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Europe and Israel 1Q16 Venture Capital Deals Done
1. Venture Capital in Europe & Israel
Venture Investment Data: First Quarter, 2016
Prepared by Gil Dibner
The London Shard
Tallest building in Western Europe, at 306 m (1,004 ft)
blog
2. The data
• 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 all currencies into USD using monthly average exchange rates
2@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
3. Quarterly pace of venture investment
• In 1Q16, Europe & Israel saw
$3.751 billion flowing into 463
venture transactions
• This set a new quarterly
record for both numbers
• These numbers, and the rest
of this deck, do not reflect
the $1B in debt raised by
Spotify in March
3
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
1,703 1,916 2,873 3,139 3,248 2,856 3,751
122
204
270 271
286
357
463
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0
50
100
150
200
250
300
350
400
450
500
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
Amountinvested(US$M)
Numberofinvestments
VC Investments in Europe & Israel
Invested amount (US $M) Number of investments
4. Monthly pace of venture investment
• Most of the increase was
concentrated in January,
which was a record-breaking
month with nearly $1.7
invested across 164
investments
• February and March were
more in line with historical
averages, with both up
slightly YoY
@gdibner
blog: yankeesabralimey 4Syndicate for European & Israeli Enterprise Companies
905
971
997
791
787
1,561
1,517
568
1,164
1,083
1,059
714
1,661
1,052
1,038
92 75 103 78 95 98 119
65 102 111 124 122 164 149 150
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2015 2016
Numberofinvestments
VC Investments in Europe & Israel, January 2015 - March 2016
Invested amount (US $M) Number of investments
5. 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+)
• Four mega-rounds took place in
Europe this quarter – all of them
consumer-oriented businesses in
the UK:
• Skyscanner, a UK-based travel
company, raised $192M in January
• Deezer, a French music company,
raised $109M in January
• MindMaze, a Switzerland-based VR
company, raised $100M in February
• FutureFinance, a Irish financial
services company, raised $170M in
March
• Even adjusting for mega-rounds,
1Q16 is a record-breaking quarter
5
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
248
349 285 354 368 507
602345
312
556
716 567
559
731
539
935
1,154 813
1,513 1,187
1,669
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
AmountInvested(US$M)
Pace of VC Investment in Europe and Israel
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)
6. Strong year-over-year growth
• 1Q16 total investment volume
in Europe & Israel was up
29% over 1Q16 (excluding
seed deals, where data is
more spotty)
• Early venture volume grew by
111% - more than doubling
• Venture volume grew by 31%
• Growth volume grew by 45%
• Mega round volume dropped
by 25%
6
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
285
602
556
731
1,154
1,669
766
571
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Qtr1 Qtr1
2015 2016
TotalVCinvestment(US$M)
VC investment volume in Europe and Israelby bracket
Mega (>100) Growth (20-100)
Venture (8-20) Early Venture (2-8)
7. Number of investments, by bracket
• Excluding seed deals, the
total number of VC
investments per quarter was
262 in 1Q16, 18% higher than
4Q15
• This growth was spread
evenly across all brackets
7
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
60
83 77 85 93
139 15330
26 42
62 44
46
61
13
26
33
26 38
35
45
3
1
6
6 4
3
4
0
50
100
150
200
250
300
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
NumberofVCinvestments
VC investment volume in Europe and Israelby bracket
Mega (>100) Growth (20-100)
Venture (8-20) Early Venture (2-8)
8. Corporate VC activity, by bracket
• Excluding seed deals, the
total number of corporate VC
investments was 48 in 1Q16,
exactly double the number of
corporate VC investments in
1Q15
• Once again, corporate VC
activity in Europe & Israel hit
the highest level since this
data set was started
8
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
6 4 5
16
7
22
19
4
3
9
12
7
12
6
4
4
7
8
7
7
20
3
1
3
0
10
20
30
40
50
