Europe and Israel 1Q16 Venture Capital Deals Done

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

Prepared by Gil Dibner

The London ShardTallest building in Western Europe, at 306 m (1,004 ft)

blog

https://twitter.com/gdibner


http://www.angel.co/gdibner/syndicate


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


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

http://yankeesabralimey.tumblr.com/


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

$3.751 billion flowing into 463 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

122

204

270 271286

357

463

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

50

100

150

200

250

300

350

400

450

500

Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1

2014 2015 2016

Am

ou

nt

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• Most of the increase was

concentrated in January, which was a record-breaking month with nearly $1.7 invested across 164 investments

• February and March were more in line with historical averages, with both up slightly YoY

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

90

5

97

1

99

7

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

1,038

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

0

200

400

600

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

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1

2015 2016

Nu

mb

er

of

inve

stm

en

ts

VC Investments in Europe & Israel, January 2015 - March 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 in the UK:

• Skyscanner, a UK-based travel company, raised $192M in January

• Deezer, a French music company, raised $109M in January

• MindMaze, a Switzerland-based VR company, raised $100M in February

• FutureFinance, a Irish financial services company, raised $170M in March

• Even adjusting for mega-rounds, 1Q16 is a record-breaking quarter


248349 285 354 368 507

602345312

556716 567

559731

539

935

1,154 813

1,513 1,187

1,669

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000


2014 2015 2016

Am

ou

nt

Inve

ste

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• 1Q16 total investment volume

in Europe & Israel was up

29% over 1Q16 (excluding

seed deals, where data is

more spotty)

• Early venture volume grew by

111% - more than doubling

• Venture volume grew by 31%

• Growth volume grew by 45%

• Mega round volume dropped

by 25%


285602

556

731

1,154

1,669766

571

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Qtr1 Qtr1

2015 2016

Tota

l VC

inve

stm

en

t (U

S $

M)

VC investment volume in Europe and Israel by bracket

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 262 in 1Q16, 18% higher than 4Q15

• This growth was spread evenly across all brackets


6083 77 85 93

139 15330

26 4262 44

46

61

13

2633

26 38

35

45

3

1

6

6 4

3

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)





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

total number of corporate VC investments was 48 in 1Q16, exactly double the number of corporate VC investments in 1Q15

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


6 4 5

16

7

2219

43

9

12

7

12

6

44

7

8

7

720

3

1

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)





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

2016, Israel saw the highest number of corporate VC investments, with 19

• The UK saw 11 corporate VC investments during that period

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

• Corporate VCs participated in three mega rounds


5 5

1 1 1 1 1 2 1 1

31

1 1

11

4

11 1

1 1

1

1

1

0

2

4

6

8

10

12

14

16

18

20

Isra

el UK

Fra

nce

Fin

lan

d

Swed

en

Swit

zerl

an

d

Ger

man

y

Icel

and

Po

rtu

gal

Den

mar

k

Spai

n

Bel

giu

m

Num

ber

of in

vest

men

ts

Number of corporate VC investments in Europe and Israel by bracket

(1Q16)

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




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


11.1

17.6

6.8

11.711.3

12.7

15.8

11.211.9

11.1

10.1

11.4

13.9

13.214.6

11.110.5

9.2

13.4

11.1

9.9

4

6

8

10

12

14

16

18

20

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


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, 1Q 2016

• The UK again took the top spot in 1Q15 with over over$1B in total capital invested

• Israel took second place with just over $960M in venture capital investment

• France with $392M in VC investment jumped ahead of Germany which took fourth place with $333M


1,084963

392333

203141140

10781

6145

3229252522201711733221

UKIsrael

FranceGermany

IrelandSwitzerland

SwedenFinland

PortugalDenmark

SerbiaSpain

BelgiumItaly

PolandLuxembourg

IcelandNetherlands

AustriaEstonia

LatviaNorwayAlbaniaGreece

Romania

0 200 400 600 800 1,000 1,200

Total VC investment volume by country, 1Q16 (US $M)




