Venture Capital Report

Europe | 3Q | 2017

VENTURE CAPITAL REPORT

VENTURE CAPITAL REPORT

The following report presents Dow Jones VentureSources quarterly findings for European venture capital fundraising, investment, valuation,
and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 3Q 2017 include:

Both the number of funds and amount raised by European venture capital funds decreased compared to the previous quarter.
Venture capital investment into European companies fell by 25% from 2Q 2017 in terms of amount raised, but was up 48% year-on-year.
The number of and amount raised through M&As fell 30% and 43%, respectively, compared with the previous quarter.
Exits via IPOs saw a steep drop in the third quarter compared to 2Q 2017, both in terms of amount raised and number of IPOs.

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EUROPEAN VENTURE CAPITAL FUNDRAISING
EXPERIENCES SIGNIFICANT DROP IN 3Q 2017
FUNDRAISING

European VC Fundraising
20 European venture capital funds raised Based on multiple closings (20142017)
1.58 billion during 3Q 2017. Compared with 2Q 2017, total 40 3.50
3.04
capital raised experienced a 48% drop, and the number of 35 2.85 3.00
fund closings decreased by 41%. 2.57
30
Compared with the same quarter last year, amount raised 2.23 2.50
2.08
increased by 24%, despite closing 13% fewer funds. 25 2.03 1.58
2.00
1.70
Partech International Ventures VII, which raised 400 million, 20
1.40
1.30 1.27 1.50
was the largest fund of the quarter, accounting for 25% of the 15
1.20

total amount raised in 3Q 2017. 0.83 1.00

10

5 0.50

0 0.00
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Amount Raised (B) 0.83 1.40 1.30 2.03 1.20 1.70 2.85 2.57 1.27 2.08 2.23 3.04 1.58
Number of Funds 22 29 24 27 19 27 29 25 23 24 19 34 20

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LARGEST EUROPEAN VC FUNDS RAISED IN 3Q 2017
FUNDRAISING

Offering
Firm Name Fund Name Amount (M) Location Fund Type Fund Category Closing Type
Status

Partech International Early-stage

Partech Ventures 400.00 Paris, France Closed Venture Capital Final
Ventures VII Venture Capital

Multi-stage
Cathay Innovation Cathay Innovation Fund 280.05 Paris, France Closed Venture Capital Final
Venture Capital

Luxembourg City, Early-stage

Mangrove Capital Partners Mangrove V Fund 148.78 Closed Venture Capital Final
Luxembourg Venture Capital

Multi-stage
BlackFin Capital Partners SAS BlackFin Tech Fund 1 100.00 Paris, France Open Venture Capital Venture Capital First

London, Multi-stage
Abingworth LLP Abingworth Bioventures VII LP 88.11 Open Venture Capital Interim
United Kingdom Venture Capital

VENTURE CAPITAL REPORT 4

INVESTMENT INTO EUROPEAN VENTURE-BACKED
COMPANIES PARES BACK GAINS IN 3Q 2017
FINANCING
Equity Financings into Europe-based,
European companies raised approximately 3.29 billion through VC-backed Companies (20142017)
513 deals in 3Q 2017. 4.50 700
650
In comparison to the same quarter last year, the amount 4.00
600
companies raised increased by 48%, while the total number of 3.50 550
deals closed fell by some 5%. 500
3.00
Quarter-over-quarter figures show both the amount raised and 450
400
number deals declining by 25% and 7%, respectively. 2.50
350
The quarters decline in the number of deals continued the year-to- 2.00 300
date downward trend in this area. Moreover, the correction in the 250
1.50
amount raised by European venture-backed companies in 3Q 2017 200
might suggest last quarters spike was more of an anomaly and 1.00 150

not fully representative of how the rest of the years equity 0.50
100
50
financings could develop.
0.00 0
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Amount Raised (B) 2.39 2.09 2.92 4.11 3.43 3.56 2.85 3.21 2.23 3.51 2.97 4.39 3.29
Number of Deals 402 473 497 516 471 591 543 598 539 608 610 554 513

