europe & israel 3q16 deals done review

Venture Capital in Europe & IsraelVenture Investment Data: Third Quarter, 2016

Prepared by Gil Dibner

Hammerfest, Norway – Northernmost city in the world70°39′45″N 23°41′00″E blog

https://twitter.com/gdibner

http://www.angel.co/gdibner/syndicate

https://www.linkedin.com/in/gildibner

http://yankeesabralimey.tumblr.com/

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

Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 2





Top 10 deals by region YTD (US $M)

DACH NordicFrance

Israel UK & Ireland Iberia

5050505050505050

70707276

96300

PhinergyElastifileSiSense

jFrogRoboteam

WalkMeKalturaVroom

ViaZertoSirin

ForeScoutSkybox Security

Gett

0 50 100 150 200 250 300 350

50

50

50

54

60

65

70

110

170

192

275

MUBI

HighQ

Intercom

Blippar

Student.com

Darktrace

Starling

FarFetch

FutureFinance

Skyscanner

Deliveroo

0 50 100 150 200 250 300

6

7

7

7

12

22

38

42

55

120

Glovo

Sherpa

iContainers

TravelPerk

ABA English

Veniam

CornerJob

Jobandtalent

OutSystems

Cabify

0 20 40 60 80 100 120 140

17

17

19

20

25

33

35

37

49

88

Sol Voltaics

Widespace

Skeleton Technologies

Polight

Vivino

AlphaSense

Klarna

M-Files

StarBreeze

Apptus

0 20 40 60 80 100

22

23

23

24

30

35

35

35

47

109

MisterFly

Dashlane

Cedexis

BlaBla Car

Nuxeo

Acco

Drivy

Zenly

Teads

Deezer

0 20 40 60 80 100 120

34

34

40

45

45

55

70

90

100

374

Smava

Spotcap

Number26

Egym

Home24

Brillen.de

SoundCloud

Heliatek

MindMaze

Global Fashion Group

0 100 200 300 400






Quarterly pace of venture investment

• In 3Q16, Europe & Israel saw $3.1 billion flowing into 393 venture transactions

• This represents a 24% decrease in activity from 2Q

• These numbers, and the rest of this deck, do not reflect the $1B in debt raised by Spotify in March

Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 42,873

3,139

3,248

2,856

3,752

4,112

3,124

0

100

200

300

400

500

600

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3

2015 2016

Amou

nt in

vest

ed (

US $

M)

VC Investments in Europe & Israel(January 2015 - September 2016)

Invested amount (US $M) Number of investments

http://www.wsj.com/articles/spotify-raises-1-billion-in-debt-financing-1459284467





Monthly pace of venture investment

• Looked at on a monthly basis, the 3Q slowdown was mostly attributable to a very slow July

• August and September saw a return to normal levels of investment

• It’s difficult to attribute this to seasonality, as July 2015 was a very strong month


905

971

997

791

787

1,561

1,517

568

1,164

1,083

1,059

714

1,661

1,052

1,039

1,401

1,450

1,262

737

1,100

1,286

0

20

40

60

80

100

120

140

160

180

200

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 Apr May Jun Jul Aug Sep


2015 2016

Inve

sted

Am

ount

(US

$M)

VC Investments in Europe & Israel(January 2015 - September 2016)

Invested amount (US $M) Number of investments





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+)

• Only one mega-rounds took place in Europe this quarter: Deliveroo’s $275M round

• Adjusting for mega-rounds, 3Q16 was $300M less than 2Q16

354 368 507 603 635 586

716 567559

731 695 762

8131,513 1,187

1,669 1,6781,337

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3

2015 2016

Amou

nt In

vest

ed (U

S $M

)

Pace of VC Investment in Europe and Israel

Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)






Strong year-over-year growth

• The first three quarters of 2016 saw 17% more venture investment than the first three quarters of 2015

• Early venture deal volume increase 81% for the first three quarters, venture volume increase 19%, growth volume increased 35%. Mega-deal volume decreased, however, by 33%

• These increases mask a year-on-year decline of 5.5% for the third quarter when it’s looked at in isolation