Total venture investment by country, 3Q14 to 1Q16

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

• In a reversal from last quarter, Investment volumes increased in all of the top five markets except Germany, which retained its third place ranking


315

567543

475

628

699

963

369

267

719

437

621444

892

180

284

389

209

379341 333

29

163118

232279

225

283

74123

89

112140

84

140


0

200

400

600

800

1000

1200

Tota

l VC

inve

stm

en

t (U

S $

M)

Total VC investment, 3Q14 - 1Q16 (top 5 countries, excluding mega-rounds)

Israel

UK

Germany

France

Sweden




Total venture investment by country, 3Q14 to 1Q16

• 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 1Q16, all countries except Finland saw a decline in investment volume compared to 4Q15



2014 2015 2016

0

20

40

60

80

100

120

Tota

l VC

inve

stm

ent

(US

$M

)

Total VC investment, 3Q14 - 1Q16

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

Spain

Finland

Denmark

Netherlands

Ireland




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

• This quarter, the data does not support this conclusion –with round sizes increasingly divergent across countries


Benelux, 4.5

Benelux, 5.6

DACH, 12.5

DACH, 10.4

France, 9.2

France, 6.7

Iberia, 9.4

Iberia, 11.9Israel, 11.5

Israel, 16.1

Nordic, 8.0Nordic, 8.1

UK & Ireland, 11.2

UK & Ireland, 13.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Qtr4 Qtr1

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, 1Q16

• 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


UK & Ireland, 1,287.5, 34%

Israel, 963.0, 26%

DACH, 485.3, 13%

France, 392.3, 10%

Nordic, 341.7, 9%

Iberia, 113.5, 3%

South. Eur., 74.0, 2%

Benelux, 67.9, 2%East. Eur., 26.0, 1%

Total VC investment by region, 1Q16




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, the UK led in the number of announced deals, with 66 investments announced

• Israel took second place with 59

• The Nordics & DACH tied for third place with 37 deals each

• France reported 36


34

26 2723 24

7 6 3 3

16

16

67

10

31

1

14

17

46 1

21

2

1 1

0

10

20

30

40

50

60

70

UK &Ireland

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

Num

ber

of in

vest

men

ts

Number of investments in Europe and Israel by bracket, 1Q 2016

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




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

participated in 10% of the venture rounds in Europe; down from 14% in 2015

• US VCs participated in only 1% of seed rounds, 8% of early venture rounds, 21% of venture rounds, and 38% of growth rounds

• In a marked change from the past, US VCs did not participate in any of Europe’s four mega-rounds in 1Q16


1%8%

21%

38%

99%92%

79%

62%

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? (1Q16)

No Yes




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

firm participation in European & Israeli venture rounds dropped in 1Q16 to 16%, down from 17% in 4Q

• In fact, 1Q16 saw the lowest US VC participation rate since I started tracking the data in 3Q14


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

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

Pe

rce

nta

ge

of

Ro

un

ds

Did US VC firms participate in European VC rounds?

(3Q14-1Q16)

No Yes




Participation of US VC firms by country• In 1Q16, US VCs firms were

active in 11 different European countries

• US VC firms were most active in Israel, where they participated in 16 investment rounds out of 71 (23%)

• The UK saw 10 investments with US VC participation out of 91 total rounds (11%)

• Germany saw 5 investments with US VC participation


1610 5 2 2 2 2 2 1 1 10

10

20

30

40

50

60

70

80

90

100

Isra

el UK

Ger

man

y

Fra

nce

Swe

de

n

Fin

lan

d

Ire

lan

d

Port

ugal

Swit

zerl

an

d

Pola

nd

Esto

nia

Nu

mb

er o

f V

C in

vest

men

ts

In which countries are US VCs most active?