60
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
NumberofVCinvestments
Corporate VC investment volume in Europe and Israel by bracket
Mega (>100) Growth (20-100)
Venture (8-20) Early Venture (2-8)
9. Corporate VC activity, by country
• During the first quarter of
2016, Israel saw the highest
number of corporate VC
investments, with 19
• The UK saw 11 corporate VC
investments during that
period
• Ten other countries saw
corporate VC activity across
Europe, but at much lower
levels
• Corporate VCs participated in
three mega rounds
9
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
5 5
1 1 1 1 1 2 1 1
3
1
1 1
11
4
1
1 1
1 1
1
1
1
0
2
4
6
8
10
12
14
16
18
20
Israel
UK
France
Finland
Sweden
Switzerland
Germany
Iceland
Portugal
Denmark
Spain
Belgium
Numberofinvestments
Number of corporate VC investments in Europe and Israelby bracket
(1Q16)
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
10. 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
• From February to June 2015, average
round sizes across all venture rounds
were hovering between $10M and
$12M
• The third quarter saw consistently
higher average round sizes – between
$13M and $14.5M on average
• In the fourth quarter, however, the
trend reversed itself, with average
round sizes dropping to $11M in
October, $10.5M in November, and
$9.2M in December
• 1Q16 was mixed: January saw a return
to the large average round sizes of
3Q15, but February & March saw a
return to the recent trend
10
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
11.1
17.6
6.8
11.7
11.3
12.7
15.8
11.2
11.9
11.1
10.1
11.4
13.9
13.2
14.6
11.1
10.5
9.2
13.4
11.1
9.9
4
6
8
10
12
14
16
18
20
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
AmountInvested(US$M)
Average investment size in Europe and Israel
(Round sizes of 2-100M)
11. Total venture investment by country, 1Q 2016
• The UK again took the top
spot in 1Q15 with over over
$1B in total capital invested
• Israel took second place with
just over $960M in venture
capital investment
• France with $392M in VC
investment jumped ahead of
Germany which took fourth
place with $333M
11
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
1,084
963
392
333
203
141
140
107
81
61
45
32
29
25
25
22
20
17
11
7
3
3
2
2
1
UK
Israel
France
Germany
Ireland
Switzerland
Sweden
Finland
Portugal
Denmark
Serbia
Spain
Belgium
Italy
Poland
Luxembourg
Iceland
Netherlands
Austria
Estonia
Latvia
Norway
Albania
Greece
Romania
0 200 400 600 800 1,000 1,200
Total VCinvestmentvolume by country, 1Q16 (US $M)
12. Total venture investment by country, 3Q14 to 1Q16
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• In a reversal from last quarter,
Investment volumes
increased in all of the top five
markets except Germany,
which retained its third place
ranking
12
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
315
567
543
475
628
699
963
369
267
719
437
621
444
892
180
284
389
209
379
341 333
29
163
118
232
279
225
283
74
123
89
112
140
84
140
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
0
200
400
600
800
1000
1200
TotalVCinvestment(US$M)
Total VC investment, 3Q14 - 1Q16 (top 5 countries, excluding mega-rounds)
Israel
UK
Germany
France
Sweden
13. Total venture investment by country, 3Q14 to 1Q16
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• The “second five” countries
for VC investment were
Finland, Denmark, Spain,
Ireland, and the Netherlands
• Note that in recent quarters,
investment trends across
these countries have been
whipsawing intensely
• In 1Q16, all countries except
Finland saw a decline in
investment volume compared
to 4Q15
13
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
0
20
40
60
80
100
120
TotalVCinvestment(US$M)
Total VC investment, 3Q14 - 1Q16
(countries ranked 6-10, excluding mega-rounds)
Spain
Finland
Denmark
Netherlands
Ireland
14. Average venture round sizes, by region
• Until this quarter, the data
had been generally
supporting the idea that
average round sizes across
Europe were converging
• This quarter, the data does
not support this conclusion –
with round sizes increasingly
divergent across countries
14
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
Benelux, 4.5
Benelux, 5.6
DACH, 12.5
DACH, 10.4
