technology investment banking The State of the Market for Growth Rounds in European Tech Companies October 2018 silverpeakib.com Silverpeak LLP 2018 Silverpeak LLP is an authorised representative of Silverpeak 1 Capital Ltd, which is authorised and regulated by the Financial Conduct Authority
KEY TAKEAWAYS EUROPEAN TECH B & C-ROUNDS REMAIN HEALTHY There is a sustained inflow of capital in PE and VC asset classes with c. 14bn of new capital raised annually In H1-18, there have been 103 announced B & C rounds for tech companies corresponding to 2.3bn of financing The median size of B & C rounds has doubled since 2015 reaching 15.4m and 34.3m respectively UK remains Europe s largest market for tech funding, despite Brexit vote, but losing market share in 2018 2018 is turning out to be a great year for European tech private companies, supported by a strong flow of capital. Europe is increasingly generating outstanding tech companies, some of which are attracting mega-rounds in excess of 100m (there were seven B and C mega-rounds in 2017-2018YTD) PIETRO STRADA MANAGING PARTNER Silverpeak LLP 2018 2
Contents 01 // SILVERPEAK OVERVIEW 02 // EUROPEAN TECH VENTURE ENVIRONMENT: RECENT TRENDS 03 // EUROPEAN TECH B-ROUNDS: A POSITIVE FUNDING ENVIRONMENT 04 // EUROPEAN TECH C-ROUNDS: ALL SEEM WELL Silverpeak LLP 2018 3
01 // A COMPANY SNAPSHOT Silverpeak advises innovative, fast-growing technology companies on M&A and financing transactions Regulated by the Financial Conduct Authority deals and assignments completed partners with close to 150 years of experience in tech investment banking strong global team office locations Giving us in-depth knowledge and access to counterparties across the globe Silverpeak LLP 2018 4
01 // THE SILVERPEAK SENIOR TEAM We have a truly international DNA with our senior team having over 150 years of deal-making experience Senior team PADDY MCCGWIRE Managing Partner London PIETRO STRADA Managing Partner London, Milan DAVID BELL Director London DAVID FORD Director London MATTEO POZZI Director London, Milan JUSTIN STEBBINS Director London, Silicon Valley SIMON WALKER Chairman London JEAN-MICHEL DELIGNY Senior Advisor London, Paris ALEX DE GANDT Associate Director London, Paris DANIEL DIES Partner Hamburg MANFRED DRAX Partner Munich DANIEL GARLIPP Partner Hamburg MARK MILLER Partner Hamburg MICHAEL MORITZ Partner Berlin CASPAR STAUFFENBERG Partner Munich Silverpeak LLP 2018 5
01 // OUR PRESENCE IN THE TECHNOLOGY SECTOR Silverpeak has deep sector knowledge and extensive execution experience in the technology sector INTERNET & DIGITAL MEDIA ENTERPRISE SOFTWARE & SAAS ENABLING TECHNOLOGIES BUSINESS SERVICES HEALTHTECH FINTECH Adtech MarTech Digital Entertainment ecommerce Marketplaces Horizontal Security Vertical Electronics Materials Networking Semiconductors IT Consulting Managed Services Outsourcing Telecom Services Diagnostics / Imaging Digital Health Genomics M-Health Medical devices Banking Compliance Hubs Insurance Payments Silverpeak LLP 2018 6
01 // WHAT WE ADVISE ON We advise on a wide range of transactions EXITS LARGER FINANCINGS ACQUISITIONS STRATEGIC ISSUES Strategic & PE buyers Growth Equity Strategic Acquisitions Exit planning Divestitures Secondary Transactions Roll-ups Portfolio Development Partial Sales Venture Debt Financial Sponsors Valuations Cash in / Cash out IPO Advisory Local support and truly global reach Silverpeak LLP 2018 7
01 // RECENT TRANSACTIONS Silverpeak LLP 2018 8
2. EUROPEAN TECH VENTURE ENVIRONMENT RECENT TRENDS silverpeakib.com 9
TOP FUNDS ANNOUNCED 02 // EUROPEAN TECH VENTURE ENVIRONMENT After a record high in 2017, influx of capital in European VC and PE funds continues in 2018 Value and volume of European VC and PE funds raised, 2015 2018YTD Amount raised by VC Amount raised by PE # VC funds raised # PE funds raised 13.6Bn 85 10.7Bn 19 13Bn 78 10.1Bn 14 14.1Bn 8.0Bn 6.2Bn 2.9Bn 3.0Bn 6.1Bn 3.9Bn 2015 2016 2017 2018YTD 72 21 14.1Bn (annualised) 10.1Bn 43 11 1,544m 1,132m 942m 600m 1,155m 1,000m 845m 528m 904m 664m 815m 463m As at September 20 th 2018 Silverpeak LLP 2018 10