1Q, 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 1Q16

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


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

Israel, 16

UK & Ireland, 10

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

UK & Ireland, 12

DACH, 8

DACH, 6

DACH, 4DACH, 9

DACH, 6Nordic, 2

Nordic, 3

Nordic, 5

Nordic, 5

Nordic, 5

Iberia, 3

Iberia, 4 Iberia, 3

Iberia, 2

Benelux, 5

France, 3

France, 2

France, 2East. Eur., 2

South. Eur., 2

0

5

10

15

20

25

30

35

40

45

50

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1

2015 2016

Num

ber

of V

C in

vest

men

ts

Investments with US VC participation




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 both consumer and enterprise in 1Q compared with 4Q

• Enterprise-oriented investments hit a new high of $1.6B in 1Q16

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

494

798

953

814

9071,112

1,678

78

133

121

153

275135

224

78

114

47

106

182

150

166

0

500

1,000

1,500

2,000

2,500

3,000

3,500


2014 2015 2016

Tota

l VC

inve

stm

ents

(U

S $

M)

European & Israeli venture financing by target market

3Q14 to 1Q16 (excluding mega-rounds, US $M)

Government

Telecom

OEM

SMB

Enterprise

Consumer




• When Israel is excluded from the sample, 53% of all VC dollars in Europe went to consumer-oriented companies

• OEM-oriented companies continued to rise slightly in importance, accounting for 6% of all VC dollars in Europe


Consumer investment leads Europe


62%

36%

56%63% 62% 57% 53%

18%

49%

34% 22% 24% 31% 35%

6%10%

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

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market

3Q14 to 1Q16 (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 significantly

• Early-stage investors favored enterprise and SMB

• Consumer investments as a percentage of rounds hit an all-time low of 38% of early rounds


Early investors cut back on consumer


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

38%

41%

37% 50%47% 39% 36%

47%

9% 7% 9% 6% 9%11%7% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market

3Q14 to 1Q16 (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

• Spain and Benelux also saw more enterprise investments than consumer

• OEM-oriented investments were particularly strong in DACH and Israel


825

76213 230

151

385

677

113 120163

91

44

87

107

107

0

200

400

600

800

1,000

1,200

1,400

UK & Ireland Israel DACH France Nordic Iberia Benelux

Tota

l am

ou

nt

inve

ste

d (

US

$M

)

Investment in Europe and Israel by target market by region

1Q, 2016 (US $M)





Distribution of investment rounds by country• Across Europe & Israel, 40%

of VC investment rounds were in consumer companies in 1Q16


17%

32%

40%

43%

43%

47%

53%

75%

61%

52%

43%

43%

38%

38%

32%

13%

8%

12%

10%

11%

10%

11%

16%

6%

13%

5%

4%

6%

3%

6%

4%

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

Israel

Benelux

UK & Ireland

DACH

Nordic

France

Iberia

South. Eur.

Investment in Europe and Israel by target market by country

1Q16 (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

• For the first time, enterprise companies accounted for over 50% of all growth rounds in Europe & Israel


56%

37%46%

56%

43% 39% 37%

25%

41%

46% 25%

38%50% 51%

6%7%

5%

9% 12%6%6% 11%

6%7% 5% 6%6%

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 the most popular vertical across Europe & Israel, with 52 investments in the category

• Marketing was second, with 33

• Security was third, with 25


Finance returned to being the top vertical


Financial, 52

Marketing, 33

Security, 23Infrastructure, 23

Employment, 22

Lifestyle, 20

CRM, 20

Electronics, 19

Logistics, 18

Industrial, 17

Health, 17

Data, 15

Adtech, 15

Development, 14

Gaming, 13

Food, 13Payments, 12Energy, 11Fashion, 11

Real Estate, 11

Communications, 10Social, 10

Travel, 10

Entertainment, 9

Education, 9

Productivity, 8

HMI, 6


1Q 2016 (number of investments)




• This graph shows number of investments in the top 10 verticals across 1Q15 and 1Q16

• All of the top ten verticals increased in frequency, except for adtech which declined slightly YoY

• Fintech-related investments more than tripled from 15 in 1Q15 to 52 in 1Q16

• Security investments more than doubled in popularity YoY


How have the most popular verticals grown?


