Europe & Israel - VC Investment Trends 2015-2018 - Angular Ventures

Europe & Israel - VC Investment Trends 2015-2018 - Angular Ventures

• 1.
  Venture Capital inEurope & Israel Venture Investment Data: 2015-2018 Amsterdam is home to 165 canals totaling over 100 kilometers in length. The city has over 1281 bridges, over three times as many as Venice. © Angular Ventures 2018 In compliance with applicable UK regulations, Angular Ventures is an Appointed Representative of Sapia Partners LLP (550103), a firm authorised and regulated by the Financial Conduct Authority (FCA).
• 2.
  Angular is aspecialist venture capital firm, built to back a very specific type of company: • Enterprise-oriented. If your business requires consumer adoption, it's not for us. We back companies that sell products and services to other companies. • Deep technology. We are firm believers in the value of meaningful barriers to entry, and we know there are a lot of ways to define and construct those barriers. • Born in Europe or Israel. We know that great innovation can come from anywhere. Our focus is on companies born on the "right" side of the Atlantic, specifically in Europe or Israel. • Global ambition. While it's possible to build a great business without targeting a global opportunity, we are exclusively focused on companies that are chasing a truly global opportunity. In most cases, this means a focus on US market entry from day one. • Outstanding founding teams with domain expertise. We believe that great founders are the main driver of success for any entrepreneurial venture. We like "well-rounded" founders, but tend to prefer founders that are "angular," bringing unique technical or domain expertise to bear. • Early stage. We like to be very early. We are not religious about being first, but most of our investments are into companies that have raised less than $1M before we engage. 2Subscribe to the Angular Ventures weekly New Investments in 2018:
• 3.
  Notes & ThankYou • The data in this report consists entirely of data I’ve gathered manually based on publicly 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. More importantly, it allows me to exclude deals that are really not “venture capital” rounds but tend to get included by others • Seed investment is under-reported and adds a lot of noise to the data set, so I exclude deals under $500K • The analysis is limited to ICT categories and excludes life sciences • The analysis excludes Turkey and FSU countries • All currencies converted into USD using monthly average exchange rates • ICOs included on a selective basis; crypto companies are classified into verticals by their end value proposition About this data: A special thank you to Andrew Poesaste (@poetential) for help with data gathering. He’s looking for a full-time VC gig in London and he’s awesome. 3Subscribe to the Angular Ventures weekly
• 4.
  Top 10 dealsby region in 2018 (US $M) France & Benelux IsraelIberia UK & Ireland DACH Nordic 4 115 120 125 129 134 141 145 200 206 250 BenevolentAI Vostok Intercom Nested Zopa Oxford Nanopore Moonbug GraphCore Atom Bank Revolut 0 100 200 300 70 70 71 80 85 100 102 104 150 160 560 Sonnen SolarisBank Design Offices WayRay Nexthink Deposit Solutions Dfinity Seba Crypto Go Euro Number 26 Auto1 0 200 400 600 46 50 50 58 60 62 63 67 80 175 Tactotek VOI Starship Technologies Vinted Pipedrive KRY Docly Syncron Neo4j Taxify 0 50 100 150 200 72 75 80 80 83 100 125 150 165 300 BlueVine Habana SiSense Gett Next Insurance eToro Trax Image Recognition Behalf jFrog Landa Digital Printing 0 100 200 300 400 62 66 75 82 100 101 115 185 200 250 Recommerce Front Ledger Evaneos GitLab Dataiku BlaBlaCar Deezer Voodoo Tradeshift 0 50 100 150 200 250 300 20 23 25 29 40 65 100 134 160 500 Fever Unbabel Hawkers OnTruck Spotahome TravelPerk TalkDesk Glovo Maximobility (Cabify) LetGo 0 200 400 600 Subscribe to the Angular Ventures weekly
• 5.
  Top 10 dealsby type in 2018 (US $M) Systems SaaSEnterprise Consumer Financial Commerce 5 67 80 85 100 100 101 115 125 165 225 Syncron SiSense Nexthink TalkDesk GitLab Dataiku BenevolentAI Intercom jFrog UiPath 0 50 100 150 200 250 43 45 48 50 53 56 56 62 150 500 Grover NA-KD Back Market TourRadar Dreamlines Made.com Pharmacy2U Recommerce Go Euro LetGo 0 100 200 300 400 500 600 40 50 50 54 55 70 75 125 141 300 Airobotics Tado Starship Technologies WISeKey Isorg Sonnen Ledger Trax Image Recognition Oxford Nanopore Landa Digital Printing 0 100 200 300 400 100 100 100 104 110 110 120 134 150 160 206 250 eToro Deposit Solutions OakNorth Seba Crypto Monzo Circle Vostok Zopa Behalf Number 26 Atom Bank Revolut 0 100 200 300 150 160 160 175 185 200 206 250 500 560 Go Euro Number 26 Maximobility (Cabify) Taxify Deezer Voodoo Atom Bank Revolut LetGo Auto1 0 200 400 600 100 100 100 101 102 115 120 125 125 141 165 378 GitLab Deposit Solutions TalkDesk Dataiku Dfinity BenevolentAI Vostok Trax Image Recognition Intercom Oxford Nanopore jFrog UiPath 0 100 200 300 400 Subscribe to the Angular Ventures weekly
• 6.
