State of European Tech by sguemouri

Behind the scenes at the State of European Tech 2020 report launch

Contents 01

The State of European Tech 2020

Investments 28

Investors 64

Value Creation

Builders 164

Diversity & Inclusion

198

Regulation & Policy

216

About 240

Resources 248

114

At the end of 2019, European tech was in its strongest ever position. VC CAPITAL RAISED

VC CAPITAL INVESTED

$B+ VC-BACKED COMPANIES

>$16B

$39B

2019 But the Covid-19 pandemic and resulting economic shock threatened to derail a decade of progress.

www.stateofeuropeantech.com

TOP 3 MOST CITED CHALLENGES FOUNDERS FACED IN 2020

46% Access to capital

32%

30%

Pivoting the product

New sales declining

SOURCE:

Although we hadn’t scheduled video consultation into our product plan, it’s what frontline NHS staff needed immediately. Most GPs lacked the tools to do this, and we knew we had the capability to develop it. We worked round the clock over the weekend of March 7th and 8th, and by Monday we had released video consulting software and text-message-based pre-appointment screening for COVID-19 to 3,500 practices already using our core SMS messaging software – around 50% of England’s practices. We were all hands on deck getting features out. In the space of four weeks, we were in 95% of England’s GP practices, and had rolled out six major new features. Jacob Haddad Co-Founder, accuRx

Investors and founders prepared for the worst. Governments rushed to provide liquidity.

TECH IN CRISIS

36% decline in capital invested in European tech in Q2 2020 versus Q2 2019

36%

SOURCE:

10% decline in European tech job postings between end of Q2 2020

10%

SOURCE:

Governments have injected nearly $11B in relief funds across Europe

$11B

SOURCE:

www.stateofeuropeantech.com

and support from

The Black Lives Matter movement cast a spotlight on the massive racial inequity in the European tech ecosystem. OPPORTUNITIES NOT EQUALLY DISTRIBUTED IN TECH

61% Black/African/Caribbean tech workers believe their background and/or identity makes it harder to succeed in the European tech industry SOURCE:

FUNDING GAP EUROPEAN TECH

91% of total capital invested in European tech in 2020 went to all-men founder teams

9% of total capital invested in European tech in 2020 went to teams with at least one woman founder UK TECH

0.2% of total capital invested in UK tech in 2009-2019 went to Black founding teams

99.8% of capital invested in UK tech between 2009 and 2019 went to founding teams that are not all Black SOURCE:

www.stateofeuropeantech.com

and support from

The liquidity of the European exit landscape has been overshadowed by a bumper year for tech IPOs (and direct listings and SPACs) in the US. US TECH IPOS DWARFED THOSE IN EUROPE TOP 5 IPOS IN 2020

$31B Europe

$111B United States

TOP 10 IPOS IN 2020

$133B $32B Europe

United States

SOURCE:

www.stateofeuropeantech.com

and support from

But Europe’s ecosystem weathered the storm AGAINST THE ODDS, ANOTHER RECORD YEAR OF INVESTMENT Total capital invested ($B) by month for 2019 and 2020 (cumulative) $B

$5B

September 2020 All-Time Highest Month on record

JAN

FEB

MAR

APR

MAY

JUN

2019

JUL

AUG

SEP

2020

OCT

NOV

DEC

SOURCE:

European VC is standing on its own feet, continuing its outperformance versus other key indices... HORIZON POOLED RETURN BY FUND INDEX, JUNE 2020 23.1% 16.2%

15.2%

16.3%

16.7%

18.3% 11.6%

10.7%

10YR

5YR

EUROPE DEVELOPED VENTURE CAPITAL INDEX

3YR CAMBRIDGE ASSOCIATES US VENTURE CAPITAL INDEX

SOURCE:

1YR

European tech grew massively

ECOSYSTEM VALUE Total estimated enterprise value ($B) of European tech companies founded after 2000, in private and public markets PUBLIC

PRIVATE

$573B $388B

5.6x

$136B

$37B 2016

2016

2020

SOURCE:

...and reducing its dependence on government agency funding. VC FUNDS RAISED FROM GOVERNMENT SOURCES AS % OF TOTAL

GOVERNMENT SOURCES

2015-17

2018-19

26%

20%

OTHER

SOURCE:

Europe’s most successful companies continued to break records, whether hitting record valuations as private companies, scaling at record speeds or reaching new heights in the public markets. TOP 10 LARGEST FUNDING ROUNDS

$650m

$317m

$600m

$310m

$275m

$580m

$300m

$250m

$225m

FASTEST EVER EUROPEAN TECH COMPANY TO HIT $1B+

17 months from founding to a $2.1B valuation

$300m

EUROPEAN WINNERS SCALING TO NEW HEIGHTS

Spotify and Adyen both surging past $50b

>$50b

The transition to remote working has presented new hurdles for startups. But it’s also challenged assumptions about geographical barriers in tech. The idea that great companies can come from anywhere has never been more true.

GREAT COMPANIES CAN COME FROM ANYWHERE

40 European towns and cities have now produced $1B+ companies

Purpose-driven European tech entrepreneurs are raising record amounts to try and solve some of the world’s biggest problems with the climate crisis top of the list.

SOLVING THE WORLD’S BIGGEST PROBLEMS

$11B

SDG 13 Climate Action

$5B

SDG 3 Good Health and Well-being

$4B

SDG 11 Sustainable Cities & Communities

An ever closer union of the historically separate islands of venture tech investment, tech-focused PE and the public markets is injecting liquidity and scale into European capital markets. EVER CLOSER UNION

European tech-focused PE activity is booming VC-BACKED

Count of $1B+ buyouts of European tech companies 10 8

NON VC-BACKED

4 2

4 1

2019

Europe’s largest public tech-companies are increasingly venture-backed

2020

Count of $B+ European tech IPOs 8 6

3 2

1 1

2016

2017

2018

2019

4 2

2020

SOURCE:

www.stateofeuropeantech.com

and support from

European tech keeps moving forward, but to pick up the pace, we’ve got to continue to retain and reinvest value in the next generation. It’s the time to double down, not be complacent. THE EUROPEAN TECH FLYWHEEL

Success stories and role models inspire and raise the bar for the next generation of…

Tech entrepreneurship is the default path …founders and builders ...investors

Extraordinary outcomes unlock talent and capital liquidity

Value + Mindset

( GDP, JOBS, IMPACT)

(AMBITION, CONFIDENCE )

Attracting world-class investors

Let’s write the next chapter

www.stateofeuropeantech.com

Better ideas, better companies

The State of European Tech 2020

In a year like no other, did European tech weather the storm?

www.stateofeuropeantech.com

Despite a series of uncertainties and upheavals, the tech industry was a net beneficiary of the shift to digital brought on by Covid-19, and 2020 is on track to set a new record of capital invested into European tech. We are seeing a growing interplay in European tech between venture capital, private equity and the public markets, creating more M&A opportunities, a strong pipeline of future IPO candidates and a systematic recycling of experienced talent to build new generations of companies. To accelerate this virtuous cycle, Europe needs to see more of its leading tech companies find appropriate paths to liquidity in a way that benefits European builders and investors while retaining its world-class talent.

and support from

01.1

Executive Summary The name “The State of European Tech” is deliberate. Each year we set out a macro snapshot of our ecosystem. We are not seeking to answer every question, but to chart progress and prompt further interrogation of how we can realise European tech’s potential. The report writing process, involving rigorous data analysis, is condensed into an intense four week sprint late in the year. It’s an incredible team effort and the generosity of those who give their time is always a highlight of the project. Of course, one big question dominated our thoughts this year: how would Covid-19 and its consequences affect European tech? 2019 ended on a high, with

a record $38.6B of capital invested, close to 180 $1B+ companies and $16B closed by European venture capital funds. Five years of continuous success had created a solid foundation of belief in European tech, both within our ecosystem and globally. Then the Covid-19 storm hit, trailing in its wake fears of deep economic recession and retrenchment by founders and investors.

The data shows that our ecosystem has more than survived, although not without cost.

European tech has undeniably been a net beneficiary of the shift to digital. Total investment is projected to exceed a record $41B in 2020, driven by an increase in $100-250M “megarounds”. We should not forget how far we’ve come in just five years. In 2016, a panel at Slush – the conference run by our partner on this report – discussed “How To Raise Above $10M in Europe”. In 2020, no one blinks at a $10M seed round.

Behind this headline progress sit thousands of individual stories of adversity and resilience. Many founders had a tough ride this year; nearly half of those who responded to our survey said they found it harder to get funding, alongside the challenges of pivoting their products and declining sales. Wellbeing ranked amongst our founders’ greatest challenges of the year.

01.1

Executive Summary

Yet many European companies have continued to rapidly scale. In November, Hopin set the record for Europe’s fastest ever company to hit a billion-dollar valuation: 17 months from founding. We now have 115 VC-backed companies valued at over $1B. Spotify and Adyen hit $50B. $100B valuations are starting to feel inevitable, not aspirational. We no longer need to sell the European tech story to LPs. Institutional investors from Europe and around the world poured three times more money into Europe’s tech industry than five years ago. As our ecosystem matures, the share of venture capital funding from government agencies is declining and now accounts for less than 10% of VC funds raised in Europe’s most mature markets.

International investment has not dried up as some feared it might this year. In fact, US investors participated in a record number of rounds. It turns out that when everyone is working remotely, Europe feels even less remote. More people are waking up to the fact that great companies can come from anywhere, great talent can work anywhere, and great investors can invest from anywhere.

I’m sometimes asked for the bear case for European tech. My answer is that we will fail to realise our potential if we do not systematically recycle capital and talent at scale. There is already evidence of this flywheel working. Alumni of Zalando, Spotify, Klarna, Skype, Just Eat and others are now building a new generation of companies. Nearly 80% of angels who responded to our survey have worked at a tech start-up and or founded their own business.

Data is changing the way businesses are built and run and in many ways, the world itself. We are lucky to work with a number of rigorous, data-driven organisations and individuals who join forces at the end of every year to produce the single most data-driven report on European tech. Turning this data into actionable insights is one of the report’s most valuable contributions to the ecosystem. This is why it’s critical we tackle data gaps that still exist, especially when it comes to diversity and inclusion. We can only make progress on this important issue - and help European tech reach its full potential if we understand the problem through data.

Sarah Guemouri Atomico Senior Associate and report Co-author

01.1

Executive Summary

So what needs to happen to accelerate this virtuous cycle? 01

First, we need to see more of our leading tech companies find paths to liquidity that benefit European builders and investors while retaining our world-class talent. This means more companies listing on Europe’s public markets. There has been significant ‘value leakage’ in past exits of $1B+ VC-backed European companies, with US listings and M&A buyers accounting for 52% of total exit value. We have a pipeline of IPO candidates valued at over $150B, but despite some major successes such as The Hut Group and Allegro, this year Europe has seen far fewer IPOs than the US, and only three at $1B+. This also means enabling companies that aren’t going to be global category leaders to exit early and recycle talent and capital, by creating liquidity at all stages. US companies ‘fail faster’; they are 50% more likely to exit after a first round of funding than European companies. On this front, there are signs of change. Europe’s venture capital, private equity and public markets are drawing together in ever closer union, creating more exit options, a strong pipeline of IPO candidates and deeper pools of experienced talent. Over the past couple of years, private equity-led buyouts have emerged as a viable path for VC-backed companies such as Pipedrive and Idealista. As publicly listed VC-backed companies like Adyen, Spotify and Zalando scale further, they will continue to acquire other tech companies. There are signs that traditional companies are becoming active tech buyers: two of Europe’s largest VC-backed exits of 2020 were the billiondollar acquisitions of Flaschenpost by German multinational The Oetker Group and Charlotte Tilbury by Spanish multinational Puig.

Second, we need to see a step change on diversity and inclusion in European tech. Underrepresented founders have found it even harder to raise capital than their peers this year. Grim data is emerging on the amount of capital going to Black founders and progress on funding to female founders has stalled since 2018. This inequity is excluding talent and ideas. Only by fixing it will we fuel our flywheel and generate even greater outcomes.

Another huge opportunity lies ahead if Europe’s startups can be front and centre of the fight against one of the world’s biggest problems: climate change. Investment into Europe’s climate-focused start-ups has soared to over $11B cumulatively in the last five years. The European Commission’s expansive Green Deal has been a key policymaker focus in 2020 and has the potential to be an important catalyst for continued investment in this area.

To realise its potential as an engine of economic growth, European tech needs supportive regulation and government action. Governments responded rapidly to support startups in the wake of COVID-19, injecting $11B in relief funds across Europe, though the impact of this investment is not yet clear. Positive policy initiatives are emerging, including on visas and employee stock options, as the EU’s Startup Nation Standard builds upon national commitments. Yet more education and awareness raising is needed; only 20% of founders and investors believe the concerns of start-ups and scale-ups are being heard by European policymakers.

For a vision of European tech’s future, we need look no further than Klarna and UiPath, our first VC-backed tech companies to reach valuations of $10B while still private. Their scaling journey has taken time: both were founded in 2005. But let’s imagine two things. First, how much greater the challenges of founding a company in Sweden or Romania in 2005. Second, how many more $10B+ companies – and $100B+ companies! – Europe will build as it’s flywheel spins faster and faster. We hope that this report continues to provide a helpful, data driven look at Europe’s tech ecosystem in a year of unforeseen volatility and uncertainty, and validates our optimism about where we can go from here.

Tom Wehmeier Atomico Partner and report Co-author

The State of European Tech The study’s impact over the years

The European startup data Bible Sifted

The European tech world is still developing its traditions (I’m not sure we’ve yet found our Burning Man, for example), but Atomico’s annual State of European Tech Report has quickly become a can’t-miss

The benchmark for the industry

Nicolas Colin

www.stateofeuropeantech.com

and support from

R OF RECORD NUMBE ED IN ST U.S. FIRMS INVE YEAR IS EUROPE TECH TH Investeringar i eu ropeiska teknikbolag slår rekord: ”Sverige är ett av nyckelländerna”

Behind the scenes at the State of European Tech 2020 report launch

Our 2020 Event

9000+ Media coverage mentions Outlets covered:

www.stateofeuropeantech.com

Launch event attendees

450+ The Information, Fortune, Reuters, TechCrunch, CNBC, The Economist, Handelsblatt, Financial Times, Bloomberg, Le Figaro, El Mundo, Di Digital (Sweden), Helsingin Sanomat (Finland)

and support from

FRANCE’S MACRON LAYS OUT A VISION FOR EUROPEAN ‘DIGITAL SOVEREIGNTY’

L’enjeu pour l’Europe, ne pas rater la prochaine révolution numérique

Macron promotes European tech ecosystem in an interview with Zennström

Emmanuel Macron President of France

The United States has the GAFA (Google, Apple, Facebook and Amazon), China has the BATX (Baidu, Alibaba, Tencent and Xiaomi). And Europe? We have the GDPR. It’s time to have our own technological sovereignty and not depend only on American or Chinese solutions!

01.2

A Word from Orrick

Over the past nine months we’ve navigated intersecting crises — a global pandemic, economic uncertainty, racial injustice and climate change – all in an increasingly polarized political environment globally. It’s been a time of unprecedented disruption, one that has upended every facet of life, work and innovating as we knew it. Companies have had to be more nimble than ever, at a moment that has ushered in “ten years’ worth of digital transformation in two months,” as Microsoft CEO Satya Nadella famously put it at the end of April. Opportunity is often borne out of crisis and the 2020 State of European Tech Report exemplifies this. European Tech continued on its growth trajectory this year. As venture capital continued to pour into the region, the tech ecosystem has ballooned since 2000 to almost $1 trillion ($960B) in combined value – up five-fold from 2016. Remarkably, 2020 is on track for record investment of more than $40 billion – a 20% compound annual growth rate over the last five years, outpacing both North America and Asia. The unicorn pipeline continues to be robust, with 18 new unicorns in the last 12 months compared to 14 in the previous period. That said, the report also indicates exits – both M&A and IPO – are likely to end the year at a 5-year low. It’s likely that this is a pause driven by the perfect storm of 2020 – and that the combination of dry powder, a strong stable of unicorns and vehicles like the special purpose acquisition company that is currently driving the US market for exits will set up Europe for a strong rebound in exit activity next year. In other words, as the world navigates a new normal that will be increasingly digital, the European tech market promises to be an engine for recovery. The Report points to three key factors the tech ecosystem must address to ensure that recovery is truly sustainable:

Focusing on Purpose 2020 has also sharpened the focus on corporate purpose. Tech leaders such as Apple, Microsoft, Netflix and many others have pledged billions to racial, social and environmental causes, while BlackRock announced they will no longer invest in companies that pose a high sustainabilityrelated risk. This trend is clearly making an impact in the European tech ecosystem. Purpose-driven companies — including in the energy tech, food tech and agtech space — have attracted record levels of investment this year. Investment in environmentally-focused technologies grew at five times the rate of traditional VC investments over the last five years. And purpose matters in attracting talent too — 81% of survey respondents indicate ethical impact plays a major role in their decision to work at a company. Founders should take this into consideration both in business planning and telling the company’s story. It has never been more clear that business will do well by doing good.

Creating an Equitable Playing Field

Forging Government Partnerships

SOET has reported for the past several years on gender and ethnic inequity as a threat to the ecosystem. In 2020, the Black Lives Matter movement has called for heightened focus and accelerated action. New data from Extend Ventures, the first-ever quantitative report on diversity beyond gender in Europe points to how dire the need is.

Public-private collaboration will continue to be critical for getting through these crises and sustaining the region’s economic recovery.

From 2009 to 2019, all-white teams received nearly 76% of venture capital, while all Black founders received only about 0.24% of funding and Black women founders, 0.02%. In an environment of fewer rounds of funding, where founders of all backgrounds report greater difficulty attracting investment, it will take our collective commitment to make progress in this area and ensure diverse and female founders have equitable access to funding. The promising news, as noted above, is that investors are driving more of their investment strategy around environmental, social and corporate governance principles, and there is clear stakeholder pressure to consider the diversity of leadership teams and boards. Last month, Orrick had the honor of working with an early mover, Paypal, on its investments in Black-led VC funds in the U.S. We encourage the tech community to work together as allies in this effort.

The UK and European countries moved decisively to support the tech industry’s recovery at the onset the pandemic, including through initiatives like the UK Future Fund scheme on which Orrick had the honor of advising HM Treasury. These stopgaps must evolve into long-term, sustainable policy that fuels growth, employment and innovative fixes to societal challenges. Founder and investor feedback clearly calls for a stronger dialogue between policymakers and the tech community to address areas such as cybersecurity, regulatory fragmentation, funding and immigration. As we noted in the introduction to last year’s report, “Tech is the economy.” It feels more true today as society depends on innovation to address the pandemic, the new workplace, and the many systemic challenges. We’re incredibly grateful to Atomico for again unearthing rich, data-backed insights that lay the groundwork for us to chart a path forward and measure our progress. We look forward to continued collaboration with the European tech community and helping to build a resilient ecosystem that not only thrives, but transforms the world for the better. Indeed, that must be our collective purpose.

Chris Grew Partner, Technology Companies Group, Orrick

01.3

A Word from Slush

2020 shaped up to be the ultimate test of our endurance as individuals and the resilience of the ecosystem in which we work. As we approach the end of the year, it’s becoming clear that Europe has held up staggeringly well. In terms of capital invested, Europe is about to post its second highest year on record.

Companies like Hopin have carved record-breaking paths to unicorn valuations. As a result, we now have more than 100 billion-dollar private European tech companies. However, 2020 is not only a story of gigantic rounds – European investors have backed the seed stage of our ecosystem to an unprecedented extent. These are incredible achievements, and speak of an ecosystem in which healthy foundations run deep.

Amid the explosive rise of the European ecosystem over the past decade, it’s been easy to forgo engaging with the inefficiencies and inequities that still hold our ecosystem back.

In an almost exhausting repetition of conclusions we’ve drawn before, a lack of diversity and inclusion remains the most pressing of these. While data is yet again insufficient, what we have points to two things: European tech continues to involve a narrow subset of the population, and those that differ from its narrow norm are held back and marginalized. Going forward, we will have to move from talk to action. Anything less would be unacceptable.

Amid all this, we at Slush continue to believe that entrepreneurship is one of the best and fastest ways to change the world for the better. To that end, it’s been encouraging to see that led by Infarm, Ynsect and Northvolt, investments into European purpose-driven companies have continued to grow. Like so often in history, it seems that a global crisis brings out our most noble ambitions. In September, Slush’s virtual stage was host to Daniel Ek’s announcement that he’ll commit €1B of his personal wealth to funding European moonshots. It directly addresses the funding gap that deeptech companies continue to struggle with.

With record numbers of capital available and an active dialogue around important policy among key European policymakers, we have the foundations in place to make 2021 an excellent year for European tech. As such, we at Slush are more inspired than ever by our mission – to help and create founders that change the world. This truly is the best time to be a founder; to courageously embrace the uncertainty, to look for patterns in what seems like chaos, and to fearlessly build technologies that will make the “new normal” a better normal.

Miika Huttunen CEO, Slush

01.4

A Word from Silicon Valley Bank

In a year that none of us will soon forget, European innovation stands out as a shining light. Coming off a record 2019, we were confident of strong 2020 growth for both the technology and healthcare sectors, until the pandemic took hold. While uncertainty still exists in global and European markets, we can report that the pace of innovation and investment in tech and healthcare remains robust and well placed to accelerate over time. Despite the headwinds that still persist with respect to the pandemic, innovation in many areas is thriving and accelerating parts of the market faster than we’ve observed pre-pandemic. Digital adoption and movement online, remote collaboration and communication tools, technology to fight and cure COVID-19 along with enhanced healthcare delivery are a few such areas.

The report’s findings show that 2020 is on track to be the highest year on record for investment in the European innovation economy. We’ve seen 18 newly created unicorns thus far, with a stable of fast growth companies right behind them. That brings the aggregate enterprise value of Europe’s 200 total unicorns to an unprecedented level of $1.09 trillion based on findings from Atomico.

Here’s what Silicon Valley Bank (‘SVB’) is seeing: 01

While the UK leads in activity, tech hubs are growing all over Europe at a rapid rate. In this environment, skilled talent is staying put and creating increased momentum in more newly energised tech clusters. We think this will lead to an acceleration of innovation across the continent and potentially a more collaborative ecosystem in the years to come. At SVB, we had already expanded to high-growth European hubs with SVB’s presence in Germany, Denmark and Israel and SVB Financial Group UK Ltd’s presence in Ireland supporting companies through our extensive global network. As innovation takes the centre stage globally, we find increased domestic and international capital supporting European entrepreneurs and their ideas. We’ve gone from building great domestic companies to creating and scaling global category leaders that need increasingly sophisticated financing options. Access to seed and early stage venture capital continued to increase but a gap remains for capital at the growth stage and there is more work to do to elevate our public markets. Support through tools such as venture debt, working capital and acquisition financing are necessary to enable companies doing well domestically to grow and compete globally and complement the maturation of the equity markets.

Capital alone does not guarantee competitive success. It relies on building an ecosystem that brings a variety of voices and ideas to the table. The European tech community is making some progress to include entrepreneurs and investors with diverse backgrounds and experiences, but most of us agree, we must do more to put words into action if we are to make significant headway on diversity, equity and inclusion within our sector.

Looking ahead to 2021, we are optimistic that the fundamentals driving our growing innovation ecosystem will continue, and we will be here to do our part. In this time of uncertainty sustaining momentum is key, and it requires policies that reduce friction around access to talent and movement of commerce. Doing business virtually, including deal-making and fundraising, may improve velocity – but not in a vacuum. Policymakers must recognise that promoting a healthy innovation ecosystem requires a seamless bridge for talent across European countries and policies that level the playing field. We are encouraged because innovators are exceptionally skilled at finding solutions and adapting when the times call for it and we firmly believe the best is yet to come for the European innovation economy.

Erin Platts Head of EMEA and President of the UK Branch, Silicon Valley Bank

Investments

How did investment in European tech hold up in a year hit by Covid-19?

www.stateofeuropeantech.com

While many founders found it more challenging to get funding, 2020 is on track to be a record year, with potential to surpass $41B invested, driven by more $100M+ deals. Purpose continues to be a differentiator for European tech, with climate action a focus of the $6B invested into purpose-driven companies this year.

and support from

02.1

Investment by Stage Capital invested in Europe will hit at least $35B in 2020 with the potential to exceed $41B when adjusted for reporting lag. The typical delays in capturing data on funding rounds mean that the nal sums will only become Capital in Europe will hit atlast least $35B in 2020 with thethat potential to exceed $41B when adjusted clear in invested due course. For reference, year's report projected total capital invested in 2019 when adjusted Capital invested Europe will hit atin least $35B in 2020 the potential to $41B when adjusted reporting lag.in The typical capturing data onwith funding roundsup; mean that the final sums will onlyfor for the reporting lag would hitdelays $36B once all rounds had been counted 12exceed months later that projected total reporting lag.inThe typical delays in capturing data on rounds mean the nal invested sums only Capital invested Europe will hit atFor least $35B in 2020 with the potential to exceed $41Bthat when adjusted for -will become clear in due course. reference, last year’ sfunding report projected that total capital 2019become has been exceeded by more than $2B for 2019. The strength of investment since September aninall-time clear due course. For reference, year's report projected that total capital invested in 2019for when adjusted reporting lag. The typical delays capturing data on rounds thathad the nal sums will only record month for -inuntil publication earlyonce December 2020 even leaves the door open 2020 to set whenin adjusted forEurope the reporting laglast would hitinfunding $36B allmean rounds been counted up; become 12 months later that clear inthe duereporting course. For reference, last year'once s report projected thatbeen total capital invested inmonths 2019 when adjusted for lag would hit $36B all rounds had counted up; 12 later that projected total a new record once again. In the face of a global pandemic and a highly volatile, uncertain macroeconomic projected total has been exceeded by more had than $2Bcounted for 2019. Themonths strength ofthat investment since September forhas the reporting lag wouldby hitmore $36Bthan once $2B all rounds been up; later total- an all-time beenthe exceeded for 2019. The strength of 12 investment since projected September climate, European tech ecosystem has been resilient. A decade-plus unbroken run of consecutive years of – an all-time record month for Europe – until publication in early December 2020 even leaves the door open hasrecord been exceeded byEurope more than $2B for 2019. The strength of investment since September an all-time monthgrowth for - until publication in early December leaves -the door open for 2020 to set year-on-year capital invested in tech could2020 welleven continue. for 2020 set a new- in record once again. InEuropean the face of a global pandemic andopen a highly volatile, uncertain record monthtofor Europe until publication in early December 2020 even leaves the door for 2020 to set a new record once again. In the face of a global pandemic and a highly volatile, uncertain macroeconomic a new record once again. In the the faceEuropean of a global pandemic and a highly uncertainAmacroeconomic macroeconomic climate, techbeen ecosystem hasAvolatile, been resilient. decade-plus unbroken run years of climate, European tech ecosystem has decade-plus run ofyears consecutive climate, the the European tech ecosystem has been resilient. resilient. A decade-plus unbroken rununbroken of consecutive of of consecutive years of year-on-year growth in capital invested in European tech could well continue. Capital invested ($B) adjusted year-on-year growth in capital invested in European well continue. year-on-year growth in capital invested in European tech couldtech well could continue. for reporting lag effect

L EGEND Capital invested ($B) adjusted Capital invested ($B) adjusted for reporting lag effect amount ($B) forActual reporting lag effect

40.0

Adjusted for reporting lag ($B)

L EGEND

Actual amount ($B)

Adjusted for reporting lag ($B)

Capital invested ($B)

L EGEND

30.0

20.0

Capital invested Capital ($B) invested ($B)

40.0

10.0

$2.0B

40.0 30.0

30.0 20.0

$38.6B

$16.5B

NOTE: date of a round's disclosure and the reported

The reporting lag is the difference between the date of a round's occurrence, resulting in a date of a round's disclosure and the reported NOTE: % of rounds being added after a long material date of a round's occurrence, resulting in a delay. is estimated atafter 95%afor 2019 and material ofThis rounds being added long The%reporting lag is the difference between the 2020 annualised. delay.85% Thisfor is estimated at 95% for 2019 and date of a round's disclosure and the reported 85% for 2020 annualised.

2017

2016

0.0

2017

2018 2018

2016

$26.7B

$22.8B $16.5B 2016

$34.9B

$38.6B $26.7B

$22.8B $16.5B

The reporting lag is the difference between the NOTE:

$26.7B $38.6B

$22.8B

20.0 10.0

10.0 0.0 0.0

$2.0B $6.2B

2019 2019

2017

2020

2018

2019

SOU RCE: SOU RCE:

date of a round's occurrence, resulting in a material % of rounds being added after a long delay. This is estimated at 95% for 2019 and 85% for 2020 annualised.

SOU RCE:

C APITAL INVESTED

If Europe has had a resilient year, the US has witnessed a return to growth and to record levels of investment. If Europe has had a resilient year, the US has witnessed a return to growth and to record Total capital invested in the North America, at $141B in 2020, is approaching nearly 5x the level of investment levels of investment. Total capital invested the North America, at $141B in to 2020, If Europe has had a resilient year,seen the US has in witnessed a drop return growth and record levels of investment. in Europe. Asia, meanwhile, has capital investment fortothe second year in aisrow. At $74B, Asia is approaching nearly 5x the level of investment in Europe. Asia, meanwhile, has seen capital Total capital invested in theinvested North America, $141B due in 2020, is approaching nearly 5x the levellevels of investment some way behind the $117B in 2018,atmostly to a continued decline of investment into If Europe has had a resilient year, the US hasinwitnessed a$74B, returnAsia to growth andthe to record levels investment drop for the second year a row. At is some way behind theof $117B in Europe. Asia, meanwhile, has seen capital investment drop for second year ininvestment. a row.in Atthe $74B, Asiatech is Chinese private tech companies. Europe is, of course, not the only up-and-coming region global Total capital invested in the North America, at $141B in 2020, is approaching nearly 5x the level of investment Capital invested inbehind 2018, mostly dueato a continued decline of investment levelsincluding intodecline Chinese private some way the $117B invested in 2018, mostly due to a continued of investment levels into invested landscape. Tech is having remarkable moment all over the world, in Latin America and Africa, in Europe. Asia, meanwhile, has seen capital investment drop for the second year in a row. At $74B, Asia is in Europe in 2020 Chinese private tech companies. Europe of course, not the only up-and-coming region tech companies. Europe is, ofof notis,the only up-and-coming region in thelevels global helping to drive levels investment in the of the world. some way behind therecord $117B invested incourse, 2018, mostly due to a rest continued decline of investment into in the global tech projected landscape. is having aEurope remarkable moment thethe world, including in the Latin America tech landscape. is having a remarkable moment all over world, including in Latin Chinese privateTech tech Tech companies. is, of course, not all theover only up-and-coming region in global tech and Africa, helping to drive record levels investment in the ofincluding the world. landscape. isAfrica, having a remarkable moment alllevels over the world, in Latin and Africa, SOURCE: AmericaTech and helping toof drive record ofrest investment in the restAmerica of the world.

$41B

Capital invested ($B)levels in Europe, 150.0of the world. helping to drive record of investment in the rest North America, Asia and Rest of Worldinvested by year ($B) in Europe, Capital Capital invested ($B) in Europe, North America, Asia and Rest North America, and Rest L ofEGEND World byAsia year

150.0

of World by year 2016

2018 2016 2016 2017 2017 2019 2018 2018 2020 2019 2019 2020

2020

Capital invested ($B)

L EGEND

L EGEND2017

100.0

50.0

Capital invested Capital ($B) invested ($B)

150.0

100.0

50.0

0.0 0.0

NOTE:

0.0

NOTE: All Dealroom.co data excludes the following:

biotech, transactions, debt, All Dealroom.co data excludes the following: NOTE: secondary lending capital, and grants. Please also note biotech, secondary transactions, debt, lending and excludes grants. Please also2020 note that the data Israel. data is Allcapital, Dealroom.co data excludes the following: that the data excludes Israel. 2020 data is debt, 2020. annualised based ontransactions, data to September biotech, secondary annualised based on data to September 2020. lending capital, and grants. Please also note that the data excludes Israel. 2020 data is annualised based on data to September 2020.

Europe Europe

North America North America

Europe

SOU RCE: SOU RCE:

SOU RCE:

Asia Asia

North America

Rest of W Rest of World

Asia

Rest of W

L EGEND

Capital invested by relative Capital by relative Global invested GDP weight of global GDP and weight of global GDP and Capital invested (2020) population

population

L EGEND

LGlobal EGEND GDP Capital invested Global GDP (2020) Population Capital invested (2020)

Population

Capital invested (%)

Population

24% 20

lending capital, and grants. Please also note NOTE: that the data excludes Israel. 2020 is annualised based on data to September 2020.

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is annualised based on data to September 2020.

40 60

37%

54%

30 50

54%

24%

17%

33%

13% 10 30

26%

28%

26%

37%

33%

24%

50%

28%

37%

20 40

0 20

50%

33%

26%

28%

17%

13% 9%

Europe

United States

17%

Asia

13%

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: lending capital, and grants. Please also note the datadata excludes Israel. 2020 is All that Dealroom.co excludes the following: biotech, secondary transactions, debt, annualised based on data to September 2020.

Capital invested (%) Capital invested (%)

European tech hasbycome 02.1 Investment Stage a long way in the past 10 years but is still underweight when looking at its relative share of global gross domestic product ('GDP'). Although Europe accounts for around one-quarter of global GDP, its share of global tech venture capital investment was still only 13%, despite the growth observed in recent years. More than anything, this illustrates the might of the US in terms of global venture capital European tech come in past 10 years but underweight when looking atat itsits accounting capital investment globally, despite investment. UShas tech still aattracts more than half all venture European tech has come a long longway way inthe the past 10of years butisisstill still underweight when looking relative for 26% of global GDP and being home to just 5% of the world's population. relative share of global gross domestic product (‘GDP’). Although Europe accounts for around one-quarter European tech has come a long way in the past 10 years but is still underweight when looking at its relative share of global gross domestic product ('GDP'). Although Europe accounts for around one-quarter of global share ofits global gross domestic product ('GDP'). Although Europeinvestment accounts forwas around one-quarter global of global GDP, its share of global tech venture capital only 13%, of despite the growth GDP, share of global tech venture capital investment was still onlystill 13%, despite the growth observed in GDP, its share of global tech venture capital investment was still only 13%, despite the growth observed in 60 observed in recent years. More than anything, this illustrates the might of the US in terms of global venture recent years. More than anything, this illustrates the might of the US in terms of global venture capital Capital invested by relative recent years. More than anything, this illustrates the might of the US in terms of global venture capital 54% venture capitalglobally, investment globally, despite accounting investment. USGDP tech still attracts more than half ofhalf all capital US tech still attracts than of all venture capital investment globally, despite weightinvestment. of US global capital investment despite accounting investment. tech stilland attracts more than half more of all venture 50% 50 5% of the world's population. population for 26% of global GDP and being home toofjust accounting forGDP 26% global GDP and being home to just 5% of the world’s population. for 26% of global andofbeing home to just 5% the world's population.

RoW

9% Europe

United States

Asia

RoW

SOU RCE: 0

Europe

SOU RCE:

State of European Tech 2020 report launch

United States

Asia

RoW

02.1

Investment by Stage

C UMUL ATIVE C A PITA L INVESTED (2 016- 2 02 0)

It understand, however, that C APITAL IN VESTED important toto understand, however, that Europe is Europe It Itis isisimportant important to understand, however, that Europeis is made up of many madeup up of different countries that are at different made ofmany many different countries that are at different different countries that are at different stages of local tech ecosystem stages of of local ecosystem development. This is stages localtech tech ecosystem development. This is evident when looking at levels of cumulative per capita development. This is evident when looking at levels ofper cumulative per capita in Poland versus $172 on average in Europe evident when looking at levels of cumulative investment by country across the region. There is huge per capita per capita in Poland versus $172 on average in Europe capita investment by country across the region. There investment by ifcountry acrosscatch theup region. is hugeis huge upside upside potential some countries with theThere per potential if somelevels catch up withup thewith perthe capita capita investment of their peers. per capita in Poland versus upside potential ifcountries some countries catch per investment levels of their peers. $172 on average in Europe capita investment levels of their peers.

$19

Cumulative capital invested ($) per capita by country, 2016 to 2020

Cumulative capital invested ($)L EGEND per capita by country, 2016Capital to 2020 invested ($) per capita

$19

DATA SET : T OP 10

Top 10

DATA SET : T OP 10

1,000.0

Capital invested ($) per capita European average

Cumulative capital invested ($)

European average

L EGEND

750.0

1,000.0

500.0

NOTE:

Cumulative capital invested ($)

It is important to understand, however, that Europe is 750.0 made up of many different countries that are at different stages of local tech ecosystem development. This is 250.0 evident when looking at levels of cumulative per capita investment by country across the region. There is huge500.0 upside potential if some countries catch up with the per 0.0 Sweden Ireland capita investment levels of their peers.

C UMUL ATIVE C A PITA L INVESTED (2 016- 2 02 0)

$19

per capita in Poland versus $172 on average in Europe United Kingdom

Finland

Switzerland

Estonia

Cyprus

Netherlands

Denmark

France

C UMUL ATIVE C A PITA L INVESTED (2 016- 2 02 0)

DATA SET : T OP 11- 2 0 250.0

population greater than one million.

Cumulative capital invested ($)

Cumulative capital invested ($) It isper important towith understand, however, that Europe is Chart includes only countries a capita by country, 2016 to SOU RCE: population greater than one million. 2020 Population data is from the World Bank. 2020 made up of many different countries that are at different is based on data up to September 2020. Top 11-20 stages of local tech ecosystem development. This is L EGEND 0.0 Sweden Ireland United Finland Switzerland Estonia Cyprus Netherlands Capital invested ($) per capita evident when looking at levels of cumulative per capita Kingdom 250.0 per capita in Poland versus $172 on average in Europe European average investment by country across the region. There is huge NOTE: potential if some countries catch upside up with the per 200.0 Chart includes only countrieslevels with a capita investment of their peers. SOU RCE: C UMUL ATIVE C A PITA L INVESTED (2 016- 2 02 0) 150.0

$19

It is important to understand, that Europe is Population data is from the World Bank.however, 2020 is basedup on data up to September made of many different2020. countries that are at different DATA SET : T OP 10 100.0 Cumulative capital stages of local tech invested ecosystem development. This is ($) per capita by country, evident when looking at levels of cumulative per capita per capita in Poland versus $172 on average in Europe 50.0 is huge 2016 to 2020by country across the region. There investment upside potential if some countries catch up with the per capita 0.0 L EGENDinvestment levels of their peers. 1,000.0

Denmark

$19

Germany

Norway

Belgium

Lithuania

Spain

Austria

Romania

Latvia

Italy

Portugal

Capital invested ($) per capita DATA SET : T OP 2 1- 30

is based on data up to September 2020.

Top 21-30

Cumulative capital invested ($) European average Chartcapita includes by onlycountry, countries with a to per 2016 population greater than one million. 2020 Population data is from the World Bank. 2020

SOU RCE:

L EGEND Capital invested ($) per capita

Cumulative capital invested ($)

European average

NOTE: Chart includes only countries with a NOTE: population greater than one million. Chart includes only countries with a Population data is from the World Bank. 2020 population greater than one million. is based ondata data up totheSeptember 2020. Population is from World Bank. 2020

150.0

Cumulative capital invested ($)

NOTE:

100.0

50.0

0.0

750.0

500.0

250.0

0.0

Greece

Hungary

Sweden

Ireland

Slovenia

Poland

SOU RCE: SOU RCE:

is based on data up to September 2020.

United Kingdom Bulgaria

Finland

Russia

Switzerland

Slovakia

Belarus

Estonia

Czech Republic

Cyprus

Albania

Netherlands

Denmark

02.1

Investment by Stage

It is interesting to look at how invested levels have trended by grouping countries into quartiles based on most recent levels of per capita investment. Most obviously, this lens provides a useful view to see how stark It is difference interesting is tobetween look at how invested levels (top havequartile) trended by groupingand countries intoare quartiles based on most the Europe's leading countries those that lagging (bottom It is interesting to look at how invested levels have trended by grouping countries into quartiles based on quartile). Putof simply, thereinvestment. are many countries wherethis tech investment notview gotten started recent levels per capita Most obviously, lens provides ahas useful to see how yet. starkImportantly, the most recent levels per capita levels investment. Most obviously, this lens provides a useful view to see how stark It is interesting to look at of how invested have trended by grouping countries intoare quartiles things can change. Investment levelsbased in theon third quartile (i.e. however, the graphs demonstrate how(top quickly difference is between Europe’ s leading quartile) countries and those that lagging (bottom quartile). the difference between Europe's leading (top quartile) countries and thoseview thatto are laggingstark (bottom mostfrom recent levels ofisper capita investment. Mostexceeded obviously, this provides a useful see 50% to 75% percentile) have already the lens per capita investment levels ofhow the top quartile Put simply, there are many countries where tech where investment has not gotten started yet. Importantly, quartile). Put simply, there are many countries tech investment has not gotten started yet.however, Importantly, the difference isjust between Europe' s leading (top quartile) countries and those that are lagging (bottom countries ve years ago. The trajectories across the quartiles, except for the bottom quartile, provide a the graphs demonstrate how quickly things can change. Investment levels in the third quartile (i.e. from things can change. Investment levels in the third quartile however, the graphs demonstrate how quickly quartile). Put simply, there are many countries where tech investment has not gotten started yet. Importantly, 50% (i.e. useful indicator of how the European investment landscape might evolve if and it's still an if these to 75% percentile) have already exceeded the per investment of in the top quartile countries just however, the graphs demonstrate how quickly things cancapita change. Investment levels the third quartile (i.e. quartile from 50% to 75% percentile) have already exceeded the per capitalevels investment levels of the top countries continue to mature in line with other countries. fromcountries 50%years to 75% percentile) have already exceeded the perexcept capita investment levels of quartile five ago. The across the quartiles, for the bottom quartile, provide a quartile, useful indicator just ve trajectories years ago. The trajectories across the quartiles, except forthe thetop bottom provide a countries just years The across the quartiles, the quartile, provide of how the ve European investment landscape might evolve if –except and it’sfor still anbottom if –ifthese countries useful indicator of ago. how the trajectories European investment landscape might evolve - and it's still ancontinue if a- theseto 200 useful indicator of how the European investment landscape might evolve if and it' s still an if these Capital invested ($) per capita by countries continue to mature in line with other countries. $176 mature in line with other countries. countries continue quartile, basedto onmature rank of in line with other countries. countries by per capita capital invested in 2020($) per capita by Capital invested Capital invested ($) per capita by quartile, based on rank of quartile, based on rank of countries per capital capita capital L EGEND countries by per by capita invested in 2020 Top quartile invested in 2020

$176

150

100

Capital invested Capital ($) invested ($)

Second Second quartile quartile

200

Capital invested ($)

Third quartile L EGEND L EGEND Second quartile Top quartile Top quartile Bottom quartile Third quartile Third quartile

200 150

$89 $75 $106

All European countries with a population NOTE: greater than one million were ranked into quartiles based on the level of capital NOTE: All European countries with ain population invested per capita 2020. The average greater than onecapital millioninvested were ranked (mean) perinto capita has been All European countries with a population quartiles based on the level of capital of countries. calculated for each quartile greater than one million were ranked into

$38 $75

invested per capita in 2020. The average quartiles basedper oncapita the level capital (mean) capital invested has of been invested per capitaofincountries. 2020. The average calculated for each quartile

$38

$53

$0 $38

$32

$23 2016 $0

02016

$111

2017

2016

$56 $47

$53 $0 $32 2017

$56 $47 $0

$89

$61

2018

2017

$83

$50

2018 $0

$83

$61

$56 $47

$32

$23 50 0$23

$106

$111

$53

100 50$75

$166

$111

$106

150 100

NOTE:

$176 $166

Bottom quartile

$166

2019 $1

$50 $1 2020

2019

2018

$50 $83

2020

2019

2020

SOU RCE: SOU RCE:

SOU RCE:

(mean) capital invested per capita has been calculated for each quartile of countries.

The gap between Europe's leading and lagging countries presents a huge opportunity for the region. Though it is really just a thought exercise, it is interesting to model the levels that total capital investment could reach if Thecapita gap between Europe's leading and lagging countries a huge opportunity the region. per investment levels at a European-level were to presents align to levels currently seenfor in some of theThough it The gap between Europe’ s leading itand lagging countries presents a hugethat opportunity for the region. Though it is really just a thought exercise, is interesting to model the levels total capital investment could continent's leading countries. It is a simple projection that has its limitations but it is useful as a way to reach try to if is really just a thought exercise, it is interesting to model the levels that total capital investment could reach if Theper gapcapita between Europe's leading and lagging countries presents aalign hugeto opportunity for the region. Though itof the investment levels at a European-level were to levels currently seen in some look at where Europe might be heading as the ecosystem continues to mature. Hitting $100B in investment is really just a thought exercise, itat is ainteresting to model thetolevels that total capital investment per capita levels were align to levels currently seen some ofreach the sto get continent' countries. ItEuropean-level is reality, a simple projection that has its limitations butinit iscould useful ascontinent’ aif way to to may seemsinvestment aleading long levels way from today's but the pathto there certainly exists. The next step, however, is try per leading capita investment at a European-level were to align levels currently seen in some of the countries. It is a simple projection that has its limitations but it is useful as a way to try to look at where look at where Europe might be heading as the ecosystem continues to mature. Hitting $100B in investment to $50B. continent' s leading countries. It is a simple projection that has its limitations but it is useful as a way to try to Europe might be heading as the ecosystem to mature. Hitting $100B in investment mayhowever, seem a long may seem a long way from today's reality,continues but the path there certainly exists. The next step, is to get look at where Europe might be heading as the ecosystem continues to mature. Hitting $100B in investment to $50B. way from today’ s reality, but the path there certainly exists. The next step, however, is to get to $50B. may seem a long way from today's reality, but the path there certainly exists. The next step, however, is to get Projected potential capital

at various Europe-wide per Projected potential capital capita investment levels invested ($B) in Europe per year Projected potential capital at various invested ($B) in Europe-wide Europe per yearper at various Europe-wide per capita investment levels

250.0

capita investment levels

Capital invested ($B)

200.0

150.0

100.0

50.0

0.0

NOTE: All Dealroom.co data excludes the following: biotech, NOTE: secondary transactions, debt,

NOTE:

lending capital, and grants. Please also note All Dealroom.co data excludes the following: that the datatransactions, excludes Israel. Allsecondary Dealroom.co data excludes biotech, debt, the following: lendingbiotech, capital, and grants. Please also note debt, secondary transactions, that thelending data excludes capital,Israel. and grants. Please also note

Capital invested Capital invested ($B) ($B)

to $50B. invested ($B) in Europe per year

250.0

$241.6B

250.0 200.0

$241.6B

200.0 150.0

$136.5B

150.0 100.0

$136.5B

$102.9B

100.0 50.0

50.0 0.0

$102.9B

$59.0B

On par with leader (Sweden)

0.0

On par with leader On par with UK On(Sweden) par with leader (Sweden)

SOU RCE: SOU RCE:

$102.9B

$136.5B

SOU RCE:

that the data excludes Israel.

On par with UK

On par with top quartile European countries

parUK with top quartileOn par with Ontop par quartile with France On parOn with European countries European countries

$59.0B

$59.0B $47.4B

$47.4B

On par with France

On par with Germa

with Germany On On parpar with France

On par with Germa

02.1

Investment by Stage

Another to feel feel confident con dent in in the the upside upsidepotential potentialof ofthe theEuropean Europeanecosystem ecosystemisisto tounderstand understandhow howthe thegrowth Another reason reason to growth pro le of companies is evolving in terms of how quickly they raise capital and at what scale. It is also Another reason to feel con dent in the upside potential of the European ecosystem is to understand how the to profile of companies is evolving in terms of how quickly they raise capital and at what scale. It is also important important to understand that though companies are scaling faster and more aggressively, it still takes time for of growth pro le of companies is evolving in terms of how quickly they raise capital and at what scale. It is also understand that though companies are scaling faster and more aggressively, it still takes time for newer cohorts Another reason tounderstand feel con dent in the upside potential ofare the European ecosystem is to aggressively, understand how the newer cohorts of companies to make a meaningful dent on the trend in terms of total capital raised. Although important to that though companies scaling faster and more it still takes time for companies to make a meaningful dent onof the trend in terms of total capital raised. Although Europe’s tech ecosystem growth pro cohorts letech of companies is evolving in terms quickly they capital atve what scale. It is also Europe's ecosystem hasto developed an how incredible amount the past years, companies founded newer of companies make a meaningful dent onraise theintrend inand terms of total capital raised. Although has developed an incredible amount in the fivefaster years, companies foundedit during that period contribute just important to understand that though companies arepast scaling and more aggressively, stillthis takes time forfounded during that period contribute over a third of total capital raised (37%) Europe year. This is due to the Europe's tech ecosystem has just developed an incredible amount in the pastinve years, companies over a third total capital raised (37%) in Europe year.inThis is of due to capital the fact that older cohorts of companies newer cohorts ofof companies to make a meaningful dent on this the trend terms total raised. Although fact that older cohorts of companies are still raising sums of capital. example, companies 8 during that period contribute just over a third of totallarge capital raised (37%) inFor Europe this year. This is founded due to the Europe' techraising ecosystem has developed an incredible amount in the past founded ve years,8companies are sstill large sums of capital. Forstill example, companies years agofounded or more still contributed years ago or more still contributed a third of total capital raised in 2020. fact that older cohorts of companies are raising large sums of capital. For example, companies founded 8a third during that period contribute just over a third of total capital raised (37%) in Europe this year. This is due to the of total capital raised in 2020. years ago or more still contributed a third of total capital raised in 2020. fact that older cohorts of companies are still raising 100.0 large sums of capital. For example, companies founded 8 years Share ago orofmore still contributed a third of total capital raised in 2020. capital invested 100.0

per year by founding Share of (%) capital investedyear cohort of companies raising per year (%) by founding year Share of capital invested capital in founding year cohort of companies per year (%) by yearraising

100.0

2001-2003 2000 & earlier

2000 & earlier

2004-2006 2001-2003

2001-2003

2007-2009 2004-2006

2004-2006

2010-2012

2007-2009 2007-2009 2013-2015 2010-2012 2010-2012

75.0 % of capital invested

2000 & earlier L EGEND

L EGEND

% of capital % of capital invested invested

75.0

cohort of companies capital in year raising capital in year L EGEND

50.0

75.0

50.0 50.0

25.0 25.0

25.0

2016-2018 2013-2015 2013-2015 2016-2018 2019+ 2016-2018 2019+ 2019+

0.0 0.0

0.0

2016

NOTE:

2016

2017 2017

2016

2017

2018 2018

2018

2019

20192020

NOTE:

All Dealroom.co data excludes the following: NOTE:

All Dealroom.co data excludes the following:debt, biotech, secondary transactions, All Dealroom.co data excludes the also following: biotech, secondary transactions, debt, lending capital, and grants. Please note lendingthat capital, and grants. Please also notedebt, biotech, secondary transactions, the data excludes Israel. that thelending data excludes capital,Israel. and grants. Please also note

SOU RCE:

SOU RCE: SOU RCE:

that the data excludes Israel.

CAPITAL R AISED IN 2020

37%

The more that European tech is driven by its newer generation of companies, theEuropean bigger the impact on the levelgeneration of investment in The more that tech is driven byoverall its newer of companies, the bigger the impact on the the ecosystem given the increased speed and scale in capital raising t European tech is driven newer generation of companies, the impact on the overall levelby ofits investment in the ecosystem given the the bigger increased speed and scale in capital raising andcapital value raised of total The more that European tech is driven by itsEuropean newer generation ofraising companies, the bigger thetheir impact on on the f investmentand in the ecosystem the speed and scale in capital value accretion. Today, agiven third of funded European tech startups belong to thisand newer cohort and effect value accretion. Today, aincreased third of funded tech startups by companies overall level of investment in the ecosystem given the increased speed and scale in capital raising and valuefounded day, a third of belong fundedto European tech startups to this newer and European technewer is really only and justbelong beginning to felt. cohort this cohort their effect onbe European tech is their reallyeffect on in the past 5 years accretion. Today, a third of funded European tech startups belong to this newer cohort and their effect on h is really onlyonly justjust beginning to be beginning to felt. be felt. European tech is really only just beginning to be felt. SOURCE:

unded companies ar

Share of total funded European tech companies Share of total funded by founding year European tech companies by founding year

2016+: 32.5 % 2016+: 32.5 %

2016+: 32.5 %

Pre-2010: 33.5 % Pre-2010: 33.5 %

Pre-2010: 33.5 %

2010-2015: 34.0 % 2010-2015: 34.0 %

2010-2015: 34.0 %

NOTE:

All Dealroom.co data excludes the following: biotech, NOTE: secondary transactions, debt, a excludes the following: lending capital, andSOU grants. Please also note RCE: ransactions, debt, All Dealroom.co data excludes that the data excludes Israel. the following: grants. Please also note biotech, secondary transactions, debt, es Israel. lending capital, and grants. Please also note that the data excludes Israel.

SOU RCE: SOU RCE:

02.1

Investment by Stage

The maturing of the ecosystem is re ected in the increased scale in terms of capital raised by more recent cohorts of European tech companies, as well as the accelerated pace that this capital accumulates. European The maturing maturing of the the ecosystem The of ecosystem is is reflected re ected in in the the increased increasedscale scalein interms termsof ofcapital capitalraised raisedby bymore morerecent recent tech companies founded in 2010 had raised a total of $2.8B by the end of their fourth year. By comparison, cohorts of of European European tech tech companies, companies, as cohorts as well well as as the the accelerated accelerated pace pace that that this this capital capital accumulates. accumulates. European companies founded in 2015 hadected raised $14.4B by thescale end ofterms their fourth full year. Companies founded even European tech companies founded in 2010 had raised a total of $2.8B by the end their fourth year. By Thetech maturing of the ecosystem is re in the increased in of capital raised byofmore recent companies founded in 2010 had raised a total of $2.8B by the end of their fourth year. By comparison, more recently are showing signs that they will scale faster and more aggressively. Hopin is a great example of cohorts of European tech companies, well as the pace that capital accumulates. comparison, companies founded in 2015 hadaccelerated raised thethis end offull their fourth fullEuropean year.founded Companies companies founded in 2015 hadas raised $14.4B by the$14.4B end ofby their fourth year. Companies even the speed and scale of capital raises now witnessed in Europe having reached a $2.1 billion valuation and tech companies founded in 2010 had raised of $2.8B the will endand of their fourth year.more By comparison, founded even more recently are showing thatbythey scale faster and aggressively. Hopin is more recently are showing signs thata total theysigns will scale faster more aggressively. Hopin is a great example of raised more than $170had million in$14.4B just 17by months founding in the of 2019. companies founded in 2015 raised the endfrom of their fourth full year.summer Companies founded even a great example of the scale of witnessed capital raises now witnessed in Europe having reached a $2.1 the speed and scale of speed capitaland raises now in Europe having reached a $2.1 billion valuation and more recently are showing signs that they will scale faster and more aggressively. Hopin is a great example of more than $170 million in just 17$170 months from founding in thefrom ofvaluation 2019. billion valuation and raised more than million in just 17 months in the summer of 2019. theraised speed and scale of capital raises now witnessed in Europe having reached asummer $2.1founding billion and raised ($M) by 17 months from 15,000 raisedCumulative more thancapital $170 million in just founding in the summer of 2019. companies per year post-launch Cumulative raised ($M) by by founding capital year cohort companies per year($M) post-launch Cumulative capital raised by by founding year cohort companies per year post-launch L EGEND Y0 L EGEND L EGENDY1 Y0 Y2 Y0 Y1 Y3 Y1 Y2 Y2 Y4 Y3 Y3 Y4

Cumulative capital raised ($M)

by founding year cohort

10,000

5,000

Cumulative Cumulative capital raised capital($M) raised ($M)

15,000 15,000

10,000 10,000

5,000 5,000

0 0

0 2010

NOTE: NOTE:All Dealroom.co data excludes the following:

2011 2011

2010

2011

2012 2012

2013

2014

2012

2013

2014 2015

2015

2014

2015

$100M-$250M

$250M+

SOU RCE:

NOTE: secondary transactions, debt, biotech,

All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, transactions, debt, the following: Allsecondary Dealroom.co data excludes that the data excludes Israel. lending capital, and grants. Please also notedebt, biotech, secondary transactions, that the data excludes Israel.

2010

SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel.

The level of investment activity at the earliest stages is an important leading indicator of the direction of The level of ecosystem. investment activity at the earliest stages an important leading indicator of the direction of raising travel of an companies raising a few is million dollars of funding today are The level of investmentThe activity at the earliest stages is an important leading indicator ofthe thecompanies direction of travel of an ecosystem. The companies raising a few million dollars of funding today are the companies hundreds millions of dollars in a few years' time. Bymillion extension, theoflargest to be more of araising travel of anofecosystem. The companies raising a few dollars fundingrounds today tend are the companies raising hundreds of millions of dollars in a few years’ time. By extension, the largest rounds tend to be lagging indicator of an ecosystem' s stage of development due to the typical extended timeline between hundreds of millions of dollars in a fewstages years' time. By extension, largest tend of to be more of a Thefounding level of investment activity atof the earliest isofancourse, important leadingthe indicator ofrounds the direction exceptional companies that raise large $100M rounds and raising those rounds. There are, more of a lagging indicator an ecosystem’ s stage of development due to the typical extended timeline lagging indicator ofThe ancompanies ecosystem' s stage of development due to the typical extended timeline travel of an ecosystem. raising a few million dollars of funding today are the companies raisingbetween very early in their lifecycle. Hopin is one recent example; it has raised a huge $125M Series B within just between founding and raising those rounds. There are, of course, exceptional companies that raise large exceptional companies raise founding and raising those There of course,the hundreds of millions of dollars in arounds. few years' time.are, By extension, largest rounds tend to bethat more of a large $100M rounds months ofin launch. What is their notable inone thisrecent chart is is thatto Europe's market decreases across $100M rounds very early in lifecycle. Hopin one recent example; has raised a Series hugegradually $125M Series very early their lifecycle. Hopin isof example; has raised aitshare huge $125M B within justB every lagging indicator of an ecosystem' s stage development due theittypical extended timeline between round size bracket. A simple way to interpret this is to state that larger brackets are an indicator of Europe's withinand just months of launch. What are, is in this chart is companies thatmarket Europe’ s market share decreases that raisedecreases large $100M rounds gradually founding those rounds. There of course, months ofraising launch. What is notable in notable this chart isexceptional that Europe's share gradually across every to where Europe relative position onsize the global stage a few years ago, smaller round sizelarger brackets pointare veryround early in their lifecycle. Hopin is way one example; itis has raised athat huge $125M Series B within across every round bracket. Arecent way to interpret this is tolarger state that an size bracket. A simple tosimple interpret this towhile state brackets arebrackets anjust indicator of Europe's is heading. Europe is succeeding in building a very healthy early-stage ecosystem in tech and, remarkably, months of launch. What is notable in this chart is that Europe' s market share decreases gradually across every relative onsthe globalposition stage aon few years ago, while smaller size brackets pointsize to where Europe indicatorposition of Europe’ relative the global stage a few yearsround ago, while smaller round brackets round size bracket. A simple wayof toall interpret this is to state that larger brackets are an indicator Europe's Europe accounts foris40% capital invested globally in rounds of less than $5M.inoftech is heading. Europe succeeding in building a very healthy early-stage ecosystem and, remarkably, point to where Europe is heading. Europe is succeeding in building a very healthy early-stage ecosystem in relative position on the global stage a few years ago, while smaller round size brackets point to where Europe Europe accounts for 40% of all capital invested globally in rounds of less than $5M. tech and, remarkably, Europe accounts for 40% capital invested globally rounds of less than $5M. 100 of all is heading. Europe is succeeding in building a very healthy early-stage ecosystem in techinand, remarkably,

Share of capital invested by Europe accounts for(%) 40% of all capital invested globally in rounds of less than $5M. 100 round size by region, 2020 Share of capital (%) invested by round size (%) by region, Share of capital invested2020 by

100

round size by region, 2020

Asia

Rest of World

75 % of capital invested

Europe L EGEND North America L EGENDEurope EuropeAsia North America Rest of World North America Asia

% of capital % of capital invested invested

L EGEND

50 50

25 25

0 0

NOTE: NOTE:All Dealroom.co data excludes the following:

NOTE: secondary transactions, debt, biotech,

All Dealroom.co data excludes the following: lending capital, and grants. Please note biotech, transactions, debt, Allsecondary Dealroom.co data excludes the also following: that the data excludes Israel. lending capital, and grants. Please also notedebt, biotech, secondary transactions, that the data excludes lending capital,Israel. and grants. Please also note

<$5M

$5M-$10M

<$5M

SOU RCE: SOU RCE:

SOU RCE:

that the data excludes Israel.

$10M-$20M

$5M-$10M

$10M-$20M $20M-$50M

$10M-$20M

$20M-$50M $50M-$100M

$20M-$50M

$50M-$100M $100M-$250M

$50M-$100M

$250M+

$100M-$250M

$250M+

02.1

Investment by Stage

ROUNDS < $5M

40%

This implied improvement in Europe’s market share in more recent startup This implied improvement in Europe's market more recent startup "cohorts" is perhaps one reason “cohorts” is perhaps one reason why there is a share widelyinshared sentiment why there is a widely shared sentiment within the European tech community that Europe can make up ground ofone all capital invested within the European tech community Europe caninmake ground with "cohorts" This implied improvement in Europe'sthat market share moreup recent startup is perhaps reason with the US and China over the next decade. This positive outlook is strongest at the top of the investment globally in rounds the US and China over the next decade. This positive outlook is strongest at why there is a widely shared sentiment within the European tech community that Europe can make up ground of stack with 70% of LPs investing in venture agreeingin that Europe will gainatground. This is also shared less than $5M by is with the US and China the next decade. This positive outlook is capital strongest the of the investment the top of the investment stack with 70% ofcapital LPs investing venture This implied improvement inover Europe's market share in more recent startup "cohorts" is perhaps onetop reason VCs (65%) and founders (48%), though the latter group are more split in their opinion. investing in Europe 70%Europe of LPswill investing in venture capital agreeing will gain ground. This is also shared by agreeing gain ground. ThisEuropean is also shared bythat VCs Europe (65%) and whystack therewith is athat widely shared sentiment within the tech community that Europe can make up ground are more splitatin their opinion. VCs and founders (48%), though the latter with the(65%) US and China over thethe next decade. This positive outlook is strongest the top of the investment SOURCE: founders (48%), though latter group are moregroup split in their opinion.

stackEuropean with 70%tech of LPs investing will gain ground. This is also shared by is likely to gainin venture capital agreeing that Europe All respondents VCs (65%) and founders ground relative to the(48%), Unitedthough the latter group are more split in their opinion. European is in likely gain States andtech China the to next ground relative to the United decade European likely to Statestech andisChina in gain the next ground relative to the United decade

All respondents Founder All respondents

Founder

L EGEND States and China in the next decadeAgree

Employee at a tech startup or scale-up Founder

L EGEND Neither L EGENDAgree Disagree AgreeNeither

Employee at a tech startup or scale-up Employee at a tech startup or scale-up Venture Capitalist

Neither Disagree

Venture Capitalist

Disagree

Venture Capitalist

LP investing in Private Equity & Venture Capital LP investing in Private Equity & Venture Capital

LP investing in Private Equity & Venture Capital

0 0

10 20

20 20 40

NOTE:

% of respondents

Numbers may not add up to 100 due to NOTE:NOTE: rounding.

% of respondents 50 60

70 90

80 100

SOU RCE: SOU RCE:

SOU RCE:

Numbers may not addnot up to 100up due Numbers may add toto100 due to rounding.

rounding.

To understand 2020 from the perspective of investment into European tech, SEPTEMBER 2020 it is helpful to look at the year on a month-by-month basis and to then compare To understand 2020started from the investment European tech, to prior years. 2020 outperspective of the gatesofincredibly fast.into Capital invested in it is helpful to look at the year on aJanuary month-by-month basis and to then compare to prior years. 2020 started out of the gates incredibly fast. represented the highest ever “January” on record, contributing to a pretty To understand 2020 from the perspectivethe of highest investment into European tech, itcontributing is helpful to to look at therobust year on Capital invested in January represented ever "January" on record, a pretty robust first quarter. The pandemic really took effect in March as Europe went into a rst month-by-month basis andreally to then compare toMarch prior as years. 2020 started out of the gates incredibly fast. quarter. The pandemic took effect in Europe went into lockdown and, while a causal link is in lockdown and, causal link is uncertain, it’s clear that investment started To understand 2020while fromathe perspective of investment into European tech, it islevels helpful to look at the year on capital invested Capital invested in January represented the highest ever "January" on record, contributing to a pretty robust started to2020 slow fromprior late-March andincredibly persisted at reduced levels 2020, uncertain, it'slate-March clear investment levels September a month-by-month basisthat and to then compare prior years. started out of the gates fast. torst slow from and persisted atto reduced levels versus years quarter. The pandemic really took effect inBy March as Europe went intothrough lockdown and, while a causal link is versus prior years through the second quarter. the end of the summer, however, monthly investment levels the highest ever Capital invested in January represented the highest ever "January" on record, contributing to a pretty robust the secondit'quarter. By the end of thelevels summer, however, monthly investmentand levels started to slow from late-March persisted at reduced levels uncertain, s clear that investment rst quarter.toThe pandemic really took effect in an March as Europe into lockdown and, while a causalthe link highest is monthever on record started pick up again. July 2020 was all-time highwent "July", while September recorded startedprior toclear pick up again. July 2020 was an all-time high “July”, September versus years the second quarter. Byfrom the end of while the summer, however, investment uncertain, that through investment levels started to slow late-March and persisted at reduced levels month it' ofs investment into European tech with more than $5B invested. October wasmonthly also a strong month levels and, SOURCE: recorded the highest ever month ofwas investment into European tech with more than started to pick up November again. an the all-time "July",high while September recorded the highest ever versus years through the July second quarter. By end ofhigh the summer, however, monthly investment levels as ofprior publication, is2020 also tracking towards all-time monthly investment levels. $5B to invested. October was also strong and, as of publication, November started pick up again. July 2020 wasaan all-time highmore "July", while September recorded theis highest month of investment into European techmonth with than $5B invested. October was alsoever a strong month and, month of investment into European tech with more than $5B invested. October was also a strong month and, also towards all-timeishigh levels. high monthly investment as oftracking publication, November alsomonthly trackinginvestment towards all-time levels.

$5B

as ofCumulative publication, November is also tracking towards40,000 all-time high monthly investment levels. month-by-month capital invested ($M), 2019 versus 2020month-by-month Cumulative Cumulative month-by-month capital invested ($M), 2019 capital invested ($M), 2019 L EGEND 2020 versus versus 2020

Capital invested ($M)

2019 2019 2020 2020

30,000

20,000

10,000

Capital invested Capital invested ($M) ($M)

30,000

2019 L EGEND L EGEND 2020

40,000

30,000 20,000 20,000 10,000 10,000 0

January

NOTE: NOTE:

All Dealroom.co data excludes the following: All Dealroom.co data excludes the following: biotech, transactions, debt, NOTE: secondary biotech, secondary transactions, debt, lending capital, and grants. Please also note lending capital, and grants. Please also note All Dealroom.co data excludes that the data excludes Israel. the following: that the data excludes Israel. biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

SOU RCE:

January

February

January

February March

March

April

February

SOU RCE: SOU RCE:

April May

March

June

April

May July

May

June August

June

July September

July

August October

August

September November

October

Novemb

December

September

October

Novemb

02.1

Investment by Stage

We see a clear flight to quality; a concentration of capital matched with the dearth of growth more broadly. There is significant liquid capital in private markets and essentially zero growth outside of technology. This capital is seeking signal out of noise. Start-ups across health, education, remote work, online events, ecommerce are seeing staggering growth and are this signal. Capital is competing at a fierce level to latch onto their coattails.

Reshma Sohoni Seedcamp Co-Founder and Managing Partner

Looking at capital invested per quarter over an extended time horizon provides a longer-term view into the pattern of investment in Europe. The second quarter of 2020 was the softest quarter since Q3 2018 at $6.5B. The bounce back after the summer months is evident here too. Capital invested in the third quarter of 2020 Looking at invested per quarter over an extended time horizon provides a longer-term intoever the to equates to capital a record "Q3" for Europe, the extended second largest quarter of all atime, and only the secondview quarter Looking at capital invested per quarter over anover time horizon longer-term view into theview into the pattern of Looking atinvestment capital invested per quarter anquarter extended timeprovides horizon provides a longer-term pattern of in Europe. The second of 2020 was the softest quarter since Q3 2018 at $6.5B. get into double-digit billions. tech of companies aresoftest now raising insince one quarter used to be raised Looking atinvestment capital per quarter over anquarter extended time horizon provides a longer-term view into the pattern of in Europe. TheEuropean second 2020 was the quarter 2018 atwhat $6.5B. investment ininvested Europe. The second quarter ofis2020 was the softest quarter sinceQ3 Q3 2018 at $6.5B. The bounce back The bounce the summer months evident here Capital invested in2018 theat third 12of months just in aafter few years ago. pattern investment Europe. The second of 2020 was the too. softest quarter since $6.5B. Thein bounce backback after the summer months isquarter evident here too. Capital invested in the thirdQ3 quarter of 2020quarter of 2020 after theto summer months evident here too. Capital invested inof the third quarter of the 2020 equates to a record “Q3” a after record "Q3" forisEurope, the second largest quarter time, and second Theequates bounce summer months is evident here too. Capital invested in the thirdonly quarter of 2020 equates to aback record "Q3"the for Europe, the second largest quarter of all time, andallonly second quarter ever toquarter ever to for Europe, the second largest quarter of all time, and only the second quarter ever to get into double-digit billions. equates to a record "Q3" for Europe, the second largest quarter of all time, and only the second quarter ever to are now raising in one quarter what used get into double-digit billions. European tech companies get into double-digit billions. European tech companies are now raising in one quarter what used to be raised to be raised Capital invested ($B) per now raising in oneto quarter whatin used to be raised get12 into billions. European tech companies European tech companies areago. now raising in 12.5 oneare quarter what used be raised 12 months just a few years ago. in 12 double-digit months ayears fewquarter years in months just ajust few ago. in 12 months just a few years ago.

Capital invested ($B) per quarter Capital invested ($B) per quarter Capital invested ($B) per quarter

10.0 12.5

12.5

Capital Capital invested invested ($B) ($B)

10.0 10.0 7.5 7.5 5.0 5.0

Capital invested Capital ($B) invested ($B)

12.5

7.5 10.0

5.0 7.5

2.5 5.0

2.5 2.5 0.0

NOTE:

0.0

NOTE:All Dealroom.co data excludes the following:

biotech, secondary transactions, debt, NOTE: All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, secondary transactions, debt, All Dealroom.co dataexcludes excludes Israel. the following: that the data NOTE: lending capital, and grants. Please also note biotech, secondary transactions, debt, that the data excludes Israel. lending and grants. Please also note Allcapital, Dealroom.co data excludes the following: that the data excludes Israel.transactions, debt, biotech, secondary

0.0 2.5 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2 2016 Q1 Q1 2016 Q2Q2 2016 Q3 Q3 2016 Q4 Q4 2017 Q1 Q1 2017 Q2Q2 2017 Q3Q3 2017 Q4 Q4 2018 Q1 Q1 2018 Q2 Q2 2018 Q3 Q3 2018 Q4 Q4 2019 Q1 Q1 2019 Q2 Q2 2019 Q3 Q3 2019 Q4 Q4 2020 Q1 Q1 2020 Q2 Q2 2020 Q3 Q3 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2017 2018 2019 2020 0.02016

SOU RCE: 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2

SOU RCE: SOU RCE:

SOU RCE: It is also helpful to smooth out the volatility between quarters by looking at how the trailing 12-month run rate lending capital, and grants. Please also note ofthat investment develops from quarter to quarter. European tech enjoyed a steady upward trajectory through the data excludes Israel. 2019 and into early 2020 when the pandemic interrupted thatprovides growthacurve. The slowdown has been shortlived Looking at capital invested per quarter overvolatility an extended time horizon longer-term view into the It is is also also helpful tosmooth smooth outthe the between quarters bylooking looking at how the trailing 12-month It helpful to out volatility between quarters by at how the trailing 12-month runrun rate and Europe is now back on a growth path. pattern investment in Europe. second quarter quarters of 2020 was the softest quarter since 12-month Q3 2018 at run $6.5B. It israte alsoof helpful to smooth out theThe volatility between byEuropean looking at how the trailing rate trajectory of investment develops from quarter to quarter. tech enjoyed a steady upward of investment develops from quarter to quarter. European tech enjoyed a steady upward trajectory through The bounce back after the summer months is evident heretech too. enjoyed Capital invested the third quarterthrough of 2020 of investment develops from quarter to quarter. European a steadyin upward trajectory through 2019 and early 2020 when the pandemic that growth curve. The slowdown has 2019 into 2020 when thesecond pandemic interrupted growth curve. The slowdown has equates to a record "Q3"into for Europe, the largest quarter ofinterrupted allthat time, and only the second quarter ever tobeen shortlived 2019 andand into earlyearly 2020 when the pandemic interrupted that growth curve. The slowdown has been shortlived Trailing 12-month capital been shortlived and Europe ispath. now on40.0 a growth Europe is back now back on a growth path. are nowpath. raising in one quarter what used to be raised getand into double-digit billions. European techback companies and Europe is now on a growth

invested ($B) per quarter

in 12 months just a few years ago. Trailing 12-month capitalcapital Trailing 12-month invested ($B) per quarter Capital invested ($B) perquarter quarter invested ($B) per

Capital Capital invested invested ($B) ($B)

12.5

30.0 10.0

7.5 20.0

5.0

Capital invested Capital ($B) invested ($B)

40.0

40.0 30.0

30.0 20.0

20.0 10.0

10.0 2.5 0.0

NOTE:

0.0

NOTE:All Dealroom.co data excludes the following:

lending capital, and grants. Please also note biotech, secondary transactions, debt, that the data excludes Israel. Allcapital, Dealroom.co data excludes the following: lending and grants. Please also note that the data excludes Israel.transactions, debt, biotech, secondary

10.0 0.0

2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2

2016 Q1 Q1 2016 Q2Q2 2016 Q3Q3 2016 Q4 Q4 2017 Q1 Q1 2017 Q2Q2 2017 Q3Q3 2017 Q4 Q4 2018 Q1 Q1 2018 Q2 Q2 2018 Q3 Q3 2018 Q4 Q4 2019 Q1 Q1 2019 Q2 Q2 2019 Q3 Q3 2019 Q4 Q4 2020 Q1 Q1 2020 Q2 Q2 2020 Q3 Q3 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2017 2018 2019 2020 0.02016

SOU RCE: 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2

SOU RCE: SOU RCE:

SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel.

02.1

Investment by Stage

In the context of the current scale of capital invested into Europe, a small number of very large rounds can still make a material dent on the overall level of investment. The top 10 largest rounds alone raised $4.1B, equivalent to 16% of capital Europe in the into rst nine months of 2020. The three In the context of the currentinvested scale of in capital invested Europe, a small number oftop very largerounds roundsraised can still In the context ofcurrent the current scale of invested capital invested intoa Europe, a small number of very can large rounds can still In the context of the scale capital intoWhile Europe, small of very large rounds $1.8B, 7% of capital invested overlevel this of period. allThe of the top 10 rounds of 2020 toraised date still exceeded $250M make aormaterial dent on theof overall investment. topnumber 10 largest rounds alone $4.1B, equivalent make a material dent the overall of investment. top rounds 10 largest rounds alone raised $4.1B, make a material dent on theon overall level oflevel investment. The topwould 10The largest alone raised $4.1B, per round, none of this year' sEurope top three largest rounds have made the top three fromraised 2019. $1.8B, or 7% to 16% of capital invested in in the first nine months of 2020. The top three rounds equivalent toof 16% of capital invested in in Europe in nine the months rst nine oftop 2020. The top three equivalent to 16% capital invested in Europe the rst ofmonths 2020. The three rounds raisedrounds raised of or capital invested over this period. While all ofallthe toptop 10 of rounds ofof 2020 totodate exceeded $250M per round, $1.8B, 7% capital invested over this period. of the 10 the rounds 2020 date exceeded $250M $1.8B, orof7% of capital invested over this While period. While all top 10 rounds of 2020 to date exceeded $250M none of this year’ syear's top rounds would have made the three from 2019. from 2019. per per round, none of thisof top three rounds would have madehave the top top three from Total capital invested ($B)three round, none this year' slargest toplargest three largest rounds would made the top2019. three 40.0

per year, divided by top 3, 10, and all other deals Total capital invested ($B) Total capital invested ($B) per year, divided by top 3, per year, divided by top 3, L EGEND 10, and all other deals 10,All and alldeals other deals other

other deals Top 10 All deals Top 3 deals Top 10 deals

Top 3 deals

30.0

20.0

10.0

Total capital Total invested capital ($B)invested ($B)

L EGEND All other deals Top 3 deals

Total capital invested ($B)

L EGEND Top 10 deals

40.0

40.0 30.0

30.0 20.0

20.0 10.0

10.0 0.0 0.0

NOTE: NOTE:All Dealroom.co data excludes the following:

biotech, secondary transactions, All Dealroom.co data excludes the following:debt, lending capital, grants. Please biotech, secondary transactions, debt, also note the NOTE: data excludes Israel. 2020 based lending capital, grants. Please also note the on data up to September 2020. Top 10data deals the data excludes Israel. 2020 based on upshow All Dealroom.co data excludes the following: to September 2020.value Top 10of deals show the deals. incremental the top 4-10 biotech, secondary transactions, debt, incremental value of the top 4-10 deals. lending capital, grants. Please also note the data excludes Israel. 2020 based on data up to September 2020. Top 10 deals show the incremental value of the top 4-10 deals.

0.0

SOU RCE:

2016

2017

2016

2017

2016

2018 2018

2017

2019 2019

2018

2019

SOU RCE:

State of European Tech 2020 report launch

2020

02.1

Investment by Stage

is also helpful towhat see what happened at different by looking lens of investment It is It also helpful to see happened at different stagesstages by looking throughthrough the lensthe of investment by round by round size. The greatest overall impact is evident in the smallest rounds of between $0-2M, it is very size.It The greatest overall impact is evident in the smallest rounds of between $0-2M, though it is very is also helpful to see what happened at different stages by looking through the lens ofthough investment by round important to note that these rounds experience the greatest adjustment due to reporting lag. The total important to note that these rounds experience the greatest adjustment due to reporting lag. The total size. The greatest overall impact is evident in the smallest rounds of between $0-2M, though it is very number of rounds will be adjusted materially higherhigher in the following monthsmonths once allonce the data is collated. To number of to rounds will bethese adjusted materially in the following all reporting the data islag. collated. To important note that rounds experience the greatest adjustment due to The total put this in context, more than 2,000 additional rounds have been captured for 2019 since we published last put this in more 2,000 materially additional rounds have captured for 2019 since we data published last To number ofcontext, rounds will bethan adjusted higher in thebeen following months once all the is collated. year's report. Seed investment, as represented by rounds of between $2-5M, has been remarkably strong and, put this in context, more than 2,000 additional rounds have been captured for 2019 since we published last year’ s report. Seed investment, as represented by rounds of between $2-5M, has been remarkably strong and, once all is �nalised, could well exceed 2019 levels. An important slowdown is evident in rounds of $20-50M. At report. Seed investment, represented rounds of between $2-5M, hasin been remarkably strong and, once is finalised, could well 2019 levels. An important slowdown is evident rounds of $20-50M. thisyear's stage,all companies typically needexceed to as show growth and,by with the pandemic distorting typical user and buyer once is �nalised, could wellchallenging exceed 2019 levels. An important slowdown isdistorting evident rounds of and $20-50M. At behaviours, that likely created more conditions to raise in this bracket. If the growth isin not At thisallstage, companies typically need to show growth and, with the pandemic typical user this stage, companies typically need to show growth and, with the pandemic distorting typical user obvious, many investors will show caution. 2020 has also seen fewer $250M+ rounds versus 2019, though that buyer behaviours, that likely created more challenging conditions to raise in this bracket. If the growth isand notbuyer hasbehaviours, been offset by a record $100-250M rounds that have raised records amount of capital. that likelynumber createdofmore challenging conditions to raise in this bracket. If the growth is not

Capital invested ($B) / # of deals

Capital invested ($B) Capital invested ($B) / # of deals

obvious, many investors will show caution. 2020 has also seen fewer $250M+ rounds versus 2019, though that obvious, many investors will show caution. 2020 has also seen fewer $250M+ rounds versus 2019, though that has been offset by a record number of $100-250M rounds that have raised records amount of capital. has beenhelpful offset by a record that have raised records amount of capital.by round DATA of SET $100-250M :at CA different PITA L INVESTrounds ED ( $ B) It is invested also to see whatnumber happened stages by looking through the lens of investment Capital ($B) and number of deals size. The greatest overall impact is evident in the smallest rounds of between $0-2M, though it is very by round size and by year important to note that these rounds experience the due to reporting lag. The total DATA SET ($B) : CA PITAgreatest L INVEST EDadjustment ( $ B) Capital invested ($B) Capital invested number of rounds will be adjusted materially higher in the following months once all the data is collated. To L EGEND and number of deals $0M-$2M put context, more than 2,000 40.0 additional rounds have been captured for 2019 since we published last by this roundinsize and by year It is also helpful to see what happened at different stages by looking through the lens of investment by round $2M-$5M report. Seed investment, as represented by rounds of between $2-5M, has been remarkably strong and, size.year's The greatest overall impact is evident in the smallest rounds of between $0-2M, though it is very $5M-$10M L EGEND once all �nalised, could wellexperience exceed 2019 levels. importantdue slowdown is evident rounds of $20-50M. At important to is note that these rounds the 40.0 greatestAn adjustment to reporting lag. Thein total 30.0 $10M-$20M $0M-$2M this stage, companies typically need to show growth and, with the pandemic distorting typical number of rounds will be adjusted materially higher in the following months once all the data is collated. To user and buyer $20M-$50M $2M-$5M behaviours, that likely more challenging conditions to raise in this bracket. If the growth is not been captured for 2019 since we published last put $50M-$100M this in context, more thancreated 2,000 additional rounds have $5M-$10M year's report. Seed investment, as represented by rounds of between $2-5M, has been remarkably strong and, obvious, many investors will show caution. 2020 has also seen fewer $250M+ rounds versus 2019, though that 20.0 $100M-$250M 30.0 $10M-$20M once all is �nalised, could well exceed 2019 levels. An important slowdown is evident in rounds of $20-50M. At has been offset by a record number of $100-250M rounds that have raised records amount of capital. $250M+

$20M-$50M this stage, companies typically need to show growth and, with the pandemic distorting typical user and buyer $50M-$100M 10.0 behaviours, that likely created more challenging conditions to raise in this bracket. If the growth is not SET : CA PITA L INVEST ED ( $ B) Capital invested ($B) will show caution. 2020DATA $100M-$250M obvious, many investors has20.0 also seen fewer $250M+ rounds versus 2019, though that and number of deals $250M+ has been offset by a record number of $100-250M rounds that have raised records amount of capital.

by round size and by year

lending capital, and grants. Please also note $2M-$5M that the data excludes Israel. 2020 is annualised based on data to September 2020. L EGEND $5M-$10M

0.0 Number of deals 40.0

$50M-$100M

$100M-$250M $250M+

# of deals Capital invested ($B) / # of deals

$50M-$100M lending capital, and grants. Please also note $100M-$250M annualised based on data to September 2020. $20M-$50M $250M+

2018

2019

2020

40.0

$0M-$2M $10M-$20M NOTE:

biotech, secondary transactions, debt, $5M-$10M

2017

SOU RCE:

$2M-$5M $20M-$50M data excludes the following: All Dealroom.co $10M-$20M that the data excludes Israel. 2020 is

2016

10.0 DATA SET : NU M BER OF DEA L S

30.0

20.0

Capital invested ($B) / # of deals

NOTE: Capital invested ($B) and L EGEND number of deals by round size All Dealroom.co data excludes the following: $0M-$2M biotech, and bysecondary year transactions, debt,

0.0

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

30.0

SOU RCE: 20.0

10.0

0.0

NOTE:

0.0

All Dealroom.co data excludes the following:

NOTE:biotech, secondary transactions, debt,

2017

SOU RCE:

lending capital, and grants. Please also note

All Dealroom.co data excludes the following: that the data excludes Israel. 2020 is biotech, secondary transactions, debt, dataalso to September 2020. lendingannualised capital, andbased grants.on Please note that the data excludes Israel. 2020 is annualised based on data to September 2020.

2016

SOU RCE:

2018

2019

2020

02.1

Investment by Stage

SH ARE OF C APITAL IN VESTED A small number of very large rounds have an outsized impact SHA R E OF C A PITA L INVESTED

SHA R E OF C A PITA L INVESTED A small numberinvestment of very largelevels roundsin have an outsized onsmall overall Europe and have the potential A number of very large rounds have an outsized impact on overall investment levels in Europe and have to significantly move the needle on in total investment. ontooverall investment levels Europe theimpact potential signi�cantly move the needle on total and have The number of rounds that are greater than $100M in size the potential to signi�cantly needle on total investment. The number of rounds move that arethe greater than of all capital invested accounted by $20M+ rounds account less than 1%than total but greater represent more investment. The for number of rounds that are than $100M in size for account less 1% of deals, total deals, but of all capital accounted ofinvested all capital investedby $20M+ rounds represent more 30% offor total capital in thedeals, $100M in size account less thaninvested 1% of total than 30% ofthan total capital invested in the region. Thebut largest accounted for by $20M+ rounds region. The ($20M+) largest rounds ($20M+) represent 8% but forinclose represent more than 30% of only total capital invested the to rounds only represent 8% but account account for close to 70% of all capital invested in the region. largestinvested rounds ($20M+) only represent 8% but 70% of The all capital in the region. region.

70%70% 70%

account for close to 70% of all capital invested in the region.

Share of capital invested and number of deals by round size and by yearof capital invested and Share

DATA SET : CA PITA L INVEST ED

DATA SET : CA PITA L INVEST ED Capital invested number of deals by round size L EGEND by year A and small number of very large rounds have an outsized $0M-$2M

SHA R E OF C A PITA L INVESTED

70%

% of capital invested / # of deals

%of capital invested % of capital invested / # of deals

impact on overall investment levels 100 in Europe and have $2M-$5M L EGEND the potential to signi�cantly move the needle on total $5M-$10M $0M-$2M $10M-$20M investment. The number of rounds that are 100 greater than 75 of all capital invested accounted by $20M+ rounds $2M-$5M $20M-$50M $100M in size account for less than 1% of total deals, but SHA R E OF C A PITA L INVESTED $5M-$10M A small number of very large rounds have an outsized $50M-$100M represent more than 30% of total capital invested in the impact on overall investment levels in Europe $10M-$20M 75 50 and have $100M+ region. The largest rounds ($20M+) only represent 8% but the potential to signi�cantly move the needle on total $20M-$50M account for close to 70% of all capital invested in the investment. The number of rounds that are greater than $50M-$100M of all capital invested accounted by $20M+ rounds region. 25 deals, but $100M in size account for less than 1% of total 50 $100M+

70%

represent more than 30% of total capital invested in the region. The largest rounds ($20M+) only represent 8% but DATA SET : CA PITA L INVEST ED Share capital and 0 account forofclose toinvested 70% of all capital invested in the 252016 2017 number of deals by round size region.

2018

2019

2020

NOTE:and by year

and by year

$2M-$5M NOTE:

SOU RCE: DATA SET : NU M BER0OF ROU NDS

$5M-$10M data excludes the following: L EGEND All Dealroom.co biotech, secondary transactions, debt, $0M-$2M $10M-$20M

100

$5M-$10M $50M-$100M

$100M+

$20M-$50M

$50M-$100M $100M+

# of rounds % of capital invested / # of deals

lending capital, and grants. Please also note $2M-$5M that$20M-$50M the data excludes Israel. $10M-$20M

2016

2017

2018

2019

2016

2017

2018

2019

100 Number of rounds

% of capital invested / # of deals

All Dealroom.co data excludes the following: biotech, secondary transactions, Share of capital investeddebt, and L EGEND lending capital, and grants. Please also note number of deals by round size that the data excludes Israel. $0M-$2M

SOU RCE: 75

NOTE: All Dealroom.co data excludes the following: NOTE:biotech, secondary transactions, debt, lending capital, and grants. Please also note All Dealroom.co data excludes the following: that the datatransactions, excludes Israel. biotech, secondary debt,

2016

2017

SOU RCE: SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel.

2018

2019

2020

02.1

Investment by Stage

This chart serves to underline this outsized impact that a small number of rounds have in driving the overall investment trend. The top 10% of rounds by size account for greater than 75% of all capital invested in the region. This chart serves to underline this outsized impact that a small number of rounds have in driving the overall This chart serves to underline this outsized impact that afor small number of75% rounds in driving theinoverall investment trend. The top of rounds bythat size account greater than of allhave capital invested the This chart serves to underline this10% outsized impact a small number of rounds have in driving the overall 80.0 investment trend. The top 10% of rounds by size account for greater than 75% of all capital invested in the region. region. investment trend. The top 10% of rounds by size account for greater than 75% of all capital invested in the Share of deals and share of

region. capital invested, 2016-2020

70.5% 80.0

Share of deals and share of

% of deals

% of capital % of capital investedinvested

60.0

70.5%

% of deals / % of capital invested

% of capital invested L EGEND

L EGEND

% of deals /%%ofofdeals capital / %invested of capital invested

80.0

L EGEND Share of deals and share2016-2020 of capital invested, of deals 2016-2020 capital % invested,

60.0

40.0

20.0

60.0 40.0

40.0 18.9%

20.0

13.5%

NOTE:

13.5%

8.9%

6.4%

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: capital, lending and grants. Please also note All Dealroom.co data excludes the following: biotech, secondary debt,2020 is based on that the datatransactions, excludes Israel. All Dealroom.co data excludes the following: lending capital, and grants. Please also note data up to 30 September 2020. biotech, secondary debt, that the data excludes Israel.transactions, 2020 is based on data up to 30 September 2020. lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to 30 September 2020.

8.9%

6.4%

20.0 0.0

0.0

13.7%

13.5%

$0M-$2M

$2M-$5M

0.0

9.6%

$5M-$10M

$0M-$2M

NOTE:

6.7%

$2M-$5M

18.9%

3.0%

18.9%

12.4%

13.7%

0.9%

9.6% $5M-$10M $10M-$20M $20M-$50M 4.8% 6.7% 3.0% 4.8% 0.9% 0.5% 3.0% $10M-$20M

$20M-$50M

$5M-$10M

$50M-$100M

$10M-$20M

15.8%

14.5%

12.4% $50M-$100M

0.5%

14.5%

0.2%

$100M-$250M

$250M

0.9%

$250M+ 0.5%

$50M-$100M

0.2%

$100M-$250M

$250M

SOU RCE: SOU RCE:

SOU RCE:

It’s the most exciting time yet for European companies at the growth stage. There’s more talent and capital in the ecosystem than ever before, with more companies across Europe reaching growth stage and then achieving increasingly large market caps. A good recent example is Poland’s Allegro. Europe really is now and the fact Europe is no longer a “secret” is a great positive for entrepreneurs. Investors will be spending more time investing in their own capabilities to add value beyond capital.

Carolina Brochado EQT Partner

HARDER TO R AISE VENTURE CAPITAL

55%

The survey has consistently asked founders to share their perspective on the fundraising climate in Europe. The survey has consistently founders to share their perspective on to raise venture capital funding. �n This year marks the �rst yearasked that more founders stated that it �as harder of founders stated it was the fundraising climate in Europe. This year marks the first year that more The2019 survey has consistently asked founders share their perspective on the fundraising climate in Europe. the survey, just 26% of founders felt theto landscape had become more challenging. This year, that harder tonumber raise venture founders stated that itfounders. was harder to raise venture capital funding. In the to raise venture capital This year marks the �rst year that more founders stated that it �as harder funding. �n in 2020 has jumped to 55% of capital funding Thethe survey has consistently asked founders share their perspective on themore fundraising climate in Europe. 2019 survey, justjust 26%26% of founders felttofelt the landscape hadhad become 2019 survey, of founders the landscape become more challenging. This year, that number This year marks the �rst year that more founders stated that it �as harder to raise venture capital funding. �n SOURCE: has to 55% of founders. This year, that has jumped to 55% ofonfounders. The jumped survey hasjust consistently askednumber founders to share their perspective the fundraising climate in year, Europe. thechallenging. 2019 survey, 26% of founders felt the landscape had become more challenging. This that number Is it easier or harder to raise

year to marks �rst year that more founders stated that it �as harder to raise venture capital funding. �n has This jumped 55%the ofEurope founders. venture capital in

the 2019 survey, just 26% of founders felt the landscape had become more challenging. This year, that number than it was 12harder months Is itjumped easier or toago? raise 2019 Survey has to 55% of founders. Europe Is it venture easier or capital harder toinraise L EGEND than it wasin12Europe months ago? venture capital Is it easier or harder to raise

than venture it Harder was 12 months ago? capital in Europe

Unchanged it was 12 months ago? Lthan EGEND

L EGEND

Easier Harder

2019 Survey

2019 Survey 2019 Survey

L EGEND Harder

Unchanged

Harder Unchanged

2020 Survey

Unchanged Easier

Easier

2020 Survey

% of founders 0 0

NOTE: NOTE:

Founders respondents only. Numbers may NOTE: Founders respondents only. may not add up to 100 due toNumbers rounding.

NOTE: not add up to 100 due to rounding. Founders respondents only. Numbers may not add up to 100 due to rounding.

SOU RCE: SOU RCE:

SOU RCE:

Founders respondents only. Numbers may not add up to 100 due to rounding.

40 50

5060

30 % of founders % of founders

70 60

8070

% of founders

90 80

100

0.2%

$100M-$250M

$20M-$50M

14.5%

12.4%

4.8%

13.7%

6.7% 8.9% $2M-$5M

$0M-$2M 6.4%

9.6%

100

02.1

Investment by Stage

As a consequence, it is not surprising that founders, when asked, indicated that the most important support their existing investors can provide is with follow-on fundraising, well as with progressing the commercial As aa consequence, consequence, is not notsurprising surprising thatfounders, founders,when whenasked, asked,as indicated thatthe themost mostimportant As itit is that indicated that support development of their companies. important support their existing investors provide is indicated with follow-on fundraising, as well existing investors can provide is withcan follow-on fundraising, as well as with progressing the commercial As atheir consequence, it is not surprising that founders, when asked, that the most important support as with progressing the commercial development of their theirdevelopment existing investors can provide is with follow-on fundraising, ascompanies. well as with progressing the commercial of their companies. Fundraising

In which areas do companies. you think development of their support from investors In most whichimportant? areas do you think is In which areasfrom do you think support investors support from important? investors is most

Partnerships (securing new clients) Fundraising

48%

Sales model (go to market strategy) Fundraising Partnerships (securing new clients)

35%

Partnerships (securing new clients) Founder leadership coaching

is most important?

29%

Sales model (go to market strategy)

Sales model (go to market strategy) Cashflow & forecasting

35% 21%

Founder leadership coaching

17%

21%

Community (connect with other founders) Team (hiring, layoffs, policy) Team (hiring, layoffs, policy)

15%

Diversity & Inclusion

Founder wellbeing support Founder wellbeing support 10% Diversity & Inclusion 4% Diversity & Inclusion 0

15%

18%

Founder wellbeing support Marketing & communications Marketing & communications

21%

18% 17%

17%

Marketing & communications

Community (connect with other founders) Community (connect with other founders)

10%

18%

15%

10% 10

40 % of founders

% of founders

SOU RCE:

NOTE: Founders respondents only. Numbers do not

add to 100 as respondents could select up to NOTE:

40 % of founders

NOTE:

Founders respondents three options. only. Numbers do not add to 100 as respondents could only. selectNumbers up to Founders respondents do not three options. add to 100 as respondents could select up to

35%

29%

Team (hiring, layoffs, policy) Cashflow & forecasting

Cashflow & forecasting

65%

48%

SOU RCE:

three options.

An important driver of increased investment into Europe is not just an overall growth in the number of rounds over time, butdriver also material increases in the sizes of rounds at different stages. Seedinrounds, for example, An important of increased investment into Europe is not just an overall growth the number of An important driver into Europeinis2020. not just in the number of right rounds have increased fromofa increased median of investment $0.7M in 2016 to $1.2M Thisanisoverall worthygrowth of an analysis in its own to rounds over time, but also material increases in the sizes of rounds at different stages. Seed rounds, for over time, butisalso materialbut increases inamongst the sizes of different stages. Seed rounds, for example, unpack what happening re�ects, other things, the fact that Seed have raised An important driver of increased investment into Europe is notrounds just an at overall growth inleading the number offunds rounds example, havematerial increased from aof median of $0.7M 2016 to $1.2M in 2020. This isof worthy of an analysis in right to have aincreases median in are 2016 toin$1.2M in 2020. This is an analysis its own overlarger time,increased but also in $0.7M the sizes of rounds at different stages. Seed rounds, forarrival example, and largerfrom amounts, Series A funds moving down the stack, asworthy well as the ofinleading US VCs itsincreased own to unpack what happening but reflects, amongst other things, theinfact that leading Seed have from aamedian ofbut $0.7M in 2016 $1.2M inother 2020.atthings, This is worthy of an analysis its own right unpack what is happening re�ects, amongst the fact that leading Seed funds raised that areright building foothold inisEurope byto participating Seed. More than anything, however, it to ishave also a funds have raised larger and larger amounts, Series A funds arethe moving down thefunds stack, as raised wellof asleading the arrival unpack what is of happening but re�ects, amongst things, the fact that leading Seed have larger and larger amounts, Series A�repower fundsother are moving down stack, as well as the arrival US VCs re�ection founders building the to compete on the global stage. larger and larger amounts, Series A funds are moving down the stack, as well as the arrival of leading US VCs of leading US VCs that are building a foothold in Europe by participating at Seed. More than anything, that are building a foothold in Europe by participating at Seed. More than anything, however, it is also a thathowever, are building foothold in Europeof participating at Seed. than anything, however, it is also astage. itofisafounders also a reflection founders building theMore firepower compete on the global re�ection building by the �repower to compete on theto global stage. Median roundbuilding size re�ection ofSeed founders the �repower to compete on the global stage. 1.2

($M) by year

$1.1M

Median Median Seed Seed round round size size by year ($M) ($M) by year

1.2 1.0

Median round size ($M)

1.0

0.7

0.5

Median round Median sizeround ($M) size ($M)

1.2

$1.2M $1.1M

1.0 0.7

$0.8M $0.7M

$0.7M $0.8M

0.7$0.7M 0.5

$1.1M

$0.7M

$0.8M

$0.7M

0.5 0.2

0.2

0.2 0.0

NOTE:

0.0

NOTE:All Dealroom.co data excludes the following:

biotech, secondary transactions, debt,

All Dealroom.co data excludes the following: NOTE: lending capital, and grants. Please also note biotech, secondary transactions, debt, the data excludes Israel. is based on lendingthat capital, and grants. Please also2020 note All Dealroom.co data excludes the following: data up to September 2020. that the data excludes Israel.transactions, 2020 is based on biotech, secondary debt, data uplending to September 2020. capital, and grants. Please also note

2016

2017

2016

2017

2016

2017

SOU RCE: SOU RCE:

SOU RCE:

that the data excludes Israel. 2020 is based on data up to September 2020.

2018 2018

2019 2019

2018

2020

2019

02.1

Investment by Stage

The later stages (Series B+) also saw increased median round sizes in 2020 versus 2019, with a 30% uplift for median Series B and Series C rounds and almost double for Series D.

The later later stages stages(Series (SeriesB+) B+)also alsosaw sawincreased increasedmedian medianround roundsizes sizesinin2020 2020 versus 2019, The versus 2019, with a 30% uplift for with a 30% uplift for median Series B and Series C rounds and almost double for Series D. median Series B and Series C rounds and almost double for Series D. DATA SET : SERIES B Median round size ($M) by round

stage and by year

Median round size ($M) by round stage and by year

Series B DATA SET : SERIES B $15.9M 15.0 $12.1M

15.0

10.0

5.0

$13.2M $12.1M

10.0

$10.0M $8.8M

The later stages (Series B+) also saw increased median round sizes in 2020 versus 2019, with a 30% uplift for median Series B and Series C rounds and almost double for Series D. 0.0 5.0 2016

NOTE:

Median round size ($M) by round

All Dealroom.co data excludes the following: stage and by year biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

2017

2018

2019

2020

DATA SET : SERIES C SOU RCE: C Series

0.0

2016

2017

2018

2019

40.0

Median round size ($M)

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

$15.9M

$10.0M

$8.8M

Median round size ($M)

$13.2M

30.0

2020

$38.5M

$29.7M

SOU RCE: $25.0M

20.0

$15.4M The later stages (Series B+) also saw increased median round sizes in 2020 versus 2019, with a 30% uplift for $12.7M median Series B and Series C rounds and almost double for Series D. 10.0

The later stages (Series B+) also saw increased median round sizes in 2020 versus 2019, with a 30% uplift for DATA SET : SERIES B Median round size ($M) by round median Series B and Series C rounds and almost double for Series D. stage and by year

Median round size ($M) by round All Dealroom.co excludes the following: stage and bydata year

biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

2016

2017

2018

2019

2020

DATA SET : SERIES D

$15.9M SOU RCE:D Series

15.0 $13.2M

Median round size ($M)

80.0

60.0

40.0

Median round size ($M)

NOTE:

0.0

$80.0M

$12.1M

10.0

$10.0M $8.8M

$41.0M

5.0 $24.2M $19.8M

20.0 $13.3M

0.0

NOTE:

0.0

2016

2017

2016

2017

NOTE:All Dealroom.co data excludes the following:

biotech, secondary transactions, debt,

All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, secondary transactions, debt, that the data excludes Israel. 2020 is based on lending capital, and grants. Please also note data to September 2020. that the dataup excludes Israel. 2020 is based on data up to September 2020.

SOU RCE: SOU RCE:

2018 2018

2019 2019

2020

02.2

Investments by Geography & Industry

Overall investment trends across Europe are clearly driven by the underlying degree of startup activity in the region. There are more than 140,000 startups in Europe, of which over 43,000 have raised at least one recorded round of funding. The universe of companies at each level of funding narrows signi cantly. While Overall investment trends across Europe are clearly driven by the underlying degree of there around 15,000 European startupsare that havedriven raisedby between $0-2M, there areofjust 74 that have in raised Overallare investment trends across Europe clearly the underlying degree startup activity the Overall investment trends clearly by the underlying degree of startup activity in the startup activity in more theacross region. Thereare are moredriven than 140,000 in Europe, of which over more than $250M. region. There are thanEurope 140,000 startups in Europe, ofstartups which over 43,000 have raised at least one region. There are raised more than 140,000 startups in Europe, of overThe 43,000 have raised at least one 43,000 have at least one round of which funding. universe of companies atsigni cantly. While recorded round of funding. The recorded universe of companies at each levelnarrows of funding recorded round of funding. The universe of companies at each level of funding signinarrows cantly. While each level of funding narrows significantly. While there are around 15,000 Europeanare startups there are around 15,000 European have raised between $0-2M, justraised 74 that have raised there are around 15,000 European startupsstartups that havethat raised between $0-2M, there are justthere 74 that have Distribution of European 150,000 144,483have raised more than $250M. that have raised between $0-2M, there are just 74 that more than $250M. morestart-ups than $250M. by total amount of funding raised

# of startups

of funding raised

100,000

50,000

144,483 150,000

# of startups

150,000

# of startups

Distribution of European Distribution of European start-ups by total start-ups byamount total amount of funding raised

100,000

100,000 50,000

NOTE: All Dealroom.co data excludes the following: NOTE: biotech, secondary transactions, debt, All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, secondary debt, that the datatransactions, excludes Israel. NOTE: lending capital, and grants. Please also note

43,201

50,000 0 0

144,483

SOU RCE:

3,718

1,970

Total startups 15,358 Total funded $0M-$2M $2M-$5M $5M-$10M 3,718 startups 1,970 1,345 961 15,358

Total startups Total funded startups

15,358 43,201

$0M-$2M

$2M-$5M

Total startups Total funded startups

$5M-$10M

$0M-$2M

$10M-$20M

1,345

961

338

181

$10M-$20M

$20M-$50M

$50M-$100M

$100M-$250M

$20M-$50M

338

181

$50M-$100M

$100M-$250M

$250M+

3,718

1,970

1,345

961

338

181

$2M-$5M

$5M-$10M

$10M-$20M

$20M-$50M

$50M-$100M

$100M-$250M

SOU RCE:

that the data excludes Israel.

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

SOU RCE:

State of European Tech 2020 report launch

Photo by: Julius Konttinen

02.2

Investments by Geography & Industry

Start-up activity at the country level varies signi�cantly in terms of density across Europe. On a populationStart-up activity atisthe level varies significantly terms of density acrossofEurope. On a populationadjusted basis, Estonia thecountry clear European capital of start-ups;inadjusted population 1.3M, Start-up activity at the country level varies signi�cantly in termsfor of its density acrossjust Europe. On a populationadjusted basis, Estonia is the clear European capital of start-ups; adjusted for its population Estonia has 4.6x as many start-ups per capita as the European average. Estonia's efforts to build a start-upadjusted basis, Estonia is the clear European capital of start-ups; adjusted for its populationof ofjust just1.3M, 1.3M, friendly environment have beenstart-ups well documented and they appear to be delivering; Pipedrive' sefforts recent to build a startEstonia has 4.6x as many per capita as the European average. Estonia’ s Estonia has 4.6x as many start-ups per capita as the European average. Estonia's efforts to build a start-upinvestment fromenvironment Vista Equity Partners at a well $1.5Bdocumented valuation means that Estonia has now played a major role in s recent up-friendly have been they appear delivering; Pipedrive’ friendly environment have been well documented andand they appear to to bebe delivering; Pipedrive's recent the building of �ve European $1B+ companies.

investment from means that Estonia has now played a major rolerole in $1.5Bvaluation valuation means that Estonia has now played a major investment fromVista VistaEquity EquityPartners Partnersatataa$1.5B in the building five European $1B+ companies. the building of of �ve European $1B+ companies.

Number of start-ups per capita by country

L EGEND

DATA SET : T OP 2 0

Top 20

Start-ups per 1M population European average

750

Po rt ug

st ria Au

Sp ai

Sl ov en

Ita

Fr an

Cy pr us

No rw

rm an

do m

Li th

Un i

te d

er la

ed en

itz

nd s

rla

Fi n

Ne th e

nm ar k

Ire

Es to ni

Estonia has 4.6x as many start-ups per capita as the European average. Estonia's efforts to build a start-up0 friendly environment have been well documented and they appear to be delivering; Pipedrive's recent 250 SET : T OPmeans 20 investment Vista Equity Partners at a $1.5BDATA valuation that Estonia has now played a major role in Numberfrom of start-ups per capita the building of �ve European $1B+ companies. by country

La tv ia

# of startups

L EGEND Start-up activity at the country level varies signi�cantly in terms of density across Europe. On a populationStart-ups per 1M population adjusted basis, Estonia is the clear European capital of start-ups; adjusted for its population of just 1.3M, European average 500 750 as the European average. Estonia's efforts to build a start-upEstonia has 4.6x as many start-ups per capita friendly environment have been well documented and they appear to be delivering; Pipedrive's recent Start-up activity at the Vista country level varies signi�cantly in terms of density across Europe. On a populationinvestment from Equity Partners 250 at a $1.5B valuation means that Estonia has now played a major role in adjusted basis, Estonia the clear European capital500 of start-ups; adjusted for its population of just 1.3M, the building of �veisEuropean $1B+ companies.

st ria Au

Sp ai

Sl ov en

La tv ia or La gi tv a ia

Ita

Cy pr us

ce Fr an

ay No rw

rm an

a ni ua

Li th

do m

te d

nd er la Un i

itz

ed en Sw

nd s rla

750

Ne th e

la Fi n

nm ar k

la Ire

Es to ni

SOU TopRCE: 20+ 200

NOTE: per 1M population Start-ups European average data excludes the following: All Dealroom.co

150 # of startups

biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Includes countries with population over 1M.

DATA SET : T OP 2 0 +

# of startups

Number of start-ups per capita

NOTE:L EGEND

All Dealroom.co dataper excludes the following: Start-ups 1M population by country biotech, secondary transactions, debt, lending capital, and grants. Please also note European average that the data excludes Israel. Includes L EGEND with population over 1M. countries

500

SOU RCE: 100

250

Bo sn i

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, secondary debt,Includes that the datatransactions, excludes Israel. lending capital, and grants. Please also note countries with population over 1M. NOTE:

SOU RCE: SOU RCE:

that the data excludes Israel. Includes countries with population over 1M.

Estonia is a country that has never had much wealth, a huge internal market or any mineral resources, but we have a lot of entrepreneurial people. We are the pathfinders in the ICT and startup world today, searching for new solutions to get things done cheaper and faster. And the government supports it. In 2016, startup founders foresaw the growth of the startup sector and the additional need for talented people in the ecosystem. As a potential solution, they suggested a startup visa program, which was implemented already 11 months after the initial idea by entrepreneurs and the government working together. Today, with the program having been active for 3.5 years, more than 2,500 start-up founders and employees from outside the EU have gained the right to relocate to Estonia to be part of our start-up ecosystem.

Eve Peeterson Startup Estonia Head

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02.2

Investments by Geography & Industry

This chart compares the density of entrepreneurial activity within a country, as measured by the ratio of startups capita with the of per capita investment. Unsurprisingly, the data follows anby intuitive trendline; Thisper chart compares thelevel density of entrepreneurial activity within a country, as measured the ratio of This chartper compares thenumber density entrepreneurial activity within a country, asdata measured the ratio of startthe denser thecapita relative ofofof start-ups activity within aUnsurprisingly, country, the greater thefollows level by of capita start-ups with the level per capita investment. the anper intuitive ups percompares capita with the level per capita investment. Unsurprisingly, the databyfollows anofmaterially intuitive This chart density of of entrepreneurial within a Sweden, country, asfor the ratio start- trendline; investment. isthe unsurprisingly not a perfect correlation. example, has seen trendline; theItdenser the relative number ofactivity start-ups activity within ameasured country, the greater the level ofhigher per upslevels perdenser capita with the level of per capita investment. Unsurprisingly, the data follows an intuitive trendline; the the relative number of start-ups activity within a country, the greater the level of capita of investment per capita relative toathe density of startup activity.for Estonia, although it per ranks amongst capita investment. It is unsurprisingly not perfect correlation. Sweden, example, has seen materially theinvestment. denser the relative number of start-ups within a country,Sweden, the greater level of has per capita It is'per unsurprisingly not aactivity perfect forthe example, seen materially higher the highest for capita investment levels',correlation. is arguably underinvested relative to the density ofitstart-up higher levels of investment per capita relative to the density of startup activity. Estonia, although ranks investment. It is unsurprisingly not a perfect correlation. Sweden, for example, has seen materially higher levels of investment per capita relative to the density of startup activity. Estonia, although it ranks amongst activity in the country, although the gap is notofasstartup pronounced as in nearby Lithuania. also stands out as a levels of investment per capita to investment the density Estonia, although itrelative ranksItaly amongst thefor highest for ‘prelative er capita isactivity. arguably underinvested to the density of the highest 'per investment levels', islevels’, arguably underinvested relative to theamongst density of start-up that has an capita underdeveloped private capital market. thecountry highest for 'per capita investment levels', is arguably underinvested relative to the density of start-up start-up activity in the country, although the gap is not as pronounced as in nearby Lithuania. Italy also activity in the country, although the gap is not as pronounced as in nearby Lithuania. Italy also stands out as a activity in the country, although the gap is not as pronounced as in nearby Lithuania. Italy also stands out as a stands out ashas a country that has an underdeveloped country an underdeveloped privatemarket. capital private market.capital market. country thatthat has an underdeveloped private capital

Capital invested Capital invested ($) per capita ($) per capita

SCAN TO UNLOCK ADDITIONAL DATA

300.0 300.0 Capital invested ($) per capita

Number of start-ups per 1M population versus capital invested ($)start-ups perper capita Number of Number of start-ups 1M per 1M population versus capitalcapital population versus invested ($) per invested ($)capita per capita

200.0

100.0

0.0

Sweden

300.0 200.0 200.0

Estonia

100.0 100.0 0.0

Italy

0.0 -100.0 0.0

-100.0 0.0

100.0

-100.0 0.0

100.0

200.0

Lithuania 200.0

300.0

400.0

500.0

400.0

600.0

500.0

700.0

# of start-ups per 1M inhabitants

600.0

700.0

800

600.0

700.0

800

700.0

800

800.0

900.0

# of start-ups per 1M inhabitants

100.0

200.0

300.0

NOTE:NOTE:

400.0

500.0

# of start-ups per 1M inhabitants

All Dealroom.co data excludes the following: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, biotech, secondary transactions, debt, NOTE: lending capital,capital, and grants. also note also note lending andPlease grants. Please that the data excludes Israel. All Dealroom.co data excludes that the data excludes Israel. the following:

SOU RCE:

SOU RCE: SOU RCE:

biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

Another interesting way to highlight the relative maturity of the private capital markets in different countries is Another interesting way to highlight the relative maturity of the private capital markets in different countries to to compare thethe relative share of venture capital investment with the geographic distribution of entrepreneurial is compare relative share of venture capital investment with the geographic distribution of Another interesting way to highlight the relative maturity of the private capital markets in different countries and developer talent, as measured by the country of origin of companies that have developed mobile entrepreneurial and developer talent, asinvestment measured bygeographic the country of origin of companiesleading that have developed is to compare the relative share of venture capital with the distribution of entrepreneurial and developer talent, asitmeasured by the country of origin of companies that havecountries, developed applications. This is fascinating as once again highlights the fact that CEE relative to the depth of leading mobile applications. This is fascinating as it once again highlights the fact that CEE countries, relative This chart the density of entrepreneurial activity within a country, as measured by the ratio of startleadingcompares mobile applications. This is fascinating as it once again highlights the fact that CEE countries, relative their talent pool, are underserved from thefrom perspective ofofthe venture investors. to the depth of their talent pool, are underserved from perspective of venture investors. to the depth of their talent pool, are underserved the perspective venture investors. ups per capita with the level of per capita investment. Unsurprisingly, the data follows an intuitive trendline;

the denser the relative number of start-ups activity within a country, the greater the level of per capita Share of companies with consumer apps investment. Itspend is inunsurprisingly not a perfect Sweden, for example, has seen materially higher United correlation. Kingdom Share of companies with >$1m annually versus share consumer spendcapital in apps levels of investment per capita relative to the density of startup activity. Estonia, although it ranks amongst of cumulative invested (2016-2020)versus country >$1m annually share the highest forper'per capita investment levels',Germany is arguably underinvested relative to the density of start-up of cumulative capital invested L EGEND activity in the country, although the gap is not as pronounced as in nearby Lithuania. Italy also stands out as a Russia Numberper of companies per country with (2016-2020) country >$1m annual consumer spend in apps country that has an underdeveloped private capital market. United Kingdom Germany Russia

France

Sweden

Share of capital invested, 2016-2020

Belarus

Sweden

Poland

300.0

Italy Netherlands Finland Ukraine Czech Republic Switzerland Austria

Capital invested ($) per capita

Number of companies per country with Number of start-ups per 1M >$1m annual consumer spend in apps population versus capital Share of capital invested, 2016-2020 invested ($) per capita

France

Spain

L EGEND

Spain 200.0 Belarus Poland 100.0 Italy 0.0 Netherlands

Lithuania

Finland Norway Denmark

-100.0 0.0 Ukraine

100.0

Czech Republic Ireland

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note NOTE: that the data excludes Israel.

SOU RCE:

Switzerland SOU RCE: Austria

Based on App Annie estimates for 2020.

Lithuania Norway

300.0

400.0

500.0

# of start-ups per 1M inhabitants

Estonia

NOTE:

200.0

600.0

02.2

Investments by Geography & Industry

�he cumulative level of capital invested by country over the past �ve years gives a sense of the relative scale

The cumulative level capital byby country over the past five�ve years gives aofsense of theof the relative scale of different markets. Onof aof cumulative basis, capital invested intoover UK tech companies isyears just short $50B �he cumulative level capitalinvested invested country the past gives a sense since 2016, thisof is more than 2x the capital invested in Germany ($23B) and France ($19B).into Cumulative capital relative scale different markets. On a cumulative basis, capital invested UK tech companies is of $50B ofinvested different markets. On a cumulative basis, capital invested into UK tech companies is just short in Sweden exceeded $10B over this period, while the level of investment in the Netherlands, just short of $50B since 2016, this is more than 2x the capital invested in Germany ($23B) and France since 2016, and thisSpain is more thanto2x thethan capital invested Switzerland has grown more $5B since 2016. in Germany ($23B) and France ($19B). Cumulative capital ($19B). Cumulative capital invested in over Sweden $10Bthe overlevel this of period, while the of invested in Sweden exceeded $10B thisexceeded period, while investment inlevel the Netherlands, investment inand theSpain Netherlands, Switzerland and has grown Switzerland has grown to SET more $5B since 2016. to more than $5B since 2016. DATA : T OP 10than COU NTSpain RIES Capital invested ($M) by country, cumulative since 2016 and per year

Capital invested ($M) L EGEND by country, cumulative 2016 since 2017 2016 and per year

DATA SET : T OP 10 COU NT RIES Top 10 countries 50,000

2018

40,000 Capital invested ($M)

2019 L EGEND 2020

50,000

Capital invested ($M)

30,000 The2016 cumulative level of capital invested by country over the past �ve years gives a sense of the relative scale 2017 of different markets. On a cumulative basis, capital invested into UK tech companies is just short of $50B 20,000 since Germany ($23B) and France ($19B). Cumulative capital 20182016, this is more than 2x the capital invested in40,000 invested in Sweden exceeded $10B over this period, while the level of investment in the Netherlands, 2019 Switzerland and Spain has grown to more than 10,000$5B since 2016.

2020

30,000

invested ($M)level by country, �heCapital cumulative of capital invested by country the past yearsSwitzerland gives aSpain senseFinland of theIreland relativeItalyscale United Germany over France Sweden �ve Netherlands Kingdom cumulative since 2016 and per 20,000 of different markets. On a cumulative basis, capital invested into UK tech companies is just short of $50B year NOTE: since 2016, this is more than 2x the capital invested in Germany ($23B) and France ($19B). Cumulative capital All Dealroom.co data excludes the following: Top 11-20 countries L EGENDsecondary transactions, debt, biotech, invested in Sweden exceeded $10B over this period, while the level of investment in the Netherlands, 10,000 SOU RCE: lending 2016capital, and grants. Please also note 2,000 that the data excludes Israel. 2020 is Switzerland Spain2020. has grown to more than $5B since 2016. 2017 based onand annualised data to September DATA SET :0 T OP 11- 2 0 COU NT RIES

2018 Capital invested ($M)

2019

1,500

United

Germany

France

Sweden

Netherlands

DATA SET : T OPKingdom 10 COU NT RIES 2020 invested ($M) Capital The cumulative level of capital invested by country over the past �ve years gives a sense of the relative scale by country, cumulative NOTE: of different markets. On a cumulative basis,1,000 capital invested into UK tech companies is just short of $50B since 2016 and per year All Dealroom.co datais excludes following: since 2016, this more the than 2x the capital invested in Germany ($23B) and France ($19B). Cumulative capital biotech, secondary transactions, debt, invested in Sweden exceeded $10B over this period, while the level of investment in the Netherlands, SOU RCE: lending capital, and grants. Please also note L EGEND 500 2016. Switzerland and Spain hasisgrown to more than $5B since that the data excludes Israel. 2020 50,000

Switzerland

Spain

Finland

Ireland

Ita

Finland

Ireland

Ita

2016 based on data to September 2020. annualised

All Dealroom.co data excludes the following: 2020 biotech, L EGENDsecondary transactions, debt, lending capital, and grants. Please also note that2016 the data excludes Israel. 2020 is annualised based on data to September 2020. 2017

DATA SET0: T OP 2 1- 30 COU NT RIES Belgium40,000Russia

SOU RCE: 400

300 Capital invested ($M)

2020

Denmark

Romania

Norway

Austria

Poland

Luxembourg

Estonia

Lithuania

Top 21-30 countries 30,000

2018 2019

Capital invested ($M)

2017 Capital invested ($M) by country, 2018 cumulative since 2016 and per NOTE: year 2019

20,000

10,000 200

0 100

United Kingdom

Germany

France

Sweden

Netherlands

Switzerland

Spain

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: capital, and grants. Please also note lending that the data excludes Israel. 2020 is All Dealroom.co data excludes the following: biotech, secondary annualised basedtransactions, on data todebt, September 2020. lending capital, and grants. Please also note that the data excludes Israel. 2020 is annualised based on data to September 2020.

Cyprus

Portugal

Iceland

Greece

Hungary

Croatia

Malta

Czech Republic

Bulgaria

Latvia

SOU RCE: SOU RCE:

We want to make sure that UK tech comes out of the Covid-19 crisis stronger than ever - supporting the sector through the recovery just as tech supported all of us through the pandemic. Our forthcoming Digital Strategy will unleash the full potential of tech innovators and entrepreneurs across the country, driving a new era of growth. The UK has long been one of the best places to start and grow a tech business and we intend to keep it that way by taking an unashamedly pro-tech approach.

Oliver Dowden United Kingdom Secretary of State for Digital, Culture, Media and Sport

FR A NC E R EC OR D YEA R

Looking at country-by-country trends on a year-by-year basis, France is the only one&of Europe's three largestFR A NC E R EC OR D YEA R 02.2 Investments by Geography Industry Looking at country-by-country trends on a year-by-year markets to grow in 2020. to this uptick in basis, France is the only one ofThanks Europe's three largest markets to grow in 2020.France Thanks toisthis in investment in 2020, setuptick to exceed $5B capital capital invested for the �rst time investment 2020, France is setbasis to exceed $5B capital invested onin an annualised for the �rst time. Sweden, capital invested for the �rst time invested on an annualised basis for the �rst time. Sweden, Finland and Belgium are other notable countries to beat basis, FR AN CE RECORD YEAR Looking atBelgium country-by-country trends on a year-by-year Finland and are other notable countries to beat the slowdown and post growth in 2020. The UK has stayed the slowdown and post growth in 2020. The UK has stayed France is the only one of Europe’s three largest markets to grow in broadly �at, at impressive levels with more thanmore $12B than $12B broadly �at,but but at impressive levels with 2020. Thanks tointhis uptick in investment in 2020, France is set to capital invested 2020. Amongst the top 10 countries ofofcapital invested in 2020. Amongst the top 10 countries by cumulative capital invested between 2016-2020, Spain basis for the first time. exceed $5B capital invested on an annualised byhas cumulative capital invested between 2016-2020, Spain seen the most signi�cant slowdown with projected Sweden, Finland and Belgium aretotal other notable countries to beat the capital invested capital invested at less than 45% of the in 2019. has seen the most signi�cant slowdown with pro�ected for the first time slowdown and post growth 2020. capital invested at less thanin45% of the total in 2019.

$5B+ $5B+

$5B+

Capital invested ($M) by country and by year

DATA SET : F RA NCE

France

DATA SET : U NIT ED KINGDOM $5,199M

5,000

4,000

Capital invested ($M) by country and by year

Capital invested ($M)

Looking at country-by-country trends on a year-by-year 12,500 basis, France is the only one of Europe's three largest 3,000 markets to grow in 2020. Thanks to this uptick in $2,286M investment in 2020, France is set to exceed $5B capital 10,000 SCAN TO UNLOCK 2,000 invested an annualised basis for the �rst time. Sweden, ADDITIONALon DATA Finland and Belgium are other notable countries to beat 7,500 the slowdown and post growth in 2020. The 1,000 UK has stayed broadly �at, but at impressive levels with more than $12B 0 countries of capital invested in 2020. Amongst the top 10 2016 5,000 by cumulative capital invested between 2016-2020, Spain has seen the most signi�cant slowdown with pro�ected NOTE: capital invested at less than 45% of the SOU total in 2019. 2,500 RCE: Only countries with at least $1M invested since 2016 included. 2020 is annualised based on data to September 2020.

$4,818M

15,000 FR A NC E R EC OR D YEA R

$13,210M

$3,830M

$5B+

$12

$2,758M

capital invested for the �rst time $8,758M

$5,236M

2017

$8,201M

2018

2019

2020

The UK has stayed broadly flat, but at impressive levels with more than $12B of capital0invested in 2020.

DATA SET : U NIT ED KINGDOM

2016

United 15,000 Kingdom

2017

2018

2019

C UMUL ATIVE C A PITA$13,210M L INVESTED (2 016- 2 02 0)

$12,540M It NOTE: is important to understand, however, 12,500 that Europe is SOU RCE: Only countries at least $1M invested since made up ofwithmany different countries that are at different 2016 included. 2020 is annualised based on 10,000 stages of local tech ecosystem development. This is data to September 2020. $8,758M $8,201M evident when looking at levels of cumulative per capita FR FRAANC NCEE RREC ECOR ORDD YEA YEARR 7,500 per capita in Poland versus $172 on average in Europe Looking at country-by-country trends on a year-by-year Looking at country-by-country trendsthe on aregion. year-by-year investment by country across There is huge basis, basis,France Franceisisthe theonly onlyone oneof ofEurope's Europe'sthree threelargest largest $5,236M upside potential if some countries catch up with the per 5,000 markets marketsto togrow growin in2020. 2020.Thanks Thanksto tothis thisuptick uptickin in capita investment levels of their peers. investment in 2020, France is set to exceed $5B capital investment in 2020, France is set to exceed $5B capital Capital invested ($M)

$19

$5B+

capital invested for the �rst time

capital invested for the �rst time invested investedon onan anannualised annualisedbasis basisfor forthe the�rst �rsttime. time.Sweden, Sweden, Finland and Belgium are other notable countries to beat Finland and Belgium are other notable countries to beat DATA SET : T OP 10 the slowdown and growth stayed Cumulative capital invested the slowdown andpost post growthin in2020. 2020.The TheUK UK0has has stayed 2016 2017 2018 2019 2020 broadly at impressive ($) per �at, capita broadly �at,but butby atcountry, impressivelevels levelswith withmore morethan than$12B $12B of capital invested of capital investedin in2020. 2020.Amongst Amongstthe thetop top10 10countries countries 2016 to 2020 NOTE: by cumulative capital invested between 2016-2020, Spain byOnly cumulative capital invested between 2016-2020, Spain SOU RCE: countries with at least $1M invested since has the signi�cant slowdown with projected 2016seen included. 2020most is annualised based on has seen the most signi�cant slowdown with projected L data EGEND 1,000.0 Amongst the top 10 countries by cumulative capital invested between to September 2020.at less than 45% of the total in 2019. capital capitalinvested invested at less than 45% of the total in 2019. 2,500

European average Capital Capitalinvested invested($M) ($M)by bycountry country and andby byyear year

2016-2020, Spain has seen the most significant slowdown with projected capital invested at less than 45% of the total in 2019.

DATA IN ISL A NDS DATASET SET::SPA FA ROE

Spain 1,500

Capitalinvested invested($M) ($M) Capital

5,000

4,000

1,000 3,000

Cumulative capital invested ($)

Capital invested ($) per capita

750.0

$1,457M

$3,830M

250.0

$2,758M

$687M $2,286M

$636M

2,000 500

0.0

Chart includes only countries with a population greater than one million. NOTE: NOTE: Population data at is from the Worldsince Bank. 2020 Only $1M Onlycountries countrieswith with atleast $1Minvested invested since is2016 based on data upleast to September 2020. 2016included. included.2020 2020isisannualised annualisedbased basedon on

$5,199M

$4,818M

$957M

1,000

NOTE:

$1,347M

500.0

2016 2016

Sweden

Ireland

2017 2017

SOU RCE: SOU SOURCE: RCE:

data datatotoSeptember September2020. 2020.

United Kingdom 2018 2018

Finland

Switzerland

2019 2019

Estonia

Cyprus

2020 2020

Netherlands

Denmark

02.2

Investments by Geography & Industry

As discussed previously, capital invested in European tech is rising not only due to an increased number of rounds but also due to increases in the average size of rounds. Rounds have been getting bigger across all stages over the past �vecapital years and also across most tech underlying countries. Though there are still clear As discussed discussed previously, invested ininEuropean isisrising not only due toto anan increased number As previously, capital invested European tech rising only due increased of is As discussed previously, capital invested in European tech is rising not only duenot to an increased number of is anumber differences in round sizes across stages in different European countries, round size in�ation trend that of rounds but also due to increases in the averagesize sizeofofrounds. rounds.Rounds Roundshave havebeen been getting getting bigger bigger across rounds but also due to increases in the average all rounds but also due to increases in the average size of rounds. Rounds have been getting bigger across all common across countries andfive thisyears chartand picks out examples six of Europe' s largest markets by capital across stages over theand past also across mostfor underlying countries. there stages over the past �ve years and also across most underlying countries. Though there still are clear stages overall the past �ve years also across most underlying countries. Though there are stillThough clear are invested: the UK, Germany, France, Sweden, Spain and the Netherlands. still clearindifferences in round sizes in different European countries, size is that is differences round sizes sizes across stages inacross different European countries, round size in�ation isround a trend thatinflation is differences in round across stages instages different European countries, round size in�ation is a trend common across countries and this chart picks out examples for six of Europe's largest markets by capital a trend that is common across onout theexamples website you examples six of Europe’ s forcan six explore of Europe' s largestfor markets by capital common across countries and countries this chartand picks DATAand SET :the U NIT ED KINGDOM invested: the UK, Germany, France, Sweden, Spain Netherlands. Median round round largest markets byby capital invested: the UK, Germany, France, Sweden, Spain and the Netherlands. invested: thesizes UK, Germany, France, Sweden, Spain and the Netherlands. stage, by year and country

Median round sizes by round L EGEND round Median sizes Median sizesby byround stage, by yearround and country

round year stage, by yearand andby country Seed stage

DATA SET : EU ROPE

Europe

DATA SET : U NIT ED KINGDOM 30.0

L EGENDSeries A Seed L EGEND

50.0

Series B

SeriesSeed A

Median roundMedian size ($M) round size ($M)

Series C

SeriesSeries B A

40.0 Median round size ($M)

Series C

Series B Series C

30.0

20.0

10.0

30.0 20.0

20.0 10.0

10.0

SCAN TO UNLOCK ADDITIONAL DATA

0.0

2016

NOTE:NOTE:

All Dealroom.co data excludes the following: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, biotech, secondary transactions, debt, lending capital,capital, and grants. also note also note lending andPlease grants. Please NOTE: that the data Israel. Israel. that theexcludes data excludes All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

0.0 SOU RCE:

SOU RCE:

2016

2017

2016

2017

2018

2017

2018

2019

2020

2019

2020

2018

SOU RCE:

Turning now to look at Europe’s largest tech hubs, London remains the undisputed hub in terms of capital invested in 2020 and has now attracted $34B in capital investment since 2016. Paris cements its position as Europe’s number argest tech hubs, London remains theinundisputed hub$11.7B in terms of capital two hub in 2020 attracting $3.4B 2020 alone and cumulatively since 2016. Stockholm is positioned in the three hubs in investment 2020, pushingsince out Berlin the first time, though this has tracted top $34B in capital 2016.for Paris cements its position aslargely been driven by two of the year’s largest rounds of investment raised by Klarna ($650M) and Northvolt ($600M). On a cumulative basis since 2016, 0 attracting $3.4B in 2020 alone and $11.7B cumulatively since 2016. ranks second to London investment over that period. Espoo and Helsinki both op threehowever, hubs in Berlin 2020,still pushing out Berlin for thewith �rst$12.6B time,ofthough this has make the top 10 and, if combined,raised would by equate to the sixth largest in Europe. A few notable absences from year's largest rounds of investment Klarna ($650M) and Northvolt thehowever, top 20 cities include Oslo Madrid. ince 2016, Berlin stillCopenhagen, ranks second toand London with $12.6B of

poo and Helsinki both make the top 10 and, if combined, would equate to the table absences from the topby20 cities include Copenhagen, Oslo and Madrid. Top 20 European hubs capital invested ($M), ranking based on 2020 London Paris Stockholm Berlin Munich Amsterdam Zurich Espoo Helsinki Mainz Solihull Bucharest Dublin Cambridge Malmö Barcelona Bristol Düsseldorf Tallinn Vienna

$3386M $1246M $905M $1191M $270M $218M $50M $15M $155M $7M $0M $1M $772M $82M $31M $322M $89M $0M $38M $57M

$5980M $1709M $593M $2056M $379M $441M $580M $36M $143M $0M $0M $46M $254M $149M $79M $572M $151M $20M $53M $122M

$5493M $2407M $660M $2483M $479M $529M $290M $165M $335M $0M $0M $421M $334M $110M $50M $895M $284M $31M $285M $83M

2016

2017

2018

SOU RCE:

$9804M $2970M $2472M $4450M $1413M $752M $516M $59M $346M $0M $0M $574M $326M $229M $31M $645M $441M $34M $92M $97M 2019

$9598M $3351M $2725M $2465M $1091M $698M $569M $508M $453M $381M $352M $303M $296M $289M $285M $277M $255M $244M $236M $197M 2020

02.2

Investments by Geography & Industry

London, Paris and Berlin remain the top three hubs in Europe by the number of deals. There is a clear decline in the number of deals across a large share of hubs. This is attributable to both the reporting lag effect, but main the topalso three hubs Europe the number of deals. There is a clear decline a drop in in deals in theby earliest round stages (<$2M). Amongst the top 20 hubs by the number of rounds in ss a large share ofonly hubs. This is and attributable thehigh reporting lag effect, but 2020, Edinburgh Lyon haveto hitboth all-time deal volumes in 2020.

arliest round stages (<$2M). Amongst the top 20 hubs by the number of rounds in yon have hit all-time high deal volumes inof2020. Top 20 European hubs by number deals, ranking based on 2020 London Paris Berlin Amsterdam Barcelona Stockholm Munich Madrid Zurich Dublin Helsinki Copenhagen Tallinn Edinburgh Milan Cambridge Hamburg Rotterdam Lyon Manchester

988 428 422 134 158 216 84 100 50 125 110 72 44 32 80 32 59 28 22 25

984 431 333 139 161 180 86 102 54 78 96 88 42 35 76 26 51 38 27 47

899 369 332 136 141 122 115 92 76 64 83 72 74 30 96 25 49 27 18 33

895 329 289 135 113 138 93 92 75 62 67 75 32 34 61 26 45 38 20 32

740 301 219 109 104 100 96 71 69 53 49 44 43 39 37 33 32 31 31 27

2016

2017

2018

2019

2020

SOU RCE:

The geographic diversi�cation of entrepreneurial activity and scaling venture investment in European tech is clear, so it is perhaps counter-intuitive that the share of deals involving Europe's top �ve hubs has stayed The geographic diversi�cation of entrepreneurial activity and scaling venture investment in European tech�at is The geographic diversification of entrepreneurial activity and scaling venture investment in European tech is clear, so it over that thecounter-intuitive share of capital invested in those hubs has even increased. The answer, at least partly, clear,time so itand is perhaps that the share of deals involving Europe's top �ve hubs has stayed �at isgeographic perhaps counter-intuitive that the share of deals involving Europe’ s investment top five hubs has stayed flatof time and Thelies diversi�cation of entrepreneurial activity scaling venture in European tech isover intime the and fact that the while startup communities are �ourishing all Europe, theThe �ywheel success is that the over that share of capital invested inand those hubs hasacross even increased. answer, at least partly, share invested those hubs has evenofincreased. The answer, at least partly, lies in the fact that while clear, soinitof is capital perhaps counter-intuitive that the share involving Europe' sHubs top �ve hubs has stayed �at in Europe' sdeals most mature hubs. such as London, Berlin, Paris and spinning just quickly, ifstartup not faster, lies the factasthat whilein communities are �ourishing all across Europe, the �ywheel of success is startup overcommunities time and thatare the flourishing share of capital invested in those hubs has even increased. The answer, atas least partly, all across Europe, the flywheel of success is spinning just quickly, if not faster, in Europe’s Stockholm have the densest startups, the deepest poolsHubs of experienced talent Berlin, and many of and the s most mature hubs. such as London, Paris spinning just as quickly, if notnetwork faster, inofEurope' liesmost in themature fact thathubs. whileHubs startup communities are �ourishing all across Europe,have the �ywheel of success is of startups, the deepest such as London, Berlin, Paris and Stockholm the densest network sophisticated investors. Little wonder then they continue to power ahead, just talent as other nascent Stockholm the densest startups, thehubs. deepest experienced andmore many of the spinning just as have quickly, if not faster,network in Europe'of s most mature Hubs pools such asofLondon, Berlin, Paris and poolstakes ofhave experienced talent and Little many of thethe most sophisticated investors. wonder then theymore continue to power hubs steps forward too. most sophisticated investors. wonder then theypools continue to powerLittle ahead, just as other nascent Stockholm the densest network of startups, deepest of experienced talent and many of the ahead, just as other moreLittle nascent hubs takes steps forward too. ahead, just as other more nascent hubs takes steps forward too.wonder most sophisticated investors. then they continue to power hubs takes steps forward too.