Financial, 15

Financial, 52Marketing, 20

Marketing, 33

Infrastructure, 17

Infrastructure, 23

Li festyle, 18

Li festyle, 20

Employment, 13

Employment, 22

Securi ty, 11

Securi ty, 23

Electronics, 14

Electronics, 19

Adtech, 17

Adtech, 15

Logistics, 10

Logistics, 18

Health, 10

Health, 17

0

50

100

150

200

250

300

Qtr1 Qtr1

2015 2016

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




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

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

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

• IT infrastructure and employment tech made strong showings

• Consumer lifestyle, CRM, electronics, logistics, health, and industrial also made the top ten verticals


Which verticals for which segments?


Industrial

Health

Logistics

Electronics

CRM

Lifestyle

Employment

Infrastructure

Security

Marketing

Financial

0 10 20 30 40 50 60


1Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government




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

• Fintech, marketing, infrastructure, and security show continued strength

• Employment, health and adtech seem to have rebounded as areas of investor interest


The most popular verticals in the past 12 months



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




• Finance was the most funded consumer category

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

• Gaming, logistics, electronics, and food continued to show strength

• Health and fashion declined slightly


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 also remains stable but significant

• Enterprise infrastructure investments continue to increase as an area of focus

• Industrial-oriented 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


Financial

Development

Industrial

Employment

CRM

Data

Adtech

Infrastructure

Security

Marketing




• Security retained the top spot in Israel, with 14 investments

• Israel also saw 10 investments in IT infrastructure

• Fintech was the third most popular vertical in Israel, with 8 investments, only 3 of which were consumer-oriented


A closer look at Israeli venture in 1Q16


Employment

Agtech

Development

Data

Communications

Adtech

Marketing

Industrial

Electronics

Financial

Infrastructure

Security

0 2 4 6 8 10 12 14 16

Israeli venture financing by target market


Consumer

Enterprise

SMB

OEM

Telecom




• For the fifth quarter running, Fintech was the dominant category of investment in the UK, and this quarter the differential was greater than in 4Q15

• Adtech rebounded to third place in UK investments

• Development tooling and employment-related companies were the fourth and fifth most popular categories


Closer look at UK VC


Food

Communications

Health

Education

Industrial

CRM

Logistics

Gaming

Real Estate

Employment

Development

Adtech

Marketing

Financial

0 2 4 6 8 10 12 14

UK venture financing by target market

1Q, 2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Government




• Fintech was by far the most popular category in German VC investment in 1Q16, with 7 investments

• Enterprise marketing was the second most popular vertical, with 3 investments


The German VC market in 1Q16


Food

Communications

Retail

Logistics

Durables

Real Estate

Energy

Payments

Adtech

SCM

Electronics

Entertainment

Development

CRM

Fashion

Dating

Health

Data

Travel

Employment

Marketing

Financial

0 1 2 3 4 5 6 7 8

German venture financing by target market


Consumer

Enterprise

SMB

OEM




• Enterprise marketing was the most commonly funded vertical in France in 1Q16

• Consumer logistics, consumer lifestyle, consumer electronics, and consumer food startups were very important categories in French VC investing in 1Q16


As usual, Nordic VC was unconventional


HMI

IndustrialDevelopment

Infrastructure

DataEducation

EnergyProductivity

SocialReal Estate

PaymentsSecurity

Fashion

HealthFinancial

FoodElectronics

LifestyleLogistics

Marketing

0 1 2 3 4 5 6 7 8 9 10

French venture financing by target market


Consumer

Enterprise

SMB

OEM

Telecom




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

• This continued into 2016, with services taking 30% of the venture dollars invested in Europe & Israel in 1Q16

