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Startup survival and exit chances

Written on December 19, 2016 by Yoram Wijngaarde

You may have seen this slide in the Atomico’s State of European Tech presentation, based on Dealroom data. The implications are interesting from the perspective of both the founders and the investors. All other things equal, which is the better investment: seed, A, B, C…. ? Are the consecutive venture round fairly priced relatively to each other?

Below is a short Dealroom slide deck with additional insights.

Probability

Question for VCs: what is the relative % dilution between the consecutive venture round series (A, B, C, ..)? Coming soon with a valuation survey! Please contact us if you are interested in helping us distributing this survey.

 

Nordics snapshot (presentation)

Written on December 11, 2016 by Yoram Wijngaarde

Both France and Sweden have been on fire this year. The Nordics are known for creating several tech icons (examples at bottom of this article). The below image opens a short presentation on high-level venture capital trends in the Nordic region.

TitleNordics

More on this in our full 2016 update!

Other useful Nordics info:

Selected Nordic tech icons

£1.4B Skyscanner acquisition: a closer look

Written on November 26, 2016 by Yoram Wijngaarde

Chinese online travel agent CTrip acquired Skyscanner at a valuation of £1.4B, predominantly in cash. That’s roughly 12x 2015 revenues, 64x 2015 normalised EBITDA. We estimate that on an LTM basis (last twelve months) the multiples are around 10x LTM revenues and 50x LTM EBITDA; a great achievement for Skyscanner’s founders and investors.

How does this transaction compare with others in travel and in tech? Time for a closer look. Download the 3-page slide deck, or continue reading below for additional insights.

How do the multiples compare?

In November 2012, Priceline paid significantly less for closest peer Kayak: 23.8x LTM EBITDA and 5.7x LTM revenues. Kayak was at the time growing at a very similar growth rate of 30%.

In December 2012, Skyscanner’s valuation multiples are similar to Trivago’s multiples back in December 2012. Back then, Trivago had been growing much faster: at about 100% per year.

What is Skyscanner’s current growth rate? Last reported revenues were only growing at 28% from 2014 to 2015. However, Skyscanner’s gross bookings were still growing 49% in 2015. Therefore, if Skyscanner’s margins did not deteriorate in 2016, then revenue growth could well have accelerated again during 2016.

Upside potential

Meta-search continues to be a strong segment. Flight meta-search specifically is benefiting from regional fragmentation of flight OTAs (online travel agents). Skyscanner is testing a direct distribution model with airlines, thus becoming a quasi-OTA. An OTA’s take-rate adds up to 5-10%, whereas for Skyscanner the CPA is as low as 2%.

And no doubt, CTrip sees opportunities for revenue synergies (e.g. tapping into Asia growth, adding hotel inventory), thus justifying the seemingly high acquisition multiple.

Slide2

Skyscanner is teh seventh largest VC backed exit, providing super returns for it’s investors. Skyscanner also ranks 25th in term of European tech acquisitions (in total we counted 36 acquisitions above €1 billion).

Skyscanner3

Looking forward

Travel remains a very exciting space where plenty of strategic activity and disruptions will continue to take place. To get you started, here is a table of top funded travel companies.

As mentioned above, meta-search (aka comparison) continues to be a strong segment, in both flights and accommodations. Below is a list of leading travel comparison companies from seed stage to late growth stage.

Travel comparison companies

Dealroom data used for this post

Finally, check out our July 2016 Travel Research report (free download) with much, much more information.

Slide01

What’s driving France’s VC surge?

Written on November 20, 2016 by Yoram Wijngaarde

3835_MagentoLiveFranceImages_Header_Location

France is having a blow out year in 2016, both in terms € amount of venture capital invested and by number of rounds. To understand better what is driving this growth, this posts looks into the numbers. The data below provides some insights, but also leaves some questions open.

Key findings:

  1. Activity started to pick up in 2015; accelerating further from Q1 2016
  2. Growth is happening across all round types
  3. It’s not just Paris. Growth is distributed across the country
  4. Slight increase in foreign funds, but not much

Download the 6-page slide deck, or view each page below with some additional insights.

