Go4Venture Bulletin - Venture & Growth Equity Market Report Europe, August 2014

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Information about Go4Venture Bulletin - Venture & Growth Equity Market Report Europe,...
Economy & Finance

Published on October 1, 2014

Author: DealMarket_com

Source: slideshare.net

Description

The report looks at Equity Capital Markets (ECM) 
- Equity private placements 
- Growth equity financings and secondaries 
- Pre-IPO advisory

Mergers & Acquisitions (M&A) 
- Sellside 
- Buyside / Buy and build
- Valuation services

Go4Venture Advisers LLP is authorised and regulated by the Financial Conduct Authority (FCA) Published by Go4Venture Research, the Equity Research unit of Go4Venture Advisers LLP Go4Venture Advisers LLP is authorised and regulated by the Financial Conduct Authority (FCA) © Go4Venture Advisers 2014 Go4Venture Advisers European Venture & Growth Equity Market Monthly Bulletin | August 2014 Technology / Media / Telecoms / Internet / Healthcare / Cleantech / Materials About Go4Venture Advisers Providing innovative, fast-growing companies and their investors with independent corporate finance advice to help them evaluate, develop and execute growth strategies www.go4venture.com Equity Capital Markets (ECM)  Equity private placements  Growth equity financings and secondaries  Pre-IPO advisory Mergers & Acquisitions (M&A)  Sellside  Buyside / Buy and build  Valuation services Visit www.go4venture.com/Bulletin to read past Bulletins

August 2014 © Go4Venture Advisers 2014 ePage Page 1 Contents This Month in Brief 2 Investments 1.1 - Headline Transaction Index (HTI) 5 1.2 - Large Transactions Summary 6 1.3 - Large Transactions Profiles 7 M&A Transactions 2.1 - M&A Activity Index 15 2.2 - Top 5 Global TMT M&A Transactions Summary 16 2.3 - Headline European VC & PE-Backed M&A Transactions Summary 17 2.4 - Headline European VC & PE-Backed M&A Transaction Profiles 18 List of Acronyms 19 About this Bulletin The Go4Venture Advisers’ European Venture & Growth Equity Market Monthly Bulletin provides a summary of corporate finance activity among emerging European TMT companies:  Investments, i.e. Venture Capital (VC) and Private Equity (PE) financings, including growth equity, financing rounds with single secondaries components (recapitalisations); and  M&A Transactions where the sellers are VC and PE-backed European companies, including all majority transactions with no new investment going into the business (e.g. acquisitions, Management Buyouts (MBOs) and other buyouts). Investment activity is measured using Go4Venture’s European Tech Headline Transaction Index (HTI), which is based on the number and value of transactions reported in professional publications. M&A activity is measured using data from a combination of external sources, primarily Capital IQ, with complementary reporting from 451 Group and VentureSource. Europe is defined as Western, Central and Eastern Europe, excluding Israel. For more details, please refer to the Methodology Note available on our website. Please note that no part of the Bulletin can be reproduced unless content is duly attributed to Go4Venture and the details of republishing are notified to g4vBulletin@go4venture.com.

August 2014 © Go4Venture Advisers 2014 ePage Page 2 This Month in Brief Dear Clients and Friends, Welcome to the latest edition of the Go4Venture Monthly European Venture & Growth Equity Bulletin, featuring our proprietary Headline Transaction Index (HTI) of investment activity, as well as a quick summary of VC & PE-backed TMT M&A exits of $50 million or more. Feeding Frenzy? “When the ducks say “quack quack”, you feed them” Anonymous banker explaining their role in price formation (c. 2001) Summer has come and gone, and we resume work taking stock of the most active August month on record. And all this at a time when the macro environment is turning negative, with geopolitical risk at its highest for some time, emerging economies slowing down, Europe stalling, and the US (and UK) planning to raise interest rates. No wonder some of the investment transactions are starting to raise eyebrows – because contamination is now touching public markets, as exemplified by the Alibaba and Rocket Internet IPOs. And the best VCs are starting to take note, with Bill Gurley of Benchmark Capital widely quoted saying “the venture-capital community […] is taking on an excessive amount of risk right now – unprecedented since ‘99”. Investments Of course, numerically August is impacted by the incredible €768mn raised by Rocket Internet in the run-up to its IPO, no less than 20% of the total recorded by the Headline Transactions Index (HTI) last year. This is for a company whose 11 “proven winners” had €727mn in revenues in 2013 (a three times increase) but EBITDA losses of €436mn. Remember that not so long ago, IPO’ing an unprofitable company was an obvious no-no. However, please note also the good showing of the other 6 companies profiled – which, in the middle of the summer recess, managed to raise over €100mn, i.e. close to €20mn each (the “Landmark” threshold we defined in the early 2000s when we started the Bulletin). So, beyond the headlines, there is a general level of activity which is – simply put – frothy. View slide

August 2014 © Go4Venture Advisers 2014 ePage Page 3 Of course, this concerns mostly internet, mobile and software. In other areas, more traditional metrics prevail and one could argue that the internet phenomenon is crowding out venture funding, with corporates, business angels and punters (see crowdfunding) stepping in to replace VCs busy elsewhere. Uncomfortable signs of the unsustainable are creeping in, as shown by the following examples (diarised by TechCrunch):  Incubators’ exuberance, with a brand name like Techstars having to introduce “an equity back guarantee”.  Crowdfunding platforms showing strain, for instance: o Kickstarter changing its terms and conditions to remind users that the contract is between parties, not with Kickstarter; o Indigogo’s poor internal controls as documented by Pando; and o Crowdcube allowing in EasyProperty’s fund-raising at a £66mn valuation for a business with no revenues (but a great brand).  Dockers raising $40mn that it won’t need to spend until next year.  Delivery Hero’s $350mn round (to be written up in our next issue), led by Vostok Nafta, an investment fund which normally focuses on Russia and the other CIS states.  Uber raising $1.2bn in June (bringing the total to $1.5bn), at a $17bn pre-money valuation but with a pref guaranteeing a 25% annual return to investors (according to the FT), when in fact the company is experiencing slowing growth (according to FutureAdvisor). What does this bode for the market for the rest of the year? We are of two minds:  On one hand, we have not seen yet the terrible investment mistakes of the late 1990s (Boo.com, Pets.com, Webvan), so this bullish phase could continue for a while; however  On the other hand, the big negative statements from Marc Andreessen, Bill Gurley and Brad Feld (amongst others) are having an effect, and we are hearing more market participants getting ready for the big sell-off. We’ll watch the trend with attention because this negative sentiment is by definition self-fulfilling. In any case, we believe that this time round it will be more a question of mispricing – so we expect a correction, rather than a collapse. And investors may go back towards traditional IP-led innovation, rather than disappearing altogether. In this era of poor returns, investors need growth. Exits On the exit front, M&A was unsurprisingly quiet with a few transactions slipping from August to September. The only transaction of note in the growth and venture world was Moneycorp selling out to private equity firm Bridgepoint. The sellers were Royal Bank of Scotland (RBS) and Adams Street (via its acquisition of RBS’ stake in the RBS Special Opportunities Fund). It is also worth mentioning AnaFocus, sold for $46mn (€34mn), just short of our $50mn threshold. The deal is unusual because of the seller’s geography (Spain), sector (semiconductor) and backer (local early-stage investor Bullnet Capital). The company was acquired by UK-headquartered e2v Technologies, a specialist developer of RF power, hi-rel semiconductors, and high performance imaging solutions. A good example of a capital-efficient European company (Bullnet had invested c. €2.5mn) eventually getting sold at 3x revenues. View slide