Top ve hubs as share of total deals (%)hubs and share of capital Top ve as share of total (%), 2016 2020 Top invested ve hubs share of versus total deals (%)as and share of capital

L EGEND 2016

2020 2016

2020 2020

% of total % of deals total deals / % of/capital % of capital invested invested

2016 L EGEND

55%

60 60

% of total deals / % of capital invested

dealsinvested (%) and share of capital (%), 2016 versus 2020 invested (%), 2016 versus 2020 L EGEND

60 55% 45% 55% 40

45%

34%

40 34%

34%

0 0

% of deals

NOTE: SOU RCE:

34%

NOTE:

All Dealroom.co data excludes the following: NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, biotech, secondary transactions, debt, Allcapital, Dealroom.co data excludes the also following: lending capital, and grants. Please note lending and grants. Please also note biotech, secondary transactions, debt, that the data excludes that the data excludes Israel. Israel.

45%

34%

SOU RCE: SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel.

% of deals % of deals

% of capital invested

% of capital invested % of capital invested

Earlier in 2020 at the onset of the pandemic in Europe, questions were raised around whether travel 02.2 Investments by Geography & Industry restrictions might impact the level of US investor activity in Europe. This has not proven to be the case. In fact, the level of US investor participation has continued to increase and remains at record high levels. in 2020 in25in Europe, questions were raised around whether travel Earlier 2020at atthe theonset onsetofofthe thepandemic pandemic Europe, questions were raised around whether travel Share of European deals (%) restrictions might impact the level of US investor activity in Europe. This has not proven to be the case. restrictions might impact the level of US investor activity in Europe. This has not proven to be the case. In Earlier in 2020 at the onset of the pandemic in Europe, questions were raised around whether travel per year with least one US restrictions might the level participation of US investor activity in Europe. This has not proven to be the case. In fact, thethe level ofimpact has to increase increase andremains remains record high levels. In fact, level ofUS USinvestor investor participation has continued continued to and atatrecord high levels. or Asian investor 19%

23%

19%

20 to increase and remains at record high levels. fact, the level of US investor participation has continued

L EGEND

Share European deals Share ofofStates European deals (%) (%) United per yearwith with at least one US per year at least one US Asia or Asian or Asianinvestor investor

% of deals

United States and Asia

16%

14%

15 12% 20

12%

L EGEND

United States Asia United Asia States and Asia

United States and Asia

15 12% 10% 5

14%

12%

14% 12%

14%

3% 12%

12% 3%

10 0

NOTE:

2016

2017

2018

3% 2017

All Dealroom.co data excludes the following: biotech, NOTE: secondary transactions, debt, lending capital, and grants. Please also note All Dealroom.co data excludes the following: that the data excludes Israel. 2020 is based on biotech, secondary transactions, debt, data upcapital, to September lending and grants.2020. Please also note

16%

14%

12% 2% 10%

19%

16%

% of deals

United States

% of deals

L EGEND

19%

10%

23%

2019 5%

2020 6%

2018

2019

2020

SOU RCE: Turning now to look at Europe's largest tech hubs, London remains the undisputed hub in terms of capital 0 2016 2017 2018 2019 invested in 2020 and has now attracted $34B in capital investment since 2016. Paris cements its position as SOU RCE: that the data excludes Israel. 2020 is based on NOTE: Europe's number two hub in 2020 attracting $3.4B in 2020 alone and $11.7B cumulatively since 2016. data up to September 2020. All Dealroom.co data excludes the following: Stockholm is positioned in the top three hubs in 2020, pushing out Berlin for the �rst time, though this has biotech, secondary transactions, debt, SOU RCE: largely been driven by two of the year's largest rounds of investmentofraised by Klarnatech ($650M) and Northvolt Cross-border investment flows demonstrate the internationalisation the European investment lending capital, and grants. Please also note Cross-border investment �ows demonstrate the internationalisation of the European tech investment that the data excludesinvestment Israel. 2020 is based on Cross-border �ows demonstrate the internationalisation of the European tech investment ($600M). On a cumulative basis since 2016, however, Berlin still ranks second to London with $12.6B of landscape. Cross-border investment accounts for two-thirds of all capital invested in the European tech data up to September 2020. Cross-border investment accounts for two-thirds of all capital invested in the European tech landscape. Cross-border investment accounts for two-thirds of top all capital invested in thewould European tech investment over that period. Espoo and Helsinki both make the 10 and, if combined, equate to the The earlier stage ecosystem. They They also also change changein inclear clearlock-step lock-stepwith withthe thescale scaleofofcapital capitalbeing beingput puttotowork. work. The earlier stage ecosystem. They also change in clear lock-step with the scale of capital being put to work. The earlier stage sixth largest in Europe. A few notable absences from the top 20 cities include Copenhagen, Oslo and Madrid. the company smaller theround round si�e, themore moredomestic domestic theinvestment investment pattern. the side, Cross-border investment �ows demonstrate thesize, internationalisation of the European tech investment and the smaller the the pattern. On�n the flip�ip side, thethe the company and theinvestment smallerthe the roundfor si�e, the more domestic theininvestment pattern. �n the �ip side, the landscape. Cross-border accounts two-thirds of all capital invested the European tech later the stage of the the company companyand andthe thelarger larger theround, round, themore more international the investor pool. Capital later the stage of the the international the investor pool. Capital later the stage of the company and the larger the round, the more international the investor pool. Capital London $3386M $5980M $9804M ecosystem. They also change in clear lock-step with the scale of capital being put to work. The earlier stage $5493M invested into rounds rounds ofless lessthan than$2M $2Moverwhelmingly overwhelmingly comes from domestic investors; rounds of $100M or Top 20 European hubs invested into of comes from domestic investors; forfor rounds of $100M Paris $1246M $1709M $2407M $2970M the company androunds the smaller the round more domestic the investment pattern. �n the �ip side, the invested into of less thansi�e, $2Mthe overwhelmingly comes from domestic investors; for rounds of $100M or Stockholm $905M $593M signi�cantly,$660M $2472M by capital invested ($M), more, the lion�s share of capital comes from outside the continent and, most from the ��. later thethe stage of the and thecomes larger the round, the morethe international theand, investor pool.significantly, Capital or more, the lion’ s company share capital comes from outside the continent and,most most fromthe the��. US. $4450M more, lion�s share ofof capital from outside continent from Berlin $1191M $2056M signi�cantly,$2483M

% of capital invested

2016 to 2020

L EGEND LL EGEND EGEND Domestic Domestic Domestic Cross-border Cross-border Cross-border Asia Asia Asia North America North America North America Rest of World Rest of World Rest of World

% of % of capital capital invested invested

ranking into based on 2020 invested rounds of less than $2M overwhelminglyMunich comes from domestic investors; for rounds of $100M or$479M $270M $379M 100 continent and, Amsterdam $218Mmost signi�cantly, $441M $529M more, the lion�s share of capital comes from outside the from the ��. 100 Zurich $50M $580M $290M Share of capital invested (%) Share of capital invested (%) Espoo $15M $36M $165M 100 in Europe by round size and Helsinki $155M $143M $335M in Europe by round size Share of capital invested (%) and geographic source region, Mainz $7M $0M $0M in Europe by round size and geographic source region, 75 2016 to 2020 Solihull $0M $0M $0M geographic source region, 75 2016 to 2020 Bucharest $1M $46M $421M 75 Dublin Cambridge Malmö 50 Barcelona 50 Bristol Düsseldorf Tallinn Vienna 25 25

$772M $82M $31M $322M $89M $0M $38M $57M

$254M $149M $79M $572M $151M $20M $53M $122M

$334M $110M $50M $895M $284M $31M $285M $83M

$1413M $752M $516M $59M $346M $0M $0M $574M $326M $229M $31M $645M $441M $34M $92M $97M

2016

2017

2018

2019

2020

$9598M $3351M $2725M $2465M $1091M $698M $569M $508M $453M $381M $352M $303M $296M $289M $285M $277M $255M $244M $236M $197M 2020

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also NOTE: note that the data excludes Israel. 2020 Allannualised Dealroom.co data excludes the following: is based on data up to biotech, secondary transactions, debt, NOTE: September 2020. lending capital, and grants. Please also note NOTE: thatDealroom.co the data excludes Israel. All data excludes the following: All Dealroom.co data excludes thedebt, following: biotech, secondary transactions, biotech,capital, secondary lending and transactions, grants. Pleasedebt, also note lending and grants. Please also note that the capital, data excludes Israel. that the data excludes Israel.

$0M-$2M

0 0

SOU RCE:

$2M-$5M

$5M-$10M

$0M-$2M $0M-$2M

$2M-$5M $2M-$5M

$10M-$20M

$20M-$50M

$5M-$10M $5M-$10M

$50M-$100M

$10M-$20M $10M-$20M

$100M-$250M

$20M-$50M $20M-$50M

$250M+

$50M-$100M $50M-$100M

$100M-$250M $100M-$250M

SOU RCE:

SOU RCE: SOU RCE:

The German ecosystem has seen some major investments, despite the crisis. For many years it was hard for German entrepreneurs to find money, in terms of seed investments as well as in growth funding. That has changed completely. Every good idea is finding money right now. What the ecosystem needs is more business models and ideas in order to build unicorns. We have enough money; we need better ideas. One promising area is the digitalization of manufacturing, another are all aspects of business automation. We have seen quite a few quickly growing startups in these areas. A lot more could come out, if business, universities and research institutes would collaborate more closely. A close network between big corporations, small and mid-sized companies, research institutes and the startup scene is crucial for achieving success. A good example for that is the network UnternehmerTUM in Munich.

Sebastian Matthes Handelsblatt Deputy Editor-in-Chief

$250M $250M

02.2

Investments by Geography & Industry

There are very interesting differences in the internationalisation of the private capital markets for tech companies across Europe. The UK, for example, has a strong domestic investor pool, attracts large sums of There are are very interesting differences inof the internationalisation of thewithin private capital markets for tech tech companies investment from theinteresting US, but a much lower level cross-border investmentof from Europe versus, say, for There very differences in the internationalisation the private capital markets Germany. France is even more weighted towards domestic investors, even in larger rounds. Interestingly, theof investment from across Europe. The UK, for example, has a strong domestic investor pool, attracts large sums companies across Europe. The UK, for example, has a strong domestic investor pool, attracts large sums of �owthe of US into European tech companies has been more signi�cant in certain countries. Thesay, share of US,capital but afrom much level of cross-border from within Europe versus, Germany. France investment thelower US, but a much lower levelinvestment of cross-border investment from within Europe versus, say, is even capital from US investors is materially higher in the UK and Germany than in France.

more weighted towards investors, evendomestic in larger rounds. Interestingly, the rounds. flow of US capital intothe European Germany. France is evendomestic more weighted towards investors, even in larger Interestingly, �ow US capitalhas intobeen European tech companies has been more The signi�cant certainfrom countries. The share of tech of companies more significant in certain countries. share ofincapital US investors is materially DATA SET : U NIT ED KINGDOM Share of capital invested (%) in capital from US investors is materially higher in the UK and Germany than in France. higher in the UK and Germany than in France. the United Kingdom, Germany and France by round size and geographic source region, of capital invested (%) in 2016Share to 2020

the United Kingdom, Germany and France by round size and L EGEND geographic source region, Domestic 2016 to 2020 Cross-border

DATA SET : U NIT ED KINGDOM United Kingdom 100

L EGEND North America Rest ofDomestic World

100

% of capital invested

Asia

% of capital invested

There are very interesting differences in the50internationalisation of the private capital markets for tech Cross-border 75 strong domestic investor pool, attracts large sums of companies Asia across Europe. The UK, for example, has a investment from the US, but a much lower level of cross-border investment from within Europe versus, say, North America Germany. France is even more weighted towards domestic investors, even in larger rounds. Interestingly, the 25 Rest of World �ow of US capital into European tech companies has been more signi�cant in certain countries. The share of 50 capital from US investors is materially higher in the UK and Germany than in France. 0

Share of capital invested (%) in the United Kingdom, Germany NOTE: and France by round size and All Dealroom.co data excludes the following: geographic source region, 2016 biotech, secondary transactions, debt, lending capital, and grants. Please also note to 2020 that the data excludes Israel.

$0M-$2M

DATA SET : GERM A NY

$2M-$5M

$5M-$10M

$10M-$20M

$20M-$50M

$50M-$100M

$100M-$250M

$250M+

25 SOU RCE:

Germany 0

100

L EGEND

$0M-$2M

$2M-$5M

$5M-$10M

$10M-$20M

$20M-$50M

$50M-$100M

$100M-$250M

Domestic

NOTE:

Cross-border

% of capital invested

All Dealroom.co data excludes the following: 75 in the internationalisation of the private capital markets for tech There are very interesting differences Asia SOU RCE: biotech, secondary transactions, debt, companies across Europe. North America lending capital, and grants. Please also noteThe UK, for example, has a strong domestic investor pool, attracts large sums of that data excludes Israel. Rest ofthe World investment from the US, but a much lower level of cross-border investment from within Europe versus, say, 50 Germany. France is even more weighted towards domestic investors, even in larger rounds. Interestingly, the There are very interesting differences in the internationalisation of the private capital markets for tech �ow of US capital into European tech companies has been more signi�cant in certain countries. The share of companies across Europe. The UK, for example, has a strong domestic investor pool, attracts large sums of capital from US investors is materially higher in the UK and Germany than in France. investment from the US, but a much lower level of cross-border investment from within Europe versus, say, 25

Germany. France is even more weighted towards domestic investors, even in larger rounds. Interestingly, the �ow of US capital into European hasSET been more signi�cant in certain countries. The share of : U NIT ED KINGDOM Share of capital invested (%) intech companiesDATA capital from US investors is materially higher in the UK and Germany than in France. the United Kingdom, Germany and France by round size and geographic source region, Share of capital invested (%) in NOTE: 2016 toKingdom, 2020 Germany the United All Dealroom.co data excludes the following:

and France by transactions, round sizedebt, and biotech, secondary lending capital, and grants. region, Please also2016 note geographic source L EGEND that the data excludes Israel. to 2020Domestic

$0M-$2M

SOU RCE:

$10M-$20M

$20M-$50M

$50M-$100M

$100M-$250M

$250M+

100

L EGEND

North America Cross-border 75 % of capital invested

Asia Rest of World

% of capital invested

Asia Domestic

Rest of World

$5M-$10M

France

Cross-border

North America

$2M-$5M

DATA SET : F RA NCE

25 25

0 0

$0M-$2M

$2M-$5M

$5M-$10M

NOTE: NOTE:

All Dealroom.co data excludes the following:

biotech, secondary transactions, debt, All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note lending capital, and grants. Please also note that the data excludes Israel. that the data excludes Israel.

SOU RCE:

$5M-$10M $10M-$20M

$10M-$20M $20M-$50M

$20M-$50M $50M-$100M

$50M-$100M $100M-$250M

$100M-$250M $250M+

02.2

Investments by Geography & Industry

The headwinds and tailwinds that the pandemic has created for tech investment are evident when looking at the relative pace of capital invested across different industry verticals in 2020 on a month-by-month basis The headwinds tailwinds the pandemic has created foralready tech investment are are evident when looking at at andThe in comparison 2019 and 2018.that Health tech companies, which had been attracting signi cant headwindstoand and tailwinds that the pandemic has created for tech investment evident when looking capital, have raised record amounts in 2020. Otherdifferent sectors that appeared to have been buoyed by tailwinds the relative pace of capital invested across industry verticals in 2020 on a month-by-month basis and the relative pace of capital invested across different industry verticals in 2020 on a month-by-month basis include enterprise software, ntech, and semiconductors. Headwinds appear to have slowed investments in comparison to 2019 and 2018. Health tech companies, which had already been attracting significant capital, and in comparison to 2019 and 2018. Health tech companies, which had already been attracting signi cant into real estate, transportation and jobs recruitment.

have raised in 2020. Other sectors that appeared have been by tailwinds andtailwinds can be capital, haverecord raisedamounts record amounts in 2020. Other sectors that to appeared to buoyed have been buoyed by further explored on software, the websitentech, includeand enterprise software, fintech, and semiconductors. Headwinds appear include enterprise semiconductors. Headwinds appear to have slowed investments DATA SET : H EA LT H Cumulative month-by-month to have slowed investments into real estate and transportation. into real estate, transportation and jobs recruitment. capital invested ($M) by industry vertical, 2018 to 2020

Cumulative L EGEND

month-by-month

DATA SET : Health H EA LT H Strong tailwinds:

Capital invested ($M)

The headwinds andbytailwinds capital invested ($M) industry that the pandemic has created for tech investment are evident when looking at January the relative pace of capital invested across different industry verticals in 2020 on a month-by-month basis vertical, 2018 to 2020 February and in comparison to 2019 and 2018. 3,000 Health tech companies, which had already been attracting signi cant March L EGEND have raised record amounts in 2020. Other sectors that appeared to have been buoyed by tailwinds April capital, May January enterprise software, andhas semiconductors. Headwindsare appear towhen havelooking slowedatinvestments Theinclude headwinds and tailwinds that thentech, pandemic created for tech investment evident June February 2,000 into real estate, transportation and jobs recruitment. the relative pace of capital invested across different3,000 industry verticals in 2020 on a month-by-month basis July March

vertical, 2018 to 2020 July

December

August

L EGENDmonth-by-month Cumulative capitalSepember invested ($M) by industry January NOTE: October vertical, 2018 to 2020

Capital invested ($M)

andAugust in comparison to 2019 and 2018. Health tech companies, which had already been attracting signi cant April capital, have raised record amounts in 2020. Other sectors that appeared to have been buoyed by tailwinds Sepember DATA SET : H EA LT H Cumulative month-by-month May 1,000 include enterprise software, ntech, and semiconductors. Headwinds appear to have slowed investments October capital invested ($M) by industry intoNovember realJune estate, transportation and jobs recruitment.2,000 DATA SET : REA L ESTAT E

2018

2019

2020

1,000

February

All Dealroom.co data excludes the following: November biotech, March transactions, debt, L EGENDsecondary lending capital, grants. Please also note the December AprilIsrael. data excludes Jan

3,000

1,500

Feb May

NOTE: Apr July

All Dealroom.co data excludes the following: May August biotech, secondary transactions, debt, lending capital, grants. Please also note the Sepember data excludes Israel. JulSCAN TO UNLOCK October DATA ADDITIONAL Aug Jun

Sep November Oct

Capital invested ($M)

Mar June

1,000

Capital invested ($M)

SOU RCE: Strong headwinds: Real Estate

2018

2019

2020

2018

2019

2020

2,000

SOU RCE: 1,000

500

December 0

Nov Dec 0

NOTE: All Dealroom.co data excludes the following: NOTE:biotech, secondary transactions, debt, lending capital, grants. Please also note the All Dealroom.co data excludes the following: data excludes Israel. biotech, secondary transactions, debt,

2018

2019

2020

SOU RCE: SOU RCE:

lending capital, grants. Please also note the data excludes Israel.

While going through a major challenge like this year is not something any of us would have wanted, I think the resilience it builds in the tech community, its companies, its teams and employees is fundamentally a good thing for the longer term. Suranga Chandratillake Balderton General Partner

The societal impact of lockdown has driven more rapid adoption of a variety of digital services, including in areas where Europe has a particular strength. For example, in fintech, where people were more likely to switch to a service like Revolut when traditional banks still required them to go into branches to manage their accounts. Similarly, European healthtech is really strong, and while not the driver anyone wanted, COVID led to huge investment and activity which has led to strong growth, including in areas like AI-based diagnosis and remote primary care. While going through a major challenge like this year is not something any of us would have wanted, I think the resilience it builds in the tech community, its companies, its teams and employees is fundamentally a good thing for the longer term.

02.2

Investments by Geography & Industry

A global pandemic presents my company with more opportunities than threats. When people are unsure about their future, there’s a chance to guide them through these changes, be it financially or even psychologically. That’s certainly not the case for every business. Tech companies in travel or hospitality have been hit hard. Like elsewhere on the planet, they need to reinvent the relationship with their customer to Robert Gaal survive. The Netherlands has the social support system and government support to Cooper weather the storm, but the lowest incomes are still hit hard. I sincerely believe that tech, Co-Founder as an industry, does not exist. Tech is a part of every industry. We should create equal opportunities foryear, anyone, regardless of background income level, toincontribute. After a strong start to the travel companies have seen or capital invested the industry vertical slow dramatically. The travel sector is expected to see 62% less capital invested in 2020 relative to 2019, though companies such as GetYourGuide ($133M) and Omio ($100M) showed that the strongest companies could raise in spite of a collapse of demand. After aa strong strong start start to to the the year, year,travel travelcompanies companieshave have seen seen capital capital invested in in the industry industry After After a strong start to the year, travel companies have seen capital invested ininvested the industrythe vertical slow vertical slow Health vertical slow dramatically. The travel sector is expected to see 62% less capital invested in to 2019, though dramatically. Thebytravel sector is expected to see less capitalininvested in 2020 relative AbsoluteThe change industry dramatically. travel sector is expected to see 62% less62% capital invested 2020 relative to 2019, though vertical of capital invested ($M), 2020 relative to 2019, though companies such as GetYourGuide ($133M) and Omio ($100M) Marketing companies as GetYourGuide and Omio ($100M)that showed that thecompanies strongestcould companies companies such such as GetYourGuide ($133M) ($133M) and Omio ($100M) showed the strongest raise could raise 2019 showed that theofstrongest companies could raise in spite of a collapse of demand. in spite of versus a collapse demand. in spite of a2020 collapse of demand. Telecom Sports Health

Absolute change by industry Absolute change by industry vertical of capital invested ($M), vertical of capital invested ($M), 2019 versus 2020

Health Kids

Marketing

Marketing Semiconductors

2019 versus 2020

Telecom

Telecom Music

Sports Kids

Sports Dating

Semiconductors

Kids Hosting

Semiconductors Legal

Music

Dating

Music Robotics

Hosting

Dating Energy

Legal

Hosting Fashion

Robotics

Legal Real estate

Energy Fashion

Robotics Home living Energy Security

Real estate

Fashion Education

Home living Security

Real estate Food

Education

Home living Gaming Security

Food Jobs recruitment

Education Gaming Enterprise software Jobs recruitment

Food Fintech

Enterprise software

Gaming Event tech

Fintech Jobs recruitment

Media

Event tech

Enterprise software Transportation

Media

Fintech Travel

Transportation

Event tech -1,500

Travel

-1,500

NOTE:

-1,250

-750

-500

-250

250

500

750

YoY absolute change ($M) -1,000

-750

-500

-250

250

500

750

1,000

YoY absolute change ($M)

Travel

biotech, secondary transactions, debt,

SOU RCE: SOU RCE:

-1,500

-1,250

-1,000

-750

-500

-250

YoY absolute change ($M)

NOTE:

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2020 annualised based on data to September 2020.

-1,000

Transportation

NOTE: All Dealroom.co data excludes the following: All Dealroom.co data excludes following: lending capital, grants.the Please also note the biotech, secondary transactions, debt, data excludes Israel. 2020 annualised based lendingon capital, Please also note the data grants. to September 2020. data excludes Israel. 2020 annualised based on data to September 2020.

Media

SOU RCE:

250

500

750

European �ntech companies raised more cap of huge growth rounds raised by Europe's larg including a giant $650M round in September. 02.2 Investments by Geography & Industry another large round of $150M in �une. More th the past two years alone. Enterprise software led by companies such as Mirakl ($300M), UiP European �ntech companies raised more in 2020 any other ind invested intocapital companies in than the transportatio European fintech companies raised more capital in 2020 than growth any other industry vertical, driven of huge rounds raised by Europe's largest �ntech giants. Klarna rais somewhat reduced levels compared to 2019. by a number of huge growth rounds raised by Europe’sincluding largest fintech raised $850M Revolut raised $500M in Febru a giantgiants. $650M Klarna roundjust in September. two years after founding. Sweden's North across two rounds, including a giant $650M round in September. Revolut $500M in February, another large roundraised of $150M in Moreyears. than $20B has been invested in in �une. just three the past two years alone. Enterprise software companies also continued to while Checkout.com raised another large round of $150M in June. More than $20B has been invested d more capital capital in in 2020 2020 than than any any other other industry industry vertical, vertical, driven driven by by a a number number d more led by companies such as Mirakl ($300M),also UiPath ($225M), MessageBird ($20 into European fintech companies in the past two years alone. Enterprise software companies urope' largest giants. two rounds, DATA SE Capital invested ($M) by industry urope'sscontinued largest �ntech �ntech giants. Klarna Klarna raised raised $�50M $�50M across across two rounds, intosuch companies in the transportation to raise large sums of capital in 2020, led byinvested companies as Mirakl ($300M), UiPath and energy industry vertical eptember. Revolut raised $500M in February, while Checkout.com raised somewhat levels compared to 2019. The UK's Cazoo raised a partic eptember. Revolut raised($200M) $500Mand in February, while Checkout.com raised ($225M), MessageBird Snyk ($200M). Capital investedreduced into companies in the transportation L EGEND just two years after founding. Sweden's Northvolt raised a further $600M an ne. More than $20B has been invested into European �ntech companies in ne. More $20B hasverticals been invested into European �ntech companies up to 10,000to andthan energy industry was also strong, though at somewhat reduced levelsincompared in just three years. e companies continued to raise sums of in 4,000founding. to 6,000 2019. The UK’s Cazooalso raised a particularly Series D, just two years after e software software companies also continued to noteworthy raise large large$310M sums of capital capital in 2020, 2020, 2,000 to 300M), ($200M) Snyk ($200M). Capital Sweden’s($225M), Northvolt MessageBird raised a further $600M andand has now raised more than $1.6B in just three 4,000 years. 300M), UiPath UiPath ($225M), MessageBird ($200M) and Snyk ($200M). Capital

Capital invested ($M) by industry nsportation nsportation and and energy energy industry industry verticals verticals was was also also strong, strong, though though at at ed The UK's Cazoo raised $310M L EGEND Capital invested by industry, 2020a ed to to 2019. 2019. The UK's($M) Cazoo raised a particularly particularly noteworthy noteworthy $310M Series Series D, D, up to 10,000 den' s Northvolt raised a further $600M and has now raised more than $1.6B den's Northvolt raised a further $600M and has now raised more than $1.6B 4,000 to 6,000 NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes DATA SET :: 2 0 DATAIsrael. SET2020 20 0is2 2annualised 0 based on data to September 2020.

1,000 to 2,000 DATA SET : 2 0 2 0 500 to 1,000 400 to 500

300 to 400 200 to 300

2,000 to 4,000

100 to 200

1,000 to 2,000

50 to 100

500 to 1,000

up to 50

Fintech

400 to 500 300 to 400 200 to 300

NOTE:

100 to 200

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, software Transportation Energy lending capital, and grants. Please alsoEnterprise note Transportation Energy that the data excludes Israel. 2020 is annualised based on data to September 2020.

50 to 100

Health up to 50 Health Fintech Fintech NOTE:

All Dealroom.co data excludes the following: biotech, secondary transactions, Security debt, Real estate Security lending capital, and grants. Please also note Real estate Marketing that the data excludes Israel. 2020 is Marketing annualised based on data to September 2020.

Travel Travel

Sports Sports

Fashion Fashion

Enterprise software Enterprise software Food Food

Media Media

Legal Legal

Telecom Telecom

SemiSemiconductors conductors

Jobs Gaming Jobs Recruitment Gaming Recruitment Music Music

SOU SOU RCE: RCE:

Robotics

SOU RCE: Robotics

Kids Kids

Hosting Hosting

Home Home Living Living

Education Education Event tech Event Dating tech Dating

SOU RC

overall percentage increase, albeit from smaller bases. Interestingly, only three industry verticals in total have recorded year-on-year increases in capital invested. On the other end of the spectrum, capital invested in event tech,Investments travel and jobs recruitment companies saw the steepest decline overall. 02.2 by Geography & Industry Kids % change by industry vertical of capital invested, 2019 Sports The relative invested across Europe by industry vertical alsoalso provides an an versus 2020 year-on-year The relative year-on-yearchange changeinincapital capital invested across Europe by industry vertical provides Telecom

1 86% 53%

interesting lens which totoview 2020 investment themes. KidsKids andand sports havehave seen the highest The relative year-on-year change in capital invested across Europe by industry vertical also provides an seen interesting lensthrough through which view 2020 investment themes. sports the highest Music interesting lens through which to view 2020 investment themes. Kids and sports have seen the highest overall percentage increase, albeit from smaller bases. Interestingly, only three industry verticals in25% in total have overall percentage increase, albeit from smaller bases. Interestingly, only three industry verticals overall percentage increase, albeit from smaller bases. Interestingly, only three industry verticals in total have Health 23% total haveyear-on-year recorded year-on-year capital invested. On theend other endspectrum, of the spectrum, recorded increasesincreases in capitalininvested. On the other of the capitalcapital invested in recorded year-on-year increases in capital invested. On the other end of the spectrum, capital invested in Marketing event tech, travel and recruitment jobs recruitment companies saw the steepest decline decline overall.overall. 19% invested in event travel and jobs recruitment companies sawoverall. the steepest event tech, travel andtech, jobs companies saw the steepest decline Semiconductors Kids

%% change by industry vertical change by industry vertical of capital invested, 2019 of capital invested, 2019 versus 2020

Sports

versus 2020

12%

Kids Energy Sports Robotics

Telecom

Semiconductors Energy Robotics

12%

Marketing Dating -5%

Robotics Real estate

Legal

Fintech Security

-13% -16%

Hosting

Food Education

Transportation

RealGaming estate

Hosting Travel

Education

-18% -19%

-22% -58% -23% -36%

Security Jobs Recruitment

-59%

-21%

-59%

-21%

-55%

-22%

-62%

-58%

Transportation Event tech -59% -85% Gaming Home Living-100 -59%

Jobs Recruitment

Event tech

NOTE:

-50 -36%

-75

Education -75

SOU RCE:

Gaming

-25

100

% change

-55%

-85% -100

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note NOTE: that the data excludes Israel.

-23%

Media -62%

Travel

-9%

-16%

-36%

-21%-55%

Home Living Media

-21%

-23% -13%

-21%

Fashion Media

Security

-7% -7%

-19%

HomeDating Living

Real estate

-21%

-22%

-18%

Legal Transportation

-5%

-19%

-9%

Hosting

Food

12%

-18%

-7%

Dating Enterprise software Fashion

19%

-16%

-7%

Energy Food

Enterprise software

23%

19% -13%

Semiconductors Fashion

Fintech

53% 25%

23% -9%

Health Legal

Marketing

86%

53%

-7%

25%

Music Enterprise software Health

86%

-7%

Telecom Fintech

Music

113%

-5%

-58% -50

-25

-59%

Jobs Recruitment

100

125

% change

-59%

This is further indeed echoed by SOU founders building companies in-62% the HR & talent space who have found it more All Dealroom.co data excludes the following: Travel RCE: biotech, secondary transactions, debt, lending capital, to and grants. Please also note di�cult raise venture capital in Europe in the last 12 months than others. �erhaps also less surprising to Event tech -85% that the data excludes Israel. see founders in health tech and security software ranking below the average (55%) in light of the pandemic -100 -75 -50 -25 0 25 50 75 and cyberattacks/data breaches. Thisheightened is further echoed by founders building companies in the HRin&the talent who havewho found it more difficult indeed echoed by founders building companies HRspace & talent space have % change found it more to is raise venture Europe the lastin 12the months others. Perhaps also less surprising to see founders di�cult to raise venture capital ininEurope last in 12than months than others. �erhaps also less surprising to This further indeedcapital echoedinby founders building companies the HR & talent space who have found it more NOTE: inShare health techventure and security below the average (55%) light the pandemic see founders in health tech and security software ranking below the in average (55%) in lighttoofand theheightened pandemic di�cult toofraise capital insoftware Europe inranking the last 12 months than others. �erhaps alsoof less surprising HR & Talent founder respondents All Dealroom.co data excludes the following: see founders in health tech and security software ranking below the average (55%) in light of the pandemic and heightened cyberattacks/data breaches. cyberattacks/data breaches. who agree with the statement: SOU RCE: Fintech biotech, secondary transactions, debt, and It heightened lending capital, to andcyberattacks/data grants.venture Please also note breaches. is harder raise that the data excludes Israel. capital in Europe than it Share of founder respondents was months ago Share of12 founder respondents who agree with the statement: who agree with the statement: is harder to raise venture It isItharder to raise venture capital in Europe capital in Europe than itthan it was 12 months ago ago was 12 months

61%

HR & Talent Average all founders HR & Talent

62%

Media, Gaming & Entertainment Media, Gaming & Entertainment Data, Design & Developer Tools

Transportation & Logistics Energy & Environment

30 47%

Founders respondents only. Sectors with at least 50 responses only.

% of founders that �nd it harder

Founders respondents only. Sectors with at

NOTE:

SOU RCE:

54%

50%

49% 50

% of founders that �nd it harder 47%

Infrastructure & Security Software 0 10

SOU RCE:

47%

49%

55%

53%

47%

50%

Healthtech & Medtech Infrastructure & Security Software

NOTE:

49%

53%

Advertising & Marketing Infrastructure & Security Software Energy & Environment Healthtech & Medtech

50%

54%

Data, Design & Developer Tools Healthtech & Medtech Advertising & Marketing

61%

53%

55%

Advertising & Marketing

54%

61%

Average all founders Average all founders

Energy & Environment

55%

63%

Fintech Fintech Transportation & Logistics

Data, Design & Developer Tools

Founders respondents only. Sectors with at least 50 responses only.

Media, Gaming & Entertainment

Transportation & Logistics

NOTE: least 50 responses only.

100

47% 47%70 50

02.2

Investments by Geography & Industry

Sitar Teli Connect Ventures Managing Partner

I’m looking at areas that benefit from community-based healthcare. Broadly, this includes chronic diseases, long-term diseases, and under resourced areas like menstrual and mental health. These are areas where public healthcare has limited budget and resources and where private healthcare can often be prohibitively expensive. In addition, even if you do receive healthcare for it, there’s a social and community component that is lacking which can be highly value add from the perspective of knowledge transfer, mental well-being and peer support. We’ve already made one investment in this space, Second Nature, and I’m looking for more.

For Europe to create more health tech breakout success stories, one of two things is required: pan-European plays or companies that can successfully grow their business in the US. Both have their issues. Each country in Europe has a different national healthcare system and different cultural attitudes towards healthcare, so while in aggregate it’s a compelling market, scaling across Europe is very challenging. The US on the other hand has a large market with a very different, profit driven attitude towards healthcare, but the healthcare system, payment coverage and attitudes towards healthcare are quite different from the most of the world, which makes it a daunting market to conquer.

European SaaS continues to go from strength to strength with record levels of capital invested in 2020. The $12B of capital invested in 2020 takes the cumulative total investment into European SaaS companies to to capital in in 2020. The European continues to go gofrom fromstrength strengthto tostrength strengthwith withrecord recordlevels levelsofof capitalinvested invested more thanSaaS $40Bcontinues since 2016. European SaaS continues to goininvested from strength to strength with record levels of investment capital 2020. 2020.of The $12B of capital in 2020 takes the cumulative total intoinEuropean SaaS $12B capital invested 2020 takes the cumulative total investment intoinvested European SaaSThe companies to $12B of capital inthan 2020 takessince the cumulative total investment into European SaaS companies to more than invested $40B since 2016. companies to more $40B 2016. more Capital than $40B since 2016. invested ($B) in

12.5

European SaaS companies per yearinvested ($B) in Capital Capital invested ($B) in European SaaS companies European SaaS companies per year per year

5.0

0.0

Capital invested Capital invested ($B) ($B)

Capital invested ($B)

7.5

2.5

NOTE:

12.5 10.0

12.5

10.0

$11.7B

$5.9B 7.5 5.0

$5.9B

$4.0B 5.0 $4.0B 2.5

2.5 0.0

$12.0B

$8.1B

$5.9B

$4.0B

2016

2017

2016

0.0

$11.7B $12.0B

$12.0B

$8.1B

10.0 7.5

NOTE:All Dealroom.co data excludes the following:

biotech, transactions, NOTE: secondary All Dealroom.co data excludes the following:debt, lending capital, grants. Please biotech, secondary transactions, debt, also note the excludes annualised based All Dealroom.co data2020 excludes the following: lendingdata capital, grants.Israel. Please also note the on dataIsrael. to September 2020. baseddebt, biotech, secondary transactions, data excludes 2020 annualised on datalending to September capital,2020. grants. Please also note the data excludes Israel. 2020 annualised based on data to September 2020.

$11.7B

2017

2016

2017

SOU RCE: SOU RCE:

SOU RCE:

2018 2018

2019 2019

2018

2020

2019

2020

02.2

Investments by Geography & Industry

Capital invested invested in European companies building with deep technology at their core or in in an an applied way raised Capital applied raised 2020,indown $10.2B 2019. Since 2016, cumulative investment $8.9B inway 2020, down$8.9B fromin $10.2B 2019.from Since 2016, in cumulative investment into deep tech companies in Capital invested in European companies building deep technology at their core an applied way raised Europe has surpassed $36B. Since deep canwith be$36B. perceived as a nebulous itorisinworth spelling out the into deep tech companies in Europe has tech surpassed Since deep tech canterm, be perceived $8.9B in 2020, down from $10.2B in 2019. Since 2016, cumulative investment into deep tech companies in underlying methodology used to derive these numbers. In Dealroom's methodology, deep tech is used as a as a nebulous term, it is worth spelling out the underlying methodology used to derive these Capital invested in European companies building with deep technology at their core or in an applied way raised Europe SinceSince tech canisbe perceived as into atag nebulous term, itstart-ups isBig worth spelling out the meta taghas to encompass start-ups indeep 16deep elds: Arti cial Intelligence/ Machine Learning/ $8.9B in 2020, down from $10.2B in 2019. 2016, cumulative investment deep tech companies inData, numbers. Insurpassed Dealroom’ s$36B. methodology, tech used as a meta to encompass inAugmented underlying methodology used toAutonomous derive these numbers. In Dealroom's methodology, deep tech isofused as a3D Reality/ Virtual Reality, Drones/ Driving, Blockchain/ Nanotech, Robotics/ Internet Things, Europe has surpassed $36B. Since deep tech can be perceived as a nebulous term, it is worth spelling out the 16 fields: Artificial Intelligence/ Machine Learning/ Big Data, Augmented Reality/ Virtual Reality, Machine Learning/ Big Augmented meta tag to encompass start-ups in 16numbers. elds: Arti cial Intelligence/ underlying methodology usedVision, to derive these In Dealroom's methodology, deep tech is used asData, a Technology/ Computer Connected Device/ Sensors Technology, and Recognition Technology (NLP, Drones/ Autonomous Driving, Blockchain/ Nanotech, Robotics/ Internet of Things, 3D Technology/ Reality/ Virtualtext, Reality, Drones/ Blockchain/ Robotics/ Internet of Things, 3D MachineNanotech, Learning/ Big Data, Augmented meta tag to video, encompass start-ups in 16 Autonomous elds: Arti cialDriving, Intelligence/ image, speech recognition). Computer Vision, Connected Device/ Sensors Technology, and Recognition Technology (NLP, Reality/ Virtual Reality, Drones/ Autonomous Driving, Blockchain/ Nanotech, Robotics/ of Things, 3D Technology/ Computer Vision, Connected Device/ Sensors Technology, andInternet Recognition Technology (NLP, image, video, text, speech recognition). Technology/ Computer Vision, Connected Device/ Sensors Technology, and Recognition Technology (NLP, image, video, text, speech recognition). Capital invested ($B) in recognition). image, video, text, speech European deep tech companies

$10.2B

10.0

Capital invested ($B) in

Capital invested ($B)

10.0

7.5

5.0

2.5

7.5

NOTE:

$7.0B

5.0

$6.1B

$3.9B

$7.0B

$6.1B

5.0 $3.9B

2.5

$3.9B

2.5 2016

2017

2016

0.0

biotech, secondary transactions, debt,

$8.9B

$6.1B

NOTE:All Dealroom.co data excludes the following:

NOTE: data excludes the following: All Dealroom.co lending capital, and grants. Please also note biotech, secondary transactions, debt, that the data excludes Israel. All Dealroom.co data excludes the is following: lending capital, and grants. Please also2020 note annualised based ontransactions, dataisto September biotech, secondary debt, 2020. that the data excludes Israel. 2020 annualised based on data to grants. September 2020. lending capital, and Please also note

$10.2B

$7.0B

7.5

0.0 0.0

$10.2B

10.0 Capital invested Capital ($B) invested ($B)

Capital invested ($B) in European deep tech companies European deep tech companies

2017

2016

2018 2018

2017

2019 2019

2018

2019

SOU RCE: SOU RCE:

SOU RCE:

that the data excludes Israel. 2020 is annualised based on data to September 2020.

More broadly I think Europe needs to find a way to get its best companies to not sell too soon - especially as deep tech gets deeper and much more patient capital will be needed to meet some of the huge challenges we face as a world. People don’t really talk much about technology sovereignty but if recent events have taught us anything it’s that geopolitics is getting more not less volatile and as a European, I’d feel a lot more comfortable if we not only developed but owned more of the future too.

Steve O’Hear TechCrunch Journalist

Slush 2019 Photo by: Jussi Hellsten

2020

02.3

Tech with Purpose Last year, in collaboration with Dealroom, this report proposed a methodology to measure entrepreneurial activity and capital invested into purpose-driven tech companies across Europe. This was based on a simple framework aligned with the United Nations Sustainable Development Goals (“SDGs”).

Overview of included SDGs included in Overview of SDGs in analysis and mapping to analysis and mapping to keywords on Dealroom's platform keywords on Dealroom's platform

The first iteration in 2019’s report focused on a subset that started with seven of the 17 SDGs. Since last year’s report, Dealroom has continued to develop the methodology and build out its coverage of purpose-driven tech companies to enable an analysis that is now extended across all 17 SDGs. For each of the individual SDGs, Dealroom’s team has manually assigned keywords to tag companies in its platform with relevant categories. Each company is then individually reviewed and assigned to either “core” or “side” depending on the business

model alignment with the SDGs, in other words whether it is core to a company’s business model, or simply a peripheral or indirect aspect of the business model. By extending the analysis in this way, Dealroom has grown the dataset from 528 unique venture-backed, purpose-driven tech companies analysed in the 2019 report to over 3,000 in this year’s report. As always, we understand the methodology has limitations and welcome feedback both in terms of scope and methodology in future iterations. The dataset and methodology are accessible on the ‘Impact & Innovation’ section of their website.

Description

Selected Dealroom Keywords

Selected Dealroom Keyw

Extreme poverty, unbanked, Extreme poverty, unbank disaster prevention, disaster prevention, microlending microlending

SDG 1: No Poverty SDG 1: No Poverty

End poverty in all its forms everywhere End poverty in all its forms everywhere

SDG 2: Zero Hunger SDG 2: Zero Hunger

End hunger, achieve food improved and Food security,and vertical farming, Endsecurity, hunger, and achieve foodnutrition security, and improved nutrition Food security, vertical far promote sustainablepromote agriculturesustainable agriculture poor nutrition, permaculture poor nutrition, permacult

SDG 3: Good Health and Well-being

Ensure health lives and promote well-being for all at all ages

SDG 4: Quality Education

Ensure inclusive and equitable quality education and promote Universal primary education, lifelong learning opportunities for all equal education Ensure inclusive and equitable quality education and promote Universal primary educat

SDG 3: Good Health and Well-being

Prenatal care, road safety, Prenatal care, road safety telemedicine, contraception, telemedicine, contracept antimicrobial resistance, Ensure health lives and promote well-being for all at all ages antimicrobial resistance, elderly care

elderly care

SDG 4: Quality Education

lifelong learning opportunities for all

SDG 5: Gender Equality

Achieve gender equality and empower all women and girls

SDG 5: Gender Equality

equal education

AI measuring bias, reproductive rights, female health, nonAI measuring bias, reprod binary

Achieve gender equality and empower all women and girls

SDG 6: Clean Water and Sanitation

SDG 6: Clean Water and Sanitation SDG 7: Affordable and Clean Energy

SDG 7: Affordable and Clean Energy

SDG 8: Decent work and economic growth

Ensure availability and sustainable management of water and sanitation for all

sanitation for all Ensure access to affordable, reliable, sustainable and modern energy for all

Solar energy, wind energy, tidaldesalination power, hydrogen, off-grid

Ensure availability and sustainable management of water and

Ensure access to affordable, reliable, sustainable and modern

andall sustainable economic growth, Promote sustained, inclusive energy for full and productive employment and decent work for all

SDG 8: Decent work and economic growth

SDG 9: Industry, Innovation and infrastructure

rights, female health, nonbinary

Safe water, wastewater treatment, water saving, desalination

Gender pay gap, equal pay, inclusive employment, fair trade

Promote sustained, inclusive and sustainable economic growth,

Safe water, wastewater treatment, water saving,

Solar energy, wind energy power, hydrogen, off-grid

Gender pay gap, equal pa

Sustainable industrialization, inclusive employment, fa Build resilient infrastructure, inclusive and sustainable full andpromote productive employment and decent work for all universal access to technology, trade industrialization and foster innovation inclusive industrialization

SDG 9: Industry, Innovation and infrastructure

Build resilient infrastructure, promote inclusive and sustainable Safe migration, refugees

Sustainable industrializat universal access to techn inclusive industrialization

SDG 10: Reduced inequalities

Reduce inequality within and among countries industrialization and foster innovation

Reduced inequalities SDG 10: SDG 11: Sustainable Cities and Communities

Safe migration, refugees Air quality measurement, urban Make cities and human settlements inclusive, safe, resilient and Reduce inequality within and among countrieswaste reduction, affordable integration, racial sustainable housing discrimination

integration, racial discrimination

Food waste, sustainable Air quality measurement, Make citiesand andproduction human settlements safe, resilient circular,and sustainable Ensure sustainable consumption patterns inclusive, fashion, SDG 11: Sustainable Cities and Communities waste reduction, affordab materials sustainable housing

SDG 12: Responsible consumption and Production

SDG 13: Climate Action

Take urgent action to combat climate change and its impacts

SDG 12: Responsible consumption and Production

Conserve and sustainably use the oceans, seas and marine resources for sustainable development

SDG 14: Life below Water

SDG 13: Climate Action

Carbon capture, carbon offset, Food waste, sustainable climate tech, alternative protein

Ensure sustainable consumption and production patterns

fashion, circular, sustaina

Marine conservation, seafood materials substitutes, overfishing, plastic pollution Carbon capture, carbon o

Take urgent action to combat climate change and its impacts

climate tech, alternative p

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, Forestry, biodiversity, wildfires Marine conservation, sea and halt and reverse land degradation and halt biodiversity loss Conserve and sustainably use the oceans, seas and marine

SDG 15: Life on Land

SDG 14: Life below Water

resources for sustainable development

substitutes, overfishing, p

pollution Promote peaceful and inclusive societies for sustainable Govtech, digital democracy, development, provide access to justice for all and build effective, corruption prevention accountable and inclusive institutions all levels Protect, restoreatand promote sustainable use of terrestrial

SDG 16: Peace, justice and strong institutions

SDG 15: Life on Land

ecosystems, sustainably manage forests, combat desertification,

Forestry, biodiversity, wi

SDG 16: Peace, justice and strong institutions

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Govtech, digital democra corruption prevention

SDG 17: Partnerships

Strengthen the means of implementation and revitalize the global partnership for sustainable development

SDG partnership, impact partnership

Strengthen the meansand of implementation andland revitalize the globaland haltSDG partnership, impact halt and reverse degradation biodiversity loss partnership for sustainable development partnership

SDG 17: Partnerships

SOU RCE:

58 SOU RCE:

02.3

Tech with Purpose

C A PITA PITA L L INVESTED INVESTED (2 016- 2 02 0) CA

Total $20B capital invested in purpose-driven tech companies is Over has been invested in purpose-driven tech expected exceed 2020. of this capital companiestoover the $6B last inve years80% across more thanhas 3,000 C APITAL IN VESTED Total invested capital invested in purpose-driven tech companies been inapproximately purpose-driven companies where impact rounds. In 2020, 17% of total capital C A PITA L INVESTED C A PITA L INVESTED is at the core ofexceed their business model. expected to $6B in 2020. 80% of this capital has Total capital invested in purpose-driven tech is invested in European tech companies went tocompanies purposeTotal capital invested in purpose-driven tech companies is capital capital invested invested in in purpose-driven purpose-driven companies tech companies in the past 5 been invested in purpose-driven companies where impact expected to exceed $6B in 2020. 80% of this capital has driven companies, of which those with purpose at their expected to exceed $6B in 2020. 80% of this capital has been invested infor purpose-driven companies where impact core accounted thebusiness lion's share of where investment. is invested at the core of their model. been in purpose-driven companies impact is atisthe core of their business model. at the core of their business model. Capital invested ($B) in capital invested in

$6B $20B $6B$6B $6B

capital invested in purpose-driven companies capital invested in purpose-driven companies

purpose-driven European Capital invested and deals in tech companies per year purpose-driven European tech Capital invested ($B) companies per in year Capital invested ($B)as ina share of purpose-driven European total capital invested and deals purpose-driven European tech companies per year (%) tech companies per year

Other

6.0

4.0

2.0

0.0

NOTE: "Core" purpose-driven start-ups have impact at the core of their business model while have it asstart-ups a peripheral "Core""side" purpose-driven havefocus. impact2020 is at the annualised core of their business based onmodel data while up to September NOTE: "side" 2020. have it as a peripheral focus. 2020 is NOTE:

Capital investedCapital ($B) invested ($B) % of total capital invested / deals

Core Side

6.0

Capital invested ($B)

L EGEND

purpose-driven companies

DATA SET : SH A RE OF DEA L S

$1.8B

6.0 4.0 100.0

$1.3B

$1.8B

$0.9B

4.0 2.0 75.0

$0.4B

2.0 0.0 50.0 $1.5B 2016

0.0

25.0 SOU RCE:

$0.5B $0.4B $0.5B

$1.5B

$1.9B

$0.4B 2016 $1.5B

2017

2016

$5.0B

$2.8B $0.9B$5.0B

$1.9B $0.5B

$5.0B

$2.8B

2017 $1.9B

$0.9B

2018 $2.8B 2018

2019

2017

$5.0B

2019

2020

2018

2019

SOU RCE:

annualised based on data up to September 2020."Core" purpose-driven start-ups have impact

at the core of their business model while 0.0 SOU RCE: "side" have it as a peripheral focus. 2020 is annualised based on data up to September Over $20B has been invested in purpose-driven tech 2020. companies over the last ve years across more than 3,000 NOTE:

C A2016 PITA L INVESTED (2 016- 2 022017 0)

2018

C A PITA L INVESTED (2 016- 2 02 0)

C APITAL IN VESTED (2 016-2 0 2 0) Over $20B has been invested in purpose-driven tech companies Over $20B has been invested in purpose-driven tech over theInlast five years across than more 3,000than rounds. In 2020, rounds. 2020, approximately 17%years ofmore totalacross capital companies over the last ve 3,000 All Dealroom.co data excludes the following: SOU RCE: invested in European tech companies went to purposebiotech, secondary transactions, debt, approximately 17% of total capital invested in European capitaltech invested in purpose-driven tech companies in the past 5 years rounds. In 2020, approximately of total capital lending capital, and grants. Please also note with17% driven companies, of which those purpose at their C A PITA L INVESTED (2 016- 2 02 0) that the data excludes Israel. companies went to purpose-driven companies, of which those invested inhas European tech companies went to purposecore$20B accounted for the lion's share ofin investment. Over been invested purpose-driven tech capital invested in purpose-driven tech companies in the past 5 with purpose at their which core accounted for the lion’ share capital invested in purpose-driven driven companies, purpose at stheir companies over theoflast vethose yearswith across more than 3,000 DATA SET : SH A RE OF CA PITA L INVEST ED of investment. Capital invested and deals in tech companies in the past 5 years core accounted the lion's share rounds. In 2020,for approximately 17%ofofinvestment. total capital

$20B

purpose-driven European tech

companies year as a sharetech of invested inperEuropean companies went to purposetotal capital invested and deals driven of which thoseShare withofpurpose atAtheir DATA SET : SH RE OF DEA L S Capital invested and deals in (%) companies, capital invested core accountedEuropean for the tech lion's share of investment. purpose-driven 100.0

$20B$20B $20B

capital invested in purpose-driven tech companies in the past 5

% of total capital invested / deals

L EGEND companies per year as a share of Core total capital invested and deals Side DATA SET : SH A RE OF DEA L S Capital invested and deals in (%) 75.0 Other C A PITA L INVESTED (2 016- 2 02 0) purpose-driven European tech Over $20B has been invested in purpose-driven tech 100.0 companies per year as a share of across more than 3,000 L EGEND companies over the last ve years total invested and deals17% of total capital rounds. In 2020, approximately 50.0 Corecapital invested in European tech companies went to purpose(%) Side capital invested in purpose-driven tech companies in the past 5 years driven companies, of which those with purpose at their75.0 100.0 Other core accounted for the lion's share of investment. L EGEND 25.0

Core

Capital Side invested and deals in purpose-driven European tech Other companies per year as a share of total capital invested and deals NOTE: (%) All Dealroom.co data excludes the following: biotech, secondary transactions, debt, L EGEND lending capital, and grants. Please also note thatCore the data excludes Israel.

DATA SET : SH A RE OF CA DEA PITA L S L INVEST ED 0.0

SOU RCE: 100.0

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note NOTE: that the data excludes Israel. All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

% of total capital invested / deals

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. NOTE:

50.0 75.0

2016

2017

2018

2019

2020

Share of deals

Side Other

% of total capital%invested of total /capital deals invested / deals

$20B

75.0

25.0 50.0

0.0 25.0

2016

2017

2018

2019

2016

2017

2018

2019

50.0

25.0

0.0

0.0 SOU RCE:

2016 SOU RCE:

2017

SOU RCE:

2018

2019

2020

C LIMATE A C TION

European entrepreneurs and investors appear to be 02.3 Tech responding to with thePurpose global climate crisis. European tech companies targeting climate action (SDG #13) have C LIMATE A C TION attracted greater sums ofand investment purpose-driven European entrepreneurs investorsthan appear to be capital invested into European tech companies targeting climate act start-ups addressing anyclimate other SDG withEuropean more than $11B C LIMATE A C TION responding to the global crisis. tech since 2016 CLIMATE ACTION European entrepreneurs and investors to be responding to European entrepreneurs investors appear toappear be invested cumulatively since 2016. This is followed companies targetingand climate action (SDG #13) haveby responding to the global climateEuropean crisis. European tech the global climate crisis. techSDG companies targeting climate investment into companies addressing #7, affordable attracted greater sums action of investment than purpose-driven companies targeting climate (SDG #13) have action (SDG #13) have attracted greater sums of investment thancapital invested into European tech companies targeting climate act and clean addressing energy, which attracted start-ups anyhave other SDG purpose-driven with$9.7B moreofthan $11B attracted greater sums of investment than since 2016 purpose-driven start-ups addressing any other SDG with more than cumulative investmentsince since 2016.This is followed by capital invested into European tech companies targeting climate action invested cumulatively start-ups addressing any other SDG2016. with more than $11B since 2016 $11B invested cumulatively since 2016. This is followed by investment capital invested into European investment into companies addressing SDG #7, affordable invested cumulatively since 2016. This is followed by into companies addressing SDG #7, affordable and clean energy, tech companies targeting investment into companies addressing SDG #7, affordable and clean energy, have attracted $9.7B DATA SETof : > $ 50 0 M INVEST ED CU M U L AT IVEL Y Capital invested ($M)which in andcumulative clean energy, which have attracted $9.7B of which have attracted $9.7B of cumulative investment since 2016. climate action since 2016 investment since 2016. purpose-driven European tech

$11B $11B

$11B

cumulative investment since 2016. companies per SDG addressed Capital L EGEND invested ($M) in

Capital invested ($M) in purpose-driven European tech SDG 13: Climate action tech purpose-driven European companies per SDG addressed companies SDG addressed SDG 7:per Affordable and clean energy

DATA4,000 SET : cumulatively > $ 50 0 M INVEST ED CU M U L AT IVEL Y >$500M invested DATA SET : > $ 50 0 M INVEST ED CU M U L AT IVEL Y

SDG 3: Good health and well-being

L EGEND L EGEND

3,000 4,000

SDG 7:SDG Affordable and cleanand energy 7: Affordable clean energy

SDG 12: Responsible consumption and

SDG 3:production Good3:health well-being SDG Goodand health and well-being

communities SDG 9: Industry, innovation and

SDG 12: Responsible consumption and infrastructure SDG 12: Responsible consumption and production

production

Life below water SDG 2:SDG Zero14: hunger 2: Zero hungerand SDG 9:SDG Industry, innovation

Capital invested ($M)

3,000

SDG 11:SDG Sustainable cities and hunger SDG 2: 11:Zero Sustainable cities and communities

2,000

infrastructure

SDG 9: Industry, innovation and

Capital invested Capital ($M) invested ($M)

4,000

SDG 11: Sustainable cities and SDG 13:SDG Climate action action 13: Climate communities

2,000 3,000

1,000 2,000

1,000

infrastructure SDG 14: Life below water

0 1,000

SDG 14: Life below water NOTE:

Companies addressing more than one SDG are counted against each individual SDG they are NOTE: targeting. 2020 is annualised based on data Companies than one SDG are up to addressing Septembermore 2020. counted against each individual SDG they are NOTE:

2016

2017

2016

SOU RCE:0

2017

2016

2018

2017

2019

2018

2020

2019

SOU RCE:

targeting. 2020 is annualised based on data up to September 2020. Companies addressing more than one SDG are

counted against each individual SDG they are targeting. 2020 is annualised based on data up to September 2020.

SOU RCE:

Slush 2019 Photo by: Jussi Hellsten

On climate specifically, we see a lot of forces at play in making this one of the most attractive investment opportunities in Europe, both in terms of profit and impact.

Heidi Lindvall Pale Blue Dot General Partner

On climate specifically, we see a lot of forces at play in making this one of the most attractive investment opportunities in Europe, both in terms of profit and impact. Multiple European countries have committed to going carbon neutral before 2030, and there are notable changes in policies and regulations forcing businesses to shift gears and come up with new ways to operate in more sustainable ways. At the same time we see a raised awareness in consumers demanding change and more founders are moving to climate as being the most urgent problem for us to solve. All of these are contributing in giving Europe a competitive advantage in becoming the leader in climate tech.

2020

02.3

Tech with Purpose

Climate action accounts for roughly 29% of all capital invested in purpose-driven tech companies since 2016 Climate action accounts for roughly of invested ininpurpose-driven tech companies since Climate action accounts forEuropean roughly29% 29%investors ofall allcapital capital invested purpose-driven companies since 2016 cumulatively. The extent to which tech are embracing climate action, affordabletech and clean 2016 cumulatively. The extent to which European tech investors are embracing climate action, affordable energy, and sustainable communities is increasing and tech is re ected in the are paceembracing and scale of investment in the affordable and clean cumulatively. The extent to which European investors climate action, last years, nearly doubling the capital invested between threeisyears in 2016-2018. andtwo clean energy, and sustainable communities isthe increasing is reflected in the and of energy, and sustainable communities is increasing and re and ected in theInterestingly, pace andpace scale of scale investment in the although less than $500M has been invested in SDGs targeting life on landinvested since 2016, the capital invested in investment in the last two years, nearly doubling the capital between the three years in 2016-2018. last two years, nearly doubling the capital invested between the three years in 2016-2018. Interestingly, this segment since 2019 has more than doubled since that of three years prior.

Interestingly, lesshas than $500M has been invested in SDGs life on2016, land the since 2016,invested the although lessalthough than $500M been invested in SDGs targeting lifetargeting on land since capital in this segment since 2019 has more than doubled since that of three years prior. capital invested in this segment since 2019 has more than doubled since that of three years prior. DATA SET : > $ 50 0 M INVEST ED CU M U L AT IVEL Y Capital invested ($M) in Climate action accounts for roughly 29% of all capital invested in purpose-driven tech companies since 2016 purpose-driven European tech cumulatively. extent to which European tech investors are embracing climate action, affordable and clean companies per SDG The addressed, DATA SET : cumulatively > $ 50 0 M INVEST ED CU M U L AT IVEL Y >$500m invested Capital versus invested ($M) in 2015-2017 2018-2020 energy, and sustainable communities is increasing and is re ected in the pace and scale of investment in the purpose-driven European tech last two years, nearly doubling the capital invested between the three years in 2016-2018. Interestingly, L EGEND SDG 13: Climate action companies per SDG addressed, 2016-2018 although less than $500M has been invested in SDGs targeting life on land since 2016, the capital invested in 2015-2017 versus 2018-2020 SDG 7: Affordable and clean energy 2019-2020 this segment since 2019 has more than doubled since that of three years prior. SDG 3: Good health and well-being

L EGEND

SDG 13: Climate action

2016-2018 SDG 11:capital Sustainable cities and communities Climate Climate action action accounts accounts forfor roughly roughly 29% 29% ofof all all capital invested purpose-driven purpose-driven tech companies companies since since 2016 2016 DATAinvested SET : > $ 50in 0 Min INVEST ED CU M U Ltech AT IVEL Y Capital invested ($M) in SDG 7: Affordable and clean energy 2019-2020 The cumulatively. cumulatively. The extent extent to to which which European European tech tech investors investors are are embracing embracing climate climate action, action, affordable affordable and and clean clean SDG 12: Responsible consumption and production purpose-driven European tech energy, energy, and and sustainable sustainable communities communities is is increasing increasing and and is is rereSDG ected ected in in the the pace pace and and scale scale of of investment investment in in the the 3: Good health and well-being companies per SDG addressed, SDG 2: Zero hunger last last two two years, years, nearly nearly doubling doubling the the capital capital invested invested between between the the three three years years in in 2016-2018. 2016-2018. Interestingly, Interestingly, 2015-2017 versus 2018-2020 in in SDGs SDGs targeting targeting lifelife onon land land since since 2016, 2016, the the capital capital invested invested in in although although less less than than $500M $500M has has been been invested invested SDG 9: Industry, innovation and infrastructure cities and communities SDG 11: Sustainable this this segment segment since since 2019 2019 has has more more than than doubled doubled since since that that ofof three three years years prior. prior. L EGEND

2016-2018

Capital Capital invested invested ($M) ($M) in purposein purpose2019-2020 driven driven European European tech tech companies companies perper SDG SDG addressed, addressed, 2015-2017 2015-2017 versus versus 2018-2020 2018-2020

NOTE:

SDG 14: Life below water SDG 13: Climate action SDG 12: Responsible consumption and production 0

DATA DATA SET SET : < $: 50 < $050 M 0INVEST M INVEST ED ED CU CU M UM LU AT L IVEL AT IVEL Y Y

2,000

4,000

SDG 7: Affordable and energy SDG 2:clean Zero hunger

6,000

8,000

12,000

10,000

Capital invested ($M)

SDG 3: Good health and well-being

SDG 9: Industry, innovation and infrastructure <$500m invested cumulatively SOU RCE:

SDG 11: SustainableSDG cities 14:and Lifecommunities below water

2020 is annualised based on data up to L EGEND L EGEND September 2020. 2016-2018 2016-2018

SDGSDG 15: Life 15: Life on land on land

SDG 12: Responsible consumption and production 0 SDGSDG 1: No 1:poverty No poverty

2019-2020 2019-2020

2,000

4,000

6,000

8,000

10,000

8,000

10,000

Capital invested ($M)

SDGSDG 5: Gender 5: Gender equality equality

SDG 2: Zero hunger

SDGSDG 10: Reduced 10: Reduced inequalities inequalities

SDG 9: Industry, innovation and infrastructure

SDGSDG 6: Clean 6: Clean water water andand sanitation sanitation

NOTE:

SOU RCE:

SDGSDG 8: Decent 8: Decent work work andand economic economic growth growthSDG 14: Life below water

2020 is annualised based on data up to September 2020.

SDGSDG 4: Quality 4: Quality education education

2,000

4,000

6,000 Capital invested ($M)

SDGSDG 17: Partnerships 17: Partnerships SDGSDG 16: Peace, 16: Peace, justice justice andand strong strong institutions institutions 0

NOTE:

50 50

100 100

150 150

200200

250250

300300

Capital Capital invested invested ($M)($M)

SOU RCE:

2020 is annualised based on data up to September 2020. NOTE: NOTE:

SOU SOU RCE: RCE:

2020 2020 is annualised is annualised based based on data on data up to up to September September 2020. 2020.

European purpose-driven companies have European purpose-driven companies have raised a raised a European purpose-driven companies have raised a number of mega-rounds this year. number of mega-rounds this year. number of mega-rounds this year. Company

Company

Top 10Top largest deals raised 10 largest dealsby raised by purpose-driven tech companies purpose-driven tech companies in 2020 in 2020

Northvolt 1

Description

CountryCity

City

Country Round Size ($M)

Round Deal Date Size ($M)

Stockholm

SwedenStockholm 600Sweden

Octopus2EnergyOctopus B2CEnergy sustainable energy supplier energy supplier B2C sustainable

London

United Kingdom London

396 United Kingdom April 2020 396

Lilium

Fully electric vertical take-off and landing (VTOL) jet

Weßling

Germany

240

March 2020

EcoVadis

Sustainability ratings software

Paris

France

200

January 2020

Kry

Telemedicine platform

Stockholm

Sweden

154

January 2020

Back Market

Refurbished electronics marketplace

Paris

France

121

Arrival

Connexin

Tokamak Energy

9 Volocopter

Lithium-ion batteries Northvolt Lithium-ion batteries

Lilium

Fully electric vertical take-off and landing (VTOL) jet

EcoVadis

Kry

Back Market

Refurbished electronics marketplace

Arrival

Electric buses and vans

Sustainability ratings software

Telemedicine platform

Electric buses and vans

Smart citiy infrastructure

Connexin Smart citiy infrastructure Fusion power research company

Fully electric helicopter

SOU RCE:

Stockholm Paris

London

United Kingdom

Hull

United Kingdom

Abingdon

United Kingdom

Tokamak Fusion power research company Bruchsal FullyEnergy electric helicopter Volocopter

Weßling

Paris

London

Hull

Germany

France

113 106 87

Sweden France

September 600 2020

240

200

121

May

113

Janu

January 2020 September 2020

United Kingdom 106 January 2020

Germany

Marc

Janu

Abingdon 87 United Kingdom 87 2020 Germany February Bruchsal

April

154

May 2020

United Kingdom

Sept

Janu

Febr

02.3

Tech with Purpose

Being purpose driven is not an advantage On the financing front, a look at some of the anymore: it’s a must! For consumers, investors, biggest amounts raised in 2020 show how talents, and companies altogether. Nowadays, attractive purpose driven Tech companies entrepreneurs cannot launch a company like Ynsect, Ecovadis, Backmarket or Alan without a strong purpose driven mission. In have become. Tech for good founders have France, we even modified our law with « La loi no problem raising big rounds in order to Pacte » to encourage companies to be more scale their companies. They are brilliantly purpose driven and integrate their social and demonstrating that profits and impact are environmental issues in their business model. compatible. In the Galion project we are Agathe Wautier It is a radical change which shows how serious thrilled to help scaling Tech for good founders: Galion Project environmental and social issues are to us. the first Impact Unicorns will be European! Co-Founder Still, European tech entrepreneurs have not taken up all the SDGs with the same gusto. For example, the combined level of investment into the eight SDGs that rank lowest is equivalent to just 27% of the total investment into the top-ranking SDG, Climate Action (SDG #13). Though the level of entrepreneurial activity and investment around many SDGs today remains low in comparison to others, it's reasonable to increase this Still, European techentrepreneurship entrepreneurs have not taken up allin the SDGs with the sameit's gusto. example, as purpose-driven continues to scale Europe. For example, likelyFor that there will be the combined level of investment into the eight SDGs that rank is equivalent todelivered just 27% of the has increased activities around SDG #4: Quality education given thelowest way that education is today Still,come European entrepreneurs have taken all SDGs with the#13). same gusto. For total investment into theduring top-ranking SDG,up Climate Action (SDG Though theexample, level of the entrepreneurial into tech the spotlight thenot pandemic. In the fact, more angel investor survey respondents selected this combined level of investment into the eight SDGs that rank lowest is equivalent to just 27% of the total area as the they are mostmany excited by today than for any other. activity andsector investment around SDGs remains low in comparison to others, it’s reasonable to investment into the top-ranking change SDG, Climate Actioninvested (SDG #13). Though the level of entrepreneurial activity The relative year-on-year in capital across Europe byin industry also provides this as purpose-driven entrepreneurship continues scale Europe.vertical For it’s likelyan and increase investment around many SDGs today remains low in comparison to to others, it's reasonable to example, increase this interesting lens through which to view 2020 investment themes. Kids and sports have seen the highest that there willentrepreneurship be increased activities around SDG #4: Quality education given the way that education in Europe. For example, as purpose-driven continues to scale Capital invested in purpose13: Climate action it's likely that there will be overall percentage increase, albeit from smaller bases. SDG Interestingly, only three industry verticals in total have increased activities around SDG #4:into Quality education given the way that education is delivered today has driven European tech is delivered today has come the spotlight during the pandemic. In fact, angel investor survey in recorded year-on-year increases in capital invested. Oninvestor the other end respondents of themore spectrum, capital invested come into the spotlight during the angel survey selected this companies per SDG as a share ofpandemic. In fact, moreSDG 7: Affordable and clean energy respondents selected this area as the sector they are excited bydecline than for any other. event tech, travel and jobs recruitment companies sawmost the steepest overall. capital invested in Climate area as the sector they are most excited by than for any other. action

SDG 3: Good health and well-being SDG 13: Climate action

SDG 11: Sports Sustainable cities and communities

41%

14%

23% 41%

Marketing SDG 9: Industry, innovation and infrastructure Semiconductors

19% 8%

SDG 12: Responsible consumption and production

29%

SDG 14: Life below water

SDG 2: Zero hunger

12% -5%

14%

Robotics

-7%

SDG 9: Industry, innovation and infrastructure SDG 1: No poverty 8%

14: Life below water EnterpriseSDG software 5%on land SDG 15: Life

Fintech

Legal

SDG 5: Gender equality

SDG 15: Life on land

Fashion SDG 10: Reduced inequalities Food

SDG 5: Gender equality

SDG Security 8: Decent work and economic growth

water and sanitation SDG 6: CleanHosting

Home Living

Media

Gaming

-59%

Based on a set of over 3,000 unique

companies identi ed by Dealroom. 2020 is annualised based on data up to September 2020.

SOU RCE:Event tech

-62%

-75

SOU RCE:

100

Capital invested as a % of capital invested in SDG 13: Climate Action 20

100

Capital invested as a % of capital invested in SDG 13: Climate Action

-50

-25

25 % change

NOTE:

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

-85% -100

SOU RCE:

-23%

-59% 0

Travel

NOTE: companies identi ed by Dealroom. 2020 is

-21%

Jobs Recruitment

NOTE:

-21%

-55%

SDG 16: Peace, justice and strong institutions Education -58% SDG 17: Partnerships 0% SDG 16: Peace, justice and strong institutions

-18%

-36% 0%

SDG 17: Partnerships

SDG 4: Quality education

-16%

-22%

SDG 4: Quality education

SDG 8: Decent work and economic growth

-9%

-19%

SDG 6: Clean water and sanitation Real estate SDG 10: Reduced inequalities

-7%

-13%

SDG 1: No poverty

Transportation

25%

44%

SDG 2: Zero hunger

Dating

53%

29%

Music SDG 3: Good health and well-being

SDG 11: Sustainable cities and communities

annualised based on data up to September Based 2020. on a set of over 3,000 unique

86% 88%

Telecom SDG 12: Responsible consumption and production

Energy

113%

100%

SDG 7: Affordable and clean energy

Health

88%

44%

Kids

% invested change by industry vertical Capital in purposedriven tech ofEuropean capital invested, 2019 companies SDG as a share of versusper 2020 capital invested in Climate action

100%

100

125

02.3

Tech with Purpose

A further tailwind for increased investment into purpose-driven tech companies comes from the institutional A investor further tailwind forLPs. increased into purpose-driven tech companies comes from the institutional layer and LPs areinvestment increasingly focused on environmental, social andcompanies governance ('ESG') A further tailwind for increased investment into purpose-driven tech comes from the institutional A further tailwind for increased investment into purpose-driven tech companies comes from institutional investor layer and LPs. LPs are increasingly focused on environmental, social and governance ('ESG') considerations when deploying capital. In fact, 45% of LP respondents to the surveysocial statedand thatgovernance theythe require investor layer and LPs. LPs are increasingly focused on environmental, ('ESG') considerations when deploying capital. In fact, 45% ofin) LPto respondents tosocial thesocial survey stated that they investor layer and LPs. LPs are increasingly focused on environmental, and governance (‘Erequire SG’of ) considerations their GPs (i.e. the fund managers they have invested report on the and environmental impact considerations when deploying capital. In fact, 45% of LP respondents to the survey stated that they require their GPs (i.e. the fund managers they have invested in) to report on the social and environmental impact of their portfolio, while a further 41% are considering implementing requirement. Established fundtheir managers when deploying capital. Inmanagers fact, 45% of LPhave respondents toin) thethis survey stated that they require GPs (i.e. impact the fundof their GPs (i.e. the fund they invested to report on the social and environmental their portfolio, while a further 41% are considering implementing this requirement. Established fund managers are also morethey likely to be requiredin)this type ofon reporting from their LPs in the future withof 47% stating this as a a further managers have invested to report the social and environmental impact their portfolio, while aretheir also more likely while to be required this type ofconsidering reporting from their LPs in thethis future with 47% stating this as a portfolio, a further 41% are implementing requirement. requirement and 53% considering this practice. As such, it is becoming an increasingly importantEstablished part of the fund managers requirement and 53% considering this practice. As such, itEstablished is becoming an increasingly important partlikely of the 41% are considering implementing this requirement. fund managers are also more tostating be required are also more likely to be required this type of reporting from their LPs in the future with 47% this as a LP mandate for VCs in Europe. LP mandate VCs in Europe. this type for of reporting from their LPs in the future with 47% stating this as a requirement and 53% considering this

requirement and 53% considering this practice. As such, it is becoming an increasingly important part of the practice. As such, itfor isin becoming increasingly important part of the tech LP mandate for VCs in Europe. LP mandate for VCs Europe.aninvestment DATA SET : A L L Finto U ND M A NA GERS A tailwind increased purpose-driven companies comes from the institutional Dofurther you require GPs

DATA SET : ESTA BL ISH ED F U N D M A N A GER ( F U N D IV+ ) Do you require GPs to report on to report on layer social and investor and LPs. LPs are increasingly focused on environmental, social and governance ('ESG') social and environmental environmental impact? impact? considerations when deploying capital. In fact, of respondents to the survey stated that they require DATA SET : 45% ALL FU NDLP M A NA GERS

Do you require GPs

All fund managers

their GPs on (i.e. theand fund managers they have invested in) to report on the social and environmental impact of to report social environmental their portfolio,impact? while a further 41% are considering implementing this requirement. Established fund managers Yes 45% Yes 47% are also more likely to be required this type of reporting from their LPs in the future with 47% stating this as a A further tailwind for increased investment into purpose-driven tech companies comes from the institutional requirement and 53% considering this practice. As such, it companies is social becoming an increasingly important part of the A investor further tailwind for increased purpose-driven tech from the institutional layer and LPs. LPs areinvestment increasinglyinto focused on environmental, andcomes governance ('ESG') investor layer andfor LPs. LPs are increasingly focused on environmental,Yes social and governance ('ESG') LP mandate VCs in Europe. considerations when deploying capital. In fact, 45% of LP respondents to the survey stated that they require

considerations when deploying capital. In fact,No, 45% of respondents to the survey stated that they require but are considering itit No, butwe we areLP considering their GPs (i.e. the fund managers they have invested in) to report on the social and environmental impact of their GPs (i.e. the fund managers they have invested in) to report on the social and environmental impact of implementing this requirement. Established fund managers their portfolio, while a further 41% are considering DATA SET : A L L F U ND this M A NArequirement. GERS implementing Established fund managers their Do portfolio, while a further 41% are considering you require GPs are also more likely to be required this type of reporting from their LPs in the future with 47% stating this as a are also moreon likely to and be required this type of reporting from their LPs in the future with 47% stating this as a to report social requirement and 53% considering this practice. As such, it is becoming an increasingly important part of the No,it butis webecoming considering an it increasingly important part of the requirement and 53% considering this practice. Asand such, No, not ititare 0% environmental impact? No,not notrequired required and notconsidering considering 14% mandatefor forVCs VCsininEurope. Europe. LPLP mandate you require GPstotoreport reporton on DoDo you require GPs social and environmental social NOTE: and environmental NOTE: impact? impact?

LP respondents only. The responses to this LP respondents The responses to how this question have beenonly. aggregated based on question have been aggregated based on how respondents answered the following respondents themanagers following do question: "Whatanswered type of fund youquestion: normally"What investtype in?" of fund managers do you normally invest in?"

10 DATASET SET: :ESTA ESTABL BLISH ISHED ED FFUUNND M0AAN NA GER 5(( F FU UN ND DATA DM A GER D IV+ IV+ ))

Yes

No, not required and not considering it

30 35 25 30 % of LPs % of LPs

53%

41%

40 35

14%

Established Fund manager (Fund IV+) SOU RCE: SOU RCE:

Yes Yes

No, but we are considering it

% of LPs

47% 47%

45 41%

NOTE: LP respondents only. The responses to this question have been aggregated based on how respondents answered the following question: "What type of fund managers do you normally invest in?"

No, but No, butwe weare areconsidering consideringitit SOU RCE:

53% 53%

No, not required and not considering it

No, not required and not considering it No, not required and not considering it

0% 0%

14%

% of LPs

NOTE: LP respondents only. The responses to this NOTE:question have been aggregated based on how NOTE: respondents answered the following LP respondents only. The responses to this question: "What type of fund managers do LP respondents The responses to how this question have beenonly. aggregated based on you normally in?" based on how question have beeninvest aggregated respondents answered the following

question: "Whatanswered type of fund respondents themanagers following do youquestion: normally"What investtype in?" of fund managers do you normally invest in?"

Shalini Rao Generation Investment Management Director, Growth Equity

0 0

5 5

10 10

15 15

20 20

25 25

30 35 30 35 % of LPs % of LPs

40 40

45 45

50 50

55 55

60 60

SOU RCE: SOU RCE: SOU RCE:

Absolutely, we see LPs consistently developing greater sophistication across sustainability. We engage in a two-way conversation with our LPs, with both parties pushing the other to think more deeply about sustainability and our respective roles as advocates. For example, our Growth Equity team weaves sustainability into term sheets, mandating quarterly reporting of financial metrics alongside impact metrics. To us, measuring the full value of a company includes considering how value will accrue to all company stakeholders. We report on these metrics to our LPs, including through an annual sustainability report, portions

of which we make public and house on our website. We are deeply committed to measuring outcomes against our sustainability objectives of planetary health, people health and financial inclusion, and work diligently alongside our portfolio companies to do so. We measure not just what a company does (i.e. the products and services they deliver) but also how a company operates (i.e. the sustainability of their organisation and practices). In turn, our portfolio companies find this process valuable to help embed sustainability KPIs into their core product, management systems, and long term goal setting.

Investors

Who are Europe’s tech investors and how resilient have they been?

www.stateofeuropeantech.com

European VC fundraising is on track to hit record levels this year, while institutional investor appetite for European tech has never been stronger and US investors continue to pour more money into the region. As Europe’s ecosystem continues to mature and a more diversified set of investors invest in tech, it becomes less reliant on funding from government agencies, which share of total funding has declined over time.

and support from

03.1

FUNDR A ISING R EC OR D

European venture capital fundraising continued its upward trajectory in 2019, setting another record year by closing Limited on $16.5B ofPartners new funds. Preliminary results for 2020 are A ISING R EC OR D also encouraging with fundraising activity in the rst six FUNDR A ISINGFUNDR R EC OR D new funds raised by VCs in 2019 European venture capital fundraising continued its upward European venture capital fundraising continued its upward months of 2020 slightly ahead of H1 2019 ($7.8B versus FUNDR AISIN G RECORD European venture capital fundraising continued its upward trajectory trajectory in 2019, setting another record year by closing trajectory in 2019, setting another record year by closing $7.5B) and very much on track to break 2019' s full-year on $16.5B of setting new Preliminary results are 2020 on $16.5B of funds. newanother funds. Preliminary results for are of new funds. in 2019, record yearfor by2020 closing on $16.5B total. alsoalso encouraging with fundraising in the rst encouraging with activity in six the rst six fundraising Preliminary results forfundraising 2020activity are also encouraging with new funds raised by VCs raised in 2019 by VCs in 2019 new funds months of 2020 slightly aheadahead of H1 2019 ($7.8B versus months of 2020 slightly of H1 2019 ($7.8B versus activity in the first six months of 2020 slightly ahead of H1 2019 ($7.8B $7.5B)Overall and very much on track to break 2019's full-year VC funds $7.5B) and very raised much on track to break 2019's full-year $16.5B versus total. ($B) per$7.5B) year and very much on track to break 2019’s full-year total. total. new funds raised by VCs in 2019

$16.5B

$16.5B $16.5B

$16.5B

($B) per year

Total VC funds raised ($B)

15.0

10.0

5.0

Total VC funds raised Total ($B)VC funds raised ($B)

15.0

Overall VC funds raised ($B)Overall per yearVC funds raised

0.0

NOTE: Taken from the European Data Cooperative, NOTE:developed by Invest Europe. EDC data at EUR:USD of 1:1.1198, the rate Takenconverted from the European Data Cooperative, on 30byJune 2020. developed Invest Europe. EDC data

$14.1B $16.5B

$11.5B

$16.5B

$10.2B

10.0 15.0

$14.1B

$11.5B $10.2B

5.0 10.0

$7.8B

0.0 5.0

2016

2017

2016

2018

2017

2018

2019 2019

H1 2020

SOU RCE: 0.0

2016

SOU RCE:

2017

2018

2019

Many ofof1:1.1198, Europe' s leading VCs have raised new vehicles to converted at EUR:USD the rate on 30 NOTE: June 2020. continue investing in Europe's next generation of Taken from the European Data Cooperative, founders. SOU RCE: developed by Invest Europe. EDC data

converted at EUR:USD of 1:1.1198, the rate Many of Europe's leading VCs have raised new vehicles to on 30 June 2020. Many of Europe’ s leading VCs have new vehicles to continue DATA SET : of $ 2 50 M + continue investing inCapital Europe's next raised generation European Venture funds raised in 2020 by investing in Europe’ s next generation of founders. founders.

fund size and country

Investor

European Venture Capital funds raised in 2020 by fund size and country

$250M+

DATA : $Ventures 2 50 M + 1 SET Index

Fund Name

United Kingdom

820

United Kingdom

Atomico

Atomico V

Index Ventures

Index Ventures X

Many of Europe's leading VCs have raised new vehicles to Investor Fund Name 4 HV Capital Holtzbrinck Ventures Fund VIII continue investing in Europe's next generation of 1 Index Ventures Index Ventures Growth V 5 Lakestar Lakestar Growth I founders. Atomico Dawn Capital

Atomico V Dawn Capital IV

37 SET Index Ventures Index Ventures DATA : $Capital 10 0 - 2 50 M Felix Felix Capital Fund IIIX

European Venture Capital funds raised in 2020 by fund size and country

$100M250M

Lakestar HV Capital

Lakestar Investor

Blossom Capital

Lakestar raised8 new vehicles

Gaia Capital Partners

SOU RCE:

DATA : < $Capital 10 0 M 7 SET Kindred 8

Hoxton Ventures

1 Seaya Ventures SOU RCE: 2 Connect Ventures

820

United Kingdom

Switzerland

United Kingdom

800

United Kingdom United Kingdom SwitzerlandGermany

Lakestar Growth I Fund Name

Fund465 Size ($M)

Project A Ventures Dawn Capital IV III

229 400

Switzerland Fund Country Germany United Kingdom

SpeedInvest III

208

Blossom Capital II

185

Target Global Early Stage Fund II

133

Germany

Point Nine Capital Fund V

118

Germany

Gaia Growth I

113

France

Kindred Capital II

106

United Kingdom

Hoxton Ventures II

100

United Kingdom

Felix Capital Fund III Lakestar III

Investor

<$100M

400

Fund Country

Germany

1,200

630

Many of Europe's leading VCs have to 4 Target Global continue investing in Europe's next generation of 5 Point Nine Capital founders. European Venture Capital funds raised in 2020 by fund size and country

465

United Kingdom

Fund Size ($M)

300

Felix Capital

800 630

Lakestar III Holtzbrinck Ventures Fund VIII 275

ProjectCapital A 61 Dawn SOU RCE: 2 Speedinvest

Fund Country

1,200

Fund Size ($M)

Index Ventures Growth V

Fund Name Seaya Ventures III

300 275

Fund Size ($M) 95

Austria

United Kingdom

Switzerland

Fund Country Spain

Connect Ventures Fund III

United Kingdom

Samaipata Ventures

Samaipata Ventures II

Spain

KFund

K Fund II

Spain

Frontline Ventures

Frontline X

Ireland

Fly Ventures

Fly Ventures II

Germany

La Famiglia

La Famiglia Fonds II

Germany

7percent Ventures

7 Percent Ventures II

United Kingdom

Volta Ventures

Volta Ventures II

Belgium

Superhero Capital

Superhero Venture Fund II

Finland

Air Street Capital

Air Street Capital Venture Fund

United Kingdom

03.1

Limited Partners

APPETITE FOR EUROPEAN VENTURE

This buoyant fundraising environment is also underpinned by robust Limited Partners ('LP') sentiment, which does not appear to have environment been negatively impacted by thebyCovid-19 pandemic. 94% of LP respondents have This buoyant fundraising is also underpinned robust Limited Partners either increased or maintained their appetite to invest in the European venture (‘LP’) sentiment, which does not appear to have been negatively impacted by the asset class, while just 6% of LPs stated their appetite has decreased the onset of by therobust The number('LP') of LPs with an which This buoyant fundraising is since also Limited Partners sentiment, Covid-19 pandemic. 94% ofenvironment LP respondents haveunderpinned either orpandemic. maintained their of LP respondents This buoyant fundraising environment is also underpinned by increased robust Limited Partners ('LP') sentiment, which increased appetite exceeds those with a decreased appetite by greater than 4x. does appear to have been negatively impacted bywhile thepandemic. Covid-19 pandemic. 94% of LP have respondents have does not not appear to have negatively impacted by the Covid-19 LP respondents appetite to invest in been the European venture asset class, just 6% of94% LPsofstated have either increased or either increased or maintained their appetite to invest in the European venture asset class, while just 6%their of appetite either increased or maintained their appetite to invest in the European venture asset class, while just 6% of maintained their appetite has decreased since the onset of the pandemic. The number of LPs with stated their appetite has decreased since the onset of the pandemic. The number of LPs with an LPsLPs stated their appetite has decreased since the onset of the pandemic. The number of LPs with an to invest in the European the startappetite of the Covid-19 anSince increased exceeds those with a decreased appetite by greater than 4x. increased appetite exceeds those a decreased appetite by greater by than 4x. greater than 4x. increased appetite exceeds those with a decreased appetite pandemic, has your appetite to with venture asset class Increased appetite 31%

94%

invest in the European venture

asset classofchanged? Since the start the Covid-19 Since the start of the Covid-19 pandemic, has your appetite to pandemic, has your appetite to invest in the European venture invest the European venture asset class in changed?

SOURCE: Increased appetite

31%

Increased appetite

31%

Stayed the same

asset class changed?

63%

Stayed the same

63%

Stayed the same

63%

Decreased appetite

6% 10

% of LPs 20

% of LPs

NOTE:LP respondents only.

SOU RCE:

NOTE:

% of LPs

SOU RCE:

The strong level of continued LP commitments to European venture is also highlighted by LP willingness to SOU RCE: NOTE: keep investing actively in 2021. 93% of LPs surveyed expect to remain active in the next 12 months, while 89% LP respondents only. have invested in the past 24 months. The strong level levelof ofcontinued continuedLP LPcommitments commitments European venture is also highlighted bywillingness LP willingness to The strong to to European venture is also highlighted by LP Thekeep strong level of continued LP commitments to European venture is also highlighted byin LPthe willingness to investing actively expect toremain remain active next months, while 89% to keep investing activelyinin2021. 2021.93% 93%of ofLPs LPssurveyed surveyed expect to active in the next 1212 months, keep Have investing activelyininVCs 2021. you invested in 93% of LPs surveyed expect to remain active in the next 12 months, while 89% have invested in the past 24 months. while 89% have invested in the past 24 months. LP respondents only.

in the past 24 months have Europe invested in the past 24 months. and are you considering investing in a VC fund in you invested HaveHave you invested in VCs in in VCs in the next 12 months? Europe in the past 24 months Europe in the past 24 months andyou areconsidering you considering and are L EGEND investing in a VCinfund investing a VCinfund in the next 12 months? theYes next 12 months? L EGEND

Investment in the next 12 months

Investment in the next 12 months Investment in the next 12 months

93%

L EGEND

Yes

93%

Investment in the past 24 months

89%

Yes No

Investment in the past 24 months

89%

11%

Investment in the past 24 months

89% 0

11 50

% of LPs 0

LP respondents only.

NOTE:

50 % of LPs

SOU RCE:

NOTE: NOTE:

SOU RCE:

LP respondents only.

100

FUNDS > €2 50M

Theecosystem's ecosystem's maturation is alsois re�ected in the scaling The maturation also re�ected in the scaling FUNDS > €2 50M 03.1 Limited Partners up of European VC funds. The share of total funds raised up of European VC funds. The share of total funds The ecosystem's maturation is also re�ected in theraised scaling through vehicles of greater than €250M continues to through vehicles offunds. greater €250M continues to up of European VC share total funds raised increase and represented closeThe tothan 60% of theof total in the total funds raised in H1 2020 increase and represented close to 60% of the total in of the through vehicles of greater than €250M to �rst six months of 2020, compared to 36% in 2016.continues This of total funds raised in H1 2020 has been driven primarily by the growing number of �rst six months 2020, compared to 36% in 2016. increase and represented close toreflected 60% of the total This in the FUNDS > €2 50M The ecosystem’ s of maturation VCfunds funds. of total raised in H1 2020 European funds raising in excessis ofalso €500M, which in the scaling up of European has been driven primarily by the growing number of �rst six months of 2020, compared to 36% in 2016. This accounted fortotal 43% offunds all VC funds raised in Europe duringof greater than €250M continues to The share of raised through vehicles European funds raising excess of €500M, whichof has driven primarily by theingrowing number a period thebeen �rst half 2020, versus in just 10% increase andofrepresented close to2016. 60%Over of the total in the first six months of 2020, of 18 months since the of start 2019, 13 funds sized in at more accounted for 43% allof funds raised Europe European funds raising inVC excess of €500M, which during compared to 36% in 2016. This has been driven primarily by the growing number of than €500M have beenof closed, raising over $7.4B, period the �rst half of43% 2020, versus just 10% in 2016. Over aduring accounted for all VC funds raised in Europe compared to just 7 funds raising $4B over the preceding European funds raising in excess of10% €500M, which accounted for 43% of all VC funds of 18�rst months since theversus start of 2019, 13infunds sized more aatperiod the half of 2020, just 2016. Over FUNDS > €2 50M three years. of total funds raised raised in Europe during the first half of 2020, versus just 10% in 2016. Over a period of The ecosystem's maturation is also re�ected in the scaling FUNDS > €2 than €500M have closed, raising of 18 months sincebeen the start of 2019, 13 over funds$7.4B, sized at more 50M in H1 2020 The ecosystem's maturation is also re�ected in the scaling up of European VC funds. The share of total funds raised 18 months since the start of 2019, 13 funds sized at more than €500M have been closed, compared tohave just 7been funds raising $4B preceding than closed, $7.4B, DATA SETover : over F U NDSthe VC funds raised ($M) number up of€500M European VC funds. The share ofraising total funds raised through vehicles ofand greater than €250M continues toRA ISED of VCyears. funds closed pergreater by than raising over $7.4B, compared to just 7 funds raising $4B over the preceding three years. three compared to just 7year funds raising $4B over through vehicles of €250M continues increase and represented close to 60% of the totalto inthe the preceding fund size (€M) of total funds raised in H1 2020 increase and represented close to 60% of the total in the �rst six months of 2020, compared to 36% in 2016. This three years. of total funds raised in H1 2020

60%

60% 60%

60%

60% 60%

>€500m

NOTE:

FundsFunds raised raised ($M) /($M) # of/funds # of funds closed closed

L EGEND < €25m >€500m NOTE: <€25 €25m - 50m Preliminary H1 2020 �gures. Taken from the European Data Cooperative, developed by €25 €50 - 50m 100m Invest Europe. EDC data converted at €50 --100m €100 250m EUR:USD of 1:1.1198, as of 30 June 2020. The data€250 shows incremental amounts in each year €100 - 250m 500m for venture funds, not only �nal closing. €250 - 500m >€500m

5,000

DATA SET : F U NDS CL15,000 OSED DATA SET : F U NDS CL OSED

300 0 300

10,000 2016

Funds 250 closed Funds Funds raised raised ($M) /($M) # of/ funds # of funds closed closed

€50 - 50m 100m €25 VC funds raised ($M) and number €100 -100m 250m of VC closed per year by €50 -funds VC funds raised ($M) and number fund (€M) of€250 VCsize funds 500mclosed per year by €100 - 250m fund size (€M) >€500m L€250 EGEND- 500m

Funds raised ($M) / # of funds closed

�rst six months 2020, compared to 36% in 2016.ofThis has been driven of primarily by the growing number L EGEND DATA has the growing number of SET : F U NDS RA ISED European funds primarily raising in by excess of €500M, which VC funds raised ($M) and number Funds raised <been €25m driven European funds raising in excess €500M, whichDATA accounted for 43% ofper all VC funds raised in Europe during of closed year by of €25 funds - 50m raised SET : F U NDS RA ISED VCVC funds ($M) and number 15,000 accounted for of versus all VC funds10% raised in Europe period theVC �rst half of43% 2020, in 2016. Over aduring €50 - 100m fund size (€M) of funds closed per yearjust by the18€100 �rst half of 2020, just 10%13infunds 2016.sized Over aatperiod of months since theversus start of 2019, more - 250m fund size (€M) of 18€250 months sincebeen the start of 2019, 13 over funds$7.4B, sized at more - 500m have than €500M closed, raising L EGEND 10,000 >€500m than €500M closed, overthe $7.4B, compared tohave just 7been funds raisingraising $4B over preceding < €25m L EGEND compared to just 7 funds raising $4B over the preceding three years. -years. 50m <€25 €25m three 15,000

250

200 SOU RCE: 200 150

2017

2018

2019

H1 2020

10,000

5,000 5,000

150 100

100

2016

2017

2018

2019

2016

2017

2018

2019

Preliminary H1 2020 �gures. Taken from the NOTE: European Data Cooperative, developed by Preliminary H1 2020 �gures. Taken from Invest Europe. EDC data converted at the European Data Cooperative, NOTE: of EUR:USD 1:1.1198, as of 30 developed June 2020.by The Invest Europe. EDC data converted data showsH1 incremental amounts inat each year NOTE: Preliminary 2020 �gures. Taken from the EUR:USD 1:1.1198, ofdeveloped 30 June 2020. The for ventureof funds, notasonly �nal closing. European Data Cooperative, by Preliminary H1 2020 �gures. Taken from data shows incremental amounts in each year Invest Europe. EDC data converted at the European of Data Cooperative, by 1:1.1198, as ofonly 30 developed June 2020. The forEUR:USD venture funds, not �nal Invest Europe. EDC data converted atclosing.

2016

2016 SOU RCE:

2017

2018

2019

H1 2020

2017

2018

2019

H1 2020

FOLLOW- ON VC

SOU RCE:

This is, perhaps unsurprisingly, being chie�y driven by SOU RCE: data shows incremental amounts in each year funds raised by follow-on VC funds, where the median SOU RCE: EUR:USD 1:1.1198, of 30 June 2020. The for ventureoffunds, notasonly �nal closing. data shows incremental amounts in each year FOLLOW- ON VC fund sizefunds, has nearly for venture not only �nal closing.tripled since 2016 to reach a record This is, perhaps unsurprisingly, being chie�y driven by $133M in H1 2020. The median size of �rst-time VC funds median fund size in H1 2020 ON VC funds raised by follow-on VChalf funds, where the$60M, median closed Europe in the �rst of 2020 was in funds lineFOLLOWFOLLOW-ON VC This is, in perhaps unsurprisingly, being chiefly driven by raised by VC Thisfund is, perhaps unsurprisingly, being chie�y driven by sizeprior has nearly tripledthis since 2016 to reach a record with the year, though represents a material stepfirms who have already raised a first-time fund, where the median fund funds raised VC funds, the median $133M in by H1 follow-on 2020. The medianwhere size of �rst-timeprior VC funds upsize compared totripled the multi-year trend observed to fund hasnearly nearly since 2016 toto reach a record median fund size in H1 2020 size has tripled since 2016 reach a record $133M closed in Europe in the �rst half of 2020 was $60M, in linein H1 2020. The 2019. $133M in H1 2020. The median size of �rst-time VC funds median size of first-time VC funds closed in Europe in the first half of 2020 median fund size in H1 2020 withinthe priorinyear, though this represents stepclosed Europe the �rst half of 2020 was $60M, ainmaterial line was $60M, in line with the prior year, though this represents a material up compared to the multi-year trend observed prior to with the prior year, though this represents a material stepmedian fund size in H1 2020 Median VC ($M) at �nal step-up compared to the multi-year trend observed prior to 2019. 2019. up compared tofund the size multi-year trend observed prior to

$133M $133M

$133M

closing per year by fund type, 2019. 2016 to H1 2020

Median VC fund size ($M) at �nal 125.0

First-time VC First-time VC

Median fund size ($M)

L EGEND

100.0

75.0

50.0

Median fund size Median ($M) fund size ($M)

$13

Follow-on VC

Follow-on VC Follow-on VC

100.0 125.0

25.0

NOTE:

European Data Cooperative, developed by 2019 �gures are preliminary. InvestH1 Europe. EDC data converted at Taken from the European Data developed by EUR:USD of 1:1.1198, theCooperative, rate on 30 June 2020.

Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

0.0

$133.3M

$77.2M 75.0 100.0 50.0 75.0 25.0 $45.5M 50.0 $28.3M

H1 2019 �gures are preliminary. Taken from the European Data Cooperative, developed by NOTE:Invest Europe. EDC data converted at EUR:USD ofpreliminary. 1:1.1198, the rate from on 30the June 2020. NOTE: H1 2019 �gures are Taken

$13

125.0

L EGEND Median VC fund ($M) �naltype, closing persize year byatfund closing per by fund type, First-time 2016 toyear H1 VC 2020 2016 to H1 2020 L EGEND

$133M

0.0 25.0

2016 0.0

SOU RCE:

$45.5M

$77.2M

$77.2M $36.2M

$62.7M

$28.3M

$60.7M $26.9M $48.7M

$45.5M $36.2M

$36.2M

$28.3M 2016

$26.9M

2017

2016

SOU RCE:

$62.7M $60.7M $60.1M

2019

$48.7M

$26.9M 2018

2018

2017

$62.7M $60.7M $48.7M

2019

2018

H1 2020

2019

03.1

Limited Partners

It is notoriously challenging to raise a fund as a rst-time manager in Europe. One reason, among many, is the fact that most LPs are primarily focused on capital allocation to established or emerging managers, not rsttime fund managers. It is not surprising that only a small proportion of LP respondents expressed a It is is notoriously notoriously challenging to aafund as manager ininEurope. reason, among many, It challenging toraise raise fund asaafirst-time rst-time manager Europe.One One reason, among many, is the preference to support rst-time fund managers over other, more established managers. is the fact that most LPs are primarily focused on capital allocation to established or emerging managers, that most LPs are to primarily focused capital allocation to established oramong emerging not rstIt isfact notoriously challenging raise a fund as a on rst-time manager in Europe. One reason, many,managers, is the not managers. It is on notcapital surprising only a small proportion ofmanagers, LP respondents fund It is not surprising that onlythat a small proportion of LP respondents expressed a facttime thatfirst-time most managers. LPs fund are primarily focused allocation to established or emerging not rstWhat of fund do expressed ato preference to support first-time fundproportion managers over other, more established fund manager (Fund preference support rst-time fund managers over other, more established managers. time fund type managers. Itmanagers is not surprising that only aEstablished small ofIV+) LP respondents expressed a managers.

39%

you normally invest in?

preference to support rst-time fund managers over other, more established managers. What type of fund managers do

What type of fund managers you normally invest in?do you normally invest in?

Emerging fund manager (Fund II or III) Established fund manager (Fund IV+)

33%

Established fund manager (Fund IV+)

12%

First time fund manager (Fund I) Emerging fund manager (Fund II or III)

Emerging fund manager (Fund II or III)

All of the above

Others

% of LPs 15

Unternehmen & Märkte 10 15 % of LPs

WOCHENENDE 15./16./17. JUNI 2018, NR. 113

% of LPs

Jeannette zu Fürstenberg

„Künstliche Intelligenz wirkt wie ein Brandbeschleuniger“

SOU RCE:

LP respondents NOTE: only.

SOU RCE:

NOTE:

12%

10%

NOTE:

10%

Others 0

10%

12%

All of the above All of the above

Others

33%

First time fundI) manager (Fund I) First time fund manager (Fund

LP respondents only.

39%

Die Investorin spricht über die Chancen und Risiken von künstlicher Intelligenz und darüber, warum Deutschland eine Revolution im Bildungswesen braucht und ihr Fonds La Famiglia Brücken bauen will zwischen etablierten und jungen Firmen.

LP respondents only.

Jeannette Erbprinzessin zu Fürstenberg: „Wir brauchen Tempo.“

Raising the second fund has been easier in a number of ways. First of all, we have certainly seen a higher interest and appetite for the asset class as such, as even more conservative investors are anticipating strong returns in the sector. Moreover, we have been able to show that our investment strategy and our focus on transformative technology companies across Jeannette zu a breadth of different sectors in B2B is playing out and is reflecting in a Fürstenberg portfolio performance. La Famiglia Predictably,strong LPs cite track record as by far the most important consideration when evaluating a prospective general partner ('GP'). This is followed, by some distance, by the overall investment strategy of theFounding fund. InPartner part, this presents a chicken-and-egg problem for prospective �rst-time fund managers, knowing that the ability to demonstrate a strong track record is such an important factor in building traction with potential LPs.

enn Jeannette zu Fürstenberg beruflich unterwegs ist, dann führt der Weg der Fondsmanagerin oft nach Berlin. Spannende junge Firmen, bei denen sich ein Investment lohnen könnte, sind in der Hauptstadt reichlich zu finden. An diesem schönen Frühlingstag aber bittet die Erbprinzessin des Hauses Fürstenberg ins Schloss Heiligenberg hoch über dem Nordufer des Bodensees. Hier lebt die Investorin, die Ökonomie studiert hat und einen Doktortitel in Philosophie besitzt, mit ihrem Mann und den beiden Kindern. Von der Schlossterrasse aus fällt der Blick geradewegs auf den See und das dahinter liegende Massiv des Säntis in der Schweiz. Frau Fürstenberg, als klassische Frühphaseninvestorin müssen Sie sich zwangsläufig auch mit der Entwicklung von künstlicher Intelligenz beschäftigen. Wie ist Ihr Empfinden? Eine Mischung aus Faszination und Sorge. Faszination über das Potenzial einer Technologie, welche durch die steigende Verfügbarkeit von Daten- und Rechenkapazität immer wirkungsvoller wird und Züge menschlicher Intelligenz und Intuition entwickelt. Gleichzeitig Sorge über das Missbrauchspotenzial und die subtile Einflussnahme auf unsere Lebensführung. Ein Beispiel dafür, wie subtil ein prägender Algorithmus wirkt, sind die Kaufempfehlungen von Amazon oder personalisierte Werbung und Inhalte von Facebook. Die Maschine beginnt, unsere Entscheidungen zu steuern.

Predictably, LPs cite track record as by far the most important consideration when evaluating a prospective general partner ('GP'). is followed, the overall investment strategy of the fund. Predictably, LPs This cite track recordby assome by fardistance, the mostbyimportant consideration when evaluating a In DATAprospective SET : A L L F U ND�rst-time M A NA GERS fund managers, knowing that the part,prospective this presents a chicken-and-egg problem for What are thegeneral most important partner (‘GP’). This is far followed, by some distance, by the overall investment strategy Predictably, cite track record as by the important consideration when evaluating a prospective criteria whenLPs assessing a track ability to demonstrate a strong record is such an most important factor in building traction with potential LPs. Mit welchen Folgen? Die Folgen sind vielerorten schon erkennbar: der Brexit, die Wahlen in Italien, die Regierungen in den USA und in Polen und hierzulande die AfD bei alarmierenden 16 Prozent. Künstliche Intelligenz wirkt wie ein Brandbeschleuniger für den Populismus. Denken Sie an den gezielten Einsatz von Bots während der Wahlkämpfe.

ofprospective the fund. In part, thisThis presents a chicken-and-egg problem first-timestrategy fund managers, general partner ('GP'). is followed, by some distance, byfor theprospective overall investment of the fund. In GP? knowing that the ability to demonstrate a strong track record is such an important factor in building part, this presents a chicken-and-egg problem for prospective �rst-time fund managers, knowing that the DATA SET : A L L F U ND M A NA GERS What are the most important Investment track record in building traction with potential LPs. traction potential LPs. ability towith demonstrate a strong track record is such an important factor criteria when assessing a Was lässt sich dagegen machen? Wir ersticken in Europa, gerade in den EU-Kernstaaten, an der Komplexität unserer n-stufigen Governance. In China werden die Entscheidungsprozesse hingegen immer autokratischer und vor allem auch schnel-

prospective GP?

Fund investment thesis

33%

Alignment DATA SET : A L L F U ND M A NA GERS of interest

What are the most important criteria when assessing a prospective GP?

24%

Investment track record

63%

Reputation of the fund

20%

Fund investment thesis

33%

Network

Alignment of interest

12%

24%

Strength of relationships between GPs Investment trackthe record

10%

Reputation of the fund

12%

on ESG 10% of interest Strength of relationships between theAlignment GPs Focus diversity & OperationalFocus track on record 4%fund Reputation ofinclusion the

33%

24%

Ability to build a strong relationship leading to direct Focus on ESG 4% Network dealflow

20%

12%

Focus on diversity & inclusion

4% Strength of relationships between the GPs 0

LP respondents only. The responses to this question have been aggregated based on how NOTE: respondents answered the following question: "What of fund do LP respondents only. The type responses to managers this normally invest in?" questionyou have been aggregated based on how

respondents answered the following question: "What type of fund managers do you normally invest in?"

Ability to build a strong relationship leading to direct 2% dealflow Operational track record 0

SOU RCE:

Focus on diversity & inclusion

Ability to build a strong relationship leading to direct dealflow

% of LPs

40 % of LPs

2% 0

SOU RCE:

% of LPs

NOTE: LP respondents only. The responses to this question have been aggregated based on how respondents answered the following question: "What type of fund managers do

10 10%

Focus on ESG

SOU RCE:

63%

20%

Operational track record Fund investment thesis Network

NOTE:

63%

03.1

Limited Partners

While historical track record remains the most important measure when evaluating a GP, its ability to generate consistent returns in the future is what matters ultimately. In our views, performance is generated by investment teams that can work successfully over the long term. We aim to support the right team, with an appropriate fund size and a clear strategy to execute on. People are at the very center of our analysis and given the long term relationships that we aim to build, we like to see consistency in the core team Maurizio Arrigo complemented by a well-defined succession plan for the Pictet Alternative Advisors Head of Private Equity younger generation of up and coming investors. Another way to measure the maturity of the European VC asset class is the share of funding from government agency sources. This percentage has historically been materially higher than that of the more mature US ecosystem, though lower than that in China. By this measure, there is clear evidence of material progress. Looking at total VC fundraising for more recent vintages (2018-2019), the share sourced from government decline has been agencies hastodeclined record lows than 20%. Interestingly, Another way measureto the maturity of of theless European VC asset class is thethe share of funding fromeven more Another way for to measure the maturity of the European VC asset class is the share of funding from government pronounced rst-time funds than for follow-on funds. government agency sources. This percentage has historically been materially higher than that of the agency sources. Thisthe percentage has historically been materially higher than that of the more mature US Another way toUS measure maturity of the European asset is the of funding from government more mature ecosystem, though lower thanVC that in class China. By share this measure, there is clearofevidence ecosystem, though lower than in China. By this measure, is clear evidence material progress. agency sources. This percentage hasthat historically been30.0 materially higher than there that of the more mature US Evolution shareVC of ofecosystem, material Looking VC for more recent vintages (2018-2019), though lower than thatat intotal China. By fundraising this measure, there is clear evidence of material progress. the share Looking atofprogress. total fundraising for more recent vintages 27.0% (2018-2019), the share sourced from government 26.1% government funding in Europe Looking at total VC fundraising for more recent vintages (2018-2019), share sourced from government 25.6% sourced from hasof declined to record lows of less than 20%. Interestingly, agencies has government declined to agencies record lows less than 20%. the Interestingly, the decline has beenthe even more (%), 2015-2017 versus to 2018-2019 agencies has declined record lows of less than 20%.25.0 Interestingly, the decline has been even more decline has been even more pronounced forfollow-on first-timefunds. funds than for follow-on funds. pronounced forrst-time rst-time for pronounced for fundsfunds than forthan follow-on funds. % of Government funding % of Government funding

While historical track record remains the most important measure when evaluating a GP, its ability to generate consistent returns in the future is what matters ultimately.

L EGEND 30.0

2015 to 2017 Evolution of share of Evolution of share of government 2018 to 2019 funding in Europe government in Europe (%), 2015-2017 funding versus 2018-2019

25.0

L EGEND 2015 to 2017

L EGEND

2018 to 2019

2015 to 2017 2018 to 2019

% of Government funding

(%), 2015-2017 versus 2018-2019

20.0

15.0

10.0

5.0

20.8%

20.0 30.0 27.0%

15.0 25.0 10.0 20.0

16.6%

27.0%

26.1%

25.6% 20.8%

19.7%

20.8%

16.6%

0.0 10.0

0.0

26.1%

25.6%

5.0 15.0

First-time VC funds

NOTE:

Follow-on Funds

5.0

Overall

Total VC funds raisedTotal by government VC funds raised agencies by government ($M) agencies ($M)

SOU RCE: Taken from the European Data Cooperative, Indeveloped absolute terms, the total level of government agency funds invested into European VCs topped $2.5B for NOTE: by Invest Europe. Excludes SOU RCE: Taken from the European Data Cooperative, Unclassi the rsteds. time in 2019, increasing from $1.1B in0.02015. Interestingly, while government agencies have materially developed by Invest Europe. Excludes First-time VC funds Follow-on Funds Unclassi eds. ramped their investment into follow-on funds, growing almost 3x between 2015 and 2019, the sums invested into rst-time funds have not seen the same consistent expansion. InNOTE: absolute terms, ofof government agency funds invested intointo European VCs topped In absolute terms,the thetotal totallevel level government agency funds invested European VCs topped $2.5B for SOU RCE: Taken from the European Data Cooperative, $2.5B for the first time in 2019, increasing from $1.1B in 2015. Interestingly, while government the rst time 2019, increasing from $1.1B in 2015. Interestingly, while government agencies have materially developed by Investin Europe. Excludes Evolution ofterms, government In absolute the total level of government agency funds invested into European VCs topped $2.5B 3x for between Unclassi eds. 2,000 growing agencies have materially ramped their investment into follow-on funds, growing almost ramped their investment into follow-on funds, almost 3x between 2015 and 2019, the sums invested funding the rst ($M) time in 2019, increasing from $1.1B in 2015. Interestingly, while government agencies have materially $1,770M 2015 and 2019, the sums invested into first-time funds have not seen the2019, same expansion. into rst-time funds have not seen the samealmost consistent expansion. ramped their investment into follow-on funds, growing 3x between 2015 and theconsistent sums invested

rst-time funds have not seen the same consistent expansion. Linto EGEND

L EGEND

First-time VC funds

First-time VC funds Follow-on Funds Follow-on Funds

NOTE: Taken from the European Data Cooperative, NOTE: developed by Invest Europe. EDC data Taken fromat the European Data Cooperative, converted EUR:USD of 1:1.1198, the rate on developed by Invest Europe. EDC data 30converted June 2020. at EUR:USD of 1:1.1198, the rate on

Total VC funds raised by government agencies ($M)

First-time VC funds

Evolution ofgovernment government Evolution Follow-onofFunds funding funding ($M) ($M)

2,000

1,500

1,000

500

$1,714M

1,500 2,000

$1,176M

1,000

$1,940M

$1,770M

$1,037M

$1,714M

$1,770M

$1,714M

$838M 1,500

$663M

$608M

$1,176M

500

$405M

$1,037M $838M $1,037M

1,000 $663M

$405M

$458M

$1,176M

$458M

0 500

2015

$663M

$608M

$838M

2016

2017

2018

$608M 2

2018

$458M

$405M

2015

2016

2017

2018

2019

SOU RCE: SOU RCE:

2015

2016

30 June 2020.

NOTE: Taken from the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

Overall

SOU RCE:

2017

03.1

Limited Partners

It can, of course, be a mistake to make assumptions about the overall ecosystem without �rst understanding the numbers at a more granular level. In this context, it's important to understand that the relative maturity of can, ofcapital course, be aclass mistake to markedly make assumptions about the overall ecosystem without first understanding theItventure asset differs at the country or sub-regional level. The UK, for example, is unquestionably the European venture capital market. Not theecosystem level of 'dthat ependency' on It can, of course, be amature mistake to make assumptions theonly overall without �rst maturity understanding the numbers at most a more granular level. In this context, it’about s important toisunderstand the relative suchcontext, as the UKit's (8%) and Nordic (10%), but government agency funds much lower in places the numbers at a more granular Inmarkedly this important tocountries understand the maturity of of the venture capital asset class level. differs at the country or sub-regional level.that Thethe UK,relative for example, decline in the share of funds raised from thesemarkedly sources isatalso falling much than elsewhere. The UK, decline the venture capital asset class differs the country orfaster sub-regional level. The for example, is is unquestionably the most mature European venture capital market. Not only is the level of ‘ d ependency’ in the DACH region, home to many of Europe's leading early-stage VCs, is also particularly pronounced. On the unquestionably the most mature European venture capital Not only is the level of 'dependency' on government agency funds much lower in places such as(32%) themarket. UK (8%) and Nordic countries �ipon side, in the less mature corners of Europe - Southern Europe or the CEE (37%) - there is an (10%), but the government agency funds much lower in places such as the UK (8%) and Nordic countries (10%), but the understandably higher of dependence. Nevertheless, the is relative share much of funding from government decline in the sharelevel of funds raised from these sources also falling faster than elsewhere. The decline decline in the share of funds raised from these sources is also falling much faster than elsewhere. The agencies is declining across thetoboard, the notable exception of France andisthe Benelux, wherepronounced. On decline in the DACH region, home manywith of Europe’ s leading early-stage VCs, also particularly in the DACH region, have home to many of Europe's early-stage VCs,VCs. is also particularly pronounced. On the government institutions been long-time and very leading active supporters of local

the flip side, in the less mature corners of Europe - Southern Europe (32%) or the CEE (37%) - there is an �ip side, in the less mature corners of Europe - Southern Europe (32%) or the CEE (37%) - there is an understandably higher Nevertheless, the relative share of funding from government understandably higherlevel levelofofdependence. dependence. Nevertheless, DATA SET : F IRST- T IM E A ND F OL L OW- ON F Uthe NDS relative share of funding from government Evolution of share of agencies is declining across the board, with the notable exception of France and the Benelux, where agenciesfunding is declining government by region across the board, with the notable exception of France and the Benelux, where government institutions have been long-time and very active supporters of local VCs.VCs. (%), 2015-2017 versus 2018-2019 government institutions have been long-time and very active supporters of local

71%

37% 32%

% of Government funding

It Lcan, of course, be a mistake to make assumptions about the overall ecosystem without �rst understanding 80 EGEND the 2015 numbers at a more granular level. In this context, it's important to understand that the relative maturity of to 2017 DATA SET : F IRST-Funds T IM E A ND F OL L OW- ON F U NDS Evolution of share of First-time & follow-on the 2018 venture to 2019 capital asset class differs markedly at the country or sub-regional level. The UK, for example, is government funding by region unquestionably the most mature European venture capital market. Not only is the level of 'dependency' on 60 (%), 2015-2017 versus 2018-2019 government agency funds much lower in places such as the UK (8%) and Nordic countries (10%), but the decline in the share of funds raised from these sources is also falling much faster than elsewhere. The decline 80 L EGEND in the DACH region, home to many of Europe's leading early-stage VCs, is also particularly pronounced. On the 40 38% 2015 to 2017 35% �ip side, in the less mature corners of Europe - Southern Europe (32%) or the CEE (37%) - there is an 2018 to 2019 understandably higher level of dependence. Nevertheless, the relative share of funding from government 27% 24% 60 agencies is declining across the board, with the notable exception of France and 20% the Benelux, where 18% 20 16% government institutions have been long-time and very active supporters of local VCs.

% of Government funding

It can, of course, be a mistake to make assumptions about the overall ecosystem without �rst understanding 10% 8% the numbers at a more granular level. In this context, it's important to understand that the relative maturity of 38% DATA SET : F IRST-40 T IM E F U NDS Evolution of sharecapital of 0 markedly at the country or sub-regional level. The UK, for example, is 35% the venture asset class differs UK & Ireland DACH Nordics France & Benelux Southern Europe CEE 32% government funding by region unquestionably the most mature European venture capital market. Not only is the level of 'dependency' on (%), 2015-2017 versus 2018-2019 27% 24% government agency funds much lower in places such as the UK (8%) and Nordic countries (10%), but the 20% understanding It NOTE: can, of course, be a mistake to make assumptions about the overall ecosystem without �rst 18% 20 80 L EGEND decline inatthe share of funds raised from these sources istoalso falling much faster than elsewhere. The decline SOU RCE: 16% Taken from the European Data Cooperative, the numbers a more granular level. In this context, it's important understand that the relative maturity of 72% 2015 to 2017 developed by Invest Europe. Excludes First-time funds leading early-stage VCs, is also particularly 10% in the DACH region, home to many of Europe's On the Unclassi�eds. the venture level. The UK, for example,pronounced. is 8% 2018 to 2019 capital asset class differs markedly at the country or sub-regional �ip side, in the less mature corners of Europe - Southern Europe (32%) or the CEE (37%) - on there is an unquestionably the most mature European venture capital market. Not only is the level of 'd ependency' 60 understandably higher level of dependence. the relative share of funding from government Southern Europe as theUKUK (8%) and Nordic countries (10%), but the government agency funds much lower in places such0Nevertheless, & Ireland DACH Nordics France & Benelux decline in the is share of funds raisedthe fromboard, these with sources also falling much faster than elsewhere. The decline agencies declining across theisnotable exception of France and the Benelux, where 42% VCs, is also particularly pronounced. On the in the DACH region, home to many of been Europe's leading early-stage 40% government institutions have long-time and very active supporters of local VCs. 40 37%

NOTE:in the less mature corners of Europe - Southern Europe (32%) or the CEE (37%) - there is an �ip side, SOU RCE: Taken from the European Cooperative, understandably higherData level of dependence. Nevertheless, the relative share of funding from government 24% developed by Invest Europe. Excludes SET : exception F IRST- T IM E Aof NDFrance F OL L OWON Fthe U NDS agencies is declining the board, with the DATA notable and Benelux,19%where Evolution of share across of Unclassi�eds. 18% 18% 20 government funding by region government institutions have been long-time and very active supporters of local VCs.

(%), 2015-2017 versus 2018-2019

DATA SET : F OL L OW80 ON F U NDS 0

UK & Ireland

CEE

35%

Evolution of share of L EGEND government funding by region 2015 to 2017 (%), 2015-2017 versus 2018-2019

DACH

Nordics

France & Benelux

Southern Europe

CEE

71%

2018 to 2019

SOU RCE:

71%

Follow-on funds % of Government funding

% of Government funding

NOTE: L EGEND Taken from the European Data Cooperative, 2015 to 2017 developed by Invest Europe. Excludes Unclassi�eds. 2018 to 2019

38%

16%

28%

15%

UK & Ireland

DACH

NOTE: SOU RCE:

NOTE: Taken from the European Data Cooperative,

developed by Invest Europe. Excludes Taken from the European Data Cooperative, Unclassi�eds. developed by Invest Europe. Excludes

SOU RCE:

Unclassi�eds.

35% 29%

10%

11%

UK & Ireland

27%

26%

32%

27%

34%

20%

18%

22%

8% 0

24%

33%

35%

Nordics

Nordics France & Benelux

France & Benelux Southern Europe

Southern Europe CEE

CEE

Pension funds

Endowmentsand and foundations apital. Notably, the most recent available data shows a0 large, sustained 2015 2016 Private individuals Familyendowments o�ces L EGEND VCSovereign fundsfunds, raised ($M) per year ment from pension insurance companies, fund of funds, and wealth funds

Unclassi�eds

NOTE: Taken from the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020. 15,000

Academic institutions

Fund of funds

Banks

Government agencies

Capital markets

Insurance companies

Corporate investors

Other asset managers (including PE houses other than fund of funds)

SOU and RCE: Endowments foundations

Pension funds

Family o�ces

Private individuals

Fund of funds

15,000

10,000

Private individuals

Sovereign wealth funds

2018

5,000

NOTE: Taken from the European Data Cooperative, 0 developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

Unclassi�eds

Insurance companies

2017

Pension funds

Unclassi�eds

Sovereign wealth funds

Government agencies

PE houses other than fund of funds) 10,000

15,000

Funds raised ($M)

by LP type, 2015-2019

Funds Funds raised ($M)raised ($M)

Funds raised ($M)

venture capital as an asset VC class, given funds raisedthe ($M)long-term per year by horizons over w LP type, 2015-2019 relationships and allocate capital. Notably, the most recent available d L EGEND growing allocation of investment from pension funds, insurance comp Academic institutions 03.1 Limited Partners 15,000 increasingly clear is that sophisticated L EGEND What is growing capital allocators are deploying into Eu and foundations. Banks Academic institutions record numbers, driving material shifts in the mix of sources of LP funding. This changing dyn1 Capital markets Banks to build an increasingly diversi�ed LP stack for Europe and a robust foundation for the future o Corporate investors VC funds given raised ($M) per year by Capital markets over which these investors ent venture capital as an asset class, the long-term horizons Endowments and foundations 10,000 into European VCs in gly clear is thatWhat sophisticated capital allocators are deploying LP type, 2015-2019are deploying Corporate investors is growing increasingly clear is that sophisticated capital allocators into European VCs in record relationships and allocate capital. Notably, the most recent available data shows a large, susta Family o�ces aterial shifts in the mix of sources of LP funding. This changing dynamic is helping Endowments and foundations numbers, driving material shifts in the mix of sources of LP funding. This changing dynamic is helping to build an growing allocation of investment from pension funds, insurance companies, fund of funds, an1 Fund of funds L EGEND stack for Europe andcapital a robust foundation fordeploying the future offoundation European yersi�ed clear isLPthat sophisticated allocators are into European VCs in Family o�ces increasingly diversified LP stack for Europe and a robust for the future of European venture capital as an and foundations. Government agencies Academic institutions Fund of funds 5,000 tterial class,shifts given the long-term horizons over theseThis investors enter into 15,000 in the mix of sources of LPwhich funding. changing isenter helping asset class, given the long-term horizons over which thesedynamic investors into relationships and allocate capital. Insurance companies Banks Government agencies capital. the most recent available data shows a large, sustained and rsi�ed Notably, LP stack for Europe and a robust foundation for the future of European Other asset managers Notably, the most(including recent available data shows a large, sustained and growing allocation of investment from pension Capital markets VC funds raised ($M) per year by Insurance companies PE houses other than fund of funds) stment from pension funds, insurance companies, fund of funds, and endowments class, given the long-term horizons over which these investors enter into Corporate investors funds, insurance companies, fund of funds, and endowments and foundations. LP type, 2015-2019 Other asset managers (including

SOU RC

2015

5,000

Other asset managers (including PE houses other than fund of funds) NOTE:

10,000

Taken from the European Data Cooperative, 0 developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

Pension funds Private individuals

10,000

Sovereign wealth funds

5,000

SOU RCE:

2015

2016

2017

Unclassi�eds NOTE:

5,000 0

2015 0

2015

Taken from the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 2016 2017 30 June 2020.

2016

SOU RCE:

2018

2019

2017

2018

2019

SOU RCE:

VC FUNDS R A IS ED

$59B

SOU RCE:

The speed at which different types of LPs are ramping their commitments to European VC is re�ected in the The speed atof which different types of LPs are ramping their to European relative size aggregate commitments in 2019 versus thecommitments trailing average of commitments over the four prior VC is reflected in the relative size of aggregate commitments in 2019 versus trailing years. Looking at the data in this way gives a simpli�ed view on which LP the types are growing in relative terms The speed at which different types of prior LPs are ramping their commitments to European VC is re�ected in the average of commitments over the four years. Looking at the data in this way versus the overall increase in funds raised, and those which are growing slowergives or declining in relative terms. raised relative size of aggregate commitments in 2019 versus the trailing average of commitments over VC thefunds four prior TheEncouragingly, at which different types of LPs are ramping commitments to European VC is re�ectedmade in the the greatest aspeed simplified view on which LP types growingtheir in relative versus theand overall funds, andterms endowments foundations insurance companies, pension over the past years. Looking at the data in this way gives a simpli�ed view on which LP types are growing in relative terms relative size increase of commitments 2019 versus theVC. trailing average of commitments the four prior increase inaggregate funds raised, and thoseinwhich are growing slower or declining in relativeover terms. relative in their allocations to European 5 years versus the at overall increase in funds andview those whichLP are growing slowerinor declining in relative terms. years. Looking the data in this way gives araised, simpli�ed on which types are growing relative terms Encouragingly, insurance companies, pension funds, and endowments andand foundations Encouragingly, insurance companies, pension funds, endowments foundations versus the overall increase in funds raised, and those which areand growing slower or declining in relativemade terms.the greatest made theincrease greatest increase into their allocations to European VC. Insurance companies SOURCE: relative inrelative their allocations European VC. Encouragingly, insurance companies, funds, and endowments and foundations made the greatest Funds committed to VC funds by pension LP type (multiple), 2019 versus relative increase in their allocations to European VC. average per year 2015-2018 Funds committed to VC funds by Funds committed to VC funds LP type (multiple), 2019by versus L EGEND LP type (multiple), 2019 2015-2018 versus average per year Multiple (2019 versus. average 2015-2018)

average per year 2015-2018

Pension funds

2.9x

Endowments and foundations Insurance companies

2.2x

Insurance companies

Private individuals Pension funds

Fund of funds Endowments and foundations

1.5x

L EGEND

Private individuals

Fund of funds

1.5x 1.5x 1.3x

Banks Family offices

Government agencies Other asset managers

Banks 0.0

Other asset managers

0.0

0.5

0.0

NOTE:developed by Invest Europe. Excludes

Unclassi�ed.

developed by Invest Europe. Excludes Unclassi�ed.

0.5

1.0

1.3x

1.5x

1.3x

1.5x

1.3x 1.3x

1.0 0.9x

1.5

2.0

2.5

3.0

SOU RCE:

3.5

Multiple of funds committed in 2019 versus average per year in 2015-2018 0.8x 1.5

2.0

2.5

3.0

0.5 of funds committed 1.0 in 2019 versus1.5 Multiple average per year 2.0 in 2015-2018

3.5

2.5

4.0

3.0

Multiple of funds committed in 2019 versus average per year in 2015-2018

SOU RCE:

Taken from the European Data Cooperative,

0.9x 0.8x

Other asset managers

NOTE:

0.9x

1.3x 0.8x

Government agencies

Banks

1.5x1.6x

1.6x

Family Fund ofoffices funds

Government agencies Corporate investors Corporate investors Family offices

2.2x

Corporate investors Private individuals

Multiple (2019 average versus.2015-2018) average 2015-2018) Multiple (2019 versus.

2.9x

Endowments and foundations

L EGEND

TakenNOTE: from the European Data Cooperative, developed by Invest Europe. Excludes Taken from the European Data Cooperative, Unclassi�ed.