  A record year •2018 was another record- setting year in EU+IL venture • Over $25.1B was invested in 1,927 rounds in 2018 • Compared to 2017, dollar volume was up 23%, but the number of deals was down by 1% • These numbers, and the rest of this deck, do not reflect the $1B in debt raised by Spotify in March, 2017 6 12,121 14,486 20,355 25,137 1,186 1,796 1,941 1,927 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 0 5,000 10,000 15,000 20,000 25,000 30,000 2015 2016 2017 2018 NumberofInvestments Amountinvested(US$M) VC Investments in Europe & Israel (2015-2018) Invested amount (US $M) Number of investments Subscribe to the Angular Ventures weekly
• 7.
  2018 started strongand got stronger • The first, second, and fourth quarters of 2018 were each record-setting quarters in terms of dollars invested • In terms of the number of deals done, 1Q18 was the slowest quarter since 1Q16, with “only” 436 deals done. • 2Q18, however, was a record-setting quarter with 535 deals done, surpassing the previous record of 527 in 1Q17 7 835 1,703 1,916 2,873 3,139 3,252 2,857 3,730 4,114 3,122 3,520 4,072 5,763 5,609 4,911 5,877 6,496 6,250 6,514 0 100 200 300 400 500 600 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 Amountinvested(US$M) VC Investments in Europe & Israel Invested amount (US $M) Number of investments Subscribe to the Angular Ventures weekly
• 8.
  Monthly pace ofventure investment • Investment activity was consistently strong throughout 2018 • June 2018 was a record- setting month in terms of the number of investments • The impact of summer and winter holidays on deal volume is easy to spot 8 1,657 1,051 1,021 1,401 1,452 1,261 725 1,101 1,296 1,458 1,170 893 1,671 943 1,458 861 3,014 1,888 2,013 757 2,840 1,925 1,541 1,445 2,302 1,543 2,032 1,755 2,395 2,347 1,761 2,075 2,414 2,194 2,303 2,017 0 50 100 150 200 250 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 Amountinvested(US$M) VC Investments in Europe & Israel Invested amount (US $M) Number of investments Subscribe to the Angular Ventures weekly
• 9.
  Even without mega-rounds,volumes are up • 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 ($100M+) • Readers of this report know that I used to put the logos of the mega-rounds into this chart – but there are just too many for that to be practical 9 708 759 733 710 735 770 920 720 917 650 921 950 873 1,011 1,036 1,527 1,319 1,094 1,196 1,395 1,567 2,507 2,126 2,203 2,499 2,419 3,026 784 778 2,339 1,358 861 1,755 1,400 1,675 1,334 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 AmountInvested(US$M) Pace of VC Investment in Europe and Israel Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2) Subscribe to the Angular Ventures weekly
• 10.
  Strong year-over-year growthin most brackets • Seed investment was down 29% from 2017 to 2018 • All other categories, however, showed growth: • Early venture was up 13% • Venture was up 33% • Growth was up 34% • Mega-rounds were up by 16% 10 732 522 2,936 3,327 3,756 4,977 7,595 10,147 5,336 6,164 0 5,000 10,000 15,000 20,000 25,000 30,000 2017 2018 TotalVCinvestment(US$M) VC investmentvolume in Europe and Israel by bracket (2018 vs 2017) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2) Subscribe to the Angular Ventures weekly
• 11.
  Number of investments,by bracket • Excluding seed deals, the total number of VC investments per quarter was relatively constant since 1Q17…with increased levels of early venture investments in 2Q18 and 4Q18 11 77 85 94 140 153 157 144 182 195 185 171 183 187 220 174 221 42 62 44 46 61 57 64 53 77 77 75 84 83 123 105 87 33 26 38 35 44 52 40 35 40 44 66 57 63 65 64 88 6 6 4 3 4 4 1 6 6 9 5 6 9 7 10 10 0 50 100 150 200 250 300 350 400 450 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 NumberofVCinvestments VC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Subscribe to the Angular Ventures weekly
• 12.
  No impact ofBrexit on deal volume… • Looking just at UK VC deal volume, there’s so far no evidence that Brexit caused any slowdown whatsoever in VC activity • There were an average of 45 VC deals per quarter in the 18 months before the referendum • There were an average of 78 VC deals per quarter since the referendum 12 0 20 40 60 80 100 120 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 NumberofVCinvestments VC investmentvolume in the UK by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Pre- Brexit avg = 45 Post-Brexit avg = 78 Subscribe to the Angular Ventures weekly
• 13.
