Global VC investment landscape and fund raising activity · VC funding recorded in the three key VC...

Venture Capital Insights® – 3Q14

Global VC investment landscape and fund raising activity November 2014

Venture Capital Insights® – 3Q14 Page 1

Insights development team

► Bryan Pearce, Global Leader, Entrepreneur Of The Year TM and Global Venture Capital Advisory Group, EY

► Jeff Grabow, United States, Venture Capital Leader, EY ► Sandra Feldner Vandergriff, Venture Capital Advisory Group, EY ► Shanta Kumari, EY Knowledge, EY ► Vidhi Gupta, EY Knowledge, EY ► Prof. George Foster, Graduate School of Business, Stanford University ► Dr. Martin Haemmig, Adjunct Professor, Globalization of Venture Capital,

CeTIM and former Senior Advisor on Venture Capital, Stanford University (SPRIE)

► Prof. Steven Kaplan, Graduate School of Business, University of Chicago

*All data contained in this is sourced to Dow Jones VentureSource unless otherwise noted.


Venture Capital Insights

This edition of Venture Capital Insights analyzes global VC investments and exits from 2008 through 2014YTD. The presentation also provides an overview of follow-on funds raised, active investor analysis and current ownership status of companies that have received VC funding from 2007 until now.

Content overview: 1 Global VC investment landscape

2 Global VC exit landscape – IPO and M&A

3 Global VC fundraising activity

3.1 VC fundraising activity and average dollars raised

3.2 Active investor analysis

3.3 Current ownership status of VC-backed companies


Section 1: Global VC investment landscape Analysis by geography, hotbed, sectors, stages of development and round classes


Section 1: Global VC investment landscape Summary

Global VC investment activity

► Global VC activity continued on its upward trajectory in 3Q14 compared to the corresponding quarter last year. The current quarter of 2014 recorded the highest third quarter funding and second-highest deal volume in the last six years.

► VC activity remained strong in the US, Europe and China during 3Q14 compared to the levels seen 3Q13. VC funding recorded in the three key VC markets – the US, Europe and China – reached its highest levels in 2014YTD compared to yearly totals of the last six years.

► Among smaller VC markets, India recorded the highest amount of quarterly VC investments in 3Q14 since 1Q08. Israel and Canada saw increased investment levels, despite a decline in the number of deals, compared to 3Q13 levels.

► Germany was the second most preferred VC destination after the Bay Area in 3Q14. Germany was the number two destination for the first time since 2009. Beijing was number three and for the first time since 2011, VC investing in Southern California, out paced New England and Metro New York.

► Consumer services was the most preferred sector in 3Q14, both in terms of value and volume followed by the business and financial services sector.

► 3Q14 recorded an increased VC activity at early stage round classes compared to 2Q14. The revenue generation stage continued to attract larger investment share, although lesser than 2Q14 levels.

► VC investors made bigger investments at the early stage round classes as suggested by increased median deal sizes for most of the markets in 2014YTD compared to 2013.

► By stage of development, 2014YTD recorded significant increase in median values across stages, particularly for the US, Europe and China, compared to 2013.


► Global VC activity continued on its upward trajectory in 3Q14 compared to the corresponding quarter last year — recorded a 36% increase in value despite a 3% decline in the number of deals during this period. The current quarter of 2014 recorded the highest third quarter funding and second-highest deal volume in the last six years.

► For 2014YTD, VC funding far surpassed the yearly totals of the last six years, at a total investment of US$59b. This was primarily due to significantly higher quarterly activity in the first three quarters of 2014, compared to the historical levels. The YTD period also recorded the highest average deal size (US$12.4m) compared to the average value recorded for first nine months for each of the last six years (remained below US$10m).

► The outlook for VC activity remains strong for the remainder of 2014 as improved macro economic conditions, strong IPO pipeline continue to drive investor confidence globally. With VC funding levels, average deal sizes at their all time high in the last six years, 2014 is currently on track to close a record year in terms of overall VC investment activity.

.

Global VC activity – by amount invested and number of rounds

Global venture capital investment Total funding through 3Q14 has surpassed the yearly totals of the last six years and has out paced 2013 by 11%, VC activity grew 36% 3Q14 compared to 3Q13

13.6 6.8 9.9 12.9 11.2 10.9

17.3 22.1 19.6

13.7

8.5 11.8

14.4 13.7 13.2 22.1

13.8

8.7

9.7

15.5 11.3 14.4

19.6 10.1

11.4

15.2

12.9

13.1 14.7

5,487

4,800

5,445

6,012 6,024

6,468

4,751

1,298 1,143 1,245 1,555 1,454 1,605 1,561

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

10

20

30

40

50

60

70

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds Am

ount

inve

sted

(US

$b)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)Number of rounds during the year/qtr Number of rounds during Q3

Note: Global total includes the US, Europe, Canada, China, Israel (all site) and India only.

51.2 35.4 46.6 55.7 49.3 53.2 58.9 22.1 19.6

1,627 1,563


US

Europe

► VC funding recorded in the three key VC markets – the US, Europe and China – reached its highest levels in 2014YTD compared to the yearly totals of the last six years.

► In the US, VC investing increased by 16% in 3Q14 compared to 3Q13 while the deal volume saw a decline of 5%, for the same period. VC funding for the third quarter was the highest compared to the amount raised during third quarter of any year, since 2008 – in line with the global trend. As the US economy continues to accelerate, the VC activity is expected to remain strong for the rest of 2014.

► Strong activity in the business and financial services and consumer services sectors drove VC activity in Europe and China during 3Q14 compared to the corresponding quarter last year. These two regions saw an increase of 41% and 88%, respectively, while the deal volume declined by 15% in Europe but increased by 61% in China, during the same time frame. The current trend suggests, the pace is likely to continue in the two markets in the months to come.

China

Venture capital investment by geography VC activity remained strong in the US, Europe and China during 3Q14

9.1 4.6 5.4 8.2 7.8 7.6

11.8 14.4 11.0

8.4 6.2

7.7

9.2 9.5

8.7

14.4 9.1

6.0 6.2

10.8 8.0 9.5

11.0 6.7

7.6 9.6

8.1 9.2 9.5

3,094

2,792 3,199

3,672 3,769 3,815 2,780

728 684 742

963 932 948 899

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

0

5

10

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds

Amou

nt in

vest

ed (U

S$b)

6.5 5.0 4.4 4.8 4.1 4.0 5.0

Median amount invested (US$m)

6.3 5.2

966 899

2.2 1.1 1.4 1.9 1.4 1.6 2.1

3.1 3.1

1.8

1.1 1.6 1.8

2.0 2.0 3.1

2.1

1.3

1.5 1.8

1.4 2.2

3.1 1.9

2.3

2.6

2.0 1.6

2.4

1,498

1,309 1,425 1,375 1,396

1,613 1,089

360 293

296 311 320 379 323

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0

1

2

3

4

5

6

7

8

9

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds Amou

nt in

vest

ed (U

S$b)

1.2 0.5 2.4 1.8 1.2 0.7

2.4 2.9 2.8 1.8

0.7

1.1 2.0

1.5 1.1

2.9

1.4

0.8

1.1 1.7

0.9 1.5

2.8

0.7

0.9

2.0 1.6

1.4 1.6

375 330

422 454

304

405 442

87 84 106

123

65

121

195

0

50

100

150

200

250

300

350

400

450

500

0

1

2

3

4

5

6

7

8

9

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds Amou

nt in

vest

ed (U

S$b)