3.5x

1.6x

Pension funds

3.5

03.1

Limited Partners

While there is still some way to go before pension funds become the largest overall source of allocation to European VCs, the data would suggest that there is a realistic path to this happening if trends continue to evolve in line recent years. 2019, pension the most recent full year which this granularity of data is available, While there is with still some way to goInbefore funds become thefor largest overall source of allocation While there is still some way to go before pension funds become the largest overall source allocation to pension funds continued to build their exposure with another record high commitment of $1.5B to European tothere European the data would suggest that there is a realistic pathoverall to this source happening if trendsof continue While is stillVCs, some way to go before pension funds become the largest of allocation to European VCs, the data would suggest that there is a realistic path to this happening if trends continue to VCs. That being said, in 2019, for every dollar raised from a pension fund, European VCs on average raised European VCs,inthe would suggest therethe is amost realistic pathfull to this if trends continue to evolve linedata with recent years.that In 2019, recent yearhappening for which this granularity ofto data is evolve in linefrom with recent years. Inthe 2019, the mostfull recent fullwhich yearthis for which this of granularity of data is available, around $1.65 government agencies. evolve in line with recent years. In 2019, most recent year for data is available, available, pension funds continued to build their exposure with another granularity record high commitment of $1.5B pension continued build their exposure withrecord another record high commitment of $1.5B to European pension fundsfunds continued to buildtotheir exposure with another high commitment of $1.5B to European to European VCs.said, Thatin being said, in 2019, for every dollar raised from afund, pension fund, European VCs on raised 2019, fordollar every dollar raised from afund, pension European VCsraised on average VCs.VCs. ThatThat beingbeing said, in 2019, for every raised from a pension European VCs on average Government agencies Funds committed ($M) to$1.65 VC from government agencies. average raised around around government agencies. around $1.65$1.65 from from government agencies. funds by LP type (>$500M), 2015-2018 versus 2019

Corporate investors Private individuals

Government agencies Government agencies

FundsFunds committed ($M) to($M) VC to VC committed EGEND fundsLfunds by LP by type LP(>$500M), type (>$500M), 2015-2018 versus 2019 VC Funds raised 2019

Pension funds Corporate investors

Corporate investors

2015-2018 versus 2019

L EGEND

Insurance companies Private individuals Private individuals

Average VC Funds raised 2015-2018

Pension funds

L EGEND

VC Funds raised 2019

Fund of funds Pension funds

Insurance companies and foundations Endowments

VC Funds raised 2019

Insurance companies

Average VC Funds raised 2015-2018

Fund of funds

Average VC Funds raised 2015-2018

Endowments and foundations

Family offices Fund of funds

Banks Endowments and foundations Family offices Other asset managers (including PE houses other than fund ofoffices funds) Family Banks

Other asset managers (including PE houses other than fund of funds)

Taken from the European Data Cooperative,

500

1,000

500

1,500

2,000

Funds committed ($M)

2,000

2,500

1,000

2,000

2,500

1,500 Funds committed ($M)

SOU RCE:

NOTE: developed by Invest Europe. Excludes

1,500 Funds committed ($M)

Other asset managers (including PE houses other than 0 500 fund of funds)

NOTE:

Unclassi ed. EDCData data converted at EUR:USD Taken from the European Cooperative, of 1:1.1198, the rate onExcludes 30 June 2020. NOTE: developed by Invest Europe. Unclassi ed. EDC data converted at EUR:USD Taken fromonthe of 1:1.1198, the rate 30European June 2020.Data Cooperative,

Banks

SOU RCE:

There are large differences on a sub-regional level when it comes to the scale of VC fundraising. The UK, SOU RCE: developedEurope's by Invest Europe. Excludes and most important already largest country in terms of VC fundraising, is on track for another record Unclassi ed. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020. year in 2020. Six months into 2020, VC funds raised have already exceeded more than 80% of the total raised There are2019 large on the scale ofof VCVC fundraising. in either ordifferences 2018. There are large differences onaasub-regional sub-regionallevel levelwhen whenititcomes comestoto the scale fundraising. The UK, There are large differences on a sub-regional level when it comes to the scale of VC fundraising. The is UK, The UK,Europe's already Europe’ sand largest and most important country inof terms of VC fundraising, already largest most important country in terms VC fundraising, is on track for another record already Europe's largest and most important country in terms of VC fundraising, is on track for another record on track for another record year in 2020. Six months into 2020, VC exceeded funds raised have already year in 2020. Six months into 2020, VCraised funds raised have already more than 80% of the total raised year in Six months into 2020, VC funds have already exceeded more than 80% of the total raised VC2020. funds raised ($B) per year exceeded more either 2019 or 2018. in either 2019 orthan 2018.80% of the total raised in 5.0 in either 2019 or 2018. by GP region L EGEND

VC funds raisedraised ($B) per year VC funds ($B) per year 2016 by GP byregion GP region 2017

L EGEND2018

L EGEND 2019 2016 2017 H1 2020 2017 2018

4.0

2019 2018

2019 H1 2020

Funds raised ($B)

2016

3.0

2.0

H1 2020 1.0

Funds raised ($B) Funds raised ($B)

4.0 5.0

5.0 3.0 4.0 2.0 3.0 1.0 2.0 0.0 1.0

NOTE: Taken from the European Data Cooperative, NOTE:developed by Invest Europe. EDC data at EUR:USD of 1:1.1198, the rate on Takenconverted from the European Data Cooperative, 30 June 2020.Europe. EDC data developed by Invest NOTE: converted at EUR:USD of 1:1.1198, the rate on

0.0

UK & Ireland

0.0

SOU RCE:

UK & Ireland

DACH

UK & Ireland

DACH

SOU RCE:

30 June 2020.

Taken from the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

Nordics

SOU RCE:

Nordics France & Benelux

Nordics

France & Benelux Southern Europe

France & Benelux

Southern Europe

CEE

Southern Europe

CEE

03.1

Limited Partners

The mix of the source of VC funds raised by LP type varies greatly across Europe. The UK, as the most The mix of the source of VC funds raised by LP type varies greatly across Europe. The UK, as the most mature mature VC market, also has the most diversified set of LPs backing its GPs, including large shares of total VC market, also has the most diversi�ed set of LPs backing its GPs, including large shares of total funds funds raised coming from pension funds, funds oftype funds, andgreatly endowments and foundations. By The mix of the source of VC funds varies across The UK, ascontrast, the most raised coming from pension funds,raised fundsby ofLP funds, and endowments and Europe. foundations. By contrast, themature share TheVC mix of theofsource of VC funds raised byinvestors LP type varies greatly across Europe. The UK,funds as theraised most mature market, also has the most diversi�ed set of LPs backing its GPs, including large shares of total funds the share funding from corporate is higher as a percentage of total by GPs in the of funding from corporate investors is higher as a percentage of total funds raised by GPs in the DACH region VCraised market,coming also hasfrom the most diversi�ed set of LPsofbacking its GPs, including large shares of total funds pension funds funds, and endowments and foundations. Bythis contrast, share DACH region to anyfunds, other region. The Nordics, as highlighted in earlier versions of report, compared tocompared any other region. Theof Nordics, as highlighted in earlier versions of this report, have thethe highest raised coming from pension funds, funds funds, and endowments and foundations. By contrast, the share of funding from corporate investors is higher as a percentage of total funds raised by GPs in the DACH region have the highest shareinvestors of funds from pension funds in Europe. In fact, Nordic VCs raise a greater share of funds raised from pension funds in Europe. In total fact, Nordic VCs raise a greater share of their funds of funding from corporate israised higher as a percentage of funds raised by GPs in the DACH region compared to any other region. The Nordics, as highlighted in earlier versions of this report, have the highest share of their funds from pension funds than from any other LP type, including government agencies. in earlier versions of this report, have the highest compared to any other region. The Nordics, as highlighted from pension funds than from any other LP type, including government agencies. share of funds raised from pension in In Europe. In fact, VCs raise a greater share of their funds share of funds raised from pension funds infunds Europe. fact, Nordic VCsNordic raise a greater share of their funds from pension funds than from any other LP type, including government agencies. from pension funds than from any other LP type, including government agencies. VC funds raised ($M) by GP region and LP type, 2015 to 2019 VC funds raised ($M) by GP by GP VC funds raised ($M) region and LP type, 2015 to2015 2019to 2019 region and LP type, L EGEND L EGENDGovernment agencies

L EGEND Corporate investors Government agencies Government agencies Corporate investors Private individuals Corporate investors Private individuals Fund of funds Private Fund of funds individuals Pension funds Pension funds Fund of funds Family o�ces Family o�ces funds Pension Insurance companies Insurance companies Family o�ces Other asset managers Other asset managers Insurance companies BanksBanks Other asset managers Endowments and foundations Endowments and foundations Banks Capital markets Capital markets Endowments and foundations Sovereign wealth wealth funds Sovereign funds Capital markets Academic institutions Academic institutions Sovereign wealth funds

UK & Ireland UK & Ireland

UK & Ireland Nordics

Nordics

Nordics France & Benelux France & Benelux

France & Benelux DACH

DACH

DACH Southern Europe Southern Europe Southern Europe CEE

CEE

NOTE:

Academic institutions NOTE:

Taken from the European Data Cooperative, developed Invest Europe. EDC data Takenbyfrom the European Data Cooperative, converted at EUR:USD of 1:1.1198, the rate ondata developed by Invest Europe. EDC NOTE: 30 June 2020.

converted at EUR:USD of 1:1.1198, the rate on Taken from the European Data Cooperative, 30 June 2020. developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

SOU RCE:

SOU RCE: SOU RCE:

Our positive view on the European VC landscape has been reinforced in recent years as we witnessed the emergence of a growing number of start-ups led by experienced entrepreneurs able to scale their business internationally. This is now confirmed from many angles by increased capital inflows and deal activity. Sofina has been an investor in VC funds for more than 30 years. We remained focused on the leading US GPs for most of this period because the European venture ecosystem did not produce enough successful venturebacked companies despite the abundance of well-educated entrepreneurial talent. We were hoping for improvement and began to see the tide turning about five or six years ago. We invested in a selection of the best European VC firms where we found investment talent and processes comparable to our US benchmarks.

Xavier Coirbay Sofina Group Executive Committee

Our positive view on the European VC landscape has been reinforced in recent years as we witnessed the emergence of a growing number of start-ups led by experienced entrepreneurs

able to scale their business internationally. This is now confirmed from many angles by increased capital inflows and deal activity. The size of financing rounds is growing and valuations are following the global rising trend. We also see more engagement from communities to support technology and innovation. It helps make startup careers more visible and more attractive for young talented professionals. Another significant development is the renewed interest of leading US VC investors who are raising their game in Europe and building local teams to support their investment activity. Competition is heating up and the pandemic did not materially change the picture. We know that the VC industry will face cycles but we are confident in its long-term positive trend.

03.1

Limited Partners

European VC is overwhelmingly funded by European LPs, as clearly highlighted by analysing the source of funds raised by LP region. As the ecosystem has matured, the level of investment from LPs from outside Europe, inVC particular in the US, has increased. Nonetheless, as thehighlighted near 50% drop in commitments between European is overwhelmingly funded by European LPs, as clearly by analysing the 2018 and 2019 demonstrates, there is still notable volatility. The long-run trend, however, is clearly trending European VC is overwhelmingly funded by ecosystem European LPs, as clearlythe highlighted by analysing theLPs source of sourceVC ofisfunds raised by LP region. As the has highlighted matured, level of investment from European overwhelmingly funded by European LPs, as clearly by analysing the source of positively in terms of securing LP allocation from outside the region. funds raised by LP region. As the ecosystem has matured, the level of investment from LPs from outside from outside Europe, in particular in the US, has increased. Nonetheless, as the near 50% drop in funds raised by LP region. As the ecosystem has matured, the level of investment from LPs from outside Europe, in particular the US, has increased. Nonetheless, the near drop The in commitments between Europe, in particular in thein US, has increased. Nonetheless, asthere the near 50% drop in 50% commitments between commitments between 2018 and 2019 demonstrates, is as still notable volatility. long-run trend, 2018 and 2019 demonstrates, there is still notable volatility. The long-run trend, however, is clearly trending 2018 and 2019 demonstrates, there is still notable volatility. The long-run trend, however, is clearly trending however, is clearly trending positively in terms of securing LP allocation from outside the region. Funds committed ($B) to VC positively of securing LP allocation from outside region.the region. positively inregion terms ofyear, securing LP allocation fromthe outside funds in byterms LP per 10.0

2015 to 2019

North America

Asia &Europe Australia NorthAsia America & Australia

North America

Funds committed ($B)

Asia & Australia 7.5

5.0

2.5

Funds committed Funds ($B) committed ($B)

10.0

2015 to 2019

L EGEND Europe

$4.4B

$10.3B

7.5 10.0

5.0 7.5

2.5 5.0

$0.1B

0.0

$9.2B

$7.1B

$4.4B

$7.1B

$1.8B

$4.4B $0.1B $0.4B

$0.7B

$0.4B

2015

$0.7B $0.1B

0.0

$0.4B

2015

$0.3B

$0.1B 2016

2016

$0.1B

SOU RCE:

developed by Invest Europe. EDC data

$10.3B

$9.2B $8.6B

2015

NOTE: Taken from the European Data Cooperative, NOTE:

$7.1B $8.6B

0.0 2.5

Takenconverted from the European Data Cooperative, at EUR:USD of 1:1.1198, the rate on developed by Invest 30 June 2020.Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on NOTE: 30 June 2020.

$9.2B $8.6B

Funds committed ($B) to VC Funds committed ($B) to VC L EGEND funds by LP region per year, funds by 2015 toEurope 2019 LP region per year, L EGEND

$10.3B

$0.3B

2017

$0.7B

2018 $0.6B

$0.3B 2018

$0.1B

$0.3B

2016

2017

$0.6B

$0.3B

$0.3B $1.8B

$1.0B

2019

$1.8B

2019

$0.6B

$0.3B

2018

2019

SOU RCE:

Taken from the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

SOU RCE:

America into the Drilling down more more granularly granularlyinto intothe theLP LPtypes typesdriving drivinginvestment investmentfrom fromNorth North America into the European VC asset classVC reveals that the decline commitments in 2019 is primarily by lower investment European asset class reveals thatinthe decline in commitments in 2019driven is primarily driven by lower from fund of funds, endowments and foundations. American funds, bythe contrast, are backing European Drilling down and more granularly the LP types drivingNorth investment from pension NorthNorth America into European VC investment from fund ofinto funds, and endowments and foundations. American pension funds, asset reveals that theThe decline in commitments inamounts 2019 is primarily driven by from fund VCs at record levels. volatility in absolute is likely explained byinvestment theamounts fact that timing of new by class contrast, are backing European VCs at record levels. The volatility inlower absolute isthe likely of funds, and endowments and foundations. North American pension funds, enough by contrast, are backing European VCs is still signi�cant to drive a material impact from one fundraises by larger, established European explained by the fact that the timing of new fundraises by larger, established European VCs is still VCsvintage at record levels. Thenext. volatility in absolute amounts is likely explained by the fact that the timing of new year to the significant enough to drive a material impact from one vintage year to the next.

fundraises by larger, established European VCs is still signi�cant enough to drive a material impact from one vintage year to the next. Capital invested ($M) by North American LPs by type

2,000

Capital invested ($M) by North American LPs by type

2,000

Corporate investors Insurance companies Insurance companies

Endowments and foundations

Fund of funds

Other asset managers (including PE houses

Other asset managers (including PE houses other than fund of funds) other than fund of funds)

Family Family o�ceso�ces

Capital invested ($M)

Pension funds investors Corporate

1,500

1,000

500

Capital invested ($M)

L EGEND

L EGENDPension funds

1,500

1,000

500

Private individuals Private individuals Academic institutions Academic institutions

BanksBanks

2017

Sovereign wealth funds

Sovereign wealth funds SOU RCE:

SOU RCE:

2018

2019

03.1

Limited Partners

It is always interesting to compare the scale of European VC to its sister asset class of Growth and Buyout. As one would expect, European buyout is a much larger asset class, with buyout funds typically raising in It is always interesting to compare the scale of European VC to its sister asset class of Growth and multiples of 5-6x more than European VCs. It is more noteworthy, however, to observe that European growth Buyout. As one European buyout athe much larger class, withclass buyout funds tech typically It is always interesting toterms compare the scale of is European VCpace to asset itsassister asset of Growth andecosystem, Buyout. As funds have not would scaledexpect, in of funds raised at same the underlying European raising in multiples of 5-6x more than European VCs. It is more noteworthy, however, to observe that one would expect, buyout is much larger class, with buyout funds typically raising in track to European andand buyout rms are on compared to European that invest before While It isnor always interesting toEuropean compareVCs the scale ofaEuropean VCthem. toasset its sister asset class ofVCs Growth Buyout. As European growth funds have not in terms ofclass, funds raised at the same pace as the underlying oneraise would expect, European buyout is ascaled muchgrowth larger with buyout funds typically raising inthat multiples of 5-6x more than European VCs. Itasset is more noteworthy, however, to observe European record sums in 2020, European funds look set to record the lowest total in recent years. growth multiples of 5-6x more than European VCs. It is more noteworthy, however, to that European growth European tech ecosystem, nor compared to European VCs that invest before them. While European funds have not scaled in terms of funds raised at the same pace asobserve the underlying European tech ecosystem, funds scaled in terms of VCs funds raised at the same pace asWhile the underlying European tech ecosystem, 100.0 VCshave andnot buyout are on track to raise record sums in 2020, European growth funds lookrms set to nor compared tofirms European that invest before them. VCs and buyout are on track to Funds raised ($B) by fundVCs typethat invest before them. While European VCs and buyout rms are on track to nor compared to European raise record sums in 2020, European growth funds look set to record the lowest total in recent years. $88.2B record the lowest total in recent years. per year

raise record sums in 2020, European growth funds look set to record the lowest total in recent years. $81.4B

L EGEND

VC funds

75.0

Buyout funds funds Buyout

VC funds

Growth Funds

Funds raised ($B)

L EGEND Growth Funds L EGEND

50.0

Funds raised ($B) Funds raised ($B)

Funds raised ($B) bytype fund type Funds raised ($B) by fund Buyout funds per per yearyear

VC funds

100.0 75.0

100.0

75.0

$70.2B50.0

$42.5B

50.0 25.0

$42.5B

$11.5B

$10.2B $5.4B $10.2B $5.4B

0.0

SOU RCE:

$11.5B

2016

$8.3B

$10.2B

2017 $11.5B

$5.4B

2016

0.0

H1 2020 gures are preliminary. Taken from

$76.5B

$70.2B

25.0 0.0

NOTE: the European Data Cooperative, developed by

$88.2B

$81.4B

25.0

NOTE:

$76.5B

$70.2B

2017

2016

$11.3B

$8.3B $14.1B

$42.5B

$16.6B

$14.1B

$10.1B

$11.3B

$10.1B

2018 $14.1B

2018

2019 $16.6B $7.8B

$11.3B

$8.3B

2019

2017

H1 $10.1B $1.5B

2018

2019

SOU RCE:

the European Data Cooperative, developed by Invest Europe. EDC data converted at EUR:USD of 1:1.1198, the rate on 30 June 2020.

PEN SION FUNDS A LLOC ATION

31x

Though the relative scale of European buyout funds is approximately 5-6x larger than European VCs, there is a much greater variance in the relative size of commitments from key LP types. As an example, pension funds have invested more than $112.3B cumulatively into European buyout funds more capital committed Though relative scale European buyout funds is approximately 5-6x larger than European VCs, there is a to European Buyout betweenthe 2015 and 2019, butoftheir commitments to European VCs total just much greater variance in the relative size of commitments from key LP types. As an example, pension funds funds than European VCs $3.6B over that same period, a relative multiple of more than 31x. Multiple havethe invested more of than $112.3B cumulatively into European buyout funds between 2015 and 2019, but their Though relative scale buyout funds is approximately 5-6x larger factors explain this gap,European including misconceptions around European VCthan European VCs, there is a commitments to European VCssize total just $3.6B over that same period, a relative multiple of more than 31x. much greater variance in the relative of commitments from types. As pension funds performance, risk appetite, as wellincluding as the perception of key theLP difficulty ofan example, SOURCE: around European VC 2019, performance, Multiple factors explain thiscumulatively gap, have invested more than $112.3B into misconceptions European buyout funds between 2015 and but their risk appetite, as putting large sums of capital to work. These hurdles are slowly being eroded. well as thetoperception of the putting largeperiod, sums aofrelative capitalmultiple to work. hurdles commitments European VCs totaldi�culty just $3.6Bofover that same of These more than 31x. are slowly being

Multiple factors explain this gap, including misconceptions around European VC performance, risk appetite, as eroded. well as the perception of the di�culty of putting large sums of capital to work. These hurdles are slowly being VC Buyout eroded. Funds committed ($B) to VC and Buyout by LP type, 2015 to 2019

Funds committed ($B) to VC and Buyout by LP type, 2015 to 2019

VC Funds ($B)

Pension funds

Buyout Funds ($B)

Funds ($B)

3.6

Funds ($B)

VC as % of Total Commitments to European VC and Buyout funds

VC as % of Total Commitments to 112.3 VC and Buyout 3.1%funds European

Multiple (Buyout/VC)

Pension fundsFund of funds

3.6

112.3

4.63.1%

42.9

9.7%

31.2x

Fund of fundsSovereign wealth funds

4.6

42.9

0.59.7%

35.5

1.4%

9.3x

3.1

1.4%

33.5

8.5%

Sovereign wealth funds

0.5

35.5

Insurance companies

3.1

33.5

Other asset managers (including PE houses other than fund of funds)

3.0

18.0

Top 5 total

14.8

242.2

Insurance companies

Other asset managers (including PE houses other than fund of funds)

SOU RCE:

Top 5 total

SOU RCE:

8.5%

3.0

14.3%

14.8

5.8%

H1 2020

Invest Europe. EDC data converted at

H1 2020 gures are preliminary. Taken from EUR:USD ofCooperative, 1:1.1198, the developed rate on 30by June 2020. NOTE: Data the European Invest Europe. EDC data converted at H1 2020 gures Taken from EUR:USD of 1:1.1198, theare ratepreliminary. on 30 June 2020.

$16.6B

18.0

14.3%

242.2

5.8%

71.0x 10.8x 6.0x 16.4x

To at how the geographic sources of LP capital might evolve as European venture capital 03.1 get a glimpse Limited Partners continues to mature, it's interesting to compare the relative share of funds raised by European buyout rms by LP region. European buyout funds have succeeded in raising a far greater share of funds from North America and Asia compared to European VCs. To get a glimpse at how the geographic sources of LP capital might evolve as European To get a glimpse at how the geographic sources of LP capital might evolve as European venture capital 100 venture capital continues to mature,to it’s interesting to compare theofrelative share by of funds continues toby mature, it'sand interesting relative share funds European buyout rms by To get raised a glimpse at how the geographic sourcescompare of LP capitalthe might evolve as European ventureraised capital Funds fund type raised by European buyout firms by LP region. European buyout funds have succeeded continues mature, it' s buyout interesting to compare relative share funds raised European buyoutofrms byinfrom North America LPLP region. European havethe succeeded inofraising a farbygreater share funds region, to 2015-2018 versus 2019funds LP region. European buyout funds have succeeded in raising a far greater share ofcompared funds from North America VCs. raising a far greater share of funds from North America and Asia to European and Asia compared to European VCs. and Asia compared to European VCs.

L EGEND

% of funds raised

Rest of the World L EGEND Europe Asia & Australia Europe North America

Asia & Australia Rest of the World

North America Rest of the World

100 % of funds raised

100

% of funds raised

Europe

Fundsraised raised by fund type and Funds Asia & Australiaby fund type and LP region, 2015-2018 versus 2019 LPNorth region, 2015-2018 versus 2019 America

50 75

25 50

0 0

NOTE:

VC Funds (2015-2018)

VC Funds (2019)

Buyout Funds (2015-2018)

Buyout Funds (2019)

25 VC Funds (2015-2018)

VC Funds (2019)

Buyout Funds (2015-2018)

Buyout Funds (2019)

small number of outperforming managers. Europe Developed Venture Capital Index

Cambridge Associates US Venture Capital Horizon pooled return (net)(net) by by Horizon return Index pooled fund index, June 2020 fund index, JunePrivate 2020Equity Index Europe Developed

Cambridge Associates US Venture Capital Europe Developed Venture Capital Index Index

Cambridge Associates US Venture Europe Developed Private Equity Index Capital Index MSCI Europe Index Europe Developed Private Equity Index MSCI Europe Index

30.0 Horizon Pooled Net Return (%)

LMSCI EGEND Europe Index Europe Developed Venture Capital Index L EGEND

40.0

20.0

10.0

0.0

-10.0

NOTE:

Data is as of 30 June 2020.

NOTE: Data is as of 30 June 2020.

Andreas Thors Partners Group Industry Value Creation

Buyout Funds (2019)

20.0 40.0

10.0 30.0

0.0 20.0

-10.0 10.0

25 year0.0

25 year

20 year

15 year

10 year

5 year

3 year

5 year

3 year

1 year

3 year

1 year

SOU RCE:

NOTE: Data is as of 30 June 2020.

Horizon Pooled Net Return Horizon (%) Pooled Net Return (%)

When allthe isEuropean said and done, European venture capital as an asset class is judged on its performance. In this Taken from Data Cooperative, NOTE: SOU RCE: developed by Invest Europe. Excludes Taken from the European Data Cooperative, regard, European venture capitalSOU continues to make huge progress. According to the latest benchmarks from RCE: Unclassi ed. may not sum to 100% due developed by Total Invest Europe. Excludes 0 Unclassi ed. Total may not sum to 100% due VC Funds (2015-2018) Funds (2019) Buyout Funds (2015-2018) to rounding. Cambridge Associates, European venture capital now outperforms all of itsVCkey comparables on a one, three, to rounding. �ve and 10-year horizon. Not only that, but the spread has increased versus US venture capital and also NOTE: a European public market index are also stark. European European private equity. The relative returns versus Taken from thesaid European Datadone, Cooperative, When all is and European venture capital as an asset class is judged on its performance. developed Europe. venture capital continues prove it venture canSOU beRCE: acapital highly attractive asset for capital to build When allby isInvest said andExcludes done, to European as an asset classclass is judged on itsallocators performance. In this InUnclassi this regard, European venture capital continues to make huge progress. According to the latest ed. Total may not sum to 100% due exposure. That is if they can access the righttomanagers, given the concentration the greatest returns in a regard, European venture capital continues make huge progress. According toof the latest benchmarks from to rounding. benchmarks from Cambridge Associates, European venture capital now outperforms all of its key small of managers. Whennumber all is said andoutperforming done, European venture capital capital as an asset class is judged on itsall performance. this Cambridge Associates, European venture now outperforms of its keyIncomparables on a one, three, comparables on aventure one, three, and 10-year horizon. Nothas only that,tobut spread increased versus regard, capital continues to make progress. According thethe latest benchmarks from capital �ve andEuropean 10-year horizon. Notfive only that, but huge the spread increased versus UShas venture and also Cambridge Associates, European venture capital now outperforms all of its key comparables on a one, three,public US venture capital and also European private equity. The relative returns versus a European a European public market index are also stark. European European private equity. The relative returns versus 40.0 increased versus US venture capital and also �ve and pooled 10-year return horizon. Notby only that, but the spread has Horizon market index arecontinues also(net) stark. European venture capital continues toasset prove it can be acapital highly attractive venture capital to prove it can be a highly attractive class for allocators to build a European public market index are also stark. European European private equity. The relative returns versus fund index, June 2020 venture capital continues to prove it to canbuild be athe highly attractive asset for capital allocators to build asset class for capital allocators exposure. That is ifclass they can access the right managers, given returns in a exposure. That is if they can access right managers, given the concentration of the greatest 30.0 exposure. That is if they cangreatest access thereturns right managers, given the concentration of the greatest returns in a the concentration of the in a small number of outperforming managers. small number of outperforming managers. L EGEND

SOU RCE:

-10.0

25 year

20 year

15 year

10 year

5 year

The developmentSOU ofRCE: Covid-19 has also demonstrated the resilience and overall belief in the market, and its attractiveness for investors as a long-term investment opportunity. The European market has matured considerably over the past years. The region today has several leading global VCs but a new generation of funds have also sprung to life, also thanks to a larger pool of former entrepreneurs. Ecosystems have therefore multiplied in depth and across geographies and selection wise, LPs are today met with a much higher level of sophistication. As the

overall ecosystem has developed, GPs have also become bolder and held on to companies much longer and by doing so, they have supported founders longer throughout their journey – leading to great outcomes for all parties involved. The development of Covid-19 has also demonstrated the resilience and overall belief in the market, and its attractiveness for investors as a long-term investment opportunity.

03.2 03.1

Limited Partners

Investors

Venture Capitalist Profiles Over 400 venture capitalists (‘VCs’) responded to the survey this year and shared their perspective on the underlying dynamics of the market as well as their experience since the start of the pandemic. This first section provides an overview of the VCs that took part in the survey, segmented by their The respondent fairly evenly distributed latest closed fundbase size,istheir preferred investmentacross stage and their firm’s journey to date. funds at different stages in their journey. TheThe respondent base base is fairly distributed across across respondent isevenly fairly evenly distributed What best de�nes your VC �rm? funds at different stages in their journey. The respondent is fairly evenly distributed across funds at different stages in their journey. funds at differentbase stages in their journey. First-time fund manager (Fund I)

36%

What best de�nes your VC �rm?

First-time fund manager (Fund I)

36%

First-time fund manager (Fund I)

36%

Emerging fund manager (Fund II or III)

38%

Emerging fund manager (Fund II or III) Established fund manager (Fund IV+)

26%

Established fund manager (Fund IV+)

26%

Established fund manager (Fund IV+) 0

26%

% of VCs 35

% of VCs

NOTE: NOTE:VC respondents only. Numbers may not add

SOU RCE:

% of VCs

SOU RCE:

to 100 due to rounding. Inupterms of fund size, close to 50% had their latest fund sized and 25% above NOTE: below €25M, 25% between €25-100M SOU RCE: €100M. VC respondents only. Numbers may not add up to 100 due to rounding. In terms of fund size, close 50% had their latest fund In terms of fund size, close to 50%to had their latest fund sized below €25M, 25% between €25-100M and 25% above sizedWhat below €25M, between €25-100M and 25%50above is the size25% of your last fund 47% In(€M)? terms of fund size, close to 50% had their latest fund sized below €25M, 25% between €25-100M and 25% above €100M. €100M. €100M. VC respondents only. Numbers may not add up to 100 due to rounding.

WhatWhat is theissize youroflast fund theofsize your last fund (€M)?

50 47%

47%

30 40 20

% of VCs

(€M)?

15%

20 10

11%

0 10

NOTE: VC respondents only. Numbers may not add NOTE: up to 100 due to rounding.

11% €25-50M

< €25M

SOU RCE:

€25-50M

< €25M

€50-100M

€25-50M

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

NOTE:

15%

11%

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

15%

€50-100M

5% €100-250M

€100-250M

€50-100M

€250M-€500M

€100-250M

€250M-€500M

€

€500M+

€250M-€500M

€

03.2

Investors

Survey respondents at rst-time funds are most likely to be focused on Seed as their preferred stage of investment, followed by Series A. This is also true of emerging fund managers. More established fund managers that have gained experience and built institutional knowledge over multiple funds are much more Survey atSeries funds are most likely to be focused on Seed as their preferred stage likely torespondents be focused on A and beyond stages of investment. Survey respondents at first-time rst-time funds are most likely to be focused on Seed as their preferred stage of Survey respondentsfollowed at rst-time funds areA.most likely to be focused on Seed as their preferred stage ofestablished of investment, by Series This is also true of emerging managers. investment, followed by Series A. This is also true of emerging fundfund managers. MoreMore established fund investment, followed by Series A. This is also true of emerging fund managers. More established fund fund managers that have gained experience and institutional built institutional knowledge over multiple funds are more managers that have gained experience and built knowledge over multiple funds are much managers have gained experience and built institutional knowledge over multiple funds are much more What isthat your preferred stage of 80 76% much more likely to be focused on Series A and beyond stages of investment. likely tofocused be focused on Series A and beyond of investment. likely to be on Series A and beyond stages ofstages investment. investment?

72%

70%

Series A

L EGEND Series C Seed Series A Series D A SeriesSeries B

B SeriesSeries C

% of VCs

Seed

SeriesSeries D C

Series D

76% 70%

49%

50%

20 40

25%

10%

First-time fund manager (Fund I)

20%

20% 10% Established fund manager (Fund IV+)

8% manager (Fund II or III) Emerging fund

Emerging fund manager (Fund II or III)

Established fund manager (Fund IV+)

Emerging fund manager (Fund II or III)

Established fund manager (Fund IV+)

SOU RCE:

100 as respondents could select as there was NOTE: no limit on the number of options selected.

SOU RCE: VC respondents only.of Numbers do not to that is often The question focus is add one asked of VCs. Do you take a focused, narrow view on your target 100 as respondents could select as there was entry or are youselected. more agnostic? The survey results outline how Europe’s venture capital landscape is no limitzone, on the number of options The question focus is one that is often asked of VCs.agnostic Do you take a focused, narrow onrespondents your composed of of both stage specialists and multi-stage funds. Just over one inview three target entry zone, or are you more agnostic? The survey results outline how Europe’ s venture capital indicated a single preferred entry, whileof 42% stated a preference across two stages. drilling The question of focus is onestage that isofoften asked VCs. Do you take a focused, narrow view onWhen your target landscape composed of both stage specialists multi-stage agnostic funds. Just one in Thedown question ofisor focus onemore that isagnostic? often asked of VCs. Doand you takecited a focused, narrow view on your over target dual-stage preferences are for Pre-Seed/Seed deeper into results, the two most commonly entry zone, areisthose you The survey results outline how Europe’s venture capital landscape is entry zone, or are more agnostic? The survey results outline howwith Europe’s venture capital landscape isacross three respondents indicated a single preferred of entry, while 42% stated aone preference and Seed/Series A,stage which accounted for 84% ofstage investors a dual-stage preference. 21% of respondents composed of you both specialists and multi-stage agnostic funds. Just over in three respondents composed of both stage specialists and multi-stage agnostic funds. Just over one in three respondents stated a preference across three stages, while 4% stated thattwo arecommonly stage-agnostic and open to investment two stages. When preferred drilling down deeper into those results, the most dual-stage indicated a single stage of entry, while 42% stated a they preference across cited two stages. When drilling indicated a single preferred stage of entry, while 42% stated a preference across two stages. When drilling across all stages. dual-stage preferences are for Pre-Seed/Seed down deeper into those results, the two most commonly cited preferences are for Pre-Seed/Seed and Seed/Series A, which accounted for 84% of investors with a down deeper into those results, the two most commonly cited dual-stage preferences are for Pre-Seed/Seed Seed/Series A, which 84% of investors with aacross dual-stage preference. respondents dual-stage preference. 21%accounted of respondents stated a preference three 21% stages, while21% 4% of stated andand Seed/Series A, which accounted for 84%for of investors with a dual-stage preference. of respondents stated a preference across three stages, while 4% stated that they are stage-agnostic and open stated athey preference across three whileto4% stated thatacross they areall stage-agnostic and open to investment to investment that stage-agnostic and open investment stages. How manyare preferred stages of stages, across all stages. across all stages. investment do you have? L EGEND

HowHow manymany preferred stagesstages of preferred of One stage investment do you have?

investment do you have? Two stages

L EGEND

Three stages L EGEND One stage Stage agnostic One stage

% of VCs

Two stages

stages ThreeTwo stages stages StageThree agnostic

42%

% of VCs

Stage agnostic

SOU RCE:

NOTE: VC respondents only. NOTE:

34%

% of VCs

SOU RCE:

VC respondents only.

NOTE:

SOU RCE:

VC respondents only.

20%

25% 10%

8% fund First-time manager (Fund I) 16%

First-time fund manager (Fund I)

40%

10%

16%

SOU RCE:

52% 25%

40%

NOTE:

72%

16% 8%

0 20

VC respondents only. Numbers do not add to NOTE: 100 as respondents could select as there was no limit ononly. the number selected. VC respondents Numbersof dooptions not add to

52%

50%

49%

72%

50%

70%

40%

40 60 49%

% of VCs

L EGENDSeries B

60 76% 80 % of VCs

L EGEND

What is your preferred stage of What is your preferred stage of Seed investment? investment?

21%

03.2

Investors

The recycling of entrepreneurial and operator talent is a well-known accelerator of the flywheel that drives value creation and positively transforms the mindset of the best talent within start-up communities. The recycling of investor talent is also an important component in helping to broaden and deepen the pool of investors ready to back new generations of founders. As the European ecosystem matures, it’s now increasingly evident that this important component of the European tech flywheel (hyperlink to flywheel imagine) is also spinning faster and faster - to the benefit of founders and LPs all across Europe. New European VC funds founded by alumni of other funds

03.2

Investors

VC Fund Strategy Similar to founders, VCs had to adapt quickly to the pandemic. From sourcing investment opportunities to evaluating deals, investors had to rethink and reshape their internal processes. There are some interesting differences between fund managers. On the one hand, �rst-time fund managers have prioritised diversifying their differences network as well as responding to cold inbounds. Onone the other hand, There are some interesting between fund managers. On hand, first-time fund managers have There are some interesting differences fund managers. Onthe the one hand, �rst-time fund managers established fund managers have both focused onbetween leveraging data-driven sourcing. Meanwhile, initiatives to prioritised diversifying their network as wellas aswell responding to cold inbounds. On the other hand, established fund have their network foster aprioritised more diversediversifying pipeline of founders were pushed intoas theresponding background. to cold inbounds. On the other hand,

managers have both focusedhave on leveraging data-driven sourcing. Meanwhile, initiatives to foster ainitiatives more diverse established fund managers both focused on leveraging data-driven sourcing. Meanwhile, to pipeline of founders were pushed into the background. foster a more diverse pipeline of founders were pushed into the background. DATA SET : F IRST- T IM E F U ND M A NA GER ( F U ND I) In the last 12 months, which strategies, if any, have you prioritised to source new investment opportunities? In the last 12 months, which

strategies, if any, have you prioritised to source new investment opportunities?

DATA SET : ESTA BL ISH ED F U ND M A NA GER ( F U ND IV+ ) First-time fund manager (fund I) Diversify network of partner funds

48%

Respond to cold inbound opportunities

47%

Attend or/and organise virtual pitches

46%

Leveraged data-driven sourcing

54%

Attend events (virtual or in-person) with stronger participation from diverse founders

41%

Diversify network of partner funds

Attend or/and organise virtual pitches Diversify network of angel investors

30% 29%

Respond to cold inbound opportunities

In the last 12 months, which strategies, if any, have you NOTE: prioritised to source new VC respondents only. Numbers do not add to investment opportunities?

100 as respondents could select as there was no limit on the number of options selected.

39%

35%

There are some interesting differences between fund managers. On the one hand, �rst-time 17% fund managers Focus on sectors withRun greater founder open officediversity hours (virtual or in-person) have prioritised diversifying their network as well as responding to cold inbounds. On the other hand, Run open Attend office hours (virtual or in-person) 16% events (virtual or in-person) with stronger established fund managers have both focused on leveraging data-driven sourcing. Meanwhile, initiatives to participation from diverse founders 14% events for diverse foster a more diverse pipeline of founders were Organise pushed into thefounders background. Hired new diverse investors

41%

36%

Leveraged data-driven sourcing

28%

27%

Diversify DATA SET : EM ERGING F U ND M A NA network GER ( F Uof NDangel II ORinvestors III) Hired new diverse investors

20%

SOU RCE:

Emerging fund (fund IIfounder or III)diversity Focusmanager on sectors with greater

13%

Leveraged data-driven Organisesourcing events for diverse founders

56%

Diversify network of partner funds

51%

There are some interesting differences between fund managers. On the one hand, �rst-time fund managers Diversify network of angel investors 42% NOTE:prioritised diversifying their network as well as responding to cold inbounds. On the other hand, have Attend events (virtual or in-person) with stronger 40% SOU RCE: participation from founders VC respondents only. Numbers do not add to have both focused established fund managers ondiverse leveraging data-driven sourcing. Meanwhile, initiatives to 100 as respondents could select as there was 39% Attend or/and organise virtual pitches foster a the more diverse pipeline of founders were pushed into the background. no limit on number of options selected. Respond to cold inbound opportunities

34%

There are some interesting differences betweenOrganise fundevents managers. On the one hand, �rst-time fund managers 17% for diverse founders DATA SET : ESTA BL ISH ED F U ND M A NA GER ( F U ND IV+ ) In prioritised the last 12 months, which have diversifying their network as well as responding to cold inbounds. On the other hand, Run open office hours (virtual or in-person) 15% strategies, if any, have youhave both focused established fund managers on leveraging data-driven sourcing. Meanwhile, initiatives to prioritised source new of founders were pushed 15% Hired new diverse foster a more to diverse pipeline into theinvestors background. investment opportunities?

In the last 12 months, which strategies, if any, have you NOTE: prioritised to source new VC respondents only. Numbers do not add to investment opportunities?

100 as respondents could select as there was no limit on the number of options selected.

Focus on sectors with greater founder diversity

10%

DATA SET : ESTA BL ISH ED F U ND M A NA GER ( F U ND IV+ )

Leveraged data-driven sourcing

54%

Diversify network of partner funds

SOU RCE:

41%

Established fund manager (fund IV+)

Attend or/and organise virtual pitches

39%

Leveraged data-driven sourcing

54%

Run open office hours (virtual or in-person)

Diversify network of partner funds

39%

Run open office hoursRespond (virtual or to in-person) cold inbound opportunities

29%

Respond to cold inbound opportunities

28%

Hired new diverse investors

27%

Diversify network of angel investors

Focus on sectors with greater founder diversity Hired new diverse investors

Organise events for diverse founders

NOTE: SOU RCE:

VC respondents only. Numbers do not add to NOTE:

100 as respondents could select as there was

VC respondents only. Numbers do not add to on the number of options selected. 100no aslimit respondents could select as there was no limit on the number of options selected.

SOU RCE:

13%

20% 13%

29% 28%

30%

Attend events (virtual or in-person) with stronger network of angel investors participation fromDiversify diverse founders

Focus on sectors with greater founder diversity

30%

41%

Attend events (virtual or in-person) with stronger Attend or/and organise virtual pitches participation from diverse founders

27% 20%

03.2

Investors

The vast majority of investors across all fund sizes have stayed consistent in their preferred investment stage of entry, but it is interesting to note that around 20% of investors stated that they have started to become more active at earlier stages since the onset of the Covid-19 pandemic - a change that was stated consistently The vast vast majority of across fund in in their preferred investment The majority of investors investors across all fundsizes sizeshave havestayed stayedconsistent consistent their preferred investment stage across fund managers of all fund sizeall cohorts. Theof vast majority investors across fund sizes have stayed consistent instated theirstated preferred investment stage stage of entry, but it is interesting to that note that around 20% of investors that they started entry, but itofis interesting to all note around 20% of investors that they havehave started to become of entry, but it is interesting to note that around 20% of investors stated that they have started to become to become activestages at earlier stages since of thethe onset of thepandemic Covid-19 pandemic a change that was more activemore at earlier since the onset Covid-19 - a change- that was stated consistently moreSince active atstart earlier stages since the onset of the Covid-19 pandemic - a change that was stated consistently the of the Covid-19 across fund managers of all fund size cohorts. stated consistently across fund managers of all fund size cohorts. across fund managers all seen fund size cohorts. pandemic, has your of fund any change of focus on the stage of entry? Since the start the Covid-19 Since the start of theof Covid-19 pandemic, has your pandemic, hasfund yourseen fund seen L EGEND any any change of focus on theon the change of focus More active at earlier stages of entry? stage stage of entry?

More active at later stages

% of VCs % of VCs

15 % of VCs

More active at earlier stages

More active at later stages

15 20

L EGEND

21%

18%

More active at later stages

More active at earlier stages

20%

18%

21%

20%

18%

10 15

5 10

10%

0 5 0

<€50M <€50M

VC respondents only.

NOTE:

>€250M

€50-250M

>€250M

<€50M

SOU RCE:

NOTE:

€50-250M

>€250M

SOU RCE:

VC respondents only.

SOU RCE:

NOTE:

VC respondents only. The vast majority of investors across all fund sizes have stayed consistent in their preferred investment stage Despite the of uncertainty caused by the pandemic, it is important note the resilience of entry, butperiod it is interesting to note that around 20% of investors stated to that they have startedoftoVCs. become Very few have made a change to their deployment target since the start of the pandemic. more active at earlier stages since the onset of the Covid-19 pandemic - a change that was stated consistently across fund managers of all fund size cohorts.

Change

L EGEND

No change No Change More active at earlier stages

Change More active at later stages

26%

20%

29%

30%

26%

20%

35%

21%

18%

% of VCs

LEGEND

100

%of VC respondents

Since the start of the Covid-19 pandemic, hasof your revised Since the start thefund Covid-19 the number ofyour new investments pandemic, has fund revised Since the start of the Covid-19 made compared toinvestments your the number of new pandemic, has your fund seen deployment target? made compared to your any change of focus on the deployment target? stage of entry?

10 74%

80%

71%

€50-250M <€50M >250M

Seed

70%

74% 9%

65%

25 5

0 <€50M

By fund size NOTE NOTE: NOTE: VC respondents only.

SOU RCE:

VC respondents only.

Series A €50-250M Series B By preferred stage

Series C+

>€250M

03.2

Investors

Of the 30% who revised their deployment pace, most have decided to make fewer investments. When looking at investors split by their preferred stage of investment, it is interesting to see a higher proportion of those playing at the earliest and latest stages making morehave investments. Of the 30% who revised their deployment pace, most decided to make fewer investments. Of the 30% who revised their deployment pace, most have decided to make fewer investments. When looking When at investors split by their of investment, is interesting to see a higher Of the 30%looking who revised their deployment pace,preferred most havestage decided to make feweritinvestments. When looking at investors split by their preferred stage of investment, it is interesting to see a higher proportion of those at investors split by preferred stage of investment, it is interesting to seemore a higher proportion of those Since the start oftheir the Covid-19 proportion of those playing at the earliest and latest stages making investments. playing at the earliest and latest stages making more investments. Pre-Seed/Seed 30% 70% playing at the earliest and latest stages making more investments. pandemic, how did your fund revise the number of new investments made compared to Since the start the Covid-19 Since the start of theof Covid-19 your deployment target? pandemic, how didfund your fund pandemic, how did your revise the number of newof new revise the number L EGEND made compared to investments investments made compared to youryour deployment target? More investments deployment target?

Pre-Seed/SeedPre-Seed/Seed Series A

Series A

Series B A Series

Less investments

30% 25%

30%

25%

75%70%

70%

75%

25% 20%

80%75%

L EGEND

More investments

Less investments

Series B

20%

80%

SeriesC+ B Series

Less investments Series C+

20%

38%

Series C+ 0

VC respondents only. Includes only the NOTE: respondents who have revised their number of new investments. VC respondents only. Includes only the respondents NOTE: who have revised their number

63% 50

63%

100

110

100

110

% of VCs by preferred stage of investment 63%

38%

NOTE:

80%

% of VCs by preferred stage of investment

100

110

% of VCs by preferred stage of investment

SOU RCE: SOU RCE:

of new investments.

SOU RCE:

VC respondents only. Includes only the Despite the enforced change in circumstances as a result of the lockdown measures imposed across Europe respondents who have revised their number of new investments. during 2020, close to 25% of respondents stated that they had made “no changes” to their evaluation process for new investment opportunities in the last 12 months. Looking at the remaining 77% of VCs, the most Despite the enforced change circumstances as a result of theevaluating lockdown measures imposed across frequently areas, wherein VCs have spent more investment opportunities, have Despite thecited enforced change in circumstances as a time resultwhen of the lockdownnew measures imposed across Europe Despite the enforced change in circumstances as a result of the lockdown measures imposed across Europe Europe during 2020, close to 25% offounder(s), respondents statedby that they had made “no changes” to their referencing. been spending more time with the followed during 2020, close toof 25% of respondents stated that they had made “no changes” to their evaluation process during 2020, close to 25% respondents stated that they hadinmade “no changes” to their evaluation process evaluation process for new investment opportunities the last 12at months. Looking at the remaining for new investment opportunities in the last 12 months. Looking the remaining 77% of VCs, the most for new investment opportunities in the last 12 months. Looking at the remaining 77% of VCs, the most 77% oflast VCs, the most frequently cited areas where VCs have spent more time when evaluating new frequently cited areas, where VCs have spent more time when evaluating new investment opportunities, have In the 12 months, which frequently cited areas, where VCs have spent more time when Time with founderevaluating new investment opportunities, have investment opportunities are spending more time with the founder(s), followed by referencing. areas, if any,more havemore you been been spending timethe with the founder(s), followed by referencing. been spending time with founder(s), followed by referencing.

spending more time on when evaluating new investment In the months, which which opportunities? In last the 12 last 12 months, areas, if any, have you been areas, if any, have you been spending more time on when spending more time on when evaluating new investment evaluating new investment opportunities? opportunities?

45%

Reference calls 53%

Time with founder

Time with founder Market research 45%

Reference calls

Reference calls Customer calls

44%

37%

Customer calls Product due diligence

27%

37%

Data analysis

Data analysis 0

27%

37% 40

% of VCs who made changes to their evaluation process

Product0due diligence 5

27% 40

% of VCs who made changes to their evaluation process

SOU RCE:

% of VCs who made changes to their evaluation process

SOU RCE:

Excludes respondents who selected "no VC made". respondents only. Numbers do not add to changes

100 as respondents could select as there was no limit on the number of options selected. Excludes respondents who selected "no changes made".

44%

37%

Customer calls

NOTE:

45%

37%

Market research

Product due diligence

53% 44%

Market research Data analysis

VC respondents only. Numbers do not add to 100 as respondents could select as there was NOTE: no limit on the number of options selected. VC respondents only. Numbers do not add to Excludes respondents who selected "no 100 as respondents could select as there was changes made".of options selected. NOTE: no limit on the number

53%

SOU RCE:

03.2

Investors

companies mature through their funding journey, the risk risk underwritten by investors changes as well.as It As As companies companies mature mature through through their their funding funding journey, journey, the the risk underwritten underwritten by by investors investors changes changes as well. well. It It is, is, As companies mature through journey, in the risk underwritten by investors changes as well. It is,stated is, therefore, interesting totheir notefunding the differences differences the due diligence process based on an investor’ s’ stated therefore, interesting to note the in the due diligence process based on an investor’s' therefore, interesting to note the differences in the due diligence process based on an investor’s' stated therefore, interesting to note the differences inathe duedivergence diligence process based onlater-stage an investor’ s' stated preferred stage of investment. There between earlier and investors preferred stage of There is ais divergence between earlier and investors on how on preferred stage ofinvestment. investment. There isclear a clear clear divergence between earlier and later-stage later-stage investors on how how preferred stage of investment. There is a clear divergence between earlier and later-stage investors on how they’ve chosen to adapt their process. The differences are intuitive: Pre-Seed, Seed and Series A investors they’ v e chosen to adapt their process. The differences are intuitive: Pre-Seed, Seed and Series A investors they’ve chosen to adapt their process. The differences are intuitive: Pre-Seed, Seed and Series A investors they’ve chosenshift to adapt their process. The differences are intuitive: Pre-Seed,investors Seed andat Series A investors stated to spending more time getting to know founders, Series C beyond stated aa shift to more time getting to know founders, whilewhile investors at Series C and beyond were were to know founders, while investors at Series C and and beyond were stated ato shift tospending spending more time getting statedmost a shift spending more time getting to know founders, while investors at Series C and beyond were likely to have shifted to spend more time in due diligence on data analysis and reference calls. likely to have shifted to spend more time in due diligence on data analysis and reference calls. most likely to have shifted to spend more time in due diligence on data analysis and reference calls. most likely to have shifted to spend more time in due diligence on data analysis and reference calls.

%% ofof VCs VCs byby preferred preferred stage stage ofof investment investment

L EGEND L EGENDL EGEND Time with founder Time withTime founder with founder Market research Market research Market research calls ReferenceReference calls Reference calls calls CustomerCustomer calls Customer calls Data analysis Data analysis Data analysis Product due diligence Product due diligence Product due diligence

60 60

60 % of VCs by preferred stage of investment

In the last 12 months, which In the last 12 months, which In the last 12 months, which areas, if any, have you been areas, if any, have you been areas, if any, have you been spending more time on when spending more spending more time ontime whenon when evaluating new investment evaluating new investment evaluating new investment opportunities? opportunities? opportunities?

50 50

40 40

30 30

20 20Pre-Seed/SeedPre-Seed/Seed Pre-Seed/Seed

Series A

Series A Series A

Series B

Series B Series B

Series C+

Series C Series C

NOTE:

NOTE: NOTE: VC respondents only. Numbers not add do to not add to VC respondents only.do Numbers VC respondents only. Numbers do addwas to 100 as respondents could select as there was 100 as respondents could select asnot there 100 as respondents could select as there was no limit onno the number ofnumber options selected. limit on the of options selected. no limit onrespondents the number of options selected. Excludes Excludes respondents who selected "no who selected "no changes made". Excludesmade". respondents who selected "no changes changes made".

SOU RCE: SOU RCE: SOU RCE:

FOLLOW- ON INVESTMENTS

At the start of the pandemic, investors focused on their portfolio of existing investments to help founders weather FOLLOW- ON INVESTMENTS the storm and manage their runway. It is interesting to see FOLLOW-ON IN VESTMEN TS At the the start of the the pandemic, focused on At start of pandemic, investors focused ontheir their that one in four investors hasinvestors seen their fund revise theirFOLLOW- ON INVESTMENTS of Series C+ investors made changes to their follow-on reserve portfolio existing investments totoat help founders At the start ofof the pandemic, investors focused on their portfolio of existing investments help founders weatherthe follow-on allocation. For investors Series C andweather beyond, allocations portfolio of existing investments to help founders weather storm and manage theirtheir runway. It to is interesting to see the storm and manage runway. It is interesting tothat see close to 40% have made changes their follow-on thethat storm and manage their runway. It is interesting to see one inallocations. four investors has seen theirrevise fund revise their one in four investors has seen their fund their follow-on reserves of Series C+ investors made changes to their follow-on reserve that one in four investors has seen their fund revise their follow-on allocation. Forat investors at Series C and beyond, of Series C+ investors changes to their follow-on allocation. For investors Series C and beyond, close to 40% ofmade Series C+ investors madereserves changes allocations follow-on allocation. For investors at Series C and beyond, allocations close to 40% have made changes to their follow-on have made changes to their to follow-on reserve allocations. to their follow-on reserve allocations close to 40% have made changes their follow-on Since the start of the Covid-19 40 reserves allocations. 38% reserves allocations.

NOTE: VC respondents only. Numbers do not add to NOTE:100 as we are looking at investors by preferred only. stage of investment andtosome VC respondents Numbers do not add more 100 asrespondents we are lookingselected at investors by than one. NOTE:

preferred stage of investment and some respondents selected more than one. VC respondents only. Numbers do not add to

100 as we are looking at investors by preferred stage of investment and some respondents selected more than one.

40 % of VCs by preferred stage of investment

pandemic, has your fund revised upward its allocation for followon investments? Since the of start the Covid-19 Since the start the of Covid-19 pandemic, has your pandemic, hasfund yourrevised fund revised upward its allocation for followupward its allocation for followon investments? on investments?

% of VCs by preferred % of VCs stage by preferred of investment stage of investment

40% 40% 40%40%

40 30

38%

23%

38%

25%

24%

30 20 23%

24%

23%

25%

24%

25%

20 10

10 0

Pre-Seed/Seed

SOU RCE:

Series A Series A

Pre-Seed/Seed

SOU RCE:

Series B Series B

Series A

Series C Series C+

Series B

Series C

03.2

Investors

This is also visible in the data for 2020 alread� - with a lar�er share of ca�ital invested in follow-on �nancin�. TheThis same alsovisible true onin deal count basis. also for 2020 is is visible inathe thedata data for 2020already alread�--with withaalarger lar�ershare shareofofcapital ca�italinvested invested in follow-on �nancin�.

The same isfinancing. also true on a deal in follow-on The samecount is alsobasis. true on a deal count basis.

Share of capital invested and deal count (%) by type of �nancin� Share of capital invested

and deal count (%) by type L EGEND of �nancin�

DATA SET : CA PITA L INVEST ED

DATA SET : CA PITA L Capital invested

INVEST ED

Initial investment Follow-on investment L EGEND

Initial investment Follow-on investment 85%

87%

88%

This is also visible in the data for 2020 alread� - with a lar�er share of ca�ital invested in follow-on �nancin�.94% The same is also true on a deal count basis. 85%

Share of capital invested

92%

87%

88%

92%

DATA SET : CA PITA L INVEST ED

This is also in the data for 2020 alread� - with a lar�er share of ca�ital invested in follow-on �nancin�. and dealvisible count (%) by type 15% The same is also true on a deal count basis. 13% 12% of �nancin� 8% 2016

L EGEND Share of capital invested Initial investment and deal count (%) by type of �nancin� Follow-on investment NOTE:

94%

2017

2018

2019

2020

DATA SET : DEA L COU NT

deal count SOU RCE:

15%

12%

13%

2016

2017

2018

85%

88%

87%

2019

2020

92%

94%

2020 data as of 31 October 2020. L EGEND Initial investment Follow-on investment

SOU RCE:

NOTE:

67%

2020 data as of 31 October 2020.

71%

15% 33%

2016

72%

2017

76%

25%

201924%

2019

2020

13%

12% 29%

75%

28%

2018

6% 2020

SOU RCE:

NOTE:

2020inherent data as of 31 October 2020. The differences in approaches SOU RCE: to portfolio construction and risk/return pro�les of investors at different stages are re�ected in the varying levels of sensitivity to entry ownership targets. Later-stage 2020 data as of 31 October 2020. investors are, perhaps intuitively, much less likely to have stated ownership targets versus those investing at the earliest stages. Just in 13% of Pre-Seed/Seed investors statedand that they do not have speci�c ownership The inherent differences to construction risk/return profiles investors at at different TheThe inherent differences in approaches to portfolio construction and risk/return pro�les of investors atof inherent differences inapproaches approaches toportfolio portfolio construction risk/return pro�lesof investors stage of entry atand Series C and beyond. targets versus 33% of investors with a preferred different stages are re�ected in the varying levels of sensitivity to entry ownership targets. Later-stage stages are reflected in the varying levels of sensitivity to entry ownership Later-stage investors are, perhaps different stages are re�ected in the varying levels of sensitivity to entry targets. ownership targets. Later-stage investors are, are, perhaps intuitively, likely to have ownership those investing at stages. intuitively, much less likely tomuch haveless stated ownership versustargets thoseversus investing at versus the earliest Justat13% investors perhaps intuitively, much less likelystated totargets have stated ownership targets those investing the earliest stages. Just 13% of Pre-Seed/Seed investors stated that they do not have speci�c ownership the start of theinvestors Covid-19 ofSince Pre-Seed/Seed stated that they do not have specific targets versus 33% ofownership investors with a the earliest stages. Just 13% of Pre-Seed/Seed investors statedownership that they do not have speci�c targets versus has 33%your of investors with a preferred stage of entry at Series C and beyond. pandemic, targets versus 33% of revised investors a preferred preferred stage offund entry at Serieswith C and beyond. stage of entry at Series C and beyond. NOTE:

ownership targets?

Since the start of the Covid-19 L EGENDhas your fund revised pandemic, Since the start of the Covid-19 ownership targets? We don’t have speci�c targets pandemic, has yourownership fund revised

26%

ownership targets?

20 30

17%

% of VCs

13%

10 20

17% 13%

VC respondents only. NOTE:

Pre-Seed/Seed

SOU RCE: 0

NOTE:

17% 13%

0 10 0

SOU RCE:

VC respondents only.

Series A Series A

Pre-Seed/Seed

VC respondents only.

NOTE:

26%

We don’t have speci�c ownership targets

33%

33% % of VCs

L EGEND

33%

SOU RCE:

Series B Series B

Series A

Series C+ Series C+

Series B

Series C+

03.2

Investors

Although most investors have not made any changes to their target since the start of the pandemic, PreSeed/Seed investors were more likely to push for more ownership than others. Although most have notnot made anyany changes to their target sincesince the start theof pandemic, Although mostinvestors investors have made changes to their target the of start the pandemic, Pre-

Although most investors have not made any changes to their target since the start of the pandemic, PreSeed/Seed investors were more ownership thanothers. others. Since the start ofinvestors the Covid-19 Pre-Seed/Seed were more likelyto topush pushfor formore more ownership than Seed/Seed investors were more likely tolikely push for more ownership than others. Pre-Seed/Seed pandemic, has your fund revised ownership targets? Since the start the Covid-19 Since the start of theof Covid-19 pandemic, pandemic, hasfund yourrevised fund revised L EGENDhas your ownership targets? ownership Unchanged targets? L EGENDUp

L EGEND

Down Unchanged Up

Pre-Seed/SeedPre-Seed/Seed

Series A

Series A Series B

Unchanged Up

Down

Series B

Series B Series C+ Series C+

Series C+ 0

% of VCs by preferred stage of investment 60

100

% of VCs by preferred stage of investment

NOTE: NOTE: VC respondents only. Excluding respondents

who don'tonly. haveExcluding ownership targets. VC respondents respondents who don't have ownership targets.

% of VCs by preferred stage of investment

SOU RCE: SOU RCE:

SOU RCE: OnNOTE: the other hand, �rst-time fund managers have been VC respondents only. Excluding respondents more likely to lower their ownership requirements. who don't have ownership targets.

fund managers have On the other otherhand, hand,first-time �rst-time fund managers have been

On the other hand, �rst-time fund managers have been more likely to lower theirtheir ownership requirements. Since the oftheir thelower Covid-19 been more likely to ownership requirements. more likely to start lower ownership requirements. pandemic, has your fund revised the �rst cheque size? Since the start the Covid-19 Since the start of theof Covid-19 pandemic, pandemic, hasfund yourrevised fund revised L EGENDhas your the the �rst�rst cheque size? size? cheque Unchanged

First-time fund manager (Fund I)

First-time fund manager (Fund I) manager (Fund I) First-time fund

Emerging fund manager (Fund II or III)

L EGENDUp

L EGEND Down Unchanged Unchanged Up

Emerging fund manager (Fund II or III)

Down

Established fund manager (Fund IV+) Established fund manager (Fund IV+)

Established fund manager (Fund IV+) 0 0

10 20

20 30

30 50

40 60

50 % of VCs

60 80

70 90

80 100

% of VCs

NOTE: NOTE: VC respondents only. Numbers may not add

up to 100 due rounding. VC respondents only.to Numbers may not add up to 100 due to rounding. NOTE:

50 % of VCs

SOU RCE: SOU RCE:

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

03.2

Investors

Competition and Market Dynamics One driver of increased competition continues to be the rising number of active investors deploying capital into European tech. Europe bene ts from a deep and active pool of about 3,000 investors, making at least one One driver ofyear. increased competition continues to be the risingvenumber of activeper investors capital into investment The pool of more active investors making least new investments year hasdeploying also One driverper of increased competition continues to be at the rising number of active investors deploying capital European tech. benefits fromThe a deep active ofofabout 3,000 investors grown to more thanEurope 200 unique institutions. deltaand between thepool scale the two investor cohortsmaking based onat least one investment intoofEuropean tech. Europe bene ts from asources deep and activethat pool of about 3,000 investors, making at least one level activity ispool noteworthy. While there are manymaking of least capitalfive are placing a small number of has bets,also grown to more per year. Theper of more active investors at new investments per year investment year. The pool of more active investors making at least ve new investments per year has also the number of funds investing at a reasonable scale on a consistent basis is far smaller.

than 200 uniquethan institutions. Theinstitutions. delta between scale of the two cohorts based oncohorts level of based activityon is grown to more 200 unique Thethe delta between the investor scale of the two investor noteworthy. While there are many sources of capital that are placing a small number of bets, thenumber numberof of bets, funds are many sources of capital that are placing a small level of activity is noteworthy. While there DATA SET : AT L EA ST ONE DEA L PER YEA R Number of unique institutions investing at aofreasonable scale on consistent basis smaller. basis is far smaller. the number funds investing at aareasonable scaleis onfar a consistent that have participated in at least One driver of increased one and �ve investment deals in competition continues to be the rising number of active investors deploying capital Europe per year into European tech. Europe bene ts from a deep and active pool of about 3,000 investors, making at least one DATA SET : AT L EA ST ONE DEA L PER YEA R Number of unique institutions leastactive one deal per year making at least ve new investments per year has also investment per year. The pool of At more investors that have participated in at least 3,229 the scale of the two investor cohorts based on grown to more than 200 unique institutions. The delta between 3,049 one and �ve investment deals in 2,975 2,943 3,000 2,893 level of activity Europe per year is noteworthy. While there are many sources of capital that are placing a small number of bets, the number of funds investing at a reasonable scale on a consistent basis is far smaller.

NOTE: Number of unique investors (incl. investment funds, corporate investors & accelerators, but excl. angel investors) that have participated in at least one investment round per year. 2020 is annualised based on data to September 2020. NOTE:

2,943

2,000

2016

2017

200

2018

194

183

2019 195

206

2020

200

1,000

At least five deals 150 SOU RCE: 200

150

100

# of unique institutions

Number of unique investors (incl. investment funds, corporate investors & accelerators, but excl. angel investors) that have participated in at least one investment round per year. 2020 is annualised based on data to September 2020.

3,049

DATA SET : AT L EA ST F IVE DEA L S

# of unique institutions

Number of unique institutions that have participated in at least one and �ve investment deals in NOTE: Europe per year

# of unique institutions

One driver of increased competition continues to be the rising number of active investors deploying capital into European tech. Europe bene ts from a2,000 deep and active pool of about 3,000 investors, making at least one 3,229 DATA SETmaking : AT L EA at ST least F IVE DEA investment per year. institutions The pool of more active investors veL Snew investments per year has also Number of unique 2,975 3,000 2,893 grown more than 200 unique institutions. The delta between the scale of the two investor cohorts based on thatto have participated in at least level ofand activity is noteworthy. While one �ve investment deals in there are many sources of capital that are placing a small number of bets, 1,000 theEurope number ofyear funds investing at a reasonable scale on a consistent basis is far smaller. per

100

206

195

194

183

2016

2017

200

2018

2019

2020

2019

2020

SOU RCE: 50

Number of unique investors (incl. investment funds, corporate investors & accelerators, NOTE: but excl. angel investors) that have Number of unique investors (incl. investment participated in at least one investment round funds, corporate investors & accelerators, per year. 2020 is annualised but excl. angel investors) that have based on data to September participated in at2020. least one investment round

2016

2017

2016

2017

2018

2019

2020

� small� but clear ma�ority of fund managers from �rms of all types (�rst-time� emerging� established) stated SOU RCE: that the Covid-19 pandemic has altered the competitive landscape for new investment opportunities at their SOU RCE: preferred stage of entry. per year. 2020 is annualised based on data to September 2020.

� small� but clear ma�ority of fundofmanagers from �rms of all typesof(�rst-time� emerging� established) � small� but clear ma�ority fund managers from �rms all types (�rst-time� emerging�stated established) stated A small, but clear majority of fund managers from firms of all types (first-time, emerging, established) that the that the Covid-19 pandemic has altered the competitive landscape for new investment opportunities at their statedat How has competition for that the Covid-19 pandemic has altered the competitive landscape for new investment opportunities their preferred stage of entry. investment opportunities at Covid-19 pandemic has altered the competitive landscape for new investment opportunities at their preferred stage of entry. preferred stage of entry. First-time fund manager (Fund I) 60% 40% your stage of entry changed with the Covid-19 pandemic?

How has competition for How hasopportunities competition investment atfor L EGEND opportunities at yourinvestment stage of entry changed Changed stage ofpandemic? entry changed withyour the Covid-19

First-time fund manager (Fund I)

40%

60%

First-time fund manager (Fund I) Emerging fund manager (Fund II or III)

60% 55%

40% 45%

with the Covid-19 pandemic? Unchanged

L EGEND Changed L EGEND

Emerging fund manager (Fund II or III)

Unchanged

45%

55%

55% 59%

Emerging fund manager (Fund II or III) Established fund manager (Fund IV+)

Changed Unchanged

Established fund manager (Fund IV+)

59%

Established fund manager (Fund IV+) 0

45% 41%

% of VCs

59%

41%

100

41% 90

100

110

% of VCs

VC respondents only.

NOTE:

SOU RCE:

NOTE:

VC respondents only.

60 % of VCs

SOU RCE:

VC respondents only.

NOTE:

SOU RCE:

03.2

Investors

It’s fascinating to note that the pinch in terms of increased competition is more likely to have been felt by investor respondents from established fund managers. It is not possible to ascertain from the survey data, but it would be reasonable to infer that competition has heated up in certain parts of the market only, in other words around certain types of founders and companies. It’ss fascinating fascinating to that the pinch in terms of competition isismore likely toto have been felt by investor to note note that thein pinch ofincreased increased competition more It’s It’ fascinating to note that the pinch termsinofterms increased competition is more likely to havelikely been felthave by been felt by respondents from established fund managers. It is not possible to ascertain from the survey data, but it data, would be investor respondents from established fund managers. It is not possible topossible ascertain to from the survey data, investor respondents from established fund managers. It is not ascertain from the survey has competition for reasonable to infer that competition has heated up in certain parts of the market only, in other words around certain butbut itHow would be reasonable to infer that competition has heated up in certain parts of the market only, in other it would be reasonable to infer that competition has heated up in certain parts of the market only, in other investment opportunities atfounders and companies. words around certain types of First-time fund manager (Fund I) types of founders and companies. 48% words around certain types of founders and companies.

30%

your stage of entry changed with the Covid-19 pandemic?

How has competition for How hasopportunities competition investment atfor L EGEND opportunities at yourinvestment stage of entry changed More competitive withyour the Covid-19 stage ofpandemic? entry changed

First-time fund manager (Fund I)

30%

48%

First-time fund manager (Fund I) Emerging fund manager (Fund II or III)

48% 58%

30% 26%

Less competitive with the Covid-19 pandemic?

L EGEND More competitive L EGEND

Emerging fund manager (Fund II or III)

Less competitive

26%

58%

58% 75%

Emerging fund manager (Fund II orIV+) III) Established fund manager (Fund

More competitive

26% 2

Less competitive Established fund manager (Fund IV+)

75%

Established fund manager (Fund IV+) 0

25%

% of VCs

75%

2 80

100

% of VCs

SOU RCE:

NOTE:

% of VCs

VC respondents SOU RCE: What is alsoonly. very interesting to note is how much variance exists between respondents from different countries. Based on the survey responses, it would appear that an increase in competition has played out VC respondents only. more signi cantly in the UK and Germany compared to other markets, such as Spain or the Netherlands. SOU RCE: NOTE: very interesting to much exists between respondents from different countries. What is also very interesting toisnote note ishow how muchvariance variance exists between respondents from different What isrespondents also very interesting to note howis much variance exists between respondents from different VC only. countries. Based on the survey responses, it would appear that an increase in competition has played out Based on the survey responses, it would appear that an increase in competition has played out more significantly in countries. Based on the survey responses, it would appear that an increase in competition has played out How has competition for United Kingdom more signi cantly in the UK and Germany compared to other markets, such as Spain or the Netherlands. more signi cantly in the UK and Germany compared to other markets, such as Spain or the Netherlands. investment opportunities at the UK and Germany compared to other markets, such as Spain or the Netherlands. NOTE:

your stage of entry changed with the Covid-19 pandemic? HowHow has competition for has competition for investment opportunities at investment opportunities at L EGEND your stage of entry changed your stage of entry changed Up with the Covid-19 pandemic? with the Covid-19 pandemic?

Germany United Kingdom

United Kingdom France

Germany

Down

L EGEND

Unchanged

UpL EGEND

Spain

France

DownUp Unchanged Down

Spain

Unchanged

Netherlands Spain 0

Netherlands

% of VCs Netherlands

100

% of VCs

SOU RCE:

NOTE: VC respondents only.

NOTE:

50 % of VCs

SOU RCE:

VC respondents only.

NOTE:

SOU RCE:

VC respondents only.

03.2

Investors

Slicing the data based on an investor’s preferred stage of investment also yields interesting results. While a majority of investors from all cohorts based on stage of entry preference stated they had observed changes in the competition at their stage sweet spot, investors at the later-stages of Series C and beyond were materially more to have done Slicinglikely the data based onso. an investor’ investor’ss preferred preferred stage stage of of investment investment also interesting results. While a Slicing based an also yields yieldsresults. interesting Slicing the the datadata based on an on investor’s preferred stage of investment also yields interesting While aresults. While a majority of investors from all cohorts based on stage of entry preference stated they had observed changes in majority of investors from all cohorts based on stageon of entry stated they had observed changes in majority of investors from all cohorts based stagepreference of entry preference stated they had observed changes How has competition for in the competition at their stage sweet spot, investors at the later-stages of Series C and beyond were thethe competition at their sweet spot, investors at the later-stages of Series C and beyondCwere competition at stage their stage sweet spot,Pre-Seed/Seed investors at the later-stages of57% Series andmaterially beyond were materially investment opportunities more likely to have done so.toathave materially more likely more likely to have done so. done so.

43%

your stage of entry changed with the Covid-19 pandemic?

How has competition for How hasopportunities competition investment atfor L EGEND opportunities at yourinvestment stage of entry changed Changed stage ofpandemic? entry changed withyour the Covid-19

Unchanged with the Covid-19 pandemic?

L EGEND

Series A

Pre-Seed/Seed

Series A

Changed

59%

Series B

41%

42%

59% 58%

Series C+

41% 42%

65%

Series B

35%

58% 0

Series C+

43%

58%

Series A

Unchanged

41%

43%

57%

Series B

Changed L EGEND Unchanged

59%

57%

Pre-Seed/Seed

20 65%

42%

35%

% of VCs 0

Series C+

65% 50

100

35%

% of VCs

SOU RCE:

NOTE: VC respondents only.

NOTE:

% of VCs SOU RCE:

And looking at those that saw a change in the competitive landscape at another level of detail reveals that the SOUof RCE: perceived change is most likely to be one increased competition. That being said, it’s still notable that a NOTE: large number of investors stated a view that the competitive dynamics had become less competitive. It VC respondents only. makes sense that stage, geography, company type and other factors all in uencelevel the of level of competition. And looking looking at at those those that that saw saw aa change change in in the the competitive competitive landscape at another another detail reveals that at of detail AndAnd looking at those that saw a change in the competitive landscapelandscape at another level of detaillevel reveals that thereveals that the the perceived is most be one of increased competition. being it’sa still notable perceived change ischange most likely to belikely one oftoincreased competition. That being said, it’being s still notable perceived change is most likely to be one of increased competition. ThatThat said,said, it’sthat still notable thatthat a How has competition for a large number of investors stated a view that the competitive dynamics had become less competitive. It large number of investors stated a view that the competitive dynamics had become less competitive. It large number of investors stated a view that the competitive dynamics had become less competitive. It Pre-Seed/Seed 56% investment opportunities at geography, makes sense that stage, geography, company type and type otherand factors all in uenceall the level of competition. makes sense that stage, company type and other factors all influence the level level of of competition. competition. makes sense that stage, geography, company other factors in uence the VC respondents only.

44%

your stage of entry changed with the Covid-19 pandemic?

How has competition for How hasopportunities competition investment atfor L EGEND opportunities at yourinvestment stage of entry changed More competitive stage ofpandemic? entry changed withyour the Covid-19

Less competitive with the Covid-19 pandemic?

L EGEND

Series A

Pre-Seed/Seed

Series A

More competitive

53%

Series B

47%

44%

53%

47%

56%

Series C+

44%

68%

Series B

32%

56% 0

Series C+

44%

56%

Series A

Less competitive

47%

44%

56%

Series B

More competitive L EGEND Less competitive

53%

56%

Pre-Seed/Seed

20 68%

44%

32%

% of VCs 0

Series C+

68% 50

100

32%

% of VCs

SOU RCE:

NOTE: VC respondents only.

NOTE:

50 % of VCs

SOU RCE:

VC respondents only.

NOTE:

SOU RCE:

VC respondents only.

Number of unique institutions by round size and by year

2,500

LEGEND

$0-$10m $10-$20m $20-$50m $50-$100m

# of unique institutions

Number of unique institutions by round size and by year

2,000

1,500

1,000

$100m+

500

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: lending capital, and grants. Please also note All Dealroom.co data excludesIsrael. the following: that the data excludes 2020 is biotech, secondary transactions, debt, annualised based on data up to September lending capital, and grants. Please also note 2020. that the data excludes Israel. 2020 is NOTE: annualised based on data up to September

# of unique institutions# of unique institutions

The investor base has been growing in absolute terms across all stages of investment and round 03.2 European Investors sizes over the past �ve years. But importantly, for a region that has lacked depth at the later stages of investment. Europe is now seeing the maturity of the ecosystem through a growing pool of investors capable of leading larger growth rounds. TheThe European investor base has been in absolute terms across all stages ofall investment and round European investor base hasgrowing been growing growing in terms across stages of and The European has been in absolute absolute termsdepth across all later stages of investment investment and round round sizes over the past investor �ve years.base But importantly, for a region that has lacked at the stages of sizes over the past five years. But importantly, for a region that has lacked depth at the later stages of sizes over the past �ve years. But importantly, for a region thatahas lacked depth at the later stages of Number of unique bythe investment. Europe isinstitutions now seeing maturity of the ecosystem through growing pool of investors capable investment. Europe is ecosystem through through a a growing growing pool pool of of investors investors capable round larger size and by yearrounds. 2,500 of investment. Europe is now now seeing seeing the the maturity maturity of the the ecosystem capable of leading growth of leading larger growth rounds. of leading larger growth rounds.

2,000

1,500 2,500

1,000 2,000

500 1,500

0 1,000

2016

2017

500 2016

SOU RCE:0

2018

2017

2016

2018

2017

2019

2018

2020

2019

SOU RCE:

Indeed, there has been an in ux of investors to these later stages. Compared to 2016, there have been 3.3x as All Dealroom.co data excludes the following: many investors active in rounds of $100M+ during 2020 and a remarkable 8x as many investors active in rounds biotech, secondary transactions, debt, capital, and grants. Please also note compares to an increase of 1.1x in the number of investors of rounds of less than oflending between $50-100M. This SOU RCE: that the data excludes Israel. 2020 is $10M. annualised based onbeen data upan to September Indeed, there has in ux of investors to theseto later stages. Compared to 2016, there have been 3.3xhave as Indeed, there has has been been an an in influx investors 2020. Indeed, there ux of of investors to these these later later stages. stages. Compared Compared to to 2016, 2016, there there have been been 3.3x 3.3x as many investors active in rounds of $100M+ during 2020 and a remarkable 8x as many investors active in rounds as many investors active in rounds of $100M+ during 2020 and a remarkable 8x many as many investors active in many investors active in rounds of $100M+ during 2020 and a remarkable 8x as investors active in rounds of between $50-100M. This compares to an increase of 1.1x in the number of investors of rounds of less than Number ofbetween unique institutions rounds of $50-100M. This compares to an increase of 1.1x in the number of investors of rounds of of between $50-100M. This compares to an increase of 1.1x in the number of investors of rounds of less than $10M. 8.0x 8.0 (multiple) by round size and by less than $10M. $10M.

(multiple) by round size and by year, 2016 versus 2020

NOTE:

multiple of unique institutions, 2016 versus 2020

year, 2016 versus 2020

Number of unique institutions (multiple) by round size and by Number of unique institutions year, 2016 versus 2020

8.0

6.0

4.0

2.0

0.0

multiple of unique institutions, multiple of unique 2016 versus institutions, 2020 2016 versus 2020

2020.

8.0x

6.0

8.0x

8.0

4.0

6.0 1.9x

2.0 4.0

1.1x

1.6x

1.9x

3.3x

1.6x

1.1x

0.0 2.0

$0 - $10m

$0 - $10m 1.1x

$10 - $20m 1.9x $10 - $20m

$20 - $50m

$20 - $50m 1.6x

$50 - $100m

$10

$100m+

All Dealroom.co data excludes the following: NOTE: biotech, secondary transactions, debt,

All Dealroom.co data excludes following: lending capital, grants. the Please also note the biotech, secondary transactions, debt, data excludes Israel. 2020 annualised based lending capital, grants. Please also note the on data up to September 2020. data excludes NOTE: Israel. 2020 annualised based on data up to September 2020.

SOU RCE: 0.0 SOU RCE:

$0 - $10m

$10 - $20m

SOU RCE:

$20 - $50m

$50 - $100m

$10

03.2

Investors

According to VC respondents that stated they had experienced an increase in competition, the main consequences stated by the largest number of fund managers has been valuation in�ation. Looking speci�cally at respondents from established fund managers, their responses indicated that the main impact of increased hasthat beenstated a shortening the fundraising processes and an increase in pre-emptive According to competition VC respondents they hadofexperienced an increase in competition, the main According torespondents VC respondents that they stated had experienced in competition, the main According to VC that stated hadthey experienced an increasean in increase competition, the main rounds in market, though these respondents also frequently cited valuation in�ation too. Looking consequences stated by the largest number of fund managers has been valuation inflation. consequences stated by theby largest numbernumber of fund managers has been valuation in�ation. Looking consequences stated the largest of fund managers has been valuation in�ation. Looking specifically at from fund their indicated that the main speci�cally at respondents from established fund managers, their responses indicated that the main impact speci�cally at respondents respondents fromestablished established fundmanagers, managers, theirresponses responses indicated that the main impact of increased competition has been a shortening of the fundraising processes and an increase in pre-emptive impact of increased competition has been a shortening of the fundraising processes and an increase in do you think has been the ofWhat increased competition has been a shortening of the fundraising processes and an increase in pre-emptive 60% 60% valuation in�ation too. rounds in market, though these respondents also frequently cited main impact of increased pre-emptive rounds in market, these respondents alsocited frequently citedin�ation valuation inflation too. 57% frequently valuation too. rounds in market, though thesethough respondents also competition on current market dynamics?

What do you think has been the doofyou think has been the mainWhat impact increased L EGEND competition on current market main impact of increased dynamics? First-time fundon manager (Fundmarket I) competition current

48% 60%

57%

60%

40%

48%

33%

dynamics? Emerging fund manager (Fund II or III)

48%

L EGEND

60% 34%

32%

40%

Established fund manager (Fund IV+) First-time fund manager (Fund I) L EGEND

34%

33% 40% 32%

Emerging fund manager (Fund II or III)

23%

First-time fund manager (Fund I)

33%

Established fund manager (Fund IV+)

Emerging fund manager (Fund II or III)

34%

32% 23%

23%

Established fund manager (Fund IV+) Valuation inflation Valuation inflation

SOU RCE:

NOTE: VC Respondents only. NOTE:

Faster fundraising process

Valuation inflation

23%

28%

25%

23%

Pre-emptive rounds

Shorter due diligence

28%

25%

23%

Pre-emptive rounds

28%

25%

23%

Pre-emptive rounds

Faster fundraising process

23%

5% Cheque5% size inflation 3%

Cheque size inflation

Dilution sensitivity

Shorter due diligence

Cheque size inflation

Dilution sensitiv

SOU RCE:

VC Respondents only.

The perceived increase in valuations is re ectedSOU inRCE: the actual data. According to data from Pitchbook, NOTE: valuations have been increasing in Europe consistently over the past years across both early and later stages VC Respondents only. andThe nowperceived stand at record highs in 2020. The perceived increase in valuations is reflected from increase in valuations is re ectedininthe theactual actualdata. data.According Accordingtotodata data from Pitchbook,

Pitchbook, have valuations been increasing in Europe consistently overyears the past years across valuations been have increasing in Europe consistently over the past across both early and later stages

DATA SET : EA at RL Yrecord STA GE European pre-money valuation bothnow early and later stages and in now stand highs in 2020. and stand at record highs 2020. ($M) by stage and by year L EGEND

European pre-money valuation ($M) by stage and by year

75th percentile

DATA SET : EA RL Y STA GE Early stage

$22.1M

Median

L EGEND $16.0M

percentile The75th perceived increase in valuations is re ected in the actual data. According to data from Pitchbook, $14.1M Median valuations have been increasing in Europe consistently over the past years across both early and later stages $11.4M and now stand at record highs in 2020. $9.6M

The perceived increase in valuations is re ected in the actual data. According to data from Pitchbook, $14.1M $6.3M $5.5M DATA SET : over EA RL Y STApast GE years across both early European pre-money valuationin Europe consistently valuations have been increasing the and later stages $4.2M $3.6M $11.4M ($M) stand by stage by year and now at and record highs in 2020.

$16.0M

$22.1M

$9.1M

$9.6M

L EGEND

European pre-money valuation 75th percentile ($M) by stage and by year

$9.1M

2016 DATA SET : L AT E STA GE

2017

2019

2020

$6.3M

$5.5M

Median

NOTE: L EGEND 2020 data as of 31 October 2021. Data converted at EUR:USD of 1:1.16775, the rate on 75th percentile 31 October 2020. Median

2018

$22.1M

$4.2M

$3.6M SOU RCE: Late stage

$52.5M

$16.0M 2016

2017

$14.1M

2018

2019

2020

$42.2M

$11.4M

NOTE: 2020 data as of 31 October 2021. Data converted at EUR:USD of 1:1.16775, the rate on 31 October 2020.

$9.6M

SOU RCE: $25.7M

$6.3M

$5.5M $4.2M

$3.6M

2017 2017

NOTE: SOU RCE:

2020 data as of 31 October 2021. Data NOTE:

$10.2M

$9.5M

2016 2016

$17.8M

$15.1M

$8.8M

converted at EUR:USD of 1:1.16775, the rate on 2020 31 data as of 312020. October 2021. Data October

$9.1M

$29.6M

$27.2M

SOU RCE:

converted at EUR:USD of 1:1.16775, the rate on 31 October 2020.

2018 2018

2019 2019

2020

03.2

Investors

Last year, the survey posed questions around the evolution of the underlying market dynamics and VCs overwhelmingly agreed with the rise in competition between local VCs as well as with top tier US VCs. This year, the survey returns to this question, but posed it to founders. The arrival of US investors on European Last year, surveynot posed questions around theallevolution the underlying market dynamics and more shores hasthe certainly gone unnoticed; 57% of foundersofagreed that US VCs seem to have been Last year, the survey posed questions around the evolution of the market underlying market dynamics and VCs Last year, the survey posed questions the evolution of the underlying dynamics and VCs top tier active in Europe overagreed the past 12around months. VCs overwhelmingly with the rise in competition between local VCs as well as with overwhelmingly agreed with rise in competition between local as top welltier asUS with topThis tier US VCs. This overwhelmingly agreed with the risethe in competition between local VCs as well VCs as with VCs. USthe VCs. This year, the survey to this but posed toUS founders. arrival of on US European year, the survey returns to thisreturns question, but posed it to founders. The arrival of The US investors year, survey returns to this question, but posed itquestion, to founders. The arrivalitof investors on European investors on European shores has certainly not gone unnoticed; 57% of all founders agreed that shores has has certainly notabout gone unnoticed; 57% of all founders agreed thatagreed US VCsthat seem toVCs haveseem been more shores certainly notthe gone unnoticed; 57% of all founders US to have been more Thinking speci cally founders active in Europe over the 12past months. US VCs seem totohave been more active in Europe over the past 12Allmonths. past 12inmonths, whatpast extent active Europe over the 12 months. do you agree or disagree with the following statement: Thinking speci cally about the US VCs seem tocally be more speci about the pastThinking 12 months, to what extent active in Europe past 12 months, to what do you agree or disagree with extent you agree or disagree with the do following statement: L EGEND US VCs seem to be statement: more the following active in Europe USAgree VCs seem to be more active in Europe Neither L EGEND

All founders I am a first-time founder

All founders

I am a first-time founder I am a repeat founder with limited experience in scaling my own company I am a first-time founder I am a repeat founder with limited experience in scaling my own company

Disagree L EGEND

Agree

I am a repeat founder with significant previous I am a repeat founder with limited experience scaling experience in scaling my ownin company my own company

Neither

Agree

Disagree

Neither

I am a repeat founder with significant previous experience in scaling my own company

Disagree

I am a repeat founder with significant previous experience in scaling0my own company 10 20

% of founders 30

100

% of founders

NOTE:

SOU RCE:

VC respondents only. Numbers may not add NOTE: up to 100 due to rounding.

% of founders

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

NOTE:

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

I’ve seen a complete 180 when it comes to [US investors’] attitude. As long as founders have a global mindset, they actively are looking to invest in Europe. Besides: on Zoom, nobody knows you’re a European.

Robert Gaal Cooper Co-Founder

Europeans are still too locally focused. Launching a company focused on just one European country is sure to make you vulnerable to your US competitor. This was as true for social networks a decade ago as it is for delivery or mobility startups today. I’d encourage all European startups to think globally from day one. I’ve raised money in the US in 2008 and in 2018, while being based in Europe. I’ve seen a complete 180 when it comes to [US investors’] attitude. As long as founders have a global mindset, they actively are looking to invest in Europe. Besides: on Zoom, nobody knows you’re a European.

Slush 2019 Photo by: Julius Konttinen

Again, this Investors is supported by data. A record number of US institutions, more than 550, have participated in at 03.2 least one investment round in Europe in 2020. This has increased by 36% since 2016. Number unique USby data. A record number of 600 Again, this isof supported US institutions, more than 550, have participated in at Again, this is supported by data.inA A2020. record number of US US institutions, institutions, more than than 550, 550,have haveparticipated participatedin inat at532 institutions that have Again, this is supported data. record number of more least one investment round inby Europe This has increased by 36% since 2016. one investment round

one investment round in Europe per year

NOTE: Number of unique investors (including investment funds, corporate investors and NOTE: accelerators, but excluding angel investors) Number unique investors (including thatofhave participated in at least one investment funds, corporate investors and investment round per year. 2020 is annualised accelerators, but excluding angel investors) based on data to September that have participated in at least one 2020. NOTE:round per year. 2020 is annualised investment

600

# of unique US institutions

Number of unique in Europe perUS year institutions that have Number of unique participated in at least US that have oneinstitutions investment round participated in Europe per yearin at least

400

200

# of unique US institutions # of unique US institutions

participated in at least round least one investment investment This has has increased increased by by 36% 36% since since 2016. 2016. least one round in in Europe Europe in in 2020. 2020. This

439

467

405

400 600

552

532 467

439

552

532

405

467

439 405

200 400

0 200

2016

2017

2016

2017

SOU RCE: 0

2018

2016

2019

2017

2020

2018

2019

2020

SOU RCE:

based on data to September 2020.

Number of unique investors (includingstated as one reason that attracts US investors to Europe, though it is likely more a Price arbitrage is often investment funds, corporate investors and accelerators,of butthe excluding angel investors) function quality of the founders and companies building category-leading positions from Europe that SOU RCE: that have participated in at least one plays a more in�uential role in the �ow of transatlantic capital. Nevertheless, it’s interesting to observe that investment round per year. 2020 is annualised based on data to September 2020. stated as one reason that attracts US investors to Europe, though it is likely more a Price arbitrage is often often despite very increases inone valuations in European tech that there still signi�cant Price arbitrage is stated reason that attracts US investors to is Europe, though likelyversus more athe Price arbitrage is material often stated as one as reason that attracts US investors to Europe, though it isalikely moreitaisdelta function of the quality of thepre-money founders and companies building category-leading positions from Europe Europe that that valuations at category-leading the early-stage, as well as at later stages. US, both in quality terms ofthe median function of the quality of the founders and companies building category-leading positions from function of the of founders and companies building positions from Europe that plays more influential role in the the flow of of transatlantic transatlantic capital.Nevertheless, Nevertheless, it’stointeresting interesting to observe observe that plays a more in�uential role inrole the �ow of �ow transatlantic capital. Nevertheless, it’s interesting observe thatto plays aa more in�uential in capital. it’s that despite veryvery material increases in valuations in European tech that there is stillthere a signi�cant delta versus the material increases in valuations in European tech significant despite material increases in valuations in European tech that is still a signi�cant delta versus the Europe and US VC pre-money valuations at the early-stage, as well as atas later stages. US,US, both in terms of median pre-money $286M at valuations the early-stage, well as at later stages. both in terms of median pre-money valuation ($M) by stage and by

year, 75th percentile

$240M

Europe and US VC pre-money Europe and VCand pre-money valuation ($M) by US stage by L EGEND ($M) by stage and by year,valuation 75th 2016percentile

$286M

year, 75th percentile 2017

$159M

L EGEND

2018 2016 L EGEND 2017 2019 2016 2018 2020 2017

2019

2020

$190M

2019 2020

$190M

$159M

$33M $37M $33M $37M

$48M

$128M $10M

$11M

$14M

$16M

$26M $27M $30M

$63M $63M $16M Early Stage (Europe) Early Stage (US) $10M $11M $14M $48M Early Stage (Europe)

$10M Early Stage (US)

$11M

$14M

$16M

Early Stage (Europe)

SOU RCE:

$26M $27M $30M

$22M

$37M

SOU RCE:

$159M

$63M $63M

Early $33M Stage (US)

$240M

$128M

2018

$286M

$190M

$240M

$42M

Late Stage (US) Late Stage (US)

$22M

Late Stage (Europe)

Late Stage (US)

$42M

$53M

Late Stage (Europe) $26M $27M $30M

$42M

Late Stage (Europe)

03.3 03.1

Limited Partners

Venture Debt Venture Debt Data Challenge Innovation takes ingenuity and capital. Much attention has been given to the increase in equity available for companies in Europe. However, given the rise in discussions around Venture Debt and the lack of data around the topic, we decided to explore the role of debt in the European venture ecosystem.

an estimate market size based on a range of data sources and a top-down analysis. Fundraising based on publicly available data was used to estimate annual run rate for new commitments over time. This was supplemented with EIB lending data in the Venture Debt space based on public announcements, as well as Silicon Valley Bank’s own lending activities Even in a time of abundant cash, debt can be an based on internal data. To account for other active attractive financing option for venture-backed participants, the data was grossed up by c.15%. The companies looking for alternatives to equity estimate for 2020 was compared to the European financing. Debt comes with the need for repayment Investment Bank (‘EIB’) research completed in 2019 but by blending debt and equity, companies can which indicated that 5% of the financing in Europe form their optimum financing solutions. came from Venture Debt, further validating our There is no comprehensive data on the European market sizedata estimate. The data for 2010 based on Data is scarce but over the last 10 years, SVB proprietary market estimates venture debtisactivity in market for Venture Debt. Silicon Valley Bank prepared the BVCA Rise ofinVenture Europe has increased by 6-8x, suggesting a market estimate of $1.5B 2020. Debt report from 2012. Data is scarce but over the last 10 years, SVB proprietary market data estimates venture debt activity in Estimated run rate of Venture Europe increased byover 6-8x,the suggesting ayears, market estimate of $1.5B in 2020. Datahas is scarce scarce but over the last1010years, SVB proprietary market data estimates venture debt activity Data is but last SVB proprietary market data estimates venture debt activity in Debt ($M) at 5 year intervals

in Europe increased by 6-8x, suggesting a market estimate of $1.5B in 2020. Europe hashas increased by 6-8x, suggesting a market estimate of $1.5B in 2020.

Estimated run rate of Venture Debt ($M) at 5 year intervals

2010 2010

NOTE: NOTE:Silicon Valley Bank proprietary market data

2015

2020

2015

2020

SOU RCE:

estimates include only term debt from early�lthough modest, the relative share of venture debt �nancing has also increased as a share of capital raised SOU RCE: 2010 2015 for rounds below $100M in Europe from 2% in 2015 to 6% in 2020. For comparison, in the US where the market isNOTE: most mature, appro�imately 16% of all �nancing is venture debt. �t current e�uity levels, this would suggest $4B capacity per annum. Silicon Valley Bank proprietary market data SOU RCE: estimates include only term debt from earlyAlthough modest, the share ofof venture debt financing alsoalso increased share of capital raised �lthough modest, therelative relative share venture debt �nancing has as a share of capital raised �lthough modest, the relative venture debt �nancing has alsohas increased asincreased a shareasofacapital raised stage venture through to mezzanine for share of technology companies. for rounds below $100M in Europe from 2% in 2015 to 6% in 2020. For comparison, in the US where the market forventure-backed rounds below $100M in Europe from 2% in 2015 to 6% in 2020. For comparison, in the US where the market rounds below $100M in Europe from 2% in 2015 to 6% in 2020. For comparison, in the US where the market Venture debt nancing as % of Data is scarce but over the last 10 years, SVB proprietary market data estimates venture debt activity in is most mature, appro�imately 16% of16% all �nancing is venture �tdebt. current e�uity levels, this would suggest isventure most mature, appro�imately 16% �nancing isdebt. venture debt. �t current e�uity levels, this would suggest most mature, approximately ofof allall financing is venture current equity levels, this would suggest nancing in Europe for Europe has increased by 6-8x, suggesting a market estimate ofAt$1.5B in 2020. $4B$4B capacity per annum. deals <$100M capacity per perannum. annum. $4B capacity Silicon Valleyventure Bank proprietary market data for stage through to mezzanine estimates include only term debt fromcompanies. earlyventure-backed technology stage venture through to mezzanine for venture-backed technology companies.

2020

Estimated run rate of Venture L EGEND Venture debt nancing as % of Debt ($M) at 5 year intervals Venture debt nancing Venture debt venture nancing�nancing in Europe foras % of venture nancing in Europe for deals <$100M E�uity �nancing

deals <$100M

$22.0B

L EGEND Venture debt �nancing L EGEND E�uityVenture �nancingdebt �nancing

$22.0B

$11.0B

E�uity �nancing

$22.0B $1.5B

$11.0B

NOTE: Silicon Valley Bank proprietary market data estimates include only term debt from earlyNOTE: NOTE:stage venture through to mezzanine for Silicon Valley Bank proprietary market dataSOU RCE: venture-backed technology companies. Silicon Valley Bank proprietary market data estimates include only term debt from earlyestimates include onlystage term venture debt from early-to mezzanine for through stage NOTE: venture through venture-backed to mezzanine fortechnology companies. venture-backed technology companies.

Silicon Valley Bank proprietary market data estimates include only term debt from earlystage venture through to mezzanine for venture-backed technology companies.

2015

2020

$11.0B

SOU RCE:

2015

2010

2015

$1.5B

2020

$1.5B 2015

SOU RCE:

2020

03.3

Venture Debt

Within the investor community, there is a growing awareness of debt. Amongst VCs surveyed, 55% are either advocates for the use of debt or are invested in companies that have already taken on debt �nancing. �his percentage doesn’t vary based on the VCs' stage of focus. Within the investor community, there is a growing awareness of debt. Amongst VCs surveyed, 55%

Within investor community, is a growing awareness of debt. Amongst VCs surveyed, Within the the investor community, there isthere a growing awareness of debt. Amongst VCs surveyed, 55% are either 55% are either are either advocates for the of debt or are invested incompanies companies that have already taken on Is debt part of use your capital Yes, in some of our portfolio already advocates for theof use ofor debt or are invested companies that have have already taken on debt �his advocates for the debt areuse invested in companies that have already taken on debt �nancing. �his�nancing. taken debt �nancin� plans for your debt financing. This percentage doesn’t vary based on the VCs’ stage of focus. percentage doesn’t vary based on the VCs' stage of focus. percentage doesn’t vary based on the VCs' stage of focus.

41%

portfolio companies?

Is debt part of your capital Is debt part of your capital �nancin� plans for your �nancin� plans for your portfolio companies?

No, we are equity-focused only

25%

Yes, some of our portfolio companies have already Yes, some of our portfolio have already takencompanies debt

41%

taken debt Yes, we are advocates and in talks with debt providers for some of our portfolio companies No, we are equity-focused only

portfolio companies?

14% 25%

No, we are equity-focused only No, not something we need right now for our portfolio Yes, we are advocates and in talks with debt providers companies for some of our portfolio companies Yes, we are advocates and in talks with debt providers for some of our portfolio companies Unsure and need to investigate further whether this is No, not something we need right now for our portfolio companies right for our portfolio companies No, not something we need right now for our portfolio companies Unsure and need to investigate further whether this is right for our portfolio companies

25%

14% 8%

12%

12% 0

% of VCs

8% 20

% of VCs

SOU RCE:

VC respondents only. Numbers may not add NOTE: up to 100 due to rounding.

12%

14%

Unsure and need to investigate further whether this is 0 5 right for our portfolio companies

NOTE:

41%

% of VCs

SOU RCE:

VC respondents only. Numbers may not add up to 100 due to rounding.

NOTE:

SOU RCE:

VC respondents only. Numbers may not add According to our survey, VCs who focus on later stage investments more often indicate debt as a part of their up to 100 due to rounding. portfolio�s capital �nancing plans.

According to our survey, VCs whoon focus on later stage investments investments According our VCs who focus later on stage investments more often more indicate debtindicate as a part debt of their According to our VCs who focus later stage more often as a part of their Is debtto part ofsurvey, yoursurvey, capital Pre-Seed/Seed portfolio�s capital �nancing plans. often indicate debt as a partplans. of their portfolio’s capital financing plans. �nancin� for your portfolio� splans capital �nancing portfolio companies?

Is debt part of your capital IsEGEND debt partfor ofyour your capital L �nancin� plans �nancin� plans for your Yescompanies? portfolio

portfolio companies? Unsure

Series A

Pre-Seed/Seed

Pre-Seed/Seed Series B

Series A

L EGEND

Series A

No Yes L EGEND No

Series C

Series B

Unsure Yes

Series B

Unsure Series C

Series D Series C 0

Series D

% of VCs 0

Series D10

100

% of VCs

SOU RCE:

NOTE: VC respondents only. NOTE:

% of VCs

SOU RCE:

VC respondents only.

SOU RCE:

NOTE: VC respondents only.

In our situation, we view venture debt as a cost-effective component of our capital structure. Venture debt can be a very flexible, nondilutive, way to extend your cash runway and time between equity rounds, which is particularly valuable in periods of high growth, to allow you to maximize your valuation between rounds.

Ken MacAskill Snyk CFO

03.3

Venture Debt

Venture debt is a loan most often secured at the same time or soon after an equity round – and is typically used to compliment equity and extend runway. In fact, 74% of VCs mentioned advising their portfolio Venture debt a loan most often secured atcase. the same time or after an equity round – andfor isfuture companies tois take debt for that speci�c use Reducing thesoon costs of shareholder dilution typically used to compliment equity and extend runway. In fact, 74% of VCs mentioned advising rounds the second can also bene�t in other ways by reducing average Ventureisdebt is a loanmost mostcited oftenreason. securedIt at the same timestart-ups or soon after an equity round – and the is typically Venture debt is a loan often at the or an equity round – and is typically theirof portfolio companies tosecured take debt for thattime specific useafter case. the costs ofalso shareholder or burning cash. It provides cost to most fundequity operations when asame company is soon scaling used tocapital compliment and extend runway. In fact, 74% ofquickly VCsReducing mentioned advising their portfolio �exibility used to compliment equity and extend runway.arise In fact, 74% of VCs of mentioned advising their portfolio in other dilution for future rounds isthat the second most cited reason. Itthe can also benefit start-ups to accelerate as opportunities over the life the �nancing companies togrowth take debt forspeci�c speci�c use case. Reducing costs ofround. shareholder dilution for future companies to take debt for that use case. Reducing the costs of shareholder dilution for future ways by reducing the average cost of capital to fund operations when a company is scaling quickly rounds is second the second cited reason. It can alsostart-ups bene�tin start-ups inby other waysthe byaverage reducing the average rounds is the most most cited reason. It can also bene�t other ways reducing or burning cash. It also provides flexibility to accelerate growth as opportunities arise over the life �exibility cost of capital to fund operations a company scaling quickly or burning cash. It also provides Extend runway or burning cash. It also provides �exibility cost of capital to fund operations when awhen company is scalingis quickly Why would you advise your ofportfolio the financing round. to accelerate growth as opportunities arise over theover life ofthe thelife �nancing to accelerate growth as opportunities arise of theround. �nancing round. companies to take Reduce shareholder dilution for future rounds

debt/venture debt?

WhyWhy would you advise your your would you advise portfolio companies to take portfolio companies to take debt/venture debt?

debt/venture debt?

Cost-effective for the business Extend runway

50% 74%

Extend runway

Reduce shareholder dilution for future roundsAccelerate growth

54%

Reduce shareholder dilution for future rounds

Cost-effective for the business

Support acquisition strategy Cost-effective for the business International expansion Accelerate growth

54% 50%

44%

13%

Support acquisition strategy

44%

50%

22%

Accelerate growth

44%

22%

Build brand awareness and bolster marketing efforts Support acquisition strategy

Adding valuable expertise to the cap table/board International expansion Build brand awareness and bolster marketing efforts

International expansion

22%

13%

Buildexpertise brand awareness and bolster marketing 3% efforts Adding valuable to the cap table/board 0

NOTE:

% of VCs 30

SOU RCE:

Adding valuable expertise to the cap table/board

VC respondents only. Numbers do not add to NOTE: 100 as respondents could select unlimited options. only. Numbers do not add to VC respondents

54%

% of VCs

SOU RCE:

100 as respondents could select unlimited options. NOTE:

VC respondents only. Numbers do not add to 100 as respondents could select unlimited options.

SOU RCE:

Slush 2019 Photo by: Pasi Salminen

Debt financing can operate as a helpful non-dilutive supplement to equity in fuelling growth. Beyond helping us accelerate our rapid growth, debt financing can also be beneficial in bridging a gap between larger equity financing events.

Peter Holten Mühlmann Trustpilot Co-Founder and CEO

03.3

Venture Debt

VCs’ & Founders’ Familiarity with Venture Debt Although VCs are much more knowledgeable on the topic, only 19% of founders mention being familiar and Although VCs are much more knowledgeable on the topic, onlywill 19%gain of founders mention being fully understanding of the lending options available. Investors experience across broader portfolio familiar and fully understanding of the lending options available. Investors will gain experience across companies while willknowledgeable have more limited experience. Therefore, understanding of debt Although VCs are founders much more on therst-hand topic, only 19% of founders mention being familiar and broader portfolio companies while founders will have more limited first-hand experience. Therefore, options is are unsurprisingly better foroptions repeat founders with cantgain experience scaling businesses, with 27% fully understanding of the lending available. Investors will experience across broader portfolio Although VCs much more knowledgeable on the topic, only 19%signi of founders mention being familiar and understanding of debt options is unsurprisingly better for repeat founders with significant experience 53% being familiar but requiring more research. reporting being well-versed onhave the topic companies while founders will moreand limited rst-hand experience. Therefore, understanding of debt fully understanding of the lending options available. Investors will gain experience across broader portfolio scaling businesses, with 27% reporting being well-versed on the topic and 53% being familiar companies founders will have more rst-hand experience. understanding of businesses, debt but with 27% options while is unsurprisingly better forlimited repeat founders with signi Therefore, cant experience scaling options is unsurprisingly better for on repeat signi cant experience scaling businesses, with 27% requiring more reporting beingresearch. well-versed the founders topic andwith 53% being familiar but requiring more research. How familiar are you with the more research. reporting being well-versed on the topic and 53% being familiar but requiring All founders different debt solutions available for high growth How familiar are you with the (e.g. Howbusinesses? familiar are you withinvoice the different debt solutions different debt solutions �nancing, venture debt, growth available for high growth available for high growth lending, working capital, businesses? (e.g. invoice businesses? (e.g. invoice mezzanine) �nancing, venture debt, growth �nancing, venture debt, growth lending, working capital, lending, working capital, L EGEND mezzanine) mezzanine)

Aware but don’t understand debt products

L EGENDFamiliar but need to do more research on

L EGEND options Awarelending but don’t understand debt products Aware but don’t understand debt products Familiar and understand the lending Familiar but need to fully do more research on lending optionsavailable Familiar but need in to the do market more research on options lending options Familiar fully understand the lending Notand familiar options available in the market Familiar and fully understand the lending options available in the market Not familiar

All founders

All founders First-time founder

First-time founder First-time founder Repeat founder with limited experience in scaling own company Repeat founder with limited experience in scaling own Repeat founder with limitedcompany experience in scaling own

company Repeat founder with significant previous experience in scaling own company

Repeat founder with significant previous experience in scaling own company Repeat founder with significant previous experience in

scaling own company 0

0 20

Not familiar

10 30

20 40

30 50

40 60

% of founders

70 90

100

% of founders

NOTE: NOTE:

Founders respondents only.

SOU RCE: SOU RCE:

Founders respondents only.

SOU RCE:

NOTE:

Founders respondents only. Only a few founders (6%) are not familiar with venture debt enough to provide an opinion. The overall perception from founders towards borrowing capital is neutral, with 42% taking this stance. However, Only a few founders (6%) are sentiment not familiar withexperience. venture debt enough to provide an opinion. founders more (6%) positive 38% of repeat founders with signi�cant experience Only a fewgain founders are not familiarwith with venture debt enough to provide an opinion. The overall The overall perception from founders towards borrowing capital is neutral, with 42% taking selected “rather positive” and only 17% selected "rather negative," which is materially lower than for �rst-time perception from(6%) founders towardswith borrowing capital is neutral, with taking stance. However, Only a few founders are not familiar venture debt enough to provide an42% opinion. Thethis overall this stance. However, founders gain more positive sentiment with experience. 38% of repeat founders. founders gain more positive sentiment with experience. repeat with signi�cant experience perception from founders towards borrowing capital is neutral, with38% 42%of taking thisfounders stance. However, founders with experience selected andwhich only 17% selected “rather founders gain“rather moresignificant positive sentiment with experience. 38% ofpositive” repeat founders with experience selected positive” and only 17% selected“rather "rather negative," issigni�cant materially lower than for �rst-time selected “rather positive” and only 17% selected "rather negative," which is materially lower than for �rst-time negative,” which is materially lower than for first-time founders. founders. What is your overall perception

founders. of debt?

All founders

What is your overall perception

L EGEND What is your overall perception of debt? of debt? Rather positive

All founders

All founders First-time founder

Neutral

L EGEND L EGEND

Rather negative

positive RatherRather positive

First-time founder First-time founder Repeat founder with limited experience in scaling own company

Not su�ciently familiar with debt to comment RatherRather negative negative

Neutral Neutral

Not su�ciently familiar with debt to Not su�ciently familiar with debt to comment

comment

Repeat founder with limited experience in scaling own Repeat founder with limited experience in scaling own company

company Repeat founder with significant previous experience in scaling own company

Repeat founder with significant previous experience in scaling own company Repeat founder with significant previous experience in 0

scaling own company 0

not add up to 100 due to rounding .

20 % of founders 30

50 % of founders

NOTE:

Founders respondents only. Numbers may NOTE: not add up to 100 due to rounding .

% of founders 0

NOTE: Founders respondents only. Numbers may

SOU RCE: SOU RCE:

SOU RCE:

Founders respondents only. Numbers may not add up to 100 due to rounding .

100

03.3

Venture Debt

Founders who are most familiar with venture debt are signi�cantly more likely to have a positive perception of it and the inverse is true as well. This points to a negative bias toward venture debt for those less informed on Founders who are are most most familiar familiar with with venture venture debt debt are are signi�cantly significantly more more likely likely to to have have a positive perception of the topic. who Founders a positive perception of it and the inverse is true as well. This points to a negative Founders who are most familiar with venture debt are signi�cantly more likely to have a positive perception of informed on it and the inverse is true as well. This points100 to a negative bias toward venture debtbias for those less it and the inverse is true as well. This points to a negative bias toward venture debt for those less informed on toward venture debt for those less informed on the topic. the topic. Impact of familiarity on overall

the topic.

perception of debt

100

Impact of familiarity on overall

Neutral

L EGEND L EGEND

Neutral Neutral RatherRather Negative Negative

% of founders

Rather Negative Positive RatherRather Positive 50

% of founders % of founders

L EGEND Impact of familiarity on overall perception of debt perception debt Ratherof Positive

75 50

50 25

25 0

Familiar and fully understand the lending options 0 available in the market

Familiar but need to do more research on lending options

Aware but don’t understand de

Aware but don’t understand debt products

Familiar but need to do more research on lending options

Aware but don’t understand de

SOU RCE:

NOTE: Founders respondents only, excluding those

not su�ciently familiar with debt to

Familiar but need to do more research on lending options

Familiar and fully understand the lending options available in the market

NOTE:

Founders respondents only, excluding those comment. NOTE: familiar with debt to not su�ciently comment.

Familiar and fully understand the lending options available in the market

SOU RCE:

Founders respondents only, excluding those not su�ciently familiar with debt to comment.

For those with a more negative perception of venture debt, 38% selected either consequence of default and For those with ainmore negative perception ofmain venture debt,for 38% selected either venture debt is typically lender attitude a downside scenario as the causes concern. In practice, consequence of default and lender attitude indebt a downside scenario as the mainthat causes free from covenants but it may vary between providers. It is worth noting with asset-light business For those with a more negative perception of venture debt, 38% selected either consequence of default and for concern. In practice, venture debt is typically free from covenants but it may vary Formodels, those with a more negative perception of venture debt, 38% selected either consequence of default and value is greatest with the business as a going concern, and therefore lenders are motivated to work lender attitude in a downside scenario as the main causes for concern. In practice, venture debt is typically lender attitude ininvestors a providers. downsideand scenario as the main causes for concern. In practice, venture debt is typically between debt is worth that with asset-light business models, value case. closely with in a downside free from covenants but itItfounders may varynoting between debt providers. It is worth noting that with asset-light business free from covenants but it may vary between debt providers. It is worth noting that with asset-light business is greatest with the business as a going concern, and therefore lenders are motivated models, value is greatest with the business as a going concern, and therefore lenders motivated to work models, value is greatest with the business as a going concern, and therefore lenders are motivatedare to work to work closely with investors and founders in a downside case. Consequences of default case. closely with investors and founders in a downside closely with investors andoverall founders in a downside case. Founders: Why is your perception of debt negative?

Terms

20%

Consequences of default Consequences default Lack ofof flexibility

Founders: Why is yourisoverall Founders: Why your overall perception of debt perception ofnegative? debt negative?

14%

How provider might actTerms in insolvency /downside Terms scenario Lack of flexibility

20%

Lack of flexibility Pricing

Don’t understand thescenario process

Don’t understand the process

Founders respondents only. Subset of respondents who selected "rather negative" for their overall perception of debt.

1% 8

5 10

8 13

10 15

13 18

% of founders 20 23

SOU RCE:

% of founders

NOTE:

Founders respondents only. Subset of

2% 3

Founders respondents only. Subset"rather of respondents who selected negative" respondents who selected "rather negative" for their overall perception of debt. NOTE: for their overall perception of debt.

2% 1%

0 seat in 3 return 5 Having to offer up a board

NOTE:

4% 4%

1% Warrants

10%

DilutionWarrants of equity

Warrants and losing in case default Warrants 2% Havingmy to IP/business offer up a board seatofin return Having to offer up a board seat in return

13%

10%

14%

10%

13%

Dilution ofPricing equity

Don’t understand the process Warrants and losingDilution my IP/business of equity in case of default4% Warrants and losing my IP/business in case of default

20%

13% 14%

How provider might act in insolvency /downside How provider might act in insolvency /downside scenario Pricing

23%

03.3

Venture Debt

Sonya Iovieno Silicon Valley Bank Head of Venture and Growth Banking

Whichever debt financing option is most suitable for your company, timing is key. Earlier stage businesses will get the most attractive offers from lenders when they have just raised equity and therefore have cash and are less risky. As such, companies may want to explore debt finance when times are good, and they have a lot of cash runway as they will get better offers from lenders. Businesses should avoid waiting to approach lenders when cash is low or they are wanting a cash “bridge”, as lenders may then decline or charge a higher price due to the increased risk profile.

items such as covenants set at a level the company is unlikely to achieve, or very high “success fees” payable at exit. Rather than comparing just headline interest rates, companies should compare all terms between competing debt providers to calculate an overall cost of capital which includes arrangement fees, early repayment fees, exit fees, non-utilisation fees etc. Whichever debt structure you opt for, it’s vital to take references on lenders from your Board or advisors and choose a lender who will add value through useful connections (not just finance) and will be supportive over the long term through good times and bad.

Companies should also check each term lender’s offer carefully and avoid restrictive

Founders’ attitude towards venture becomes Founders' attitude towards venture debt becomes increasingly more positive they scale their company in Founders' attitude towards venture debt becomes increasingly more positive as they scaleas their company in terms of company capital raised and company size.raised their inraised terms of capital terms of capital and company size.and company size. What is your overall perception What is your overall perception of debt?

of debt?

L EGEND

L EGEND Rather Positive Rather Positive Neutral RatherNeutral negative Not su�ciently familiar with debt to Rather negative comment

Not su�ciently familiar with debt to comment

DATA SET : BY CA PITA L RA ISED

DATARAISED SET : BY COM PA NY SIZ E BY CAPITAL

None

1-10 <$1M

11-50

$1-2M

$2-5M

51-150

Founders' attitude towards venture debt becomes increasingly more positive as they scale their company in 151-500 terms of capital raised and company size. $25M+ $5-25M

501+ 10

DATA SET : BY COM PA NY SIZpositive E % of founders Founders' attitude towards venture debt becomes increasingly more as they scale their company in What is your overall perception terms capital raised and company size. ofof debt? 0

NOTE: L EGEND

What is your overall perception Founders respondents only. Numbers may Rather Positive of not debt? add up to 100 due to rounding. Founders respondents only. Numbers may Rather Positive notNot addsu�ciently up to 100 due to rounding. familiar with debt to comment Neutral Rather negative

100

% of founders SOU RCE: DATA SET : BY COM PA NY SIZ E 1-10

BY COMPANY SIZE

Neutral NOTE:

L EGENDRather negative

SOU RCE: 11-50

1-10

11-50

51-150

151-500

Not su�ciently familiar with debt to comment

151-500

501+

50 % of founders

NOTE: NOTE: Founders respondents only. Numbers may

not add up to 100 due to rounding.

SOU RCE: SOU RCE:

Founders respondents only. Numbers may not add up to 100 due to rounding.

100

03.3

Venture Debt

Only 19% of founders surveyed have taken debt so far and over 44% mentioned either being unsure or only focusing on securing equity for growing their business. 19% of founders founders surveyed surveyed have taken debt so far and mentioned either or Only 19% of over 44% mentioned being Only 19% of part founders either being unsure only unsure or only Yes, we have already taken debt Is debt of yoursurveyed have taken debt so far and over 44% being unsure or only focusing on securing equity for growing their business. focusing on securing equity for growing their business. focusing on securing equity for growing their business. capital �nancing plans for business growth?

Yes, we are considering it and talking to debt providers

Is debt part of your Is debt part of your capital �nancing plans plans capital �nancing for business growth?

12%

Yes, we have already debt already taken debt Yes,taken we have

Yes, we have participated in government-backed schemes

19%

Yes, we are considering it and talking to debt providers

for business growth?

19%

12%

Yes, we are considering it and talking to debt providers Unsure and need to investigate further

Yes, we have participated in government-backed schemes Yes, we have participated in government-backed

12%

schemes No, we did not qualify but were interested

Unsure and need to investigate further

19%

7% 26%

Unsure and need to investigate further No, we are equity focused only

No, we did not qualify but were interested

18%

No, we did not qualify but were interested

No, we only don’t need any funding No, we are equity focused

No, we are equity focused only 0

No, we don’t need any funding

5 No, we don’t0need any funding

18% 12%

12%

18% 20

% of founders

20 12%

% of founders

SOU RCE:

NOTE:

% of founders

SOU RCE:

Founders respondents only. NOTE: Founders respondents only.

SOU RCE:

NOTE: Founders respondents only.

Venture debt has proven an essential tool for Daye as we brought the manufacturing of our pain-relieving tampons in house. Venture capital is rarely an appropriate source of funding for hardware, design engineering and production expenses. Through venture debt, Daye got to enjoy the best of both worlds - venture capital to fuel growth, and venture debt to enable us to continuously invest in R&D projects that will pay off in the long-term. We wouldn’t have been able to deliver on our promise for genuine product differentiation if we didn’t have venture debt at our disposal.

Through venture debt, Daye got to enjoy the best of both worlds - venture capital to fuel growth, and venture debt to enable us to continuously invest in R&D projects that will pay off in the long-term.

Valentina Milanova Daye Founder

As companies in Europe reach greater levels, founders and investors are gaining experience across a broad Debt Financing Cheat Sheet range of �nancing.Solutions Of those 160 founders who used debt in the past, 41% mentioned working capital, 35% venture debt and 24% growth lending. As companies companies in in Europe Europe reach reach greater greater levels, levels, founders founders and and investors investors are As are gaining gaining experience across a broad As range companies inacross Europe aOf reach greater founders andthose investors are gaining experience across a broadcapital, 35% experience broad range of financing. Of founders who used debt in of �nancing. those 160 levels, founders who used debt160 in the past, 41% mentioned working types of debt have you rangeWhat of �nancing. Of those 160 founders who usedWorking debtcapital in the past, 41% mentioned working capital, 35% the past,debt 41% mentioned working capital, 35% venture debt and 24% growth lending. venture and 24% growth lending. used in the past to fuel growth?

venture debt and 24% growth lending.

35%

Venture debt

What types ofhave debtyou have you What types of debt used inpast the to past fuel growth? used in the fuelto growth?

Working capitalWorking capital

Venture debt

35%

Venture debt

24%

Growth lending

Mezzanine finance Invoice financing

Peer-to-Peer loan

Mezzanine finance

NOTE: Based on the responses from 160 founders NOTE: who used debt as part of their capital �nancing plans in the past.

Based on the responses from 160 founders who used debt as part of their capital NOTE: �nancing plans in the past.

Based on the responses from 160 founders who used debt as part of their capital �nancing plans in the past.

4% 0

9% 4%

Mezzanine finance

24%

Invoice financing

Peer-to-Peer loan

35%

Invoice financing

Peer-to-Peer loan

41%

24%

Growth lending

% of founders 10

4% 5

SOU RCE:

25 % of founders

SOU RCE:

03.3

Venture Debt

Debt Financing Indicative Structures

Venture Debt

Situation

Typical use cases

Type of facility

Sources of capital

• Series A & B stage • Institutional investors • High-growth potential

• Extend runway by 3 - 9 months • Accelerate growth • Mitigate delays

Term debt

Working Capital & Credit Lines

Growth Loan

• All stages where a company has differences between cash outflows and inflows

• Series B & C+ stage • Institutional investors • Proven economics

• Late stage companies • Pre-IPO financing • Path to profitability

• Free up equity for growth purposes • Fund working capital eg » Customer acquisition costs » Accounts receivable » Inventory financing » Warehouse facilities

• Extend runway • Accelerate growth • Finance acquisitions

Term debt

• Specialist banks • Debt funds • Government-backed funds

Mezzanine

Revolving facility

• Specialist banks • Debt funds • Government-backed funds

• Specialist banks • Alternative lenders

• Runway to next round or profitability • Acquisition financing • Other corporate events

Term debt

• Specialist banks • Debt funds

Size

€1 – €10M representing 25 - 35% of the equity round

€5 – 20M

< €1M to €100M+

€10 – €50M+

Term

3 to 4 years

Up to 3 years with renewal

3 to 4 years

Monthly interest with principal at maturity

Limited interest and amortisation with bullet repayment

30 - 36 months after Typically, 24 - 36 months 12 - 18-month after 6 - 12-month interest-only period Repayment 0 years, SVB proprietary market data estimates venture drawdown / debt activity in depending on milestones uggesting a market estimate of $1.5B in 2020. interest-only period /covenants

Interest rates (Typical rates)

8 – 12% plus fees

7 – 10% plus fees

5 – 8% when drawn plus a lower non-utilised fee when not used, plus fees

Low-to-mid teens Internal Rate of Return (IRR)

Warrants or equity kicker

Yes

Depends on covenant structure

Yes

Covenants

Typically, none. Possible performance test for further tranches

None.

Yes.

Typically, none.

Security

Senior

Junior

2010

2015

2020

SOU RCE:

100

03.4 03.1

Limited Partners

Angels

Angels Survey Respondents There has been a growing interest in angel investing in Europe over the past few years. Last year we found the data was scarce and very few studies were conducted on the topic. As such, we created a set of questions specifically targeted to respondents who identified as angel investors in the survey and received close to 100 responses from all over Europe.

58% of angel investors who responded to the survey have been angel investing for over 58%58% of angel investors who responded to the survey beenhave angelbeen investing over six years. Breaking of angel investors who responded to thehave survey angelforinvesting for over six years. Breaking six years. Breaking this down by age group, it becomes clear that respondents belonging thisthis down by age it becomes clear that respondents belonging belonging to older ageto groups more down bygroup, age group, it becomes clear that respondents olderare age groups are more experienced in angel investing. However, the European tech ecosystem has hinted on a shift in paradigm and to older age groups are more experienced in European angel investing. However, the European experienced in angel investing. However, the tech ecosystem has hinted on atech shift in paradigm and on greater diversi cation across angel investor pro les with the continued rise of unicorns and the ecosystem has hinted on across a shift in paradigm and on les greater diversification across angel and the on greater diversi cation angel investor pro with the continued rise of unicorns emergence of talent ma as. investor profiles withma theas. continued rise of unicorns and the emergence of talent mafias. emergence of talent

How long have you been angel investing? How long have you been angel

investing?

DATA SET : A L L RESPONDENT S

All respondents 40

36%

% of angel investors

30 25%

22%

% of angel investors

58% of angel investors who responded to the survey have been angel investing for over six 25% years. Breaking 20 this down by age group, it becomes clear that respondents belonging to older age groups are more experienced in angel investing. However, the ecosystem has hinted on a shift in paradigm and 20 European tech12% on greater diversi cation across angel investor pro les with the continued rise of unicorns and the 10 58% of angel investors who responded to the survey have been angel investing for over six years. Breaking emergence of talent ma as. 12% 4% this down by age group, it becomes clear that respondents belonging to older age groups are more 10 experienced in angel investing. However, the European tech ecosystem has hinted on a shift in paradigm and 0 or:less 2 years 3 - 5 years 6 - 10 years on greater diversi cation across pro1 year les with the continued rise of unicorns and the SET A L L RESPONDENT S How long have you been angel angel investor DATA 4% emergence of talent ma as. investing? 0

How long have you been angel Angel investor respondents only. Numbers investing? may not add up to 100 due to rounding. LEGEND

SOU RCE: 40 DATA SET : BY A GE GROU P

< 21 years old NOTE:

31 - 40 years old

51 - 60 years old

61+ years old

Prefer not to say

Angel investor respondents only. Numbers 41not - 50 years may add up toold 100 due to rounding.

60 % of angel investors

1 year or less

2 years

3 - 5 years

75%

25%

2 20

36%

12%

45%

41% 36%

35%

31% 31% 25%

4% 0

NOTE:

11+

SOU RCE:

25%

may not add up to 100 due to rounding.

6 - 10 years 36%

NOTE:Angel investor respondents only. Numbers

11+ years

By age group

% of angel investors

NOTE:

18% 9%

2 years

SOU RCE: SOU RCE:

Angel investor respondents only. Numbers may not add up to 100 due to rounding.

101

14% 5% 2 years

1 year or less

20%

18%18%

13% 5%

3 - 5 years

3 - 5 years 6 - 10 years

6 - 10 years 11+ years

11+

03.4

Angels

Have you worked in a tech L EGEND start-up or scale-up or started / Have worked in a tech co-founded a business? Yes you

L EGEND co-founded a business?

% of angel investors

start-up or scale-up or started / No

Yes NoL EGEND

Yes No

% of angel investors % of angel investors

As mentioned above, the European tech ecosystem is proving that both recycled tech talent and capital continue to nurture the ecosystem. Nearly 80% of angel respondents have worked at a tech start-up and or founded their own business and are now focusing on investing in and supporting early stage companies. As mentioned above, the European tech ecosystem is proving that both recycled tech talent As mentioned above, the European tech ecosystem is proving that both recycled tech talent and capital andmentioned capital continue to nurture the 80% ecosystem. Nearly 80% have of angel respondents havetalent worked As above, the European techofecosystem is proving that both tech continue nurture the Nearly angel respondents worked atrecycled a tech start-up and or and capital Haveto you worked in aecosystem. tech 79% 78% at a tech start-up and or founded their own business and are now focusing on investing in and 80 founded their own business and are now focusing on investing in and supporting early stage companies. continue toscale-up nurtureorthe ecosystem. Nearly 80% of angel respondents have worked at a tech start-up and or start-up or started / co-founded a business? supporting early stage companies. founded their own business and are now focusing on investing in and supporting early stage companies. 60

79%

78%

40 60 22%

21%

22%

40 0

21%

Have you worked in a tech startup or scale-up before? 22%

79%

78%

Have you worked in a tech startup or scale-up before?

Have you ever started or co-founded a business? 21% Have you ever started or co-founded a business?

SOU RCE:

NOTE:

SOU RCE:

Have you worked in a tech startup or scale-up before?

Have you ever started or co-founded a business?

Expectedly, the majority of angel investor respondents come from a tech background. Nearly 80% of them Angel respondents only. have had previous experience working at a tech start-up or scale-up mostly as founders, followed by senior leaders and operators in CxO positions. In terms of investing experience, a large number of the angel investor SOU RCE: NOTE: respondents have been aofpart of wider angel syndicate and, onfrom average, been investing over years. Expectedly, the majority angel investor respondents come a tech techhave background. Nearlyfor 80% of six them Expectedly, the majority of angel investor respondents a background. Expectedly, the majority of angel investor respondents come fromcome a techfrom background. Nearly 80% ofNearly them 80% of them Angel respondents only. have had previous experience working at aa tech start-up ormostly scale-up mostly as as founders, followed by by senior senior have previous experience working tech or start-up or scale-up mostly founders, followed have hadhad previous experience working at a techatstart-up scale-up as founders, followed by senior leaders and operators in CxO positions. In terms of investing experience, a large number of the angel investor What was your capacity in the investor Founder experience, a large number of the angel investor leaders and operators in CxO positions. In terms of investing or scale-up? tech start-up on average, for over respondents havehave been been a part aofpart wider and, on average, have been investing for over six years. respondents ofangel widersyndicate angel syndicate and, on average, have been investing over six six years. years. Angel respondents only. NOTE:

32%

CxO

What was your capacity in the What was your capacity in the tech start-up or scale-up?

Founder

41%

Founder Advisor

tech start-up or scale-up?

41%

10% 32%

CxO

CxO Sales & Marketing

32%

7% 10%

Advisor

Advisor Other

Sales & Marketing

Sales & Marketing Operations

Other

Other 0

Operations

% of angel investors 10 4%

0 Operations 5

10%

% of angel investors

SOU RCE:

NOTE: Angel investor respondents only.

NOTE:

% of angel investors

SOU RCE:

Angel investor respondents only.

NOTE:

SOU RCE:

Angel investor respondents only.

The next generation of tech leaders now has the opportunity to vote for the teams they believe can build the next global success story out of Europe.

Sonali De Rycker Accel Partner

Angel investing has been democratized by the rise of scout programs, with investments no longer just coming from a small pool of previously successful entrepreneurs. The next generation of tech leaders now has the opportunity to vote for the teams they believe can build the next global success story out of Europe. Scout programs are just another

102

measure of Europe’s maturing tech ecosystem, where it has become increasingly common to start a company rather than simply join one. People invest in people and, in a fragmented European market, those best-placed to spot talent early on are often former colleagues at tech companies - where many scout initiatives are now focused.

Investment portfolio diversi cation varies signi cantly across angel investors. While 59% of angel investors 03.4 Angels respondents have made less than 10 investments to date, including nearly a quarter that have made fewer than ve, around 4% have built portfolios with over 50 investments. This comes as no surprise; while some angels are more experienced and have been investing over longer periods of time, others are simply just Investment portfolio diversi cation varies signi cantly across angel investors. While 59% of angel investors starting out.portfolio diversi cation varies signi cantly across angel investors. While 59% of angel investors Investment respondents have made less than 10 investments to date, including nearlyangel a quarter that have made59% fewer Investment portfolio diversification significantly across investors. While of angel respondents have made than with 10varies investments to date, including a quarter thatsome have madeinvestors fewer than ve, around 4% have builtless portfolios over 50 investments. This comesnearly as no surprise; while 40 respondents have made less than 10 investments to date, including nearly a quarter that have made fewer than ve, around 4% have built portfolios with over 50 investments. This comes as no surprise; while somethan five, angels are more experienced and have been investing over longer periods of time, others are simply just How many start-ups do you around 4% have built portfolios with over 50 investments. This comes as no surprise; while some angels are more 35% starting out. angels arehave more experienced in your portfolio? and have been investing over longer periods of time, others are simply just currently experienced and have been investing over longer periods of time, others are simply just starting out. starting out. 40

How many start-ups do you currently have in your portfolio? % of angel investors

30 % of angel investors % of angel investors

How many start-ups do you currently have in your portfolio?

35%

40 24%

24% 30

22%

35% 20 22%

24%

22%

20 3%

Investment activity across angel investor respondents provides a forward-looking view and insight into 0 4% 3% Up to 5 6-10 11-20 21-30 31-40 2% upcoming trends de ning the earliest stages to 10 of entrepreneurial activity. It's incredibly interesting 9% 0 understand the categories that are most exciting to Europe's angel community,31-40which could Up to 5 6-10 11-20 investor21-30 41-50 50+ potentially de ne upcoming trends across the ecosystem. Interestingly, angel investor respondents 3% SOU RCE: NOTE: prominently ranked sectors that closely correlate to current macro thematic challenges as ones they are most 0 Up to 5 6-10 11-20 21-30 31-40 SOU RCE: Angel investor respondents excited about suchonly. as edtech, digital health, biotech/life sciences and climate. NOTE:

2% 41-50

Angel investor respondents only.

Edtech Which sectors are you most SOU RCE: NOTE: excited about? Investment activity across angel investor respondents provides a forward-looking view and Digital health

27%

Angel investor respondents only.

insight into upcoming trends defining the earliest stages of entrepreneurial activity. It’s Big data Investment activity across angel investor respondents provides a forward-looking view and insight into 24% incredibly interesting to understand the categories that are most exciting to Europe’s angel upcoming trends de ning the earliest stagesBiotech of entrepreneurial activity. It's incredibly interesting to 22% / life sciences Investment activity across angel investor respondents provides aupcoming forward-looking view and insightthe into ecosystem. investor community, which could potentially define trends across understand the categories that are most exciting toactivity. Europe's angel investor community, which could upcoming trends de ning the earliest stages of entrepreneurial It's incredibly interesting to Enterprise applications 21% Interestingly, investor ranked sectorswhich that closely correlate understandde theangel categories that arerespondents most exciting to prominently Europe's angel investor community, could potentially ne upcoming trends across the ecosystem. Interestingly, angel investor respondents potentiallymacro deranked ne upcoming trends across the ecosystem. Interestingly, angelmacro investorthematic respondents to current thematic challenges ascorrelate ones they are most excited about such as edtech, Energy efficiency 19%they are most prominently sectors that closely to/ Cleantech current challenges as ones prominently ranked sectors that closely correlate to current macro thematic challenges as ones they are most digital health, biotech/life sciences and climate. excited such edtech, health, biotech/life sciences and climate. excitedabout about such as as edtech, digital digital health, biotech/life sciences and climate. Fintech / Insurtech 19% Which sectors are you most

Edtech

Which sectors excited about? are you most excited about?

Digital health Big data

Cybersecurity Edtech

12%

AR / VR Digital health

12% 11% 10%

21%

Energy efficiency / Cleantech

19%

Fintech / Insurtech

19%

E-Commerce Enterprise applications

Blockchain / Cryptocurrency Cybersecurity Energy efficiency / Cleantech

Cybersecurity

Creative & media industry Blue economy

New materials Social economy Mobile applications E-Commerce7%

19% 8% 12%

10%

7% 12%

10%

Logistics Internet of things

Mobility

19%

11%

Blue economy AR / VR

Blockchain / Cryptocurrency

10%

11%

6% 10%

Femtech7% Blockchain / Cryptocurrency

Logistics

10%

New materials

6% Consumer Packaged Goods Mobility Mobile applications

4% 9%

Space Femtech 6% Creative & media industry

Space

Robotics

2% 0

SOU RCE:

NOTE: NOTE: Angel investor respondents only. Angel investor respondents only.

