Europe & Israel 3Q15 Deals Done Review

Venture Capital in Europe & Israel
Venture Investment Data: Third Quarter, 2015
Prepared by Gil Dibner @gdibner
blog: yankeesabralimey
Steinerne Brücke, Regensburg, Germany
Oldest vaulted stone bridge in Germany (built 1135-1146)

The data
• Around the middle of last year, I decided I wasn’t happy with available data sources on VC
rounds in Europe & Israel, and that I’d need to build my own
• 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 EUR and GBP into USD using monthly average exchange rates
2@gdibner
blog: yankeesabralimey Syndicate for European & Israeli Enterprise Companies

Monthly pace of venture investment
• During the third quarter of
2015, there were 286 venture
investments in Europe &
Israel totaling $3.2B
• July’s investment volume was
just under June’s in terms of
total dollars invested, but it
was a record-breaking month
in terms of deals reported
• August saw a massive
slowdown in activity due
most likely to summer
vacations. Note, however,
that while August 2015 was
one third of the July 2015
volume, it was roughly even
with August 2014.
@gdibner
blog: yankeesabralimey 3Syndicate for European & Israeli Enterprise Companies
493
565
644 625
562
725
905
971 997
791 787
1,555 1,517
567
1,157
42 30 50 79 73 52 92 75 103 78 95 98 119
65 102
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3
2014 2015
Numberofinvestments
VC Investments in Europe & Israel, July 2014 - September 2015
Invested amount (US $M) Number of investments

Quarterly pace of venture investment
• Europe & Israel saw another
record-breaking quarter in
3Q, with $3.252 billion
flowing into 286 venture
transactions
• Since I started collecting this
data in 3Q14, every quarter
has set a new high
4
@gdibner
1,703 1,912 2,873 3,133 3,241
122
204
270 271
286
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
50
100
150
200
250
300
350
2014 2015
Amountinvested(US$M)
Numberofinvestments
VC Investments in Europe & Israel
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+)
• Four mega-rounds took place in
Europe this quarter:
• Kreditech, a German-based lending
platform, raised $110M in July
• Fanduel, a Scottish-based fantasy
sports gaming provider, raised
$275M in July
• Letgo, a Spanish mobile classifieds
application, raised $100M in
September
• Blablacar, a French ride-sharing
platform, raised $200M in September
(following a $100M raise in 2014)
• Adjusting for mega-rounds, 3Q15
was a record-breaking quarter,
especially for growth rounds.
5
@gdibner
248
343 285 354 369
345
312
556
731 565
539
935
1,154 792
1,509
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2014 2015
AmountInvested(US$M)
Pace of VC Investment in Europe and Israel
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)

Strong year-over-year growth
• 3Q15 total investment volume
in Europe & Israel was up
85% over 3Q14 (excluding
seed deals, where data is
more spotty)
• Early venture volume grew by
49%
• Venture volume grew by 64%
• Growth volume grew by
180%, nearly tripling from
3Q14 levels
6
@gdibner
248 369
345
565
539
1,509
554
685
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Qtr3 Qtr3
2014 2015
TotalVCinvestment(US$M)
VC investment volume in Europe and Israel by bracket
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
180 in 3Q15, roughly the
same as last quarter (179) but
nearly double that of one
quarter ago (106)
• Despite the typical summer
slowdown in August, the
quarter showed no sign of a
slowdown from the previous
quarter
7
@gdibner
60
82 77 85 94
30
26 42
63 44
13
26
33
25 38
3
1
6
6 4
0
20
40
60
80
100
120
140
160
180
200
2014 2015
NumberofVCinvestments
VC investment volume in Europe and Israel by bracket
Mega (>100) Growth (20-100)

