2010 01 13 Creandum Nordic Exit Analysis

  • 1,973 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,973
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
47
Comments
0
Likes
3

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Being a VC in the Nordics
  • 2. Creandum Nordic Technology Exit Analysis •  Database with 280+ private technology company exits •  20+ parameters covered including exit value, exit revenue, exit type, years from inception to exit etc •  Companies from Denmark, Finland, Norway & Sweden •  Focus on VC and angel investments – no buyout or privatizations •  Exit value (€m) of companies at time of trade sale or IPO •  EXCLUDING Life science, retail, energy (oil & gas etc) & environmental and consulting •  Focus on exit information, not best practice for VC investment •  Sources include official information (web sites, press releases, newspaper articles, annual reports) as well as financial resources & databases* •  Feel free to use material but please mention the source * VentureOne/Source, EVCA, Thompson, Zephyr, Private Equity Insight, Nordic Unquote, Förvärv & Fusioner Copyright Creandum 2009 2
  • 3. The Nordics at a Glance GDP (US$ bn) Population (M) 2 000 40 1 700 34 25 1 006 1 000 20 0 0 Nordics California Nordics California Olympic Gold Medals WEF Global ICT Report (/million inhabitants) Rank Country Score 100 1 Denmark 5.85 2 Sweden 5.84 66 3 USA 5.68 4 Singapore 5.67 50 5 Switzerland 5.58 6 Finland 5.53 7 Iceland 5.50 8 Norway 5.49 8 9 Netherlands 5.48 0 10 Canada 5.41 Nordics US Copyright Creandum 2009 3
  • 4. 100 1 000 10 000 100 000 Google 1 000 000 First Solar Exit Value (€M) Source: Balderton REC QQ (Tencent) Baidu Alibaba Q-Cells Ctrip Navteq Salesforce Sunpower Suntech MetroPCS Iliad Focus Media Tom-Tom CTC Media Giant Interactive LDK Solar IndiaBulls Yingli Copyright Creandum 2009 Betfair TeleAtlas Shanda Skype YouTube Omniture •  12 US Perfect World Co >1 BUSD technology companies last 5 years •  12 China VistaPrint SMIC Netsuite A global take on billion dollar tech companies Infinera MoneySupermarket •  10 Europe - 3 in Nordics Rightmove Riverbed MySQL 4
  • 5. The Nordic technology market A very attractive region Exits Exits of private Nordic technology (ICT) companies between 1998-2009 80 Median: €20M Average €114M 70 60 50 40 Number of IPO Number of M&A 30 20 10 0 =< 10 10 - 49 50 - 99 100 - 499 ≥ 500 M€ •  Creating substantial exit value – more than €2Bn per year last 10 years! •  Producing significant number of home runs – 34 exits larger than €100 •  25% of European technology exits larger than €100M (2004-2006) •  8% of global technology exits larger than $1Bn last 5 years (vs 2% of invested capital) Sources: EVCA, Thompson, Dow Jones, Creandum Copyright Creandum 2009 5
  • 6. Exit market development Timing matters Exits Number and average value of exits between 1999-2009 M€ 60 350,0 50 300,0 250,0 40 200,0 Number of IPO 30 150,0 Number of M&A 20 100,0 Avg Exit Value 10 50,0 0 0,0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 •  Exit opportunity closely connected to general economy situation •  M&A represents ~83% of exits and has been dominant since 2001 – similar development as in US •  Norway is the exception in terms of IPO – other Nordic countries dried up after 2001 Sources: EVCA, Thompson, Dow Jones, Creandum Copyright Creandum 2009 6
  • 7. Large value created in early-stage companies… Total exit value in intervals from company founded to exit (Skype & REC excluded) M€ Exits 4 000,0 100 3 500,0 90 80 3 000,0 70 2 500,0 60 2 000,0 50 Total value 1 500,0 40 Number of exits 30 1 000,0 20 500,0 10 0,0 0 1-3 4-6 7-9 10-12 13-15 =>15 Years from company founded to exit •  Average age for exited companies is 8.2 years vs 9.1 years for home runs (>100M€) •  Exit value is not directly proportional to company age (except for software) •  43% of total exit value created in companies up to 6 years old •  Primarily internet companies exited within 3 years Copyright Creandum 2009 7