SOU RCE:

4% 8%

Robotics 4% Blue economy

Consumer Packaged Goods

21% 10% 9%

12%

Internet of things Creative & media industry

E-Commerce

22%

10%

12%

Mobility Fintech / Insurtech

Social economy

24%

22%

Social economy Biotech / life sciences

Enterprise applications

AR / VR

27%

24%

Internet of things Big data

Biotech / life sciences

35% 27%

2% 7% 0

Logistics

5 New materials

% of angel investors

Mobile applications

Femtech

Consumer Packaged Goods

Space

Robotics103 0

2% 5

03.4

Angels

It would be safe to assume that European angel investment activity largely plays out in localised ways given the inherent importance and element of relationships at the earliest stages of investment. The survey responses drive a wedge through that assumption. Although nearly a quarter of respondents focus on local It would be safe to assume that European angel investment activity largely plays out in localised ways given the investments at the nationalthat level, the largest share of angels, nearlylargely half (46%) focus onlocalised European-wide It would be safe to assume European angel investment activity plays outways in ways given It would be safe to while assume that element European angel investment activity largely plays out in givensurvey inherent importance and of relationships at the earliest stages oflocalised investment. The responses investments, a further 17% focus globally, suggesting that even at the earliest stages, capital ows inherent importance and element of relationships at the earliest stages of The investment. The survey thethe inherent importance andthat element of relationships at thenearly earliest stages ofof investment. surveyon local drive a European wedge through assumption. Although a quarter respondents focus investments across hubs are more interconnected than many might think. responses a wedge through that assumption. nearly quarter of respondents responses drivedrive a wedge through that assumption. Although Although nearly a quarter ofarespondents focus on local focus on local at the national level, the largest share of angels, nearly half (46%) focus on European-wide investments, while a investments at the national level, the largest share of angels, nearly half (46%) focus on European-wide investments at the national level, the largest share of angels, nearly half (46%) focus on European-wide further 17% focus globally, suggesting evensuggesting atthat theeven earliest stages, flows across hubs are investments, while a further 17% focus suggesting at the earliest stages, capitalstages, ows European investments, while a further 17%globally, focusthat globally, that even atcapital the earliest capital ows What is your geographical focus European across European hubs are more interconnected than many might think. more interconnected than many might think. for investments? across European hubs are more interconnected than many might think. 25%

Local / Country level

What is your geographical focus What is your geographical focus for investments?

for investments?

European

46%

European Global

46%

17% 25%

Local / Country level

25%

Local / Country level Regional

Global

17%

Global Regional North America

8% 3%

Regional 1%

North America Africa & Middle 3% East

Africa & Middle East

46%

North America

% of angel investors 5 Africa 0& Middle East

SOU RCE:

NOTE: Angel investor respondents only. NOTE:

1% 10

% of angel investors

SOU RCE:

Angel investor respondents only.

SOU RCE:

NOTE:

The majority of angel investor respondents (61%) have remained inconsistent their deployment strategy The majority of angel angel investor respondents (61%) haveconsistent remained in their deployment Angelmajority investor respondents only. investor The of (61%) remainedshared consistent theirangels deployment strategy despite the Covid-19 pandemic, whichrespondents is broadly aligned withhave the sentiment by VCs. in Though strategy despite the Covid-19 pandemic, which is broadly aligned with the sentiment shared by despite the Covid-19 pandemic, which is broadly aligned with the sentiment shared by VCs. Though angels more frequently cited a slow down in the pace of investments compared to VC respondents, they also more VCs. Though angels more a slow down in the pace of investments comparedthey to also more frequently cited in ancited increase infrequently investment speed. more frequently a slow down in cited the pace of investments compared to VC respondents,

VC respondents, also more cited in an increase in investment speed. frequently cited inthey an increase infrequently investment speed. Since the start of Covid-19, have you revised your deployment strategy? Since the start of Covid-19, have

DATA SET : DEPL OYM ENT PA CE

DATApace SET : DEPL OYM ENT PA CE Deployment you revised your deployment 80 L EGEND strategy? The majority of angel investor respondents (61%) have remained consistent in their deployment strategy 71%

Share of angel investors

Share of VC investors

% of investors

despite Covid-19 pandemic, which is broadly aligned with the sentiment shared by VCs. Though angels Share of VC the investors 80 61% L EGEND more frequently cited a slow down in60the pace of investments compared to VC respondents, they also more 71% Share of angel investors frequently cited in an increase in investment speed. 60

61%

% of investors

The majority of angel investor respondents (61%) have remained consistent in their deployment strategy TheSince majority of angel investorhave respondents (61%)DATA have remained SET : DEPL OYMconsistent ENT PA CE in their deployment strategy theCovid-19 start of Covid-19, despite the pandemic, which is broadly aligned with the sentiment shared by VCs. Though angels despite the Covid-19 pandemic, which is broadly aligned with the sentiment shared by VCs. Though angels youfrequently revised your deployment more cited a slow down in the pace of investments compared to VC respondents, they also more 20 of investments compared to VC respondents, they also more more frequently cited a slow down in the pace strategy? 40 frequently cited in an increase in investment speed. 11% frequently cited in an increase in investment speed. 9%

L EGEND L EGEND Share of angel investors NOTE: Share of angel investors Share of VCand investors Angel investor VC respondents only. Share of VC investors

Cheque size SOU RCE: 75

%%ofofinvestors investors

Angel investor and VC respondents only.

50 40

investments

61%

11%

0 40 61% 67%

83% 71%

No change, I am making the same number of investments

Yes, I am making fewer investments

20%

Yes, I am making more investments

20%

SOU RCE: 20

27%

11% of No change, I am making the same number investments

No change, I am making the same number of No change investments

SOU RCE:

NOTE:

Yes, I am making fewer investments

28%

11% 25 20

NOTE: Angel investor and VC respondents only. NOTE: Angel investor and VC respondents only. Angel investor and VC respondents only.

28% 71% Yes, I am making more investments

NOTE:

20%

DATA SET 0 : CH EQU E SIZ E DATA SET : DEPL OYM ENT PA CE the same number of No change, I am making

% of investors

L EGEND

Since the start of Covid-19, have Share angel Since the of start ofinvestors Covid-19, have you revised your deployment you revised your deployment Share of VC investors strategy? strategy?

28%

SOU RCE: SOU RCE:

104

28%9% 20%

Yes, I am making more investments 9% 10% 6%

Yes, I am making more investments Yes, down

Yes, I am making fewer Yes, up investments

Yes, I am making fewer investments

03.4

Angels

At what pace are angels deploying capital? This varies across respondents. Almost a third (27%) are very active and make more than �ve investments per year on average, while another third (34%) make between 1-2 investments. At what what pace pace are are angels angels deploying deploying capital? This This varies varies across across respondents. respondents. Almost Almost aa third third (27%) are very active At At what pace are angels deploying capital?capital? This varies across respondents. Almost a third (27%) are very active (27%) are very active and make more than five investments per year on average, while and make more than �ve investments per year on average, while another third (34%) make and make morenew than �ve investments per year on average, while another third (34%) make between 1-2 between 1-2 How many investments do 25 24% another thirddo(34%) make between 1-2 investments. investments. investments. you typically in a year?

% of angel investors

% of angel investors % of angel investors

you typically do in a year?

20%

20 10

19%

24%

15% 19% 20%

10%

19% 15%

15%

12%

10%

10 0

10%

SOU RCE:

NOTE:

24%

5 0

Angel investor respondents only. NOTE:

20%

HowHow manymany new investments do new investments do you typically do in a year?

2 2

3 3

4 4

5 6+

SOU RCE:

Angel investor respondents only.

NOTE:

SOU RCE:

Angel investor respondents only.

State of European Tech 2020 report launch

Photo by: Pasi Salminen

105

03.4

Angels

The survey provides insight into the demographics of European angel investors on a self-reported basis. To no surprise, there was a lack of diversity and representation across demographic groups. The share of angels who selfThe survey provides insight into the demographics of European angel investors on a self-reported basis. To identified as Black, Multi-Ethnic, Asian or Hispanic/Latinx represented 15% of the angel respondents, 23% identified no surprise, there was a lack of diversity and representation across demographic groups. The share of angels asself-identi women and are aged 46 andAsian older.orSome existing trends have the to respondents, change the status quo and have who ed 63% as Black, Multi-Ethnic, Hispanic/Latinx represented 15%potential of the angel meaningful impact angel One example is the launch of AngelList’ s Rolling Venture Funds in 23% identi ed as womenon and 63%investor are aged demographics. 46 and older. Some existing trends have the potential to change Onechange example theSEC launch ofthe tech infrastructure thethe status andthis haveyear, meaningful impact on angel US quo earlier which has been madeinvestor possibledemographics. by a regulatory byisthe and AngelList's Venture Funds in the US earlier year, which has been made possibletheir by a regulatory providedRolling by AngelList. This structure makesthis it easier for individuals to leverage reach and experience to raise change by the SEC and the tech infrastructure provided by AngelList. This structure makes it easier for funds. It also has the potential to enable greater diversity across GPs by opening up access to different LP capital individuals to leverage their reach and experience to raise funds. It also has the potential to enable greater pools.across 70 of these funds have to been set up the US by active investors. arrival have been set in Europe should diversity GPs byrolling opening up access different LPincapital pools. 70 of these rollingTheir fundspossible up be in the US by active investors. Their possible arrival in Europe should be encouraged and welcomed. encouraged and welcomed. Angel survey respondents by survey respondents ageAngel group and gender

by age group, gender and by ethnicity

DATA SET : BY A GE GROU P

By age group

Less than 21 years old

Between 21 to 25 years old

2% The survey provides insight into the demographics of European angel investors on a self-reported basis. To Between 31 and 35 years old 8%The share of angels no surprise, there was a lack of diversity and representation across demographic groups. who self-identi ed as Black, Multi-Ethnic,Between Asian or40Hispanic/Latinx represented 15% of the angel 36 and years old 10%respondents, 23% identi ed as women and 63% are aged 46 and older. Some existing trends have the potential to change Between 41 and 45 years old the status quo and have meaningful impact on angel investor demographics. One example is the launch of Between 46 and 50 years old AngelList's Rolling Venture Funds in the US earlier this year, which has been made possible by a regulatory Between 51 and 55 years old change by the SEC and the tech infrastructure provided by AngelList. This structure makes it easier for Between 56 and 60 old funds. It also has the potential to enable greater individuals to leverage their reach and experience toyears raise 61+ yearsLP old capital pools. 70 of these rolling funds have been set diversity across GPs by opening up access to different up in the US by active investors. Their possible arrival in Europe should be encouraged 0 3 5 8 and welcomed. 10 13 Between 26 and 30 years old

16% 16% 15% 18% 15% 15

% of angel investors

Angel respondents by Thesurvey survey provides age group and gender

DATA SET : BY GENDER insight into the demographics of European angel investors on a self-reported basis. To By gender no surprise, there was a lack of diversity and representation across demographic groups. The share of angels SOU RCE: NOTE: who self-identi ed as Black, Multi-Ethnic, Asian or Hispanic/Latinx represented 15% of the angel respondents, Angel investor respondents only. 23% identi ed as women and 63% are aged 46 and older. Some existing trends have the potential to change the status quo and have meaningful impact on angel investor23%demographics. One example is the launch of Woman The survey provides insight into the demographics of European angel investors on a self-reported basis. To AngelList's Rolling Venture Funds in the US earlier this year, which hasgroups. been made possible by a regulatory no surprise, there was a lack of diversity and representation across demographic The share of angels change by the SEC and the tech infrastructure provided by AngelList. This structure makes it easier for who self-identi ed as Black, Multi-Ethnic, Asian or Hispanic/Latinx represented 15% of the angel respondents, individuals towomen leverage reach and to raise funds. It also the potential to enable greater 23% identi ed as andtheir 63% are aged 46 experience and older. Some existing trends havehas the potential to change across GPsmeaningful by opening up access toinvestor different LP capital pools. 70 of these funds have been set demographics. One example is the rolling launch of thediversity status quo and have impact on angel AngelList's in theTheir US earlier this year, which has beenshould made possible by a regulatory up in theRolling US byVenture active Funds investors. possible arrival in Europe be encouraged and welcomed.

Man provided by AngelList. This structure makes it easier for change by the SEC and the tech infrastructure individuals to leverage their reach and experience to raise funds. It also has the potential to enable greater DATA SETLP : BYcapital ET H NICIT Y Angelacross surveyGPs respondents by up access to different diversity by opening pools. 70 of these rolling funds have been set gender up inage thegroup US byand active investors. Their possible arrival in Europe should be encouraged and welcomed. 0

73%

% of angel investors

Angel survey respondents by age group and gender NOTE:

85%

White

DATA SET : BY ET H NICIT Y

By ethnicity SOU RCE:

Mixed/Multiple ethnic groups

85%

White

Angel investor respondents only.

Black/African/Caribbean Mixed/Multiple ethnic groups

Black/African/Caribbean

Asian

not to say AsianPrefer2%

2% Prefer not to say Hispanic/Latinx

Hispanic/Latinx

1% 10

% of angel investors 0

50 % of angel investors

SOU RCE:

NOTE: Angel investor respondents only. NOTE:

SOU RCE:

Angel investor respondents only.

106

03.4

Angels

Respondents also shared insight into the level of diversity within their angel investment portfolios. It’s interesting to look at founder diversity within angel investor portfolios especially given these early stage companies are at the top of the investment funnel and consequently provide visibility on upcoming talent and Respondents also insight level their angel investment portfolios. It’sIt’s deal ow for subsequent investment rounds.within Respondents also shared sharedinstitutional insightinto intothe the levelofofdiversity diversity within their angel investment portfolios. Respondents also shared insight into the level of diversity within their angel investment portfolios. It’s interesting to look at founder diversity within angel investor portfolios especially given these early stage interesting to look at founder diversity within angelportfolios investor especially portfoliosgiven especially given these early stage interesting to look at founder diversity within angel investor these early stage companies are at the top of the investment funnel and consequently provide visibility ontalent upcoming companies are at the top of the investment funnel and consequently provide visibility on upcoming talent and companies are at the top of the investment funnel and consequently provide visibility on upcoming and talent What percentage of your and deal flow for subsequent institutional investment rounds. deal owsubsequent for subsequent investment deal ow for institutional investment rounds. rounds. portfolio companies have at institutional least one founder from an underrepresented background What percentage of yourof your What in the percentage founding team? portfolio companies have at portfolio companies have at least one founder from an least one founder from an underrepresented background underrepresented background in the founding team? in the founding team?

Less or equal to 25%

56%

Less or equal to 25%

Between 26 and 50%

29%

Between 26 and 50%

29%

Between 26 and 50%

29%

Over 50%

15%

Over 50%

15%

Over 50% 0

15%

% of angel investors 30

% of angel investors

NOTE: Angel investor respondents only. NOTE: Underrepresented across gender, ethnicity, Angeldisability, investor respondents only. status. socioeconomic

SOU RCE:

% of angel investors

SOU RCE:

The newer generation of angel investors, as represented by those that have started to angel invest within the last �ve years, appear to be investing in a more diverse set of founders. This provides some insight - though SOU RCE: Angel investor respondents only. not causal evidence - ethnicity, that the pool of founders at the angel investment stage has more recently started to Underrepresented across gender, disability, socioeconomic status. numbers The newer generation of as bybythose have started toto angel invest within diversify with greater of underrepresented founders. The newer generation ofangel angelinvestors, investors, asrepresented represented thosethat that have started angel invest within the The newer generation of angel investors, as represented by those that have started to angel invest within the the last five years, appear to be investing in a more diverse set of founders. This provides some insight last �ve years, appear to be investing in a more diverse set of founders. This provides some insight - -though last �ve years, appear to be investing in a more diverse set of founders. This provides some insight - though though not causal evidence that the pool of founders at the angel investment stage has more recently causal evidence that theofpool of founders at the angel investment stage has more recently started to notnot causal evidence - that-the pool founders at the angel investment stage has more recently started to Share of underrepresented 66% started towith diversify with greater numbers of underrepresented diversify greater numbers of underrepresented diversify with greater numbers of underrepresented founders.founders.founders. founders by angel experience Underrepresented across gender, ethnicity, NOTE: disability, socioeconomic status.

Share of underrepresented Share of underrepresented Lessby orangel equal to 25% founders experience

founders by angel experience Between 26 and 50%

L EGEND

Less Between 26or andequal 50% to 25% Between 26 and 50% Over 50% Over 50%

% of angel investors

Over 50% L EGEND

Less or equal to 25%

% of angel investors % of angel investors

L EGEND

66%

60 40 30%

43%

43% 40 20

30%

Less than 5 years

SOU RCE:

28%

27%

SOU RCE:

Angel investor respondents only.

107

6% than 5 years Over

Over than 5 years

Less than 5 years

SOU RCE:

Angel investor respondents only.

NOTE:

28%

Less than 5 years

Angel investor respondents only. NOTE:

28%

27%

30%

20 0

NOTE:

66%

43%

Over than 5 years

The most established angel investors with the largest portfolios also appear to have invested in a less diverse 03.4 portfolio ofAngels founders. Share of underrepresented The most established angelangel investors with thewith largest The most established investors the largest founders by portfoliotosize portfolios also appear have in a less diverse The most established angel investors with largest portfolios also appear to have invested in a less diverse portfolios also appear to invested have invested in athe less diverse portfolio of founders. 75

83%

of founders. portfolio founders. L EGEND Less or equal to 25%

50%+ founders by portfolio size

% of angel investors

Share of underrepresented Between 26 and 50%size founders by underrepresented portfolio Share of 75

Between 26 and 50%

Less or equal to 25% 50%+ Between 26 and 50% 50%+

83% 42%

36% 55%

53%

25%

55%

20% 42%

55%

53% 42%

25%

Up to 10 investments

20%

Up to 10 investments 25% 20%

17%

36%

25 0

55% 83%

53%

55%

% of angel investors

Less or equal to 25%

L EGEND

% of angel investors

L EGEND

55% 50

36%

11 to 20 investments 5%

17%

21-40 investments

40+ investments

11 to 20 investments

21-40 investments

17%

40+ investments

SOU RCE: along with nancial returns are the top Supporting entrepreneurs and new businesses 5% two motivations for NOTE: angel investing by our survey respondents. This insight is interesting in the context of the main motivations 0 Angel investor respondents only. SOU RCE: to 10 investments 11 to 20 investments 21-40 investments NOTE: shared by angel investors for why they are investingUpin start-ups. For those angels that are former operators, Angel investor respondents only. the main motivation is to give back by supporting entrepreneurs and new businesses. Their capital is can nancial be evenreturns more accretive fortwo themotivations founders they important, their operating and networks Supportingbut entrepreneurs andexperience new businesses along with are the top for SOU RCE: Supporting entrepreneurs and new businesses along with financial returns are the top two motivations formotivations angel investing NOTE: back. It’s important that underrepresented founders are able to access this. Supporting entrepreneurs new businesses alongThis with insight nancial is returns are the top two motivations angel investing by ourand survey respondents. interesting in the context of for the main byAngel our survey respondents. This insight is interesting in the ofcontext the motivations shared angeloperators, investors angel investing by our survey respondents. This insight is interesting in the of the main motivations investor respondents only. shared by angel investors for why they are investing in context start-ups. Formain those angels that are by former shared bythey angelare investors forin why they are investing inangels start-ups. For those angels that arethe former operators, for why investing start-ups. For those that are former operators, main motivation is to give themain main motivation is to give by supporting entrepreneurs and new businesses. Their capital is back by ismotivation your main motivation for byback theWhat is to give back supporting entrepreneurs and new businesses. To support entrepreneurs and new businesses Their capital is supporting and new businesses. Their capital ismore important, their operating experience and networks can networks beaccretive evenbut more accretive important, but operating experience and investingbut inentrepreneurs start-ups? important, theirtheir operating experience and networks can be evencan for the founders for theythe founders they be even more accretive forunderrepresented the founders they back. It’s important that founders are able to access this. back. important that founders able to underrepresented access this. back. It’sIt’s important that underrepresented founders are able to are access this. 9%

Financial returns

What is your main motivation for What is your main motivation for investing in start-ups?

51%

To support entrepreneurs and new businesses To learn new skills (investing, board member, etc)

51%

11%

Financial returns

24%

Financial returns To stay up to date with new businesses and technology

24%

11%

To learn new skills (investing, board member, etc)

To learn new skills (investing, board member, etc) Other

11%

To stay up to date with new businesses and technology

To stay up to date with new businesses and technology 0 Other

51%

24%

To support entrepreneurs and new businesses

investing in start-ups?

0% 40+ investments

10 9%

% of respondents

As we highlighted in last year's report, a large share of angel investment activity is not "visible," which makes it 0 10 30 40 50 hard to track capital �ows across Europe in the earliest stage of funding. Still,20Dealroom's data supports our Other 6% % of respondents survey �ndings. It is also a helpful proxySOU forRCE: the type of founding teams getting capital and although this only NOTE: 10 at every20 30 puts the �nger on gender imbalances, it is a stark reminder that diversity0 is an issue stage of the % of respondents Angel investor respondents only. SOU RCE: stack. NOTE:

As we last year's report, a large share of angel investment activity is not "visible," which makes it Angelhighlighted investor respondentsin only. As highlighted last report, a large share of investment activity is not "visible," which it hard towe track capitalin�ows across Europe in the stage of angel funding. Still, Dealroom's data our 600angel Aswe highlighted inyear's last year' s report, aearliest large share of investment activity issupports notmakes "visible," which makes it Cumulative capital invested ($M) hard to track capital �ows across Europe in the earliest stage of funding. Still, Dealroom' s data supports our SOU RCE: survey �ndings. It is also a helpful proxy for the type of founding teams getting capital and although this only AsNOTE: wetohighlighted in last year’ s report, a large share of angel investment activity is not “visible,” which makes it hard to $537M hard track capital �ows across Europe in the earliest stage of funding. Still, Dealroom's data supports our by investors by founding survey �ndings. is also a helpful proxy forathe type of founding getting although this puts theangel �nger onItgender imbalances, it is stark reminder thatteams diversity is ancapital issue and at every stage ofonly the track capital flows across Europe in the earliest stage of funding. Still, Dealroom’ s data supports our survey findings. Angel investor respondents only. survey �ndings. It is also a helpful proxy for the type of founding teams getting capital and although this only 500 team 2016-2020 puts thegender, �nger on gender imbalances, it is a stark reminder that diversity is an issue at every stage of the stack. puts the a�nger onproxy gender it is a stark reminder diversity is an issue every stage of the on gender It is also helpful forimbalances, the type of founding teams gettingthat capital and although thisatonly puts the finger stack.

Capital invested ($M)

400 400 300

300

200

100 100

NOTE:

Total capital invested ($M)

L EGEND

500 500 Total capital invested ($M) Total capital invested ($M)

by angel investors by founding

L EGEND L EGEND team gender, 2016-2020 Capital invested ($M) Capital invested ($M)

600

Total capital invested ($M)

L EGEND stack. imbalances, it is a stark reminder that 400 is an issue at every stage of the stack. 600diversity

Cumulative ($M) Capitalcapital investedinvested ($M) capital ($M) byCumulative angel investors byinvested founding by angel investors by founding team gender, 2016-2020 Cumulative capital invested ($M) team gender, 2016-2020

$537M

600 300

$537M

$537M 500 200

400 100

$89M $32M

300 0

Men only founders

$89M$89M

Mixed teams

200

$32M $32M

Men only founders

Mixed teams Mixed teams

SOU RCE: Men only founders 100

$89M

Data as of 30 September 2020. NOTE: NOTE:

Women only founders

only founders WomenWomen only founders

$32M SOU SOURCE: RCE:

Data as 30 of 30 September 2020. Data as of September 2020.

Men only founders

108 SOU RCE:

Mixed teams

Women only founders

03.4

Angels

13 companies count more than three angels actively investing in the European ecosystem and a further 16 have twoRecycling or less angel alumni. Still it is remarkable to see that Skype, Spotify and Just Eat / Takeaway account Talent for over 40% of the sample cohort. We gathered a list of over 100 ex-operators from $B+ European companies that had become investors, either through angel or institutional investing. This is not an exhaustive list and is entirely Shareon of ex-operator angels by Skype but is a large enough sample to represent based manual scraping of publicly available sources, 15% alumni company the type of investors emerging from the first generation of successful scale-ups. 14%

Just Eat / Takeaway

12% Spotify 13 companies companies count count more more than than three three angels angels actively actively investing in in the the European European ecosystem ecosystem and and a further 13 investing 16 a further two less angel Still it isin remarkable to see that have two 16 or have less angel alumni. Stillalumni. itactively is remarkable to see thatecosystem Skype, Spotify and16Spotify Just Eatand / Takeaway account 13 companies count moreor than three angels investing the European and a Skype, further have two less alumni. Still itfor is remarkable to of seethe that sample Skype, Spotify and Just Eat / Takeaway account 7% King Just Eat /orTakeaway account over 40% cohort. for over 40% ofangel the sample cohort.

for over 40% of the sample cohort.

Share ex-operator angels by by Share ofofex-operator angels alumni company alumni company

Skype

Delivery Hero Skype

Just Eat / Takeaway

Zalando Spotify

King

12%

Adyen King

Delivery Hero

Criteo Delivery Hero

Zalando

HelloFresh Rovio

Adyen

Avito Zalando

Criteo

Skyscanner Adyen

Avito

4% 4%

Klarna Criteo

Skyscanner

Others 3% HelloFresh

Klarna

Others

NOTE:

14% 12%

Spotify

HelloFresh

15%

14%

Rovio Just Eat / Takeaway

Rovio

15%

19%

Avito

Skyscanner

Klarna

SOU RCE:

Numbers NOTE: don't add up to 100, as some had experience in more than one company. Numbers don't add up to 100, as some had experience in more than one company.

SOU RCE:

At my last count there were more than 20 start-ups founded by TransferWise alumni, there are probably many more today. This mini Others ecosystem is supported with hires, advisory, connections and in many cases angel funding from other ex TransferWisers. NOTE: Numbers don't add up to 100, as some had experience in more than one company.

Taavet Hinrikus TransferWise Co-Founder and CEO

An entrepreneurial mindset is a non-negotiable part of life at TransferWise, we SOU RCE: encourage it and we hire for it. Everybody in the business has incredibly hard problems to solve, now just as much as in the earliest days, and an entrepreneurial spirit is essential in overcoming those challenges. At my last count there were more than 20 start-ups founded by TransferWise alumni, there are probably many more today. This mini ecosystem is supported with hires, advisory, connections and in many cases angel funding from other ex TransferWisers. That network is hard to replicate, and incredibly valuable. This very special environment is making more people feel supported to take the leap and solve other hard problems in the world once their time at TransferWise is up.

109

03.4

Angels

Similar to our survey respondents, there is a lack of diversity amongst ex-operators. There were only 10% of Similar to respondents, there ofofdiversity ex-operators. Similar to our our survey survey respondents, thereis alack lack diversityamongst amongst ex-operators. There were only 10% of underrepresented ethnicities and 8% of women inisathe sample.

There were only 10% of underrepresented ethnicities and 8% of women in the sample. underrepresented ethnicities and 8% of women in the sample.

Share of ex-operator angels by ethnicity and by gender

DATA SET : BY ET H NICIT Y

Share of ex-operator angels by ethnicity and by gender

DATA SET : BY ET H NICIT Y By ethnicity 100 90%

100 90%

% of angel sample

50 Similar to our survey respondents, there is a lack of diversity amongst ex-operators. There were only 10% of underrepresented ethnicities and 8% of women in the sample.

DATA : BY ET H NICIT Y Similar to our survey respondents, of SET diversity amongst ex-operators. There were only 10% of Share of ex-operator angels by there is a lack underrepresented and 8% of women in the sample. ethnicity and byethnicities gender 5% 100 White DATA SET : BY GENDER

Share of ex-operator angels by ethnicity and by gender

By gender

0 75

SOU RCE:

NOTE:

100

Asian

90%

% of angel sample

Angel investor respondents only.

% of angel sample

3% Middle Eastern/North African

White

Asian

Black/African/Caribbean

Middle Eastern/North Afric

92%

Angel investor respondents only.

NOTE:

Black/African/Caribbean

SOU RCE: 50

5% 0

White

2% 8%

Asian

Black/African/Caribbean

Man

Middle Eastern/North Afric

Woman

SOU RCE:

NOTE: SOU RCE:

NOTE: Angel investor respondents only.

This is not entirely surprising in turn when looking at the gender composition by C-level title in companies that have raised Series A or Series B. Women represent less than 20% of senior management in these companies.

Angel investor respondents only.

y surprising in turn when looking at the gender composition by C-level title in companies that the gender genderincomposition This is entirely surprising turn20% when looking at the by C-level title in100% companies that Chief Revenue Officer 0% s A orThis Series B.not Women represent lessin than ofat senior management these companies. Gender composition by is not entirely surprising in turn when looking the gender composition by C-level title in companies that A Women represent less than 20% of senior management in these companies. have raised Series or Series B. represent less than 20% of senior management in these haveC-level raisedtitle Series A or Series B. Women represent thanOfficer 20% of1%senior management in these companies.99% companies. Chiefless Technology

n by

L EGEND

Chief Revenue Officer

Chief Executive Officer

Gender composition by Gender composition byChief Technology Officer Women C-level title title C-level

Chief Executive Officer

Men

L EGEND

Women Men

Chief Product Officer

9% 1%

Chief Technology Officer 1% Officer Chief Technology

Chief Operating Officer 6% Chief Executive Officer

Chief Executive Officer

Chief Operating Officer Chief Scientific Officer Chief Financial Officer CxO Other Chief Marketing Officer

Based on a sample of founders and executives in CxO positions at 348 European NOTE: VC-backed tech companies that raised a Based on a sample founders and 1 October 2019 Series A or Bof round between executives in September CxO positions2020 at 348 European NOTE: ders and and 30 with more than $10M VC-backed tech companies that raised a SOU RCE: s at 348 Europeanin total funding. A or B on round betweenof1 October 2019 a sample founders and s that raised Series a Based and 30 September 2020 with more than $10M n 1 October 2019 executives in CxO positions at 348 European in total funding. tech companies that raised a VC-backed th more than $10M Series A or B round between 1 October 2019 and 30 September 2020 with more than $10M in total funding.

99%

94%

14%

0 10 Chief Marketing Officer 20 30

SOU RCE:

99%

94%

3033%

10 % of Executives 20

94% 100%

100%

91% Scientific Officer 14% Chief ProductChief Officer 9% Chief Product Officer 9% 86% 14% Financial Officer 17% Chief OperatingChief Officer 14% Chief Operating Officer 14% 86% 14% Scientific Officer Chief CxO 14% Other 24% Chief Scientific Officer 14% 83% 17%Financial Officer Chief 17% Chief Marketing Officer 33% Chief Financial Officer 17% 24% 76% 24%CxO Other 0 10 20 30 CxO Other 24% Chief Marketing33% Officer 33% 67%

Chief Product Officer

NOTE:

100%

6% 0%

Chief Revenue Chief OfficerRevenue 0% Officer

94%

86%

86% 91%

91%

83% 86%

86% 86%

86%

83% 76%

SOU RCE:

110

67%

50 % of Executives

SOU RCE:

76%

83%

76%

% of Executives 67%

% of Executives

91%

90 67% 100

100

03.4 This is not aAngels trend that is changing either. For the past three years, the share of CTOs has been at stagnating at a mere 1% and this is not by lack of talent in the ecosystem. The system needs xing at every layer and as much as investors have work to do on rebalancing capital allocation, the founders of tomorrow also need guidance and support on assembling a more diverse team. This is is not not aa trend trend that that is is changing changing either. either. For Forthe thepast pastthree threeyears, years,the theshare shareof ofCTOs CTOshas hasbeen beenat atstagnating stagnatingatat This This is not a trend that is changing either. For the past three years, the share of CTOs has been at stagnating at by lack of talent in the ecosystem. The system needs fixing at every a mere 1% and this is not by lack of talent in the ecosystem. The system needs xing at every layer and as much ntirely surprising in turn when looking at the gender composition by C-level title in companies that a mere 1%as and this is(%) not by lack of talent inon the ecosystem. The system needs xing at every layer and as Share of women by as investors have work to do on rebalancing capital allocation, the founders of tomorrow also need guidance and much investors have work to do rebalancing capital allocation, the founders of tomorrow also need Series A or Series B. Women represent less than 20% of senior management in these companies. 10 muchexecutive-level as investors have workofto do on rebalancing capital allocation, the founders of tomorrow also need positions guidance and support on assembling a more diverse team. support on assembling a more diverse team. selected European Series A and 0%

Share of women (%) Technology by Officer Share of women (%) byChief L EGEND executive-level positions of executive-level positions of 2017European Series Chief Officer selected AExecutive and A and selected European Series 2018 B venture-backed companies B venture-backed companies L EGEND 2020

2017

2018 2019

Chief Operating Officer

2017

2020

CxO Other

17% 3

24%

010

100%

8 10

99%

91%

8 6%

86%

1% 60

% of founders

1% 70 1%

% of founders

% of CTOs

% of all CxO l

100 % of all CxO leaders

% of founders

SOU RCE:

Breaking the cycle

Widening access to capital to a more diverse group of individuals should accelerate the rebalancing of the founder makeup at the later stages. The Atomico angel programme was started in 2018 on this premise and with now two angel cohorts of 23 active individuals and close to 90 investments made, there is a sufficient sample size to put this hypothesis to the test. Given the rise of more angel and scout programs around Europe, it is perhaps a good time to share some of our key findings.

Atomico Angel Program Cohort 2

Andy Davis United Kingdom

Sarah Drinkwater United Kingdom

Robert Gaal The Netherlands

Cédric Giorgi France

Gulnaz Khusainova Denmark

Harry McLaverty United Kingdom

Deepali Nangia United Kingdom

Maud Pasturaud France

Marcus Ross Germany

Christine Spiten Norway

Danica Krajic Sweden

Tine Thygesen Denmark

Katja Toropainen Finland

Karina Univer Estonia

Ville Vesterinen Finland

111

67%

1% 2% 1%

of Executives CTOs %%of

% of CEOs

76% % of CTOs

% of CEOs 2%

% of CEOs SOU RCE:

6% 5%

83% 1%

2% 86%

10%

94%

33%3

Chief Marketing Officer

Based on a sample of founders & executives in CxO positions at European VC-backed tech companies that raised a Series A or B round NOTE: with more than $10M in total funding in that Based on a sample of founders executives respective year (Q3 FY).&2020 includes 348 e of founders and NOTE: in CxOcompanies. positions at European VC-backed tech SOU positions at 348 European companies that raised a Series A orRCE: B round Based on$10M a sample founders & executives ompanies that raised awith more than in totalof funding in that in CxOyear positions at European tech respective (Q3 FY). 2020 includes VC-backed 348 d between 1 October 2019 companies. companies that raised a Series A or B round 2020 with more than $10M with more than $10M in total funding in that respective year (Q3 FY). 2020 includes 348 companies.

14%

Chief Financial Officer

2020 2019

14%

Chief Scientific Officer

2018

NOTE:

Chief Product Officer

2019

L EGEND

% of women by executive-level % of women position by executive-level position

companies B venture-backed Chief Revenue Officer

% of women by executive-level position

osition by

guidance and support on assembling a more diverse team.

% of all CxO l

03.4

Angels

Over 60% of angels in the rst two cohorts were women and over 20% from an underrepresented ethnicity. We will be materially improving on the ethnic makeup of our next cohort.

Over 60% of angels in in the the first rsttwo twocohorts cohortswere werewomen womenand andover over20% 20%from fromananunderrepresented underrepresented ethnicity.

ethnicity. will be materially the ethnic of makeup of our next cohort. DATA SETethnic : BYon GENDER We will beWe materially improvingimproving on the makeup our next cohort. Atomico Angel Programme cohorts breakdown by gender and by ethnicity Atomico Angel Programme by gender Women and by ethnicity

L EGEND cohorts breakdown

DATA SET : BY GENDER

By gender

Men

L EGEND

33%

37%

40%

Women Men 33%

37%

40%

Over 60% of angels in the rst two cohorts were women67% and over 20% from an underrepresented ethnicity. 60% We will be materially improving on the ethnic makeup of our next cohort. Atomico Angel Programme cohorts breakdown by gender and by ethnicity L EGEND

DATA SET : BY ET H NICIT Y Cohort 1

67%

Cohort 2

63%

Total

60%

63%

by ethnicity SOU RCE:

Ethnically underrepresented angel

Cohort 1

Ethnically represented angel

Cohort 2

SOU RCE: 75%

25%

Cohort 1

Total

80%

78%

20%

22%

Cohort 2

Total

SOU RCE:

Comparing angel investors who have made up to 10 investments with angel investors in the Atomico program, we can see the stark difference in the makeup of the founders they back. Comparing angel investors who have made up to 10 investments with angel investors in the

Share of underrepresented Comparing angel investors whomade haveupmade up with angel investors the Atomico program, 60 to 10 investments Comparing angel investors who have to 10 investments with angel investors in the Atomicoinprogram, founders in portfolio 55% makeup of the founders they back. Atomico program, wedifference caninsee stark in they the can the stark in the makeup of the founders wewe can see see the stark difference thethe makeup ofdifference the founders back. they back.

57%

of survey respondents versus Atomico Angels

Share of underrepresented Share of underrepresented founders in portfolio L EGEND founders in portfolio of survey respondents Less or equal to 25% of survey respondents versus Atomico Angels

% of deals

versus Atomico Angels Between 26 and 50%

Less Between 26or andequal 50% to 25% Over 50% Between 26 and 50%

Over 50%

30%

Underrepresented in the context of Atomico

angels is de ned as Women founders and NOTE:

20%

40 20

30%

SOU RCE:

20% 25%

SOU RCE: 0

20% Survey angels with up to 10 investments

Survey angels with up to 10 investments

founders from underrepresented ethnicity.

Underrepresented in the context of Atomico angels is de ned as Women founders and NOTE: founders from underrepresented ethnicity.

13%

30%

25%

57%

25%

20 0

NOTE:

57%

55%

% of deals

L EGEND Less or equal to 25%

% of deals

L EGENDOver 50%

60 4055%

SOU RCE:

Underrepresented in the context of Atomico angels is de ned as Women founders and founders from underrepresented ethnicity.

112

13%

Underrepresented Atomico angels 13%

Underrepresented Atomico angels

03.4

Angels

Drilling down on the portfolio diversity makeup of Atomico angels, there are some interesting differences. Given large of women on of theAtomico program, there there is a much larger representation of women Drillingthe down onproportion the portfolio diversityangels makeup angels, are some founders in the angels portfolio, with over 35% of angels stating 50%+ of companies interesting differences. Given the large proportion of women angels on the program,in their portfolio has at least founder. Although the share of angels with in a number of investments involving at least one thereaiswomen a much larger representation of women the angels portfolio, with Drilling down on the portfolio diversity makeup offounders Atomico angels, there are some interesting differences. Drilling down on the diversity makeup of Atomico angels, there are some differences. founder from anportfolio underrepresented ethnicity is much lower at 13%, it is interesting likely to change with more over 35% of angels stating 50%+ of companies in their portfolio has at least alarger women Given the large proportion of women angels on the program, there is a much representation of women Given the large proportion of women angels on the program, there is a much larger representation of women underrepresented ethnicity in future cohorts. Indeed, the six angels who are themselves from founder. Although the share ofover angels with a number of50%+ investments involving founders in the angels portfolio, with 35% of angels stating of companies in theiratportfolio has atportfolio has at founders in the angels portfolio, with over 35% of angels stating 50%+ of companies in their underrepresented ethnicity collectively led 20 investments, of which 55% were backing founders from least a women founder. Although the share angelsofwith a number of investments involving one at least one founder from an underrepresented ethnicity is much lowerofatinvestments 13%, it is at least least aone women founder. Although theofshare angels with a number involving underrepresented ethnicity. at 13%, isatlikely toitchange with founder an underrepresented ethnicity is much lower lower 13%, is likely to more change founder from an with underrepresented ethnicity isethnicity much likelyfrom to change more underrepresented initfuture cohorts. Indeed, the with more underrepresented ethnicity in future cohorts. Indeed, the six angels who are themselves from underrepresented in future cohorts. Indeed, the six angels who are led themselves from six angels whoethnicity are ethnicity themselves from underrepresented ethnicity collectively 20 underrepresented collectively led 20 investments, of which 55% were backing founders from Share of angels basedethnicity on share collectively led 60 underrepresented 20 investments, of which 55% were backing founders from investments, of which 55% were backing founders from underrepresented ethnicity. 57% underrepresented of companies inethnicity. portfolio by underrepresented ethnicity.

57%

team diversity makeup

Share of angels based on share L EGEND in portfolio by of companies Share of angels based on share team makeup Less or equal to in 25% ofdiversity companies portfolio by % of Atomico angels

Over 50%

Less or equal to 25%

L EGEND

Between 26 and 50%

Less or equal to 25%

Over 50%

Between 26 and 50%

% of Atomico angels % of Atomico angels

Between 26 and 50% team diversity makeup

L EGEND

30% 35%

35% 30%

30%

57%

35%

30%

35%

13%

35%

30%

30% 13%

13%

Share of companies with underrepresented founders 13%

Share of companies with underrepresented founders

NOTE: SOU RCE:

Share of companies with women founders

SOU RCE:Share of companies with underrepresented founders

Based on Atomico angels from cohort one NOTE: and two investments to date.

35%

30%

20 0 0

57%

40 30% 20

Over 50%

57%

60 40

Share of companies with foun underrepresented ethn

Share of companies with founders from underrepresented ethnicity

Share of companies with women founders

Share of companies with foun underrepresented ethn

Based on Atomico angels from cohort one and two investments to date.

NOTE:

SOU RCE:

Based on Atomico angels from cohort one and two investments to date.

Creating a stronger network of angels is a way to build a stronger European start-up ecosystem... But one of the key obstacles to creating such a network is accessibility.

I think creating a stronger network of angels is a way to build a stronger European start-up ecosystem. Angel investors usually bring more market expertise and personal experience and passion to the start-ups they invest in, which is so valuable in the early days. But one of the key obstacles to creating such a network is accessibility. Angel investing is still something that only very few people are doing and are able to do. And there aren’t many resources to support them or attract new ones. There is this notion that to be an angel investor, one has to be able to invest big checks. In some countries that is still the case due to laws that are tailored more towards professional investors.

Gulnaz Khusainova Easysize Founder

While we’re waiting for legislation to catch up, it has been great to see that crowd-investing platforms, like Funderbeam, are becoming more popular. Another example is the launch of an angel syndicate by Unconventional Ventures.

113

Value Creation

Who said Europe couldn’t build tech giants?

www.stateofeuropeantech.com

2020 saw 18 new 1B+ companies, Klarna and UiPath become $10B+ companies, and Adyen and Spotify pass $50B valuations. The ecosystem is now systematically recycling experienced talent to build new generations of companies. And if exit and M&A numbers are still far behind the US, there are hopeful signs that this is changing.

114

and support from

04.1

Seed to $1B+ Methodology Together with our partner Dealroom, we set out to find out what proportion of Seed-funded startups make it to a $1B+ valuation in Europe. This was inspired by an excellent analysis for the US market shared by CB Insights. Our first step was to create a clean dataset; this involved creating filters that may exclude certain companies. These filters were used to exclude: crowdfunding rounds, rounds with no investor, and rounds involving companies without a founding date. This left a clean, standardised cohort of 1,064 companies that raised a qualifying Seed round between 2010 and 2013. The lifecycle of these companies has been tracked until November 2020.

exited, we can explore when those exits happened and, when disclosed, at what valuation. The data also distinguishes companies that fail to raise further rounds of funding or make it to an exit. These companies are either out of business or have become self-sustaining companies. A key limitation of this analysis is the inability to specifically separate those that are out of business with those that are self-sustaining.

The dataset quantifies their fundraising journey, path to exit and, ultimately, shows whether the companies reached a $1B+ valuation. We can see what rounds the companies raised, how much they raised and how long it took them along each step of the journey. For those companies that

Dealroom’s analysis for Europe is presented alongside the US data from CB Insights for illustrative benchmarking purposes. It should be noted that there may be minor differences in the underlying methodology, although we do not believe these would materially distort the findings.

Journey of a European VC-backed tech startup

1,064

European Seed-funded companies

at least 13 $1B+ companies (1.2%)

518

261

122 (11%)

65 (6%)

2nd Round

3rd Round

4th Round

5th Round

(49%)

(25%)

115

(3%)

6th Round

04.1

Seed to $1B+ Companies

BEC OMING A UNIC OR NBEC OMING A UNIC OR N

Let's get straight to the punchline. Dealroom's analysis et's get straight to the punchline. Dealroom's analysis that a Seed-funded company building from Europe ound thatfound a Seed-funded company building from Europe BECOMIN G A UN ICORN Let’s get straight to the punchline. Dealroom’ s analysis found that a Seedas the same probability of scaling to aof $1B+ valuation as BEC OMING A UNIC OR N has the same probability scaling to a $1B+ valuation as funded company fromDealroom' Europe the same probability of scaling Let's get straightcompany tobuilding the punchline. shas analysis he average Seed-funded building from the US. from the US. the average Seed-funded company building company raising a Seed round raising have a shot of becoming a unicorn found that a Seed-funded company building from Europe company a Seed round have a shot of becoming a unicorn to a $1B+ valuation as the average Seed-funded company building from ccordingAccording to the funnel 13 ofanalysis, the 1,064 13 companies toanalysis, the funnel of the 1,064 has the same probability of scaling to a $1B+ valuation as companies n the starting cohort have gone on to achieve a $1B+ 13 of the 1,064 companies in the US. According to the funnel analysis, the average Seed-funded company building from the US. a $1B+ in the starting cohort have gone on to achieve company raising a Seed round have a shot of becoming a unicorn aluation, the equivalent tocohort 1.2%. Inhave other words, a company starting gone on to achieve a $1B+ valuation, equivalent According to the funnel analysis, 13 of the 1,064words, companies companies raising a Seed valuation, equivalent to 1.2%. In other a company aising a Seed round of funding in Europe has about a 1-inin1.2%. the starting cohort have a gone on to achieve a $1B+ to In other words, company raising a Seed round of funding in round have a shot of raising a Seed round of funding in Europe has about a 1-in-100 shot ofvaluation, becoming a unicorn. equivalent to 1.2%. In other words, a company

1 in 100 1 in 100 1 in 100

Europe about aof1-in-a-100 shot ofhas becoming a unicorn. a-100 shot of becoming a unicorn. raising ahas Seed round funding in Europe about a 1-in-

1 in 100 becoming a unicorn

a-100 shot of becoming a unicorn.

Share of companies in initial cohort that reached a $1B+ Share of companies in initial Shareby of companies valuation or higher, region in initial

cohort reached a $1B+ cohort that that reached a $1B+ valuation or by region valuation orhigher, higher, by region

United States

L EGEND

Europe

Europe United States United States

1.22%

0.75

0.50

0.25

0.00

SOU RCE:

1.07% 1.07%

1.00

0.75

0.50

0.25

0.00

SOU RCE:

1.00 % of companies

L EGEND

1.25

% of companies

Europe

1.25

1.00 % of companies

L EGEND

1.22%

1.25

0.75

0.50

0.25

companies %% ofofcompanies

0.00

% of companies

SOU RCE:

Selected European $1B+ Companies This cohort included breakout companies such as Supercell, TransferWise, Auto1 Group, GetYourGuide, Doctolib, HelloFresh and others that all scaled to a $1B+ valuation. As the cohort continues to mature, the actual number of $1B+ companies will likely continue to grow.

116

1.07%

04.1

Seed to $1B+ Companies

The unicorn conversion rate is a helpful measure to project the expected number of new $1B+ companies Theunicorn unicorn conversion raterate is a helpful measure to project expected of new $1B+ companies The conversion iseach a helpful measure tothe project thenumber expected number of new $1B+ being being started across Europe year, using the total number of companies that raise a companies rst round of funding being started across Europe each year, using the total number of companies that raise a rst round of funding started across Europe each year, using the total number of companies that raise a first round of funding in ininEurope given asdenominator. the denominator. Based onvolume the current around Europe inina a given yearyear as the Based on the current of aroundvolume 1,500 rstof rounds of 1,500 rst rounds of Europe a year given year asit's the denominator. Based on current volume of around 1,500 first rounds funding fundingin per in Europe, reasonable to expect Europe tothe produce 20+to $1B+ companies per$1B+ year, every funding per year in Europe, it' s reasonable to expect Europe produce 20+ companies perofyear, every year. per year in Europe, it’s reasonable to expect Europe to produce 20+ $1B+ companies per year, every year. year. Projected number of $1B+

potential companies Projected numberstarted of $1B+ per year in Europe by potential companies conversion rate and by started per yearofin�rst Europe volume roundsby conversion rate and by L EGEND volume of �rst rounds

1.20%

L EGEND 1.30% 1.10%

20 15

# of companies

1.10%

1.20%

20 17

BEC OMING A UNIC OR N

Let's get straight to the punchline. Dealroom's analysis 1.30% 0 found that a Seed-funded company building from Europe 1,250 1,500 1,750 has the same probability of scaling to a $1B+ valuation as 5 the average Seed-funded company building from the US. company raising a Seed round have a shot of becoming a unicorn RCE: According to the funnel analysis, 13 of the 1,064SOU companies 0 in the starting cohort have gone on to achieve a $1B+ 1,250 1,500 valuation, equivalent to 1.2%. In other words, a company The reality is, however, that most companies doit not make ita unicorn. to becoming a unicorn. In fact, 43% of companies raising a Seed funding inthat Europe has about a 1-inTheround realityof is, most companies do not make to becoming In fact, 43% of companies The reality is,however, however, that companies do not make it to becoming a unicorn. Inup fact, of companies a-100 shotdo ofdobecoming unicorn. not past rstmost round of funding. 77% of up companies endor out43% of business or selfnot make make itait past the the rst round of funding. Eventually,Eventually, 77% of companies end out of business self-

1 in 100

1,750

SOU RCE: dosustaining, not make itnot past the firstfurther round of funding. Eventually, ofalso companies end up out or selfi.e. raising any rounds ofrounds funding and also not77% nding a pathnot to exitnding either M&Aof or business sustaining, i.e. not raising any further of funding and aviapath to exit either via M&A or IPO. sustaining, i.e. not raising any further rounds of funding and also not finding a path to exit either via M&A or IPO. IPO. in initial Share of companies

1.00

0.50

Europe United States

70%

80 60% 60

0.25

0.00

67% 62%

58%

49%

Cumulative % of companies

0.75

77%

1.07% 74%

Cumulative % of companies

United States

L EGEND

% of companies

(%) that do not raise again after Cumulative share of companies each speci�ed round of funding, L EGEND (%) by that regiondo not raise again after Europe each speci�ed round of funding, United States byL EGEND region Europe

1.22%

1.25

cohort that reached a $1B+ Cumulative share of companies valuation or higher, by region

74%

70% 62%

60%

58%

43% 38%

49% 43% 38%

Seed round

3rd round% of companies4th round

2nd round

5th round

BEC OMING A UNIC OR N

6th round

Let's get straight to the punchline. Dealroom's analysis SOU RCE: SOU RCE: found that a Seed-funded company building from Europe 0% has the same probability of scaling to a $1B+ valuation as 0 Seed round 2nd round 3rd round 4th round 5th round the average Seed-funded company building from the US. company raising a Seed round have a shot of becoming a unicorn According to the funnel analysis, 13 of the 1,064 companies The probability of making it through to later and later rounds ofprecipitously funding drops precipitously following The probability making through to later and later rounds of funding following the following Seed SOU The probability of making itachieve through later andRCE: later rounds ofdrops funding drops precipitously the Seed the Seed in the starting cohort haveof gone onitto ato $1B+ Funding round. While 49% of the starting cohort succeed in raising a second round of funding, only 3% of Funding round. While 49% of the starting cohort succeed in raising a second round of funding, only 3% of valuation, equivalent to 1.2%. In other words,starting a company Funding round. While 49% of succeed in raising around second roundsimilar of funding, only 3% of companies progress through to athe sixth ofcohort funding. Thefunding. drop-off rate is broadly across companies to about around sixth round of Thebydrop-off rate by round is broadly similar across raising a Seed round of progress funding in through Europe has a 1-inEurope and progress US, though thereto areaintriguing differences for companies raisingrate theirby third and fourth rounds companies sixth of funding. The drop-off round is broadly similar across Europe andthe the US, through though there areround intriguing differences for companies raising their third and fourth rounds a-100 shotEurope ofofbecoming a unicorn. funding, which are raised by fewer companies in the European cohort than in the US cohort. This adds more

1 in 100

andfunding, the US, though there are intriguing differences forincompanies raising their third and fourth funding, of which are raised by gap fewer companies the European cohort inthe the US rounds cohort.ofThis adds more fuel to the re that there is a funding at the post-Series A, in-between phase of growththan around Series which are raised by fewer companies in the European cohort than in the US cohort. This adds more fuel to the fireSeries B and Series C stage. fuel to the re that there is a funding gap at the post-Series A, in-between phase of growth around the Share of companies in initial 1.22% 1.25 that there is a funding gap at the post-Series A, in-between phase of growth around the Series B and Series C stage. and Series cohort thatBreached a $1B+ C stage.

valuation or higher, Shareby of region companies (%) that

United States

L EGEND

0.75

0.50

Europe United States

0.25

0.00

100

SOU RCE: SOU RCE:

75 % of companies

Europe

% of companies

Share of companies (%) that raise each subsequent round of L EGEND United States funding, Europe by region

L EGEND

1.07%

100

1.00

% of companies

raise each subsequent round of funding, by region

Seed round

% of companies4th round 3rd round

2nd round

5th round

6th round

Seed round

2nd round

117 SOU RCE:

3rd round

4th round

5th round

04.1

Seed to $1B+ Companies

BEC OMING A UNIC OR N

These interesting differences the relative probability of raising a subsequent of funding are more These to interesting differences inin the relative probability of raising a subsequent roundround of funding are more et's get straight the punchline. Dealroom's analysis easily represented by looking at the share of companies at each stage that goes on to raise the next ound that easily a Seed-funded company building fromshare Europe represented by looking at the of companies at each stage that goes on to raise the next sequential as the same probability of scaling ain$1B+ valuation These interesting differences the relative probability of raising subsequent of areraise more sequential round. The to most signi cant divergence isafor companies to a third round round. The most significant divergence isas for companies seeking toround raiseseeking a funding third round of funding (SeriesofB),funding easily represented byit looking at the share of companies at each stage that goes on toraising raise theanext he average Seed-funded company building from the US.probability (Series B), though is also clear that the of successfully fourth (Series C) fth of (Series D) company raising a Seed round have shot (Series of becoming a unicorn though it isround. also clear that the1,064 probability of is successfully raising atofourth C) of orafunding fifth D)orround The most cant divergence for companies seeking raise a (Series third round ccording round tosequential the funnel analysis, 13 ofsigni the companies of funding is also somewhat lower in Europe versus the US. Interestingly, if companies do succeed in (Series B), though it is also clear that in theaEurope probability of successfully raising a fourth (Series C) or fth do (Series D) funding is also lower the US. Interestingly, if companies succeed in making it n the starting cohort havesomewhat gone on to achieve $1B+ versus making it through these later growth stages, the probability of then raising a sixth round is very high. It is round of funding is also somewhat lower in Europe versus the US. Interestingly, if companies do succeed in aluation, equivalent to 1.2%. Ingrowth other words, a company through later stages, thethe probability then raising a sixth round ishigh. very It is important not making itthese through later growth stages, probability of then raising a sixth round is very Ithigh. is be important not tothese overreach in analysing the data,of but one theoretical argument could that Europe's aising a Seed round of funding in Europe has about a 1-inimportant not to overreach in analysing the data, but one theoretical argument could be that Europe' s to overreach in analysing the data, one theoretical argument could bewhen that Europe’ s strongest companies survive thebut funding gap at Series B/C and that, they emerge, theycompanies are then able to -100 shotstrongest ofstrongest becoming a unicorn. companies survive the funding gap at Series B/C and that, when they emerge, they are then able to

1 in 100

survive the funding gap at Seriespools B/C andcapital that, when they emerge, theystage are then able to tap into more readily market tap more readily available at Equity the Growth Equity (Series where the funding market tapinto into more readily available pools of capitalof at the Growth stage (Series D+) where the fundingD+) available pools of capital at the Growth Equity stage (Series D+) where the funding market is more liquid. more liquid. isismore liquid.

Share of companies in initial cohort that reached a $1B+ Shareby of region companies (%) that valuation or higher,

1.22%

1.25

Europe

0.75

0.50

0.25

0.00

SOU RCE:

51%

50%

48%

United States

60 49%

% of companies

United States L EGEND

63% 49%

% of companies

Europe

1.07%

63% 60

1.00 % of companies

Share (%)that that raisedof thecompanies speci�ed round went on to raise a subsequent raised the speci�ed round that L EGEND round, by region went on to raise a subsequent Europe round, by region L EGEND United States

56%

53%

48%

47%

50%

48%

51%

53%

56% 48%

47% 31%

31%

20 % of Seed that a raise 2nd round (Series A)

% of 2nd round that raise a 3rd % of 3rd round that raise a 4th % of 4th round that raise a 5th % of 5th round that raise a 6th round (Series B) (Series C) round (Series D) round (Series E) %round of companies

SOU RCE:

% of Seed that a raise 2nd round (Series A)

% of 2nd round that raise a 3rd % of 3rd round that raise a 4th % of 4th round that raise a 5th % of 5th round that rais round (Series B) round (Series C) round (Series D) round (Series E)

BEC OMING A UNIC OR N

et's get straight to the punchline. Dealroom's analysis SOU RCE: ound that a Seed-funded company building from Europe as the same probability of scaling to a $1B+ valuation as It’sSeed-funded often said that European companies sell out earlier, but the cohort analysis would suggest this isn’t the he average company building from the US. company a Seed round havewould a shot of becoming a unicorn It' s often said that European companies sell out earlier, butraising the cohort analysis suggest this isn't the ccording case. to the In funnel 13 of the are 1,064 companies fact,analysis, US companies actually more than 50% more likely to exit after a first round of funding. case. In fact, US companies are actually morebut than 50% more exit after a the rst round of funding. This It'scohort often said that European companies sell out earlier, the cohort analysislikely wouldto suggest this isn't n the starting have gone on to achieve a $1B+ This should not be seen are as actually a negative; in fact, more it could be interpreted as evidence of both a willingness to case. Innot fact, US companies more than 50% likely to exit after aasrst round of funding. This should seen as a negative; in fact, it could be interpreted evidence of both a willingness to "fail aluation, equivalent tobe 1.2%. In other words, a company “fail faster”, aas healthy Arguably, benefit from should not beand a negative; inenvironment. fact, it could be interpreted asEurope evidencestands of both atowillingness to "fail more liquid and earlier faster", and aseen healthy exitexit environment. Arguably, Europe stands to bene t from more liquid and earlier aising a Seed round ofafunding in Europe has about a 1-infaster", and healthy and exit environment. Arguably, Europebe stands to bene t from mores liquid and earlier recycling of talent capital. In fact, it could argued that Europe’ challenge isisnot tech -100 shotrecycling ofrecycling becoming a unicorn. oftalent talent capital. fact,be it argued could that be argued that Europe's challenge notthat thatEuropean European tech Europe's challenge is not that European tech of andand capital. In fact,In it could

1 in 100

companies exit too early, but that they companies exit too early, but that don't exitdon’t early exit enough. exit too early, butthey that they don't exitearly earlyenough. enough.

Share of companies in initial Share of companies (%) that exit cohort that reached a $1B+ Share of region companies (%) that exit after the rst round of funding valuation or higher, by

14%

0.50

1.07%

14%

0.25

% of companies

0.75

% of companies

Europe United States

1.22%

1.00 % of companies

L EGEND

by region after the rst round of funding by region

1.25

5 0

Europe

0.00

United States

% of companies SOU RCE:

SOU RCE:

Europe

SOU RCE:

118

United States

1 in 100

found that a Seed-funded company building from Europe has the same probability of scaling to a $1B+ valuation as the average Seed-funded building from the US. EARLY EXIT 04.1 Seed company to $1B+ Companies company raising a Seed round have a shot of becoming a unicorn According to the funnel analysis, 13 of the 1,064 companies in the starting cohort have gone on to achieve a $1B+ valuation, equivalent to 1.2%. In other words, a company raising a Seed round of funding in Europe has about a 1-inThe probability of an exit after each round of funding US companies are actually a-100 shot of becoming a unicorn. 50% likely to exitof after is lower for the European cohort at every step of the The probability of an exit after each round is funding is lower for the European cohort at every step of the more The probability of an exit after each round is funding is lower for the European cohort at every step the a first round of funding journey compared compared to the US cohort. journey to the US cohort. compared to the US cohort. Share of companies in initial than European ones 1.22% 1.25

50%

cohort that reached a $1B+ Shareby of region companies (%) that exit valuation or higher,

United States

Europe United States L EGEND

Europe

0.50

14%

16%

15%

13%

15 10

United States 5

0.25

19% 15%

0.75

SOURCE: 1.07%

19%

% of companies

Europe

1.00

% of companies

L EGEND

% of companies

after the ed round(%) that exit Share of speci companies without raising again by region after the speci ed round without L EGEND raising again by region

13%

15%

14% 13%

13% 6%

BEC OMING A UNIC OR N

Let's get straight to the punchline. Dealroom's analysis 0 found that a Seed-funded company building0.00 from Europe Seed round 2nd round round 4th round 5th round % of3rd companies 5 has the same probability of scaling to a $1B+ valuation as SOU RCE: the average Seed-funded company building from the US. SOU RCE: company raising a Seed round have a shot of becoming a unicorn According to the funnel analysis, 13 of the 1,064 companies 0 in the starting cohort have gone on to achieve a $1B+ Seed round 2nd round 3rd round 4th round valuation, equivalent to 1.2%. In other words, a company raising a Seed roundatofthe funding in Europe has about a 1-inLooking cumulative cohort that SOU RCE: at theunicorn. cumulativedevelopment developmentof ofthe theshare shareofofcompanies companieswithin withineach each cohort that exit after each a-100 shotLooking ofLooking becoming at theacumulative development of the share of companies within each cohort that exit after each

1 in 100

5th

exit after each successive funding round shows theofdelta terms ofstarts exit likelihood successive funding round delta inhow terms exit in likelihood withgap a meaningfully large gap successive funding round showsshows how thehow deltathe in terms of exit likelihood starts with a meaningfully large starts with a meaningfully large gap from the and grows increasingly larger over time. fromthe the outset and grows increasingly larger over time.outset from outset and grows increasingly larger over time.

Share of companies in initial cohort that reached a $1B+ Cumulative % of companies that valuation or higher, by region

Europe

L EGEND United States Europe

0.75

0.50

United States 0.25

0.00

1.07%

3 29%

27%

31%

27%

Cumulative % of companies

United States

L EGEND

29%

1.00 Cumulative % of companies

Europe

Cumulative % ofeach companies have exited after speci ed that round, by region have exited after each speci ed round, by region

% of companies

L EGEND

1.22%

1.25

21%

19%

20%

21%

15%

14%

Seed round

15%

14%

20%

19%

2nd round

% of3rd companies round

4th round

5th round

SOU RCE: SOU RCE:

Seed round

2nd round

3rd round

4th round

SOU RCE:

Photo by: Julius Konttinen

119

5th

04.1

Seed to $1B+ Companies

While exit valuations are undisclosed most of the time, it’s interesting to look at the relative volume of exits

While exit exit valuations are undisclosed most the time, it' s interesting to look the volume of$500M, exitsvolume at and 13 While valuations are undisclosed most of the time, it'sAinteresting to look theover relative ofat exits at BEC OMING UNIC OR N at at different exit value thresholds. TheofEuropean cohort includes one exit ofrelative $1B+,atfour different exit value thresholds. The European cohort includes one exit of $1B+, four over $500M, and 13 at et's get straight to the punchline. Dealroom's analysis different exit value thresholds.the Thevast European cohort includes one exit ofand $1B+, four over $500M, and 13 at $100M or more. Unsurprisingly, majority of exits are small in scale it’ s a reasonable assumption $100M or more. Unsurprisingly, the vast majority of exits are scale and it's a reasonable to assumption to ound that a Seed-funded company building from Europe $100M orvast more. Unsurprisingly, the vast of small exits in are small scale and it's aassumption reasonable While exit valuations are undisclosed most of themajority time, it's interesting to look at thein relative volume of exits at that the of with undisclosed valuations are also smallest ofexit therange exit range (i.e. that the vastmajority of exits with undisclosed valuations are also on on thethe smallest end end of the as themake same probability ofmajority scaling toexits a $1B+ valuation as includes different exit value thresholds. The European cohort one exit of $1B+, four over $500M, and 13 at make that the vast majority of exits with undisclosed valuations are also on the smallest end of the exit range (i.e.less less than $50M). Nonetheless, exits of any size are crucial to the ecosystem given the role that they play in than $50M). Nonetheless, exits of any size are crucial to the ecosystem given the role that they play in he average Seed-funded company building from the US. $100M or more. Unsurprisingly, the vast majority are small in scale and to it'as the a reasonable assumption tothe company raising Seed round have agiven shot of becoming a unicorn any size are crucial ecosystem role that they play in (i.e. less than $50M). Nonetheless, exitsofofexits driving liquidity to enable the systematic recycling of experienced talent and capital toof help and new ccording tomake the funnel analysis, 13 ofof the 1,064 that the vast exits withcompanies undisclosed valuations are also on the smallest end the build exitto range driving liquidity tomajority enable the systematic recycling of experienced talent and capital helpfund build and fund driving toNonetheless, enable thecompanies systematic of experienced talent and capital tonot build and fund new generations of companies. in recycling this cohortto that exited meaningfully, but perhaps with (i.e. lessliquidity than $50M). exits any size are crucial ecosystem given the role that they play inhelp n the starting cohort have gone onSeveral to achieve aof $1B+ new generations of companies. Several companies in the this cohort that exited meaningfully, butperhaps perhapsnot with generations oftocompanies. Several companies in this cohort that exited meaningfully, but driving liquidity enable the systematic recycling of experienced talent andNevera capital to help(~$100M) build andhave fund new giant outcomes, such as ($219M), Wunderlist (<$200M) and La Roja gone on to aluation, equivalent to 1.2%. In Quandoo other words, a company not with giant outcomes, such as Quandoo ($219M), Wunderlist (<$200M) and La Nevera Roja (~$100M) have on to generations of companies. Several companies in this cohort that exited meaningfully, but perhaps not with giant outcomes, such as Quandoo ($219M), Wunderlist and Laleading Nevera (~$100M) have gone anround outsized impact onEurope their local their(<$200M) alumni network, to Roja new generations aising have a Seed of funding in has ecosystems about a 1-in-through gianton outcomes, such as Quandoo ($219M), Wunderlist (<$200M) and La Nevera Roja (~$100M) have gone on to gone to have an outsized impact on their local ecosystems through their alumni network, leading to new of startups (e.g. Pitch, Superlist) or VCs (e.g. Cherry Ventures, Samaipata Ventures). -100 shothave of becoming a unicorn. an outsized impact on their local ecosystems through their alumni network, leading to new generations

1 in 100

have an outsized impact on their local ecosystems through their alumni network, leading to new generations

generations of Pitch, startups (e.g.orPitch, orCherry VCsSamaipata (e.g. Cherry Ventures, of (e.g. Pitch, Superlist) orSuperlist) VCs (e.g. Ventures, SamaipataSamaipata Ventures).Ventures). ofstartups startups (e.g. Superlist) VCs (e.g. Cherry Ventures, Ventures). 250

Number of exits by exit value Share of companies in initial andreached byNumber region cohort that a $1B+ of exits by exit value Number of exits by exit value valuation or higher, region and byby region

1.25

200 1.00

United States

Europe

United States

200 0.75

150

100

50 50

0.25

192

150

100 100

0.50

1.07%

227

192 192

# of exits

Europe

United States

200

## ofof exits exits

L EGEND Europe

L EGEND United States

% of companies

Europe

1.22%

250

227

and by region L EGEND

L EGEND

227

250

40 23

31 13

BEC OMING A UNIC OR N

25 9

$1B+ 50 et's get straight to the punchline. Dealroom's analysis Undisclosed/<$50M 40 $50M+ $200M+ $500M+ % of$100M+ companies 31 25 ound that a Seed-funded company building from Europe 23 SOU RCE: 13 9 as the same probability of scaling to a $1B+ valuation SOU RCE: as SOU RCE: 0 he average Seed-funded company building from the US. Undisclosed/<$50M $50M+ company raising a Seed round have a $100M+ shot of becoming $200M+ a unicorn ccording to the funnel analysis, 13 of the 1,064 companies n the starting cohort have gone on to achieve a $1B+ SOU RCE: Looking at theto distribution of exits by exit value as a percentage of the initial starting cohort further aluation, equivalent 1.2%. In other words, a company that the US market ishas more liquid atvalue every scale of exit, whether for large $1B+ exitscohort or for further aising demonstrates a Seed round of funding in Europe about aexit 1-inLooking at the distribution of exits by Looking at the distribution of exits byexit valueasasaapercentage percentageofofthe theinitial initialstarting starting cohort further Looking at the distribution of exits by exit value as a percentage of the initial starting cohort further smaller exits in the sub-$50M range. -100 shot demonstrates of becoming a unicorn. that forfor large $1B+ exits that the the US US market marketisismore moreliquid liquidatatevery everyscale scaleofofexit, exit,whether whether large $1B+ exits or for

0.00

Undisclosed/<$50M

$50M+

$100M+

$200M+

1 in 100

$500M+

1 $1B+

$500M+

$1B+

demonstrates that the US market is more liquid at every scale of exit, whether for large $1B+ exits or for

orsmaller for smaller exits insub-$50M the sub-$50M range. exits thethe sub-$50M range.range. smaller exitsinin

Europe L EGEND

Europe United States United States

L EGEND United States Europe United States

20.0

0.75

0.50

15.0

0.00

1.07%

20.3%

20.0 18.0%

15.0

10.0 10.0

5.0

0.25

1.22%

18.0% 20.3% 18.0%

% of %companies of companies

Europe

20.3%

20.0

1.00 % of companies

L EGEND

by region exited at different exit values, L EGEND by region

1.25

5.0

0.0 0.0

% of companies

Share of companies Share of companies in initial (%) that exited at different cohort that reached a $1B+ exit values, Share of companies (%) that valuationby orregion higher, Share of companies (%) that exitedby atregion different exit values,

15.0

10.0 3.6% 2.2% 2.2%

Undisclosed/<$50M 5.0 Undisclosed/<$50M

3.6%

$50M+ $50M+

2.8%

1.2%

$100M+

% of$100M+ companies

SOU RCE: SOU RCE:

0.0

Undisclosed/<$50M

SOU RCE:

120

0.8%

$200M+

$50M+

0.4%

$200M+

3.6%

2.2%

SOU RCE:

2.2%

0.8%

1.2%

$500M+

0.4% 0.1%

$100M+

0.4%

$500M+ $1B+

2.8% 1.2%

1.2%

0.4%

0.1% $1B+

2.2% 0.8% $200M+

0.4%

1.2%

$500M+

0.4

0.1% $1B+

1 in 100

found that a Seed-funded company building from Europe has the same probability of scaling to a $1B+ valuation as the average Seed-funded company building from the US. company raising a Seed round have a shot of becoming a unicorn to $1B+ Companies According 04.1 to the funnelSeed analysis, 13 of the 1,064 companies in the starting cohort have gone on to achieve a $1B+ Theequivalent cohort analysis alsoInallows us to compare the funding journey of the average company. The median valuation, to 1.2%. other words, a company raised across six rounds with the cohort is $90M, very similarjourney to the funding ofcompany. the medianThe US median raising amount a Seed round of funding in Europe has about a 1-inThe cohort analysis also allows us to compare the funding of thejourney average The cohort analysis also allows us to compare the funding journey of the average company. The median company. a-100 shot of becoming a unicorn. The cohort analysis alsosix allows us towith compare the funding journey the average The median amount raised across rounds the cohort is $90M, very of similar to the company. funding journey of theamount median US amount raised across six rounds with the cohort is $90M, very similar to the funding journey of the median US

raised across six rounds with the cohort is $90M, very similar to the funding journey of the median US company. company. company. 100

Europe United States Europe United States

L EGEND United States Europe

1.00

0.75

0.50

United States

1.22%

100

Cumulative amount raised ($M) ($M) Cumulative amount raised

Europe

after raising each subsequent (based on median) by companies roundraising of funding by region after each subsequent L EGEND round of funding by region L EGEND

% of companies

L EGEND

1.25

100

50 50

0.25

0.00

1.07%

Cumulative amount raised ($M)

amount Share of Cumulative companies in initial raised ($M) (based on median) cohort that reached a $1B+ by companies Cumulative amount raised ($M) raising subsequent valuationafter or higher, byeach region Cumulative amount raised ($M) (based on median) by companies round of funding by region

Seed round Seed round

Seed >Seed 2nd > 2nd

Seed > 3rdSeed > 3rd

BEC OMING A UNIC OR N

Seed > 4th

Seed > 4th Seed > 5th

% of companies

Seed > 6th Seed > 5th

Seed > 6th

Let's get straight to the punchline. Dealroom's analysis SOU RCE: SOU Europe RCE: SOU RCE: found that a Seed-funded company building from 0 has the same probability of scaling to a $1B+ valuation as Seed round Seed > 2nd Seed > 3rd Seed > 4th Seed > 5th the average Seed-funded company building from the US. company raising a Seed round have a shot of becoming a unicorn Taking thefunnel mean,analysis, however,13shows a1,064 big difference. The mean funding raised across six rounds increases to According to the of theshows companies Taking the mean, however, a big difference. The mean funding raised across six rounds increases SOUfor RCE: $137M incohort thethe European cohort, to $216M the US The cohort. Thisfunding implies that a smaller of Taking mean, however, shows a big difference. mean raised acrossnumber six rounds increases to in the starting have gone on tocompared achieve a $1B+ to $137M in the European cohort, compared to $216M for the cohort. This implies that asmaller smaller numberof Takingin the mean, however, shows a amounts big The meanthe funding raised across sixThis rounds increases to a companies raise signi cantly larger thatto distort average. One possible explanation for this could number $137M the European cohort, compared $216M for the USUS cohort. implies that valuation, equivalent to 1.2%. In other words, a difference. company $137M in the European cohort, compared to $216M for the US cohort. This implies that a smaller number of of companies raise significantly larger that distortthe theaverage. average. Oneand possible explanation for this this could that US founders and investors double down much more aggressively as they scale emerge as companies signi cantly larger amounts that distort One possible explanation for raising be a Seed round of raise funding in Europe has about aamounts 1-incompanies raise signi cantly larger amounts that distort the average. One possible explanation for this could potential category winners, thereby succeeding in raising signi cantly greater sums of capital. could be that US founders and investors double down much more aggressively as they scale and emerge a-100 shot of becoming a unicorn. be that US founders and investors double down much more aggressively as they scale and emerge as

1 in 100

be that US founders and investors double down much more aggressively as they scale and emerge as

aspotential potential category winners, thereby succeeding raising significantly greatersums sumsofofcapital. capital. cantly greater sums of capital. category winners, thereby succeeding in raising signi potential category winners, thereby succeeding in in raising signi cantly greater

amount Share of Cumulative companies in initial raised ($M) (based on mean) by companies Cumulative amount raised ($M) cohort that reached a $1B+ raising each subsequent (based mean) by companies Cumulative amount raised ($M) valuationafter or higher, byon region round of funding by region after raising each subsequent (based on mean) by companies

after raising each subsequent round of funding by region L EGEND

L EGEND

Europe United States Europe United States

United States L EGEND

Europe

0.75

0.50

United States

200

150

100 100

50 50

0.25

1.07%

200

0.00

Cumulative amount raised ($M)

1.00

round of funding by region

Cumulative amount raised ($M)($M) Cumulative amount raised

Europe

200

% of companies

L EGEND

1.22%

1.25

150

100

Seed round

Seed > 2nd

Seed50 round

Seed > 2nd

SOU RCE:

Seed > 3rd

Seed > 4th

Seed > 3rd % of companies

Seed > 5th

Seed > 4th

Seed > 6th

Seed > 5th

Seed > 6th

BEC OMING A UNIC OR N

SOU RCE:

SOU RCE: Let's get straight to the punchline. Dealroom's analysis 0 Seed round Seed > 2nd Seed > 3rd Seed > 4th Seed > 5th found that a Seed-funded company building from Europe has the same probability of scaling to a $1B+ valuation as The development the cohort over time also interesting. The median company took 90 months (7.5 years) SOU RCE: the average Seed-fundedof company building fromisthe US. The development of the cohort overfounding. time is also interesting. The median took years) company a Seedtocompany round have a median shot90 ofmonths becoming(7.5 a unicorn to raise six rounds of funding from initial The trajectory is raising very similar that of the According to the funnel analysis, 13 of the 1,064 companies The development of the cohort over time is also interesting. The median company took US 90 months (7.5 years) to raise six rounds of funding from initial founding. The trajectory is very similar to that of the median US company, except that US on companies tend to raise their rst and second funding rounds much faster. There in the starting cohort gone to achieve a $1B+ toThe raise sixhave rounds of funding founding. trajectory is very similar toyears) that of the median US ofthat the cohort overfrom time isinitial also TheThe median company took 90 months (7.5 areequivalent a fewdevelopment possible explanations. Could be thatinteresting. US companies are much faster tofunding execute? Or could it befaster. that There company, except US companies tend to raise their first and second rounds much valuation, to 1.2%. In other words, aitcompany company, US companies tend to raise their rst and second funding much faster. There to raise sixexcept rounds ofthat funding from initial founding. The trajectory is very similar to that of the medianrounds US investors are happier to invest earlier? Or, perhaps most likely, is it because more companies exit the raising US a Seed round of funding in Europe has about a 1-inare a possible Could it be that USUS companies areare much faster to execute? Or could it be it be that company, except thatexplanations. US companies tend to raise rst and second funding rounds much faster. There are a few few in possible Could it their be that companies much faster to execute? Or could funnel faster the US -explanations. and therefore not drag down the average to raise the next a-100 shot ofare becoming a unicorn. a few possible explanations. Coulddo it be that US companies are much time fastertaken to execute? Or could it be round? that

1 in 100

thatinvestors US investors are happier to invest earlier? perhaps most likely,isisititbecause becausemore morecompanies companies exit exit the most likely, the US are happier to invest earlier? Or,Or, perhaps US investors are happier to invest earlier? Or, perhaps most likely, is it because more companies exit the funnel faster in the US and therefore do not drag down the average time taken to raise the next round? and therefore dodown not drag downtime thetaken average time taken to raise the next round? funnel faster faster inin thethe US -US and-therefore do not100drag the average to raise the next round?

number Share of Cumulative companies in initial of elapsed months (based on median) cohort that reached a $1B+ each subsequent Cumulative number of elapsed valuationbetween or higher, by region Cumulative number of elapsed round of funding by region months (based on median)

United States Europe

L EGEND United States Europe

% of companies

L EGEND

0.75

0.50

United States 0.25

0.00

100

1.07% 74

75 74

50 50

25 25

Cumulative # of elapsed months

1.00

Cumulative # of elapsed monthsmonths Cumulative # of elapsed

months on median) between(based each subsequent round of funding by region between each subsequent L EGEND Europe round of funding by region Europe United States

100

L EGEND

1.22%

1.25

75 56

16 16

Seed > 2nd Seed > 2nd

34 21

Seed > 3rd Seed > 3rd

% ofSeed companies > 4th Seed > 4th

Seed > 5th

Seed > 5th Seed > 6th

Seed > 6th

SOURCE: RCE: SOU RCE: SOU

Seed > 2nd

121 SOU RCE:

Seed > 3rd

Seed > 4th

Seed > 5th

Seed

04.2

$1B+ C OMPA NIES

The number of European tech companies scaling to a $1B+ valuation continues to grow at an impressive speed. Europe saw the creation of 18 new $1B+ tech companies in $1B+including Companies 2020, its 200th overall, and now has 208 in total.

208

tech companies scaled to $1B+ in Europe $1B+ C OMPA NIES

$1B+ COMPAN IES The number number of of European Europeantech techcompanies companiesscaling scalingtotoa$1B+ C OMPA NIES The $1B+ Number of VC-backed and nonThe number of European tech companies scaling to a $1B+ a $1B+ valuation continues to at an impressive valuation continues to grow at grow an impressive speed. VC-backed $1B+ European tech valuation continues to grow at an impressive speed. 200 speed. Europe saw the creation of 18 new Europe sawper the creation new $1B+ tech$1B+ companies in Europe saw the creation of 18 of new18 $1B+ tech companies in tech companies year (cumulative) 2020, including its 200th overall, and now has 208 in total. companies in 2020, including its 200th overall, and 2020, including its 200th overall, and now has 208 in total. tech companies scaled to $1B+ in Europe companies scaledtoto$1B+ $1B+in in Europe Europe L EGEND techtech companies scaled now has 208 in total. 150

208 208

# of $1B+ companies

208

# of non-VC-backed companies

# of VC-backed companies

L EGEND

# of non-VC-backed companies

# of $1B+ companies

# of non-VC-backed companies

200

82 100

200

150

31 50

100

# of VC-backed companies 50 3

# of $1B+ companies

Number of VC-backed and non# of VC-backed companies VC-backed $1B+ European tech

Number of VC-backed and noncompanies per year (cumulative) VC-backed $1B+ European tech L EGEND companies per year (cumulative)

11 102

150

0 100

2010 6

7 22

2011 7 22

20 2012

10 26

2013 50

82 57

2015 66

882016

2017 57

102

2018

2019

2018

2019

# of non-VC-backed companies L EGEND # of VC-backed companies

# of non-VC-backed companies # of VC-backed companies

NOTE:

% of $1B+ companies

L EGEND

100

% %of of$1B+ $1B+ companies companies

Share of VC-backed and # of non-VC-backed companies Share of VC-backed and non-VC-backed $1B+ European non-VC-backed $1B+ European # of VC-backed companies tech companies (%) per tech companies (%) per founding year decade founding year decade

% of $1B+ companies

"hidden giants". This is explored in further details in the article on "Private Equity". L EGEND

100 50

75 25

50 0

1990s

2000s

2010s

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending NOTE: capital, and grants. Please also note that the data excludes Israel. Based on data All Dealroom.co data excludes the following: upbiotech, to 15 November 2020. debt, secondary transactions, lending capital, and grants. Please also note that the data excludes Israel. Based on data up to 15 November 2020.

1990s

2000s

2010s

SOU RCE: SOU RCE:

1990s

2000s

NOTE:

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Based on data up to 15 November 2020.

Allegro. Visma. Sinch. Infobip. Idealista. Freepik. Silae. Adevinta. I can keep going. There are SOU RCE: two common threads that run along these [non VC-backed] companies – they are incredible businesses and they are underreported. On one end, they show us that building and scaling a software company is doable without VC money. We’ve gotten ridiculously good at celebrating press releases but tech is not just TechCrunch. On the other end, these companies usually lack what makes VC-backed tech companies great for European tech. Going back to Allegro: their IPO was an incredible success story but it won’t recycle capital or talent into the Polish or European tech ecosystem in any way whatsoever. The IPO was great for the C-suite and lenders, but not for employees to go on and start or fund new companies.

Gonz Sanchez Seedtable Founder

Both worlds have a lot to learn from each other – but what gives me a dose of optimism is that they are getting increasingly closer, with the Pipedrive / Vista Equity Partners long-term partnership being the perfect example. 122

9 11

An important discussion in European0 tech in 2020 has been the role of 2015 alternative sources for 31 of funding 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020 50 20 SOU RCE: startups. Looking at companies started in Europe since 2010 that have reached a $1B+ valuation, venture NOTE: 66 6 10 capital is now the funding journey of choice for the3 vast majority. But it is also true that many companies still 56 7 50 Based on data up to 15 November 2020. 39 SOU RCE: 26 NOTE: that scale without taking a single dollar of venture capital. 22 reach In fact, it is likely that there is a sample bias in 19 17 0 on data up to 15 November 2020. thisBased dataset as these companies are typically growing outside of the tech industry and 2010 2011 2012 "mainstream" 2013 2014 2015 2016 remain 2017 An important important discussion in tech has been the role ofofalternative ofof funding forfor "hidden giants". This is explored in further details the article "Private Equity".sources An discussion inEuropean European techin in2020 2020in has been theon role alternative sources funding startups. Looking at companies started in Europe since 2010 that have reached a $1B+ valuation, venture companies started in Europe since 2010 that have reached a $1B+ valuation, venture 100 An important discussion in European techof inchoice 2020 hasRCE: been thevast role majority. ofmajority. alternative sources ofalso funding for SOU the funding journey for the But ititisisalso true that many companies capital is now funding journey of choice for the vast But true that many companies still NOTE: Share of VC-backed and startups. Looking at companies started in Europe since 2010 that have reached a $1B+ valuation, venture reach that scale without taking a single dollar of venture capital. In fact, it is likely that there is aissample bias in still reach that scale without taking a single dollar of venture capital. In fact, it is likely that there a sample non-VC-backed $1B+ European Based onis data up to 15 November capital now the funding2020. journey of choice for the vast majority. But it is also true that many companies still tech (%) per this dataset aswithout these companies are typically growing outside of the "mainstream" and remain reach that a single dollar of venture capital. growing In fact, it isoutside likely thatof there a sample tech bias inindustry bias incompanies thisscale dataset astaking these companies are typically theis“mainstream” tech industry and 75 founding year this dataset as decade these companies typically growing outside of the the "mainstream" tech industry and remain "hidden giants". This is explored in further details in article on "Private Equity". remain “hidden giants”. This are is explored in further details in the article on “Private Equity”. "hidden giants". This is explored in further details in the article on "Private Equity". 17

82 2014

115

102

2010s

VC - BA C K ED $1B+

Shortly after the publication of the 2019 edition of this report, Vinted became Europe's 100th VC-backed company 04.2 $1B+ Companies to reach the billion-dollar mark. Since Vinted, a further 15 new companies have reached $1B+ valuations - includingVC - BA C K ED $1B+ tech Shortly after the publication of the 2019 edition of this VC - BAcompanies C K ED $1B+ in Europe 13 in 2020 - amounting to 115 VC-backed $1B+ tech report, Vinted became Europe's 100th VC-backed company Shortly after the publication of the 2019 edition of this VC-BACKED $1B+ companies inthe Europe. - BA C K ED $1B+ Shortly publication of the 2019a edition of this VC report, to reach theafter billion-dollar mark. Since Vinted, further 15 report, company ShortlyVinted after thebecame publicationEurope's of the 2019100th editionVC-backed of this newto companies reached valuations - including Vinted became Europe’ s $1B+ 100th VC-backed company to reach report, Vinted became Europe' smark. 100th VC-backed company reach thehave billion-dollar Since Vinted, a further 15techthe companies in Europe 13 inbillion-dollar 2020 amounting to 115 VC-backed $1B+ tech 125 to reach the billion-dollar mark. Since Vinted, a further 15 mark. Since Vinted, a further 15 new companies Number of new and totalreached $1B+ new companies have $1B+ valuations - including have companies in Europe. companies in Europe new companies have reached valuations - including VC-backed European tech to-$1B+ reached $1B+ valuations including 13 in 2020 amounting to 115 intech tech companies Europe 13 inin2020 amounting 115 VC-backed $1B+ -tech 13 2020 --amounting companies per year to 115 VC-backed $1B+ tech VC-backed tech companies in Europe. 100 companies inEurope. Europe. companies in$1B+ tech companies in Europe

115

Number of new and total $1B+ L EGENDEuropean tech VC-backed Number ofyear new and total $1B+ companies per Existing

115

# of $1B+ companies

125

Number ofEuropean new and total $1B+ VC-backed tech New in Yearper companies year VC-backed European tech L EGEND companies per year Existing L EGEND

New in Year Existing

L EGEND New in Year Existing New in Year

100

75 75

# of $1B+ companies

# of#$1B+ companies of $1B+ companies

100

50 50

NOTE: All Dealroom.co data excludes the following: NOTE: NOTE: biotech, secondary transactions, debt, All Dealroom.co data excludes the following: lending capital, and grants. Please All Dealroom.co data excludes the following: biotech, secondary transactions, debt, also note biotech, secondary transactions, debt,also that the data excludes Based lending capital, and grants.Israel. Please noteon data that the data excludes Israel. Based on data lending capital, and grants. Please also note up to 15 November 2020.

2010 2010

125 75

100 50

75 25

50 0

2010 2011 2011

2011 2012 2012

2013

2012 2013 2014

2013 2015 2014

2014 2016 2015

2017 2016

2015 2018 2017

2016

2017

2019 2018

2020

2019

2018

2019

2020

SOU RCE: SOU RCE:

SOU RCE:

up to excludes 15 November 2020. that the data Israel. Based on data up to 15 November 2020.

2010

2011

2012

2013

2014

2015

2016

2017

2018

NOTE:

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Based on data up to 15 November 2020.

SOU RCE: VC-backed European tech companies reaching a $1B+ valuation in 2020

The 2020 cohort of $1B+ companies consists of an impressive set of 13 VC-backed companies, ranging from electric VTOL jets (Lilium) to an online car marketplace (Cazoo) to a virtual event software company (Hopin). These 13 companies have an aggregate value of nearly $25B.

Transportation London, United Kingdom

Transportation Tallinn, Estonia

Marketplace London, United Kingdom

Enterprise Software Paris, France

Enterprise Software London, United Kingdom

Transportation Munich, Germany

Enterprise Software Amsterdam, Netherlands

Marketplace Paris, France

Fintech Amsterdam, Netherlands

Enterprise Software Tallinn, Estonia

Security London, United Kingdom

Enterprise Software Lisbon, Portugal

Enterprise Software Dublin, Ireland

123

2019

Europe's VC-backed tech companies continue to scale to ever greater levels. Adyen and Spotify have both 04.2 $1B+ Companies reached $50B+ valuations, having grown signi cantly in the public markets in 2020. Behind those two giants of European tech, there are a further 10 VC-backed companies that have now scaled beyond the $10B mark. Europe's VC-backed tech companies continue to scale to ever greater levels. Adyen and Spotify have both Number of $1B+ VC-backed Europe’ s VC-backed tech companies continue$1-2B to scale to ever greater levels. Adyen and Spotify reached $50B+ valuations, having European tech companies by grown signi cantly in the public markets in 2020. Behind those two giants have both reached $50B+ valuations, having grown in now the public markets in 2020. of European tech, there are a further 10 VC-backed companies that scaled beyond the $10B Europe's tech companies continue tosignificantly scale tohave ever greater levels. Adyen andmark. Spotify have both valuationVC-backed group

Behind those twovaluations, giants of European tech, there agreater further 10public VC-backed companies that reached $50B+ having grown signi cantly in the 2020. Behind those two giants $2-5B 24in Europe's VC-backed tech companies continue to scale toare ever levels. Adyenmarkets and Spotify have both reached $50B+ valuations, signi10cantly in the public markets in 2020. Behind thosescaled two giants of European tech, therehaving are$10B agrown further VC-backed companies that have now beyond the $10B mark.67 have now scaled beyond the mark. Number of $1B+ VC-backed $1-2B of European tech, there European tech companies by are a further 10 VC-backed companies that have now scaled beyond the $10B mark. 12 $5-10B valuation group

Number of$1B+ $1B+ VC-backed Number of VC-backed European tech companies European tech companies by by valuation group valuation group

$2-5B

$5-10B $2-5B

$25B+

$10-25B

$25B+

All Dealroom.co data excludes the following: biotech, secondary NOTE:transactions, debt, lending capital, and grants. Please also note that the data All Dealroom.co NOTE: data excludes the excludes Israel. Based on data up to 15 following: biotech, secondary All Dealroom.co data excludes November 2020. transactions, debt, lending capital, the and following: biotech, secondary grants. Please also note that the data transactions, debt, lending capital, and excludesgrants. Israel.Please Based onnote datathat up the to 15 also data November 2020.Israel. Based on data up to 15 excludes

1210

$25B+

$2-5B

$5-10B

$10-25B

$5-10B $10-25B

NOTE:

$1-2B

$10-25B 5

# of $1B+ companies 0

$25B+

# of $1B+ companies

SOU RCE: 0

# of $1B+ companies

SOU RCE: SOU RCE:

NOTE: November 2020.

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Based on data up to 15 November 2020.

# of $1B+ companies

SOU RCE:

A sizeable portfolio of European startup giants now stand ready to capture the IPO landscape and meet pent up demand.

Ed Lukins Orrick Partner, Capital Markets

Whilst Europe has originated more than a third of the world’s startups, it accounts for disproportionally smaller count of unicorns globally. This gap is in many ways attributable to a previously limited supply of large, late-stage risk capital pools. Fortunately, this is changing rapidly. Driven by the growth in recent years of European funds writing bigger checks at larger valuations and an influx of U.S. and Asia-based funds looking for quality and value – the stable of European unicorns is growing - with an additional 14 in 2019 and 18 in 2020. A sizeable portfolio of European startup giants now stand ready to capture the IPO landscape and meet pent up demand. Additionally, the SPAC or Special Purpose Acquisition Company, an exit of choice right now in the U.S., is beginning to find its way across the Atlantic. These are not novel structures, but the latest batch is backed by top-rate financial institutions and serial investors seeking highly sought-after targets. Orrick has helped navigate companies through a string of these deals and we expect to see SPACs become a driver of European exit planning. As a result, we’re optimistic that next year’s IPO metrics will tell a quite different story.

124

04.2

$1B+ Companies

Europe's VC-backed tech companies continue to scale to ever greater levels. Adyen and Spotify have both reached $50B+ valuations, having grown signi cantly in the public markets in 2020. Behind those two giants FINTEC H MOST VALUABLE FIN TECH Another first tech, for European techfurther was the10christening of two MOST VA LUA BLE VAnow LUA BLE FINTEC H of European there VC-backed have scaled beyond the $10B mark. Another �rst for European techare wasa the christening of two companies thatMOST Another �rst for European tech was the christening of two decacorns, i.e. private VC-backed tech companies with a decacorns, i.e. private VC-backed tech companies with a MOST decacorns, private VC-backed tech companies with asVA LUA BLE FINTEC H valuation of i.e. more than Sweden’ s Klarna and Romania’ valuation of more than $10B.$10B. Sweden's Klarna and Another for European tech was the christening of two Number�rst of $1B+ VC-backed $1-2B and 67 valuation of more than $10B. Sweden's Klarna Romania' s UiPath both hit this milestone during 2020, UiPath both hitprivate this milestone during 2020,with making them the decacorns, i.e. VC-backed tech companies a European tech companies by making Klarna the most valuable private European �ntech company Romania' s UiPath both hit this milestone during 2020, making them the �rst and second most valuable private, valuation of more than $10B. Sweden' s Klarna and valuation group most valuable private, VC-backed European first and second making Klarna the most valuable private European �ntech comp VC-backed European tech Romania's UiPath both hitcompanies. this making them the �rst andmilestone secondduring most2020, valuable private, making Klarna the most valuable $2-5B making Klarna the most valuable 24 private European �ntech company tech companies. making themEuropean the �rst andtech second most valuable private, VC-backed companies. private European fintech company

$11B$11B $11B

$11B

VC-backed European tech companies.

Klarna

Top 10 VC-backed $1B+ private European tech companies

Top10 10 VC-backed VC-backed $1B+ private Top $1B+ private European tech companies European tech companies

$10.7B

UiPath $5-10B

Klarna

Checkout.com UiPath

Klarna

UiPath 10

Checkout.com Revolut$10-25B

Checkout.com

Veeam

Greensill Greensill

N26

Veeam 0

Arrival

Greensill

Auto1Group Group Auto1

N26

N26 Arrival

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Based on data up to 15 November 2020.

$5.0B

$25B+ 2 TransferWise

0.00.0

1.0 1.0

Arrival

$3.5B

$3.5B $3.4B $3.3B

2.0

3.0

$5.0B

$5.0B 35

$3.3B 4.05.0

9.0 11.0

10.012.0

11.0

12.0

$3.4B6.0 7.0

8.07.0

9.0 8.0

10.0

Valuation ($B)Valuation ($B)

Auto1 Group

$3.3B 0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Valuation ($B)

SOU RCE:

Fastest companies to scale to $1B+ valuation by months from founding Skype held the title of Europe’s fastest ever VC-backed company to hit a billion-dollar valuation for 15 years. This record was broken twice in just a few months in 2020. First, Cazoo hit a billion-dollar valuation in June, 18 months after being founded. Hopin then broke this record in November 2020, having scaled to a $2.1B valuation in 17 months.

17 months months to reach $1B+ valuation in 2020

18 months months to reach $1B+ valuation in 2020

31 months months to reach $1B+ valuation in 2018

# of $1B+ companies

$3.5B 6.0 5.0

SOU RCE: SOU RCE:

$3.5B

$3.4B

3.0 4.0

$5.5B

$5.0B

15$3.5B

$10.2B

$5.5B

$5.5B $5.0B

Revolut

$10.2B

$5.5B

Revolut TransferWise TransferWise

$10.2B

$10.7B

$5.5B

29 months months to reach $1B+ valuation in 2005

32 months months to reach $1B+ valuation in 2019

125

9.0

10.0

An important discussion in European tech in 2020 has been the role of alternative sources of funding for Europe has now seen $1B+ tech companies emerge from 24 countries all around the region. It's a remarkable An important discussion in European tech in 2020 since has been role of alternative sources of funding for startups. Looking at companies started in Europe 2010the that have reached a $1B+ valuation, venture validation of the belief that great companies can come from the anywhere. 04.2 important $1B+ Companies An discussion injourney European tech infor 2020 has role of sources ofcompanies funding for still startups. Looking at companies started in Europe 2010 that have reached a $1B+ venture capital is now the funding of choice thesince vastbeen majority. But it alternative is also true thatvaluation, many startups. Looking at companies in Europe since 2010 thatIn have reached a $1B+ valuation, venturebias capitalthat is now thewithout funding journey of choice forofthe vast majority. But it is true thatthere manyiscompanies still in reach scale taking astarted single dollar venture capital. fact, italso is likely that a sample United Kingdom 33 43 bias capital isofnow funding journey of choice for vast majority. But it isitalso truethat thatthere many still in reach that scale without taking a single dollar ofthe venture capital. fact, is likely iscompanies a sample Number $1B+ European tech this dataset asthe these companies are typically growing outside of In the "mainstream" tech industry and remain companies byas country of origin reach that scale without taking ainsingle dollar of venture capital. fact, is likely that is a sample bias in this dataset these are typically growing of the "mainstream" techthere industry and remain "hidden giants". This iscompanies explored further details in theoutside article onIn "Private Germany 16 11it Equity". Europe has now seen $1B+ tech emerge 24 all around the region. It’s It's a aand anddataset backing status Europe has now seen $1B+ techcompanies companies emerge from 24countries countries all around the region. remarkable this as these typically growing outside of the "mainstream" tech industry remain "hidden giants". This explored inare further details infrom the article on "Private Equity". Europe has now seen $1B+iscompanies tech companies emerge from 24 countries all around the region. It's a remarkable France 11 4 100 remarkable validation of the belief that great companies can come from anywhere. validation of the belief that great companies can come from anywhere. validation the belief thatisgreat companies can come from "hiddenofgiants". This explored in further details inanywhere. the article on "Private Equity". 100Sweden

100 United Kingdom Netherlands United Kingdom

France

L EGEND # of non-VC-backed companies

Sweden

non-VC-backed companies L EGEND # of VC-backed companies

Netherlands

Spain 75 France

Ireland 50Sweden

# of VC-backed companies

NOTE: NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: All Dealroom.co data excludes the also following: lending capital, and grants. Please note biotech, secondary transactions, debt, thatDealroom.co the data excludes Israel. Based on data All data excludes the following: lending capital, and2020. grants. Please also note up to 15 November biotech, secondary transactions, debt, that the data excludes Israel. Based on data lending and2020. grants. Please also note up to 15 capital, November that the data excludes Israel. Based on data up to 15 November 2020.

Spain 1 254 Austria

242

Switzerland

254Ukraine Ireland 1

Russia

20 2 Romania Switzerland

1 14

0 Portugal Russia 0

2 2

Poland Austria

121 2

Romania 11 SOU RCE:

Norway Ukraine

Luxembourg Romania SOU RCE:

121

Ireland Portugal

Estonia Poland

121

Czech Norway Ireland 2 Republic

Estonia Luxembourg 2 Belgium

SOU RCE: Portugal 2 Poland

Norway

Luxembourg

Czech Republic

Belgium

Slovenia

Malta

Slovenia Ireland

Malta Estonia

CzechLithuania Republic

1 0

Based on data up to 15 November 2020.

6 3 6

1990s

2000s

2010s

1990s

2000s

2010s

1990s

2000s

2010s

Belgium 0 2

Slovenia

Malta

Lithuania

SOU RCE:

# of $1B+ companies

SOU RCE:

Based on data up to 15 November 2020.

Several Dutch startups are now unicorns or getting closer to it, which makes The Netherlands a more obvious choice for worldwide talent to start or grow their career.

Robert Gaal Cooper Co-Founder

# of $1B+ companies

Based on data up to 15 November 2020.

NOTE:

# of $1B+ companies

SOU RCE:

NOTE:

4 71

Ireland

Ukraine

2 28

2 2

16 3

Russia Denmark 4 6 25

Austria

11 6

Spain

Lithuania

NOTE:

50 Switzerland Netherlands Denmark 3 50 8

VC-backed companies # of non-VC-backed companies

6 33

75 16 Denmark Germany 75

Germany

% of $1B+ % of % $1B+ companies of $1B+ companies companies

Share of VC-backed and non-VC-backed $1B+and European Share of VC-backed Number of $1B+ European tech companies (%) tech per non-VC-backed $1B+ European Number of $1B+ European tech Share of VC-backed and companies by year country of origin founding tech companies (%) per companies by decade country of origin non-VC-backed $1B+ European and backing status founding year decade and backing status tech companies (%) per L EGEND year decade founding

Several Dutch startups are now unicorns or getting closer to it, which makes the Netherlands a more obvious choice for worldwide talent to start or grow their career. But homegrown startups and more US tech companies have called Amsterdam home in the last few years. This also puts a career in tech on the map for talent from traditional educational backgrounds, agencies, or corporates. For founders, there is a serious lack of capital from investors with operational experience. Most capital is also being invested beyond the seed stage. More established founders and operators have to start writing checks. (And by checks, I just mean wire transfers. What are we, Neanderthals?)

126

04.2

$1B+ Companies

Europe �rst built a reputation in consumer, but the rise of European SaaS has helped to transform the region's role in the global enterprise software market. In a year of so many milestones, 2020 also marks the year that the number of VC-backed $1B+ enterprise-focused European tech companies �nally caught up with Europe first built a reputation in consumer, but the rise of European SaaS has helped to consumer. The count, as of report publication, stands at 53-54 with Pipedrive breaking the tie. transform the region’s role in the global enterprise software market. In a year of so many Europe �rst 2020 built aalso reputation in consumer, but the rise European$1B+ SaaSenterprise-focused has helped to transform the region's milestones, marks the year that the number ofof VC-backed role in the global enterprise software market. In a year of so many milestones, 2020 also marks the year that Number�rst oftech $1B+ Europe builtVC-backed a reputation infinally consumer, but the of European SaaS The has helped to as transform the region' s European companies caught uprise with consumer. count, of report publication, European tech companies, the number of VC-backed $1B+market. enterprise-focused European role in the global software In a year of so many milestones,tech 2020 companies also marks the�nally year thatcaught up with stands at 53-54enterprise with Pipedrive breaking the tie. enterprise consumer the numberversus of VC-backed $1B+ European tech companies caught up with consumer. The count, as ofenterprise-focused report publication, stands at 53-54 �nally with Pipedrive breaking the tie. Consumer

consumer. The count, as of report publication, stands at 53-54 with Pipedrive breaking the tie.

Number of$1B+ $1B+ VC-backed Number of VC-backed European tech companies, European tech companies, enterprise versus consumer enterprise versus consumer

Consumer

Enterprise

The rise of SaaS in Europe is exempli ed by the number of new SaaS unicorns minted in 2020. Six new billion0 5 10 15 20 25 30 35 40 45 50 55 60 dollar SaaS companies emerged this year, beyond any other industry# ofand placing Enterprise Software at the $1B+ companies top of the list for the rst time. These included companies such as Dataiku, MessageBird, Pipedrive and Snyk. SOU RCE: NOTE:

NOTE:on data up to 15 November 2020. Based

SOU RCE:

Based on data to 15 November 2020. Number ofup$1B+ VC-backed European tech companies by industry, all time

# of $1B+ companies Enterprise Software

Fintech

SOU RCE:

NOTE:

# of $1B+ companies

Enterprise

Fashion

L EGEND The rise ofupSaaS in Europe Based on data to 15 November 2020. is exemplified by the number of new SaaS unicorns minted in 2020. Transportation 4 3 Existingbillion-dollar SaaS companies emerged this Six new year, beyond any other industry and placing TheNew rise of SaaS in Europe is exempli ed by the number of new SaaS unicorns minted in 2020. Six new billionin year &first 6 Enterprise Software at the top ofed the forGaming the time. These included companies such as Software at the The rise of SaaS in Europe isemerged exempli by list the number ofEntertainment newany SaaSother unicorns minted in 2020. Six newEnterprise billiondollar SaaS companies this year, beyond industry and placing dollar SaaS companies emerged this year, beyond any other industry and placing Enterprise Software at the Dataiku, MessageBird, Pipedrive and Snyk. top of the list for the rst time. These included companies such as Dataiku, MessageBird, Pipedrive and Snyk. Travel 6

top of the list for the rst time. These included companies such as Dataiku, MessageBird, Pipedrive and Snyk. Security

Number of VC-backed Number of$1B+ $1B+ VC-backed European tech companies by European tech companies by industry, all time industry, all time

Fintech

L EGEND

New in year

Fintech Health 8

Fashion 4 Social & Consumer Apps

Transportation

Travel

Travel Real5Estate

Security 5 Retail (excl. Fashion)

Food & Drink Health

Social & Consumer Apps Marketplace

4 & Drink Food Adtech & Martech 2

Social & Consumer Apps 2 Communications

Real Estate

2Marketplace

Retail (excl. Fashion) Adtech & Martech

Construction

Semiconductors Energy

Real Estate

Energy

Media

1 Adtech & Martech Music

1 1

Media Music

Based on data up to 15 November 2020. NOTE:

Based on data up to 15 November 2020.

Communications

3 Construction

2 3

Energy

Manufacturing

Media

Music

# of companies

SOU RCE: SOU RCE:

Classified

NOTE:

Retail1 (excl. Fashion) Construction

Manufacturing

1Manufacturing

Communications

5 5

Classified

Health 3 Classified

Semiconductors

Gaming & Entertainment Semiconductors

6 1

Security

19 23

Transportation 6 Marketplace

Gaming & Entertainment

New in year

1 19

Food & Drink

Fashion

Existing L EGEND

Existing

Enterprise Software Enterprise Software

# of companies

1 0

127

15 # of companies

04.2

$1B+ Companies

We grew MessageBird to a €100 million business, with no outside funding or investors whatsoever, until 2017 when we secured our first VC financing. Since then, MessageBird’s team has been focused on building a world where we can talk to businesses the way we talk to our friends, through all the same channels like WhatsApp and SMS. We’ve achieved incredible results, but we still have a long way to go. This year, we were able to raise additional capital through private markets, Robert Vis and people ask me when we’re going to IPO. We are operating at the highest level of MessageBird financial integrity, run as an IPO company, but we will ring the bell when it makes sense. Founder C OMPA NIES FOUNDED IN L AST DEC A DE

53 VC-backed European tech companies founded during the last decade (2010s) have scaled to $1B+ valuation. As is to be expected, those companies overwhelmingly remain C OMPA NIES FOUNDED IN L AST DEC A DE in the private markets. half of the companies 53 VC-backed EuropeanMore techthan companies founded during of $1B+ VC-backed tech IN companies founded in the 2010s are still priva COMPAN IES FOUNDED L AST DEC ADE 53 VC-backed tech founded during theislast founded in theEuropean 90s, 2000s orcompanies 2010s have already eitherAs the last decade (2010s) have scaled to $1B+ valuation. made their transition to the marketsAs orishave been decade (2010s) have scaled to public $1B+ valuation. to be expected, to be expected, those companies overwhelmingly remain C OMPA NIES FOUNDED IN L AST DEC A DE acquired. those companies overwhelmingly remain in the private markets. 53 VC-backed European tech companies founded during in the private markets. More than half of the companies of $1B+ VC-backed tech companies founded in the 2010s are still priva the last decade have scaled to $1B+ valuation. As 90s, is either More than of the2000s companies founded in the 2000s or founded inhalf the(2010s) 90s, or 2010s have already 100 to be expected, those companies overwhelmingly remain made their transition to than the public markets orto have 2010s already either made their transition the been public Share of $1B+ VC-backed in thehave private markets. More half of the companies of $1B+ VC-backed tech founded in thetech 2010s companies are still private ofcompanies $1B+ VC-backed European companies by have already either acquired. founded intech the 90s, 2000sacquired. or(%) 2010s markets or have been founded in the 2010s are still private made their transition the public markets or have been ownership status andtofounding

83%

acquired. year decade Share of $1B+ VC-backed European tech companies (%) by L EGEND Share of $1B+ VC-backed ownership status and founding European companies (%) by Private tech ownership status and founding year decade Public

100

Public

Acquired

% of $1B+ companies % of $1B+ companies

Private Private

83%

75 100

% of $1B+ companies

year decade Acquired L EGEND L EGEND

83% 83%

50 75

25 50

0 25 0

NOTE: All Dealroom.co data excludes the following: NOTE: biotech, secondary transactions, debt, All Dealroom.co following: lending capital,data andexcludes grants.the Please also note biotech, secondary transactions, debt, that the data excludes lending capital, and grants.Israel. Please also note NOTE: that the data excludes Israel. All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

1990s 1990s

0 SOU RCE:

2000s 2000s

1990s

2010s 2010s

2000s

SOU RCE:

Liquidity is a key concern for VC investors globally as companies remain private longer and growth capital is increasingly available for companies willing to scale and preserve their independence.

Xavier Coirbay Sofina Group Executive Committee

That being said, Europe-based venture firms should be able to improve exit prospects over time. M&A is the most frequent exit route for VC backed companies. In a low interest rates and low growth environment where technology is key for every business, strategic acquirers are likely to be active in the coming years and attractive VC-backed companies from Europe could be on their shopping list. The best companies will also expand internationally and have access to capital from global investors. They could eventually qualify for IPOs in Europe or in the US. The development of more active secondary markets is another possibility. Whatever happens, if the European ecosystem keeps producing an increasing density of emerging companies with sustainable business models and enduring growth prospects, I trust liquidity opportunities will follow. It is still early days compared to the US and we need to be patient.

128

2010s

combined enterprise value. It's much less a question of whether these companies will list, but of when and where. Will they go public in Europe or head to the US? 04.2

$1B+ Companies

Total aggregate value ($B) Fintech of private VC-backed $1B+ European tech companies Enterprise Software Europe has a healthy pipeline of companies preparing to go public, with many of the region’s privatelyby industry

$38.7B

Europe has a healthy pipeline of companies preparing to go public, with many of the region's privately-held held $1B+ tech companies having signalled theirTransportation intent to IPO in 2021. The pipeline today now exceeds $1B+ tech having signalled their intent to IPO 2021. The pipeline today now exceeds $150B based Europe hascompanies a healthy pipeline of companies preparing to go public, within many of the region' s $12.8B privately-held $150B based on the combined enterprise value. Europe’ s private fintech companies alone now companiesenterprise having signalled theirEurope' intent to sIPO in 2021. The pipeline today now exceeds $150Baccount based on$1B+ thetech combined value. private ntech companies alone now foraccount $50B in for inenterprise combined enterprise value. It’s much less aof question ofthese whether willof list, on$50B the combined enterprise value.It' Europe's private companies alone now account for these $50B incompanies Security $11.3B combined value. s much less antech question whether companies will list, but when and combined enterprise value. Will It's much less question whether or these companies but of when and where. goapublic inofEurope head to the will US?list, but of when and where. Will they go public inthey Europe or head to the US? where. Will they go public in Europe or head to the US? Totalaggregate aggregate value ($B) ($B) Total value of private VC-backed $1B+ ofEuropean privatetech VC-backed companies$1B+ European by industrytech companies by industry

Health

Fintech

$8.6B

Travel Fintech

$51.2B

$6.2B

Enterprise Software

$38.7B

Fashion Enterprise Software

$5.1B

Transportation

$38.7B

$12.8B

Marketplace Transportation

Security

Travel

$6.2B

Social & Consumer Apps Health Fashion

$12.8B

$3.0B

Real Estate$8.6B Security

Health

$4.7B

$11.3B

$2.3B

$8.6B

$5.1B

Food &Travel Drink Marketplace

$2.0B

$6.2B

$4.7B

Real Estate

Semiconductors Fashion $3.0B

Social & Consumer Apps

$2.3B Energy Marketplace

Food & Drink

$1.7B

$5.1B

$1.6B $4.7B

$2.0B

Communications Real Estate Semiconductors

$1.3B $3.0B

$1.7B

Manufacturing Social & Consumer Apps

Energy

$1.0B $2.3B

$1.6B

$1.3B Food &Media Drink

Communications

Manufacturing

$1.0B

Media

$1.0B

Retail (excl. Fashion)

$1.0B

$1.0B $2.0B

Retail (excl. Fashion) Semiconductors

Energy

$1.0B $1.7B 0.0

5.0 $1.6B

10.0

15.0

20.0

EC OSYSTEM VA L UE

25.0

30.0

35.0

40.0

45.0

50.0

Total aggregate enterprise value ($B)

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 Communications The rise of this growing cohort of European unicorns on $1.3B Total aggregate enterprise value ($B) the ecosystem has had a dramatic impact on the total SOU RCE: Manufacturing NOTE: of the European tech ecosystem. The total $1.0B value SOU RCE: Based to 15 November 2020. estimated enterprise value of European tech companies NOTE:on data up increase in the size of the ecosystem value since 2016 Media Based on data up to 15 November founded after 20002020. in the public and private markets has $1.0B EC OSYSTEM VA L UE ballooned to almost $1 trillion ($961B), up 5x from $191B in The rise of this growing cohort of EuropeanRetail unicorns on $1.0B (excl. Fashion) 2016. The vast majority of this value remains in the private the ecosystem has had a dramatic impact on the totalEC OSYSTEM VA L UE ECOSYSTEM VALUE markets today ($573B),cohort which of have seen the creation of0.0ecosystem The rise of thisgrowing growing European unicorns on the 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 The rise this cohort European unicorns value of of the European techofecosystem. Theontotal Total aggregate enterprise value ($B) more than $400B in enterprise value since 2016. has had a dramatic impact on the total value of the European tech the ecosystem has had a dramatic impact on the total estimated enterprise value of European tech companies increase in the size of the ecosystem value since 2016 value of the European ecosystem. The total value of European tech ecosystem. The2000 totaltech estimated enterprise founded after in the public and private markets has estimated enterprise value of European tech companies increase inhas the size of the ecosystem value since 2016 companies founded after 2000 the public and private markets ballooned to almost $1public trillion ($961B), up 5x from $191B in Total estimated enterprise value founded after 2000 in the andin private markets has 1,000 SOU RCE: NOTE:of ballooned to almost $1$1 trillion up 5xup from ($B) European tech ballooned to almost trillion ($961B), 5x$191B fromin in 2016. The vast 2016. The vast majority of($961B), this value remains in$191B the private increase in the size of the 2016. The vast of 2020. this value remains in the private companies founded after 2000, Based on data up tomajority 15($573B), November markets today which seen the creation of($573B), which majority of this value remains inhave the private markets today markets ($573B),markets which have seen the creation of in privatetoday and public ecosystem value since 2016 more than $400B in enterprise value since have creation of more $400B in 2016. enterprise value since 2016. moreseen than the $400B in enterprise valuethan since 2016. 750

L EGEND

in private and public markets L EGEND Public

L EGEND Private Public Private

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: lending capital, and grants. Please also note All the Dealroom.co data excludes the following: that data excludes Israel. biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

1,000

Total estimated enterprise value ($B)

Total estimated enterprise value Public Total estimated enterprise value ($B) of European tech Private ($B) of European companies founded tech after 2000, in private andfounded public markets companies after 2000,

750

500

250

Total estimated enterprise value Total ($B) estimated enterprise value ($B)

1,000 500

$573B

750 250

$573B $388B $136B $55B

500 0

2016

$388B

2020

$136B

250

$55B 2016

2020

$55B 2016

129 SOU RCE:

$388B

$136B

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt,

$573B

SOU RCE: SOU RCE:

2020

50.0

04.2

$1B+ Companies

This is mainly because top platform companies are missing in the European ecosystem and because there is a different historical experience with investing in the public stock market.

Europe’s startup ecosystem has developed significantly over the past decade, with unprecedented growth in funding, jobs, and valuations. But there are nonetheless still challenges ahead such as a lack of exit opportunities, including IPOs or M&A.

Another challenge is fragmentation. Europe is not a single, unified market; it is an aggregation of 27 markets in the EU, and 51 markets across the continent, each with its own language, entrepreneurial culture, ecosystem, regulation, and sometimes even currency. While this of course is one of the factors that makes the market so vibrant, Europe is much more complex compared to the US when it comes to scaling a company as it involves operating across multiple geographies. Finally, diversity and inclusivity are sizable challenges, but that is something that all geographies face! On the whole, the European startup scene is emerging from the shadows of Silicon Valley, successfully developing globally-known innovations and businesses for consumers and enterprises alike. This is inspiring a new generation of founders and entrepreneurs and fuelling this growth in years to come.

Young Sohn Samsung Electronics President and Chief Strategy Officer

The aggregate value of private European tech companies has grown totomore than $570B, including dozens The The aggregate aggregate value value of of private private European European tech tech companies companies has has grown grown to more more than than $570B, $570B, including including dozens dozens of of of companies that have scaled to $1B+ valuations and are still private. These companies represent the pipeline companies that have scaled to $1B+ valuations and are still private. These companies represent the companies that have scaled to $1B+ valuations and are still private. These companies represent the pipeline pipeline of future IPO candidates. An important consideration that will influence the decisions of these of of future future IPO IPO candidates. candidates. An An important important consideration consideration that that will will in�uence in�uence the the decisions decisions of of these these companies companies on on if if companies on if and where to list is their expectation of how their value proposition and business model will and where to list is their expectation of how their value proposition and business model will be understood and where to list is their expectation of how their value proposition and business model will be understood by by mapped thehave distribution of European tech public market investors. To that end, we have be understood by market To that end,grown we mapped thepublic distribution of public European by mapped distribution of public tech companies by public investors. To companies thatinvestors. end, we have Thevalue aggregate value ofpublic private European techgrown companies to more than $570B, including of companies ate gregate value of private ofmarket private European European tech tech companies has has grown to more tohas more thanthe than $570B, $570B, including including dozens dozens of European of dozens category with the distribution of private $1B+ European tech companies with a view to identifying if tech companies by category with the distribution of private $1B+ European tech companies with a topublic companies that have scaled toand $1B+ valuations and areEuropean still private. These companies represent pipeline view category with the distribution of private $1B+ tech companies with a viewthe to identifying if the the public anies that have that have scaled scaled to $1B+ to $1B+ valuations valuations are and still are private. still private. These These companies companies represent represent the pipeline the pipeline companies depth of or if there be gaps. future IPO candidates. An important consideration that will in�uence the decisions of these companies on if identifying the public companies have ofmay expertise, orthese ifof there may be gaps. companies have depth of expertise, expertise, or ifdepth there may be gaps. O recandidates. IPOof candidates. An important Anifhave important consideration consideration that will that in�uence will in�uence the decisions the decisions of these companies companies on if on if

where toexpectation list is their expectation howproposition their value proposition and business will understood by here to listtoand islist their is their expectation of how of their how their valueof value proposition and business and business model model will be will understood bemodel understood bybe by 100 public market investors. To that end, we have mapped the distribution of tech public European techby companies by 100of ket market investors. investors. To that To end, that end, we have we have mapped mapped the distribution the distribution public of public European European tech companies companies by Share of European public tech category with the distribution of private $1B+ European techa companies with a view toifpublic identifying if the public Share of of European public tech ory ith the with distribution thefor distribution private of private $1B+ $1B+ European European tech tech companies companies with with view a view to identifying to identifying if the the public companies <$1B, >$1B versus for companies <$1B, >$1B versus companies have depth of expertise, or if there may be gaps. anies havehave depthdepth of expertise, ofcompanies expertise, or if>$1B there or if there may be may gaps. be gaps. private private companies >$1B

eerce Commerce

Semiconductors Tech Hardware Semiconductors

OnlineFintech Commerce

% of companies

re Hardware

% of companies

Online Commerce Online Commerce

Internet L EGENDConsumer Consumer Internet

Fintech 50 50 Consumer InternetSoftware Enterprise ernet umer Internet Enterprise Software Semiconductors tors conductors Games & Interactive Entertainment Games & Interactive Entertainment Fintech ch Internet Advertising & Direct Marketing Internet Advertising & Direct Marketing 25 25 Enterprise Software oftware rprise Software Others GamesOthers & Interactive Entertainment

es ractive & Interactive Entertainment Entertainment Internet Advertising & Direct Marketing net rtising Advertising & Direct & Marketing Direct Marketing NOTE: Others NOTE: rs

Numbers may not add up to 100 due to Numbers may not add up to 100 due to rounding. S&P Capital IQ Platform, as of date NOTE:rounding. S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes SOU RCE: SOU RCE: 31 October 2020, for illustrative purposes only. Numbers may not add up to 100 due to ot s may add up notto add 100updue toonly. to 100 due to rounding. S&P Capital IQ Platform, as of date

75 75

100

%%ofofcompanies companies

100

% of companies

100

L EGEND Share of European public tech ropean of European public public tech Ltech EGEND for companies <$1B, >$1B versus Techversus Hardware mpanies es <$1B, >$1B <$1B, versus >$1B Tech Hardware private epanies companies >$1B >$1Bcompanies >$1B

50 50

25 25

0 0

SOU RCE:

RCE: Public (<$1B) PublicSOU (<$1B)

Public (<$1B) Public (<$1B)

Public (<$1B)

Public (>$1B) Public (>$1B)

SOU RCE:

g. apital S&PIQ Capital Platform, IQ Platform, as of date as of date 31 October 2020, for illustrative purposes er for2020, illustrative for illustrative purposes purposes only.

130

Public (>$1B) Public (>$1B)

Public (>$1B)

Private (>$1B) Private (>$1B)

Private (>$1B)

04.2

$1B+ Companies

An important question for the European ecosystem is what happens to the value created by its leading tech companies. Do they stay independent and transition into the public markets? And, if so, where do they choose to list? Do they end up being acquired? If so, by whom? These questions matter as they help to understand where and by whom future value created by these companies will be captured. To try to answer this, and working in partnership with Horsley Bridge, this analysis sets out the exit route of every VC-backed European company that has exited at a billion-dollar valuation or higher covering more than 50 companies. The majority of value has transitioned to the public markets with the IPO exit route accounting for 74% of exit value. Importantly, from the perspective of retaining value in Europe, the US accounts for the largest share of exit value at a combined 52% of the total across both IPOs that listed in the US and acquisitions by US buyers. VC-backed$1B+ $1B+European European tech value flow by HQ and by exit VC-backed techcompanies companies value flow by country HQ country and byroute exit route

United Kingdom IPO in Europe (36%)

100

Germany IPO in the US (38%) Netherlands

% of companies

tech ean tech companies companies has grown has grown to more to more than than $570B, $570B, including including dozens dozens of of valuations tions and are andstill areprivate. still private. These These companies companies represent represent the pipeline the pipeline nt nsideration consideration that will thatin�uence will in�uence the decisions the decisions of these of these companies companies on if on if of w their how their valuevalue proposition proposition and business and business model model will be will understood be understood by by Sweden ave we have mapped mapped the distribution the distribution of public of public European European tech tech companies companies by by ate 1B+$1B+ European European tech tech companies companies with a with view a view to identifying to identifying if theifpublic the public or here if there may be may gaps. be gaps.

Denmark Acquired by US Buyers

M&A-USA (14%)

Finland 25

Luxembourg

Acquired by Chinese Buyers (8%)

Austria 0

U RCE: SOU RCE:

Public (<$1B) Public (<$1B)

Public (>$1B) Public (>$1B)

Private (>$1B) Private (>$1B)

Acquired by European Buyers (4%)

SOURCE:

People used to wonder if Europe could create $10 billion companies. Now the question is: what will be the first $100 billion company? The past few years have been really exciting for European tech. People used to wonder if Europe could create $10 billion companies. Now the question is: what will be the first $100 billion company? We’re seeing more and more world-class tech companies being formed across the region, by ambitious founders who want to win on a global scale. That’s why Sequoia is doubling down in Europe and building our local team, to meet these founders as early as possible and be a stronger partner for our portfolio companies on the ground.

Luciana Lixandru Sequoia Capital Partner

The rich pool of technical talent means Europe isn’t just catching up, it’s leading the way, particularly across sectors like enterprise software, deep tech and fintech. At Sequoia, we’re excited to grow our presence in the region, privileged to have received such a warm welcome from the ecosystem and looking forward to partnering with many more market leaders with roots in Europe.

131

04.3

Public Markets The public markets are home to the world’s largest and most mature technology LOBA L TEC H VA and LUE companies that have been built over several generations ofG companies The total value of global tech companies has soared to technology cycles, over many decades.

$20T

nearly $20T ($19.8T), as measured by market capitalisation. The order is insights dominated by the US the historical rise of technology around As a global result, technology they offer important to understand ($12.8T), though China's momentous rise in tech means it major countries and regions. the world and, importantly, Europe’s position relative to other total market capitalisation for global tech companies has produced public tech companies that are now valued G LOBA L TEC H VA LUE G LOBA L TEC H VA LUE intotal excess of Asiacompanies has other tech total of global techseveral companies has TheThe valuevalue of$3.3T. global tech has soared tosoared to powerhouses too, including Taiwan, and Japan that nearly ($19.8T), as measured byKorea market capitalisation. nearly $20T$20T ($19.8T), as measured by market capitalisation. GLOBAL TECH VALUE are all home toof public companies valued at more than $20T ($19.8T), global technology order is dominated the US TheThe global technology ordertech is dominated by the USby total value global tech companies has soared to nearly $0.5T. There are three European countries that make the ($12.8T), though China's momentous rise in tech means it ($12.8T), though China's momentous rise in tech means it as measured by market capitalisation. The global technology order is capitalisation total market for global tech companies market capitalisation for global tech companies hasTop produced public tech companies that are now are valued 10 with the Netherlands ($0.5T), Germany ($0.3T) andrise in tech total has produced public tech companies that now valued dominated by the US ($12.8T), though China’ s momentous means in excess of $3.3T. Asia has several other tech the UK ($0.1T). in excess of $3.3T. Asia hascompanies several other tech it has produced public tech arethat now valued in excess of powerhouses too, including Taiwan, Korea andthat Japan powerhouses too, including Taiwan, Korea and Japan that Asia has several other techvalued powerhouses too, including Taiwan, Korea are $3.3T. all home to public tech companies at more than are all market home to public tech companies valuedthe at more than total market capitalisation $0.5T. There are three European Total capare ($B) of home global countries $12,753B and Japan that all to publicthat techmake companies valued at more than are three European countries for global tech companies public tech companies for($0.5T), top 10 Germany Top$0.5T. 10 withThere the Netherlands ($0.3T)that andmake the $0.5T. areNetherlands three European countries that($0.3T) make the Top 10 with the 10 There with the ($0.5T), Germany and country by company HQ theTop UK ($0.1T). Netherlands ($0.5T), Germany ($0.3T) and the 10,000 UK ($0.1T). the UK ($0.1T).

$20T $20T

Total market cap ($B)

$20T

Total market cap ($B) of global public tech companies for top 10 Total market cap ($B) of global country by company HQ

10,000

$12,753B 5,000 $3,348B

ng Ki Un i

or Re

te d

st of w

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te d Un i

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$80

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nd s rla Ne th e

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$126B

Ki te d

$178B

st of w

$275B

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$455B

$800B

$120B

$80

$120B

rm an Ge $126B st ra l

$522B

$126B

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$531B

rla $275B

nd s rla

$652B

Ne th e

So ut h

Ja pa n

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a in Ch

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S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Un i

SOU RCE:

NOTE:

Ta i

St at es

te d Un i

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

$178B

$455B

$275B

$522B

SOU RCE:

$455B

$652B $3,348B $531B

$522B

Ja pa n

Ko re a So ut h

Ta i

$3,348B

St at es

5,000

$531B

Ne th e

$652B 0

Un i

5,000

10,000

te d

Total market cap ($B)

public tech companies for top 10 country by company HQ

$12,753B

TECH VALUE CONCENTR ATION

SOU RCE:

Put differently, a total of 96% of all value created in the public markets by global tech companies is NOTE: concentrated in just 10 countries. The US alone accounts for just under two-thirds of the $19.6T of global tech S&P Capital IQ Platform, as of date 31 October Put differently, a total of 96% ofaccounts all value created in the17%. public markets by other countries that exceed a 5% share 2020, for illustrative purposes only. market cap (65%), while China for a further There are no global tech companies is concentrated in just 10 countries. The US alone and just seven countries globally can claim more than a 1% of global tech market cap in the public markets. of the total market accounts for just under two-thirds of the $19.6T of global tech market cap differently, a of total ofof96% of allcreated value created in the publicbymarkets by companies global techcapitalisation companies isof global tech PutPut differently, a total 96% all value in the public markets global tech is (65%), while China accounts for a furtherUS 17%. There are no other countries concentrated in10 just 10(%) countries. alone accounts for just underof two-thirds the $19.6T ofconcentrated global tech Share of total market cap of The USThe concentrated in just countries. alone accounts for just under two-thirds the $19.6Tof ofcompanies global tech is that exceed a 5% share and just seven countries globally can claim more market cap (65%), while for a17%. further 17%. are no other countries exceed a 5% share global tech companies of accounts market cappublic (65%), while China China accounts for a further There are There no other countries that exceed athat 5% share in just 10 countries than a 1% ofcountries global tech market inmore the public topjust 10 country bycountries company HQ seven globally can claim more a 1%tech of global market cap markets. in the public markets. andand just seven globally can cap claim than amarkets. 1%than of global markettech cap in the public

96% SOURCE:

China

Share of total cap (%)cap of (%) of Share of market total market global public tech companies of global public tech companies of top 10 country by company HQ

top 10 country by company HQ

Res wo

United States Rest of world China

China

Res wo

Taiwan

Japan

Netherl

United States

United States Taiwan

South Korea

Japan

Netherlands

Germany

SOU RCE: NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Japan

Netherl

Australia

United Kingdom

South Korea

Germany

Canada

United Kingd

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Germany

Canada

United Kingd

Taiwan South Korea

Canada

SOU RCE:

132

04.3

Public Markets

Europe's tech ecosystem is, of course, comprised of many separate countries, but it does operate with a large degree of interconnection between its human and nancial capital markets. Taken together, the total value of Europe’ ss tech ecosystem is, of comprised ofofmany countries, but operate with public European tech companies $1.2T, placing Europe at aseparate distant third place behind US and Europe' tech ecosystem is,exceeds ofcourse, course, comprised many separate countries, butitthe itdoes does operate with a large a large degree of interconnectivity between its human and financial capital markets. Taken together, China with a share equivalent to 6.3% of total global tech market cap. degree of interconnection between its human and nancial capital markets. Taken together, the total value of

the total value of tech public European exceeds tech companies exceeds $1.2T,at placing Europe a distant third public European companies $1.2T, placing Europe a distant thirdatplace behind the US and DATA : M total A RKET CA P ( $ B) tech place behind the USequivalent and Chinato with aSET share equivalent to 6.3% of total China with share 6.3% of global market cap.global tech market cap. Total market cap a ($B) of global

public tech companies by selected major regions

Total market cap ($B) of global public tech companies by selected major regions

DATA SET : M A RKET CA P ( $ B) Market cap ($B) 12,753

12,500

Market cap ($B) / % of total

Marketcap cap($B) ($B) Market / % of total

Europe's tech ecosystem is, of course, comprised of many separate countries, but it does operate with a large degree of interconnection between 10,000 its human and nancial capital markets. Taken together, the total value of 12,753 12,500 placing Europe at a distant third place behind the US and public European tech companies exceeds $1.2T, China with a share equivalent to 6.3%7,500 of total global tech market cap. 10,000

5,000 Europe's tech ecosystem is, of course, comprised of many separate countries, but it does operate with a large DATA SET : M A RKET CA P ( $ B) Total market cap ($B) of global 3,348 degree of interconnection between its human and nancial capital markets. Taken together, the total value of 7,500 public tech companies by 2,500 public European tech companies exceeds $1.2T, placing Europe at a distant third place behind the US and selected major regions 1,246 China with a share equivalent to 6.3% of total global tech market cap. 652 530 0

5,000

United States

DATA SET : % OF T OTA L 12,500 2,500 SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

% of total

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

% of($B) total Market cap / % of total

Market cap ($B) / % of total

Total market cap ($B) of global public tech companies by selected major regions NOTE:

10,000 0 65

China

12,753

Europe

3,348

NOTE:

South Korea

1,246

United States

China

Europe

522

709

Japan

Rest of world

652

530

522

Taiwan

South Korea

Japan

7,500

SOU RCE:

5,000 3,348 2,500 1,246

United States

China

SOU RCE: United States

652

530

522

Taiwan

South Korea

Japan

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Taiwan

China

Europe

Europe 3

Taiwan

South Korea

Japan

Rest of World

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

State of European Tech 2020 report launch

133

04.3

Public Markets

The Netherlands theoflist of European countries when ranked the totalofmarket cap of public tech companies The Netherlands topstops the list European countries when ranked by the total by market tech The Netherlands tops the list of European countries when ranked by thecap totalpublic market cap of public tech companies based on the location of company their company headquarters.This Thisisisdriven driven by aasmall number of very based on the location of their headquarters. by small number of very large companies, companies based on the location of their company headquarters. This is driven by a small number of very large companies, including Prosus, ASML and Adyen. ranks Germany ranks second driven byscale the scale of companies including Prosus, ASML and Adyen. Germany second driven by the of companies such as SAP, Infineon, large companies, including Prosus, ASML and Adyen. Germany ranks second driven by the scale of companies such as SAP, In�neon, Zalando and Delivery Hero. The top 5 is rounded out by the UK, France and Sweden. Zalando and Delivery Hero. The top is rounded outThe by the and Sweden. such as SAP, In�neon, Zalando and5Delivery Hero. topUK, 5 is France rounded out by the UK, France and Sweden. Total public tech market cap ($B) by country of company HQ

Total public tech market cap ($B) by country of company HQ L EGEND

DATA SET : T OP 10 COU NT RIES

DATA SET : T OP 10 COU NT RIES Top 10 countries 500.0

Market cap ($B) The Netherlands tops the list of European countries when ranked by the total market cap of public tech L EGEND 500.0 400.0 companies based on the location of their company headquarters. This is driven by a small number of very $455.2B Market cap ($B) large companies, including Prosus, ASML and Adyen. Germany ranks second driven by the scale of companies 400.0 300.0 such as SAP, In�neon, Zalando and Delivery Hero. The top 5 is rounded out by the UK, France and Sweden. $274.5B

Market cap ($B)

200.0

300.0

public tech market capof($B) TheTotal Netherlands tops the list European countries when ranked by the total market cap of public tech $119.9B $113.2B by country of company HQ companies based on the location of their company headquarters. This is driven by a small number of very 100.0 $80.5B large companies, including Prosus, ASML and Adyen.200.0 Germany ranks second driven by the scale of companies $51.8B $34.3B L EGEND 500.0 such as SAP, In�neon, Zalando and Delivery Hero. The top 5 is rounded out by the UK, France and Sweden. 0.0

France

$119.9B

Sweden

$113.2B Switzerland

Poland

$21.9B

$21.7B

$13.6B

Spain

Norway

Ireland

$80.5B $51.8B

$34.3B

SOU RCE:

Market cap ($B)

Other countries0.0 $13.0B

300.0

Netherlands

Germany $274.5B

United Kingdom

France

Sweden

Switzerland

Poland

$21.9B

$21.7B

$13.