  …and no impacton dollars invested in the UK • An average of $819M per quarter was invested in the UK in the 18 months before the referendum • An average of $1.282B per quarter was invested in the UK since the referendum • 4Q18 was a record quarter in the UK, with $1.849B invested 13 74 70 98 79 136 108 133 150 189 162 180 155 249 215 215 206 165 166 96 128 172 148 181 113 159 247 224 184 120 368 308 301 459 180 405 209 532 273 202 191 149 514 755 587 493 666 654 639210 150 275 478 192 110 275 202 899 633 391 347 365 100 704 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 NumberofVCinvestments VC investmentvolume in the UK by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Pre-Brexit avg = $819M Post-Brexit avg = $1,282M Subscribe to the Angular Ventures weekly
• 14.
  Corporate VC activity,by bracket • Excluding seed deals, the total number of corporate VC investments rose to 73 in 2Q18, a record level • In the second half of 2018, corporate VC investment was dramatically reduced – especially in early venture and venture brackets 14 6 4 5 16 7 22 19 23 19 27 25 26 23 25 20 26 12 164 3 9 12 7 12 6 16 19 5 17 17 18 20 26 31 13 15 4 4 7 8 7 7 20 18 6 9 12 11 18 18 14 14 16 16 3 1 3 3 3 2 3 1 2 2 1 2 0 10 20 30 40 50 60 70 80 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 NumberofVCinvestments CorporateVC investmentvolume in Europe and Israel by bracket Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Subscribe to the Angular Ventures weekly
• 15.
  Corporate VC activity,by country • During 2018, Israel saw the highest number of corporate VC investments, with 78 • The UK saw 39, followed by the Germany with 32 • Corporate VCs were active in 20 European countries 15 21 13 7 8 30 13 11 5 7 25 11 13 5 0 10 20 30 40 50 60 70 80 90 Israel UK Germany France Sweden Switzerland Netherlands Spain Norway Denmark Belgium Iceland Finland Estonia Portugal Italy Ireland Austria Luxembourg Hungary Numberofinvestments Number of corporate VC investments in Europeand Israel by bracket (2018) Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Subscribe to the Angular Ventures weekly
• 16.
  Average round size •This average excludes seed rounds and mega rounds, so it reflects all rounds done in Europe & Israel between $2M and $100M • With very few exceptions, most quarters before 3Q17 saw average round sizes of $10-12M • Starting in 3Q17, a new level was set – with average round sizes consistently above $12M 16 4 6 8 10 12 14 16 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 AmountInvested(US$M) Average investmentsize in Europe and Israel (Round sizes of 2-100M, and 6-month trailingaverage) Subscribe to the Angular Ventures weekly
• 17.
  Total venture investmentby country, 2018 • The UK saw the most VC investment in 2018, with over $6B raised • Israel was second with over $4.5B raised • Germany and France were virtually tied for third place, with over $3.5B each • Spain and Sweden were tied for a distant fourth place, with over $1.2B each 17 6,046 4,580 3,638 3,545 1,255 1,242 928 753 504 379 360 312 288 256 204 183 151 148 59 58 51 41 31 28 27 23 19 19 7 1 UK Israel Germany France Sweden Spain Switzerland Netherlands Ireland Romania Finland Estonia Denmark Norway Belgium Italy Austria Portugal Greece Lithuania Hungary Malta Iceland Cyprus Slovenia Poland Luxembourg Bulgaria Latvia Croatia Total VC investmentvolumeby country, 2018 (US $M) Subscribe to the Angular Ventures weekly
• 18.
  Venture dollars percapita (2018) 18 $1.00 $10.00 $100.00 $1,000.00 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 VCDollarsperCapita(LogScale) Population Venture Capital Investment per Capita (2018) (bubble size indicates total VC investment) Israel Sweden UK France Germany Netherlands Italy Spain Belgium Switz. Ireland Finland Estonia Norway Denmark Portugal Romania Hungary Latvia Bulgaria Austria Lithuania Slovenia Greece Malta Iceland CyprusLuxem. $0.18 $0.60 $2.63 $3.02 $3.46 $5.17 $5.44 $13.06 $14.31 $17.16 $17.94 $19.32 $20.73 $26.68 $31.90 $32.76 $43.81 $43.94 $48.44 $49.90 $52.77 $65.39 $89.44 $92.10 $95.22 $105.22 $109.65 $124.19 $230.82 $520.86 Croatia Poland Bulgaria Italy Latvia Hungary Greece Slovenia Portugal Austria Belgium Romania Lithuania Spain Luxembourg Cyprus Netherlands Germany Norway Denmark France Finland Iceland UK Malta Ireland Switzerland Sweden Estonia Israel VC dollars per capita in 2018 (US$) USA(2018)=$257.62 Subscribe to the Angular Ventures weekly
• 19.
  Venture dollars asa percentage of GDP (2018) • This graph shows 2018 venture dollars invested as a percentage of GDP • Estonia jumped up to first place at 1.33% of GDP. Israel was a close second at 1.31% of GDP. • All of the other European countries were below 0.40% • In US, by comparison, VC was 0.43% of GDP in 2016 19 Austria BelgiumBulgaria Croatia Cyprus Denmark Estonia FinlandFrance Germany Greece Hungary Iceland Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Norway Poland Portugal Romania Slovenia Spain Sweden Switzerland UK US 2018 Israel 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 0 20,000 40,000 60,000 80,000 100,000 120,000 VCasapercentageofGDP GDP per Capita Subscribe to the Angular Ventures weekly
• 20.