France, 9.2
France, 6.7
Iberia, 9.4
Iberia, 11.9Israel, 11.5
Israel, 16.1
Nordic, 8.0
Nordic, 8.1
UK & Ireland, 11.2
UK & Ireland, 13.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Qtr4 Qtr1
2015 2016
Averageroundsize(US$M)
Average investment size in Europe and Israel(rounds of $2-100M)
15. Total venture investment by region, 1Q16
• When VC investments across
Europe are aggregated into
regions, UK & Ireland, Israel,
DACH, France, and the
Nordics are the clear and
consistent leaders
• Benelux, Iberia, Southern
Europe, and Eastern Europe
do produce meaningful VC
investments, but the volumes
are still low
15
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
UK & Ireland, 1,287.5,
34%
Israel, 963.0, 26%
DACH, 485.3, 13%
France, 392.3, 10%
Nordic, 341.7, 9%
Iberia, 113.5, 3%
South. Eur., 74.0, 2%
Benelux, 67.9, 2%
East. Eur., 26.0, 1%
Total VC investment by region, 1Q16
16. Rounds by bracket & region
• To get a better sense of deal
volume, this analysis excludes
seed deals which are often
poorly reported
• Excluding seed deals, the UK
led in the number of
announced deals, with 66
investments announced
• Israel took second place with
59
• The Nordics & DACH tied for
third place with 37 deals each
• France reported 36
16
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
34
26 27
23 24
7 6 3 3
16
16
6
7
10
3
1
1
14
17
4
6 1
2
1
2
1 1
0
10
20
30
40
50
60
70
UK &
Ireland
Israel Nordic DACH France Benelux Iberia South. Eur. East. Eur.
Numberofinvestments
Number of investments in Europe and Israelby bracket, 1Q 2016
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)
17. Participation rate of US VC firms, by bracket
• Year to date, US VC firms
participated in 10% of the
venture rounds in Europe;
down from 14% in 2015
• US VCs participated in only
1% of seed rounds, 8% of
early venture rounds, 21% of
venture rounds, and 38% of
growth rounds
• In a marked change from the
past, US VCs did not
participate in any of Europe’s
four mega-rounds in 1Q16
17
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
1%
8%
21%
38%
99%
92%
79%
62%
100%
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? (1Q16)
No Yes
18. US VC firm participation hits a new low
• Excluding seed rounds, US VC
firm participation in European
& Israeli venture rounds
dropped in 1Q16 to 16%,
down from 17% in 4Q
• In fact, 1Q16 saw the lowest
US VC participation rate since
I started tracking the data in
3Q14
18
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
16%
24% 20% 22% 21% 17% 16%
84%
76% 80% 78% 79% 83% 84%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
PercentageofRounds
Did US VC firms participate in European VC rounds?
(3Q14-1Q16)
No Yes
19. Participation of US VC firms by country
• In 1Q16, US VCs firms were
active in 11 different European
countries
• US VC firms were most active
in Israel, where they
participated in 16 investment
rounds out of 71 (23%)
• The UK saw 10 investments
with US VC participation out
of 91 total rounds (11%)
• Germany saw 5 investments
with US VC participation
19
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blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
16
10 5 2 2 2 2 2 1 1 10
10
20
30
40
50
60
70
80
90
100
Israel
UK
Germany
France
Sweden
Finland
Ireland
Portugal
Switzerland
Poland
Estonia
NumberofVCinvestments
In which countries are US VCs most active?
1Q, 2016
No US VC involved US VC involved
20. Participation of US VC firms by country
• This chart shows US VC
activity within Europe
throughout 2015 and 1Q16
• The overwhelming bulk of US
VC activity is in Israel, the UK
& Ireland, DACH, and the
Nordics
20
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
Israel, 12
Israel, 14 Israel, 14 Israel, 14
Israel, 16
UK & Ireland, 10
UK & Ireland, 13
UK & Ireland, 9 UK & Ireland, 8
UK & Ireland, 12
DACH, 8
DACH, 6
DACH, 4
DACH, 9
DACH, 6Nordic, 2
Nordic, 3
Nordic, 5
Nordic, 5
Nordic, 5
Iberia, 3
Iberia, 4 Iberia, 3
Iberia, 2
Benelux, 5
France, 3
France, 2
France, 2
East. Eur., 2
South. Eur., 2
0
5
10
15
20
25
30
35
40
45
50
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2015 2016
NumberofVCinvestments
Investments with US VC participation
21. 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?