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EQUITY FINANCINGS INTO EUROPE-BASED,
VC-BACKED COMPANIES, BY ROUND CLASS (20142017)
FINANCING
320 Number of Deals
280

240

200

160

120

80

40

0
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Seed 43 51 43 61 47 56 58 55 51 63 71 80 79
First 193 230 244 225 219 300 241 292 261 272 253 225 186
Second 72 83 87 82 89 102 106 105 103 121 146 110 118
Later 58 58 81 110 75 78 84 91 74 94 76 80 84
Restart 1 1 1

VENTURE CAPITAL REPORT 6

EQUITY FINANCINGS INTO EUROPE-BASED,
VC-BACKED COMPANIES, BY ROUND CLASS (3Q 20143Q 2017)
FINANCING

2,500 Amount Raised (M)

2,000

1,500

1,000

500

0
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Seed 19 32 36 43 38 43 48 46 42 65 79 83 113
First 495 500 654 683 721 803 757 902 740 1,116 961 1,007 584
Second 247 830 446 937 643 811 800 580 455 597 755 730 827
Later 886 681 1,690 2,295 1,981 1,452 1,053 1,607 902 1,615 846 1,559 1,556
Restart 2 1 2

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EQUITY FINANCINGS INTO EUROPE-BASED,
VC-BACKED COMPANIES (3Q 20143Q 2017)
FINANCING

2.50 Median Equity Deal Size [M]

2.00

1.50

1.00

0.50

0.00
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Median Equity Deal Size (M) 1.48 1.60 1.59 1.86 1.78 1.86 1.90 1.56 1.81 2.05 2.20 1.96 2.36

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EQUITY FINANCINGS INTO EUROPE-BASED,
VC-BACKED COMPANIES, BY INDUSTRY GROUP (3Q 2017)
FINANCING
3Q 2017 Industry
Business and Financial Services
Breakdown
By Number 26% 26% Consumer Goods
Consumer Services received the largest allocation of investment during 3Q 2017, of Deals
Consumer Services
raising 996 million through 121 deals. The sector attracted 30% of capital raised
by European VC-backed companies in the quarter, and a 24% share of all deals Energy & Utilities
3% 4%
completed in the quarter. Healthcare
14%
Business and Financial Services ranked second, raising some 904 million Industrial Goods & Materials
24%
3%
through 134 deals. The sector attracted 27% of the total amount invested into Information Technology
European VC-backed companies as well as a 26% share of all deals completed in
the quarter. 3Q 2017 Industry
Breakdown Business and Financial Services
Information Technology (IT) placed third in terms of euros invested, raising 641 20%
By Amount 27% Consumer Goods
million, or some 20% of the total amount invested into European VC-backed Raised Consumer Services
companies for the quarter. Additionally, IT, with 136 financing rounds, was 4%
Energy & Utilities
Europes most active industry, beating out Business and Financial Services by 3% Healthcare
two deals. 14%
Industrial Goods & Materials
2%
30% Information Technology

VENTURE CAPITAL REPORT 9

TOP 5 DEALS INTO EUROPEAN VC-BACKED
COMPANIES (3Q 2017)
FINANCING

Industry Industry Industry Brief Close Round Raised Round Investors

Co. Name Location
Code Segment Group Description Date Type (M) (* denotes lead)
Accel Partners, Digital Sky Technologies Ltd.,
London,
Roofoods Ltd. Shopping Consumer Provider of a food delivery Later Fidelity Management & Research Co.*, General
United Consumer Services 24/09/2017 301.79
(Deliveroo) Facilitators Information Services platform. Stage Catalyst Partners, Index Ventures, T. Rowe Price
Kingdom
Group Inc.*

Movie / Music Operator of an online platform to Atlantic Labs Manager GmbH, Doughty Hanson,
Berlin, Later
SoundCloud Ltd. Producers and Media & Content Consumer Services send, receive, and distribute 11/08/2017 142.94 Temasek Holdings Pvt. Ltd.*, The Raine Group
Germany Stage
Distributors music. LLC*, Union Square Ventures

Lilium GmbH Gilching, Commercial Aerospace Industrial Goods Developer of small-scale electric Second Atomico, LGT Group, Obvious Ventures
05/09/2017 75.87
(Lilium Aviation) Germany Aircraft & Defense & Materials aircrafts. Round Management LLC, Tencent Holdings Ltd.

