European VC from a

UK Perspective

Stanford Engineering

European Entrepreneurship & Innovation

7th January 2013

Anne Glover

CEO, Amadeus Capital Partners Limited,

Chairman of EVCA, VC Council

Amadeus Capital – a Leading European ICT Investor

Early stage investor and business builder

• Experienced entrepreneurs and start-up executives

• 15 years 85 companies 7 funds £500m AUM

• Global and multi-cultural

Consistently at the forefront of key trends in the ICT industry

• Backed leaders in every ICT wave since the 70’s

• Active today in mobile services, security software, medtech and h’care IT

• Deep global network of investors, entrepreneurs and corporations

Proven contributor to the creation of tech ecosystems

• Generates benefits beyond returns – M&A, partnerships, incubation

• Active in the development of clusters – Cambridge, London, Stockholm

• Leading role in BVCA, EVCA and UK and EU innovation initiatives

2

Our Experience

3

Unique transaction and business building capabilities

VC & Transaction Experience

Operational Experience

P&L Responsibility International Experience Start-up

Experience

Experience Gained at Amadeus

0%

10%

20%

30%

40%

50%

60%

70%

Total of 219 Person Years

Pe

rce

nta

ge

of

To

tal W

ork

Ex

pe

rie

nc

e

We increasingly back serial entrepreneurs

17%

37%

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

AMI AMII AMIII

% o

f c

om

pa

nie

s w

ith

se

ria

l e

ntr

ep

ren

eu

rs

5

We increasingly attract international deal flow in our sectors

Source: Amadeus internal analysis

6

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Perc

enta

ge o

f D

eals

Seen

UK International - Europe International - USA International - Other

Mobility – we understand our sectors deeply

Amadeus Mobile Portfolio 7

Service Layer

Devices

Control Layer

Transport Layer

Access Layer

SS7 SIP / IMS

Apps/

Services

Amadeus Mobile Portfolio* …

… and help them scale exponentially

*17 mobile companies excluding End2End

because of short holding period

8

0

50

100

150

200

250

300

350

400

1 2 3 4 5 6

Po

rtfo

lio

Reve

nu

e (

£ m

illi

on

s)

Years from First Investment

82% CAGR

… has grown to >£350m in annual sales

We Back Ambition … and guide our companies to globalise from early on

9

22 out of 30 portfolio companies sell into emerging markets

Portfolio companies with sales into region > 5%

Emerging Markets

1 7

Global

Western Europe North America

19

3

… and have exited in all market conditions

Source data: Nasdaq Composite indices 10

… frequently via IPOs

0

1,000

2,000

3,000

4,000

5,000

6,000

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Amadeus Exits vs. Nasdaq Index

Summary

11

BUT…

Amadeus Capital

• Experienced early stage investor and business builder

• Consistently at the forefront of key trends in the ICT

industry

• Consistently built market leading companies

• Focussed on the sectors we know, rather than following

momentum based trends

• Proven contributor to the creation of tech ecosystems

Europe is still sub-scale relative to the US

……on every dimension (2007-2012)

Dow Jones Venture Source 12

-

20

40

60

80

100

120

140

US Europe

$m

illio

ns

Avg. Fund Size

-

50

100

150

200

US Europe

No. of Funds

45%

-

5

10

15

20

25

US Europe

$B

illio

ns

Annual Funds Raised US

Europe

26%

58%

=

..however this means that median pre-money

valuations are much better in Europe

Source: Venture Source

: 13

Median Pre-money valuations: EU as a % of US Median Pre-money valuations: US vs EU 1H’12

0%

20%

40%

60%

80%

100%

120%

140%

2007 2008 2009 2010 2011 1H'12

Later Second First Seed

46m

30m

10m

3m

21m

11m

4m 1m

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Later Second First Seed

US

EU

…and today is the right time to invest because:

VC capital invested in Europe is at its lowest level since 1997

Source: EVCA 14

0

5

10

15

20

25

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

€b

n (

bars

)

Nu

mb

er

of

co

mp

an

ies

(li

ne

s)

Seed Start up Later Stage

-60

-40

-20

0

20

40

60

80

100

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

No

. of

Fun

ds

rais

ed

IRR

% -

GB

P

Upper Median No of funds raised

Slide 6

…and low fund raising vintages offer the best returns

Tech Bubble/Crash

Source: Thomson One

Credit Bubble/Crash

European Venture Returns by Vintage Year (IRR % - GBP)

The UK is a good place to invest…

Source: EVCA 16

…it remains the largest VC market in Europe

United Kingdom 23%

France 19%

Germany 17%

Sweden 7%

Spain 6%

Netherlands 5%

Switzerland 4%

Norway 4%

Denmark 3%

Belgium 3%

Finland 2%

Italy 2%

Ireland 2%

Austria 1%

Total Amount Invested by Country 2007 -2011

… but you need to choose the moments to invest!

...Seed and Early Stage .. OR… Expansion Stage

Expansion

Seed Early Rev

17

The Challenges

Fund raising the euro crisis

poor VC returns since 2000

regulatory burden on LPs from Brussels

banks, insurance companies, pension funds all pulling out

fund of funds struggling because of double fee burden

large pools of capital cannot write small cheques for small VC fund sizes

Need to re-invent LP base yet again – family offices, endowments, corporates

Exits High value exits require competition at the time of exit, often vs. IPO

European stock market investors are risk averse and dividend driven

Need to scale companies successfully to list in the US

or

Need to create globally compelling stories, and sell to an ex-US cash rich corporations

18

VC is about entrepreneurship and we are having to be entrepreneurial as well

Amadeus Office Network

19

Cambridge Bay Area

Investment & back office

2 Mount Pleasant,

Cambridge CB3 0RN

Tel: +44 1223 707 000

London

Investment

16 St James’s Street,

London SW1A 1ER

Tel: +44 20 7024 6900

Investment & connectivity

321 Pacific Avenue, San

Francisco, CA 94111

Tel: +1 (415) 699 4834