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UK tech leads Europe with almost $8bn of VC investment and exits worth $40bn during 2018

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UK achieves more tech exits than any other European country, with IPOs and acquisitions worth $40bn. Another bumper year for VC investment in UK tech with $7.9bn raised in 2018, ahead of Germany ($4.6bn), France ($4.4bn) and Israel ($3.4bn). Europe closes gap on US in terms of sales and IPOs in 2018. Landmark UK flotations include Farfetch, Funding Circle, Orchard Therapeutics.

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UK tech leads Europe with almost $8bn of VC investment and exits worth $40bn during 2018

  1. 1. Prepared for Tech Nation and the Government’s Digital Economy Council by Dealroom.co Another bumper year for UK tech as 2018 draws to a close with the UK leading on both VC investment and exits December 2018
  2. 2. Summary Source: Dealroom. See methodology page for more info. 1. Figure anticipated by 31 Dec based on Jan-Nov annualised. 2 Record exits of VC-backed companies in UK ▪ 2018 was an extraordinarily successful year for European venture and tech, with $107 billion in exits (a sale or an IPO) of European venture-backed companies. ▪ The UK saw $40 billion in exits from venture-backed companies, during 2018 - higher than any other European country. Significant UK exits included Farfetch, Funding Circle, FNZ and Zoopla. European exits near US levels ▪ Europe closed the gap on the US in terms of exits of venture backed companies in 2018: the whole of Europe saw acquisitions and IPOs of venture-backed companies worth $107 billion compared with $136 billion in the USA. Another bumper year for VC investment in UK ▪ UK startups raised $7.9 billion(1) in 2018, almost matching the record levels set in 2017 ▪ While 2017 was skewed by a few mega rounds, 2018 shows distributed growth across the ecosystem with a higher number of total rounds
  3. 3. The UK has seen more exits of VC backed tech companies than any other European country in 2018 Exits of VC backed companies in 2018 Italy, France, Germany Netherlands Sweden United Kingdom 3Source: Dealroom.co
  4. 4. The UK consistently created the most tech exits in the past five years Exits of VC & growth equity backed companies in 2013 - 2018 4Source: Dealroom.co
  5. 5. Europe, led by the UK, nearly matched the USA in terms of exits of VC-backed companies, with deals worth $107 billion 5 Exits of VC backed companies in 2018 Source: Dealroom.co. Total value of exits of all companies that have been venture backed at any stage in their life cycle. Excludes secondary transactions and biotech
  6. 6. Venture capital investment
  7. 7. The UK continues its strong momentum, with startups raising $7.9 billion in 2018 Venture capital funding by country location 2018E 7Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants. Based on Jan-Nov data.
  8. 8. Number of rounds (> $2M) UK venture capital investment in $ billions Top-10 largest rounds alone accounted for $1.6 billion in 2018 The rest of the VC rounds accounted for $6.3 billion in 2018 #1 round The Hut Group ($ 132M) Immunocore ($ 320M) Deliveroo ($ 275M) Improbable ($ 502M) Greensill ($ 250M) #2 round Adaptimmune ($ 105M) Reward Gateway ($ 158M) Skyscanner ($ 169M) Farfetch ($ 397M) Revolut ($ 250M) #3 round Powa Technologies ($ 80M) Funding Circle ($ 150M) Oxford Nanopore Technologies ($ 127M) Deliveroo ($ 385M) Graphcore ($ 200M) #4 round Cell Medica ($ 66M) Mereo Biopharma ($ 119M) Farfetch ($ 110M) Truphone ($ 337M) Atom Bank ($ 197M) #5 round Virtus ($ 66M) Atom Bank ($ 108M) Kymab ($ 100M) TransferWise ($ 281M) AWAL ($ 150M) #6 round Farfetch ($ 66M) WorldRemit ($ 100M) Sabio ($ 66M) Gryphon Group Holdings ($ 238M) Orchard Therapeutics ($ 150M) #7 round Funding Circle ($ 65M) Deliveroo ($ 100M) Darktrace ($ 65M) OakNorth Bank ($ 204M) Oxford Nanopore Technologies ($ 132M) #8 round Intelligent Energy ($ 63M) BenevolentAI ($ 100M) Starling Bank ($ 64M) The Hut Group ($ 165M) BenevolentAI ($ 116M) #9 round NuCana ($ 57M) Oxford Nanopore Technologies ($ 92M) Student.com ($ 61M) Gigaclear ($ 136M) Monzo ($ 112M) #10 round Huddle ($ 51M) OakNorth Bank ($ 87M) F2G ($ 61M) Orchard Therapeutics ($ 110M) Culture Trip ($ 80M) Top 10 $ 0.8B $ 1.3B $ 1.1B $ 2.7B $ 1.6B Fundamentals in 2018 are looking strong: $6.3 billion invested, even when the top ten largest rounds are excluded 8Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
  9. 9. UK startups raised $7.9 billion in 2018, almost matching 2017 the previous all-time record … 9Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
  10. 10. Venture capital investment in UK by round size … but where 2017 was skewed by a few mega rounds, 2018 shows growth in investment across each stage $250M $250M $200M $194M $104M $100M $100M $80M Top UK rounds in 2018 10Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
  11. 11. Not only by amount invested, but also by number of venture capital rounds, the UK continued its lead Cumulative number of rounds Jan-Nov ‘18Cumulative amount invested by country Jan-Nov ‘18 11Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.
  12. 12. Methodology & additional information 12
  13. 13. Source: Dealroom.co. Methodology & definitions 13 Venture capital investments and exits ▪ Investment numbers refer to venture capital investment rounds such as seed, series A, B, C, late stage and growth equity rounds. It excludes debt or other non- equity funding, lending capital, grants and ICOs ▪ Buyouts, M&A and IPOs are treated as exits: they are excluded from funding data, but included in exit data ▪ Exits include sale of a company via acquisition or IPO. A company is deemed venture-backed if it received institutional investment any any point in its life-cycle. In some cases, the initial venture capital investors had already realised their investment prior to the larger exit counted in this report ▪ Number of rounds are often shown excluding rounds below $2 million. This is done to eliminate the effect of delayed reporting of smaller rounds ▪ 2018E estimate is based on Jan-Nov 2018 actual data, annualised What is a tech company? ▪ Companies included in the analysis are innovative, tech-driven businesses. Industries include software, ecommerce, online marketplaces, hardware, ICT infrastructure. The full industry and business model taxonomy can be found online via app.dealroom.co/heatmaps/funding/industries ▪ Increasingly, innovative models are scaling offline or via hybrid online-retail models. Examples are beer brand Brewdog which innovated distribution and marketing, by leveraging viral marketing and crowdfunding to build a brand, and Metro Bank, a retail-first challenger bank ▪ This report focuses on companies from the post-internet age. Excluded are companies founded by corporates (e.g. WorldPay) and before 1990 (e.g. Travelport) How is data collected? ▪ Dealroom’s proprietary database and software aggregate data from multiple sources including processing of public news-flow, data feeds, web scraping, crowd- sourced contributions (verified by Dealroom) and manual research ▪ Data is verified and curated with an extensive manual process, augmented by data processing ▪ Most underlying data from the report is available online. For more info please visit dealroom.co or contact support@dealroom.co
  14. 14. Realised unicorns: 46 Unrealised unicorns: 16 Future unicorns: 54 Overview of UK unicorns Source: Dealroom.co 14