August 2014 © Go4Venture Advisers 2014 ePage Page 4 All the rest of the activity was on the IPO side, with 3 key tech IPOs lined up for September:  Alibaba – which was described as “a tasty dish (just don’t ask how it’s made)” and “a textbook example of a successful IPO: priced at $68 a share, opening at $92.70 a share” (i.e. we are back to the times where a 36% first day pop-up is a sign of success);  Rocket Internet – which eventually cut short its bookbuilding period and doubled the amount of its planned raise to €1.5bn; and  Zalando – the largest German tech offering since the 2000 listing of Deutsche Telekom. In this environment it is going be difficult to keep calm. Just like the VC market takes a beating every time public markets go down (even though different time horizons should make these two markets uncorrelated), it is difficult to resist contamination of earlier-stage valuations when late-stage goes up: at worst, you don’t get it (ref. the New Economy of the late 1990s); at best, you are a party pooper who doesn’t know how to enjoy the good times. Enjoy the reading. Please direct any questions or comments to g4vBulletin@go4venture.com. If you do not wish to receive future HTI updates from us, please send an email with the title "unsubscribe" to g4vBulletin@go4venture.com. The Go4Venture Team Where to Meet the Go4Venture Advisers Team in October 2014 – see www.go4venture.com/contact  October 8-10, Madrid, Spain – The South Summit  October 9, London, UK – EISA Autumn Technical Seminar  October 12-14, Lausanne, Switzerland – CEO Collaborative Forum Fall Meeting  October 16, London, UK – The FinTech50 2015 starts … here For more details about the Headline Transactions Index (HTI), please visit our website.

August 2014 © Go4Venture Advisers 2014 ePage Page 5 1.1 Headline Transaction Index (HTI) Go4Venture HTI Index by Deal Value Source: Go4Venture Advisers HTI Database Go4Venture HTI Index by Cumulative Deal Value Source: Go4Venture Advisers HTI Database August 2013 2014 Var. Year-to-Date 2013 2014 Var. Large Transactions # 4 7 75% Large Transactions # 88 117 33% €mn 86 878 921% €mn 2,032 3,298 62% Other Transactions # 17 14 (18%) Other Transactions # 241 141 (41%) €mn 43 35 (19%) €mn 645 433 (33%) All Headline Transactions # 21 21 0% All Headline Transactions # 329 258 (22%) €mn 129 878 581% €mn 2,677 3,731 39% Of Which: Of Which: Landmark Transactions # 1 4 300% Landmark Transactions # 23 40 74% €mn 57 847 1,386% €mn 1,300 2,707 108% Definitions Large Transactions: > £5mn / €7.5mn / $10mn Other Transactions: < £5mn / €7.5mn / $10mn Landmark Transactions: subset of Large Transactions > €20mn / £13mn / $27mn 0 100 200 300 400 500 600 700 800 900 1,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Value of Transactions per Month (€mn) 2011 2012 2013 2014 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cumulative Value of Transactions (€mn) 2011 2012 2013 2014 Includes Rocket Internet (€768mn)

August 2014 © Go4Venture Advisers 2014 ePage Page 6 1.2 Large Transactions Summary (>£5mn / €7.5mn / $10mn) Ranked by Round Size (€mn, including estimates) in Descending Order, then Alphabetically # Company Sector Round €mn Description Investors 1 Rocket Internet (Germany) www.rocket-internet.com Internet Services Late Stage 768 An incubator which acts as a conglomerate, building internet businesses based on proven models and launching them outside the US and China. PLDT, United Internet 2 Alfresco Software (UK) www.alfresco.com Software Late Stage 33.8 Developer of Enterprise Content Management (ECM) software. Accel Partners, Mayfield Fund, Sageview Capital, SAP Ventures 3 GoEuro (Germany) www.goeuro.com Internet Services C 25.0 Aggregator of European air, bus, car rental and rail information which operates a price comparison and travel optimisation site. Battery Ventures, Hasso Plattner Ventures, Lakestar, NEA 4 Smaato (Germany / US) www.smaato.com Software Late Stage 20.0 Mobile advertising Real- Time Bidding (RTB) exchange and Supply Side Platform (SSP). Aeris Capital, EDBI, Singapore Press Holdings 5 Tobii Technology (Sweden) www.tobii.com Hardware Late Stage 10.9 Provider of eye tracking solutions for Human Computer Interaction (HCI) and research. Swedish National Pension Fund 6 Quinyx (Sweden) www.quinyx.com Software B 10.5 Developer of SaaS workforce management tools. Alfvén & Didrikson 7 Purplebricks (UK) www.purplebricks.com Internet Services B 10.0 Operator of an online real estate agency. Alchemy Partners, DN Capital, Woodford Equity Income Fund Source: Go4Venture Advisers HTI Database Key Bold indicates lead investor(s)

