VentureSource Europe - 1Q 2013 VentureSource The following report presents Dow Jones VentureSource’s quarterly findings for European venture capital fundraising, investment, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market. Highlights for 1Q 2013 include: European venture capital fundraising declined from 4Q 2012 and 1Q 2012 in both the number of funds closed and capital raised; Venture capital investment into European companies experienced a quarter-over-quarter increase; A single venture-backed initial public offering (IPO) was completed during the quarter, the lowest figure since 1Q 2010. Merger and acquisition (M&A) deal activity also fell from the previous quarter. To view Dow Jones VentureSource’s U.S. data for 1Q 2013 , please click here. 2 VentureSource European venture capital fundraising declines in 1Q 2013 FUNDRAISING 13 European venture capital funds accumulated €756 million in 1Q 2013, dipping 13% in the number of funds and 5% in amount raised from the prior quarter. In contrast with 1Q 2012, the number of funds fell by the same proportion, however, the amount raised fell slightly more (8%). The largest fund of the quarter was Accel Partners’ London IV fund, which raised €365 million, accounting for 48% of the total amount raised for 1Q 2013. European VC Fundraising (2011 – 2013) € 2.00 30 Based on multiple closings € 1.80 25 € 1.60 € 1.40 20 € 1.20 € 1.00 15 € 0.80 10 € 0.60 € 0.40 5 € 0.20 0 Amount Raised (€B) Number of Funds 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 € 0.69 € 0.64 € 0.45 € 1.74 € 0.82 € 0.97 € 0.76 € 0.80 € 0.76 15 15 9 25 15 16 16 15 13 € 0.00 3 Largest European VC Funds Raised in 1Q 2013 VentureSource FUNDRAISING Firm Name Fund Name Amount (€M) Closed in 1Q Location Accel Partners Accel London IV €364.85 Palo Alto, CA U.S. Prime Ventures NV Prime Technology Ventures Fund IV €100.00 Atlantic Capital Partners GmbH ACP II Arthurian Life Sciences Point Nine Management GmbH Offering Status Fund Type Fund Category Closed Multi-stage venture capital Venture Capital Amsterdam, Netherlands Open Multi-stage venture capital Venture Capital €60.00 Munich, Germany Closed Early-stage venture capital Welsh Life Sciences Fund €57.94 Cardiff, U.K. Open Point Nine Capital II €40.00 Berlin, Germany Closed Closing Type Final First Venture Capital Final Multi-stage venture capital Venture Capital First Early-stage venture capital Venture Capital Final 4 VentureSource Venture capital investment into European companies experiences a quarter-over-quarter increase FINANCING European companies raised €1.1 billion in 283 venture capital deals, a 1% rise in the number of deals completed and a 2% rise in capital raised from the previous quarter. In contrast with 1Q ‘12, deal flow experienced a 9% decline, while investment saw an increase of 9%. The business and financial services, IT, and consumer services sectors all saw increases in venture capital investment from the previous quarter. Conversely, healthcare and energy and utility companies experienced declines in capital garnered. Equity Financings into Europe – based, VC-backed Companies (2011 – 2013) € 1.60 400 € 1.40 350 € 1.20 300 € 1.00 250 € 0.80 200 € 0.60 150 € 0.40 100 € 0.20 50 € 0.00 Amount Raised (€B) Number of Deals 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 € 1.30 € 1.19 € 1.15 € 1.33 € 1.02 € 1.46 € 1.10 € 1.09 € 1.12 280 358 288 321 312 323 276 280 283 0 5 VentureSource FINANCING Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 – 2013) Number of Deals 200 160 120 80 40 0 Seed 1Q'11 15 2Q'11 26 3Q'11 27 4Q'11 28 1Q'12 22 2Q'12 26 3Q'12 40 4Q'12 32 1Q'13 19 First 136 169 155 149 150 167 137 152 156 Second 58 83 48 59 62 58 52 53 53 Later 57 56 49 70 68 57 43 36 47 Restart 0 1 2 3 0 0 0 0 0 6 VentureSource FINANCING Equity Financings into Europe-based, VC-backed Companies, by