Segment descriptor Consumer + Travel + Marketplace
AirBnB has built a travel-related
marketplace for consumers
Three-dimensional approach to sector mapping
22. • Excluding mega-rounds,
investment activity increased
in both consumer and
enterprise in 1Q compared
with 4Q
• Enterprise-oriented
investments hit a new high of
$1.6B in 1Q16
22
@gdibner
blog: yankeesabralimey
What target markets are attracting the most VC
investment in Europe & Israel?
Syndicate for European & Israeli Enterprise Companies
475 595
980 850
1,177
930 1,078
494
798
953
814
907
1,112
1,678
78
133
121
153
275
135
224
78
114
47
106
182
150
166
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
TotalVCinvestments(US$M)
European & Israeliventure financing by target market
3Q14 to 1Q16 (excluding mega-rounds, US $M)
Government
Telecom
OEM
SMB
Enterprise
Consumer
23. • When Israel is excluded from
the sample, 53% of all VC
dollars in Europe went to
consumer-oriented
companies
• OEM-oriented companies
continued to rise slightly in
importance, accounting for
6% of all VC dollars in Europe
23
@gdibner
blog: yankeesabralimey
Consumer investment leads Europe
Syndicate for European & Israeli Enterprise Companies
62%
36%
56%
63% 62% 57% 53%
18%
49%
34% 22% 24% 31% 35%
6%
10%
4% 12% 8% 6% 5%
5%
4% 2% 4% 5% 6%6%8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
European venture financing by target market
3Q14 to 1Q16 (excluding Israel, percent of US $M)
Government Telecom OEM SMB Enterprise Consumer
24. • When the sample set is
limited to rounds under
$20M, the ratio of consumer
to enterprise investments
shifted significantly
• Early-stage investors favored
enterprise and SMB
• Consumer investments as a
percentage of rounds hit an
all-time low of 38% of early
rounds
24
@gdibner
blog: yankeesabralimey
Early investors cut back on consumer
Syndicate for European & Israeli Enterprise Companies
39%
50% 46% 41% 46% 50%
38%
41%
37% 50%
47% 39% 36%
47%
9% 7% 9% 6% 9%11%
7% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
European venture financing by target market
3Q14 to 1Q16 (excluding Israel, rounds up to $20M, percent of US $M)
Government Telecom OEM SMB Enterprise Consumer
25. Breakdown by region & target market
• Once again, almost all
regions except Israel saw
more consumer investment
than enterprise/SMB
investment
• Spain and Benelux also saw
more enterprise investments
than consumer
• OEM-oriented investments
were particularly strong in
DACH and Israel
25
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
825
76
213 230
151
385
677
113 120
163
91
44
87
107
107
0
200
400
600
800
1,000
1,200
1,400
UK & Ireland Israel DACH France Nordic Iberia Benelux
Totalamountinvested(US$M)
Investment in Europe and Israel by target market by region
1Q, 2016 (US $M)
Government Telecom OEM SMB Enterprise Consumer
26. Distribution of investment rounds by country
• Across Europe & Israel, 40%
of VC investment rounds
were in consumer companies
in 1Q16
26
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blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
17%
32%
40%
43%
43%
47%
53%
75%
61%
52%
43%
43%
38%
38%
32%
13%
8%
12%
10%
11%
10%
11%
16%
6%
13%
5%
4%
6%
3%
6%
4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Israel
Benelux
UK & Ireland
DACH
Nordic
France
Iberia
South. Eur.