02 // EUROPEAN TECH VENTURE ENVIRONMENT Large funding rounds in the European Tech Sector are mainly led by large VCs and Private Equity funds Breakdown of investors who led at least one tech funding round between 20m and 200m in 2017 PE/Growth Others * TOTAL Large VCs Corporates 2017 * Includes Infrastructure, Institutional investors, Family Offices & State Funds Silverpeak LLP 2018 11
Total Amount Raised ( m) Deals per Half-Year (#) 02 // EUROPEAN TECH VENTURE ENVIRONMENT B & C rounds on an upward trend Series B & C Total Financing Amounts ( m) and Deal Count by Half-Year, 2015-2018H1 2,500 103 110 2,000 76 731 90 62 69 69 71 70 70 1,500 273 762 50 1,000 694 500 377 479 495 613 702 449 486 1,223 842 1,606 30 10 0 H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 Series B Series C Total Deal Count -10 As at September 20 th 2018 Silverpeak LLP 2018 12
Total Amount Raised ( m) Deals per Half-Year (#) 02 // EUROPEAN TECH VENTURE ENVIRONMENT Despite Brexit vote, the UK saw an increase in both number of deals and amount invested in 2017 Series B & C Total Financing Amounts ( m) and Deal Count by Half-Year in the UK, 2015-2018H1 900 35 31 800 700 600 500 27 20 18 21 69 26 29 451 292 30 25 20 400 732 15 300 181 236 115 528 10 200 157 100 222 182 237 125 312 5 0 H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 Series B Series C Total Deal Count 0 As at September 20 th 2018 Silverpeak LLP 2018 13
02 // EUROPEAN TECH VENTURE ENVIRONMENT Software sector accounts for more than half of B & C rounds in both volume and value Number and value of funding raised by software companies IN VOLUME 60 60 88 80 40% 40% 54% 57% 2015 2016 2017 2018 IN VALUE 45% 38% 62% 60% 889m 885m 1,953m 1,828m As at September 20 th 2018 Silverpeak LLP 2018 14
3. EUROPEAN TECH B-ROUNDS A POSITIVE FUNDING ENVIRONMENT silverpeakib.com 15
03 // EUROPEAN TECH B-ROUNDS 2018 looks on track to reach new highs for B-rounds Series B Total Financing Amounts ( m) and Deal Count by Half-Year, 2015-2018H1 83 56 45 51 47 51 50 1,606m 1,223m 479m 613m 702m 486m 842m H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 Total Financing Amounts Deal Count Silverpeak LLP 2018 16
03 // EUROPEAN TECH B-ROUNDS Shift towards larger deals Breakdown of Series B funding rounds by size range between 2015 and 2018YTD 1% 1% 11% 15% 5% 6% 17% 25% 28% 28% > 50m 33% 20-50m 10-20m 5-10m < 5m 18% 29% 21% 38% 42% 20% 27% 24% 11% 2015 2016 2017 2018 YTD As at September 20 th 2018 Silverpeak LLP 2018 17
03 // EUROPEAN TECH B-ROUNDS The median size of B-round deals has doubled since 2015 Median and Average size (in m) of Series B rounds by Half-Year, 2015-2018YTD OUTLIER DEAL 458m May 2017 21.8 19.4 18.3 16.8 14.9 14.6 15.4 10.7 12.0 10.0 11.9 9.5 11.5 12.0 7.4 7.3 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 Average size Median size As at September 20 th 2018 Silverpeak LLP 2018 18
03 // EUROPEAN TECH B-ROUNDS UK and Germany combined make up c. 50% of the European market in 2015-18YTD, but losing market share in 2018 # of Series B Rounds by country (2015-2018YTD) Value of Series B Rounds by country (2015-2018YTD) 32% 143 39% 2.5bn 18% 81 15% 972m 14% 61 15% 937m 6% 28 5% 350m 4% 18 = 5% 294m Trend in 2018YTD compared to the 2015-2018YTD period As at September 20 th 2018 Silverpeak LLP 2018 19
03 // EUROPEAN TECH B-ROUNDS UK, France and Germany take the top three spots in 2018 Total volume and value of Series B funding rounds in the most active European countries in 2018YTD SWEDEN 131m GERMANY 345m UNITED KINGDOM 698m 5 34 19 FRANCE 439m 19 10 10 Total number of Series B funding rounds SPAIN 127m 9 Total value of Series B rounds SWITZERLAND 109m Including countries which raised more than 100m in 2018YTD As at September 20 th 2018 Silverpeak LLP 2018 20
03 // EUROPEAN TECH B-ROUNDS Only a small number are repeat B-round investors Investors who participated in more than two Series B funding rounds in 2017-2018YTD 25 17 7 NEW 4 NEW NEW 2 2 1 1 = = 3 4 5 6 7 8 9 12 NEW Trend in 2017-2018YTD compared to the 2015-2016 period As at September 20 th 2018 Silverpeak LLP 2018 21