Corporate VC activity, by bracket
• Excluding seed deals, the
total number of corporate VC
investments was 21 in 3Q15,
down significantly from a
peak of 36 in 2Q15
8
@gdibner
6
4 5
16
7
4
3
9
12
7
4
4
7
8
7
3
0
5
10
15
20
25
30
35
40
2014 2015
Corporate VC investment volume in Europe and Israel by bracket
Mega (>100) Growth (20-100)

Corporate VC activity, by country
• During the first three quarters
of 2015, Israel saw the highest
number of corporate VC
investments, with 33
• The UK saw 21 corporate VC
investments during that
period
• Nine other countries saw
corporate VC activity across
Europe, but at much lower
levels
9
@gdibner
10
7
4
1 2 1 1 1 1
14
5
4
1
2
1
1
8
8
1
3
2
1
1
1
0
5
10
15
20
25
30
35
Israel
UK
Germany
France
Sweden
Spain
Ireland
Norway
Switzerland
Estonia
Belgium
Numberofinvestments
Number of corporate VC investments in Europe and Israel by bracket
(1Q15-3Q15)
Mega (>100) 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
• Since February, 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 $14.5M on average
10
@gdibner
11.1
17.6
6.8
11.7 11.4
12.7
15.8
11.2
11.9
11.1
10.1
11.4
13.9
13.2
14.3
4
6
8
10
12
14
16
18
20
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2014 2015
AmountInvested(US$M)
Average investment size in Europe and Israel
(Round sizes of 2-100M)

Total venture investment by country, 3H 2015
• The UK took the top spot in
3Q15 with nearly $900M in
total capital invested
• Israel took second place with
$628M in venture capital
investment
• France (boosted by Blablacar)
nearly eclipsed Germany
(which was helped by
Kreditech) – both countries
saw just under $500M of
capital invested in the quarter
11
@gdibner
896.8
627.8
484.7
477.9
181.0
139.9
109.5
87.1
81.0
46.6
33.5
15.2
13.3
12.0
9.9
9.1
7.5
6.8
1.4
0.6
UK
Israel
Germany
France
Spain
Sweden
Netherlands
Ireland
Finland
Belgium
Greece
Norway
Italy
Slovenia
Poland
Switzerland
Denmark
Czech
Latvia
Estonia
0 100 200 300 400 500 600 700 800 900 1,000
Total VC investment volume by country, 3Q15 (US $M)

Total venture investment by country, 3H 2015
(excluding mega rounds)
• Once again, when mega-
rounds ($100M+) are
excluded, Israel takes the top
slot, with the UK coming in
just behind it
• Excluding mega-round,
Germany is a solid third place
at $375M, with France at
$278M
12
@gdibner
627.8
621.8
374.7
277.9
139.9
109.5
87.1
81.0
81.0
46.6
33.5
15.2
13.3
12.0
9.9
9.1
7.5
6.8
1.4
0.6
Israel
UK
Germany
France
Sweden
Netherlands
Ireland
Spain
Finland
Belgium
Greece
Norway
Italy
Slovenia
Poland
Switzerland
Denmark
Czech
Latvia
Estonia
0 100 200 300 400 500 600 700
Total VC investment volume by country, 3Q15 (Excludes mega-rounds, US $M)

Total venture investment by country, 3Q14 to 3Q15
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• Investment volumes increase
in all of the top five markets
• Israel retained it’s top spot,
but just barely
• Germany bounced back up to
third place
13
@gdibner
315
567
543
475
628
369
263
719
437
622
180
284
389
209
375
29
163
118
232
278
74
123
89
112
140
0
100
200
300
400
500
600
700
800
Total VC investment, 3Q14 - 3Q15 (top 5 countries, excluding mega-rounds)
Israel
UK
Germany
France
Sweden

