1.
1
www.frontline.vc
Startups & Venture Capital in Germany
Tech emerges in Europes largest economy
A GLOBAL PERSPECTIVE BROUGHT TO YOU BY:
www.pointnine.vc

2.
2
Many new venture funds have been raised in Germany
1Cash on Hand and Bank Balance, RKET Annual Report, Rocket ECP, Earlybird, Creathor, bmp, Target Partners, Lakestar, Coparion, Crunchbase: Global Founders Capital,
Holtzbrinck, HTGF, Cherry Ventures, Dow Jones Venture Source, CBInsights, Estimates may sometimes include realisations, does not include funds HQ’d outside of Germany
TotalFundsRaisedorSimilar(€1,000s)
FUNDS RAISED IN 2016
Funds domiciled in Germany or
primarily do business there
0
400
800
1,200
1,600 RocketInternet
RocketRICP
EarlyBird
Holtzbrink
HTGF
Acton
Lakestar
TargetPartners
ProjectA
Coparion
B-to-V
IBB
Creathor
Cherry
BlueYard
PointNine
Speedinvest
Paua
Capnamic
4065100110120
150
180182200225
290300
385
470
576
635
700
1,000
1,504

3.
3
Which has lead to better upstream funding for startups
Seed Series A - B Late StageIncubators
Note: approximation, many investors participate across different stages

4.
0
13
25
38
50
20%
24%
35%
37%
40%
48%
The highest level of international participation in Europe
4
London
Paris
Berlin
Stockholm
€0b €4.5b €9b €13.5b €18b
$2.3b
$5.8b
$3.7b
$11b
$1.8b
$1.3b
$9.6b
$17b
USD
Total Funds Raised
Total Funds Invested
TOTAL VC FUNDS RAISED VS INVESTED2VC BACKED WITH AN INTERNATIONAL INVESTOR1
1
Crunchbase Pro (2013-2016), 2
The numbers behind Europe's VC ecosystem [datagraphic] (2006-2016)

5.
As funds globally position themselves to do more German deals
5
FUNDS ADD GERMAN DEAL
MAKERS
RECENT TRANSACTIONS IN
GERMANY
Series B
Series A
v
77% OF FUNDING ROUNDS IN
BERLIN ARE LED BY NON-LOCALS
Berlin needs more VCs!
0
15
30
45
60
13%
29%
57%
60%
17%
22%
Berlin Silicon Valley
Local Led
rounds
Non-Local
Domestic
International
Led
Why Berlin Needs More Local VCs a Network Analysis

6.
A boom in investment activity
6Crunchbase Pro, Gil Dibner Slideshare
# OF VC BACKED COMPANIES IN THE PAST 10 YEARS
50
140
230
320
410
500
Q
3
2014
Q
4
2014
Q
1
2015
Q
2
2015
Q
3
2015
Q
4
2015
Q
1
2016
Q
2
2016
Q
3
2016
Q
4
2016
QUARTERLY VC FUNDING EX-MEGA (€100m)
ROUNDS IN GERMANY
Quarterlyfundsraised($1m)
62% CAGR
0 350 700 1050 1400
139
157
165
417
607
1,203

7.
$3.1b
€9b
€2b
Is giving birth to the German startup ecosystem!!
7
€3.1b
€100m
€150m
€760m
€82m
$4b
€830m
$190m
€210m
Scout24
€3.2b
€210m
€150m
€100m
€215m
€950m
€1b
€272m
€300m
Current or last valuations: Notable exits, companies with €50m+ in funding, other notable. Private market valuation, best estimate based on public data
€420m
$700m
$700m
€480m

8.
8
Investors

9.
9
1See Appendix & FY 2015 Financial Statements and Rocket Internet Financial Statements and Capital Markets Day, 2Crunchbase, 3Rocket ECP, GFC vs. Rocket Internet Capital Partners: Wie
passen Rockets Fonds zusammen? ,Rocket Internet Capital Partners fund closes at $1 billion 4
The Samwer brothers control vehicles with billions in combined assets1,2
Rocket participated in 16 out of 20 of Germanys largest funding rounds1
Rocket is largely an emerging markets and eCommerce investor1
Cash
€1.5b1
RICP4
€1b
FOUNDED
2007
OFFICES
Berlin, London
FUNDS
2
RAISED
-
# OF INVESTMENTS
75+
EXITS
5+

