2015 Q2 Europe & Israel VC Trends Review

Venture Capital in Europe & Israel
Venture Investment Data: Second Quarter, 2015
Prepared by Gil Dibner @gdibner
blog: yankeesabralimey
The Dead Sea, Israel
Lowest point on earth, 427M below sea level

The data
• Around the middle of last year, I decided I wasn’t happy with available data sources on VC
rounds in Europe & Israel, and that I’d need to build my own
• The data in this report consists entirely of data I’ve gathered manually based on publically
available, free sources
• No paid data sources or API calls were harmed in the making of this dataset, every
investment was manually classified
• This allows analysis of some aspects of the data I consider important – aspects that don’t
appear in other data sources
• Seed investment is still under-reported, but I got a bit better at capturing it in the fourth
quarter. Rounds smaller than $500K are generally excluded from this analysis
• The analysis is limited to ICT categories and excludes life sciences
• The analysis excludes Turkey and FSU countries
• I’m converting EUR and GBP into USD using monthly average exchange rates
2@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies

Monthly pace of venture investment
• During the 12 months ended
June, 2015, there were 866
reported venture investments
across Europe & Israel
• A total of $9.581B was
invested in Europe & Israel
during this period, an
average of $798M per month
• June 2015 was a record-
breaking month for total
investments, with over $1.5B
raised across 98 rounds
• Spotify, which raised $526M
in June, significantly skews
the June figure (see slide 5)
@gdibner
blog: yankeesabralimey 3Syndicate for European & Israeli Enterprise Companies
493
565
644 625
562
725
905
971 997
751 787
1,555
42 30 50 79 73 52 92 75 103 77 95 98
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Numberofinvestments
VC Investments in Europe & Israel, July 2014 - June 2015
Invested amount (US $M) Number of investments

Quarterly pace of venture investment
• Despite June’s record deal
volumes, the second quarter
of 2015 saw only a slight
uptick in activity over the first
quarter
• Amusingly, there were exactly
270 deals recorded in both
the first and second quarter
of 2015
4
@gdibner
1,703
1,912
2,873
3,093122
204
270 270
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
50
100
150
200
250
300
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Amountinvested(US$M)
Numberofinvestments
VC Investments in Europe & Israel
Invested amount (US $M) Number of investments

Mega-rounds skew the investment totals
• This analysis breaks down VC
investments into brackets by size:
• Seed (less than $2M)
• Early venture ($2-8M)
• Venture ($8-20M)
• Growth ($20-100M)
• Mega ($100M+)
• Six mega-rounds took place in Europe
in the first quarter:
• Funding Circle, a British financial services
company, raised $150M in April
• Food Panda, a German food delivery
company, raised $100M in April
• Infinidat, and Israeli enterprise storage
systems company, raised $150M in May
• Home24, a German commerce
company, raised $134M in June
• Delivery Hero, a German food delivery
company, raised $110M in June
• Spotify, a Swedish music streaming
service, raised $526M in June
• Adjusting for mega-rounds, 2Q was
slightly below 1Q in terms of total
volume, but still above Q3 & Q4
5
@gdibner
248
343 285 354
345
312
556
731539
935
1,154 752
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
AmountInvested(US$M)
Pace of VC Investment in Europe and Israel
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)

Number of investments, by bracket
• Deal volume across the geo
seems to have stabilized in
terms of the number of
investments
• Early venture and seed
volumes seem to be down
slightly
• Ventures ($8-20M) rounds
seem to have increased
somewhat
• Throughout 2015, Europe &
Israel seem to have stabilized
at around 80-100 deals per
month
6
@gdibner
6 3 7
28 26
15
37
30
45
30 34 2821
14
25
31 29
22
24
20
33
23
33
29
9
5
16
10
6
10
13
16
13
16
21
26
5
7
1
10
12
4
18
5
10
6
6 12
0
20
40
60
80
100
120
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
NumberofVCinvestments
Number of investments in Europe and Israel by bracket
July 2014 to June 2015
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)