Average venture round sizes, by country
• This analysis excludes mega-
rounds and rounds less than
$2M
• UK & Ireland companies
raised the largest round sizes
on average in 3Q, just as they
did in 2Q
• When we compare 3Q15 to
3Q14, all regions saw
increased round sizes, except
DACH and Iberia
• DACH round sizes contracted
to bring them in line with the
rest of the leading markets
• Round sizes in France
increased, bringing France in
line with other leading
markets.
14
@gdibner
Benelux, 10.6
Benelux, 13.1
DACH, 18.0
DACH, 14.8
France, 3.7
France, 13.5
Iberia, 10.4
Iberia, 8.6
Israel, 11.6
Israel, 15.2
Nordic, 7.7
Nordic, 10.4
UK & Ireland, 11.9
UK & Ireland, 16.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Qtr3 Qtr3
2014 2015
Averageroundsize(US$M)
Average investment size in Europe and Israel (rounds of $2-20M)

Total venture investment by region, 3Q14 to 3Q15
• When VC investments across
Europe are aggregated into
regions, Israel, DACH, UK &
Ireland, the Nordics, and
France are the clear and
consistent leaders
• Benelux, Iberia, Southern
Europe, and Eastern Europe
do produce meaningful VC
investments (Adyen, Prezi,
and many others), but the
volumes are still low
15
@gdibner
UK & Ireland, 399.0
UK & Ireland, 262.9
UK & Ireland, 932.2
UK & Ireland, 680.7
UK & Ireland, 983.9
Israel, 315.2 Israel, 567.5
Israel, 834.6
Israel, 625.2
Israel, 627.8
DACH, 532.2 DACH, 290.2
DACH, 573.3
DACH, 565.8
DACH, 493.8
Nordic, 124.0
Nordic, 219.3
Nordic, 190.1
Nordic, 775.7 Nordic, 245.5
France, 129.3 France, 163.3
France, 233.0
France, 231.6
France, 477.9
Benelux, 31.9
Benelux, 284.9
Benelux, 46.7
Benelux, 98.3 Benelux, 156.1
Iberia, 168.1
Iberia, 56.5
Iberia, 53.7
Iberia, 137.2 Iberia, 181.0
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2014 2015
Total VC investment by region
UK & Ireland Israel
DACH Nordic
France Benelux
Iberia East. Eur.
South. Eur.

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, UK &
Ireland led in the number of
announced deals, with 43
investments announced
• Israel took second place with
40
• DACH took third place with
26
16
@gdibner
23
18
14 13
9 7 5
2 3
8
11
7
5
7
2
2
2
11
11
4
4
4
2
1
1
1
1
1
1
0
5
10
15
20
25
30
35
40
45
50
UK &
Ireland
Israel DACH Nordic France Benelux Iberia South. Eur. East. Eur.
Numberofinvestments
Number of investments in Europe and Israel by bracket, 3Q 2015
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)

Investment by region, by bracket
• In 3Q, UK & Ireland led in
terms of total VC dollars
invested, even with Fanduel
mega-round excluded
• Israel was in second place
17
@gdibner
98 62 61 41 49
96 146
92 92 69
490
400
217
136 111
105
275
110
200
100
0
200
400
600
800
1,000
1,200
UK &
Ireland
Israel DACH France Nordic Benelux Iberia South. Eur. East. Eur.
Totalamountinvested(US$M)
Investment in Europe and Israel by bracket by region, 3Q 2015
(ranked excluding mega-rounds)
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)

Participation rate of US VC firms, by bracket
• US VC firms are increasingly
active in the European and
Israeli VC markets
• Year to date, US VC firms
participated in 15% of the
venture rounds in Europe
• US VCs participated in only
5% of seed rounds, 11% of
early venture rounds, and
21% of venture rounds
• As a company moves from
bracket to bracket, the
chance of US VC participation
doubles with each bracket
change
18
@gdibner
5%
11%
21%
36%
75%
95%
89%
79%
64%
25%
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? (1Q15-3Q15)
No Yes

