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Lakestar - NOAH17 Berlin

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Keynote by Dr. Klaus Hommels, Founder & CEO of Lakestar at the NOAH Conference Berlin 2017, Tempodrom on the 22nd of June 2017.

Published in: Investor Relations

Lakestar - NOAH17 Berlin

  1. 1. DIGITALIZATION AND GEOPOLITICS KLAUS HOMMELS NOAH 2017
  2. 2. GET YOUR TICKET TODAY! www.noah-conference.com 6-7 Old Billingsgate, London Tempodrom, Berlin JUN20182-3 NOV2017 SAVE THE DATE
  3. 3. EUROPE'S RISE AND POTENTIAL DOWNFALL? Economic growth and its reasons over time
  4. 4. CULTIVATION INDUSTRIALIZATION DIGITALISATION PRE 1700 1700 - 1990 1990 - ?
  5. 5. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION
  6. 6. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION Political influence local Capital local
  7. 7. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION Trade Deficit DIGITAL Industry Protectionism $66bn European trade surplus in "old industries" Mainly national industry politics Capital national, later global
  8. 8. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION Global industry politics Global capital
  9. 9. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION Protectionism
  10. 10. PRE 1700 1700 - 1990 1990 - ? CULTIVATION INDUSTRIALIZATION DIGITALISATION Protectionism Digital trade deficit
  11. 11. EUROPE OPERATES AT A MASSIVE DIGITAL TRADE DEFICIT TO THE UNITED STATES 10Source: BEA 2016 (numbers from 2014) $165bn $97bn $68bn deficit
  12. 12. 11Source: Lakestar Research GERMANY ESPECIALLY HAS STRUGGLED TO „EXPORT“ DIGITAL INNOVATION IN RECENT YEARS 2016 $26bn deficit $36bn $10bn
  13. 13. DIGITAL TRADE DEFICIT = WARNING SIGN FOR FUTURE DEPENDENCY ON FOREIGN COUNTRIES (WE NURTURE FOREIGN-OWNED GLOBAL MONOPOLIES)
  14. 14. WHAT LEVERS DOES EUROPE HAVE AT ITS DISPOSAL?
  15. 15. Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda POLITICAL SPHERE
  16. 16. 16Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda POLITICAL SPHERE FINANCIAL SPHERE
  17. 17. 17Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda POLITICAL SPHERE Rigorous political action. Europe needs to have one voice. FINANCIAL SPHERE
  18. 18. 18Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda POLITICAL SPHERE FINANCIAL SPHERE Rigorous political action. Europe needs to have one voice. Ownership in global platform matters. Ownership = control
  19. 19. POLITICAL SPHERE
  20. 20. CAPITALIZE ON LARGE HOME MARKETS 20 EUROPEAN UNION 2015 POPULATION 321 mn 510 mn 1.37 bn
  21. 21. CAPITALIZE ON LARGE HOME MARKETS 21 EUROPEAN UNION 2015 POPULATION 321 mn 510 mn 1.37 bn
  22. 22. HETEROGENITY: EUROPE FAILS TO SPEAK WITH ONE VOICE 22Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda EUROPEAN UNION •  11 small Telcos instead of 4 large ones •  Few globally relevant investment banks Domestic Regulation creates “sub-sized” players too small to compete globally Foreign Regulation Brussels lacking decisiveness towards level playing-field Ownership & Representation engaged and expert- driven political ownership needed •  Protection against foreign platforms through topics such as “Net Neutrality” •  Role and functions of Germany’s Digitalminister
  23. 23. HETEROGENITY: EUROPE FAILS TO SPEAK WITH ONE VOICE 23Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda EUROPEAN UNION •  11 small Telcos instead of 4 large ones •  Few globally relevant investment banks Domestic Regulation creates “sub-sized” players too small to compete globally Foreign Regulation Brussels lacking decisiveness towards level playing-field Ownership & Representation engaged and expert- driven political ownership needed •  Protection against foreign platforms through topics such as “Net Neutrality” •  Role and functions of Germany’s Digitalminister
  24. 24. HETEROGENITY: EUROPE FAILS TO SPEAK WITH ONE VOICE 24Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda EUROPEAN UNION •  11 small Telcos instead of 4 large ones •  Few globally relevant investment banks Domestic Regulation creates “sub-sized” players too small to compete globally Foreign Regulation Brussels lacking decisiveness towards level playing-field Ownership & Representation engaged and expert- driven political ownership needed •  Protection against foreign platforms through topics such as “Net Neutrality” •  Role and functions of political influencers
  25. 25. PROTECTIONISM AS A GEOPOLITICAL POWERPLAY 25Source: … EUROPEAN UNION - PROTECTIONISM Market share of search engines Percent 76%2% 92% 1% European search engines
  26. 26. FINANCIAL SPHERE
  27. 27. OVERCOME FEAR TO INVEST IN DIGITAL INNOVATION 27 INVESTED VENTURE CAPITAL as ‰ of GPD Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda CAPITAL 3.3 0.7 0.6 5x
  28. 28. OVERCOME FEAR TO INVEST IN DIGITAL INNOVATION 28 R&D SPENDING as % of global R&D spending Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda CAPITAL Industrials Software & Internet 26% 19%29% 25% 12% USA China RoW 62% USA 18% China 8% RoW
  29. 29. WHY IS CAPITAL SO CRUCIAL?
  30. 30. WHY IS CAPITAL SO CRUCIAL? CAPITAL IS A GEOPOLITICAL TOOL: It ensures influence over corporate governance