Median amount invested (US$m) Median amount invested (US$m)

2.9 2.1 2.5 2.1 2.0 1.9 2.7 2.8 2.7 6.8 5.2 7.4 10.0 7.1 4.9 10.0 15.5 8.0

390 323 130 195

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b) Amount invested during Q3 (US$b)

Amount invested during Q4 (US$b) Number of rounds during the year/quarter Number of rounds during Q3


0.2 0.1 0.2 0.4

0.2 0.2 0.2 0.4 0.4 0.2

0.2 0.2

0.4

0.2 0.3 0.4 0.3

0.1

0.5

0.3

0.3 0.3 0.4 0.2

0.2

0.2

0.1

0.3 0.4

111 91 114

144 152

189

120

25 19 38 51 36 40

38

-50

0

50

100

150

200

0

1

2

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds

Amou

nt in

vest

ed (U

S$b)

02

Venture capital investment by geography India recorded the highest quarterly VC investments in 3Q14 since 1Q08 driven by mega deal of Flipkart Internet Pvt. Ltd.

► Deal value increased by 18% in Canada for 3Q14 compared to 3Q13, driven by a strong activity in the media and content sector. While the sector attracted US$97m in 3Q14 compared to US$5m in 3Q13, deal volume dropped marginally – from 40 to 38 deals over the same period.

► In Israel, despite a decrease in the number of deals during the current quarter compared to the volume seen in 2Q14 and 3Q13, the deal value increased by 15% and 41%, respectively, during 3Q14. Increased funding in the business and financial services sector, particularly business support services, drove this growth.

► 3Q14 saw the highest quarterly VC funding in India since 2008 driven by the retailers sector. The quarter saw VC funding close to US$2b mainly due to a mega deal of Flipkart Internet Pvt. Ltd, an e-commerce online shopping portal operator that raised US$1b in a later stage round class deal.

0.8 0.2 0.3 0.3 0.3 0.3 0.4 0.5 0.5

0.6

0.2

0.9 0.7

0.2 0.7 0.5

0.5

0.3

0.3 0.4

0.3

0.4 0.5

0.3

0.2

0.5 0.6

0.4

0.4

290

180 165 183 167

201

144

59 43

34 52 39 45 40

0

50

100

150

200

250

300

350

0

1

2

3

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds

Amou

nt in

vest

ed (U

S$b)

0.2 0.2 0.2 0.4 0.4 0.4 0.4 0.8

1.7 0.9 0.1 0.2

0.4 0.3 0.6 0.8

0.4

0.1 0.3

0.4 0.5 0.5

1.7

0.2

0.3 0.3

0.4 0.4 0.4

119 98

120

184

236 245

176

39 20

29 55

62 72 66

0

50

100

150

200

250

300

0

1

2

3

4

2008 2009 2010 2011 2012 2013 2014YTD Q2 Q3

Num

ber of rounds Amou

nt in

vest

ed (U

S$b)

36 38

47 40 58 66

Canada 5.0 4.3 4.9 5.0 2.8 2.2 3.1

Median amount invested (US$m)

5.3 5.0

India Median amount invested (US$m)

7.1 4.2 6.8 5.0 3.8 4.0 4.5 5.0 7.0

Israel (all site) Median amount invested (US$m)

5.3 4.0 5.2 7.4 4.1 5.0 6.0 6.8 8

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b) Amount invested during Q3 (US$b)

Amount invested during Q4 (US$b) Number of rounds during the year/quarter Number of rounds during Q3


► For 3Q14, the Bay Area continued to lead with 44% share each of the total volume and amount invested in the top five major VC hotbeds. The hotbed activity saw a marginal increase of 9% in value with 8% decline in volume compared to 3Q13 due to low activity levels seen in the consumer services and IT sectors.

► Germany ranked among the top three VC destinations for the first time in 3Q14 since 2009. The US$350m deal of consumer services sector-based Delivery Hero Holding GmbH, which happened to be the second-largest deal of the quarter, which moved Germany up the ranking list to second for the current quarter.

► 3Q14 saw increased VC investing in India, primarily due to the top deal of the quarter — US$1b deal of Bengaluru-based Flipkart Internet Pvt. Ltd. — saw Bengaluru move up six spots from the previous quarter.

Venture capital investment by hotbed Germany was the second-most preferred VC destination after the Bay Area in 3Q14.

30

48

8

37

25

38

40

90

83

18

126

67

94

60

304

Number of rounds

126

154

184

193

210

384

516

714

790

1,127

1,210

1,261

1,574

1,638

4,508

Potomac

France

Switzerland

Shanghai

Illinois

Canada

Israel (All Site)

UK

New England

Bengaluru

NY Metro

S. California

Beijing

Germany

Bay Area

Amount invested (US$m)

Top five hotbeds1

US$10.2b (70% of the total2)

Top five hotbeds1

697 (65% of the total2)

113

385

395

408

558

657

879

911

958

1,033

1,481

1,820

2,284

3,246

8,787

Bengaluru

Switzerland

Shanghai

Illinois

Canada

Potomac

Israel (All Site)

Beijing

France

Germany

UK

NY Metro

S. California

New England

Bay Area


Top five hotbeds1 US$17.6b (74% of the total2)

2009 3Q14

316

384

756

821

1,173

1,216

1,282

1,660

1,983

2,001

2,798

3,373

3,821

3,969

14,065

Bengaluru

Switzerland

Illinois

Germany

Shanghai

Canada

France

Potomac

Israel (All Site)

UK

Beijing

NY Metro

New England

S. California

Bay Area


Top five hotbeds1


2011

413

507

587

775

1,131

1,159

1,241

1,745

2,036

2,249

2,336

3,284

3,563

3,808

13,723

Switzerland

Illinois

Bengaluru

Shanghai

Canada

France

Potomac

Israel (All Site)

Germany

Beijing

UK

S. California

NY Metro

New England

Bay Area


Top five hotbeds1


2013

246

260

361

380

560

795

800

805

1,186

1,349

1,671

1,930

2,624

2,659

14,276

Switzerland

Illinois

Bengaluru

Potomac

Canada

Israel (All Site)

Germany

France

Shanghai

UK

S. California

Beijing

New England

NY Metro

Bay Area


Top five hotbeds1


1H14

Note: 1 Top five hotbeds by amount invested. 2 Total of 15 major VC hotbeds listed above.


Venture capital investment by industry Consumer services was the most preferred sector in 3Q14, in both value and volume

By number of rounds: ► The consumer services sector attracted the highest number of VC rounds in 3Q14, overtaking the business and financial services sector -which led for the first half of 2014. ► Compared to 2Q14 and 3Q13, the activity remained soft across all sectors in 3Q14 with an exception of the consumer goods sector which saw deal volume increase from 36 in

3Q13 and 51 in 2Q14 to 59 in 3Q14. By amount invested: ► The consumer services sector continued to dominate the global VC landscape in terms of the amount invested for 3Q14. While the sector recorded a decline of 11% in dollar

value in 3Q14, compared to 2Q14, the dollar value almost doubled when compared to the corresponding quarter last year. Funding in all other sectors increased during 3Q14 when compared to 3Q13 with an exception in the energy and utilities and IT sectors that saw a decline of 39% and 13% respectively.