Spain

Norway

Irela

$21.9B

$21.7B

$13.

Spain

Norway

Irela

$10.0B SOU RCE: 200.0

$6.9B

$119.9B

$6.4B

100.0

$113.2B

$6.3B

5.0

$34.3B

$0.1B

$0.0B

ar ia

Je rs ey

$0.2B

Poland

Hu n

Switzerland

Gr ee

Re h ec

$1.2BSweden $0.6B

pu bl ic

st ria Au

m iu lg Be

Cy pr us

nm ar k

ly Ita

France

er ns ey

United Kingdom

Germany

Netherlands

0.0

SOU RCE:

$51.8B $2.6B

0.0

$80.5B

$5.2B

10.0

Lu xe m bo u

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

United Kingdom

Fi n

NOTE:

100.0

$455.2B

Germany

DATA SET : OT H ER 400.0 COU NT RIES

Market cap ($B)

NOTE: L EGEND S&P Capital IQ Platform, as of date 31 October Market cap ($B) purposes only. 2020, for illustrative

Netherlands

Market cap ($B)

Total public tech market cap ($B) by country of company HQ

$274.5B DATA SET : T OP 10 COU NT RIES

Market cap ($B)

$455.2B

NOTE: The scale of public market is typically driven in each country by a small number of large tech companies. In the S&P Capital IQ Platform, as of date 31 October Netherlands, for example, 80.4%SOU ofRCE: the total market cap of public Dutch companies is accounted for by the top 2020, for illustrative purposes only. NOTE: three companies with a Netherlands HQ. The UK has the most distributed public tech market cap. The top S&P Capital IQ Platform, as of date 31 October three public UK tech companies account for only 33.8% of total market cap, signi�cantly lower than than other 2020, for illustrative purposes only. country. TheThe scale of public market is typically driven indriven each country a small number of large tech of companies. In companies. the scale of public market is typically in eachbycountry by a small number large tech In the The scalefor of example, public market isoftypically driven incap each country by acompanies small number of large tech companies. In the Netherlands, 80.4% the total market of public Dutch is accounted for by the top Netherlands, for example, 80.4% of the total market cap of public Dutch companies is accounted for by the top three companies with a Netherlands HQ. UK hasmarket the most distributed public market cap. The top for by the top three Netherlands, for example, 80.4% ofThe theHQ. total cap of most publicdistributed Dutchtech companies accounted three a Netherlands The UK has the public is tech market cap. The top Sharecompanies of market capwith held by top three public UK tech companies account for only 33.8% of total market cap, signi�cantly lower than than other 100.0 companies with atech Netherlands HQ.account The UK has the most distributed publiccap, techsigni�cantly market cap. The top three public UK99.1% public tech companies 3 largest 94.0% three public UK companies for only 33.8% of total market lower than than other country. per country basedaccount on location tech companies forofonly 33.8% of total market cap, significantly lower than than other country. 88.1% country.

company HQ

98.

80.4%

74.2%

Share of market cap held by top public tech companies 3 largest Share of market cap held by top per country based on location of 3 largest public tech companies company HQ

100.0

% of total

75.0

68.0%

67.4% 88.1%

100.0

80.4%

per country based on location of company HQ

75.0 50.0

25.0

98.

71.0%

33.8%

74.2%

71.0%

67.4%

33.8%

50.0 0.0

99.1% 88.1%

67.4%

68.0%

25.0

98.4%

94.0%

74.2%

80.4% 68.0%

% of total

75.0

50.0

71.0%

99.1%

94.0%

Netherlands

Germany

United 33.8% Kingdom

France

Sweden

Switzerland

Poland

Spain

Norway

Irela

Norway

Irela

25.0 0.0

Netherlands

SOU RCE:

Germany

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

0.0

Netherlands

United Kingdom

Germany

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

134

France

United Kingdom

Sweden

Switzerland

France

Poland

Sweden

Spain

Switzerland

Norway

Poland

Ireland

Spain

04.3

Public Markets

PUBLIC MARKETS: L AGGING INDICATOR In some ways, the public markets re�ect the historical development of technology, as well as the potential to build enduring companies that scale ever larger over decades. In fact, it is noteworthy that the largest share of global tech market cap ismarkets concentrated companies in theof1980s or even earlier, equivalent to 43.8% In some ways, the public reflectin the historical founded development of total market cap. The public markets are therefore a lagging technology, as well as the potential to build enduring companies indicator that scalewhen considered in the context of the private markets; 76.9% of total global today hastech been health of the early-stage technology global market ever larger over decades. In fact, it is noteworthy that the largest share of tech market capof created by companies founded in the pre-dotcom bubble era. By contrast, companies founded in the past 10 In some ways, the public markets re�ect the historical development of technology, as well as the potential to cap is concentrated In some ways, the public markets re�ect the historical development of technology, as well as the potential to in global tech market cap is concentrated in companies founded in the 1980s years unsurprisingly represent just 6.2% of global tech market cap, though those companies have already build enduring companies that scale ever larger over decades. In fact, it isIn noteworthy that the largest share oflargest share companies founded build enduring companies that scale ever larger over decades. fact, it is noteworthy that the of in or even earlier, equivalent to 43.8% of total market cap. The public markets global techtech market cap iscap concentrated in value companies founded the 1980sinorthe even earlier, equivalent to 43.8% generated an astonishing $1.2T of incompanies the publicin markets. the 1980s or even earlier global market is concentrated in founded 1980s or even earlier, equivalent to 43.8% are therefore lagging indicator considered in the context of the health ofin the context of the of total market cap.a The marketswhen are therefore a lagging indicator considered of total market cap.public The public markets are therefore a laggingwhen indicator when considered in the context of the SOURCE: theof early-stage technology private markets; 76.9% techmarket marketcap cap health the early-stage technology private markets; 76.9%of oftotal total global global tech today has been health of thecap early-stage technology private markets; 76.9% of total globalfounded tech market cap today has been Total market ($B) created by created by companies founded in the pre-dotcom bubble era. By contrast, companies in the past 10 today has been created by companies founded in the pre-dotcom bubble era. By contrast, $8,656B created by companies founded in the pre-dotcom bubble era. By contrast, companies founded in the past 10 global public tech companies by years unsurprisingly represent just 6.2% of global tech market cap, though those companies have already companies founded inrepresent the past 10 years unsurprisingly represent justthough 6.2% ofthose globalcompanies tech market company founding decade years unsurprisingly just 6.2% of global tech market cap, have already generated an astonishing $1.2T of value in the public7,500 markets. cap, thoughanthose companies have already astonishing $1.2T of value in the public markets. generated astonishing $1.2T of value in generated the public an markets.

44%

Market cap ($B)

7,500

5,000

2,500

$8,656B $6,534B

$3,316B $6,534B

2,500

NOTE: This does not include $34.9B of total market cap representing companies that had an unclassi�ed founding year, equating to <0.2% NOTE:of total market cap. S&P Capital IQ Platform, as of date 31 October 2020, for illustrative This does not include $34.9B of total market purposes only. cap representing companies that had an

$8,656B

5,000

7,500

Market cap ($B)

global public tech companies by company founding decade

Market cap ($B)

$6,534B

Total market cap ($B) created by global public tech companies by Total market cap ($B) created by company founding decade

$1,219B 5,000

$3,316B

1980s and earlier

1990s

2000s $3,316B

2010s $1,219B

2,500 0

SOU RCE: 1980s and earlier

SOU RCE:

unclassi�ed founding year, equating to <0.2% of total market cap. S&P Capital IQ Platform, NOTE: as of date 31 October 2020, for illustrative purposes Thisonly. does not include $34.9B of total market

1990s

1980s and earlier

2000s

1990s

2010s

2000s

$1,219B

2010s

SOU RCE:

cap representing companies that had an

unclassi�ed founding year, equating to Inof assessing the health of<0.2% the European tech ecosystem today, it is important to take this time dimension total market cap. S&P Capital IQ Platform, as ofaccount date 31 October 2020, foranalysing illustrative In assessing the health of thedifferent European tech ecosystem it isfrom important to take this time dimension into when indicators. One waytoday, to switch a lagging indicator to one that has into purposes only. account when analysing different indicators. One way to switch from a lagging indicator to one that the the potential to serve as a leading indicator of direction of travel is to analyse Europe’s share of globalhas public potential to serve as a leading indicator of direction of travel is to analyse Europe's share of global public tech tech market cap using cohorts of companies categorised by their year of founding. If Europe is indeed making market cap using cohorts of companies categorised by their year of founding. If Europe is indeed making forward progress in tech, its share of global public tech market cap should be increasing. The data, sliced in forward progress in tech, its share of global public tech market cap should be increasing. The data, sliced in this way, tellshealth a fascinating story. The US is the dominant across every but has also experienced In assessing of the European today, it isplayer important to take thiscohort time dimension this way, the tells a fascinating story.tech The ecosystem US is the dominant player across every cohort but hasinto also experienced account when analysing different indicators. One China’ way tosswitch lagging thatas has a clear decline in market share over time. rise isfrom alsoaclear to indicator see, but to itsone might a the tech powerhouse a clear decline in market share over time. China's rise is also clear to see, but its might as a tech powerhouse potential serve as a leading indicator of direction of travel is to analyse Europe'The s share of globalstory public tech interesting datesto back as far 1990s, earlier most might imagine. dates back ascohorts far as as the the 1990s, much much earlierthan than most imagine. TheEuropean European storyisismost most interesting market cap using of companies categorised by their yearmight of founding. If Europe is indeed making of all. all. Europe lost its way in tech after the 1980s and seemingly endured a alost decade inin the 1990s. But the 1990s. But Europe of Europe lost its way in tech after the 1980s and seemingly endured lost decade forward progress in tech, its share of global public tech market cap should be increasing. The data, sliced in Europe has been fighting back and more recent cohorts show that Europe keeps rising on the global stage. has been ghting back and more recent cohorts show that Europe keeps rising on the global stage. this way, tells a fascinating story. The US is the dominant player across every cohort but has also experienced

a clear decline in market share over time. China's rise is also clear to see, but its might as a tech powerhouse 100 100 dates back as far as the 1990s, much earlier than most might imagine. The European story is most interesting Share of total market cap (%) of all. Europe lost its way in tech after the 1980s and seemingly endured a lost decade in the 1990s. But Europe created by global public tech has been ghting back and more recent cohorts show that Europe keeps rising on the global stage. companies by company founding decade by selected major regions Share of total market cap (%)

L EGENDEurope Europe UnitedTaiwan States Taiwan China South South Korea Korea Europe Japan

Japan

Taiwan

Rest of of World World Rest

% %of oftotal totalmarket marketcap cap

China China

75 % of total market cap

created by global public tech companies L EGEND EGENDby company founding L decadeUnited by selected major States United States regions

75 75

100

50 50

25 25

0 0

South Korea

1980s and and earlier earlier 1980s

1990s 1990s

2000s 2000s

2010s 2010s

Japan Rest of World

NOTE: NOTE: S&P S&P Capital Capital IQ IQ Platform, Platform, as as of of date date 31 31 October October 2020, for illustrative purposes only.

NOTE:2020, for illustrative purposes only.

SOU RCE: RCE: SOU 1980s and earlier

1990s

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

135

2000s

2010s

To Europe's relative position, it is interesting to examine the scale of tech in more granular 04.3further understand Public Markets categories. The largest single category by global market cap is Online Commerce, having generated companies valued at more than $4T in the public markets. This is followed by Consumer Internet Services ($3.4T), Semiconductors ($3.1T), Tech Hardware ($2.6T) and Application Software ($2.3T). To further understand Europe’s relative position, it is interesting to examine the scale of tech in more granular To further understand Europe's it is interesting the scale ofgranular tech in more granular To further understand Europe' s relativerelative position,position, it is interesting to examineto theexamine scale of tech in more categories. The largest single category by global market cap is Online Commerce, having generated companies Commerce Total market cap ($B) created categories. The largest single category by globalby market isOnline Online having generated categories. The largest single category globalcap market capCommerce, is Online Commerce, having generated valued at more than $4T the markets. This isConsumer followed byis Consumer Internet Services ($3.4T), by global public companies companies valued attech more thanin$4T inpublic the This is followed by Consumerby Internet Services companies valued at more than $4Tpublic in themarkets. public markets. This followed Consumer Internet Services Internet by category Semiconductors ($3.1T), Tech ($2.6T) and Application Software ($2.3T). ($2.3T). ($3.4T), Semiconductors ($3.1T), TechHardware Hardware ($2.6T) and Application Software ($2.3T). ($3.4T), Semiconductors ($3.1T), Tech Hardware ($2.6T) and Application Software Semiconductors

Tech Hardware Online Commerce

Total market cap ($B) created Totalpublic market cap ($B) created by global tech companies by global public tech companies by category

Consumer Internet

$1,608B

500

$470B Fintech $53B

Games & Interactive Entertainment

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

1,000

1,500

$2,194B 2,000 2,500 $1,608B Total market cap ($B)

3,000

3,500

4,000

$470B

500

1,000

Internet Advertising & Direct Marketing

NOTE:

$2,300B

$2,194B

$53B 0

$2,647B

$2,300B

$470B

Internet Advertising & Direct Marketing FintechSystems Software

SOU RCE:

$3,075B

$2,647B

$1,608B

Games & Interactive Entertainment Application Software Systems Software

Internet Advertising & Direct Marketing

$3,356B

$2,194B

Fintech Tech Hardware

Games & Interactive Entertainment

$4,058B

$3,075B

Semiconductors

Application Software

$3,075B

$3,356B $2,300B

SemiconductorsSystems Software Tech Hardware

$3,356B

$2,647B $4,058B

Online Commerce

Consumer Internet Application Software

by category

$4,058B

1,500

$53B 0

2,000

2,500

3,000

3,500

4,000

4,500

Total market cap ($B)

500

1,000

1,500

2,000

SOU RCE:

2,500

3,000

3,500

Total market cap ($B)

The regional share of global market cap of public tech companies in these different categories varies quite signi�cantly. The US is the clear leader in every category other than Games & Interactive Entertainment and SOU RCE: Internet Advertising & Direct Marketing. China's share is strongest in categories that are shielded from NOTE: The regional share of global market cap of public tech companies in these different categories varies quite international competition, including Online Commerce and Consumer Internet. S&Pregional Capital IQ Platform, as of of dateglobal 31 October market cap of public tech companies The share in these different categories varies quite 2020, for illustrativeThe purposes significantly. USonly. is the clear leader in every category other than Games & Interactive Entertainment The US ismarket the clear leader intech every category other than Games & Interactive Entertainment and 100companies in these different categories varies quite Thesigni�cantly. regional share of global cap of public and Internet Advertising & Direct Marketing. China’ s share is strongest in categories that shielded from Internet Direct Marketing. China's share is strongest in categories that areare shielded from Share ofAdvertising market (%)&clear created signi�cantly. The UScap is the leader in every category other than Games & Interactive Entertainment and international competition, including Online Commerce and Internet. by global public tech companies international competition, including Online Commerce and Consumerthat Internet. Internet Advertising & Direct Marketing. China's share is strongest inConsumer categories are shielded from NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

by category and selected international competition, including Online Commerce 75 and Consumer Internet. regions Share of market cap (%) created Share ofglobal marketpublic cap (%) created L EGEND by tech companies by global public tech companies by United category States and selected by category and selected regions China

Europe

L EGEND L EGEND

Rest of World UnitedUnited States States

China China EuropeEurope

% of market cap

regions

Rest ofRest World of World

% of market cap % of market cap

100 100

50 75

25 50

0 25

Online 0 Commerce

SOU RCE: NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. NOTE:

Online Commerce

Consumer

Online Internet Commerce

Consumer Internet

Semiconductors Tech Hardware

Consumer Internet

SOU RCE:

S&P Capital NOTE:IQ Platform, as of date 31 October 2020, for illustrative purposes only.

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

136

Application

Application Software

Systems

Fintech

Semiconductors Software Tech HardwareSoftware Application Software

Systems Software

Games & Interactive Entertainment

Intern Advertis Dire Marke

Systems Interactive Fintech Advertising & Games & Entertainment Direct Software Interactive Marketing Entertainment

Intern Advertis Dire Marke

Games &

Fintech

Internet

Europe shareshare of total L EGEND Europe ofcategory total category market cap (%) versus category market cap (%) versus category Category as % of total tech market cap share (%) of total tech share (%) of total tech marketEurope cap as % of total category market cap

market cap

L EGEND

L EGEND Category as % of total tech market cap Category as % of totalmarket tech market cap Europe as % of total category cap Europe as % of total category market cap

% of total category map vs % of total tech market cap

market cap

21%

17%

28%

16% 13% 12%

10 20

21% 17%

13% 16%

10% 8%

12%

10%

Online 8% Commerce

Online SOU RCE: Commerce

11% 8%

16%

3% 8% 0

12%

10% 17%

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

21%

% of total category map % of vs total % of total category techmap market vs %cap of total tech market cap

Looking at Public Europe's 04.3 Markets share of major tech categories more closely, it is interesting to compare this to the relative size of the category (as a share of total global public tech market cap). Europe's market share in important categories such as Consumer Internet, Tech Hardware and Systems Software is very small. In other large categories, such as Online Commerce and Semiconductors, however, European companies account for a Looking at share toto compare this toto the signi�cantly highers share. Looking at Europe’ Europe's share of ofmajor majortech techcategories categoriesmore moreclosely, closely,ititisisinteresting interesting compare this the Looking at Europe's share of major(as tech categories more closely, it is interesting to compare this to the relative size of the category a share of total global public tech market cap). Europe’ s market share in in relative size of the category (as a share of total global public tech market cap). Europe's market share relative size of the category (as a share of total global public tech market cap). Europe's market share in important categories such as Internet, Tech and Systems Software isisvery small. In In other important categories such as Consumer Consumer TechHardware Hardware and Systems Software very small. 30 Hardware Europe share of total category important categories such as Consumer Internet,Internet, Tech and Systems Software is very small. In other other large categories, such as Online Commerce and Semiconductors, however, European companies market cap (%) versus category large categories, such as Online Commerce and Semiconductors, however, European companies large categories, such as Online Commerce and Semiconductors, however, European companies account for a account for a share (%)higher of total techshare.higher share. signi�cantly account for ahigher significantly signi�cantly share.

Consumer Internet

Online Commerce

Consumer Internet

11%

Semiconductors Tech Hardware 10%

Semiconductors Tech Hardware

Consumer Internet

12%

13%

12% 12% 8% Application Software

1% 11% Systems Software

1% Application Systems 1% Software Software

Semiconductors Tech Hardware

10%

Fintech 8% 8%

Games10% & Interactive Entertainment D

0% Fintech

Application Software

2% Games & Internet 1% Interactive Advertising & Entertainment Direct Marketing

Systems Software

Fintech

SOU RCE:

Games & Interactive Entertainment D

NOTE:

It is important, however, not to only look in the rear-view mirror given the lagging nature of public tech market SOU RCE: cap in aggregate. As such, it is again helpful to examine the evolution of European market share across NOTE: It is important, however, not to only look in theallows rear-view mirror given the nature public techincreasing cohorts of companies by founding year. This interesting tolagging emerge, suchof asof Europe's It S&P is important, however, not to only look in the rear-view mirrortrends given the lagging nature public tech market Capital IQ Platform, as of date 31 October market cap in purposes aggregate. As such, it is again helpful tomarkets examineinthe evolution of European market share share value generated in the Online Commerce Consumer Internet. It 2020, for illustrative cap in of aggregate. Asonly. such,byit companies is again helpful topublic examine the evolution of European and market share across across cohorts of companies bythe founding year. This allowscategory. interesting trends to emerge, as/ SaaS, Europe’ s also shows Europe's decline in Application Software Europe was latesuch into such Cloud though cohorts of however, companies by founding year. This allows interesting trends to emerge, as Europe's increasing It isEurope's important, not to only look private in the rear-view mirror given the markets lagging nature of public tech market market new generation of $1B+ cloud companies should help to boost Europe's share whenIt increasing share of value generated by companies in the public in Online Commerce and Consumer share of valueAsgenerated by companies in the public markets Online Commerce Consumer Internet. capthey in aggregate. such, it ispublic again helpful to examine the evolution of in European market shareand across transition into the markets. Internet. It also shows Europe’ s decline in the Application Software category. Europe was late into Cloud Software category. Europe late into Cloud / SaaS, though also of shows Europe's declineyear. in the Application cohorts companies by founding This allows interesting trends to emerge, suchwas as Europe's increasing / SaaS, though Europe’ new generation ofcloud $1B+ private cloud companies should help to boost Europe’ s when Europe's new generation of $1B+ private companies should help to boost Europe's market share of value generated by scompanies in the public markets in Online Commerce and Consumer Internet. It share 50.0 category. Europe was late into Cloud / SaaS, though alsothey shows Europe' stotal decline the Application Software market share when they transition into the public markets. transition into theinpublic markets. Europe share of category S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Europe share of total category market L EGEND cap by founding decade Europe share of total category for1980s selected categories & earlier L EGEND 2000s L EGEND1980s & earlier 2010s 1990s 1980s & earlier 1990s 2000s 2000s2010s 2010s

50.0

% of total category market cap

market cap by founding decade 1990s categories for selected

40.0

30.0

20.0

% of total category % of total market category cap market cap

Europe's new generation ofdecade $1B+ private cloud companies should help to boost Europe's market share when market cap by founding they transition into the public markets. for selected categories 40.0 50.0

30.0 40.0

20.0 30.0

10.0 20.0

0.0 10.0

10.0

0.0

0.0 Application Software

SOU RCE:

Application Software

Consumer Internet

Application Consumer Software

Consumer Fintech Internet

Internet

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

NOTE:NOTE: S&P Capital IQ Platform, as of date 31 October S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

2020, for illustrative purposes only.

137

Fintech

Games & Interactive Entertainment

Internet Online Semiconductors Advertising & Commerce Direct Marketing Games & Internet Online Semiconductors Internet Online Semiconductors Systems Tech Hardware Interactive Advertising & Commerce Advertising & Commerce Software Entertainment Direct Direct Marketing Marketing

Systems Software

04.3

Public Markets

t is not surprising that the US and China are home to the world's largest technology giants. The US now have our techItcompanies valued in the excess of $1T, while China's largest companies are worth a combined is not surprising that US and China are home totwo the world’ s largest technology giants. The US $1.5T, It is not surprising that the US and China are home to the world's largest technology giants. The US now have signi cantly more than the total value of all European public tech companies. Europe's largest now have four tech companies valued in excess of $1T, while China’s two largest companies public are worth a fourcompany tech companies excess of even $1T, while two are the worth a combined echnology (Prosus,valued $163B)inwould not makeChina's the top 10largest list for companies the US, where entry ticket is $1.5T, combined $1.5T, significantly more than the total value of all European public tech companies. Europe’s signi cantly more than the totalever value of alltech European publicand techits companies. largest public top 10 are Europe's now valued at more than $214B. Europe is, however, producing larger companies largest public technology company (Prosus, $163B) would not even make the top 10 list for the US, $700B intechnology aggregate.company (Prosus, $163B) would not even make the top 10 list for the US, where the entry ticket is where the entryis, ticket is $214B. Europeever is, however, producing ever and larger companies and itsat top itstech top 10 are now valued more than $214B. Europe however, producing larger tech companies 10 are now valued at more than $700B in aggregate. $700B in aggregate. Top 10 largest public tech companies by market cap ($B) and regionTop 10 largest public tech companies by market cap ($B) and region

DATA SET : EU ROPE

Europe

Company

Market cap ($B)

Category

Category Online Commerce

VC-backed No

VC-backed

Alibaba 2

ASML

824152

Online Commerce Semiconductors

Yes

Tencent 3

SAP

725127

Consumer Internet Application Software

Yes

4 Meituan

Adyen

219 51

Fintech Online Commerce

Yes

5 JD.com

Spotify

127 45

Consumer Internet Online Commerce

Yes

6 Dassault Systèmes Pinduoduo

10845

Application Software Online Commerce

Yes

Semiconductors

Online Commerce

Yes

7 8

NXP Semiconductors

Infineon Technologies

STMicroelectronics

Zalando

Xiaomi NetEase Baidu

68 60 45

LONGi Green Energy Technology

Will Semiconductor

SOU RCE:

NOTE:

S&P Capital IQ Platform data as of date 31 October 2020.

Yes

S&P Capital IQ Platform data as of date 31 October 2020.

Fintech

SOU RCE:

138

38 36 27 24

Tech Hardware

Games & Interactive Entertainment Consumer Internet Semiconductors

Semiconductors

Yes Yes Yes Yes No

04.3

Public Markets

The top 10 largest public tech companies in the US, China and Europe also highlight an interesting point about the relative maturity of local venture capital ecosystems. 80% of the largest US tech companies were backed by venture capitalists in their early days and 90% of China's largest public tech companies were also VCThe top 10 largest public tech of companies in public the US,tech China and Europe also highlight an interesting point about the backed. In Europe, just three the largest companies were funded by VCs, though this actually The top maturity 10 largestofpublic tech companies in the US, China and Europe also highlight an interesting point about relative local venture capital ecosystems. 80% of the largest US tech companies were backed by venture represents huge progress. The arrival of Adyen, Spotify and Zalando into the Top 10 most valuable European the relativeinmaturity of local venture capital ecosystems. 80%tech of the largest USwere techalso companies wereInbacked capitalists their early days and 90% of China’ s largest public companies VC-backed. Europe, Thetech top 10 largest public tech companies in the US, China and Europe also highlight an interesting point aboutand generating companies is an important indicator that Europe's venture capital ecosystem is maturing by venture capitalists in their early days and 90% of China's largest public tech companies were also VCtheoutcomes relative maturity of local venture capital ecosystems. 80% of the largest USthough techas companies were backed just three of largest public tech companies were funded by this actually represents huge progress. ofthe extraordinary scale. This is important because as VCs, recently 2017, there was not a single VCbacked.capitalists In Europe, just three of the largest public largest tech companies were funded byalso VCs,VCthough this actually by venture in their early days and 90% of China's public tech companies were backed tech company amongst Europe' s into largest companies. Going forward, this is only set to increase. The arrival of Adyen, Spotify and Zalando the Top 10 most valuable European tech companies is an important represents huge The arrival of Adyen, Spotify and into the Top 10 most valuable European backed. In Europe, justprogress. three of the largest public tech companies wereZalando funded by VCs, though this actually indicator that Europe’ s venture capital ecosystem is maturing and generating outcomes of extraordinary scale. This tech companies is an important indicator that Europe's venture capital ecosystem is maturing represents huge progress. The arrival of Adyen, Spotify 100 and Zalando into the Top 10 most valuable European and generating iscompanies important because as recently 2017, there was because notcapital a single VC-backed tech there company amongst Europe’ tech an important indicator that Europe' s venture ecosystem isas maturing and generating outcomes ofis extraordinary scale.as This is important as recently 2017, was10% not a single VC- s largest Share of top 10 largest public 20% tech companies by region outcomes oftech extraordinary scale. This is important as recently Going as 2017,forward, there was notis a single VC-to increase. companies. Going forward, this only set tobecause increase. backed company amongst Europe' s largest companies. this only set L EGEND

Share of top 10 largest public VC-backed

100

Share of top 10 largest public tech companies by region Non-VC-backed tech companies by region L EGEND

VC-backed VC-backed Non-VC-backed Non-VC-backed

75 % of public tech companies

L EGEND

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

% of public tech companies % of public tech companies

backed tech company amongst Europe's largest companies. Going forward, this is only set to increase. 75 100

20%

10%

20%

50 75

10%

70%

90% 80%

70%

25 50

90% 80%

0 25

90%

30%

80%

United States

China

30%

United States

China

United States

Europe

SOU RCE:

$1B+ PUBLIC TECH COMPANIES

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

795

The scale of the tech industry is evident when looking at the sheer number of public public tech The scale of industry the tech industry is evident when looking atsheer the sheer number of public tech companies that have tech companies that have generated huge value. It is, of course, remarkable that companies arehave now The scale of the tech is evident when looking at the number of public tech companies that The scale of the value. tech industry is evident when looking at the are sheer number of public tech companies thatthree have generated huge It is, of course, remarkable thatcompanies there now four $1T+ tech companies, another there are now four $1T+ tech companies, another three at >$500B and 22 valued at $1B+ generatedgenerated huge value. It is, of course, remarkable that there are now four $1T+ tech companies, another three huge value.and It is,22ofvalued course, that there are now four $1T+oftech companies,founder anotherorthree companies at >$500B atremarkable over $100B. But from the perspective an early-stage valued at over $100B. But from the perspective of an early-stage founder orof investor, companiescompanies at >$500B and 22 valued at over $100B. But from the perspective an early-stage founder or at >$500B and 22 valued at over $100B. But from the perspective of an early-stage founder or$1B SOURCE: investor, it iseven perhaps even more astonishing to there know are that795 there are tech 795 public tech companies valued at itisisperhaps perhaps more astonishing to know that public companies investor, itor even more astonishing to know that there are 795 public tech companies valued at $1B investor, it is perhaps even more astonishing to know that there are 795 public tech companies valued at $1B more. The possibilities to create huge outcomes with tech are massive. valued atThe $1B possibilities or more. The to possibilities to outcomes create huge outcomes tech are massive. or more. createoutcomes huge with tech arewith massive. or more. The possibilities to create huge with tech are massive. Number of companies

Total number of public tech number oftotal public tech cap companies and market Total numberTotal of public tech companies andgroup total market cap by market cap companies and total market cap by market cap group

by market cap group

$1T+ $1T+ $1T+ $500B-$1T $500B-$1T $500B-$1T$100-500B $100-500B $100-500B$50-100B $50-100B $50-100B $25-50B $25-50B $10-25B $25-50B $10-25B $5-10B $10-25B $5-10B $1-5B $5-10B $1-5B <$1B <$1B $1-5B

<$1B

NOTE:

NOTE: NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.31 October S&P Capital IQ Platform, as of date 2020, for illustrative purposes only.

30%

Europe

China

SOU RCE:

S&P Capital IQ Platform, as of date 31 October NOTE: 2020, for illustrative purposes only.

Europe

SOU RCE: 0

NOTE:

70%

SOU RCE: SOU RCE:

4 3 22 20 38 111 123 474 3,274

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

139

4 4 3 3 22 22 20 20 38 38 111 111 123 123 474 474 3,274 3,274

Number of companies Number of companies

POWER L AW

04.3 Public Markets to note that the power law distribution It is also fascinating of value creation is evident in the public markets, just as it is in the private markets. The top 1% of most valuable global public tech companies account for a combined of most valuable globalL AW public tech companies account for 69% of tota POWER It is also tocap noteofthat the ($13.5T), power law distribution of value L AWcreation share of fascinating total market 68.9% while the topPOWER POWER AW value marketLcap It is10% also fascinating to note that the power law distribution is is evident in the public just it is inlaw the private markets. The top of companies account 93.9% of total value created It also fascinating tomarkets, notefor that theaspower distribution of value creation is evident in the public markets, just as it ($18.4T). 1% of most valuable global public tech companies account for of value creation is evident in the public markets, just as it a combined is in the private markets. The top 1% of most valuable is in the private markets. The top 1% of most valuable share of total capaccount of 68.9% while the top 10% of companies global public tech market companies for($13.5T), a combined of most valuable global public tech companies account for 69% of total global public tech companies account for a combined share of total market cap of 68.9% ($13.5T), while the top account for 93.9% of total value created ($18.4T). Share of total public tech of most valuable techglobal companies account for 69% of tota market cap value ofglobal mostpublic valuable public 80.5% share of total market cap of 68.9% ($13.5T), while the top 10% of companies account 93.9% of total value created 80.0 companies versus sharefor of total market cap value tech companies account for ($18.4T). 10% of companies market cap by marketaccount cap groupfor 93.9% of total value created 69% of total market cap value ($18.4T).

L EGEND

companies versus share of total market cap by market cap group L EGEND Share of companies (%)

L EGEND Share of total market cap (%) Share of companies (%) Share of total market cap (%)

80.0 % of companies / % of total market cap

Share of total public tech Shareversus of companies companies share(%)of total Share total public tech market cap of by market cap group Share of total market cap (%)

60.0

40.0

20.0

0.0

NOTE: S&P Capital IQ Platform, as of date 31 October

% of companies / % of total % market of companies cap / % of total market cap

1% 1%

60.0

80.5%

80.0 40.0 30.4% 22.6%

60.0 20.0 11.6%

30.4%

40.0 0.0

6.8% 0.1% $1T+30.4% 11.6%

0.1%

22.6%

$500B-$1T

0.5%

0.1%

$1T+

0.1% $500B-$1T

0.5%

$100-500B 0.5%

$100-500B

11.6%

0.9%

0.5% $50-100B

6.8%

20.0 SOU RCE:

7.0%

22.6%

$50-100B

$25-50B

$10-25B

6.8% SOU RCE:

0.5%

$10-25B

0.5%

5.5%

4.6%

$5-10B

7.0% 0.9%

$1-5B

<$1

2.4%

$1-5B

<$1B

9.0% 3.0%

2.7%

5.5%

4.6%

$5-10B

11.6%

3.0%

2.7%

0.9%

3.0%

2.7%

9.0%

7.0%

11.6%

9.0%

4.6%

0.1% 0.1% 2020, for illustrative purposes 0.0 Europe does not yetonly. have any companies to match the scale of the largest US and Chinese tech giants, but it NOTE: $1T+ $500B-$1T $100-500B $50-100B $25-50B $10-25B $5-10B now three companies valued at more than $100B (Prosus, ASML and SAP), Adyen in the $50-100B category S&P Capitalhas IQ Platform, as of date 31 October 2020, for illustrative purposes only. and a further 18 companies valued at more than $10B, including VC-backed companies, such as Spotify, SOU RCE: Zalando, Delivery Hero and Just Eat Takeaway. NOTE: Europe does not yet have any companies to match the scale of the largest US and Chinese tech Europe does not yet have any companies to match the scale of the largest US and Chinese tech giants, but it S&P Capital IQ Platform, as of date 31 October giants, but now has three companies valued more than $100B ASML andgiants, SAP), Europe does notityet have any companies tomore match the scale of (Prosus, the largest US(Prosus, and Chinese tech but it 100at 2020,has for illustrative purposes only. now three companies valued at than $100B ASML and SAP), Adyen in the $50-100B category nowAdyen has companies valued at more than $100B (Prosus, ASML and SAP),at Adyen inthan the $50-100B category Totalthree number of public tech in the $50-100B category and a further 18 companies valued more $10B, including and a further 18 companies valued at more than $10B, including VC-backed companies, such as Spotify, market capvalued group at more than $10B, including VC-backed companies, such as Spotify, andVC-backed acompanies further 18 by companies companies, suchJust as Spotify, Zalando, Delivery Hero and Just Eat Takeaway. Zalando, Delivery HeroJust and Eat Takeaway. by selected regions Zalando, Delivery Hero and Eat Takeaway.

11.6% 5.5% $1-5B

<$1

$1-5B

<$1B

$1-5B

<$1B

number of public TotalTotal number of public tech tech United States companies by market cap group companies by market cap group by selected regions byChina selected regions L EGEND

Rest of World L EGEND

United States China

United States

China

Europe

Rest of World

75 # of public tech companies

Europe

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

# of public tech companies # of public tech companies

100

L EGEND

100

50 75

25 50

0 25

$1T+

$500B-$1T

$50-100B

$25-50B

$10-25B

$5-10B

SOU RCE: $1T+

$500B-$1T

0 SOU RCE:

$1T+

$100-500B

$500B-$1T

NOTE: S&P Capital IQ Platform, as of date 31 October 2020,NOTE: for illustrative purposes only.

$100-500B

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

140

$50-100B

$100-500B

$25-50B

$50-100B

$10-25B

$25-50B

$5-10B

$1-5B

$10-25B

<$1B

$5-10B

04.3

Public Markets

An important discussion in European tech has centred around the choice of exchange for companies making the transition into the public markets. The prevailing narrative is that European tech companies have eschewed listing at home in order to go public in the US on one of the two main exchanges, the NASDAQ or the NYSE. In that discussion context, it is to examine the top 10 exchanges market based on the An important in interesting European tech has centred around the choiceby of total exchange forcap companies primary listing venue of European tech companies. The NASDAQ and NYSE do indeed feature prominently with An important discussion in European tech has centred around the choice of exchange for companies making making the transition into the public markets. The prevailing narrative is that European tech companies An important discussion in10 European tech of haschoice centred around the choice of exchange forcap companies makingtech both making the top exchanges based on the combined market of European companies the transition into the public markets. The prevailing narrative is that European tech companies have have eschewed at home in order to go public in the US on one oftech the two main have exchanges, the thethat transition thelisting public markets. The prevailing narrative is that have into listed on eschewed listing atdifferent home in exchanges. order to go public in the US on European one of the twocompanies main exchanges, the NASDAQ or the NASDAQ or the NYSE.inInorder thattocontext, it in is the interesting the top 10 exchanges by total market eschewed listing at home go public US on onetoofexamine the two main exchanges, the NASDAQ or the NYSE. In that context, it is interesting to examine the top 10 exchanges by total market cap based on the NYSE. that context, is interesting examine the top 10 exchanges by total The market cap based on the do indeed capInbased on the itprimary listingtovenue of European tech companies. NASDAQ NYSE Exchange Market cap ($B) and % of total primary listing venue of European tech companies. Theand NASDAQ and NYSE do indeed feature prominently with primary venue of tech companies. The NASDAQ NYSE do indeed feature prominently with Toplisting 10 exchanges by European total feature prominently with both making the 1top 10 exchanges of choice based oncap theof combined market Euronext Amsterdam (ENXTAM) 393 32European both making the top 10 exchanges of choice based on the combined market tech companies both making toppublic 10 exchanges Europeanthe tech market capof choice based on the combined market cap of European tech companies cap of European tech companies that have listed on different exchanges. that have listed on different exchanges. that have on different exchanges. basedlisted on primary listing venue 2 XETRA Trading Platform (XTRA) 279 22 of European tech companies

Top 10 exchanges by totalby total Top 10 exchanges European tech public marketmarket cap European tech public cap based on primary listing venue based on primary listing venue of European tech companies

of European tech companies

139 % of total Market cap ($B)

11 % of total

Euronext (ENXTAM) 393 Stock Exchange (LSE) London 14 Amsterdam Euronext Amsterdam (ENXTAM)

32 118 393

10 32

XETRA Trading Platform (XTRA)

279

Euronext Paris (ENXTPA)

139

London Stock Exchange (LSE)

118

Nasdaq Global Select (NasdaqGS)

New York Stock Exchange (NYSE)

Warsaw Stock Exchange (WSE)

5 2

6 3

Nasdaq Global Select (NasdaqGS) XETRA Trading Platform (XTRA)

78 279

New YorkParis Stock(ENXTPA) Exchange (NYSE) Euronext

6 22

58 139

5 11

Warsaw (WSE) London Stock Exchange (LSE)

34 118

3 10

8 5

OMX Nordic Exchange Stockholm (OM) Nasdaq Global Select (NasdaqGS)

32 78

3 6

9 6

SIX Exchange (SWX)(NYSE) NewSwiss York Stock Exchange

29 58

2 5

10 Bolsas yStock Mercados Espanoles 7 Exchange Warsaw Exchange (WSE)(BME) OMX Nordic Stockholm (OM) 32

22 34 3

2 3

SIX Swiss 29 11 Other 8 Exchange OMX (SWX) Nordic Exchange Stockholm (OM)

2 62 32

5 3

Bolsas 9y Mercados Espanoles (BME) (SWX) 22 SIX Swiss Exchange

2 29

OtherSOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Euronext ParisExchange (ENXTPA) Market cap ($B) Exchange

SOU RCE:

Bolsas y Mercados Espanoles (BME)

Other

The NASDAQ and NYSE together account for a combined 11.1% of total market cap of public European tech RCE: companies, but it is clear that EuropeanSOU tech companies have, historically, overwhelmingly chosen to list in NOTE: Europe. 94.4% of public European tech companies are listed on European exchanges and those companies S&P Capital IQ Platform, as of date 31 October account for a combined 87% of total market cap. 2020, for illustrative purposes only. together The NASDAQ and account for 11.1% ofoftotal market cap ofofpublic The NASDAQ and NYSE NYSE together foraacombined combined 11.1% total market public The NASDAQ and NYSE together accountaccount for a combined 11.1% of total market cap of publiccap European techEuropean tech European tech companies, but it is clear that European tech companies have, historically, chosen to list in companies, but it is clear that European tech companies have, historically, overwhelmingly companies, but it is clear that European tech companies have, historically, overwhelmingly chosen to list in Share of94.4% total public European 100 of public overwhelmingly chosen to list in Europe. 94.4% European tech companies listed Europe. of public European tech companies listed onexchanges European exchanges and those companies Europe. 94.4% of public European tech companies are listedare on94% European and thoseare companies tech market cap (%) and share onofEuropean exchanges and those companies account for a combined account for a combined 87% of total market cap. account for a combined 87% of total market cap. 87% 87% of total market cap. total public European tech NOTE:

companies, by region of

Sharevenue of market cap (%) listing

L EGEND Share of companies (%) L EGEND Share of market cap (%) Share of companies (%)

Share of market cap (%)

100

% of companies / % of market cap

exchange of primary Share of total European Share of public total public European techlisting marketvenue cap (%) and share tech market cap (%) and share of total public European tech of totalby public European tech companies, L EGEND region of companies, by region of exchange of primary Share of companies (%) exchange listing venue of primary

% of companies / %%ofofmarket companies cap / % of market cap

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

75 100 94%

94%

87%

50 75

25 50

11% 3%

Europe

11%

2% United States

3% 0

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE: 0

SOU RCE:

Europe

United States

Europe

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

141

Rest of world 2%

11% 3% United States

2% Rest of world

04.3

Public Markets

There is, however, a good reason that the issue of 'leakage' of value from Europe onto US exchanges is raised. This is due to the fact that those companies that list on US exchanges are typically larger. The mean market cap of a public European tech company is $1.6B, though the median is far lower at just $49M, due to the volume small-cap public European tech companies. Those that from have Europe chosenonto to list the US, by is contrast, There is,ofhowever, a good reason that the issue of ‘leakage’ of value USinexchanges Thereais, however, a good reason that the issue market of 'leakage' of $970M, value from Europe onto larger US exchanges is raised. have mean market cap of $5.7B and a median cap of around 20 times than the raised. This is adue toreason the fact that companies that list on US exchanges are US typically larger. The mean median There is,is however, good that the issue ofexchanges. 'leakage' of value Europe onto exchanges is raised. This due to the fact that those companies that list on USfrom exchanges are typically larger. The mean market public tech company listed on European market cap a public European techthat company is $1.6B, though median is far lower atmarket just $49M, due Thiscap is due theoffact that those companies on US exchanges arethe typically larger. The of atopublic European tech company islist $1.6B, though the median is far lower atmean just $49M, due to the capto ofthe a public European tech company is $1.6B, though the median is far lower at just $49M, due to the of small-cap European tech companies. Those that have chosen toinlist inUS, the by US,contrast, by volumevolume of small-cap publicpublic European tech companies. Those that have chosen to list the volume of and small-cap public European techofcompanies. Those that market have chosen to $970M, list in thearound US, by contrast, Mean median market cap of contrast, have a mean market cap $5.7B and a median cap of 20 times larger 6,000 market cap of $970M, around have a mean market cap of and $5.7B and a median 20 than times than thethan median have a mean market cap of $5.7B a median market cap of $970M, around 20 times$5,741M larger thelarger median public European tech companies the median public tech company listed on European exchanges. public tech company listed on European exchanges. public tech company listed on European exchanges. by region of exchange of primary

L EGEND

Mean ($M)

Median ($M)

Market cap ($M)

L EGEND

6,000

4,000

2,000

Market cap ($M)

MeanMean and median marketmarket cap of cap of and median L EGEND public European tech companies public European tech companies by region of($M) exchange of primary by Mean region of exchange of primary listing venue Median ($M) listing venue

6,000 4,000

Market cap ($M)

listing venue

4,000 2,000

$5,741M

$1,618M

$1,754M

$1,474M $970M

$1,618M

$49M

2,000 0

$5,741M

SOU RCE:

NOTE:

$1,618M Europe

$970M

United States $970M

$49M

$1B+ PUBLIC United States

Europe

$1,754M

$1,474M

$72M

$1,754M

Rest of world $1,474M $72M

$51M Total

$51M

C OMPA NIES Rest of world

Total

$72M $49M So, while just 3.4% of all public European tech0companies S&P Capital IQ Platform, as of date 31 October Europe United States Rest of world RCE: chose list inpurposes the US, dramatically different 2020, forto illustrative only. the mix is SOU NOTE: when looking at companies valued at over $1B. The SOU RCE: S&P Capital IQ Platform, as of date 31 October propensity for these companies to list in the US is more 2020, for illustrative purposes only. NOTE: of $1B+ European C OMPAtech NIES companies chose to list in the US OMPAPUBLIC NIES than six times higher, with 13.4% of public European tech$1B+ PUBLIC C$1B+ S&P Capital IQ Platform, as of date 31 October $1B+ PUBLIC COMPAN IES while just 3.4% of allpublic public European tech companieschose to list So,So, while just just 3.4% of all of public European tech So, while 3.4% all European tech companies 2020, for illustrative purposesat only. companies valued $1B+ choosing to companies list on US chose to list inlist theinUS, the mix is dramatically differentdifferent chose to the US, the mix is dramatically in the US, the mix is1.9% dramatically different whenatlooking exchanges, versus of companies valued <$1B. at companies when looking at companies valuedvalued at over $1B. The$1B. The when looking at companies at over valued at over $1B. The propensity for these companies to list in the propensity for these companies to list intothe more propensity for these companies listUSinisthe US is more of $1B+ European tech companies chose to list in the US US is more than six times higher, with 13.4% of public European techof $1B+ European tech companies chose to list in the US than six times higher, with 13.4% of public European tech Share total public European than sixoftimes higher, with 13.4% of public European tech 100.0 95.8% companies valued at $1B+ choosing to list on US companies valued at $1B+ choosing to tech companies (%) by market of $1B+ European tech companies companies valued at $1B+ choosing tolist liston onUS USexchanges, versus exchanges, versusof1.9% of companies valued at <$1B. cap by region exchange 84.4% 1.9% of companies valued at <$1B. chose to list in the US exchanges, versus 1.9% of companies valued at <$1B.

13.4%

$51M Total

13.4% 13.4%

L EGEND

cap by region of exchange

L EGEND

<$1B market cap

L EGEND

$1B+ market cap

<$1B market cap

$1B+ market cap

100.0 % of total public European tech companies

Share of total public European <$1B market(%) cap by market techShare companies of total public European cap by region of exchange $1B+ market cap tech companies (%) by market

75.0

50.0

25.0

0.0

% of total public European % oftech totalcompanies public European tech companies

13.4%

75.0 95.8%

100.0

SOU RCE:

84.4%

25.0 13.4% 50.0 Europe

25.0

SOU RCE:

0.0

2.2%

1.9%

0.0

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

84.4%

75.0

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

95.8%

50.0

13.4%

United States 2.2%

1.9% Europe

13.4%

United States

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

142

2.2% Rest of world

2.2%

1.9% Europe

2.2% Rest of world

United States

2.2% Rest of world

04.3 debatePublic Markets The around the leakage of value out of the European capital markets is also likely exacerbated by the fact that more recent cohorts of European tech companies seem more inclined to list on US exchanges. While just 5.5% of public European tech companies valued over $1B and founded pre-2000 are listed on US VALUE LEAK AGE exchanges, this is up almost 5x to 25.7% for companies founded after 2000. The debate around the leakage of value out of the European capital markets is The debate around the leakage of value out of the European capital markets is also likely exacerbated by the also debate likely exacerbated the fact more recent cohorts ofcapital European tech is also likely exacerbated by the around the by leakage of that value out 100 of the seem European factThe that more recent cohorts of European tech companies more inclinedmarkets to list on US exchanges. While Share of total public $1B+ companies seem more inclined to list on US exchanges. While just 5.5% of public 91% founded that more recent cohorts of European tech seem more inclined toby list justfact 5.5% of public European tech valued overcompanies $1B and pre-2000 are listed on USon US exchanges. While The debate around the leakage value out of the European capital markets is also likely exacerbated the European tech companies (%) ofcompanies more European tech $1B andvalued founded pre-2000 listed on fact thatthis more recent cohorts European tech companies seem more inclined toare list on US exchanges. While exchanges, is upcompanies almost tovalued 25.7% for companies founded after 2000. by region of exchange and5xof just 5.5% of public European techover companies over $1B and founded pre-2000 are listed on US likely for public just 5.5% of public European tech companies valued over $1B and founded pre-2000 are listed on US European tech founding decade 74% US exchanges, is up almost 25.7% founded after 2000. exchanges, thisthis is up almost 5x 5x to to 25.7% forfor companies founded after 2000. 75 companies exchanges, this is up almost 5x to 25.7% for companies founded after 2000. companies valued 100 Share of total public $1B+ 91% L EGEND over $1B and founded European tech companies (%) 100 100 Share of total public $1B+ Share total public Founded Pre-2000 by region ofof exchange and $1B+ 91% after 2000 to list on European tech companies (%) 91% 50 European tech companies (%) founding decade 74% Founded Post-2000 75 by region of exchange and US exchanges

L EGEND Founded Pre-2000 Founded Pre-2000

Founded Post-2000 L EGEND

Founded Post-2000

Founded Pre-2000 Founded Post-2000

50 50

25 25

% of total $B+ European tech % ofcompanies total $B+ European tech companies

byfounding regiondecade of exchange and

L EGEND founding decade

% $B+ European techtech companies %ofoftotal total $B+ European companies

74%

SOURCE:

74%

26%

50 26%

26%

Europe

United States

The leakage of large-cap public European tech companies into the US markets is a trend seen across many 6% 6% 4% 26% 4% 0% different European markets. It would0 appear that large German tech companies have proven to be consistent 25 0% SOU RCE: 0 Europe United States Rest of World United States of World inNOTE: choosing local exchanges for their public listingEurope with the exception of Jumia, which chose to list onRestthe NYSE. Other large companies that have chosen the US for their primary listing include Spotify, 6% RCE: S&P Capital IQ Platform, as ofEuropean date 31 October techSOU SOU RCE: 2020, for illustrative purposes only. NOTE: Farfetch, Criteo and Mimecast. 0 NOTE: Europe

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Rest of World

United States

Rest of World

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Europe United States

L EGEND

Rest of World

Europe

United States

# of total public $1B+ European tech companies

Europe Number of total public $1B+

United States European tech companies Number of total publicby $1B+ company HQ country and region Rest of World European tech companies by of exchange company HQ country and region EGEND ofL exchange

# of total public $1B+ European tech # of total companies public $1B+ European tech companies

The leakage of public large-cap Number of total $1B+ public European SOUtech RCE: companies into the US markets is a trend seen across many The leakage oflarge-cap large-cap public European tech companies into the US isacross a trend seen across many different The leakage of public tech companies into the US markets is amarkets trend seen many European tech companies by European NOTE: different European markets. It would appear25that large German tech companies have proven to be consistent different European markets. It would appear that large Germantech tech companies have proven to beto consistent European markets. It would appear that large German companies have proven be consistent in choosing local country region S&P Capital IQHQ Platform, asexchanges of and date 31 October incompany choosing local forpublic theirlisting public with the exception of Jumia, in choosing local exchanges for their withlisting the exception of Jumia, which chose to list onwhich the chose to list on the 2020, for illustrative purposes only. listing with the exception of Jumia, which chose to list on the NYSE. Other large European of exchange exchanges their public NYSE. Other Otherfor large European tech companies that have chosen the USchosen for their primary include Spotify, listing include Spotify, NYSE. large European tech companies that have the USlisting for their primary 20 Farfetch, Criteo and Mimecast. tech companies that have chosen the US for their primary listing include Spotify, Farfetch, Criteo and Mimecast. Farfetch, Criteo and Mimecast. L EGEND 15

25 10

20 5

15 0

United Kingdom

Germany

France

Netherlands

Sweden

Rest of World There is also a stark trend when looking at the 10 primary listing venue choices of European public tech SOU RCE: companies broken down by category 0 and company founding period. The aggregate market cap of companies NOTE: United Kingdom Germany France Netherlands Sweden Others founded pre-2000 listed on US exchanges was negligible across almost all categories. The cohort of 5 S&P Capital IQ Platform, as of date 31 October SOU RCE: 2020, for illustrative purposes only. companies founded after 2000, however, has listed a signi cant share of total market cap on US exchanges in NOTE: several categories, including Consumer Internet and Semiconductors. S&P Capital IQ Platform, as of date 31 October 0

2020, for illustrative purposes only.

United Kingdom

Germany

France

Netherlands

Sweden

exchanges by category and L EGEND founding period L EGEND Founded Pre-2000 Founded Pre-2000 Founded Post-2000 Founded Post-2000

L EGEND

Founded Pre-2000 Founded Post-2000

100.0 100.0

75.0 75.0

50.0 50.0

25.0 25.0

NOTE:

NOTE: NOTE: S&P Capital IQ Platform, as of date 31 October S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. 2020, for illustrative purposes only.

50.0 99.2% 99.2%

100.0 25.0

75.0 0.0

7.7% 1.3%

SOU RCE: SOU RCE:

0.0%

Consumer Internet

4.0%

Fintech

50.0 4.0% 0.0% 4.0% 0.0% Fintech Fintech

0.0% 0.0% 0.0% 0.0% Games & Games & Interactive Interactive Entertainment Entertainment

7.7% 0.0

1.3% Application Software

0.0% Consumer Internet

143 SOU RCE:

22.4% 79.8%

75.6% 0.0%

Application Software

1.3% 0.0% 1.3% 0.0% Application Consumer Application 25.0 Consumer Software Internet SOU RCE: Software Internet

99.2%

79.8% 79.8%

75.6% 75.6%

7.7% 7.7%

0.0 0.0

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

% of total public European tech market % of total cappublic European tech market cap

Founded Pre-2000 Share Share of of total total public public European European Founded Post-2000 tech cap (%) on tech market market cappublic (%) listed listed on US US Share of total European exchanges by category exchanges by category and and tech market cap (%) listed on US founding period founding period

%% ofoftotal totalpublic publicEuropean Europeantech techmarket marketcap cap

There is also a stark trend when looking at the primary listing venue choices of European public tech Shareis ofalso total public European There a stark trend when looking SOU at the primary listing venue choices of European public tech 99.2% RCE: 100.0 There is also a stark trend when looking at primary listing choices of public tech companies broken down category company founding period. The cap ofof companies Theremarket is alsobroken a stark when looking at the theand primary listing venue venue choices of European European public tech market tech cap (%)trend listed onby US companies down by category and company founding period. Theaggregate aggregate market cap NOTE: companies broken down by category and company founding period. The aggregate market cap of companies companies broken downpre-2000 by categorylisted and company period. Thenegligible aggregate market capalmost of companies exchanges by category and companies founded onnegligible USfounding exchanges was across all categories. founded pre-2000 on US exchanges wasacross negligible almost categories. The 79.8% cohort of founded pre-2000 listed on US exchanges was negligible across almost across all categories. categories. Theall cohort of S&P Capitalpre-2000 IQ Platform, as oflisted date 31 US October founded listed on exchanges was almost all The cohort of founding period 75.6% 2020, for illustrative purposes only. 75.0 The cohort of companies founded after 2000, however, has listed a significant share of in total market companies founded after 2000, however, has listed a signi cant share of total market cap on US exchanges companies founded after however, listed signi cant share market cap on US exchanges in companies founded after 2000,2000, however, has listedhas a signi cant a share of total market capof ontotal US exchanges in several categories, including Consumer Internet Semiconductors. several categories, including Consumer Internet and and Semiconductors. cap on US exchanges in several categories, including Internet and Semiconductors. several categories, including Consumer Internet andConsumer Semiconductors. L EGEND

0.0% 0.0% Internet Internet Advertising & Advertising & Direct Direct Marketing Marketing

0.0%

4.0%

Fintech

0.0%

Games & Interactive Entertainment 3.3% 0.0% 3.3% 0.0% Online Online Commerce Commerce

0.0%

0.2% 0.2% Semiconductors Semiconductors

0.0%

Games & Interactive Entertainment

0.0%

Internet Advertising & Direct Marketing

0.2% Semiconductors

22.4% 22.4%

0.0% 0.0% Systems Systems Software Software

0.0%

3.3%

42.0% 42.0%

Online Commerce

0.0% Systems Software

0.0% 0.0% Tech Hardware Tech Hardware

0.0%

3.3%

Online Commerce

22.4%

0.2% Semiconductors

0.0% Systems Software

04.4

TEC H IPOS PER MONTH

Europe has produced more tech IPOs than the US every year over the period from 2016 onwards. On average, Tech IPOs Europe has recorded about 3.6 tech IPOs per month since 2016 versus about 2.3 per month in the US. But the US is tech IPOs per month since 2016 in Europe on average narrowing the gap. TECH IPOS PER MON TH Europe has produced more tech IPOs than the US every year TEC H IPOS PER MONTH over the period from 2016 onwards. On average, EuropeTEChas H IPOS PER MONTH 60 Europe has produced more tech IPOs than the US every Numberhas of tech IPOs more by region Europe produced tech IPOs than the US every 54 recorded about 3.6 tech IPOs per month since 2016 versus year theperiod period 2016 onwards. On average, yearover over the fromfrom 2016 onwards. On average, 51 50 about 2.3 per month inabout the US. But the US per issince narrowing the gap. L EGEND Europe has recorded about 3.6 tech per month Europe has recorded 3.6IPOs tech IPOs month since 2016 versus about 2.3 per month in the US. But the US is Europe tech IPOs per on month 2016 versus about 2.3 per month in the US. But the UStech is IPOs per month since 2016 in Europe averagesince narrowing the gap. tech IPOs per month since 2016 in Europe on average United States 40 38 2016 in Europe on average narrowing the gap. 36

3.6

3.6 3.6

# of tech IPOs

3.6

Number of tech IPOs by region

Number of tech IPOs by region L EGEND

Europe

L EGEND United States

54 51

20 50

10 40

0 30

2016

2017

2018

2019

2020

20 SOU RCE: 2016

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

30 60

32 30

# of tech IPOs

United States

# of tech IPOs

Europe

2017

2018

2019

2020

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

2016

2017

2018

2019

Europe has consistently produced three to �ve $1B+ tech IPOs per year. 2020 has been in line with this average with three $1B+ tech IPOs to date as of October 2020. By contrast, the US has had an incredibly strong SOU RCE: Europe has consistently produced threein to fivethe $1B+ tech IPOs perayear. year. 2020 has been been in in line line with with this this yearEurope for $1B+has tech IPOs. With 20produced $1B+ tech three IPOs 2020, UStech is on IPOs track per for �ve-year high. consistently to �ve $1B+ 2020 has

2020

NOTE:

with three average three $1B+ $1B+ tech techIPOs IPOsto todate dateas asof ofOctober October2020. 2020.By Bycontrast, contrast,the theUS UShas hashad hadananincredibly incredibly strong S&P Capital IQ Platform, as of date 31 October 2020,for for illustrative purposes only. DATA SET : EU ROPE year $1B+ tech IPOs. With 20 $1B+ tech IPOs in 2020, the US is on track for a �ve-year high. strong year for $1B+ tech IPOs. With 20 $1B+ tech IPOs in 2020, the US is on track for a five-year high. Number of tech IPOs with <$1B+,

$1B+ and $5B+ market cap at IPO by region

Number of tech IPOs with <$1B+,

L EGEND $1B+ and $5B+ market cap at IPO

Europe 50

DATA SET : EU ROPE 44

2016 by region

2017

2018 2019

# of tech IPOs

50 Europe has consistently produced three to �ve $1B+ tech IPOs per year. 2020 has been in line with this 2018 L EGEND average with three $1B+ tech IPOs to date as of October 2020. By contrast, the US has had an incredibly strong 2019 32 44 2016 30 2020 for $1B+ tech IPOs. With 20 $1B+ 28 in 2020, the US is on track for a �ve-year high. year tech IPOs 27 40 2017 40

# of tech IPOs

DATA SET : EU ROPE Number of tech IPOs with <$1B+,three to �ve $1B+ Europe has consistently produced tech IPOs per year. 2020 has been in line with this 30 2020 28 $1B+ and $5B+ market cap at IPO 27 average with three $1B+ tech IPOs to date as of October 2020. By contrast, the US has had an incredibly strong by region 10 year for $1B+ tech IPOs. With 20 $1B+ tech IPOs in 2020, the US is on track for a �ve-year high. L EGEND

50 20

Number of tech IPOs with <$1B+, 2016 $1B+ and $5B+ market cap at IPO 2017 by region

DATA SET 0 : U NIT ED STAT ES 44

NOTE: L EGEND2019

United States 15

2018

$250-500M

$500M-1B

5 32

30 0

$1-5B

$5-10B

$10-25B

$50-100B

1 28 <$250M 27

$250-500M

$500M-1B

$1-5B

$5-10B

$10-25B

$50-100B

12 # of tech IPOs

10 9 8

10 5

4 3

<$250M 2

NOTE:

SOU RCE: <$250M

$250-500M

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

144

$250-500M 1

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE: 20

2019

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

S&P2016 Capital IQ Platform, as of date 31 October 2020 2020, for illustrative purposes only. 2017

NOTE: 2020

40 10

# of tech IPOs

2018

<$250M

$500M-1B

1 $500M-1B

$1-5B 1

$5-10B

1 $1-5B

$5-10B

$10-25B

1 $10-25B

1 $50-100B

$50-100B

04.4 Tech IPOs Three-quarters of all European tech IPOs involve small cap companies with a market cap of below $250M. These companies account for just one-third of US tech IPOs. Just 10% of European tech IPOs since 2016 have involved companies with a market cap of >$1B. By comparison, more than half (52%) of US tech IPOs had a market cap of >$1B after the �rst day of trading. Europe has had 21 $1B+ market cap IPOs since 2016 versus 71 Three-quarters of all European tech IPOs involve small cap companies with a market cap of below $250M. in the US. Three-quarters of all European tech IPOs involve small cap companies with a market cap of below $250M. These companies These companies account account for for just justone-third one-thirdof ofUS UStech techIPOs. IPOs.Just Just10% 10%ofofEuropean Europeantech techIPOs IPOssince since2016 2016 have 100 >$1B. By comparison, more than half (52%) of US tech IPOs have involved companies with a market cap of involved companies with a market cap of >$1B. By comparison, more than half (52%) of US tech IPOs had a Share of total tech (%) bytech IPOs involve small cap companies with a market cap of below $250M. Three-quarters of allIPOs European had a market cap of >$1B after theday firstofday of trading. Europe has21 had 21 $1B+ market cap IPOs since 2016 market cap of >$1B after the �rst trading. Europe has had $1B+ market cap IPOs since 2016 versus 71 market cap groupaccount by region These companies for just one-third of US tech IPOs. Just 10% of European tech IPOs since 2016 have versus 71companies in the US. in the US. involved with a market cap of >$1B. By comparison, more than half (52%) of US tech IPOs had a

$1-5B

$5-10B

75 % of total tech IPOs

$500M-1B market cap group by region $1-5B L EGEND L EGEND $5-10B <$250M <$250M $10-25B $250-500M $250-500M $50-100B $500M-1B $500M-1B

% of total tech IPOs % of total tech IPOs

75 market L EGEND cap of >$1B after the �rst day of trading. Europe has had 21 $1B+ market cap IPOs since 2016 versus 71 in the US. 100 <$250M Share of total tech IPOs (%) by 100 $250-500M market by(%) region Share ofcap totalgroup tech IPOs by

$5-10B $10-25B

25 50

$50-100B $10-25B

Europe

$50-100B

SOU RCE:

Europe

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

United States

SOU RCE:

United States

Europe

United States

NUMBER OF EUROPEAN TECH COMPANIES THAT WENT PUBLIC VIA A REVERSE MERGER WITH A SPAC IN 2020

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

The profile of the average tech IPO varies dramatically in Europe compared The pro�le of the average tech IPO varies dramatically in Europe compared the US, with European public the US, with publicofmarkets open companies ofan allIPO sizes. markets openEuropean to companies all sizes. As ato consequence, is a viable alternative funding path in As a consequence, ansmall IPO iscompanies a viable alternative funding pathcap. in Europe Europe for even very with <$100M market The difference between the average and for evenmarket very small with <$100M market cap. TheWhile difference median capcompanies of European and US tech IPOs is stark. the median market cap of US tech companies The pro�le ofaverage the average tech IPO varies dramatically in $42M Europe the US,at with European public between and market cap of European and US tech the mean, there still a that havethe listed since 2016median is $1.1B, the equivalent is just in compared Europe. Looking Arrival, the commercial EVis manufacturer, markets open to companies of all sizes. As a consequence, an IPO is a viable alternative funding path in signi�cant difference at $2.7B in the US versus $576M for European tech IPOs. IPOs is stark. While the median market cap of US tech companies that is going public via a reverse merger with Europe for even companies with <$100M market cap. The difference between average CIIG Mergerthe Corp with theand transaction have listed sincevery 2016small is $1.1B, the equivalent is just $42M in Europe. median market cap of tech European and US techinIPOs is compared stark. While the median market cap of US techatcompanies The pro�le of the average IPO varies dramatically Europe the US, with European public valuating the company $5.4B. At time 3,000 Looking at the mean, there is still a significant difference at $2.7B Mean andopen median market 2016 cap markets to companies of allissizes. As the a consequence, an is IPOjust is a viable funding path in at the mean, there is still a Looking that have listed since $1.1B, equivalent $42Malternative in Europe. $2,732M of publication, this remains the only in the US versus $576M for European tech IPOs. ($M) at IPO (close of �rst day Europe for even very smallat companies market $576M cap. Thefor difference between theIPOs. average and signi�cant difference $2.7B inwith the<$100M US versus European tech SPAC involving a European trading) by region, to 2020and US tech IPOs is stark. 2,500 While the median market cap of US tech companies median market cap 2016 of European that have listed since 2016 is $1.1B, the equivalent is just $42M in Europe. Looking at the mean, there is still a tech company.

2,500

Europe Europe

United States United States

Market cap ($M)

L EGEND

2,000

1,500

1,000

Market cap ($M)

($M) at IPO (close of �rst day trading) by region, 2016 to 2020 L EGEND

Market cap ($M)

signi�cant difference at $2.7B in the US versus $576M3,000 for European tech IPOs. L EGEND Mean and median market cap 2,000 Europe ($M) at IPO (close of �rst day 3,000 Mean and median market capto 2020 United States trading) by region, 2016 2,500 $2,732M

$2,732M

1,500

$1,149M

2,000 1,000 $576M

1,500 500

$42M Mean

$576M

500

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Median

$576M

500

$1,149M

1,000 0

$42M

SOU RCE: Mean

Median

Mean

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

145

$42M Median

04.4

Tech IPOs

Across both regions, however, the average size of IPOs in boththeEurope and increasing the US has been increasing over Across both both regions, however, the average size of IPOs in both Europeinand has been Across regions, however, the average size of IPOs both US Europe and the USover has been increasing over time. The huge delta between the mean and median for European tech IPOs the massive spread time. The huge delta between the mean and median for European tech IPOs underlines the massive spread in time. The huge delta between the mean and median for European tech IPOsunderlines underlines the massive spread in the scale of companies comingcoming to marketto in market Europe. Ininthe US, the delta is narrower as thereis is narrower much less as there is much less in the scale of companies Europe. In the US, the delta the scale of companies coming to market in Europe. In the US, the delta is narrower as there is much less variance in the scale of companies coming to market. variance in the scale scale of of companies companiescoming comingto tomarket. market. Mean and median market cap ($M) at IPO (close of �rst day Mean and market trading) bymedian region and by year cap

DATA SET : M EA N

Mean Across both regions, however, the average size of IPOs in both Europe and the US has been increasing over ($M) at IPO (close of �rst day 6,000 L EGEND time. The huge delta between the mean and median for European tech IPOs underlines the massive spread in $5,437M trading) by region and by year Europe the scale of companies coming to market in Europe. In the US, the delta is narrower as there is much less United States 5,000 6,000 variance market. L EGEND in the scale of companies coming to United States

Market cap ($M)

Europe

4,000

5,000

United States

DATA SET : M EDIA N

3,000

Europe 2,500

United States

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Market cap ($M)

2,000

1,500

Market cap ($M)

SOU RCE:

Median

S&P Capital IQ Platform, as of date 31 October L EGEND 2020, for illustrative purposes only.

NOTE:

Market cap ($M)

DATA SET : M EA N Mean and median market cap 3,000 ($M) at IPO (close of �rst day $2,224M 4,000 trading) by region and by yearthe average size Across both regions, however, 2,000 of IPOs in both Europe and the US has been increasing over time. The huge delta between the mean and median for European tech $1,014M IPOs underlines the massive spread in $891M 6,000 $711M is much less $724M the scale of companies coming to market in1,000 Europe. In3,000 the US, the delta is narrower as there L EGEND $297M $277M variance Europe in the scale of companies coming to market.

Mean and median market cap ($M) at IPO (close of �rst day trading) by region and by year NOTE:

5,000 2016 2,000

2017

2018

$946M

$5,437M $2,224M

2019

2020

$297M

$277M

2016

2017

$946M

$3,651M $724M

$711M $2,653M

3,000 0

2,000

2018 $2,224M

$1,752M

SOU RCE:

2019

2020

$1,646M

$1,014M

$891M

1,000

$297M

$711M

$724M

2018

2019

$946M

$277M

$693M

$3,651M

$1,014M

$891M

4,000 1,000

1,000

500

2016

2017

2020

$320M $35M

$29M

$61M

$32M

2016

2017

2018

2019

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

$5,437M

$3,651M

$103M 2020

SOU RCE:

NOTE:

US BLOCKBUSTER IPOS

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

$110B

The combined market cap of the top five largest US tech IPOs The combined market cap of the top ve largest US tech IPOs exceeded $110B, more than 3.6x the value of the exceeded $110B, than 3.6x the tech valueIPOs. of theLooking combined toptop 10, the gap in value generated by these combined top vemore largest European at the five largest European tech IPOs. Looking at the top 10, the gap is value the combined VALUE more GAP than 3.6x the companies expands tocap 4.1xofatthe $133B US versus $32B forexceeded Europe. $110B, The combined market top forvethe largest US tech IPOs of the market cap of the in value generated by these companies expands to 4.1x at $133B combined top ve largest European tech IPOs. Looking at the top 10, the gap in value generated by these top five largest US for the US versus $32B for Europe. companies expands to 4.1x at $133B for the US versus $32B for Europe. tech IPOs

3.6x

TheAggregate combinedmarket marketcap cap($M) of the top ve largest US tech IPOs exceeded $110B, more than 3.6x the value of the $30,928M of top 5 and top 10 tech IPOs than the combined top ve largest European tech IPOs. Looking at the top 10, the gap in valuemore generated byvalue these by region of the combined top Aggregate marketto cap ($M) companies expands 4.1x at $133B for the US versus $32B for Europe. Top 5 $30,928Mfive

of top 5 and top 10 tech IPOs L EGEND by region

Aggregate Europemarket cap ($M) of top 5 and top 10 tech IPOs United States L EGEND by region Europe

Top 5

SOURCE:

largest European tech IPOs

$110,966M

$30,928M

$110,966M

Top 5

$32,444M

L EGEND

United States

Europe

$110,966M

Top 10

United States

$32,444M $133,032M

$32,444M

Top 10 Top 10

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

90,000

100,000

110,000

120,000

130,000

$133,032M

Market cap ($M) 0

10,000

20,000

SOU RCE:

10,000

30,000

20,000 40,000

S&P Capital IQ Platform, as of date 31 October

SOU RCE:

40,000

60,000

50,000

70,000

80,000

60,000

Market cap ($M)

NOTE: 2020, for illustrative purposes only. NOTE:

30,000

50,000

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October S&P IQ Platform, as of date 31 October 2020, forCapital illustrative purposes only.

2020, for illustrative purposes only.

146

90,000

70,000

100,000

80,000

110,000

120,000

Market cap ($M)

130,000

140,000

150,000

$133,032M 140,000 1

140,000

04.4

Tech IPOs

Europe’s largest tech IPO was Allegro which closed on its first day of trading at a market cap of $19B. The largest tech IPO in the year was Snowflake, reaching $70B at the end of its first day of trading. Snowflake is valued at more than the top 10 European tech IPOs combined. In fact, the entire US top 10 companies all had a market cap far in excess of $1B; while there are just three in Europe. Europe’s tech IPOs count a diverse set of companies - many coming from outside the ‘mainstream’ tech industry and where incentives for going public vary. On the other end, US tech Across regions, however, the average of IPOs inAsboth Europe and the USare hasa been increasing over IPOs areboth much more typically scaled throughsize VC funding. a consequence, there different time. The huge delta between the mean and median for European tech IPOs underlines the massive spread in set of incentives in terms of when a listing may make sense. the scale of companies coming to market in Europe. In the US, the delta is narrower as there is much less variance in the scale of companies coming to market. $70.3B

Top 10 largest tech IPOs Mean and cap median market by market at IPO ($B) cap ($M) at IPOand (close of �rst day in Europe United States trading) in 2020 by region and by year

DATA SET : M EA N

$18.9B $18.0B $8.8B

6,000

L EGEND

$5,

$8.7B

Europe United States

Market cap ($M)

5,000

$1.6B $8.2B

4,000

$3,651M

$0.8B 3,000

$5.7B

$2,224M

$0.8B 2,000

$5.1B

$1,014M3.6x the value of the The combined market cap of the top ve largest US tech IPOs exceeded $110B, more than $891M 1,000 $0.5B combined top ve largest European tech IPOs. Looking at the top 10, the gap in value generated by these $711M $297M $277M companies expands to 4.1x at $133B for the US versus $32B for Europe. 0

Aggregate market cap ($M) of top 5 and top 10 tech IPOs by region NOTE:

2016

2017

2018

2019

$30,928M

$4.6B $0.3B

L EGEND

$110,966M

S&P Capital IQ Platform, as of date 31 October Europefor illustrative purposes only. 2020,

$4.3B

United States

$0.3B $32,444M

$3.4B

Top 10

$0.2B NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. Market capitalisation at IPO is based on end of first day trading.

$133,032M

0 0

10,000

$4.8B

$0.3B

SOU RCE:

Top 5

$724M

20,000

20 30,000

40,000

50,000

40 60,000

70,000

80,000

Market cap ($M)

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

147

60 90,000

100,000 110,000cap 120,000 Market at IPO130,000 ($B) 140,000

150,000

04.4

Tech IPOs

average amount of proceeds raised atincreased IPO has increased over past five years both TheThe average amount of proceeds raised at IPO has over the past �vethe years in both Europeinand theEurope and The average amount of proceeds raised at IPO has increased over themar�et past �ve years to in deploy both Europe and the US.the ThisUS. re�ects factors, including signi�cant demand amongst publicamongst investors This many reflects many factors,the including the significant demand public market investors to US.and Thisbuild re�ects many factors,There including theagain, signi�cant demand amongst public mar�et investors to deploy capital their tech exposure. is, once a huge spread between thespread mean and median deploy capital and build their tech exposure. There is, once again, a huge between the mean and capital and build their tech exposure. is, scale once diversity again, a in huge spreadcoming between the mean and median average proceeds raised in Europe, re�ectingThere the huge companies to mar�et in the median average proceeds in Europe, reflecting huge scale diversity in companies to in the average proceeds raised inraised Europe, re�ecting the hugethe scale diversity in companies coming coming to mar�et region. market in the region. region.

Mean and median proceeds raised ($M) at IPO by region Mean and median proceeds and by year

raised ($M) at IPO by region and by year L EGEND

DATA SET : M EA N

Mean

The average amount of proceeds raised at IPO has increased over the past �ve years in both Europe and the Europe US. This re�ects many factors, including the500signi�cant demand amongst public mar�et investors to deploy L EGEND United States 400 capital and build their tech exposure. There is, once again, a huge spread between the mean and median Europe average proceeds raised in Europe, re�ecting the huge scale diversity in companies coming to $321M mar�et in the United States 400 300 region. Proceeds raised ($M)

500

S&PEurope Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. United States

250

Proceeds raised ($M)

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

200

$99M

2018

$71M

2019

2016

2017

2019 $321M

2018

2020

$250M

$239M

$200M

$186M

200

$202M

$194M

$134M

100

$101M

$99M

$116M

$109M $71M

$84M

2016

2017

2018

2019 $22M

$20M

$8M

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

$448

2020

300

100

NOTE:

$194M

$109M 2017

150

$202M

$134M $101M

SOU RCE: NOTE:

$321M $194M

400

SOU RCE: Median

NOTE: L EGEND

$448

$71M

DATA SET : M EDIA N 0 1002016

Proceeds raised ($M)

L EGEND

Mean and median proceeds Europe raised ($M) at IPO by region and by yearUnited States

Proceeds raised ($M)

The average amount of proceeds raised at IPO has increased over the past �ve years in both $239M Europe and the US. This re�ects many factors, including the signi�cant demand amongst public market investors to deploy $202M 300 200 DATA SET : M EA Mean median capital andand build theirproceeds tech exposure. There is, once again, aNhuge spread between the mean and median $239M raised ($M) at IPO by region $134M average proceeds raised in Europe, re�ecting the huge scale diversity in companies coming to market in the $109M $101M and by year $99M region. 100 200

$448M

SOU RCE:

$6M

2016

$5M 2017

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

148

2018

2019

2020

04.4

Tech IPOs

The IPOs of The Hut Group and Allegro represented 2020’s most significant events in terms of public market activity for tech in Europe. These two IPOs alone raised a combined $4.8B in proceeds, equating to more than 70% of all proceeds raised by tech companies at IPO in Europe in regions, 2020 to date. Snowflake’ s IPO insize theof US wasinan outlier across vectors, Across both however, the average IPOs both Europe andmany the US has been increasing over time. The the huge delta between mean and median forpublic European tech underlines including massive amount the raised in proceeds in its listing. ByIPOs raising $3.4B, itthe massive spread in the scale ofthe companies coming to market Europe. the US, the delta is narrower as there is much less out-raised next largest US tech IPO byin a factor ofIn 2.6x. variance in the scale of companies coming to market. Top 10 largest tech IPOs by Mean and raised medianatmarket cap proceeds IPO ($M) ($M) at IPO (close of �rst day in Europe and United States trading) in 2020 by region and by year

$3,360M

DATA SET : M EA N

$2,445M $1,300M $2,384M

6,000

L EGEND

$5,

Europe

$935M

United States

Market cap ($M)

5,000

$647M $740M

4,000

$3,651M

$257M 3,000

2,000

$704M

$2,224M

$211M $594M

$1,014M

$891M The combined market cap of the top ve largest US tech IPOs exceeded $110B, more than 3.6x the value of$711M the 1,000 combined top ve largest European tech IPOs. Looking at$117M the top$297M 10, the gap in value generated by these $277M companies expands to 4.1x at $133B for the US versus $32B for Europe.

$509M

Aggregate market cap ($M) of top 5 and top 10 tech IPOs by region NOTE:

2016

$107M

2018

2019

$30,928M

SOU RCE: Top 5

2017

$724M

$468M $94M

S&P Capital IQ Platform, as of date 31 October L EGEND

$110,966M

2020, for illustrative purposes only.

$405M

Europe

United States

$87M $32,444M

$402M

Top 10

$84M 0 NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. 2020 is based on data to October 2020

10,000

$133,032M

500 20,000

30,000

1,000 40,000

50,000

1,500 60,000

2,000 70,000

80,000

Market cap ($M)

2,500 90,000

3,000

100,000

110,000

3,500 120,000

Proceed raised ($M)

130,000

140,000

150,000

SOU RCE:

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Slush 2019 Photo by: Tanu Kallio

149

27%

that have not raised VC funding. There have been 57 VCbacked tech IPOs in Europe since 2016, equating to 27% of all 04.4tech IPOs. TechThe IPOs funding background for the rest is varied: bootstrapped, high-net-worth investors, corporate funding, or private equity.

of all tech IPOs VC - BA C K ED TEC H IPOS

VC - BA C K ED TEC H IPOS The majority ofEuropean European techIPOs IPOsinvolve involve companies VC-BACKED TECH IPOS Themajority majority ofofEuropean techtech IPOs involve companies The companies that have not Number of VC-backed tech IPOs that have not raised VC funding. There have been 57 VCthat have not raised VC funding. There have been 57 VC40 raised VC funding. There have been 57 VC-backed tech IPOs in Europe 40 in Europe backed tech in Europe since since 2016, equating to 27% of to 27% of backed techIPOs IPOs in Europe 2016, equating since 2016, equating to 27% of all tech IPOs. The funding background tech IPOs. funding background for the rest allalltech IPOs.The The funding background foristhe rest is of all tech IPOs L EGEND bootstrapped, high-net-worth investors, corporate of all tech33IPOs varied: for the rest is varied: bootstrapped, high-net-worth investors, varied: bootstrapped, corporate funding, or private equity. high-net-worth investors, VC-backed 30 28 corporateorfunding, private equity. of all tech IPOs funding, private or equity. Non-VC-backed

Number of VC-backed tech IPOs in Europe

Number of VC-backed tech IPOs EGEND inLEurope

Non-VC-backed

33 18

28 14

2016

2017

2016

2018

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

# of tech IPOs

VC-backed

27%

30 # of tech IPOs

L EGEND

27%

20 40

VC-backed Non-VC-backed

# of tech IPOs

27%

2019

2020

14 10

2017

2018

2019

2020

SOU RCE:

NOTE:

S&P Capital IQ Platform, as of IPOs date 31 October VC-backed tech account for a much greater share of the region's $1B+ tech IPOs. VC-backed companies 2020, for illustrative purposes only. 0 2016 2018$1B market cap. 2019 accounted for 50% of all tech IPOs with a market cap >$1B, but only 22%2017 of tech IPOs below There are, notably, still many large cap tech IPOs in Europe that have not raised VC funding, including recent SOU RCE: IPOs such as Allegro and Nexi. VC-backed tech IPOs account for aa much greater share of region’ s $1B+ tech VC-backed NOTE: VC-backed tech IPOs account for much greater share ofthe the region's $1B+VC-backed techIPOs. IPOs. VC-backed companies VC-backed tech IPOs account for a much greater share of the region's $1B+ tech IPOs. companies companies accounted for 50% of all tech IPOs with a market cap >$1B, but only 22% of techcap. IPOs S&P Capital Platform, as date 31 October accounted for of 50% of all techwith IPOs with acap market butofonly tech$1B IPOs below $1B market cap. accounted forIQ50% allof tech IPOs a market >$1B,cap but >$1B, only 22% tech22% IPOsof below market 2020, forof illustrative purposes only. Share tech IPOs (%) in Europe 80 below $1B market cap. are, notably, many large cap tech IPOs in Europe that have not There notably, stillThere manycap large cap tech IPOs inthat Europe that have not raised VC funding, including recent There are, are, notably, still many large tech IPOs instill Europe have not raised VC funding, including recent 76% with >$1B+ market cap that are IPOs such as Allegro andincluding Nexi. IPOs such as Allegro and Nexi. raised VC funding, recent IPOs such as Allegro and Nexi. VC-backed, 2016 to 2020

L EGEND Share of tech IPOs (%) in Europe Share of tech IPOs (%) in Europe with >$1B+ market cap that are Non-VC-backed with >$1B+ VC-backed, 2016market to 2020 cap that are

VC-backed

% of tech IPOs

Non-VC-backed VC-backed

% of tech IPOs % of tech IPOs

L EGEND

L EGEND Non-VC-backed

VC-backed 2016 to 2020 VC-backed,

76%

NOTE: S&P Capital IQ Platform, as of date 31 October

NOTE:2020, for illustrative purposes only. S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

SOU RCE:

50%

40 60

50%

22%

40 22%

<$1B

20 0

2020

SOU RCE:

<$1B

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

150

>$1B

<$1B

NOTE:

22%

>$1B

04.4

Tech IPOs

The different sources of funding a company takes on creates different sets of incentives around the timing and size of an IPO for its stakeholders. Simplistically, VC-backed companies are driven by investor incentives to maximise returns and therefore to exit at an increased scale. These incentives are not necessarily shared by that have or have shareholders different return expectations. Thecompanies different sources of bootstrapped funding a company takes on creates with different sets of incentives around In any case, The different sources of funding a company takes on creates different sets of incentives around timing this is in some way re�ected when looking at the average market cap of VC-backed tech which the timing and size of an IPO for its stakeholders. Simplistically, VC-backed companies are IPOs, driven bythe are Thematerially different sources funding amean company takes on creates different sets of incentivesare around the by timing and size of an IPOof for its stakeholders. Simplistically, VC-backed companies driven investor incentives higher on both a and median basis. investor to maximise Simplistically, returns and therefore tocompanies exit at an are increased These incentives andto size of anincentives IPOreturns for its stakeholders. VC-backed driven byscale. investor maximise and therefore to exit at an increased scale. These incentives areincentives not necessarily shared arecompanies not necessarily shared bytocompanies that have bootstrapped or have shareholders with different to maximise returnsthat andhave therefore exit at anor increased scale. These incentives are not necessarily shared 1,250shareholders with different return expectations. In any case, by bootstrapped have by companies that have bootstrapped orthis have shareholders withlooking differentatreturn expectations. In cap any case, return expectations. In any case, is reflected when the average market of Mean and median market cap tech IPOs, which are this is in some way re�ected when looking at the average market cap of VC-backed $1,098M thisVC-backed is($M) in some way re�ected when looking at the average market of VC-backed tech IPOs, which are of VC-backed tech IPOs in are tech IPOs, which higher on bothcap a mean and median basis. materially higher on both a meanmaterially and median basis. materially higher on2020 both a mean and median basis. 1,000 Europe, 2016 to

Non-VC-backed

VC-backed

Market cap ($M)

750

500

Market cap ($M)

L EGEND

Market cap ($M)

1,000

L EGEND

Non-VC-backed

1,250

L EGEND

and median cap MeanMean and median marketmarket cap ($M)($M) of Non-VC-backed VC-backed tech IPOs in IPOs in of VC-backed tech VC-backed Europe, 2016 to 2020 Europe, 2016 to 2020

750

$1,098M

1,000 500 $388M

750 250 500

$113M

$388M

$30M

$388M

250

$1,098M

Mean

Median

250 0

$30M

SOU RCE: Mean

NOTE: S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

$113M

$113M Median

$30M

Mean

SOU RCE:

Median

NOTE:

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020,NOTE: for illustrative purposes only.

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

VALUE CREATION

The prevalence of VC-backed companies is important as they typically have a different growth profile. The The prevalence of VC-backed companies is aggregate important market as they cap typically have a different growth pro le. The of VC-backed tech cap IPOsofsince 2016 ontech the first of trading aggregate market VC-backed IPOsday since 2016 onwas the rst day of trading was $63B compared to $63Bfor compared to $61B for non-VC-backed companies. BetweenIPOs and 31 October 2020, however, VC-backed $61B non-VC-backed companies. Between their respective added in market cap by VC-This companies haveIPOs added $77B however, in marketVC-backed cap versus just $32B for non-VC-backed companies. their respective andan31additional October 2020, backed companies since The prevalence of VC-backed companies is important as they typically have a different growth pro le. The underlines the role that VC-backed tech companies play from a growth and value creation perspective. companies have added an additional $77B in market cap versus Theaggregate prevalencemarket of VC-backed companies is important as they typically have arst different growth pro le.$63B The their IPOs, over 2.3x moreto cap of VC-backed tech IPOs since 2016 on the day of trading was compared just $32B for non-VC-backed companies. This underlines the role aggregate market cap of VC-backed tech IPOs since 2016 on the rst day ofIPOs trading $63B compared to than non-VC-backed $61B for non-VC-backed companies. Between their respective andwas 31 October 2020, however, VC-backed that VC-backed tech companies play from a growth and value $61B for non-VC-backed companies. Between their respective IPOs and 31 October 2020, however, VC-backed Market cap ($B) at IPO and added companies companies have added an additional $77B in80.0 market cap versus just $32B for non-VC-backed companies. This companies have added an and additional $77B in market cap versus just $32B for non-VC-backed companies. This post-IPO by VC-backed creation perspective. underlines the role that VC-backed tech companies play from a growth and value creation perspective.

$77B

$77.1B

underlines role tech that IPOs, VC-backed tech companies play from a growth and value creation perspective. non-VCthe backed SOURCE: 2016 to 2020

Non-VC-backed

VC-backed

40.0

20.0

Market cap ($B) Market cap ($B)

L EGEND

60.0 Market cap ($B)

L EGEND

80.0

40.0 60.0

Excludes companies that have delisted since IPO. S&P Capital IQ Platform, as of date 31 NOTE:October 2020, for illustrative purposes only. Excludes companies that have delisted since IPO. S&P Capital IQ Platform, as of date 31 NOTE: October 2020, for illustrative purposes only.

0.0

$77.1B

$61.3B

$62.6B

$32.3B

20.0 40.0

$32.3B

$32.3B 0.0

At IPO

20.0

NOTE:

$62.6B

$61.3B

60.0

Market capat($B) and added Market cap ($B) IPO at andIPO added L EGEND post-IPO by VC-backed and and post-IPO by VC-backed Non-VC-backed non-VC backed tech IPOs, non-VC backed tech IPOs, 20162016 toVC-backed 2020 to 2020

Added post-IPO

SOU RCE: At IPO

0.0

Added post-IPO

At IPO

SOU RCE:

Excludes companies that have delisted since IPO. S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

151

Added post-IPO

04.4

Tech IPOs

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

ar ia Lu xe m bo ur g

Sp ai

ta 2

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only.

Slush 2019 Photo by: Julius Konttinen

Polish people are naturally very entrepreneurial which can be seen by the number of large private companies set up over the last 30 years (since transformation), of which some of the most well-known with a tech focus are CD Project, Allegro, Asseco group companies, Polsat group, Ten Square Games – all of these were once startups.

Kinga Stanisławska Experior Venture Fund General Partner and Founder

The venture ecosystem in Poland really kicked off about 6-7 years ago and is gathering momentum. Seed financing from angels and around 100 local micro VC funds is abundant. Grant and support possibilities for building out of R&D, as well as export and promotion via accelerators is booming. The establishment of software R&D centres by some of the largest global tech players in Poland some years ago (due to the skills of Polish software engineers who are ranked 3rd by HackerRank globally) has created a new cast of talented and high quality software developers with now global experience of building the software being used today by the global consumer. These engineers are now ready to venture out on their own and establish new companies. Some have already raised significant VC money for their projects, such as NoMagic. The recent establishment of a local fund of funds, PFR Ventures, who have now invested in over 30 VCs, has also accelerated progress and availability of capital for early stage.

152

ar ia lg

Lu xe m b

n Sp ai

ta al M

SOU RCE:

NOTE:

Je rs ey

pu bl ic

m iu lg Be

nd la Ire

nd s rla

ce Fr an

Ne th e

nd la Fi n

rm an Ge

ay No rw

nm ar k De

Po la

ng Ki

Ita

do m

Lu xe m b

ar ia

lg h

M 1

Sp ai

Je rs ey 1

1 pu bl ic

Je rs ey

Ire 2

Ire

nd s

Fr an

rla

pu bl ic

1 4

nd s

Ne th e

rla

Fr an

nd la Fi n 2

3 5

2 4

rm an Ge

No rw

ay No rw

nm ar k De

nd Po la

Ita

ed en

te d Un i

SOU RCE:

S&P Capital IQ Platform, as of date 31 October 2020, for illustrative purposes only. NOTE:

do m ng Ki

Un i

NOTE:

SOU RCE:

te d

ed en

Un i

te d

nm ar k

Fi n

rm an

1 5

Ne th e

2 3

>$1B

47 20

<$1B

do m

L EGEND

>$1B

47 20 5

<$1B

# of tech IPOs

ed en

Number of tech IPOs by market cap by country, 2016 to 2020 L EGEND

Po la

<$1B

Number of tech IPOs by market cap by >$1B country, 2016 to 2020

Ita

# of tech IPOs

This reveals hidden insights into the state of European tech capital markets. There are a large number of smaller IPOs in countries such as Italy and Poland - perhaps because the private capital markets for VC are not as well developed. Sweden also stands out� it has a �ourishing VC investor base, but also very active public markets for smaller-cap tech IPOs. It is not surprising to see that the UK & Germany have produced the largest This reveals hidden insights into the state of European tech capital markets. There are a number of >$1B+ tech IPOs since 2016. More surprising is that Norway comes in third place. number smaller IPOs countries suchtech as Italy and PolandThere - perhaps because theof Thislarge reveals hiddenofinsights into thein state of European capital markets. are a large number ThisIPOs reveals hidden such insights into the state- of European tech capital markets. There for areVC a large number of smaller in countries as Italy andnot Poland perhaps because the private capital markets are not private capital markets for VC are as well developed. Sweden also stands out; it has a smaller IPOs inSweden countries asout� Italy and - perhaps because the markets for VC are not as well developed. alsosuch stands has aPoland �ourishing VC investor but private also verycapital active public Number of tech IPOs by market flourishing VC investor base, butstands alsoitvery active public markets base, forinvestor smaller-cap tech IPOs.very active public as well Sweden out� ittohas �ourishing but also markets for smaller-cap tech IPOs.also It is not surprising seeathat the UK & VC Germany havebase, produced the largest cap by developed. country, 2016 to 2020 It is not surprising to see that the UK & not Germany have to produced number have of produced the largest markets for smaller-cap tech IPOs. Itsurprising is surprising see thatthe thelargest UK & Germany number of >$1B+ tech IPOs since 2016. More 40 is that Norway comes in third place. 5 >$1B+ tech IPOs since 2016. More surprising is that Norway comes in third place. L EGEND of >$1B+ tech IPOs since 2016. More surprising is that Norway comes in third place. number

04.5

Mergers & value Acquisitions The aggregate of exits of European tech companies via M&A exceeded $90B by the end of September 2020, on track for the strongest year since 2016. The aggregate value of exits of tech companies via $90B TheThe aggregate value ofvalue exits European tech companies via M&A exceeded $90B by the end of by September aggregate value ofof exits ofEuropean European tech companies viaM&A M&Aexceeded exceeded $90B the end of September European M&A exit 150.0 by the end of September 2020, on track for the strongest year since 2016. 2020, on track for the strongest year since 2016. per year 2020, on track for the strongest year since 2016. European M&A exit value European M&A exit value per year

50.0

Exit value ($B)

100.0

Exit value ($B)

150.0

per year

150.0 100.0

$143.9B 100.0 50.0

All Dealroom.co data excludes the following: NOTE:biotech, secondary transactions, debt, lending capital, and grants. Please also note All Dealroom.co data excludes the following: that the datatransactions, excludes Israel. biotech, secondary debt,2020 data is up to September 2020.Please also note NOTE: lending capital, and grants.

$61.8B

$143.9B

0.0

2016

0.0 SOU RCE:

$61.8B

$91.2B 2018

$86.2B 2017

2016 2017

2016

$92.7B

$91.2B

$86.2B

50.0 0.0

NOTE:

$91.2B

$86.2B

$143.9B

2018

2017

2019 $61.8B 2019

2018

$9 2

2020

2019

SOU RCE:

that the data excludes Israel. 2020 data is up All Dealroom.co data excludes the following: to September 2020.

biotech, secondary transactions, debt, of VC-backed European tech companies are small in scale. In fact, exits via M&A that The vast majority of exits SOU RCE: lending capital, and grants. Please also note are at $100M ordata lower, thatvalued the data excludes Israel. 2020 is up including those that involve undisclosed exit valuations, account for more than to September 2020. The vast majority exits of VC-backed European tech companies are small in scale. 90% of total exitsof per year. The vast majority of exits of VC-backed European tech companies are small in scale. In fact, exits via M&A that In fact, exits via M&A that are valued at $100M or lower, including those that valued atof $100M lower, including those that involve undisclosed exit involve valuations, account for more than Theare vast majority exits or of VC-backed European tech 100.0companies are small in scale. In fact, exits via M&A that 4.4% undisclosed exit account more than 90%7.9% of total per year. 8.8% ofat total exits per year. are90% valued $100M orvaluations, lower, including thosefor that involve undisclosed exitexits valuations, account for more8.9% than

VC-backed M&A exit count by

90% of total deal sizeexits per year.

100.0

VC-backed M&A exit count by L EGEND VC-backed M&A exit count by deal size

100.0

>$100M L EGEND

75.0

<$100M

>$100M >$100M

% of VC-backed M&A exits

L EGEND

50.0

25.0

All Dealroom.co data excludes the following: NOTE:biotech, secondary transactions, debt, lending and grants. Please also note NOTE: capital, All Dealroom.co data excludes the following: that the datatransactions, excludes Israel. biotech, secondary debt,2020 is based on Allcapital, Dealroom.co data excludes the following: data up to September 2020. lending and grants. Please also note biotech, secondary that the data excludes Israel.transactions, 2020 is based debt, on data up to September lending capital,2020. and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

0.0

4.4% 4.4%

8.9% 8.9%

8.8% 8.8%

7.2%

75.0 50.0

50.0

92.1%

25.0

95.6%

92.1%

95.6%

91.1%

91.2%

91.1%91.2%

92.8% 91.2%

25.0 0.0

NOTE:

7.9%

% of VC-backed % of M&A VC-backed exits M&A exits

<$100M deal size

75.0

2016

2017

2016

0.0

2017

2016

2018

2017

SOU RCE: SOU RCE:

SOU RCE:

153

2018

2019 2019

2018

2020

2019

04.5

Mergers & Acquisitions

The top 10 largest acquisitions of VC-backed European tech companies drove an aggregate enterprise value at exit of $12.7B. The top three largest transactions all involveddrove acquisitions of onceenterprise VC-backed value The top largest of European tech an he top 10 largest of VC-backed European tech companies an aggregate The top 10 10acquisitions largest acquisitions acquisitions of VC-backed VC-backed European tech companies companies drove drove an aggregate aggregate enterprise enterprise value value companies by private equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, incompanies a exit of $12.7B. The top three largest transactions all involved acquisitions of once VC-backed t exit of at $12.7B. The top three largest transactions all involved acquisitions of once VC-backed companies by by at exit of $12.7B. The top three largest transactions all involved acquisitions of once VC-backed companies by transaction that valued the company at more than $1.2B, by Spanish fashion and beauty giant, Puig, private equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, in a transaction that valued rivate equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, in a transaction that valued private equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, in a transaction that valued the company more than $1.2B, by fashion and Puig, together the together withat the billion-dollar acquisition of Flaschenpost by Thegiant, Oetker Group, represent he company at more than $1.2B, Spanish fashion and beauty giant, Puig, together withwith the important billion-dollar the company at more thanby $1.2B, by Spanish Spanish fashion and beauty beauty giant, Puig, together with the billion-dollar billion-dollar acquisition of Flaschenpost by The Oetker Group, represent important milestones of older European milestones of older European incumbent businesses looking to Europe’ s VC-backed startup ecosystem cquisition of Flaschenpost by The Oetker Group,Group, represent important milestones of older European represent important milestones of older European acquisition of Flaschenpost by The Oetker incumbent businesses to ss VC-backed startup ecosystem for and forbusinesses growth and innovation. ncumbent looking looking to Europe's VC-backed startup ecosystem for growth and innovation. incumbent businesses looking to Europe' Europe' VC-backed startup ecosystem for growth growth and innovation. innovation. Company

Top 10 largest VC-backed exits TopVC-backed 10 largest VC-backed exits Top 10 largest exits by value at exit in 2020 value at exit in 2020 by value at by exit in 2020

NOTE: NOTE: Based on data up to 31 October 2020. NOTE: Based on Tilbury data upBeauty to 31 October 2020. Charlotte and United Charlotte Tilbury Beauty and United Wardrobe value at2020. exit based on rumours. Based on data up to 31 October Wardrobe value at exit based on rumours.

Company Company

1 1 Veeam

2 Idealista

Country

Country Country

City

Veeam Veeam

Switzerland SwitzerlandBaar Switzerland

Idealista Idealista

Spain

3 3

Pipedrive Pipedrive

4 4

Charlotte Tilbury Beauty Charlotte Tilbury Beauty

United Kingdom United Kingdom

5 5

Flaschenpost Flaschenpost

Germany Germany

6 6

Jagex Jagex

7 7

Voxbone Voxbone

8 8

Polskie ePlatnosci Polskie ePlatnosci

Poland Poland

9 9

DecaWave DecaWave

Ireland Ireland

Touch Surgery

Spain Spain Estonia Estonia

City EV ($M) Acquirers (if any) CityEV ($M)EV ($M) Acquirers Acquirers (if any)(if any) Baar 5,000 Insight Partners Baar 5,000 5,000 Partners Insight Insight Partners Madrid

1,500

EQT Partners

Tallinn Tallinn

1,500 1,500

Vista Equity Partners Vista Equity Partners

London London

1,230 1,230

BDT Capital Partners, Puig BDT Capital Partners, Puig

Muenster Muenster

1,160 1,160

Dr Oetker Dr Oetker

EQT Partners Madrid Madrid 1,500 1,500EQT Partners

Pipedrive

Charlotte Tilbury Beauty

United Kingdom

London

Flaschenpost

Germany

Muenster

1,160

Jagex

United Kingdom

Cambridge

530

Voxbone

Belgium

Brussels

527

Polskie ePlatnosci

Poland

Rzeszow

480

DecaWave 10 Touch Surgery

Ireland

Touch Surgery

United Kingdom

Estonia

Tallinn

1,500 1,230

Vista Equity Partners

BDT Capital Partners, Puig

United Kingdom United Kingdom

Cambridge Cambridge

530 530

Belgium Belgium

Brussels Brussels

527 527

Rzeszow Rzeszow

480 480

Dublin Dublin

400 400

Dublin London400 United Kingdom United Kingdom

London

350

Dr Oetker

Runescape Runescape

Runescape

Bandwidth.com Bandwidth.com

Bandwidth.com Nets

Nets Nets

Qorvo Qorvo

350 Qorvo Medtronic 350

Medtronic

SOU RCE: SOU RCE:

SOU RCE:

Charlotte Tilbury Beauty and United Wardrobe value at exit based on rumours. The acquisitions of

companies like Flaschenpost to a European buyer is in some way not unusual. European buyers actually consistently drive the largest share of exits of European tech companies by M&A, consistently accounting for around 70% or so ofFlaschenpost exits by count. The acquisitions acquisitions of like totoa aEuropean buyer is is in in some way notnot unusual. The ofcompanies companies like Flaschenpost European buyer some way unusual. European European buyers actually consistently drive the largest share of exits of European tech companies actually consistently the largest share of exits European companies by M&A, consistently Thebuyers acquisitions of companies like drive Flaschenpost to 100 a European buyer of is in some waytech not unusual. European byShare M&A, accounting for around or of soEuropean of exits by count. accounting for around 70% of exits by 70% count. buyers actually consistently drive or theso largest share of exits tech companies by M&A, consistently ofconsistently M&A exits by buyer accounting foryear around 70% or so of exits by count. region by

100

Share L EGENDof M&A exits by buyer Share of M&A region byexits yearby buyer North America

100

Europe L EGEND

L EGENDAsia

North America

Asia Asia Rest ofRest World of World

% of exits

North Rest America of World

Europe Europe

% of exits % of exits

region by year

75 50

50 25

25 0

NOTE: VC-backed and non-VC-backed deals NOTE:included. All Dealroom.co data excludes the following: biotech, secondary transactions, NOTE: VC-backed and non-VC-backed deals debt, capital, grants. Please also included. Alllending Dealroom.co dataand excludes the note that the data excludes Israel. 2020 is VC-backed non-VC-backed deals following: biotech,and secondary transactions, data up to September 2020. the included. All Dealroom.co dataalso excludes debt, based lendingon capital, and grants. Please note that the databiotech, excludes secondary Israel. 2020 is following: transactions, baseddebt, on data up to September 2020. lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

02016

2016

2017 2017

2016

2018

2017

SOU RCE: SOU RCE:

SOU RCE:

154

2018

2019 2019

2018

2020

2019

2020

04.5

Mergers & Acquisitions

The Flaschenpost acquisition by The Oetker Group is remarkable for other reasons. It is simply still an infrequent occurrence to see European buyers acquiring VC-backed European tech companies at such large The values. Flaschenpost by acquisitions The Oetker Group remarkable for other It isby simply from the US. exit In fact,acquisition large-ticket have is been - and continue toreasons. be - driven The Flaschenpost acquisition by The Oetker Group is remarkable for other reasons. It isbuyers simply still an still an infrequent occurrence to see European buyers acquiring VC-backed European tech While Northoccurrence American have accounted for 22% of M&A volume 2016, those transactions have Theinfrequent Flaschenpost acquisitionbuyers TheEuropean Oetker Group is remarkable forVC-backed otherexit reasons. It issince simply still an tobysee buyers acquiring European tech companies at such large companies at such large exit values. In fact, large-ticket acquisitions have been -higher andat continue toticket size of accounted for a disproportionate share of total exit value (45%), indicating the average infrequent occurrence to see European buyers acquiring VC-backed European tech companies such large exit values. In fact, large-ticket acquisitions have been - and continue to be - driven by buyers from the US. be - driven byAmerican buyers from the US. While North buyers have accounted for2016, 22%those of M&A exitUS-led values. In fact, large-ticket acquisitions have beenAmerican - and continue to exit be - driven bysince buyers from the US.transactions have acquisitions. While North buyers have accounted for 22% of M&A volume While North American buyers have accounted for 22% of M&A exit volume since 2016, those share transactions have exit volume since 2016, those transactions have accounted for a disproportionate of total accounted for a disproportionate share of total exit value (45%), indicating the higher average ticket size of accounted for a disproportionate share of total exit value (45%), indicating the higher average ticket size of exit value (45%), indicating the higher average80ticket size of US-led acquisitions. US-led acquisitions. Share of M&A exits by buyer US-led acquisitions.

73%

region, 2016 to 2020

Share of exits M&A by exits by buyer Share of M&A buyer L EGEND region, 2016 2016 to 2020 region, to 2020

73%

L EGENDShare of value (%)

L EGEND

Share of count (%) Share of value (%)

Share of value (%)

% of exits

Share of count (%) 40

% of exits % of exits

Share of count (%)

45%

38%

40 45%

40 20

38% 16%

16%

22%

US & Canada

Europe

US & Canada

NOTE:All Dealroom.co data excludes the following:

biotech, secondary transactions, debt, All Dealroom.co data excludes the following: lending capital, and grants. Please also note biotech, secondary transactions, debt, NOTE: that the data excludes Israel. lending capital, and grants. Please also2020 note data is up Alldata Dealroom.co data2020 excludes that the excludes2020. Israel. data isthe up following: to September to September biotech,2020. secondary transactions, debt,

38%

22%

NOTE:

45%

22%

Europe

16% Asia1%

Asia

US & Canada

Europe

Rest of World

Rest of W

SOU RCE:

The trend over time also shows that while North American buyers have accounted for a relatively steady share The trend over time also that while North American buyers haveof accounted a relatively of M&A exit volume, theyshows have been responsible for a growing share total exitfor value over the past ve years, steady share of M&A exit volume, they have been responsible for a growing share of total exit though a few larger M&A transactions led by European buyers has shifted the dial back in 2020. The trend over time also shows that while North American buyers have accounted for asomewhat relatively steady share value over the past five years, though a few larger M&A transactions led by European buyers has Theof trend over time also shows that while North American buyers have accounted for a relatively steady share M&A exit volume, they have been responsible for a growing share of total exit value over the past ve years, shifted the dial backhave somewhat in 2020.ledfor of M&A exitof been responsible growing share of total valuethe overdial theback past somewhat ve years, in 2020. though avolume, few larger transactions bya80European buyers hasexit shifted Share exits by they M&A though a few larger M&A transactions led by European buyers has shifted the dial back somewhat in 2020. North American buyers Share of exits by

L EGEND Share of exits by North American buyers North American buyers Share of total number of exits (%)

% of exits

total number of exits (%) Share Share of totalof number of exits (%)

% of exits % of exits

Share of total value of exits (%)

60 40

40 20

20%

20 0

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, All Dealroom.co data excludes the following: lending and grants. Please also note NOTE: capital, biotech, secondary debt,2020 data is up that the data transactions, excludes Israel. lending and grants. Please also note Allcapital, Dealroom.co data excludes the following: to September 2020. that the data excludes Israel.transactions, 2020 data is updebt, biotech, secondary to September 2020. lending capital, and grants. Please also note that the data excludes Israel. 2020 data is up to September 2020.

36%

24%

36%

20%

36%

19%

2017

SOU RCE:

155

27%

2018 2018

2017

SOU RCE:

27%

24%

2017

SOU RCE:

27%

24%

27%

19%

2016

59%

55%

27%

24%

19%

2016

NOTE:

73%

55% 73%

24% 20

73%

L EGEND L EGEND

NOTE:

Asia

SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel. 2020 data is up to September 2020.

Share Share of totalof value ofvalue exits (%) total of exits (%)

Rest of W

2019 2019

2018

2020

2019

04.6

Private Equity Private Equity and European Tech Private equity buyout firms (‘PE’) are playing a growing role in the broader European tech ecosystem, but their presence and activities are not yet that well understood within the mainstream tech narrative. To that end, we have partnered with Hg, Europe’s leading software investor to explore the state of European tech through the lens of private equity.

A positive development for European tech is the emergence of an increasingly active exit route to private equity buyers. The strength of the European tech investment opportunity set has attracted an increasingly deep and sophisticated base of investors with large funds available to deploy in the region. Hg is Europe’s only large-scale, pureplay homegrown tech buyout firm, though the investor base active in European tech spans local, generalist funds from inside and outside Europe with a tech focus. Leading US pureplay tech buyout firms, such as Vista Equity and Thomas Bravo, are also sometimes active in Europe. Selection of the leading European-based and European-focused tech PE firms

European HQ

Generalist

Tech specialist

European focus NOTE: Positioning of logos is for illustrative purposes only.

156

04.6

Private Equity

The past two years have seen an unprecedented level of large-scale buyouts of European tech companies. The past two years have seen anbeen unprecedented levelofof large-scale of European tech companies. Since 1 January 2019, there have 17 acquisitions European techbuyouts companies at an enterprise value 1 January 2019, there have been is 17 dominated acquisitions European tech companies at an enterprise value in TheSince two years have seen an level of large-scale buyoutssoftware of European tech companies. inpast excess of $1B. The list of unprecedented companies byof enterprise companies, but also includes Since 1 January 2019, there have been 17 acquisitions of European tech companies at an enterprise value in includes a excess of $1B. The list of companies is dominated by enterprise software companies, but also a number of significant consumer transactions, such as Badoo, AutoScout24 and Idealista. Horizontal excess of $1B. list of companies is dominated by enterprise softwareAutoScout24 companies, butand alsoIdealista. includes aHorizontal number of The signi�cant consumer transactions, such as Badoo, enterprise software is well transactions, represented,such but as theBadoo, companies span multiple verticals, including fintech and number of signi�cant consumer AutoScout24 and Idealista. Horizontal enterprise software is well represented, but the companies span multiple verticals, including �ntech and healthtech. Though sponsor-to-sponsor aremultiple the most common, there�ntech is alsoand a mix of types of enterprise software is well represented, but the transactions companies span verticals, including healthtech. Though sponsor-to-sponsor transactions are the most common, there is also a mix of types of healthtech. Though sponsor-to-sponsor transactions are the most common, there is also a mix of types of of European transactions, including including public-to-private and divestitures. The diversity transactions, public-to-private andcorporate corporate divestitures. Thegeographic geographic diversity of European transactions, including public-to-private and corporate divestitures. The geographic diversity of European tech is is strongly evident in this as most have been built in in towns and cities not tech strongly evident thisanalysis, analysis, mostof ofthese thesecompanies companies have towns tech is strongly evident in thisin analysis, as mostas of these companies have been built inbeen townsbuilt and cities not and cities not typically associated with most active tech typically associated with Europe’ Europe's mosttech active techhubs. hubs. typically associated with Europe's mostsactive hubs. $1B+$1B+ EV acquisitions of EV acquisitions of European tech companies by European tech companies by PE/buyout �rms since 1 Jan 2019

PE/buyout �rms since 1 Jan 2019

Visma

EV ($B)

Date

Aug 2020

Oslo

Apr 2019

Oslo

Feb 2020

Baar

Visma Veeam

Veeam Advanced Computer Software Group

AutoScout24

Sophos

AutoScout24 Industrial & Financial Systems

SUSE

Aug 2019

Advanced Computer Software Group Mar

Sophos

Badoo

2020

5 Slough

Aug Norway Oslo 2020 Apr 2019

BC Partners

Hellman & Friedman

Thoma Bravo Auto marketplace

EQT, TAGermany

Hellman Friedman ERP&software

Cybersecurity

3 Linkoping

Apr Munich Sweden 2020

London 3

Jul UK Accel GrowthEQT, TA Social/Dating Linkoping Blackstone, Sweden 2020

Mar 2019

NurembergNov

2019

Jul 2019

Nedre Vats

Feb 2019

Delft

Dec 2019

Schaffhausen

Sep 2020

Madrid

Nov 2020

2 Tallinn

May 2019

Paris

Aug 2019

Heidelberg

Webhelp AutoStore Exact Software

Germany

London

Ardian, EQT

DevOps

Blackstone, Accel Growth Payroll and HCM software

Wiesbaden

Germany

France

Groupe Bruxelles Lambert

3 2 2 2

Mar 2019 Dec 2019 Aug 2019 Jul 2019 Feb 2019

Nuremberg Wiesbaden

Norway

Germany

Ardian, EQT Hg

Thomas H Lee Partners

Paris Netherlands

Germany

France

CRM and services Warehouse automation/Robotics

Groupe Bruxelles Lambert

KKR

Thomas H Lee Partners

Delft

KKR

Spain

Tax & Accounting/ERP software Tax & Accounting/ERP software

Yes

DevOps

Healthcare softwa Cybersecurity

Yes

Auto marketplace ERP software Social/Dating DevOps Yes

Payroll and HCM software CRM and services

Fintech

Nedre Vats CVC Capital Norway Partners.

Switzerland

VCbacked (at any What they do time)

Healthcare software

Jul 2020

Unzer

DevOps

Insight Partners

P&I Personal & Informatik

Idealista

Tax & Accounting/ERP software Hg, CPPIB

BC Partners

Mar Oxford 2020 Germany

Paris

eFront

Switzerland

Aug 2019

WebPros

Tax & Accounting/ERP

Hg, Warburg Pincus, TPG software

Insight Partners

Baar UK

What they do Buyer

Munich

Pipedrive

Norway

Thoma Bravo

Webhelp

Idealista

Hg, CPPIB

Aug Slough 2019 UK

WebPros

Norway

Oxford

P&I Personal & Informatik

Exact Software

Hg, Warburg Pincus, TPG

Oslo Switzerland

Feb 2020

Dec 2019

AutoStore

Norway

Buyer Country

Apr 2020

Nov

SUSE

Country City

3 Industrial & Financial Systems 2019

Badoo

EVCity Date ($B)

Oakley Capital, BrainWeb Investment, Pecunalta

Netherlands

Web hosting

EQT

Warehouse automation/Robo Fintech

Online real estate

Yes

Dec Schaffhausen Switzerland Vista Equity Partners 2019 Estonia

CVC Capital Partners. OakleyCRM Capital, BrainWeb software Investment, Pecunalta

Sep France Madrid 2020

Spain

EQT

Estonia

Vista Equity Partners

CRM software

BlackRock

Nov Germany Tallinn 2020

eFront

May 2019

Paris

France

BlackRock

Fintech

Unzer

Aug 2019

Heidelberg

Germany

KKR

Fintech

SOU RCE:

157

Fintech

Online real estate

Pipedrive

KKR

Fintech

YesWeb hosting

04.6

Private Equity

It is is fascinating the huge scale of the PE-target companies, mostmost of them are likely be unknown It fascinatingthat, that,despite despite the huge scale of the PE-target companies, of them areto likely to be

It is fascinating that, despite the huge of thebeen PE-target most of themaround arestartups likely to and be scaleups. to the European tech ecosystem which has traditionally around VC-backed unknown to the European tech scale ecosystem which hascompanies, beenbuilt traditionally built VC-backed startups and unknown to the European tech ecosystem which has been traditionally built around VC-backed startups and The fact is that Europe is home to a large number of ‘hidden giants’ that have remained ‘ o ff-the-radar’ by building scaleups. The fact is that Europe is home to a large number of 'hidden giants' that have remained 'off-thescaleups. Theof fact that Europe is home ecosystem. to a large number of 'hidden giants' thatthat have remained 'off-theoutside theismore mainstream TheseVC areecosystem. huge companies of employees radar' by building outside of theVC more mainstream These arehave hugethousands companies that have radar' by building outside of the more mainstream VC ecosystem. These are huge companies that have thousands or hundreds of millions of dollars revenue. by building theofventure or hundredsof ofemployees millions of dollars of revenue. Yet, by building offof the venture Yet, fundraising path,off many them have thousands of employees or hundreds of millions of dollars of revenue. Yet, by building off the venture fundraising path, many ofany them have equity scaledfunding, withouti.e. ever taking bootstrapped any external equity funding, i.e.isby having scaled without ever taking external by having growth. JetBrains fundraising path, many of them have scaled without ever taking any external equity funding, i.e. by having a great bootstrapped growth. JetBrains is a great example of a huge business that has been built with zero examplegrowth. of a huge businessisthat has been builtof with zerobusiness funding. JetBrains is based Prague the Czechfunding. bootstrapped JetBrains a great example a huge that has been builtinwith zeroin funding. JetBrains is based in Prague in the Czech Republic. This may be considered an unlikely home for should a European JetBrains is based Prague in the Czech This for maya be considered unlikely home forshows, a European Republic. Thisinmay be considered anRepublic. unlikely home European tech an giant but, as the list this tech giant but, as the list shows, this should not be considered the case. In fact, another Prague-based tech giant but, as the listthe shows, should not bePrague-based considered the case. InAvast, fact, another Prague-based not be considered case.this In fact, another company, went public in 2018 and is now valued company, Avast, wentin public in 2018 andvalued is nowatvalued at $6.3B. A common theme that runs through of company, Avast, went public 2018 and is now $6.3B. A common theme that runs through several of several at $6.3B. A common theme that runs through several of these companies is that many are tackling markets that companies is thatare many are tackling thatseem initially small to be of these these companies is that many tackling marketsmarkets that initially tooseem small too to be of interest tointerest global to global initially seem toothe small to they be of�gure interest tothey global players, but by the timeplayer they figure out they are interesting, players, time are interesting, a local has �won� already. Prominenta players, but by but the by time they �gure out theyout are interesting, a local player has �won� already. Prominent local player has “won” already. Prominent examples include Allegro versus Amazon / eBay in Poland. examples versus Amazon eBay in Poland. examples includeinclude AllegroAllegro versus Amazon / eBay in/Poland. Company

Selected examples of 'off-theSelected examples of 'off-theradar' large-scale European radar' large-scale European tech companies tech companies

Country City

Employees Country

Revenue (2019) Employees

Revenue (2019)

Acronis1

Acronis2003

Bootsrapped; Growth Equity Growth Schaffhausen 2003 Bootsrapped; Equity

Switzerland Schaffhausen

1,400+ Switzerland

$250M 1,400+

$250M

AutoDoc 2

AutoDoc2008

Bootstrapped Bootstrapped Berlin 2008

Germany Berlin

1,800+ Germany

$700M 1,800+

$700M

Cegid Group 1983 3 Cegid Group

1983PE-owned

Lyon

France Lyon

2,000+ France

$570M 2,000+

$570M

Infobip

Bootsrapped; Growth Equity

Vodnjan

Croatia

Vodnjan

Croatia

2,200+

$700M

JetBrains

Bootsrapped

Prague

Czech Republic

Prague

1,000+

Czech Republic

$270M

Murex

Paris

France

Paris

2,500+

France

$600M

Relex Solutions

2005

Bootsrapped; Growth Equity

Helsinki

Finland

800+

n/a

Tesonet

2008

Bootsrapped

Vilnius

Lithuania

700+

n/a

The Access Group

1989

Colchester

1,600+

$280M

Transporeon

2000

Ulm

Germany

800

$100M

P&I

Wiesbaden

Germany

Founding Year FoundingFunding City Company Year history Funding history

Infobip

2006 2000

JetBrains

Murex

Bootsrapped; Growth Equity

2000

1986

Bootsrapped

Bootstrapped

1986

Relex Solutions

PE-owned

2006

2005

Tesonet

Bootstrapped

Bootsrapped; Growth Equity

2008

Bootsrapped

PE-owned

The Access Group

1989

PE-owned

Transporeon

2000

PE-owned

P&I

1968

PE-owned

1968

PE-owned

Helsinki

Finland

Vilnius

Lithuania

Colchester

Ulm

Germany

Wiesbaden

Germany

450

2,200+ 1,000+ 2,500+

n/a n/a

1,600+

$280M

800

$100M

450

$160M

SOU RCE:

57%

Non VC-backed L EGEND

VC-backed

# of buyouts

VC-backed

8 10

Non VC-backed 3

5 8

# of buyouts

Non VC-backed European tech companies since 2019, by VC-backed or not

L EGEND 1 Jan

Based on data up to September 2020.

NOTE:

SOU RCE:

2019

Based on data up to September 2020.

2020

SOU RCE:

2019

Based on data up to September 2020.

NOTE:

4 3

2019

SOU RCE:

NOTE:

158

$600M

800+

It is a positive, therefore, that there are now growing signs that these two worlds are inching closer together. Coming back to the 17 $1B+ acquisitions of European tech companies by private equity buyers reveals an EVER CLOSER UNION interesting trend. While just one of the ten transactions (10%) in 2019 involved a company that previously It is a positive, therefore, that there are now growing signs that these two worlds are raised funding from VCs, the numbers for 2020 show that PE buyers appear to be setting their sights on inching closer together. Coming back to the 17 $1B+ acquisitions of European tech assets growing regularity. The seven atinching >$1B EV in 2020 involved four It isventure-backed ais positive, therefore, that with there are noware growing signs that thesetransactions two worlds are closer together. It a positive, therefore, that there now growing signs that these two are inching closer together. companies by buyers reveals an interesting trend. justequity oneworlds of the ten European companies that were previously including Pipedrive, Idealista and Coming back totech theprivate 17 $1B+equity acquisitions of European techventure-backed, companies byWhile private buyers reveals an Coming back to the 17 $1B+ acquisitions of European tech companies by private equity buyers reveals transactions 2019 company that previously raised ain funding from VCs, or 4 an outup of 7 PE interesting trend.(10%) While just oneinvolved of the tena transactions (10%) in 2019 involved company that previously AutoScout24. This in represents a healthy potential driver of liquidity European capital markets, opening interesting trend. While just one of the ten transactions (10%) in 2019 involved a company that previously transactions at $1B+ raised funding from VCs, the numbers for 2020 show that PE buyers appear to be setting their sights on the numbers for 2020 show that PE buyers appear to be setting their sights on venturenew exit routes for founders and their investors. raised funding from VCs, the numbers for 2020 show that PE buyers appear to involved be setting theirEV sights on VC-backed venture-backed assets with growing regularity. The seven transactions at >$1B EV in 2020 four involved backed assets with growing regularity. The seven transactions at >$1B EV in 2020 venture-backed assets with growing regularity. The seven transactions atIdealista >$1B EVand in 2020 involved four in 2020 European tech companies that were previously venture-backed, including Pipedrive, companies involved four European tech companies that were previously venture-backed, including AutoScout24. potential driver of liquidity in European capital Pipedrive, markets, opening up and European tech companies that were previously venture-backed, including Idealista Number ofThis $1B+represents buyouts of a healthy SOURCE: Pipedrive, Idealista andand AutoScout24. This represents a healthy potential driver ofcapital liquidity 10 European tech since newAutoScout24. exit routes for companies founders theirainvestors. This represents healthy potential driver of liquidity in European markets, opening up 1 Jan 2019, by VC-backed or not in European capital markets, and opening new exit routes for founders and their investors. new exit routes for founders theirup investors. 10

$270M

700+

SOU RCE:

Number of $1B+ buyouts of L EGEND European tech companies since VC-backed $1B+ buyouts 1 JanNumber 2019, by of VC-backed or not of

$700M

2020

04.6

Private Equity

A further reason reason to be positive about the growing of PE-backed European tech companies the role A further to be positive about thepresence growing presence of PE-backed European techiscompanies is the role that they can playreason in driving liquidity into capital markets through their M&A rollout strategies. The average PEA further to be positive about the growing presence of PE-backed European tech is the role that they can play in driving liquidity into capital markets through their M&A rollout strategies.companies The average backed company executing adriving roll-up based growth plan makes two to three so-called bolt-on acquisitions of The average PEthat they can play in liquidity into capital markets through their M&A rollout strategies. PE-backed company executing a roll-up based growth plan two market to threethat so-called bolt-on acquisitions smaller companies per yearpositive over the lifecycle of its holding. Again, for makes a European generally A further reason to be about the growing presence of PE-backed European companies is the role backed company executing a roll-up based growth plan makes two tech to three so-called bolt-on acquisitions of ofthat smaller companies per year the lifecycle of its holding. Again, for European market underperforms terms driving exits,over thiscapital should be welcomed andM&A highlights theagrowing as that well generally theyin can play inofdriving liquidity into markets through their rollout strategies. The breadth, average PEsmaller companies per year over the lifecycle of its holding. Again, for a European market that generally as depth, of European or capital-raising opportunities. Historically, options mightacquisitions have backed companyexits executing aofroll-up based growth makes two to threethe so-called bolt-on of underperforms in terms driving exits, thisplan should be welcomed and highlights the been growing breadth, as underperforms in terms of driving exits, this should be welcomed and highlights the growing breadth, as well smaller companies year over thethere lifecycle of its holding. Again, for a European market or that generally into a restricted to trade sale orper IPO, but now is scope for growth equity, private equity rolling-up well as depth, of European exits or this capital-raising opportunities. Historically, the options mighthave have been been should be welcomed and highlights the growing breadth, as well underperforms in terms of driving exits, as depth, of European exits or capital-raising opportunities. Historically, the options might larger European entity. This helps drive more success, as well as providing further off-ramps for investors, restricted trade sale or now there isis scope for growth equity, private equity or rolling-up into into a a as shareholders, depth, ofto European exits orIPO, capital-raising opportunities. Historically, the options might havethe been restricted to trade sale or IPO,but but now there scope growth equity, private equity or rolling-up employee angel investors and operator talent to ndfor their next paths within ecosystem. restricted to trade entity. sale or IPO, buthelps now there is more scope for growth equity, private equity or rolling-up into a European This drive success, as as well as providing further off-ramps for investors, larger entity. drive more well as providing further off-ramps for investors, largerEuropean European entity. This This helps helps drive more success, assuccess, well as providing further off-ramps for investors, 300 employee shareholders, angel investors and operator talent to find their next paths within the ecosystem. employee shareholders, angel investors and operator talent to nd their next paths within the ecosystem. employee Estimated number shareholders, of M&A bolt- angel investors and operator talent to nd their next paths within the ecosystem. 272

on acquisitions per year in Europe by PE-backed European Estimated number of M&A bolttech companies Estimated number ofinM&A bolton acquisitions per year

200

150

250

242

181

250

200

150

100 100

50 50

242

300

# of M&A bolt-on acquisitions

onEurope acquisitions perEuropean year in by PE-backed tech companies Europe by PE-backed European tech companies

# of M&A bolt-on acquisitions

250 300

231

246 272

272

246

231

242

231

181

200

181

150

100

2016

2017

2016

2017

2018

2019

2020

50 SOU SOU RCE: RCE:

2016

2017

2018

2019

SOU RCE:

Selection of acquisitions of European VC-backed tech companies The emergence of PE-led buyouts or majority ownership transactions as a viable path for VC-backed companies is exemplified by recent transactions in the past two years. This is a trend that has long since been established in the US, but has been underdeveloped in Europe until recently.

auto24 Munich, Germany

Idealista Madrid, Spain

Pipedrive Tallinn, Estonia

Veeam Baar, Switzerland

Selection of late-stage growth rounds led by PE investors in 2020 The coming together of VC and PE investors in European tech is also evident in late-stage investment trends. A growing number of large growth rounds of $100M+ now involve the minority participation of investors more traditionally associated with majority investments.

Stockholm, Sweden $650M, Growth Equity, Sept 2020 / Silver Lake and BlackRock

Munich, Germany $561M, Series F, Jul 2020 / Permira

Paris, France $300M, Series D, Sept 2020 / Permira

Paris, France $200M, Growth Equity, Jan 2020 / CVC

159

Paris, France $190M, Series D, May 2020 / BlackRock

Paris, France $160M, Series B, Oct 2020 / BlackRock and Bridgepoint

04.6

Private Equity

1 January there have been least thirteen exits of PE-backed European tech companies Since2019, 1 January 2019, there haveatbeen at least 13 exits of ofof PE-backed European tech companies at greater at er thanSince $1B $1B enterprise value, totalling of almost Visma's partial 1 January 2019, theretotalling have been ataggregate least thirteen of of PE-backed European tech atat a than enterprise value, anan aggregate valuevalue ofexits almost $60B. As$60B. Visma’ sAs partial exit atcompanies a valueexit greater than $1B enterprise value, totalling an aggregate value of almost $60B. As Visma's partial exit at a of these of $12.2B clearly demonstrates, outcomes is becoming even larger. The scale of $12.2B clearly demonstrates,the the magnitude magnitude of of outcomes is becoming even larger. The scale of these value of $12.2B clearly demonstrates, the magnitude of outcomes is becoming even larger. The scale of these omes isoutcomes driving con�dence in the upside potential, even when entryEVEV is the in the billions - a fact that is driving confidence in the upside potential, even whenthe the entry is in billions - a fact outcomes is driving con�dence in the upside potential, even when the entry EV is in the billions - a fact that PE-backed European tech companies arean an rive further sponsor-to-sponsor large cap large activity. that will drive further sponsor-to-sponsor cap activity. PE-backed European tech companies are will drive further sponsor-to-sponsor large cap activity. PE-backed European tech companies are an important contributor to IPO market activity, as exemplified by the IPOs of companies such as Allegro, Nexi rtant contributor to IPO market activity, as exempli�ed by the IPOs of companies such as Allegro, important contributor to IPO market activity, as exempli�ed by the IPOs of companies such as Allegro, NexiNexi and TeamViewer TeamViewer eamViewer in recent in years. and in recent recentyears years.