August 2014 © Go4Venture Advisers 2014 ePage Page 7 Rocket Internet Germany | www.rocket-internet.com # Sector Round €mn Description Investors 1 Internet Services Late Stage 768 An incubator which acts as a conglomerate, building internet businesses based on proven models and launching them outside the US and China. PLDT, United Internet Rocket Internet (Germany), an incubator of internet businesses, raised €333mn from PLDT and €435mn from United Internet in successive Late Stage rounds one week apart. The PLDT investment will be used to develop mobile and online payment technologies, and services for emerging markets. The United Internet investment will be used to build new businesses, and maintain majority stakes in existing ones, following Rocket’s forthcoming IPO. As readers will know from previous write-ups in August and May 2013, Berlin-based Rocket Internet was co-founded by the Samwer brothers in January 2007. The brothers’ first success was setting up a version of eBay (Alando) in Germany in 1999, and selling it to eBay for €45mn three months later. This was followed by mobile content platform Jamba, which was sold to Verisign for €225mn in 2004. With their new found wealth, the brothers started analysing the US market for successful innovative business models, and building new companies based on these models in Germany (Frazr/Twitter, MyVideo/YouTube and StudiVZ/Facebook). Rocket formalised this process and developed a cookie cutter approach to analysing markets (such as the US) for new internet business models showing signs of traction, and then rolling them out elsewhere – initially in Europe and later in emerging markets (with the exception of China). The rationale is that, while China and the US together account for roughly a third of global GDP, over three quarters of the world’s population lives elsewhere but shares the same basic needs. Thirty years ago, Rocket would have been described as a conglomerate with 53 businesses employing 20,000 people and combined (pro forma) revenues for 2013 in excess of €0.75bn. The glue which binds Rocket’s companies together includes both the proprietary technology platforms which they have developed (and share throughout the group), as well as the favourable terms they are able to negotiate with suppliers such as Google, Rackspace, Salesforce, etc. (by virtue of their collective bargaining power). Typically, Rocket takes an equity stake of 80-90% at launch with 10% ear-marked for management. Operating across e-commerce, marketplaces and financial technology in over a hundred different countries, Rocket is well diversified – one of the traditional advantages of being a conglomerate. It is also structured like a conglomerate with a number of regional holding companies (Africa, Asia Pacific, Latin America and MENA) encapsulating local market knowledge and, as its businesses grow, facilitating additional financial support from Rocket co-investors, local strategic partners and others. Rocket has made a number of successful exits. Technically, one of the most successful is likely to be Zalando. In October 2012, Rocket shareholder Kinnevik bought Zalando shares from Holtzbrinck Ventures, Tengelmann and Rocket itself for €287mn. In July 2013, Kinnevik exercised its option to buy another 3.5% of Zalando for €100mn, while Anders Holch (who owns Danish fashion company Povlsen), also bought a 10% stake-leaving Zalando owned almost entirely by Rocket shareholders and planning an IPO of its own, raising as much as €0.5bn at a valuation of €5.3bn. Despite these exits, a 2013 TechCrunch interview quoted Oliver Samwer as saying: “Our biggest mistake we made in the first 10 years was to not build the biggest business, but to sell businesses too early.” More recently, he stated that Rocket is an investment for those with a “long-term investment horizon” and not “for those that want short-term success and results in three months”. According to its prospectus, Rocket now aims for its businesses to break even 6-9 years after launch. As a public company, Rocket has stated in its prospectus that it will maintain a beneficial ownership of more than 50% going forward and has recently increased its stakes in a number of portfolio companies. As part of the preparations for its IPO in Frankfurt, Rocket has been tidying up its shareholding structure as well as creating pre-IPO financing events to support the IPO valuation:  Early August, Philippines Long Distance Telephone (PLDT) company announced a $445mn (€333mn) investment in Rocket, valuing the company at $4.5bn (€3.3bn). The €333mn PLDT investment is intended to finance development of mobile payment systems for the emerging markets (where most of the population has little access to banks, debit or credit cards, but mobile phone penetration is high as telecoms companies opted to roll-out wireless networks rather than more expensive wire-line equivalents). Through its subsidiary, Smart Communications, PLDT handled about €3.4bn of financial transactions in 2013 via its mobile money systems

August 2014 © Go4Venture Advisers 2014 ePage Page 8 including mobile payments platform eMoney. As well as providing relevant local knowledge, building a payments platform with PLDT as a local strategic partner should help Rocket’s e-commerce businesses (including Lazada and Zalora), in Southeast Asia, where mobile penetration far exceeds the use of credit cards.  A week later, United Internet came in with an investment in the form of €333mn in cash plus United’s holding in the Samwer brothers’ VC firm Global Founders Capital Funds valued at just under €102mn. Interestingly, the business was then valued at $5.7bn (€4.2bn). There was no explanation for the $1bn increase in valuation in a week, other than high demand for the stock.  Alongside these two rounds, early-stage German venture firm and long-term Rocket co-investor Holtzbrinck Ventures (HV) exchanged its stake in seven of Rocket’s businesses (Dafiti, HelloFresh, Home24, Jabong, Lamoda, Namshi and Westwing) for a stake in Rocket Internet itself. Note that many of these were among Rocket’s ‘proven winners’. The IPO itself is expected to raise €0.5bn at a valuation up to €6.7bn. The offering will consist entirely of new shares with all existing shareholders locked in for 12 months and unable to treat the IPO as a liquidity event. The bankers on the deal – Berenberg, BofA Merrill Lynch, Citigroup, J.P. Morgan, Morgan Stanley and UBS-started their book on September 24th. It was scheduled to run until October 4th but, owing to investor demand, the target was raised to €1.5bn and the close brought forward to October 1st for institutional investors. The FT has raised some concerns over corporate governance. Specifically: “Rocket paid a €290mn cash dividend into a fund owned by the Samwer brothers (Rocket’s founders and majority owners). And Rocket failed to benefit meaningfully from its biggest incubator success, the e-commerce company Zalando.” Possibly more importantly in the short term, the FT has also questioned the valuation. Adding up the valuations of Rocket’s portfolio businesses, the €800mn of cash on its balance sheet and a putative €1.5bn from the IPO values the firm at €4.5-5.0bn. This is consistent with the valuation after United’s investment only a month ago. But the IPO has been priced at a range of up to €6.7bn. There seems to be a missing billion or two. Investors Early-stage German venture firm and long-term Rocket co-investor Holtzbrinck Ventures (HV) (€177mn (2011)) is a successful venture firm in its own right with over a hundred investments and 40 exits to its name. This deal is not just a way for the Samwer brothers to reward HV for its long-term support (which dates back to studiVZ even before they set up Rocket) with pre-IPO stock and a successful exit. The quid pro quo is that the deal enables Rocket to maintain larger stakes in the companies it has built ahead of its planned IPO. Strategic investor the Philippine Long Distance Telephone Company (PLDT) (PSE:TEL) is the largest telecoms company in the Philippines – a country whose GDP ranks alongside Denmark, Hong Kong and Singapore. It provides a full range of wireless, wired and ISP services and made 2013 revenues of $3.8bn (€2.8bn) with a market cap of around $15bn (€11.2bn). United Internet (Xetra:UTDI) is a diversified German internet services provider, which started out as an ISP in 1998, and now owns well known web-host 1&1 and made revenues of €2.7bn in 2013. 75% of its customer base is still in Germany, with the rest in Europe and North America. United’s collaboration with Rocket gives it exposure to the rapidly growing emerging markets which may provide a source of earnings growth to satisfy its shareholders. Following the two investment rounds and the share swap, Rocket remains majority owned by the Samwer brothers’ venture fund Global Founders Capital Fund (€150mn (2013)), which holds 52% of the company. The rest of the cap table is comprised of Emesco (a subsidiary of AB Kinnevik) with 18%, United Internet (XETRA :UTDI) with 10%, Access Industries (the industrial group owned by Russian-born American industrialist Len Blavatnik) and the PLDT with a little over 8% each, and Holtzbrinck Ventures with 2.5%.

