german & berlin tech: performance on the international stage€¦ · • the objective of this...

German & Berlin Tech:

performance on the international stage

14 November 2018

in partnership with

Data trusted by leading publications

2

How are German & Berlin Tech performing on the international stage?

• Since 2000s, German tech has created 28 unicorns, with a combined value of €106 billion. Astonishingly, nine of them i.e. one-third became a unicorn (reached $1 billion) in 2018 alone

• Germany is Europe’s second largest tech hub after the UK by almost any metric, including venture capital invested, unicorns created and realised exits. Berlin is Europe’s second largest tech hub by the same metrics. Munich ranks third tech hub in Europe by number of unicorns created

• €4.3 billion is projected to be invested in 2018 in German startups: a new record (based on January to October annualized data)

• This record-level is driven in part by a handful of mega-rounds, more so than in the UK and France. Already at Seed and Series A stage, German rounds tend to be bigger than in the UK, France and Europe

• Germany’s multinationals are among the most active corporate venture investors in Europe, investing €0.9 billion in European VC rounds (compared with €0.5 billion by UK and French corporates)

• Investment from USA and Asia into Germany has grown from €0.4 billion in 2016 to €1.8 billion in 2018

3

What can be done to support and accelerate development of the German & Berlin tech industry?

• Berlin’s tech sector emerged without any pre-conceived notion of a “startup ecosystem”. But X years after the Samwer brothers launched Rocket Internet, we’ve entered the age of mega-tech companies, mass adoption of digitization, large investments in artificial intelligence, as well as uncertainty about (e.g. GDPR). Some degree of grand-planning may be inevitable. Plus the risks of disconnect between public and private are larger than ever

• The objective of this report is not merely to highlight Germany’s successes, but rather offer new insights, identifying both strengths and areas for improvement for Berlin’s and Germany’s tech sector

• Unicorns are one useful metrics as it reflects a tech hub’s ability to support hyper-growth, attract top talent and create a new generation of future founders, executives, and angel investors. This report also looks at investment allocation, cross-border investment flows, talent pools & development

• This report will function as a starting point for discussions about Germany’s and Berlin’s tech ecosystem, including a launch event on Wednesday, November 14Dealroom will also unveil a new data resources dedicated to Berlin, to support the local ecosystem and improve data

4

Underlying data is available online via berlin.dealroom.co

5

1. Startups and unicorns

2. Venture capital investment and exits

3. Tech infrastructure: foundations for growth

Contents

3 3 34 4 4

5

9

1618

19

28

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

28 unicorns were created in Germany in the last ten years, of which 9 (one-third) in 2018 alone

Source: Dealroom.co. Only includes companies founded after 1990.

3 3 611 2 1 9

Cumulative number of unicorns created (year in which $1 billion valuation mark is crossed)

CTS Eventim (05‘)Infineon (’00)

7

Germany firmly ranks second by number of unicorns, well ahead of Israel, Netherlands, Sweden, France

60

3 3 3 4 4 4 5

9

16 18 19

28

13

10 11

7

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cumulative number of unicorns created (year in which $1 billion valuation mark is crossed)

Source: Dealroom.co. Only includes companies founded after 1990.

United Kingdom

Germany

Room for growth

IsraelNetherlandsSwedenFrance

8

Germany’s unicorns are worth a combined €106 billion, mostly concentrated in Berlin, Munich and Hamburg

$10B+

$5-10B

$2-5B

$1-2B

Future unicorns (1)

Berlin Munich Hamburg Stuttgart Dusseldorf

Source: Dealroom.co. Companies valued €200M to €1B. 9

Realised unicorns: 18 Unrealised unicorns: 10 Future unicorns: over 20

IPO-ed or acquired Not exited Companies valued €200M to €800M

Germany has created 28 unicorns so far with a promising

pipeline of potential unicorns

10Source: Dealroom.co. Only includes companies founded after 1990.

Still a wide gap versus Silicon Valley and Beijing

Source: Dealroom.co. 11

Current number of unrealised unicorns

120

75

15

11

10

5

4

3

2

2

2

United States

China

United Kingdom

India

Germany

Israel

France

South Korea

Switzerland

South Africa

Indonesia




Contents

With a projected €4.3 billion invested, 2018 will be a record year for venture capital investment in Germany

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

€ 1.7B

€ 2.8B

€ 1.9B

€ 2.9B

€ 4.3B

–

40

80

120

160

200

–

€ 1.0B

€ 2.0B

€ 3.0B

€ 4.0B

€ 5.0B

2014 2015 2016 2017 2018E

Investment (in € billions) Number of rounds (> €2M)