EV exits of PE-backed EV exits of$1B+ PE-backed European tech companies since pean tech1companies since Jan 2019

n 2019

EV ($B)EV ($B) Date Date Visma

Visma

Allegro

12 12

Nexi

12 12 8

The Hut Group

Aug 2020

Oct 2020

Apr 2019

Sep 2020

Exittype type Exit

City City

Country Country

Secondary transaction

Oslo

Norway

IPO

Poznan

Poland

IPO

Milan

Italy

Secondary transaction IPO IPO

Poznan Milan

IPO

Northwich

Norway Poland

Italy

The Hut Group 7 TeamViewer

Sep 2020 IPOIPO Sep 2019

Goppingen

Germany

TeamViewer Avaloq

Sep 2019 Oct 2020 IPOTrade acquisition

Goppingen Zürich

Germany Switzerland

Trainline 2

Jun 2019 Trade IPO acquisition Oct 2020

Edinburgh Zürich

UK Switzerland

AutoStore

Sponsor-to-sponsor

Nedre Vats

Norway

Sponsor-to-sponsor

Schaffhausen

Switzerland

Sponsor-to-sponsor

Madrid

Spain

Avaloq Trainline

WebPros

AutoStore

WebPros

Idealista EVRY ASA

Idealista eFront

2 2 2

Jul 2019

Jun 2019

Dec 2019

IPO

Jul 2019

Sponsor-to-sponsor

Dec 2019

Sponsor-to-sponsor

Sep 2020 Jun 2019

Trade acquisition

Northwich

Edinburgh Nedre Vats Schaffhausen

UK Norway Switzerland

Oslo

Norway

Sep 2020 May 2019 Sponsor-to-sponsor Trade acquisition

Madrid Paris

Spain France

EVRY ASASkillsoft 2

Oct 2020 Trade SPAC Jun 2019 acquisition

Dublin Oslo

Ireland Norway

eFront Skillsoft

SOU RCE:

May 2019

Trade acquisition

Paris

France

Oct 2020

SPAC

Dublin

Ireland

SOU RCE:

Our success is a result of a commitment to innovation, our customers, our people, and an engaged and diverse corporate culture. For almost 15 years now, Visma has benefited from a supportive and highly knowledgeable private equity investor base which has enabled us to consistently expand our product offering and geographic footprint.

Nic Humphries Hg Senior Partner

I’d known Øystein Moan and Visma for many years, so when he called in 2006 and asked me if we wanted to invest, I could see this was a special opportunity. Even so, our expectations have been blown away by the scale and duration of Visma’s success. 14 years into our investment (and with many more ahead), it is growing faster than ever, and it’s been a privilege to have been so involved with the company’s journey from $500M to $12B, with so much left to come.

160

Merete Hverven Visma CEO

04.6

Private Equity

As Europe’s most valuable PE-backed software company, Visma represents an interesting case study. Visma first took on private funding from Hg in 2006, moving away from the constraints of a public listing in order to drive longer-term investment in Visma the company’ s strategy. The CEOcase at the time, As Europe' s most valuable PE-backed software company, represents an interesting study. Visma A further reason to be positive about the growing presence of PE-backed European tech companies is the role �rst took on private funding from Hg in 2006, moving away from the constraints of a public listing in order to Øystein Moan (now Chair), had joined Visma in 1997 when it was a $25M revenue Norwegian software that they can play in driving liquidity into capital markets through their M&A rollout strategies. The average PEdrive longer-term investment in the company’s strategy. The CEO at the time, Øystein Moan (now Chair), had business. Alongside Hg, Moan has taken it to $2B ofrepresents annual and a $12B+ EV. Visma As Europe'sexecuting most valuable PE-backed software company, Visma an interesting case study. Visma backed company a roll-up based growth plan makes two to threerevenue so-called bolt-on acquisitions of coupled �rst took on private funding from Hg inmany 2006, away from theeven constraints of a public listing in order to joined Visma inon 1997 when was a $25M Norwegian software business. Alongside Moan ancompanies early focus SaaS (before other providers considered this delivery model)Hg, with an has taken smaller per year over theitlifecycle ofmoving itsrevenue holding. Again, for a European market that generally drive longer-term investment in the company’s strategy. The CEO at the time, Øystein Moan (now Chair),(before had it to $2B of annual revenue and a $12B+ EV. Visma coupled an early focus on SaaS many other underperforms in terms ofwhen driving exits, this should be welcomed highlights the growing breadth, asallowing well M&A strategy targeting innovative businesses insoftware newand geographies and product areas, it to joined Visma in 1997 it was a $25M revenue Norwegian business. Alongside Hg, Moan has taken providers even considered this delivery model) with anfocus M&Aon strategy targeting innovative businesses in new as depth, of European exits or capital-raising opportunities. Historically, the options might have been it to $2B of annual revenue and a $12B+ EV. Visma coupled an early SaaS (before many other increase its own pace of innovation even as the business scaled. Visma has scaled to more than 1M geographies and areas, allowing itfor toM&A increase its own pace of innovation even restricted to trade sale orproduct IPO, but now there is scope growth equity, private equity or rolling-up into providers even considered this delivery model) with an strategy targeting innovative businesses in new aas the business scaled. SMB customers, served almost entirely through platforms, making it Europe’ s largest “local” SaaS geographies and product areas, allowing to increase itswell ownSaaS pace of innovation even as the through business scaled. largerVisma European This drive more success, as as providing further off-ramps for investors, hasentity. scaled tohelps more than 1M itSMB customers, served almost entirely SaaS platforms, making it Visma has scaled to more than 1M SMB customers, served almost entirely through SaaS platforms, making it software provider by revenue. Theoperator case study also highlights itstudy is possible to grow tohow a large size employee shareholders, angel investors and talent torevenue. nd their The nexthow paths within the ecosystem. Europe's largest "local" SaaS software provider by case also highlights it is possible to Europe's largest "local" SaaS software provider by revenue. The case study also highlights how it is possible to by combining a number of small, local markets under a single cohesive strategy, alongside long-term grow largesize size by combining a number of small, understrategy, a singlealongside cohesive strategy, alongside growto to a a large by combining a number of small, local marketslocal undermarkets a single cohesive 300 investment andbolta team experienced operators. long-term investment and and a of team experienced operators. operators. long-term investment a of team of experienced Estimated number of M&A

Revenue ($B)

L EGEND Enterprise value ($B) Revenue ($B) Enterprise value ($B)

242

12.2

12.5

200

181

10.0

150 7.5

100 5.0

50 2.5

246

231

12.5

Revenue ($B) / enterprise value ($B)

L EGEND

# of M&A bolt-on acquisitions

enterprise value ($B) measured by revenue ($B) and enterprise value ($B)

272

250

Revenue ($B) / enterprise value ($B)

on acquisitions per year in Europe by PE-backed European Visma's growth trajectory as tech companies Visma's growth trajectory measured by revenue ($B) and as

1.7

0.4 0.0

2010

10.0 6.6

7.2

5.4 4.4

7.5 2.8

2.4

5.0

2016

2.5 SOU RCE: SOU RCE:

0.0

0.6

0.5 2011

2012

3.4

0.7

2017

2.42013

3.6

0.7

2.8

2014

6.6

3.7

0.7

0.8

3.4

2018

2015

3.6

2016

1.0

2017

1.4

1.7

4.4

1.9

5.4

3.7 2019 2018

2019

2020

1.7 0.4

0.5

0.6

2010

2011

2012

7.2

0.7

0.8

1.0

2013

2014

2015

2016

2017

1.4

2018

1.7

2019

SOU RCE:

A further reason to be positive about the growing presence of PE-backed European tech companies is the role that they can play in driving liquidity into capital markets through their M&A rollout strategies. The average PEAncompany interesting aspect of Visma’ s journey that it hastwo successfully navigated theacquisitions transition to backed executing a roll-up based growth is plan makes to three so-called bolt-on of the cloud Ancompanies interesting aspect of the Visma's journey is that itAgain, has successfully navigated the transition to the cloud where smaller per year over lifecycle of its holding. for a European market that generally where many others have struggled. Visma has scaled its SaaS revenues from 29% of total software revenue many others have Visma has scaled its SaaS revenues fromgrowing 29% ofbreadth, total software revenue in 2015 underperforms terms ofstruggled. driving exits, this should welcomed and highlights as well in 2015 toin71% in 2019. Most impressively, itbehas added SaaS revenue the as pure growth on top of its existing on to 71% in 2019. Most impressively, it has added SaaS revenue as pure growth on top of its existing on premise An interesting aspect of Visma's journey is that it has successfully navigated the transition to the cloud where as depth, of European exits or capital-raising opportunities. Historically, the options might have been premise revenue base. Today, Visma than $1B in SaaS making easily of the largest many others haveToday, struggled. Visma hasmore scaled itsmore SaaS revenues from 29% of revenue, total software revenue in 2015 revenue base. than $1B in SaaS revenue, making itrolling-up easilyitone ofaone the largest SaaS restricted to trade sale or IPO, Visma but nowhas there is has scope for growth equity, private equity or into to 71% in 2019. Most impressively, it has added SaaS revenue as growth on top of off-ramps its existing on SaaS companies to have from Europe. isaspure aproviding remarkable achievement inpremise and of itself, but to have largercompanies European entity. This helpsscaled drive more success, asThis well further for investors, achievement in and of itself, but to have done so to have scaled from Europe. This is a remarkable revenue base. Today, Visma has more than $1B in SaaS revenue, making it easily one of the largest SaaS employee shareholders, angel investors and talent to nd their next paths within the done so in a corefootprint market footprint ofoperator nine small European countries, ofthe which theecosystem. largest has a population in a core market of nine small European countries, of which largest has a population of just 17M, companies to have scaled from Europe. This is a remarkable achievement in and of itself, but to have done so

a core ofthe ninemore small impressive European countries, of which the largest has a population of tech just 17M, ofinjust 17M, it allimpressive as a case study intohidden Europe’ s hidden giants. makes it market allmakes thefootprint more as a case study into Europe's tech giants. 300study into Europe's hidden tech giants. makes it all the more impressive as a case

L EGEND On premise OnSaaS premise SaaS

200

150

242

246

231

181 1.0

100 0.5

Revenue ($B)

L EGEND

Revenue ($B)

premise premise

272

1.5

250 1.5 # of M&A bolt-on acquisitions

Estimated number of M&A bolton acquisitions per year in software revenue Europe Visma's byVisma's PE-backed European software revenue ($B) ($B) tech companies evolution by versus on on evolution bySaaS SaaS versus

1.0

0.5 0

0.0

RCE: SOU SOU RCE:

2016 2015

0.0

2017

2016

2015

2017

2016

SOU RCE:

161

2018

2019

2017

2019

2020

2018

04.6

Private Equity

As far as European tech is concerned, the worlds of VC and PE have historically not overlapped a huge amount. In fact, they have mostly existed as separate islands altogether - to the detriment of the tech ecosystem as a whole. The fact that these circles of capital and talent only overlap at the margins misses out on the potential for increased scale and liquidity. Europe’s flywheel is dependent on building a talent and capital marketplace that is liquid and systematically recycles at scale.

The European Flywheel

Success stories and role models inspire and raise the bar for the next generation of…

Tech entrepreneurship is the default path …founders and builders ...investors

Extraordinary outcomes unlock talent and capital liquidity

Value + Mindset

( GDP, JOBS, IMPACT)

(AMBITION, CONFIDENCE )

Attracting world-class investors

162

Better ideas, better companies

04.6

Private Equity

All in all, and to coin a very European term, this “ever closer union” represents a healthy development for the liquidity of European capital and talent markets. The convergence of VC and PE in tech has the potential to create greater optionality in terms of potential paths to liquidity. There is a talent upside too if these worlds come together. A hallmark of PE investors is their network of experienced, tier one executive talent - people that run organisations of thousands of employees, P&Ls of $100s of millions, and products sold into thousands of companies.

Why wouldn’t the European early-stage ecosystem want to be closer to such a talent pool? 163

05 Builders

How did founders cope with the upheavals of 2020? What does Europe’s tech talent look like now? And how has Covid-19 affected the region’s tech hubs? Founders and companies have emerged resilient but their mental wellbeing has been tested to the extreme. Demand for talent has bounced back from the lows of spring. And virtual working has flung open the doors of the ecosystem and spurred the growth of emerging hubs.

www.stateofeuropeantech.com

164

and support from

05.1

Founders Resilient But Exhausted Although 2020 has the potential to be another record-breaking year in terms of capital invested in Europe, it has been an intense and difficult ride for many founders.

This chapter sets out to understand how the journey of starting and building a company has evolved in 2020 against the backdrop of the ongoing Covid-19 pandemic and uncertain and volatile 50% macroeconomic conditions. As wellsurvey lookingbelieve in the rear-view mirrorhas on proven the pastresilient year, in the face of an Almost of founder respondents to the the ecosystem this also takesyear. a forward-looking view at journey ahead. extraordinary But the challenges ofthe 2020 have also taken a toll on the founder community. When asked to share the three biggest challenges that they have personally experienced over the past 12 months, the most frequently cited challenge has been maintaining mental wellbeing. The challenges of navigating this year have not only taken an individual toll on founders, but have also created a set of new challenges for their Almost 50% of founder respondents to the survey believe the ecosystem has proven resilient in teams. ectedrespondents by the fact that thesurvey secondbelieve most frequently cited has challenge by in founders Almost This 50% is ofre founder to the the ecosystem provenshared resilient the facehas of an the face of an extraordinary year. Buttheir the challenges of 2020 have also taken a toll on the founder been motivating and encouraging teams. extraordinary year. But the challenges of 2020 have also taken a toll on the founder community. When asked community. When asked to share three believe biggestthe challenges thatproven they resilient have personally Almost 50% of founder respondents tothe the survey ecosystem has in the faceexperienced of an toextraordinary share the three biggest challenges that theytaken have personally experienced overasked the past 12 months, the year. But the challenges of 2020 have also a toll on the founder community. When over the past 12 months, the most frequently cited challenge has been maintaining mental wellbeing. most frequently cited challenge has been mentalover wellbeing. challenges of navigating this to share the biggest challenges that they havemaintaining personally experienced the past 12The months, the Maintaining mental wellbeing In the last 12three months, what have The challenges of navigating this yearmaintaining have not only taken an individual tollcreated on founders, but havechallenges also most frequently cited challenge has been mental wellbeing. The challenges of navigating this year have not only taken an individual toll on founders, but have also a set of new for their been your three biggest but have created a set of team new challenges for their year have not only taken an individual tolltheir onthat founders, created a set of new challenges teams. This is also reflected by the that the second most by founders has teams. This ected by thefor fact the second most cited challenge shared Motivating andfrequently encouraging thefact challenges asis a re founder? teams. This is re ected by the fact that the second most frequently cited challenge shared by founders has frequently cited challenge shared bytheir founders has been motivating and encouraging their teams. been encouraging teams. beenmotivating motivating andand encouraging their teams. Getting enough support from investors

In the last 12 months, what have Inbeen the your lastthree 12 months, what have biggest been your three biggest challenges as a founder? challenges as a founder?

Maintaining mental wellbeing

39%

Enabling smooth collaboration among remote teams Maintaining mental wellbeing Motivating and encouraging the team

Receiving advice/mentoring on how to navigate Motivating and encouraging the times team uncertain

25% 35%

Internal communications Getting enough support from investors

Enabling smooth collaboration among remote teams

21%

33%

Receiving advice/mentoring on how to navigate Getting support family and friends Enabling smooth collaboration among remote teams uncertain times from 21%

33%

20 25 25% % of respondents

8% 0

35%

8%25%

Internal communications Receiving advice/mentoring on how to navigate 0 uncertain times

Internal communications

33%

38%

Getting enough support from investors

Getting support from family and friends

35%

21%

% of respondents

NOTE:

SOU RCE:

Getting support from family and friends

The most cited challenges cited by founders varied according to the gender of the Founders only.frequently Numbers do not add to 100personal as NOTE: respondents selected up to threecommonly options. 0 5 10 15 20 teams, 25 SOU RCE: founders. Men most experienced challenges related to motivating and encouraging their Founders only. Numbers do not add to 100 as % of respondents respondents selected up to three options. enabling smooth collaboration among remote teams, and maintaining mental wellbeing. Founders that are women were more likely to have cited the challenge of maintaining mental wellbeing, more likely to have felt insu ciently supported their investors, and alsobymore likelyvaried to have felt a lack of advice mentorship on The most frequently citedby personal challenges cited founders according to the genderand of the NOTE: SOU RCE: cited by founders varied according to the gender of the The most frequently cited personal challenges how to navigate the uncertain times. Founders that are women, however, are less likely to cite internal founders. Men most commonly experienced challenges related to motivating and encouraging their Founders only. Numbers do not add to 100 as founders. Men up most experienced related to founders motivating and encouraging their teams, The most frequently personal challenges cited bychallenges founderscompared varied according to the gender ofare the respondents selected tocited threecommonly options. communications and team motivation as challenges to that men. Founders teams, enabling smooth collaboration among remote teams, and maintaining mental wellbeing. founders. Men most commonly experienced challenges toand motivating and encouraging teams, Founders that are enabling smooth collaboration among remote related teams, maintaining mental their wellbeing. that aresmooth women were more likely tocited haveteams, cited themaintaining challenge of maintaining mental wellbeing, more likely enabling collaboration among and mental wellbeing. Founders that are women were more likely to haveremote the challenge of maintaining mental wellbeing, more likely to have felt 35% women were more likelywhat to have cited the challenge of maintaining mental wellbeing, more likelyfelt to have feltof advice and to have felt insufficiently supported by their investors, and also more likely to have a lack In the last 12 months, have Maintaining mental wellbeing insu ciently supported by their investors, and also more likely to have felt a lack of advice and mentorship on more likely to have felt a lack of advice and mentorship on insu ciently supported by their investors, and also been your three biggest mentorship on how touncertain navigate the uncertain times. Founders that however, are women, however, areto less likely to how tonavigate navigate the Founders that are women, less likely cite internal how to uncertain times. times. Founders that are women, however, are less likely to are cite internal 33% challenges as athe founder? Getting enough support from investors cite internal communications and team motivation as challenges compared to founders that are men. communications motivation as challenges toare founders communications andand teamteam motivation as challenges compared tocompared founders that men. that are men. L EGEND

53%

41%

31%

Internal communications

Getting support from family and friends

Founders only. Numbers do not add to 100 as NOTE: respondents selected up to three options.

29%

23%

SOU RCE: Getting support from family and friends

SOU RCE:

Founders only. Numbers do not add to 100 as respondents selected up to three options.

NOTE: Founders only. Numbers do not add to 100 as respondents selected up to three options.

SOU RCE:

165

24%

15%

Internal communications

NOTE:

35% 31%

8% 29% 23%

32%

23%

15%

24%

Receiving advice/mentoring on how to navigate among remote teams Enabling smooth collaboration uncertain times

41%

29% 35%

Enabling smooth collaboration among remote teams

41%

24%

32%

uncertain times Motivating and encouraging the team

Getting support from family and friends Receiving on how to navigate Internaladvice/mentoring communications uncertain times

31%33%

41%

Getting enough support from investors

L EGEND

35%

33%

Receiving advice/mentoring on how to navigate Motivating and encouraging the team

Men

Women

32% 35%

Maintaining mental wellbeing

Enabling smooth Getting enough supportcollaboration from investors among remote teams

L EGEND

Men

35%

Maintaining mental wellbeing

challenges as a founder?

Women

41%

Motivating and encouraging the team

Menlast 12 months, what have In the In the last 12 months, what have been your three biggest Women been yourasthree biggest challenges a founder?

41%

15% 8% 9%

The responses also showed material variance when looking at the experience level of founder respondents. 05.1 impactFounders The of the past 12 months on �rst-time founders appears to have been greater on their ability to maintain mental wellbeing than for more experienced, repeat founders. They do, however, appear to be less likely to have felt that they experienced challenges in getting su�cient support from their investors. Based on the survey responses, one of the main advantages experienced by experienced, repeat founders was their The responses responses also showed material when atatthe experience of of founder respondents. ability to tap into a network advicevariance and mentorship on how to navigate thelevel uncertain times. The also showedfor material variance whenlooking looking the experience level founder respondents. The impact of the past 12 months on first-time founders appears to have been greater on their ability toto The impact ofalso theshowed past 12 months on �rst-time founders appearslevel to have been greater on their ability The responses material variance when looking at the experience of founder respondents. maintain mental wellbeing than for more experienced, repeat founders. They do, however, appear to be less The impactmental of the past 12 monthsthan on �rst-time founders appears torepeat have been greater onThey their ability to maintain wellbeing for more experienced, founders. do, however, appear to be less In the last 12 months, what have Maintaining mental wellbeing maintain mental wellbeing than for more experienced, repeatin founders. They do, however, appear to betheir less investors. Based likely to have felt that they experienced challenges getting sufficient support from likely to have felt that they experienced challenges in getting su�cient support from their investors. Based beentoyour biggest likely havethree felt that they experienced challenges in getting su�cient support from their investors. Based survey one of main experienced byby experienced, repeat founders was experienced experienced, repeat on thesurvey survey responses, one ofthe the mainadvantages advantages as aresponses, founder?one of onchallenges the responses, the main advantages experienced repeat founders was their founders was their Motivatingby andexperienced, encouraging the team their tointo tap afor network formentorship advice and onthe how to navigate uncertain times. ability tap ainto network for advice and mentorship on how touncertain navigate the the uncertain times. abilityability tototap into a network advice and on mentorship how to navigate times. L EGEND

Maintaining mental wellbeing

Maintaining mental wellbeing Enabling smooth collaboration among remote teams Motivating and encouraging the team Receiving advice/mentoring on how to navigate Getting enough support from investors uncertain times

experience in scaling own company L EGEND First-time founder

L EGEND

Repeat founder with limited experience in First-time founder scaling own company

Repeat founder withwith signi�cant previous Repeat founder limited experience in experience in scaling own company

scaling own company

22% 20% 19%

Internal advice/mentoring communications Receiving on how to navigate uncertain times

22% 20% 19%

4% Internal communications

SOU RCE:

Getting support from family and friends

SOU RCE:

10% 9%

Founders only. Numbers do not add to 100 as respondents selected up to three options.

NOTE:

29%

17%

10% 9%

Getting support from family and friends

Founders only. Numbers do not add to 100 as respondents selected up to three options.

26%

41% 38%

37%

30% 31%

10% 29% 9%

SOU RCE:

During the crisis’s peak, our focus was to listen, support, and connect the entrepreneurs to the right opportunities.

The pandemic made the Maria 01 community stronger and proved how this startup campus transcends the space. Furthermore, during a crisis, people resort to people as a means for support and guidance. During the crisis’s peak, our focus was to listen, support, and connect the entrepreneurs to the right opportunities. The measures Kim Ogulive taken to support our startup companies went from granting rent waivers, actively Maria 01 CMO sharing information related to grants to weekly peer support calls to listen, and map out struggles from the entrepreneurs and possible solutions. Founders were also asked to share the challenges they faced at the company level. The most frequently cited challenge by far was securing access to capital, followed then by pivoting their products, managing revenue declines and maintaining company morale. In many ways, 2020 has been a year of the pivot as companies sought to respond rapidly to adapt their products and operating models to accommodate the 'new normal' in to atnd to creatively grow revenue. terms of changing and personal behaviours Founders were alsoworking theyand faced theways company level. The most frequently cited Founders were alsoasked askedtotoshare sharethe thechallenges challenges they faced at the company level. The most frequently cited challenge by far was securing access to capital, followed then by pivoting their products, managing revenue Founders were to share the challenges they faced at the company The most cited challenge byalso far asked was securing access to capital, followed then bylevel. pivoting theirfrequently products, managing revenue Securing access topivoting capital challenge by far was securing access to capital, followed then by their products, managing revenue In the last 12 months, what have declines and InIn many ways, 2020 hashas been a year of the pivot as companies declines andmaintaining maintainingcompany companymorale. morale. many ways, 2020 been a year of the pivot as companies declines and three maintaining company morale. In many ways,Pivoting 2020the has been a year of the pivot as companies been your biggest product sought to respond rapidly totoadapt their products and operating models to accommodate the ‘new normal’ in 32% sought respond rapidly adapt their products and operating models tothe accommodate sought toto respond rapidly to adapt their products and operating models to accommodate 'new normal' in the 'new normal' in challenges as a company? of changing working and personal behaviours and to find ways to creatively grow revenue. terms of changing working and personal behaviours and to nd ways to creatively grow revenue. terms of changing working and personal behaviours and to nd ways to creatively grow revenue. New sales declining 30% Maintaining team morale

In the last 12 months, what have In the last 12 months, what have been your three biggest been your biggest challenges asthree a company?

46%

Securing access to capital Managing team remotely

Pivoting the product

Pivoting the product Cutting expenses New sales declining

Maintaining team morale Navigating a sector in jeopardy

13%

Cutting expenses Managing team remotely

Making layoffs 0

SOU RCE:

Founder respondents only. Numbers do not add to 100 as respondents selected up to NOTE: three options.

20%

% of respondents

16%

Making layoffs

13%

% of respondents

SOU RCE:

166

% of respondents

NOTE: Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

13%

Existing customer churn

NOTE:

25%

20%

6% 16%

Navigating a sector in jeopardy Making layoffs

29%

25%

Existing customer churn

Cutting expenses

30%

29% 16%

Maintaining team morale Managing team remotely

Existing customer churn

32%

20%

30%

46%

25%

32%

New sales declining

Navigating a sector in jeopardy

46%

29%

Securing access to capital

challenges as a company?

Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

44%

40% 38%

22% 20% 19%

26%

17%

Getting support from family and friends

29% 30%

37%

30% 31%

Receiving advice/mentoring on how to navigate Enabling smooth collaboration among remote teams uncertain times

35%

26%

38%

37% 37%

30%32% 31%

41% 38% 40% 38%

17%

Getting enough support from investors Internal communications

NOTE:

30%

Enabling smooth collaboration among remote teams

Repeat founder with signi�cant previous experience in scaling own company

Founders only. Numbers do not add to 100 as respondents selected up to three options.

35%

41%

40% 38%

44%

37%

32%

Motivating and encouraging the team

challenges aswith a founder? Repeat founder signi�cant previous

35%

30%

Getting enough support from investors

First-time founder

In the last 12 months, what have In the last 12 months, havein Repeat with limitedwhat experience been yourfounder three biggest scaling own company been your biggest challenges asthree a founder?

44%

37%

32%

In the context of the responses founders shared around the biggest challenges they faced in 2020 on a 05.1 Founders personal and company level, it's perhaps unsurprising that fundraising is cited as the most important form of support they seek from their investors. The strong level of pull from founders for supporting in de ning their go-to-market strategy and in securing new customers also makes sense in the context of the uncertainty in have experienced. Last year,they 25%faced of founders the spending that many founders will In the contextenvironment of the responses founders shared around the biggest challenges in 2020shared on a In the context of the responses founders shared around the biggest challenges they facedto infeel 2020 on of a a sense of isolation and loneliness at the top so it's interesting to see a need from founders part a personal and company level, it’s perhaps unsurprising that fundraising is cited as the most important personal and company level, it's perhaps unsurprising that fundraising is cited as the In the context ofto the responses founders shared around the biggest challenges they faced in 2020 on amost important form of 'community' connect with other founders. form of support they seek from their investors. The high number of respondents who cited support in personal company level, it's perhaps unsurprising that fundraising cited as the most important form of supportand they seek from their investors. The strong level ofispull from founders for supporting in de ning their defining their go-to-market defining their go-to-market strategy and in securing new also support they seekstrategy from theirand investors. The strong of pull from founders forsense supporting in de ning customers their go-to-market in securing newlevel customers also makes in the context of the uncertainty in Fundraising go-to-market strategy and in securing new customers also makes sense in the context of the uncertainty in In which areas environment do the you think makes sense in contextthat of the uncertainty the spending environment that 25% manyoffounders have experienced. Last year, founderswill shared a the spending many founders in will experienced. Last year, 25% of founders shared a at the top so it’s the spending environment many founders will have support from investors isthat most Partnerships (securing new clients) have experienced. Last year, 25% ofthe founders a sense ofsee isolation loneliness sense isolation and loneliness at so shared it's interesting a needand founders to feel part of a sense ofof isolation and loneliness at the top so it'stop interesting to see a needto from founders tofrom feel part of a important? Salespart model (go strategy) interesting awith need from founders to feel ofto amarket ‘community’ to connect with other founders. 'community' tosee connect with other founders. 'community' toto connect other founders. Founder leadership coaching

L EGEND First-time founder In which areas do you think In which areas do you think support from investors is most Repeat founder with limited scaling support from investors is most experience important?

important?

Repeat founder with signi cant previous L EGEND scaling experience

Fundraising Cashflow & forecasting

Fundraising

Partnerships (securing new clients)

Team (hiring, layoffs, policy) Partnerships (securing new clients)

Sales model (go to market strategy)

Community (connect other founders) Sales model (gowith to market strategy)

Founder leadership coaching

Marketing & communications Founder leadership coaching Cashflow & forecasting

First-time founder L EGEND Repeat founder with limited scaling First-time founder experience

Repeat founder with cant limited scaling Repeat founder with signi previous scaling experience experience

Team (hiring, layoffs,Founder policy) wellbeing support Cashflow & forecasting Community (connect with other founders)

Diversity & Inclusion Team (hiring, layoffs, policy)

Marketing & communications

Repeat founder with signi cant previous scaling experience

Community (connect with other founders) 0

Founder wellbeing support

% of respondents

Marketing & communications

Diversity & Inclusion

Founder0 wellbeing support 10

NOTE: Founders only. Numbers do not add to 100 as respondents selected up to three options.

NOTE:

SOU RCE:

% of respondents

Diversity & Inclusion 0

% of respondents

SOU RCE:

Founders only. Numbers do not add to 100 as respondents selected up to three options.

NOTE:

SOU RCE:

Founders only. Numbers do not add to 100 as respondents selected up to three options.

State of European Tech 2020 report launch

167

05.1

Founders

It Itisisinteresting the of needs of founders evolve as their companies scale. As founders move interesting to to seesee how how the needs founders evolve as their companies scale. As founders move along It the is interesting to see howinvestor the needs ofwith founders evolve as their companies scale. As founders move along journey, support fundraising andwith people-related challenges are alongcompany-building the company-building journey, investor support fundraising and people-related challenges the company-building journey, investorassupport fundraising and people-related challenges are increasingly cited as important. Unsurprisingly, they scalewith and reach product-market �t, founders are less are increasingly cited as important. Unsurprisingly, as they scale and reach product-market fit, founders likely to cite the importance of support Unsurprisingly, on generating new sales. There are some where the level of increasingly cited as important. as they scale andareas reach product-market �t, founders are less need from founders was the consistent across founders from companies of different stages of development: are less likely to cite importance of support on generating new sales. There are some areas where likely to cite the importance of support on generating new sales. There are some areas where the level of support with leadership coaching and access to a founder community. the level offounders need from founders was across consistent across founders from companies different stages of from companies of different of stages of development: need from was consistent founders development: support with leadership coaching access to a founder community. support with leadership coaching and access to aand founder community. DATA SET : INCREA SED NEED W IT H SCA L ING In which areas do you think support from investors is most important?

DATA SETwith : INCREA SED NEED W IT H SCA L ING Increased need scaling In which areas do you think L EGEND support from investors is most Fundraising Team (hiring, layoffs, policy) It important? is interesting to see how the needs of founders evolve as their companies scale. As founders move along

Founder wellbeing support the company-building journey, investor support with fundraising and people-related challenges are L EGEND increasingly cited as important. Unsurprisingly, as they scale and reach product-market �t, founders are less Fundraising It is interesting to see how the needs of founderson evolve as their companies scale.There As founders move along likely to cite the importance of support generating new sales. are some areas where the level of (hiring, layoffs, policy) theTeam company-building journey, investor support with fundraising and people-related challenges are need from founders was consistent across founders from companies of different stages of development: Founder wellbeing increasingly citedsupport as important. Unsurprisingly, as they scale and reach product-market �t, founders are less support with coaching access tosales. a founder community. likely to cite theleadership importance of support onand generating new There are some areas where the level of

need from founders was consistent across founders from companies of different stages of development: support with leadership coaching and access to a founder community. SET : DECREA SING NEED W IT H SCA L ING areas doto you think It In iswhich interesting see how the needs ofDATA founders evolve as their companies scale. As founders move along support from investors is most Bootstrapped UpIT toH$5m $5-10m $10-25m $25-50m DATA SET : DECREA SING NEED W SCA L ING which areas do you think theIncompany-building journey, investor support with fundraising and people-related challenges are$50m+ important? support from investors is most

increasingly cited as important. Unsurprisingly, as they scale and reach product-market �t, founders are less important? NOTE:to cite the importance of support likely onneed generating new sales. There are some areas where the level of SOU RCE: Decreased with scaling L EGEND L EGEND only. Numbers do not add to 100 as Founders from companies of different stages of development: need from founders was consistent across founders respondents selected up to three options. Partnerships (securing new clients) Partnerships (securing new clients) It is Sales interesting tostrategy) see how the needs founders their companies scale. As founders move along support with coaching andof access to a evolve founderascommunity. Sales model model (go to leadership market (go to market strategy) Cash�ow & forecasting the Cash�ow company-building journey, investor support with fundraising and people-related challenges are & forecasting Bootstrapped Up to $5m $5-10m $10-25m $25-50m increasingly cited as important. Unsurprisingly, as they scale and reach product-market �t, founders are less DATA SET : INCREA SED NEED W IT H SCA L ING In which areas do you think It is interesting to see how the needs founderson evolve as their companies scale.There As founders move along likely to cite the importance of of support generating new sales. are some areas where the level of support from investors is most the company-building journey, investor support with fundraising and people-related challenges are need from founders was consistent across founders from companies of different stages of development: important? NOTE: increasingly cited as important. Unsurprisingly, asSOU they scale and reach product-market �t, founders are less RCE: support with leadership coaching and access to a founder community. likely toonly. citeNumbers the importance support on generating new sales. There are some areas where the level of Founders do not add toof 100 as respondents up towas threeconsistent options. need fromselected founders across founders from companies of different stages of development: L EGEND support with leadership coaching and access to a founder community. Fundraising DATA SET : SU STA INED NEED T H ROU GH OU T SCA L ING In which areas do you think Team (hiring, layoffs, policy) support from investors is most DATA SET : SU STA INED NEED T H GH OU T SCA L ING $5-10m Bootstrapped UpROU to $5m $10-25m InFounder which areas do you think wellbeing support important? support from investors is most

$25-50m

$50m+

important?

NOTE: L EGEND

L EGEND Founders only. Numbers do not add to 100 as Founder leadership respondents selected up tocoaching three options. Founder leadership coaching

SOU RCE: Sustained needBootstrapped throughout scalingUp to $5m

$5-10m

$10-25m

$25-50m

$50m+

$5-10m

$10-25m

$25-50m

$50m+

$25-50m

$50m+

Community (connect withwith other other founders) Community (connect founders) Marketing & communications

NOTE: Marketing & communications

SOU RCE:

Diversity & Inclusion

Diversity & Inclusion Founders only. Numbers do not add to 100 as respondents selected up to three options.

Bootstrapped

NOTE:

SOU RCE:

Founders only. Numbers do not add to 100 as respondents selected up to three options. NOTE:

Founders only. Numbers do not add to 100 as respondents selected up to three options.

NOTE:

SOU RCE:

Up to $5m

$5-10m

Bootstrapped

Up to $5m

$10-25m

$25-50m

$5-10m

$50m+

$10-25m

SOU RCE:

Founders only. Numbers do not add to 100 as respondents selected up to three options.

The lack of an advanced ecosystem can be a challenge for building a tech company that wants to win the global market from Italy. That said, overcoming those challenges in the early days can strengthen you, and in the long run, those challenges can even turn into advantages.

168

Filippo Conforti Commerce Layer Founder and CEO

05.1

Founders

Managing a Team For tech companies, talent is a critical competitive advantage, and the ability to attract and retain the best people plays a - if not the - pivotal role in the success of a company. Remote workspeed and the distributed recruitment strategies complexity The of adoption scaling anoforganisation can be so in�uential on undoubtedly success. Go add too fast and youto put everything from unlocking that talent runway, execution andadvantage. culture at risk. Go too slow and you risk underinvesting and falling behind the pace of the market or competitors. It is a delicate balancing act and uncertain market conditions only make that harder. It's interesting then to see how founders adjusted their hiring plans in 2020. A third chose to stick to plan and made no changes to their hiring plans. Another third hired slower than planned, while one in �ve The speed of scaling an organisation can be so influential on success. Go too fast and you put everything founders actually accelerated their hiring be plans,in�uential presumably emboldened by positive experienced by The of execution scaling anand organisation Go too fast and andtailwinds you put everything fromspeed runway, culture atcan risk. Goso too slow andon yousuccess. risk underinvesting falling behind the from their company. Only 10% of founders froze hiring altogether and just 5% shared that they had also conducted runway, execution and culture at risk. Go too slow and you risk underinvesting and falling behind the pace of pace of the market or competitors. It is a delicate balancing act and uncertain market conditions only make layoffs. the competitors. It iscan a delicate balancing act and uncertain market conditions Themarket speed ofor scaling an organisation be so in�uential on success. Go too fast and you put everything from only make that that harder. It’s interesting totoo see how adjusted their hiringbehind plans inpace 2020. A third chose to runway, execution and culture atthen risk. Go slow andfounders you risk underinvesting falling harder. It's interesting then to see how founders adjusted theirand hiring plans inthe 2020. of A third chose to stick to the market or and competitors. It ischanges a delicate balancing act and plans. uncertain market conditions onlyslower make that stick to plan made no to theirplans. hiring Another thirdslower hired than planned, whilein �ve plan and made no changes to their hiring Another third hired than planned, while one In the last months, then how have harder. It's 12 interesting to see how founders adjusted their hiringFaster plans in 2020. A third chose to stick to than planned 20% one in five founders actually accelerated their hiring plans, presumably emboldened by positive tailwinds founders actually accelerated their hiring plans, presumably emboldened byone positive Another third hired slower than planned, while in �ve tailwinds experienced by planchanged and made no changes to their hiring plans. you your hiring plans? experienced by their company. Only 10% of founders froze hiring altogether and just 5% shared that they founders actually Only accelerated their hiring plans, presumably positive experienced by had also conducted their company. 10% of founders froze hiring emboldened altogetherbyand justtailwinds 5% shared that they their company. Only 10%layoffs. of founders froze hiring altogether and just 5% shared that they had also conducted had also conducted No change to plan layoffs. layoffs.

the last last 12 howhow have have InInthe 12months, months, you changed your hiring plans? you changed your hiring plans?

Slower than planned Faster than planned

Faster than planned

No change to plan

20%

33%

10%

We have frozen hiring No change to plan

33%

Slower than planned

We have frozen hiring and conducted layoffs Slower than planned

5% 10%

We have frozen hiring

0 20 30 Stock options are an effective tool to attract, incentivise and5 retain10talent 15and% ofthe latest25generation of35 founders We have frozen hiring and conducted layoffs 5% NOTE: SOU RCE: companies from Europe are rewarding their most talented executives and employees at levels on par with Founder respondents only. Numbers may not companies from the US now. There is still work to do, and we are starting to5see different degrees of ambition add up to 100 due to rounding. 0 10 15 20 25 NOTE: SOU RCE: around Europe. Countries like Germany are currently working on a set of very concrete measures%around of founders Founder respondents only. Numbers may not add up to 100 due to rounding. employee stock options schemes and preparing a draft legislation that includes incentives to increase the distribution of shares to startup employees.

We have frozen hiring and conducted layoffs

NOTE:

20 % of founders

10%

We have frozen 5%hiring

SOU RCE:

Founder respondents only. Numbers may not add up to 100 due to rounding.by funding Employee ownership

Staff + Other (Europe)

(Europe) BaseExecutives SalaryExecutives (United States) (Europe)

Executives (US) Incentive Pay (Europe)

Executives (US)

StaffPay + Other (Europe) Incentive (United States)

Staff + Other (Europe)

Staff + Other (US)

Staff + Other (US) Unissued (Europe)

5.0 300,000 15.0 200,000 10.0

100,000 5.0

Unissued Unissued (US) (Europe) Unissued (US)

15.0 % of ownership

L EGEND Base Salary (Europe) L EGEND

20.0

% of ownership

L EGEND

400,000

Founder base salary and incentives ($)

Founder base salary ($) by Staff + Other (US) Employee by funding Employee funding roundownership in theownership 50thby funding Unissued (Europe) round in50th the 50th percentile round in the percentile percentile by region by region byUnissued region (US)

% of ownership

Stock options options are are an an effective effective tool tool to to attract, attract, incentiviseand andretain retaintalent talentand andthe thelatest latestgeneration generationof of 20.0incentivise Stock companies from Europetool are to rewarding their most most talented executives and employees employees at round in the 50th percentile Stock options are an effective attract, incentivise and retain talent and the latest generation of companies from Europe are rewarding their talented executives and at levels levels on on par par with by region with companies from the US now. There still work do,we and we are starting todifferent see different degrees companies fromfrom Europe rewarding their and employees atsee levels on par with companies theare US now. There ismost stillistalented work toexecutives do,toand are starting to degrees of ambition 15.0 companies from the US now. isGermany still to do, andofwe are starting to asee degrees ambition Relatedly, it's also interesting to There observe the work average level founder compensation and how this of ambition around Europe. Countries like Germany are currently working on aconcrete set varies of of very concrete around Europe. Countries like are currently working on setdifferent of very measures around L EGEND around Europe. Countries like Germany are currently working on a set of very concrete measures around between Europe and theoptions US. Founders in theand US have materially higher base salaries and higher incentive pay measures around employee stock options schemes and preparing draft legislation that includes employee stock schemes preparing a draft legislation that includes incentives to increase the Executives (Europe) employee stockof options schemes and preparing a draft legislation that includes incentives to increase the at various stages theshares startup journey. distribution of to startup employees. incentives to increase theemployees. distribution of shares to startup employees. Executives (US) 10.0 distribution of shares to startup

0.0 Europe

10.0

Europe

0.0

NOTE:

United States

Seed Seed

Europe

GET A L L PAY & EQU IT Y DATA - $ 0 Seed

SOU RCE: SOU RCE:

This details equity held by employees and

SOU RCE: GET A L L PAY & EQU IT Y DATA - $ 0 GET A L L PAY & EQU IT Y DATA - $ 0

United States

EuropeSeries A

NOTE:

EquityNOTE: not related to salary nor incentives.

Europe

Series A

Europe

Series B

Series

SOU RCE: 5.0

Europe

Note that at Seed stage some Founders may not take a base salary and take incentive pay instead. Incentive pay is cash bonus or NOTE:which is not related to equity or incentive, equity value. Converted EURby to employees USD with FXand This details equity held rate of 1.1867 (27 November 2020). unissued options excluding founders shares.

Europe

0 0.0

This details equity held by employees and unissued options excluding founders shares. Equity not related to salary nor incentives.

Seed

169

GET A L L PAY & EQU IT Y DATA - $ 0

Series A

Europe

United States

Europe Series B

Europe

Series A

Series B

Europe

United States

Europe Series C

Series C

Europe

Series B

Europe

Series

Remote working has been a huge adjustment for the tech industry and the global economy as a whole and has, 05.1course, created Founders new considerations for founders in how to best manage their teams and build and nurture of their culture. The effect of the pandemic has been to clear shift sentiment around remote work to be far more favourable than previously. 76% of founders responded that they are supportive of remote work for the longterm future, an uplift from 54% before the pandemic. The future of work will be reshaped. Remote working has been a huge adjustment for the tech industry and the global economy as a whole and Remote working has been a huge adjustment for the tech industry and the global economy as a whole and has, has, of course, created considerationsfounders for founders in how to best manage their teams build of course, created newanew considerations in how to best manage their teams andand build andand nurture Remote working has been huge adjustment forfor the tech What was your sentiment 80 industry and the global economy as a whole and has, nurture their culture. The effect of the pandemic has been to shift sentiment around remote work to befar farmore their culture. The effect of the pandemic been to manage clear shift sentiment around remote work to be of course, created new considerations for foundershas in how to best their teams and build and nurture towards remote work at your their culture. The effect of the pandemic has been to clear shift sentiment around remote work to be far more more favourable than previously. 76% of founders responded that they are supportive of remote work for company before start of favourable thanthe previously. 76% of founders responded that they are supportive of remote work for the longfavourable than previously. of founders responded that they are supportive offuture for the longthelong-term Covid-19 pandemic the an76% uplift from 54% before the pandemic. The of will be reshaped. term future, anfuture, uplift from 54% before the pandemic. The future ofremote work work willwork be reshaped. Whatwas was your sentiment L EGEND What your sentiment towards remote work at your towards remote work at your Pre Covid-19 company before the start of company before the start of the Covid-19 pandemic Today versus today? pandemic the Covid-19

Pre Covid-19

L EGEND Today

76%

Pre Covid-19 20

Today

76%

40 28% 60 20

% of founders

L EGEND

54%

60 % of founders

versus today?

% of founders

term future, an uplift from 54% before the pandemic. The 60 future of work will be reshaped. versus today?

76%

54%

18%

54%

17% 7%

28%

18%0

17%

Not supportive (1-2)

28%

Sometimes (3)

Supportive (4-5)

NOTE:

18%

17%

Not supportive (1-2) Sometimes Supportive (4-5) The degree of support for moving towards a remote-�rst culture varies by(3)stage of the company. Interestingly, Founder respondents only. The sentiment SOU RCE: was measured onlarger a scale of 1companies to 5. For the 7% founders of were less in favor of fully �exible work location, while founders still at inception NOTE: purpose of this chart, data was aggregated as respondentstheir only. The sentiment and building company, seemed more open to exploring a fully distributed setup. perFounder legend. SOU RCE: was measured on a scale of 1 to 5. For the 0 0

Not supportive (1-2)

purpose of this chart, data was aggregated as per legend.

Sometimes (3)

Supportive (4-5)

100

NOTE: is your sentiment towards What

The degree for ofof the company. remote workof at support your company The degree of support for moving movingtowards towardsaaremote-first remote-�rstculture culturevaries variesbybystage stage the company. Interestingly, Founder respondents only. The sentiment SOU RCE: culture varies by stage of the company. Interestingly, was on scale of 1 tofor 5. For thelarger Themeasured degree ofa support moving towards a remote-�rst today? by total capital raised Interestingly, founders of companies were less in favor of fully flexible work, while founders still founders ofchart, larger companies were less in favor of fully �exible work location, while founders still at at inception purpose of this data was aggregated as founders of larger companies were less in favor of fully75�exible work location, while founders still at inception per legend. inception and building their company, seemed more open to exploring a fully distributed setup. and their company, seemed more open to exploring a fully andbuilding building their company, seemed more open to exploring a fully distributed setup.distributed setup. Not supportive What is your sentiment towards

100

Neutral What is your sentiment towards remote work at your company Supportive remote work yourraised company today? by totalat capital today? by total capital raised Extremely supportive

% of founders

L EGEND

Extremely supportive Neutral

Supportive

25 50

% of founders

Neutral

Not supportive Supportive

% of founders

Not supportive

L EGEND

100

50 0

$10-25M

$25-50M

$50M

25 0 One of the potential challenges of remote work is <$1M the ability to build a strong culture and sense of belonging. Bootstrapped $1-2M $2-5M $5-10M $10-25M $25-50M $50M+ SOU RCE: One way to bring people together and to align them is to have a clear mission or purpose. The past 12 months NOTE: appear to have placed an even greater importance on the mission / purpose of a company for its employees, Founder respondents only. SOU RCE: NOTE: 0 especially for larger organisations where maintaining a strong<$1M culture at$1-2M scale is that much harder. Bootstrapped $2-5M $5-10M $10-25M

$25-50M

$50M

Extremely supportive

Bootstrapped

<$1M

$1-2M

$2-5M

$5-10M

Founder respondents only.

No change Decrease L EGEND

52% 43%

10 employees

11-100 employees

10 employees

11-100 employees

SOU RCE:

10 employees

170 NOTE:

34%

SOU RCE:

NOTE:

Founder respondents only.

34% 61%

52%

34%

No change

Founder respondents only. NOTE:

61%

43%

Increase

Decrease

% of respondents

mission / purpose of the L EGEND company? Increase

% of respondents

In the last 12 months, how have L EGEND you seen a change in employees Inplacing the last 12 months, Increase greater emphasis how on thehave mission of the you seen/ purpose a change in employees No change company? placing greater emphasis on the Decrease

% of respondents

One of last the12 potential challenges ofofremote work is the ability to build a strong culture and and sense of belonging. In the months, how have One potential challenges remote build a strong belonging. Oneof of the the potential challenges of remote work is thework abilityistothe buildability a strongtoculture and sense ofculture belonging. sense of 61% youway seento a change in employees SOU RCE: 60 One bring people together and to align them is to have a clear mission or purpose. The past 12 months NOTE: One way to bring people together and to align them is to have a clear mission orclear purpose. The pastor 12purpose. months One way to bring people together and to align them is to have a mission The past 12 months placing greater emphasis on the appear to have placed an even greater importance on the mission /52% purpose of a/ company for itsa employees, appear to have placed an even greater importance on the mission purpose of company for its employees, Founder respondents only. appear to have placed an even greater importance on the mission / purpose of a company for its employees, mission / purpose the especially for largerof organisations where maintaining a strong culture at scale is that much harder. especially maintaining a strong culture at scale is that much harder. company?for especially forlarger largerorganisations organisationswhere where maintaining a strong culture at scale is that much harder. 43%

SOU RCE:

5% 11-100 employees

The rise of purpose-driven companies in tech is accelerating, but, for now, it would appear that employees working in several other industries, including the non-pro�t, healthcare and education sectors, are more likely 05.1feel inspired Founders to by the purpose and mission of their organisation than those working in tech. The average score their employees provided on this question is 5-10% higher than for tech workers. In fact across the 12 industries tracked by Peakon, tech ranked in the bottom half. % sentiment change between employees % sentiment inchange Tech and between other employees in Tech and other sectors sectors

The rise inin tech is is accelerating, but, forfor now, it would appear thatthat employees The rise of of purpose-driven purpose-drivencompanies companies tech accelerating, but, now, it would appear employees Sentiment differential on The rise in of purpose-driven companies in tech is accelerating, but, for now, ithealthcare would appear that employees several other industries, including the non-profit, healthcare and education sectors, are more working in several other industries, including the non-pro�t, and education sectors, are more likely 10.0 purposeinand mission of industries, the working several other including the non-pro�t, healthcare and education sectors, are more likely likely to feel inspired by the purpose and mission of their organisation than those working in tech. The average to feel inspired by the purpose and mission of their organisation than those working in tech. The average company (%) for employees Theinspired rise of purpose-driven companies in techof is their accelerating, but, forthan now, those it wouldworking appear that employees to feel bytech the purpose and mission organisation in tech. The average versus other sectors working in several other industries, including the non-pro�t, healthcare and education sectors, are more likely score their employees provided on this question is 5-10% higher than for tech workers. In fact across the 12 their employees provided on this question is 5-10% higher than for tech workers. In fact across the 12 score their employees provided on this question is 5-10% higher than for tech workers. In fact across the 12 to feel inspired bybythe purposetech and mission of their organisation than those working in tech. The average the bottom half. industries tracked Peakon, ranked in the bottom half. industries tracked by Peakon, tech ranked in 7.5 industries tracked by provided Peakon, ranked in the bottom score their employees on tech this question is 5-10% higher than forhalf. tech workers. In fact across the 12

8.0%

industries tracked by Peakon, tech ranked in the bottom half. % sentiment change between employees in Tech and other

% sentiment change between sectorsemployees in Tech and other sectors

Sentiment differential on Sentiment on purpose anddifferential mission of the Sentiment differential on company (%)and for tech employees purpose mission ofof thethe purpose and mission versus other sectors company (%) for tech employees

company (%) for tech employees versus other sectors versus other sectors

NOTE:

10.0

7.5

5.0

2.52.5

10.0%

5.0%

5.0 10.0

5.0% 10.0%

8.0% 8.0%

8.0%

2.5 7.5

2.0% 1.0%

0.0 5.0

5.0%

Finance

5.0% Education

Consumer

2.0%

5.0%

5.0% Materials

Healthcare

Perhaps unsurprisingly, the share of remote jobs has picked up steam since April 2020 but the pace of change 0.0 has been different across Europe. Only Consumer a handful ofEducation countries Materials have seen Healthcare a steep acceleration such as the UK, Finance Non-profit 2.5 2.0% SOU RCE: Ireland and Spain. 1.0% 1.0%

0.0

Based on Peakon average survey score results for European companies to the NOTE: statement "I’m inspired by the purpose and NOTE: Based on Peakon average survey score missionresults of our organisation.". for European companies to the Based on Peakon average survey score statement "I’m inspired by the purpose and resultsmission for European companies to the of our organisation.". statement "I’m inspired by the purpose and mission of our organisation.".

Finance

SOU RCE:

Consumer

Education

Materials

Healthcare

Non-profit

1.0%

0.0

10.0

% of postings for remote work as a share of total

Evolution of remote work Finance Consumer Education Materials Healthcare as a share (%) of all job Perhaps unsurprisingly, the share since April April 2020 Perhaps unsurprisingly, the share of of remote remote jobs jobs has has picked picked up up steam steam since 2020 but but the the pace pace of of change postings by country NOTE:

different across Only handful of countries have seen a steep acceleration such as the UK, Although ohas cebeen space isbeen perhaps not a Europe. top forafounders right now, the data certainly helps change has different across Europe. a up handful of7.5 countries have steep acceleration Perhaps unsurprisingly, the share ofpriority remote jobs hasOnly picked steam since April 2020 but the seen pace ofaunderstand change Based on Peakon average survey score SOU RCE:of travel - this can be helpful for founders entering and Spain. results for European companies to the the relativeIreland cost of different cities and the current direction L EGEND has been different across Europe. Only a handful of countries have seen a steep acceleration such as the UK, such as the UK, Ireland and Spain. statement "I’m inspired by the purpose and the new yearmission with expansion and seeking access either to new customers or new talent pools. Ireland Spain. plans UK ofand our organisation.".

Ireland

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2.5

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France

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France Spain

% of postings for remote work as a share of total

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ar -1 9

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5.0

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Q3 2019

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L EGEND

Italy

% of postings for remote work as a share of total

countries, Q3 2019 versus Q3 L EGEND 2020 L EGEND

10.0 10.0

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Germany

Evolution of remote work Evolution of remote work Spain asasasquare share metre (%)ofof all job Prime rent ($ per a share (%) all job France per year) by city in selected postings by country postings by country

$592

Helsinki

The shift towards remote work is forcing founders to reimagine$564the purpose and value of their o ce space for Austria The shift towards remote work is forcing founders to reimagine theand purpose and valueceofspace theirfor office space for their $572 The shift towards remote work isOne forcing founders to RCE: reimagine the purpose value of their Oslo SOUwill their teams going forward. factor that unquestionably play a role inothose decisions is an assessment $665 their teams going forward. One factor that will unquestionably play a role in those decisions is an assessment teams going forward. One factor that will unquestionably play a role in those decisions is an assessment of the ofofthe cost and return on investment. that investment. Covid-19 has impacted ce space in cities across $557 the demand for o cost and return on that Munich Covid-19 has impacted the demand for o ce space in cities across costthe and return on that investment. Covid-19tohas impacted demand forand office space in implications, cities across Europe $542 Europe to varying degrees. too call the on the depth long-term but it'sto Europe to varying degrees. It's tooIt's early to early make a callmake on theadepth and long-term implications, but it's $540 varying degrees. It’ s too early to make a call on the depth and long-term implications, but it’ s interesting to atThe Amsterdam has changed in different European tech hubs. The interesting to look at how the cost of prime o ce space changed in different European tech look hubs. interesting to look at how the cost of prime o ce space has$517 differences are striking; while prices in has London and Stockholm have started to fall, they have actually how the cost of prime office space changed in different European tech hubs. The differences are striking; $535have started to fall, they have actually differences are striking; while prices in London and Stockholm continued to rise in Paris and Berlin. Berlin $493 while pricesto inrise London and Stockholm continued in Paris and Berlin.have started to fall, they have actually continued to rise in Paris and Berlin. Evolution of prime o ce rent cost for selected tech hubs, Evolution rebased toof 100prime o ce rent

cost for selected tech hubs, L EGEND rebased to 100 Paris

London

$528

Rome

$505 $511

Madrid

$493 $458

Hamburg

$423 $402

Dusseldorf

$394

L EGEND Berlin

Paris Amsterdam Stockholm London

Barcelona

$394 $373

Athens

$394 $352

Berlin

Amsterdam

NOTE:

400

600

800

1,000

1,200

1,400

1,600

Prime Rent ($ per square metre per year)

Stockholm

Data converted at EUR:USD of 1.17, the rate on 30 September 2020.

200

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

SOU RCE: SOU RCE:

Q2 2019

Q3 2019

171

Q4 2019

Q1 2020

Q2 2020

that have attracted talent for so long. What makes a city vibrant is the density of startups, talent and investors, but the premium cost of certain locations might become unjusti ed as more players in the ecosystem adopt 05.1 Founders remote work and/or distributed teams.

though o Cost ce space is perhaps a top priority for founders London right now, the data certainly helps understand of prime rent ($ pernot square e relative cost ofper different the current direction of travel - this can be helpful for founders entering metre year) forcities o ce and space In with this context, the choice location for founders an interesting and important question. London Paristoremains e new year expansion plans and of seeking access either new customers or new talent city,context, Q3 2020 the Inby this choice of location for founders remains an interesting and pools. important question. London is$1,104 a

$1,414

is a key destination for tech and entrepreneurial talent, but the changing nature of work and, specifically, key destination tech and entrepreneurial talent, but the changing nature of work and, speci cally,$965 an Genevaan interesting and important question. London is a In this context, thefor choice of location for founders remains an increased appetite to build remotely or in athe distributed way has thepotential potential tochange change theincentive incentive$1,414 increased appetite to build remotely or in a distributed way has the to the models London key destination for tech and entrepreneurial talent, but changing nature of work and, speci cally, an Prime rent ($ per square metre $1,518 models that havetoattracted talent so long.makes What a citytovibrant is the density of startups, talent Zurich increased appetite build remotely or long. infor a distributed way hasmakes potential change incentive models $938 per year) bythat city in selected have attracted talent for so What athe city vibrant is the the density of startups, $1,104 talent and investors, Paris makes a city vibrant is the density of startups, talent and investors, that have attracted talent long. What countries, Q3 2019 versus Q3 but and investors, the for premium cost of certain locations become as in theadopt $998more might becomemight unjusti ed asunjustified more players in theplayers ecosystem but the premium cost ofso certain locations but the premium cost of certain locations might become unjusti ed as more players in the ecosystem adopt Stockholm 2020 $828 $965 ecosystem adopt remote work and/or distributed teams. Geneva remote work and/or distributed teams. remote work and/or distributed teams. $899

L EGEND Q3 2020 Q3 2019

NOTE:

Dublin

Zurich

Cost of prime rent ($ per square

Cost of prime rent ($ per square metre per year) for o ce space metre year) for o ce space by city,per Q3 2020 by city, Q3 2020

London

Stockholm

London Luxembourg

$878

Paris Moscow

Geneva Zurich

Geneva Frankfurt

MoscowStockholm

Zurich Helsinki

Luxembourg

Dublin

Frankfurt

$733

Oslo Munich

Oslo

Berlin

Munich

$572

Luxembourg Amsterdam

Helsinki

Amsterdam

$592 $564

Dublin Munich

Frankfurt

$517

Frankfurt Rome

Rome

Hamburg

Munich Dusseldorf

$458 $423

Madrid

Amsterdam Barcelona

Dusseldorf Hamburg

Berlin Athens Rome 0

Barcelona

Athens

200 Madrid 0

200

Data converted at EUR:USD of 1.17, the rate on SOU RCE: 30NOTE: September 2020. SOU RCE:

$557

$402

$458

$394$394200 $352 $394

$394

$540

$394

$535

400

600 $528

800

600

800

$511 1,000

per square metre 600 Prime Rent ($ 800 1,000per year)

400

1,000

1,200

1,400

$ per square metre per year 1,200 1,200

1,400 1,400

1,600 1,600

$ per square metre per year

$458

SOU RCE:

Data converted at EUR:USD of 1.17,atthe rate on Data converted EUR:USD of 1.17, the rate on 0 September 2020.30 September 2020.

$402

Dusseldorf Barcelona

$394

Athens

$394

As a relocation company directly affected 0 200 by the pandemic, we saw very clearly that even throughout the turbulent year for travel, our number of relocations continued to grow. In SOU RCE: fact, our relocations grew by 365% during 2020.

Data converted at EUR:USD of 1.17, the rate on 30 September 2020.

Karoli Hindriks Jobbatical Founder

$528

$572

$511

Hamburg

NOTE:

$458

$535

$394 $402 $373

400

$620 $592

$511

$402 $394

BarcelonaDusseldorf

NOTE:

$511

$645

$528

$505 $493

$733

$535

$572

$528$540

Oslo Hamburg

Berlin

Madrid

$790

$540

$535$557

Helsinki Madrid

$828

$557

$645

$493

Rome

$938

$592 $572

$665 $620

$540

$965

$620

$733

$557 $542 $592

Moscow Berlin

Amsterdam

$828

$1,104

$645

$790

$620 $592

Stockholm Oslo

Moscow

$938

$670

Luxembourg

Helsinki

$965

$822 $704

$1,414

$1,104

$790

$645

$1,414

$733

$828

Paris

Dublin

$790

$938 $819

On one hand, technology helped improve the experience of the lockdown and many organisations saw that they can in fact operate remotely. On the other hand, we were more strongly than ever before reminded about the importance of human connection and, maybe for the first time ever, the limits of technology. As we come out of this new experience, organisations will increasingly trust their employees to work independently, and thus people will have more freedom to choose their own paths. At the same time, people will value physical togetherness much more than

172

before the create more 600pandemic. 800 This will1,000 1,200 per square metre per flexibility year organisations $with greater for remote work, but will also balance that new paradigm with more meaningful time together in the same physical space. As a relocation company directly affected by the pandemic, we saw very clearly that even throughout the turbulent year for travel, our number of relocations continued to grow. In fact, our relocations grew by 365% during 2020.

400

Another thing that will likely emerge from this pandemic is the explosion of digital nomads. There are a few things that will lead to this: 1) Employees and their bosses know that they can work remotely. 2) People still have dreams of traveling and with travel having been restricted, this itch will find its relief as soon as the opportunity to travel resumes.

1,400

05.1

Founders

There are stark differences in the cost base of primary and secondary hubs and with Europe continuing to see tech activity grow in those cities, the rise of remote work might very well act as a strong tailwind to drive There are stark differences the cost base of primary andand secondary hubs and with Europe continuing to see increased geographic diversiincation of entrepreneurial activity startup communities across a greater number of hubs. tech activity grow in those cities, the rise of remote work might very well act as a strong tailwind to drive increased

geographic diversification of entrepreneurial activity and startup communities across a greater number of hubs. Cost of prime rent ($ per square metre per year) for o ce space by city in selected countries, Q3 Cost of prime rent ($ per 2020

DATA SET : F RA NCE

France

square metre per year) for office space by city, Q3 2020

$1,104

Paris

$352

Marseille

$382

Lyon

$264

Nice

There are stark differences in the cost base of primary and secondary hubs and with Europe continuing to see in thosenot cities, thepriority rise of remote work might very well actdata as a certainly strong tailwind drive $270 Lille Although otechceactivity spacegrow is perhaps a top for founders right now, the helpstounderstand increased geographic diversi�cation of entrepreneurial activity and startup communities across a greater the relative cost of different cities and the current direction of travel - this can be helpful for founders entering number of hubs. $247 Bordeaux There are stark differences in the cost base of primary and secondary hubs and with Europe continuing to see

the new year with expansion plans and seeking access either to new customers or new talent pools.

tech activity grow in those cities, the rise of remote might200 very well tailwind to700drive 800 0 work 100 300 act as 400 a strong 500 600

Prime Rentacross ($ per square per year) increased diversi�cation ofDATA entrepreneurial activity and startup communities ametre greater SET : U NIT ED KINGDOM Cost of prime geographic rent ($ per square London number of hubs. Prime rent ($metre per square metre per year) for o ce space city selected countries, Q3 per year) by by city inin selected Paris NOTE: United Kingdom 2020 countries, Q3 2019 versus Q3 SOU RCE: $998

2020

L EGEND Q3 2020 Q3 2019

Cost of prime rent ($ per square Data converted at EUR:USD of 1.17, the rate on metre per year) 30 September 2020.for o ce space by city in selected countries, Q3 2020

1,000

1,100

1,200

$1,414 $1,518 $1,104

DATA SET : U NIT ED KINGDOM

$965

Geneva

$899

London

$1,414

$938

Zurich

$819

There are stark differences inStockholm the cost base of primary and secondary hubs$828 and with Europe continuing to see South East $543 London $1,414 $878 tech activity grow in those cities, the rise of remote work might very well$790 act as a strong tailwind to drive Dublin $822 increased geographic diversi cation and startup communities across a greater Southof East entrepreneurial activity $543 Manchester $508 $733 number of hubs. Luxembourg $704 Manchester

Moscow

Cost of prime rent ($ per square metre per year) for o ce space by city in selected countries, Q3 2020

$508

DATA SET : F RA NCE Frankfurt

Bristol

Edinburgh

$501

$592 $564

Edinburgh

$501

$572

$515

Glasgow

$540

$517

Marseille

Glasgow

$535

$453

$493

Lyon

Aberdeen

$382

$528 $453 $505

Leeds

$446

$511

Nice

Leeds

$264

$493 $446 $458

Hamburg Liverpool

$348

$423

Lille

Liverpool

$270

$348

$402

Dusseldorf

$394

Belfast

$320

Bordeaux

Belfast

$247

$394 $320 $373

Athens Southampton

$394 100 $313 $352

Southampton

200

300

400

200

200 200

400

500

600

700

800

900

Prime Rent ($ per square metre per year)

$313

NOTE:

$352

$453

Berlin Aberdeen

$1,1

$453

Amsterdam

Barcelona

$665

$557 $515 $542

Paris

MunichBirmingham

Madrid

$670

$620 $508$592

Helsinki

Rome

$645

$508

Bristol

Oslo Birmingham

NOTE:

900

400 400

600

800

1,000

Prime Rent ($ per square metre per year)

SOU RCE:

Data converted at EUR:USD of 1.17, the rate on NOTE: SOU RCE: SOU RCE: 30NOTE: September 2020. SOU RCE:

converted at EUR:USD 1.17, the rate on Data converted atData EUR:USD of 1.17, the rateofon Data converted at EUR:USD of 1.17, the rate on 30 September 2020. 30 September 2020. 30 September 2020.

173

1,000

1,200

Rent ($ per square metre per year) 1,200 600 Prime 1,000per Prime Rent800 ($ per square metre year)

1,400

1,200

1,600

1,400

1,600

1,000

1,100

05.1

Founders

Budgeting for a (Series A) team How much does it cost to start and build a team in different European cities? We (still) don’t have a perfect answer, but we are providing a revised version of our illustrative org chart for a Series A stage software-as-a-service (SaaS) company. We think it provides a reasonable benchmark on what a team might look like for this type of business at that stage.

The dataset on rewards data (covering base salary and actual incentives) is provided by Aon and CBRE is provided the prime rent cost of office space dataset. We then built this out to give cost benchmarks for ten key Although o ce space perhaps notas a top priority for founders right now, the data certainly helps understand European tech is hubs, as well the relative cost of different cities and the current direction of travel - this can be helpful for founders entering provide a comparison with the the new year with expansion plans and seeking access either to new customers or new talent pools. equivalent cost to build the team from the Bay Area. Prime rent ($ per square metre per year) by city in selected Given the rise ofQ3remote work, countries, Q3 2019 versus 2020 we have revised down our

$1,518 $1,104

Paris

estimates of sqm per headcount to account for employees who Q3 2020 Q3 2019 may have an assigned office space but chose not to be based there five days per week.

L EGEND

$998 $965

Geneva

$899 $938

Zurich

$819 $828

Stockholm

$878 $790

Dublin

$822 $733

Luxembourg

No methodology is ever perfect, but this should help founders (and others) to understand what it costs to set up and build in different European tech hubs.

$704 $645

Moscow

$670 $620 $592

Frankfurt

$592 $564

Helsinki

$572

Oslo

$665 $557 $542

Munich

$540

Amsterdam

$517 $535

Berlin

$493 $528

Rome

$505 $511

Madrid

$493 $458

Hamburg

$423 $402

Dusseldorf

$394

Barcelona

$394 $373

Athens

$394 $352 0

200

400

600

800

1,000

Prime Rent ($ per square metre per year)

NOTE:

$1,414

London

SOU RCE:

Data converted at EUR:USD of 1.17, the rate on 30 September 2020.

174

1,200

1,400

1,600

05.2 05.1

Founders

Recycling Talent Talent is everything when it comes to building a successful company. It’s no Talent is everything when it comes to building a successful company. It’s no surprise then that access to surprise then that access to talent tops the list for founders when asked to share talent tops the list for founders when asked to share the most important factors they considered when the most important factors they considered when choosing where to locate their choosing where to locate their companies. Looking forward, it will be interesting to track how this changes in companies. Looking forward, ittowill be interesting to track how this changes in the to a talent base from the the years ahead. Arewhen we going see shift in the perceived importance of Talent is everything ittocomes toabuilding a successful company. It’sproximity noproximity surprise then that access to years ahead. Are we going see a shift in the perceived importance of in a remoterst and distributed way choice of founding location the trend building Talent is everything when itfounders comesifto building atowards successful company. It’s important no surprise then that access to talent tops the list for when asked to share the companies most factors they considered when to atops talent from thethe choice of founding location if the so trend towards building talent the base list forfact founders when asked to ‘where share the most ranks important factors they considered when continues? The that response I lived’ highly across the key considerations also speaks choosing where to locate their companies. Looking forward, it will be interesting to track how this changes in choosing where to alocate their companies. Looking forward, it will to be optimise interesting to geographical track in to talent, companies in remote-first and distributed way continues? The factfor that thehow this changes to the idea that the notion of moving to build a company proximity the years ahead. Are we going to see a shift in the perceived importance of proximity to a talent base from the thecapital years ahead. Are we going tobe see a shift in the perceived importance of proximity tospeaks a talent baseoperations. from the response ‘where I lived’ ranks so highly across the key considerations also to or may by the changing acceptance of virtual and remote companies a remoterst and distributed way choice of customers founding location iferoded the trend towards building choice of founding location if the trend towards building companies in a remote-in rst and distributed way the idea that thefact notion of moving to build a company to optimise foracross geographical continues? The that the response I lived’ ranks so highly the key considerations continues? The fact that the response ‘where I‘where lived’ ranks so highly across the key considerations also speaks also speaks proximity tothat talent, capital ormoving customers mayabe by the changing to the idea the notion of build company tofor optimise for geographical proximity to talent, Access to talent to the ideawas thatthe the notion of moving to buildto a company toeroded optimise geographical proximity to talent, What most important acceptance of virtual and remote operations. capital or customers may be eroded by the changing acceptance of virtual and capital orbusiness customers may be eroded by the changing acceptance of remote virtual operations. and remote operations. practical considerations for you when choosing where to locate your What was the most important What waswhen the most company you important founded it? practical business practical business considerations for you when considerations for you yourwhen choosing where to locate choosing to locate company whenwhere you founded it? your company when you founded it?

Where I lived

17%

Access to customers Access to talent

14%

Access to talent

Where I lived Specific market opportunity Where I lived

17%

Access to customers

14%

Access to capital/investors Access to customers

Lower cost base Specific market opportunity

Access to capital/investors

Financial incentives Lower cost base Friendly regulatory environment

Lower cost base

Founders respondents only.

NOTE:

SOU RCE:

14%

12% 11%

17%

13%

11%

Financial incentives

NOTE:

11%

12%

Friendly regulatory environment Access to capital/investors

Friendly regulatory environment Financial incentives

13%

12%

13%

Specific market opportunity

22%

% of founders 13

% of founders

SOU RCE:

Founders respondents only.

SOU RCE:

NOTE: The differences between founders based on their prior entrepreneurial experience are signi�cant. The most Founders respondents only. experienced, repeat founders place an elevated importance on access to talent, presumably informed by their The differences betweenand founders based on in their prior entrepreneurial experiences in attracting retaining talent prior entrepreneurial endeavours. These founders also appear experience are significant. The most experienced, repeat place to bedifferences least in�uenced by the idea ofbased ‘starting theyentrepreneurial live’founders compared to less experienced and �rst-time The between founders on where their prior experience are signi�cant. The most Thefounders. differences founders based on their priorpresumably entrepreneurial experience are signi�cant. The most an elevatedbetween importance on access to talent, informed by their experienced, repeat founders place an elevated importance on access to talent, presumably informed by their experienced, repeat founders place an elevated importance on access to talent, presumably informed by their experiences in in attracting attractingand andretaining retainingtalent talentininprior prior entrepreneurial experiences entrepreneurial endeavours. These founders also appear experiences in attracting and retaining talent in prior entrepreneurial endeavours. These founders also appear 19% endeavours. These founders also appear to be least influenced by the idea of to be least in�uenced by the idea of ‘starting where they live’ compared to less experienced and �rst-time Access to talent to beWhat leastwas in�uenced the idea of ‘starting where they live’ compared to less experienced and �rst-time 21% the mostby important ‘starting they live’ compared to less experienced and first-time founders. founders. founders. 'business'where consideration for you 17%

when choosing where to locate your company when you What was the most What wasit? the important most important founded 'business' consideration for you 'business' consideration for you when choosing where to locate when choosing where to locate EGEND yourLcompany when you your company when you founded it? First-time founder founded it?

Repeat founder with limited experience L EGENDscaling company L EGEND First-time founder Repeat founder with signi�cant experience

Where I lived

Access to talent Access to customers

Repeat founder with limited experience Repeat foundercompany with signi�cant experience scaling

in scaling company

12% 17% 12%

Where I lived Specific marketWhere opportunity I lived

11%

Access to customers

10%

Access to capital/investors Access to customers

Specific market opportunity

Lower cost base Specific market opportunity

Friendly regulatory environment Financial incentives

0 5% 4%

0 Financial incentives 5

SOU RCE:

Founders respondents only.

NOTE:

8% 15%

13%

4% 5

8% 10

9% 10

4% 5

12%

19%

17%

SOU RCE:

Founders respondents only.

175

21% 30%

20%

16% 15%

13%14%

11% 11%

16%

20% 14%

12% 11% 12%

8% 9%

21%

12% 15%

11% 13% 15

% of founders 15

% of founders

20 % of founders

Founders respondents only.

NOTE:

Financial Lowerincentives cost base

12%

11% 10% 14%

11%

Lower cost base

NOTE:

12% 12%

11%

Friendly regulatory environment Access to capital/investors

Friendly regulatory environment

11%

16% 11%

11%

Access to capital/investors

Repeat founder with signi�cant experience in scaling company

19%

10%

Access to talent

in scalingwith company Repeat founder limited experience First-time founder scaling company

20%

11%

05.2

Recycling Talent

European startups enabling access to remote employees The toolkit to support founders in building their companies in a remote-first way is itself a vibrant category of entrepreneurial activity and early-stage investment. A number of European startups are targeting this opportunity and have gone on to raise from leading early-stage investors. As this category develops and as the toolkit and tech stack for founders is built out, it’s likely that more founders will feel confident in choosing to go down the path of building their companies agnostic of any fixed office location.

Lano

HR Solution for distributed teams

Oyster HR

HR Solution for distributed teams

Remote

HR Solution for distributed teams

Safety Wing Insurance for nomads

European founders have never had greater optionality in terms of where to start and build their company, including - of course - the option to build remote-first with no fixed headquarters. The idea that great companies can come from anywhere has never been more true as demonstrated by the fact that European founders have now succeeded in building billion-dollar companies in 40 different towns and cities from 20 countries. Overview of cities with VC-backed $1B+ European tech companies

176

Beyond the main hubs o� �ondon� �aris or Berlin� geographic diversi�cation has been happening at a rapid pace with 24 new cities seeing a homegrown VC-backed company scale to billion-dollar valuation in the last �ve decade ago� this was �ust a hand�ul o� European cities. �s such� it�s exciting to see entrepreneurial 05.2 year. �Recycling Talent activity and startup communities �ourishing in cities as diverse as Vilnius� Bucharest or Bristol. Number of new and total unique

Beyond the main hubs ofo�London, Paris oror Berlin, geographic diversification hashas been happening at a rapid cities tothe havemain birthed a $1B+ Beyond hubs �ondon� �aris Berlin� geographic diversi�cation been happening at a rapid Beyond the24 main hubs o� �ondon� �aris or Berlin� geographic diversi�cation hasscale been happening at a rapidvaluation in the last pace with new cities seeing a homegrown VC-backed company to billion-dollar company by milestone year pace 24new new cities seeing a homegrown scale to billion-dollar pacewith with 24 cities seeing a homegrown VC-backedVC-backed company scalecompany to billion-dollar valuation in the last valuation in the last five decade ago, this�ust was just handful ofo�cities. European cities. As�s such, it’sentrepreneurial exciting to see entrepreneurial �veyears. year. ��A decade ago�ago� this was a hand�ul European �s such� it�s exciting to see �ve year. decade this was �ustaao� hand�ul European cities. such� it�s exciting to see entrepreneurial Lactivity EGEND and startup communities �ourishing in cities as diverse as Vilnius� Bucharest or Bristol. activity and startup communities flourishing in cities as diverse as Vilnius, Bucharest or Bristol. and startup communities �ourishing in cities as diverse as Vilnius� Bucharest or Bristol. Existing

3 8

New in year Number of new and total unique cities to of have birthed $1B+ unique Number new anda total company by milestone year

9 3

cities to have birthed a $1B+ company by milestone year L EGEND

3 4

Existing New in year L EGEND

Existing 3

New in year

2010

2011

20124

2013

2014

37 26

2015

2016 9

2017

2018

3 7 3 The geographic diversi�cation is visible in the rise6 of billion-dollar companies from secondary hubs across SOU RCE: 3 3 26 2010 2012 2013 2014 2015companies 2016 4 2017 2018 2019 2020 NOTE: Europe. In Germany, for example, seven of 2011 the 16 VC-backed $1B+ tech have been founded and 17 3 �ilestone year is de�ned as the yearthe the country’s primary tech hub. Though1 more $1B+ companies have built outside of Berlin, emerged from 14 SOU RCE: company reached a $1B+ valuation milestone. 10 3 London than anywhere else in Europe by some distance, 30% 6of the UK’s unicorns have emerged from outside NOTE: 7 3 3 year is de�ned as the year the the�ilestone capital. By contrast, Paris is the only city within France to date to have produced a $1B+ company; with 11 company reached a $1B+ valuation milestone. 2010 2011 2012 2013 2014 2015 2016 2017 in total, this puts Paris second only to London. 10

The geographic diversification is visible in the SOU RCE:rise of billion-dollar companies from secondary hubs across The geographic diversi�cation is visible in the rise of billion-dollar companies from secondary hubs across NOTE: United 24 Europe. for example, seven of theKingdom 16 VC-backed $1B+ tech companies have been founded and Number In of Germany, $1B+ companies Europe. In isGermany, for example, seven ofof the 16 VC-backed $1B+ from techsecondary companies have been founded and The geographic diversi�cation visible in the rise billion-dollar companies hubs across by main and secondary hubs �ilestone year de�ned as the year the is built outside of Berlin, the country’ s primary tech hub. Though more $1B+ companies have emerged from company reached a $1B+ valuation milestone. built outside of Berlin, the country’ s primary tech hub. Though more $1B+ companies have emerged from Europe. In Germany, for example, seven of the 16 VC-backed $1B+ tech companies have been founded and Germany 9 7 by country London than anywhere else in Europe by some distance, 30% of the UK’ s unicorns have emerged from built outside of Berlin, the country’s hub. Though more30% $1B+ of companies emerged from London than anywhere else inprimary Europetech by some distance, the UK’shave unicorns have emerged from outside France 11 London than anywhere else inParis Europe some 30% of the UK’s have emerged from outside outside the capital. By contrast, Paris isdistance, the cityFrance within France - to date - to have produced $1B+ L EGEND the capital. By contrast, isby the only cityonly within - tounicorns date - to have produced a $1B+ acompany; with 11 the capital. By contrast, Paris is the only city within France to date to have produced a $1B+ company; with 11 company; with 11 in total, this puts second only to London. Main hub in total, this puts Paris second onlyParis to London. Sweden 1 7

2019 37

2018

2019

in total, this puts Paris second only to London. Secondary hubs

Number of $1B+ companies Number of $1B+ companies byby main andand secondary hubs hubs main secondary byby country country L EGEND

Switzerland

Denmark France

France

L EGEND Main hub

Main hub

Secondary hubs

Switzerland

Ireland Spain

Belgium 2 Ireland 2

Estonia

Luxembourg 3 Spain

2 2

Russia

2 Portugal

Portugal

Ukraine Austria Romania

4 4

3 1

Ukraine Belgium

Austria Luxembourg 1 1

Romania 1 Portugal

1 Poland Finland

1 1

1 Lithuania

1 1

Austria

Romania

1 0

1 2 1 2 1 2 2

Ukraine

Lithuania

Finland Russia

Poland

6 2

Luxembourg

Finland

Main hub is de�ned as the number one city by funding in the last 5 years.

SOU RCE:

SOU RCE:Poland

Lithuania

1 0

20 # of $1B+ companies

177 NOTE:

# of $1B+ companies

NOTE:

Main hub is de�ned as the number one city by funding in the last 5 years.

2 3

Russia Denmark 4

Estonia

NOTE:

Estonia Netherlands

Belgium

Spain Switzerland

Denmark

Netherlands

Ireland 7 Sweden

Sweden

Netherlands Germany 9

Germany

United KingdomUnited Kingdom

05.2

Recycling Talent

Talent Recycling The more that Europe sees the emergence of successful companies that have scaled to billions of dollars of enterprise value, hundreds of millions of revenue or thousands of employees, the deeper and broader it is able to grow its pool of experienced operators that have helped to build and scale worldclass products, design, build and run large-scale organisations, or grow billion-dollar P&Ls. As these companies then go through the full lifecycle, including an exit event via an IPO or M&A, they can play an important role in injecting scale and liquidity into the talent marketplace. This potential to recycle talent is a crucial enabler to accelerate the progression of the ecosystem by unlocking new generations of founders and operators that are powered by extensive knowledge and networks hard earned through their exposure to the ups and downs of the company-building process. To contribute to a better understanding of the scale of talent recycling at work in the European tech ecosystem, we have attempted to quantify the number of founders that have started companies having previously gained experience in some of Europe’s most successful companies. More specifically, this focused on the founder alumni networks of 24 European tech companies that have previously scaled to a valuation of $5 billion or more.

In total, it was possible to identify more than 2,350 individuals that currently list themselves as founders or cofounders companies, equating around average of almost 100 founders forthemselves each one ofasthe 24 ‘parent’ In total, itof was possible to identifyto more thanan2,350 individuals that currently list companies the initial cohort. Remarkably, moreto than 50%an of average the founders have 100 emerged from one of just founders orin co-founders of companies, equating around of almost founders Inve total, it was possible to Spotify, identify Klarna, more than 2,350 individuals that currently list themselves asve founders or cocompanies: Zalando, Just Eat. It’s notable that four of the top companies all for each one of the 24 ‘parent’ companiesSkype in the and initial cohort. Remarkably, more than 50% of the founders of companies, equating to around an average of almost 100 founders for each one of the 24 ‘parent’ In total, it was possible to identify more than 2,350 individuals that currently list themselves as founders or covia IPO or M&A, but it’s also interesting to see went through events, founders havelandmark emergedliquidity from one of justeither five companies: Zalando, Spotify, Klarna, Skype andKlarna Just make the companies in speaks the initial cohort. Remarkably, more than 50% of the founders have emerged frominone of just founders of companies, equating to around an average of almost 100 for each(Klarna one of the 24founded ‘parent’ top ve. This to the fact thatfive even if companies stayfounders private longer was 2005), these Eat. It’ s in notable that four of the top companies all went through landmark liquidity events, either ve companies: Zalando, Spotify, Klarna, Skype and Just Eat. It’s notable that four of the top ve companies all companies the initial cohort. Remarkably, more than 50% of the founders have emerged from one of just companies are still contributing meaningfully to the talent marketplace as private companies. via IPO or M&A, but it’Spotify, s also interesting see Klarna make the but top five. This speaks toto the fact vewent companies: Zalando, Klarna, Skypetoand Just Eat. It’s thatit’s fouralso of the top ve companies all either via IPO ornotable M&A, interesting see Klarna make the through landmark liquidity events, that even if companies private longer was founded in 2005), these are went through landmark liquidity either via IPO or M&A, but it’s also interesting to(Klarna seecompanies Klarna the still top ve. This speaks to stay theevents, fact that even if(Klarna companies stay private longer wasmake founded in 2005), these Zalando topcompanies ve. Thisofspeaks to the fact that even if companies stay private longer (Klarna was founded in 2005), these Number founders spun out of contributing meaningfully to the talent marketplace as private companies. are still contributing meaningfully to the talent marketplace as private companies. companies are still contributing meaningfully to the talent marketplace as private companies. $B+ companies Spotify

Number of founders spun out of

Number of founders spun out of companies $B+ $B+ companies

209

Klarna Zalando Skype Spotify Spotify Just Eat Klarna Klarna King.com Skype Skype Yoox Net-a-Porter Just Eat Just Eat HelloFresh King.com King.com Farfetch Yoox Net-a-Porter Yoox Net-a-Porter HelloFresh Delivery Hero HelloFresh Farfetch Others Farfetch Zalando

Delivery Hero

Others

Delivery Hero 0

158

175 158 146

Ex-operators of a selection of 24 companies who currently self identify as "founder" or "cofounder," as of October 2020

114

Others 50

100

145 158

209 175

146 145

114

100 94 150

146

533

102

200

100

150

200

250

300

350

SOU RCE:

178

400

# of founders 250

150

300 # of founders

200

350

250

400

450

500

550

533

450

300 # of founders

NOTE:who currently self identify as "founder" or "co-

founder," of October 2020 Ex-operators ofas a selection of 24 companies NOTE: self identify as "founder" or "cowho currently founder," as of October 2020

102

SOU RCE:

Ex-operators of a selection of 24 companies

114

145

NOTE:

243

243 209

443

175

443

243

350

500

550

400

533

600

450

500

550

05.2

Recycling Talent

It is also interesting to see the ywheel spinning faster in some countries. Rocket Internet made news this year as itinteresting chose to delist after public sincefaster 2014 and it is striking to see the Internet positive ywheel of the “clone It is also to see the being flywheel spinning in some countries. Rocket factory”, as famously conceded by Samwer, on the German ecosystem and beyond. Zalando, Delivery Hero and made news this year to assee it chose to delist spinning after being public since 2014 and it is striking to see made It is also interesting the ywheel faster inthe some countries. Rocket Internet news this HelloFresh all participating to place Germany so high on list have one thing in common: Rocket Internet. the flywheel of the “clone factory”, as famously conceded by Samwer, the German It isyear alsopositive interesting to the ywheel spinning faster in 2014 someand countries. Rocket Internet made news this as it chose tosee delist after being public since it is striking to seeon the positive ywheel of the “clone year as it chose to delist after being public since 2014 is strikingecosystem tohave see the of the “clone ecosystem beyond. Zalando, Delivery Hero and onepositive thing inywheel common: factory”, as and famously conceded by Samwer, onand theit HelloFresh German and beyond. Zalando, Delivery Hero and factory”, as famously conceded by Samwer, on the German ecosystem and beyond. Zalando, Delivery Hero and Top 5 countries by number of to place Germany so high on the list have one thing in common: Rocket Internet. HelloFresh all participating Rocket Internet. 773

HelloFresh allspun participating to place Germany so high on the list have one thing in common: Rocket Internet. out of $5B+ founders companies

651

5 countries by number of Top Top 5 countries by number of founders of $5B+ spun spun out ofout $5B+ founders companies companies

599

773

651

599

Sweden Sweden

Germany

NOTE: Ex-operators of a selection of 24 companies who currently self identify as "founder" or "cofounder," of October 2020. Ex-operators ofas a selection of 24 companies NOTE: self identify as "founder" or "cowho currently

SOU RCE:

NOTE:

Germany

Sweden

United Kingdom

Germany

Denmark

United Kingdom

Denmark 96

Nethe 9

Netherlands

Denmark

Nethe

SOU RCE:

founder," as of October 2020.

SOU RCE:

Ex-operators of a selection of 24 companies who currently self identify as "founder" or "cofounder," as of October 2020.

London and their Tallinn. started company in the

Share of founders (%) who Share of founders (%) who started company started theirtheir company in the in the same country ascompany $5B+ company same country as $5B+

% of founders who were still located in the same country

same country as $5B+ company

NOTE:

founder," of October 2020. Ex-operators ofas a selection of 24 companies NOTE: self identify as "founder" or "cowho currently founder," as of October 2020.

Ex-operators of a selection of 24 companies who currently self identify as "founder" or "cofounder," as of October 2020.

65%

52%

65%

50% 44%

60 40

52%

50%

50% 44%

44%

40 20

21%

20 0

Germany

SOU RCE:

Ex-operators of a selection of 24 companies

NOTE:who currently self identify as "founder" or "co-

% of founders % who of were founders still who located wereinstill the located same country in the same country

It’s also interesting to explore the extent to which the alumni founders built companies within the same It’s also interesting to explore the extent which theInalumni founders built companies country as the HQ country of their ‘parent’tocompany. other words, how many ex-Spoti within ers have founded a the same country as the HQ country of their ‘parent’ company. In other words, how excompany in Sweden? This lens reveals some interesting differences. While 65% ofmany the founders that have It’ s also interesting to explore the extent to which the alumni founders built companies within same spun out ofhave German success storiesin have gone on tolens found their startup in Germany, this is justthe 52% for the UK Spotifiers founded a company Sweden? This reveals some interesting differences. country as the HQ country of their ‘parent’ company. In other words, how many ex-Spoti ers have founded a by the factgone that certain Sweden and even lower for Denmark. This can besuccess explained While 65% of the founders have spunthe outalumni of German stories have to companies built It’s and also 50% interesting to explore thethat extent to which founders built companies within the on same company in Sweden? This lens reveals some interesting differences. While 65% of the founders that have their talent base in ainmore way with a large share talent located country as the HQ country ofGermany, theirgeographically ‘parent’ In other words, how many ex-Spoti ersof have founded a in one country, found their startup thiscompany. is justconcentrated 52% for the UK and 50% Sweden and even lower spun out of German success stories have on to found While their in Germany, thishave is just 52%Skype, for thefor UK company in Sweden? This lens reveals some differences. 65% ofbuilt the founders that while others built their employee bases ingone afact more distributed waystartup across many different locations. for Denmark. This can be explained byinteresting the that certain companies their talent base by the fact that certain companies built and 50% Sweden and even lower for Denmark. This can be explained spun out of German success stories have gone on to found their startup in Germany, this is just 52% for the UK example, famously was built as a European company with a meaningful presence in multiple cities, such as in50% a more geographically concentrated way can withbeaexplained large share of talent located in one country, andtheir Sweden and even lower for Denmark. This the fact that certainof companies built in one country, talent base in a more geographically concentrated waybywith a large share talent located London and Tallinn. while others built their employee bases in many different their talent base in a more geographically concentrated waydistributed with a large way shareacross of talent located in one locations. country, Skype, for while others built their employee bases in aa more more distributed way across many different while others built their employee bases in a more distributed way across many different locations. Skype, locations. Skype, for example, famously was built as a European company with a meaningful example, famously was built as a European company with a meaningful presence in multiplefor cities, such as example, was as a European companyand withTallinn. a meaningful presence in multiple cities, such as Sharefamously ofand founders (%)built who presence in Tallinn. multiple cities, such as London London 65%

United Kingdom United Kingdom

Germany

Sweden

United Kingdom

SOU RCE:

179

Sweden Netherlands

Sweden

Netherlands

Den

Denmark

Netherlands

Den

05.2

Recycling Talent

Selected programmes to identify, support and invest in next generation European talent The growing depth and liquidity of the operating talent pool in Europe has made it an attractive place to establish programmes that seek to identify and support individuals to make the transition into entrepreneurship and then invest with a talent-first mindset, as pioneered by Entrepreneur First.

Antler Talent Investor

Creative Destruction Lab Fellowship

Entrepreneur First Talent Investor

Heartcore Fellowship

On Deck Fellowship

Zinc Talent Investor

capital Raisedraised $10m+ and by year

L EGEND

L EGEND Raised $5m+ RaisedRaised $10m+$5m+

Raised $10m+

NOTE: All Dealroom.co data excludes the following: NOTE:biotech, secondary transactions, debt, lending capital, grants.the Please also note the All Dealroom.co data excludes following: data excludes Israel. 2020debt, data based on data biotech, secondary transactions, up to September 2020.also note the lending capital, grants. Please NOTE:

Number of repeat-only founders and founding teams

L EGEND

Number of repeat founders by Number of repeat Raised capital raised$5m+ and by yearfounders by

Number of repeat-only Number founders of repeat-only and founding founders teams and founding teams

The growing pool of experienced talent is also evident in the growing numbers of rounds being raised by teams of founders that have prior founding experience over the past ve years. The number of companies The growing experienced talent also evident in the growing numbers ofthat rounds with foundingpool teamofcomposed entirely of is founders with prior founding experienced raised more than being raised by teams of founders that have prior founding experience over the past five $10M in funding in 2020 represented 11.6% of total companies, versus 8.9% in 2016. growing of experienced is alsoinevident in thenumbers growing of rounds being raised by TheThe growing pool pool of experienced talent istalent also evident the growing ofnumbers rounds being raised by years. The number of companies with a founding team composed entirely of of founders teams of founders that have prior experience over the past ve companies teams of founders that havefounding prior founding experience over theyears. pastThe venumber years. The number of companies with prior founding experience that raised more $10Mexperienced in funding in 2020 with founding composed entirelyentirely of founders with priorthan founding that raisedrepresented more with founding team composed of founders with prior founding experienced thatthan raised more than Number ofteam repeat founders by 79 78 $10M in funding in 2020 represented 11.6% of total companies, versus 8.9% in 2016. 11.6% of total companies, versus 8.9% in 2016. capital raised and by year 80 $10M in funding in 2020 represented 11.6% of total companies, versus 8.9% in 2016. 67 79

80 60

81 57

47 57

43 39

60 4048

48 26 40 2026

2016

SOU RCE:

57 47

43 39

2016

2017

2016

SOU RCE:

180

2018 2018

2017

SOU RCE:

data excludes Israel. 2020 data based on data up to All September 2020. data excludes the following: Dealroom.co

biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2020 data based on data up to September 2020.

2019 2019

2018

2020

2019

2020

05.2

Recycling Talent

Selected European startups founded by repeat founders or ex-operators The strength of the new generation of European founders is also playing a role in changing the dynamics of the investor landscape. There are a growing number of examples of talented founding teams that have raised from leading investors at very early stages of development, certainly pre-revenue and often pre-product and with just a very small initial team.

Johanna Gallo and Cyril Pierre, Founders of Aplanet ex-Stubhub, Ontruck

Christian Eggert, Founder of Back ex-Rocket EIR, MiNODES, Bonativo

Adrien Roose and Karim Slaoui, Founders of Cowboy ex-Take Eat Easy

Thomas Dullien, Founder of Optimyze ex-Google

Andrus Purde, Founder of Outfunnel ex-Pipedrive, Skype

Eleanor Crespo and Romain Niccoli, Founders of Pigment ex-Google, Criteo

Tariq Rauf, Founder of Qatalog ex-Transferwise

Nimrod Priell and Jackson Gabbard, Founders of Radical ex-Facebook

Petr Nikolaev and Thomas Paul Mann, Founders of Raycast ex-Facebook, WhatsApp

Alexis Fogel and Krzysztof Dąbrowski, Founders of Stonly ex-Dashlane

Pierre Burgy, Founder of Strapi ex-Checkout.com

Mart Abramov, Founder of TaxScouts ex-Transferwise, Microsoft, Skype

181

05.2

Recycling Talent

An important aspect of the flywheel that powers tech ecosystems is the ability for success stories to generate economic value for founders (and employees) that can - and often is - reinvested back into the ecosystem via means such as angel investment activity, as highlighted in the ‘Angels’ article. A prerequisite is founder equity and so it’s interesting to monitor how this evolves as companies progress multiple funding rounds. As a point Relatedly, it's also interesting to observe the average level of through founder compensation and how this varies between Europe and theitUS. Founders in the have materially higher base salaries and higher incentive pay of comparison, is noteworthy thatUSthe level of founder equity is closely aligned on average at various stagesthe of the journey. between USstartup and Europe at each stage of funding.

L EGEND Base Salary (Europe) Base Salary (United States) Incentive Pay (Europe) Incentive Pay (United States)

Founder base salary and incentives ($)

400,000

Founder base salary ($) by funding round in the 50th percentile by region

300,000

200,000

100,000

0 Europe

United States

Europe

Seed

United States

Europe

Series A

United States

Europe

Series B

United States

Series C

Relatedly, it's also interesting to observe the average level of founder compensation and how this varies between Europe and the US. Founders in the US have materially higher base salaries and higher incentive pay SOU RCE: at various stages of the startup journey. NOTE: Note that at Seed stage some Founders may Founder base salarypay($) by not take a base salary and take incentive instead. Incentive pay is cash bonus or funding round in the 50th incentive, which is not related to equity or equity value. Converted EURby to USD with FX percentile region rate of 1.1867 (27 November 2020).

400,000

GET A L L PAY & EQU IT Y DATA - $ 0

at various stages of the startup journey. Base Salary (United States)

Incentive Pay (United States)

Founder base salary and incentives ($)

L EGEND

L EGEND L EGEND Base Salary (Europe) L EGEND Base Salary (Europe) Base Salary (Europe) Base Salary (United (Europe)States) Base Salary (United States) Base Salary (United States) Incentive Pay(United (Europe) Base Salary States) Incentive Pay (Europe) Incentive Pay (Europe) Incentive Pay (United States) (United States) Incentive Pay (Europe) Incentive Pay (United States)

400,000 400,000

Founder base salary and incentives ($)

Founder salary ($) by Incentivebase Pay (Europe) Founderfunding base salary ($) salary by round in the ($) 50th Founder base Founder base salary ($) by Incentive Pay (United States) by fundingpercentile round in the 50th by region funding the 50th funding roundround in the in 50th percentile by region percentile by region percentile by region

300,000 300,000

200,000 200,000

100,000 100,000

Founder Founder base base salary salary and incentives and incentives Founder ($) ($) base salary and incentives ($)

Relatedly, it's also interesting to observe the average level of founder compensation and how this varies 300,000 Relatedly,Europe it’ss also alsoand interesting to observe observe average level of compensation and Relatedly, interesting to the average level of founder founder compensation and this varies pay between the US. Founders in the the USofhave materially higher base salaries and how higher incentive Relatedly, it's alsoit' interesting to observe the average level founder compensation and how this varies Relatedly, it's also interesting to observe the average level of founder compensation and how this varies how this varies between Europe and the US. Founders in the US have materially higher base L EGEND between thestartup US. Founders in the US have materially higherand base salaries and higher incentive pay at various stages of the journey. between EuropeEurope and the and US. Founders in the US have materially higher base salaries higher incentive pay between Europe and the incentive US. Founders inat the US have materially higher base journey. salaries and higher incentive pay Base Salary (Europe) salaries and higher payjourney. various stages of the startup at various stages of thejourney. startup at various stages of the startup 200,000 400,000 400,000

100,000 300,000 300,000

0 200,000

Europe

200,000

United States

Europe

Seed

United States

Europe

Series A

United States

Europe

Series B

United Stat

Series C

100,000 100,000

SOU RCE: NOTE: Note that at Seed stage some Founders may not take a base salary and take incentive pay instead. Incentive pay is cash bonus or incentive, which is not related to equity or equity value. Converted EUR to USD with FX rate of 1.1867 (27 November 2020). NOTE: NOTE: Note that at Seed stage some Founders may NOTE: Note that at Seedand stage some Founders not take a base salary take incentive pay may not Incentive take a base salary andbonus take incentive pay instead. pay is Seed cash or NOTE: Note that at stage some Founders may instead. Incentive pay is cash bonus incentive, which is not related to equity oror not take ais base salary to and takeorincentive pay incentive, which not related equity equity value. Converted EUR to USD with FX Note thatIncentive at Seed stage some Founders may instead. paytoisUSD cash bonus equity value. Converted2020). EUR with FX or rate of 1.1867 (27 November not take a base and taketoincentive whichsalary is not related equity orpay rate ofincentive, 1.1867 (27 November 2020).

instead. Incentive pay isEUR cashto bonus or FX equity value. Converted USD with incentive, which is not related to equity or rate of 1.1867 (27 November 2020). equity value. Converted EUR to USD with FX rate of 1.1867 (27 November 2020).

0 Europe Europe

Seed 0

United States United States Europe

Seed

Europe

UnitedEurope States

Europe

United States United States Europe

Seed United States

Europe

Series A Series A

Seed - $ 0 GET A L L PAY & EQU IT Y DATA SOU RCE: SOU RCE:

SOU RCE: SOU RCE:

GET A L L PAY & EQU IT Y DATA - $ 0 GET A L L PAY & EQU IT Y DATA - $ 0

182

Europe United States Europe United States Europe States United States Europe Europe United States United United States

Series B

Series B Series AUnited States

Series A

Series C

Europe

Series C Series BUnited States

Series B

Europe

United Stat

Europe

Series C United Stat Series C

05.3

Talent Trends Impact of Covid-19 on the European tech job market Data partner, Indeed, provides interesting insights into tech job trends on a country-by-country basis across Europe. The data explores changes in the relative level of tech job openings, the relative ease or difficulty of filling those roles, and changes in the search volume by potential candidates for tech jobs. The data highlights that the impact of Covid-19 has varied significantly across the region. In certain countries, the impact of Covid-19 led to a contraction in the relative supply of tech jobs and large spikes in search volumes for new jobs, helping to ease the challenge of filling vacant roles for companies that kept roles open and could tap into pools of demand. In other countries, notably in Southern Europe, there are opposing trends visible in the data. Indeed tracks the number of month-by-month open tech job postings relative to total job postings in a Indeed tracks the number of month-by-month open tech job postings relative to total job postings in a country, which serves a useful proxy for changes in tech hiring patterns. In other words, are tech jobs growing country, whichrelative servestoaothers? useful It proxy for changes ininteresting tech hiringlens patterns. other words, areof tech jobs growing or shrinking faster is, therefore, also an to use toInexplore the impact or shrinking relative others? therefore, also an interesting lens to explore Covid-19. What isfaster noticeable across the boardItisis, volatility wild up and down theuse months since inthe Indeed tracks the number ofto month-by-month openwith tech jobswings postings relative tointotal jobtopostings a impact of Covid-19. What is noticeable across the board is volatility with wild swings up and down in the months since March 2020. In some markets, such as Portugal and Ireland, the number of tech job postings spiked massively country, which serves a useful proxy for changes in tech hiring patterns. In other words, are tech jobs growing and Ireland, the numberfrom of tech job postings March In some markets, such Portugal relative to 2020. non-tech jobs, presumably as jobas postings in other sectors disappeared the market due to spiked massively or shrinking faster relative to others? It is, therefore, also an interesting lens to use to explore the impact of more aggressive hiring freezes of tech In others, suchsectors as Sweden, Denmark and, notably, relative to non-tech jobs, outside presumably aspositions. job postings in other disappeared from the market due to Covid-19. What is noticeable across the board isthe volatility with wild swings up and down invariances the months since themore US, tech positions declined in volume relative to broader job market. Also of note are the aggressive hiring freezes outside of tech positions. In others, such as Sweden, Denmark and, notably, March some markets, such as andevolved Ireland, the number of techand job postings spiked massively across countries in how the relative share ofPortugal job postings the intoofthe second the US,2020. tech In positions declined in volume relative to the through broader jobsummer market. Also note are the variances halfrelative of 2020.toWhile tech postings remained at elevated levels in some, in others the relative share of tech jobs non-tech job postings in otherevolved sectors disappeared the market due tosecond more across countries in jobs, how presumably the relative as share of job postings through the from summer and into the started to decline, presumably as moreof non-tech jobs started to come back market. Denmark and, notably, the US, aggressive hiring freezes outside tech positions. In others, such astoSweden,

Tech job postings as % of totalFounder job postings Tech job postings as % of total job postings base salary and incentives ($)

Tech job postings as % of total job postings

half of 2020. While tech postings remained at elevated levels in some, in others the relative share of tech jobs tech positions declined in volumeasrelative to the broader market. started to decline, presumably more non-tech jobs job started to come back to market. DATA SET : SU STA INED INCREA SE IN T ECH J OB SH A RE Share of 'tech' job postings as % Indeed tracks the number of month-by-month open tech job postings relative to total job postings in a of total job postings by country which serves a useful proxy forDATA changes in tech hiring patterns. In other words, are tech jobs growing incountry, the last 12 months SET : SUin STA INEDjob INCREA SE IN T ECH J OB SH A RE Share of 'tech' job postings as % Sustained increase tech share orofshrinking faster relative to others? It is, therefore, also an interesting lens to use to explore the impact of total job postings by country L EGEND Indeed tracks the number of month-by-month tech job postings relative to total job postings in in a the months since Covid-19. is noticeable across theopen board is volatility with wild swings up and down in the lastWhat 12 months Spain country, which serves a useful proxy for changes in tech hiring patterns. In number other words, are tech jobs growing and Ireland, the of tech job postings spiked massively March 2020. In some markets, such as Portugal Belgium or shrinking faster relativejobs, to others? It is, therefore, also an interesting lens to use to explore the impact ofmarket due to 6.0 L EGEND to relative non-tech presumably as job postings in other sectors disappeared from the Portugal Covid-19. What is noticeable theoutside board isof volatility with wild swings up and down the months since and, notably, Spain more aggressive hiringacross freezes tech positions. In others, such asinSweden, Denmark March 2020. some markets, such as Portugal and Ireland, thelevel number of tech job postings spikedand massively Belgium Init' Relatedly, s also interesting to observe the average of founder compensation thisvariances varies the US, tech positions declined in volume relative to sectors the broader job market. Also of notehow are the 6.0in other relativePortugal to non-tech jobs, presumably as job4.0postings disappeared from the market due to between Europe and the US. Founders in the US have materially higher base salaries and higher incentive pay across countries how the relative share of job postings throughDenmark the summer and into the second more aggressive hiringinfreezes outside of tech positions. In others, evolved such as Sweden, and, notably, at various stages of the startup journey. of 2020. While tech postings elevated levels in some, innote others thevariances relative share of tech jobs thehalf US, tech positions declined in volumeremained relative toat the broader job market. Also of are the started to decline, as more jobs started tothe come backand to market. across countries in how presumably the relative share of jobnon-tech postings evolved through summer into the second 400,000 4.0

half of 2020. base Whilesalary tech($) postings remained 2.0 at elevated levels in some, in others the relative share of tech jobs Founder by started to decline, presumably funding round in the 50th as more non-tech jobs started to come back to market. L EGEND of total job postings by country NOTE: in the last months Base12 Salary (Europe) L EGEND

'Tech jobs' included in the search for example: software Base engineer, programmer, application Salary (United States) France developer, L EGEND UI/UX/graphic designer, web Incentive (Europe) developer, frontendPay developer, backend FranceNetherlands developer, data scientist, business Incentive Pay (United States) intelligence, IT support. Italy NOTE: Netherlands Italy UKjobs' included in the search for example: 'Tech

engineer, programmer, application UKsoftware Ireland developer, UI/UX/graphic designer, web

Ireland developer, frontend developer, backend

developer, data scientist, business intelligence, IT support.

DATA SET : VOL AT IL IT Y IN T ECH J OB SH A RE

300,000 0.0 DATA SET : VOL AT2.0 IL IT Y IN T ECH Jan-20 J OB SH A RE Nov-19 Dec-19 Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Volatility in tech job share SOU RCE: 5.0 Tech job postings as % of total job postings

Share of 'tech' job postings as % percentile by region of total job postings by country Share 'tech' in of the lastjob 12 postings months as %

4.0

3.0

2.0

1.0

5.0 200,000 0.0

Nov-19

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

4.0 100,000

3.0

SOU RCE: 0 Europe

2.0

United States

Seed

Europe

United States

Europe

Series A

United States

Europe

Series B

Series

1.0

SOU RCE: NOTE: Note that at Seed stage some Founders may NOTE: NOTE: not take a base salary and take incentive pay 'Tech instead. jobs' included in the pay search for example: Incentive is cash bonus or 'Tech jobs'which included in the search for example: software engineer, programmer, application incentive, is not related to equity or software engineer, programmer, application developer, UI/UX/graphic designer, web equity value. Converted EUR to USD with FX developer, UI/UX/graphic designer, web developer, frontend developer, backend rate of 1.1867 (27 November 2020). developer, data scientist, business developer, frontend developer, backend intelligence, IT support. developer, data scientist, business intelligence, IT support.

0.0

Nov-19

0.0

Dec-19 Nov-19

Jan-20 Apr-20 Mar-20 May-20 Dec-19 Feb-20Jan-20Mar-20 Feb-20

GET A L L PAY & EQU IT Y DATA - $ 0 SOU RCE:

SOU RCE:

183

Jun-20 Apr-20

Jul-20 May-20

Aug-20 Jun-20

Sep-20 Jul-20

Oct-20 Aug-20

Sep-20

Indeed tracks the number of month-by-month open tech job postings relative to total job postings in a

Founder base salary and incentives ($)

Indeed tracks the of month-by-month open tech job postings relative total job postings in a country, which serves anumber useful proxy for changes in tech hiring patterns. In other words, areto tech growing or shrinking faster relative to others? It is, therefore, also an interesting lens to use to explore thejobs impact of country, which serves useful proxy for changes in tech hiring patterns. other words, are tech or shrinking faster relative others? It is, therefore, also with an lens use toIn the impact country, which servestoa aacross usefulthe proxy for ininteresting tech patterns. Inexplore other words, areof tech jobs jobs growing growing Covid-19. What is noticeable board is changes volatility wild hiring swings up to and down in the months since Relatedly, it'issfaster also interesting toPortugal observe the average level ofinteresting founder compensation and how this varies or shrinking relative to others? therefore, also an lens to explore the impact of Covid-19. What noticeable across the boardIt isis, volatility with swings andjob down in to theuse months since March 2020. In some markets, such as and Ireland, thewild number ofup tech postings spiked massively or shrinking faster relative to others? It is, therefore, also an interesting lens to use to explore the impact of 05.3 Talent Trends between Europe and thesuch US. across Founders inboard theIreland, US have materially higher base salaries and higher incentive pay Covid-19. What is noticeable the is volatility with wild swings up and down in the months since March 2020. In some markets, as Portugal and the number of tech job postings spiked massively relative to non-tech jobs, presumably as job postings in other sectors disappeared from the market due to Covid-19. What is noticeable across the board is volatility with wild swings up and down in the months since at various stages of the startup journey. relative to non-tech jobs, presumably as job postings in other sectors disappeared from the market due to and Ireland, the number of tech job postings spiked massively March 2020. In some markets, such as Portugal more aggressive hiring freezes outside of tech positions. In others, such as Sweden, Denmark and, notably, March 2020. In some markets, such as Portugal and Ireland, the number of tech job postings spiked massively more aggressive hiringdeclined freezes outside of relative tech positions. In others, such as Sweden, Denmark and, notably, therelative US, techto positions volume to the broader market. Also disappeared of note are the variances non-tech jobs, presumably as postings in other sectors from the relative to non-tech jobs, in presumably as job job postings injob other sectors disappeared from the market market due due to to 400,000 the US,countries tech positions declined in volume relative to the positions. broader market. of note areinto thethe variances across in how the relative share of jobof postings evolvedjob through theAlso summer and second and, notably, more aggressive hiring freezes outside tech In others, such as Sweden, Denmark more aggressive hiring freezes outside of tech positions. In others, such as Sweden, Denmark and, notably, Founder base salary ($) by Also of note are thethe variances across countries inevolved how the relative share of and job postings evolved through across countries in tech how relative share ofatjob postings through the summer into theofsecond halfthe of 2020. While postings remained elevated levels in some, in others the relative share tech jobs US, tech in volume relative to the broader job market. Also of are the variances funding roundpositions in the 50th declined US, tech positions declined volume relative to tech the broader job market. Also of note note arejobs the variances halfthe of 2020. While tech postings remained atofelevated levels in some, in others the relative share of tech started to decline, presumably as moreinnon-tech jobs started to come back to market. the summer and into the second half 2020. While postings remained at elevated levels in some, across countries in how the relative share of job postings evolved through the summer and into the second percentile by region across countries in how the relative share of job postings evolved through the summer and into the second started to decline, presumably as more non-tech jobs started to come back to market. 300,000 in others the relative share of tech jobs started to decline, presumably as more non-tech jobs started to

half half of of 2020. 2020. While While tech tech postings postings remained remained at at elevated elevated levels levels in in some, some, in in others others the the relative relative share share of of tech tech jobs jobs

DATA SET : SU STA INED INCREA SE IN T ECH J OB SH A RE L EGEND come back to market. Share of 'tech' job postings as % started to decline, presumably more non-tech jobs started to come back started tojob decline, presumably as asDATA more non-tech jobs back to to market. market. SET : SU STA INED DECREA SE started IN T ECH J OBto SHcome A RE of totalof job postings by country Share 'tech' postings as % Base Salary (Europe) in 12postings monthsby country 200,000 of the totallast job Base Salary (United States) in the last 12 months DATA SET : SU STA INED INCREA SE IN T ECH J OB SH A RE

Sustained decrease in tech share DATA SET : SU STA INEDjob DECREA SE IN T ECH J OB SH A RE

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NOTE: Note that at Seed stage some Founders may not take a base salary and take incentive pay NOTE: instead. Incentive pay is cash bonus or which issearch not related to equity or NOTE:incentive, 'Tech jobs' included in the for example: equity value.programmer, Converted EUR to USD with FX software engineer, application 'Tech jobs' included in the search for web example: developer, UI/UX/graphic designer, rate of 1.1867 (27 November 2020).

software engineer, application developer, frontendprogrammer, developer, backend developer, data UI/UX/graphic designer, web developer, scientist, business developer, frontend developer, backend intelligence, IT support. developer, data scientist, business intelligence, NOTE:IT support.

NOTE: 'Tech jobs' included in the search for example: 'Tech jobs'engineer, includedprogrammer, in the search application for example: software software engineer, programmer, application developer, UI/UX/graphic designer, web developer, frontend UI/UX/graphic designer, web developer, developer, backend developer, frontend developer, backend developer, data scientist, business developer, data scientist, business intelligence, IT support. intelligence, IT support.

TechTech job postings job postings as %as of % total of total job postings job postings

Paypostings (United States) of Incentive total job by country L EGEND Spain

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Tech Tech job job postings postings asas %% ofof total total job job postings postings

Share of 'tech' job postings as % Incentive Pay (Europe) of 'tech' job postings as % of total job postings by country in the last 12 months in the last 12 months Denmark Belgium

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State of European Tech 2020 report launch

Photo by: Jussi Hellsten

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05.3

Talent Trends

The success of Talkdesk, Farfetch, Outsystems has inspired more people to create companies, captured the attention of investors that started paying attention to the local ecosystem and helped move the local investment landscape forward. We now have professional investors and independent VC funds like Indico, combining expertise and capital to help these companies scale.

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Portugal has all the ingredients needed to create tech companies besides being a country where people want to live, we have very good technical talent and universities. The limiting factor used to be capital and that changed in the last years.

Cristina Fonseca Indico Capital Partners Partner

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NOTE: 'Tech jobs' included in the search for example: NOTE: software engineer, programmer, application UI/UX/graphic 'Tech developer, jobs' included in the search fordesigner, example: web developer, developer, backend software engineer,frontend programmer, application developer, UI/UX/graphic designer,business web developer, data scientist, NOTE: developer, frontendIT developer, intelligence, support.backend developer, business 'Techdata jobs'scientist, included in the search for example: intelligence, IT support. software engineer, programmer, application developer, UI/UX/graphic designer, web developer, frontend developer, backend developer, data scientist, business intelligence, IT support.

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postings Oct 2018 by country and by year

L EGEND

Tech job postings Tech as % of jobtotal postings job postings as % of total job postings

TechL EGEND job postings per 1M job Octby 2017 Tech job postings 1M job postings country and per by year

Tech job postings as % of total job postings

Indeed’s data also enables an interesting insight into the relative importance of tech as a share of total job postings across countries. While not shedding light on the absolute volume of an tech job postings, it’sinto useful pinpoint countriesof tech as a share of total job Indeed’ s data also enables interesting insight theto relative importance postings across While not shedding lightelevated on the absolute volume of tech job postings, it’s useful to where tech’ s rolecountries. as a driver of the job market has importance. This pinpoint countries where tech’ s role as a driver of the job market has elevated is most notable in Spain and Portugal, where the relative share of tech jobs isimportance. This is most notable in Spain and Portugal, where the relative share of tech jobs is far higher than other European far higher than other European countries. It’s also toimportance observe how Indeed’ s data also enables an interesting insight intointeresting the relative of tech as a share of total job countries. It’of s enables also interesting to observe howthe the impact of theeven pandemic onlyofserved to underline this Indeed’s data also an interesting insight into relative importance of tech ashas a share total job the impact the pandemic has only served to underline given postings across countries. While not shedding light on thethis absolute more, volume of tech job postings, it’s useful to postings across countries. While notjobs shedding light onthe the absolute volume tech job postings, it’s usefulIntothat context, it’s even more, given material share gains for tech jobs relative to job theof overall local job markets. material share gains for tech relative to overall local markets. In that pinpoint countries tech’ s role as aofdriver the job market has elevated importance. is most pinpoint countries wherewhere tech’s role as aisdriver the jobof has elevated importance. This issuch mostasThis interesting tointeresting note how Portugal succeeding inmarket attracting global tech companies, Cloud�are, to context, it’ s to note how Portugal is succeeding in attracting global notable in Spain and Portugal, where the relative share of tech jobs is far higher than other European notable Spaino�ces. and Portugal, wherereasons the relative tech jobs is far than other European openinlocal Cloud�are forshare doingofso included anhigher attractive immigration policy, high standard of tech companies, as Cloudflare, to open local offices. s reasons of Cloudflare’ the has pandemic has to only servedthis to underline this countries. It’s interesting alsosuch interesting to observe how theofimpact countries. It’s also to observe how the impact the pandemic only served underline as key factors in their living, as well as logistical factors such as time zone and direct �ights to San Francisco’ even more, material sharefor gains for jobs tostandard the local job markets. even given material share gains tech jobstech relative torelative thehigh overall localoverall job of markets. In context,Init’that s context, it’s formore, doing sogiven included an attractive immigration policy, living, asthat decision. This is the bar that other tech companies will expect if they are to be tempted to relocate. interesting to note howfactors Portugal is succeeding in attracting globalflights techglobal companies, such as Cloud�are, to Cloud�are, to interesting to note how Portugal succeeding attracting tech companies, well as logistical such asistime zone andindirect to San Francisco’ as such as open locallocal o�ces. reasons for doing sodoing included an attractive immigration policy, high standard of standard of open o�ces. reasons for included attractivewill immigration key factors in Cloud�are theirCloud�are decision. This is the bar thatsoother techan companies expect policy, high living, as well as logistical factors such assuch time as zone andzone directand �ights to San Francisco’ asFrancisco’ key factorsas in their Tech job postings per 1M job living, as well as logistical factors time direct �ights to San key factors in their if theyThis areistothe bebar tempted to tech relocate. decision. thatbyother companies will expect if they are to be tempted to relocate. postings by country and decision. This is the bar year that other tech companies will expect if they are to be tempted to relocate. 6.0

05.3

Talent Trends

150 150

France Netherlands

Spain

France

Portugal

Belgium

Netherlands

France

Portugal

Netherlands

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Portugal NOTE:

140 140 Change Change in 'tin ech' 'tech' jobjob searches searches

Spain Belgium

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Change in share of ‘tech’ job searches by country in the last 12 months, November 2019 rebased to 100

L EGEND

Belgium

150

Change in 'tech' job searches

L EGEND rebased to 100 (Bespoke)

Change in 'tech' job searches

Indeed’s data can be used to perform an analysis of how demand for tech jobs has evolved during 2020 relative to changes in demand amongst overall jobseekers. In other words, are there more or fewer searches for tech jobs conducted as a relative share of overall job searches carried out by jobseekers? For ease of comparison, the data is rebased to November 2019 to allow for a simple analysis across a 12 month timeframe and to see the - Change shareare of 'tech' relative increases in demand. The trends surfaced in the data are not uniform across allIndeed countries, but in there job searches by country in the clear patterns that are replicated across a large number of European markets that provide a12clear indication of 150 months, Indeed - Change inlast share of 'tech' November 2019 how demand for tech jobs boomed from March 2020 onwards. This increase in the relative share could well be rebased 100 (Bespoke) job searches by country into the 150 in tech driven by increased demand from newly-available talent, but most likely last reflects an increased interest 140 12of months, Indeed - Change in share 'tech' November 2019 L EGEND rebased to 100 (Bespoke) due to its perceived position as a Covid-19 beneficiary or relative safe haveninwithin joba searches by country the a challenging job market. Spain 140 months, November 2019has not skyrocketed. 130 Interestingly, Portugal is one of few markets where the last local12demand for tech jobs

100

Nov-2019

Examples of 'tech jobs' included in the search: software engineer, programmer, application NOTE: developer, UI/UX/graphic 90 designer, web Nov-2019 Dec-2019 Jan-2020 developer, frontend Examples of 'tech jobs' included in the search:developer, backend developer, data scientist, business software engineer, programmer, application NOTE: IT support. developer, UI/UX/graphicintelligence, designer, web SOU RCE: developer, Examples of 'tech jobs' included in thefrontend search: developer, backend developer, data scientist, business software engineer, programmer, application intelligence, developer, UI/UX/graphic designer, webIT support. SOU RCE: developer, frontend developer, backend

130 130 120 120 110 110

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developer, data scientist, business intelligence, IT support.

100 100 90 90

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NOTE: of ‘tech jobs’ included in the search: software engineer, programmer, SOUExamples RCE: developer, UI/UX/graphic designer, web developer, frontend SOUapplication RCE: developer, backend developer, data scientist, business intelligence, IT support.

SCANby TO UNLOCK The growth in overall demand for tech jobs is perhaps more visibly noticeable isolating the year-on-year ADDITIONAL DATA change in relative search volume for tech jobs across different countries. This highlights how demand from jobseekers in France and Spain has boomed in the past 12 months, relative to demand for all other non-tech jobs. It also, again, highlights how demand in Portugal has been more muted. 50.0

Change in % of tech job searches Change in % of tech job searches

The growth in more visibly noticeable by isolating the year-on-year Change in share of techdemand jobs The growth in overall overall demandfor fortech techjobs jobsisisperhaps perhaps 43.9% more visibly noticeable by isolating the year-on-year searches per million by country, change in relative search volume for tech jobs across different This highlights how demand from change in relative search volume foris tech jobs across differentcountries. countries. highlights how demand from The growth in to overall demand for tech jobs perhaps more visibly noticeable by isolating theThis year-on-year 40.0 October 2019 October 2020 jobseekers in France and Spain has boomed in the past 12 months, relative to demand for all other non-tech jobseekers in France Spain hasjobs boomed in the past 12 months, relative to demand change in relative searchand volume for tech across different countries. This highlights how demand from for all other non-tech jobseekers France and Spain hashow boomed in the past 12 months,has relative to demand for all other non-tech jobs. It also,inagain, highlights demand ininPortugal been more again, highlights how demand Portugal has29.5% been moremuted. muted. 30.0 jobs. It also, again, highlights how demand in Portugal has been more muted.

NOTE: This data measures the relative number of searches per country for tech related job postings as a share of every million searches onNOTE: the local Indeed site for each country. 'Tech jobs' software engineer, Thisinclude: data measures the relative number of searches per country for tech related job programmer, application developer, etc. postings as a share of every million searches on the local Indeed site for each country. 'Tech jobs' include: software engineer, NOTE: programmer, application developer, etc.

This data measures the relative number of searches per country for tech related job postings as a share of every million searches on the local Indeed site for each country. 'Tech jobs' include: software engineer, programmer, application developer, etc.

50.0

43.9% 40.0 Change in % of tech job searches

Change share tech Change in in share of of tech jobs jobs searches per by country, searches permillion million by country, October 2019 to October 2020 October 2019 to October 2020

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21.5% 20.0 -10.0

18.7%

17.7%

20.8%

20.4% 13.0%

-1. 18.7% 8.6%

France

Spain

Ireland

Germany

Belgium

Netherlands

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0.0Spain

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29.5%

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Germany

Belgium

Netherlands

Sweden

Italy

Portugal

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05.3

Talent Trends

Whilst we have offices in London, Barcelona and Munich, we have seen the most significant transformation occur within the Spanish startup ecosystem in the last couple of years driven by few notable developments. First, the Spanish market has seen an increase in companies maturing with large exits and IPOs, signalling to European investors to look more closely at Spanish opportunities with great potential. Additionally, there is a larger amount of capital available locally - more than ever before - which enables companies to raise Seed and Series A locally first, therefore, making it more appealing and less risky for international investors who feel more comfortable participating at Series B and beyond. What’s more, there is a stronger pool of founder talent, top management and staff stemming from three waves of Spanish entrepreneurship in the past two decades. Each of these waves have strengthened the ecosystem and nurtured startups by supplying invaluable talent.

Jordi Vinas Nauta Capital General Partner

Successful Spanish enterprises have also inspired a new generation of founders with great international track record to return to the region, bringing knowledge, expertise, language skills and the ambition to succeed internationally. Indeed, all these factors have led to the increased interest from international VCs.

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Examples of 'tech jobs' included in the search:

NOTE:software engineer, application developer,

UI/UX/graphic web data Examples of 'tech jobs'designer, included in the developer, search: scientist. Hard to ll is developer, de ned as % of software engineer, application UI/UX/graphic web developer, 'software engineer' job postingsdata on the Indeed NOTE: designer, scientist. Hard ll is than de ned % of site(s) fortomore 60as days. 'software engineer' postings on the Indeed Examples ofjob 'tech jobs' included in the search: site(s)software for more than 60 days. engineer, application developer, UI/UX/graphic designer, web developer, data scientist. Hard to ll is de ned as % of 'software engineer' job postings on the Indeed site(s) for more than 60 days.

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Share of tech jobs (%) that are ofcountry tech jobs hardShare toOct �ll2019 by per(%) yearthat are

% of tech jobs that %are of tech hardjobs to that ll are hard to ll

To complete the dive into the impact of the pandemic in changing supply and demand dynamics for tech jobs, Indeed’s data also provides an interesting proxy for the relative supply-demand balance across countries by measuring the the share of tech jobs that are classi ed as hard to ll as a percentage of total tech jobs. Hard To complete theas dive into thehas impact of theadvertised pandemic on in changing supply dynamics for tech to ll is de ned a job that remained the Indeed site(s)and fordemand more than sixty days. Portugal To complete the into divethe into the impact of the pandemic in supply changing supply and demand dynamics for tech jobs, To complete the dive impact the pandemic in proxy changing andll, demand dynamics forbalance tech jobs, jobs, the Indeed’ s data also of provides an that interesting supply-demand across sees highest share techof jobs are classi edfor as the hardrelative to according to Indeed, followed by the Indeed’ s data also provides an interesting proxy for thesupply-demand relative supply-demand balance across countries by Indeed’s data also provides an the interesting proxy for the relative balance across countries Netherlands Belgium. On the other ofjobs the spectrum, employers posting tech inbyDenmark, countries by and measuring the share ofend tech that are classified as hard to fill as ajobs percentage of the UK measuring theshare the share tech jobs areedclassi to ll as a percentage of total measuring the the of techofjobs that arethat classi as harded toasllhard as a percentage of total tech jobs. Hardtech jobs. Hard and Ireland are least likely to nd their position hard toremained ll. total tech jobs. Hard to fill is defined as a job that has advertised on the Indeed site(s) for ned as that a jobhas that has remained advertised on the Indeed site(s) forsixty more than sixty days.more Portugal to to ll is lldeis de ned as a job remained advertised on the Indeed site(s) for more than days. Portugal than days. Portugal sees the highest of tech that classified asIndeed, hard fill, according sees the sixty highest share of tech that are classi ed as hard ll,hard according Indeed, followed by to the edtoasjobs to are ll,toaccording to followed by the sees the highest share ofjobs tech jobs that areshare classi toShare Indeed, followed by the and Belgium. On the other endtech of posting the employers Netherlands and Belgium. On theNetherlands other of the spectrum, employers posting jobsspectrum, in Denmark, the Netherlands and Belgium. On theend other end of the spectrum, employers tech jobs in UK Denmark, the UK of tech jobs (%) that are 60.0 andand Ireland are least likely to nd their position hard to ll. posting tech jobs in Denmark, the UK and Ireland are least likely to find their position hard to fill. hard to �ll by country per year Ireland are least likely to nd their position hard to ll.

Before Covid-19, European employers seeking to �ll tech jobs had found it increasingly di�cult with growing 05.3 Talent Trends numbers of open positions classifed by Indeed as hard to �ll, in other words that they remained open for longer than six months. In the UK, for example, there had been a 43% increase in the share of tech job vacancies classi�ed as hard to �ll between October 2018 and October 2019. For the year to October 2020, however, this trend has been completely reversed, a 23% decline in the share of tech jobs Before Covid-19, European employers seeking to fillresulting tech jobsinhad found it increasingly difficult with classi�ed as hard to �ll. Similar patterns are repeated in other countries, such as France and the Netherlands. growing numbers of open positions classifed by Indeed as hard to fill, in other words that they remained Before Covid-19, European employers seeking to �ll techin jobs had found it increasingly di�cult with growing Interestingly, thethan reversal has much much less apparent certain markets, such as Portugal, Germany and open for longer six months. In the for example, there been a 43% increase in the share Before Covid-19, European employers seeking toUK, �ll tech jobs hadto found ithad increasingly di�cult withremained growing numbers of open positions classifed by Indeed as hard �ll, in other words that they opentech for jobs. Belgium, which indicate that it remains challenging to �nd the demand to �ll the supply of available numbers of than open positions classifed Indeed astohard tothere �ll, in had other words that they remained open for the of tech job vacancies classified asfor hard fill between October October 2019. For yearjob to longer six months. In theby UK, example, been a2018 43%and increase in the share of tech longer than six months. In the UK, for example, there had been a 43% increase in the share of tech job October 2020, however, this to trend has beenOctober completely resulting in athe 23% decline in the 2020, share vacancies classi�ed as hard �ll between 2018reversed, and October 2019. For year to October vacancies classi�ed as to �ll between 2018 and October 2019. Forin theother year to October 2020, 42.6% inthis share (%)hard ofhas software ofChange tech jobs classified asbeen hard to fill.October Similar patterns are repeated countries, such as France and however, trend completely reversed, resulting in a 23% decline in the share of tech jobs UK however, this trend has been reversed, resulting in a 23% decline in the share of tech jobs engineer job postings thatcompletely are -22.6% the Netherlands. reversal much much less apparentsuch in certain markets, such as classi�ed asto hard to �ll. Similarthe patterns arehas repeated in other countries, as France and the Netherlands. classi�ed �ll.Interestingly, Similar hardas to hard ll, 2018-2019 versuspatterns are repeated in other countries, such as France and the Netherlands. Interestingly, the reversal has much much less apparent in certain markets, such as Portugal, Germany Portugal, Germany and Belgium, which indicate that it remains challenging to find the demand to fill theand Interestingly, the reversal has much much less apparent in certain markets, such as Portugal, Germany and 2019-2020 France Belgium, which indicate that it remains challenging to �nd the demand to �ll the supply of available tech jobs. supply of available tech jobs. challenging to �nd the demand to �ll the supply of available tech jobs. Belgium, which indicate that it remains L EGEND Oct 2018 to Oct 2019

Change in share of software Change in(%) share (%) of software Oct 2019 to Oct 2020 engineer job postings that are that are engineer job postings hard to ll, to 2018-2019 versus versus hard ll, 2018-2019 2019-2020

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Oct 2019 to Oct 2020

54.9% 59.2%

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Denmark

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Oct 2018 to Oct 2019

2018 to Oct 2019 Oct 2019Oct to Oct 2020

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Sweden Netherlands

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United States

Italy United States

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20.9% -9.1%

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Sweden -6.2%

26.2%30.4%

Ireland Sweden

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Italy

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Spain Italy

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Ireland

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Portugal Ireland

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NOTE:

Belgium

%-point change in % of software engineer jobs that are hard to �ll in Oct 2018 versus Oct 2019 and Oct 2019 versus Oct 2020 by country. NOTE: Hard to �ll is de�ned as % of 'software %-pointengineer' change injob % ofpostings softwareon engineer the Indeed site(s) for jobs that are hard �lldays. in Oct 2018 versus Oct more thanto60

2019 and Oct 2019 versus Oct 2020 by country. Hard to �ll is de�ned as % of 'software engineer' job postings on the Indeed site(s) for NOTE: more than 60 days.

%-point change in % of software engineer jobs that are hard to �ll in Oct 2018 versus Oct 2019 and Oct 2019 versus Oct 2020 by country. Hard to �ll is de�ned as % of 'software engineer' job postings on the Indeed site(s) for more than 60 days.