10.
10
1Holtzbrinck-Ventures.com, 2Crunchbase, 3Proprietary, 4Holtzbrinck Ventures etabliert 177 Mio. Early-Stage-Fonds mit
HarbourVest Partners, 5Holtzbrinck Ventures Closes $331M Fund To Back More Consumer And E-Commerce Startups
Founded in 2000 as part of German publishing house Holtzbrinck
Track record of investment success: 150+ investments1
, 16 acquisitions2
and 3 IPOs3
LPs include US based HarbourVest Partners and Georg Von Holtzbrinck4
Strong focus on consumer internet, eCommerce, transactional business models
AUM
€635m
Consumer
Internet
in EU
Fund VI
€285m5
FOUNDED
2000
OFFICES
Munich
FUNDS
6
RAISED
€635
# OF INVESTMENTS
100+
EXITS
25+

11.
111Tech.eu: Most Active Tech Investors In Europe (H1 2015)
SaaS and marketplace focused, Seed and early Series A
Created out of Team Europe, a network of Berlin-based entrepreneurs
One of the most active Tech Investors in EU1
with strong foothold in Berlin
American style VC, with international LPs (US, Israel, EU)
€55m Fund 3
SaaS
Marketplaces
€40m Fund 2
FOUNDED
2011
OFFICES
Berlin
FUNDS
3
RAISED
€112
# OF INVESTMENTS
80+
EXITS
10+

12.
121earlybird.com, 2Heilemann Ventures and Earlybird VC Join Forces
Founded in 1997, with €700m invested across 5 funds, invested in over 100 startups1
Earlybird is one of the oldest and most established funds in Germany
Invests €250k-10m across all stages1
Recently merged with Heilemann Ventures2
Technology
Eastern Europe
Healthcare
FOUNDED
1997
OFFICES
Berlin, Munich
FUNDS
3
RAISED
€112
# OF INVESTMENTS
120+
EXITS
25+

13.
13
Who to know
Marc Samwer
Oliver Samwer
Alexander Samwer
rocket-internet.com
@RocketInternet
Pawel Chudzinski
Christoph Janz
pointnine.vc
@PointNineCap
Hendrik Brandis
Christian Nagel
Fabian Heilemann
earlybird.com
@EarlybirdVC
Daniel Glasner
Christian Meerman
Filip Dames
cherry.vc
@CherryVentures
Ciaran O’Leary
Jason Whitemire
berlinvc.com
@BlueYard
Uwe Horstmann
Dr. Florian Heinemann
project-a.com
@ProjectAcom
Jan Beckers
@FinLeap
@HitFoxGroup
Klaus Hommels
Mark Schmitz
Nicolas Brand
lakestar.com
Will Prendergast
Thomas Olszewski
frontline.vc
@frontline

14.
Corporate Investors
14
Funds Focus Areas
B2C consumer goods, retail and services
Manager of several corporate venture funds
IoT, smart home, digital customer access, big data
Direct-to-consumer or transaction oriented
SevenVentures, Redstone Digital, Vito Ventures, Vowerk
Digital Media & Publishing Tech
Consumer internet, marketplaces, and deep tech
Independent venture fund of Commerzbank

15.
Accelerators
15
Accelerators % Stake Comments
6%
5%
6-8%
4-5%
Investment
€20k+100
€25k
€15k
-
Techstars Berlin, Axel Springer Plug & Play, Berlin Startup Academy, Startupbootcamp Smart Transportation & Energy
- - Diversified
Transportation and energy
Axel Springer
Diversified
Diversified
Negotiable Community focusedNegotiable

16.
What to expect when you close a deal in Germany
16*Most traditional databases do not contain accurate valuation information, Techstars Berlin1
Incubated Companies Angel & Seed Deals
€1-3m €2-6m
Angel Round Seed Round
TractionInception
SaaS Funding Napkin, the mobile-friendly edition , Fundraising Framework for Marketplace Startups in 2016
Expectations can very dramatically
Business with some traction, first customers
Can include companies from accelerator
Typically raising at above market valuations
Management owns 0-70% of equity
Part of the capital raised may go to the incubator