Average round size
• Previously, I presented this
broken down by bracket, but
I think the data is more
meaningful when taken in
aggregate.
• This average excludes seed
rounds and mega rounds, so
it reflects all rounds done in
Europe & Israel between $2M
and $100M
• Since February, average
round sizes across all venture
rounds were hovering
between $10M and $12M
7
@gdibner
11.1
17.6
6.8
11.7 11.4
12.7
15.8
11.2
11.9
10.4 10.1
11.4
4
6
8
10
12
14
16
18
20
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
AmountInvested(US$M)
Average investment size in Europe and Israel
(Round sizes of 2-100M)

Total venture investment by country, 2H 2015
• Powered by Spotify’s massive
round, Sweden took the top
spot in funds raised in 2Q
• Israel, UK, Germany, and
France rounded out the rest
of the top five
8
@gdibner
638.5
625.2
587.4
553.6
231.6
103.1
93.3
71.1
64.4
32.8
27.2
21.5
12.2
10.0
9.5
5.4
1.8
1.6
1.1
0.8
0.6
0.5
Sweden
Israel
UK
Germany
France
Denmark
Ireland
Netherlands
Spain
Portugal
Belgium
Estonia
Switzerland
Poland
Finland
Italy
Greece
Norway
Latvia
Hungary
Slovenia
Iceland
0 100 200 300 400 500 600 700
Total VC investment volume by country, 2Q15 (US $M)

Total venture investment by country, 2H 2015
• When mega-rounds
($100M+) are excluded, Israel
takes the top slot, with the UK
coming in just behind it
• With Spotify excluded,
Sweden’s total drops to
$112.5M, putting in the fifth
slot
• Germany and France round
out the top five in the third
and fourth place
9
@gdibner
475.2
437.4
231.6
208.9
112.5
103.1
93.3
71.1
64.4
32.8
27.2
21.5
12.2
10.0
9.5
5.4
1.8
1.6
1.1
0.8
0.6
0.5
Israel
UK
France
Germany
Sweden
Denmark
Ireland
Netherlands
Spain
Portugal
Belgium
Estonia
Switzerland
Poland
Finland
Italy
Greece
Norway
Latvia
Hungary
Slovenia
Iceland
0 50 100 150 200 250 300 350 400 450 500
Total VC investment volume by country, 2Q15 (Excludes mega-rounds, US $M)

Total venture investment by country, 3Q14 to 2Q15
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• UK venture activity trended
down in 2Q15 after
skyrocketing in 1Q15
• Investment volume in Israel
regained its first place slot
• France has showed continued
strength, overtaking both
Sweden and Germany in
terms of investment volume
10
@gdibner
Israel, 315
Israel, 567
Israel, 543
Israel, 475
UK, 369
UK, 263
UK, 719
UK, 437
Germany, 180
Germany, 284
Germany, 389
Germany, 209
France, 29
France, 163
France, 118
France, 232
Sweden, 74 Sweden, 123
Sweden, 89
Sweden, 112
Qtr3 Qtr4 Qtr1 Qtr2
0
100
200
300
400
500
600
700
800
TotalVCinvestment(US$M)
Total VC investment, 3Q14 - 2Q15 (top 5 countries, excluding mega-rounds)

Average venture round sizes, by country
• This analysis excludes mega-
rounds and rounds less than
$2M
• UK & Ireland companies
raised the largest round sizes
on average in 2Q, but much
less on average than in 1Q
• DACH startups fell from first
place in terms of average size
to seventh place
• Generally, average round
sizes seem to be converging
across the broader
geography into very tight
band between $8M and $12M
11
@gdibner
Benelux, 10.6
Benelux, 9.9
DACH, 18.0
DACH, 8.9
France, 3.7
France, 10.8
Iberia, 10.4
Iberia, 12.3
Israel, 11.6
Israel, 9.9
Nordic, 7.7
Nordic, 11.1
UK & Ireland, 11.9
UK & Ireland, 18.9
UK & Ireland, 12.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Averageroundsize(US$M)
Average investment size in Europe and Israel (rounds of $2-20M)