1.6%

34.6%

6.7%

-1.0%

34.6%

Germany

6.7%

52.4%

28.3%

1.6%

SOU RCE:

34.6%

Belgium 6.7%

SOU RCE:

188

43.7%

1.6% 28.3%

Belgium Portugal

52.4%

30.4%

28.3%

Germany Spain -1.0%

Germany

43.7%

52.4%

05.3

Talent Trends

It’s interesting to note that while most countries are ending the year with a declining trend insthe share of to tech jobs that are most ‘hard countries to fill’, thisare onlyending followed further in the months It’ interesting note that while theayear withspike a declining trend in the share of tech of April and May that actually initially exacerbated the trend of recent years. ‘Hard to May fill’ isthat actually initially jobs that are ‘hard to ll’, this only followed a further spike in the months of April and defined as the share of software engineer job postings that have been on the Indeed site fortech job postings It’s exacerbated interesting to note that while most countries are ending thede year with declining in the share of the trend of recent years. 'Hard to ll' is ned asa the sharetrend of software engineer more than 60 to days. jobs thathave are ‘hard thisIndeed only followed a further spike60 in days. the months of April and May that actually initially that been onll’,the site for more than exacerbated the trend of recent years. 'Hard to ll' is de ned as the share of software engineer job postings that have been on the Indeed site for more than 60 days. Share of tech jobs that are hard to �ll by country over last 12 Share of tech jobs that are hard months, rebased to 100

to �ll by country over last 12 months, rebased to 100 L EGEND

L EGENDSpain SpainBelgium Belgium France France

Netherlands

Denmark

Portugal

Germany

Italy Italy US

Nov-19

Nov-19 Dec-19

Dec-19 Jan-20

Jan-20 Mar-20Feb-20 Apr-20 Mar-20 Feb-20 May-20 Apr-20 Jun-20

May-20 Jul-20

Jun-20 Aug-20

Jul-20 Sep-20

Aug-20 Oct-20

Sep-20

IrelandIreland Sweden

Sweden

SOU RCE:

Building locally with an international mindset Europe's billion-dollar companies are more likely to have internationalised by setting up o�ce locations Europe’sofbillion-dollar billion-dollar companies are more likely to internationalised by up outside their home market thanare their counterparts from the US. This is driven, for the most part, by a desire Europe's companies more likely to have have internationalised by setting setting up office o�ce locations locations outside of their home market than their counterparts from the US. This is driven, forpart,and to increase the size ofmarket their addressable market by tapping intoUS. oneThis of the world'sfor most outside of their home than their counterparts from the is driven, theimportant most by alargest desire theincrease most part, by a desire increase themarket size ofinternationalised their addressable market byo�ce tapping into one markets for consumer andto enterprise spending. to the size of their addressable by tapping into one of theup world's most important and largest Europe's billion-dollar companies are more likely to have by setting locations of the s most important andcounterparts largest markets forUS. consumer and enterprise outside of world’ their market thanenterprise their from the This is driven, for the mostspending. part, by a desire markets forhome consumer and spending. to increase the size of their addressable market by tapping into one of the world's most important and largest Share of leading VC-backed markets for consumer and enterprise spending. European and Bay Area tech Share of leading VC-backed companies (%)Bay with an tech European and Area international o ce footprint Share of leading VC-backed companies (%) with an European and Bay Area tech international o ce footprint companies L EGEND(%) with an international o ce footprint

European tech companies

80%

European tech companies

20%

80%

European tech companies

20%

80%

20%

�nternational o�ce location L EGEND

international o�ce location L EGEND�o �nternational o�ce location �nternational o�ce location �o international o�ce location �o international o�ce location

Bay Area tech companies

61%

Bay Area tech companies

61%

Bay Area tech companies

10 20

NOTE:

10 30

39%

20 20 40

30 3050

40 40 60 % of companies

SOU RCE:

NOTE:Based NOTE: on a sample of VC-backed 132

European tech companies and 265 Bay Area

39%

61%

Basedtech on acompanies sample of VC-backed 132 reached Based on a sample VC-backed 132 $B+ thatofand have European tech companies and 265 Bay Area European tech companies andBased 265 Bay milestone, excluding Biotech. onArea data tech companies that and have reached $B+ tech companies that and have reached $B+ up to 30 September 2020. milestone, excluding Biotech. Based on data excluding up to milestone, 30 September 2020. Biotech. Based on data

39%

SOU RCE:

up to 30 September 2020.

189

% of companies 50 70 8060 90 70 % of companies

80 100

110

100

Though there isTrends likely a recency bias to consider given the fact that companies will typically only 05.3 Talent internationalise their o�ce footprint after reaching a certain point in their �ourney, it�s interesting to observe a notable downward trend in terms of the share of younger companies that have internationalised. One possible consideration is that more recent cohorts of companies are now scaling to billion-dollar valuations within their Though there issimply likely abecause recencyofbias consider theopportunities fact that companies home markets theto scale of thegiven market that canwill be typically tapped as tech increasingly moves into gigantic industries, such as �nance or health, that havejourney, the scale only internationalise their office footprint after reaching a certain point in their it’sto enable Though there is likely recency bias towithout consider given the fact that companies will typically only companies to ahuge outcomes the to of internationalise. interesting to to grow observe a notable downward trend inneed terms the share of younger companies internationalise their o�ce footprint after reaching a certain point in their �ourney, it�s interesting to observe a that have internationalised. One possible consideration is that more recent cohorts of Though there is likely trend a recency to consider theof fact that companies will typically 100 notable downward in bias terms of thegiven share younger companies thatonly have internationalised. One possible internationalise their o�ce footprint after reaching a certain point inwithin their �ourney, it�s interesting to observe a companies areis now scaling to billion-dollar theirscaling home markets simply Share of European, VC backed consideration that more recent cohorts ofvaluations companies are now to billion-dollar valuations within their notable downward trend in terms of the share of younger companies that have internationalised. One possible $B+ companies that have because of the scale of the market opportunities that can be tapped as tech increasingly 26%be tapped as tech home markets simply of the scale of are thenow market that can consideration is that morebecause recent cohorts of companies scalingopportunities to billion-dollar valuations within their 42% expanded the US by industries, such as finance or health, 38% moves intotogigantic that have thethat scale to enable home markets simply because of the scale of the market opportunities that can be tapped as tech increasingly as �nance or health, have the scale to enable 75 founding yearmoves into gigantic industries, such increasingly moves intoto such as �nance or need health,to that have the scale to enable companies to grow grow huge industries, outcomes without the internationalise. companies to togigantic huge outcomes without the need to internationalise.

56%

L EGEND

100

Expanded to the United States

Shareof of European, VC VC backed Share European, backed Did not expand to thehave United States $B+ companies that $B+ companies that have expanded to the US by expanded to the US by founding year founding year

Did not expand to the United States

Expanded to the United States

50 26%

26% 42% 74%

38%

38% 62%

56%

Did not expand to the United States 25

74% 58%

2000-2004

2005-2009 74%

2010-2013

44%

62%

NOTE: Based on a sample of 132 European tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data NOTE: up to 30 September 2020.

56% 44%

50 062%

42% 58%

25 % of companies

Expanded to the United States

L EGEND

100

75 % of companies

L EGEND

% of companies

companies to grow to huge outcomes without the need to internationalise.

58%

SOU RCE: 25 2000-2004

2014-2018

2005-2009

2010-2013

2014-2018

44%

SOU RCE:

Based on a sample of 132 European tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data up to 30 September 2020.

NOTE:

2000-2004

2005-2009

2010-2013

SOU RCE:

Based on a sample of 132 European tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data up to 30 September 2020.

The pandemic has offered us a great opportunity to be more inclusive than ever, due to the remote work culture that it reinforces. We all could see and leverage the potential of multi cultural teams across the globe going forward. Our team at Future Females is distributed over 3 countries and 2 continents and we have always seen that as a big advantage. Now this is possible for many more companies and teams. So far I have not seen a lot of change but 2021 will be a completely new year in terms of structuring. We are hoping to see a positive trend of women starting businesses (partly due to COVID implications) and hence changing the landscape of business owners to a more diverse one.

Cordula Pfluegl Future Females Europe Director

Slush 2019 Photo by: Jussi Hellsten

190

2014-2018

Though caveated with an element of recency bias, it's also interesting to observe how younger cohorts of VCbacked $1B+ companies from the Bay Area are less likely to have expanded their o ce footprint into Europe 05.3 Talent Trends versus those founded in earlier years. 100

Share of Bay Area, VC-backed Though caveated with an element element of of recency recency bias, bias, it's it’s also also interesting interesting to to observe observe how how younger younger cohorts of VCThough caveated cohorts of $B+ companies thatwith have an VC-backed $1B+ companies from the Bay Area are less likely to have expanded their office footprint into expanded to Europe by backed companies fromofthe Baybias, Area likelytotoobserve have expanded o of VCce footprint into Europe Though$1B+ caveated with an element recency it'sare alsoless interesting how younger their cohorts 75 founding yearcompanies Europe versus those from founded earlier years. backedthose $1B+ the BayinArea are less likely to have expanded their o ce footprint into versus founded in earlier years. 58%Europe 63%

versus those founded in earlier years.

100

Expanded to Europe Share of Bay Area, VC-backed Share of Bay Area, VC-backed $B+ companies that have $B+ that have Didcompanies not expand to Europe expanded to by by expanded toEurope Europe founding year founding year

Did not expand to Europe

Expanded to Europe

84%

58%

63%

Did not expand to Europe 25

NOTE:

58% 70%

63%

84%

30%

16%

2000-2004

2005-2009

43%

2010-2013

2014-20

30%

SOU RCE:

70%

84%

43%

37%

Based on a sample of 265 US tech companies that have reached $B+ milestone, excluding Biotech NOTE: and Pharma. Based on data up to 30 September 2020.

70%

100

25 % of companies

Expanded to Europe L EGEND

% of companies

L EGEND

% of companies

L EGEND

2000-2004

16%

43%

37%

2005-2009

2010-2013

2014-2018

30%

The top 10 most popular countries for international o�ce locations of European tech scale-ups is dominated SOU RCE: by other European countries, most frequently Germany and the UK. Although companies have been slower to Based on a sample of 265 US tech companies 0 that have reached $B+ milestone, excluding 2000-2004 2005-2009 expand to the US, the large market opportunity presented by the US still means that it ranks by far 2010-2013 number 1 Biotech and Pharma. Based on data up to 30 September 2020. amongst most popular location for international o�ces for European tech scale-ups. Other interesting NOTE: SOUare RCE:high on the list compared to other European markets that are locations such as Singapore and Australia Based on a10 sample of 265 US tech companies The top most popular countries for international locationsabove of European scale-ups is dominated closer It is also worth outoffice Spain Francetech and thescale-ups Netherlands. that top havegeographically. reached $B+ milestone, excluding The 10 most popular countries for pointing international o�ceranking locations of European tech is dominated andEuropean Pharma. Based on data up to 30 most frequently Germany and the UK. Although companies have been slower byBiotech other countries, bySeptember other 2020. European countries, most frequently Germany and the UK. Although companies have been slower to toThe expand thepopular US, the large for market opportunity presented by thetech US scale-ups still means that it ranks by far number top 10 to most countries international o�ce locations of European is dominated United States expand to the US, the large market opportunity presented by the US stillhave means that ittoranks by far number 1 Top 10 most popular countries by other European countries, most frequently Germany andoffices the UK. Although companies been slower 1amongst amongst most popular location for international for European tech scale-ups. Other29%interesting Germany location for international formeans European techbyscale-ups. interesting for international othece locations expand tomost the US,popular large market opportunity presented byo�ces the US still that it ranks far number 1 Other locations such as Singapore and Australia are high onon thethe list compared to other European markets that are of European tech scale-ups that amongst most popular location for international o�ces for European tech scale-ups. Other locations such as Singapore and Australia are high list compared tointeresting other European 29% markets that are United Kingdom list compared to other European markets that are locations such as Singapore and Australia are high on the have internationalised their closer geographically. It is also worth pointing out Spain ranking above France and the Netherlands. closer geographically. It is also worth pointingAustralia out Spain ranking above France and the 25% Netherlands.

16%

2014-20

geographically. It is also worth pointing out Spain ranking above France and the Netherlands. ocloser ce footprint

24%

Singapore

Top10 10most most popular countries Top popular countries international o ce locations forforinternational o ce locations of European tech scale-ups that ofhave European tech scale-ups that internationalised their o ce footprint have internationalised their o ce footprint

United States Spain

United States Germany United Kingdom

29%

Germany Netherlands

Australia

United Kingdom France

Singapore

Australia Italy

Spain

25%

France

20%

France

Canada Brazil

14% companies with o�ce in country % of internationalised

United Kingdom companies that have reached $B+ milestone, Top 10 most popular countries % of internationalised companies with o�ce in country excluding Biotech and Pharma. Based on data up to 30 September 2020. for international o ce locations Australia 15% of Bay Area tech scale-ups that NOTE: SOU RCE: India 14% have internationalised their Meanwhile, English speaking countries take precedence Based on a sample of 132 European tech Meanwhile, English speaking countries precedence Germany companies that have reached $B+ milestone, o ce footprint Meanwhile, English speaking countries take precedence for Bay Area scale-ups as well as 12% India. for Bay Area scale-ups as well astake India. excluding and Pharma.as Based onas data for BayBiotech Area scale-ups well India.

Top most popular countries Top 1010most popular countries for international o ce locations forof international o ce locations Bay Area tech scale-ups that of have Bay internationalised Area tech scale-ups that their o ce footprint have internationalised their o ce footprint

Singapore

Germany Singapore

Netherlands Germany

Canada

Ireland Singapore

Japan

Netherlands Ireland

NOTE: Based on a sample of 265 US tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data up to 30 September 2020.

11%

15%

11% 11%

14%

12%

15 18 11% 13 % of internationalised companies with o ce in country 11%

Netherlands

7% 0

% of internationalised companies with o ce in country

SOU RCE:

11% 10

% of internationalised companies8% with o ce in country

Ireland

Based on a sample of 265 US tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data up to 30 September 2020.

12%

France

SOU RCE:

24%

12% 11%

11%

12%

Canada 0

France

Based on a sample of 265 US tech companies that have reached $B+ milestone, excluding Biotech and Pharma. Based on data up to 30 NOTE: September 2020.

14%

France India

Japan

NOTE:

15%

Japan Australia

India

12%

Canada United Kingdom

Australia

14% 0

United Kingdom

17% 20

Brazil

up to 30 September 2020.

18% % of internationalised companies with o�ce in country

14%

Italy

SOU RCE:

19% 20

14%

NOTE: Meanwhile, English speaking countries take precedence 0 RCE: 5 10 15 SOU Canada Based on Area a samplescale-ups of 132 European tech for Bay as well as India. companies that have reached $B+ milestone, NOTE: Biotech and Pharma. Based on data excluding up Based to 30on September 2020. a sample of 132 European tech

20%

14% 10

17%

24%

14%

18%

Netherlands 0

Italy

25%

17%

19%

Spain Brazil

29%

18%

24%

Singapore Canada

Netherlands

29%

19%

29%

58%

20%

191

05.3

Talent Trends

Europe: a powerhouse technical talent Europe is home to 10 of the world'sfor highest rank universities for computer science globally, including four Europe is 10 of to the10world's highesthighest rank rank ofhome the top 10. Europe istohome of the world's Europe is home to 10 of the world’ s highest rank universities for computer science globally, universities for computer science globally, including four universities for computer science globally, including four University including four of the top 10. of theEurope top 10. of the top 10.to 10 of the world's highest rank is home European universities among 1 University of Oxford universities for50computer science globally, including four global top in computer UniversityUniversity 4 ETH Zurich of thescience top 10.and their global rank universities European European universities among among 1 University 1 University of Oxford of Oxford 6 University of Cambridge top 50 in computer University global topglobal 50 in computer 4 ETH4 Zurich ETH Zurich European universities among science and their global rank science and their global rank 1 University 10 of Oxford Imperial College London global top 50 in computer science and their global rank

Country

Switzerland Switzerland United Kingdom

United Kingdom

University of Cambridge ETH Zurich 14 Technical University of Munich

University of Cambridge

United Kingdom Switzerland United Kingdom Germany

610

10 of Imperial College London University Cambridge Imperial College London

United Kingdom United Kingdom United Kingdom

Imperial London University of Munich 14 College Technical

United Kingdom

École Polytechnique Fédérale de Lausanne

Switzerland

Germany Germany United Kingdom

Technical University of Munich 18 UCL

Technical Munich 16 University ÉcoleofPolytechnique Fédérale de Lausanne

Germany

École Polytechnique Fédérale de Lausanne

Switzerland

UCL

United Kingdom

18 22

Rank refers to position in global list of top 100 institutions for engineering and technology NOTE: quali�cations. Compiled by the Times Higher NOTE: NOTE:Education Supplement and includes 827 Rank refers to position in global Rank refers to position in global list of toplist 100of top 100 across the world. Rank refers to universities position in global list top 100 institutions for engineering and technology institutions for engineering andof technology institutions for engineering and technology quali�cations. Compiled by the Times Higher quali�cations. Compiled by the Times Higher Education Supplement andTimes includes 827 quali�cations. Compiled by the Higher Education Supplement and includes 827 universities across the world. Education Supplement and includes 827 universities across the world. universities across the world.

Country Country Switzerland United Kingdom United Kingdom United Kingdom

6 4

NOTE:

Country

United Kingdom

École de Lausanne 22 Polytechnique UniversityFédérale of Edinburgh

18 UCL45

UCL Paris Sciences et Lettres - PSL Research University Paris

22 University of Edinburgh University of 50 KUEdinburgh Leuven

Switzerland Switzerland United Kingdom United Kingdom United Kingdom France

United Kingdom United Kingdom Belgium

University of Edinburgh

United Kingdom

45 45

Paris Sciences et Lettres PSL Research University Paris Paris Sciences et Lettres - PSL-Research University Paris

France

50 50

KU Leuven KU Leuven

Belgium

Paris Sciences et Lettres - PSL Research University Paris

KU Leuven

France Belgium

SOU RCE:

SOU RCE: SOU RCE: The gender composition of Europe' s leading engineering universities provides a validation that there is a SOU RCE: strong pipeline of engineering talent that are women in excess of current employment level benchmarks in European tech. The gender gender composition of Europe' Europe’ leading engineering universities provides aa validation The composition of ss leading engineering universities provides validation that The gender composition of Europe's leading engineering universities provides a validation that there is there aof womenis(%)a University Country Share that there is a strong pipeline of engineering talent that are women in excess of current strong pipeline of engineering talent that are women in excess of current employment level benchmarks in Share of female students and strong pipeline of engineering talent that are women in excess benchmarks in 2 University of Oxfordof current employment level United Kingdom 46 rank of select European employment level benchmarks in European tech. European tech. European tech. 6 University of Cambridge United Kingdom 47

universities among global top 100 in engineering female students and Share ofShare femaleofstudents and rank ofEuropean select European rank of select universities among global top universities among global top 100 in engineering 100 in engineering

ETH ZurichUniversity University

United Kingdom United Kingdom 46 United Kingdom

46 39

6 University of Cambridge University Cambridge 20 ofÉcole Polytechnique Fédérale de Lausanne

United Kingdom United Kingdom 47 Switzerland

47 29

9 ETH Zurich ETH Zurich 21 Delft University of Technology

Switzerland Switzerland Netherlands 32

32 30

14 Imperial College London Imperial London 24 College Technical University of Munich

United Kingdom United Kingdom 39 Germany

39 36

École Polytechnique Fédérale de Lausanne École20 Polytechnique Fédérale de Lausanne 30 RWTH Aachen University

Switzerland Switzerland 29 Germany

29 32

21 Delft of Technology Delft University ofUniversity Technology 42 UCL

Netherlands Netherlands 30 United Kingdom

30 57

24 University Technical Technical ofUniversity Munich of Munich 46 University of Manchester

Germany

Germany 36 United Kingdom

36 53

RWTH30Aachen University RWTH Aachen University 53 KU Leuven

Germany

32 Germany Belgium

32 50

UCL 42

UCL

Europe is home to 10 of the world's highest rank 63 Technical University of Berlin 46 including University Manchester 46 of University of Manchester universities for computer science globally, four 68 Eindhoven University of Technology of the top 10. 53 KU Leuven 53 KU Leuven 69

European universities among global top 50 in computer science and their global rank

68 4

69 6

70 10

Rank refers to position in global list of top 100 institutions for engineering and technology quali�cations. Includes 1,098 universities NOTE:across the world. Share of females refers to NOTE: share NOTE:of female students attending the Rank refers to position in global list of top 100 university. Rank refers to position in listtechnology top 100 institutions for engineering and Rank refers toglobal position inofglobal list of top 100 institutions for engineering and quali�cations. Compiled bytechnology the Times Higher institutions for engineering and technology Education Supplement and includes 827 quali�cations. Includes 1,098 universities quali�cations. Includes 1,098 universities across of thefemales world. refers to acrossuniversities the world. acrossShare the world. Share of females refers to share of female students attending the share of female students attending the university. university.

Chalmers University of Technology

United Kingdom 57 United Kingdom Germany

57 34

United Kingdom 53 United Kingdom Netherlands

53 n/a

Belgium

Belgium50 Sweden

50 32

34 Country Germany

34 33

Technical ofUniversity Berlin University 63 University Technical of Berlin 70 KTH Royal Institute of Technology

Germany

Eindhoven ofUniversity Technology 68 University Eindhoven of Technology 78 Technical University of Denmark

Netherlands Netherlands n/a Denmark

n/a 31

Chalmers ofUniversity Technology 69 University Chalmers of Technology 86 Karlsruhe Institute of Technology

Sweden

Sweden32 Germany

32 28

KTH Royal of Technology 70 Institute KTH Royal Institute of Technology 93 College University Imperial London of Edinburgh

Sweden

Sweden33

33 60 31 46

University of Oxford

ETH Zurich

University of Cambridge

Sweden

United Kingdom Switzerland

United Kingdom

Kingdom United United Kingdom

Technical ofUniversity Denmark of Denmark Denmark 31 78 University Technical Denmark 94 University Paris Sciences France Technical of Munichet Lettres – PSL Research University Paris Germany

86 16

Karlsruhe Institute of Technology Karlsruhe Institute of Technology École86 Polytechnique Fédérale de Lausanne 97 TU Dresden

Germany

28 Germany Switzerland Germany

28 43

93 18

University Edinburghof Edinburgh UCL 93 ofUniversity 98 Wageningen University & Research

United United Kingdom 60 United Kingdom Kingdom Netherlands

60 54

94 22

Paris Sciences et Lettres – PSL Research University Paris France University of Paris Edinburgh United France Kingdom46 94 Sciences et Lettres – PSL Research University Paris

45 97

Paris Sciences etDresden Lettres - PSL Research University Paris TU Dresden 97 TU

FranceGermany Germany 43

50 98

KU Leuven University & Research Wageningen 98 Wageningen University & Research SOU RCE:

Belgium Netherlands 54 Netherlands

NOTE:

Country Share 32 Country Switzerland Share of women (%)of women (%)

2 University of Oxford University Oxford College 14 ofImperial London

SOU RCE:

SOU RCE: SOU RCE:

192

pool by gender and role pro�le. Looking at the gender composition of software developers in Europe on a country-by-country basis, a number of countries stand out including three from the Nordics region who rank 05.3 across the Talent top 5Trends countries with the highest share of women software developers. On average, there are 3 women software developers for every 10 in Europe. Ukraine

of software developers by It’sShare important to benchmark the gender composition of the European tech workforce. TalentUp, which has Switzerland gender in Europe It' s important to benchmark the gender of the European techsuch workforce. TalentUp, which has reviewed a sample of over 2 million uniquecomposition European tech workers, provides benchmarks across a range It's important to benchmark the gender composition of the European workforce. TalentUp, has Poland reviewed a sample of over 2 million unique European tech tech workers, provides such which benchmarks across a range of different technical enabling better insights intoprovides the distribution of the European technical talent reviewed a sample of over 2positions, million unique European tech workers, such benchmarks across a range France of different technical positions, enabling better insights into the distribution of the European technical talent pool by gender and role profile. Looking at the gender composition of software developers in Europe on a of different positions, enablingLooking better insights into the distribution of of thesoftware Europeandevelopers technical talent pool bytechnical gender and role pro�le. at theGreece gender composition in Europe on a poolcountry-by-country by gender and role pro�le. Looking at the gender composition of software developers in Europe on a stand outout including three from thethe Nordics region who who rankrank country-by-countrybasis, basis,aanumber numberofofcountries countries stand including three from Nordics region Belgium country-by-country basis, a number ofthe countries stand out including three fromdevelopers. the NordicsOn region who rank across the top 5 countries with highest share of women software average, there are 3 across the5 countries top 5 countries the share highest share women software developers. On average, there are 3 Austriaof across the top with thewith highest of women software developers. On average, there are 3 women software developers for every 1010 in in Europe. women software developers for Europe. women software developers for every 10every in Europe. Russia

Germany

ShareShare of software developers by of software developers by gender in Europe gender in Europe

Ukraine

Ukraine Netherlands

Switzerland

Switzerland Romania

Poland

Poland Hungary

France

France Serbia

Greece Belgium

Greece Italy

Austria

Belgium Belarus

Russia

Austria Denmark

Germany

Russia Finland

Netherlands

Germany United Kingdom

Romania

Netherlands Norway

Hungary

Romania Czech Republic

Serbia

Hungary Croatia

Italy

Serbia Bulgaria

Belarus Denmark

Italy Portugal

Finland

Belarus Sweden

United Kingdom

Denmark Spain

Norway

Finland Latvia

Czech Republic United Kingdom

Estonia

Croatia Bulgaria Portugal

Norway Ireland Czech Republic Lithuania Croatia

Sweden

Bulgaria

Spain

% of software developers

Portugal

Latvia

Sweden

Estonia

SOU RCE: Spain Ireland Latvia

Lithuania 0

NOTE:

10 Estonia

Based on a sample of over 2M unique tech workers in Europe. Only countries with over 8,000 software developers included.

REA L DATA ON REA L SA L A RIES Lithuania

SOU RCE:

% of software developers

NOTE: Based on a sample of over 2M unique tech workers in Europe. Only countries with over 8,000 software developers included.

100

% of software developers

Ireland

REA L DATA ON REA L SA L A RIES SOU RCE:

I feel very lucky because everyone on the team is driven by As a woman aware of diversity this same desire to improve the way we produce food. We issues and committed to promote NOTE: all have different backgrounds but each one of us wants it, I also regret having difficulty REA L DATA ON REA L SA L A RIES Based on a sample of over 2M unique tech to improve the society in our own way. It’s very motivating workers in Europe. Only countries with over recruiting women into the team!

8,000 software developers included.

Alexia Rey NeoFarm Founde

for the people who want to join our team. On the other hand, the agricultural sector and the R&D skills required at our stage of development are very specific (agronomy, robotics, mechatronics, etc.). Sometimes it takes a little time to find the perfect match, both interested in our mission, qualified and autonomous. As a woman aware of diversity issues and committed to promote it, I also regret having difficulty recruiting women into the team!

193

L EGEND

Full stack developer

79%

21%

Men 05.3

Women

Talent Trends

Android developer

IOS developer

78%

22%

77%

23%

Diving deeper differences where Diving deeper into into the the gender gendercomposition compositionacross acrosstechnical technicalpositions, positions,there thereare areclear clear differences where women are more equally represented than their men counterpart. The share of UX designers is almost split Diving deeper into the gender composition across technical positions, there are clear differences where PHP developer 76% women are more equally represented than their men counterpart. The share of UX designers is almost split women are more equally represented than their men counterpart. The share of to UX close designers isgap almost split all categories. between men and women, but there’ s still much work to be done the across and women, but there's still much work to be done to close the gap across all categories.

24%

between men and women, but there's still much work to be done to close the gap across all categories. Backend developer

Gendercomposition composition Gender tech position byby tech position L EGEND

L EGEND Men Women Men

Women

Devops engineer

76% 80%

Devops engineer

24% 20%

80%

Java developer

25%

79%

Full stack developer

21%

Full stack developer

79%

Data engineer

Android developer

IOS developer

76%

23%

24%

31% 24%

76% 62%

75%

Java developer

24% 38%

25%

Backend developer

76% 75%

Product manager Java developer

24% 25%

60% 75%

73%

User experience designer Data engineer

27%

69%

Quality assurance engineer

Data scientist

22% 23%

77%

76%

PHP developer

Frontend developer

22%

73%

Data scientist

Data engineer

25%

78% 77%

Frontend developer

Backend developer

21%

75%

78%

IOS developer

PHP developer

20%

75%

40% 25%

27%

57%

43%

69%

38%

Frontend developer

73%

27%

60%

Product manager

25% 90

% of tech workers

62%

Quality assurance engineer

31%

75% 40

40%

SOU RCE: Data scientist

User experience designer

Quality assurance engineer

NOTE: Based on a sample size of over 400k unique tech workers in Europe.

NOTE:

69%

57%

31%

43%

38%

REA L DATA ON REA L SA L A RIES SOU RCE:

Product manager

60%

User experience designer

40%

57%

43%

REA L DATA ON REA L SA L A RIES

Based on a sample size of over 400k unique tech workers in Europe.

50 % of tech workers

SOU RCE:

NOTE:

100

% of tech workers 62%

REA L DATA ON REA L SA L A RIES

Based on a sample size of over 400k unique tech workers in Europe.

Photo by: Tanu Kallio

194

05.3

Talent Trends

10 10 European universities made 50top engineering ranking. They are spread across the UK, Germany, 10 European universities made to 50 ranking. They are spread across the UK, Germany, 10 European universities made ittop to the the top 50 engineering engineering ranking. They are spread across the UK, European universities madeititto to the theit top 50 engineering ranking. They are spread across the UK, Germany, 10 European universities made it to the top 50 engineering ranking. They are spread across the UK, Germany, Switzerland, and the Netherlands. The share of international students across these institutions remains Switzerland, and Netherlands. share ofinternational international students across these institutions remains Germany, andThe the Netherlands. The share of international students across these institutions Switzerland, andthe theSwitzerland, Netherlands. The share of students across these institutions remains Switzerland, and École the Netherlands. TheFédérale share of de international students across these institutions remains above 30%, with Polytechnique Lausanne ranking highest with three in every �ve students above 30%, with École Polytechnique Fédérale de Lausanne ranking highest with three in every �ve students remains above 30%, with École Polytechnique Fédérale de Lausanne ranking highest with three in above 30%, with École Polytechnique Fédérale de Lausanne ranking highest with three in every �ve students aboveinternational. 30%, with École Polytechnique Fédéraleto deattract Lausanne rankingtalent highest with three in every �ve students being The ability for universities and retain is key to strengthen the depth of the every five students being international. The ability for universities to attract and retain talent is key to being international. The for universities toattract attract andretain retain talent strengthen the depth of the being international. Theability ability for universities to and talent is is key to to strengthen the depth of beingecosystem international. The ability for universities to attract and retain talent iskey key to strengthen the depth of the the tech in Europe. strengthen the depth of the tech ecosystem in Europe. tech ecosystem ininEurope. tech ecosystem Europe. tech ecosystem in Europe. University

Europe's universities among Europe's universities among Europe's universities among global top 50 in engineer and Europe's universities among global top 50 inand engineer and share of international students global top 50 in engineer global top 50 inshare engineer and of international students

share internationalstudents students share of of international

22 66 9

42 NOTE: NOTE: Rank refers to position in global list of top 100 institutions forposition engineering quali�cations Rank refers to in global list of top 100 NOTE: (general, electrical and electronic, mechanical institutions for engineering quali�cations and aerospace, civil and chemical mechanical (general, electrical and electronic, NOTE: Rank refers to position in global list of top 100 engineering). Includes 1,098 universities and aerospace, civil and chemical institutions for engineering across the quali�cations world. engineering). Includes 1,098 universities Rank refers to position in electronic, global list of top 100 across the world. (general, electrical and mechanical

Country

University University University

Country Country Country

% international students

%% international students % international students international students

2 University of Oxford United Kingdom United Kingdom United Kingdom United Kingdom 41 6 University of Cambridge United Kingdom 6 University of Cambridge United Kingdom University ofofCambridge United Kingdom University Cambridge United Kingdom 38 9 ETH Zurich Switzerland 9 ETH Zurich Switzerland ETH14ZurichImperial College London Switzerland United Kingdom 40 ETH Zurich Switzerland 14 Imperial College London United Kingdom Imperial London Kingdom 58 20 College École Polytechnique Fédérale de LausanneUnited Switzerland Imperial College London Fédérale de Lausanne United Kingdom 20 École Polytechnique Switzerland 21 Delft University of Technology Netherlands École Polytechnique Fédérale de Lausanne Switzerland 60 École Fédérale de Lausanne Switzerland 21 Polytechnique Delft University of Technology Netherlands 24 Technical University of Munich Germany Delft University of Technology Netherlands 31 24University Technical of Munich Germany Delft ofUniversity Technology Netherlands 30 RWTH Aachen University Germany Technical University of Munich Germany 31 30 RWTH Aachen University Germany Technical University of Munich Germany 42 UCL United Kingdom RWTH Germany 42 Aachen UCL University United Kingdom 23 RWTH University Germany 46 Aachen University of Manchester United Kingdom University of Manchester Kingdom 55 UCL46 UnitedUnited Kingdom 2 University of Oxford University UniversityofofOxford Oxford

UCL

University of Manchester

United Kingdom

41 41 41 38 38 38 40 40 5840 58 60 58 60 31 3160 31 3131 23 23 5531 55 4123 41

55 41

SOU RCE: SOU RCE:

SOU RCE: institutions for engineering quali�cations and aerospace, civil and chemical The strength of the European talent pipeline and the role that its globally competitive education system plays (general, electrical and electronic, mechanical engineering). Includes 1,098 universities SOU RCE: analysis, conducted by Marco Polo, and highlighted in The State of AI andacross aerospace, civil and chemical in feeding it is captured by an interesting the world. engineering). Includes 1,098 universities Report (see link in notes), that shows that 22% of top-tier AI researchers completed their undergraduate across the world.

The strength strength ofpipeline the European talent pipeline and the role that its itsglobally globally competitive education system plays degree in Europe, a European number isrole second tothe China. th of the European talent andthat the that only itsand globally competitive education system plays system The of the talent pipeline role that competitive education plays in feeding it is captured by an interesting analysis, conducted by Marco Polo, and highlighted The of AI feeding it is captured by an interesting conducted byhighlighted Marco Polo, and highlighted t is capturedinby an interesting analysis, conductedanalysis, by Marco Polo, and in The State ofinAITheinState State of AI Report that shows that 22% of top-tier AI researchers completed their undergraduate degree Others: 10.0 % (see link that in notes), that shows that 22% ofAItop-tier AI researchers their undergraduate e link in notes), thathighest shows 22% of top-tier AItop-tier researchers completed theircompleted undergraduate France alsoReport ranks terms of where researchers in Europe work today with 31% of all Where do top-tierboth AI in inresearchers Europe, a come number that is second only to China. degree in Europe, a number that is second only to China. from? Israel: 3.0 % Europe, number that isbased second only toworking China. from France, followed by Germany top tieraAI researchers in Europe with 17% and Switzerland

with 15%.

Iran: 3.0 %

Where do top-tier AI op-tier AI researchers come from? Where do top-tier AI s come from? researchers in Europe work today?

China: 29.0 % Others: 10.0 %

Others: 10.0 %

Canada: 5.0 % Israel: 3.0 %

Israel: 3.0 %

Iran: 3.0 %

India: 8.0 % Canada: 5.0 %

China: 29.0 %

France: 31.0 %

Canada: 5.0 % Others: 37.0 %

India: 8.0 %

India: 8.0 % Europe: 20.0 %

Europe: 20.0 %

SOU RCE:

Europe: 20.0 %

Country a liations are based on the country where the researcher received their SOU RCE: undergraduate degree.

United States: 22.0 %

Germany: 17.0 % Switzerland: 15.0 %

SOU RCE:

NOTE:

United States: 22.0 %

L INK T O T H E F U L L REPORT

SOU RCE:

NOTE:

L INK T O T H E F U L L REPORT Country a liations are based on the country where the researcher received their undergraduate degree. �ountry a�liations are based on the T O T H E F U L L REPORT geographic location of the researchers within L INK T O T H E FLUINK L L REPORT ons are based on the country Europe, not their institution’s headquarters. rcherThe received their UK is not included in Europe.

NOTE:

degree.

195

United States: 22.0 %

05.3

Talent Trends

Europe, however, has a leakage issue when it comes to top-tier talent. While 22% of the world's leading AI researchers studied in Europe, just 14% of them now work in the region. This equates to a leakage equivalent to a third of the relevant talent pool. The biggest bene�ciary of this is the US. While only 20% of top-tier AI has a leakage when it comes to top-tier talent.inWhile 22% world's leading AIUS thanks researchers gained their undergraduate degrees the US, 59%ofofthe them now work to the Europe,issue however, has 22% of in thethe world’ s leading Europe, however, has aa leakage leakageissue issuewhen whenititcomes comestototop-tier top-tiertalent. talent.While While 22% of the world's leading AI strength of the US tech ecosystem in absorbing world-class talent. ed in Europe, just 14% of them now work in the region. This equates to a leakage equivalent AI researchers studied Europe, just 14% themnow now work theregion. region. Thisequates equates toaaleakage leakage equivalent researchers studied in in Europe, just 14% ofof them work ininthe This to levant talent pool. The biggest bene�ciary of this is the US. While only 20% of top-tier AI equivalent to a third of the relevant talent pool. The biggest beneficiary of this is the US. While 20% AI to a third of the relevant talent pool. The biggest bene�ciary of this is the US. While only 20%only of top-tier Others: 10.0 % ncetheir alsoresearchers ranks highest both in terms of where top-tier AI researchers in Europe work today with 31% of ed undergraduate degrees in the US, 59% of them now work in the US thanks to the of top-tier AI researchers gained their undergraduate degrees in the US, 59% of them now work in the USthe Where do top-tier AI their undergraduate degrees in the US, 59% of them now work in the US thanksall gained to tier AI researchers based in Europe working from France, followed by Germany with 17% and Switzerland researchers work today? S tech ecosystem in absorbing world-class talent. world-class thanks toof the strength the US tech in absorbingtalent. world-class talent. strength the US techofecosystem inecosystem absorbing Canada: 6.0 % h 15%. Others: 10.0 %

Others: 10.0 %

Where do top-tier AI I researchers work today? here do top-tier AI oday?

searchers in Europe ork today?

China: Canada: 11.0 % 6.0 %

Canada: 6.0 %

France: 31.0 % Others: 37.0 % China: 11.0 %

China: 11.0 %

United States: 59.0 %

Europe: 14.0 % United States: 59.0 %

United States: 59.0 % Europe: 14.0 %

Europe: 14.0 % SOU RCE:

Germany: 17.0 % Switzerland: 15.0 %

NOTE: �ountry a�liations are based on the headquarters of institutions in which the SOU RCE: researchers currently work.

SOU RCE: L INK T O T H E F U L L REPORT

SOU RCE:

Drilling down into the European talent pool to the country level (though analysis notably has excluded the UK), NOTE: is the biggest source of top-tier European AI research talent based on where they received their France L INK T O T H E F U L L REPORT �ountry a�liations are based on the with 26%, followed TE: undergraduate degree by Germany (15%) and Italy (12%). Interestingly, Belgium makes it headquarters of institutions in which the untry a�liations are based on the into fourth place with 6% ofcountry top-tier European AI talent graduating from the country despite its smaller researchers currently work. the European talent pool to the level (though analysis notably has excluded the UK), L INK T O T H E F U Lto L REPORT Drilling down into the talent country level (though analysis notably has excluded thethe UK), ographic location of the researchers within L INK O T H E F U L L REPORT Drilling down theTEuropean European talentpool pool tothe the country level (though analysis notably has excluded size. into ed onnot the ope, theirrelative institution’ stop-tier headquarters. est source of European AI research talent based on where they received their UK),inFrance the biggest source of top-tier European AI research talent based on where they received se UK in which is not the included Europe. France isfollowed theisbiggest source of top-tier European AI research talent based on where they their gree with 26%, by Germany (15%)followed and Italy (12%). Interestingly, Belgium makes itreceived their undergraduate degree with 26%, by Germany (15%) and Italy (12%). Interestingly, Belgium undergraduate degree with 26%, followed by Germany (15%) and in Italy (12%).work Interestingly, Belgium makes it nce also ranks highest both in terms of where top-tier AI researchers Europe today with 31% of all with 6% makes ofWhere top-tier European AIAIwith talent from theAIcountry despite its smaller top-tier European itdointo fourth place 6%graduating ofEuropean top-tier European talent graduating from the country despite its France: 26.0 % into fourth place with 6% of top-tier AI talent graduating from the country despite its smaller tier AI researchers based in Europe working from France, followed by Germany with 17% and Switzerland researchers come from? smaller relative size. size. h 15%. relative Others: 35.0 %

uropean AIWhere do top-tier European AI here do top-tier AI rom? researchers come from? searchers in Europe ork today?

France: 26.0 %

France: 31.0 %

Others: 35.0 %

France: 26.0 %

Others: 37.0 %

Germany: 15.0 % Spain: 6.0 % Belgium: 6.0 %

Italy: 12.0 % Germany: 15.0 %

Germany: 15.0 % Spain: 6.0 %

Spain: 6.0 % SOU RCE:

Belgium: 6.0 %

Belgium: 6.0 %Switzerland: 15.0 % NOTE: �ountry a�liations are based on where the researchers received their undergraduate degree within Europe. The UK is not included SOU RCE: in Europe.

SOU L INKRCE: T O T H E F U L L REPORT

SOU RCE:

NOTE:

�ountry a�liations are based on where the L INK T O T H E F U L L REPORT researchers received their undergraduate within The UK is not included untry a�liationsdegree are based onEurope. the L INK T O T H E F U L L REPORT Europe. ographic location the researchers within ed on where theinof ope, not their institution’s headquarters.L INK T O T H E F U L L REPORT ndergraduate e UK notincluded included in Europe. UK isis not

TE:

196

Italy: 12.0 %

Germany: Italy: 12.0 % 17.0 %

05.3

Talent Trends

France also ranks highest both in terms of where top-tier AI researchers in Europe work today with 31% of all top tier AI researchers based in Europe working from France, followed by Germany with 17% and Switzerland with 15%.

anks highest both in terms of where top-tier AI researchers in Europe work today with 31% of all France also ranks ranks highest highest bothofin inwhere termstop-tier of where whereAItop-tier top-tier AI researchers researchers inwork Europe work today with 31%of all France alsoFrance ranks highest in terms researchers in Europe today with 31% of all both terms of AI Europe work today with 31% searchers based in also Europeboth working from France, followed by Germany with 17%inand Switzerland Where do top-tier AI

of all topAItier AI researchers in Europe working from France, followed by Germany withand 17% and top tier AI researchers based in Europe working from France, by Germany with 17%with and17% Switzerland top tier researchers basedbased in Europe working fromfollowed France, followed by Germany Switzerland researchers in Europe Switzerland with 15%. with 15%. with 15%. France: 31.0 % work today?

Others: 37.0 %

-tier AI Where Where do top-tier AI do top-tier AI n Europe in Europe researchers inresearchers Europe

France: 31.0 %

work today? work today?

Others: 37.0 %

31.0 % France: 31.0 France: %

Others: 37.0 % Others: 37.0 %

Germany: 17.0 % Switzerland: 15.0 %

SOU RCE:

Switzerland: 15.0 % Switzerland: 15.0 %

Germany: 17.0 % Germany: 17.0 %

Germany: 17.0 %

Switzerland: 15.0 % NOTE: �ountry a�liations are based on the geographic location of the researchers within Europe, not their institution’ s headquarters. SOU RCE: The UK is not included in Europe.

SOU RCE:

SOU RCE: L INK T O T H E F U L L REPORT

NOTE:

�ountry a�liations are based on the L INK T O T H E F U L L REPORT location �ountry a�liationsgeographic are based on the of the researchers within Europe, not their institution’s headquarters. L INK T O T H E F U L L REPORT geographic location of the researchers within are based on the The UK is not included in Europe. Europe, not theirwithin institution’s headquarters. L INK T O T H E F U L L REPORT n of the researchers The UK is not included stitution’s headquarters. in Europe.

ded in Europe.

Although Europe as a bloc has what it takes in terms of a robust expertise of some of the best scientific researchers in the world and a vibrant startup ecosystem, the continent is still lagging behind China and the US in its AI advancements. This is largely because the talent and resources are scattered across the various European countries.

Moojan Asghari Women in AI Co-Founder

At this point, there is no denying the fact that Artificial Intelligence will continue to be a dominant force in how global competitiveness and productivity shapes out. Although Europe as a bloc has what it takes in terms of a robust expertise of some of the best scientific researchers in the world and a vibrant startup ecosystem, the continent is still lagging behind China and the US in its AI advancements. This is largely because the talent and resources are scattered across the various European countries. Thankfully, many European leaders are raising their ambitions to make the region more AI competitive. Creating ethical or ‘trustworthy AI” is a major objective here and I believe this is one area in which Europe will have an advantage over the others because it already has an effective regulatory system. Being someone who works with start-ups, I can say that entrepreneurs in the tech industry especially those who incorporate AI technologies in their operations are well supported, even though there still exist some disparities along gender lines in who gets funding. But generally, Europe is poised to give China and the US a run for their money when it comes to AI and the startup ecosystem will be a significant contributor to the realization of that goal.

197

Diversity & Inclusion

How much attention was paid to building a more diverse and inclusive tech ecosystem?

www.stateofeuropeantech.com

The Black Lives Matter movement shone a spotlight on European tech’s dismal progress on ethnic diversity and while better data is emerging, more is needed at the pan-European level. While many founders found it tough to get funding this year, this is especially true for underrepresented founders. Progress on gender diversity has stalled, while discrimination remains a systemic problem. Covid-19 put the brakes on much needed change, and more action is needed if Europe is to stop squandering talent and value.

198

and support from

06.1

State of Diversity & Inclusion The Ethnicity Data Gap Since 2018, The State of European Tech report has plotted tech’s dismal track record on diversity and inclusion because we believe that European tech will only be able to reach its true potential if diversity and inclusion are at its core. This is a complex topic; diversity is not just about gender, it is also about age, nationality, sexual orientation, socioeconomic backgrounds, neurodiversity and ethnicity. In particular, the Black Lives Matter movement this year gave cause for long-overdue reflection on the systematic exclusion of talent from Black/African/Caribbean, Asian, Hispanic/Latinx, Middle Eastern/North African, and mixed ethnic backgrounds from European tech. We believe that data is key to progress, and a number of outstanding reports mapped Europe’s diversity deficit this year. Those include The Black Report from 10x10, Extend Ventures’ Diversity Beyond Gender Report, and Unconventional Ventures’ Nordic Start-up Funding report.

So far, close to 300 people have taken part and for those who reported their ethnicity, 11% identified as Asian, 4% as Black/ African/Caribbean, 4% as Mixed, 3% as Middle Eastern/North African and 2% as Hispanic/Latinx. This data will slowly allow us to build an accurate picture of the diversity of those who make up the tech industry. With enough representative data, we hope to be able to conduct research on capital flows based on both ethnicity and gender, in different territories, subsectors and funding stages. For this, we need help. Claim your Dealroom profile and update your details, to help build the most comprehensive living dataset on ethnicity and gender in the tech industry.

But very little data exists at a European level. Dealroom started an initiative in September to collect ethnicity data through self-identification.

We are always looking for partners on diversity data, and welcome inbound at research@atomico.com. Looking at the composition of the founder respondents thehelp State of European Techquo survey based on selfWith data, wetocan change the status together! reported ethnicity, 83% of all founders identi�ed as White/Caucasian. Only 2% of all founder respondents selfidenti�ed as Black/African/Caribbean, and none of those respondents raised external capital. Looking the respondents to thethe State of European Tech survey based on on selfAsian Share ofat founder respondents of Looking at the composition composition ofthe thefounder founder respondents to State of European Tech survey based (%) who have raised external self-reported ethnicity, all founders identified as White/Caucasian. Onlybased 2%ofof allfounder founderrespondents respondents selfLooking atethnicity, the composition of respondents to the of European Tech survey onall selfreported 83%83% ofthe alloffounder founders identi�ed asState White/Caucasian. Only 2% Black/African/Caribbean funding self-identi edall founders identi�ed as White/Caucasian. reportedby ethnicity, 83% of Onlyrespondents 2% of all founder respondents self-capital. self-identified as Black/African/Caribbean, and none of those raised external identi�ed as Black/African/Caribbean, and none of those respondents raised external capital. ethnicity identi�ed as Black/African/Caribbean, and none of those respondents raised external capital. Hispanic/Latinx

L EGEND Share of of founder respondents Share founder respondents All who founders (%) have raised external (%) who have raised external funding by self-identi ed Already raised external capital funding ethnicityby self-identi ed Bootstrapped to date ethnicity

Asian

Asian Middle Eastern/North African Black/African/Caribbean

Black/African/Caribbean Mixed/Multiple ethnic groups

Hispanic/Latinx

L EGEND All founders

L EGEND

Already raised external capital

AllBootstrapped founders to date

Hispanic/Latinx White

Middle Eastern/North African

Middle Eastern/North African Mixed/Multiple ethnic groups

Prefer not to say

Already raised external capital

White

Mixed/Multiple ethnic groups 0

Bootstrapped to date

NOTE: Sample sizes across different respondent NOTE: are lower when multiple segmentation groups �lters have been applied, such as job Sample sizes across different respondent function, ethnicity and gender. Please groups are lower when multiple segmentation �lters have been applied, such interpret the data with thisas injob mind.  Numbers function, ethnicity and gender. Please may not add to 100 due to rounding. interpret the data with this in mind.  Numbers

White

100

% of respondents

Prefer not to say

SOU RCE:

50 % of respondents

SOU RCE:

may not add to 100 due to rounding. NOTE:

Sample sizes across different respondent groups are lower when multiple segmentation �lters have been applied, such as job function, ethnicity and gender. Please interpret the data with this in mind.  Numbers may not add to 100 due to rounding.

50 % of respondents

Prefer not to say

SOU RCE:

199

As not come as a surprise that although most founders have found it harder to raise venture 06.1 such, it should State of Diversity & Inclusion capital in Europe in the last 12 months, it is especially true for underrepresented founders. For reference, last year, 31% of underrepresented founders found it harder to fundraise; that number has jumped by an extra 31% this year �ith 62% �nding it more challenging to raise venture capital on average. As such, such, it it it harder toto raise venture As it should should not notcome comeas asaasurprise surprisethat thatalthough althoughmost mostfounders foundershave havefound found harder raise venture capital in Europe in the last 12 months, it is especially true for underrepresented founders. For reference, In your opinion is it easier capital the as last 12 months, it is especially true forfound underrepresented founders. For reference, last As such,init Europe should notincome a surprise that although most Hispanic/Latinx founders have it harder to raise venture or harder to raise last year, 31% ofinventure underrepresented found it harder to fundraise; that number has jumped capital in Europe the last 12 months,founders it is founders especially true for underrepresented founders. For reference, last year, 31% of underrepresented found it harder to fundraise; that number has jumped byby anan extra 31% capital inof Europe than it year, 31% underrepresented founders found it harder to fundraise; that number has jumped by an extra 31% Mixed/Multi Ethnic extra 31% this year with 62% finding it more challenging to raise venture capital on average. this year �ith 62% �nding it more challenging to raise venture capital on average. was 12 months ago? this year �ith 62% �nding it more challenging to raise venture capital on average. L EGEND your opinion is itiseasier InInyour opinion it easier orHarder harder to raise venture orcapital harder to raise venture in Europe than it Unchanged capital in Europe was 12 months ago? than it Easier was 12 months ago? L EGEND

Black/African/Caribbean Hispanic/Latinx

Hispanic/Latinx Asian

Mixed/Multi Ethnic

Mixed/Multi Ethnic Black/African/Caribbean

Middle Eastern/North African

Harder

Black/African/Caribbean

L EGEND

Asian

Unchanged

Harder Easier

Unchanged

White Asian

Middle Eastern/North African

Easier

Middle Eastern/North African

NOTE:

% of founders

White

100

% of founders

Founders respondents only. Numbers may NOTE: not add up to 100 due to rounding. Sample sizes across different respondent Founders respondents only. Numbers maygroups are not add up tomultiple 100 due to segmentation rounding. Sample �lters have lo�er �hen sizesapplied, across different groups are been suchrespondent as job function, ethnicity lo�er �hen multiple segmentation �lters have and gender. been applied, such as job function, ethnicity

White

SOU RCE:

When asked whether they think the European tech ecosystem is fair to people from all demographics, SOU RCE: % of founders backgrounds and experiences, a large share of survey participants disagreed and voiced concerns over and gender. NOTE: inequalities, proving that it is all the more urgent for us to act. While 41% of men respondents believe that Founders respondents only. Numbers may not addopportunity up to 100 due to rounding. Sample equal is available to all, only 19% of women respondents share the same sentiment. Most notably, sizes across different respondent groups are SOU RCE: however, 77% of Black/African/Caribbean participants disagreed to this statement. lo�er �hen multiple segmentation �lters have been applied, suchwhether as job function, ethnicity When asked they think the European tech ecosystem is fair to people from all demographics, and gender. When asked whether they think the European tech ecosystem is fair to people from all demographics, backgrounds and experiences, a large share of survey participants disagreed and voiced concerns over backgrounds and ecosystem experiences, a largetech share of survey disagreed and voiced concerns over The European tech When asked whether they think the European ecosystem is fair participants toAllpeople from all demographics, inequalities, proving that itit the urgent for totoact. 41% ofofmen respondents believe backgrounds and experiences, a is large of survey participants disagreed and voiced concerns over provides equal opportunity inequalities, proving thatfor isall allshare themore more urgent forus us act.While While 41% men respondents believe that Men inequalities, proving that it is all the more urgent for us to act. While 41% of men respondents believe that that equal opportunity is available to all, only 19% of women respondents share the same sentiment. people of all demographics, equal opportunity is available to all, only 19% of women respondents share the same sentiment. Most notably, equal opportunity is available to all, 19% of women respondents share the same disagreed sentiment. Most notably, Women backgrounds, Most notably, however, 77% ofonly Black/African/Caribbean participants to this statement. to this statement. however, 77%and of experiences Black/African/Caribbean participants disagreed however, 77% of Black/African/Caribbean participants disagreed to this statement. White

L EGEND All

The European tech ecosystem Agree The European tech ecosystem provides equal opportunity for Neitherof all provides equal opportunity for people demographics, backgrounds, experiences people of alland demographics, Disagree backgrounds, and experiences

Mixed/Multiple ethnic groups Men Women

Hispanic/Latinx Black/African/Caribbean White

Agree

Neither

Agree Disagree

Mixed/Multiple ethnic groups

Middle Eastern/North African Hispanic/Latinx Asian

Neither Disagree

Asian Women

White

L EGEND

Hispanic/Latinx All

Men

Mixed/Multiple ethnic groups 0

% of respondents Asian

Middle Eastern/North African 0

Black/African/Caribbean

NOTE: All respondents. Numbers may not add up to 100 due to rounding. NOTE:

100

% of respondents

SOU RCE:

Middle Eastern/North African 0

SOU RCE:

All respondents. Numbers may not add up to 100 due to rounding.

NOTE:

Black/African/Caribbean

50 % of respondents

SOU RCE:

All respondents. Numbers may not add up to 100 due to rounding.

200

06.1

State of Diversity & Inclusion

The responses were broken down to examine sentiment by gender and ethnicity at the same time. 86% and 72% of women respondents who self-identi�ed as Black/African/Caribbean and Asian, respectively, don't believe the European tech ecosystem provides equal opportunities for all. Across the board, however, respondents more or less seem to share this view, particularly women respondents. The responses responses were and ethnicity atat the same time. 86% The were broken brokendown downto toexamine examinesentiment sentimentbybygender gender and ethnicity the same time. 86% and and 72% of women respondents who self-identified as Black/African/Caribbean and Asian, respectively, The responses were broken down to examine sentiment by gender and ethnicity at the same time. 86% and 72% of women respondents who self-identi�ed as Black/African/Caribbean and Asian, respectively, don't Share ofthe respondents who Black/African/Caribbean 72% of women respondents who tech self-identi�ed as Black/African/Caribbean and Asian, respectively, don't don’t believe the European ecosystem provides equal opportunities for Across all. Across the board, believe European tech ecosystem provides equal opportunities for all. the board, however, disagree with the statement: believe the European tech ecosystem provides equal opportunities for all. Across the board, however, respondents more or less seem to share this view, particularly women respondents. however, respondents more or less seem to share this view, particularly women respondents. The European tech ecosystem respondents more or less seem to share this view, particularly women respondents. Asian provides equal opportunity for people of all demographics, Share of respondents who Share of respondents Black/African/Caribbean Black/African/Caribbean Mixed/Multiple ethnic groups backgrounds, andwho experiences disagree withwith the statement: disagree the statement: The European tech ecosystem The European tech ecosystem Asian L EGENDequal opportunity for Asian provides Hispanic/Latinx provides equal opportunity for people of all demographics, Women people of all Mixed/Multiple ethnic groups backgrounds, anddemographics, experiences Men Mixed/Multiple ethnic groups backgrounds, and experiences White L EGEND

Women

White

Middle Eastern/North African 0

Sample sizes across different respondent

SOU RCE:

NOTE: groups are lower when multiple segmentation

2041%

41%

63%

41%

63%

40 32%

58% 60

41% 70

%63% of respondents who "disagree" 80

% of respondents who "disagree"

70%

49%

63%

63% 40

% of respondents who "disagree"

SOU RCE:

Sample sizes across different respondent groups are lower when multiple segmentation �lters have been applied, such as job function, ethnicity and gender.

70%

58% 32%

72%

63%

46%

49%

58%

Middle Eastern/North African

NOTE:

�lterssizes have beendifferent applied, such as job Sample across respondent function, ethnicity and gender. groups are lower when multiple segmentation �lters have been applied, such as job function, NOTE:ethnicity and gender.

41%

32%

Men

66%

49% 72%

46%

41%

White

70%

86% 66%

Hispanic/Latinx Middle Eastern/North African

Men

72%

46%

Hispanic/Latinx

LWomen EGEND

66%

2¢

SOU RCE:

In the rst ever quantitative report on diversity beyond gender in Europe, Extend Ve grimmer light on the lack of investments in founders from ethnicities other than Wh for every dollar invested Ethnic communities represent 14% of the UK population but all-ethnic teams receiv in venture capital over capital funding across stages between 2009-2019. the past 10 years has gone to all-ethnic Total capital ($B)teams. raised across 60.0 Furthermore, Black$57.4B women

0.02%

all venture capital stages by ethnicity of funding team in the UK, 2009-2019

founders received even less support

capital funding across stages between 2009-2019. Total capital ($B) ($B) raisedraised acrossacross Total capital capital ($B) raised across allTotal venture capital stages by all venture capital stages by all venture capital stages by ethnicity of funding team in the ethnicity of funding ethnicity of funding team inteam the in the UK, 2009-2019

Capital raised ($B)

0.24%

NOTE:

20.0 60.0

60.0

Capital raised ($B)

withisonly 10 receiving VC funding In the rst ever quantitative report on diversity beyond gender in Europe, Extend Ventures shining an even equating to 0.02% of the total grimmer light on the lack of investments in founders from ethnicities other than White. The Black and Multi40.0 amount invested across the In the first ever quantitative report on diversity Ethnic communities represent 14% of the UK population but all-ethnic teams received 1.58% of all venture 10-year period and none so beyondfunding gender across in Europe, Extend Ventures capital stages between 2009-2019. far raising late-stage is shining an even grimmer light on the lack 20.0 funding. While all ethnic entrepreneurs are ofTotal investments in founders from ethnicities underfunded, Black founders, who capital ($B) raised across 60.0 $57.4B other than capital White.stages The Black and Multirepresent 3.5% of the UK’s population, all venture by are most heavily impacted with only 0.0 ethnicity of funding team in the Ethnic communities represent 14% of the UK All-White 38 Black founders receiving venture UK, 2009-2019 In the rst ever quantitative report on diversity beyond gender in Europe, Extend Ventures is shining an even population but all-ethnic teams received 1.58% capital funding inother the last 10 years, Ingrimmer the rst ever quantitative report on diversity beyond gender in from Europe, Extend Ventures isthan shining an even light on the lack of investments in founders ethnicities White. The Black and Multiofthe all venture capital funding stages representing 0.24% 40.0 ethnicities In rst ever quantitative report onacross diversity beyond gender in Europe, other Extend Ventures isjust shining an even grimmer light on the lack of investments in founders from than White. The Black and MultiSOU RCE: Ethnic communities represent 14% of the UK population but all-ethnic teams received 1.58% of all venture of theThe total sumand grimmer light on the lack of investments in founders from ethnicities otherteams than White. Black Multibetween 2009-2019. Ethnic communities represent 14% of the UK population but all-ethnic received 1.58% of all venture capital funding across stages between 2009-2019. invested. Ethnic communities represent 14% of the UK population but all-ethnic teams received 1.58% of all venture capital funding across stages between 2009-2019. Based on 3,784 entrepreneurs who started 2,002 companies and received venture capital $57.4B investment between 2009 and 2019.

$57.4B

L INK T O T H E F U L L REPORT

$17.0B

40.0

20.020.0

Capital raised ($B)

UK, UK,2009-2019 2009-2019

$1.2B

0.0 40.0

All-White

Mixed

$17.0B

SOU RCE:

$17.0B

20.0

0.0

All-White

NOTE:

NOTE: Based on 3,784 entrepreneurs who started

2,002on companies and received who venture capital Based 3,784 entrepreneurs started investment between 2009 and 2019.

Mixed

All-White

NOTE: Based on 3,784 entrepreneurs who started 2,002 companies and received venture capital investment between 2009 and 2019.

$17.0B $1.2B

0.0

SOU RCE:

All-White

SOU RCE:

L INK T O T H E F U L L REPORT

2,002 companies and received venture capital investment between 2009 and 2019.

NOTE: Based on 3,784 entrepreneurs who started 2,002 companies and received venture capital

Mixed

All-Ethnic

201 L INK T O T H E F U L L REPORT

$1.2B All-Ethnic

$1.2B

L INK T O T H E F U L L REPORT SOU RCE:

All-Ethnic

Mixed

All-Ethnic

06.1

State of Diversity & Inclusion

Ethnicity data is not (yet) available at a European-wide level but given the size of the UK venture market, it Ethnicity data (yet) available at a European-wide level but given size of thethe UK venture Ethnicity dataisisnotnot available European-wide levelthe but given size ofmarket, the UKitventure market, it provides particularly(yet) glaring proofat ofa of the lackdiversity of ethnic diversity inThe European tech. The data challenge is also provides particularly particularly glaring proofproof of theof lack ethnic indiversity European tech. data challenge is also provides glaring the lack of ethnic in European tech. The data challenge is also present across other types of diversity. Over the past few years, Dealroom has taken present across other types of diversity. Over the past few years, Dealroom has taken huge strides forward inhuge strides forward in present across other types of diversity. Over the past few years, Dealroom has taken huge forward in tracking the of play on gender diversity.diversity. The difference men-only teams and mixed/womentracking thestate state of play on gender Thebetween difference between men-only teamsstrides and mixed/womenteams captured 91% of all capital raised and 85% of all rounds in only teams continues to be huge. Men-only tracking thecontinues state of play diversity. teams The difference between men-only only teams to on be gender huge. Men-only captured 91% of all capital teams raisedand andmixed/women-only 85% of all rounds in 2020. teams continues to be huge. Men-only teams captured 91% of all capital raised and 85% of all rounds in 2020. 2020. Share of capital raised and deals

DATA SET : CA PITA L RA ISED

% of capital raised / deals

(%) by founding gender Ethnicity datateam is not (yet) available at a European-wide level but given the size of the UK venture market, it SET : CA PITA L RA ISED Share of capital raised and deals CAPITALDATA RAISED composition provides particularly glaring proof of the lack of ethnic diversity in European tech. The data challenge is also (%) by founding team gender L EGEND 100.0 present across other types of diversity. Over the past few years, Dealroom has taken huge strides forward in composition 90.7% 90.8% 90.3% Men 89.4% tracking the state of play on gender diversity. The difference between men-only 90.3% teams and mixed/womenMixed L EGEND 100.0 only teams continues to be huge. Men-only teams captured 91% of all capital raised and 85% of all rounds in Women 75.0 90.7% 90.3% 90.3% Men 89.4% 2020. Mixed Women

50.0

0.0

Mixedof capital raised and deals Share NOTE: (%) by founding team gender AllWomen Dealroom.co data excludes the following: composition biotech, secondary transactions, debt,

% of capital raised / deals

75.0 Ethnicity data is not (yet) available at a European-wide level but given DATA SET : CA PITA L RAthe ISEDsize of the UK venture market, it Share of capital raised and deals provides particularly glaring proof of the lack of ethnic diversity in European tech. The data challenge is also (%) by founding team gender present across other types of diversity. Over the past few years, Dealroom has taken huge strides forward in 25.0 composition tracking the state of play on gender diversity. The difference between men-only teams and mixed/women50.0 91% of all capital raised and 85% of all rounds in8.2% only teams continues to be huge. Men-only teams captured 8.2% 7.4% 7.1% L EGEND 100.0 2.6% 2.4% 2020. 1.9%

Men

SOU RCE:

DEALS

% of capital raised / deals

DATA SET : DEA L S

lending capital, and grants. Please also note that the data excludes Israel. L EGEND

84.4%

Men Mixed

75.0

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

% of capital raised / deals

Women

NOTE:

50.0

2016

89.4%

1.7%

90.7% 2019

2018

2020

90.8%

90.3%

75.0 8.2%

7.1%

2.4% 0.0

82.7% 2016

50.0

82.3%

1.9% 83.4%

2017

8.2%

7.4%

2.6%

2018

7.5% 1.6%

84.5%

2019

25.0

2.4% 201611.4%

10.3%

2016

7.1%

2017

1.9% 11.2%

5.7% 2018

8.2%

7.4%

2.6%

2017 11.8% 5.8%

5.2%

2018 5.3%

2019

7.5% 1.6%

9.8%

2019 5.6%

2020

SOU RCE: SOU RCE:

lending capital, and grants. Please also note that the data excludes Israel.

We’ve made huge strides on the drive for greater gender Equity, but yet both for women, and other overlooked groups, there are still huge inclusion gaps.

Ashleigh Ainsley Colorintech Co-Founder

1. 2020

SOU RCE:

8.2%

0.0

7.5% 1.6%

25.0

0.0

All Dealroom.co data excludes the following: NOTE: secondary transactions, debt, biotech, lending capital,data andexcludes grants.the Please also note All Dealroom.co following: biotech, secondary transactions, that the data excludes Israel.debt,

90.3%

2017

25.0

NOTE:

90.8%

It’s no surprise to hear that when just 0.24% of VC funding has gone to Black entrepreneurs - as an Extend Ventures report found earlier this year - most respondents recognise the European Tech landscape can do more. We’ve made huge strides on the drive for greater gender Equity, but yet both for women, and other overlooked groups, there are still huge inclusion gaps. We, for example, run an equity free pre accelerator program, Rise, which gets hundreds of applications from founders from diverse backgrounds. We have support from a number of the most progressive firms out there such as Atomico, Google.org and Microsoft, but the entire ecosystem has to do more. There are still too many funds that don’t have diverse investment teams, partnerships with ground roots organisations, or rely on other people to work at the very early stage. You can’t build an ecosystem if you only want to get involved after Series A!”

202

1. 2020

We to &share 06.1 asked founders State of Diversity Inclusionwhether they had raised any form of external capital or whether they had bootstrapped / self- nanced their own company. Amongst survey respondents, 22% of all founders identi ed as women, although comprise of only 16% of founder respondents who have raised external capital. We asked founders totoshare they had raised anyany form of external capital or whether they had Share of founder respondents We asked founders sharewhether whether they had raised form of external capital or whether they had (%) whofounders have raised external We asked to share whether they had raised any form of external capital or whether they had bootstrapped / self-financed their own company. Amongst survey respondents, 22% of all founders identified Man bootstrapped / self- nanced their own company. Amongst survey respondents, 22% of all founders identi funding by self-identi ed their own company. Amongst survey respondents, 22% of all founders identi ed bootstrapped / self- nanced asgender women, although comprise of only 16% of founder respondents who have raised external capital. women, although comprise of only 16% of founder respondents who have raised external capital. as women, although comprise of only 16% of founder respondents who have raised external capital. Woman

Man

83%

66%

76%

16%

Man

32% 3%

L EGEND Woman

Already raised external capital All founders

Woman

Already raised external capital

16% 32% 32%

3% Other

66%

22%

Bootstrapped to date

83%

66%

22%

1% 16%

Other

76% 83%

Bootstrapped to date gender

Bootstrapped to date

22%

L EGEND

Share of founder respondents Share of founder respondents All founders (%) who have raised external (%) who have raised external funding by self-identi edcapital Already raised external funding by self-identi ed gender

founders LAll EGEND

76%

% of founders

3% 3%

Other 0

Last year, there was a very meaningful gap between women and men founders when it came to their ability to SOU RCE: NOTE: 0 10 20 disparity 30 further.40But if it is 50 true that 60 women70 fundraise, and the Covid-19 pandemic threatened to increase this Founders respondents only. % of founders still experience more challenges in raising venture capital than men, the difference is less pronounced when SOU RCE: NOTE: Last year, there was a very meaningful gap between women and men founders when it came to their ability to looking at ethnicity. Founders respondents only. fundraise, and the Covid-19 pandemic threatened to women increaseand thismen disparity further. if it isto true that women Last year, there was a very meaningful gap between founders whenBut it came their ability to Last year, there there was was aa very gap between women and men founders when it it came toto their 100 Last year, very meaningful meaningful gap between women and men founders when came their ability to still experience more challenges in raising venture capital than men, the difference is less pronounced when fundraise, and the Covid-19 pandemic threatened to increase this disparity further. But if it is true that women SOU RCE: NOTE: to fundraise, and the Covid-19 pandemic threatened to increase this disparity further. But if it is ability Is it easier or harder to raise fundraise, and the Covid-19 pandemic threatened to increase this disparity further. But if it is true that women looking at ethnicity. still experience more challenges in raising venture capital than men, the difference is less pronounced when Founders respondents Last year, there was a very meaningful gap between women and men founders whencapital it came to theirmen, abilitythe to difference is venture capital inonly. Europe than it true that women still experience more challenges in capital raising venture than still experience more challenges in raising venture than men, the difference is less pronounced when looking at ethnicity. fundraise, and the Covid-19 pandemic threatened to increase this disparity further. But if it is true that women was 12 months ago? 100 less pronounced when looking at ethnicity. 75 looking at ethnicity. still experience more challenges in raising venture capital than men, the difference is less pronounced when Is it easier or harder to raise looking at ethnicity. L EGEND capital in Europe than it venture Is it easier or harder to raise tocapital raise (2019) was 12 months ago? venture in Europe than it Is itHarder easier or harder to raise

Harder to raise (2019)

(2019) Unchanged (2019) Harder toraise raise (2020) Harder to to (2020) Easier raise (2020) Unchanged (2019) Harder to raise (2020) Unchanged (2020) (2019)

% of founders

Harder to raise (2019) L EGEND Unchanged (2020)

Unchanged (2020)

Unchanged (2019) Easier to raise (2019) (2020)

% of % founders of founders % of founders% of founders

100

Is it easier or harder to raise

L EGEND Harderto toraise raise(2019) (2020) (2019) Easier

100

Harder tocapital raise (2020) was 12 months venture in Europe venture capital in ago? Europe than itthan it L EGEND Unchanged (2019) was 12 months ago? was 12 months ago? L EGEND

% of founders

Easier to raise (2019)

100 75 50 75 75 50 25 50 50 25 0 2019 Survey

Unchanged (2020) Easier to raise (2020) (2019) Easier to raise (2020) (2019) Easier to raise (2020)

2020 Survey

2019 Survey

Women

Setting a magnifying glass on early stage investing, however, shows small signs of positive change. 2020 saw 0 0 Easier to raise (2020) 2019 Survey 2020 Survey 2019 Survey a “record” number of rounds by women who have raised between $10M to $50M. For rounds below $10M, the Women Men 0 Women NOTE: seems to oscillate around 6%. This 2019start Survey 2020 Survey of capital 2019 Survey share isRCE: hopefully the of a broader trend owing across SOU 0 Women Founders respondents only. Numbers may 2019 Survey 2020 Survey 2019 Survey more diverse sets of founders. Figures are bleak at a later stage, however; not one deal over $50M has been not add up to 100 due to rounding. NOTE: SOU RCE: Women closed by a women-only team. Founders respondents only. Numbers may 2019 Survey

2020 Survey

2019 Survey

2020 Survey

Men

2020 Survey

Men

2020 Survey

Men

2020 Survey

Men

NOTE: not add up to 100 due to rounding. SOU RCE: Founders NOTE: respondents only. Numbers may SOU RCE: not add up to 100 due to rounding. Share of deals (%) byNumbers round may NOTE: Founders respondents only. SOU RCE: 6.3% Setting magnifying glass on early stage investing, however, shows small signs of positive change. 2020 saw not add upato 100 due rounding. size and year fortowomen Founders respondents only. Numbers may 5.9%$10M to $50M. For rounds below $10M, the 6.0between anot “record” number of rounds by women who have raised add up to 100 due to rounding. founding team

2019

2020 Share of deals (%) by round Share ofyear deals (%) by round size and for women founding size and team year for women

6.0

% of deals

Setting aa magnifying small signs of of positive change. Setting magnifying glass glasson onearly earlystage stageinvesting, investing,however, however,shows shows small signs positive change. 2020 saw saw number a “record”ofnumber women have raised between $10M to $50M. Forbelow rounds a2020 “record” roundsof byrounds womenbywho havewho raised between $10M to $50M. For rounds $10M, the below $10M, the share seems to oscillate around 6%. This is hopefully the start of a broader trend of share seems to oscillate around 6%. This is hopefully the start of a broader trend of capital owing across share seems to oscillate around 6%. This is hopefully the start of a broader trend of capital owing across more diverse sets of founders. Figures are bleak at a later stage, however; not one deal over $50M has been capital flowing across more diverse sets of founders. Figures are bleak at a later stage, however; not more diverse sets of founders. Figures are bleak at a later stage, however; not one deal over $50M has been L EGEND closed by aawomen-only team. closed byover women-only team. one deal $50M has been closed by a women-only team.

2.4%

5.9%

1.5%

% of deals

3.4%

2.0

4.0 0.0

2.4%

1.5%

$20M-$50M

2.4% 0.0

2.0 <$10M

SOU RCE:

0.0

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt,

0.0%

2.3%

3.4% $10M-$20M

<$10M

NOTE:

biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is annualised based on data to September 2020.

1.5%

4.0

2020

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note NOTE: that the data excludes Israel. 2020 is annualised based data the to September 2020. All Dealroom.co dataon excludes following:

2.3%

2.0 % of deals

2019

6.3% 6.0

L EGEND 2019

3.4%

6.3%

5.9%

founding team L EGEND 2020

4.0

1.5% $50M-$100M

0.0%

0.0% $100M+

1.5%

0.0% <$10M

$10M-$20M

203 SOU RCE:

$20M-$50M

$10

2.3% 0.0%

$10M-$20M

0.0%

$50M-$100M

$20M-$50M

$50M-$100M

0.0%

$10

06.1

State of Diversity & Inclusion

Select VC-backed European startups with women founding teams

Anna von Stackelberg Health / Berlin

Tania Boler FemTech / London

Osnat Michaeli FoodTech / Berlin

Josefin Landgard Health / Stockholm

Chloe Macintosh Marketplace / London

Fiona Canning Fintech / London

Anne Boden Fintech / London

Sofia Pessanha Enterprise Software / Lisbon

Milda Mitkutė Marketplace / Vilnius

Tugce Bulut Enterprise Software / London

Cristina Fonsecaa Enterprise Software / Lisbon

Maria Piechnick Robotics / Dresden

204

countries in Northern Europe, such as Denmark and the Netherlands. 06.1 State(%) of Diversity & Inclusion Share of deals by founding

Denmark

team gender composition and country, 2016-2020

Russia

L EGEND

Netherlands TheMen share of byby country across Europe. Looking The share of rounds rounds raised raisedby bygender-diverse gender-diversefounding foundingteams teamsvaries varies country across Europe. Looking at the The share of rounds raised byof gender-diverse founding teams varies by since country2016, acrossitEurope. Looking at the Mixed at the total distribution deals raised by founding teams is worth noting that countries total distribution of deals raised by founding teams since 2016, it is worth noting that countries from Southern Czech Republic totalWomen distribution of deals raised by founding teams since 2016, it is worth noting that countries from Southern from Southern Europe such asand Portugal, Italy and Spain are performing better in terms of gender diversity Europe such as Portugal, Italy Spain are performing better in terms of gender diversity compared to other Europe such as Portugal, Italy and Spain are performing better in terms of gender diversity compared to other compared toNorthern otherEurope, countries insuch Northern Europe, such asNetherlands. Denmark and the Netherlands. countries inin Northern such as Denmark the Netherlands. countries Europe, as and Denmark and the Poland

Share of deals (%) by founding

Share of deals (%) by and founding team gender composition country, 2016-2020 team gender composition and country, 2016-2020

Denmark

Russia

France Russia

L EGEND Men

Netherlands

L EGEND Mixed Women Men

Mixed Women

Germany Denmark

Czech Republic

Poland

Germany

Finland Netherlands Belgium Czech Republic

Spain Poland

France

Finland

Belgium

Spain

Switzerland Germany Sweden France

United Kingdom Finland

Switzerland

Ireland Belgium Sweden

United Kingdom

Ireland

Portugal Spain Italy Switzerland

Portugal

Sweden

% of deals

Italy

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, NOTE: capital, and grants. Please also note lending that the data excludes Israel. All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

0 United Kingdom 10

100

% of deals

SOU RCE: Ireland SOU RCE:

Portugal

Italy

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel.

Nana Addison CURL Founder and Director

As a Ghanaian-German female founder, living and raised in 50 0 10 20 30 40 Germany, I think the hardest thing is access and being taken % of deals seriously. Often times if you are not already part of a network (which most 1-2 generation immigrant startup founders aren’t) itSOU isRCE: really hard to tap into that. It’s very much like a sorority over here. Secondly since most VC are white, male and 40+ they often don’t understand the ideas, products or opportunities within the Female BIPoC founders community as well as do not understand these markets and their growth/ expansion potential at all.

205

06.1

State of Diversity & Inclusion

Looking at the share of deals by founding team gender composition, the year-on-year trends across select European countries vary. Some countries such as France, Germany, and Sweden are seeing a slow but steady trend in the share of deals by all women founding teams, but his doesn't ring true for others. Looking at the share of deals by founding team gender composition, the year-on-year trends across select European countries vary. Some countries such as France, Germany, and Sweden areselect seeing a slow but steady Looking at the share of by team gender composition, the year-on-year trends across select Looking at the share of deals by founding team gender composition, the year-on-year trends across Looking at the share ofdeals deals byfounding founding team DATA SET : gender SW EDEN composition, the year-on-year trends across select Shareinof deals (%) byof founding European countries vary. Some countries such asfounding France, Germany, and Sweden areFrance seeing aand slow butothers. steady trend the share deals by all women teams, but his doesn't ring true for European countries vary. Some countries such as Sweden (see below), Germany are seeing a steady European countries vary. Some countries such as France, Germany, and Sweden are seeing a slow but team gender composition trend in the share of deals byand all women founding teams, but his doesn't ring true for others. slow but steady trend in the share of deals by all women founding teams, but this doesn’t ring true for others. country trend in the share of deals by all women founding teams, but his doesn't ring true for others. EDEN 84.3% Sweden DATA SET : SW

L EGEND Women

84.3%

Men

Men LMixed EGEND Mixed Women Men Women Mixed

75.0

% of deals

Women

50.0

25.0

SCAN TO UNLOCK ADDITIONAL DATA

84.3% 75.0 50.0

81.5%

80.6%

SOU RCE:

80.6%

82.1%

81.5%

77.3%80.6%

82.1%

81.5%

80.6%

ng:

77.3% 77.3%

50.0 25.0 50.0 9.8%

25.0

2016

SOU RCE:

2016 9.8% 9.8% 2016

10.1%

5.8%

10.1%

5.8%

0.0

All Dealroom.co data excludes the following:

81.5%

84.3%

NOTE:

82.1%

7.7%

9.9%

7.7% 8.4%

2017 2017

5.8% 5.8%

10.1%2018 10.1% 2017

9.9% 11.3%

8.4%

7.7%

2019 9.9%

9.9% 2018

2019

8.4%

2020 11.3%

8.4%

11.3% 2019

0.0

2016 2017 2018 It is also interesting to explore the density of women founders on a relative basis to the general working 2019 All Dealroom.co size data excludes the following:countries. On a population-adjusted basis, Finland, Sweden and Ireland stand out. population of different NOTE: SOU RCE:

biotech, secondary transactions, debt, lending capital, and grants. Please note All Dealroom.co data excludes the also following: that the data excludes Israel. biotech, secondary transactions, debt, lending capital, and grants.per Please also note Number of rounds 1 million that the data excludes Israel.

SOU RCE:

population size of different countries. On a population-adjusted basis, Finland, Sweden and Ireland stand out.

inhabitants.

Number of rounds per 1 million

Number of software developers working women, 2016 to 2020 by country per 1 million inhabitants LEGEND

1-5 6-10 11-15 16-30 31-50 51-70 70+

SCAN TO UNLOCK ADDITIONAL DATA

NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. Labour data from the Worldbank. NOTE: All Dealroom.co data excludes the following: biotech, secondary transactions, debt,

lending capital, and grants. Please also note NOTE:

SOU RCE:

that the data excludes Israel. Labour data

Based on a sample of over 2.6M unique tech from the Worldbank. workers in Europe. National SOU RCE:population estimates obtained from the United Nations World Population Prospects 2020 database.

REA L DATA ON REA L SA L A RIES

206

13.9%

8.0%

8.7%

8.0%

2018 7.7%

11.3% 13.9%

plore theIt density of women founders on a relative basis to the on general working is also interesting to explore the density of of women founders aonrelative basis to the working women, 2016looked to Beyond gender, we also at the overall number of software developers country and found that, on a working It working is also interesting to2020 explore the density women founders aper relative basis togeneral the general nt countries. On a population-adjusted basis, Finland, Sweden and Ireland stand out. population size ofbasis, different countries. Onhave a population-adjusted Finland, Sweden and Ireland stand out. population-adjusted Finland and Ireland the highest number basis, of software developers per 1 million

77.3%

75.0

9.8% 25.0 0.0 0.0

All Dealroom.co data excludes the following: biotech, secondary transactions, debt, biotech, secondary transactions, debt, lending capital, and grants. Please lending capital, and grants. Please also note also note thatthat the data excludes Israel. the data excludes Israel. NOTE:

82.1%

75.0

% of deals

team gender composition and Mixed country L EGEND

DATA SET : SW EDEN

% of deals % of deals

Share of deals (%) by founding

Share of deals (%) by founding L EGEND team gender composition and team gender composition and Share Men of deals (%) by founding country country

2020 13.9% 8.0% 8.0%

8 13.9%

8 2020 2020

The European tech ecosystem provides equal opportunity for people of allState demographics, 06.1 of Diversity & Inclusion backgrounds, and experiences

Physical appearance

Gender

L EGEND Agree

Beyond gender and ethnicity, 70% of those who have been discriminated against because of their socioReligion

andoverwhelmingly ethnicity, 70% 70% of those those who have have Neither gender Beyond of who been discriminated against because of their socioeconomic status also rejected the fairness of the tech ecosystem. Separately, it's worth Disagree noting that 40% of respondents who have not experienced any form of discrimination believe that ecosystem. the socio-economic status also overwhelmingly rejected the fairness of theecosystem. tech Separately, economic status also overwhelmingly rejected the fairness of the tech Separately, it's worth Beyond gender and ethnicity, 70% of those who have been discriminated against because of their sociotech ecosystem provides equal opportunity to all. it’European seconomic worth noting that 40% of respondents who have not experienced any form of discrimination noting that 40% of respondents who have not experienced any form of discrimination believe that the Communication status also overwhelmingly rejected the fairness of thestyle tech ecosystem. Separately, it's worth noting that 40% of respondents who have not experienced any form of discrimination believe that the European tech ecosystem provides equal opportunity to all. believe that the European tech ecosystem provides equal opportunity to all. European tech The European techecosystem ecosystem provides equal opportunity to all. Physical appearance provides equal opportunity for Socio-economic status people of all demographics, The European tech ecosystem The European tech ecosystem backgrounds, and experiences Physical appearance Physical appearance Gender provides equal opportunity for provides equal opportunity for people of all demographics, L EGEND people of all demographics, and experiences backgrounds, Age Agree

backgrounds, and experiences

Gender Religion

LNeither EGEND

Disagree Agree

L EGEND Neither Disagree Agree

Neither Disagree

Gender

Religion Communication style

Language Religion

Communication style Socio-economic status

Education

Socio-economic status

Communication style

Age

Ethnicity

Age

Language

Socio-economic status

Language

Education

Sexual orientation Age

Education

Ethnicity

Nationality

Ethnicity

Language

Sexual orientation

Disability

Sexual orientation

Education

Nationality

Disability

NOTE:

100 due to rounding. Only forms of included. Respondents were to selectwere up discrimination with over 50able respondents to all types of discrimination applicable to up included. Respondents were able to select them. to all types of discrimination applicable to them.

0 0

100

% of respondents

SOU RCE: Sexual orientation

Total capital ($B) raised across all venture capital stages by ethnicity of funding team in the Nationality UK, 2009-2019

SOU RCE: SOU RCE:

60.0

$57.4B

ELITE EDUC ATION AL BACKGROUND Capital raised ($B)

All respondents. Numbers may not add up to 100 due to rounding. Only forms of discrimination with over 50 respondents were NOTE: included. Respondents were able to select up NOTE: Numbers may not add up to toAllallrespondents. types of discrimination applicable to 100All due to rounding.Numbers Only forms respondents. mayofnot add up to them. discrimination with over 50 respondents were

Disability

% of respondents In the rst ever quantitative report on diversity beyond gender in Europe, Extend Ventures is grimmer light on the lack of investments in founders from ethnicities other than White. The B Ethnicity Ethnic communities represent 14% of the UK population but all-ethnic teams received 1.58% 10 20 30 40 50 60 70 80 90 100 capital funding across stages between 2009-2019. % of respondents

40.0

42.7%

Disability If we look at the highest educational attainment of founder respondents to the survey, 84.5% of all founders reported having completed university education (bachelor's degree or higher) while 15.5% have not. 20.0 UK capital over 30 50 at seed 60 70 Furthermore, of the founders who have raised external0capital 10to date,2082.5%ofhave had40ainvested university education % ofwas respondents the past 10 years invested in while 17.5% not. educational attainment of founder respondents If we look athave the highest

founding teams with at least one

NOTE:

member from0.0an elite educational toAll the survey, 84.5% of allupfounders reported having completed If we look atNumbers the highest attainment of founder respondents to the survey, 84.5% of all All-White founders respondents. may not addeducational to background. (Oxford, Cambridge, 100 due to rounding. Only forms of Share of founder respondents university education (bachelor’ s degree or higher) while 15.5% have not. If we look athaving the highest educational attainment education of founder respondents to the survey,or 84.5% of all founders reported completed university (bachelor's degree higher) while 15.5% have not. discrimination with over 50 respondents were Harvard, Stanford). (%) whohaving have raised external SOU RCE:external reported completed education degree or higher) to while 15.5% have not. included. Respondents able touniversity select up who Furthermore, of the founders have raised capital Furthermore, ofwere the founders who have(bachelor's raised external capital todate, date, 82.5% have had a university education funding bydiscrimination educational to all types of applicable to have raised external capital to date, 82.5% have had a university education SOU RCE: Furthermore, of the founders who SOURCE: University educated 82.5% have had a university education while 17.5% have not. them. while 17.5% have not. background while 17.5% have not. L EGEND Share of founder respondents Share of founder respondents (%)All who have raised external founders (%) whobyhave raised external funding educational Already raised external capital background funding by educational Bootstrapped to date background

NOTE:

82.5%

84.5

82.5%

University educated

82.5% 87.8%

No completed university education

All founders

17.5%

15.5%

All foundersto date Bootstrapped

12.2%

17.5%

No completed university education

Bootstrapped to date

0.0

12.2%

15.5% 20.0

10.0

No completed university education

NOTE:

0.0

10.0

30.0

40.0

50.0

30.0

40.0

50.0

60.0

70.0

80.0

70.0

80.0

% of founders

17.5%

20.0

60.0

70.0

80.0

90.0

100.0

% of founders

12.2%

SOU RCE: 0.0

SOU RCE:

10.0

20.0

30.0

40.0

50.0 % of founders

companies. Numbers may not add up to 100 due to rounding.

NOTE: Share of founders who reported having already raised external capital (of any amount) versus reporting having bootstrapped their companies. Numbers may not add up to 100 due to rounding.

84.5

84.5%

15.5%

L EGEND Already raised external capital

Share of founders who reported having NOTE: raised external capital (of any amount) already versus having bootstrapped their Share ofreporting founders who reported having already raised external capital (of not any amount) companies. Numbers may add up to 100 versus having bootstrapped their due toreporting rounding.

Mixed

L INK T O T H E F U L L REPORT

Based on 3,784 entrepreneurs who started 2,002 companies and received venture capital investment between 2009 and 2019.

University educated

L EGEND

Already raised external capital

$17.0B

SOU RCE:

207

60.0

06.2 05.1

Founders

Call to Action Exposing biases There is strong agreement across the European tech and VC community about the importance of creating a more diverse and inclusive industry. The launch of a new diversity ‘standard’ for VC firms in September 2020 by the non-profit organisation Diversity VC aimed at standardising the approach to diversity across the industry and drive meaningful action has been adopted by already by 11 VC firms. The survey includes a number of questions each year to explore the progress made on building a more diverse and inclusive European tech industry in the past 12 months. While many feel better informed and more empowered to take actions towards this goal and /or continue to change their behaviours, it is also clear that for many the industry is a long way from creating equal opportunity for people of all demographics, backgrounds and experiences.

Until we see the change we want to see, we need to look at this as an injection to the DNA, the rewriting of the algorithm, not an add-on for the sake of diversity.

Nora Bavey Unconventional Ventures Partner

We need to understand that [hurdles to underrepresented founders raising capital] are a structural problem. With this I don’t mean that the structures are not working, in fact it is the very opposite. The structures are working exemplary by only benefiting those who define and design the current structures. There isn’t a design error in that sense and the only way we can create better outcomes for those other than the typical funded entrepreneur, the white cis man, is by designing and building new structures. There are existing examples of new types of VC’s and new structures and I am positive that more will follow. Until we see the change we want to see, we need to look at this as an injection to the DNA, the rewriting of the algorithm, not an add-on for the sake of diversity. As a new player in the world of venture I am on the mission to rewrite these algorithms and I believe these will be unconventional.

Progress in building a more diverse, equitable and inclusive European tech ecosystem has been slow. The increased attention on ethnic diversity heightened by the “Black Lives Matters” movement has further Progress in building more diverse, andtoday inclusive European tech ecosystem hasgroups been at the highlighted that the away systems areequitable structured bene�ts certain privileged ethnic slow. Theof increased attention on ethnicimpedes diversitythe heightened Lives Matters” movement expense others and, consequently, progressby ofthe the“Black disadvantaged. These systemic issues Progress in building a more diverse, equitable and inclusive European tech ecosystem has been slow. The Progress in building more diverse, and inclusive European tech hasofbeen slow. Theethnic has further highlighted thattech theequitable way systems are According structured today benefits59% certain privileged exist within the aEuropean ecosystem, too. to our ecosystem survey, Black/African/Caribbean increased attention on ethnic diversity heightened by the “Black Lives Matters”has movement has further increased onhave ethnic heightened by the “Black Livesform Matters” movement further women and men experienced discrimination in some in the last months versus 8%These of White men. groupsattention at the expense ofdiversity others and, consequently, impedes the progress of12 the disadvantaged. highlighted that the way systems are structured today bene�ts certain privileged ethnic groups at the highlighted that the way systems are structured today bene�ts certain privileged ethnic groups at the systemic issues exist within the European tech ecosystem, too. According to our survey, 59% of Black/ expense of others and, consequently, the progress of the disadvantaged. These systemic issues expense of others and, consequently, impedesimpedes the progress of the disadvantaged. These systemic issues 12% form in the last 12 months African/Caribbean women and men have experienced discrimination in some exist within the European tech ecosystem, too. According to our survey, 59% of Black/African/Caribbean All the last months, have you 59% of Black/African/Caribbean existInwithin the12European tech ecosystem, too. According to our survey, 42% versus ofmen White men. experienced any form of experienced women and8% men have experienced discrimination in some form in theform last 12 8% of versus White men. women and have discrimination in some inmonths the lastversus 12 months 8%32%of White men. discrimination while working in the European tech industry? In the months, have you In last the12 last 12 months, have you experienced any form of L EGEND experienced any form of discrimination while working in discrimination while working in Men the European tech industry? theWomen European tech industry?

Asian

12%

Black/African/Caribbean All Asian

32%

20%

Hispanic/Latinx Asian

Sample sizes across different respondent

NOTE:groups are lower when multiple segmentation

�lters are have been applied, such as job Sample sizes across different function, ethnicity andrespondent gender. Please groups are lower when multiple segmentation interpret NOTE: the data with this in mind.

�lters are have been applied, such as job function, ethnicity and gender. Please Sample sizes across different respondent interpret the data with this in mind.

groups are lower when multiple segmentation �lters are have been applied, such as job function, ethnicity and gender. Please interpret the data with this in mind.

SOU RCE:

48% 34% 35%

22%

53%

% of respondents who have experienced discrimination34%

SOU RCE:

208

60 53%

% of34% respondents who have experienced discrimination 8%

53%

35%

% of respondents who have experienced discrimination

SOU RCE:

59% 59%

21%

White

57%

48%

22%

0 Mixed/Multiple ethnic groups 8%

48%

35%

White Middle Eastern/North African

White

59%

21%

Mixed/Multiple ethnic groups

57% 59%

20%22%

Mixed/Multiple ethnic groups Hispanic/Latinx Middle Eastern/North African

NOTE:

32%

20%

Hispanic/Latinx

Men Women

59%

42%

21%

Middle Eastern/North African Black/African/Caribbean

L EGEND Men

59%

42%

Black/African/Caribbean

L EGEND

Women

57% 12%

All

face working in the tech ecosystem. When we asked different respondent groups about the kinds of discrimination they have faced, the split becomes very clearly distinguished. An overwhelming 87% of women are by gender discrimination compared to 26% of men. Men more frequently experience 06.2 challenged Call to Action discrimination pertaining to socio-economic status, nationality and ethnicity than their women counterparts. 26% What kind of discrimination have Gender you experienced? Looking at the data from a gender perspective shines a harsh light into the challenges that men and

Looking at the data from a gender perspective shines a harsh light into the challenges that men and women women working theecosystem. tech ecosystem. When welight asked respondent groups about the kinds Looking atface the data aingender perspective shines a harsh intodifferent the challenges thatgroups men andabout women face working in from the tech When we asked different respondent the 42% kinds of L EGEND Age clearly groups face working in the tech ecosystem. When we asked different respondent about the kinds of of discrimination they have faced, the split becomes very distinguished. An overwhelming 87%87% of of women discrimination they have faced, the split becomes very clearly distinguished. An overwhelming Men 43% discrimination they have faced, the split becomes very clearly distinguished. An overwhelming 87% of women women are challenged by gender discrimination compared to 26% of men. more frequently experience Women are challenged by gender discrimination to 26% of men. MenMen more frequently experience are challenged by gender discrimination comparedcompared to 26% of men. Men more frequently experience 43% discrimination pertaining to socio-economic status, nationality and ethnicity than their women counterparts. ethnicity than their women counterparts. discrimination pertaining to socio-economic status, nationality and discrimination pertaining to socio-economic status, nationality and ethnicity than their women counterparts. Ethnicity 18%

What kind of discrimination have have What kind of discrimination you experienced?

26%

Gender

you experienced?

L EGEND

Women

23%

18%

24%

19%

Physical appearance Nationality

13%

41% 19%

18%

20%23%

24%

14%

18%

16%

12%

Education Language 13%

24%

14%

20%

Socio-economic status

Sexualappearance orientation Physical 12%

Education

13% 10%

Sexual orientation

4% DisabilitySexual orientation 1% 0

SOU RCE:

12%

10 9%

Religion

10%

100

% of respondents

2% 4% 1% 0

% of respondents

NOTE:

% of respondents

Disability

Respondents were able to select up to all types of discrimination applicable to them.

20%

Disability Education 10%

Religion

16%

Religion Socio-economic status

NOTE:

16% 23%

Communication style

Respondents were able to select up to all types of discrimination applicable to them.

43%

14% 18% 41%

Nationality

Physical appearance

43%

18%

Language Ethnicity

Socio-economic Communicationstatus style Language

42%

43%

Ethnicity

NOTE:

42%

Communication style Age

Women Men

87%

19%

Age

LMen EGEND

41%

26%

Nationality Gender

SOU RCE:

Respondents were able to select up to all types of discrimination applicable to them.

Slush 2019 Photo by: Pasi Salminen

209

% of respondents

Language Age of L EGEND different ethnic When we took a closerAgelook into the types What kindgroups. of discrimination have Socio-economic status Nationality Nationality Gender you experienced? ce acrossWhat different ethnic subsets, weexperienced? found that larger shares of kind of discrimination have you Physical appearance Communication style Communication style Ethnicity as White more prominently face ethnic discrimination. 86% of respondents 75 50 Education Language Language Age L EGEND ibbean have faced discrimination due to their ethnicity compared to 12% status of Religion Socio-economic status Socio-economic Nationality Gender hite. Sexual orientation Physical appearance Physical appearance Communication style Ethnicity

% of respondents % of respondents

While it's important to While examine it's important the disparities examine in sentiment the andmore experiences in prominently sentiment across and experi gende respondents who didtonot identify asdisparities White face ethn important to do the same important across to as different doBlack/African/Caribbean the same ethnic across groups. different When ethnic wefaced took groups. adiscrimination closer When lookwe into toot due who identify have discrimination that individuals discrimination face that across individuals different ethnic across subsets, different we found ethnicthat subsets, largerwe sh respondents who identi�ed as face White. 06.2 Call to Action While it's important to examine the disparities in sentiment and experiences across gender groups, it's equally respondents who didrespondents not identify who as White did not more identify prominently as White face more ethnic prominently discrimination. face ethn 86 important to do the same across as different ethnic groups. When wefaced took adiscrimination closer look the types of due to discrimination their ethnicity due co who identify Black/African/Caribbean who identify as Black/African/Caribbean have haveinto faced What kind ofethnic discrimination havewe found that larger shares of discrimination that individuals face across different subsets, respondents who identi�ed respondents as White. who identi�ed as White. youexperiences experienced? across gender groups, it's equally While it's importantrespondents to examine the disparities in sentiment and who did not identify as White more prominently face ethnic discrimination. 86% of respondents important to do thewho same across different ethnic groups. When we tookdiscrimination a closer into the typesethnicity of 75 compared to 12% of identify as Black/African/Caribbean have faced duegroups, to their While it’s important to examine the disparities in sentiment and experiences acrosslook gender L EGEND What kind of discrimination What have kind offound discrimination have shares of discrimination that individuals face across different ethnic subsets, we that larger whoacross identi�ed as White. it’s equally importantrespondents to do the same different ethnic groups. When we took a closer look into Gender you experienced? you experienced? respondents who did not identify as Whiteface moreacross prominently face ethnic discrimination. 86% of respondents Ethnicity subsets, we found that larger the types of discrimination that individuals different ethnic 75 75 of 50 who identify as Black/African/Caribbean have faced discrimination due to their ethnicity compared to 12% Age L EGEND shares of respondentsWhat whokind didofnot identifyL EGEND ashave White more prominently face ethnic discrimination. 86% discrimination respondents who identi�ed as White. Nationality Gender Gender you experienced? of respondents who identify as Black/African/Caribbean have faced discrimination due to their ethnicity e disparities in sentiment and experiences across it's equally Communication style Ethnicity gender groups, Ethnicity compared to 12% of respondents who identified as White. 75 50 50

NOTE: 25 Disability Education Disability 0 Respondents were able to select up to all Religion Religion Socio-economic status Nationality types of discrimination applicable to them. Sample sizes across different respondent Sexual orientation Sexual orientation Physical appearance Communication style groups are lower when multiple segmentation NOTE: NOTE: 25 �lters Disability Disability Education Language 0 are have been applied. Respondents were able to select up to all Respondents were able to select up to all Asian White 75 Religion Socio-economic status types of discrimination applicabletypes to them. of discrimination applicable to them. SOU RCE: Sample sizes across different respondent Sample sizes across different respondent Sexual orientation Physical appearance groups are lower when multiple segmentation groups are lower when multiple segmentation NOTE: �lters0are have been applied. �lters are have been applied. Disability Education Respondents were able to select up to all White Asian Black / African / Religion types of discrimination applicable to them. Caribbean 50 SOU RCE: Sample sizes across different respondent Sexual orientation groups are lower when multiple segmentation NOTE: �lters are have been applied. Disability Respondents were able to select up to all types of discrimination applicable to them. SOU RCE: Sample 25 sizes across different respondent groups are lower when multiple segmentation �lters are have been applied. Language

White

Asian

25 0

Education

% of respondents

Age

Black / African / Caribbean

Hispanic / Latinx

Middle Eastern/North African

White

Asian

White

Asian

White

Black / AfricanAsian / Caribbean

SOU RCE:

Black / African / Caribbean

Hispanic / Latinx

SOU RCE:

Hispanic / Latinx

Middle Eastern/North African

Mixed / Multiple ethnic groups

SOU RCE: NOTE: Respondents were able to select up to all types of discrimination applicable to them. Sample sizes across different respondent groups are lower when multiple segmentation filters are have been applied.

Deborah Okenla YSYS Founder

The impact [of the Black Lives Matter movement] led organisations to face what they had been avoiding for centuries: the fact that racism exists and is prevalent in our workplace, communities, and businesses. Here in the UK, the impact led to organisations embarking on D&I workshops, holding safe space forms, reviewing their process, volunteering with their community and so much more. But importantly, it strengthened the bond and unity between black communities all over the world, from US, to Nigeria, recognising the injustice the black community experiences is happening on a global scale and requires a global response. At YSYS we hosted The Rise of Black Tech Communities event bringing together black community leaders, to reinforce this bond - discussing resilience, strength and activism - turning our pain into power!

210

Middle E A

Mixed / Multiple e groups

When we asked respondents if it is more di�cult for them to be successful in tech because of their 06.2 Call to Action background or identity, it became clear that many demographic groups face this challenge. 72% of respondents that self-identi�ed as Black/African/Caribbean and 52% of respondents that identi�ed as women agreed that their background or identity makes it more challenging for them to be successful. When we inin tech because of of their When we asked asked respondents respondentsififititisismore moredifficult di�cultfor forthem themtotobebesuccessful successful tech because their

Women It is di respondents cult for me if toitbe When wemore asked more di�cult them to be demographic successful in tech because of their background or identity, clear that many face this ofof background identity, itisbecame became clearfor that many demographicgroups groups face thischallenge. challenge.72% 72% successful inor tech because background or identity, it becameof clear that many demographic groups Men face this challenge. 72% of respondents that self-identified as Black/African/Caribbean and 52% of respondents that identified asas women respondents that self-identi�ed as Black/African/Caribbean and 52% respondents that identi�ed my background and/or identity respondents that self-identi�ed as Black/African/Caribbean and 52% of respondents thatof identi�ed as women women agreed that their background identity makes more challenging forto them to be successful. agreed background or identity makes it more challenging for them be successful. agreed thatthat their their background or identity makes itor more challenging for it them to be successful. Black/African/Caribbean

L EGEND Agree

Women

Disagree

Men Eastern/North African Middle Men

It is more di cult for me to be It isNeither more di nor cult forofme to be successful inagree tech because disagree in tech because of identity my successful background and/or

my background and/or identity

L EGEND

Black/African/Caribbean

Mixed/Multiple ethnic groups Black/African/Caribbean Asian

Agree

L EGEND

Neither agree nor disagree

Agree

Middle Eastern/North African

Neither agree nor disagree

Mixed/Multiple ethnic groups

Disagree

Asian Women

Hispanic/Latinx Asian

White Middle Eastern/North African 0

Hispanic/Latinx

% of respondents

Mixed/Multiple ethnic groups

White When asked about the type of discrimination survey respondents experienced in the last 12 months, gender NOTE: Hispanic/Latinx 0 10 30 50 60 70 80 90 and age discrimination are the most often cited with 63%20 and 43% of40our% ofrespondents experiencing this100 respondents Numbers may not add up to 100 due to respectively. Further, almost 1 in 3 respondents experienced discrimination based on their nationality and rounding. Sample sizes across different White NOTE: respondent groups are lower when multiple ethnicity. of respondents who answered this question shared that they have experienced more SOU RCE: Numbers may not addNotably, up to 100 due to 64% segmentation �lters are have been applied, 0 10 20 30 40 50 60 rounding. across ethnicity different and gender. suchSample as jobsizes function, than one type ofmultiple discriminationSOUand almost 40% had experienced discrimination of three different forms or respondent groups are lower when % of respondents Please interpret the data with this in mind. RCE: segmentation �lters are have been applied, such as job function, ethnicity and gender. more.

Please interpret the data with this in mind. NOTE:

Numbers may not add up to 100 due to rounding. Sample sizes across different What kind of discrimination have respondent groups are lower when multiple Gender SOU RCE: segmentation �lters are have been applied, you experienced? suchasked as job function, and gender. When aboutethnicity the type of discrimination survey respondents experienced in the Please interpret the data with this in mind.

When asked about the type of discrimination survey respondents experienced in the last 12 months, gender When asked about the type of discrimination survey respondents experienced in the last 12 months, gender and and age discrimination are the most often cited with 63% and 43% of our experiencing this lastrespondents 12 months, gender age discrimination are the most often cited with 63% and 43% of our respondents experiencing respectively. respectively. Further, almost in 3 cited respondents experienced discrimination based on theirthis nationality and and age discrimination are the most 1often with 63% and 43% of our respondents experiencing this Further, almost 1 in 3 respondents experienced discrimination based on their nationality and ethnicity. Notably, respectively. Further, almost 1 inrespondents 3 respondents experienced discrimination based on their nationality Age this question 43% ethnicity. Notably, 64% of who answered shared that theyand have experienced more ethnicity. Notably, 64% ofwho respondents who answered this question shared they have experienced moredifferent 64% of respondents answered this question shared that they that havediscrimination experienced more than one type of of three forms or than one type of discrimination and almost 40% had experienced than one type of discrimination and almost 40% had experienced discrimination ofdifferent three different or discrimination and almost 40% had experienced discrimination of three formsforms or more. more. more. What kind of discrimination have have What kind of discrimination you experienced? you experienced?

Gender

Nationality

28%

Gender Ethnicity

28%

Age

28%

Nationality Language 28%

Ethnicity Physical appearance Communication style

20%

Communication style

Socio-economic status Language

Physical appearance

Language Education

14%

Education

20%

18%

12%

Physical appearance Sexual orientation

28%

14%

12%

18%

Socio-economic status

14%

Socio-economic status Religion Sexual orientation

12%

Education Disability

Religion

Sexual orientation

Disability

Respondents were able to select up to all types of discrimination applicable to them.

28%

18%

Ethnicity

Respondents were able to select up to all types of discrimination applicable to them. NOTE:

43%

20%

Nationality

% of respondents

Religion

NOTE:

63%

43%

Age Communication style

% of respondents

SOU RCE: SOU RCE:

Disability

211

40 % of respondents

Drilling down further into age, respondent groups between the ages of 31-40 experience the most 06.2 Call to Action discrimination. Of the 31% of respondents aged <30 years old, 47% have experienced age discrimination. 31% Age groups of respondents <30 years experiencing discrimination Drilling down further into age, groups between the ofof31-40 experience the most Drilling down further intorespondent age,respondent respondent groupsthe between theages ages 31-40 experience the most Drilling down further into age, groups between ages of 31-40 experience the most 40% Of the 31% of respondents aged <30 years old, 47% have experienced age discrimination. discrimination. Of the 31% of respondents aged <30 years old, 47% have experienced age discrimination. L EGEND discrimination. Of the 31% of respondents aged <30 years31 old, have experienced age discrimination. Between and 4047% years old 35%

All respondents Respondents who have faced age Age groups of respondents Age groups of respondents discrimination experiencing discrimination

LAllEGEND respondents Respondents who have faced age All respondents discrimination

Respondents who have faced age discrimination

20%

31%

<30 years 41 and 50 years old Between <30 years

experiencing discrimination

L EGEND

31% 47%

Between 31 51 and and 40 60 years years old old Between

40%

35%

years old old Between 41 and61+ 50 years

60%

35%

20%

Between 41 and 50 years old

44% 47%

40%

Between 31 and 40 years old

44%

20%

10 8%

Between 51 and 1%60 years old

60%

61+ years old

60 60%

60% 0

61+ years old

% of respondents

SOU RCE: 0

60%

% of respondents

SOU RCE:

Sample sizes across different respondent groups are lower when multiple segmentation �lters are have been applied, such as job function, ethnicity and gender. Please interpret the data with this in mind.

% of respondents

NOTE: Sample sizes across different respondent groups are lower when multiple segmentation �lters are have been applied, such as job NOTE: function, ethnicity and gender. Please Sample sizes the across different respondent interpret data with this in mind.

60%

44%

Between 51 and 60 years old

groups are lower when multiple segmentation �lters are have been applied, such as job function, NOTE:ethnicity and gender. Please interpret the data with this in mind.

47%

SOU RCE:

Call to Action

Respondents were asked to review a number of statements and select the ones which they felt meaningfully changed, whether in a positive or negative way if at all. Respondents were overall more positive about the steps taken towere increase gender diversity in theof butand less positive progress made on Respondents were asked to review review aa number statements select the ones they Respondents asked to number ofworkplace statements and select the around ones which which they felt meaningfully diversifying the ethnic makeup of their organisation. felt meaningfully changed, whether in a positive negative way if at were all. Respondents were changed, whether into a positive or negative way ifor atand all. select Respondents positive about the Respondents were asked review a number of statements the ones whichoverall they feltmore meaningfully overall more positive about the steps taken to increase gender diversity in the workplace butmade on steps taken to increase gender diversity in the workplace but less positive around progress changed, whether in a positive or negative way if at all. Respondents were overall more positive about the less positive around progress made on diversifying the ethnic makeup of their organisation. diversifying the ethnic makeup of their organisation. steps taken to increase gender diversity in the workplace but less positive around progress made on In your view, which of the The priority level of my company to recruit, retain and grow talent from different genders

statements any) diversifying the below ethnic(ifmakeup of their organisation. have meaningfully change In your12view, which of the since months ago? In your view, which of the(if any) statements below statements below (if any)change have meaningfully L EGEND have meaningfully change since 12 months ago? Share of respondents for which it has 'meaningfully improved'

L EGEND Share of respondents for which it has L EGEND

4% 26%

The priority level of my company to recruit, retain and

16%

'meaningfully worsened'

The ethnic makeup of senior leadership in my company

The ethnic makeup of senior leadership in my company 0

9% 9% 4% 5

10 9%

NOTE:

10 % of respondents

SOU RCE:

Respondents were able to select up to all

SOU RCE:

choices that were applicable for this question. Please interpret the data with this in mind.

212

% of respondents 20

15 % of respondents

NOTE:choices that were applicable for this question.

Please data up with Respondents were ablethe to select to this all in mind. NOTE: interpret choices that were applicable for this question. Respondents were able Please interpret the data with thistoinselect mind. up to all

16%

The gender makeup of senior leadership in my company The gender makeup of senior leadership in my company

The ethnic makeup of senior leadership in my company

23%

The priority level of my company to recruit, retain and grow talent from different ethnicities talent from different ethnicities Thegrow gender makeup of senior leadership in my company

of respondents which it has Share Share of respondents for whichfor it has 'meaningfully improved' 'meaningfully improved' Share Share of respondents for whichfor it has of respondents which it has 'meaningfully worsened' 'meaningfully worsened'

23%

26%

grow talent different genders The leveltoofrecruit, my company to recruit, retain and The priority level of priority my company retain from and grow talent from different grow talentgenders from different ethnicities 4%

since 12 months ago?

26%

Respondents mentioned that in the last 12 months, the focus on recruiting, retaining and growing talent from different genders has become a bigger focus. It is clear though that this focus is happening at the "junior" layer 06.2 Call to Action of these organisations as very few have seen meaningful progress in senior leadership change, except perhaps for employees at tech start-ups and scale-ups who are noticing more positive steps taken in their workplace. Respondents mentioned that in the last 12 months, the focus on recruiting, retaining and growing talent from Respondents mentioned that in the last 12focus. months, the focus on recruiting, growingattalent from layer 40 It is different genders has become a bigger clear though that thisretaining focus is and happening the "junior" In your view, which of the different genders has become a bigger focus. It is clear though that this focus is happening at the “junior” layer Respondents mentioned that in the last 12 months, the focus on recruiting, retaining and growing talent from of these organisations as very few have seen meaningful progress 35% in senior leadership change, except statements (if any) different genders hashave become a bigger focus. Itseen is clear though that progress this focus isinhappening at the "junior" layer except perhaps of these organisations as very few have meaningful senior leadership change, perhaps for employees at tech start-ups and scale-ups who are noticing more positive steps taken in their ofmeaningfully these organisations as very few have seen meaningful progress in senior leadership change, except improved for employees at tech start-ups andand scale-ups arenoticing noticing more positive workplace. perhaps for employees at tech start-ups scale-ups30who who are more positive steps steps taken intaken their in their workplace.29% since 12 months ago? workplace.

28%

L EGEND

In your view, which of the In your view, which the The priority level ofofmy company to statements (if havefrom recruit, retain andany) grow statements (if any) havetalent different genders meaningfully improved meaningfully improved since ago?ago? since 12months months The12 gender makeup of senior leadership in my company

% of respondents

26% 40

24%

16% 14%

L EGEND

The priority level of my company to recruit, retain and grow talent from The priority level of my company to different genders

recruit, retain and grow talent from

The gender makeup of senior leadership in different genders my company

The gender makeup of senior leadership in my company

% of respondents

26%

L EGEND

20%

35%

26%

29%

24%

13%

28%

NOTE:

28%

24% 20%

20%

16%

16% 0

14%

13%

All respondents

VCs

14%

Founders13%

Employee at a tech start-up

10 0

29%

Limited

All respondents

VCs

SOU RCE:

Founders

Employee at a tech start-up

Limited Partners

Respondents were able to select up to all Close quarter of question. all respondents have0 seen improvements around the ethnic makeup of their company, choicesto thatone were applicable for this NOTE: All respondents Founders Employee at a tech start-up SOU RCE: but they all report very little change happening at the leadership level. VCs Respondents were able to select up to all

Limited

choices that were applicable for this question.

L EGEND

% of respondents

my company

L EGEND

L EGEND The priority level of my company to

recruit, retain and grow talent from The priority level of my company to different ethnicities

recruit, retain and grow talent from The ethnic makeup of senior leadership in different ethnicities

my company

The ethnic makeup of senior leadership in my company

23%

% of respondents

In your view, which of the In your view, which the The priority level ofofmy company to statements (if havefrom recruit, retain andany) grow statements (if any) havetalent different ethnicities meaningfully improved meaningfully improved since ago? since 12months months ago? The12 ethnic makeup of senior leadership in

% of respondents

NOTE: In your view, which of the SOU RCE: 27% statements (if any) have Respondents were able to select upall to all Close to one quarter ofof respondents have seen improvements around the ethnic makeup of their Close to one quarter all respondents have seen improvements around the ethnic makeup ofcompany, their company, 25% choices that were applicable for this question. 25 meaningfully improved they all very little happening at the leadership but they allreport report very littlechange change happening at23% the leadership level. Close to12one quarter of all respondents have seen improvements around thelevel. ethnic makeup of their company, since months ago? 21% but they all report very little change happening at the leadership level.

22%

20 30 15 25

23% 21%

10 20 5 15 0 10

27%

25%

22%

21%

22%

2% All respondents

VCs

Founders

Employee at a tech start-up

Limited

2% 0

NOTE:

All respondents

SOU RCE:

Respondents were able to select up to all choices that were applicable for this question. NOTE:

0 SOU RCE:

VCs

5% Founders

Employee at a tech start-up

Limited Partners

All respondents

VCs

Founders

Employee at a tech start-up

Respondents were able to select up to all choices that were applicable for this question.

NOTE:

SOU RCE:

Respondents were able to select up to all choices that were applicable for this question.

The change also needs to take place on the “other side of the table”, the investment side: Decision – & dealmakers need to get more diverse on all levels (junior to senior). Nina Wöss Female Founders Co-Founder

The change also needs to take place on the “other side of the table”, the investment side: Decision- & dealmakers need to get more diverse on all levels (junior to senior). If we look at the ratio of female/male partners at VCs, we realise, there is still a long way to go. This obviously goes beyond the question of gender, and also should include other aspects of diversity. Having a more mixed group of people discussing a potential investment will lead to different investment decisions. In addition to that, this will also lead to a broader and more diverse funnel for investors, as this is going to attract teams that might not have felt that they were the target group before.

213

Limited

An obvious but perhaps important point to reiterate is the need for VCs to continue to diversify their network in order to rebalance the ow of investments going to founders of different ethnicities. Although an imperfect 06.2 Call to Action measure, the percentage of family and close friendship circle that is non-white is a helpful proxy of 'trusted network' diversity. An obvious but perhaps important point to reiterate is the need for VCs to continue to diversify their network

What percentage of your family White Anobvious obvious but perhaps important point to reiterate is to the need for of VCs to to diversify their network in order An butrebalance perhaps important point to reiterate is the need forfounders VCs to VC continue to continue diversify their network in order to the ow of investments going different ethnicities. Although an imperfect and close friendship is into order to rebalance thecircle owinvestments of investments goingto tofounders founders of different ethnicities. Although an imperfect rebalance the flow of going of different ethnicities. Although an imperfect measure, measure, the percentage of family and close friendship circle thatisisa helpful non-white is a helpful proxy of 'trustedthe non-white? measure, the percentage of family and close friendship circle that is non-white proxy of 'trusted Hispanic/Latinx Founder non-white percentage of someone’ s family and close friendship circle is a helpful proxy of ‘trusted network’ diversity. network' diversity. network' diversity. L EGEND Middle Eastern/North African Founder

0-5%

What percentage of your What percentage offamily your family 5-20%friendship circle is and close and close friendship circle is non-white? 20-50%

White VC

Mixed/Multiple ethnic groups Founder

non-white?

Hispanic/Latinx Founder

Over 50%

L EGEND

Asian Founder

Middle Eastern/North African Founder

L0-5% EGEND

Middle Eastern/North African Founder

5-20% 0-5%

Mixed/Multiple ethnic groups Founder

20-50%

Black/African/Caribbean Founder

5-20%

Over 50%

Mixed/Multiple ethnic groups Founder

20-50%

Asian Founder

Over 50%

Black/African/Caribbean Founder

Numbers may not add up to 100 due to rounding.

% of respondents

100

% of respondents

SOU RCE:

NOTE:

Asian Founder

Black/African/Caribbean Founder

NOTE:

% of respondents

SOU RCE:

Numbers may not add up to 100 due to rounding.

NOTE:

SOU RCE:

If investors don’t know by now that the first thing to do is go beyond their immediate network, then they have been hiding in the bushes. Diversify your network! Investors always say there is a pipeline problem, and the talent is hard to reach, but have they ever considered that they are the ones who are hard to reach? It’s time to be accessible: get on the frontline and start volunteering, mentoring, hosting office hours, attending diverse events you would have never considered before, make your Deborah Okenla statements bold, use diverse jobs boards. You can YSYS Founder start with using YSYS jobs board, but don’t end with us only. There are still a number of actions that tech startups and scale ups can take to improve diversity and inclusion. A diversity taskforce with representation from across the �rm (all seniority level and teams) can drive progress while keeping the whole �rm accountable. Similarly setting quanti�able objectives is an effective way to push for better alignment across the organisation. There are still a number of actions that tech startups and scale ups can take to improve diversity and inclusion. A There are still a number of actions that tech startups and scale ups can take to improve diversity and There are stilltaskforce a number with of actions that tech startups and scale ups can to improve diversity and can drive progress while diversity representation from across the firm (alltake seniority level teams) inclusion. A diversity taskforce with representation from across the �rm (alland seniority level and teams) can Appointing a diversity taskforce Amongst the following list ofwith representation inclusion. A diversity taskforce from across the �rm& inclusion (allobjectives seniority level and teams) can keeping the whole firm accountable. Similarly setting quantifiable is an effective way to push for better drive progress while keeping the whole �rm accountable. Similarly setting quanti�able specific D&I talent development which one(s) if anythe didwhole �rm accountable.Introducing driveactions, progress while keeping Similarly setting quanti�able objectives is anobjectives is an programmes alignment across thebetter organisation. your way company not adopt yet better effective way to push for alignment across the organisation. effective to push for alignment across the organisation.

It’s time to be accessible: get on the frontline and start volunteering, mentoring, hosting office hours, attending diverse events you would have never considered before, make your statements bold, use diverse jobs boards.

Numbers may not add up to 100 due to rounding.

37% 37%

Introducing quantifiable D&I targets

Amongst the following list of list of Amongst the following actions, whichwhich one(s)one(s) if any did actions, if any did your company not adopt yet

Offering regular updates the results of D&I initiatives Appointing a diversity & inclusion taskforce Appointing a on diversity & inclusion taskforce

37%

Introducing specific D&I talent development Introducing talentfor development Offeringspecific relevantD&I training employees programmes

37%

programmes

your company not adopt yet

Introducing quantifiable D&I targets

Introducing more generousquantifiable paternity leave Introducing D&Ipolicies targets

Introducing specific D&I policies Offering regular updates on the results of hiring D&I initiatives 32%

Introducing Offering more generous maternity leave policies relevant training for employees

Introducing more generous paternity leave policies

Introducing an anti-harassment code of conduct Introducing more generous paternity leave policies 5

Introducing an anti-harassment of conduct Introducing morecode generous maternity leave policies

SOU RCE:

NOTE:

24% 25

% of respondents SOU RCE:

SOU RCE:

214

30%

26% 30

30%

% of respondents

Respondents were able to select up to all choices that were applicable for this question.

26%

35% 32%

24%

Introducing an anti-harassment code of conduct

Respondents were able to select up to all choices that were applicable for this question.

36%

30% 26%

30%

37%

30%

Introducing specific D&I hiring policies

NOTE:

32%

35%

Offering relevant training for employees

35% 37%

36%

Offering regular updates on the results of D&I initiatives

Introducing specific D&I hiring policies Introducing more generous maternity leave policies

36%

06.2

Call to Action

Europe Diversity Initiatives A powerful reason to be optimistic about building a more diverse and inclusive European tech ecosystem is the growing number of initiatives working directly to achieve this goal, like the top 25 organisations and initiatives that Sifted identified this year.

10x10 United Kingdom

23 Code Street United Kingdom

50inTech France

Ada’s List United Kingdom

Blooming Founders United Kingdom

Colorintech United Kingdom

Czechitas Czech Republic

Female Founders Austria

Femstreet Online

Foundervine United Kingdom

Fundright The Netherlands

Girls in Tech Switzerland

Google for Startups Europe

Inklusiiv Finland

La French Tech Tremplin France

One Tech United Kingdom

Portuguese Women in Tech Portugal

Rails Girls Finland

SheTech Italy

Station F Fighters Program France

Willa France

Women in AI Online

Women in Tech DK Denmark

YSYS United Kingdom

#BcnTech4Women Spain

215

Regulation & Policy

What can policymakers do to help startups? Has Covid-19 changed how governments and the tech ecosystem interact? As Europe faces the challenge of post-Covid economic recovery, startups stand out as the fastest engine for job creation in Europe. But while governments have supported startups in unprecedented and innovative ways through Covid-19, founders still feel like some of their priorities are not being heard.

www.stateofeuropeantech.com

216

and support from

07.1

Tech & Government Tech: Motor for Growth In this section we are exploring employment in startups in partnership with Dealroom. Its proprietary database and software aggregate public information via machine learning and APIs. This includes Chamber of Commerce, news flow, and user-generated data verified by Dealroom. All data is verified and curated with an extensive manual process. All jobs at start-ups are counted, not just ‘tech’ jobs and companies with unavailable employee data, or with 1 employee (thus not offering jobs) are excluded.

The estimated estimated number The number of of people people working workingin inEuropean Europeantech techstart-ups start-upshas hasreached reachedtwo twomillion, million, an increase of an increase of 0.7M jobs in the past five years. Given the current trajectory and accelerated The estimated number of people working in European tech start-ups has reached two million, an increase of 0.7M jobs in the past ve years. Given the current trajectory and accelerated rate of employment growth within 0.7Mof jobs in the past vegrowth years. Given the current trajectory and accelerated rate of employment growth within that rate employment within European start-up communities, Dealroom estimates European start-up communities, Dealroom estimates that a further 1.2M jobs could be added over the next European start-up communities, Dealroom estimates that a further 1.2M jobs could be added over the next a ve further veyears. years.1.2M jobs could be added over the next five years. Number of start-up jobs

Number ofinstart-up estimated Europe jobs estimated in Europe

3.2M

3.0

2.0M

2.0

# of startup jobs

3.0

1.0

2.0M

1.3M

2.0

1.3M 1.0

0.0

December 2015

October 2020

December 2025

Start-up jobs year on year EU employment YoY growth (%) growth rate (%) across Europe

Startups employment L EGEND YoY growth (%)

employment YoY growth (%) EU employmentStartups YoY growth (%)

L EGEND EU employment YoY growth (%)

Startups employment YoY growth (%) EU employment YoY growth (%)

NOTE:

Europe employment growth rate sourced from EuroStat. Start-up employment data NOTE: sourced from Dealroom.

Europe employment growth rate sourced from growth EuroStat.rate Start-up employment data Europe employment sourced sourced from Dealroom.

10.0 annual growth rate from previous year (%)

L EGEND

annual growth rate from previous year (%)

Start-up jobs year on year

growth rate (%)year across Start-up jobs onEurope year growth rate (%) across Europe

10.0

7.5

5.0

2.5

0.0

7.5

6.2%

annual growth rate from previous annual year growth (%) rate from previous year (%)

Why should governments pay attention to start-ups? There are many possible answers. One important reason is that they are a motor for growth. Unsurprisingly, employment growth at European start-ups far outpaces the SOU RCE: 0.0 employment growth rate of the European economy. In recent years the gap has grown October wider2020 as Europe's tech December 2015 startup communities have ourished and employment growth has accelerated, in stark contrast to the slowdown observed in the rest of the economy. 2020 may have temporarily eroded the pace of growth of Why should governments pay attention start-ups? There areemployment many possiblegrowth answers.remains One important reason start-up employment, but thetogap with European colossal. SOUstart-ups? RCE: Why should governments pay attentionemployment to There are manystart-ups possible answers. One is that they a motor for growth. Unsurprisingly, growth at European outpaces theimportant Whyare should governments pay attention to start-ups? There are many possiblefaranswers. One important reason reason is that areEuropean afor motor fortogrowth. Unsurprisingly, employment growth at European far employment growth ratethey the economy. In recent thepossible gap hasanswers. grown wider as Europe's tech start-ups Why should governments pay attention start-ups? There years areemployment many One reason is that they are aofmotor growth. Unsurprisingly, growth at important European start-ups far outpaces the Start-up jobs year onourished year startup employment communities have and employment growth has accelerated, in stark contrast to the outpaces the employment growth rate of the European economy. In recent years the gap has grown wider is that they are a motor for growth. Unsurprisingly, employment growth at European start-ups far outpaces the growth rate of the European economy. In recent years the gap has grown wider as Europe's tech 9.9% 10.0 rate (%) across slowdown observed the rest of economy. 2020 may have years temporarily eroded the pace growth of employment growth rateEurope of the the European economy. Inflourished recent the gap has grown wider as of Europe's tech asgrowth Europe’ s in tech startup communities have and employment growth has accelerated, startup have ourished and employment growth has accelerated, in stark contrastintostark the startup communities communities ourished and employment growth has accelerated, in stark contrast to the 8.8% start-up employment, but thehave gap with European employment growth remains colossal. contrast to the slowdown observed in the rest of the economy. 2020 may have temporarily eroded the of slowdown observed in rest theofrest of the economy. 2020 may have temporarily of growth temporarily eroded the pace of eroded growth of the pace observed in the the economy. 2020 may have Lslowdown EGEND start-up employment, but the gap with European employment growth colossal. pace of growth ofYoYstart-up employment, but the gap withremains European employment growth remains colossal. start-up employment, but gap with European employment growth remains colossal. 7.5 Startups employment growth (%) the 8.8% 5.3%

5.0 10.0

5.0

2.5

0.0

9.9% 7.1%

8.8%

0.0 5.0

5.3%

Dec 2016

Dec 20162.5

1.5%

1.3%

7.1%

1.4%

1.0%

5.3% Dec 2016

1.5% 1.5%

1.3%1.3%

SOU RCE:

7.1%

5.3%

6.2%

Dec 2017

Dec 2018

1.4%1.4%

1.0%

Dec 2019

<1.0% Dec 2017

Dec 2017

Dec 2018

Dec 2019

Oct 2020

Dec 2019

1.5%

1.3%

SOU RCE:

0.0

Dec 2016

SOU RCE:

Europe employment growth rate sourced from EuroStat. Start-up employment data sourced from Dealroom.

217

Dec 2017

Oct

1.0% <1.0%

Oct 2020

1.4%

1.0%

SOU RCE:

from EuroStat. Start-up employment data sourced from Dealroom.

NOTE:

9.9%

8.8%

2.5 7.5

7.1%

9.9%

6.2%

December 2025

Dec 2018

Dec 2019

Oct

Given the difference in absolute new job contribution, it might be unfair to benchmark start-up employment growth against sectors that are made up of companies of all ages and sizes. It is still valid, however, to say that 07.1 & Government there is no Tech other engine in the economy that can match the relative speed of employment growth of Europe's start-ups. Jobs the growth rate across Given difference inEurope absolute new job contribution, it might be unfair to benchmark start-

Given the difference in absolute job contribution, mighttoStartups be unfair to start-up benchmark start-up employment Given the difference in absolute new jobnew contribution, it might beitunfair benchmark employment sector, 2019 versus 2018against upbyemployment growth sectors areofmade upand of ofvalid, all ages andvalid, sizes. growth against sectors that areup made upthat of companies allcompanies agesItand sizes. Ithowever, is still however, to say that growth against sectors that are made of companies all agesof sizes. is still to say that It is valid, however, there no can other engine inrelative theofeconomy can match the there is still noisother engine in thetoeconomy that canis match thematch relative speed employment growth of Europe's there no other engine insay thethat economy that the speed that of employment growth of Europe's Information and communication 3.8% relative speed of employment growth of Europe’s start-ups. start-ups. start-ups. Jobs growth rate across Europe Jobs growth rate across Europe by sector, 2019 versus 2018

Construction Startups

Startups

by sector, 2019 versus 2018

2.4%

Information and communication

3.8%

Professional, scientific and technical activities Information and communication

Construction

2.4%

Real estate Construction

Professional, scientific and technical activities

1.5%

1.6%

Public administration, defence, education Professional, scientific and technical activities

1.2% 1.6%

Real estate

1.5%

Arts, entertainment and recreation Real estate

1.0% 1.5%

Public administration, defence, education

1.2%

Wholesale and retail trade Public administration, defence, education

Arts, entertainment and recreation

0.9% 1.2%

1.0%

Industry (except construction) Arts, entertainment and recreation

Wholesale and retail trade

0.4% 1.0%

0.9%

Manufacturing industry

Industry (except construction) Wholesale and retail trade

0.1%

0.4%

Financialindustry and insurance activities Manufacturing

0.1%

Industry (except construction)

-0.6%

Agriculture, forestry and fishing -0.6%-2.8% Manufacturing industry

Agriculture, forestry and fishing

-0.6%

SOU RCE:

All sector growth rate from EuroStat, except

NOTE:for "start-ups" where Dealroom is the source.

SOU RCE:

Agriculture, forestry and fishing

All sector growth rate from EuroStat, except for "start-ups" where Dealroom is the source.

NOTE:

0.1%

-2.8%

Financial and insurance activities

SOU RCE:

All sector growth rate from EuroStat, except for "start-ups" where Dealroom is the source.

218

-2.8%

0.9%

0.4%

Financial and insurance activities

NOTE:

1.6%

9.9%

3.8%

2.4%

9.9%

07.1 role of Tech & Government The venture capital in supporting employment growth is demonstrated by the accelerated pace of job creation at start-ups that have raised greater levels of investment. The increased �ow of capital invested into European tech start-ups, especially through larger growth rounds of �nancing, should continue to drive accelerated levels of employment growth from these cohorts of companies. The role role of of venture venture capital The capital in in supporting supporting employment employmentgrowth growthisisdemonstrated demonstratedby bythe theaccelerated acceleratedpace pace of job of job creation at start-ups that have raised greater levels of investment. The increased flow of capital 250 The role of venture capitalthat in supporting employment growth isof demonstrated by The the accelerated pace ofof job creation at start-ups have raised greater levels investment. increased �ow capital invested into Trend line for European startinvested into European tech start-ups, especially through larger growth rounds of financing, creation at start-ups that have raised greaterthrough levels oflarger investment. The increased �ow of capital invested intoshould European tech start-ups, especially growth rounds of �nancing, should continue to drive ups team size by age and total European tech through larger growth rounds of �nancing, should continue drive continue to start-ups, drive levelsgrowth of employment growth from cohorts oftocompanies. accelerated levelsaccelerated ofespecially employment from these cohorts ofthese companies. capital raised 200

L EGEND

250

Trend for European Trend lineline for European start- startSeed ups team byand agetotal and total ups team sizesize by age Series A raised capital capital raised

200

L EGEND Seed

Seed

Series A

Series Series B A Series B

Number of employees

Series B

L EGEND

Number of employees Number of employees

accelerated levels of employment growth from these cohorts of companies.

150

100

250 150 200 100 150 50 100 0

NOTE: Trend line based on 60,000+ start-ups average team size and by company age and NOTE: total funding raised. Trend line based on 60,000+ start-ups average team size and by company age and total funding raised.

SOU RCE: 0

SOU RCE:

NOTE:

SOU RCE:

Trend line based on 60,000+ start-ups average team size and by company age and total funding raised.