Investment in Europe and Israel by target market by country
1Q16 (Number of investments)
Consumer Enterprise SMB OEM Telecom Government
27. Growth rounds by target market
• From 4Q14 to 2Q15, there
was an upward trend towards
consumer-oriented
companies in growth
investing, but this trend
reversed itself in 3Q15 and
continued into 1Q16
• For the first time, enterprise
companies accounted for
over 50% of all growth
rounds in Europe & Israel
27
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blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
56%
37%
46%
56%
43% 39% 37%
25%
41%
46% 25%
38%
50% 51%
6%
7%
5%
9% 12%
6%6% 11%
6%
7% 5% 6%6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
Investment in Europe and Israel by target market
(Rounds over $20M, number of investments)
Government Telecom OEM SMB Enterprise Consumer
28. • Fintech was the most popular
vertical across Europe &
Israel, with 52 investments in
the category
• Marketing was second, with
33
• Security was third, with 25
28
@gdibner
blog: yankeesabralimey
Finance returned to being the top vertical
Syndicate for European & Israeli Enterprise Companies
Financial, 52
Marketing, 33
Security, 23
Infrastructure, 23
Employment, 22
Lifestyle, 20
CRM, 20
Electronics, 19
Logistics, 18
Industrial, 17
Health, 17
Data, 15
Adtech, 15
Development, 14
Gaming, 13
Food, 13
Payments, 12Energy, 11Fashion, 11
Real Estate, 11
Communications, 10
Social, 10
Travel, 10
Entertainment, 9
Education, 9
Productivity, 8
HMI, 6
European & Israeliventure financing by target market
1Q 2016 (number of investments)
29. • This graph shows number of
investments in the top 10
verticals across 1Q15 and
1Q16
• All of the top ten verticals
increased in frequency,
except for adtech which
declined slightly YoY
• Fintech-related investments
more than tripled from 15 in
1Q15 to 52 in 1Q16
• Security investments more
than doubled in popularity
YoY
29
@gdibner
blog: yankeesabralimey
How have the most popular verticals grown?
Syndicate for European & Israeli Enterprise Companies
Financial, 15
Financial, 52Marketing, 20
Marketing, 33
Infrastructure, 17
Infrastructure, 23
Lifestyle, 18
Lifestyle, 20
Employment, 13
Employment, 22
Security, 11
Security, 23
Electronics, 14
Electronics, 19
Adtech, 17
Adtech, 15
Logistics, 10
Logistics, 18
Health, 10
Health, 17
0
50
100
150
200
250
300
Qtr1 Qtr1
2015 2016
European & Israeliventurefinancing by vertical market
(top 10 verticals, number of investments)
30. • Finance was the most
frequently funded vertical, with
about half of the investments
aimed at consumer finance
• Marketing was the second most
frequently funded vertical, with
enterprise-oriented marketing
taking the lion’s share within
that category
• Security took third place with a
heavy emphasis on enterprise
security
• IT infrastructure and
employment tech made strong
showings
• Consumer lifestyle, CRM,
electronics, logistics, health,
and industrial also made the
top ten verticals
30
@gdibner
blog: yankeesabralimey
Which verticals for which segments?
Syndicate for European & Israeli Enterprise Companies
Industrial
Health
Logistics
Electronics
CRM
Lifestyle
Employment
Infrastructure
Security
Marketing
Financial
0 10 20 30 40 50 60
European & Israeliventure financing by target market
1Q, 2016 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM
Telecom
Government
31. • This chart shows the ten most
commonly funded verticals
across Europe & Israel by
quarter
• Fintech, marketing,
infrastructure, and security
show continued strength
• Employment, health and
adtech seem to have
rebounded as areas of
investor interest
31
@gdibner
blog: yankeesabralimey
The most popular verticals in the past 12 months
Syndicate for European & Israeli Enterprise Companies
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
0
50
100
150
200
250
300
European & Israeliventure financing by vertical market
(number of investments, top 10 verticals)
Adtech
Health
Logistics
Electronics
Lifestyle
Employment
Security
Infrastructure
Marketing
Financial
32. • Finance was the most funded
consumer category
• Lifestyle, which is admittedly a
bit of a catch-all consumer
category, continues to show
tremendous strength in terms
of VC volume
• Gaming, logistics, electronics,
and food continued to show
strength
• Health and fashion declined
slightly
32
@gdibner
blog: yankeesabralimey
Consumer VC investment trends