Rate of participation by US firms has recovered
• US VC firm participation in
European & Israeli venture
rounds held steady at just
over 20%
19
@gdibner
16%
24% 20% 22% 21%
84%
76% 80% 78% 79%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
PercentageofRounds
Did US VC firms participate in European VC rounds?
(Excludes seed rounds, 3Q14-3Q15)
No Yes

Participation of US VC firms by country
• In 3Q, US VCs firms were
active in 15 different
European countries, up from
10 in 2Q
• US VC firms were most active
in Israel, where they
participated in 14 investment
rounds out of 57 (26%)
• The UK saw 7 investments
with US VC participation,
down from 11 in 2Q
• In the Netherlands, 4 of a
total of 15 investments saw
US VC participation (27%)
20
@gdibner
14
7 4 30
10
20
30
40
50
60
70
Israel
UK
Netherlands
Germany
France
Sweden
Finland
Ireland
Greece
Spain
Belgium
Switzerland
Poland
Norway
Czech
In which countries are US VCs most active?
3Q, 2015
No US VC involved US VC involved

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

• Excluding mega-rounds,
investment activity decreased
in both consumer and
enterprise over 2Q
• Consumer-oriented
investments hit a new high of
$1.1B in 3Q
• SMB-oriented and OEM-
oriented investment volume
both increased
22
@gdibner
What target markets are attracting the most VC
investment in Europe & Israel?
Syndicate for European & Israeli Enterprise Companies
475 595
980 850
1,172
494
794
953
808
905
133
121
153
275
114
106
182
0
500
1,000
1,500
2,000
2,500
3,000
2014 2015
TotalVCinvestments(US$M)
European & Israeli venture financing by target market
3Q14 to 3Q15 (excluding mega-rounds, US $M)
Government
Telecom
OEM
SMB
Enterprise
Consumer

• When Israel is excluded from
the sample, 62% of all VC
dollars in Europe went to
consumer-oriented
companies
• Enterprise dropped from 48%
in 4Q14 to 24% in 3Q15
23
@gdibner
Consumer investment leads Europe
62%
36%
56%
63% 62%
18%
48%
34% 22% 24%
6%
10%
4% 12% 8%5%
4% 2% 4%6%8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
European venture financing by target market
3Q14 to 3Q15 (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
looks a bit more balanced –
and steadier over time
24
@gdibner
Consumer accounts for half of early rounds
39%
51% 46% 41% 46%
41%
36% 50%
48% 39%
3%
10%
2%
7% 9%11%
2% 2% 3%
0%2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
European venture financing by target market
3Q14 to 3Q15 (excluding Israel, rounds up to $20M, percent of US $M)

Breakdown by region & target market
• All regions except Israel saw
more consumer investment
than enterprise/SMB
investment
• Investments across DACH
were dominated by
consumer-oriented
companies
• UK & Ireland, France, and the
Nordics showed a healthy
balance
25
@gdibner
546
225
435
276
135 119 104
218
275 150
66 57
133
87
71
0
200
400
600
800
1,000
1,200
UK & Ireland Israel DACH France Nordic Iberia Benelux
Totalamountinvested(US$M)
Investment in Europe and Israel by target market by region
3Q, 2015 (US $M)

Distribution of investment rounds by country
• Across Europe & Israel, 44%
of VC investment rounds
were in consumer companies
in 3Q
• In DACH, 62% of rounds were
into consumer companies,
the highest proportion of any
region
• In UK, the number of
consumer rounds was equal
to the number of enterprise
rounds
26
@gdibner
29%
30%
36%
41%
43%
53%
55%
62%
71%
51%
54%
41%
30%
28%
30%
22%
5%
7%
14%
17%
12%
15%
11%
14%
4%
5%
9%
5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
South. Eur.
Israel
France
UK & Ireland
Benelux
Nordic
Iberia
DACH
Investment in Europe and Israel by target market by country
3Q 2015 (Number of investments)
Consumer Enterprise SMB OEM Telecom Government