August 2014 © Go4Venture Advisers 2014 ePage Page 9 Alfresco Software UK | www.alfresco.com # Sector Round €mn Description Investors 2 Software Late Stage 33.8 Developer of Enterprise Content Management (ECM) software. Accel Partners, Mayfield Fund, Sageview Capital, SAP Ventures Alfresco Software (UK), a developer of Enterprise Content Management (ECM) software, raised $45mn (€33.8mn) in a Late Stage round led by Sageview Capital with support from existing investors Accel Partners, Mayfield Fund and SAP Ventures. The money will be used for hiring sales personnel in the US and Western Europe, as well as in marketing and R&D. Alfresco was set up early in 2003 by Documentum co-founder John Newton and former Business Objects COO John Powell, with developers from Documentum and Oracle. Starting with an on-premise Document Management System (DMS) for the enterprise market on a Java platform, the firm has developed a range of products covering document management, collaboration tools, Business Process Management (BPM) and compliance. Customers can now choose between on-premise deployment or SaaS implementation (either via private hosting or the public cloud). Alfresco also offers mobile versions of its user interface to cater for the enterprise trend towards BYOD (Bring Your Own Device). Alfresco’s software is primarily open source, as licenced under the GNU Lesser General Public License – which enables the company to keep proprietary parts of its source code, and conforms to the language agnostic Content Management Interoperability Services (CMIS) standard for content management systems operating over IP networks. This standard is administered by the web standards body OASIS – a not-for-profit consortium whose participants include Adobe, EMC, HP, IBM, OmniDocs, Oracle and SAP, as well as other ECM providers. The firm makes its money from consulting, support and training (like other open source software suppliers), as well as through monthly subscriptions on a per user basis for the commercial expansion of the product. By 2013, the firm had six offices in Australia, Germany, Japan, the UK and the US with annual revenues to February 2013 of just under €40mn from 1,300 customers (over half of which were in the US) and 7mn users. According to Gartner, the global ECM market is worth $5bn (€3.7bn) and growing at c.9% per annum. Particularly strong in government, healthcare and high-tech, Alfresco is growing over 3x as fast as the ECM market and now has 1,800 active customers with 11mn users worldwide. Such rapid organic growth is impressive, but the quality of the firm’s revenues is not yet up to public market standards. When Alfresco replaced co-founder John Powell with US-based CEO Doug Dennerline (who had led SaaS HR software firm SuccessFactors prior to its $3.4bn (c.€2.6bn) acquisition by SAP in 2012), the intention was to list on the NASDAQ in 2013. However, rather than risk another tech stock heading south post IPO, Dennerline has said that he will postpone the decision to go public for 2-3 years until a greater proportion of Alfresco’s revenues come from the recurring predictable subscriptions of its SaaS business (rather than relatively ad hoc training, consulting and support fees). To this end, Alfresco intends temporally to forego profitability in order to pursue enterprise sales and emphasise its SaaS products. These are likely to provide annual recurring revenues of six figures per customer, but have notoriously long sales cycles. The adoption of this sales-focused strategy is likely informed by Mr. Dennerline’s experience at 3Com and Cisco. As it expands its SaaS business, Alfresco may well find itself competing more often against the likes of Box, Dropbox and Huddle as they seek to enter the enterprise market. Alfresco does not see these firms as a serious competitive threat, owing to its superior version control and ability to meet compliance requirements. Investors Led by Sageview Capital (AUM €1.5bn), this round brings total investment in Alfresco to over €50mn at a valuation in the hundreds of millions of euros. Established in 2005 by two former KKR partners, Sageview invests in both private and public companies in North America and Europe from offices in Stockholm in Sweden, Greenwich on the US East Coast and Palo Alto in Silicon Valley. The firm’s strategy is to make low-leverage investments in SMEs. Its preferred sectors are energy, financial and business services, and technology. Readers will be familiar with global VC Accel Partners (€356mn (2014); AUM €5.6bn). Less well known in Europe is the Mayfield Fund (€273mn (2012)). One of America’s older VCs, Mayfield is a stage agnostic investor in IT companies. It focuses on communications, enterprise software and internet services. Despite only having offices in Silicon Valley, Mayfield has been investing in China and India since 2005 and 2006, respectively, through locally-based partners. Set up in 1997, SAP Ventures (€488mn (2013); AUM €1.0bn) is structured as an independent vehicle whose investment preferences match SAP’s strategic interests. The firm typically comes in once a business model or product has been proven, and typically invests $5-20mn with a preference for leading early growth rounds but a willingness to support larger, later stage rounds if necessary. SAP is gradually expanding its SaaS business with a series of acquisitions. Aside from the acquisition of SuccessFactors mentioned above, SAP has just agreed to buy SaaS travel and expenses software provider Concur Technologies (CNQR) for $7.4bn – its largest ever acquisition according to the 451 Group.

August 2014 © Go4Venture Advisers 2014 ePage Page 10 GoEuro Germany | www.goeuro.com # Sector Round €mn Description Investors 3 Internet Services C 25.0 Aggregator of European air, bus, car rental and rail information which operates a price comparison and travel optimisation site. Battery Ventures, Hasso Plattner Ventures, Lakestar, NEA GoEuro (Germany), an aggregator of European air, bus, car rental and rail information which operates a price comparison and travel optimisation site, raised $27.0mn (€25.0mn) in a Series C round led by NEA with support from existing investors Battery Ventures, Hasso Plattner Ventures and Lakestar. The money will be used to expand the firm’s coverage into France, Scandinavia and Eastern Europe. Air travel, car rental and hotel booking have long been covered by price comparison sites making their money by taking advertising and commission from travel and hotel operators. This business model is now successful worldwide and we have covered a number of such companies in their early stages. In Europe, however, there is another problem that must be solved. Unlike North America, much of the Asian market and the former Soviet Union, Europe has a high population density and a highly fragmented transport infrastructure even though it is almost a quarter of a century since the Schengen Convention abolished many European border controls. Founded in 2012, GoEuro aggregates information on air, bus, car rental and rail travel throughout Europe, and allows users to optimise their travel arrangements (as finding a cheap flight is no good if you then have to spend a small fortune on taxi fares). GoEuro undertook a closed beta last summer, launched in Spain and the UK last October and came out of beta at the start of 2014. The firm now operates in Belgium, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK, providing coverage of over 20,500 railway stations, 10,000 bus stations and more than 200 airports. The platform does not yet allow users to book tickets directly, but this feature is planned. There is an obvious reason for the rapid pace of this expansion. Price comparison sites are now a well-known design pattern and it only takes a relatively small technical team to build the website, but negotiating deals with transport providers and ensuring travel information is correct takes a lot of effort. For this reason, GoEuro has over 60 employees negotiating deals and curating travel data. The key to its success will be getting sufficiently comprehensive coverage to attract enough users, and generate the revenues it needs to cover its cost base, before it runs out of investment. In other words, can GoEuro carry the costs of its complex data aggregation until it reaches critical mass? Investors This round was led by healthcare and technology investor New Enterprise Associates (NEA) (€2bn (2012); AUM €8.6bn), which last appeared in our Bulletin as recently as June 2014 with a €51.5mn round for ElasticSearch. We have chosen to call this a Series C round as there have been two previous multi-million euro rounds involving venture investors. The first was a $4mn round from Battery Ventures (€678mn (2013); AUM €3.4bn) and Hasso Plattner in Q1 2013, which funded GoEuro’s closed beta in 2013. Also 30 years old and based on both coasts of the US, Battery is a stage agnostic venture firm focusing on e-tail, digital media, software and services, infrastructure and industrial technologies. Battery is currently investing from its BV IX fund ($750mn), and recently announced the close of its BV X ($650mn) and BV X Side ($250mn) funds. Potsdam-based Hasso Plattner Ventures was set up in 2005 by SAP chairman and founder Hasso Plattner. The firm backs IT, software and internet services companies at any stage with investments from €0.25mn to €10mn per round. This round was also backed by ITA Software co-founder Dave Baggett and JetBlue Airways co-founder John Owen acting as angels. GoEuro’s second round was an undisclosed multi-million euro investment by Lakestar in January 2014, at the same time as the company came out of beta. Lakestar was founded by former AOL Germany MD and Benchmark Capital VP Klaus Hommels. The firm is stage agnostic and targets finance, internet and technology businesses. This second round was used to support GoEuro’s expansion from two beta countries to being live in seven countries during the first half of this year. This is not the first time that such a travel optimisation site has been tried. In July 2008, British start-up and Seedcamp finalist Zoombu was trying to do exactly the same thing for Western Europe. Again, one of the key business issues was acquiring enough scale. Zoombu solved this problem by being ‘acqui-hired’ by travel global search engine provider Skyscanner in January 2011 for an undisclosed sum. With so many mature travel sites and Google having started to include transport data in its Google Maps service, it is not unlikely that GoEuro might be offered a similar exit in the near future. The combination of GoEuro’s integrated data with Google’s ubiquitous map service would be game-changing. Of course there is competition. Other firms in the sector include Munich-based FromAtoB which raised a seven figure Series A round in November last year, Rome-based Wanderio which raised a $275k seed round last December, and Berlin-based Waymate.

