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EY French Venture Capital Barometer - 1st semester 2016

The EY French Venture Capital Barometer surveys equity financing deals for start-ups and early-stage businesses, announced prior to July 25 2016, with a deal date from January 1 to June 30 2016.

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EY French Venture Capital Barometer - 1st semester 2016

  1. 1. EY French Venture Capital Barometer 1st semester 2016 #EYVCB
  2. 2. EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 Franck Sebag EY partner in charge of the VC-IPO sector in France The pace is picking up! While last year seemed to have broken all records, the first half of this year has seen one of the best starts since the Barometer was first published (2013). With an increase of 33% compared to H1 2015, the amounts invested totaled just over one billion euro with 297 deals. The average ticket value, which is constantly on the increase, hit almost 3.4 million euro this semester. The French venture capital ecosystem appears to be about to move up a gear and continue its rise in the European league table. In line with previous years, a large proportion – more than two thirds – of this momentum was driven by the Digital and Technology sector, which once again boasted some exceptional fundraisers by companies such as Deezer, the on demand music streaming website (100 million euro), Acco, specializing in semiconductor components (35 million euro), or the peer-to-peer car rental platform Drivy (31 million euro). However, the most remarkable breakthrough goes to the Life Sciences sector, which alone accounted for 20% of funds raised, representing a 40% increase compared to H1 2015! Again, the most spectacular feats included those pulled off by MedDay, a company specializing in the treatment of neurological disorders, which raised some 34 million euro, and Gecko Biomedical, surgical adhesives manufacturer, with nearly 23 million euro. Fintech retained its place in the rankings, although there was a fall in terms of amounts raised (-30%). This continued acceleration has taken France and French capital to No. 1 in terms of number of deals and into second place, tied with Sweden, for amounts raised – thanks to Spotify’s outstanding fundraiser (900 million euro) – behind the UK but ahead of Germany. Despite this progress, the UK is still the top European fundraising ecosystem. This is mainly due to the fact that 60% of the fundraisers are accounted for by tickets of above €20 million, whereas 65% of French deals are for tickets less than that amount. While a Stanford study* recently established a correlation between the amounts invested and the number of jobs created – 38% of US employees working in listed companies are employed by companies that were funded by venture capital – the rise of the French ecosystem is promising and gives an indication of the potential of this vital link in the economic chain and growth. Let’s keep it going! *How Much Does Venture Capital Drive the US Economy?, Stanford Graduate School of Business, Oct. 2015
  3. 3. Data EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 € 1.006bn of funds raised, 297 deals Average per deal: €3.4m
  4. 4. Investments by sector Big jump in investments in Internet Services and Life Sciences Already at the top of the fundraising league table at the end of last year, investment in the Internet Services sector has doubled compared to H1 2015. With 38% of deals and 42% of amounts raised, it stays at No. 1 in the top 5 investments by sector. In parallel, the Life Sciences sector has seen a similar boom: the capital invested has doubled, moving the industry up two places in the ranking. This sector alone accounts for 20% of the funds raised this semester. Still among the top contenders, the Fintech sector has however had a relatively quiet period, accompanied by a 30% decrease in the sums invested in comparison with the 1st half of 2015. EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 #EYVCB
  5. 5. Investments by maturity stage : 1st semester 2016 Total investments Average amount invested 1st semester 2015 Total investments Average amount invested EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 #EYVCB
  6. 6. Top 5 investments EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 #EYVCB
  7. 7. Interview Frédéric Sedel CEO and co-founder of MedDay Pharmaceuticals Founded in 2011, MedDay is a biotechnology company that develops new drugs to treat disorders of the nervous system. In April, the company sealed a deal for investment totaling 34 million euro from Innobio, Sofinnova Partners, Edmond de Rothschild Investment Partners and Bpifrance Investissement. It returns MedDay to the top of the table in the Life Sciences sector this semester. The €34 million in funds you have raised – which places you among the top 5 for the first semester of 2016 – is the highest fundraiser in the Life Sciences sector. How did it go? Very well! This fundraiser comes at a time when our company had begun to generate income, which is quite rare in the Biotech sector. We were therefore in a good position, especially as our product, which showed efficacy in a phase 3 clinical trial, treats the most advanced