Total venture investment by region, 3Q14 to 1Q15
• When VC investments across
Europe are aggregated into
regions, Israel, DACH, UK &
Ireland, the Nordics, and
France are the clear and
consistent leaders
• Benelux, Iberia, Southern
Europe, and Eastern Europe
do produce meaningful VC
investments (Adyen, Prezi,
and many others), but the
volumes are still low
12
@gdibner
Nordic, 124.0 Nordic, 219.3 Nordic, 190.1
Nordic, 775.7UK & Ireland, 399.0 UK & Ireland, 262.9
UK & Ireland, 932.2
UK & Ireland, 680.7
Israel, 315.2
Israel, 567.5
Israel, 834.6
Israel, 625.2
DACH, 532.2
DACH, 290.2
DACH, 573.3
DACH, 565.8
France, 129.3 France, 163.3
France, 233.0
France, 231.6
Benelux, 31.9
Benelux, 284.9
Benelux, 46.7
Benelux, 98.3
Iberia, 168.1
Iberia, 56.5
Iberia, 53.7
Iberia, 97.2
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
TotalVCinvestment(US$M)
Total VC investment by region
Nordic UK & Ireland
Israel DACH
France Benelux
Iberia East. Eur.
South. Eur.

Rounds by bracket & country
• To get a better sense of deal
volume, this analysis excludes
seed deals which are often
poorly reported
• Excluding seed deals, Israel
again led the region in the
number of VC deals reported
• The UK and DACH followed
• Despite an impressive three
mega-rounds into German
companies, DACH was a
distant third in terms of deal
volumes
13
@gdibner
22
18
14
11 12
5
18
15
8
8 6
3
4
7
8
2
2 3
1
1
3
1
0
10
20
30
40
50
60
Israel UK &
Ireland
DACH Nordic France Benelux Iberia East. Eur. South. Eur.
Numberofinvestments
Number of investments in Europe and Israel by bracket, 2Q 2015
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)

Investment by region, by bracket
• In 2Q, UK & Ireland led in
terms of total VC dollars
invested
• Israel was in second place
• Excluding Spotify’s $526M
round, the Nordics are in
third place, still ahead of
France and DACH
14
@gdibner
70 98 48 50 55
176
197
85 72 99
261 172
99 105 61
150
150
526
345
0
100
200
300
400
500
600
700
800
900
UK &
Ireland
Israel Nordic France DACH Benelux Iberia East. Eur. South. Eur.
Totalamountinvested(US$M)
Investment in Europe and Israel by bracket by region, 2Q 2015
(ranked excluding mega-rounds)
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)

Participation rate of US VC firms, by bracket
• US VC firms are increasingly
active in the European and
Israeli VC markets
• Over the past twelve months,
US VC firms participated in
16% of the venture rounds in
Europe
• US VCs participated in only
5% of seed rounds, 11% of
early venture rounds, and
25% of venture rounds
• As a company moves from
bracket to bracket, the
chance of US VC participation
doubles with each bracket
change
15
@gdibner
5%
11%
25%
42%
81%
95%
89%
75%
58%
19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seed (.5-2) Early Venture (2-8) Venture (8-20) Growth (20-100) Mega (>100)
Percentageofrounds
Did US VC firms participate in European VC rounds? (3Q14-2Q15)
No Yes

Rate of participation by US firms has recovered
• Reversing the negative trend
in the first quarter, US VC firm
participation in European &
Israeli venture rounds
increased in the second
quarter
• Within rounds of between
$2M and $20M, US VC
participation rose from 8% of
rounds in February to 20% of
rounds in June
16
@gdibner
10% 5%
17%
24%
17% 16% 19%
8% 11% 15% 17% 20%
90% 95%
83%
76%
83% 84% 81%
92% 89% 85% 83% 80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
PercentageofRounds
Did US VC firms participate in European VC rounds? (3Q14-2Q15)
No Yes

