VentureSource

Europe -- 1Q 2014

VentureSource

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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 2014 include:

European venture capital fundraising fell nearly two-thirds from 4Q 2013;

Venture capital investment into European companies experienced double digit declines in both capital

raised and deals completed compared with 4Q 2013;

While initial public offerings (IPOs) remain flat, an increase in mergers and acquisitions (M&As) during

1Q 2014 helps to exceed the previous quarter in venture-backed exit activity.

To view Dow Jones VentureSource’s U.S. data for 1Q 2014 , please click here.

VentureSource

FUNDRAISING

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1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Amount Raised (€B) € 0.43 € 0.63 € 0.42 € 2.15 € 0.98 € 1.12 € 0.76 € 1.09 € 0.74 € 0.99 € 0.50 € 1.72 € 0.64

Number of Funds 14 18 10 35 17 20 15 28 14 16 10 34 20

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€ 2.50 European VC Fundraising (2011 – 2014) Based on multiple closings

European Venture Capital Fundraising Falls Significantly from 4Q 2013; Yearly Trend

Continues

A total of 20 European venture capital funds accumulated €640 million during 1Q 2014, equating to a decline of

63% in euros raised from 4Q 2013. The number of funds also fell sharply during the quarter to 20 from 34 in 4Q

2013, an overall drop of 41%.

Despite the amount raised falling 14%, the number of venture funds completing closings in 1Q 2014 improved

by 43% from the 14 funds in 1Q 2013.

The largest fund of the quarter was Life Sciences Partners’ Health Economics Fund , which raised €112 million

and accounted for 18% of the total amount raised during 1Q 2014.

VentureSource

FUNDRAISING

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Largest European VC Funds Raised in 1Q 2014

Firm Name Fund Name Amount

(€M) Closed in 1Q

Location Offering Status

Fund Type Fund Category Closing Type

Life Sciences Partners BV LSP Health Economics

Fund €112.00

Amsterdam, Netherlands

Closed Late-stage

venture capital

Venture Capital Final

Earlybird Venture Capital GmbH & Co.

Earlybird Digital East Fund

€79.96 Berlin,

Germany Open

Early-stage venture capital

Venture Capital

First

Acton Capital Partners Burda Digital Ventures

Fund II €79.96

Munich, Germany

Open Late-stage

venture capital

Venture Capital

First

Seventure Partners SA Health for Life Capital

Fund €62.00 Paris, France Open

Multi-stage venture capital

Venture Capital

First

Emertec Gestion Emertec 5 €50.00 Grenoble,

France Open

Early-stage venture capital

Venture Capital

First

VentureSource

FINANCING

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Equity Financings into Europe –

based, VC-backed Companies

(2011 – 2014)

Investment into European Venture-backed Companies Experiences Decline from

4Q 2013

European companies raised €1.4 billion for 336 deals during 1Q’14, a decline of 21% in the number of deals

and 14% in capital raised from the previous quarter.

In contrast with 1Q’13 figures, despite deal flow decreasing by 2%, investments improved by 23%.

Consumer Services and Business and Financial Services were the quarter’s strongest sectors, respectively

attracting a 30% and 27% share of total amount invested.

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Amount Raised (€B) € 1.40 € 1.24 € 1.23 € 1.44 € 1.07 € 1.47 € 1.13 € 1.22 € 1.16 € 1.80 € 1.28 € 1.65 € 1.43

Number of Deals 299 393 303 356 331 355 314 350 344 402 361 427 336

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VentureSource

FINANCING

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Equity Financings into Europe-based, VC-backed Companies, by Round Class

(2011 – 2014)

Number of Deals

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Seed 19 36 30 42 28 36 47 54 26 32 46 65 29

First 145 187 162 158 157 178 151 178 187 200 185 192 189

Second 62 86 51 62 62 62 55 59 62 87 59 76 59

Later 58 56 50 71 71 55 45 39 53 63 51 80 49

Restart 0 1 2 3 0 0 0 0 0 0 0 0 0

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VentureSource

FINANCING

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1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Seed € 8 € 16 € 20 € 22 € 11 € 23 € 12 € 20 € 12 € 15 € 16 € 22 € 14

First € 393 € 383 € 572 € 406 € 291 € 446 € 279 € 430 € 382 € 417 € 457 € 350 € 398

