2012 02 creandum nordic exit analysis
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The document discusses Nordic technology exits and companies. It provides data on over 400 private Nordic tech company exits since 1998. Some key findings include: - Nordic companies represented 9% of global billion dollar tech exits from 2005-2009, disproportionate to population size. - The average annual exit value in the Nordics has increased 72% from 1998-2004 to 2005-2011. - 17% of exits account for 82% of total exit value, with VC investors involved in nearly all large exits. - The Nordic region produces many successful companies and consistently produces winners with exit values over €100 million. Recent exits also show solid businesses with considerable revenues.
2012 02 creandum nordic exit analysis
- 1. Backing the companies of tomorrow //////////////////////////////////////////// Creandum Nordic Technology Exit Analysis 1
- 2. Creandum exit database • Database with ~400 private technology company exits (~250 with exit value) • 20+ parameters covered including exit value, exit revenue, exit type, years from inception to exit • Companies from Denmark, Finland, Norway & Sweden • Focus on VC & angel investments – no buyout or privatizations • Exit value (€m) of companies at time of trade sale or IPO (end of 1st day trading) • EXCLUDING Life science, med tech, bio tech, retail, energy (oil & gas etc) & environmental and consulting • Sources include official information (web sites, press releases, newspaper articles, annual reports) as well as financial resources & databases • Feel free to use the material but please mention the source • The database is good but not complete – total exit values are likely to be higher Copyright Creandum 2011 2
- 3. Nordic technology firms represent a significant portion of global BUSD exits • Nordic companies represented 9% of all BUSD Technology Exits 2005-2009 global billion dollar technology exits during 9% 6% 2005 – 2009 • In terms of M&A exit value for VC-backed 18% technology companies, the Nordics represented ~18% compared to the US 35% during the same period (but only 5% of active VC firms & likely even lower percentage of capital) • Sample of recent significant BUSD Nordic 32% company exits: Nordic (3) US (11) Rest of Europe (6) China (12) IPO: $6.7Bn M&A: $2.75Bn Others (2) IPO: $1Bn M&A: $1Bn Sources: NVCA, EVCA, Thompson, Dow Jones, Creandum, Balderton Copyright Creandum 2011 3
- 4. and a disproportionally large portion of Europe Deloitte Europe Billion dollar exits Fast-500 companies Amount of VC investment 27,6% 33,0% 14,0% 2005-2009: Nordics Rest of Europe Europe’s 100 largest Olympic gold software companies medals:)* Population 22,0% 3,5% 21,0% *Includes all gold medals between 1896-2010 for existing and previous European countries Sources: EVCA, Thompson, Dow Jones, Creandum, Truffle, Deloitte, International Olympic Committee Copyright Creandum 2011 4
- 5. Nordic entrepreneurs create world class companies & services Sample of recent successful companies & services created by Nordic entrepreneurs Creandum Note: Skype, Soundcloud, SuccessFactors, Playfish primarily established outside Nordics Copyright Creandum 2011 5
- 6. The Nordics is one of the world’s most attractive regions for a VC Best Countries Global Researchers Global Corruption R&D as % of Rank To Start a Innovation per 1000 Competitive- Perceptions GDP3 Company1 Index2 employed3 ness Index4 Index5 1 Denmark Iceland Israel Finland Switzerland Denmark 2 Canada Sweden Sweden Iceland Sweden New Zealand 3 United States Hong Kong Finland Denmark Singapore Singapore 4 Sweden Switzerland United States Sweden United States Finland 5 New Zealand Denmark Denmark Norway Germany Sweden 6 Ireland Finland Austria Austria Japan Canada 7 Switzerland Singapore Iceland United Kingdom Finland Netherlands 8 Norway Netherlands France Estonia Netherlands Australia 9 Iceland New Zealand Belgium Slovenia Denmark Switzerland 10 Netherlands Norway United Kingdom Luxembourg Canada Norway Sources: 1) Small Business Administration's Office of Advocacy 2) INSEAD 3) OECD 2010 Factbook 4) World Economic Forum 5) Transparency International CPI 2010 Copyright Creandum 2011 6
