Europe & Israel 2016 VC Year in Review

Venture Capital in Europe & Israel
Venture Investment Data: 2016 Year in Review
Prepared by Gil Dibner
Millau Viaduct, France – Highest bridge in Europe
Length: 2.5 km; Maximum clearance: 270 meters
blog

The data
• The data in this report consists entirely of data I’ve gathered manually based on
publicly available, free sources
• No paid data sources or API calls were harmed in the making of this dataset, every
investment was manually classified
• This allows analysis of some aspects of the data I consider important – aspects that
don’t appear in other data sources. More importantly, it allows me to exclude
deals that are really not “venture capital” rounds but tend to get included by
others
• Seed investment is under-reported and adds a lot of noise to the data set, so I
exclude deals under $500K
• The analysis is limited to ICT categories and excludes life sciences
• The analysis excludes Turkey and FSU countries
• I’m converting all currencies into USD using monthly average exchange rates
Prepared by Gil Dibner follow me on (@gdibner), connect with me on , subscribe to my , or invest with me onblog 2

Top 10 deals by region in 2016 (US $M)
France & Benelux IsraelIberia
UK & Ireland DACH Nordic
35
35
37
38
47
50
75
108
109
150
Drivy
Zenly
Finanzcheck
Navya
Teads
Showpad
Tradeshift
Devialet
Deezer
SigFox
0 50 100 150 200
60
70
70
72
76
89
96
100
180
300
Lumus
Via
Zerto
Sirin
ForeScout
BlueVine
Skybox Security
Voyager Labs
Payoneer
Gett
0 100 200 300 400
20
21
21
25
33
35
36
38
49
88
The Future…
Swap.com
Visedo
Vivino
AlphaSense
Klarna
Neo4j
M-Files
StarBreeze
Apptus
0 20 40 60 80 100
49
54
70
85
90
90
100
100
216
374
Movinga
Brillen.de
SoundCloud
Sonnen Group
Hello Fresh
Heliatek
Innogames
MindMaze
GoEuro
Global Fashion Group
0 100 200 300 400
50
50
50
52
54
60
65
70
110
170
192
275
MUBI
Intercom
HighQ
Nutmeg
Blippar
Student.com
Darktrace
Starling
FarFetch
FutureFinance
Skyscanner
Deliveroo
0 50 100 150 200 250 300
7
8
8
12
22
38
42
55
56
120
TravelPerk
Coverwallet
Verse
ABA English
Veniam
CornerJob
Jobandtalent
OutSystems
Hawkers
Cabify
0 50 100 150

Top 10 deals by type 2016 (US $M)
Systems SemiconductorEnterprise
Consumer Financial Commerce
54
55
65
70
75
76
88
96
100
180
Blippar
OutSystems
Darktrace
Zerto
Tradeshift
ForeScout
Apptus
Skybox Security
Voyager Labs
Payoneer
0 50 100 150 200
108
109
110
120
170
192
216
275
300
374
Devialet
Deezer
FarFetch
Cabify
FutureFinance
Skyscanner
GoEuro
Deliveroo
Gett
0 100 200 300 400
36
37
40
43
45
52
70
75
89
170
Tandem
Finanzcheck
Number26
EZBob
World Remit
Nutmeg
Starling
Tradeshift
BlueVine
FutureFinance
0 50 100 150 200
29
35
38
45
50
50
72
85
100
108
Airobotics
Formlabs
Navya
Egym
Phinergy
Roboteam
Sirin
Sonnen Group
MindMaze
Devialet
0 20 40 60 80 100 120
45
50
54
56
90
110
192
216
275
374
Home24
Vroom
Brillen.de
Hawkers
Hello Fresh
FarFetch
Skyscanner
GoEuro
Deliveroo
0 100 200 300 400
15
17
17
20
20
25
25
30
35
38
Kandou Bus
Oryx
MultiPhy
ColorChip
Valens
Autotalks
Satixfy
GraphCore
Acco
Celeno
0 10 20 30 40

Quarterly pace of venture investment
• In 4Q16, Europe & Israel saw
$3.5 billion flowing into 450
venture transactions
• This represents a slight
improvement from 3Q16 and
4Q15 levels, but well below
2Q16
• In total, there was $14.5B of
venture investment into
Europe & Israel in 2016 in
1,795 transactions
• These numbers, and the rest
of this deck, do not reflect
the $1B in debt raised by
Spotify in March
2,873
3,139
3,252
2,857
3,730
4,114
3,122
3,519
0
100
200
300
400
500
600
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2015 2016
Amountinvested(US$M)
VC Investments in Europe & Israel
Invested amount (US $M) Number of investments