Early rounds trending away from consumer
• This graph shows the
percentage of seed ($0-$2M)
and early venture ($2M-$8M)
rounds by target market
• These early rounds provide a
leading indicator of things to
come
• The percentage of rounds
into consumer companies
peaked in 1Q15 at 50% and
has been trending downward
since
27
@gdibner
39% 44%
50% 48% 44%
47%
44%
39% 38%
40%
9%
8% 12%
8% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Investment in Europe and Israel by target market
(Rounds of up to $8M, number of investments)

Growth rounds by target market
• Looking at rounds over
$20M, it’s hard to draw a
clear trend
• From 4Q14 to 2Q15, there
was an upward trend towards
consumer-oriented
companies in growth
investing, but this trend
reversed itself in 3Q15
28
@gdibner
56%
37%
46%
58%
43%
25%
41%
46% 23%
38%
7%
10% 12%
6% 11%
6%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Investment in Europe and Israel by target market
(Rounds over $20M, number of investments)

DACH investors shift back to consumer
• DACH is clearly a region with
a record of strong consumer-
oriented investment
• In 4Q14 this began to
change, but it wasn’t clear if
the trend would be long-
lived.
• In 3Q15, consumer-oriented
investments accounted for
64% of rounds in DACH
29
@gdibner
71%
36%
57% 57%
64%
14%
56%
41%
31% 22%
7%
9% 11%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Investment in DACH by target market
(Number of investments)
OEM SMB Enterprise Consumer

The Nordics shift back to the consumer
• Investment patterns in the
Nordics seem to be shifting
away from enterprise and
towards the consumer
30
@gdibner
47%
62%
37%
43%
56%
40%
28%
47%
43%
29%
9%
12%13%
7% 7% 9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Investment in the Nordics by target market

…especially in terms of dollars invested
• When we look at dollars
investment as opposed to the
number of investments, 3Q15
saw a sharp rise in consumer-
oriented investing
• Spotify’s massive round in 2Q
has been removed from this
graph
31
@gdibner
42%
59%
29% 29%
59%
37%
25%
65% 64%
29%
4% 12%
22%
16%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Investment in the Nordics by target market
(Percentage of total US $M invested)

France shifts even further towards enterprise
• In France, only 33% of
investments in 3Q15 were
consumer-oriented
• Enterprise investments
accounted for 56% of rounds
in France
32
@gdibner
60%
52% 55%
44%
33%
30%
38%
39%
44%
56%
10% 12% 7%
10% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
VC Investment in France by target market

…with enterprise taking share from SMB
• When the data is presented
by the amount of dollars, it
becomes clear that more and
more of French VC dollars are
flowing towards enterprise-
oriented companies
• 3Q15 saw a shift from SMB
towards enterprise
33
@gdibner
69%
61%
28% 27% 27%
17%
20%
68%
43%
54%
18%
30%
14%
13%
4% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
VC Investment in France by target market
(Percentage of total US $M)

• Once again, Finance and
Marketing were the first and
second most commonly
funded verticals
• Lifestyle (which is a catch-all
consumer category) took the
third slot
• IT Infrastructure and security
took the fourth and fifth slots
34
@gdibner
Finance returned to being the top vertical
Financial, 36
Marketing, 31
Lifestyle, 15
Infrastructure, 14
Security, 13
Social, 12
Productivity, 11
Employment, 11
Fashion, 11
Data, 10
Electronics, 10
Development, 9
Health, 8
Logistics, 8
Payments, 7
Entertainment, 7Gaming, 6Adtech, 6CRM, 6
Education, 6
Durables, 5
Industrial, 5
Real Estate, 5
Travel, 5
3Q 2015 (number of investments)