  Total venture investmentby country (top 5) • To get a better sense of VC volumes in various countries, this analysis excludes mega-rounds • With this filter, volumes and rankings are more consistent • The UK overtook Israel in 2Q17 and has maintained the lead since, but Israel came was a very close second in 4Q18 • After a very strong first half, French VC volume dropped in the second half • German and Swedish VC investment volume continue to grow steadily 20 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 0 200 400 600 800 1000 1200 1400 TotalVCinvestment(US$M) TotalVC investment,2016 - 2018 (top 5 countries, excluding mega-rounds) UK Israel France Germany Sweden Subscribe to the Angular Ventures weekly
• 21.
  Total venture investmentby country (6-10) • To get a better sense of VC volumes in various countries, this analysis excludes mega-rounds • The “second five” countries for VC investment in 2016 were Spain, Ireland, the Netherlands, Finland, and Switzerland • Finland hit a record in 1Q18, Switzerland hit its record in 3Q18, and the Netherland hit its record in 4Q18 21 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 0 50 100 150 200 250 300 TotalVCinvestment(US$M) TotalVC investment,2016- 2018 (countries ranked 6-10, excluding mega-rounds) Spain Ireland Netherlands Switzerland Finland Subscribe to the Angular Ventures weekly
• 22.
  Total venture investmentby region • When VC investments across Europe are aggregated into regions, UK & Ireland, Israel, the Nordics, France, and DACH are the clear and consistent leaders • The UK and Ireland account for 26% of total investment volume, DACH 19%, Israel 18%, and France 14% • Other regions do produce meaningful VC investments, but the volumes are still low 22 UK & Ireland, 6,550.6, 26% DACH, 4,717.8, 19% Israel,4,579.8, 18% France, 3,545.3, 14%Nordic,2,567.7, 10% Iberia,1,389.6, 6% Benelux,975.9, 4% East.Eur., 472.0, 2% South.Eur., 338.4, 1% TotalVC investmentby region, 2018 (US $M, includes megarounds) Subscribe to the Angular Ventures weekly
• 23.
  Rounds by bracket& region • Including seed deals, the UK and Ireland saw 477 venture deals in 2018 • France came in second with 376 • DACH was third with 286, just edging out the Nordics with 282, and Israel with 254 23 91 98 42 85 13 42 27 213 174 100 116 92 51 29 91 63 79 51 81 70 37 59 29 63 0 100 200 300 400 500 600 UK & Ireland France DACH Nordic Israel Benelux Iberia South. Eur. East. Eur. Numberofinvestments Number of investments in Europe and Israel by bracket, 2018 Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<.5-2) Subscribe to the Angular Ventures weekly
• 24.
  Participation rate ofUS VC firms, by bracket • During 2018, US VCs participated in 10% of the VC financing rounds in EU and Israel • As usual, US VCs are much more likely to participate in later rounds • US VCs participated in only 2% of European/Israeli seed investments and only 5% of early venture investments 24 2% 5% 14% 25% 39% 98% 95% 86% 75% 61% 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 participatein EuropeanVC rounds? (2018) No Yes Subscribe to the Angular Ventures weekly
• 25.
  US VC firmparticipation rose slightly in 1H18 • During 2017, US VC firms participated in 8.9% of European & Israeli VC deals • In 2018, this rose to 9.9% 25 14.8% 16.7% 13.3% 16.6% 15.6% 11.5% 9.3% 11.5% 13.9% 7.5% 8.3% 8.5% 8.7% 10.1% 11.2% 11.0% 9.3% 8.2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 PercentageofRoundswithUSVCParticipation Did US VC firms participatein EuropeanVC rounds? (3Q14-4Q18) Subscribe to the Angular Ventures weekly
• 26.
  Participation of USVC firms by country • In 2018, US VCs firms were active in 20 different European countries • US VC firms were most active in Israel, where they participated in 64 investment rounds • The UK saw 39 US investments • US VCs invested in 20 German companies and 14 French companies 26 64 39 20 14 8 6 6 6 5 0 10 20 30 40 50 60 70 Israel UK Germany France Ireland Denmark Switzerland Spain Sweden Estonia Finland Portugal Netherlands Belgium Austria Romania Lithuania Norway Italy Greece NumberofVCinvestments Rounds with a US VC involved (2018) Subscribe to the Angular Ventures weekly
• 27.
  Three-dimensional approach tosector mapping 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? How is value delivered to customers? What are customers paying for? For example: Consumer + Travel + Marketplace AirBnB is a travel-related marketplace for consumers 27Subscribe to the Angular Ventures weekly
• 28.
