224
209 194
180 163
123 140 140
118 112 113
74 89 84
0 29
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Europe & Israel 2016 VC Year in Review, Gil DibnerSource Links
ONLINE ACCESSIBLE CONTENT IN THE ORDER OF APPEARANCE
• International monetary fund 2017
• Eurostat 2017
• Gfk 2017
• dealroom.co: German Venture Capital climate: a sneak preview: August 2018
• EY Fast growth in Germany: Tech start-ups and investors setting new benchmarks. Venture Capital and start-ups in Germany 2017
Swiss Venture Capital Report 2018
• Atomico. The State of European tech
• Gil Dibner. Venture Capital in Europe & Israel. Venture Investment Data: 1H18
• European Venture Report 1Q 2018
• Max Niederhofer. Here's what's really going on in European venture in three charts
• KPMG. Venture Pulse Q4 2017. Global Analysis of Venture Funding
• EIF Research & Market Analysis, Working Paper 2016/34. The European venture capital landscape: an EIF perspective
• European Investment Fund Venture Capital Portfolio. Performance - EIF own resources. Vintage and Team Location. As at 30/06/17
• Cambridge Associates. US Venture Capital Index and Selected Benchmark Statistics. 31. December 2017.
CBINSIGHTS Global Tech Hubs Report
• Global Startup Ecosystem Report 2017 by Startup Genome
• Start-up-Barometer Deutschland. Januar 2018.
• Global FinTech Report 2017, Switzerland Highlights
• IFZ FinTech Study 2018. An Overview of Swiss Fintech
Data Services:
• CBInsights
• Crunchbase
• Linkedin
• DealroomMethodology Slide 5 - Selection of investments of DACH-based VC funds in the rest of Europe & in the rest of the world (non-DACH startups). The graph displays percentage of investments of DACH-based VC funds abroad: based on Crunchbase data, filtered by year, investor location, investee location. Slide 6 - New venture funds raised in DACH. Funds domiciled in Germany. Does not include corporates, funds without official ‘funds raised’, or non-internet funds Slide 7 - Debut funds include new funds launched for the first time in the last 18 months. Slide 8 - Active VCs investing in DACH. Approximation by stage, as many investors invest across different stages. Slide 9 - Author´s choice: selection of successful startups in the DACH region. Includes current or latest available valuations, best estimate based on public data publicly available valuations. Slide 10 - Selection of notable exits (IPOs and acquisitions) in the DACH region in 2017. Slide 14 - VC deals with involvement from international investors. Methodology: Crunchbase 2017 data, filtered by: investments announced throughout 2017, investees based in DACH, investors based outside DACH. Slide 15 - Foreign VC investments by stage. Methodology: Crunchbase 2017 data, filtered by: investments announced throughout 2017, investees based in DACH, investors based outside DACH / in the US. Notable DACH transactions with high involvements of international VC investors. Slide 18 - DACH VC investment activity. Crunchbase data, filtered by years, investees based in Germany, Austria, Switzerland. Slide 19 - European investment activity. Crunchbase data, filtered by years, investees based in Europe. Slide 21 - Investments in VC of EIF own resources 1997-2015. Based on EIF data, by team location (not the same as geographic focus or domicile of the investment fund. Slide 27 - Selection of key most active DACH based VC investors. Slide 28 - Selection of funds with German operation; not including special/side vehicles; data from Crunchbase & interviews Slide 53 - Selection of up-and-coming Startups based in DACH. Includes portfolio companies of Speedinvest. Slides 59-60 - Selection of slides from “State of the German Startup and Venture Capital Landscape, 2017 Edition”
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