• SaaS emerged as the second most funded business model in 1Q16

• Commerce dropped to 6% of the dollars

• Marketplaces – businesses that serve a price discovery function – were just 7%


Services & SaaS dominated 2015


Services, 973, 30%

SaaS, 735, 23%

Software, 656, 21%

Systems, 319, 10%

Marketplace, 211, 7%

Commerce, 191, 6%

Semiconductors, 37, 1%

Media, 36, 1%

Components, 19, 1%

Meda, 3, 0%

European & Israeli venture financing by target market1Q16 (in US $M) (excluding mega-rounds)




• Services businesses overtook SaaS to set a new record of nearly $1B in funding in 1Q16

• SaaS investments, however, continued to increase and also set a record of $735M

• Commerce investments continued to slide, reaching just $200M in investment in 1Q16

• Marketplace investment stayed flat at around $200M in the quarter


In 1Q, services overtook SaaS to 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




• The top three segments were unchanged in 1Q16

• Enterprise marketing SaaS was again the most popular segment for VC investment in 1Q16 with 26 investments across the region

• Consumer financial services were next, with 23 investments

• Enterprise security software was third, with 14 investments


Enterprise marketing & consumer fintech


0 5 10 15 20 25 30

Consumer Gaming Services

SMB Financial Services

Consumer Food Commerce

Consumer Social Media

Enterprise Infrastructure Software

Consumer Lifestyle Commerce

Consumer Electronics Systems

Enterprise Development SaaS

Enterprise CRM SaaS

Enterprise Security Software

Consumer Financial Services

Enterprise Marketing SaaS

Number of VC investments

Investment in Europe & Israel by segment by country1Q16 (top 10 segments)

France UK & Ireland

Israel Nordic

DACH Benelux

Iberia South. Eur.

East. Eur.




• Across Europe & Israel, US VC firms invested in 27 enterprise companies, 10 consumer companies, 3 SMB companies, and 2 OEM-oriented companies

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

• Consumer services were 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

Services

Systems

Services

Marketplace

Systems

Commerce

Services

Marketplace

Services

Systems

Software

SaaS

OEM

SMB

Co

nsu

me

rE

nte

rpri

se

US VC Investments in Europe and Israel by end market,

business model, & country, 1Q16 (excludes seed & mega-rounds)

Israel

UK & Ireland

DACH

Nordic

Iberia

France

East. Eur.




Show me the SaaS• The most popular category

by far for SaaS investments across the geography was marketing

• CRM SaaS was the second-most popular category

• Development tools were the third most popular SaaS category


0 5 10 15 20 25 30 35

Health

Productivity

Infrastructure

Employment

Adtech

Data

Financial

Development

CRM

Marketing

SaaS VC investment in Europe and Israel

by vertical and target market, 1Q16 (top 10 verticals)

Consumer Enterprise SMB Telecom




Services investing in 1Q16• This graph shows the top ten

verticals within the services category in 1Q16 across Europe & Israel

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

• Gaming services were the second-most funded vertical in the category

• Interesting, health was third


0 5 10 15 20 25 30 35 40

Adtech

Productivity

Communications

Education

Infrastructure

Payments

Entertainment

Logistics

Health

Gaming

Financial

Services VC investment in Europe and Israel


Consumer Enterprise Government SMB




Systems investing in 1Q16• This graph shows the top ten

verticals within the systems category in 1Q16 across Europe & Israel

• Consumer electronics systems and enterprise industrial systems were the most popular segments within the category


0 2 4 6 8 10 12 14

Food

Adtech

Financial

Logistics

Communications

Education

Lifestyle

Agtech

Security

Infrastructure

Energy

Health

Payments

Industrial

Electronics

Systems VC investment in Europe and Israel


Consumer Enterprise SMB Telecom




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.45

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







Europe and Israel 1Q16 Venture Capital Deals Done

Technology

Transcript of Europe and Israel 1Q16 Venture Capital Deals Done