  • 8. But technology sector is maturing Avg P/S: 529 Avg Rev: €73M Nordic technology home runs between 1998 - 2003 M&A: € 940M M&A: € 961M IPO: € 491M IPO: € 474M IPO: € 430M M&A: € 600M IPO: € 383M IPO: € 189M IPO: € 278M IPO: € 347M M&A: € 230M IPO: € 191M IPO: € 167M SendIt IPO: € 254M M&A: € 169M M&A: € 120M IPO: € 200M M&A: € 135M €1M €10M €50M Revenue Copyright Creandum 2009
  • 9. But technology sector is maturing Avg P/S: 33 Avg Rev: €115M Nordic technology home runs between 2004 - 2009 M&A: € 645M IPO: € 5’148M M&A: € 645M IPO: € 328M M&A: € 473M IPO: € 415M M&A: € 282M M&A: € 222M M&A: € 2’200M IPO: € 198M M&A: € 172M M&A: € 186M M&A: € 109M M&A: € 162M M&A: € 140M M&A: € 100M €1M €10M €50M Revenue Copyright Creandum 2009
  • 10. IPO & trade sale to US most important large exit Exit value distribution Exit distribution for trade sale & IPO per exit interval for trade sale & IPO Exits M€ •  Lack of larger Nordic exit opportunities since IPO-market dried up •  Larger exits very dependent on US exit market •  VC investors in 100% of exits larger than €500M and 70% of exits larger than €100M (81% last 3 years) but few include US investors Copyright Creandum 2009 10
  • 11. Sweden & Norway create majority of exit value Relative portion of Nordic exits and exit value per country 1999-2008 60% 132 50% € 8.8 40% € 7.3 30% Number of exits Exit value 50 20% Number of IPO 39 33 € 2.6 Company value € 1.8 10% at IPO 0% Sweden Norway Denmark Finland •  Swedish & Norwegian companies represent 67% of exits & 78% of exit value •  Large portion of Norway exits through IPO •  Denmark mostly strong exit market before 2001 •  Finland: some big IPOs before 2001, then small domestic exits Copyright Creandum 2009 11
  • 12. ...but without biggest exits Sweden is clear nr 1 Relative portion of Nordic exits and exit value per country 1999-2008 60% € 6.7 131 50% 40% 30% Number of exits Exit value 49 20% € 2.1 Number of IPO 38 € 1.6 32 € 1.5 Company value 10% at IPO 0% Sweden Norway Denmark Finland •  Sweden: without Skype (€2.2Bn) •  Norway: without REC (€5.1Bn) •  Denmark: without Giga (€940M) •  Finland: without SSH (€383M) Copyright Creandum 2009 12
  • 13. Software & internet services biggest sectors Nr of Exits: 290 Exit value: € 21.8 Bn 8% 3% 1% Software 5% 25% Internet Services 24% 8% 41% Systems Components 14% Operator 7% 22% Materials 10% 23% 9% •  Last 3 years, internet services has been even more significant •  Software companies are exited in all value intervals •  System & components companies are more digital, either large exit or no exit at all (or fire sale) •  Operators create significant exits but are expensive to build Copyright Creandum 2009 13
  • 14. Local differences of where exit value is created •  Sweden: Internet & software •  Norway: Software & materials •  Denmark: Components & software •  Finland: Software Copyright Creandum 2009 14
  • 15. Local differences of where exit value is created •  Sweden without Skype (Internet services): Software & systems •  Norway without REC (Materials): Software & internet services •  Denmark without Giga (Components): Software •  Finland without SSH (Software): Software Copyright Creandum 2009 15
  • 16. Wrapping up •  The Nordic region produces great companies •  Sweden & Norway have created majority of exit value •  It takes time to build great companies but if you are not growing you are getting left behind – requires scalability and strong sales focus •  Technology sector is maturing – substantial revenues required •  Internet & software biggest sectors •  International footprint is important – the exit market is primarily outside the Nordic region 16