Monthly pace of venture investment
• Looked at on a monthly
basis, the slight pick up in 4Q
was due mostly to a strong
October
• December was seasonally
weak in 2015 and 2016
• As would be expected,
European & Israeli VC
investment trends show
seasonal slowdowns in
summer (July, August) and
winter (December)
905
971
997
791
787
1,561
1,518
571
1,164
1,084
1,059
715
1,657
1,051
1,021
1,401
1,452
1,261
725
1,101
1,296
1,457
1,170
893
0
20
40
60
80
100
120
140
160
180
200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2015 2016
VC Investments in Europe & Israel
(January 2015 - December 2016)
Invested amount (US $M) Number of investments

Mega-rounds skew the investment totals
• This analysis breaks down VC
investments into brackets by
size:
• Seed (less than $2M)
• Early venture ($2-8M)
• Venture ($8-20M)
• Growth ($20-100M)
• Mega ($100M+)
• Six mega-rounds took place in
Europe in 4Q16
• Devialet (France, $108M)
• GoEuro (Germany, $146M)
• Innogames (Germany, $100M)
• Sigfox (France, $150M)
• Payoneer (Israel. $180M)
• Voyager Labs (Israel, $100M)
• Adjusting for mega-rounds,
4Q16 was about $110M less
than 3Q16, the second
quarterly decline in a row
354 371 510 602 635 592 707
716 567
559
730 695 752 651
813
1,513 1,187
1,650 1,679
1,336 1,197
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2015 2016
AmountInvested(US$M)
Pace of VC Investment in Europe and Israel
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (.5-2)

Strong year-over-year growth
• 2016 saw 20% more venture
investment than 2015
• Early venture deal volume
increased 67%, venture
volume increased 18%,
growth volume increased
26%.
• Mega-deal volume was down
18%
437 726
1,520
2,536
2,397
2,828
4,667
5,862
3,100
2,534
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2015 2016
TotalVCinvestment(US$M)
VC investmentvolume in Europe and Israel by bracket
(2015 vs 2016)
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8) Seed (<2)

Number of investments, by bracket
• Excluding seed deals, the
total number of VC
investments per quarter was
275 in 4Q16, a new record
level since I started tracking
this data
77 85 94
140 153 157 144
181
42
62 44
46
61 57
64
53
33
26 38
35
44 52
40
35
6
6 4
3
4
4
1
6
0
50
100
150
200
250
300
2015 2016
NumberofVCinvestments
VC investmentvolume in Europe and Israel by bracket
Mega (>100) Growth (20-100) Venture (8-20) Early Venture (2-8)

No evidence of a Brexit effect on deal volume
• The biggest story in the UK in
2016 was, undoubtedly, the
Brexit referendum on June 23
• Looking just at UK VC deal
volume, there’s so far no
evidence that Brexit caused
any slowdown whatsoever in
VC activity
• There were an average of 14 VC
deals per month in 2H15 (pre-
Brexit referendum)
• There were an average of 19 VC
deals per months in 2H16 (post-
Bredit referendum)
0
5
10
15
20
25
30
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2014 2015 2016
VC investmentvolume in the UK by bracket

Corporate VC activity, by bracket
• Excluding seed deals, the
total number of corporate VC
investments stayed flat at 44
in 4Q16 compared to 3Q16
• Overall, there were 196
corporate VC investments in
Europe & Israel in 2016
compared to 123 in 2015, an
increase of 59%
6 4 5
16
7
22 19
23
19
27
4
3
9
12
7
12
6
16
19 5
4
4
7
8
7
7
20
18
6
9
3
1
3
3
3
0
10
20
30
40
50
60
70
2014 2015 2016
CorporateVC investmentvolume in Europe and Israel by bracket

Corporate VC activity, by country
• During 2016, Israel saw the
highest number of corporate
VC investments, with 70
• The UK saw 39 corporate VC
investments during the year
• France and Germany each
saw 21 corporate VC
investments in 2016
• 13 other countries saw
corporate VC activity across
Europe, but at much lower
levels
22 19
10 8 6 5
22
9
25
10
7 6
0
10
20
30
40
50
60
70
80
Israel
UK
Germany
France
Sweden
Switzerland
Spain
Italy
Belgium
Finland
Denmark
Norway
Iceland
Estonia
Netherlands
Poland
Portugal
Numberofinvestments
Number of corporate VC investments in Europeand Israel by bracket
(2016)

Average round size
• Previously, I presented this
broken down by bracket, but I
think the data is more
meaningful when taken in
aggregate.
• This average excludes seed
rounds and mega rounds, so it
reflects all rounds done in
Europe & Israel between $2M
and $100M
• With very few exceptions, most
months saw average round
sizes of $10-12M and there is
seems to be little pattern other
than mean reversion
• 3Q15 is the only systematic
outlier to this trend, with
average round sizes of $12-
15M throughout the quarter
• Round sizes seemed to dip in
4Q16, with November seeing
the lowest average round size
since September 2014
4
6
8
10
12
14
16
18
20
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
AmountInvested(US$M)
Average investmentsize in Europe and Israel
(Round sizes of 2-100M)