An important point to note is that start-ups’ contribution to employment growth is more distributed than the contribution towards total value, as measured by their share of total combined enterprise An important point to note is that start-ups' contribution to employment growth is more distributed than the value created. In other words, while the top 10 start-ups account for 35% of total enterprise value contribution towards total value, as measured by their share of total combined enterprise value created. In An important to note for is that start-ups' employment growth isthe more distributed than the account for created, theypoint account only 2% ofcontribution total jobstocreated. Similarly, next 50 start-ups other words,towards whiletotal the value, top 10 35%combined of total enterprise enterprise value created, they account for only contribution asstart-ups measured byaccount their sharefor of total value created. In a other further 26% of the total enterprise value, but only 3% of total jobs. And the26% remaining of 2% of total Similarly, the next 50ofstart-ups account for awhile further ofonly totaltens enterprise value, words,jobs while created. top 10 start-ups account for 35% total enterprise value created, they account for thousands of start-ups only collectively account for 39% of enterprise value, they are responsible 2% of total jobs created. Similarly, the next 50 start-ups account for a further 26% of total enterprise value, account for but only 3% of total jobs. And while the remaining tens of thousands of start-ups only collectivelyfor thousands of start-ups only collectively for about the but only 3% of totaljobs. jobs. And the remaining 95% of enterprise start-up It iswhile important that tens thisofisfor understood by policymakers asaccount they think 39% of value, they are responsible 95% of start-up jobs. It is important that this is understood by 39% of enterprise value, they are responsible for 95% of start-up jobs. It is important that this is understood by most appropriate measures to most support start-ups of different sizes. policymakers they the most appropriate measures to support start-ups of different sizes. policymakers asas they thinkthink aboutabout the appropriate measures to support start-ups of different sizes. Distribution of value versus

Distribution value versus distribution ofof jobs distribution of jobs

95%

L EGEND Valuation as % of total

L EGEND

Employees as % of total

Valuation as % of total Employees as % of total 39%

35% 26%

39%

35% 3%

2% Top10 start-ups

Next 50 start-ups

26% Rest of the ecosystem

SOU RCE:

Top10 start-ups

SOU RCE:

219

Next 50 start-ups

Rest of the ecosystem

07.1

Tech & Government

Relief Funding & Innovation Programmes There are clear benefits to closer collaboration between policymakers and the tech ecosystem. The Covid-19 pandemic, if anything, has increased the focus on this point, as technology played a crucial role in enabling economies to adapt to the realities of virtual living and working. But even before the pandemic, Europe had started building out the “infrastructure” needed to support the growth of start-ups via a number of regional and European initiatives. This article explores the role that governments have played in supporting the start-up ecosystem following the onset of the pandemic, paying particular attention to funding relief programmes, government innovation programmes and tendering processes.

Though it may have slowtime, at the time, it isapparent now apparent that governments institutions across hough itThough may have felthave slowfelt at the is now that governments andand institutions across Europe it may felt slow at theittime, it is now apparent that governments and institutions across Europe Europe reacted quickly and decisively to set up dedicated relief programmes in response to the impact acted quickly and decisively to set up dedicated relief programmes in response to the impact of widespread reacted quickly and decisively to set up dedicated relief programmes in response to the impact of widespread of widespread measures on startups. someprogrammes cases, these programmes were upwithin and running ckdownlockdown measures onlockdown startups. In someIncases, theseInthese programmes werewere up and running within weeks. measures on startups. some cases, up and running weeks. within weeks. France, for example, was fastest to respond, announcing an extensive set of measures to ance, for example, was fastest to respond, announcing an extensive set of measures to support local startFrance, for example, was fastest to respond, announcing an extensive set of measures to support local startsupport local start-ups just one week after entering into a strict lockdown in March. in March. ps just one after entering into a strict upsweek just one week after entering into alockdown strict lockdown in March. Country

Country

Governments and Institutions Governments and Institutions Relief Programs Relief Programs

Institutions Institutions

Covid-19 response Covid-19 response

1 France

2 Germany BMWi, KfW, regional banks Germany BMWi, KfW, regional banks €2B

Sweden

Netherlands

FranceBpifranceBpifrance

€5.2B €5.2B €2B

Sweden

Saminvest, Almo, Vinnova

SEK3B

Netherlands

RVO, BOM, InvestNL

€100M

EIF, EIB, EIC, Horizon Europe

BBB, Innovate UK, EIS

Saminvest, Almo, Vinnova

RVO, BOM, InvestNL

EIF, EIB, EIC, Horizon Europe

£1.25B SEK3B

€100M €300M

£1.25B

€300M

programs ReliefRelief programs

Guarantees, accelerated tax credits, direct loans Guarantees, accelerated tax credits, direct loans Fund-of-funds, direct loans Fund-of-funds, direct loans Co-investing, direct loans

Co-investing, direct loans

Direct investing, guarantees, tax credits

Direct investing, guarantees, tax credits Direct loans

Direct loans

Fund-of-funds triggering investments of up to €1.2B

SOU RCE:

To date, attention has rightly focused on the vital life support these loans are providing for many start-ups and scale-ups, but it will be fascinating to see how states leverage their shares in the long term, particularly as tax payers demand transparency and accountability over the investments made.

Leo Rees Onward Fellow

The Covid-19 response has provided an interesting prompt to review the state’s role as a direct investor in earlymid stage firms. Stopgap solutions like the UK’s Future Fund, and its equivalents in mainland Europe have given governments equity stakes either directly, or in the form of convertible loans. To date, attention has rightly focused on the vital life support these loans are providing for many start-ups and scale-ups, but it will be fascinating to see how states leverage their shares in the long term, particularly as tax payers demand transparency and accountability over the investments made. Much has been made of Europe’s potential to create ‘entrepreneurial states’. Advocates for the idea normally focus on the state’s role in galvanising R&D and creating markets: processes that take far longer than normal political and investment timelines. But with these stakes, European governments have a petri dish to experiment with entrepreneurialism over a shorter time horizon. Will they seek profitable exits to recoup cash as soon as possible for their stuttering economies? Or will they use their stakes more strategically, perhaps crowding entrepreneurs into solving challenges in the public interest?

220

07.1

Tech & Government

To get a sense of the scale of these relief programmes, we benchmarked them against the universe of unique funded companies that raised more than >$2M. As measured by the average amount of funding provided on a per start-up basis, France's programme has offered the most generous funding amounts to startups, at $3.7M. This compares to $0.6M in average support for companies in the UK and $2.2M in Germany. To get a sense of the scale of these relief programmes, we benchmarked them against the universe ofRelief unique funded companies raised than >$2M.we Asbenchmarked measured by them the average of To get aprogramme sense ofamount the scale ofthat these reliefmore programmes, againstamount the universe of unique France per start-up with funding funding provided a per start-up basis, s programme has offered theamount most generous funding To get acompanies sense of theon scale ofraised these relief programmes, we benchmarked them against the universe of unique funded that more than France’ >$2M. As measured by the average of funding provided on a >$2M per country funded companies that raised more than >$2M. As measured by the average amount of funding on a in the UK amounts to startups, at $3.7M. This compares to $0.6M average support forprovided companies per basis, France' s programme has thein most generous funding perstart-up start-up basis, France' s programme has offered theoffered most generous funding amounts to startups,amounts at $3.7M. to startups, at $3.7M. and in Germany. Germany This compares $0.6M in average for companies in the and $2.2M in Germany. This$2.2M compares to to $0.6M in average supportsupport for companies in the UK and $2.2M in UK Germany. $2.2M Relief programme amount

Relief programme amount per start-up with funding >$2M per country per start-up with funding >$2M per country

France

United Kingdom France

United Kingdom

Netherlands United Kingdom

Netherlands

Based on 1,553 companies in France, 987 companies in Germany, 2,516 companies in the UK, 511 in Sweden and 376 in the Netherlands.

$0.5M

$2.2M

$0.6M

NOTE: Based on 1,553 companies in France, 987 companies in Germany, 2,516 companies in the NOTE: UK, 511 in Sweden and 376 in the Netherlands.

$3 $2.2M

Sweden Germany

Sweden

$3.7M

$0.6M

Germany

$0.2M $0.5M

$0.2M

Sweden

$0.6M

$0.5M

SOU RCE: Netherlands

SOU RCE:

$0.2M

NOTE: Based on 1,553 companies in France, 987 companies in Germany, 2,516 companies in the UK, 511 in Sweden and 376 in the Netherlands.

SOU RCE:

The French government was the first in the world to set up an Emergency Plan for start-ups: €4.3bn unlocked one week after lockdown started. We were the fastest, because it was a no brainer. We believe in the future of tech entrepreneurship and stand by our ecosystem, in sickness and in health (although, preferably health).

Ylan Steiner Orrick Partner,Technology Companies Group

Kat Borlongan La French Tech Director

As we entered the pandemic, there was legitimate fear that the UK could lose a generation of start-ups if the tech ecosystem stalled. With pressure on an economy that is largely being driven by tech, intervention came from the UK Government. In addition to measures available to the market generally, HM Treasury responded to lobbying from the venture community to introduce the Future Fund scheme, a lifeline in the form of a convertible loan package for innovators in need of sustainable financing. As a member of the task force that helped the government design and implement this scheme, we have been impressed by the process and strongly encourage continued equitable innovation-friendly policy to get through these crises. It’s clear that is an investment not just in the future of tech, but our society at large.

221

07.1 has been Techa & Government verall, there steady rise in public contracting across European countries and Covid-19 has further ccelerated that trend due to the need to manage a large demand shock. This was particularly the case in the K: with the government dealing with the twin forces of Covid-19 and Brexit, healthcare spending has had a massive uplift.

Beyond temporary relief programs, we also wanted Total healthcare spend public to get ainbetter understanding of the other ways contracting by country, H1 2020 governments have supported start-ups across Europe.

To this end, we have collaborated with PUBLIC to better understand the role of ‘GovTech’ innovative solutions addressing public sector challenges - in tackling the pandemic.

Across Europe, governments introduced a range of programmes and initiatives to identify and adopt Across Europe, governments introduced a range of programmes and initiatives to identify and adopt

Across Europe, governments introduced a range ofbrought programmes and initiatives to identify and adopt innovative solutions to on from and innovative solutions tospecific speci cchallenges challenges onby byCovid-19, Covid-19, fromaccelerators accelerators andhackathons hackathonstoto innovative solutions to speci c challenges brought brought on by Covid-19, from accelerators and hackathons to competitions and funding programmes. PUBLIC has comprehensively indexed all such programmes and competitions and funding programmes. has comprehensively all such programmes and competitions and funding programmes. PUBLIC PUBLIC has comprehensively indexed allindexed such programmes and initiatives. The categorisation used by PUBLIC is laid out here. initiatives. The categorisation used by PUBLIC is laid out here. initiatives. The categorisation used by PUBLIC is laid out here. Description

TypesTypes of government innovation of government innovation programmes programmes

Description

Grant funding initiatives and pitch competitions generally only resulted in government funding,in and not with additional forwith additional support f Grant funding initiatives and pitch competitions generally only resulted government funding,support and not Funding OnlyFunding Only deployment anddeployment uptake among theuptake public sector and among the public sector Challenge-programmes, hackathons, incubators and accelerators generally included additional wrap-around support, such as Challenge-programmes, hackathons, incubators and accelerators generally included additional wrap-around support, such as Funding and Supporttechnical support and access to networks mentoring, mentoring, technical support and access to networks

Funding and Support Support Only

Platform / marketing refers to platforms that seek to promote and showcase relevant companies that could be deployed to tackle

/ marketing Covid-19 acrossPlatform a multitude of sectors refers to platforms that seek to promote and showcase relevant companies that could be deployed to tack Support Only Covid-19 across a multitude of sectors

SOU RCE: SOU RCE:

SOU RCE:

Select partnerships Mbetween tech and Government ORE DETA IL ED DATA CA N BE start-ups F OU ND ON T H E VA M STA R W EBSIT E

Video consultation and text messaging platform for primary care rolled into 1,300 GP practices United Kingdom

Conversational AI platform helping authorities better inform citizens about Covid-19 Germany

Covid-19 Digital ‘Staff’ Bank created for 14 NHS trusts United Kingdom

Earth observation start-up deployed microsatellites to track the economic impact of the crisis Finland

Digital therapeutics start-up built a Covid-19 tracker app for the national health system Iceland

Marketplace enabling healthcare workers to buy essentials in partnership with the government France

Chatbot deployed to address disinformation in partnership with the government Estonia

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In total, PUBLIC has mapped out 86 different public sector initiatives launched across 26 different countries. The vast majority of these initiatives went beyond simple funding with 53 (62%) providing both funding and support on the development and procurement of innovative solutions.

In total, PUBLIC has mapped out 86 different public sector initiatives launched across 26 different countries. mapped out 86 different public sector initiatives launched across 26 different countries. The by vast majority of these initiatives went beyond simple funding with 53 (62%) providing both funding and hese initiatives wentList beyond simple funding with 53and (62%) providing both funding and of initiatives by region country opment and procurement of innovative solutions. support on the development and procurement of innovative solutions.

on and

List of initiatives by region and by country

DATA SET : U K & IREL A ND

UK & Ireland

Initiative Ireland

DATA SET : SOU T H ERN EU ROPE

Southern Europe

Type

SFI’s COVID-19 Rapid Response funding

Sector

Grant Funding

Healthcare

Initiative Greece

Type

Greece v Virus

Sector

Hackathon

Cross-Sector

Ireland

Innovate Together Fund

Grant Funding

Cross-Sector

Greece

Digital Innovation Against COVID-19 Ideas Challenge

Challenge Programme

Healthcare

Ireland

Co-Fund Programme for Medical Devices

Grant Funding

Healthcare

Italy

Hack for Italy

Hackathon

Cross-Sector

TechForce19

Challenge Programme

Healthcare

Italy

Call4Ideas: Covid 19 Challenge

Challenge Programme

Healthcare

Medical Robotics for Contagious Diseases Challenge 2020

Challenge Programme

Healthcare

Italy

National Innovation Fund

Grant Funding

Cross-Sector

COVID-19 Therapeutic Accelerator

Accelerator

Healthcare

Portugal

Vale Incubação — COVID19

Incubator

Cross-Sector

Innovate UK Coronavirus Grant Funding

Grant Funding

Cross-Sector

Spain

Positive Energy +

Accelerator

Business Support

COVID-19 Collaboration & Collaborative Grant

Grant Funding

Business Support

Spain

Special Spanish Research Programme on COVID-19

Grant Funding

Healthcare

Future Flight: Drone Projects to Address Covid 19

Grant Funding

Healthcare

Malta

R&D Fund for COVID-19 Innovations

Grant Funding

Healthcare

Wales COVID-19 Digital Solutions Fund

Grant Funding

Healthcare

In total, PUBLIC has mapped out 86 different public sector initiatives launched across 26 different countries. apped out 86 different public sector initiatives launched across 26 different countries. UK Space Helping the UK on COVID-19 Grant Funding Cross-Sector MDIA Award for Innovative Technologies in Response to COVID-19 Grant Funding The vast majority of these initiatives wentMalta beyond simple funding with 53 (62%) providing both funding andCross-Sector hese initiatives went beyond simple funding with 53 (62%) providing both funding and UK COVID-19 Rapid Response Rolling Call Grant Funding Cross-Sector Malta YouStartIT Validator Programme with a special focus on Covid-19 Incubator Healthcare ofMITA innovative solutions. pment and procurement of innovative solutions. support on the development and procurement

on and

ountry by open data f nd Baltics.

NOTE:

List ofwas initiatives by region and The list manually collected country by country using keyword searches, open data by country

DATA SET : F RA NCE & BENEL U X

France & Benelux SOU RCE:

and PUBLIC's existing database of programmes for the UK, Nordics Type and Baltics.

Initiative

Belgium

DATA SET : PA N- EU ROPEA N

Hack the Crisis Belgium

Hackathon

SOU RCE: Pan-European Sector

Cross-Sector

Initiative Pan-European

Type

DeepHack: Data Against Covid-19

Sector

Hackathon

Data

Belgium

BioWin Cooperation Platform

Platform

Healthcare

Pan-European

#EUVSVIRUS

Hackathon

Healthcare

France

Hackathon Covid-19

Hackathon

Healthcare

Pan-European

Data against Covid-19

Hackathon

Cross-Sector

France

Call for Projects for Innovative Solutions to Fight Covid-19

Challenge Programme

Healthcare

Pan-European

Sentinel Hub Custom Script

Hackathon

Agriculture

France

The Technology Transfer Acceleration Comapanies

Grant Funding

Healthcare

Pan-European

EU Datathon (October 2020)

Hackathon

Data Agriculture

Luxembourg

Hack the Crisis Luxembourg

Hackathon

Cross-Sector

Pan-European

COVID19 INSPIRE Hackathon

Hackathon

Luxembourg

StartupsVsCovid19

Challenge Programme

Healthcare

Pan-European

JEDI GrandChallenge: Billion Molecules Against Covid-19

Challenge Programme

Luxembourg

Fit4Start

Accelerator

Healthcare

Overall, there has beenHackathon a steady rise in public contracting across European countries and Covid-19 has further Cross-Sector Pan-European EIC Accelerator pilot Accelerator Cross-Sector accelerated that trendChallenge due Programme to the need to manage a large demand shock. This was particularly the case in the Healthcare Pan-European EIT Headstart Programme Accelerator Healthcare UK: with government twin public forces of Covid-19 and Brexit, healthcare spending has had a Netherlands StartupInResidence: Alternativethe Food Programme Agriculture In Challenge total, PUBLICChallenge hasdealing mapped with out 86the different initiatives Pan-European sector EIT Crisis Response Initiative -launched Venture Support across 26 different Grant Funding countries. Business Support mapped out 86 different public Creative sector initiatives launched across 26 different countries. massive The vast majority these initiatives went beyond simple funding with 53 (62%) providing both funding and Netherlands solutions approach touplift. coronavirus Grant of Funding Healthcare Pan-European EIT Crisis Response Initiative -Innovation Activities Grant Funding Business Support Netherlands

Hack the Crisis NL

Netherlands

Get in the Ring: First Responders

Pan-European

EIT Urban Mobility Accelerator Programme

these initiatives went beyond simple funding with 53 (62%) providing both funding and support on thePlatform development Cross-Sector and procurement of innovative solutions. Netherlands Tech Against Corona opment and procurement of innovative solutions. Pan-European Space in Response to Covid-19: Announcement of Opportunity

gion and untry by

pen data

DATA SET : NORDICS

Nordics

SOU RCE:

Total healthcare spend in public NOTE: List of initiatives by region and contracting by country, H1 2020 by The country list was manually collected country by

Denmark

Corona Innovation Fund

Grant Funding

Cross-Sector

Denmark

NordicBaltic.tech

Platform

Cross-Sector

Finland

Hack The Crisis Finland

Hackathon

Cross-Sector

Iceland

Covid-19 Tech Solutions

Platform

Cross-Sector

Hack The Crisis Norway

Hackathon

Cross-Sector

Norway

Hack The Crisis in the Barents Region

Hackathon

Cross-Sector

Norway

Call for Collaborative Covid-19 Projects

Challenge Programme

Healthcare

Sweden Hacksector The Crisis Sweden Cross-Sector apped out 86 different public initiatives launched across 26Hackathon different countries. hese initiatives wentSweden beyond simple funding with 53 (62%) providing bothProgramme fundingCross-Sector and Finding New Ways Challenge pment and procurement ofUrgent innovative solutions. Sweden grants 2020 to secure access to data or research materials Grant Funding Cross-Sector

on and

country by , open data of and Baltics.

untry by pen data

nd Baltics.

DATA SET : DA CH

DACH SOU RCE:

Initiative

Type

Sector

Austria

Hack the Crisis Austria

Hackathon

Cross-Sector

Austria

Emergency Call Sars-CoV-2

Grant Funding

Healthcare

Germany

#WirVsVirus

Hackathon

Cross-Sector

Germany

#SmartDevelopmentHack

Hackathon

Cross-Sector

Germany

H+ Digital Health Innovation Program

Accelerator

Healthcare

Accelerator

Healthcare

Germany

Future Perfect Accelerator

Switzerland

#VersusVirus Hackathon

Switzerland

#CodeVsCovid19

Switzerland

Innosuise Innovation Project

SOU RCE:

NOTE:

Hackathon Cross-Sector The list was manually collected country by country using keyword searches, open data Hackathon Cross-Sector and PUBLIC's existing database of programmes for the UK, Nordics and Baltics. Grant Funding

Healthcare

SOU RCE:

Hack The Crisis Denmark

Norway

Grant Funding

CEE Sector

Denmark

Hackathon

Data

DATA SET : CEE

country using keyword searches, open data Typeof and PUBLIC's existing database programmes for the UK, Nordics and Baltics.

Initiative

nd Baltics.

Accelerator

Initiative Albania

Hack the Crisis Albania

Type Hackathon

Sector Cross-Sector

Estonia

Hack The Crisis Estonia

Hackathon

Cross-Sector

Estonia

The Global Hack

Hackathon

Cross-Sector

Estonia

Nordic Remote Learning Solutions

Platform

Education

Estonia

Covid-19 Idea Bank

Platform

Cross-Sector

Hungary

Reload Hungary

Incubator

Healthcare

Latvia

Hackforce

Hackathon

Healthcare

Latvia

Skola 2030

Platform

Education

Lithuania

Hack The Crisis Lithuania

Hackathon

Cross-Sector

Lithuania

Covid-19 Innovation Fund

Challenge Programme

Healthcare

Lithuania

Startup Fair Pitch Battle

Pitch competition

Healthcare

Lithuania

There is No Quarantine on the Internet

Platform

Business Support

Poland

GovTech Polska Hackathon

Hackathon

Cross-Sector

Poland

NCBR Hackathon

Hackathon

Business Support

Poland

GovTech Festival

Hackathon

Cross-Sector

Serbia

Serbia’s Innovation Fund

Grant Funding

Cross-Sector

Serbia

UNICEF Funding Opportunity for Blockchain Startups

Grant Funding

FinTech ,Business Support

SOU RCE: SOU RCE:

NOTE: The list was manually collected country by country using keyword searches, open data and PUBLIC’s existing database of programmes for the UK, Nordics and Baltics.applied.

M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E

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verall, there has been a steady rise in public contracting across European countries and Covid-19 has further ccelerated that trend due to the need to manage a large demand shock. This was particularly the case in the There are some interesting differences between regions. For example, Central and Eastern Europe have K: with the government dealing with differences the twin forces of Covid-19 andFor Brexit, healthcare spending has had a There some between regions. example, Central and Eastern Europe have made made aare real pushinteresting on initiatives, ranking first on absolute count. Governments across Europe (Estonia, Sweden, massive uplift. a real push on initiatives, ranking �rst on absolute count. Governments across Europe �Estonia, Sweden, There are some interesting between For example, and Eastern Europe have made Norway, Poland, Austria,differences and Finland) have regions. sponsored national Central hackathons - “Hack the Crisis” - designed to Poland, Austria, and Finland� havecount. sponsored national hackathons - �Hack the Crisis� - designed to �nd a Norway, real on initiatives, �rst on created absolute Governments Europe findpush urgent solutions ranking to challenges by Covid-19. This is across interesting to�Estonia, note asSweden, it has largely taken place urgentspend solutions created by Covid-19. is interesting toCrisis� note as it has largely Norway, Poland, and Finland� have sponsored nationalThis hackathons - �Hack the - designed to �nd taken place Total healthcare in Austria, publicto challenges outside of gaze of European tech attention. IttoisItnote also worth noting the propensity within the the urgent solutions challenges created by Covid-19. This is interesting as itworth has largely taken place outside ofthe the gaze ofmainstream mainstream European tech attention. is also noting the propensity within contracting by country, H1to 2020 UK to favour funding only support rather than a more holistic approach that also encompasses procurement outside of the gaze of mainstream European tech attention. It is also worth noting the propensity within the UK to favour funding only support rather than a more holistic approach that also encompasses procurement UK to favour funding only support rather than a more holistic approach also encompasses procurement and development support. NHSx sponsored TechForce19, a challenge-based programme to identify solutions and development support. NHSx sponsored TechForce19, a that challenge-based programme to identify solutions and development support. NHSxmental sponsored TechForce19, a challenge-based programme tocare identify solutions across remote social care, health and the optimisation of staffing in the sector. From a pool of of remote social care, mental health and the optimisation of sta�ng in the care sector. From a pool across remote social care, mental health and the optimisation of sta�ng in the care sector. From a pool of applicants, 18 were toand deploy scale their solutions. 1600+ applicants, 18companies companies wereawarded awarded £25k to deploy and scale their solutions. 1600+ applicants, 18 companies were awarded £25k to£25k deploy scaleand their solutions. PUBLIC sector initiatives PUBLIC sector initiatives byby region region

Central & Eastern Europe& Eastern Europe Central France & Benelux

France & Benelux

L EGEND

Southern Europe

Hackathon

Southern Europe

Hackathon

Grant Funding

Cross-European

Grant Funding Challenge-based Programme

verall, there has been aProgramme steady rise in public contractingCross-European across European countries and Covid-19 has further Accelerator/Incubator Challenge-based UK & Ireland cceleratedPlatform/Marketing that trend due to the need to manage a large demand shock. This was particularly the case in the Accelerator/Incubator UK & Ireland K: with theOthers government dealing with the twin forces of Covid-19 and Brexit, healthcare spending has had a DACH Platform/Marketing massive uplift. Others DACH Nordics

Total healthcare spend in public contracting by country, H1 2020

Nordics

# of public sector initiatives

SOU RCE:

SOU RCE: Given the the unprecedented unprecedentednature natureand andscale scale theCovid-19 Covid-19pandemic, pandemic, won’t come Given ofofthe it it won't come as a surprise that Given the unprecedented nature and scale of the Covid-19 pandemic, it won't come as a surprise that as a surprise that healthcare was one of the top sectors targeted by these initiatives. healthcare was one of top thesectors top sectors by these initiatives. healthcare was one of the targeted targeted by these initiatives. M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E

Number of initiatives by sector

Cross Sector

Healthcare

Healthcare 7

Business Support

Business Support 3

Agriculture

3 Agriculture

Data

Education

Data 0

# of initiatives

Education

SOU RCE:

20 # of initiatives

SOU RCE: M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E

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Tendering and public procurement Another way government can play a role in supporting the startup ecosystem is through contracting. Public procurement, the process by which governments purchase goods, services and works from the private sector, is a vast contributor to global spending and represents a colossal 12% of global GDP ($11T), according to the World Bank. The potential share to be won by tech start-ups, ‘GovTech’, is estimated to be $125B (€105B) in Europe, according to PUBLIC. As healthcare is now top of mind in light of the current pandemic, and with healthtech attracting over $4B of capital invested into European tech companies in 2020, it is interesting to explore the potential for those startups to tap into healthcare-related technology spending from government institutions. To try to shine a light on this, we partnered with Vamstar, the data science powered B2B healthcare marketplace platform that tracks and enriches contracting data published by public procurement bodies and private healthcare institutions. Although it is difficult to have data on tech start-ups more specifically, SMEs responding to health technology tenders is a helpful proxy to measure the direction of travel for the former.

I hope that, looking to the future, governments will continue to harness the flexibility and resilience of start-ups that we’ve seen throughout the pandemic. PUBLIC and Vamstar’s research clearly demonstrates the unprecedented reliance by governments on the start-up ecosystem during the Covid-19 crisis. Never before has the public sector depended so heavily on new and innovative applications, developed by Europe’s brightest tech entrepreneurs.

Alexander de Carvalho PUBLIC Co-Founder and Chief Investment Officer

During this time, we have seen especially high numbers of initiatives coming out of governments, which are looking to quickly identify start-ups that can help to address their most critical challenges. These challenges, competitions and programmes have helped to drive the acceleration of technology adoption across the spectrum of public services. Whether we look at the health care sector, which of course has been under great

pressure, or to those areas of the public services landscape that are less prevalent in the public consciousness, such as social care and education, startups have been at the heart of finding new ways to deliver critical services. Before the pandemic, the GovTech market, the start-ups and technologies driving the transformation of public services, was growing rapidly; entrepreneurs, investors and policy makers began to believe in the benefits in terms of cost, efficiency, and the positive impact on the lives of citizens. The trends we’ve seen during COVID have validated this belief. I hope that, looking to the future, governments will continue to harness the flexibility and resilience of startups that we’ve seen throughout the pandemic. In doing so, I really believe that we’ll see a positive transformation in the way that our public services are provided, and ultimately used, by citizens globally.

Slush 2019 Photo by: Julius Konttinen

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has been a steady in public contracting across European countries and Covid-19 has further l,verall, therethere has been a steady rise inrise public contracting across European countries and Covid-19 has further ccelerated that trend the need to manage a large demand shock. Thisparticularly was particularly the in case rated that trend due todue thetoneed to manage a large demand shock. This was the case thein the K:the withgovernment the government dealing withtwin theforces twin forces of Covid-19 and Brexit, healthcare spending hasahad a th dealing with the of Covid-19 and Brexit, healthcare spending has had has been a steady risehas in public contracting across European countries and Covid-19countries has further Overall, there been rise public across and has massive uplift. ve uplift. Overall, there beenaasteady steady riseininnumber publiccontracting contracting acrossEuropean European countries andCovid-19 Covid-19 has further Beyond wehas also at the overall of software developers per country and in found hat trend duegender, to the need tolooked manage a large demand shock. This was particularly the case the that, on a further accelerated that trend due to the manage ademand large shock. Thisparticularly was particularly population-adjusted Finland Ireland have thetohighest number of demand software per 1 million accelerated thatbasis, trend due toand the need toneed manage a large shock.developers This was the case in the government dealing with the twin forces of Covid-19 and Brexit, healthcare spending has had a inhabitants. the case in the UK: with the government dealing with the forces ofBrexit, Covid-19 and Brexit, healthcare UK: with the government dealing with the twin forces of twin Covid-19 and healthcare spending has had a t.Total healthcare in public healthcare spend spend in public massive uplift. spending has had a massive uplift. contracting by country, H1 2020 acting by country, H1 2020 Number of software developers

re spendby in country public per 1 million y country,inhabitants H1 Total 2020 healthcare spend in public contracting by country, H1 2020 LEGEND

$1-5B $6-10B $11-15B 16B+

SCAN TO UNLOCK ADDITIONAL DATA

SOU RCE: SOU RCE: SOU RCE:

Europe, SMEs playSOU an important role in public procurement. One way governments have supported smaller RCE: InInEurope, SMEs play an important role in public procurement. One way governments have supported smaller is by introducing Covid-19-speci�c rules.procurement. Although SMEs are a much category than In Europe, SMEs play an importantprocurement role inSOU public One waybroader governments have supported smaller RCE: firms is by introducing Covid-19-specific rules. Although SMEs are much as broader category startups, they are a helpful category to look at, asprocurement increased SME spending is likely to bene�t tech astartups Based on a sample of over 2.6M unique tech �rms is by introducing Covid-19-speci�c procurement rules. Although SMEs are a much broader category than REA L when DATA ON REA L SA L Aestimates RIES workers in Europe. National population well. The results have varied by country and comparing for H1 2019 (pre-Covid-19) and H1 2020, thanobtained startups, theyNations are a helpful category to look at, as increased SME spending is likely to benefit tech estimates from the United M ORE DETA IL ED DATA CA N ND BE F OU ON TaH E VA Rthat W Eis likely M ORE DETA IL ED DATA CA N BE F "losers" OU ON TND H Ealso VA M STA RM WSTA EBSIT E EBSIT startups, they are a helpful category to look at, as increased SME spending to bene�t tech startups as biggest are reminder improving access to there are some emerging "winners" for SMEs. The World Population Prospects 2020 database. startups as well. The results varied country and when comparing estimates for(pre-Covid-19) H1 2019 (pre-Covid-19) public procurement processes willhave unlock furtherby value for SMEs and startups alike. well. The results have varied by country and when comparing estimates for H1 2019 and H1 2020, and H1are 2020, there are some emerging “winners” forbiggest SMEs. The biggest “losers” are also athat reminder that access to "losers" are also a reminder improving there some emerging "winners" for SMEs. The M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E DATA SET : BIGGEST W INNERS will unlock further value for SMEs and startups alike. Estimated SMEs share of improving access tothepublic procurement processes public procurement processes will unlock further value for SMEs and startups alike. �rms NOTE:

total annual contract value for M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E public healthcare procurement country has been a steady in public contracting across European countries and Covid-19 has further l,verall, therethere has by been a steady rise inrise public contracting across European countries and Covid-19 has further DATA SET : BIGGEST W INNERS Biggest Winners Estimated SMEs share of the

H1 2020

63%

69%

60%

60 51%

SOU RCE:

39%

SMEs share of total contract value %

L EGEND

Total healthcare in public healthcare spend spend in public H1 2019 contracting by country, H1 2020 acting by country, H1 2020

SMEs share of total contract value %

ccelerated that trend the need to manage a large demand shock. Thisparticularly was particularly the in case rated that trend due todue thetoneed to manage a large demand shock. This was the case thein the L EGEND total annual contract value for 80% spending K:the withgovernment the government dealing withtwin theforces twin80forces of Covid-19 and Brexit, healthcare hasahad a th dealing with the of Covid-19 and Brexit, healthcare spending has had H1 2019 77% public healthcare procurement H1 2020 massive ve uplift.uplift. by country 68% 67%

43%

80%

77% 68%

69%

67%

63%

60%

60 51%

Netherlands

39%

Norway

43%

Hungary

United Kingdom

Germany

Biggest Losers 20

M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E

Netherlands

Norway

SOU RCE:

SOU RCE: SOU RCE:

M ORE DETA IL ED DATA CA N BE F OU ND ON T H E VA M STA R W EBSIT E

226

Hungary

United Kingdom

Germany

07.1

Tech & Government

Increase accessibility and visibility of upcoming tenders

Weacurrently have tocontracting browse through a European lot ofEuropean pages andcountries it would be Overall, has been steady in public contracting across and Covid-19 has further Anonymous survey verall, therethere has been a steady rise inrise public across countries and Covid-19 has further easier to view by timeframes as we need to go through several pages accelerated that trend the need to manage a large demand shock. Thisparticularly was particularly the in case ccelerated that trend due todue the need to manage a large demand shock. This was the case thein the respondent Finland only to realise the deadline has passed. Marketing upcoming tenders UK:the withgovernment the government dealing with the twin forces of Covid-19 and Brexit, healthcare spending hasahad a K: with dealing with the twin forces of Covid-19 and Brexit, healthcare spending has had more effectively would also enable us to rely less on consulting firms. massive massive uplift.uplift. Total healthcare in public Total healthcare spend spend in public contracting by country, H1on 2020 contracting by country, H1down 2020 Drilling a few emerging areas of health technology, including digital health, remote patient

Drilling down on a few emerging areas of health technology, including digital health, remote patient

monitoring, tracing, level of across has significantly increased Drilling down on aand fewpatient emerging areas ofthe health technology, including digital health, remote patient monitoring, and patient tracing, the level ofspend spend acrossthese thesecategories categories has signi cantly increased in monitoring, and and patient tracing, the level of spend2019. acrossInthese categories has signi cantlyhave increased in gained in Germany Poland in H1 2020 versus Germany and the UK, SMEs not only Germany and Poland in H1 2020 versus 2019. In Germany and the UK, SMEs have not only gained market share Germany and Poland in H1 2020 suppliers, versus 2019.they In Germany and the UK, SMEs have not only gained market share market share over larger have significantly expanded contract value as well in absolute over larger suppliers, theysigni havecantly signiexpanded cantly expanded contract value as well in absolute terms. In fact, over larger suppliers, they have contract value as well in absolute terms. In fact, terms. In fact, German SMEs have expanded contract value by over 10x. German SMEs have expanded contract value by over 10x. German SMEs have expanded contract value by over 10x. Healthcare technology spend spend Healthcare technology expansion per country per type expansion per country per type of supplier, H1 2020 vs. H1 2019

of supplier, H1 2020 vs. H1 2019

Germany

9.9x

Germany 7.6x

Poland

2.7x

3.9x

United Kingdom

SME supplier Large supplier

SME supplier

7.7x

2.7x

United Kingdom

3.9x

4.5x

France

2.7x

France

4.5x 3.4x

Spain

11.

7.6x

7.7x

Poland

L EGEND

L EGEND Large supplier

9.9x 11.1x

2.7x

2.6x

3.4x

1.0x Spain

Italy

2.6x

0.8x 0.0

1.0

Italy

2.0

0.0

SOU RCE: SOU RCE: SOU RCE:

3.01.0x

4.0

1.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

H1 2020 / H1 2019 healthcare technology spend

0.8x 2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

H1 2020 / H1 2019 healthcare technology spend

SOU RCE:

To continue with digital transformation at because we let frontline staff pick software M ORE DETA IL ED DATA CA N BE OU ND ON T H E VA Mand STA R W EBSIT E works for them, set it up, and use it. This pace, health systems need toFfind faster that M ORE DETA IL ED N ND BE F OUTND TH Eto VA M Ris W E M ORE DETA IL ED DATA CADATA N BE CA F OU ON H E ON VA M STA R be WSTA EBSIT E EBSIT clearer routes for effective innovations not how software in healthcare is typically tested and adopted. Right now, there isn’t a implemented, but we believe when the ‘users challenge spottingMproblems orDATA building they’ll ORE DETA IL ED CA N BE the F OU ND ONare T H Echoosers’, VA M STA R W EBSIT E consistently raise the technology to solve them, but knowing what bar, as the wider SaaS industry has shown. to do next is where innovations stop. We To continue with digital transformation at pace, need to move from a place where IT budgets health systems need to find faster and clearer are fixed, regardless of technological routes for effective innovations to be tested progress, to one where new solutions that and adopted. Right now, there isn’t a challenge create value across the system can be spotting problems or building the technology rapidly procured and adopted. to solve them, but knowing what to do next is Decision making in healthcare systems is typically driven by risk rather than opportunity. In March, adopting new technology moved from being an opportunity to an imperative, as systems needed to be able to deliver care remotely and communicate more efficiently. Existing inefficiencies in the system were accentuated, and we’ve been fortunate to be able to help whilst accelerate our existing roadmap, rather than develop Covid-19specific products. Jacob Haddad accuRx Co-Founder

We went from 50% of GP practices in England using us to 95% in the space of four weeks, and we rolled out six major new features in as many weeks. We were only able to do this

227

where innovations stop. We need to move from a place where IT budgets are fixed, regardless of technological progress, to one where new solutions that create value across the system can be rapidly procured and adopted. The innovations that have scaled and worked in 2020 have also been free from the AI/ wearables/personalised medicine hype often seen in healthcare. That’s not to say these technologies won’t play a role in the future, but healthcare systems are currently decades behind. Particularly in times of crisis, staff value software that makes their day easier and just works. That’s what we need a lot more of.

10.0

11.0

07.2 Policy

Measuring policy focus in Europe Last year’s report identified a number of opportunities for improved collaboration between policymakers and the European tech community. This year’s report explores change in these areas, based on the results of the For reference, the table below describes the type ofPro data used throughout the shared State of European Tech Survey as well as POLITICO Intelligence’ s analysis ofanalysis the activities of by thePOLITICO European Europe. Activities and press releases provide a sense of what is being talked about and the responses to Parliament (the legislative branch of the European Union). those discussions. Legislative documents, on the other hand, reveal what makes it into draft policies. Information

Description

Why Is It Useful?

Type Overview of European in This data looksthroughout specifically at keywords occurrences For reference, the table table below below describes by POLITICO Parliament datathe Activities a good proxy for the prevalence of selected technology For reference, describes the the type type of of data data used used throughoutthe theanalysis analysisshared shared byare POLITICO

parliamentary questions, speeches and debates made by Activities For reference, the table below describes the type1 of data used throughout the analysis shared by POLITICO related discussions taking place at the EP. elected legislators. Europe. Activities and of what isisbeing talked and responses Europe. Activities and press press releases releases provide asense sense of what being talked about andthe theto responsestoto Europe. Activities and press releases provideprovide a senseaof what is being talked about and about the responses those discussions. Legislative documents, on the other hand, reveal what makes it into draft policies. Press releases are a proxy for the response of the EP to these discuss discussions. Legislative documents, on the other hand, reveal what makes it into draft policies. those discussions. Legislative documents, on the other hand, reveal what makes itoccurrences into draft This data focuses on keywords in policies. 2

Overview of European Overview of European Parliament data data Parliament

Activities

Press releases

NOTE: We look at the number of keyword occurrences relating to a set of selected technology-related topics in the European Parliament.

Press releases

Information Information Type Type

1 3

commentaries and responses from the various agencies and other moving parts of government. Description Description

and the communication back to the public. This should translate into greater awareness of the issues at hand (and proposed solutions) of public.Why Is It Useful? Why Is It Useful?

This data looks This specifically at keywords occurrences in data at the number keywords occurrences This data looks looks specifically atof keywords occurrences Activities areina good proxy for the prevalence of selected technologyActivities are aagood proxy for the prevalence of selected technology parliamentary questions, anddocumentation, debates made bywhich relates to the related tospeeches legislative Legislation proxy relatedmade discussions taking place atisthe EP. for the 'o utcome' of 'activities', as it takes Activities parliamentary questions, speeches and debates by Legislation elected legislators. related discussions takinginto place atprocess the EP. of law making. discussions a step further the ongoing process of law making, actual bills, procedures, elected legislators. etc. Press releases are a proxy for the response of the EP to these discussions

This data focuses on keywords occurrences in Press releases are a proxy for the response of the EP to these discuss and Thisresponses data focuses occurrences in the communication back to the public. This should translate into commentaries and from on thekeywords various agencies andissues the communication back tosolutions) the public. This should translate into Press greater awareness of the at hand (and proposed of the 2 commentaries and responses from the various agencies parts of government. and other moving public. greater awareness of the issues at hand (and proposed solutions) of releases and other moving parts of government. public. SOU RCE:This data looks at the number of keywords occurrences Legislation is a proxy for the 'o utcome' of 'activities', as it takes related to legislative documentation, which relates to the This data looks at the number of keywords occurrences Legislation actual documentation, bills, procedures, whichdiscussions a step further into the process of for lawthe making. ongoing processrelated of law making, Legislation is a proxy 'o utcome' of 'activities', as it takes to legislative relates to the 3 Legislation etc. discussions a step further into the process of law making. ongoing process of law making, actual bills, procedures, etc.

NOTE: We lookNOTE: at the number of keyword occurrences relating to a set of selected Topics and corresponding Topics corresponding technology-related topics in theof European We look atand the number keyword search terms Parliament. occurrences relating to a set of selected search terms

technology-related topics in the European Parliament.

Topic / Keywords Topic / Keywords SOU RCE: 1 Artificial Intelligence 1 Artificial Intelligence artificial intelligence artificial intelligence

SOU RCE:

Search Terms

Autonomous vehicles / mobility

autonomous vehicles, autonomous vehicle, self driving cars, driverless, autonomous driving

Blockchain / Crypto

cryptocurrency, crypto-currency, blockchain, bitcoin, ethereum

Brexit

brexit

Capital gains taxation

capital gains

Content & Copyright

Covid-19

Autonomous vehicles / mobility

Blockchain / Crypto

Brexit

autonomous vehicles, autonomous vehicle, self driving cars, driverless, autonomous driving

cryptocurrency, crypto-currency, blockchain, bitcoin, ethereum

Capital gains taxation

Content & Copyright

Covid-19

brexit capital gains copyright

covid-19, covid19, pandemic, coronavirus, health crisis

Cybersecurity

8 Cybersecurity Dataprivacy / GDPR

data breach data privacy, gdpr,cybersecurity, general data privacy regulation, data protection

Digital 9 health Dataprivacy / GDPR

data privacy, gdpr,healthcare general data privacy regulation, data protection ehealth, e-health, digital health, digital

cybersecurity, data breach

Digital 10 ServicesDigital Act health

digital services actehealth, e-health, digital health, digital healthcare

Digital 11 Single Market Digital Services Act

digital single market digital services act

Digital tax

Digital Transformation

digital transformation, digital age

Disinformation / deepfakes

disinformation, deepfakes, deepfake

Drones

drones, uav, unmanned aerial vehicle

European Startups

digital tax, digital taxation

Digital Single Market

digital single market

Digital tax

digital tax, digital taxation

Digital Transformation

digital transformation, digital age

Disinformation / deepfakes

disinformation, deepfakes, deepfake

Drones

drones, uav, unmanned aerial vehicle

European Startups

Fintech

european startup, startup

Fintech

Genome editing

Green Deal

19 workers Genome editing Platform / gig economy

platform workers,crispr gig economy, zero hours contract

20computing Green Deal Quantum

climate crisis, green deal, sustainable economy, european climate law quantum computer quantum computing,

fintech, financial technology crispr

european startup, startup fintech, financial technology

climate crisis, green deal, sustainable economy, european climate law

Research framework horizon 2020, research and innovation framework 21 and innovation Platform workers / gig economy platform workers, gig economy, zero hours contract

Stock options 22 Quantum computing

stock options, employee ownership, share options computer computing, quantum quantum

US Big Tech companies

google, youtube, amazon, facebook, instagram, whatsapp, apple, twitter, netflix, airbnb, ebay, microsoft

SOU RCE:

Research and innovation framework

horizon 2020, research and innovation framework

Stock options

stock options, employee ownership, share options

US Big Tech companies

google, youtube, amazon, facebook, instagram, whatsapp, apple, twitter, netflix, airbnb, ebay, microsoft

SOU RCE:

228

prominently in European Parliament activities and press releases. The topic of US Big Tech companies remains high on the discussion agenda, still ranking above Brexit in terms of volume of mentions, despite the 07.2 Policyof the UK from the European Union. imminent exit Covid-19 Top 20 key topics in European Parliament by number of Unsurprisingly, Covid-19 has dominated much of the European Parliament’s attention in 2020 and has Green Deal Parliament's attention in 2020 and has dwarfed Unsurprisingly, Covid-19 mentions in activities and has dominated much of the European dwarfed almost every other topic over the past year. Looking beyond Covid-19, theDeal Green also press releases Unsurprisingly, has dominated the European Parliament's attention in 2020 and has dwarfed almost everyCovid-19 other topic over themuch pastofyear. Looking beyond Covid-19, the Green hasDeal alsohas been discussed US Big Tech companies been discussed prominently in European Parliament activities and press releases. The topic of US Big almost every other topic over the past year. Looking beyond Covid-19, the Green Deal has also been discussed prominently in European Parliament activities and press releases. The topic of US Big Tech companies L EGEND prominently in European Parliament and press releases. The topic of US Big TechBrexit Tech companies remains high activities onagenda, the discussion agenda, still ranking above in terms of volume of Brexit remains high on the discussion still ranking above Brexit in terms ofcompanies volume of mentions, despite the remains 2020high on the discussion agenda, still ranking above Brexit in terms of volume of mentions, despite the mentions,exit despite theUK imminent exit of the UK from the European Union. imminent of the from the European Union. imminent 2019 exit of the UK from the European Union. Digital Transformation Disinformation / deepfakes Covid-19 Covid-19

Top 2020 keykey topics in European Top topics in European Parliament by number of Parliament by number of mentions in activities and mentions in activities and press releases

Green DealData privacy / GDPR

Green Deal

press releases

US Big Tech companies

USArtificial Big TechIntelligence companies

L EGEND

Brexit

L 2020 EGEND

Research and innovation framework Brexit

2019 2020

Digital Transformation

Cybersecurity

2019

Digital Transformation Disinformation / deepfakes

Act Data privacy / GDPRDigital Services Disinformation / deepfakes Artificial Intelligence

Drones Data privacy / GDPR

Research and innovation framework

Content & Copyright Artificial Intelligence

Cybersecurity

European Startups Research and innovation framework Digital Services Act

Digital health Cybersecurity

Drones

Digital Act tax Content & CopyrightDigital Services European StartupsBlockchain / Crypto

Drones

Digital health

Digital Single Market Content & Copyright

Digital tax Blockchain / Crypto

Fintech European Startups

Platform workers /Digital gig economy health

Digital Single Market Fintech

Digital tax

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

4,500

5,000

# of mentions

Platform workers / gig economy

Blockchain / Crypto

NOTE:

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

This data looks at the number of keyword of mentions Digital Single Market The shifting focus oftopics theinnew European SOU Parliament administration is re ected #in the downward trend of RCE: occurrences related to key tech European Parliament activities and press NOTE: keyword occurrences around US Big Tech companies and Brexit, suggesting that these topics have slipped releases. Data as of 10 November 2020. Fintech This data looks at the number of keyword down the policy agenda. SOU RCE: occurrences related to key tech topics in European Parliament activities and press releases. Data as of 10 November 2020.

Platform workers / gig economy

Number of mentions of US Big

2,500

500

1,000

1,500

2,000

2,500

3,000 3,500 2,363 # of mentions

4,000

Tech companies or Brexit in The shifting focus The shifting focus of of the the new new European European Parliament Parliament administration administration is is reflected re ectedin inthe thedownward downwardtrend trend of European Parliament activities ofand keyword occurrences around US Big Tech companies and Brexit, suggesting that these topics haveslipped The shifting focus of the new European Parliament administration is re ected in the downward trend of NOTE: keyword occurrences around US Big Tech companies and Brexit, suggesting that these topics have 2,000 press releases per year keyword occurrences around US Big Tech companies and Brexit, suggesting that these topics have slipped slipped down policy agenda. This data looks at thethe number of keyword down the policy agenda. down the policy occurrences related toagenda. key tech topics in

2,500

Brexit

US Big Tech companies NOTE: This data looks at the number of keyword occurrences related to Brexit and US Big Tech companies in European Parliament activities NOTE: and press releases. Data as of 10 November 2020. This data looks at the number of keyword occurrences related to Brexit and US Big Tech companies in European Parliament activities and press releases. Data as of 10 November 2020.

1,106

1,029

908

1,000

500

538

1,106 916

876

2017

724

2018 916

876

908

1,029 2019

2017

2016

SOU RCE:

229

2018

2017

445

538

SOU RCE:

1,349

1,029

908

1,106

2016

1,000

2016 500

445

1,349

1,500

NOTE:

This data looks at the number of keyword occurrences related to Brexit and US Big Tech companies in European Parliament activities and press releases. Data as of 10 November 2020.

2,363

916

876

500

1,500

# of mentions

US Big Tech companies

1,349 2,363

2,000 # of mentions

Brexit

L EGEND

1,500 2,500 1,000

2,000

and press releases per year L EGEND

# of mentions

SOU RCE:

L EGEND Parliament activities and press European releases. BrexitData as of 10 November 2020. Number of of US Number ofmentions mentions ofBig US Big US Big Tech companies Tech companies or Brexit in Tech companies or Brexit in European Parliament activities European Parliament activities and press releases per year

2019

445

2020

2018

2019

In 2020, Europe's digital transformation strategy has become a point of focus. To this end, the European 07.2 Policy Commission is working across three key areas: technology, a competitive and fair digital economy, and lastly, an open, democratic and sustainable society. Data privacy discussions have decreased following the implementation of the GDPR in May 2018, and the focus has shifted to arti�cial intelligence, with the regulatory framework on ethical AI in the making. In 2020, 2020, Europe's Europe’s digital digital transformation In transformation strategy strategy has has become become aa point point of of focus. focus. To Tothis thisend, end,the theEuropean European Commission is working working across across three three key keyareas: areas:technology, technology,aacompetitive competitiveand andfair fairdigital digitaleconomy, economy,and and lastly, In 2020, s democratic digital strategy has become point ofprivacy focus. To discussions this end,have the European Number of mentions oftransformation Digital lastly, anEurope' open, and sustainable society. Data have decreased following an open, democratic and sustainable society. Dataa privacy discussions decreased following the Commission is working across three key areas: technology, a competitive and fair digital economy, and lastly, 400 Transformation, Arti�cial implementation of the GDPR in May 2018, and the focus has has shifted to arti�cial intelligence, withwith the the regulatory the implementation of the GDPR in May 2018, and the focus shifted to artificial intelligence, an open, democratic Intelligence or GDPRand in sustainable society. Data privacy discussions have decreased following the framework on ethical AI in the making. implementation of the GDPR in May 2018, and the focus has shifted to arti�cial intelligence, with the regulatory regulatory framework on ethical AI in the making. European Parliament activities framework on ethical AI in the making. and press releases per year

Digital Transformation L EGEND Data Privacy / GDPR

# of mentions

400

300

200

Digital Transformation Arti�cial Intelligence

Data Privacy / GDPR

400 200

300 # of mentions

L EGEND

300

# of mentions

Number ofmentions mentions of Digital Number of of Digital L EGEND Transformation, Arti�cial Transformation, Arti�cial Digital Transformation Intelligence oror GDPR in in Intelligence GDPR European Parliament Data Privacy / GDPR activities European Parliament activities and press releases per year Arti�cial and pressIntelligence releases per year

100

200 0

100

Arti�cial Intelligence NOTE: This data looks at the number of keyword occurrences related to Digital Transformation, NOTE: Arti�cial Intelligence and Data privacy / GDPR This data looks at the number of keyword in European Parliament activities and press occurrences related to Digital Transformation, releases. Data as of 10 November 2020. Arti�cial Intelligence and Data privacy / GDPR

2016

2017

2018

2019

2020

2019

2020

100

2016

2017

2018

2019

2020

SOU RCE: 0

SOU RCE:

2016

2017

2018

in European Parliament activities and press releases. Data as of 10 November 2020. NOTE:

This data looks at the number of keyword occurrences related to Digital Transformation, Arti�cial Intelligence and Data privacy / GDPR in European Parliament activities and press releases. Data as of 10 November 2020.

SOU RCE: For Europe, achieving a global leadership on AI will require pulling all necessary levers to unleash innovation-led growth, ease transitions in the skillset of the workforce and foster technology adoption and diffusion.

While China and the United States have been moving forward with determination on the AI front, Europe has the resources at its disposal to keep pace. The continent boasts cuttingedge education and research capabilities; it has more professional developers than the US and is home to 1/3 of high-quality research publications on AI. For Europe, achieving a global leadership on AI will require pulling all necessary levers to unleash innovation-led growth, ease transitions in the skillset of the workforce and foster technology adoption and diffusion. We Eric Hazan estimate that if only 9 European “digital front-runners” countries were to adopt AI at scale, the McKinsey After much talk aboutpotential US Big Tech Companies over thebepast veas years, the European is expected Senior Partner economic impact could as high €42 billion annuallyCommission (or 1.4% of GDP). to deliver a new piece of regulation by the end of 2020 as a response to its concerns about building a competitive and fair digital economy. The newly-christened Digital Services Act ("DSA") regulation is expected to be one oftalk the about largest regulatory overhauls ofover the digital economy. The EUEuropean is preparing a "blacklist After much US Big Tech Companies the past ve years, the Commission isof expected After much talk about US Big Tech Companies over the past five years, the European Commission isthey expected to as can make of the data collect, behaviours" and is expected to narrow down the use that "gatekeepers" After much talk about US Big Tech Companies over the past ve years, the European Commission to deliver a new piece of regulation by the end of 2020 as a response to its concerns about buildingisaexpected deliver alimit new piece of regulation by thebyend ofend 2020 as a response to on its their concerns about building abuilding competitive well as the preferential treatment their own services enjoy sites or platforms. Unsurprisingly, the to deliver a new piece of regulation the of 2020 as a response to its concerns about a competitive and fair digital economy. The newly-christened Digital Services Act ("DSA") regulation is expected and fair digitalaround economy. The newly-christened Digital Services Act (“DSA”) regulation is("DSA") expected topress be one discussions the DSA are now picking up steam in European Parliament activities and releases. competitive and fair digital economy. The newly-christened Digital Services Act regulation is expected to be one of the largest regulatory overhauls of the digital economy. The EU is preparing a "blacklist of ofAfter the largest regulatory overhauls ofoverhauls theover digital economy. The EU is preparing a “blacklist and to be one of the largest regulatory of the economy. The EU isispreparing a "blacklist of as much talk about US Big Tech Companies the past ve digital years, the European Commission expected behaviours" and is expected to narrow down the use that "gatekeepers" can make of of thebehaviours” data they collect, to deliver a new piece of regulation by the end of 2020 as a response to its concerns about building a behaviours" and is expected to narrow down the use that "gatekeepers" can make of the data they collect, asthe is expected tothe narrow down thetreatment use that “gatekeepers” can make of the they collect, as well asUnsurprisingly, limit the well as limit preferential their2,500 ownDigital services enjoy ondata their sites orexpected platforms. Number of mentions of theeconomy. DSA competitive and fair digital The newly-christened Services Act ("DSA") regulation is 2,363 well as limit the preferential treatment their own services enjoy on their sites or platforms. Unsurprisingly, the preferential treatment their services enjoy oneconomy. their sites orEUplatforms. Unsurprisingly, the discussions and BigofTech Companies in own to beUS one the largest regulatory overhauls the digital The is preparing a "blacklistactivities of discussions around the DSA are now of picking up steam in European Parliament and press releases. discussions around the DSA are now picking up steam in European Parliament activities and press releases. can make of the data collect, as behaviours" and isare expected to narrow the use that "gatekeepers" European activities around theParliament DSA now picking updown steam in European Parliament activities andthey press releases.

This data looks at the number of keyword occurrences related to US Big Tech NOTE: companies and the DSA in European Parliament activities and press releases. Data This data looks at the number of keyword as of 10 November occurrences related to2020. US Big Tech NOTE: companies and the DSA in European NOTE: Parliament activities and press releases. Data This data looks at the number of keyword as of 10 November 2020. occurrences related US Big of Tech This data looks at thetonumber keyword companies and the DSA in European occurrences related to US Big Tech Parliament activities andinpress releases. Data companies and the DSA European as of 10 November 2020. Parliament activities and press releases. Data as of 10 November 2020.

2,000

1,500

1,000

1,000 # of#mentions of mentions

# of mentions

2018 and press releases per year L EGEND 2019 L EGEND L 2016 EGEND 2020 2016 2016 2017 2017 2017 2018 2018 2018 2019 2019 2019 2020 2020 2020 NOTE:

# of mentions

well press as limitreleases the preferential 2,000 enjoy on their sites or platforms. Unsurprisingly, the and per yeartreatment their own services discussions around the in European Parliament activities and press releases. Number of mentions ofDSA the are DSAnow picking up steam2,500 2,363 Number of mentions of the DSA 2,500 L EGEND and US Big Tech Companies in 2,363 1,500 and US Big Tech Companies in European activities Number mentions of the DSA 2016 of Parliament 2,500 1,349 2,363 European activities andpress US Big Parliament Tech Companies in 2,000 and releases per year 2017 European 2,000 and pressParliament releasesactivities per year

1,000 1,000

876

1,349 1,349

1,349

500

0 500

916

876

1,500 1,500

916

916 916

876 876

724

US Big Tech Companies

500 500

724

724 724

0 0

US Big Tech Companies

SOU RCE: SOU RCE:

230

Digital Services Act

US Big Tech Companies US Big Tech Companies

Digital Services Act

Digital Services Act Digital Services Act

4 4

63 63

The administration's new focus on sustainability and, more speci�cally, climate, is noteworthy. The Commission' s "European Green Deal" aims to make the European Union the �rst continent to become climate 07.2 Policy neutral by 2050 and is considered by European Commission President, Ursula von der Leyen, to be a European "moonshot". The scale of the projected investment needed to �nance the Green Deal - more than €1 trillion has the potential to be an important catalyst for purpose-driven European tech entrepreneurs focused on The administration’ s new focus on sustainability and, more specifically, climate, is noteworthy. The tackling climate issues. The administration' s newGreen focus Deal” on sustainability and, speci�cally, climate, is noteworthy. The Commission’ s “European aims to make themore European Union the first continent to become Commission's "European Green Deal" aims to make the European Union the �rst continent to become climate The administration's focus onis sustainability and,by more speci�cally, climate, is noteworthy. The Ursula von der Leyen, climate neutral bynew 2050 and considered European Commission President, Numberby of2050 mentions 1,000 Commission President, Ursula von der Leyen, to be a European neutral andofisthe considered European s "European Green Deal" aimsby to make the European Union the �rst continent to become climate toCommission' be a European “moonshot”. The scale of the projected investment needed to finance the Green Deal Green Deal in The European "moonshot". of thebyprojected investment needed to �nance the Green Deal - more than €1 trillion neutral by 2050 andscale is considered European Commission President, Ursula von der Leyen, to be a European Parliament activities and press - more than €1 scale trillion - an has the potential toneeded befor anpurpose-driven catalyst purpose-driven tech on "moonshot". The of the projected investment toimportant �nance the Green Deal for - more than €1entrepreneurs trillion - European European tech focused has the potential to be important catalyst releases per yearto be an important catalyst for purpose-driven European tech entrepreneurs focused on has the potential entrepreneurs focused on tackling climate issues. 750 tackling climate issues.

Number of of the Number ofmentions mentions of the Green Deal in European Green Deal in European Parliament activities and press Parliament and press releases peractivities year releases per year

1,000

# of mentions

tackling climate issues.

1,000 500

936

# of mentions

750

293

750 250 # of mentions

500 Under the Juncker Commission, 30 legislative proposals on the Digital Single Market were made, of which 28 have been agreed. The two proposals that have not yet 14been rati ed pertain to "strengthening trust" and the 22 14 500 293 0importance of moving forward on these EU's capacity to respond to cyberattacks. The two proposals is 250 2016 2017 2018 2019 underpinned by responses to the State of European Tech survey. When asked to identify up to three areas 293 NOTE: impact on requiring urgent attention from regulators given their potential 22 society, disinformation, 14 14 250 0 This data looks at theand number of keyword 2016 highly by respondents. 2017 2018 2019 role of Big 2020 cybersecurity data privacy were all ranked Interestingly, the Tech SOU RCE: occurrences related to the Green Deal in companies also featured high amongst survey respondents. European NOTE: Parliament activities and press

releases. Data as of 10 November 2020. This data looks at the number of keyword occurrences related to the Green Deal in European Parliament activities and press releases. Data as of 10 November 2020.

SOU RCE:

2016

2017

2018

2019

In your opinion, which areas in Disinformation (e.g. deep fakes) tech urgent attention NOTE: require Under the Juncker Commission, 30 legislative proposals on the Digital Single Market were made, of which from regulators as they are likely Under the Juncker Commission, 30 legislative proposals on the Digital Single Market were made, of which 28 This data looks at theagreed. number of keyword Big Tech dominance 28to have been The two proposalsSOU that have not yet been ratified pertain to “strengthening trust” and RCE: bebeen most impactful for society occurrences related to the Green Deal in have agreed. The two proposals that have not yet been rati ed pertain to "strengthening trust" and the Under the Juncker Commission, legislative proposalsThe on the Digital Single of Market were made, of which 28 European Parliament press 30to (in a good or badactivities way) ?and the EU’ s capacity to respond cyberattacks. importance moving forward on these two proposals EU' s capacity toNovember respond to cyberattacks. importance of moving forward on and these releases. Data agreed. as of 10 2020. have been The two proposals that have not The yet been rati ed pertain to "strengthening trust" the two proposals is Artificial Intelligence isEU's underpinned by responses the State European Tech survey. When askedtoto identify up to three underpinned responses toto the State ofof European Tech survey. When asked capacity toby respond to cyberattacks. The importance of moving forward on these two proposals isidentify up to three areas areas requiring urgent attention from regulators given their potential impact on society, disinformation, underpinned by responses to the State of European Tech survey. When asked to identify up to three areas requiring urgent attention from regulators given their potential impact on society, disinformation, impact on society, disinformation, requiring urgentand attention regulators their potential Datarespondents. privacy & management cybersecurity datafrom privacy weregiven all ranked highly by Interestingly, the role highly by respondents. Interestingly, the roleof ofBig BigTech Tech cybersecurity and data privacy were all ranked highly by respondents. Interestingly, the role of Big Tech companies also featured high amongst survey respondents. high amongst survey respondents. companies also featured high amongst survey respondents. Cybersecurity

In your opinion, which areas in

Intech your opinion, which areas in require urgent attention tech urgent attention fromrequire regulators as they are likely to beregulators most impactful society from asfor they are likely a good or bad way) ? to(inbe most impactful for society (in a good or bad way) ?

30%

29%

27%

24%

Disinformation (e.g. deep fakes)

37%

Disinformation (e.g. deep fakes) Tax (e.g. digital tax for Big Tech)

20%

Big Tech dominance

30%

Big Tech dominance Genetic editing

Artificial Intelligence

Data privacy & management Digital infrastructure (e.g. 5G)

24%

Tax (e.g. digital tax for Big Tech)

29%

15%

27%

Cybersecurity Data privacy & management Platform workers (e.g. gig economy)

30%

17%

29%

27%

15%

20%

Cybersecurity Intermediary liability (i.e. Platforms responsible for content uploaded by its users)

17%

Tax (e.g. digital tax for Big Tech) Blockchain / cryptocurrency

Digital infrastructure (e.g. 5G)

Intermediary liability (i.e. Platforms responsible for content uploaded by its users)

Digital infrastructure (e.g. 5G) Mass automation

Blockchain / cryptocurrency

20%

10%

15%

Genetic editing Autonomous vehicles

Platform workers (e.g. gig economy)

24%

11%

Genetic editing

15%

17%

11%

15%

10%

Platform workers (e.g. gig economy) European cloud frameworks (e.g. Gaia X)

Autonomous vehicles

15%

Intermediary liability (i.e. Platforms responsible for Mass automation content uploaded by its7% users) Drones

11%

6% 0 Blockchain / cryptocurrency

European cloud frameworks (e.g. Gaia X)

10 10%

% of respondents 4%

Drones

Autonomous vehicles 0

NOTE:

SOU RCE:

Respondents were able to select up to three responses for this question. NOTE:

Respondents were able to select up to three responses for this question.

% of respondents

Mass automation

SOU RCE:

European cloud frameworks (e.g. Gaia X)

231

Drones 0

07.2

Policy

The EU should go beyond patching existing frameworks and bolstering effective enforcement. The increased use of AI systems, in particular, suggests that the EU’s regulatory vision Corinne Cath-Speth Oxford Internet Institute must expand to include tech’s impact on discrimination and DPhil student socioeconomic inequities. Rather than retreating or “sheltering The huge increase in mentions of keywords related to disinformation is a re ection of the growing concern place,” now is the moment fortothe EUpart to translate the “new around the in topic. This policy area is likely form of the third pillar of the EU's digital transformation possible” of a post-pandemic world to its digital ambitions. strategy to protect an open, democratic and sustainable society, given the perceived threat of coordinated disinformation activities to democratic institutions.

Number of of of Number ofmentions mentions Disinformation / Deepfakes in Disinformation / Deepfakes in European Parliament activities European Parliament activities and press releases per year and press releases per year

# of mentions

The hugeofincrease in related Number mentions of The huge increase in mentions mentions of of keywords keywords250 relatedto todisinformation disinformationisisaareflection re ectionofofthe thegrowing growingconcern concern Disinformation / Deepfakes in around the topic. This policy area is likely to form part of the third pillar of the EU’ s digital transformation 212 around the topic. This policy area is likely to form part of the third pillar of the EU's digital transformation The huge increase in mentions of keywords related to disinformation is a re ection of the growing concern European Parliament activities strategy to protect an open, democratic and sustainable society, given the perceived threat of coordinated around the topic. This policy area is likely to form part of the third pillar of the EU's digital transformation strategy protect anyear open, democratic and200sustainable society, given the perceived threat of coordinated and presstoreleases per strategy to protect an open, democratic and sustainable society, given the perceived threat of coordinated disinformation activities to democratic institutions. institutions. disinformation activities to democratic institutions. 250

200

238

151

150 238

250 212

238 212

100

151

100

NOTE:

50 # of mentions

# of mentions

200 150

151

150 0

2016

100

2017

2018

2019

2020

AnThisanalysis of the top 20 topics across the 2015-2019 and 2020 periods shines a light on the two data looks at the number of keyword 0 occurrences related to Disinformation 40 administrations' differing/ priorities. Notably, mentions of 2017 the Digital Single Market have These 2016 2018 2019 faded quickly. 2020 50 SOU RCE: Deepfakes in European Parliament activities 21 NOTE: changes will continue to materialise over the following year, especially if and when the focus can move on and press releases. Data as of 10 November 2020. This data looks at the number of keyword from responding to the Covid-19 pandemic. occurrences related to Disinformation / Deepfakes in European Parliament activities and press releases. Data as of 10 November 2020.

SOU RCE:

2016

2017

2015-2019

NOTE:

2018

2020

2019

Top 20 key topics in top European 1 US Big Tech companies Covid-19 AnThis analysis of the 20 topics data looks activities atof thethe number of keyword An analysis top 20 topics across across the the 2015-2019 2015-2019 and and 2020 2020 periods periods shines shines aa light lighton onthe the two Parliament and press occurrences related to Disinformation / across Antwo analysis of the top 20 topics the 2015-2019 and 2020 periods shines a light on the two administrations’ differing priorities. Notably, mentions of the Digital Single Market have 2 Brexit Green Deal releases, 2015-2019 versus 2020 SOU RCE: administrations' differing priorities. Notably, mentions of the Digital Single Market have faded quickly. These Deepfakes in European Parliament activities administrations' differing priorities. Notably, mentions of the Digital Single Market have faded quickly. These and press releases. Data as of 10 November faded quickly. These changes will continue to following materialise overespecially the following year, especially 3the Data privacy / GDPR US Big Tech companies changes will continue to materialise over year, if and when the focus can move on changes 2020. will continue to materialise over the following year, especially if and when the focus can move on if and when the focus can move on from responding to the Covid-19 pandemic. from responding to the Covid-19 pandemic. from responding to the Covid-19 pandemic. 4 Research and innovation framework Brexit 5

TopTop 20 key in European 20 topics key topics in European Parliament activities and press Parliament activities and press releases, 2015-2019 versus 2020

releases, 2015-2019 versus 2020

NOTE: This data looks at the number of keyword occurrences related to key tech topics in European Parliament activities and press NOTE: releases. Data as of 10 November 2020. This data looks at the number of keyword occurrences related to key tech topics in European Parliament activities and press releases. Data as of 10 November 2020.

NOTE: This data looks at the number of keyword

Digital Single Market 2015-2019 2015-2019

Digital Transformation 2020 2020

US Big6 1Tech companies US Big Tech companies Cybersecurity

Covid-19

Brexit

Green Deal

Data privacy / GDPR

US Big Tech companies

Research and innovation framework

Brexit

Digital Single Market

Digital Transformation

5 Digital Single Market 10 Artificial Intelligence Cybersecurity

Digital Transformation Cybersecurity Disinformation / deepfakes

6 & Copyright Cybersecurity 11 Green Deal Content

Dataprivacy / GDPR

Disinformation deepfakes Digital Services/Act Dataprivacy / GDPR Drones

Brexit & Copyright Content

3 8

Data privacy / GDPR Digital Transformation

4 9

Research and innovation framework Disinformation / deepfakes

Covid-19 Disinformation / deepfakes Green Deal / GDPR Dataprivacy US Big Tech companies Artificial Intelligence Brexit and innovation framework Research

Digital7 Transformation Content 12 Drones & Copyright

Artificial Intelligence

Disinformation / deepfakes

Research and innovation framework

Artificial Intelligence

Cybersecurity

Green Deal

Digital Services Act

8 13

Digital Transformation Blockchain / Crypto

9 14

Disinformation Digital health / deepfakes

10 15

Artificial EuropeanIntelligence Startups

11 16

Green Deal Fintech

Drones

Blockchain / Crypto

Artificial Content &Intelligence Copyright

Drones Content & Copyright

Research innovation framework Europeanand Startups Cybersecurity Digital health Services Act Digital tax

12 Digital17 health

European 13 Startups Blockchain 18 Digital tax / Crypto

Digital health

Content & Copyright Digital Single Market

Fintech

Digital tax

European Startups Fintech

14 19

Drones Autonomous vehicles / mobility European Startups

Digital health Platform workers / gig economy

Autonomous vehicles / mobility

Blockchain / Crypto

Digital tax

Digital Single Market

Platform workers / gig economy

Genome editing

15 20

SOU RCE:

Europeanediting Startups Genome

Fintech

Autonomous vehicles / mobility

Fintech

Drones Blockchain / Crypto

Digital health Platform workers / gig economy Digital tax Blockchain / Crypto

Platform workers / gig economy

SOU RCE: 18 Digital tax

Digital Single Market

Platform workers / gig economy

Fintech

Genome editing

Platform workers / gig economy

232

2020

07.2

Policy

This year, the survey included specific questions to gather targeted and actionable insights from This year, the survey included speci�c �uestions to gather targeted and actiona�le insights from respondents respondents on the European Commission’s strategy. One area of focus was the upcoming Research and on the European Commission's strategy. One area of focus was the upcoming Research and Innovation Innovation Framework (Horizon Europe). This programme meantup to to deliver tospending €100B ofon spending on and This year, the survey included speci�c �uestions to gather actiona�le insights fromup respondents Framework (Horizon Europe). This programme istargeted meantand tois deliver €100B of Research on the European Commission'sinstrategy. One area ofUnion focus was the upcoming Research and Innovation Research and Innovation the European and set to launch in 2021. Despite its scale and potential Innovation in the European and is set to launch inup2021. Despite its scale and potential impact, almost twoFramework (Horizon Europe). ThisUnion programme meant to deliver to €100B of spending on Research and impact, almost two-thirds (65%) of survey respondents are unaware of its existence. Amongst founder thirds (65%) of survey respondents are unaware of its existence. Amongst founder respondents to the survey, Innovation in the European Union and set to launch in 2021. Despite its scale and potential impact, almost twothirds (65%) survey respondents areone unaware of its existence. Amongst founder respondents toprogramme, the survey, respondents to the survey, in aware three (37%) they were aware of theare they only one in of three (37%) saidonly they were of thesaid programme, though they one of the though most important only one in three (37%) said they were aware of the programme, though they are one of the most important are one of the most important intended recipient groups of the huge-scale spending plan. intended recipient groups of the huge-scale spending plan. intended recipient groups of the huge-scale spending plan. Areyou you aware ofof thethe upcoming Are aware upcoming research and innovation research and innovation framework program of the framework program of the European Commission, Horizon Europe? European Commission, Horizon Europe? L EGEND

% of founders

37%

63%

Yes

L EGEND No

% of founders

37%

63%

Yes No

100

% of founders

The survey also asked respondents to optionally provide feedback for the European Commission on how to improve the e�cacy of their programmes and yielded more than 670 responses. A keyword analysis of these 0 10 20 30 50 60 70 SOU RCE: responses highlights that eliminating perceived bureaucracy and complexity from 40 the process to access % of founders Research & Innovation funding is by far the most frequently recommended improvement. The second most recommended step is to inform and communicate around these programmes more effectively. Additionally, The survey also asked respondents to optionally provide feedback for the European Commission on how widening access to funding is another recommendation that the relates, in particular, to tender The survey alsoefficacy asked respondents to common optionally providemore feedback European on how to SOU RCE: to improve the of their programmes and yielded than for 670 responses. A Commission keyword analysis requirements that are perceived to exclude many potential participants. Finally, it is worth noting that improve the e�cacy of their programmes and yielded more than 670 responses. A keyword analysis ofathese of these responses highlights that eliminating perceived bureaucracy and complexity fromfrom the process meaningful number of survey respondents felt that the evaluation process could bene�t having a more responses highlights that eliminating perceived bureaucracy and complexity from The survey also asked respondents to optionally provide feedback for the European Commission on howthe to process to access toimprove access Research & Innovation funding is by far the most frequently recommended improvement. diverse group of experts and investment professionals. of theirfunding programmes and yielded more than 670 responses. A keyword analysis of these Researchthe&e�cacy Innovation is by far the most frequently recommended improvement. The second most The second most recommended step isbureaucracy to inform and communicate programmes more responses highlights that eliminating perceived and complexity from thearound process these to access more effectively. Additionally, recommended step is to inform and communicate around these programmes Research & Innovation funding is by far the most frequently recommended improvement. The second most effectively. Additionally, widening access to funding is another common recommendation that relates, Bureaucracy / Simplified Process widening access to funding is another common recommendation that relates, in particular, to tender recommended step is to informthe and communicate around these programmes more effectively. Additionally, What would you recommend inwidening particular, tothat tender requirements that aremany perceived exclude many potential Finally, access to funding is another common recommendation thatto relates, in particular, to tender itparticipants. requirements are to exclude potential participants. Finally, is worth noting that a to European Commission doperceived Communication 14% requirements that are perceived to exclude many potential participants. Finally, it is worth noting that a it improve is worth noting thatof asurvey meaningful number of respondents that the evaluation process could the e ciency and meaningful number respondents feltsurvey that the evaluationfelt process could bene�t from having a more meaningful number of survey respondents felt that the evaluation Widen accessprocess to funding could bene�t from having a more 12% effectiveness ofofitsexperts research benefit from having a more diverse group of experts and investment professionals. diverse group and investment professionals. diverse group of experts and investment professionals. and innovation programs?

What would you recommend the What would you recommend the European Commission do to European Commission improve the e ciency and do to effectiveness research improve the eof itsciency and and innovation programs? effectiveness of its research and innovation programs?

Collaboration Bureaucracy / Simplified Process Diversity and Inclusion 14%

Communication Evaluation and Feedback

Widen access to funding

Diversity and Inclusion Collaboration Quicker turnaround time

9% 8%

Transparency and Results

Diversity and Inclusion Research commercialisation Evaluation and Feedback 0 5%

some respondents provided multiple recommendations for this question. Please interpret the data with this in mind.

8% 10

SOU RCE: Research commercialisation

% of respondents

20 % of respondents

233

4% 0

SOU RCE:

8% 10

Quicker turnaround time

NOTE: Based on text analysis of 670 respondents some respondents provided multiple recommendations for this question. Please interpret the data with this in mind.

% of respondents

SOU RCE:

10%

Transparency and Results Research commercialisation 4%

Based on text analysis of 670 respondents some respondents provided multiple NOTE: recommendations for this question. Please Based onthe textdata analysis of 670 interpret with thisrespondents in mind. -

12%

10%

Evaluation and Feedback

14%

12%

Transparency and Results Collaboration

33%

Communication

NOTE:

10%

Bureaucracy / Simplified Process

Quicker turnaround time

07.2

Policy

Generally: we need better explanations. I am informing myself about a lot of the regulatory pieces, and I know about most of it. But you have to really search for it, it is not like you are getting the information easily. Also, I feel that the startup economy is not a top priority of the EU. For example, Macron is Anonymous Respondent (SME, Germany) doing a lot to boost France’s start-up economy and also publicly. Not a lot of high-level European politicians are actively lobbying or even publicly caring about startups (except for for thethe ones who can Similarly, the Digital Single Market ("DSM"), a key priority Juncker Commission (2014-2019) to drive a almost beEurope compared corporates their size). digitally connected has to become less regarding of a priority given a series of measures are either now in force or in the process of being implemented. Number of mentions of the

391 Similarly, the Digital Digital Single Market key DSM in European Parliament Similarly, the Single Market (“DSM”), ("DSM"), aa400 key priority priority for for the the Juncker Juncker Commission Commission(2014-2019) (2014-2019)to todrive driveaa Similarly, the Digital Single Market ("DSM"), a key priority for the Juncker Commission (2014-2019) to drive a 352 activities and press releases digitally connected connected Europe are digitally Europe has has become become less lessof ofaapriority prioritygiven givenaaseries seriesof ofmeasures measures areeither eithernow nowininforce force or digitally connected Europe has become less of a priority given a series of measures are either now in force 327 or per year orin inthe the process of being implemented. in the process of being implemented. process of being implemented.

Number of mentions of the

400

254

391

400 200

391

352 327

180

352

300

327 254

300 100 200

100

# of mentions

Number of mentions of the DSM in European Parliament DSM in European Parliament activities and press releases per year and press releases activities per year

# of mentions

300

180

254 33

200 0

2015

2016

2017

180 2019

2018

2020

33 0

NOTE: This data looks at the number of keyword occurrences related to the DSM in European NOTE: Parliament activities and press releases. This data looks at the number of keyword occurrences related to the DSM in European Parliament activities and press releases.

2015100

2016

2017

2018

2019

2020

SOU RCE: SOU RCE:

2015

2016

2017

2018

2019

NOTE: This data looks at the number of keyword occurrences related to the DSM in European Parliament activities and press releases.

SOU RCE:

The EU data economy will not flourish under the present DSM directive. EU only has a small share of the world data economy and the EU is the only jurisdiction where text and data mining is an act relevant to copyright. In the US and Asia, copyright protects the artistic or literary form, not the information embedded in works. The EU commission should change the DSM directive to allow text and data mining, that is extracting information from works, without the present restrictions. The EU data economy will not flourish under the present DSM directive and this makes commercialisation of research results difficult in Europe. Startups based on EU funded research involving data science have to move to the US or Asia.

234

Anonymous Respondent (Public sector, Finland)

2020

07.2

Policy

The EU took a series of measures designed to help build a DSM such as the free flow of non-personal data, The EU took a series of measures designed to help build a DSM such as the free ow of non-personal data, digital content and services, copyright, platform-to-business relations, and geo-blocking. The survey digital content and services, copyright, platform-to-business relations, and geo-blocking. The survey asked The EUrespondents took a series ofto measures designed to help agreed build a DSM such as thethese free ow of non-personal data, asked state whether they notthese that measures had positive been positive overall forgrowth respondents to state whether they agreed or not or that measures had been overall for the digital content and services, copyright, platform-to-business relations, and geo-blocking. The survey asked the growth of tech startups and scaleups in Europe. The majority of respondents agree these measures ofrespondents tech startups and scaleups in Europe. The majority of had respondents measures have had a to state whether they agreed or not that these measures been positiveagree overall these for the growth have had a positive impact overall, while of total agree respondents disagreed. 40% neither of tech startups and scaleups in Europe. majority of5% respondents these measures have hadAbout aneither disagreed. About 40% agreed nor positive impact overall, while onlyThe 5% of only total respondents positivenor impact overall, while only 5% of total respondents disagreed. About 40% neither agreed nor agreed disagreed. disagreed. disagreed.

Would you you say that overall, thesethese Would say that overall, measures are positive for the measures are positive for the growth of tech start-ups and growth ofintech start-ups and scale-ups Europe? scale-ups in Europe?

Other Investors

Other Investors Academic/Researcher

Academic/Researcher

Employee at a company that is not a tech startup or scale-up Employee at a company that is not a tech startup or

L EGEND Agree

L EGEND

Neither

Agree Disagree

Angel Investor

scale-up

Venture Capitalist

Angel Investor

All respondents

Venture Capitalist

LP investing in PE and VC

Neither

All respondents

Employee at a tech startup or scale-up

LP investing in PE and VC

Disagree

Founder

Employee in the public sector Employee at a tech startup or scale-up Overlaying the analysis of European Parliament activities and press releases with the focus areas of legislative 0 20 and the 40 DSM are 60 more prevalent, 80 100while documentation provides a proxy for actual policy outcomes. GDPR Founder % of respondents Disinformation and Deepfakes are much less frequently mentioned in legislative documents. Digital Employee in the public sector Transformation and the Green Deal feature high on the list.

SOU RCE:

% of respondents

Covid-19 Number mentions key tech- Parliament activities and press Overlaying theofanalysis ofofEuropean releases with the focus areas of legislative related issues in European documentation a proxy for actual policy outcomes. GDPR and the DSM are more prevalent, while Overlayingprovides the analysis of European Parliament activities and press releases with the focus areas of 72 Data Privacy and / GDPR press releases with the focus areas of legislative Overlaying the analysis of European Parliament activities Parliamentand legislative SOU RCE: Disinformation Deepfakes areprovides much less frequently mentioned inoutcomes. legislative GDPR documents. Digital legislative documentation a proxy for actual policy and the DSM are more while documentation provides outcomes. GDPR and the DSM are more prevalent, documents by topic, 2020 a proxy for actual policy Digital 47 Transformation Transformation theDisinformation Green Deal feature on the list. prevalent, and while and high Deepfakes are much less frequently mentioned in legislative

Disinformation and Deepfakes are much less frequently mentioned in legislative documents. Digital 40 Green Deal high on the list. documents. Digital the high Green Transformation andTransformation the Green Deal and feature onDeal the feature list.

Number of mentions of key techrelated issues in European Parliament legislative Number of mentions of key techdocuments byissues topic, 2020 related in European

Covid-19

Data Privacy / GDPR

Covid-19 Artificial Intelligence

Digital Transformation

Data Privacy / GDPR Digital Single Market

Parliament legislative documents by topic, 2020

Green Deal

Digital Transformation Blockchain / crypto

Artificial Intelligence

Cybersecurity

Artificial Intelligence

Digital Single Market

Platform Workers / gig economy 8 US Big Tech companies 5

Digital Services Act Quantum Computing

Platform Workers / gig economy Autonomous vehicles / mobility

Fintech Digital Tax

Quantum Computing European Startups

2 1

Autonomous vehicles / mobility 0 European Startups

NOTE: This data looks at the number of keyword occurrences of key tech-related issues in European Parliament legislation. Data as of 10 NOTE: November 2020. This data looks at the number of keyword occurrences of key tech-related issues in European Parliament legislation. Data as of 10 November 2020.

NOTE:

SOU RCE:

Drones Content and Copyright

8 8

Disinformation/Deepfakes Brexit

Digital Tax

Fintech

Content and Copyright

Drones

Brexit

Digital Services Act Digital Health 8

Autonomous vehicles / mobility

Research Innovation Framework12 US Big Techand companies Disinformation/Deepfakes

Blockchain / crypto12 DigitalWorkers Health Platform / gig economy

Quantum Computing

Digital Services Act13 Research and Innovation Framework

Big Tech companies13 Blockchain US / crypto

Fintech

Digital Single Market Digital Health

Green Deal Research and Innovation Framework

Drones

Cybersecurity

Disinformation/Deepfakes

108

Cybersecurity

4 4 3

Brexit

Content0and Copyright 10

1 20

100

# of mentions

100

110

120

# of mentions

Digital Tax

European Startups

SOU RCE:

235

# of mentions

100

From Founders and tech company employees to VCs, disinformation is cited most frequently by survey respondents as an area requiring urgent attention, showing the urgency to devote attention to this particular 07.2 Policy challenge. We can expect to see this become more of a focus point for the European Commission with the announcement in September of an extensive review of the “Code of Practice” aimed at ghting the spread of disinformation online, rst introduced in 2018. The Commission agrees more efforts are needed to address From Founders and tech company employees to VCs, disinformation is cited most frequently by survey the current shortcomings of theseemployees self-regulatory From Founders tech requiring company to VCs,measures. disinformation is citedtomost frequently by survey respondents asand an urgent attention, showing themost urgency devote attention to this respondents particular as From Founders and techarea company employees to VCs, disinformation is cited frequently by survey an area requiring urgent attention, showing the urgency to devote attention to this particular challenge. We the can expect Highest Urgency respondents ancan areaexpect requiringtourgent attention, showing theof urgency to devote attention to this particular challenge. as We see this become more a focus point for the European Commission with to see this become more of a focus point for the European Commission with the announcement in September challenge. We can expect to see this become more of a focus point for the European Commission with the In your opinion, which areas in Employee at a company a tech startup or scale-up aimed Disinformation (43%) announcement in September of an extensive review of that theis not “Code of Practice” at ghting the spreadof ofan announcement in September of an of extensive review of the “Code of Practice” aimed atdisinformation ghting the spread of first introduced in 2018. tech require urgent attention extensive review of the “Code Practice” aimed at fighting the spread of online, disinformation online, rst introduced in Media 2018. The Commission agrees more efforts are needed to address / Journalist agrees more efforts are needed toDisinformation address (43%) disinformation online, rstare introduced in 2018. The Commission from regulators as they likely The Commission agrees more efforts are needed to address the current shortcomings of these self-regulatory measures. the current shortcomings of these self-regulatory measures. thetocurrent shortcomings these self-regulatory measures. be most impactful for of society (in a good or bad way) ? Top choice by occupation InInyour opinion, which areasareas in your opinion, which in tech require urgent attention tech require urgent attention from regulators as they are likely from regulators are likely to be most impactfulas forthey society toabe most impactful (in good or bad way) ? Topfor society choice by occupation (in a good or bad way) ? Top choice by occupation

NOTE: Respondents were able to select three responses for this question and we are NOTE: presenting their top choice by occupation.

Employee at a tech startup or scale-up

Disinformation (38%)

Highest Urgency Disinformation (37%)

Highest Urgency

Founder

Employee at a company thatat isanot a tech startup Disinformation (43%) Employee company thatorisscale-up not a tech startup or scale-up

Venture Capitalist

Media / Journalist

Disinformation (43%)

Employee at a tech startup or scale-up

Disinformation (38%)

Disinformation (43%) Disinformation (36%)

The areas requiring urgen Disinformation ranked to Founder The areastopped requiring attentio theurgent ranks in certa Founder Disinformation (37%) Venture Capitalist Disinformation (36%) Student Data privacy & management (45%) Disinformation ranked top in most Other Investor Venture Capitalist Disinformation (36%) Disinformation (36%) The areastopped requiring attention theurgent ranks in certain varied countria Academic / Researcher Data privacy & management (30%) In your opinion, which areas Consultant / M&A Advisor / Investment Banker Cybersecurity (34%) Disinformation ranked top in most countries Other Investor Disinformation (36%) Angel Investor Big Tech dominance (36%) tech require urgent attentio Student Data privacy & management The(45%) areastopped requiring attention varied as according theurgent ranks in certain countries. Consultant / M&A Advisor / Investment Banker Cybersecurity (34%) from regulators they are li LP investing in PE and VC Big Tech dominance (34%) In your opinion, which areas in (30%) Academic / Researcher Data privacy & management Disinformation ranked top in most countries, though be most impactful for socia tech requiretourgent attention Student Data privacy & management (45%) The areas(36%) requiring attention varied according to the Angel Investor Big Tech dominance topped theurgent ranks in certain countries. (in a good or bad way)? ho fromwhich regulators In your opinion, areasas in they are likely DATA S Academic / Researcher Data privacy & management (30%) Disinformation ranked top in most countries, though arti�cial in LP investing in PE and VC Big Tech dominance (34%) be most impactful for society tech requiretourgent attention L EGEND topped the ranks in certain countries. (in a good or bad way)? SOU RCE: Angel Investor Big Tech dominance (36%) from regulators as they are likely DATA SET : F RA NCE Media / Journalist Other Investor

Disinformation (43%) Disinformation (36%)

Employee at a tech startup or scale-up Consultant / M&A Advisor / Investment Banker Disinformation (37%)

Disinformation (38%) Cybersecurity (34%)

In your opinion, which areas in up to 49 to be most impactful for society

tech urgent attention LP investing in PE and VC Bigrequire Tech dominance (34%) iring urgent attention varied accordingSOU toRCE: the home country of the survey respondents. EGEND (in a good orLare bad way)? 39 to 44 Respondents were able to select three from regulators as they likely DATA SET : F RA NCE, BENEL U X, S responses for this question and we are In your opinion, which areas in 34 to 39 up to 49 ranked top in their most countries, though arti�cial intelligence and Big Tech dominance also presenting top choice by occupation. to be most impactful for society tech require urgent attention 29 to 34 39 to 44 L EGEND ks in certain (in a good or are badlikely way)? NOTE:countries. from regulators as they The areas requiring urgent attention varied SOU according to the home country of the survey respondents. Disinformation ranked 25 to 29 34 to 39 up to 49 RCE: Respondents were able to select three to be most impactful for society top in most countries, though artificial intelligence and Big Tech dominance(inalso topped the ranks in certain countries. D responses for this question and we are 20 to 25 29 to 34 L EGEND 39 to 44 a good or bad way)?

their top choice by occupation. DATA SET : F RA NCE, BENEL U X, SOU T H ERN EU ROPE A ND U K which areaspresenting in ent attention In your opinion, which areas in tech require urgent as they are likely attention from regulators as they are likely to be ctful for society most impactful for society (in a good or bad way)? way)?

France, Benelux, Southern Europe and UK

L EGEND up to 49

up to 49

34 to 39

25 to 29

15 to 20

39 to 44

29 to 34

20 to 25

10 to 15

34 to 39

25 to 29

15 to 20

5 to 10

39 to 44

29 to 34

20 to 25

10 to 15

34 to 39

25 to 29

15 to 20

5 to 10

20 to 25 49 2615 to 20

Big Tech dominance

29 to 34 29 25 to 29 43

34 5 to 10

3010 to 15

22 up to 5

DACH, Nordics, CEE and Baltics

Ge Intermediary liability Platform workers (e.g.(ig

Digital infrastruc

Data privacy & management

15 to 20 29

285 to 10

Cybersecurity

10 to 15 23

23up to 5

Tax (e.g. digital tax for Big Tech)

24 5 to 10

Genetic editing

11 up to 5

Autonomous vehicles

Mass automation

European cloud frameworks (e.g. Gaia X)

France

Belgium

5 NOTE: 4

Intermediary liability (i.e. Platforms resp NOTE: 33

Blockchain / cry 22 Respondents were able to select up to t European Autonom responses for this question. 28

17 NOTE: Mas 18 15 Respondents were able to select up to three European cloud framework 19 13 responses for 12 this question. 13 NOTE: SOU RC 10 10 15 7 Respondents were able to select up to three 22 14 9 7 responses for this question. SOU RCE: 4 10 6 12

16 NOTE: 9 Respondents were 2 6 able to select 8 up to three 8 responses for this question. 2 5 7 3

Respondents were7 able to select4up to three 7 3 responses for this question. Netherlands Portugal Italy Spain

3 12 SOU RCE:

Switzerland

Disinformation (e.g. deep fakes)

Big Tech dominance

Artificial Intelligence

Data privacy & management

Cybersecurity

Tax (e.g. digital tax for Big Tech)

Genetic editing

Platform workers (e.g. gig economy)

11 11

Digital infrastructure (e.g. 5G)

Blockchain / cryptocurrency

Autonomous vehicles

Mass automation

European cloud frameworks (e.g. Gaia X)

Drones

Austria

Germany

Denmark

Finland

Norway

Sweden

Estonia

Poland

236 SOU RCE:

C Interm Platfo Tax (e.g. digital tax

Blockchain / cryptocurrency

Big Tec

Artificia Data privacy &Tm

Intermediary liability (i.e. Platforms responsible for…

NOTE: Respondents were able to select up to three responses for this question.

ble to select up to three

up to 5

Drones

e to select up to three stion.

Artificial Intelligence

DATA SET : DA CH , NORDICS, CEE A ND BA LT ICS

SOU RCE:

20 to 25 37

uiring urgent attention varied according to the home country of the survey respondents. Platform workers (e.g. gig economy) 18 14 12 19 n ranked top in most countries, though Digital arti infrastructure cial intelligence and Big Tech dominance (e.g. 5G) 18 26 16 12 also nks in certain countries. Intermediary liability (i.e. Platforms responsible for… 7 19 6 19

, which areas in rgent attention s as they are likely actful for society ad way)?

10 to 15

Disinformation (e.g. deep fakes)

up to 5

Disinformation (e.g

07.2

Policy

There is is clearly and scale-ups and There clearly still still work workto tobe bedone doneto tobuild buildbridges bridgesbetween betweenEuropean Europeanstart-ups start-ups and scale-ups and European European policymakers. The number of survey respondents agreeing that the perspectives of start-ups policymakers. The number of survey respondents agreeing that the of start-ups and scale-ups There is clearly still work to be done to build bridges between European start-ups and perspectives scale-ups and European and scale-ups are being by European policymakers is stilloutweighed significantly outweighed bythat the number policymakers. The number ofheard survey respondents agreeing the perspectives of start-upsby and scale-ups are being heard by European policymakers is stillthat signi�cantly the number disagree. are being heard by European are policymakers is still signi�cantly outweighed by thewith number that disagree. than they are to agree. that disagree. Founders nearly two times as likely to disagree the statement Founders are nearly two times as likely to disagree with the statement than they are to agree. Founders are nearly two times as likely to disagree with the statement than they are to agree. Theconcerns concerns and perspectives The and perspectives of start-ups and scale-ups are ofbeing start-ups and scale-ups are heard by European being heard by European policymakers policymakers

23%

Venture Capitalist

23%

Venture Capitalist

34%

36%

Disagree

19%

Founders

Agree

19%

Angel Investor

Disagree

32%

19%

Founders

Agree

22%

32%

All respondents

L EGEND

34%

22%

All respondents

36%

40%

28% 10

% of respondents

Employee at a tech startup or scale-up

17%

28% 0

SOU RCE:

19%

17%

Angel Investor

Employee at a tech startup or scale-up

% of respondents

SOU RCE:

There’s a way to go until Europe has the right environment to keep pace with tech elsewhere in the world, and more needs to be done by regulators and policymakers to protect competitive dynamics and help foster European tech champions.

Thomas Plantenga Vinted CEO

There are definitely reasons for optimism, not least as the European tech ecosystem is still evolving and improving in a number of ways. For one, people are moving back from established tech businesses in the USA and bringing great skills and strong experience with them. And, funding opportunities are improving; while there’s still far more value being created in the US and China than in Europe, investors from the USA and elsewhere are also looking this way. Even during the first half of 2020 when so much was unknown, we saw some impressive investment news coming from European firms. However, there’s a way to go until Europe has the right environment to keep pace with tech elsewhere in the world, and more needs to be done by regulators and policymakers to protect competitive dynamics and help foster European tech champions. In particular, we would welcome greater harmonisation of laws and regulations between the Member States of the European Union.

[Europe] should avoid turning a call into Digital Sovereignty into a self-defeating effort to protect European champions, impose data localisation and build a “European” cloud. Its upcoming Digital Services Act should set new standards of responsibility for Big Tech, without hindering European access to new technologies or imposing costs which force ambitious entrepreneurs to flee.

William Echikson Centre for European Policy Studies Associate Senior Research Fellow and Head of Digital Forum

Europe can do tech. Although the Old Continent is often viewed as a digital laggard, running far behind the frontier-pushing United States and Asia, the appearance is deceiving. Start-ups are strengthening. Venture capital is flourishing. Gone are the days when Europe’s “tech” sector largely comprised consumer-oriented e-commerce businesses – often blatant knockoffs of successful US companies. Today, Europe is home to pioneering innovation, led by real successes in fintech and digital health. Looking forward, the continent needs to be careful to avoid jeopardising this success through overregulation or protectionism. It should avoid turning a call into Digital Sovereignty into a self-defeating effort to protect European champions, impose data localisation and build a “European” cloud. Its upcoming Digital Services Act should set new standards of responsibility for Big Tech, without hindering European access to new technologies or imposing costs which force ambitious entrepreneurs to flee.

237

07.2

Policy

% of respondents by company % of respondents size by company % of respondents size by company size

% of respondents by company size

It is critical that policymakers engage deeply with the ecosystem to understand their needs, and vice versa. It Itisiscritical that policymakers deeply with thetoecosystem to understand critical that policymakers engageengage deeply with the ecosystem understand their needs, and vicetheir versa.needs, and vice versa. The needs of any given European tech start-up differ significantly based on where the company is in its Theneeds needs ofofany given European tech start-up signi�cantly on where the company is in its the company is in its The any given European tech differ start-up differ based signi�cantly based on where scaling Effective policy understands and addresses these For example, as companies scaling journey. journey. Effective policy understands and addresses these differences. Fordifferences. example, as companies scaling journey. Effective policyincredible understands and addresses these differences. For example, as companies scale,accessing accessing and tapping into the talent pooltalent Europepool bene�ts from becomes very material. As scale, and into incredible benefits from becomes very material. scale, accessing and tapping tapping intothe the incredible talentacross poolEurope Europe from becomes very material. As procedures Europe hasbene�ts the potential to unlock such enabling harmonised and simpli�ed immigration Asmaterial such enabling harmonised simplified procedures across Europe hasthe thepotential potentialto tounlock value forharmonised companies. At and theand earliest stagesimmigration ofimmigration a company's journey, incentivising talent to join is procedures across Europe has such enabling simpli�ed crucial and represents another area where regulation could play an important role. unlock material value for companies. At the earliest stages of a company’ s journey, incentivising talent to It is critical that policymakers engage deeply with the ecosystem to understand their needs, and vice versa. material value for companies. At the earliest stages of a company's journey, incentivising talent to join is join is crucial and represents another area where regulation could play an important role. The needs of any given European tech start-up differ signi�cantly based on where the company is in its crucial and represents another area where regulation could play an important role. DATA SET : INCREA SED IM PORTA NCE W IT H SCA L ING What isjourney. one regulatory change scaling Effective policy understands and addresses these differences. For example, as companies that would have a materially scale, accessing and tapping into the incredible talent pool Europe bene�ts from becomes very material. As positive impact on the DATA SET : INCREA SED IM PORTA NCE W IT H SCA L ING What is one regulatory prospects of your business?change Increased importance withprocedures scaling Europe hasneeds, the potential toversa. unlock such enabling harmonised and simpli�ed immigration It that is critical thatapolicymakers engage deeply with the ecosystem toacross understand their and vice would have materially 35 material value for companies. At the earliest stages of a company's journey, incentivising talent to join L EGEND The needs of any given European tech start-up differ signi�cantly based on where the company is in itsis positive impact on the Simpli�ed immigration / visa procedures crucial and represents another where regulation could play an differences. important role. prospects of yourEffective business? scaling journey. policyarea understands and addresses these For example, as companies 30 Simpli�ed employment regulations scale, accessing tapping into the incredible talent pool Europe bene�ts from becomes very material. As Better taxation of employeeand stock options 35 L EGEND 25 such enabling harmonised and simpli�ed immigration procedures across Europe has the potential to unlock It is critical that policymakers engage deeply with the ecosystem to understand their needs, and vice versa. DATA SET : DECREA SED IM PORTA NCE W IT H SCA L ING What is one regulatory change Simpli�ed immigration / visa procedures tech start-up differ signi�cantly based on where the company is in its The needs of anyfor given European material value companies. At the earliest stages of a company's journey, incentivising talent to join is that would have a materially 30 20 and addresses Simpli�ed employment regulations scaling journey. Effective policy understands these differences. For example, as companies crucial and represents another area where regulation could play an important role. positive impact on the scale, accessing and tapping into the incredible talent pool Europe bene�ts from becomes very material. As Better taxation of employee stock options prospects of your business? 15 procedures across Europe has the potential to unlock such enabling harmonised and simpli�ed immigration 25 material value for companies. At the earliest stages of a company's journey, incentivising talent to join is DATA SET : DECREA SED IM PORTA NCE W IT H SCA L ING 30 What isand onerepresents regulatoryanother changearea where regulation L EGEND crucial could play an important role. 10 that would have a materially More favourable capital gains taxation 20 across Europe positive impact on the 5 : DECREA SED 25 IM PORTA NCE W IT H SCA L ING DATA SET What is one regulatory change 1 2-5 6-10 11-25 26-50 prospects of your business? More harmonised corporate tax rates that would have a materially NOTE:

More favourable taxation The x-axis refers to the capital number ofgains employees L EGEND inacross the respondent companies. Europe More favourable capital gains taxation across Europe More harmonised corporate tax rates across Europe corporate tax rates More harmonised across Europe

NOTE: The x-axis refers to the number of employees in the respondent companies.

51-100

100+

20 30 Decreased importance with scaling

SOU RCE: 30

25 % of respondents by company size

across Europe positive impact on the prospects of your business? L EGEND

10 15 25 5 10 20

2-5

6-10

11-25

26-50

51-100

100+

2-5

6-10

11-25

26-50

51-100

100+

51-100

100+

5 15

SOU RCE: 10

0 10

NOTE: The x-axis refers to the number of employees in the respondent companies. NOTE:

SOU RCE: 0

2-5

6-10

2-5

SOU RCE:

The x-axis refers to the number of employees in the respondent companies.

NOTE:

11-25

SOU RCE:

The x-axis refers to the number of employees in the respondent companies.

238

26-50

6-10

51-100

11-25

100+

26-50

The persistence of regulatory fragmentation across Europe is cited by the largest number of respondents across all company sizes when asked to highlight the main regulatory hurdles or issues limiting the growth of startups and scale-ups in Europe compared to other large markets, such as the US and China. Funding limitations and over-regulation generally were also commonly cited by respondents.

The persistence of regulatory fragmentation across Europe is cited by the largest number of respondents across company sizes when askedfragmentation to highlight theacross main regulatory hurdles issues limiting the growth of Theall persistence of Europe byby the number ofof respondents The persistence of regulatory regulatory fragmentation across Europeis iscited citedor thelargest largest number respondents startups and scale-ups inmain Europe compared to other largethe markets, such asfragmentation the US and China. Funding Regulatory across all company sizes when asked to highlight main regulatory hurdles or issues limiting thethe growth To date, what are the across all company sizes when asked to highlight the main regulatory hurdles or issues limiting growth of limitations and hurdles over-regulation generally were alsoEurope commonly cited bylargest respondents. The persistence of regulatory across is cited by the number of respondents regulatory or issues fragmentation

of startups and scale-ups Europe compared other largemarkets, markets, suchasasthe theUS USand andChina. China.Funding Funding startups and scale-ups in in Europe compared toto other large such Funding limitations across company when asked to highlight the main regulatory hurdles or issues limiting the growth of growthsizes of start-ups limitingallthe limitations and over-regulation generally were also commonly cited by respondents. over-regulation generally were commonly byChina. respondents. startups and scale-ups in Europe compared to other large also markets, such as thecited US and Funding and scale-ups in Europe

Regulatory fragmentation To date, what areand theover-regulation main Over-regulation limitations generally were also commonly cited by respondents. compared to other large markets regulatory hurdles or issues Funding limitations like the thegrowth US andofChina? start-ups limiting Corporate and employee taxation Regulatory fragmentation To date, what are the main Regulatory fragmentation To date, what are the main and scale-ups in Europe Over-regulation regulatory hurdles or issues Lack of common European immigration rules for tech regulatory hurdles or markets issues compared to other large L EGEND Funding limitations workers Funding limitations limiting the growth of start-ups limiting the growth of start-ups like the US and China? Corporate and employee taxation <10 employees

andscale-ups scale-ups in in Europe and Europe compared to other large markets 11-100 employees compared to other large markets L EGEND like the US and China? > 100 theemployees US and China? <10like employees 11-100L EGEND employees

Over-regulation Administration requirements (e.g. VAT) Over-regulation

Lack of common European immigration rules for tech Corporate and employee taxationworkers

Public procurement requirements Corporate and employee taxation

Lack of common European immigration rules for tech Administration requirements (e.g. VAT) workers

Lack common European rules for tech Lack ofof level playing field withimmigration third country companies workers

<10 employees

L EGEND > 100 employees

Public requirements procurement requirements Administration (e.g. VAT)

11-100 employees

<10 employees > 100 employees

11-100 employees > 100 employees

Public procurement requirements Administration requirements (e.g. VAT) Lack of level playing field with third country companies Lack of level playing field with third country companies

Lack of level playing field with third country companies

NOTE: NOTE:Respondents were able to select up to 3

responses for this question. NOTE:

% of respondents grouped by company size 20

Public procurement requirements 0

Respondents were able to select up to 3 Respondents were able to select up to 3 responses for this question.

% of respondents grouped by company size 30

% of respondents grouped by company size

SOU RCE:

% of respondents grouped by company size

SOU RCE:

responses for this question.

NOTE:

SOU RCE:

Respondents were able to select up to 3 responses for this question.

State of European Tech 2020 report launch

239

Who is behind the report? This report was produced in partnership with Slush and Orrick. Over 70 people and over 20 companies and organizations came together to provide insights and data. This is who they are.

About

www.stateofeuropeantech.com

240

and support from

08.1

Contributors

Thanks to all of the following people for their assistance and insight in developing this year’s State of European Tech Report.

Nana Addison

Ashleigh Ainsley

Maurizio Arrigo

Moojan Asghari

CURL

Colorintech

Pictet Alternative Advisors

Women in AI

Nora Bavey

Kat Borlongan

Carolina Brochado

Corinne Cath-Speth

Unconventional Ventures

La French Tech

EQT

Oxford Internet Institute

Suranga Chandratillake

Xavier Coirbay

Filippo Conforti

Alexander de Carvalho

Balderton Capital

Sofina Group

Commerce Layer

PUBLIC

Sonali de Rycker

Oliver Dowden

William Echikson

Cristina Fonseca

Accel

DCMS

Centre for European Policy Studies

Indico Capital Partners

241

08.1

Contributors

Robert Gaal

Jacob Haddad

Eric Hazan

Karoli Hindriks

Cooper

accuRx

McKinsey

Jobbatical

Taavet Hinrikus

Nic Humphries

Merete Hverven

Sonya Iovieno

TransferWise

Visma

Silicon Valley Bank

Gulnaz Khusainova

Heidi Lindvall

Luciana Lixandru

Ed Lukins

Easysize

Pale Blue Dot

Sequoia

Orrick

Ken MacAskill

Sebastian Matthes

Valentina Milanova

Peter Holten Mühlmann

Snyk

Handelsblatt

Daye

Trustpilot

Kim Ogulive

Steve O’Hear

Deborah Okenla

Eve Peeterson

Maria 01

TechCrunch

YSYS

Startup Estonia

242

08.1

Contributors

Cordula Pfluegl

Thomas Plantenga

Shalini Rao

Leo Rees

Future Females

Vinted

Generation Investment Management

Onward

Alexia Rey

Gonz Sanchez

Young Sohn

Reshma Sohoni

NeoFarm

Seedtable

Samsung Catalyst Fund

Seedcamp

Agathe Wautier

Meri Williams

Galion Project

Healx

Unternehmen & Märkte

WOCHENENDE 15./16./17. JUNI 2018, NR. 113

Jeannette zu Fürstenberg

„Künstliche Intelligenz wirkt wie ein Brandbeschleuniger“ Kinga Stanisławska Robert Vis Experior Venture Die Investorin spricht über Fund die Chancen und Risiken von künstlicher Intelligenz und darüber, warum Deutschland eine Revolution im Bildungswesen braucht und ihr Fonds La Famiglia Brücken bauen will zwischen etablierten und jungen Firmen.

MessageBird Jeannette Erbprinzessin zu Fürstenberg: „Wir brauchen Tempo.“

Nina Wöss

Jeannette zu Fürstenberg

Female Founders

La Famiglia

Wie wird sich das auf die Entwicklung der Gesellschaft auswirken? Für mich ist die Entwicklung demokratiegefährdend. Basis einer Demokratie ist die geteilte Wirklichkeitswahrnehmung einer Gesellschaft. Diese löst sich zunehmend durch den globalisierungs- und technologiebedingten Wegfall von Arbeitsplätzen auf und führt zu diffusen Ängsten und wegfallender Zugehörigkeit zu identitätsbildenden Strukturen. Vor Social Media haben klassische Medien die Erklärung und Einordnung übernommen, was sich stabilisierend auf die Meinungsbildung ausgewirkt hat. Heute werden durch Fake News und vor allem die direkte und ungefilterte Weitergabe von großteils auch falschen Informationen Ängste verstärkt und vorgefasste Meinungen bestätigt. Die sogenannte gesellschaftliche Mitte, die immer stabilisierend gewirkt hat, verliert an Kraft. Und dadurch polarisiert sich das gesamte System. Mit welchen Folgen? Die Folgen sind vielerorten schon erkennbar: der Brexit, die Wahlen in Italien, die Regierungen in den USA und in Polen und hierzulande die AfD bei alarmierenden 16 Prozent. Künstliche Intelligenz wirkt wie ein Brandbeschleuniger für den Populismus. Denken Sie an den gezielten Einsatz von Bots während der Wahlkämpfe. Was lässt sich dagegen machen? Wir ersticken in Europa, gerade in den EU-Kernstaaten, an der Komplexität unserer n-stufigen Governance. In China werden die Entscheidungsprozesse hingegen immer autokratischer und vor allem auch schnel-

243

08.2

Acknowledgements We wouldn’t have been able to put together the State of European Tech without a lot of help - thanks to all of the following in particular:

Jordi Arcas

Karl Bjelland

Anna Brchisky

Jon Brewer

TalentUp

POLITICO Europe

Slush

Orrick

Orla Browne

Seb Butt

Joe Cainey

Daniel Cavallari

Dealroom

Craft

Peakon

Dealroom

George Clayton

Lewis Dean

Katelyn Dennis

Ivan Draganov

GoodLove

Indeed

Shareworks by Morgan Stanley (Option Impact)

Dealroom

Vishesh Duggar

Dr Richard Freeman

Mat Gazeley

Sofian Giuroiu

Vamstar

SVB

PEREP Analytics/EDC

244

08.2

Acknowledgements

Mike Gedye

Linda Griffin

Sarah Guemouri

Keaton Hoffman

CBRE

EU Tech Alliance

Atomico

Aon

Richard Holberton

Miika Huttunen

Ben Jakob

Tomas Jasaitis

CBRE

Slush

GoodLove

Vamstar

Bryce Keane

Julien Krantz

Marta Krupinska

Joe Lovelock

Atomico

Invest Europe

Google for Startups

GoodLove

Stephen Lowery

Rhiannon Main

Mikko Mäntylä

Praful Mehta

SVB

London Stock Exchange Group

Slush

Vamstar

Joanna Nagadowska

Elmo Pakkanen

Angelina Panagiotopoulou

Erin Platts

Google for Startups

Slush

GoodLove

SVB

245

08.2

Acknowledgements

Julien Puls

Ram Puvinathan

Arabella Reeves

Matteo Renoldi

Dealroom

Public

Atomico

Dealroom

Karl Laurentius Roos

Neil Shah

Maxine Smith

David Toms

POLITICO Europe

London Stock Exchange Group

Atomico

Eleanor Warnock

Sam Warren

Tom Wehmeier

Yoram Wijngaarde

Atomico

Horsley Bridge Partners

Atomico

Dealroom

James Young

Henna Zamurd-Butt

Mitch Zuklie

The purpose-driven porpoise

Peakon

Engage Inclusivity

Orrick

Working remotely somewhere

246

08.3

08.6

Partners to Gamechangers. Atomico invests in ambitious tech founders at Series A and beyond with a particular focus on Europe, leveraging deep operational experience to supercharge their growth.

For more than 35 years, Silicon Valley Bank (SVB) has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world. With commercial banking and lending services, SVB helps address the unique needs of innovators.

About Atomico

About Silicon Valley Bank

Founded in 2006, Atomico has partnered with over 100 ambitious teams - including those at Supercell, Graphcore, Omio, Klarna, Lilium, MessageBird, Gympass, Pipedrive and The Climate Corporation. Atomico’s team of founders, investors and operational leaders have been responsible for global expansion, hiring and marketing at companies from Skype, Google and Twitter to Uber and Spotify. The firm currently has $2.7B in assets under management.

Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Financial Protection and Innovation (DFPI) and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. © 2020 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license

08.4

About Slush Slush is a student-driven, not-for-profit movement originally founded to change attitudes toward entrepreneurship. What started as a gathering of 300 local founders in 2008, has become a community of true global magnitude. The mission of Slush remains the same: to create and help the next generation of groundbreaking entrepreneurs.

08.7

About GoodLove

08.5

GoodLove is a creative brand consultancy based in London.

About Orrick

GoodLove helps businesses that are on a mission to scale belief in what they’re doing through ideas, narratives and visual storytelling. GoodLove’s consultancy proposition combines strategic rigour with creative flair and has been designed to serve fast-moving businesses in the startup community.

Creators. Visionaries. Underdogs. The Daring. Orrick counsels more than 2,700 tech companies, as well as the most active funds, corporate venture investors and public tech companies worldwide. We help you disrupt. We help you build. We protect you. We help you win.

Find out more at goodlove.co

We are the No. 1 most active law firm in European venture capital and No. 4 globally (PitchBook), top 20 for global M&A and PE (Mergermarket) and advisors to seven of the top 15 global private equity funds. We offer destination practices in other areas that are important to tech companies’ success: privacy and cybersecurity, intellectual property, payments, and beyond. And we innovate not only in our legal advice but also in the way we deliver our services. That’s why Financial Times has named us the most innovative law firm in North America for three years in a row and runner up in 2019.

247

Resources www.stateofeuropeantech.com

248

09.1

What is your primary country

UK & Ireland

Survey Respondents of residence?

Nordics

24%

DACH

What yourprimary primary country Whatis is your country residence? ofofresidence?

14%

France & Benelux UK & Ireland

11%

UK & Ireland

Southern Europe Nordics CEE DACH DACH France & Benelux Rest of Europe France & Benelux Southern Europe United States CEE Southern Europe Rest of World Rest of Europe 2% CEE United States

24%

6% 2%

14% 11%

10%

5% 3

Rest of Europe

Rest of World

14%

24%

11%

26%

10%

Nordics

United 3States

2% 82%

% of respondents 10

% of respondents

NOTE: What best describes your All respondents included. Numbers may not primary occupation? NOTE: add to 100 due to rounding.

Rest of World

SOU RCE:

Founder 5

18%

Employee at a tech startup or scale-up

NOTE:

SOU RCE:

14%

Venture Capitalist

All respondents included. Numbers may not add to 100 due to rounding.

Employee at a company that is not a tech startup or scale-up

What describes Whatbest best describes youryour primary occupation? primary occupation?

12%

Founder

32%

Consultant/M&A Advisor/Investment Banker 18%

Employee at a tech startup or scale-up

18%

Employee in the public sector

14%

Venture Capitalist

14%

Venture Capitalist Employee at a company that is not a tech startup or scale-up

Angel Investor

12%

Employee at a company that is not a tech startup or 7% scale-up Other Investor

3% 12%

Consultant/M&A Advisor/Investment Banker

Employee in the public sector

Consultant/M&A Advisor/Investment Banker 3%

Student 3%

Angel Investor

Employee in the public sector

LP investing in Private Equity & Venture Capital 3%

Other Investor

Angel Investor Student

3% Academic/Researcher

LP investing in Private Equity & Venture Capital

2% 3%

Other Investor 1%

Policymaker/regulator 2%

Academic/Researcher

Student 1%

Media/Journalist 1%

Policymaker/regulator

LP investing in Private Equity & Venture Capital 0

% of respondents 5

Academic/Researcher

NOTE:

Media/Journalist

Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

% of respondents

All respondents included. Numbers may not add to 100 due to rounding.

% of respondents

SOU RCE: SOU RCE:

Policymaker/regulator

Media/Journalist

Europe-based respondents only. Numbers may not add to 100 due to rounding.

20 % of respondents

NOTE:

SOU RCE:

Europe-based respondents only. Numbers may not add to 100 due to rounding.

249

09.1 Survey Respondents How many people are employed

at your company?

20%

2-5 14%

6-10

14%

11-25

How people employed Howmany many people areare employed your company? atatyour company?

26-501

2-5

51-100 2-5

6-10 11-25

51-100

251-500 26-50

101-150

501+ 51-100 Not applicable 101-150

251-500

9% 16%

8% 2%

% of respondents

16%

% of respondents

SOU RCE:

% of respondents

Europe-based respondents only. Numbers may not add to 100 due to rounding.

58%

Master's degree or equivalent

What is your latest formal NOTE: educational attainment or Europe-based respondents only. Numbers current level if you are may not add to 100 due to rounding. still a student?

SOU RCE:

22%

Bachelor's degree or equivalent 9%

Doctoral degree or equivalent 5%

Professional qualification

Some college/university study without earning a degree Master' s degree or equivalent

What yourlatest latest formal Whatis is your formal educational attainment or or educational attainment current level if you are current level if you are still a student? still a student?

Master's degree or equivalent

Professional qualification

22%

9% GCSE or Doctoral degree or equivalent equivalent

Doctoral degree or equivalent

Primary / elementary school Professional qualification

Trade / vocational school Some college/university study without earning a degree 1% A-Level or equivalent

9% 5%

0% Primary / elementary school Not applicable - I never completed any formal education GCSE or equivalent

0% 0%

Trade / vocational school

0% 1%

Prefer not to say A-Level or equivalent

GCSE or equivalent

0 0% Primary 0% / elementary school Prefer not to say

Not applicable - I never completed any formal education

Prefer not to say

SOU RCE:

% of respondents

SOU RCE:

Are the�rst �rst person (or part Areyou you the person (or part the �rst �rst generation) in your ofofthe generation) in your immediate family to go to immediate family to go to university? university?

Europe-based respondents only. Numbers may not add to 100 due to rounding.

Are you the �rst person (or part NOTE: of the �rst generation) in your Europe-based respondents only.to Numbers immediate family to go may not add to 100 due to rounding. university?

% of respondents

SOU RCE:

% of respondents

Not applicable - I never completed any formal education

NOTE:

0% / vocational school Trade 0

58%

1% 22%

Bachelor's degree or equivalent Bachelor'sA-Level degree or or equivalent equivalent

Some college/university study without earning a degree

Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

16%

501+

SOU RCE:

4% 3%

Not applicable

NOTE:

14%

2% 251-500

Not applicable

14%

151-250 0

501+

20%

14%

151-250 11-25

151-250

Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

101-150 6-10

26-50

Prefer not to say

28%

No Yes

Yes

Prefer not to say No

71%

28%

71%

% of respondents Prefer not to say 0 10

% of respondents

NOTE: Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

SOU RCE: 0

SOU RCE:

NOTE:

40 % of respondents

Europe-based respondents only. Numbers may not add to 100 due to rounding.

SOU RCE:

Europe-based respondents only. Numbers may not add to 100 due to rounding.

250

Less than 21 years old

09.1 What is yourSurvey age?Respondents

Between 21 to 25 years old

Between 26 and 30 years old 18%

Between 31 and 35 years old

What yourage? age? Whatis is your

Between 36 and 40 years old

16%

Less than1% 21 years old Less than 21 years old

and 45 years years old old Between 21 to 25Between years old 4121 Between to 25

13%

10%

Between 26 and 30 years old 46 and 50 years old Between

Between 26 and 30 years old

Between 31 and 35 years old

Between 31 51 and and 35 55 years years old old Between 4%

Between 56 and 60 years old

Between Between 41 and 45 years old 36 and 40 years old

years old old Between 41 and61+ 45 years

Between 46 and 50 years old

Between 51 and 55 years old

Between 56 and 60 years old

3% 61+Between years old 51 and 55 years old

Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

10%

13% 10%

PreferBetween not to say 56 and 1% 60 years old 3

61+ years old

SOU RCE:

Europe-based respondents only. Numbers may not add to 100 due to rounding.

Man

31.9%

Prefer not to say

1.7%

Prefer not to say Man

0.4%

1.7%

0.4%

Queer

0.2%

Other

0.1%

31.9%

0.1% 0.4%

Other Non-binary 0.0

10.0

20.0

30.0

10.0

20.0

30.0

50.0

60.0

40.0

50.0

60.0

50.0

60.0

70.0

% of respondents

0.1%

Other

40.0 % of respondents

0.2%

Queer

0.0

31.9%

0.2% 1.7%

Queer Prefer not to say

Non-binary

65.7%

Non-binary Woman

Woman

Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

Woman

NOTE:

% of respondents

SOU RCE:

What Whatgender gender dodo youyou identify with? identify with?

% of respondents

Europe-based respondents only. Numbers may not add to 100 due to rounding.

What gender do you NOTE: identify with?

% of respondents

Prefer not to say

SOU RCE:

18% 16%

13%

to say Between 46 Prefer and 50not years old

NOTE:

16%

Between 36 and 40 years old

19% 18%

SOU RCE: 0.0

SOU RCE:

10.0

20.0

30.0

Which best describes NOTE: your ethnicity?

40.0 % of respondents

Europe-based respondents only. Numbers may not add to 100 due to rounding.

White

SOU RCE: Asian

Europe-based respondents only. Numbers may not add to 100 due to rounding.

Which describes Which best best describes yourethnicity? ethnicity? your

Mixed/Multiple ethnic groups

Prefer not White to say

White

Asian 5% African Middle Eastern/North Asian Mixed/Multiple ethnic groups

Prefer not to say

2% 5%

Hispanic/Latinx Mixed/Multiple ethnic groups

2%4%

Black/African/Caribbean Prefer not to say

Middle Eastern/North African

2%4%

0%2%

Hispanic/Latinx Other 2% Middle Eastern/North African Black/African/Caribbean

80%

Hispanic/Latinx 0

Black/African/Caribbean 0

% of respondents

Other

% of respondents

NOTE: Europe-based respondents only. Numbers NOTE: may not add to 100 due to rounding.

SOU RCE:

Other 0

SOU RCE:

NOTE:

% of respondents

Europe-based respondents only. Numbers may not add to 100 due to rounding.

SOU RCE:

Europe-based respondents only. Numbers may not add to 100 due to rounding.

251

09.2

Data Partners

AON Radford is the technology and life sciences unit of Aon’s Rewards Solutions practice. About Rewards Solutions The Rewards Solutions practice at Aon empowers business leaders to reimagine their approach to rewards in the digital age through a powerful mix of data, analytics and advisory capabilities. Our colleagues support clients across a full spectrum of needs, including compensation benchmarking, pay and workforce modeling, and expert insights on rewards strategy and plan design. To learn more, visit: rewards.aon.com. About Aon Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. For further information, please visit aon.com.

App Annie App Annie is the industry’s most trusted mobile data and analytics platform. App Annie’s mission is to help customers create winning mobile experiences and achieve excellence. Founded in 2010, the company launched the first mobile market data solution. In 2020, App Annie launched App Annie Ascend, an advertising analytics solution, making it the first company in its space to offer a side-by-side view of market data and companies’ own data to support mission-critical business decisions. Together, these solutions comprise the industry’s most complete mobile performance platform. More than 1,100 enterprise clients and 1 million registered users across all geographies and industries rely on App Annie to drive their mobile business. The company is headquartered in San Francisco with 12 offices worldwide.

Dealroom Dealroom is a global company information database & research firm. Its software, database and bespoke research enable its clients to stay at the forefront of innovation, discover promising companies and identify strategic opportunities. Among its clients are world-leading strategy consulting firms, investment banks, multinationals, technology firms, venture capital & buyout firms and governments. For more information, please visit: dealroom.co

European Tech Alliance The European Tech Alliance (EUTA) brings together a total of 30 companies from 17 European countries and gives voice to the major European digital champions, scaleups and leading startups. We believe that Europe is good at tech and our sector is driving jobs and growth across the continent. With an overarching goal of fostering innovation in Europe, EUTA members are keen to provide expert insights to the EU institutions and promote EU competitiveness in the global tech space.

252

CBRE CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

Craft Craft is building the ‘Source of Truth’ on companies, mapping the global economy, and delivering unique intelligence on companies to corporate decision-makers globally. Craft collects, aggregates and curates financial, operating and human capital data to provide the deepest picture of private and public companies to assist decisionmakers to manage their supply chain, maximize their investments, mitigate risks, grow their sales, leverage their talent and enhance their competitive position.

Google Google’s mission is to organise the world’s information and make it universally accessible and useful.

Hg Hg is a leading global investor in software and services, focused on backing businesses that change how we all do business. Deep technology expertise, complemented by vertical application specialisation and dedicated operational support, provides a compelling proposition to management teams looking to scale their businesses. Hg has funds under management of over $30 billion, with an investment team of over 140 professionals, plus a portfolio team of more than 30 operators, providing practical support to help our businesses to realise their growth ambitions. Based in London, Munich and New York, Hg has a portfolio of over 30 software and technology businesses, comprising over 35,000 employees across the UK, US and Europe. For further details, please visit the Hg website: https://hgcapital.com

Indeed More people find jobs on Indeed than anywhere else. Indeed is the #1 job site in the world and allows jobseekers to search millions of jobs on the web or mobile in over 60 countries and 28 languages. More than 250 million people each month search for jobs, post resumes, and research companies on Indeed. For more information, visit indeed.com.

253

09.2

Data Partners

Invest Europe Invest Europe is the world’s largest association of private capital providers. We represent Europe’s private equity, venture capital and infrastructure investment firms, as well as their investors, including some of Europe’s largest pension funds and insurers. Our aim is to promote a better understanding of private equity that enables our members to invest capital and expertise into improving businesses and generating returns for investors, free from unnecessary regulation and constraints. Invest Europe’s members take a long-term approach to investing in privately-held companies, from start-ups to established firms. They inject not only capital but dynamism, innovation and expertise. This commitment helps create healthy and sustainable companies across Europe, securing millions of jobs and delivering strong returns for leading pension funds and insurers whose members depend on them for their retirements.

London Stock Exchange Group London Stock Exchange Group (LSE.L) is a diversified international exchange Group that sits at the heart of the world’s financial community. The Group can trace its history back to 1801. The Group operates a broad range of international equity, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, Europe’s leading fixed income market; and the pan-European equities platform, Turquoise. Through its markets, the Group offers international business, and investors, unrivalled access to Europe’s capital markets. Post trade and risk management services are a significant and growing part of the Group’s business operations. LSEG operates CC&G, the Rome headquartered CCP and Monte Titoli, the significant European settlement business, selected as a first wave T2S participant. The Group is also a majority owner of leading multi-asset global CCP, LCH. The Group offers its customers an extensive range of real-time and reference data products, including Sedol, UnaVista and RNS. FTSE calculates thousands of unique indices that measure and benchmark markets and asset classes in more than 80 countries around the world. London Stock Exchange Group is also a leading developer of high performance trading platforms and capital markets software. In addition to the Group’s own markets, over 40 other organisations and exchanges around the world use the Group’s MillenniumIT trading, surveillance and post trade technology. Headquartered in London, United Kingdom with significant operations in Italy, France, North America and Sri Lanka, the Group employs approximately 4,700 people.

254

09.2

Data Partners

Peakon Peakon is an employee success platform that converts feedback into insights. It makes the employee conversation quantifiable and actionable to increase employee engagement – not simply measure it. Peakon’s core belief is that work should work for people, and with the largest data set of employee feedback in the world, Peakon provides customised benchmarks and personalised insights to support our mission of helping every employee drive the change they want to see. To date, Peakon has helped organisations like Capgemini, Verizon, Pret, Trustpilot, and easyJet make fundamental changes in how they operate to improve employee experience, driving greater business results.

Pitchbook PitchBook is a financial technology company that provides data on the capital markets to help professionals discover and execute opportunities with confidence and efficiency. We collect and analyze detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. Our data and analysis are available through our suite of products (the PitchBook Platform), industry news and in-depth reports.

POLITICO Europe POLITICO, a global nonpartisan politics and policy news organization, launched in Europe in April 2015. POLITICO Europe is a joint-venture between POLITICO LLC, based in the USA and Axel Springer, the leading digital publisher in Europe. With operations based in Brussels and additional offices in London, Berlin and Paris, POLITICO connects the dots between global power centers. POLITICO’s premium politics and policy intelligence service, POLITICO Pro, empowers thousands of policy experts and decision-makers from over 1000 organizations in key industries. Launched in 2015, Pro now covers 7 policy areas: Agriculture and Food, Energy and Climate, Financial Services, Healthcare, Technology, Trade, and Mobility. POLITICO Pro has 4 cross-industry products: Brexit Transition Pro, Sustainability Pro, Cybersecurity and Data Protection Pro, and Competition and Industrial Policy Pro. In 2020, POLITICO Pro launched its first U.K national policy product, Pro Trade UK. Subscribers include EU and national government, corporations, trade associations, consultancies, law firms, and NGOs. POLITICO Pro’s award-winning platform, Pro Intelligence, fuses the power of technology with the power of journalism, providing professionals with an overview of bills, legislation, voting behavior and attendance, tweets, activities, press releases, transcripts and more, at the touch of a button. Users can track information on the EU Institutions and national legislatures in the UK, France and Germany. Pro Intelligence was used by Atomico to research data on EU Tech legislation for this report.

255

09.2

Data Partners

PUBLIC PUBLIC gives technology startups the networks, support, insights and capital to solve public problems and improve the lives of citizens. The team – led by Daniel Korski, ex-deputy head of the No.10 policy unit and venture investor, Alexander de Carvalho – combines expertise in government, technology and finance into a range of programmes like GovStart, a pan-european GovTech accelerator. Through GovStart, its market-leading insight, well-known events and the technology solutions it builds in-house, PUBLIC has rapidly earned a reputation as a GovTech pioneer and an expert in the role of startups in transforming Europe’s public sector. Its headline event: the annual GovTech Summit, brings together thousands of governments, startups, and investors from across Europe in an effort to break down the barriers that prevent great tech ideas from changing people’s lives. For more information, Visit PUBLIC.io.

Shareworks Option Impact by Shareworks is the leading provider of pre-IPO compensation data. We partner with over 180 top-tier investors and over 3600 private companies to produce the world’s largest corporate-sourced compensation database specific to private, venture-backed companies. Option Impact is a rolling cash and equity survey providing relevant market data across all levels and job families for $0 in exchange for maintaining current information in the system. To learn more, please email us at compensation@shareworks.com.

Sifted Sifted is the Financial Times backed media platform for European entrepreneurs, innovators and investors. It is an essential, trusted and independent resource for the startup and tech world: a source of news, information and analysis and also a channel for discovery.

S&P Global Market Intelligence At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. We integrate financial and industry data, research and news into tools that help track performance, generate alpha, identify investment ideas, perform valuations and assess credit risk. Investment professionals, government agencies, corporations and universities around the world use this essential intelligence to make business and financial decisions with conviction. S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI), the world’s foremost provider of credit ratings, benchmarks and analytics in the global capital and commodity markets, offering ESG solutions, deep data and insights on critical business factors. S&P Global has been providing essential intelligence that unlocks opportunity, fosters growth and accelerates progress for more than 160 years. For more information, visit www.spglobal.com/marketintelligence.

256

09.2

Data Partners

TalentUp TalentUp offers data-driven insights into the talent market to help companies drive effective recruitment and retention strategies. With TalentUp talent market data, companies can tailor their human resource strategies to discover exceptional talent, detect market opportunities and present better job offers. TalentUp uses proprietary Big Data and AI technology to analyze millions of companies and professionals on social networks and websites. Our talent market data offers business leaders and HR professionals deep insights into the talent market, and offer guidance on what it takes to recruit the right candidate.

Vamstar Vamstar uses artificial intelligence to help healthcare companies find new commercial opportunities and accelerate market entry. Our vision is to become the number one trusted source of buyer, supplier, and contract data in healthcare. For more information, visit https://vamstar.io

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