► For sectors other than the consumer services, funding remained nearly at the same level in 3Q14 as seen in 2Q14. Healthcare and IT were the only exceptions that saw 18% and 28% decline in value, respectively, over the same period.

1,671

250

1,173

238

1,326

183

1,160

Information technology

Industrial goods and materials

Healthcare

Energy and utilities

Consumer services

Consumer goods

Business and financial services

2011

1,755

211

1,086

179

1,450

189

1,131

Number of rounds

Amount invested (US$b)

1,093

113

811

87

1,193

180

1,260

Note: There are also some deals for which sector has not been assigned.

2012 2013 2014YTD 2Q14 3Q14

362

46

295

31

399

51

441

363

36

262

33

402

59

399

10.4 2.4

12.7 4.7

13.4

2.0

9.8



Healthcare

Energy and utilities

Consumer services

Consumer goods


11.7

2.1

11.0

2.5

11.4

1.4

9.0

10.4

2.0

10.4

1.0

18.8

1.2

14.9

3.8

0.7

4.1

0.3

7.6

0.5

5.1

2.7

0.7

3.4

0.3

6.8

0.4

5.2

11.5

2.1

11.6

1.7

12.6

1.8

11.7

1,734

215

1,124

160

1,519

214

1,493

2011 2012 2013 2014YTD 2Q14 3Q14


Venture capital investment by country 3Q14 recorded the strongest growth for India with dollars invested growing more than three times the levels seen in 3Q13

By number of rounds: ► Compared to 3Q13, the deal volume declined in all markets except for China which recorded an increase of 61% in 3Q14.The highest decline was recorded in Europe at 15%

followed by Israel at 11% for the same period. In Europe, low deal activity in the business and financial services and consumer services sectors drove the decline – which saw close to 25% decrease each during this period.

► In China, deal volume also increased versus the previous quarter by 50%, primarily driven by increased VC activity across all sectors except for the consumer goods sector. For the US and Europe, the number of rounds declined by 7% and 17%, respectively, during the same period.

By amount invested: ► All VC markets saw a significant uptick in investments in 3Q14 compared to 3Q13. India and China recorded the highest growth of 237% and 88%, respectively. While Europe

and Israel increased by nearly 40% each, the US and Canada saw an increase of close to 16% and 18%, respectively. ► Compared to the previous quarter, VC activity picked up across all markets in 3Q14 except for the US and China, which saw a decline of 24% and 5%, respectively. India

recorded the steepest growth of 118% on the back of Flipkart Internet Pvt. Ltd. deal of US$1b, followed by Israel that saw 15% increase over the same period.

184

183

144

454

1,375

3,672

India

Israel

Canada

China

Europe

US

236

167

152

304

1,396

3,769

Number of rounds


245

201

189

405

1,613

3,815

176

144

120

442

1,089

2,780

58

47

36

130

390

966

66

40

38

195

323

899

1.5

2.0

1.2

6.7

7.5

36.2

India

Israel

Canada

China

Europe

US

1.6

1.2

0.9

4.8

6.4

34.4

2.0

1.7

1.1

4.9

8.1

35.3

3.0

1.3

0.9

8.1

8.3

37.3

0.8

0.5

0.4

2.9

3.1

14.4

1.7

0.5

0.4

2.8

3.1

11.0

2011 2012 2013 2014YTD 2Q14 3Q14

2011 2012 2013 2014YTD 2Q14 3Q14


Venture capital investment by round class and stage of development 3Q14 recorded increased VC activity at early stage round classes compared to 2Q14; revenue generation stage continued to attract larger investment share, although lesser than 2Q14 levels

1,639

1,063

2,302

636

Later stage

Second round

First round

Seed round

1,546

996

2,373

749

Number of rounds


1,536

1,239

2,643

723

1,298

994

1,918

323

481

371

625

81

417

330

658

87

28.0

10.8

12.3

0.6

Later stage

Second round

First round

Seed round

26.0

8.3

10.6

0.5

27.1

11.0

11.0

0.5

32.2

10.7

9.5

0.3

13.4

4.2

3.3

0.1

10.1

3.6

3.5

0.1

312

3,689

1,438

566

Profitable

Generating revenue

Product development

Startup

236

3,879

1,309

595

Number of rounds


275

4,410

1,271

509

197

3,522

833

197

79

1,209

284

54

6.0

36.4

12.2

1.1

Profitable

Generating revenue

Product development

Startup

3.5

36.3

8.8

0.8

4.2

39.5

8.8

0.6

6.5

44.1

8.0

0.4

2.1

17.0

2.8

0.1

2.2

14.4

2.9

0.1

By stage of development

By round class

44

1,185

272

60

2011 2012 2013 2014YTD 2Q14 3Q14

2011 2012 2013 2014YTD 2Q14 3Q14

2011 2012 2013 2014YTD 2Q14 3Q14

2011 2012 2013 2014YTD 2Q14 3Q14


Median round size by round class VC investors continue to make larger investments in the early round classes as shown by increased median deal sizes for most of the markets 2014YTD

10.0

8.0

7.7 10

.0

10.0

10.0

12.0

5.9

4.4 5.1

5.5 7.

3

6.3 7.4 8.7

7.3 10

.0

20.0

20.0

20.0

20.0

9.5

5.7 8.

9

7.3 8.

8

4.2

14.9

9.0

5.9

9.8 11

.0

10.0

8.0

14.9

11.6

11.5

10.8

10.0

8.5 10

.4

15.5

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014YTD

8.0

5.0

5.5 6.0

5.5 6.

0 6.5

3.8

2.5 3.0

2.9 3.3

3.3

3.6

10.0

8.0 10

.0 15

.0

15.4

12.5

16.3

5.1

5.6

5.0 6.

9

6.0

5.9

3.5 6.

0

5.0 6.

0 8.0

5.5

8.5

6.5

10.6

8.0 9.0

7.9

6.1 6.0 8.

0

02468

1012141618

2008 2009 2010 2011 2012 2013 2014YTD

4.1

3.5

3.0

3.0

2.7 2.6 3.0

2.1

1.6 1.8

1.6

1.5

1.3 1.6

5.0

3.8 5.

0

7.7

3.4

3.2

3.2 4.

2

2.8 3.

0

3.3

2.0

1.6 2.0

4.0

2.3

2.0

3.5

3.0

3.0 3.

7

5.5

4.0

3.7 4.0

3.3

1.6 2.0

0

2

4

6

8

10

2008 2009 2010 2011 2012 2013 2014YTD

0.8

0.6 0.

7

0.8

0.7

0.7

0.9

0.8

0.6

0.5

0.5

0.3

0.2

0.7 0.7

NS

NS

1.0

0.2 0.

3

1.0

0.6

NS

0.9

0.9

0.4

0.1

0.5 0.

6

0.6 0.6 0.7

0.5 0.

7

0.6

NS

NS

NS

0.3 0.

4

0.2

NS

0.0

0.5

1.0

1.5

2008 2009 2010 2011 2012 2013 2014YTD

Seed round (median round size in US$m)

2014YTD, the median deal sizes increased across markets except for Israel compared to 2013. This shows that VC investors are inclined to take more risks and are not adverse to making larger investments in young startups across globe. In India, however, the median value was insignificant.