Total venture investment by country, 4Q 2016
• Israel saw the most VC
investment in 2016, with
$3.9B raised
• The UK came in second
place, with $3B raised
• Germany saw the third-
highest amount of venture
investment, with $2.3B
3,974
3,033
2,270
1,795
712
419
382
305
300
280
199
128
122
107
103
83
56
47
45
36
35
18
7
5
5
5
4
4
2
1
1
1
Israel
UK
Germany
France
Sweden
Spain
Ireland
Netherlands
Switzerland
Finland
Belgium
Denmark
Norway
Italy
Portugal
Poland
Austria
Serbia
Luxembourg
Iceland
Estonia
Bulgaria
Czech
Slovenia
Greece
Latvia
Lithuania
Slovakia
Albania
Hungary
Romania
Croatia
Total VC investmentvolumeby country, 2016 (US $M)

Total venture investment by country, 3Q14 to 4Q16
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• With this filter, volumes and
rankings are more consistent
• The biggest change in 4Q16
was a dramatic decline in
Israeli VC volume, down to
the lowest quarterly level in
the past two years, but still
just clinging to its first-place
rank
• What is most notable
important about this chart is
the consistent gradual growth
in Germany, France, and
Sweden
315
567
543
475
628
699
963
1,064
877
490
369
267
719
437
625 444
871
553 544
487
180
284
389
209
379
340 335
392
460
463
29
163
118
232 279
224 279
367
339 443
74
123
89 112
140
84
139 151
198
224
0
200
400
600
800
1000
1200
TotalVC investment,3Q14 - 4Q16 (top 5 countries, excluding mega-rounds)
Israel
UK
Germany
France
Sweden

Total venture investment by country, 3Q14 to 4Q16
• To get a better sense of VC
volumes in various countries,
this analysis excludes mega-
rounds
• The “second five” countries
for VC investment in 2016
were Finland, Ireland, the
Netherlands, Spain, and –
somewhat surprisingly -
Switzerland
• After two very solid quarters,
the Netherlands seemed to
revert back to lower levels
• Switzerland edged out
Denmark to round out the
top ten
2014 2015 2016
0
20
40
60
80
100
120
140
160
180
TotalVC investment,3Q14 - 4Q16
(countries ranked 6-10 in 2016, excluding mega-rounds)
Spain
Ireland
Netherlands
Switzerland
Finland

Average venture round sizes, by region
• For a while, I had been seeing
a trend towards convergence
in the sizes of rounds across
the geography
• In 2016, this trend seems to
be holding
• Most regions saw average
round sizes flat or slightly
down
• The DACH region saw a
significant increase in average
round size in 4Q16 compared
to 4Q15
Benelux,4.7
Benelux,7.5
DACH, 14.9
DACH, 16.2
France, 8.2
France, 7.6Iberia,7.2
Iberia,9.1
Israel,15.9
Israel,11.8Nordic,11.5
Nordic,7.0
UK & Ireland,8.5
UK & Ireland,8.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Qtr4 Qtr4 Qtr4
2014 2015 2016
Averageroundsize(US$M)
Average investmentsize in Europe and Israel (rounds of $2-100M)

Total venture investment by region
• When VC investments across
Europe are aggregated into
regions, UK & Ireland, Israel,
DACH, France, and the
Nordics are the clear and
consistent leaders
• Benelux, Iberia, Southern
Europe, and Eastern Europe
do produce meaningful VC
investments, but the volumes
are still low
Israel,3,974
UK & Ireland,3,415
DACH, 2,626
France, 1,795
Nordic,1,322
Benelux,549
Iberia,523
South.Eur., 167
East.Eur., 114
TotalVC investmentby region, 2016

Rounds by bracket & region
• To get a better sense of deal
volume, this analysis excludes
seed deals which are often
poorly reported
• Excluding seed deals, the UK
and Ireland saw 63 venture
deals in the fourth quarter
• France took second place,
with 55
• The Nordics had a very busy
quarter, with 49 deals, up
from 30 in 3Q
• Israel dropped to fourth
place, with only 43 deals,
down from 62 in 3Q
42
38 39
23
19
9
5 3 3
12
10 6
11
7
1
3
1
9
5
4
7
8
1
1
2
2
2
0
10
20
30
40
50
60
70
UK &
Ireland
France Nordic Israel DACH Iberia Benelux East. Eur. South. Eur.
Numberofinvestments
Number of investments in Europe and Israel by bracket, 4Q 2016

Participation rate of US VC firms, by bracket
• In the fourth quarter, US VCs
participated in 8% of the VC
financing rounds in EU and
Israel
• As usual, US VCs are much
more likely to participate in
later rounds
• US VCs participated in only 1
of 6 mega-rounds in 4Q16
0% 9%
17%
23%
17%
100%
91%
83%
77%
83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Seed (.5-2) Early Venture (2-8) Venture (8-20) Growth (20-100) Mega (>100)
Percentageofrounds
Did US VC firms participatein EuropeanVC rounds? (4Q16)
No Yes

