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THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 1 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 2 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 3 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 4 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 5 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 6 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 7 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 8 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 9 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 10 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 11 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 12 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 13 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 14 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 15 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 16 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 17 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 18 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 19 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 20 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 21 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 22 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 23 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 24 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 25 THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT Slide 26
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THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT

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A comprehensive analysis of Tech and Venture Capital in DACH for 2019/2020

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THE FRONTLINE & SPEEDINVEST 2019/2020 DACH REPORT

  1. 1. THE 2019/2020 DACH REPORT: AN ANALYSIS OF TECH AND VENTURE CAPITAL November 2020
  2. 2. THE MACRO VIEW 2
  3. 3. WEALTHY & EDUCATED: “DACH” IS AN ECONOMIC POWERHOUSE 3 Germany (D), Austria (A) and Switzerland (CH) are home to 100 million people, including the wealthiest and best educated in Europe - as well as a disproportionate amount of developers. Sources: DACH Map; US Map; GDP data Eurostat and US Bureau of Economic Analysis; Developers, Atomico DACH represents 13% of the European population and 20% of its professional developers. DACH at $5.2 trillion GDP in 2019 No. of Professional Developers in EuropePurchasing power adjusted GDP per capita, in €, 2019 DACH, 1,166,800 Rest of Europe, 4,933,200 47.5 39.6 37.6 33 33 32.6 31.3 € 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 45 € 50 Switzerland Austria Germany France Euro 19 United Kingdom EU 28 Thousands
  4. 4. $0.00 $100.00 $200.00 $300.00 $400.00 Cambridge UCL Oxford Ecole polytechnique (lausanne) ETH Zurich Innsbruck Imperial college University of Turin Trinity College Dublin Nottingham University TU München 0 0.01 0.02 0.03 0.04 Switzerland Sweden Austria Denmark Germany France United Kingdom 0 500 1000 1500 2000 Germany France UK Switzerland Netherlands Russia Italy Sweden Finland Austria LEADING R&D AND IP GENERATION IN EUROPE 4 DACH countries lead Europe in R&D spent and filed patents. Swiss spin-outs are 2nd most capitalized in Europe. Sources: Patents and Top Unis, Atomico State of European Tech 2019; R&D Spending: Eurostat Total number of patents (1000's) filed by country Top European universities by total capital raised ($m) by spinoffs in 2019 R&D spending as a % of GDP, 2017
  5. 5. 1,673 981 558 492 416 0 500 1,000 1,500 2,000 Basel Zurich Lausanne Baar Zug 9,516 2,798 1,114 300 253 0 2,500 5,000 7,500 10,000 Berlin Munich Hamburg Tübingen Düsseldorf 527 61 19 13 10 0 200 400 600 Vienna Graz Linz Klosterneuburg Wattens 75% 25 % 55 % 45 % 28 % 72 % 5896 3237 2346 1110 1029 573 560 519 455 385 382 345 310 265 257 0 2000 4000 6000 London Berlin Paris Stockholm Munich Amsterdam Barcelona Bucharest Baar Madrid Cambridge Copenhagen Zurich Utrecht Helsinki Source: Dealroom.co as of 09/2020 Top city share of total deal volume Deal Volume by City 2015-2019 (in EUR M)Deal Volume by City 2015-2019 (in EUR M) WITH ACTIVITY SPREAD ACROSS BUSTLING HUBS 5 DACH houses 3 of Europe’s top 10 tech hubs. Multiple hubs are worth watching. Covid is likely to increase regional fragmentation
  6. 6. THE IMPACT OF COVID-19 6
  7. 7. M&A SPEND IS BACK TO PRE COVID LEVELS… 7 Covid has shortened the M&A spend cycle. Despite total deal count falling, Q4 spend is picking up due to the €1.2b acquisition of Flaschenpost by Dr Oetker in November. -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 0 5 10 15 20 25 30 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Totalspent$b dealcount quarter deal count Cumulative $b spent Deal count and cumulative deal value $b in the last 2 yrs Sources: Pitchbook.com search on 04.11.20 of all M&A of VC backed companies Eu Startups Blog on Flaschenpost acquisition COVID Impact