• This graph shows number of
investments in the top 12
verticals across 3Q14 and
3Q15
• All verticals increased in
frequency except Adtech,
which declined from 8
investments in 3Q14 to 6 in
3Q15
• The number of finance-
related investments more
than tripled from 11 in 3Q14
to 36 in 3Q15
• Marketing-related
investments increased from 6
in 3Q14 to 31 in 3Q15.
35
@gdibner
How have the most popular verticals grown?
Financial, 11
Financial, 36
Marketing, 6
Marketing, 31
Infrastructure, 10
Infrastructure, 14
Lifestyle, 5
Lifestyle, 15
Electronics, 10
Electronics, 10
Security, 6
Security, 13
Data, 7
Data, 10
Employment, 5
Employment, 11
Productivity, 4
Productivity, 11
Development, 5
Development, 9
Adtech, 8
Adtech, 6
Fashion, 3
Fashion, 11
0
20
40
60
80
100
120
140
160
180
200
Qtr3 Qtr3
2014 2015
European & Israeli venture financing by vertical market
(top 12 verticals, number of investments)

• Once again, financial startups
were the most commonly
funded category in 3Q,
including consumer,
enterprise, and SMB-oriented
companies
• The single most common
category was enterprise
marketing, also unchanged
from last quarter
• Consumer lifestyle, social, and
fashion startups were
particularly active as well
• In contrast with last quarter,
gaming and health startups
didn’t crack the top ten
segments
36
@gdibner
Which verticals for which segments?
Data
Electronics
Fashion
Employment
Productivity
Social
Security
Infrastructure
Lifestyle
Marketing
Financial
0 5 10 15 20 25 30 35 40
3Q, 2015 (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
• Financial, marketing, and
security show increasing
strength over time
• Adtech and health are
declining
37
@gdibner
The most popular verticals in the past 12 months
2014 2015
0
20
40
60
80
100
120
140
160
180
European & Israeli venture financing by vertical market
(number of investments, top 10 verticals)
Financial
Marketing
Lifestyle
Infrastructure
Adtech
Electronics
Health
Security
Employment
Data

• Lifestyle, which is admittedly a
bit of a catch-all consumer
category, continues to show
tremendous strength in terms
of VC volume
• Finance took the second place
overall, and first place in 3Q15
• Electronics (which typically
means consumer electronics
systems companies) has shown
increasing strength through 1Q,
but little investment in 2Q &
3Q
• Gaming, travel, and food-
related categories seem to be
declining
• Consumer-oriented logistics
plays seem to be emerging as
an important category for VC
investment
38
@gdibner
Consumer VC investment trends
2014 2015
0
10
20
30
40
50
60
70
80
90
100
European & Israeli venture financing by consumer verticals
Lifestyle
Financial
Fashion
Travel
Gaming
Social
Health
Logistics
Electronics
Education
Food

• Enterprise marketing
continues to show strength as
an area for VC investment
• Adtech, while it has been the
second most popular
category for investment over
the past 15 months, faded
significantly over the past two
quarters
• Investment in developer tools
has picked up
• Health industry-related
enterprise investment
disappeared in 3Q15
39
@gdibner
Enterprise VC investment trends
2014 2015
0
10
20
30
40
50
60
70
80
90
100
European & Israeli venture financing by enterprise verticals
Marketing
Adtech
Infrastructure
Security
Data
Development
Financial
Employment
Health
CRM

• After a diverse 2Q,
investment trends in Israel
returned to form in 3Q with
enterprise, SMB, and OEM
investments dominating
• Security jumped to the top
spot, including one
consumer-oriented company
• Enterprise marketing tech was
a very strong category for
Israeli VC investment
• Financial companies took the
third place slot
• Enterprise infrastructure was
back in the top ten
• Developer tooling was
nowhere to be seen
40
@gdibner
A closer look at Israeli venture in 1Q15
Industrial
Information
Entertainment
Logistics
Productivity
Infrastructure
Communications
Electronics
Financial
Marketing
Security
0 1 2 3 4 5 6 7 8 9 10
Israeli venture financing by target market
Consumer
Enterprise
SMB
OEM