US VC firm participation rate drops in 4Q
• In 4Q, US VCs participated in
about 12% of the rounds that
took place in Europe
• This rate is the lowest since
I’ve been tracking the data
• This analysis excludes seed
and mega-rounds
15%
23%
17% 20% 20% 16% 16%
21% 21%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016
PercentageofRounds
Did US VC firms participatein EuropeanVC rounds?
(Rounds of $2M-$100M, 3Q14-4Q16)
No US VC in the round US VC in the round

US VC firm participation rate vary widely by country
• Rates of US VC participation
vary wide across different
countries
• On this metric, in 2016,
Estonia, Israel, and Portugal
leap to the top of the list, with
60%, 34%, and 29%
respectively
• Italy and France bring up the
rear, with only 6% and 5%
100%
60%
34%
29% 26% 24% 24% 23% 22%
13% 11% 10% 10% 8% 6% 6% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bulgaria
Estonia
Israel
Portugal
Switzerland
Ireland
Netherlands
Germany
Poland
UK
Sweden
Finland
Spain
Norway
Belgium
Italy
France
PercentageofDollarsInvested
Did US VC firms participatein EuropeanVC rounds?
(2016)
No US VC in the round US VC in the round

Participation of US VC firms by country
• In 2016, US VCs firms were
active in 17 different
European countries
• US VC firms were most active
in Israel, where they
participated in 80 investment
rounds
• The UK saw 31 US
investments
• US VCs invested in 26
German companies
• France and Sweden both saw
9 US VC investments in 2016
80
31
26
9 9 7 50
10
20
30
40
50
60
70
80
90
Israel
UK
Germany
France
Sweden
Switzerland
Netherlands
Ireland
Spain
Estonia
Finland
Portugal
Poland
Bulgaria
Belgium
Italy
Norway
Rounds with a US VC involved
(2016)

Participation of US VC firms by country
• This chart shows US VC
activity within Europe
throughout 2015 and 2016
• The overwhelming bulk of US
VC activity is generally in
Israel, the UK & Ireland,
DACH
• In 4Q, there was only 1 US VC
investment in the UK &
Ireland
• The Nordics, however,
continued to show strength –
rising to 6 US VC investments
in 4Q16
Israel,12 Israel,14 Israel,14 Israel,14 Israel,16
Israel,27 Israel,25
Israel,12
UK & Ireland,10
UK & Ireland,14
UK & Ireland,10
UK & Ireland,8
UK & Ireland,11
UK & Ireland,11
UK & Ireland,12
UK & Ireland,1
DACH, 8
DACH, 6
DACH, 4 DACH, 9
DACH, 6
DACH, 8 DACH, 8
DACH, 11
Nordic,2
Nordic,3
Nordic,5
Nordic,5
Nordic,5
Nordic,4
Nordic,6
Iberia,3
Iberia,4
Iberia,3
Iberia,2
France, 3
France, 2
France, 2
France, 3 France, 3
Benelux,5
Benelux,3 Benelux,3
0
10
20
30
40
50
60
2015 2016
Investments with US VC participation
Israel UK & Ireland DACH Nordic Iberia France Benelux East. Eur. South. Eur.

Dimension Categories Explanation/Example
1. Target market
Consumer, SMB, Enterprise, Government,
Telecom, OEM
What sort of customer does the
company target?
2. Vertical market
Adtech, Communications, Data, Development, Durables,
Education, Electronics, Employment, Energy, Fashion,
Financial, Food, Gaming, Health, HMI, Industrial,
Infrastructure, Lifestyle, Logistics, Marketing, Media,
Productivity, Real Estate, Security, Sports, Storage,
Transportation, Travel, Water
What type of problem does the
company solve?
3. Business model
Commerce, Components, Content,
Marketplace, SaaS, Semiconductors,
Services, Software, Systems,
How does the company make
money? How is value delivered to
customers? What are customers
paying for?
For example: Consumer + Travel + Marketplace
AirBnB has built a travel-related
marketplace for consumers
Three-dimensional approach to sector mapping

• Excluding mega-rounds,
investment activity decreased
in both consumer and
enterprise, continuing a trend
from 3Q
• Investment activity has been
continued to trend up in
OEM-oriented companies –
with volumes nearly doubling
in 4Q compared to 3Q
What target markets are attracting the most VC investment
in Europe & Israel?
980 850
1,177
931 1,076
1,244 1,097 1,004
953
804
910
1,110
1,654
1,640
1,269
962
275
224
270
182
150
163 187
219
423
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2015 2016
TotalVCinvestments(US$M)
European& Israeli venture financing by target market
3Q14 to 4Q16 (excluding mega-rounds, US $M)
Agriculture
Government
Telecom
OEM
SMB
Enterprise
Consumer