First round (median round size in US$m)

In the US, the median deal size increased by 15% for 2014YTD compared to 2013, for all other markets, the median value increased by close to 25%, indicating investor sentiment remains strong in the global VC market. China was the only market that saw no change in median value during the same period.

Second round (median round size in US$m)

While the two mature VC markets — US and Europe — saw close to 10% increase in the median value in 2014YTD, the two developing venture capital economies — China and India — recorded close to 30% increase over 2013, reflecting investor preference to make bigger investments in the emerging markets to earn higher returns. However, the median value declined by 41% and 24% in Canada and Israel respectively.

Later stage (median round size in US$m)

All VC markets saw a significant growth in median deal sizes for 2014YTD compared to 2013, except for China. The growth was the steepest in Canada, where the median value increased to almost 3.5x. In Israel, the median value almost doubled to US$14.9m for 2014YTD from US$8.0m in 2013. China saw no change in median deal values but had the highest deal value globally, for the same period.

Note: Chart scales vary for the purpose of clarity.

0.3 0.2 0.3 0.6 0.5 0.5 0.3

338 305 389 636 749 723 323

Amount invested

globally (US$b)

No. of global deals

Amount invested

globally (US$b)

No. of global deals

13.7 7.9 9.8 12.3 10.6 11.0 9.5

2,202 1,675 1,961 2,302 2,373 2,643 1,918

US Europe China Canada Israel (all site) India

11.4 7.6 8.4 10.8 8.3 11.0 10.7

1,082 1,024 1,053 1,063 996 1,239 994

22.2 17.5 24.8 28.0 26.0 27.1 32.2

1,474 1,466 1,677 1,639 1,546 1,536 1,298


Median round size by stage of development 2014YTD shows a significant increase in median values across stages, particularly for the US, Europe and China

7.0

5.0

5.0 5.2

5.0 5.0 5.6

3.0

2.1 2.4

2.1 2.4

1.9 2.4

7.3

7.3 8.

8 10.0

8.0

6.4

10.0

6.0

4.0 5.

0

5.0

3.3

2.5 3.

5

6.0

4.5 6.

0

9.0

4.5 6.

0 6.5

8.0

5.1 6.

8

5.5

4.0 4.0 4.5

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014YTD

8.0

5.0 6.8 9.2

6.4

5.3 10

.0

3.9

2.9 5.

6

3.9

4.0

3.9 5.7 7.0

5.4 6.8

20.0

20.0

10.7

10.0

NS

7.9 14

.6

NS

NS

7.5

32.4

9.0

NS

8.5 12

.5

7.0 12

.0

NS 7.

2

5.1

5.0 8.

0 9.2

40.9

4.5

05

1015202530354045

2008 2009 2010 2011 2012 2013 2014YTD

7.0

5.1

4.1 4.9

3.7 3.2 4.

5

2.6

2.1 2.6

1.9

1.3 1.7

3.2

2.7

3.9 5.

0

3.1 3.6

1.5

3.0 3.3

4.2

3.0

6.0

2.0

1.5 1.7

4.5 3.8

4.0

4.4

3.2 4.

3 4.5 6.

3

1.8

8.7

0.4

3.3

2.2

NS

0

2

4

6

8

10

2008 2009 2010 2011 2012 2013 2014YTD

1.2

1.0

1.0

1.0

0.9

0.8 1.0

0.9

0.8

0.7

0.7

0.4

0.3 0.7

7.5

1.9

1.4

1.0

0.5

0.3 1.

3

NS

1.5

1.4

0.9

0.5

0.3

NS

2.5

1.5

1.2 1.

8

0.6 0.9 1.0

NS

NS

6.7

3.0

0.5

0.2

NS

012345678

2008 2009 2010 2011 2012 2013 2014YTD

Startup (median round size in US$m)

The median deal size increased for all VC markets for 2014YTD when compared to 2013, except for Canada and India for which the median values were insignificant. China and Europe saw the highest increase -- median value grew from US$0.3m in 2013 to US$1.3m in 2014YTD in China and from US$0.3m to US$0.7m in Europe, during the same period.

Product development (median round size in US$m)

The three key VC markets ‒ the US, Europe and China ‒ saw a significant growth in median deal sizes in 2014YTD compared to 2013, indicating investors remain confident in these markets. China saw the largest increase in median value during this period from US$1.5m to US$3.0m, followed by Europe at 86% and the US at 40%.

Generating revenue (median round size in US$m)

2014YTD, median deal sizes recorded at the generating revenue stage increased in all markets compared to 2013. China saw the highest rate of growth with 56% and continued to see the highest median value across all markets for the first nine months of 2014, indicating VC investors are more positive and are willing to make large investments in China.

Profitable (median round size in US$m)

While the median values increased to US$10.0m and US$5.7m in the US and Europe, in 2014YTD, up from US$5.3m and US$3.9m respectively, China recorded close to 7% decrease during the same time period. India saw a decline from its all-time high median value US$40.9m in 2013 to US$4.5m in 2014YTD ‒ this deal value was more in line with the levels seen in previous years.


Amount invested

globally (US$b)

No. of global deals

1.1 0.8 0.9 1.1 0.8 0.6 0.4

368 377 359 566 595 509 197

17.5 11.3 13.0 12.2 8.8 8.8 8.0

1,666 1,422 1,574 1,438 1,309 1,271 833

Amount invested

globally (US$b)

No. of global deals

27.1 19.7 27.1 36.4 36.3 39.5 44.1

3,024 2,685 3,149 3,689 3,879 4,410 3,522

5.4 3.6 5.6 6.0 3.5 4.2 6.5

418 306 361 312 236 275 197

US Europe China Canada Israel (all site) India


Section 2: Global VC exit landscape — IPO and M&A Analysis by geography


Section 2: Global VC exit landscape — IPO and M&A Summary

Global VC-backed IPOs ► 2014YTD saw increased IPO activity across all VC markets when compared to all of 2013. ► While the IPO volume increased for the first three quarters of 2014 by 15% in the US compared to all of last year,

Europe saw number of deals increasing to 2.6x and China saw 3.1x the levels seen in 2013, with their capital markets reopening.

► A similar growth trend was seen even in the smaller VC markets, with Israel and Canada recording the highest number of IPOs for 2014YTD compared to the levels seen over the last six years.

► For 2014YTD, the US continued to dominate in terms of dollar amount raised through IPO exits, followed by China. ► For other markets, while Canada recorded the highest proceeds amount in 2014YTD since 2008, despite no activity

during the current quarter, activity picked up in India and Israel in 3Q14 after first two quiet quarters of 2014.

Global VC-backed M&As ► The US and Europe continue to dominate the global M&A exit landscape for 2014YTD, each recording 86% of the total

deal volume seen in 2013. China also recorded close to 80% of the levels seen in 2013. ► M&A activity, continues to remain slow in the smaller VC markets – India, Israel and Canada, in terms of deal volume. ► VC-backed M&A activity remained strong particularly in the US year to date, on the back of big ticket deals, with the

amount raised through M&A exits being at its all-time high of US$5.3b since 2008. ► While amount raised in all other markets also grew during 2014YTD when compared to first nine months of 2013,

Canada and Israel were the only exceptions that saw the value declining by 77% and 28%, respectively, during the same period.