Round Class (2011 – 2013) Amount Raised (€M) € 700 € 600 € 500 € 400 € 300 € 200 € 100 €0 Seed 1Q'11 €8 2Q'11 € 12 3Q'11 € 19 4Q'11 € 16 1Q'12 € 10 2Q'12 € 16 3Q'12 € 10 4Q'12 € 12 1Q'13 € 10 First € 396 € 347 € 537 € 395 € 253 € 481 € 279 € 376 € 326 Second € 241 € 303 € 198 € 364 € 295 € 248 € 292 € 285 € 195 Later € 602 € 427 € 321 € 533 € 456 € 663 € 514 € 418 € 576 €0 €0 € 69 € 15 €0 €0 €0 €0 €0 Restart 7 VentureSource FINANCING Equity Financings into Europe-based, VC-backed Companies, Median Equity Deal Size (€M) (2011 – 2013) € 2.50 € 2.00 € 1.50 € 1.00 € 0.50 € 0.00 Median Equity Deal Size (€M) 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 € 1.50 € 1.50 € 1.54 € 1.60 € 1.55 € 2.00 € 1.33 € 1.54 € 1.61 8 VentureSource Equity Financings into Europe-based, VC-backed Companies, by Industry Group (1Q 2013) FINANCING The consumer services sector received the largest allocation of investment in 1Q’13 (31%), accumulating €352 million through 61 deals, a rise of 7% from 4Q’12 in capital raised but a drop of 22% in the number of deals. IT overtook healthcare to take second position in terms of investment allocation, taking a 27% share of all venture investment. The sector raised €302 million across 92 deals, up 48% and 6% respectively from the previous quarter. The healthcare sector saw its share of investment fall from 30% in 4Q’12 to 22% in 1Q’13. Companies completed 53 deals for a total of €242 million, up 15% in deal flow but a drop of 26% in capital raised from the previous quarter. Energy and utility companies failed to attract the levels of investment accrued in 4Q’12, even though deal activity remained flat. €35 million of investment was raised during the quarter, down 44% and 37% from 4Q’12 and 1Q’12 respectively. 1Q’13 Industry Breakdown By Amount Raised 1Q'13 Industry Breakdown By Number of Deals Business and Financial Services 14% 10% Business and Financial Services 1% 3% 32% Consumer Goods 27% Consumer Goods Consumer Services 22% Consumer Services 31% Energy & Utilities Energy & Utilities 6% Healthcare 6% 4% 19% Industrial Goods & Materials Information Technology Healthcare 22% 3% Industrial Goods & Materials Information Technology 9 Top 5 Deals into European VC-backed Companies (1Q 2013) VentureSource FINANCING Co. Name Location Industry Group Industry Segment Industry Code Brief Description Close Date Round Type Raised (€M) Round Investors (* denotes lead) Truphone Ltd. U.K. Information Technology Communications and Networking Wired Communications Equipment Provider of Internet telephony solutions. 2/1/2013 3rd €86.91 Minden*, Vollin Holdings 1/15/2013 Later €78.53 Leeds Equity Partners* €32.00 Abingworth Management Inc.*, Index Ventures*, Novartis Venture Fund*, Versant Venture Management LLC* €28.00 Alto Invest, Auriga Partners SA, Bioam Gestion, Edmond de Rothschild Investment Partners, Fonds Strategique d'Investissement, InnoBio, iXO Private Equity SAS, Merieux Developpement, National Technology Enterprise Co., NBGI Ventures, Omnes Capital, Wellington Partners €22.43 Accel Partners, Atomico, Felicis Ventures, Global Brain Corp., Individual Investors, Phenomen Ventures, Red Swan Ventures LLC, Union Square Ventures*, Wellington Partners INTO University Partnerships Ltd. GenSight Biologics SA SuperSonic Imagine SA Hailo Network Ltd. U.K. France France U.K. Consumer Services Healthcare Healthcare Information Technology Provider of education services that aim to help Educational/Training universities achieve their Media and Content Media and Services strategic goals and improve their competitive positioning globally. Biopharmaceuticals Biotechnology Therapeutics Medical Devices and Diagnostic Imaging Equipment Equipment Software Business Applications Software Developer of ophthalmic therapeutics using gene therapy. Provider of ultrasound medical imaging systems for measuring and visualizing tissue elasticity. Provider of a mobile network for taxi cab drivers and passengers. 