• When Israel is excluded from
the sample, 45% of all VC
dollars in Europe went to
consumer-oriented
companies – the lowest level
in two years
• OEM-oriented companies
continued their rise,
accounting for 10% of all VC
dollars in Europe in 4Q
• Telecom also showed a
resurgence, at 6% in 4Q
• It’s nearly invisible in the
graph, but Agtech accounted
for 1.5% of total volume in 4Q
Consumer investment leads Europe
62%
36%
56%
63% 62%
57% 53% 58%
52%
45%
18%
48%
34% 22% 24% 31% 35%
33%
32%
29%
6%
10%
4% 12% 8% 6% 5% 3%
7%
8%
5%
4% 2% 4% 5% 6% 5% 8%
10%
6% 6%8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016
Europeanventure financing by target market
3Q14 to 4Q16 (excluding Israel, percent of US $M)
Agriculture Government Telecom OEM SMB Enterprise Consumer

• When the sample set is
limited to rounds under
$20M, the ratio of consumer
to enterprise investments
shifted a bit towards
enterprise
• Consumer investments as a
percentage of rounds
accounted for 41% of early
rounds compared to 40% for
enterprise
Early-stage consumer deals come back
39%
50% 46% 41% 46% 50%
38%
46% 46% 41%
41%
36% 50%
47% 39%
35%
46%
40%
32% 40%
9% 7% 9% 6% 9% 5%
11% 7%
11%
7% 5% 5% 9% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016
Europeanventure financing by target market
3Q14 to 4Q16 (excluding Israel, rounds up to $20M, percent of US $M)

Breakdown by region & target market
• In 2016, consumer companies
represented the plurality of
investments in all regions
except for Israel and Benelux
945
1,847 1,709
831
537
304
2,407
1,179
431
564
526
349
Enterprise,Iberia,
194
192
343
165
304
182
160
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Israel UK &
Ireland
DACH France Nordic Benelux Iberia South.
Eur.
East. Eur.
Totalamountinvested(US$M)
Investment in Europe and Israel by target market by region
2016 (US $M)

Distribution of investment rounds by country
• Across Europe & Israel, 44%
of VC investment rounds
were in consumer companies
in 2016
• Agtech accounted for 3% of
investments in South Europe,
and 2% in DACH and Israel
• Nearly two-thirds of Israeli
venture investments were
into enterprise companies
67%
54%
52%
48%
47%
43%
32%
19%
21%
32%
32%
31%
36%
41%
48%
63%
5%
10%
10%
9%
11%
9%
14%
5%
9%
5%
6%
9%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
South. Eur.
Iberia
France
Nordic
DACH
UK & Ireland
Benelux
Israel
Investment in Europe and Israel by target market by country
2016 (Number of investments)
Consumer Enterprise SMB OEM Telecom Government Agriculture

Growth rounds by target market
• The later-stage market in
Europe & Israel diversified in
4Q16, with increased focus on
OEM companies (20%) and
SMB-oriented businesses
(12%)
56%
37%
46%
56%
43% 39% 38%
43% 44%
34%
25%
41%
46% 25%
38% 50% 50%
50% 44%
32%
6%
7%
5%
9% 12%
3% 6% 5%
12%
6% 11%
6%
7% 5% 6% 5% 5%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016
Investment in Europe and Israel by target market
(Rounds over $20M, number of investments)
Government Telecom OEM SMB Enterprise Consumer

• Fintech was the most popular
vertical across Europe &
Israel, with 178 investments in
the category
• Marketing-related startups
were the second most
popular category with 109
investments in 2016
• Lifestyle (a catchall category
for consumer commerce) was
the third most popular
vertical, with 99
Finance returned to being the top vertical
14
14
23
23
24
34
38
39
40
41
42
43
44
45
47
48
52
53
56
63
64
64
65
65
70
81
81
86
99
109
178
SCM
ERP
HMI
Agtech
Automotive
Social
Energy
Development
Real Estate
Payments
Gaming
Education
Entertainment
Communications
Productivity
Fashion
CRM
Food
Data
Health
Industrial
Adtech
Travel
Logistics
Employment
Infrastructure
Security
Electronics
Lifestyle
Marketing
Financial
2016 (top 30 categories, number of investments)

