This document discusses the European technology sector and startup ecosystem. It notes that while US companies are valued higher on average, European companies have significantly outperformed since their IPOs. The document also analyzes trends in venture capital funding, noting it is less developed in Europe. Several high-profile European startups that have raised large funding rounds are presented. Overall the document presents a positive outlook on the growth of European tech companies and venture capital investment.

1. November
2012
Strictly
Private
and
Confiden2al

2. Reaching
to
New
Limits
…
We
Are
Proud
to
Be
Here
Guys,
It
is
Really
Finally
Let’s
Go!
Hot
Here
Here!
2

3. Europe
MaJers!
A
significant
number
of
companies
are
valued
at
over
€200
million
3
Note:
selected
examples.

4. European
Internet
Pioneers
&
Global
Leaders
Some
business
models
were
invented
or
most
successfully
executed
in
Europe
Company
Segment
Company
Segment
 InnovaQve
payment
plaRorm
 Remote
access
 Largest
pure-­‐play
fashion
Retailer
 Open-­‐source
database
 Enterprise
soTware
 FX
 Social
networking
for
people
you
don’t
know
 VerQcal
ad
network
(soccer)
 BeVng
 VoIP
 Free
to
play
online
gaming
 Legal
music
service
 Toolbars
 Global
hotel
comparison
leader
 Freemium
anQ-­‐virus
 Private
sales
 Payment
instalments
 Personal
loans
4

5. Company
Size
and
ValuaQon
Growth
 US
company
universe
valued
2.3x
higher
than
European
one
 However,
EU
companies
performed
4.5x
beGer
since
IPO
than
the
US
group
 European
Internet
IPOs
are
cheaper
than
US
Internet
IPOs
Average
Market
Cap
($bn)
Average
Share
Price
Performance
since
IPO
 Average
market
cap
of
across
sampled
firms
 Average
share
price
increase
since
IPO
of
sampled
firms
4.4
36%
1.9
8%
US
Europe
US
Europe
Sources:
Bloomberg,
FactSet,
4-­‐traders,
NOAH
Advisors.
We
excluded
Asos
(up
11,175%
since
IPO)
5

6. VC
Funding
is
Less
Developed
in
Europe
 European
public
companies
have
relied
less
on
VC
money
than
US
ones
 VC
investment
per
company
and
in
%
of
current
market
cap
significantly
lower
in
Europe
compared
to
the
US
 However,
there
are
also
fewer
winners
in
Europe
(less
exits)
Average
VC
Funding
Raised
($m)
VC
Funding
as
%
of
Market
Cap
 Average
amount
of
venture
capital
raised
across
sampled
 Average
of
venture
capital
raised
as
a
percentage
of
current
firms
market
capitalisa:on
of
sampled
firms
367
17.1%
71
1.9%
US
Europe
US
Europe
Sources:
Bloomberg,
FactSet,
4-­‐traders,
NOAH
Advisors.
Excluded
Tradedoubler
and
Ocado
for
Europe.
6

7. A
Look
at
the
Largest
VC
Backed
Companies
Over-­‐promised
and
under-­‐delivered?
They
jumped
several
hurdles
in
our
valuaQon
chain
VC
Capital
Raised
($bn)
Share
Price
Performance
since
IPO
2,240
(48.6%)
1,140
(73.6%)
860
(75.7%)
510
(0.5%)
471
(63.1%)
Source:
Bloomberg,
FactSet,
4-­‐traders
&
NOAH
Advisors.
7

8. High
Profile
Venture
Backed
Companies
European
VC
is
waking
up
or
rather
has
been
awakened
by
many
US
investors
Company
Last
Round
Raised
Selected
Investors
Company
Last
Round
Raised
Selected
Investors
Mar-­‐11
$218m
Feb-­‐09
$65m
June-­‐11
$188m
Jan-­‐12
$63m
Dec-­‐11
$166m
Apr-­‐12
$62m
Feb-­‐12
$145m
Mar-­‐11
$59m
Jul-­‐07
$130m
Feb-­‐12
$58m
Apr-­‐12
$129m
Jun-­‐09
$53m
Sep-­‐07
$117m
Jun-­‐12
$47m
May-­‐11
$114m
May-­‐10
$23m
Feb-­‐12
~$100m
Sources:
Crunchbase,
NOAH
Advisors.
8

9. ValuaQon
Drivers
in
the
Context
of
a
Company’s
Development
Stage:
How
NOAH
sees
the
World
Market
Management
Technology
Users
/
KPIs
Revenues
EBITDA
Leadership
Increasing
valuaQons
–
However
MulQples
Get
More
Reasonable
(in
Theory)
Decreasing
ExecuQon
Risk
and
Benefit
of
the
Doubt
(Less
to
Hope
for)
(GROWTH
*
MARGIN)
Predictability
=
ValuaQon
MulQple
9

10. The
NOAH
Network
–
Leaders
Connected
!
Internet
Coverage
of
over
10,000
industry
leaders:
500
target
companies
and
300
investors
TradiQonal
Large
Cap
TMT
&
Retail
Angels
/
Family
VC
and
Hedge
Funds
Offices
Private
Growth
Equity
Funds
Maryland
Klaus
Hommels
Armira
10