  15. 15. Major tech IPOs & acquisitions in UK in 2018 15 NAME ACQUIROR SELLER INDUSTRY LOCATION TRANSACTION EXIT VALUE Farfetch Online luxury fashion retail platform -- Advent Venture Partners e.ventures Index Ventures … Fashion London $ 855 m IPO $ 5.8 b Sky Betting & Gaming (1) Leading operators in the UK’s online betting and gaming market The Stars Group Sky CVC Capital Partners Gaming Sports Leeds $ 4.7 b ACQUISITION $ 4.7 b Zoopla Property website for the British residential market Silver Lake Partners Atlas Venture LocalGlobe Octopus Investments … Real Estate London $ 2.9 b ACQUISITION $ 2.9 b FNZ Wealth management platforms for financial advisers and direct customers Generation Investment Management Caisse de dépôt et placement du Québec HIG Capital General Atlantic Fintech Enterprise Software Edinburgh $ 2.2 b ACQUISITION $ 2.2 b Funding Circle Peer-to-peer business loans -- Index Ventures, Accel Partners, Unique Square Ventures, Blackrock Fintech London $ 390 m IPO $ 2.0 b Callcredit Provider of consumer information management and direct marketing services TransUnion Vitruvian Partners GTCR Fintech Enterprise Software Leeds $ 1.8 b ACQUISITION $ 1.8 b Esure Group Leading provider of insurance products Bain Capital Penta Investments Penta Capital Souter Investments Fintech Reigate $ 1.6 b BUYOUT $ 1.6 b CRF Health Provider of patient-centric technology solutions Genstar Capital Vitruvian Partners Health Enterprise Software London $ 1.1 b ACQUISITION $ 1.1 b Clear Score Technology Making clear the confusing world of credit Experian Lead Edge Capital QED Investors Brightbridge Ventures Fintech London $ 385 m ACQUISITION $ 385 m NewVoiceMedia Provider of cloud technology for sales and service teams Vonage Salesforce Ventures Bessemer Venture Partners Highland Capital Partners Marketing Enterprise Software Basingstoke $ 350 m ACQUISITION $ 350 m Go to online data » Source: Dealroom.co 1. Founded in 1999 as Sports Internet Group and initially acquired by BSkyB in 2000.
  16. 16. Major tech IPOs & acquisitions in Europe & Israel in 2018 NAME ACQUIROR SELLER INDUSTRY LOCATION TRANSACTION EXIT VALUE Spotify Music streaming software -- Accel Partners, Goldman Sachs, Lakestar, Fidelity, GP Bullhound … Music Stockholm $ 9.2 b IPO $ 29.5 b Adyen Leading global payments company -- Index Ventures Felicis Ventures General Atlantic … Fintech Amsterdam $ 1.0 b IPO $ 7.8 b Farfetch Online luxury fashion retail platform -- Advent Venture Partners e.ventures Index Ventures … Fashion London $ 855 m IPO $ 5.8 b Yoox Net-a-Porter Global Internet retailing partner for leading fashion & design brands Richemont 360 Capital Partners Balderton Capital Net-a-Porter Alabbar Enterprises Fashion Milan $ 3.0 b ACQUISITION $ 5.5 b Sky Betting & Gaming Leading operators in the UK’s online betting and gaming market The Stars Group Sky CVC Capital Partners Gaming Sports Leeds $ 4.7 b ACQUISITION $ 4.7 b Avast Software Cybersecurity products for businesses and consumers -- Summit Partners CVC Capital Partners Security Prague $ 192 m IPO $ 3.1 b Zoopla Property website for the British residential market Silver Lake Partners Atlas Venture LocalGlobe Octopus Investments … Real Estate London $ 2.9 b ACQUISITION $ 2.9 b Elastic Self-managed and SaaS software for search, security and analytics -- Benchmark Data Collective New Enterprise Associates … Developer tools Amsterdam $ 252 m IPO $ 2.5 b SUSE Provider of an Enterprise Linux distribution software EQT Partners Novell Developer tools Nuremberg $ 2.5 b ACQUISITION $ 2.5 b iZettle Secure and easy mobile payment solutions PayPal Creandum, Index Ventures, Intel Capital, Northzone, 83North Payments Stockholm $ 2.2 b ACQUISITION $ 2.2 b Go to online data » 16Source: Dealroom.co