• For the third quarter running,
Fintech was the dominant
category of investment in the
UK
• Enterprise marketing, security,
and infrastructure were
important categories
• Consumer-oriented
companies dominated most
categories of VC funding
across the UK
• UK investors still seem willing
to bet on Adtech
41
@gdibner
UK VCs continue to bet heavily on fintech
Energy
Fashion
Data
Social
Logistics
Food
Adtech
Education
Employment
Payments
Security
Marketing
Infrastructure
Financial
0 2 4 6 8 10 12 14 16
UK venture financing by target market
3Q, 2015 (number of investments, top verticals)
Consumer
Enterprise
SMB
OEM

• The top three categories in
German VC investment in
3Q15 were consumer lifestyle,
consumer finance, and
consumer social applications
• Enterprise marketing and
enterprise data companies
emerged as important
categories as wel
• In total, the top 10 categories
in Germany generated 32
investments, 22 of which were
in consumer companies
42
@gdibner
The German consumer party continues
Health
Infrastructure
Adtech
CRM
Education
Travel
Logistics
Food
Real Estate
Durables
Fashion
Data
Marketing
Social
Financial
Lifestyle
0 1 2 3 4 5 6
German venture financing by target market
Consumer
Enterprise
SMB
OEM
Telecom

• While Nordic investment
swung back towards
consumer, the mix was
interesting
• Electronics were the most
frequently funded vertical –
mostly consumer but also
one OEM play and one
government-oriented
investment
• Productivity software took
second place
43
@gdibner
As usual, Nordic VC was unconventional
Infrastructure
ERP
Marketing
Entertainment
Gaming
Lifestyle
Financial
Social
Employment
Productivity
Electronics
0 1 2 3 4 5 6
Nordic venture financing by target market
Consumer
Enterprise
SMB
OEM
Government

• As software eats the world,
services will become an
increasingly important
business model for venture-
backed startups
• This was certainly the case in
3Q15, with services taking
29% of the venture dollars
invested in Europe & Israel
• Commerce continues to be
important, with 20%
• SaaS and software were neck-
and-neck at 17% and 15%
• Marketplaces – business that
serve a price discovery
function – declined to just 7%
44
@gdibner
Services & commerce dominated 3Q15
Services, 748, 29%
Commerce, 516, 20%
SaaS, 439, 17%
Software, 394, 15%
Marketplace, 170, 7%
Media, 123, 5%
Systems, 96, 4%
Components, 68, 3%
3Q, 2015 (in US $M) (excluding mega-rounds)

• Services jumped to first place
with $748M invested
• Commerce leaped over SaaS
to take second place with
$516M invested
• Marketplaces seem to be
slowly declining
45
@gdibner
In 3Q, services recovered their lead
0
100
200
300
400
500
600
700
800
2014 2015
European & Israeli venture financing by business model
(top five, in US $M, excluding mega-rounds)
Services
SaaS
Software
Commerce
Marketplace

US VCs focused on SaaS & services
• US VC interest was skewed
heavily towards SaaS,
Software & Services models
• Markets, commerce, and
media investments also
attracted US VC interest, but
at much lower levels
46
@gdibner
12 11 9
4 3 3
64
29
63
18
33
18
12
0
10
20
30
40
50
60
70
80
SaaS Software Services Marketplace Commerce Media Components Systems
VC Investments in Europe & Israel
3Q, 2015 (number of investments)
No US VC involved US VC involved

• Enterprise marketing SaaS
was again the most popular
segment for VC investment in
3Q15 with 20 investments
across the region
• Consumer social media again
took the second slot, with 12
investments
• Consumer financial services
were tied for second place,
with 12 investments
• SMB financial services were a
close third, with 11
investments
47
@gdibner
Enterprise marketing & consumer social media
0 5 10 15 20 25
SMB Marketing SaaS
Enterprise Data Software
Enterprise Development SaaS
Enterprise Security Software
Consumer Lifestyle Commerce
Consumer Fashion Commerce
SMB Financial Services
Consumer Financial Services
Consumer Social Media
Enterprise Marketing SaaS
Number of VC investments
Investment in Europe & Israel by segment by country
3Q15 (segments with 5 or more investments)
UK & Ireland Israel
DACH France
Nordic Iberia
Benelux South. Eur.
East. Eur.