Second € 260 € 313 € 206 € 360 € 292 € 256 € 304 € 330 € 226 € 478 € 307 € 383 € 301

Later € 677 € 423 € 320 € 607 € 463 € 676 € 528 € 436 € 532 € 877 € 449 € 879 € 616

Restart € 0 € 0 € 69 € 15 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0 € 0

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Equity Financings into Europe-based, VC-backed Companies, by Round Class

(2011 – 2014)

Amount Raised (€M)

VentureSource

FINANCING

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Equity Financings into Europe-based, VC-backed Companies, Median Equity Deal Size (€M)

(2011 – 2014)

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Median Equity Deal Size (€M) € 1.50 € 1.50 € 1.55 € 1.50 € 1.53 € 1.91 € 1.20 € 1.33 € 1.58 € 1.53 € 1.03 € 1.48 € 1.80

€ 0.00

€ 0.50

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VentureSource

FINANCING

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31%

4%

30%

2%

12%

2%

19%

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

1Q'14 Industry Breakdown

By Number of Deals

Equity Financings into Europe-based, VC-backed Companies, by Industry Group

(1Q 2014)

The Consumer Services sector received the largest allocation of investment during 1Q’14 (30%), accumulating

€422 million through 101 deals. The figures represent a respective decline of 39% and 23% from 4Q’13.

Business and Financial Services placed second in terms of equity financing, taking a 27% share of all 1Q’14

investment. The sector raised €385 million across 104 deals, an increase of 54% in capital raised despite an

8% dip in deal flow. The sector’s investment total is the largest for a single quarter since 3Q’01.

Healthcare ranked third, with companies gathering a 23% share of the total amount invested during the quarter.

The sector received €327 million across 42 deals, a fall of 25% in deals completed, and 14% in capital raised

from 4Q’13.

27%

2%

30%

4%

23%

1%

13% Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

1Q’14 Industry Breakdown

By Amount Raised

VentureSource

FINANCING

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Co. Name Location Industry Group

Industry Segment

Industry Code Brief Description Close Date Round Type

Raised (€M)

Round Investors (* denotes lead)

Klarna AB Sweden Business and

Financial Services

Financial Institutions and

Services

Payment/ Transactional

Processing

Provider of a payment solution for e-

commerce stores in Europe.

3/16/2014 Acquisition Financing

€90.00

Atomico, General Atlantic LLC, Management*, Sequoia

Capital

Takeaway.com BV

Netherlands Consumer Services

Travel and Leisure Restaurants/Food

Service Provider of online food

ordering services. 3/31/2014 Later €74.00

Macquarie Capital Inc., Prime Ventures NV, Individual

Investors,

Delivery Hero Holding GmbH

Germany Consumer Services

Consumer Information

Services

Shopping Facilitators

Provider of an online food ordering platform.

1/13/2014 5th €64.29 Insight Venture Partners*

Glycotope GmbH

Germany Healthcare Biopharmaceuticals Biotechnology Therapeutics

Provider of new technologies to

optimize the glycosylation of

biopharmaceuticals.

3/11/2014 Later €55.00 ELSA Eckert Life Science Accelerator GmbH, Jossa

Arznei GmbH*

Novimmune SA Switzerland Healthcare Biopharmaceuticals Biotechnology Therapeutics

Developer of antibody-based drugs for the

treatment of inflammatory diseases,

immune-related disorders, and cancer.

2/18/2014 Later €49.10 Rosetta Capital Ltd.*, Individual Investors

Top 5 Deals into European VC-backed Companies (1Q 2014)

VentureSource

FINANCING

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30

9 8

7 6

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25

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35

Internet InitiativesDevelopment Fund

High-TechGruenderfonds

Management GmbH

Index Ventures SEED CapitalManagement I/S

Jenson FundingPartners LLP

Most Active Investors for Europe-based, VC-backed Companies by Deals Completed

(1Q 2014)

VentureSource

FINANCING

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Amount Raised in 1Q 2014 by Country

(Top 4)

26%

17%

12%

11%

34% United Kingdom

Germany

Sweden

France

Rest of Europe

25%

15%

12% 12%

36% United Kingdom

France

Germany

Russia

Rest of Europe

Number of Deals in 1Q' 2014 by Country

(Top 4)

Equity Financings into Europe-based, VC-backed Companies, by

Country (1Q 2014)

The U.K. remained the favoured destination for equity financing in 1Q’14 with a 26%

share of investment into European VC-backed companies. The country received €372

million across 84 deals, a drop of 19% from 4Q’13 in both deal flow and capital raised.