August 2014 © Go4Venture Advisers 2014 ePage Page 11 Smaato Germany / US | www.smaato.com # Sector Round €mn Description Investors 4 Software Late Stage 20.0 Mobile advertising Real-Time Bidding (RTB) exchange and Supply Side Platform (SSP). Aeris Capital, EDBI, Singapore Press Holdings Smaato (Germany), operator of a mobile advertising Real-Time Bidding (RTB) exchange and Supply Side Platform (SSP), raised $25.0mn (€20.0mn) in a Late Stage round led by Singapore Press Holdings, with support from existing investors Aeris Capital and EDBI. The money will be used to add self-service functionality to Smaato’s platform. Despite being incorporated in the US rather than in Germany, we have chosen to cover this investment in our Bulletin because the firm has had offices in both Hamburg and San Francisco since its inception in 2005. More interestingly, the firm’s two co-founders are both German nationals who have lived for a long time in and around Silicon Valley. CEO Ragnar Kruse is a serial entrepreneur who went to school in Munich, while co-founder and Chief Alliances Officer Petra Vorsteher has always worked on building international alliances, initially between IT companies in the US and Europe, and is a board member of Hamburg@work – a German trade organisation for TMT. As with any start-up, the track record of the founders is hugely important and, once again, this is a German story. Both Kruse and Vorsteher worked for B2B e-commerce solutions provider Intershop, which gave them e-commerce experience throughout the dot-com boom. They also took part in growing the firm from a start-up to a publicly listed company – initially on the Neuer Markt in 1998 and subsequently in a $108mn NASDAQ listing in 2000. Initially, Smaato provided targeted, in-application ads through a platform called SOMA™ (Smaato Open Mobile Advertising). It acted as an SSP to help app developers and publishers optimise the monetisation of their users and content through advertising. Smaato’s timing was perfect as the firm was able to grow alongside the mobile advertising market on increasingly capable smartphones. The mobile advertising industry is extremely attractive, having grown by over 100% to reach $18bn in 2013 and expected to exceed $30bn in 2014. This growth is mirrored by Smaato, which has increased the number of publishers using its RTB exchange for mobile ads from 12,000 at the time of its $3mn Series D round in 2011 to more than 78,000 publishers today – a CAGR of c. 45%. 65% of these are publishers are app developers and 35% publish content through mobile sites. Smaato’s target market has so far been primarily mid-tier publishers but, now that it is profitable, the company wants to target higher-end publishers too. Smaato is able to place these ads through over 100 different ad networks and more than 180 buy-side platforms (more commonly called Demand Side Platforms in this context and referred to as DSPs) and distribute them through its own ad server. This serves more than 90bn ads per month (compared with only 20bn in 2011 – a CAGR of 35%) to over 450mn unique users and visitors across the US, EMEA and APAC regions, and allows for both campaign management and analytics. Smaato already has over 100 employees in five offices (on both coasts of the US, Germany, as well as Jakarta and Singapore in the Far East). It has also started to grow through acquisition, having acquired mobile DSP adsmobi for an undisclosed sum in the summer of 2013. Investors Although Smaato’s growth came initially in the US and then in Europe, much of the growth is now expected to come from the APAC region, explaining the interest how investors such as Singapore Press Holdings (SPH) (SGX:T39) which led this round. SPH is Singapore’s largest media company earning revenues of just under $1bn from a portfolio of classified ads, financial portals, magazines, mobile apps, newspapers and other digital media. Apart from the obvious strategic benefits to a digital puslisher, SPH intends to use Smaato's technology for private ad exchanges to automate its direct sales relationships with premium brand advertisers. This will give Smaato an entry point into its desired higher end publishers. SPH was supported by existing investor Aeris Capital – a family office originally based in Switzerland but now with an office in the US. Aeris financed Smaato’s $3.6mn Series A round in 2008 and $4.5mn Series B round in 2009 almost entirely alone (there was a small amount of co-investment from legal services firm Wilson Sonsini Goodrich & Rosati). For the Series C and D rounds, both of which took place in 2011, Aeris was joined by Singaporean life sciences and technology VC EDBI. In technology, EDBI focuses on venture, growth and later stage investments in the advertising, cleantech and mobile sectors, and was a natural partner at the start of Smaato’s expansion into the Asian market. Smaato is continuing its growth in this region and has recently announced a partnership with Indosat – the region’s second largest wireless carrier.