• This graph shows number of
investments in the top 16
verticals across 2015 and 2016
• Most categories showed
significant increases, in line
with the overall trend
How have the most popular verticals grown?
Financial,97
Financial,145
Marketing, 106
Marketing, 95
Lifestyle,65
Lifestyle,84Security,60
Security,73Electronics,49
Electronics,75
Infrastructure, 55
Infrastructure, 66
Employment,42
Employment,64
Logistics,45
Logistics,58
Adtech,48
Adtech,55
Health,51
Health,45
Travel, 33
Travel, 58
Fashion,42
Fashion,43
Data, 37
Data, 43
Productivity,38
Productivity,40
Industrial,23
Industrial,55
Development,44
Development,30
Education, 32
Education, 40
Food, 28
Food, 44
Gaming, 31
Gaming, 36
Communications,25
Communications,41
0
200
400
600
800
1,000
1,200
2015 2016
European & Israeli venture financing by vertical market
(top 15 verticals, number of investments)

• This graph shows the change
in the number of investments
by vertical across 2015 and
2016
• Automotive, agtech, and
imaging skyrocketed in
frequency
• Strong growth was seen in
CRM, industrial, energy,
storage
• Sport, dating, and music saw
substantial declines
Growth rates by vertical
Music,-80%
Dating, -75%
Sports, -50%
Development, -11%
Durables,-7%
Social,-6%
Legal, 0%
Marketing, 3%
Fashion,14%
Health, 24%
Productivity,24%
ERP, 27%
Adtech, 33%
Education,34%
Security, 35%
Gaming, 35%
Logistics,44%
Infrastructure,47%
Data, 51%
Payments, 52%
Lifestyle, 52%
Employment, 67%
Entertainment, 69%
Electronics,76%
Communications,80%
Financial,84%
Food, 89%
Travel, 97%
SCM, 100%
Water, 100%
Real Estate, 111%
HMI, 130%
Storage, 150%
Energy, 171%
Industrial,178%
CRM, 189%
Imaging,400%
Agtech, 475%
Automotive, 1100%
Change in number of VC investments by vertical (2016 vs. 2015)

• Finance was once again the
most frequently funded
vertical
• Consumer lifestyle companies
took second place
• Marketing was the third most
frequently funded vertical,
with enterprise-oriented
marketing taking the lion’s
share within that category
Which verticals for which segments?
Employment
Industrial
CRM
Food
Data
Logistics
Electronics
Infrastructure
Health
Marketing
Lifestyle
Financial
0 10 20 30 40 50 60
4Q, 2016 (number of investments, top 10 verticals)
Consumer
Enterprise
SMB
OEM
Telecom
Government

• This chart shows the ten most
commonly funded verticals
across Europe & Israel by
quarter
The most popular verticals in the past 2 years
2014 2015 2016
0
50
100
150
200
250
300
European& Israeli venture financing by vertical market
(number of investments, top 10 verticals)
Adtech
Health
Logistics
Electronics
Lifestyle
Employment
Security
Infrastructure
Marketing
Financial

• Investors continue to favor
financial and health
investments
• Fashion and gaming showed
declines
Consumer VC investment trends
2014 2015 2016
0
20
40
60
80
100
120
140
160
180
European& Israeli venture financing by consumer verticals
Social
Travel
Health
Fashion
Food
Electronics
Logistics
Gaming
Lifestyle
Financial

• Enterprise marketing seems
to have levelled off as an area
for VC investment
• There was a marked decrease
in security investments in 4Q
• Most other enterprise
segments were largely stable
Enterprise VC investment trends
2014 2015 2016
0
20
40
60
80
100
120
140
160
180
European& Israeli venture financing by enterprise verticals
CRM
Financial
Industrial
Employment
Development
Data
Infrastructure
Adtech
Security
Marketing

• Security was the most
commonly funded category
in Israel, with 43 investments
in 2016
• Infrastructure, marketing, and
finance were next
A closer look at Israeli venture in 2016
Data
Industrial
Development
Adtech
Communications
Electronics
Financial
Marketing
Infrastructure
Security
0 5 10 15 20 25 30 35 40 45 50
Israeli venture financing by target market
2016 (number of investments,top 10 verticals)
Consumer
Enterprise
SMB
OEM
Telecom
Government

• Israeli deal volume declined
in 4Q relative to record-
setting quarters earlier in the
year
• Much of this decline seems to
be attributable to the Jewish
high holidays which occurred
this year in 4Q compared to
3Q in 2015
Pace of Israeli venture in 2016
0
5
10
15
20
25
30
35
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
VC investmentvolume in Israel by bracket
2015-2016 monthly
average = 18
2015-2016 monthly
average = 18
Jewishholydays
Jewishholydays

• Over the past 24 months,
Israeli VC investment volume
averaged $277M per month
• 4Q trended below that level,
but just slightly
Pace of Israeli venture in 2016
0
100
200
300
400
500
600
700
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
AmountofVCinvestments(US$M)
VC investmentvolume in Israel by bracket
2015-2016 monthly
average = $277

• The UK venture landscape
was dominated by fintech,
and consumer fintech in
particular
• Marketing (mostly for the
enterprise) was the second-
most funded category in the
UK
• Consumer lifestyle companies
were the third most funded
category in the UK
The UK VC market in 2016
CRM
Development
Education
Productivity
Real Estate
Infrastructure
Adtech
Employment
Lifestyle
Marketing
Financial
0 5 10 15 20 25 30 35 40 45
UK venture financing by target market
2016 (number of investments,top verticals)
Consumer
Enterprise
SMB
OEM
Telecom