  31. 31. CAPITAL ENSURES GLOBAL GEOPOLITICAL INFLUENCE – AND EUROPE IS BAD AT IT 31 IMPORT/EXPORT VENTURE CAPITAL 2011-2015 (accumulated) Source: Invest Europe € 3.0bn IMPORT € 1.3bn EXPORT € 1.7bn net import = loss of influence on corp. governance
  32. 32. EVEN OUR EUROPEAN WINNERS ARE FINANCED BY U.S. INVESTORS 32Source: Invest Europe
  33. 33. WHAT ABOUT EXISTING GLOBAL PLATFORMS?
  34. 34. EUROPE NEEDS TO ENSURE SUBSTANTIAL OWNERSHIP IN THE WORLD’S MOST DOMINATING DIGITAL PLATFORMS 34Source: Public Information, Quigley Report TOP 20 digital platforms
  35. 35. EUROPE NEEDS TO ENSURE SUBSTANTIAL OWNERSHIP IN THE WORLD’S MOST DOMINATING DIGITAL PLATFORMS 35Source: Public Information, Quigley Report TOP 20 digital platforms 132 Investment rounds with >$10m volume $62bn Total investment raised
  36. 36. EUROPE NEEDS TO ENSURE SUBSTANTIAL OWNERSHIP IN THE WORLD’S MOST DOMINATING DIGITAL PLATFORMS 36Source: Public Information, Quigley Report TOP 20 digital platforms 132 Investment rounds with >$10m volume $62bn Total investment raised 14% with European involvement
  37. 37. All Investment Rounds in Top 20 Digital Platforms EUROPE NEEDS TO ENSURE SUBSTANTIAL OWNERSHIP IN THE WORLD’S MOST DOMINATING DIGITAL PLATFORMS 37Source: Public Information, Quigley Report 1.98% Total invested capital
  38. 38. All Investment Rounds in Top 20 Digital Platforms EUROPE NEEDS TO ENSURE SUBSTANTIAL OWNERSHIP IN THE WORLD’S MOST DOMINATING DIGITAL PLATFORMS 38Source: Public Information, Quigley Report 1.98% 1.44% No influence on corporate governance whatsoever Total invested capital Avg. captable ownership
  39. 39. CAPITAL AS A GEOPOLITICAL GAME CHANGER
  40. 40. THE VISION FUND AS A GEOPOLITICAL POWERPLAY 40Source: … GEOPOLITICS IN THE DIGITAL AGE $93bn TOTAL CAPITAL $32bn acquisition Expected to deliver 1 trillion chips over the next 20 years Implementation in majority of global IoT devices June 2017 acquisition as part of Softbank's growing robotics portfolio of to dominate robotics globally
  41. 41. THE VISION FUND AS A GEOPOLITICAL POWERPLAY 41 IF SOFTBANK HAD STARTED TO DEPLOY ITS FUND 10 YEARS AGO, IT WOULD HAVE OWNED ALL 30 CO’S Source: … GEOPOLITICS IN THE DIGITAL AGE Total financing volume of top 30 companies $93bn TOTAL CAPITAL $26bn REMAINING $67bn TOTAL CAPITAL … and 23 more
  42. 42. IT IS ABOUT EUROPE'S FUTURE: WE NEED TO STEP UP OUR GAME!
  43. 43. 4343Source: Invest EUrope; NVCA; IVC; Eurostat; Oanda BRUSSELS EUROPEAN INVESTORS needs to speak with one voice need to become serious about capital & ownership
  44. 44. Selected Completed NOAH Transactions Focus on Leading European Internet companies Covering over 400 companies across 25 online verticals, a broad range of over 500 investors as well as 100+ online-focused corporates Deep understanding of industry dynamics Ability to add value beyond banking advice Facilitates overall process and minimizes management distraction NOAH Advisors is globally well connected and has direct access to virtually all key players in the industry Knowledge of and strong relationships with potential buyers’ key decision makers Proactively finds and unlocks attractive investment opportunities for leading investors Annual NOAH Conference in its 8th year Over 40 years of combined relevant M&A experience Routine execution of M&A and financing transactions with sizes of several billion euros 30 successfully completed NOAH Advisors transactions underline successful transfer of M&A competencies to the Internet sector Entrepreneurial mind-set, focused on growing the business and establishing a reputation for excellence Ability to deliver top results in short time frames Highly success-based compensation structures align interests of clients and NOAH Advisors, and demonstrate conviction to deliver top results Creative deal solutions December 2014 September 2014 October 2014 May 2014 Sale of 100% of for $800m to Exclusive Financial Advisor to Fotolia and the Selling Shareholders Sale of 100% of for €80m to Exclusive Financial Advisor to Trovit and its Shareholders Sale of controlling stake in to Exclusive Financial Advisor to Facile.it and its Shareholders sold 100% of for $228m to a joint venture between Exclusive Financial Advisor to Yad2 and its Shareholders Unique Industry Know-How Unmatched Network and Relationships Strong Investment Banking Competence Full Commitment - We Are Entrepreneurs! EUROPE’S LEADING INTERNET CORPORATE FINANCE BOUTIQUE September 2016 October 2016December 2016 May 2016 Investment in by Financial Advisor to Oakley Capital Exclusive Financial Advisor to 10Bis and its Shareholders ® Marco Rodzynek Managing Director & Founder marco.rodzynek@noah-advisors.com Jan Brandes Managing Director jan.brandes@noah-advisors.com Justus Lumpe Managing Director justus.lumpe@noah-advisors.com The NOAH Advisors Core Banking Team Nikhil Parmar Director nikhil.parmar@noah-advisors.com 10Bis Acquisition of a Majority Stake in by from at a valuation of €300m Investment in Exclusive Financial Advisor to KäuferPortal and its Shareholders by 84% Ownership Financial Advisor to Silver Lake Investment in by

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