1,0071,824

1,839

2,188

3,481

4,684

2,622

1,751

0

2,000

4,000

6,000

8,000

10,000

12,000

2015 2016

Tota

l VC

inve

stm

ent (

US $

M)

VC investment volume in Europe and Israel by bracket(1Q-3Q 2015 vs 1Q-3Q 2016)

Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)






Number of investments, by bracket

• Excluding seed deals, the total number of VC investments per quarter was 248 in 3Q16, down a bit from 270 in 2Q16 – but still the third highest number of deals per quota since I started tracking this 60

83 77 85 93

139 153 157 1423026 42

62 44

4661 57

65

13

2633

26 38

35

45 5240

3

16

6 4

3

4 41

0

50

100

150

200

250

300

Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3

2014 2015 2016

Num

ber o

f VC

inve

stm

ents

VC investment volume in Europe and Israel by bracket

Mega (>100) Growth (20-100)Venture (8-20) Early Venture (2-8)






Brexit? Nothing to see here. Carry on.

• Looking just at UK VC deal volume, there’s so far no evidence that Brexit caused any slowdown whatsoever in VC activity

• UK has been running at around 15 VC deals per month for the past year

• July 2016 peak of 25 deals is exactly the number of deals that were done in July 2015

9

37 7 9 8

5 5 5 48 6

14

26 5

9 9 9 11 11 107

11 13 11 10

1

1

4 23

73

1

5 8

4

3

1 4

4 38 4 2

1 74

10

4 42

2

12 1 1

41

4

1

13

6

3

1

31

6

3 54

4 1

2

2 21 1

1

1

1

2

1

1 1

0

5

10

15

20

25

30

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


2014 2015 2016

Num

ber o

f VC

inve

stm

ents

VC investment volume in the UK by bracket

Mega (>100) Growth (20-100)Venture (8-20) Early Venture (2-8)






Corporate VC activity, by bracket

• Excluding seed deals, the total number of corporate VC investments dropped by 28% to 43 in 3Q16

• This is the first quarterly drop in over a year, but still represents more than double the 3Q15 level 6 4 5

167

22 19 23184

39

12

7

12

6

1619

44

7

8

7

720

18

6

3

13

3

0

10

20

30

40

50

60

70


2014 2015 2016

Num

ber o

f VC

inve

stm

ents

Corporate VC investment volume in Europe and Israel by bracket







Corporate VC activity, by country

• During the third quarter of 2016, Israel yet again saw the highest number of corporate VC investments, with 17, down from 25 last quarter

• The UK saw 9 corporate VC investments during that period, down from 10

• Nine other countries saw corporate VC activity across Europe, but at much lower levels

4 42 2 1 2 1 1 1

9

3

2 1

2 11

4

2

0

2

4

6

8

10

12

14

16

18

Israe

l

UK

Germ

any

Fran

ce

Swed

en

Finl

and

Italy

Norw

ay

Switz

erla

nd

Spai

n

Denm

ark

Num

ber o

f inv

estm

ents

Number of corporate VC investments in Europe and Israel by bracket(3Q16)

Growth (20-100) Venture (8-20) Early Venture (2-8)






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

• With very few exceptions, most months saw average round sizes of $10-12M and there is seems to be little pattern other than mean reversion

• 3Q15 is the only systematic outlier to this trend, with average round sizes of $12-15M throughout the quarter

• I’ll continue to monitor this, but see no reason to expect a major shift here

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 Apr May Jun Jul Aug Sep


2014 2015 2016

Amou

nt In

vest

ed (U

S $M

)

Average investment size in Europe and Israel(Round sizes of 2-100M)






Total venture investment by country, 3Q 2016

• Israel maintained it’s lead with $877M raised

• The UK was just behind Israel, with $830M raised

• Germany dropped behind the UK with $461M raised

877830

461339

194102

7448

3128282624

161514

64211111

IsraelUK

GermanyFrance

SwedenNetherlands

SpainSwitzerland

NorwayDenmark

FinlandIreland

BelgiumEstonia

ItalyIceland

CzechPortugal

AustriaGreeceCroatia

LatviaSlovenia

Poland

0 100 200 300 400 500 600 700 800 900 1,000

Total VC investment volume by country, 3Q16 (US $M)