August 2014 © Go4Venture Advisers 2014 ePage Page 12 Tobii Technology Sweden | www.tobii.com # Sector Round €mn Description Investors 5 Hardware Late Stage 10.9 Provider of eye tracking solutions for Human Computer Interaction (HCI) and research. Swedish National Pension Fund Tobii Technology (Sweden), a provider of eye tracking solutions for Human Computer Interaction (HCI) and research, raised SEK 100.0mn (€10.9mn) in a Late Stage round from the Swedish National Pension Fund. The money will be used to finance the acquisition of US-based communications company Dynavox, and to support the firm’s expansion into new markets. We last saw Tobii in our March 2012, issue with a late-stage round of €15.9mn from Intel Capital. Up until that time Tobii had focused on three market segments, which have grown into its three business units – assistive technology for the disabled, analysis for UI design, web-site design and marketing, and OEM solutions for industry. However, the money from this round is to be used to help the company develop mass market applications. For the past two years, Tobii has been developing cheaper, simpler versions of its technology for use in consumer electronics, and also trying to enter the gaming industry. In terms of hardware, Tobii has launched Tobii REX™ – a device that clips on to the bottom of a monitor and allows gaze-interaction for Windows 7 and Windows 8 PCs. This is now available for €595 and is also sold through specialist gaming hardware vendor SteelSeries, with whom Tobii has a partnership agreement. In August of this year, Tobii announced that games developer Overwolf had added eye-tracking to 600 of its games. There is also a smaller version for laptops and tablets. To encourage OEMs to use its products, Tobii opened an office in Silicon Valley in October 2013. On the software front, Tobii undertook a JV with Tiitoo, whose Natural User InterAction (NUIA) middleware incorporates eye-tracking, gestures and speech recognition into user interfaces, to add eye-tracking as a means of control in well known game Minecraft. Of course with no user base, it is difficult to persuade developers to write games incorporating eye-tracking. In order to encourage them, Tobii launched its Gaze partner program, which makes the hardware and a SDK (called EyeX) available to developers for only €99. These started shipping in May 2014. When we last saw Tobii, the most up-to-date figures available gave Tobii’s turnover as €21mn for the 2009 financial year. In 2014 revenues are expected to approach €50mn, primarily from the disability and advertising analysis segments. The firm has also roughly doubled headcount from 340 employees to around 650. Investors Sweden, which was the first country in the world to introduce universal pensions, still has an unusual system comprised of a nationalised pension scheme, compulsory occupational pension schemes and voluntary schemes. The nationalised scheme is financed by deductions from income of 16% which are paid into Autonomous national Pension (AP) funds which are self-regulating and free from government intervention. Traditionally comprised of four funds (AP1-4) which each received one quarter of the 16% deductions, the Swedish pension system was reformed in the late nineties and now includes AP6 (AUM €2.5bn), which invests in private companies both directly and through funds. Tobii’s three business units – particularly that catering to online advertising and UI research – constitute a perfectly reasonable business with a market size big enough to be interesting. Indeed, earlier this year, Tobii was in discussions with investment banks regarding a possible IPO in Stockholm in the second half of 2014 (valuing the firm at over $300mn). If, however, there were wide-scale adoption of Tobii’s technology, this would be almost as game-changing as the introduction of the mouse and WIMP (Windows, Icons, Mouse and Pointer) OS. Any signs of traction in the $20bn (€15bn) PC games market would significantly increase the firm’s value – assuming that the investment banks touting for the IPO business hadn’t already factored gaming revenues into the proposed offer price. Chasing the gaming market is a high risk punt, but if it comes off the pay-back will be huge. However, two years is not really long enough to both commoditise the hardware, engage with games developers and also achieve a critical mass of users. This is probably one of the reasons for the postponement of Tobii’s IPO. Another is the firm’s acquisition of Dynavox for an undisclosed sum in May of this year. Dynavox provides speech-synthesisers and symbol-adapted education software for individuals with speech, language and learning difficulties. Integrating Dynavox and trying to break into the global gaming industry, while simultaneously trying to do an IPO, would be challenging even for a much larger management team, and impudent for a firm the size of Tobii. Once Tobii has digested Dynavox, however, an IPO remains an option, particularly as a dispute over IP with SensoMotoric Instruments (SMI) has just been resolved in Tobii’s favour.

August 2014 © Go4Venture Advisers 2014 ePage Page 13 Quinyx Sweden | www.quinyx.com # Sector Round €mn Description Investors 6 Software B 10.5 Developer of SaaS workforce management tools. Alfvén & Didrikson Quinyx (Sweden), a developer of SaaS workforce management tools, raised $14.0mn (€10.5mn) in a Series B round from Alfvén & Didrikson. The money will be used for further international expansion. This is another example of a sector where legacy enterprise software running on local servers is being replaced by SaaS solutions. Conventionally, organisations with a large workforce to manage have used software from JDA, Kronos or Workplace. A typical feature set for such software includes shift-planning, time-recording, absence management, forecasting and some form of dashboard or analytics. Founded in 2005, Quinyx provides a SaaS alternative. The firm was set up by Erik Fjellborg while still a student at the Stockholm School of Economics. Fjellborg experienced traditional employee management software first-hand during a part-time job at McDonald’s. Not only were the system’s inadequacies (such as an inability to quickly and easily change shifts) obvious to a fresh pair of eyes, but to ‘digital native’ Fjellborg, the advantages of the internet and the possibility of cost savings from delegating responsibility to employees for administering their schedules were obvious. Of course there are many young proto-entrepreneurs with good business ideas. But good ideas are worthless without execution and few have the ability to follow through, set up and grow a company while still studying – Mr. Fjellborg did not finish his degree until 2011. Nonetheless, in 2009, Quinyx opened offices in Denmark, Germany and the UK as well as setting up a new operations centre in Geneva. Smartphone functionality was added in 2011 and the firm has diversified from the fast food industry into other personnel-intensive sectors such as call centres, construction, healthcare, retail, hotels and restaurants, as well as the public sector. Quinyx now has more than 100,000 users and its customers include major corporates such as Burger King, Compass Group, Deutsche Telekom, Fedex, Santander, Subway and, naturally, McDonald's. With revenues of €4mn in 2013, the firm expects to do over €5.5mn in 2014 (37% growth). As with so many opportunities that are worth pursuing, a variety of competitors are also entering the market with SaaS alternatives to legacy ‘heavy iron’ systems. Examples include Danish firm Planday which received $3.8mn (c.€2.8mn) from Creandum and RECAPEX in May this year, San Francisco based Shiftplanning which has just received $3.2mn (€mn) from MHS Capital and Point Nine Capital, and Canadian firm 7Shifts. Moreover, incumbents have had time to watch SaaS eat into the market share of conventional enterprise software firms in other sectors. Those with competent management will have been doing something about it. An obvious example is SAP, whose current offering in this area is the SAP Human Capital Management system. As described in our coverage of SaaS content management supplier Alfresco above, SAP has gradually been increasing its portfolio of SaaS offerings. Of course market leadership amongst the new SaaS entrants will be determined by breadth of coverage (can the system go beyond basic workforce management to include absence management, for example), integration with other existing systems (such as payroll) and, as always, ease of migration to the new system. While legacy players such as Kronos – which has 25% of the global market – in principle have plenty of money to develop their own systems, they may be hampered by the need to maintain backward compatibility with their existing products or migrate existing customers to new SaaS products. It may be simpler and quicker for them to buy up one of the new entrants. Investors The headline figure for this transaction is €10.5mn, but this includes a secondary portion for the buyout of previous investor Mint Capital (AUM €112mn). The amount was undisclosed, but Mint is known to have put in c. €1.1mn in 2007. Alfven & Didrikson Invest is a Swedish venture firm founded by three former bankers and management consultants in 2010. The firm targets Nordic SMEs with the potential for scalable, international growth. While sector agnostic in principle, the majority of the firm’s investments to date have been in healthcare and medical technology. Angel investor and former Google engineer Magnus Sandberg co-invested as an angel and joins existing angel investor Per-Olof Myrén, who founded ERP software provider Scala Business Solutions (sold to Epicor in 2004 for €76mn). It is not unlikely that Quinyx’s exit will ultimately be to a legacy system provider electing to buy a SaaS offering rather than build its own. It is worth noting, however, that despite his age Quinyx CEO Fjellborg already has some public company experience as a board member of SaaS accounting software provider Fortnox (which has a market cap of €50mn).

