Beruflich Dokumente
Kultur Dokumente
Welcome
| Venture Capital and Start-ups in Germany
Contents
Foreword BVK
Start-ups 8
Funding 18
M&A Overview
28
Expert Essay
36
Appendix 38
Martin Selter
Partner
Ernst & Young GmbH
Senior Manager
Ernst & Young GmbH
Foreword
The key to innovational change and
growth, particularly in the digital market,
is a dynamic business environment. An
essential determinant for entrepreneurs
in this regard is access to funding, mainly
provided by early stage and venture
capital investors. The Federal Government of Germany is aware of this hard
factor and has formulated ideas for policy
measures in the coalition agreement of
the Grand Coalition. Rarely has there
been so much talk about venture capital
and private equity in the political scene at
local and national level as at present but
those words need to be backed up by
deeds.
In the German start-up scene, the number
of companies founded has increased once
again. Berlin, the capital of Germany, is
known as a central hotspot of start-ups
in information and communications
technology but other federal states such
as Bavaria, North Rhine-Westphalia and
Baden-Wuerttemberg are also characterized by a large number of innovative
ventures. Sectors with strong innovation
dynamics in Germany include not only the
ICT sector, but also the areas of medical
technology and biotechnology. In addition,
spin-offs from higher education often
generate excellent start-up ideas.
For early-stage ventures, dedicated
funding programs have been established
not only by institutional investors but also
by venture capitalists and business angels
aiming at funding innovative business
ideas.
Venture Capital
Worldwide corporates and VC
firms target the German market
Investment vehicles of
corporates set a new funding
trend
Investments
Deal: German
Haufe Verlag
acquires
trainingplatform
Semigator
Deal: Xing
buys Austrian
professional
network
Kununu,
EUR 10 million
Deal: Dutch
Reed Elsevier
acquires
science
network
Mendeley,
EUR
100 million
Deal:
Deutsche
Post acquires
SaaS-provider
optivo
Deal:
Takeover of
JouleX by US
technology
company
Cisco,
EUR
107 million
Deal:
Commerce
company
Otto Group
acquires
French 3SI
ecommerce
assets
Deal: Axel
Springer
buys majority
stake in
Austrian
firm Runtastic
Deal: Scout24
takeover by
US investor
Hellman &
Friedman,
EUR 1.5 billion
Jan 2013
Jan 2013
Apr 2013
Jun 2013
Jul 2013
Sep 2013
Oct 2013
Nov 2013
Q1
Q2
Q3
2H 2013
1H 2013
Mar 2013
Jun 2013
Jul 2013
Jul 2013
Community: Microsoft
launches its Ventures
Accelerator in Berlin, focusing
on the local start-up scene
and on promising early stage
entrepreneurs
Community: TechHub,
a provider of workspace
and services for tech
entrepreneurs, announces
the launch of a location in
Berlin
Ecosystem
Q4
Highlights
in 2013
and 2014
Crowdfunding attracts
interest from a large number
of people
Deal: erento
purchases
Finnish rental
community
iRent.fi
Deal:
Take-over of
payment firm
Sofort AG by
Swedish
Klarna;
EUR
110 million
Deal: Axel
Springer
acquires
Israeli classifieds business
Yad2,
EUR
165 million
Deal: Permira
buys software
application
firm
TeamViewer,
EUR 1.1 billion
Deal:
DeliveryHero
announces
full take-over
of fooddelivery
competitor
Pizza.de
Deal: Neiman
Marcus buys
e-commerce
platform
Mytheresa.
