titans of tech -...
TRANSCRIPT
TITANS OF TECH
An update on the European scene and a look at why
Spain is likely to be a contributor in the future
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250+Successful transactions
8,500+In contact with
GP Bullhound team annually
1,000+VC / PE contacts
50+Dedicated tech bankers
8Offices
1,500+Strategic buyer contacts
300+Events, keynotes &
Research reports
18Years since inception
Our missionTo advise the most passionate
technology entrepreneurs
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Marquee credentials in Spain
Local team in Madrid
PER ROMANManaging Partner
OLOF RUSTNERVice President
JAIME SENDAGORTAAssociate
JACOB LOVENSKIOLDAnalyst
JOBANDTALENT
Investment in THE COCKTAIL
WUNDERMAN part of WPP
Sold toInvestment in
WALLAPOP
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BUILDING A $50bn TECH TITAN in Europe
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Who are the Titans?
$62.0bn
$60.0bn
$4.5bn+
$59.8bn
$7.0bn+
$437.6bn
$12.8bn+
$62.5bn
$11.9bn+
$50.0bn
$15.7bn+
$6.3bn+
UBER
BAIDU
ANT FINANCIAL
TESLA
DIDICHUXING
Revenue
multiple
5.7x
40.0x
5.9x
13.2x
9.6x
16.7x
Valuation Disclosed funding
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Building a Titan: What does it take?
Average
Funding
raised
Average
number of
acquisitions5 312
US $50bn clubEU champions Asia $50bn club
Up to $50bn valuationTo date
$1.8bn
$5.4bn$6.8bn
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$0.7bn+ $0.8bn+ $1.0bn+
$2.3bn+ $2.4bn+
$2.1bn+$4.5bn+
$7.0bn+ $7.0bn+
$15.7bn+
Europe’s leaders need significant capital injections
Funds raised to reach $50bn
Funds raised by Europe’s leaders
Asia
US
Avg. funds raised
EU
$1.4bn
US & Asia
$7.3bn
+5x
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Growth needed to reach a $50bn valuation
Actual revenue Target revenue for $50bn valuation
$4.6bn $20.2bn
$380m $3.4bn
$3.2bn $12.3bn
9.0x growth
3.8x growth
4.4x growth
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$60m$96m
$118m $130m
$250m
$385m $397m $400m$423m
$502m
Softbank effect and mega rounds having an Impact
Top 5 funding rounds 2013 Top 5 funding rounds in H1 2017
Total capital injected for top 5$0.7bn $2.1bn
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EUROPE’S FLAGSHIP Tech Companies
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57 companies
16%
117 companies
34%
172 companies
50%
EU Asia US
$164bn
$555bn
$1,131bn
EU Asia US
$2.9bn $4.7bn $6.6bn
Average and cumulative valuesGeographic split 2017
Global compare – the Billion $ club is 346 strong
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$2bn
$4bn
$6bn
$8bn
$10bn
$12bn
$14bnSp
otify
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tfit7
The European Billion $ club is 57 strong
Company valuation ($bn)
New billion $ company$10bn+ company
26Independent
private firms
$169bnCumulative
valuation
9Net additions
vs. 7 in 2016
3Companies valued
at $10bn+
$5.6bn Market Cap at IPO date close
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Cumulative Value $49.9bn $35.9bn $27.3bn $14.2bn $13.1bn $8.1bn $5.7bn $3.8bn $2.6bn
# of billion $ companies
22 7 7 2 3 3 5 2 2
Which country Tech champ?
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The barometers of a dynamic ecosystem
Leading companies by Revenue Leading companies by revenue growth
$0.0bn $1.5bn $3.0bn $4.5bn 0% 100% 200% 300%
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The barometers of a dynamic ecosystem (cont’d)
$0.0bn $0.8bn $1.6bn $2.4bn 0 2000 4000 80006000
Leading companies by capital raised Leading companies by media presence
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Most companies make money
72%OF BILLION$
COMPANIESARE PROFITABLE
51%AVERAGE CAGR
28%OF BILLION$
COMPANIESARE UNPROFITABLE
103%AVERAGE
CAGR
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Proven business models generate significant revenues
Average revenue
Revenue segmentation of European billion $ companies in 2015
2014
$265m
2015
$454m
2013
$163m
<$50m
$50m–$150m
$150m–$300m
$300m–$1200m
>$1200m
7%
29%
26%
24%
14%
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FOCUSING ON THE FOUNDERS
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Nearly half of founders are under 30 at foundation
» Founders average age of 32 and overwhelmingly male
» 46% of them are under 30
» Youngest founder started the company at 21
» Only 7 female founders in our sample
Age at foundation and gender
<=25 25–29 30–34 35–39 40–44 >45
30% 23% 20%15%4%
8% 4%
4%female
96%male
20
11%
Founding experience and a scientific background helps
» Over 50% of Founders are with their first start up
» 40%+ of the founders that have a degree in business,
finance or economics vs 26% in computer sciences
and 10% in engineering
Education and experience
Other SciencesEngineering OtherComputer ScienceBusiness, Finance &
Economics
46%Previous founding
experience
54%First
company
26%42% 10%
42% 10% 11% 11%
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Movement of talent critical
» Almost one third of
founders are expats
» 60% of expats started
their company in the
UK
» 39% of founding
teams are
composed of
different nationalities
Expatriates & founders’ nationalities
71% 29%
Nationals Expatriates
21%
7%
NonEU
5%6%
9%
5%
7%
11%12% 12% 12%
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Who will be the next billion $ start-up?