  What target marketsare attracting the most VC investment in Europe & Israel? • Both consumer and enterprise investments increased in 2018, but enterprise investment volumes are rising faster 28 1,056 1,369 1,551 1,492 1,728 1,925 1,537 1,534 1,650 1,345 1,820 1,880 1,800 2,197 2,335 2,924 283 220 264 377 516 255 406 545 241 387 400 389 537 0 1,000 2,000 3,000 4,000 5,000 6,000 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2017 2018 TotalVCinvestments(US$M) European& Israeli venture financing by target market 2017 to 2018 (excluding mega-rounds, US $M) Industrial Agriculture Government Telecom OEM SMB Enterprise Consumer Subscribe to the Angular Ventures weekly
• 29.
  The enterprise/consumer tug-of-warcontinues • When Israel is excluded from the sample, Europe skews more towards consumer, but this is changing • In 4Q18, over 51% of all European (ex-Israel) venture dollars went to enterprise-oriented companies 29 46% 58% 42% 51% 53% 47% 47% 37% 36% 32% 44% 37% 37% 34% 41% 51% 12% 6% 8% 13% 5% 5% 5% 7% 4% 7% 6% 6% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2017 2018 Europeanventure financing by target market 2017 to 2018 (excluding Israel, percent of US $M) Industrial Agriculture Government Telecom OEM SMB Enterprise Consumer Subscribe to the Angular Ventures weekly
• 30.
  Breakdown by region& target market • Regional differences are apparent when VC investment are categorized by target market 30 2,663 2,552 805 1,668 1,233 1,000 2,921 1,627 2,593 1,432 1,032 367 433 403 342 596 759 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 UK & Ireland DACH Israel France Nordic Iberia Benelux East. Eur. South. Eur. Totalamountinvested(US$M) Investment in Europe and Israel by target market by region 2018 (US $M) Agriculture Government Telecom OEM SMB Enterprise Consumer Subscribe to the Angular Ventures weekly
• 31.
  Distribution of investmentrounds by country • Across Europe & Israel, 37% of VC investment rounds were in consumer companies in 1H18; 47% were in enterprise companies 31 17% 29% 35% 40% 41% 44% 47% 48% 62% 49% 46% 47% 45% 39% 44% 40% 4% 10% 9% 6% 5% 6% 8% 5% 12% 9% 9% 5% 7% 8% 7% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Israel Benelux France UK & Ireland DACH Nordic Iberia South. Eur. Investment in Europe and Israel by target market by country 2018 (Number of investments) Consumer Enterprise SMB OEM Telecom Government Agriculture Subscribe to the Angular Ventures weekly
• 32.
  Growth rounds bytarget market • Later stage rounds in Europe & Israel shifted towards enterprise in the second half of 2018 32 43% 44% 34% 37% 45% 32% 35% 43% 39% 32% 27% 50% 44% 32% 50% 36% 48% 56% 43% 44% 57% 60% 5% 12% 7% 4% 6% 6% 10% 4% 5% 5% 20% 7% 13% 14% 10% 7% 7% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 Investment in Europe and Israel by target market (Rounds over $20M, number of investments) Agriculture Telecom OEM SMB Enterprise Consumer Subscribe to the Angular Ventures weekly
• 33.
  Finance still leads,security is strong • Fintech was the most popular vertical across Europe & Israel, with 261 investments in the category in 2018 • Security came in second at 115 • Marketing was third at 105 33 14 18 21 24 28 28 29 35 38 39 46 50 51 52 53 54 55 60 60 62 70 72 81 83 83 87 88 105 115 261 ERP Payments Social Adtech Legal Communications Agtech Gaming CRM Fashion Infrastructure Education Entertainment Automotive Productivity Travel Development Industrial Food Energy Real Estate Logistics Employment Data Electronics Health Lifestyle Marketing Security Financial European& Israeli venture financing by target market 2018 (top 30 categories, number of investments) Subscribe to the Angular Ventures weekly
• 34.
  Growth rates byvertical • This graph shows the change in the number of investments by vertical from 2017 to 2018 • Productivity, security, and dev tools saw the biggest increases • IT Infrastructure, lifestyle, and electronics saw the biggest decreases 34 Infrastructure, -46% Lifestyle,-26% Electronics,-24% Fashion,-17% Automotive,-15% Employment,-12% Health,-11% Education, -7% Travel, -7% Entertainment,-4% Marketing, -2% Industrial,-2% Logistics,6% Financial,17% Data, 20% Real Estate, 21% Food, 28% Energy, 32% Development,41% Security,51% Productivity,61% -60% -40% -20% 0% 20% 40% 60% 80% Change in the number of venture investments (2018 vs 2017, 20 most popular categories) Subscribe to the Angular Ventures weekly
• 35.
  Which verticals forwhich segments? • Consumer finance was once again the most frequently funded vertical, with 136 investments • Enterprise security was second, with 107 investments • Enterprise marketing was third, with 89 investments • Consumer lifestyle was a close fourth, with 83, followed by enterprise fintech, with 80 35 Real Estate Logistics Employment Data Electronics Health Lifestyle Marketing Security Financial 0 50 100 150 200 250 300 European& Israeli venture financing by target market 2018 (number of investments,top 10 verticals) Consumer Enterprise SMB OEM Government Subscribe to the Angular Ventures weekly
• 36.