Annual investment in German VC rounds Top 10 rounds in 2018 City Round Quarter

Auto1 GroupProvides consumers with access to used and new cars

Berlin € 460 m

GROWTH EQUITY€3.0B valuation

Q1

NuCom GroupOmnichannel platform for consumer services and lifestyle brands in Europe

Unterföhring€ 450 m

GROWTH EQUITY€1.8B valuation

Q1

About YouE-commerce retailer for fashion

Hamburg$ 300 m

GROWTH EQUITY$1.0B valuation

Q3

BioNTechPersonalized cancer immunotherapies

Mainz € 225 mSERIES A

Q1

Number26Bank account that can be managed entirely from a smartphone

Berlin $ 160 mSERIES C

Q1

GoEuroMulti-mode search tool that compares and combines rail, air, bus and car for European destinations

Berlin $ 150 m

GROWTH EQUITY$1.0B valuation

Q3

Deposit SolutionsThe open architecture platform for retail deposits

Hamburg$ 100 mSERIES D

Q2

Frontier Car GroupBuilds and runs marketplaces focused on emerging markets in the auto sector

Berlin$ 89 m

SERIES CQ3

Sonnen GmbHGlobal leader in smart energy storage solutions

Wildpoldsried€ 60 m

LATE VCQ2

SmavaGermany's largest online credit market

Berlin$ 65 m

LATE VCQ1

13

€ 2.9B

€ 5.3B € 5.0B

€ 7.7B

€ 7.1B

€ 1.7B

€ 2.8B

€ 1.9B

€ 2.9B

€ 4.3B

€ 1.0B

€ 1.7B

€ 2.5B € 2.6B

€ 4.0B

462

172

330

–

100

200

300

400

500

–

€ 2.0B

€ 4.0B

€ 6.0B

€ 8.0B

€ 10.0B

2014 2015 2016 2017 2018E 2014 2015 2016 2017 2018E 2014 2015 2016 2017 2018E

United Kingdom Germany France


Germany ranks second in Europe by venture capital investment activity, in most years including in 2018

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants. 14

$150M $495M

$506M $89M

$160M $100M

$300M $250M

Venture capital investment in Germany by round size

German mega rounds have had a big impact on the large amount of capital invested in 2018

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt.

€ 0.1B

€ 0.5B

€ 0.4B € 0.4B

€ 0.4B € 0.5B

€ 0.1B

€ 0.3B € 1.2B

–€ 0.8B

€ 2.0B

€ 0.9B

€ 1.7B

€ 2.8B

€ 1.9B

€ 2.9B

€ 4.3B

–

€ 1.0B

€ 2.0B

€ 3.0B

€ 4.0B

€ 5.0B

2013 2014 2015 2016 2017 2018E

$ 100M+

$ 50-100M

$ 25-50M

$ 10-25M

$ 0-10M

15

Venture capital investment by round size

Mega rounds represent a larger share of German venture capital invested than in the UK and France


€ 1.6B

€ 2.9B

€ 5.3B

€ 5.0B

€ 7.7B

€ 7.1B

€ 0.9B

€ 1.7B

€ 2.8B

€ 1.9B

€ 2.9B

€ 4.3B

€ 0.8B € 1.0B

€ 1.7B

€ 2.5B € 2.6B

€ 4.0B

€ 3.3B

–

€ 2.0B

€ 4.0B

€ 6.0B

€ 8.0B

€ 10.0B

2013 2014 2015 2016 2017 2018E 2013 2014 2015 2016 2017 2018E 2013 2014 2015 2016 2017 2018E 2018

$ 100M+

$ 50-100M

$ 25-50M

$ 10-25M

$ 0-10M

United Kingdom€50M+ rounds = 40% of capital

Germany€50M+ rounds = 60% of capital

France€50M+ rounds = 30% of capital

16

€ 7M

€ 8M

€ 6M

€ 6M

€ 3M

€ 4M

€ 5M

€ 6M

€ 7M

€ 8M

€ 9M

2014 2015 2016 2017 2018

United Kingdom Series A Germany Series A

France Series A Europe Series A

€ 1.0M

€ 1.3M

€ 1.1M

€ 0.8M

–

€ 0.3M

€ 0.6M

€ 0.9M

€ 1.2M

€ 1.5M

2014 2015 2016 2017 2018

United Kingdom Seed Germany Seed

France Seed Europe Seed

Already at Seed and Series A stage, German rounds tend to be bigger than in the UK, France and Europe