Participation of US VC firms by country
• In 2Q, US VCs firms were
active in 10 different
European countries, flat from
1Q and down from 12
countries in 4Q
• US VC firms were most active
in Israel, where they
participated in 14 investment
rounds
• The UK saw 11 investments
with US VC participation
• Germany saw 5 investments
with US VC participation
17
@gdibner
14 11
5
43 48
25
18 15
9 11
0
10
20
30
40
50
60
70
Israel
UK
Germany
Sweden
Spain
Ireland
Switzerland
Netherlands
Hungary
Denmark
NumberofVCinvestments
In which countries are US VCs most active?
2Q, 2015
No US VC involved US VC involved

Dimension Categories Explanation/Example
1. Target market
Consumer, SMB, Enterprise, Government,
Telecom, OEM
What sort of customer does the
company target?
2. Vertical market
Adtech, Communications, Data, Development, Durables,
Education, Electronics, Employment, Energy, Fashion,
Financial, Food, Gaming, Health, HMI, Industrial,
Infrastructure, Lifestyle, Logistics, Marketing, Media,
Productivity, Real Estate, Security, Sports, Storage,
Transportation, Travel, Water
What type of problem does the
company solve?
3. Business model
Commerce, Components, Content,
Marketplace, SaaS, Semiconductors,
Services, Software, Systems,
How does the company make
money? What are customers paying
for?
Combined segment descriptor Consumer + Travel + Marketplace
AirBnB has built a travel-related
marketplace for consumers 18
Three-dimensional approach to sector mapping

• Excluding mega-rounds,
investment activity decreased
in both consumer and
enterprise
• SMB-oriented and OEM-
oriented investment volume
both increased
19
@gdibner
What target markets are attracting the most VC
investment in Europe & Israel?
Syndicate for European & Israeli Enterprise Companies
475 595
980
811
494
794
953
808
78
133
121
153
78
114
47
106
0
500
1,000
1,500
2,000
2,500
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
TotalVCinvestments(US$M)
European & Israeli venture financing by target market
3Q14 to 2Q15 (excluding mega-rounds, US $M)
Government
Telecom
OEM
SMB
Enterprise
Consumer

• Last quarter’s trend reversed
itself, with consumer-oriented
companies accounting for
54% of all VC investment in
Europe & Israel, up from 43%
in 1Q
• Enterprise dropped from 55%
in 4Q14 to 31% in 2Q15
• SMB-oriented companies
accounted for 10% of
investment dollars, a new
high – driven mostly by
funding circle
20
@gdibner
The return of consumer investment
54%
31%
43%
54%
29%
55%
47%
31%
5%
7% 4% 10%5%
6% 3%7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
3Q14 to 2Q15 (percent of US $M)
Government Telecom OEM SMB Enterprise Consumer

Breakdown by region & target market
• The Israeli VC landscape
continued to be dominated
by non-consumer companies
• The DACH region saw a
continuation of the
dominance of consumer-
oriented companies in VC
financing (all three of
Germany’s mega-rounds in
2Q were consumer
companies)
• FundingCircle’s massive
round helped explain why
more money went into SMB
in the UK & Ireland than into
enterprise
• If Spotify’s $526M round is
removed, the Nordics
seemed to continue their shift
towards the enterprise
21
@gdibner
599
288
146
466
64 50
160
169 404
55
99
182
70
0
100
200
300
400
500
600
700
800
900
Nordic UK & Ireland Israel DACH France Benelux Iberia
Totalamountinvested(US$M)
Investment in Europe and Israel by target market by country
2Q, 2015 (US $M)

