Sia Houchangnia from the Seedcamp investment team was invited to give a talk at the Geneva-based Fintech Fusion accelerator on the current state of the VC landscape in Europe.

1. The VC landscape in Europe
Sia Houchangnia
March 2nd

2. Seedcamp is a Founder’s
First Round Fund.
We invest smart capital into
pre-seed and seed stage startups,
providing up to €200k and a
lifelong platform of Learning,
Network and Capital to support
the most ambitious Founders.
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3. Some of the top VCs our
companies are raising from
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4. 1. The current
funding environment

5. “We need to make the economics work…
We have to understand that every round
of funding must be treated as our last.”
William Shu
Founder Deliveroo
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European Tech Scene Begins to Feel Silicon Valley’s Woes,
Mark Scott, The New York Times, February 2016

6. Public & private markets are interconnected
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Yahoo Finance, March 2016

7. The story in short…
Upcycle
1. More companies raising large rounds on unproven metrics and fundamentals
2. non VC-expert money coming in (Hedge Funds, Family Offices, Corporates)
3. Private markets valuing companies at 50-100x revenue
4. US investors flying to Europe not just for holidays
Economic slowdown —> market correction
1. Public stock markets falling
2. Tech IPOs trading below issue price
3. Investors raising their expectations
4. Fundraising taking longer and rounds closing at lower valuations
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8. What the data shows
Venture Pulse Q4 2015, KPMG & CBinsights, January 2016
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9. 2. Where is the capital
coming from?

10. Leading global VC firms
Large European
VC firms
Emerging European
VC firms
Some of the leading European VC firms
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11. Selected examples of new funds
recently launched
The State of European Tech, Slush & Atomico, November 2015
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12. The key role of government funding
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The State of European Venture Capital, BCG, October 2015

13. US money also contributing to fill the gap
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2015 Anual European Venture Industry Report, PitchBook, January 2016

14. The State of European Tech, Slush & Atomico, November 2015
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Selected examples of European
investments made by US VC firms

15. 3. The geographic disparities

16. VC firms all across Europe
€70Maverage size
>800VC firms
80%manage
< €100M
Techstars, Investors in Europe, December 2015
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The State of European Venture
Capital, BCG, October 2015

17. …but the capital is not evenly
distributed across the continent
The State of European Tech, Slush & Atomico, November 2015
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18. A closer look at the main hubs
The State of European Tech, Slush & Atomico, November 2015
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19. 4. What’s next for Europe?

20. More and more European success stories
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European Unicorns: Do They Have Legs?, GP Bullhound, June 2015

21. The generational effect
The State of European Tech, Slush & Atomico, November 2015
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22. Increasing number of entrepreneurs
turned investors in Europe
The State of European Tech, Slush & Atomico, November 2015
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23. …But still lots of room to grow
Entrepreneurship at a Glance 2015, OECD. August 2015
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24. We need to have larger funds
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2015 Anual European Venture Industry Report, PitchBook, January 2016

25. …funding larger rounds
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2015 Anual European Venture Industry Report, PitchBook, January 2016

26. 5. Conclusion

27. The correction in Europe should not
be as bad as the US… Why?
Valuations less inflated than in US and China
Weak EUR & weakening GBP contribute to attract US capital
Very low interest rates in EU pushes pension funds / mutual funds
to consider asset classes like VC, which drive higher returns
Government agencies maintaining / increasing their support
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28. 3 things to remember if you fundraise now
1. Keep your burn under control
2. Demonstrate a clear path towards monetization
3. Raise for 18 months
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29. Thank you
Sia Houchangnia - Investment Team at Seedcamp
@SiaHouchangnia