• Fintech led the German VC
eco-system in 2016, with 24
investments
• Consumer travel was next,
with 11
• Logistics and fashion (mostly
but not exclusively for the
consumer) were tied at 9
each
• Enterprise industrial also
made a strong showing, with
7 investments in 2016
The German VC market in 2016
Lifestyle
Data
Employment
CRM
Marketing
Real Estate
Industrial
Logistics
Fashion
Travel
Financial
0 5 10 15 20 25 30
German venture financing by target market
Consumer
Enterprise
SMB

• As with the UK and Germany,
the Nordics also saw more
fintech companies funded
than any other vertical
• Surprisingly, electronics tied
with gaming for second place
– split evenly between
consumer electronics and
OEM-oriented companies
• Health took fourth place with
19 rounds
The Nordic VC market in 2016
Employment
Entertainment
Infrastructure
Industrial
Energy
Lifestyle
Health
Gaming
Electronics
Financial
0 5 10 15 20 25 30 35 40 45
Nordic venture financingby target market
Consumer
Enterprise
SMB
OEM
Telecom
Government

• Not surprisingly, Sweden saw
the most actively among
Nordic nations across most
verticals – with particular
strength in financial, gaming,
energy and entertainment
• Finland showed particular
strength in gaming, health
and infrastructure
The Nordic VC market by country
Employment
Entertainment
Infrastructure
Industrial
Energy
Lifestyle
Health
Gaming
Electronics
Financial
0 5 10 15 20 25 30 35 40 45
Nordic venture financingby target market
Sweden Finland
Denmark Norway
Estonia Iceland
Latvia Lithuania

• Sweden is by far the most
active venture market in the
Nordics
• Gaming was the single most
funded category in Sweden,
followed closely by consumer
finance and consumer
lifestyle
The Swedish VC market in 2016
Food
Adtech
Communications
CRM
Productivity
Logistics
Industrial
Marketing
Entertainment
Health
Energy
Lifestyle
Electronics
Gaming
Financial
0 5 10 15 20 25 30
Swedish venture financing by target market
Consumer
Enterprise
SMB
OEM
Telecom

• Across France, consumer
lifestyle, consumer
electronics, and consumer
travel were the most
frequently funded categories
• Enterprise marketing was also
significant
The French VC market in 2016
Education
Data
Real Estate
Financial
Food
Logistics
Marketing
Travel
Electronics
Lifestyle
0 5 10 15 20 25 30
French venture financingby target market
Consumer
Enterprise
SMB
OEM
Telecom
Government

• Italy dominated the consumer
lifestyle and adtech
categories
• Poland and Italy each saw
three electronics investments
in 2016
Venture capital in Southern & Eastern Europe in 2016
Employment
Durables
Data
Agtech
Productivity
ERP
Social
Health
Food
Financial
Travel
Fashion
Security
Logistics
Marketing
Electronics
Adtech
Lifestyle
0 2 4 6 8 10
Venture financingby target market (S. Eur & E. Eur)
Italy
Poland
Greece
Czech
Slovenia
Slovakia
Serbia
Croatia
Romania
Bulgaria
Albania
Hungary

• SaaS was the most funded
business model in 2016,
representing 27% of all VC
dollars
• As software eats the world,
services are becoming an
increasingly important
business model for venture-
backed startups
• This continued into 2016, with
services taking 24% of the
venture dollars invested in
Europe & Israel
• Systems – complete physical
products – took fourth place
at 9% of all venture dollars
• Marketplaces – businesses
that serve a price discovery
function – were just 6%
SaaS above all (but keep an eye on systems)
SaaS, 3,202, 27%
Services, 2,825, 24%
Software, 1,680, 14%
Commerce, 1,194, 10%
Systems,
1,129, 9%
Marketplace, 742, 6%
Media, 533, 5%
Components, 398, 3%
Semiconductors, 242, 2%
Materials, 6, 0%
European & Israeli venture financing by target market
2016 (in US $M) (excluding mega-rounds)

• SaaS and Services remained
the top two business models
by funding volume
• Commerce rose throughout
2016, taking third place in 4Q
• Systems moved up from last
place in early 2015 to fourth
place in 4Q16
• Marketplaces hit a new low
and were in last place for the
first time
Commerce resurgent and systems rising
0
200
400
600
800
1000
1200
2014 2015 2016
European& Israeli venture financing by business model
(top seven, in US $M, excluding mega-rounds)
Services
SaaS
Software
Commerc
e
Marketpl
ace