TTTech Software
Vienna, Information Provider of time-triggered Later
Computer- Development Software 14/09/2017 75.00 Samsung Strategy & Innovation Center*
Austria Technology systems. Stage
technik AG Tools

Arix Bioscience Investments Ltd., Cormorant Asset

London,
Biotechnology Provider of biopharmaceutical Later Management LLC*, Nextech Invest Ltd., Syncona
Autolus Ltd. United Biopharmaceuticals Healthcare 26/09/2017 64.42
Therapeutics solutions. Stage Partners LLP, Woodford Investment Management
Kingdom
LLP

VENTURE CAPITAL REPORT 10

MOST ACTIVE INVESTORS FOR EUROPE-BASED,
VC-BACKED COMPANIES (3Q 2017)
FINANCING

16 Deals Completed
14
14 13
12
12 11
10 10
10 9 9

0
Force Over Mass Bpifrance Partech Ventures High-Tech Kima Ventures Sunstone Capital Balderton Capital Global Founders
Capital LLP Investissement Gruenderfonds A/S Management LLP Capital
SAS Management
GmbH

VENTURE CAPITAL REPORT 11

EQUITY FINANCINGS INTO EUROPE-BASED,
VC-BACKED COMPANIES BY COUNTRY (3Q 2017)
FINANCING
Number of
Deals in 3Q 2017 United Kingdom
The United Kingdom remained the most favored destination for equity 28%
by Country
financings in 3Q 2017, attaining some 41% of amount raised and 28% of all (Top 4) 37% France
deals. The region received 1.34 billion across 146 deals. The amount invested
was down 35% from last quarter while the deal flow decreased by 12%. Germany

Germany ranked second with 603 million raised through 70 deals. This 15%
23%
Russia
6%
represents a 33% decrease in capital invested and a 8% rise in the number of 14%
deals compared to last quarter. Rest of Europe

France came in third, raising 504 million in 78 deals. It attracted 11% more
capital than last quarter, through a similar level of deals. Amount Raised
in 3Q 2017 United Kingdom
22%
Switzerland, garnering 146 million across 30 deals, was just two financings by Country
Germany
shy of being in the Top 4 outright for both amount raised and number of deals. (Top 4) 41%
Instead, Russia, with 31 deals, rounded out the Top 4 for number of financings. 4%
France
19%

15% Switzerland

18% Rest of Europe

VENTURE CAPITAL REPORT 12

EUROPE 3Q 2017 VENTURE CAPITAL EXIT ACTIVITY
LIQUIDITY

Exits for European VCbacked Companies (20142017)

During the quarter, 46 venture-backed M&As took
3Q'17
place in Europe, a 30% quarter-on-quarter drop and a
2Q'17
39% drop compared to the same quarter last year. 1Q'17
4Q'16
The total amount raised through European VC-backed
3Q'16
M&As in 3Q 2017 was 1.8 billion, representing a 43% 2Q'16
decrease from last quarter and a 52% decline from 3Q 1Q'16
2016. 4Q'15
3Q'15
Eight European venture-backed companies completed 2Q'15
initial public offerings in the quarter, indicating M&As 1Q'15

continue to be the preferred exit strategy for venture- 4Q'14

3Q'14
backed companies.
0 10 20 30 40 50 60 70 80 90 100
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
IPOs 16 11 12 17 8 17 7 11 13 17 10 17 8
M&As 60 59 63 53 64 45 67 66 75 74 62 66 46

VENTURE CAPITAL REPORT 13

TOP 3 M&As IN EUROPE (3Q 2017)
LIQUIDITY

Brief Industry Close Round Amount Paid

Company Name Location Industry Segment Industry Group Acquirer
Description Code Date Type (M)

Operator of an e-commerce site

Berlin, for industrial and trade supplies Shopping Consumer
Contorion GmbH Consumer Services 26/07/2017 Acquisition 120.00 Hoffmann SE
Germany in the maintenance repair and Facilitators Information Services
operations (MRO) parts sector.