Syndicate for European & Israeli Enterprise Companies
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
0
20
40
60
80
100
120
140
160
European & Israeliventure financing by consumer verticals
(number of investments, top 10 verticals)
Social
Travel
Health
Fashion
Food
Electronics
Logistics
Gaming
Lifestyle
Financial
33. • Enterprise marketing seems
to have levelled off as an area
for VC investment
• Security also remains stable
but significant
• Enterprise infrastructure
investments continue to
increase as an area of focus
• Industrial-oriented startups
seem to be consistently
increasing as an area of focus
33
@gdibner
blog: yankeesabralimey
Enterprise VC investment trends
Syndicate for European & Israeli Enterprise Companies
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
0
20
40
60
80
100
120
140
160
180
European & Israeliventure financing by enterprise verticals
(number of investments, top 10 verticals)
Financial
Development
Industrial
Employment
CRM
Data
Adtech
Infrastructure
Security
Marketing
34. • Security retained the top spot
in Israel, with 14 investments
• Israel also saw 10 investments
in IT infrastructure
• Fintech was the third most
popular vertical in Israel, with
8 investments, only 3 of which
were consumer-oriented
34
@gdibner
blog: yankeesabralimey
A closer look at Israeli venture in 1Q16
Syndicate for European & Israeli Enterprise Companies
Employment
Agtech
Development
Data
Communications
Adtech
Marketing
Industrial
Electronics
Financial
Infrastructure
Security
0 2 4 6 8 10 12 14 16
Israeli venture financing by target market
1Q, 2016 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM
Telecom
35. • For the fifth quarter running,
Fintech was the dominant
category of investment in the
UK, and this quarter the
differential was greater than
in 4Q15
• Adtech rebounded to third
place in UK investments
• Development tooling and
employment-related
companies were the fourth
and fifth most popular
categories
35
@gdibner
blog: yankeesabralimey
Closer look at UK VC
Syndicate for European & Israeli Enterprise Companies
Food
Communications
Health
Education
Industrial
CRM
Logistics
Gaming
Real Estate
Employment
Development
Adtech
Marketing
Financial
0 2 4 6 8 10 12 14
UK venture financing by target market
1Q, 2016 (number of investments, top verticals)
Consumer
Enterprise
SMB
OEM
Government
36. • Fintech was by far the most
popular category in German
VC investment in 1Q16, with 7
investments
• Enterprise marketing was the
second most popular vertical,
with 3 investments
36
@gdibner
blog: yankeesabralimey
The German VC market in 1Q16
Syndicate for European & Israeli Enterprise Companies
Food
Communications
Retail
Logistics
Durables
Real Estate
Energy
Payments
Adtech
SCM
Electronics
Entertainment
Development
CRM
Fashion
Dating
Health
Data
Travel
Employment
Marketing
Financial
0 1 2 3 4 5 6 7 8
German venture financing by target market
1Q, 2016 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM
37. • Enterprise marketing was the
most commonly funded
vertical in France in 1Q16
• Consumer logistics, consumer
lifestyle, consumer
electronics, and consumer
food startups were very
important categories in
French VC investing in 1Q16
37
@gdibner
blog: yankeesabralimey
As usual, Nordic VC was unconventional
Syndicate for European & Israeli Enterprise Companies
HMI
Industrial
Development
Infrastructure
Data
Education
Energy
Productivity
Social
Real Estate
Payments
Security
Fashion
Health
Financial
Food
Electronics
Lifestyle
Logistics
Marketing
0 1 2 3 4 5 6 7 8 9 10
French venture financing by target market
1Q, 2016 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM
Telecom
38. • As software eats the world,
services are becoming an
increasingly important
business model for venture-
backed startups
• This continued into 2016, with
services taking 30% of the
venture dollars invested in
Europe & Israel in 1Q16
• SaaS emerged as the second
most funded business model
in 1Q16
• Commerce dropped to 6% of
the dollars
• Marketplaces – businesses
that serve a price discovery
function – were just 7%
38
@gdibner
blog: yankeesabralimey
Services & SaaS dominated 2015
Syndicate for European & Israeli Enterprise Companies
Services,973, 30%
SaaS,735, 23%
Software, 656, 21%
Systems, 319,10%
Marketplace, 211,7%
Commerce, 191, 6%
Semiconductors, 37, 1%
Media, 36, 1%
Components, 19, 1%
Meda, 3, 0%
European & Israeliventurefinancing by target market