• This graph provides a quick
overview of the ten most
commonly funded segments
across the top ten countries
for those segments
• In a nutshell:
• UK consumer financial services
• Israeli enterprise security
software
• French consumer electronics
• Swedish, Finnish, and British
games
• French food commerce
• And some other stuff…. 
EU+IL VC Cheat Sheet
0 10 20 30 40 50 60 70 80 90
Enterprise CRM SaaS
Consumer Food Commerce
Consumer Gaming Media
Consumer Fashion Commerce
SMB Financial Services
Consumer Electronics Systems
Enterprise Security Software
Consumer Lifestyle Commerce
Enterprise Marketing SaaS
Consumer Financial Services
Number of VC investments
Investment in Europe & Israel by segment by country
2016 (top 10 segments, top 10 countries)
UK France
Israel Sweden
Germany Spain
Italy Netherlands
Finland Belgium

Once again, but this time more SaaS!
• During 2016, the most
popular vertical by far for
SaaS investments across the
geography was marketing
• CRM (which includes sales
tooling) was a distant second
• Productivity and developer
tools were tied for third
0 10 20 30 40 50 60 70 80 90 100
Security
Financial
Adtech
Employment
Infrastructure
Data
Development
Productivity
CRM
Marketing
SaaS VC investmentin Europe and Israel
by vertical and target market, 2016 (top 10 verticals)
Consumer Enterprise Government SMB Telecom

Services investing in 2016
• This graph shows the top ten
verticals within the services
category in 2016 across
Europe & Israel
• Financial services were far
and away the most frequently
funded vertical – mostly for
consumers and SMBs
• Education services (edtech)
was in (distant) second place,
followed by logistics and
adtech
0 20 40 60 80 100 120 140 160
Infrastructure
Marketing
Communications
Health
Entertainment
Payments
Adtech
Logistics
Education
Financial
Services VC investment in Europe and Israel
by vertical and target market, 2016 (top 10 verticals)
Consumer Enterprise Government SMB Telecom

Focus on Industrial
• 2016 saw a dramatic rise in
the number of industrial-
oriented investments across
Europe and Israel
• These investments
concentrated in Israel (16),
France (13), the UK (11),
Germany (10), and Sweden
(9)
0
2
4
6
8
10
12
14
16
18
Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2014 2015 2016
Numnberofinvestments
Industrial- VC investmentin Europe and Israel
Lithuania Poland Iceland Norway Finland Ireland
Spain Denmark Switzerland Belgium Netherlands Sweden
Germany UK France Israel

Focus on consumer systems
• 2016 also saw a substantial
rise in the volume of
consumer systems
investments across Europe
and Israel
• $564M was invested into this
category in 2016 across 74
rounds, up from $189M
across 39 rounds in 2015
0
5
10
15
20
25
0
20
40
60
80
100
120
140
160
180
200
2014 2015 2016
Numberofinvestments
Consumer Systems - VC investmentin Europeand Israel
Amount
Number

Focus on agtech
• 2016 also saw growth in the
number of agtech
investments across Europe
and Israel
• There were 23 deals in the
space in 2016, up from 4 in
2015
• In 2016, there were 5 agtech
deals in Israel and 3 in each
of the UK, France, and
Switzerland
0
1
2
3
4
5
6
7
8
9
2015 2016
Agtech - VC investment in Europe and Israel
Austria Croatia Ireland Estonia Greece
Spain Netherlands Sweden Norway Switzerland
UK France Israel

Focus on agtech
• $86M was invested into
agtech startups across
Europe and Israel in 2016, up
from $13 in 2015
0
1
2
3
4
5
6
7
8
9
0
5
10
15
20
25
30
35
40
45
2014 2015 2016
Numberofinvestments
Agtech - VC investment in Europe and Israel
Amount
Number

Focus on automotive
• 2016 also saw 23 automotive
deals across Europe & Israel,
up from 2 in 2015
• France led in this category,
with 6 investments, all in 2016
• The UK was second, with 5
0
2
4
6
8
10
12
14
2015 2016
Automotive- VC investmentin Europe and Israel
Italy Finland Switzerland Sweden Netherlands
Germany Israel UK France

Focus on automotive
• $187M was invested into
automotive startups across
Europe and Israel in 2016, up
from $27 in 2015
0
2
4
6
8
10
12
14
0
20
40
60
80
100
120
140
2015 2016
Numberofinvestments
Automotivetech - VC investmentin Europe and Israel
Amount
Number

Based in , I was previously a partner at . Before that, I helped run the
European seed program for . I moved to London after seven years in
during which I worked as a VC with and . I’m originally from .
My VC investments include and .
Angel investments include and many more.
If you found this useful, I hope you’ll subscribe to my blog.
60
Gil Dibner
To invest in the best European & Israeli enterprise startups,
consider backing me on here. Lots of exciting stuff in the
pipeline – and you’ll be in pretty good company.

Europe & Israel 2016 VC Year in Review

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