29

NS

NS

105

NS

2

197

158

NS

532

46

20

11 91

NS

7 42

24

NS

156

419

2008 2009 2010 2011 2012 2013 2014YTD

Canada India Israel

Amount raised through IPO exits (US$m)

In 2014YTD, the US continues to dominate in terms of dollar amount raised via IPO, followed by China. The dollar amount raised in China and Europe for 2014YTD was three times the yearly total of 2013. For the other three markets, Canada recorded the highest amount in 2014YTD since 2008, despite no activity during the current quarter. IPO activity picked up in India and Israel in 3Q14 after being quiet for first two quarters of 2014 (the dollar amount raised increased to US$91m and US$419m in 2014YTD from US$11m and US$156m in 2013, in the two markets, respectively)

Global VC-backed IPO 2014YTD saw increased IPO activity across all VC markets compared to the whole of last year

562

904 3,19

3

5,28

3 11,2

04

8,21

6

6,42

6

36

170

564

996

494

646 1,95

6

633 4,

448

21,9

61

15,5

94

4,73

7

1,98

0 5,85

5

2008 2009 2010 2011 2012 2013 2014YTDUS Europe China


2

0 0 1 1

1

3 2

0

6

2 2

1

2

0

2 2

2

0

2

5

2008 2009 2010 2011 2012 2013 2014YTD

Canada India Israel

8 8

47 46 48

74 85

11 3

18 15 16 17 27 12

45

141

99

48

15

47

2008 2009 2010 2011 2012 2013 2014YTD

US Europe China

The key VC markets — the US, Europe and China — saw a significant growth in number of IPO deals for 2014YTD, compared to 2013. While the volume increased for 2014YTD by 15% in the US compared to whole of last year, Europe and China saw number of deals increasing by 165% and 213% respectively, of levels seen in all of 2013. A similar growth trend was seen in the smaller VC markets, with Israel and Canada recording the highest number of IPOs in 2014YTD compared to the levels seen over the past six years.

Number of IPO exits


2,30

9

1,13

0

1,35

6

2,39

6 2,94

4

2,68

8

474

40

162

1,15

8

255 442 73

3

675 1,

333

683 1,00

2

827

907 1,

561

759

2008 2009 2010 2011 2012 2013 2014YTD

Canada India Israel

Amount raised through M&A exits (US$m)

Global VC-backed M&A VC-backed M&A activity remains strong in 2014YTD, particularly in the US, on the back of big ticket deals

26,4

17

22,6

14 42

,264

49,6

98

45,8

57

44,3

83

53,0

72

12,2

49

7,18

9

9,34

3

12,4

80

6,44

9 15,1

26

10,1

24

593

638

1,00

9

745

281

2,46

7

6,42

1

2008 2009 2010 2011 2012 2013 2014YTDUS Europe China


30 29 35

24

30 28

16

2

6 17

6 17

15 13

24 18

21 18

19

13 9

2008 2009 2010 2011 2012 2013 2014YTD

Canada India Israel

451 435

596 572 505 475

407

254 209 228 223

172 167 144

8 15 20 11 11 23 18

2008 2009 2010 2011 2012 2013 2014YTD

US Europe China

Number of M&A exits

The US and Europe continue to dominate the global M&A landscape for 2014YTD, each recording 86% of the total volume seen in 2013. China also recorded close to 80% of the levels seen in 2013 with 18 deals, although much higher than the yearly totals of 2011 and 2012. However, for India and Israel, while M&A deal volume in 2014YTD remained at similar levels as seen in the first nine months of 2013, Canada saw 16 M&A deals to date for this year compared to 22 deals for the same period last year.

VC-backed M&A activity remained very strong in the US in 2014YTD, with the amount raised through M&A exits being at its all-time high of US$5.3b since 2008. The two big-ticket M&A deals of Beats Electronics LLC (acquired by Apple Inc.) and Oculus VR (acquired by Facebook, Inc.) with a post M&A valuation of ≥US$2b drove this increase. While the dollar amount raised in all other markets also grew during 2014YTD when compared to the first nine months of 2013, Canada and Israel were the only two markets that saw their deal value decline by 77% and 28%, respectively, over the same period. Canada in fact recorded the least M&A quarterly amount raised during 3Q14 since 1Q08.


Section 3: Global VC fundraising activity Analysis by fundraising activity and average dollars raised, active investor and current ownership status of VC-backed companies


3.1 VC fundraising activity and average dollars raised ► Early-stage and late-stage fundraising reached multi-year highs for 2014YTD in the US. ► Fundraising activity in Europe remain low year-to-date compared to levels seen in the past. However, the average

fund size remains in line with historical levels. ► In the Asia-Pacific region, venture capital funds continue to target early stage investing reflected by an increasing

proportion of early stage funds closed. ► The average fund size increased across all markets year-to-date when compared to 2013, except for Canada. The

Asia-Pacific region recorded the biggest gains in average values over the same period. 3.2 Active investor analysis ► Globally VC funds continue to focus on investing in a smaller number of deals except for China which saw a

significant increase in the number of funds with four or more deals in year-to-date. ► VC funds were the most active in the Bay Area with 25% of the funds doing four or more deals in so far this year. ► The UK continues to dominate Europe with increased investment activity in the business and financial services sector. 3.3 Current ownership status of VC-backed companies ► The US continued to see the highest volume and value of M&A exits since 2003, followed by Europe. Since 2007, the

M&A activity has begun to pick up in Canada and Israel, albeit slowly. ► China saw the highest proportion of companies exiting via IPO route in 2007-2010 period. ► Exit activity in India remain relatively lower than other VC markets, which suggests by higher proportion of private and

independent companies.

Section 3: Global VC fundraising activity Summary


Section 3.1: VC fundraising activity and average dollar raised Analysis by geography


VC fundraising activity — the US Early-stage and late-stage fundraising are reaching multi-year highs 2014YTD

97

54 66

58

84 103 90

13 7 6 11 13 11 11

53

31 31 22

33 20 17

2008 2009 2010 2011 2012 2013 2014 YTD*

Early-stage Late-stage Multi-stage

12.8 7.2 6.2 5.5 6.0 8.7 8.8

3.5

1.6 1.3 5.4 4.2 4.8 6.0

12.8

7.5 9.1 6.0 11.4 4.4 6.6

2008 2009 2010 2011 2012 2013 2014 YTD*


US VC funds 2008 – 2014 YTD (amount closed — US$b)

142

215

109 49 28 44 60 63 46 49 24 38 35 41

82 81 51

19 17 21 31 22 14 21 11 19 10 9 48 42 21 9 11 14 10 8 7 4 4 9 1 3

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

# of initial funds closed # of firms that closed a second fund # of firms that closed a third fund

Follow-on funds (vintage years 1999 – 2012)

► In the US, nearly 120 VC funds closed in 2014YTD, which raised an aggregate of $21.4b, indicating that the region has begun to emerge from its post-crisis low and the year is now well on its way to match the fund raising activity levels seen in 2008 where 163 such funds closed raised an aggregate of US$29.3b.