Distribution of investment rounds by country
• Across Europe & Israel, 46%
of VC investment rounds
were in consumer companies
in 2Q, down slightly from 47%
in 1Q
• Benelux, France, and the
Nordics saw a majority of
investments happening into
non-consumer companies
22
@gdibner
65%
56%
50%
50%
45%
44%
39%
30%
20%
31%
36%
25%
41%
44%
39%
56%
10%
8%
11%
5%
12%
11%
4%
5%
25%
9%
7%
6% 6%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Iberia
DACH
UK & Ireland
South. Eur.
Nordic
France
Benelux
Israel
Investment in Europe and Israel by target market by country
2Q 2015 (Number of investments)
Consumer Enterprise SMB OEM Telecom Government

Trending away from consumer?
• Over the past few months,
the trend seems to be away
from consumer investing
23
@gdibner
38% 40% 44% 44%
37% 42%
50%
35%
54% 56%
42% 40%
50% 40%
44% 42%
48%
48% 38%
57%
36% 29%
48%
42%
5% 9% 14% 7%
6%
6%
10%
7%
10%
6% 6% 8% 6%7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Investment in Europe and Israel by target market by country,
3Q14 to 2Q15 (Number of investments)

Seed and growth swing back to consumer
• As in last quarter, a clear
majority of both growth deals
and seed deals were in
consumer-oriented
companies
• Early venture deals also
reflected this trend
• Venture deals, however,
showed continued interest in
non-consumer categories –
mostly enterprise
24
@gdibner
52%
54%
33%
54%
31%
37%
55%
24%
7%
8%
6%
15%
8%
7%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Seed (<2)
Early Venture (2-8)
Venture (8-20)
Growth (20-100)
Investment in Europe (excluding Israel) by target market by stage
bracket 2Q 2015 (Number of investments)
Consumer Enterprise SMB OEM Telecom Government

DACH investors shift back to consumer
• DACH is clearly a region with
a record of strong consumer-
oriented investment
• In 4Q14 this began to
change, but it wasn’t clear if
the trend would be long-
lived. Indeed, 1Q15 saw a
majority of investments in
DACH go into consumer
companies
• 2Q15, however, saw the
pendulum in DACH start to
shift back towards non-
consumer categories
25
@gdibner
100%
67%
60%
40%
13%
57% 60%
33%
73% 69%
63%
43%
17%
20%
40%
88%
43% 40%
67%
20% 23% 38%
36%
20%
10%
7%
21%17%
10% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Investment in DACH by target market by stage bracket
July 2014 to June 2015 (Number of investments)
OEM SMB Enterprise Consumer

The Nordics shift towards the enterprise…
• The Nordic region saw pretty
diverse investment patterns in
3Q14 and 4Q14, but in 1Q15
there was a clear shift
towards the enterprise which
seemed to continue into 2Q
• OEM-oriented investments
which almost vanished in 1Q,
returned in 2Q
26
@gdibner
40%
25%
67%
83%
50%
64%
20%
50%
38% 33%
50% 47%
60%
50%
17%
42%
27%
60%
50%
38% 44%
44%
35%
8%
10% 14%
6%
6%25%
17% 17%
9% 10% 10%
22%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Investment in the Nordics by target market

…especially in terms of dollars invested
• When we look at dollars
investment as opposed to the
number of investments, the
trend in the Nordics is even
clearer
• Spotify’s massive round has
been removed from this
graph
• June seemed to buck the
trend, with an increase in
consumer and OEM-oriented
investments
27
@gdibner
32%
11%
72% 75%
44%
52%
43%
20%
12%
5%
27%
45%
68%
49%
6% 0%
55%
24%
55%
80%
72% 87%
72% 36%
12%
40%
21% 25% 24%
4% 8%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
Investment in the Nordics by target market
July 2014 to July 2015
(Percentage of total US $M invested, excluding mega-rounds)

Over 50% of French VC deals were SMB or
enterprise…
• In France, the ratio of
enterprise deals to consumer
deals seems roughly constant
from September 2014 to June
2015
28
@gdibner
100% 100%
50% 46%
58%
50%
62% 60%
46% 50%
29%
50%
38%
38%
33% 50% 31%
40%
46% 33% 71% 33%
15%
8%
17% 17%13% 8% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
VC Investment in France by target market