03 // EUROPEAN TECH B-ROUNDS Only 27 investors led more than one round since last year Investors who led more than one Series B funding round in 2017-2018YTD 20 2 3 2 NEW NEW = NEW = 2 3 4 5 NEW Trend in 2017-2018YTD compared to the 2015-2016 period As at September 20 th 2018 Silverpeak LLP 2018 22
03 // EUROPEAN TECH B-ROUNDS The UK attracted 3 out of the 5 largest B-rounds since 2017 Top 5 largest Series B funding rounds in 2017-2018YTD 1 458m United Kingdom 2 140m Austria 3 102m Netherlands 4 5 1 3 4 85m United Kingdom 2 5 65m United Kingdom As at September 20 th 2018 Silverpeak LLP 2018 23
4. EUROPEAN TECH C-ROUNDS ALL SEEMS WELL silverpeakib.com 24
04 // EUROPEAN TECH C-ROUNDS 2018 remains a robust year for Series C funding rounds Series C Total Financing Amounts ( m) and Deal Count by Half-Year, 2015-2018H1 26 17 18 22 20 20 14 694m 762m 731m 377m 495m 449m 273m H1'15 H2'15 H1'16 H2'16 H1'17 H2'17 H1'18 Total Financing Amounts Deal Count Silverpeak LLP 2018 25
04 // EUROPEAN TECH C-ROUNDS Slow down in small size deals, hike in mega rounds Breakdown of Series C funding rounds by size range between 2015 and 2018YTD 26% 16% 5% 2% 9% 11% 7% > 100m 17% 19% 33% 37% 40-100m 20-40m 10-20m 31% 30% 24% < 10m 22% 26% 30% 33% 22% 2015 2016 2017 2018 YTD As at September 20 th 2018 Silverpeak LLP 2018 26
04 // EUROPEAN TECH C-ROUNDS The median size has doubled over the last four years Median and Average size (in m) of Series C rounds by Half-Year, 2015-2018YTD 46.6 36.5 34.3 27.5 31.5 29.3 22.2 16.7 18.5 20.1 22.5 20.0 18.9 20.8 13.1 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 Average Median As at September 20 th 2018 Silverpeak LLP 2018 27
04 // EUROPEAN TECH C-ROUNDS UK and Germany combined make up c. 60% of the European market in the period 2015-18YTD # of Series C Rounds by country (2015-2018YTD) Value of Series C Rounds by country (2015-2018YTD) 33% 53 = 39% 1.6bn 26% 42 21% 860m 8% 13 10% 413m 4% 7 = 8% 348m 4% 6 4% 180m Trend in 2018YTD compared to the 2015-2018YTD period As at September 20 th 2018 Silverpeak LLP 2018 28
04 // EUROPEAN TECH C-ROUNDS UK and Germany still ahead of other European countries Total volume and value of Series C funding rounds in the most active European countries in 2018YTD GERMANY 175m UNITED KINGDOM 335m 9 5 FRANCE 79m 2 3 10 Total number of Series C funding rounds SPAIN 115m 1 Total value of Series C rounds SWITZERLAND 98m Including countries which raised more than 50m in 2018YTD As at September 20 th 2018 Silverpeak LLP 2018 29
04 // EUROPEAN TECH C-ROUNDS Only a small number are repeat C-round investors 40 investors participated in more than one Series C funding round in 2017-2018YTD 26 9 NEW 2 2 NEW NEW 1 2 3 4 5 6 NEW Trend in 2017-2018YTD compared to the 2015-2016 period As at September 20 th 2018 Silverpeak LLP 2018 30
04 // EUROPEAN TECH C-ROUNDS There is no continuity among lead investors of C-Rounds 2015-2016 Investors who led more than one Series C funding round in 2015-2016 2017-2018YTD Investors who led more than one Series C funding round in 2017-2018YTD 2 2 3 As at September 20 th 2018 Silverpeak LLP 2018 31
04 // EUROPEAN TECH C-ROUNDS Only the UK generates mega rounds over 200m Top 5 largest Series C funding rounds in 2017-2018YTD 1 204m United Kingdom 2 203m United Kingdom 3 130m Germany 2 1 3 4 115m Spain 5 5 68m Switzerland 4 As at September 20 th 2018 Silverpeak LLP 2018 32
Pietro Strada Managing Partner M +44 (0) 7798 603784 T +44 (0) 20 7529 5402 E ps@silverpeakib.com Disclaimer Neither this presentation nor any of its contents may be used without the prior written consent of Silverpeak LLP, trading as Silverpeak technology investment banking ( Silverpeak ). The information in this presentation reflects prevailing conditions and our views as of this date, all of which are subject to change. In preparing this presentation, Silverpeak has relied upon and assumed, without independent verification, the accuracy and completeness of all information available to us or from public sources or which was otherwise reviewed by us. silverpeakib.com Silverpeak LLP 2018 33
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