Median size of Seed rounds Median size of Series A rounds

17Source: Dealroom.co

5%

15%

5%

16%

12%

5%

10%

8%

4%

3%

5%

5%

2%

1%

3%

1%

1%

24%

12%

10%

10%

10%

6%

5%

5%

5%

5%

4%

3%

2%

1%

1%

0%

0%

20% 15% 10% 5% 0% 5% 10% 15% 20% 25% 30%

Food

Enterprise software

Home

Health

Fintech

Transportation

Biotech

Marketing

Fashion

Travel

Energy

Security

Gaming

Insurance

Telecom

Robotics

Semiconductors

4%

15%

5%

17%

15%

7%

10%

4%

3%

3%

5%

4%

2%

2%

2%

1%

1%

7%

13%

5%

11%

16%

18%

5%

4%

5%

5%

6%

1%

0%

3%

0%

1%

1%

20% 15% 10% 5% 0% 5% 10% 15% 20% 25% 30%

Food

Enterprise software

Home

Health

Fintech

Transportation

Biotech

Marketing

Fashion

Travel

Energy

Security

Gaming

Insurance

Telecom

Robotics

Semiconductors

Investment focus in Germany has now moved from Food towards Fintech and Transportation / Mobility


From 2013 to 2016 From 2017 to 2018

Europe GermanyEurope Germany

18

€ 5.9B

€ 3.6B

€ 3.3B

€ 2.4B

€ 1.3B

€ 0.9B

€ 0.9B

€ 0.6B

€ 0.5B

€ 0.4B

€ 0.4B

€ 0.4B

€ 0.4B

€ 0.3B

€ 0.3B

€ 0.2B

€ 0.2B

€ 0.1B

€ 0.1B

United Kingdom

Germany

France

Israel

Spain

Sweden

Switzerland

Ireland

Netherlands

Finland

Denmark

Portugal

Italy

Belgium

Russia

Norway

Estonia

Cyprus

Austria

The UK, Germany and France together account for 57% of total European venture capital investment

Venture capital funding by company location in 2018 YTD (Year to date from January to October)

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants. 19

German investors invest 29% of rounds and 48% of capital outside of Germany (25% and 42% outside of DACH region)


UK€0.3B

110 rounds

France€0.1B

52 rounds

Spain€0.3B

21 rounds

Norway€0.3M

1 round

Poland€12M

7 rounds

Sweden€0.1B

18 rounds

Finland€16M

10 rounds

Austria€0.1B

24 rounds

Switzerland€0.1B

35 rounds

Israel€0.4B

28 rounds

Allocation by invested capital (2017-2018)

Allocation by number of rounds (2017-2018)

71%

8%

4%

3%

2%

2%

2%

2%

1%

Germany

United Kingdom

France

Switzerland

Israel

Austria

Netherlands

Spain

Sweden

52%

12%

10%

4%

3%

3%

3%

2%

1%

Germany

Israel

United Kingdom

Sweden

France

Austria

Switzerland

Spain

Belgium

20

Additional unrealised

value of €15B

Venture returns are mostly driven by few very large exits. Germany’s realised exits add up to €29B, since 2013

Source: Dealroom.co

€ 1.1B

€ 7.1B€ 8.1B

€ 1.1B

€ 7.9B

€ 4.1B

(€ 0.9B)(€ 1.7B)

(€ 2.8B)(€ 1.9B)

(€ 2.9B)(€ 4.3B)

2013 2014 2015 2016 2017 2018E

€14B of invested capital

(2013-2018)

€29B of realised exits (2013-2018)

Value of realised exits (2013-2018)

21

UK, Germany and Sweden are leading Europe in terms of

realised exits for venture investors

Source: Dealroom.co. Total value of exits of all companies that have been venture backed at any stage in their life cycle.

Invested capital (’13-’18) Value of realised exits (’13-’18)

(€ 29B)

(€ 6B)

(€ 15B)

(€ 3B)

(€ 2B)

(€ 13B)

€ 92B

€ 35B

€ 29B

€ 21B

€ 13B

€ 12B

United Kingdom

Sweden

Germany

Netherlands

Finland

France

Selected landmark exits

22




Contents

Berlin is home to several of the most prominent venture capital investors in Europe

24

INVESTOR LOCATION LAST FUND FOCUS NOTABLE INVESTMENTSDACH

RANK (1)

HV Holtzbrinck Ventures Munich / Berlin € 306MJan 2018

Seed, series A 1st

Lakestar Zurich / Berlin € 350MAug 2016

Seed, series A 2nd

Rocket Internet / Global Founders Capital

Berlin € 1.0BJan 2017

Multi-stage 3rd

Point Nine Capital Berlin € 75MJun 2017

Seed 4th

Target Global Berlin $ 100MJun 2018

Multi-stage 5th

Earlybird Venture Capital Berlin € 175MJun 2018

Seed, Series A 6th

Tengelmann Ventures Mülheim -- Multi-stage 7th

Cherry Ventures Berlin € 150MMay 2016

Seed 8th

Project A Ventures Berlin € 50MJan 2018

Seed, series A 9th

Speedinvest Vienna€ 50MJan 2018

Seed 10th

Source: Dealroom.co.1. Prominence rank of German investors, based on Dealroom’s Prominence Rank which measures activity and investment success.