…but money increasingly flows to enterprise
• When the data is presented
by the amount of dollars, it
becomes clear that more and
more of French VC dollars are
flowing towards enterprise-
oriented companies
29
@gdibner
100% 100%
59%
44%
65%
77%
33% 31%
19%
50%
14%
28%
23%
46%
10%
23%
64% 69%
74%
25%
86%
30%
10%
25% 25%
41%
18%
3% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
VC Investment in France by target market

• Finance recovered its top slot
• Marketing-related companies
took the second slot
• Digital health opportunities
were in third place
• Perhaps somewhat
surprisingly, Adtech took
fourth place
30
@gdibner
Finance returned to being the top vertical
Financial, 23
Marketing, 22
Health, 16
Adtech, 12 Lifestyle, 12
Travel, 11
Gaming, 11
Social, 11
Logistics, 11
Security, 10
Development, 9
CRM, 9
Electronics, 8
Entertainment, 8
Food, 8
Industrial, 8
Productivity, 8
Payments, 7Fashion, 7Education, 6Infrastructure, 6
Employment, 6
Data, 5
Durables, 5
ERP, 3
Energy, 3
Legal, 3
2Q 2015 (number of investments)

• Financial startups were the
most commonly funded
category in 2Q, including
consumer, enterprise, and
SMB-oriented companies
• The single most common
category was enterprise
marketing
• Consumer lifestyle, social, and
gaming startups were
particularly active as well
31
@gdibner
Which verticals for which segments?
Security
Logistics
Gaming
Social
Travel
Lifestyle
Adtech
Health
Marketing
Financial
0 5 10 15 20 25
2Q, 2015 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM

• This chart shows the ten most
commonly funded verticals
throughout 2015, by quarter
• Financial, marketing, and
health show increasing
strength over time
• Infrastructure shows a decline
32
@gdibner
The most popular verticals in the past 12 months
Qtr3 Qtr4 Qtr1 Qtr2
0
20
40
60
80
100
120
140
160
European & Israeli venture financing by vertical market
3Q14-2Q15, 2015 (number of investments, top 10 verticals)
Financial
Marketing
Infrastructure
Adtech
Lifestyle
Electronics
Health
Logistics
Travel
Employment

• Lifestyle, which is admittedly a
bit of a catch-all consumer
category, has shown
tremendous strength in terms
of VC volume
• Electronics (which typically
means consumer electronics
systems companies) has
shown increasing strength
through 1Q, but little
investment in 2Q
• Gaming, health, and food-
related investments seem to
be increasing in 2Q
33
@gdibner
Consumer VC investment trends
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
0
10
20
30
40
50
60
70
80
90
European & Israeli venture financing by consumer verticals
Lifestyle
Financial
Travel
Gaming
Fashion
Health
Electronics
Logistics
Education
Food

• The most popular enterprise
verticals are marketing,
adtech, and infrastructure
• Infrastructure and data-
related investment declined
over the past few quarters
• CRM seems to have picked
up steam over the past few
quarters
• Other verticals largely
holding steady
34
@gdibner
Enterprise VC investment trends
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
0
20
40
60
80
100
120
European & Israeli venture financing by enterprise verticals
Marketing
Adtech
Infrastructure
Data
Security
Development
Financial
Employment
Health
Logistics
CRM

• VC activity in Israel was very
diverse in 2Q15, with health-
related and consumer social
investments rising the 3rd and
4th slots
• Interestingly, infrastructure
investments weren’t in the
top ten
• Not surprisingly, security was
solidly in the second slot
35
@gdibner
A closer look at Israeli venture in 1Q15
Electronics
Productivity
CRM
Development
Financial
Energy
Logistics
Data
Adtech
Social
Health
Security
Marketing
0 1 2 3 4 5 6 7 8 9
Israeli venture financing by target market
Consumer
Enterprise
SMB
OEM
Telecom
Government