Total venture investment by country, 3Q14 to 2Q16• 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

• Israel still led with volume, but 3Q dropped below both 1Q and 2Q

• Once Deliveroo is backed out of the analysis, UK levels were basically flat in 3Q against 2Q

• What is most notable important about this chart is the consistent gradual growth in Germany, France, and Sweden

315

567 543475

628

699

963

1,064

877

369

267

719

437

621444

892

552 555

180

284

389

209

379339 333

392461

29

163118

232 279225 281

367339

74123 89 112

14084

140 150194


200

400

600

800

1000

1200

Tota

l VC

inve

stm

ent (

US $

M)

Total VC investment, 3Q14 - 3Q16 (top 5 countries, excluding mega-rounds)

IsraelUKGermanyFranceSweden






Total venture investment by country, 3Q14 to 3Q16

• 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

• One trend that can be spotted here is persistent strength in the Netherlands


2014 2015 2016

0

20

40

60

80

100

120

140

160

180

Tota

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inve

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ent (

US $

M)

Total VC investment, 3Q14 - 3Q16(countries ranked 6-10, excluding mega-rounds)

Spain

Netherlands

Finland

Ireland

Denmark






Average venture round sizes, by region

• For a while, I had been seeing a trend towards convergence in the sizes of rounds across the geography

• I think that is still true, but round sizes do seem to be diverging a bit

• I suspect that the decreases in round size across France, Portugal, and Spain are likely due to increased (and better) reporting around small rounds

Benelux, 4.7

Benelux, 14.1DACH, 14.9

DACH, 12.7

France, 8.2 France, 8.7Iberia, 7.2

Iberia, 5.9

Israel, 15.9Israel, 14.1

Nordic, 11.5

Nordic, 10.1UK & Ireland, 8.5 UK & Ireland, 9.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Qtr4 Qtr4 Qtr3

2014 2015 2016

Aver

age

roun

d siz

e (U

S $M

)

Average investment size in Europe and Israel (rounds of $2-100M)






Total venture investment by region, 3Q16

• 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

Israel, 877

UK & Ireland, 856

DACH, 511

France, 339

Nordic, 312Benelux, 126

Iberia, 78

South. Eur., 18

East. Eur., 6

Total VC investment by region, 3Q16






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 and Israel were tied for the number of venture deals, with 62 each 26

36

22 2516

93 4 1

21

19

10 4

10

1

156

76

1

14

1

0

10

20

30

40

50

60

70

Israel UK & Ireland DACH France Nordic Iberia Benelux South. Eur. East. Eur.

Num

ber o

f inv

estm

ents

Number of investments in Europe and Israel by bracket, 3Q 2016







Participation rate of US VC firms, by bracket

• In the third quarter, US VCs participated in 14% of the VC financing rounds in EU and Israel

• As usual, US VCs are much more likely to participate in later rounds

1% 15%25%

38%

100%99%85%

75%63%

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)

Perc

enta

ge o

f rou

nds

Did US VC firms participate in European VC rounds? (3Q16)

No Yes






US VC firm participation rate are consistent

• In 3Q, US VCs participated in about 21% of the rounds that took place in Europe

• This rate is flat with 2Q and at the top end of the historical range

15%23% 17% 20% 20% 16% 16% 21% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

Perc

enta

ge o

f Rou

nds

Did US VC firms participate in European VC rounds?(Rounds of $2M-$100M, 3Q14-3Q16)

No US VC in the round US VC in the round






US VC firm participation rate are consistent

• Rates of US VC participation vary wide across different countries

• I’ve tried to limit the analysis to countries with venture scenes active enough that the statistics would be meaningful

• On this metric, in 2016, Israel and Ireland leap to the top of the list, with 40% and 35% respectively

• Spain and France bring up the rear, with only 5% and 7%

40% 35%26%

21% 17% 16%8% 7% 5%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ireland Israel Netherlands Germany UK Finland Sweden France Spain