com,
EUR
150 million
Deal: Axel
Springer
invests
EUR 20 million
in equity-stake
of US media
start-up Ozy
Deal: IPOlisting by
e-commerce
platform
Zalando and
company
builder Rocket
Internet
(market
capitalizations:
> EUR 1 billion)
Feb 2014
Feb 2014
May 2014
Jul 2014
Sep 2014
Sep 2014
Oct 2014
Oct 2014
Q1
Q2
Q3
Q4
2H 2014
1H 2014
Mar 2014
Jun 2014
Apr/Sep 2014
Start-ups
| Venture Capital and Start-ups in Germany
200
17
150
Early stage
100
Expansion
Seed
Later stage
Source: ThomsonReuters
* January to September 2014
The overall attitude towards established new venture ideas has significantly
improved in Germany, both in terms of
the number of VC firms now active in the
market and the volumes raised to invest
in digital start-ups. The fact that German
entrepreneurs are more attractive to
investors than ever before can be seen
particularly in the velocity of funding
engagements even though 2014 will
possibly show a decline compared to
previous years. Good ideas are not just
linked to one location. That is why inter
national investors are active in the main
technology hubs where promising ideas
emerge, either through offices, office
hours or industry events.
11
22
12
11
9
18
9
16
25
60
130
118
114
24
50
3
38
64
43
0
2010
2011
2012
2013
2014*
Helsinki
Stockholm
Moscow
Dublin
Copenhagen
London
Hamburg
Amsterdam
Paris
Munich
Zurich
Madrid
Barcelona
151200 start-ups
101150 start-ups
51100 start-ups
050 start-ups
Berlin
Vienna
Venture capital
investments in start-ups
in the digital sector
in Germany 2010 to
September 2014
Top 10 cities
Hamburg
Berlin
Potsdam
Leipzig
Aachen
Cologne
Frankfurt a. M.
Karlsruhe
Stuttgart
Munich
201400 start-ups
101200 start-ups
51100 start-ups
2650 start-ups
025 start-ups
Source:
ThomsonReuters
E-commerce and
marketplaces
Network and
communication
Online and
mobile services
Marketing and
sales services
IT and other
software solutions
Fashion
Second hand
High-street & luxury
Baby & childrens wear
Streaming services
Music streaming
Video streaming
eSports broadcasting
FinTech
Online payments
Cashier systems
Peer-to-peer lending
Digital analytics
User acquisition
Influencer networking
LBS marketing
Big data
Real-time analytics
Predictive analytics
Credit scoring
Messenger services
Social messengers
Event guides
Mobile dating
Personal investments
Micro payments
Crowdfunding
Bitcoin platforms
Gaming
Mobile reality games
Virtual reality
Live sports data
Online education
eLearning
Mentored courses
Job portals
SEO
Management tools
SEO microsites
Enterprise services
Cloud services
Dashboards
File hosting
Cloud invoicing
Food
Organic food
Food delivery services
Online supermarkets
Transportation
Taxi services
Chauffeur services
Long-distance bus
services
Career development
Job engine
Social recruiting
Reputation management
Others
Sharing economy
Art auctions
Cleaning services
Others
Online gambling
Personal news
Creative cooperation
Others
ID verification
Energy management
Task management
Others
Digital production
Multiscreen advertising
In-game advertising
Others
3D printing
SaaS solutions
Speech analysis
We see a high growth potential in the digital health market, as major
digital players have entered the market and Anglo-American venture
capital funds already invested USD 2.3 billion in the first two quarters
of 2014.