In 2014 and 2015, French VC was less than half the size of Germany, but in 2016, France is overtaking Germany in both number of rounds and € invested.

Slide2

Given the fact that activity started to pick up in 2015, and accelerated since Q1 2016, we cannot attribute the growth to Brexit.

Slide3

Growth is happening across all round types, but the number of rounds increased most sharply in seed stage. Seed stage rounds have slowed down in many other countries, such as UK and Germany. Possibly, France is simply lagging these countries here.

Slide4

The number of rounds outside Paris is *tripling* in 2016. The rest of France is very distributed across over 150 cities. Many of these cities have 1 or 2 rounds for the first time in 2016.

Slide5

Contribution from French investors dropped slightly, from 60% in 2011-2013 to 50% in 2016. Not enough to be a key driver behind the growth.

Slide6

 

Dealroom premium: powerful search

Written on November 13, 2016 by Yoram Wijngaarde

Dealroom premium comes with very powerful search, that is simple to use. This post shows you what’s new and how to get the most out of it.

Visit https://app.dealroom.co/companies to use any of the visible drop-down menus to select filters (or use the advanced filter option on the right).

search

Alternatively, you can also simply start typing, for example “Fin” so that possible filters such as “industry = Fintech” or “Location = Findlay” will be suggested. Click on each to select.

search2

You can keep adding criteria, so create long filter strings such as the following:

search3

Another useful tool is related tags. For example by searching for the tag “artificial intelligence” a few related tags show up, which can be added by clicking on them:

AI related tags

Finally, you can also opt to exclude certain criteria, for example, Fintech in Europe but not payments, by selecting the down-arrow on each selected filter.

fintechnotpayments

All these filters are part of the Premium package. For only €2,500 per year, per user (€208 per month), you get instant access to our latest powerful search tools to explore rich data and analytics on over 500,000 companies. If you would like to speak with us about upgrading, please contact us.

pricing

B2B vs. B2C investment activity

Written on November 6, 2016 by Yoram Wijngaarde

Among the many filters available in Dealroom is client focus: B2B or B2C. Last week, Pawel Chudzinski ‏from Point Nince Capital asked us on Twitter to show investment activity of B2B vs. B2C. Below is the result for Europe (note: “Other” includes companies with are both B2B and B2C and companies where there is no data available yet).

The data shows:

  • Investment into B2C has grown faster than B2B in the last three years
  • Berlin, Stockholm, Barcelona and Madrid are predominantly strong in by B2C
  • London, Paris, Amsterdam, Tel-Aviv are more equally split
  • Copenhagen stands out as B2B specialist (albeit based on a few large rounds)

Pawel1 Pawel2

Pawel3

Note: the year 2016 has been annualised based on Q1-Q3 2016 multiplies by 4/3.

Europe’s top tech cities: long-term trends

Written on October 31, 2016 by Yoram Wijngaarde

The below two charts show the 6 year trend of top European cities (including Israel) by number of rounds and total venture capital raised. The year 2016 has been annualised based on the first three quarters for comparison purposes. The sudden jump of Paris remains remarkable. As the funding amounts are always skewed by a few large deals, the top-2 largest rounds are shown separately.

Timm1

Below are the top 6-10 European cities, showing a sharp increase in most cities.

Timm2

Finally, the below matrix shows aggregate VC funding by city between 2011 and Q3 2016. London, Paris and Amsterdam appear to be the relatively diversified, while some other cities like Berlin, Tel-Aviv, Stockholm, Geneva and Zurich are more concentrated around specific markets of focus.

matrixNEW

Where is European VC coming from

Written on October 31, 2016 by Yoram Wijngaarde

The below chart looks at the long-term evolution of European venture capital by country of origin. Funding from Continental European based VC funds has been on the increase, at the expense of the UK which has seen a relative decline (but still absolute strong growth).

BySource

About methodology: the country or origin is based on the VC fund’s headquarters. For rounds with multiple investors, the allocation is assumed to be proportionate, i.e. if three funds participated in one round, each fund is allocated 1/3 of the total round size.