► For 2014YTD, early-stage and late-stage funds raised US$8.8b and US$6.0b, respectively – the highest totals since 2009. Subsequently, for late-stage funds, the average fund size accelerated to reach the highest amount of US$542.9m for the last six years.

► The number of initial funds closed remains high compared to recent years with more than 40 funds closed in 2012 compared to 35 and 38 in 2011 and 2010, respectively. The proportion of VC funds that raised follow-on funds was at its lowest for 2012, particularly for second fund raised — only 22% of these funds raised a second fund, while 7% raised a third.

% of firms that raised 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Second fund 58% 38% 47% 39% 61% 48% 52% 35% 30% 43% 46% 50% 29% 22%

Third fund 34% 20% 19% 18% 39% 32% 17% 13% 15% 8% 17% 24% 3% 7%

US VC funds 2008 – 2014 YTD (number of final closings)

Note: *2014 YTD includes nine months of data up to 30 September 2014


VC fundraising activity — Europe Average fund sizes remain in line with historical levels despite slow fund raising activity for 2014YTD

5.1 2.7 1.5 1.5 2.1 2.3 1.7

0.7

0.1 0.3 0.1 0.2

0.4 0.3

4.1

2.5 1.4 2.6 0.9 2.2

1.1

2008 2009 2010 2011 2012 2013 2014 YTD*


Europe VC funds 2008 – 2014 YTD (amount closed — US$b)

47 77 59

33 20 22 15 23 29 24

14 15 19 16 27

40 26

16 16 12 7 11 10 7 4 5 3 3 20 21 14 10 5 8 2 4 2 1 2 1 2

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012# of initial funds closed # of firms that closed a second fund # of firms that closed a third fund

► Fundraising activity in Europe remain low in 2014YTD compared to levels seen in the past. The year so far saw a total of 31 funds compared to 98 funds in 2008 and close to 50 or more that were closed each year for the 2011-13 period. The average fund sizes for those funds closed through 2014YTD were in line with historical levels, with 2014YTD seeing an average fund size of US$99.3m compared to US$101.6m in 2008 and US$94.3 in 2013.

► Early-stage fund raising accounted for 55% of the total amount of venture funding closed in 2014 YTD in Europe, continuing the trend seen in 2012 and 2013 where early-stage funds made up the majority of total funds raised in a year of 66% and 47% respectively. Year-to-date also saw the highest average fund size raised for early-stage funds since 2010 with an average of US$94.3m.

► The number of initial funds closed during 2012 continued to be much lower than the levels recorded before 2009. To date, 2014 has seen a total of 16 initial funds closed, compared to 20 or more funds closed each year during pre-2009 period except for 2005 which saw 15 funds close.

Europe VC funds 2008 – 2014 YTD (number of final closings)


Second fund 57% 52% 44% 48% 80% 55% 47% 48% 34% 29% 29% 33% 16% 19%

Third fund 43% 27% 24% 30% 25% 36% 13% 17% 7% 4% 14% 7% 11% 0%

42 25

19

30 26

24

18

8 2 3

1 1 2

2

48

22 20

21 18

25

11

2008 2009 2010 2011 2012 2013 2014 YTD*





VC fund raising activity — Asia-Pacific Venture capital funds continued target early-stage investing reflected by an increasing proportion of early-stage funds closed

2.1 1.1 3.8

7.3

2.0 1.5 4.3 0.8

0.2

0.1

1.0

0.2 0.1

5.7

4.0

3.9

4.9

1.9 1.5

2.6

2008 2009 2010 2011 2012 2013 2014 YTD*


Asia-Pacific VC funds 2008 – 2014 YTD (amount closed — US$b)

5

24 12

5 5 11 18 25 28 26 42 45 40

30

4 19

4 4 3 10 12 15 12 13 13 17

9 6 2 10 4 3 2 7 7 8 7 7 8 6 5 0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

# of initial funds closed # of firms that closed a second fund # of firms that closed a third fund

► In the Asia-Pacific region, the amount closed in early-stage and multi-stage funds for the first nine months of 2014, far exceeded the yearly totals of 2012 and 2013. With almost half the number of early-stage funds closed during 2014YTD compared to the last two years, early-stage funds closed more than doubled over the same period.

► VC funds continue to target early-stage investments which is reflected by the increasing proportion of early stage funds closed as a percentage for the total fundraising activity. In 2014YTD, the proportion of early stage funds was 63% compared to 20%-25% during 2008-09 and approximate 50%-55% for 2010-13 period. With such high fundraising levels, early stage investing looks set to continue its prominence in the Asia-pacific VC sector.

► Fund follow-on activity slowed in the region compared to the historical levels. While only 30 initial funds were closed in 2012 compared to ≥40 during 2009-2011 period, the percentage of funds that raised a second fund also declined — 20% in 2012 from 23% in 2011 and more than 30% in both 2009 and 2010.

Asia-Pacific VC funds 2008 – 2014 YTD (number of final closings)


Second fund 80% 79% 33% 80% 60% 91% 67% 60% 43% 50% 31% 38% 23% 20%

Third fund 40% 42% 33% 60% 40% 64% 39% 32% 25% 27% 19% 13% 13% 0%

31 37 48

66

39 33

22

3 3 2 9

1 1 0

50 47

66

37

26 22

13

2008 2009 2010 2011 2012 2013 2014 YTD*





VC fund raising activity — Canada and Israel Early-stage fundraising in Israel reaches a new high with 2014YTD, second only to the amount closed in whole of 2008

129.9 86.6 119.2 401.3

1075.6 779.8

68.6 68.1 19.7

0.0 0.0

91.0

0.0

0.0

370.3

1269.9

0.0

484.0

30.4

249.4

0.0

2008 2009 2010 2011 2012 2013 2014 YTD*


Canada VC funds 2008 – 2014 YTD (amount closed — US$m) Canada VC funds 2008 – 2014 YTD (number of final closings)

505.0

166.0 171.4 30.0

170.2 175.0 290.0

200.0

0.0 0.0 80.0

80.0 0.0

0.0

177.0

0.0 0.0 88.0

0.0 356.0 0.0

2008 2009 2010 2011 2012 2013 2014 YTD*


Israel VC funds 2008 – 2014 YTD (number of final closings) Israel VC funds 2008 – 2014 YTD (amount closed — US$m)

2

3

2

5

4

6

2

1 1

0 0

1 0

3 3 3

1

2

0

2008 2009 2010 2011 2012 2013 2014 YTD*


4

1

3

1

4

3 3

1

0 0

1 1

0

3

1 0

3

0

2008 2009 2010 2011 2012 2013 2014 YTD*




Average dollar raised in final closing The average fund size increased across all markets in year-to-date compared to 2013, except for Canada; the Asia-Pacific region recorded biggest gains in average values

132

134

94

94

72

85

98

273

223

217

487

326

438

543

242

243 29

5

273 34

7

222

388

2008 2009 2010 2011 2012 2013 2014YTD*


US

Average final close (US$m)

Europe

Asia-Pacific



121

107

79

50 80

94

94

90

70 90

82

150

196

164

86 11

3

72

123

53 86

96

2008 2009 2010 2011 2012 2013 2014YTD*

69

30

80 11

1

51

46

196

280

51

33

117

200

53

0

113

86

59

131

73

67

198

2008 2009 2010 2011 2012 2013 2014YTD*

65

29 60

80

269

126

57

68

20

0 0

91

0 0

123

423

0

161

30

125

0

2008 2009 2010 2011 2012 2013 2014YTD*

Canada Average final close (US$m)