August 2014 © Go4Venture Advisers 2014 ePage Page 14 Purplebricks UK | www.purplebricks.com # Sector Round €mn Description Investors 7 Internet Services B 10.0 Operator of an online real estate agency. Alchemy Partners, DN Capital, Woodford Equity Income Fund Purplebricks (UK), an online real estate agent, raised £8.0mn (€10.0mn) in a Series B round led by Woodford Equity Income Fund with support from existing investor Alchemy Partners and DN Capital. The money will be used to support the firm’s expansion throughout the UK. Despite more stringent mortgage criteria since 2008, the UK market for residential property sales through estate agents is still worth about £6bn and growing at 5% a year – not bad for an old-fashioned industry where most of the UK’s 17,000 estate agents are small local businesses only open during office hours! Still highly fragmented, the four largest estate agents make up less than 15% of the industry despite numerous acquisitions over the last decade. Online advertising through sites like Primelocation, Rightmove and Zoopla is now the norm, but 95% of residential property is still sold by bricks-and-mortar estate agents. This is despite online agents providing materially the same service (valuations using local experts, sales packs, advertising, and so on; the only difference is that vendors conduct their own viewings) at an order-of-magnitude cost advantage (with a typical price of c.£500 rather than c.£5,000). The UK’s Office of Fair Trading (OFT) has been reporting on this disparity (and other issues in the industry) for a long time, and the Government’s response suggests disruptive regulatory and legislative changes favouring new entrants. Britain’s largest traditional realtor by revenues Countrywide (backed by private equity firm Oaktree Capital) made a successful IPO in March 2013 when it saw its shares rising by 15% on its first day of trading. However, this was at least partly due to increased optimism in European IPOs as institutional investors returned, bullish public equity markets and increasing UK house prices. Stringent competition is emerging. This includes online agent Purplebricks which was launched in April 2014 by two brothers. Financed by the sale of their conventional estate agency business to Connells only three years after buying it out of administration, Purplebricks charges only £599 for sales. Like traditional agents, Purplebricks also has a lettings service (a £4bn market). Being online not only reduces costs: Purplebrick’s eZie® platform enables vendors to change property details at any time and landlords to get a real-time overview of their portfolio. More than 50% of Purplebricks activity happens outside office hours. Other competitors include well-known online agents 121Move, eMoov, Hatched, Housenetwork, HouseSimple, Tepilo and The Little House Company. Online agents do not need to be big to be profitable (Tepilo was profitable only three months after launching its online estate agency), but larger firms can negotiate better advertising deals. As we have seen before, traditional bricks-and-mortar players may wait to see which online agents are the most successful and then try to buy them. Waiting to see who will win may mean they have to pay a high price but, particularly for those with public shareholders demanding returns, there will be little choice once the victors emerge. Traditional agents may not be the only ones bidding for successful online agencies. Property advertiser Zoopla, which was set up in 2007 and received £8mn in three rounds of venture funding, floated in London in June. This IPO, which valued the company at roughly £1bn, raised £370mn for the selling shareholders which included Countrywide – the traditional estate agent described above – and listed residential property services company LSL. Even if pure play property advertising firms like Zoopla elect not to pursue vertical integration (owing to conflicts of interest with their client base), there may be other competition in the bidding war for successful agents. Consisting of what is now a fairly standard web-platform and a small head office, online estate agencies are relatively cheap to set up. EasyJet founder Stelios Haji-Ionnou recently set up easyProperty – an online estate agent which raised £1.4mn in crowd-funding at a valuation of almost £70mn. Thanks to the strength of the ‘easy’ brand, easyProperty has already pencilled in a tentative IPO for three years time. Investors This transaction was led by the Woodford Equity Income Fund (AUM €3.4bn), which we covered in some detail in our July 2014 issue when it made a €9.7mn investment in rural broadband provider Gigaclear. Woodford paid £7mn for a 30% stake valuing Purplebricks at over £23mn. Woodford was supported by DN Capital (€80mn (2014); AUM €170mn), which also last appeared in our July 2014 Bulletin with an €18.4mn investment in reservations platform Quandoo. This is a classic deal for DN Capital – it is an early to growth stage investment, straddles two of the firm’s preferred sectors (e-commerce and software), and allows the firm to work with a market-leading co-investor. Moreover, just like Quandoo, this is a marketplace business which uses the internet to disrupt what have hitherto been highly localised businesses.

August 2014 © Go4Venture Advisers 2014 ePage Page 15 2.1 M&A Activity Index Disclosed Global TMT M&A Transactions Source: Capital IQ; Go4Venture Advisers Analysis (1) Includes Dell acquisition by Silver Lake for €22.3bn (2013) and WhatsApp acquisition by Facebook for €13.9bn (2014) Disclosed European VC & PE-Backed TMT M&A Transactions (>£30mn / €35mn / $50mn) Source: Capital IQ; The 451 Group; VentureSource (including transaction value estimates); Go4Venture Advisers Analysis (1) Includes ista International acquisition by CVC Capital Partners for €3.1bn (2013) Disclosed European VC & PE-Backed TMT M&A Transactions (2014) >£30mn / €35mn / $50mn Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Monthly Number # 5 4 1 2 3 7 6 1 Value €mn 1,106 1,140 448 258 906 1,083 1,607 266 Median €mn 240 259 448 129 215 129 200 266 Cumulative Number # 5 9 10 12 15 22 28 29 Value €mn 1,106 2,246 2,695 2,953 3,859 4,942 6,549 6,815 Median €mn 240 39 303 186 228 175 175 195 0 5,000 10,000 15,000 20,000 25,000 30,000 0 100 200 300 400 500 600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Deal Value per Month (€mn) # of Deals per Month European Deals 2013 (€mn) European Deals 2014 (€mn) Global Deals 2013 (€mn) Global Deals 2014 (€mn) # of Global Deals 2013 # of Global Deals 2014 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 0 2 4 6 8 10 12 14 16 18 20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Deal Value per Month (€mn) # of Deals per Month Value of Deals 2013 (€mn) Value of Deals 2014 (€mn) # of Deals 2013 # of Deals 2014 (1) (1)