Guido Hegener
XL Health
Target name
Location
Target profile
Founding year
Delivery Hero
Berlin
2011
Bigpoint.com
Hamburg
Online games
2002
BestSecret.com
Aschheim
Shopping community
2007
WestWing
Munich
2011
SoundCloud
Berlin
Music streaming
2007
Foodpanda
Berlin
2012
Wimdu
Berlin
Private accommodation
2011
HelloFresh
Berlin
Food boxes
2011
Kreditech
Hamburg
2012
10
Auctionata
Berlin
Online auctions
2012
11
GetYourGuide
Berlin, Zurich
Travel recommendations
2009
12
Internetstores
Esslingen
Multi-store e-commerce
2007
13
Quandoo
Berlin
2012
14
NumberFour
Berlin
SaaS services
2009
15
Open-Xchange
Nuremberg
Communication software
2005
16
Webtrekk
Berlin
2003
17
ResearchGate
Berlin
Academic network
2008
18
Azubu
Berlin
2011
19
SumUp
Berlin
Payment system
2011
20
Wooga
Berlin
Online games
2009
21
GoEuro
Berlin
2012
22
MisterSpex
Berlin
Glasses retailer
2007
23
Auxmoney
Dusseldorf
Peer-to-peer lending
2007
24
Netbiscuits
Kaiserslautern
2000
25
Zimory
Berlin
Cloud technology
2007
26
6Wunderkinder
Berlin
Task-Manager application
2010
27
Simfy
Cologne
Music streaming
2006
28
Onefootball
Berlin
Football community
2008
29
AppLift
Berlin
2012
30
Windeln.de
Gruenwald
Baby products
2010
Funding
| Venture Capital and Start-ups in Germany
Idea
Later stage
Expansion stage
Early stage
Funding by Business Angels and Friends, Family, Fools (FFF)
Seed
Concept, product
and team
Source: EY
Start-up
Expansion
Market launch
Setting up operations
and sales
IPO
Public market
Mezzanine
Exit
IPO
Disposal
Turnaround
Investor
Name
Location
Volume
Announced
Acton Capital
Munich
January 2014
Berlin
EUR 50 million
February 2014
Earlybird
Berlin
January 2014
Earlybird
Berlin
July 2013
Eran Davidson
January 2014
Startup Unit
Berlin
June 2014
Freistaat Bayern
Wachstumsfonds Bayern
Munich
April 2014
Munich
March 2013
Index Ventures
Geneva
June 2014
10
Otto Group
Project A Ventures
Berlin
EUR 30 million
October 2013
11
Partech Ventures
Berlin
October 2013
12
Berlin
EUR 40 million
February 2013
13
SAP
Palo Alto
October 2013
14
Siemens
Munich
February 2014
15
UnternehmerTum GmbH
UnternehmerTum
Garching
EUR 25 million
August 2013
Source: EY Research
Berlin-Potsdam area
Munich area
Hamburg area
500 Start-ups
Atlantic Internet
Axel Springer Plug and Play
Axel Springer Ventures
BC Brandenburg Capital
Bergfrst
Berlin Hardware Accelerator
Berlin Start-up Academy
Berlin Ventures
Bertelsmann Digital Media Investments
Betafabrik
bmp media investors
b-to-v Partners
BVP Berlin Venture Partners
Catagonia Capital
e.ventures
Earlybird
ECONA AG
estag | Capital AG
Founders Link
German Startups Group
GMPVC German Media Pool
Grupo Intercom Berlin
Hasso Plattner Ventures
Heilemann Ventures
Hitfox Group
hub:raum (Deutsche Telekom AG)
IBB Beteiligungsgesellschaft
K New Media
Lakestar
M Cube (Check24-Group)
M10
Microsoft Ventures (Microsoft,
HTGF, Seedcamp)
Mller Ventures
Next Station (Deutsche Bahn)
Partech Ventures
Point Nine Capital
Project A Ventures
Rheingau Founders
RI Digital Ventures
Richmond View Ventures
Rocket Internet
Seedcamp Berlin
Siemens Technology Accelerator
Sky & Sand
Springstar
Startupbootcamp Berlin
Team Europe
Vogel Ventures
WestTech Ventures
XL Health
Bauer Digital
Capnamic Ventures
Cinco Capital
Digital Pioneers Germany
Fielmann Ventures
Gruner + Jahr
Hanse Ventures
Innovationsstarter Fonds Hamburg
iVentureCapital
J.C.M.B. Beteiligungs
Neuhaus Partners
Shortcut Ventures
Start 2 Ventures
TheMediaLab (Madsack, WAZ Group)
Tivola Ventures
TruVenturo
Cologne/Bonn-DusseldorfWuppertal area
Frankfurt(Main)-Wiesbaden area
Aurelia Private Equity
Creathor Venture
HR Alpha Venture Partners
KfW Bankengruppe
Main incubator (Commerzbank)
Omnis Mundi
Sirius Venture Partners
TEV Global Invest
Others
Interviews
1
Christoph Fahle
CEO and Co-founder of Betahaus
Germanys largest co-working space
Matthias Wischnewsky
Project Manager at Business Angels
Netzwerk Deutschland e.V.