Germany placed second with a 17% share of investment, raising €246 million across

42 deals, a decline of 39% in euros raised and 37% in deal flow from the previous

quarter.

Sweden consolidated third spot, raising €171 million, representing a 12% share of

investment. France placed fourth with an 11% share, raising €164 million during

1Q’14. It was the country’s lowest quarterly investment total since 3Q’12.

VentureSource

LIQUIDITY

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Exit Opportunities for European

VC – backed Companies

(2011 – 2014)

Venture Exits in Europe Experience Overall Uptick in 1Q 2014

A total of 42 venture-backed M&As took place in Europe during 1Q’14, an increase of 14% from 4Q’13 and

24% from 1Q’13.

The largest M&A of 1Q’14 was for Oxford-based NaturalMotion Ltd., a 3-D character animation technology

provider, which was acquired by Zynga Inc. for €383 million.

Eight venture-backed IPOs took place during 1Q’14, the same as 4Q’13 and joining it as the highest quarterly

figure since 2Q’10. Companies raised € 449 million during 1Q’14, the largest figure for a single quarter since

2Q’07.

0 10 20 30 40 50 60 70

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

IPOs 3 7 3 2 6 3 2 5 1 4 3 8 8

M&As 50 56 50 45 35 42 28 43 34 35 40 37 42

VentureSource

LIQUIDITY

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Top 3 M&As in Europe (1Q 2014)

Company Name

Location Brief Description Industry Code Industry Segment

Industry Group

Close Date

Round Type

Amount Paid (€M)

Acquirer

NaturalMotion Ltd.

Oxford, U.K.

Provider of 3-D character animation

technology which combines biology and computer science to

create animations for electronic

entertainment and simulations.

Graphics/Publishing Software

Software Information Technology

1/30/2014 Acquisition €383.08 Zynga Inc.

Activaero GmbH Gemuenden,

Germany

Provider of controlled breathing drug delivery

technologies. Drug Delivery Biopharmaceuticals Healthcare 3/13/2014 Acquisition €130.00 Vectura

Eyeworks Holding B.V.

Amsterdam, Netherlands

Provider of television (TV) production

services.

General Media/Content

Media and Content Consumer Services

3/11/2014 Acquisition €119.53 Warner Bros.

Television Group

VentureSource

LIQUIDITY

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European VC-backed IPO Activity

(2011 - 2014)

European VC-backed IPOs (2011-2014)

Eight IPOs were completed during 1Q’14, equalling that of 4Q’13 and representing the highest number of

venture-backed IPOs in a quarter since 2Q’10 when 10 were completed.

During 1Q’14, IPOs raised €449 million, up 23% on 4Q’13 and the largest quarterly amount since 2Q’07 when

18 IPOs took in €467 million.

The largest European VC-backed IPO of 1Q’14 was King Digital Entertainment’s March listing on the New York

Stock Exchange. The company raised a total of €253 million, representing 56% of the total amount raised by

European venture-backed companies for the quarter.

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Raised (€M) through IPO € 259.71 € 355.76 € 65.15 € 18.66 € 157.40 € 26.76 € 52.08 € 142.99 € 19.22 € 71.56 € 25.51 € 364.20 € 448.63

Number of IPOs 3 7 3 2 6 3 2 5 1 4 3 8 8

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LIQUIDITY

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Company Name

Country Brief Description Industry Code Industry Segment

Industry Group

Close Date Raised

through IPO (€M)

Exchange/ Symbol

King Digital Entertainment

PLC Ireland

Provider of entertainment and games for the mobile

world. Entertainment

Consumer Information

Services

Consumer Services

3/26/2014 €253.19 NYSE: KING

uniQure BV Netherlands Developer of gene

therapies for genetic or acquired diseases.

Biotechnology Therapeutics

Biopharmaceuticals Healthcare 2/5/2014 €68.06 NASDAQ: QURE

Horizon Discovery Group

PLC

United Kingdom

Provider of research tools to support translational genomics research and

the development of personalized medicines.

Drug Development Technologies

Biopharmaceuticals Healthcare 3/27/2014 €48.52 AIM: HZD

Top 3 IPOs in Europe (1Q 2014)

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. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

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