Perc

enta

ge o

f Dol

lars

Inve

sted

Did US VC firms participate in European VC rounds?(Nine months ended September 2016)

No US VC in the round US VC in the round






Participation of US VC firms by country

• In 3Q16, US VCs firms were active in only 9 different European countries (down from 12 in 2Q)

• US VC firms were most active in Israel, where they participated in 25 investment rounds

• The UK saw 11 investments• US VCs invested in 6 German

companies and 3 French ones

25

11

63 3 3 2 1 10

5

10

15

20

25

30

Israe

l

UK

Germ

any

Fran

ce

Swed

en

Neth

erla

nds

Switz

erla

nd

Irela

nd

Finl

and

Num

ber o

f VC

inve

stm

ents

Rounds with a US VC involved(3Q, 2016)






Participation of US VC firms by country

• This chart shows US VC activity within Europe throughout 2015 and 2016

• The overwhelming bulk of US VC activity is in Israel, the UK & Ireland, DACH

Israel, 12 Israel, 14 Israel, 14 Israel, 14 Israel, 16

Israel, 27 Israel, 25

UK & Ireland, 10

UK & Ireland, 13UK & Ireland, 9 UK & Ireland, 8

UK & Ireland, 12

UK & Ireland, 11UK & Ireland, 12

DACH, 8

DACH, 6

DACH, 4DACH, 9

DACH, 6

DACH, 8 DACH, 8

Nordic, 2Nordic, 3

Nordic, 5

Nordic, 5Nordic, 5

Nordic, 4

Benelux, 5

Benelux, 3Benelux, 3

France, 3 France, 2France, 2

France, 3France, 3

Iberia, 3

Iberia, 4Iberia, 3

0

10

20

30

40

50

60


2015 2016

Num

ber o

f VC

inve

stm

ents

Investments with US VC participation

Israel UK & Ireland DACH Nordic Benelux France Iberia East. Eur. South. Eur.






Dimension Categories Explanation/Example

1. Target market Consumer, SMB, Enterprise, Government, Telecom, OEM

What sort of customer does the company target?

2. Vertical marketAdtech, 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 modelCommerce, Components, Content, Marketplace, SaaS, Semiconductors, Services, Software, Systems,

How does the company makemoney? How is value delivered to customers? What are customers paying for?

For example: Consumer + Travel + Marketplace AirBnB has built a travel-related marketplace for consumers

Three-dimensional approach to sector mapping






• Excluding mega-rounds, investment activity decreased in both consumer and enterprise

• Investment activity has been trending up in OEM-oriented companies

What target markets are attracting the most VC investment in Europe & Israel?

475 595980 850

1,177930 1,078 1,243 1,092

494

798

953814

9071,112

1,6791,644

1,288

78

133

121

153

275135

224 91

177

78

114

47106

182150

166 186

219

0

500

1,000

1,500

2,000

2,500

3,000

3,500


2014 2015 2016

Tota

l VC

inve

stm

ents

(US

$M)

European & Israeli venture financing by target market3Q14 to 3Q16 (excluding mega-rounds, US $M)

Government

Telecom

OEM

SMB

Enterprise

Consumer






• When Israel is excluded from the sample, 52% of all VC dollars in Europe went to consumer-oriented companies

• OEM-oriented companies continued their rise, accounting for 8% of all VC dollars in Europe

Consumer investment leads Europe

62%

36%

56%63% 62% 57% 53% 58% 52%

18%

49%

34% 22% 24% 31% 35%33%

32%

6%10% 4% 12% 8% 6% 5% 3%

7%5%4% 2% 4% 5% 6% 5% 8%6%8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market3Q14 to 3Q16 (excluding Israel, percent of US $M)

Government Telecom OEM SMB Enterprise Consumer






• When the sample set is limited to rounds under $20M, the ratio of consumer to enterprise investments shifted back to where it has been in the past

• Consumer investments as a percentage of rounds accounted for 45% of early rounds