M&A Overview
28 | Venture Capital and Start-ups in Germany
120
100
80
Total number of
acquisitions
Number of acquired
start-ups
Source: ThomsonReuters,
EY Research
60
40
20
0
1st Quarter 2013
Other major deals in relation to e-commerce and marketplace-related businesses were the takeover of the payment
provider Sofort AG by Klarna, the coupon
platform Retailo by Blackhawk Networks,
food-delivery service Lieferando by
Takeaway.com or online tire seller Tirendo
by Delticom.
IT and software solutions rebounded in
terms of attractiveness to investors.
One megadeal took the national
community by surprise: The IT solution
provider TeamViewer, well-known for a
desktop sharing software, was acquired
by the private equity investor Permira
for a deal value of approximately
EUR 1.1 billion. The target is operator of
the worlds most downloaded remotesupport solution for private consumers
and SME businesses. Other IT-driven
deals included the takeover of energy
management provider JouleX by Cisco,
messenger application Hoccer by Media
Ventures (Stroer), or street-map provider
Skobbler by Telenav. All of them had
received a great deal of attention prior
the M&A deal due to strong growth
figures or a unique business model with
the potential to become one of the global
players worldwide.
German companies in the digital sector
continue to focus on product portfolio
acquisition or optimization. Recent
International investors
increase their share
Acquirer countries of German start-ups in the digital sector 2013 compared to 2014
6%
Germany
US
UK
Sweden
2% 6%
Germany
8%
US
UK
2013
Spain
Israel
9%
9%
2014
Other
Other
Source: EY Research
2%
1%
8%
78%
71%
7%
31%
19%
E-Commerce/Marketplace
10%
5%
32%
IT/Software solutions
Network/Communication
Marketing/Sales
Online/Mobile services
Other
10%
Source: EY Research
20%
16%
2013
13%
18%
2014
19%
> 10 years
710 years
24%
18%
27%
46 years
31%
03 years
Source: EY Research
A trade sale will remain the no. 1 exit scenario in Germany. Nevertheless,
I think that a new stock market segment with a certain minimum of
regulatory requirements can serve as an attractive additional exit channel
for volumes of about EUR 20 million and above.
Jens Spyrka
bmp media investors
Transaction values
have reached new heights
Top 15 deals in Germany from 2013 until October 2014 based on announced or rumored value
#
Target name
Location
Target Profile
Buyer Name
Country
Buyer Profile
Value*
Announced
Rocket Internet
Berlin
Company
Builder
GER
Various
October 2014
Zalando
Berlin
E-commerce
GER
Various
October 2014
Scout24
Munich
Classifieds
US
Private equity
November 2013
TeamViewer
Goeppingen
Remote
software
Permira
UK
Private equity
May 2014
pizza.de
Braunschweig
Food-delivery
service
Delivery Hero
GER
Food-delivery
service
August 2014
Delasocial (and
other agencies)
Hamburg
Advertising
Equistone Partners
GER
Private equity
April 2014
Fyber
Berlin
Mobile
advertising
RNTS Media
ROK
Digital
content
October 2014
Mytheresa
Munich
E-commerce
Neiman Marcus
US
Department
store
September 2014
Sociomantic
Berlin
Display
campaigns
Dunnhumby
UK
Customer
services
March 2014
10
Sofort AG
Gauting
Payment
provider
Klarna
SE
Payment
provider
February 2014
11
JouleX
Munich
Energy
management
Cisco
US
Technology
provider
EUR 83 million
May 2013
12
Retailo
Cologne
Coupon
platform
Blackhawk Network
US
Coupon
platform
EUR 50 million
March 2013
13
Lieferando
Berlin
Food-delivery
service
Takeaway.com
NL
Food-delivery
service
EUR 50 million
April 2014
14
Tirendo
Berlin
Online tire
seller
Delticom
GER
Online tire
seller
EUR 50 million
September 2013
15
Hoccer
Berlin
Messenger
application
Media Ventures
GER
Advertising
EUR 50 million
March 2014
EUR 10 billion
In November 2013, US investor
Hellman & Friedman LLC agreed to buy
70% of the Scout24 Holding digitalclassifieds business from Bonn-based
Deutsche Telekom AG. The purchase
valued the business at EUR 2 billion
including debt. The Scout24 holding,
founded in 1998, is the operator of
Germanys largest real-estate and
dating portal, also providing online
classifieds for cars, recruiting and
travel.