  The most popularverticals • This chart shows the ten most commonly funded verticals across Europe & Israel by quarter 36 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 0 50 100 150 200 250 300 350 European& Israeli venture financing by vertical market (number of investments, top 10 verticals) Data Health Logistics Electronics Lifestyle Employment Security Infrastructure Marketing Financial Subscribe to the Angular Ventures weekly
• 37.
  Consumer VC investmenttrends • Investors continue to favor consumer fintech, lifestyle, food, travel, and health 37 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 0 20 40 60 80 100 120 140 160 180 European& Israeli venture financing by consumer verticals (number of investments, top 10 verticals) Fashion Electronics Logistics Entertainment Gaming Health Food Travel Lifestyle Financial Subscribe to the Angular Ventures weekly
• 38.
  Enterprise VC investmenttrends • Within the enterprise world, investor attention was focused on financial, security, marketing, and employment startups in the back half of 2018 38 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 0 20 40 60 80 100 120 140 160 180 200 European& Israeli venture financing by enterprise verticals (number of investments, top 10 verticals) Adtech Infrastructure Industrial Data Health Development Employment Marketing Security Financial Subscribe to the Angular Ventures weekly
• 39.
  SaaS and Servicesaccount for 51% • SaaS returned to the top spot in 2018, with 26% of the invested amount. • Services were a close second, representing 25% of all VC dollars • Systems – complete physical products – took fourth place at 10% of all venture dollars • Commerce represented 8% and marketplaces were just 7% 39 SaaS, 4,944, 26% Services, 4,772, 25% Software, 3,246, 17% Systems, 1,801, 10% Commerce, 1,568, 8% Marketplace, 1,358, 7% Components, 465, 3% Media, 449, 2% Materials, 214, 1% Semiconductors, 155, 1% European & Israeli venture financing by target market 2018 (in US $M) (excluding mega-rounds) Subscribe to the Angular Ventures weekly
• 40.
  Services and SaaSare dominant • Services and SaaS remained the top two business models by funding volume 40Subscribe to the Angular Ventures weekly 0 200 400 600 800 1000 1200 1400 1600 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2016 2017 2018 European& Israeli venture financing by business model (top seven, in US $M, excluding mega-rounds) Services SaaS Software Commerce Marketplace Components Systems
• 41.
  EU+IL VC CheatSheet (2018) • This graph provides a quick overview of the ten most commonly funded segments across the top ten countries for those segments • In a nutshell: • Consumer financial services (Everywhere, but especially in the UK) • Israeli enterprise security software • Marketing SaaS in France • Enterprise data SaaS in the UK and Israel • Consumer food commerce in the UK, Germany, and France • SMB finance in the UK and Israel • Enterprise employment/HR SaaS in the UK • Enterprise productivity SaaS in France • And some other stuff….  41Subscribe to the Angular Ventures weekly
• 42.
  A closer lookat UK venture in 2018 • Finance was the most commonly funded category in the UK, with 94 investments in 2018 • Data, health, and employment were next 42 Education Development Marketing Real Estate Security Lifestyle Employment Health Data Financial 0 10 20 30 40 50 60 70 80 90 100 UK venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Government Subscribe to the Angular Ventures weekly
• 43.
  A closer lookat Israeli venture in 2018 • Security was the most commonly funded category in Israel, with 20 investments in 2018 alone – nearly than three times that of the next most frequent category - finance 43 Real Estate Logistics Agtech Development CRM Health Electronics Infrastructure Data Automotive Financial Security 0 10 20 30 40 50 60 70 Israeli venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Government Agriculture Subscribe to the Angular Ventures weekly
• 44.
  A closer lookat German venture in 2018 • Finance was the by far most commonly funded category in Germany, with 15 consumer investments and 28 total investments in 2018 • Lifestyle was next with 13 • Industrial, electronics, and logistics were tied for third with 11 44 Food Automotive Infrastructure Energy Marketing Employment Travel Industrial Electronics Logistics Lifestyle Financial 0 5 10 15 20 25 30 German venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Government Subscribe to the Angular Ventures weekly
• 45.
  A closer lookat French venture in 2018 • Enterprise marketing led in France, with 28 investments • Consumer lifestyle (20) and enterprise productivity (15) took second and third place 45 Industrial Energy Logistics Real Estate Food Electronics Productivity Lifestyle Employment Financial Marketing 0 5 10 15 20 25 30 35 French venture financingby target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Subscribe to the Angular Ventures weekly
• 46.
  A closer lookat Swedish venture in 2018 • Sweden’s venture landscape was dominated by consumer finance, consumer lifestyle, and gaming 46 Security Data Marketing Fashion Energy Health Entertainment Gaming Lifestyle Financial 0 5 10 15 20 25 Swedish venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Subscribe to the Angular Ventures weekly
• 47.
  A closer lookat Spanish venture in 2018 • Lifestyle and real estate tech were the most funded categories in Spain, with seven investments each • Logistics, travel, and fashion were tied for second 47 Marketing Education Health Legal Security Social Fashion Travel Logistics Real Estate Lifestyle 0 1 2 3 4 5 6 7 8 Spanish venture financingby target market 2018 (number of investments,top verticals) Consumer Enterprise SMB Subscribe to the Angular Ventures weekly
• 48.