  8. 8. ..AND VC SPEND IS AT AN ALL TIME HIGH (!) 8 Total VC deal spend in DACH has reached its peak at $2.6b in Q2 this year. Interestingly, valuations crashed- which means VCs aren’t spending less, they are just getting more value for their money. 0 5 10 15 20 25 30 0 0.5 1 1.5 2 2.5 3 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 valuations$m TotalVCspend$b quarter Total VC spend $b Median post money valuation $m Evolution of total VC spend in DACH and post money valuations Sources: Pitchbook.com search on 04.11.20 of all VC backed companies COVID Impact
  9. 9. DACH VCS CONTINUE TO RAISE LARGE FUNDS 9 Established, emerging and new fund managers in DACH have been able to raise new funds in 2020. $100m $100m $53m $50m $250m $150m $120m $60m $80m $190m$50m $82m $170m$678m $70m $180m $600m
  10. 10. COVID-19 impact DACH startup & size of last round Consumer engage in more speculative trading and investing in volatile markets 1 Students learn school/university courses online Remote work collaboration tools Shift towards E-commerce & efficient logistics3 consumers seek more liquidity through debt. They are also more likely to default on loans 1 Hospitals & clinics seek to increase efficiency and reach patients remotely 2 Financial crime is rife 1 Growth of telemedicine and consumer wellness 2 Remote employee management tools for HR & Finance teams TO DEPLOY CAPITAL IN “COVID-READY” STARTUPS 10 Several home-grown startups are addressing key COVID-related shifts in the market and raised funds in 2020 1. Blog: ‘8 Top fintech trends in a post covid world’ 2. Speedinvest blog: ‘Covid-19 and the future of telemedicine in the German speaking world’ 3. Blog: ‘how covid is impacting ecommerce’ $15m $9m $12m $16m LBO $5m $2m $15m $11m $6m $31m $4m $18m $60m $9m $73m $78m $15m $12m $56m $11m $6m $6m $14m $21m
  11. 11. DIVING INTO THE DACH ECOSYSTEM 11
  12. 12. THE PRE-SEED ECOSYSTEM IS GROWING FAST 12 DACH is now home to numerous local and international pre-seed funds, micro funds, accelerators and incubators. Local International Acceleratorsand incubators microVCs&preseed investors
  13. 13. AND ATTRACTING GLOBAL FUNDING DOWNSTREAM 13 Seed in DACH is dominated by local and European funds. Growth capital is mainly international, with growing interest from the US and Asia. Investors with a local presence in DACH Investors based outside DACH Corporate Venture Capital Seed Series A-B Growth Stage Source: Crunchbase.com, Pitchbook.com (Retrieved September 2020)
  14. 14. SNAPSHOT: THE LARGEST STARTUP VALUATIONS IN DACH 14 Winners have maintained and surpassed their valuations in the last 12 months, despite Covid. €419M €2.3B €5.3B €1.8B €1.5B €1.1B €909M €800 M €16B >€2.5B €20.5B €7.1B €3.2B €4.5B €1B €909M €909M €818M €558M €455M €455M €909M €397M €464M €300M €6.4B €300M €436M €780M €436M €436M €273M €360M €355M€164M €273M €182M €227M €3B €370M Note: notable companies in the DACH region, based on current or LTM valuation; private market valuation, best estimate based on public data. Source: Crunchbase.com, Pitchbook.com (Retrieved September 2020). Bubble size only roughly proportional to valuation.
  15. 15. DACH UNICORNS ARE TAKING FLIGHT 15 A growing number of DACH VCs count unicorns in the portfolio or have exited companies at + $1 billion valuations. VCs Top $1b+ exitsUnicorns still in portfolio
  16. 16. CORPORATE Stage Focus Late stage Insurtech, mobility, connected health, wealth management Series A Health, mobility, smart home, fintech Seed, growth Emerging tech with strong IP, B2C & B2B Seed, growth Fintech and insurtech Series A-B Travel, health, home & living, beauty, ecommerce, retail Seed, series A B2B enterprise software SAP is DACH corporate with largest # LP commits to VC funds THROUGH IT ALL, CORPORATES REMAIN A KEY SOURCE OF FUNDING Both on the LP and CVC side, corporates are a key source of capital for top tier local and global companies. Source: Pitchbook.com search Sep 2020 Corporate Stage Focus
  17. 17. WHAT’S HOT 2019/2020 17
  18. 18. B2B SOFTWARE: • 148 financing rounds in 2019 • $1b of total invested volume • Good stage-mix in the ecosystem leads to strong cross-pollination HEALTHCARE: • 133 rounds in 2019. • $0.4b of total invested volume • New reimbursement rules for health apps are encouraging a whole wave of new startups ECOMMERCE: • 3 successful IPOs worth approx. $8b at time of public offering. • 2 unicorns MOBILITY: • 26 financing rounds in 2019 • $1.3b of total invested volume FINTECH: • 48 financing rounds in 2019 • $1.2b of total invested volume • Industry consolidates as number of deals begin to stabilise Established sectors in Germany Emerging sectors in Germany GERMAN HEALTHCARE AND B2B SOFTWARE ON THE RISE 18 Mobility is well established. Ecommerce has renewed momentum from Covid. Fintech is consolidating. Sources: pitchbook , last updated october 2020.