- 7. and the Nordic tech opportunity is big and increasing MEUR Total Nordic exit value 1998-2011 7 000,0 6 000,0 5 000,0 4 000,0 3 000,0 €2.4Bn 2 000,0 €1.4Bn 1 000,0 0,0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Exit year Avg. annual exit value 1998-2004 Avg. annual exit value 2005-2011 • Average exit value per year for the last seven years is €2.4Bn • Total exit market value increased 72% between economic cycle in ‘98-’04 and ‘05-’11 • 17% of M&As & IPOs represent 82% of total exit value • VC investors in 100% of exits > €500M and 73% of exits > €100M (% of total exits) Sources: EVCA, Thompson, Dow Jones, Creandum Copyright Creandum 2011 7
- 8. The Nordic region consistently produces a significant number of winners Tech exits larger than €100M 1998 - 2004 M&A: 940 MEUR IPO: 514 MEUR IPO: 474 MEUR M&A: 961 MEUR IPO: 491 MEUR IPO: 383 MEUR M&A: 600 MEUR IPO: 189 MEUR IPO: 347 MEUR IPO: 430 MEUR M&A: 284 MEUR IPO: 200 MEUR IPO: 191 MEUR M&A: 230 MEUR IPO: 167 MEUR IPO: 278 MEUR SendIt M&A: 120 MEUR M&A: 150 MEUR* M&A: 169 MEUR IPO: 254 MEUR M&A: 135 MEUR Revenue 1 MEUR 10 MEUR 50 MEUR Median P/S: 15 Median Rev: 27 MEUR *Part of Kelkoo exit Sources: Creandum Copyright Creandum 2011 8
- 9. and the trend is towards more solid businesses with considerable revenues Tech exits larger than €100M 2005 - 2011 IPO: 5’148 MEUR IPO: 732 MEUR M&A: 645 MEUR M&A: 282 MEUR M&A: 645 MEUR M&A: 473 MEUR M&A: 2’200 MEUR M&A: 258 MEUR IPO: 415 MEUR M&A: 222 MEUR M&A: 172 MEUR IPO: 198 MEUR M&A: 196 MEUR M&A: 162 MEUR M&A: 194 MEUR IPO: 160 MEUR M&A: 140 MEUR M&A: 186 MEUR M&A: 121 MEUR M&A: 109 MEUR M&A: 100 MEUR Revenue 1 MEUR 10 MEUR 50 MEUR Median P/S: 6 Median Rev: 53 MEUR Sources: Creandum Copyright Creandum 2011 9
- 10. Sector considerations: Consumer and software increasingly important Distribution of Nordic Total exit value distribution last 5 exits > €100M years for selected sectors 14 12 11,4% 10 Hardware 8 45,4% Software 6 43,3% Consumer 4 2 0 Consumer Software Hardware Other * 1998-2004 2005-2010 • Significant increase in value creation in consumer sector and decrease in hardware and software • Consumer and software close to 90% of value created in selected sectors • Emerging new sectors (other) likely to generate value as well *REC IPO valued at 5,143 MEUR. Sources: NVCA, EVCA, Thompson, Dow Jones, Creandum, Balderton CONFIDENTIAL 10
- 11. Geo considerations: Sweden most important geography with 42% of value % of Nordic exits and exit value per country 1998-2011 60% 208 50% €10.9Bn 40% €8.2Bn Number of exits 30% Exit value 20% 70 Number of IPO 52 €3.9Bn Company value at IPO 42 €3.1Bn 10% 0% Sweden Norway Denmark Finland • Swedish & Norwegian companies represent 70% of exits & 73% of exit value • Large portion (62%) of Norway exit value through one IPO (REC €5.1Bn) • Denmark & Finland continually decreasing in importance since 2001 Skype 50/50 Sweden & Denmark, MySQL 50/50 Sweden & Finland Copyright Creandum 2011 11
- 12. IPO and trade sale to US most important for large exits Exit value distribution for trade Nr of exits for trade sale & sale & IPO (of total exit value) IPO per exit interval % of Exits 8% 100% 90% 80% RoW 70% US 60% 49% 34% Other nordic country 50% 40% Inside country 30% IPO 20% 10% 0% Exit =< 10 10 -‐ 49 50 -‐ 99 100 -‐ 499 ≥ 500 intervals 3% 6% in M€ • Lack of larger Nordic exit opportunities since IPO-market dried up after 2000 • Larger exits very dependent on US exit market • VC investors in 100% of exits larger than €500M and 73% of exits larger than €100M (% of total exits) Copyright Creandum 2011 12
- 13. Nordic VC allocation is required to capture the value of the region % of Nordic exits with VCs from Nordic, % of Nordic exits with VCs from Nordic, UK & Rest of Europe 1996 - 2010 UK & Rest of Europe 1996 - 2010 100.0% 80.0% Nordic VC US VC 60.0% RoW VC RoE VC 40.0% UK VC 20.0% 0.0% Exit value Intervals (MEUR) >=10 >=50 >=100 • Nordic VCs present in ~90% of all VC-backed exits larger than €100M • Non-Nordic VCs are on average only represented in 1.3 Nordic exit deals each – very difficult to access the value from outside the region Sources: EVCA, Thompson, Dow Jones, Creandum Copyright Creandum 2011 13
- 14. Wrapping up > Large and growing Nordic tech market • €2.4Bn yearly exit value last 7 years • A significant part of European and global exit • Increased high-quality deal flow • Software & consumer sectors dominant and Sweden most important geography > Significantly maturing ecosystem • More serial entrepreneurs • Successful entrepreneurs becoming angel investors • Experienced growth company management teams available • Few but more experienced investors active in the region CONFIDENTIAL 14