  A closer lookat Swiss venture in 2018 • Financial was again by far the most commonly funded category in Switzerland, with 12 investments in 2018 48 Data Industrial Development Infrastructure Social Lifestyle Employment Logistics Health Marketing Electronics Security Energy Financial 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Swiss venture financingby target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Subscribe to the Angular Ventures weekly
• 49.
  A closer lookat Dutch venture in 2018 • Logistics and marketing were the two most funded categories in the Netherlands 49 Communications Agtech Health Employment Industrial Financial Development Electronics Travel Energy Marketing Logistics 0 1 2 3 4 5 6 7 8 9 Dutch venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Government Agriculture Subscribe to the Angular Ventures weekly
• 50.
  A closer lookat Irish venture in 2018 • Fintech was the most commonly funded category in Ireland, followed by marketing • Entertainment, and security were tied for third place 50 Health Energy Agtech Education Employment HMI Data Productivity Electronics Legal Food Security Entertainment Marketing Financial 0 1 2 3 4 5 6 7 8 Irish venture financing by target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Agriculture Subscribe to the Angular Ventures weekly
• 51.
  A closer lookat Finnish venture in 2018 • Fintech, electronics, and employment were tied for first place, with four investments each in 2018 51 Collaboration Travel Health Development Real Estate Gaming Energy Marketing Education Financial Electronics Employment 0 1 2 3 4 5 Finnish venture financingby target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Subscribe to the Angular Ventures weekly
• 52.
  The Nordic VCmarket in 2018 • Like elsewhere in Europe, the Nordics were focused on fintech • Gaming was in second place 52 Data Electronics Education Energy Entertainment Marketing Health Lifestyle Gaming Financial 0 5 10 15 20 25 30 35 40 45 50 Nordic venture financingby target market 2018 (number of investments,top verticals) Consumer Enterprise SMB OEM Subscribe to the Angular Ventures weekly
• 53.
  The Nordic VCmarket by country • Across the Nordics, finance dominated, followed by gaming. • Sweden saw the most actively among Nordic nations • Finland was especially active in electronics • Norway was active in data 53Subscribe to the Angular Ventures weekly
• 54.
  Venture capital inSouthern & Eastern Europe • Fintech and food were the most financed vertical in Southern and Eastern Europe • Italy showed strength across a range of consumer categories 54Subscribe to the Angular Ventures weekly
• 55.
  Focus on SaaS •Marketing was yet again the most frequently funded SaaS vertical in 2018, with 68 investments • Data was second with 56 • Employment, CRM and productivity were tied for third with 38 55 0 10 20 30 40 50 60 70 80 Security Financial Infrastructure Health Development Employment CRM Productivity Data Marketing SaaS VC investmentin Europe and Israel by vertical and target market, 2018 (top 10 verticals) Consumer Enterprise Government SMB Subscribe to the Angular Ventures weekly
• 56.
  Focus on Services •The lion’s share of the services investment landscape is consumer financial services • There are, however, many more verticals where “services” companies are emerging – most of these are in consumer categories 56 0 20 40 60 80 100 120 140 160 180 Employment Lifestyle Health Entertainment Marketing Education Real Estate Logistics Gaming Financial Services VC investment in Europe and Israel by vertical and target market, 2018 (top 10 verticals) Consumer Enterprise SMB Subscribe to the Angular Ventures weekly
• 57.
  Focus on Marketplaces •The most frequently funded marketplace category in 2018 was financial marketplaces, mostly aimed at consumers • Lifestyle, real estate, and employment were also important marketplace categories 57 0 5 10 15 20 25 30 Food Marketing Automotive Fashion Logistics Travel Lifestyle Real Estate Employment Financial Marketplace VC investment in Europe and Israel by vertical and target market, 2018 (top 10 verticals) Consumer Enterprise SMB Subscribe to the Angular Ventures weekly
• 58.
  Focus on Systems •The most funded systems categories was electronics – including general consumer electronics and systems designed for OEM sales • Both energy and agtech were well represented 58 0 10 20 30 40 50 60 Food Space Logistics Health Security Automotive Agtech Industrial Energy Electronics Systems VC investmentin Europe and Israel by vertical and target market, 2018 (top 10 verticals) Consumer Enterprise Government OEM Agriculture Subscribe to the Angular Ventures weekly
• 59.
  Focus on Components •Across Europe & Israel, components investments were focused on general electronics and energy, followed by industrial and automotive 59 0 5 10 15 20 Space Imaging Communications Automotive Industrial Energy Electronics Components VC investment in Europe and Israel by vertical market, 1H18 (top 10 verticals) Subscribe to the Angular Ventures weekly
• 60.
  Focus on Fintech •In 2018, over $4.1B was invested into fintech • After six consecutive quarters of increase, fintech investment levels seemed to level off in 2018 60 0 200 400 600 800 1,000 1,200 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 Fintech - VC investment in Europe and Israel (US $M) SMB Enterprise Consumer Subscribe to the Angular Ventures weekly
• 61.