1Q16 (in US $M) (excluding mega-rounds)
39. • Services businesses overtook
SaaS to set a new record of
nearly $1B in funding in 1Q16
• SaaS investments, however,
continued to increase and
also set a record of $735M
• Commerce investments
continued to slide, reaching
just $200M in investment in
1Q16
• Marketplace investment
stayed flat at around $200M
in the quarter
39
@gdibner
blog: yankeesabralimey
In 1Q, services overtook SaaS to set a record
Syndicate for European & Israeli Enterprise Companies
0
200
400
600
800
1000
1200
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2014 2015 2016
European & Israeliventure financing by business model
(top five, in US $M, excluding mega-rounds)
Services
SaaS
Software
Commerce
Marketplace
40. • The top three segments were
unchanged in 1Q16
• Enterprise marketing SaaS
was again the most popular
segment for VC investment in
1Q16 with 26 investments
across the region
• Consumer financial services
were next, with 23
investments
• Enterprise security software
was third, with 14 investments
40
@gdibner
blog: yankeesabralimey
Enterprise marketing & consumer fintech
Syndicate for European & Israeli Enterprise Companies
0 5 10 15 20 25 30
Consumer Gaming Services
SMB Financial Services
Consumer Food Commerce
Consumer Social Media
Enterprise Infrastructure Software
Consumer Lifestyle Commerce
Consumer Electronics Systems
Enterprise Development SaaS
Enterprise CRM SaaS
Enterprise Security Software
Consumer Financial Services
Enterprise Marketing SaaS
Number of VC investments
Investmentin Europe& Israelby segmentby country
1Q16 (top 10 segments)
France UK & Ireland
Israel Nordic
DACH Benelux
Iberia South. Eur.
East. Eur.
41. • Across Europe & Israel, US
VC firms invested in 27
enterprise companies, 10
consumer companies, 3 SMB
companies, and 2 OEM-
oriented companies
• Enterprise SaaS & Software
attracted by far more US VC
interest than any other space
• Consumer services were the
third-most often backed
sector by US VC firms
41
@gdibner
blog: yankeesabralimey
What business models attract US VC investments?
Syndicate for European & Israeli Enterprise Companies
0 2 4 6 8 10 12 14
Services
Systems
Services
Marketplace
Systems
Commerce
Services
Marketplace
Services
Systems
Software
SaaS
OEMSMBConsumerEnterprise
US VC Investments in Europe and Israelby end market,
business model, & country, 1Q16 (excludes seed & mega-rounds)
Israel
UK & Ireland
DACH
Nordic
Iberia
France
East. Eur.
42. Show me the SaaS
• The most popular category
by far for SaaS investments
across the geography was
marketing
• CRM SaaS was the second-
most popular category
• Development tools were the
third most popular SaaS
category
42
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
0 5 10 15 20 25 30 35
Health
Productivity
Infrastructure
Employment
Adtech
Data
Financial
Development
CRM
Marketing
SaaS VC investment in Europe and Israel
by vertical and target market, 1Q16 (top 10 verticals)
Consumer Enterprise SMB Telecom
43. Services investing in 1Q16
• This graph shows the top ten
verticals within the services
category in 1Q16 across
Europe & Israel
• Financial services were far
and away the most frequently
funded vertical – mostly for
consumers and SMBs
• Gaming services were the
second-most funded vertical
in the category
• Interesting, health was third
43
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
0 5 10 15 20 25 30 35 40
Adtech
Productivity
Communications
Education
Infrastructure
Payments
Entertainment
Logistics
Health
Gaming
Financial
Services VC investment in Europe and Israel
by vertical and target market, 1Q16 (top 10 verticals)
Consumer Enterprise Government SMB
44. Systems investing in 1Q16
• This graph shows the top ten
verticals within the systems
category in 1Q16 across
Europe & Israel
• Consumer electronics
systems and enterprise
industrial systems were the
most popular segments
within the category
44
@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies
0 2 4 6 8 10 12 14
Food
Adtech
Financial
Logistics
Communications
Education
Lifestyle
Agtech
Security
Infrastructure
Energy
Health
Payments
Industrial
Electronics
Systems VC investment in Europe and Israel
by vertical and target market, 1Q16 (top 10 verticals)
Consumer Enterprise SMB Telecom
45. 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.
45
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.