  17. 17. Major tech IPOs & acquisitions in the United States in 2018 NAME ACQUIROR SELLER INDUSTRY LOCATION TRANSACTION EXIT VALUE Dropbox File hosting service allowing customers to share and store files online -- Y Combinator, Goldman Sachs, Blackrock, Accel Partners … Enterprise Software San Francisco $ 756 m IPO $ 9.2 b Qualtrics Allows customers to create surveys and capture customer data SAP Accel Partners Sequoia Capital Insight Venture Partners Enterprise Software Utah $ 8.0 b ACQUISITION $ 8.0 b GitHub Best place to share code with other people. Microsoft Andreessen Horowitz SV Angel Thrive Capital … Enterprise Software San Francisco $ 7.5 b ACQUISITION $ 7.5 b Arris Group Delivers cable and telecom equipment to cable operators CommScope SOSV Telecom Georgia $ 7.4 b ACQUISITION $ 7.4 b MuleSoft Developer tools providing connectivity between applications and data Salesforce Andreessen Horowitz SV Angel, Thrive Capital Sequoia Capital … Enterprise Software San Francisco $ 6.5 b ACQUISITION $ 6.5 b Marketo Marketing automation software Adobe Systems InterWest Partners Battery Ventures Vista Equity Partners … Marketing / Enterprise Software San Mateo $ 4.8 b ACQUISITION $ 4.8 b DocuSign Electronic signatures and online documents -- Ignition Partners, Sigma, Partners, Accel, Bain Capital Ventures, Wellington … Legal / Enterprise Software San Francisco $ 629 m IPO $ 4.5 b GreenSky Leading company in consumer finance marketplace -- TPG Capital, ICONIQ Capital, Wellington, Pacific Investments … Fintech Atlanta $ 874 m IPO $ 4.4 b Pivotal Providing digital transformation technology and services -- VMware General Electric (GE) Microsoft … Marketing / Enterprise Software San Francisco $ 555 m IPO $ 3.9 b Pandora Internet radio and recommendation services -- Walden Venture Capital Labrador Ventures Selby Venture Capital … Music / Media Oakland $ 3.5 b ACQUISITION $ 3.5 b Go to online data » 17Source: Dealroom.co
  18. 18. About Dealroom.co Source: Dealroom.co 1. Verified rounds excluding secondary, ICOs, debt and other non-equity rounds. The most comprehensive European data sourceTrusted by world-leading clients ■ Dealroom is a global company information database & research firm ■ Its software, database and bespoke research enable its clients to stay at the forefront of innovation, discover promising companies and identify strategic opportunities ■ Among its clients are world-leading strategy consulting firms, investment banks, multinationals, technology firms, venture capital & buyout firms and governments Number of European VC rounds tracked in 2017 (1) Not disclosed in official report Selected publishers of Dealroom data Selected Dealroom clients Europe’s most comprehensive database of promising companies and investment Growth metrics like product usage, funding and valuation momentum (web, iOS, Android) Track team size, background, composition and growth Discover potential unicorns, long before others do Industry taxonomy and database structure designed for innovative technology startups & scaleups Stay at forefront of innovation and investment trends 18
  19. 19. Tech Nation - The UK Network for Ambitious Tech Entrepreneurs Tech Nation empowers ambitious tech entrepreneurs to scale faster through digital entrepreneurship skills, a visa scheme for exceptional talent, building networks and connections, and by championing the UK’s digital sector through data, stories and media campaigns. Founded in 2011 as Tech City, Tech Nation’s programmes cater for businesses of all growth stages, from initial idea and early stages (The Digital Business Academy, Founders’ Network and Rising Stars), right through to the mid and late stages (Upscale and Future Fifty). It also recently launched its first ever sector-specific programme, for fintech companies, with more in the pipeline. Some of the UK's biggest tech success stories have taken part in Tech Nation's growth programmes, from Just Eat, Deliveroo, Not On The High Street, and Skyscanner, to Farfetch, Unruly, Zoopla and Darktrace. Check out all alumni companies. www.technation.io Twitter @TechNation #WeAreTechNation

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