Manufacturer of laser-
spectroscopy systems for Electronic
Cobalt Light Abingdon, United Electronics & Information Agilent Technologies
pharmaceutical analysis, Components 07/07/2017 Acquisition 45.59
Systems Ltd. Kingdom Computer Hardware Technology Inc.
research, security, and / Devices
biomedical analysis

The Social Travel Operator of an international Travel Resort

London,
Club Ltd. (Love vacation home exchange Arrangement / Travel & Leisure Consumer Services 31/07/2017 Acquisition 45.59 Condominiums
United Kingdom
Home Swap) website. Tourism International Ltd.

VENTURE CAPITAL REPORT 14

EUROPEAN VC-BACKED IPOs (3Q 2014-3Q 2017)
LIQUIDITY

During 3Q 2017, both the number of IPOs and the amount

raised fell significantly in comparison to the prior quarter.
2,500.00 18
Only eight venture-backed companies went public in the
16
quarter, down markedly from the 18 IPOs in 2Q 2017. This
2,000.00
14
figure represents 53% fewer IPOs than last quarter and 38%
fewer than the same quarter last year. Furthermore, the 12
1,500.00
207.60 million raised through the quarters IPOs 10
constituted a 72% and 57% decline compared to last quarter
8
and 3Q 2016, respectively. 1,000.00
6
The largest European VC-backed IPO during the quarter was
4
NuCana PLC, which raised 84.34 million at a valuation of 500.00

450.07 million for its offering on NASDAQ. 2

0.00 0
3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17
Raised (M) through IPO 447.47 2,264.11 417.40 576.70 699.69 612.93 155.78 227.64 483.22 202.04 357.82 749.81 207.60
Number of IPOs 16 11 12 17 8 17 7 11 13 17 10 17 8

VENTURE CAPITAL REPORT 15

TOP 3 IPOs IN EUROPE (3Q 2017)
LIQUIDITY

Brief Industry Close Raised through

Company Name Location Industry Segment Industry Group Exchange: Ticker
Description Code Date IPO (M)

Provider of biopharmaceuticals for Biotechnology

NuCana PLC United Kingdom Biopharmaceuticals Healthcare 28/09/2017 84.34 NASDAQ: NCNA
anti-cancer therapies. Therapeutics

Developer of gene therapies for

Nightstar Biotechnology
United Kingdom retinal dystrophies, such as Biopharmaceuticals Healthcare 28/09/2017 63.26 NASDAQ: NITE
Therapeutics Ltd. Therapeutics
choroideremia (CHM).

Rovio Recreational / Home Information

Finland Provider of entertainment products. Software 29/09/2017 30.00 HEL: ROVIO
Entertainment Ltd. Software Technology

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ABOUT US & METHODOLOGY
Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and
partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides
accurate, comprehensive data on venture-backed companies including their investors and executives in every region, industry and stage of
development throughout the world.

The investment figures included in this report cover venture backed companies headquartered in Europe, and are based on aggregate findings of Dow
Jones proprietary research for VentureSource.

This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. To be included,
companies have to receive financing from a venture capital or private equity firm. Our figures do not include companies that have received funding solely
from individual, corporate and/or government investors. The data in this report only accounts for equity funding, not convertible debt deals.

Figures contained throughout the report are current at time of editorial but subject to change without notice. No statement herein is to be construed as a
recommendation to buy or sell securities or to provide investment advice.

VENTURE CAPITAL REPORT 17

ABOUT DOW JONES

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