3/31/2013 3/31/2013 2/5/2013 First Round 5th 3rd 10 VentureSource FINANCING Most Active Investors for Europe-based, VC-backed Companies by Deals Completed (1Q 2013) 18 16 16 14 12 12 10 8 6 9 7 5 5 5 5 5 4 2 0 11 Equity Financings into Europe-based, VC-backed Companies, by Country (1Q 2013) VentureSource The U.K. retained its position as the favoured destination for equity financing in Europe, raising €377 million across 67 deals, a 34% share of all investment into European VC-backed companies. FINANCING France placed second, raising €237 million through 63 deals, an increase of 4% and 43% on respective 4Q’12 figures. The allocation represents a 21% share of all European investment. Finland placed third raising €134 million, a 12% share of European investment and the country’s highest quarterly figure since the third quarter of 2008. Germany secured fourth position raising €113 million, a 10% share of Europe-wide investment. The figure represents a substantial drop from the €249 million raised during 4Q’12, a 23% share of investment into European VC-backed companies during that quarter. Number of Deals in 1Q' 2013 by Country (Top 4) Amount Raised in 1Q 2013 by Country (Top 4) 23% 24% United Kingdom 32% 34% United Kingdom France France Germany Finland Spain Rest of Europe Germany 10% Rest of Europe 22% 8% 12% 14% 21% 12 VentureSource LIQUIDITY Venture M&A and IPO Market Activity in Europe Fails to Improve during 1Q 2013 M&As of venture-backed companies in Europe declined by 19% from 4Q ‘12 with 29 deals completed. The largest M&A of the quarter was Trivago GmbH, which was acquired by Expedia Inc. (Nasdaq:EXPE) for €477 million. A single venture-backed initial public offering (IPO) was completed during the quarter, the lowest figure since the first quarter of 2010. Exit Opportunities for European VC – backed Companies (2011 – 2013) 1Q'13 4Q'12 3Q'12 2Q'12 1Q'12 4Q'11 3Q'11 2Q'11 1Q'11 0 10 IPOs 1Q'11 3 2Q'11 7 M&As 51 60 20 3Q'11 3 52 30 4Q'11 2 40 1Q'12 6 50 2Q'12 3 45 32 49 60 3Q'12 2 32 70 80 4Q'12 5 1Q'13 1 36 29 13 VentureSource Top 3 M&As in Europe (1Q 2013) LIQUIDITY Company Name Trivago GmbH Location Brief Description Operator of a userdriven travel website in Düsseldorf, Europe, providing Germany travel information, package deals, and tips for travel planning. Uteron Pharma SA GraceHollogne, Belgium Provider of female healthcare products related to contraception and fertility, menopause, and osteoporosis. Arieso Ltd. Newbury, U.K. Provider of location aware solutions for mobile network operators. Industry Code Industry Segment Industry Group Close Date Round Type Amount Paid (€M) Acquirer Online Communities Consumer Information Services Consumer Services 3/12/2013 Acquisition €477.00 Expedia Inc. Pharmaceuticals Biopharmaceuticals Healthcare 1/23/2013 Acquisition €229.59 Watson Pharmaceuticals Communications Software Information Technology 3/8/2013 Acquisition €65.29 JDS Uniphase Software 14 VentureSource European VC-backed IPOs (2011-2013) LIQUIDITY Danish liquid cooling solutions provider Asetek Inc. was the only venture-backed company in Europe to complete an IPO during 1Q’13 with its €19 million Oslo Børs listing in March. European VC-backed IPO Activity (2011 - 2013) € 400.00 8 € 350.00 7 € 300.00 6 € 250.00 5 € 200.00 4 € 150.00 3 € 100.00 2 € 50.00 1 € 0.00 1Q'11 2Q'11 Raised (€B) through IPO € 259.71 € 355.76 Number of IPOs 3 7 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 € 65.15 € 18.66 € 157.40 € 26.76 € 52.08 € 142.99 € 19.22 3 2 6 3 2 5 1 0 15 VentureSource ABOUT US 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 release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. 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