Although we still do not have exit levels where they ideally need to be to drive
market growth, we are seeing an increasing number of international investors
looking at the European market. In addition to the maturing of the scene here,
this may also result from a lower level of valuations in Europe versus the US,
where some investors are being priced out of the market.
Aljoscha Kaplan
GMPVC German Media Pool
A successful bus
High
Low
High
International
scalability
Examples
Business
drivers
International scalability
Monetization horizon
Online shop
Assortment
Low
Low
(country-specific marketing, country-adapted
assortment, local supply chain)
Short term
Marketplaces
Classifieds
Daily deals
Online food
delivery
Media libraries
Payment services
Number of
business
partners
Number of
users
Middle-High
Low-Middle
(country-specific marketing, acquisition of
local business partners [and customers])
Short term
(commission-based services)
Social networks
Messaging services
B2C-collaboration/
file sharing
Number of
users
High
High
(usually no to little adaption of platform,
marketiing supported byword-of-mouth
acrosscountry borders)
Mid term
(financed through advertising)
iness model
more easily than local business partners
and often volunteer in spreading the
word.
What does this mean for investors and
founders?
As outlined, Business Model no. 3 has
the most opportunities for rapid expansion, but is also a risky all-or-nothing bet.
In that sense, investors and founders
should be clear that a conservative
financing approach is not adequate and
could even be the root of market failure.
If the business can be rolled out to
new regions without re-inventing the
company, a business plan should foresee
that in order to avoid losing monetization
potential, to be attractive for globally
operating business partners and
advertising clients and to benefit from
operational economies of scale.
Surprisingly, EY found in a recent survey
of 151 start-ups (EY Start-up Barometer
Deutschland) that only 27% are targeting the global market. Although not all
start-ups are suited for an international
Financing need
the winner
takes it all
Founder
Investor
Business model
economics
Competitive
landscape
Author
Martina Liggesmeier
Martina Liggesmeier is Senior
Manager at EYs Commercial
Advisory Services. She deals with
commercial due diligence and
strategy advice. Martinas background is based on Private Equity
and strategy consulting.
Appendix
| Venture Capital and Start-ups in Germany
Insights
VC Trends Quarterly
Start-up Barometer
Access
CODE_n
BITKOM Trendkongress
The 50 finalists will exhibit their leadingedge business cases in the 5,000 square
meter space of Hall 16 during the CeBIT.
All start-ups invited will get to showcase
their business solution free of charge
from March 16th to March 20th 2015.
For more information please visit
www.de.ey.com/start-hub or contact
annekatrin.nowotny@de.ey.com.
Contacts
Editor
Ernst & Young GmbH
Wirtschaftsprfungsgesellschaft
Friedrichstrasse 140 | 10117 Berlin
Martin Selter | Partner
Dr. Thomas Pruever | Senior Manager
+49 30 25471 0
www.ey.com
compensated
Id-No. 1216923
www.bvdm-online.de
In line with EYs commitment to minimize its impact on the environment, this document has been
printed on FSC-certified paper that consists of 60% recycled fibers.
This material has been prepared for general informational purposes only and is not intended
to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors
for specific advice.
www.ey.com