A dialogue on European Venture Capital

1. praveenjothi.com
A dialogue
on European Venture Capital
PRAVEEN PARANJOTHI

2. European Investment Fund.
Venture Capital activities.
European Venture Capital 2
”
“
€4.2bn
Of
Investments
in European
Venture
Capital funds
250+
Venture
Capital funds
Europe’s Leading Developer of
Risk Financing for
Entrepreneurship & Innovation
3600+
Companies
18
Years
in European
Venture
Capital
market

3. European Venture Capital 3
?
IS THERE AN
OPPORTUNY IN
EUROPE
YES!
and there
is work to
be done!

4. Sizable market & strong fundamentals
Source: World Bank and ComScore

5. Emerging hubs
Helsinki
Stockholm
Amsterdam
Berlin
Paris
London
Tallinn
Barcelona
- Time to reach the $ billion
valuation is same everywhere
(and decreased from 10 to 2 years)
- Europe created 25
$ billion ICT
companies
between 2003-12
(source Atomico)

6. Work to do
European Venture Capital
- Success comes first. Hub comes next.
Skype in Estonia, Rocket Internet in Berlin, Spotify in
Stockholm makes them a hub.
- Linking the hubs to form an effective ecosystem.
Skype is Swedish/Estonian, King.com is Anglo-Swedish,
Transferwise is Anglo-Estonian
- “Single Digital Market” to unlock EU’s potential.
No single EU country is comparable with large markets.
- Early-stage entrepreneurial activity < 6% of the
population (Germany, France, Italy, Spain)
USA and BRIC 10 – 17%**
** Global Entrepreneurship Monitor in 2013

7. 7
European
Venture Capital

8. European Venture Capital 8
European Venture Capital
Positive trends:
- Fundraising
- Investments
- Divestments
EUR m 2012 2013 2014
VC funds raised (EVCA) 3900 3900 n/a
VC fund commitments (EIF) 497 602 760*
VC investments (EVCA) 3200 3400 n/a
VC investments (DowJones) 4980 6160 7900
VC divestments (EVCA) 1900 2200 n/a
* EIF 2014 commitments are preliminary numbers and subject to vary
* EIF portfolio

9. - Early-stage capital crunch
- Emerging fund managers are more
likely to focus on early stage
- Government agencies role would
continue to be important
- Similar to raise of Micro VCs in the US
(In 2014 67% US VC funds < $50m)
- Later stage investment
capability
- EIF is working on a growth-stage co-
investment fund for Germany
Source: Upfront Ventures
Early-stage
Seed- stage Later-stage
- European VCs
- US Growth VCs
- Private Equity and others
- Corporates (Alibaba,
Rakuten etc.)
Early/Balanced-stage European
VCs
- Business Angels
- Incubators/Accelerators
- HTGF et al.
Led by
non-European investors
Few investors
Primarily European and hyper activity
European Angels Fund (EIF)
increases BA investment
capacity
- European ecosystem has to master the art of the new
market/platform creation.
- iOS, Android, Facebook, Twitter, Collaborative sharing –all created
elsewhere.
- European corporate leadership required
- Think Google, Facebook, Microsoft. Who are they in Europe?

10. IMAGINATION
STORY TELLING
+
Team
Technology
Finance
MARKET
Tech and VC are essentially
IMAGINATION

11. European Venture Capital 11
We already know
where we are
going!

12. Connected everything
Intelligence everywhere
Access anywhere
C I A world
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