• Last quarter, Fintech was the
most popular vertical in the
UK – this quarter fintech was
far and away the dominant
category in the UK
• Consumer-oriented
companies dominated most
categories of VC funding
across the UK, with enterprise
marketing and enterprise
CRM as the two notable
exceptions
36
@gdibner
Consumer fintech dominated the UK
Industrial
Development
Infrastructure
ERP
Food
Health
Entertainment
Logistics
Lifestyle
Fashion
CRM
Travel
Gaming
Education
Marketing
Payments
Financial
0 2 4 6 8 10 12 14
UK venture financing by target market
2Q, 2015 (number of investments, top verticals)
Consumer
Enterprise
SMB
OEM

• The top three categories in
German VC investment in
2Q15 were consumer
durables, consumer fashion,
and enterprise employment
• In total, the top 10 categories
in Germany generated 23
investments, 14 of which were
in consumer companies
37
@gdibner
German VC was mostly about consumer
Financial
Food
Education
Logistics
Marketing
Payments
Travel
Fashion
Durables
Employment
0 1 2 3 4
German venture financing by target market
Consumer
Enterprise
SMB

• Nordic VC interest in
entertainment startups wasn’t
confined to Spotify – and this
category was the most
popular category in 2Q,
including one enterprise
offering (Soundtrack Your
Brand)
• Perhaps surprisingly, social
media was the second most
popular category in the
Nordics
• Note the strength of
enterprise and SMB-related
companies
38
@gdibner
Nordic VC was very diverse
Electronics
Security
Adtech
Development
Health
Gaming
Financial
Marketing
Social
Entertainment
0 1 2 3 4 5 6
Nordic venture financing by target market
Consumer
Enterprise
OEM

• In terms of dollars invested
during 2Q15, SaaS (28%) and
services (22%) were the
leaders
• Commerce models were
third, at 17% of dollars
invested
• The bottom of the
distribution was a bit more
diverse, including relatively
strong showings for media
and systems companies
39
@gdibner
SaaS jumped ahead of services in 2Q
SaaS, 536, 28%
Services, 432, 22%
Commerce, 319, 17%
Software, 194, 10%
Marketplace, 139, 7%
Systems, 130, 7%
Media, 108, 6%
Semiconductors, 40, 2%
Components, 24, 1%
2Q, 2015 (in US $M) (excluding mega-rounds)

• SaaS returned to its growth
trend, both in absolute and
relative terms.
• Perhaps driven by the
increase in SaaS funding,
note the precipitous decline
in software funding (non
SaaS)
• E-commerce and
marketplace models trended
down
• Service models declined, but
took the number two slot and
were up dramatically
compared to 3Q and 4Q
40
@gdibner
In 2Q, SaaS was king & software collapsed
0
100
200
300
400
500
600
700
800
Qtr3 Qtr4 Qtr1 Qtr2
2014 2015
European & Israeli venture financing by business model
3Q14 to 2Q15 (in US $M, excluding mega-rounds)
Software
SaaS
Services
Marketplace
Commerce

US VCs focused on SaaS & services
• US VC interest was skewed
heavily towards SaaS &
Services models
• Commerce and marketplace
models also attracted some
US VC attention
41
@gdibner
17
11
4 4
55
48
32
22
18 18
31
0
10
20
30
40
50
60
70
80
SaaS Services Commerce Marketplace Media Systems Software Components Semiconductors
VC Investments in Europe & Israel
2Q, 2015 (number of investments)
No US VC involved US VC involved

• Enterprise marketing SaaS
was again the most popular
segment for VC investment in
2Q15 with 15 investments
across the region
• Surprisingly, consumer social
media took the second slot,
with 11 investments
• Enterprise CRM SaaS took
third place, with investments
across the UK, Israel, the
Nordics, Benelux, and Iberia
• Consumer financial services
took the fourth slot,
dominated by UK-based
startups
42
@gdibner
Enterprise marketing & consumer social media
0 2 4 6 8 10 12 14 16
Enterprise Health SaaS
Consumer Travel Commerce
Consumer Lifestyle Commerce
Enterprise Adtech Services
Consumer Fashion Commerce
Consumer Food Commerce
Enterprise Security Software
Consumer Gaming Software
Consumer Financial Services
Enterprise CRM SaaS
Consumer Social Media
Enterprise Marketing SaaS
Number of VC investments
Investment in Europe & Israel by segment by country
2Q15 (segments with 5 or more investments)
UK & Ireland Israel
Nordic DACH
Benelux Iberia
France South. Eur.
East. Eur.