  19. 19. Consolidating sectors in Austria Emerging sectors in Austria AUSTRIA SHOWCASING FINTECH AND ENTERPRISE SOFTWARE 19 Austria has a small ecosystem with winners in several sectors, including fintech, enterprise SaaS, Prop Tech, B2C FINTECH & CRYPTO: • $77m invested over 11 rounds in 2019/2020. • Bitpanda’s $52m series A was Europe’s largest A round in 2020. • Round led by Peter Thiel’s Valar ventures. ENTERPRISE SAAS: • $100m in 26 rounds in 2019/2020. • Strong technical talent pool has enabled several deep tech successes: Anyline ($12M Series A in 01/2020, Mostly.ai (4.5M Series A in 03/2020) and Bitmovin $65m raised to date. • Dynatrace - the most overlooked Decacorn in Europe - was founded in Austria. INDUSTRIAL & PROPTECH: • $45m invested over 22 round in 2019/2020. • Driven by Planradar’s $33m series A with participation from Tier 1 international investors: Insight Partners and e.ventures. • Austria has strong industrial/construction SMEs backbone-likely to generate more winners. B2C & B2B MARKETPLACES: • Sector is nascent with a few breakout rounds in 2020: • Refurbed’s $17m series A with US investor FJ labs participating. • GoStudent: edtech platform GoStudent, who raised $9M Series A.
  20. 20. BioTech & MedTech wins Fintech & Crypto consolidates Emerging enterprise SaaS winners SWISS ENTERPRISE SOFTWARE GETS HOT, HOT, HOT! 20 Whilst biotech and fintech continue to show signs of success, large rounds in enterprise SaaS has put Switzerland in the spotlight • $1b invested across 51 companies. • Life science & genetics startups account for +40% of company count. • Driven by strength of Swiss IP and pharma HQs. • Large rounds in 2020: Sophia Genetics ($100M+ Series F in Oct), Arvelle Therapeutics ($222M in May) and Polares Medical ($ 40M Series B in June). • $0.6b invested in 49 companies. • Startups supported by strong banking ecosystem. • +50% of investments are crypto/blockchain. • Largest rounds in 2019: Bitcoin Suisse ($47m Series B) and Metaco ($18m series A). • $0.5b invested into 72 companies. Large rounds in 2020 include: • Scandit: $80M Series C in May with Atomico and Salesforce ventures • Frontify:: $22M Series B in Jan with Blossom capital and EQT participating • Beekeeper: $60M Series B in July with Keen ventures, Samsung NEXT and btov. Source: Dealroom.co search in Oct 2020, Crunchbase, Genomeweb, Tech.eu All data is for 2019 & 2020.
  21. 21. ZOOMING IN ON DACH B2B 21
  22. 22. These funds have made early investments in local B2B SaaS companies that ended up raising Series C+ rounds. LOCAL VCs EUROPEAN VCs SPOTLIGHT: BULLISH EARLY BACKERS OF DACH B2B WINNERS 22
  23. 23. London DublinAmsterdam Paris Stockholm Helsinki Frankfurt Madrid Utrecht Brussels Prague Arlborg Copenhagen Berlin Hamburg Cork Milan Lisbon Barcelona Rotterdam Manchester Innsbruck Vienna Munich Oslo Warsaw Bucharest Gothenburg Zurich 1 10 100 1,000 1 10 100 1,000 10,000 Senior hires across all companies sampled Total hires made across all companies sampled Large talent pools with excellent availability of Senior Talent Emerging locations Smaller talent pools with good availability of Senior Talent Hires made in European cities by US B2B Software Companies THE US WANTS A SLICE OF THE DACH B2B TALENT PIE 23 Abundant and highly qualified talent has made Germany in particular a popular beachhead for European operations. B2B US companies with DACH office Sources: Frontline’s European expansion report released in June 2020, Pitchbook.com Hiring patterns (number and seniority) of US tech companies when landing in Europe. Taken from Frontline’s european expansion report.
  24. 24. OUTLOOK 24
  25. 25. EARLY STAGE GROWTH: The growth in pre seed and seed stage funds and incubators will accelerate the growth of local start- ups at the early stages. DIGITAL HEALTH BOOM: German regulatory shifts (DVG) are unleashing a digital health boom that is only just beginning. FIERCE COMPETITION: intense competition for hot deals by repeat founders at all stages, as new growth capital enters from Asia and the US. VALUATIONS INFLATE: Seed and series A valuations continue to grow in line with European trends. FRAGMENTATION: COVID is driving fragmentation and remote work, so more very early-stage start-ups will come from non-obvious places. CAREFUL CVCs: Corporate VCs acting more carefully as their corporate backers deal with COVID aftermath. B2B SaaS: will gain serious ground due to tremendous strength of DACH R&D and a new wave a successful repeat entrepreneurs. DACH 2021 WHAT’S NEXT? SOME GUESSES AMID THE CHAOS. 25 It’s difficult to make predictions on the brink of the second COVID-19 wave. We feel fairly confident about these.
  26. 26. Krishan Allen LinkedIn, Twitter CONTRIBUTORS 26 Lead author: Héléna Cavell Linkedin, Twitter Yang Tran Linkedin, Twitter Felix Fein Linkedin Felix Faltin Linkedin
  • marylouise

    Sep. 20, 2021
  • StefanGrll

    Dec. 14, 2020
  • EduardoBrngerPaperin

    Dec. 9, 2020

A comprehensive analysis of Tech and Venture Capital in DACH for 2019/2020

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