August 2014 © Go4Venture Advisers 2014 ePage Page 16 2.2 Top 5 Global TMT M&A Transactions Summary Ranked by Price (€mn, including estimates) in descending order # Target Acquirer Target Sector Price (€mn) Revenues (€mn) P/R 1 OmniVision Technologies (US NASDAQ:OVTI) www.ovt.com Hua Capital Management (China) Shanghai Pudong Science and Technology Investment (China) www.pdsti.com Semiconductor 1,258 1,085 1.2x Noteworthy Sellers: CEC Capital Management, Fidelity Management & Research Company, Fisher Investments OmniVision Technologies, a provider of digital imaging Complementary Metal Oxide Semiconductor (CMOS) for smartphones and other devices, will be acquired by Hua Capital Management and Shanghai Pudong Science and Technology Investment. While this acquisition fits nicely with Shanghai Pudong Science and Technology Investment’s strategy of controlling listed technology companies, no public information is available on Hua Capital Management. 2 Siemens Health Services (US) www.medical.siemens.com Cerner (US NASDAQ:CERN) www.cerner.com Healthcare Technology 975 N/A N/A Noteworthy Seller: Siemens Medical Solutions US Siemens Health Services, Siemens’ health information technology business unit, will be acquired by Cerner, a provider of healthcare practice management software and SaaS. This acquisition will enable Cerner to strengthen its R&D, as well as expand its global presence by acquiring a complementary client base. 3 Twitch Interactive (US) www.twitch.tv Amazon (US NASDAQ:AMZN) www.amazon.com Internet Services 727 N/A N/A Noteworthy Sellers: Alsop Louie Partners, Bessemer Venture Partners, Draper Fisher Jurvetson, Take-Two Interactive Software (NASDAQ:TTWO), Thrive Capital, WestSummit Capital, Y Combinator Twitch Interactive, an operator of a live video platform for gamers, will be acquired by Amazon, the global online retailer and hosted services provider. This acquisition, which is Amazon’s second largest to date (behind Zappos) according to The Wall Street Journal, comes as a surprise as in May 2014 Google expressed an intention to acquire Twitch for $1bn (€728mn). It will enable Amazon to strengthen its presence within the gaming industry, while providing Twitch with Amazon’s support in creating new services and tools. 4 DianDian Interactive Technology (China) Shanghai Zhongji Investment (China SHSE:600634) www.600634.com Internet Services 720 N/A N/A Noteworthy Seller: FunPlus DianDian Interactive Technology, a social and mobile gaming (owing popular games such as Family Farm) subsidiary of FunPlus, a global social and mobile gaming company, will be acquired by Shanghai Zhongji Investment, a construction conglomerate. This acquisition will expand Shanghai Zhongji Investment’s portfolio with a profitable and growing gaming and entertainment company. 5 SafeNet (US) www.safenet-inc.com * 2013 revenues Gemalto (Netherlands ENXTAM:GTO) www.gemalto.com Security 668 254* 2.6x Noteworthy Seller: Vector Capital SafeNet, a provider of anti-malware and Digital Rights Management (DRM) systems, encryption, as well as software monetisation solutions, will be acquired by Gemalto, a provider of security hardware and software globally. This acquisition will enable Gemalto to broaden its offer by adding encryption to its product portfolio, and complement its access and identity management solutions. Source: Capital IQ; The 451 Group; Go4Venture Advisers Analysis Key P/R – Price / Last 12 Months Revenues

August 2014 © Go4Venture Advisers 2014 ePage Page 17 2.3 Headline European VC & PE-Backed M&A Transactions >£30mn / €35mn / $50mn Ranked by Price (€mn, including estimates) in descending order # Target Acquirer Target Sector Price (€mn) Revenues (€mn) P/R Funding (€mn) P/F 1 Moneycorp (UK) www.moneycorp.com Bridgepoint (UK) www.bridgepoint.eu Internet Services 266 114 2.3x N/A N/A Noteworthy Sellers: Adams Street Partners, Royal Bank of Scotland Source: Capital IQ; The 451 Group; VentureSource; Go4Venture Advisers Analysis Key P/R – Price / Last 12 Months Revenues P/F – Price / Total Funding P/F > 1x indicates an investment where all investors have made a positive return on their investment P/F < 1x indicates poor returns for some, but early or late investor entrants may still show a positive return on investment

August 2014 © Go4Venture Advisers 2014 ePage Page 18 # Target Acquirer Target Sector Price (€mn) Revenues (€mn) P/R Funding (€mn) P/F 1 Moneycorp (UK) www.moneycorp.com Bridgepoint (UK) www.bridgepoint.eu Internet Services 266 114 2.3x N/A N/A Moneycorp (UK), a provider of multi-channel foreign currency exchange, money transfers and other transaction processing services, will be acquired by Bridgepoint for £212mn (€266mn) in cash. The sellers are private equity firm Adams Street Partners and Royal Bank of Scotland (“RBS”). Target Acquirer Founded in 1962 – and involved in foreign exchange since 1979 – Moneycorp (the trading name of TTT Moneycorp) is a provider of multi-channel foreign currency exchange, money transfers and other transactions processing services. It offers its services via an integrated online payments and telephone platform that handles over 35 currencies, for both private customers and SMEs. In 2013 it carried out 6.4 million transactions worth more than £10bn (c.€12bn) in 100 different countries. Moneycorp is regulated by the Financial Conduct Authority. The company also operates a bureau de change business with 10 stores in the UK, in addition to over 61 partner airports including Bristol Airport, Gatwick, Heathrow, London Stansted Airport, London Southend Airport and Southampton Airport. With over 945 staff the company reached revenues and EBIT of respectively €104mn and €11.6mn for calendar year 2013. Headquartered in London, Moneycorp operates globally via its offices in the UK, Ireland, Spain and the US. Founded in 1984, Bridgepoint (€4.8bn (2008); AUM €12bn) is a private equity firm that invests in buyout transactions valued between €200mn and €1bn. It typically invests between €75mn and €400mn in companies within the business services, consumer, financial services, healthcare, industry and media sectors. It also invests via its subsidiary Bridgepoint Development Capital (AUM €800mn) in growth capital transactions for businesses with enterprise values up to €150mn. Bridgepoint operates in Europe with a team of c.80 professionals split across its offices in Frankfurt, Istanbul, London, Luxembourg, Madrid, Paris, Shanghai, Stockholm and Warsaw. While this is the first time Bridgepoint features in our Bulletin, Bridgepoint Development Capital last appeared in our June 2014 Bulletin, when it sold UK-based provider of managed, hosted data center and IT infrastructure services Pulsant to private equity firm Oak Hill Capital Partners for $340mn (€250mn). Noteworthy Sellers US-based Adams Street Partners (AUM €16bn) is one of the largest private equity firms globally. With offices in Asia, Europe and the US, it invests in funds, buyouts (as a co-investor), secondary and venture capital transactions. As a venture capital firm, it invests between $5mn (€3.7mn) and $20mn (€15mn) within the healthcare (biopharmaceuticals, healthcare IT and services, as well as medical devices) and technology (business services, cleantech, communications, components, consumer internet, financial technology and software) sectors. Although not an investor in Moneycorp, Adams Street Partners became involved in the deal when it acquired RBS’s stake in the bank’s private equity fund RBS Special Opportunities Fund in May 2014 for c.£100mn (€123mn). Adams Street Partners last featured in our Bulletin in October 2012 when it sold Ancestry.com, a US-based subscription internet service that provides users with detailed genealogical mapping and associated services. RBS first invested in Moneycorp in 2006 when it acquired 50% of the Shlewet family’s (Moneycorp’s former Chairman and Director Bassam Shlewet’s family) stake. In 2011, RBS acquired the remaining shares held by Bassam Shlewet via its private equity fund RBS Special Opportunities Fund, which it closed in 2007 after raising £1.1bn (€1.6bn). RBS Special Opportunities Fund, which RBS was in discussion to spin off since June 2013, specialises in equity and mezzanine debt investments.

August 2014 © Go4Venture Advisers 2014 ePage Page 19 List of Acronyms Financial Terms k used as abbreviation for 1,000 (for example, €1k means €1,000) mn million bn billion AUM Assets Under Management CAGR Compound Annual Growth Rate EBIT Earnings Before Interest and Tax EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation ECM Equity Capital Markets EV Enterprise Value FYE Fiscal Year-End IPO Initial Public Offering LBO Leveraged Buyout MBO Management Buyout LTM Last Twelve Months M&A Mergers and Acquisitions P/E Price to Earnings ratio P/R Price to Revenues Ratio P/F Price to Funding ratio PE Private Equity PIPE Private Investment in Public Equity VC Vent

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