Enterprise SaaS & BI
Marketplaces
Fintech
Transportation & Logistics E-commerce Digital Media
Digital Marketing
Development Tools
Cyber SecurityOther
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Facts at a glance
57billion $
companies
14Enterprise
focused billion $
companies
3Companies valued
at $10bn+
58xAverage return on
capital invested
4billion $ companies
born on average every
year in Europe
$3.0bnAverage valuation
43Consumer focused
billion $ companies
12billion $
companies joined
the club
SPAINLate to the game, but now ideally positioned
25
343
660
849
426458
365
1,215
39
5457
60
65
73
79
0
10
20
30
40
50
60
70
80
0
200
400
600
800
1,000
1,200
1,400
2010 2011 2012 2013 2014 2015 2016Volume (EURm) # of transactions
EUR1.2bn – Same amount as
three previous years combined
Investment activity at all-time highTechnology investments, 2010 - 2016
26
669
2,099
447 385
1,243
2,298
2,85815
21
13
1012
14
22
-25
-20
-15
-10
-5
0
5
10
15
20
25
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2010 2011 2012 2013 2014 2015 2016Volume (EURm) # of transactions
M&A activity at all-time high
Technology M&A, 2010 - 2016
SPANISH TECHNOLOGY
ECOSYSTEM SET TO BLOSSOM
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Spanish technology ecosystem set to blossom
1
2
3
Macroeconomic recovery with government support
Rapid consumer adoption of mobile technologies
Workforce shift to internet
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Macroeconomic recovery with strong government support
Annual GDP growth, %
3.1%
1.6%
0%
1%
2%
3%
4%
2015 2016 2017E
Spain Euro Area Germany UK France Italy
▪ Spain is stronger than ever before
– Growing its GDP by 3.1% vs.
Euro area at 1.6%
– Unemployment rate at 17%,
lowest in 10 years
– Significant digital government
investments
» EUR2.5bn to be spent 2015 -
2020
» Catalyst for innovation and
modernisation
» Impact the recovery of
Spanish SME
1
EUR2.5bnGovernment
investment
2015-2020
The Digital AgendaA European Commission initiative to better exploit the potential of
ICT in order to foster innovation, economic growth and progress
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Rapid consumer adoption of mobile technologies
Internet penetration 2007 vs 2016, %
Mobile as main device used to access the internet, 2016
▪ Ideal market for internet
businesses
– Greatest increase in internet
penetration in Europe since 2007
(+27%)
– Highest proportion of users
accessing the internet via a
mobile phone, 93% vs. EU
average at 79%
» Key factor to the success of
many Spanish fast-growing
technology ventures
» Expect many more mobile-
first businesses to reap the
benefits of this behaviour
82% 75% 75% 66%55%
41%
11% 18% 13% 20%27%
25%
93% 93% 88% 86% 82%
66%
Sweden UK Germany France Spain Italy
2007 Increase 2007 to 2016
93% 86% 84% 82% 79%
Spain UK Sweden Germany EU
2
31
Workforce shift to internet
Preferred professional route
Cities by number of start-ups
▪ Eyes set on entrepreneurship
– Old aspirations have shifted to
technology ventures
– Barcelona and Madrid are fifth
and sixth in a European ranking
of number of start-ups by city
– Cost of an engineer in Spain is
low compared to rest of Europe;
» Average developer salary in
Spain is USD34k per year
– 41% lower than in
Germany, 42% lower than
in Sweden, 51% lower than
in the UK
Entrepreneurship
27%
Civil service
25%
Multinational
corporation
23%
SME
11%
Undecided
14%
34,229
47,213
58,176 59,011
70,500
3
Developer salary (USD annually)
1. London 2. Berlin 3. Paris 4. Amsterdam 5. Barcelona 6. Madrid 7. Stockholm 8. Dublin
COMPANIES TO WATCH
33
Companies to watch
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