European corporate venture investments by location of corporate

German world-leading multinationals are Europe’s most active corporate venture investors


€ 0.2B € 0.2B

€ 0.2B

€ 0.4B

€ 0.9B

€ 0.2B

€ 0.2B

€ 0.3B

€ 0.7B

€ 0.5B

€ 0.1B

€ 0.3B € 0.3B

€ 0.4B

€ 0.5B

–

40

80

120

160

200

–

€ 0.2B

€ 0.4B

€ 0.6B

€ 0.8B

€ 1.0B

2014 2015 2016 2017 2018E 2014 2015 2016 2017 2018E 2014 2015 2016 2017 2018E

Germany United Kingdom France


Media Automotive Industrial

FinanceRetail &

distributionTechnology

25

German funds make 25% of investments abroad, in line with the UK. German corporates invest nearly half abroad


19%

29% 29%

25% 22%

10%

2014 2016 2018E

German VCs UK France

VC funds: % cross-border investment Corporates: % cross-border investment

26

35%

46%

35% 32%

43%

17%

2014 2016 2018E

German corporates UK France

Selected investments and acquisitions by German corporates

Source: Dealroom.co.

Investors Company Location Round Date

USA$ 8.0 b

ACQUISITIONNov 2018

Netherlands€ 2.8 b

ACQUISITIONAug 2015

Indonesia$ 1.5 b

SERIES EJan 2018

Netherlands€ 628 m

ACQUISITIONAug 2018

Germany$ 300 m

GROWTH EQUITYJul 2018

UAE $ 150 mSERIES D

Jun 2017

USA$ 100 mSERIES A

Mar 2018

Israel/USA$ 80.0 mLATE VC

Jun 2018

Germany € 70.0 m

ACQUISITIONApr 2018

USA ACQUISITION Oct 2018

27

Investor appetite in German tech has increased dramatically, especially from the USA & Asia (plus South African Naspers)


€ 0.4B

€ 0.6B

€ 0.4B

€ 1.1B

€ 1.8B

–

€ 0.4B

€ 0.8B

€ 1.2B

€ 1.6B

€ 2.0B

2014 2015 2016 2017 2018

USA and Canada Asia Africa

Investment into Germany from USA, Asia and Africa

28

Top universities

City Top universities Highest ranked university (1)

Oxford University of Oxford 1

Cambridge University of Cambridge 2

London Imperial College London*, UCL, London School of Economics and Political Science, King’s College London 8

Munich LMU Munich*, Technical University of Munich 32

Manchester University of Manchester*, Manchester Metropolitan University 54

Amsterdam University of Amsterdam*, Vrije Universiteit Amsterdam, 59

Berlin Humboldt University of Berlin*, Free University of Berlin, Technical University of Berlin 62

Paris Paris Sciences et Lettres - PSL Research University Paris*, Ecole Polytechnique, Pierre and Marie Curie University 72

Copenhagen University of Copenhagen*, Copenhagen Business School 116

Barcelona Pompeu Fabra University*, Autonomous University of Barcelona, University of Barcelona 135

Hamburg University of Hamburg*, Hamburg University of Technology 135

Stuttgart University of Stuttgart*, University of Hohenheim 89

Stockholm Karolinska Institute*, Stockholm University, KTH Royal Institute of Technology 153

Madrid Autonomous University of Madrid*, Complutense University of Madrid, Carlos III University of Madrid 351

University rank as per Times Higher Education.*Highest ranked university per city 29

https://www.timeshighereducation.com/world-university-rankings/2018/world-ranking#!/page/0/length/25/sort_by/rank/sort_order/asc/cols/stats

837

814

467

310

268

176

144

Germany

United Kingdom

France

Netherlands

Spain

Sweden

Switzerland

22%

14%

9%

7%

7%

4%

3%

United Kingdom

Germany

France

Netherlands

Spain

Switzerland

Sweden

Germany has one of Europe’s largest talent pools of

professional developersNumber of professional developers Destinations of choice for tech talent

Source: Atomico’s State of European Tech 2017; SpeedInvest’s Startup & venture Capital Landscape in DACH 2018. 30

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german & berlin tech: performance on the international stage€¦ · • the objective of this...

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