  Focus on Fintech •Over a long horizon, fintech investment pace has accelerated across all brackets • 1Q18 was a high-water mark in fintech mega- rounds – activity seemed to shift towards early-stage fintech investment in late 2018 61 0 200 400 600 800 1,000 1,200 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2015 2016 2017 2018 Fintech - VC investment in Europe and Israel (US $M) Mega Growth Venture Early Venture Seed Subscribe to the Angular Ventures weekly
• 62.
  Focus on Marketing •Since 2016, there were 321 marketing investments in 22 countries • France saw the most – with 75 62Subscribe to the Angular Ventures weekly
• 63.
  Focus on Marketing •VCs invested $915M into marketing tech in Europe & Israel in 2018, up slightly from $842M in 2017 63 0 5 10 15 20 25 30 35 40 45 0 50 100 150 200 250 300 350 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Marketing - VC investmentin Europeand Israel Amount Number Subscribe to the Angular Ventures weekly
• 64.
  Focus on ProductivityTools • Since 2016, there were 133 productivity tool investments in 21 countries • France saw the most with 40, following by the UK with 25 64Subscribe to the Angular Ventures weekly
• 65.
  Focus on ProductivityTools • VCs invested $728M into productivity tools in Europe & Israel in 2018, up dramatically from $120M in 2017 65 0 2 4 6 8 10 12 14 16 18 20 0 50 100 150 200 250 300 350 400 450 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Productivity Tools - VC investment in Europe and Israel Amount Number Subscribe to the Angular Ventures weekly
• 66.
  Focus on DeveloperTools • Since 2016, there were 133 developer tool investments in 19 countries • The UK saw the most with 31, following by Israel with 30 66Subscribe to the Angular Ventures weekly
• 67.
  Focus on DeveloperTools • VCs invested $804M into developer tools in Europe & Israel in 2018, up significantly from $498M in 2017 67 0 2 4 6 8 10 12 14 16 18 20 0 50 100 150 200 250 300 350 400 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2014 2015 2016 2017 2018 Numberofinvestments Amountinvested(US$M) Developer Tools - VC investment in Europe and Israel Amount Number Subscribe to the Angular Ventures weekly
• 68.
  Focus on Data •Since 2016, there were 208 data investments in 20 countries • The UK saw the most with 57, following by Israel with 39 68Subscribe to the Angular Ventures weekly
• 69.
  Focus on Data •VCs invested $981M into data companies in Europe & Israel in 2018, up from $702M in 2017 69Subscribe to the Angular Ventures weekly
• 70.
  Focus on Security •Since 2016, there were 272 security investments in 20 countries • Israel saw the most with 140, following by the UK with 43 70Subscribe to the Angular Ventures weekly
• 71.
  Focus on Security •VCs invested $1.4BM into security companies in Europe & Israel in 2018, up from $1.1B in 2017 71Subscribe to the Angular Ventures weekly
• 72.
  Focus on Energy •Since 2016, there were 147 energy investments in 16 countries • The France saw the most with 32, following by Sweden with 28 72Subscribe to the Angular Ventures weekly
• 73.
  Focus on Energy •VCs invested $539M into energy companies in Europe & Israel in 2018, up massively from $267M in 2017 73Subscribe to the Angular Ventures weekly
• 74.
  Focus on ITInfrastructure • Since 2016, there were 212 infrastructure investments in 21 countries • Israel saw the most with 54, following by the UK with 42 74Subscribe to the Angular Ventures weekly
• 75.
  Focus on ITInfrastructure • VCs invested $1.17B into infrastructure companies in Europe & Israel in 2018, down from $1,56B in 2017 75Subscribe to the Angular Ventures weekly
• 76.
  Focus on Industrial •Since 2016, there were 185 industrial investments in 20 countries • France saw the most with 36, followed by Germany with 26 76Subscribe to the Angular Ventures weekly
• 77.
  Focus on Industrial •VCs invested $633M into industrial companies in Europe & Israel in 2018, up from $339B in 2017 77Subscribe to the Angular Ventures weekly
• 78.
  Focus on Logistics •Since 2016, there were 205 logistics investments in 22 countries • France saw the most with 57, followed by Germany with 27 78Subscribe to the Angular Ventures weekly
• 79.
  Focus on Logistics •VCs invested $1.26B into logistics companies in Europe & Israel in 2018, down from $846M in 2017 79Subscribe to the Angular Ventures weekly
• 80.
  Focus on Electronics •Since 2016, there were 277 electronics investments in 19 countries • France saw the most with 71, followed by Israel with 44 80Subscribe to the Angular Ventures weekly
• 81.
  Focus on Electronics •VCs invested $1.45B into electronics companies in Europe & Israel in 2018, up from $847M in 2017 81Subscribe to the Angular Ventures weekly
• 82.
  Focus on Electronics(components, systems, & semis) • The majority of “electronics” investments were into systems • Components and semis were also important categories 82Subscribe to the Angular Ventures weekly
• 83.
  Thank you