• Interestingly, OEM & SMB investments doubled as a percentage of the total from 2Q to 3Q – and entirely at the expense of enterprise deals

Early-stage consumer deals come back

39%50% 46% 41% 46% 50%

38%46% 45%

41%37% 50%

47% 39% 36%47%

41%33%

3%

9%2%

7% 9% 6% 9% 5%11%

11%2% 2% 2% 3% 7% 5% 5% 9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

European venture financing by target market3Q14 to 3Q16 (excluding Israel, rounds up to $20M, percent of US $M)







Breakdown by region & target market

• In 3Q, enterprise companies represented the plurality of investments in Israel, the Nordics, and Benelux

• DACH and the Nordics show relatively high concentrations of OEM investments

196

521

282170

84 46 55

568

246

75161

147

69

110

59

0

100

200

300

400

500

600

700

800

900

1,000

Israel UK & Ireland DACH France Nordic Benelux Iberia

Tota

l am

ount

inve

sted

(US

$M)

Investment in Europe and Israel by target market by region3Q, 2016 (US $M)







Distribution of investment rounds by country

• Across Europe & Israel, 43% of VC investment rounds were in consumer companies in 3Q16

63%

60%

56%

48%

41%

41%

17%

16%

31%

20%

26%

35%

33%

31%

73%

68%

6%

10%

11%

10%

16%

11%

16%

7%

6%

10%

15%

10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

France

South. Eur.

Iberia

UK & Ireland

DACH

Nordic

Israel

Benelux

Investment in Europe and Israel by target market by country3Q16 (Number of investments)

Consumer Enterprise SMB OEM Telecom Government






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

• In 2Q, this trend reserved itself for the first time in four quarters and persisted into 3Q

56%

37%46%

56%43% 39% 37% 43% 44%

25%

41%

46% 25%38% 50% 51%

50% 44%

6% 7%

5%

9% 12%3% 6% 5%6% 11% 6% 7% 5% 6% 5% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


2014 2015 2016

Investment in Europe and Israel by target market(Rounds over $20M, number of investments)







• Fintech was yet again the most popular vertical across Europe & Israel, with 33 investments in the category

• Lifestyle (a catchall category for consumer commerce) was the second most popular vertical, with 28

Finance returned to being the top vertical

Financial, 33

Lifestyle, 28

Marketing, 27

Security, 23

Electronics, 20

Infrastructure, 17

Industrial, 16

Travel, 16

Logistics, 15

Adtech, 14

Data, 14

Communications, 13

Fashion, 13

Education, 11

Gaming, 11

Food, 10Productivity, 10Automotive, 9Health, 9Employment, 9Payments, 8

HMI, 7Energy, 7

Social, 7

Entertainment, 6CRM, 6

European & Israeli venture financing by target market3Q 2016 (number of investments)






• This graph shows number of investments in the top 10 verticals across 3Q15 and 3Q16

• The two most popular verticals, finance and marketing, both declined slightly in frequency

• Most of the other categories registered strong increases

• Travel and industrials, for example, tripled; and electronics doubled

How have the most popular verticals grown?

Financial, 36 Financial, 33

Marketing, 31 Marketing, 27

Lifestyle, 15 Lifestyle, 28

Security, 13Security, 23Infrastructure, 14

Infrastructure, 17Electronics, 10

Electronics, 20

Fashion, 11

Fashion, 13

Data, 10

Data, 14

Logistics, 8

Logistics, 15

Industrial, 5

Industrial, 16

Travel, 5

Travel, 16

Productivity, 11

Productivity, 10

0

50

100

150

200

250

Qtr3 Qtr3

2015 2016

European & Israeli venture financing by vertical market(top 10 verticals, number of investments)






• Finance was once again the most frequently funded vertical

• Consumer lifestyle companies took second place

• Marketing was the third most frequently funded vertical, with enterprise-oriented marketing taking the lion’s share within that category

• Enterprise security took fourth place

• Electronics (both consumer systems and OEM components) was the fourth most funded category in the quarter

Which verticals for which segments?