• Across Europe & Israel, US VC
firms invested in 16 enterprise
companies, 14 consumer
companies, 2 SMB
companies, and 2 OEM-
oriented companies
• Enterprise SaaS attracted by
far more US VC interest than
any other space
• The only Nordic companies
that attracted US VC interest
were in the enterprise SaaS
space
• The only Germany companies
that attracted US VC interest
were in the consumer and
SMB spaces
43
@gdibner
What business models attract US VC investments?
0 2 4 6 8 10 12
Components
Semiconductors
SaaS
SaaS
Systems
Commerce
Media
Marketplace
Services
Software
Services
SaaS
OEMSMBConsumerEnterprise
US VC Investments in Europe and Israel by end market,
business model, & country, 2Q 2015 (excludes seed & mega-rounds)
Israel UK & Ireland
France DACH
Iberia Nordic
Benelux

Focus on dev tools: everywhere you look
• Over the past 12 months, 31
dev tooling companies raised
VC money across Europe &
Israel
• These companies were
distributed across eleven
countries
• Israel led the pack with 8; the
UK saw 5, Sweden 4, and
both France and the
Netherlands saw 3 each
• This strength continued
unabated into 2Q
44
@gdibner
0
1
2
3
4
5
6
7
Jul Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2014 2015
Numnberofinvestments
Development tools VC investment in Europe and Israel
3Q14 to 2Q15, Number of investments
Ireland Belgium Norway Latvia
Estonia Germany Netherlands France
Sweden UK Israel

Focus on SaaS: what’s powering the growth
• 64 SaaS companies raised VC
financing across Europe &
Israel in 2Q15
• Marketing and CRM led the
category
• Significantly, health SaaS
came in third
• Driven by health-related
enterprise SaaS, we are
seeing the proliferation of
SaaS models into new
verticals such as logistics,
legal, and education
45
@gdibner
0 2 4 6 8 10 12 14 16 18 20
Education
Travel
Agtech
Legal
SCM
Logistics
Adtech
ERP
Development
Infrastructure
Productivity
Health
CRM
Marketing
SaaS VC investment in Europe and Israel
by vertical and target market, 2Q 2015 (top 10 verticals)
Consumer Enterprise Government SMB

Focus on health
• In 2Q15, 16 health-related
startups raised VC money
• Israel and Spain saw 5 health-
related investments each, the
UK saw 2, and Sweden,
Finland, the Netherlands, and
Poland each saw 1
• 8 of these investments were
consumer-oriented, mostly
marketplaces and services
• 7 were enterprise oriented (5
of which were SaaS models)
46
@gdibner
0 1 2 3 4 5 6
SaaS
SaaS
Commerce
Software
Commerce
Services
Marketplace
Software
SMBEnterpriseConsumer
Health-related VC investment in Europe and Israel
by vertical by country, 2Q 2015 (number of investments)
Israel
Spain
UK
Sweden
Finland
Netherlands
Poland

Based in , I was previously a partner at . Before that, I helped run the
European seed program for . I moved to London after seven years in
during which I worked as a VC with and . I’m originally from .
My VC investments include and .
Angel investments include and many more.
If you found this useful, I hope you’ll subscribe to my blog.
47
Gil Dibner
To invest in the best European & Israeli enterprise startups,
consider backing me on here. Lots of exciting stuff in the
pipeline – and you’ll be in pretty good company.

2015 Q2 Europe & Israel VC Trends Review

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