• Across Europe & Israel, US VC
firms invested in 18 enterprise
companies, 14 consumer
companies, 2 SMB
companies, and 1 OEM-
oriented companies
• Enterprise SaaS & Software
attracted by far more US VC
interest than any other space
48
@gdibner
What business models attract US VC investments?
0 2 4 6 8 10 12
Systems
SaaS
Services
Software
Media
Services
Commerce
Marketplace
Services
Software
SaaS
OEMSMBConsumerEnterprise
US VC Investments in Europe and Israel by end market,
business model, & country, 3Q 2015 (excludes seed & mega-rounds)
Israel
UK & Ireland
Nordic
DACH
South. Eur.
East. Eur.
Benelux
France

SMB fintech is a UK-dominated segment
• Over the past 15 months, 26
SMB fintech companies raised
VC financing
• 14 of these companies were
based in the UK
• 12 of these investments took
place in 3Q15, up from 5 in
2Q15
• France and Israel saw 3
companies each in the space
49
@gdibner
0
2
4
6
8
10
12
14
2014 2015
Numnberofinvestments
SMB Fintech VC investment in Europe and Israel
Number of investments
Germany Belgium Finland Estonia Spain France Israel UK

Consumer electronics systems – farewell?
• Over the past 15 months, 23
consumer electronics systems
companies (consumer IoT
devices) raised venture
finance in Europe & Israel
• Only 6 raised in the past six
months, down from a record
breaking 11 in 1Q15 alone
50
@gdibner
0
2
4
6
8
10
12
2014 2015
Consumer electronics systems - VC investment in Europe and Israel
Germany Norway Poland Belgium Latvia
Israel Netherlands Finland Denmark Spain
UK France Sweden

Security, strong as ever
• 3Q15 saw a record-setting
number of security
investments
• Within the security space,
Israel and UK are the biggest
sources of companies, with
Sweden and Spain close
behind
51
@gdibner
0
2
4
6
8
10
12
14
2014 2015
Consumer gaming - VC investment in Europe and Israel
Netherlands Finland Germany Spain Sweden UK Israel

Show me the SaaS
• The most popular category
by far for SaaS investments
across the geography was
marketing
• Productivity SaaS applications
came in second, with a focus
on consumer and SMB
offerings
• SaaS-based development
tools and CRM SaaS products
are also important categories
52
@gdibner
0 5 10 15 20 25 30
Financial
Infrastructure
Security
Data
Employment
Collaboration
CRM
Development
Productivity
Marketing
SaaS VC investment in Europe and Israel
by vertical and target market, 3Q 2015 (top 10 verticals)
Consumer Enterprise SMB

Services, diverse & dominated
• This graph shows the top ten
verticals within the services
category
• Not surprisingly, the category
is dominated by financial
services and payments – two
services types that are
relatively easy to deliver
digitally
• But the there is a huge
diversity of the types of
services being delivered by
venture-backed startups,
including educations,
marketing, communications,
and logistics
53
@gdibner
0 5 10 15 20 25 30
Communications
Education
Logistics
Lifestyle
Adtech
Employment
Marketing
Infrastructure
Payments
Financial
Services VC investment in Europe and Israel
by vertical and target market, 3Q 2015 (top 10 verticals)
Consumer Enterprise SMB

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.
54
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.

Thank you
Prepared by Gil Dibner @gdibner
Steinerne Brücke, Regensburg, Germany
Oldest vaulted stone bridge in Germany (built 1135-1146)

Europe & Israel 3Q15 Deals Done Review

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