Data

Adtech

Logistics

Industrial

Travel

Infrastructure

Electronics

Security

Marketing

Lifestyle

Financial

0 5 10 15 20 25 30 35

European & Israeli venture financing by target market3Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Government






• This chart shows the ten most commonly funded verticals across Europe & Israel by quarter

• 3Q was fairly consistent with 2Q, with decreased volume across most categories

The most popular verticals in the past 2 years


2014 2015 2016

0

50

100

150

200

250

300

European & Israeli venture financing by vertical market(number of investments, top 10 verticals)

Adtech

Health

Logistics

Electronics

Lifestyle

Employment

Security

Infrastructure

Marketing

Financial






• Lifestyle, which is admittedly a bit of a catch-all general consumer category, continues to show tremendous strength in terms of VC volume

• Finance was the second-most funded consumer category

• Health and logistics (transportation, parking, etc.) show continued decreases

Consumer VC investment trends


2014 2015 2016

0

20

40

60

80

100

120

140

160

180

European & Israeli venture financing by consumer verticals(number of investments, top 10 verticals)

Social

Travel

Health

Fashion

Food

Electronics

Logistics

Gaming

Lifestyle

Financial






• Enterprise marketing seems to have levelled off as an area for VC investment

• Security and infrastructure also remain stable but significant

• Adtech decreased slightly• CRM and employment

decreased significantly• Data-oriented startups and

industrial startups trended higher

• Enterprise employment (HR) related startups attracted very little investment

Enterprise VC investment trends


2014 2015 2016

0

20

40

60

80

100

120

140

160

180

European & Israeli venture financing by enterprise verticals(number of investments, top 10 verticals)

CRM

Financial

Industrial

Employment

Development

Data

Infrastructure

Adtech

Security

Marketing






• Security retained the top spot in Israel, with 11 investments

• Marketing, data, infrastructure, and electronics were next

• Adtech was nowhere to be seen

A closer look at Israeli venture in 3Q16

Industrial

Financial

Agtech

Development

Productivity

Communications

Electronics

Infrastructure

Data

Marketing

Security

0 2 4 6 8 10 12 14

Israeli venture financing by target market3Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom

Government






• Fintech reclaimed its top spot in the UK VC landscape

The UK VC market in 2Q16

Adtech

Fashion

Communications

Payments

Productivity

Automotive

Real Estate

Infrastructure

Data

Security

Marketing

Lifestyle

Financial

0 2 4 6 8 10 12

UK venture financing by target market3Q, 2016 (number of investments, top verticals)

Consumer

Enterprise

SMB

OEM

Telecom






• Fintech led the German VC eco-system in 3Q16, with 7 investments

• Logistics was next• Fashion and travel tied for

third place, with 4 investments each

The German VC market in 3Q16

Health

Industrial

Data

Infrastructure

Energy

CRM

Marketing

Durables

Payments

Adtech

Social

Employment

Lifestyle

ERP

Travel

Fashion

Logistics

Financial

0 1 2 3 4 5 6 7 8

German venture financing by target market3Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM






• Fintech was the most commonly funded vertical in the Nordics, with 9 investments, mostly into SMB-oriented companies

• Gaming was next, followed by marketing

The Nordic VC market in 3Q16

Infrastructure

Legal

Logistics

Education

Productivity

Health

Communications

Industrial

Electronics

HMI

Energy

Marketing

Gaming

Financial

0 1 2 3 4 5 6 7 8 9 10

Nordic venture financing by target market3Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

OEM

Telecom






• Uniquely, consumer electronics dominated the French VC landscape in 3Q16

• Travel and adtech were particularly strong in France in 3Q16

The French VC market in 3Q16

Logistics

Infrastructure

Industrial

Education

Entertainment

Food

Adtech

Travel

Lifestyle

Electronics

0 1 2 3 4 5 6 7 8 9 10

French venture financing by target market3Q, 2016 (number of investments, top 10 verticals)

Consumer

Enterprise

SMB

Government






• SaaS was the again most funded business model in 3Q16

• As software eats the world, services are becoming an increasingly important business model for venture-backed startups

• This continued into 2016, with services taking 23% of the venture dollars invested in Europe & Israel in 3Q16