Israel


126 16

6

57

30

43

58 97

200

0 0

80

80

0 0

59

0 0

88

0

119

0

2008 2009 2010 2011 2012 2013 2014YTD*

103 61 67 118 62 54 197 95 197 60 111 200 126 57 110 166 57 66 50 89 97

179 176 163 185 167 136 181 102 108 76 80 71 94 99



Section 3.2: Active investor analysis Analysis by geography and hotbed


63% 65% 66% 66% 67% 63% 68%

37% 35% 34% 34% 33% 37% 32%

2008 2009 2010 2011 2012 2013 2014YTD*

Europe US Canada

# funds: 4 or more deals in year # funds: 1-3 deals in year

955 853 873 947 967 947 776

77% 76% 77% 77% 76% 77% 77%

23% 24% 23% 23% 24% 23% 23%

2008 2009 2010 2011 2012 2013 2014YTD*

425 393 422 393 404 449 323

89% 93% 92% 92% 88% 90% 88%

11% 7% 8% 8% 12% 10% 13%

2008 2009 2010 2011 2012 2013 2014YTD*

64 55 61 93 90 91 80

84% 88% 79% 74% 78% 74% 59%

16% 12% 21% 26% 22% 26% 41%

2008 2009 2010 2011 2012 2013 2014YTD*

India China Israel 122 111 104 88 79 82 61

78% 86% 85% 76% 86% 75% 73%

23% 14% 15% 24% 14% 25% 27%

2008 2009 2010 2011 2012 2013 2014YTD*

40 37 52 46 70 59 45

79% 84% 91% 91% 92% 87% 93%

21% 16% 9% 9% 8% 13% 7%

2008 2009 2010 2011 2012 2013 2014YTD*

84 67 67 69 83 86 70

► The number of VC funds with one to three deals in the US increased to 68% year-to-date up from 63% in 2013 driven by consumer goods, healthcare and IT sectors. For 2014YTD, the business and financial services was the most active sector in the region, which saw the highest number of investors with four or more deals (76 funds), across all sectors.

► Over the past six years, Europe did not see any change in the investment percentage in these two categories. For 2014YTD, the business and financial services sector saw 16 VC funds which made four or more deals – the highest level recorded since 2003.

► Canada and India were the only two markets that saw an increased number of total investors for the last six years. For these two markets, the share of VC funds with four or more deals increased in 2014YTD due to an uptick in consumer services sector.

► Year-to-date, China saw the share of VC funds with four or more deals increase to 41% compared to 25% over the last few years led by an increased share of funds focused in the business and financial services and consumer services sectors. For Israel, the share of these funds dropped to 7% which is the lowest level seen for the last six years.

VC investment by active investors — by geography VC funds continued to focus on a small number of deals except for China, which saw a significant increase in the number of funds with four or more deals



73% 77% 76% 73% 76% 74% 75%

27% 23% 24% 27% 24% 26% 25%

2008 2009 2010 2011 2012 2013 2014YTD*

New England Bay Area Southern CA

# funds: 4 or more deals in year # funds: 1-3 deals in year

521 469 471 509 498 535 455 247 213 205 235 233 235 186

88% 93% 90% 92% 89% 90% 95%

12% 7% 10% 8% 11% 10% 5%

2008 2009 2010 2011 2012 2013 2014YTD*

247 212 198 204 237 217 154

94% 91% 94% 93% 95% 86% 92%

6% 9% 6% 7% 5% 14% 8%

2008 2009 2010 2011 2012 2013 2014YTD*

New York Metro Texas

99 78 85 87 99 81 64

89% 91% 86% 85% 87% 81% 86%

11% 9% 14% 15% 13% 19% 14%

2008 2009 2010 2011 2012 2013 2014YTD*

198 178 203 250 268 270 230

VC investment by active investors — by hotbed VC funds most active in the Bay Area with 25% of the funds doing four or more deals 2014YTD

► VC funds have completed fewer deals in 2014YTD the share of the number of VC funds with four or more deals declined across all hotbeds compared to historical levels. ► The drop was the steepest in Southern California

and Texas — where the share of funds with four or more deals dropped to almost half in 2014YTD to those seen in 2013.

► For 2014YTD, a quarter of the VC deals in the Bay Area were from the funds that did four or more deals in a year particularly in the business and financial services, IT and consumer services sectors.

► New York Metro was the only US hotbed that saw an increase in the total number of deals for 2014YTD with 230 compared to 198 in 2008. For all other US hotbeds, the number declined with Southern California seeing the largest drop of 40%, over the same time period.

84% 87% 85% 84% 86% 88% 90%

16% 13% 15% 16% 14% 12% 10%

2008 2009 2010 2011 2012 2013 2014YTD*



86% 88% 87% 88% 84%

88% 88%

14% 12% 13% 12% 16%

12% 12%

2008 2009 2010 2011 2012 2013 2014 YTD*

83% 80% 82% 81% 81% 81% 85%

17% 20% 18% 19% 19% 19% 15%

2008 2009 2010 2011 2012 2013 2014 YTD*

► For 2014YTD, the UK continued to maintain its dominance among European hotbeds recording the highest number of active VC funds, primarily due to business and financial services sector. ► The sector, saw seven VC funds that have done four or more deals year-to-date – the

highest number seen since 2003. 49 investors did one to three deals which was the second highest over the last 11 years.

► In — Germany and France — slow activity in the consumer services, healthcare and IT sectors during 2014YTD led to the decline in the number of VC investors, particularly the funds which did one to three deals. ► Germany saw the total number of funds completing one to three deals decline from 94 in

2013 to 56 in 2014YTD. In France, the number fell from 53 to 38, over the same time period.

Germany

99 74 84 83 97 116 66

United Kingdom

147 133 152 137 141 139 102

79% 73% 85% 82% 80% 74% 76%

21% 27% 15% 18% 20% 26% 24%

2008 2009 2010 2011 2012 2013 2014 YTD*

66 67 78 62 59 72 50

France # funds: 4 or more deals in year # funds: 1-3 deals in year

VC investment by active investors — by hotbed The UK continues to dominate Europe with increased activity in the business and financial services sector



Section 3.3: Current ownership status of VC-backed companies Analysis by geography


Current ownership status of VC-backed companies – by geography Large proportion of VC-backed companies remain private and independent across the globe

Global

► Globally 1,949 companies have been funded year-to-date in 2014, versus 2,879 in 2007, which is 70% of 2007 funding levels.

► The US continued to see the highest volume and value of M&A activity since 2003, followed by Europe. In Canada and Israel, M&A activity has also started to pick up in, although slowly.

► China saw the highest proportion of companies exiting via IPO over the 2007-2010 period. In 2007, China had 95 IPO exits that raised US$3.7b – the strongest IPO exit activity seen over the last seven years, across all VC markets.

► Exit activity in India remain relatively low than the other VC markets as seen by higher proportion of private and independent companies – percentage of such companies in India has never fallen below 80% in any year, since 2007.