forms of multiple sclerosis and is positioned on an important market in which no treatment has been approved to date. This unusual situation for the Biotech sector was seen as a great opportunity for investors. With this money, we can fund a new confirmatory clinical trial which will be conducted in the United States with a view to obtaining definitive marketing authorization in Europe and the US. How do you choose your investors? Why the Edmond de Rothschild Group (EDR)? We are looking for investors who understand our business, share our vision, our ambition and are able to invest and wait for as long as it takes our company to reach critical mass. This fundraiser, which encompassed our existing investors, was also an opportunity to attract two new investors: Edmond de Rothschild Investment Partners, the top investor in this second round, and Bpifrance’s Large Venture fund. These investors know our industry and are not necessarily looking for a quick return on investment. Edmond de Rothschild Investment Partners also shares these values. That is why we seized the opportunity when it arose! Raphaël Wisniewski seemed to be the right person to come on board this exciting adventure and join the Board of MedDay Pharmaceuticals. EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016
  8. 8. (interview continued) What is the next step for MedDay Pharmaceuticals? Now that the financial health of the company is secure, we can focus on the operational and regulatory aspects with the start of our new trial, the approval and marketing authorization for our product in Europe and the United States. The timing will be important because, depending on the authorizations granted, we will probably need additional funding, particularly if we decide to market our product ourselves. The question of a new fundraising or IPO would then allow us to launch the commercial business. We chose not to make a decision immediately on this to enable us to retain a margin of flexibility and opportunity, let our thinking take its course and better adapt to future regulatory deadlines. Raphaël Wisniewski Partner at Edmond de Rothschild Investment Partners Investments in the Life Sciences sector doubled in this first semester – why, do you think? The continued rise in investment over the last 3 years, the excellent growth of companies in the sector and the performance of the stock market in recent years have had a very positive impact. This momentum has enabled investors to increase their investment capacity in these companies, which have achieved significant fundraisers of more than €20m this semester. This growth was also driven by increased foreign investment in French Biotech firms. How do you see the end of the year for the Biotech industry? I am confident it will be a good second semester! The funds raised recently by industry experts have increased their capacity to invest. And although we have seen a slowdown in stock market activity, corporate financing requirements remain high, creating many investment opportunities. The level of investment in the French Biotech sector should therefore be maintained to the end of this year. EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016
  9. 9. European perspective Top 3 Countries for VC activity EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 With 27% of the total number of deals, France moved up to first place on the European podium in terms of volume of transactions, but not only that, with more than one billion euro raised (16% of total sums raised), France has overtaken its rival, Germany! Note, however, that second place is shared with Sweden which, thanks to Spotify’s record deal (€900 million euro) made a spectacular leap into the top 3 in investments in Europe. #EYVCB
  10. 10. Note on methodology : The EY French Venture Capital Barometer surveys equity financing deals for start-ups and early-stage businesses, announced prior to July 25 2016, with a deal date from January 1 to June 30 2016. The French data presented in the Barometer are based on data from Dow Jones VentureSource, CFNEWS and Capital Finance. The European data are based on data from Dow Jones VentureSource and CB Insights. These data have been processed and analyzed in accordance with the EY methodology by Ernst & Young et Associés. This study only covers deals for which the amount was publicly announced. The Internet Services sector covers activities such as e-commerce, performance marketing (e.g. lead generation, search engine optimization), geomarketing or mobile applications. The Life Sciences sector covers the biotech and medtech industries. The Fintech sector covers start-ups that use technology to rethink financial and banking services (online banking, crowdfunding, new payment means, etc.) The Technology sector covers activities such as hardware, semiconductors, etc. EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 #EYVCB
  11. 11. Contacts Franck SEBAG EY partner in charge of the VC-IPO sector in France @frsebag Nadège Abdou-Brahim Marketing @nadege_AB Bonnie Olivier Médias relations @BonnieOlivier EY French Venture Capital Barometer ……………….……………………………………………………………………… 1st semester 2016 #EYVCB

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