• Commerce rebounded, accounting for 13% of the dollars invested

• Marketplaces – businesses that serve a price discovery function – were just 5%

SaaS above all

SaaS, 729, 26% Services, 658, 23%

Software, 425, 15%

Commerce, 375, 13%Systems, 197, 7%

Marketplace, 148, 5%

Components, 144, 5%

Media, 99, 3%

Semiconductor, 73, 3%

Meda, 2, 0%

European & Israeli venture financing by target market3Q16 (in US $M) (excluding mega-rounds)






• Trends about business models remained fairly consistent

• SaaS reverted to mean a bit• Commerce recovered a lot of

lost ground• Marketplaces hit a new low

In 2Q, SaaS set a record

0

200

400

600

800

1000

1200


2014 2015 2016

European & Israeli venture financing by business model(top five, in US $M, excluding mega-rounds)

Services

SaaS

Software

Commerce

Marketplace






• Enterprise marketing SaaS was again the most popular segment for VC investment in 3Q16 with 20 investments across the region

• Consumer lifestyle commerce took second place, driven by 8 UK and 3 Spanish investments

• Enterprise security software took third place, with 16 investments.

• Consumer financial services dropped to fourth place, with 14 investments (down from 21 in 2Q)

The 10 most popular investment segments

0 5 10 15 20 25

Consumer Gaming Services

Consumer Education Services

Consumer Travel Marketplace

Enterprise Data SaaS

Enterprise Infrastructure Software

Consumer Fashion Commerce

Consumer Electronics Systems

SMB Financial Services

Consumer Financial Services

Enterprise Security Software

Consumer Lifestyle Commerce

Enterprise Marketing SaaS

Number of VC investments

Investment in Europe & Israel by segment by country3Q16 (top 10 segments)

UK & Ireland IsraelFrance NordicDACH IberiaBenelux South. Eur.East. Eur.






• Across Europe & Israel, US VC firms invested in 37 enterprise companies, 14 consumer companies, and 1 OEM company

• Enterprise SaaS & Software attracted by far more US VC interest than any other space

What business models attract US VC investments?

0 5 10 15 20 25

Semiconductor

SaaS

Marketplace

Software

Media

Commerce

Services

Systems

Systems

Marketplace

Services

Software

SaaS

OE M

Cons

umer

Ente

rpris

e

US VC Investments in Europe and Israel by end market, business model, & country, 3Q16 (excludes seed & mega-rounds)

Israel

UK & Ireland

DACH

Nordic

Benelux

France






Show me the SaaS

• As usual, the most popular vertical by far for SaaS investments across the geography was marketing

• Data-related SaaS (databases, analytics, BI) was tied with productivity SaaS for second place

• Infrastructure SaaS was third• Consumer SaaS opportunities

emerged across productivity, energy, and legal

0 5 10 15 20 25

Employment

CRM

Agtech

Legal

Industrial

Energy

Adtech

Development

Infrastructure

Productivity

Data

Marketing

SaaS VC investment in Europe and Israelby vertical and target market, 3Q16 (top 10 verticals)

Consumer Enterprise Government SMB






Services investing in 3Q16

• This graph shows the top ten verticals within the services category in 3Q16 across Europe & Israel

• Financial services were (yet again) far and away the most frequently funded vertical –mostly for consumers and SMBs

• Education services (edtech) tied with gaming as the second most funded services categories

0 5 10 15 20 25 30

Health

Industrial

Entertainment

Real Estate

Communications

Marketing

Security

Payments

Adtech

Logistics

Education

Gaming

Financial

Services VC investment in Europe and Israelby vertical and target market, 3Q16 (top 10 verticals)

Consumer

Enterprise

SMB

Telecom






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.48

Gil Dibner

To invest in the best European & Israeli enterprise startups,

consider backing me on here. Lots of exciting stuff in thepipeline – and you’ll be in pretty good company.

https://twitter.com/gdibner/lists/announced-portfolio/members

http://yankeesabralimeysignup.myinstapage.com/


Thank youblog





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