Number of companies by class year -- year of initial funding

5% 4% 5% 3% 1% 0% 0% 0%

19% 15% 13% 11% 9% 5% 2% 0%

65% 73% 78% 83% 90% 94% 97% 99%

10% 7% 4% 3% 1% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*

Publicly-held Acquired/merged Private & independent Out of business

2,879 2,534 1,999 2429 2,879 2,978 3,062 1,949

Total equity raised (US$b)

15% 10% 13% 6% 5% 2% 4% 0%

19% 9% 8%

8% 6% 3% 5% 1%

60% 77% 77%

86% 89% 96% 91% 99%

6% 3% 1% 1% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*Publicly-held Acquired/merged Private & independent Out of business

49.3 41.4 32.5 34.2 28.7 23.1 15.7 8.3

Note: Global total includes the US, Europe, Canada, China, Israel and India only; 2014 YTD includes nine months of data up to 30 September 2014


US Number of companies

3% 6% 4% 3% 3% 2% 2% 1% 1% 0% 0% 0%

42% 36% 32% 29% 26% 21% 19% 17% 11% 7% 3% 1%

36% 39% 50% 55% 59% 68% 75% 79% 87% 92% 97% 99%

19% 20% 15% 13% 12% 9% 4% 3% 1% 0% 0% 0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD*

Publicly held Acquired/merged Private & independent Out of business

677 830 948 1,110 1,324 1,268 922 1,198 1,548 1,656 1,570 972


12% 24% 17% 12% 10% 11% 7% 4% 8% 0% 1% 0%

37% 24%

22% 18% 24%

11% 11% 9% 7% 4% 8% 2%

37% 41% 54% 61% 61%

74% 81% 85% 85% 96% 91% 98%

13% 11% 8% 9% 5% 4% 1% 1% 0% 0% 0% 0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD*


20.7 24.6 31.1 32.0 32.2 29.1 20.2 21.7 17.5 15.0 9.6 5.0

Number of companies

6% 4% 3% 2% 2% 2% 2% 1% 0% 0% 0% 0%

28% 22% 24%

18% 16% 10% 7% 6% 6% 3% 1% 0%

45% 55% 58% 67% 72% 81% 87% 91% 93% 97% 99% 100%

21% 19% 15% 14% 11% 7% 5% 2% 1% 0% 0% 0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD*


498 535 579 777 1,008 798 684 787 805 821 904 577


14% 5% 7% 5% 4% 1%

36%

2% 0% 3% 3% 0%

32%

28% 31% 22% 17%

6%

3%

7% 3% 1% 0% 0%

41% 54%

57% 69% 74%

89%

61%

90% 96% 96% 97% 100%

13% 12% 4% 4% 5% 3% 1% 1% 1% 0% 0% 0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD*


3.2 3.9 4.5 6.9 6.3 5.2 5.4 4.7 4.8 3.4 2.4 1.7

Europe

Current ownership status of VC-backed companies – by geography M&A remains the most preferred exit route for companies in the US and Europe



Number of companies

71 47 44 50 72 86 111 55


Number of companies


1% 2% 0% 0% 0% 0% 0% 0%

11% 26% 18% 15%

8% 5% 0% 0%

81% 70%

79% 83% 92% 95% 100% 100%

7% 2% 3% 2% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*Publicly held Acquired/merged

0% 1% 0% 0% 0% 0% 0% 0%

7% 17% 6% 8% 10% 1% 0%

0%

87% 82%

92% 87% 90% 99% 100% 100%

6% 0% 2% 5% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*

Publicly held Acquired/merged

3% 1% 4% 0% 0% 0% 1% 0%

5% 6% 9% 15% 6% 4% 0%

75% 86% 80% 76% 100% 94% 95% 100%

17% 6% 7% 9% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*Publicly held Acquired/merged

3% 4% 13%

0% 0% 0% 2% 0% 4%

6% 7% 21% 0%

2% 0%

0%

46%

87% 78% 77%

100% 98% 98% 100%

47% 3% 2% 1% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014YTD*Publicly held Acquired/merged

0.7 0.3 0.9 0.6 0.7 0.5 0.4 0.2

110 81 56 34 36 54 81 43

1.9 0.7 0.4 0.4 0.3 0.3 0.3 0.1

Canada Israel

Current ownership status of VC-backed companies – by geography M&A activity has started to pick up in Israel and Canada over 2007-2010 period



Number of companies


Number of companies


290 249 231 284 302 206 254 230

33% 27% 30% 21%

3% 2% 2% 0%

8% 2%

6% 2%

4% 2% 1% 0%

57% 67%

64% 75%

93% 96% 97% 100%

2% 4% 1% 1% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014YTD*


57%

19% 28%

15% 3% 7% 17% 0%

5%

3%

8%

2% 2% 0%

0%

1%

37%

75% 64%

83% 95% 93%

83% 99%

0% 2% 0% 1% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*


3% 3% 2% 1% 1% 1% 0% 0% 13% 14% 6% 9%

6% 1% 2% 0%

83% 80% 92% 88% 92% 98% 98% 100%

1% 2% 0% 1% 1% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*Publicly held Acquired/merged Private & independent Out of business

2% 4% 0% 1% 0% 0% 0% 0% 9% 2% 0% 3% 10% 0% 0% 0%

88% 94% 100% 95% 90% 100% 100% 100%

1% 0% 0% 1% 0% 0% 0% 0%

2007 2008 2009 2010 2011 2012 2013 2014 YTD*


6.4 4.0 3.3 5.5 4.5 3.0 2.5 1.3

76 91 62 76 116 155 142 72

1.6 2.1 2.3 1.4 1.0 0.9 0.5 0.1

China India

Current ownership status of VC-backed companies – by geography China recorded the highest proportion of companies exiting through IPO route, across VC markets



Appendix


Sector classification

Sector Sub-sector


Business support services Construction and civil engineering Financial institutions and services Wholesale trade and shipping

Consumer goods

Food and beverage Household and office goods Personal goods Vehicles and parts

Consumer services

Consumer information services Media and content Retailers Travel and leisure

Energy and utilities Non-renewable energy Renewable energy Utilities

Healthcare

Biopharmaceuticals Healthcare services Medical devices and equipment Medical software and information services


Aerospace and defense Agriculture and forestry Machinery and industrial goods Materials and chemicals


Communications and networking Electronics and computer hardware Semiconductors Software


EY’s global venture capital advisory group leadership network

Markets and Operations Sandra Feldner Vandergriff +1 213 977 3253 [email protected]

EMEIA Andrea Vogel +31 8 8407 4070 [email protected]

Asia-Pacific Ringo Choi +86 755 2502 8298 [email protected]

Greater China Lawrence Lau +862 1222 82816 [email protected]

France and Luxembourg Franck Sebag +33 1 46 93 73 76 [email protected]

Global Leader Bryan Pearce +1 617 585 0499 [email protected]

Global SGM Leader Maria Pinelli +44 20 7980 0960 [email protected]

India Mayank Rastogi +91 22 6192 0850 [email protected]

Israel Oren Bar-On +97 2 3568 7102 [email protected]

US Leader Jeff Grabow +1 408 947 5607 [email protected]

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All data contained in this is sourced to Dow Jones VentureSource unless otherwise noted.

Global VC investment landscape and fund raising activity · VC funding recorded in the three key VC...

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