17.
17
Opportunities

18.
18
Strengths
Top class engineering and
business universities
Berlin is an attractive place
to live for a lot of young
talented people
Easier immigration policies
then elsewhere in Europe
Largest EU economy in
terms of GDP and
population
Higher capital efficiency as a
result of lower salaries and
cost of rent
Optimism surrounding
Berlin and the prospects of
the ecosystem

19.
Berlin
19
Population 3.5m
1 Bedroom Flat €500-1,0001
Beer €31
Avg Salary €40,0002
Avg Software
Engineer Salary
€50,0003
Berlin named most 'fun' city in the world - telegraph.co.uk
1Berlin named most 'fun' city in the world - telegraph.co.uk, 2Salary Survey in Berlin, 3Berlin Software Engineer Average Salary

20.
20
Growing Pains

21.
21
Challenges
1Think We're the Most Entrepreneurial Country In the World? Not So Fast
Difficult to retain top talent
with lower salaries vs other
EU cities
Victim of its own success?
Rent and cost of living are
increasing
Culture of risk aversion and
slower adoption of new
products
English & German are used
Lower levels of
entrepreneurship vs rest of
Europe1
Relatively small talent pool
of software developers in
some sectors

22.
22
Incubated startups, management equity participation
Incubator
50%
New Investors
30%
Management
20%
A Letter to German Entrepreneurs, Index Ventures
“
”
In some cases, part of the 2nd round of
funding is used to pay for services
A startling number of German startups that we have spoken
to have ownership structures which put them at a real
disadvantage when raising their first venture round. In many
cases we have observed, the founders have given away too
much equity to their first investors - typically angels and
family offices, who have little experience with the fast-
growing startups or the venture capital funding model.
‘Incubated’ companies allocate a relatively
small equity stake to management teams
EXAMPLE SEED STAGE INCUBATOR CAP TABLE

23.
23
Winning sectors

24.
FinTech
• Credit related and consumer business
• Large market for consumer finance
• Population which travels a great deal
Four sectors where German startups have succeeded
24
eCommerce
• Fashion, auctions, and food delivery
• Largest market for fashion in Europe
• Lean and cost competitive, low margin
Leisure
• E-sports, gaming, travel, and music
• Travel culturally important
• Large number of consumers
AdTech
• Big data, data analytics, data mgmt, SEO
• E-commerce companies as customers
• High small- & mid-cap M&A-activity

25.
25
FinTech
Founder
Alexander Graubner-Müller
Formerly Groupon, Rocket Internet
University of St. Gallen
Founder
Valentin Stalf
Formerly Paymill, Rocket Internet
University of St. Gallen
Pawn Loans
Payday
Credit Cards
Bank Loans
Better credit for
customers with
no or poor
access to credit
The mobile bank
Linkedin Information, Crunchbase

26.
26
AdTech
Founder
Andreas Bodczek
Formerly Telefonica, Bertelsmann
Ludwig-Maximilians Universität
Mobile in-app ad monetisation platform, incl.
ad mediation & marketplace.
Founder & CTO
Marcus Tober
Formerly Ecards, Idealo Internet
Technische Fachhochschule Berlin
Acquired
for $190m
Linkedin Information, Crunchbase
SEO SaaS platform

27.
27
Founder
Hakan Koç
Formerly Home24, Rocket
Internet, Zalando, DailyDeal
Founder
David Schneider
Formerly Compara Tarifas,
Unibicate, Roland Berger
San Andrés, Singapore, WHU
Trouble Selling Grandma’s Cars Led to $1 Billion Startup, LinkedIn Information, Crunchbase
eCommerce
Designer shopping online
IPO at
€5.3b
valuation
B2B marketplace
for used car
dealers

28.
28
Leisure
Alexander Ljung
Formerly Trustmojo.com, Jung
Studios, SF Anytime
Stockholm University
Rolf Schroemgens
Formerly ciao.com
Leipzig Graduate School of
Management
Online travel
booking Social Music
Samwer brothers
Trivago, auf leisen Sohlen, LinkedIn Information, Crunchbase
Christian Vollmann
Dr. Florian Heinemann
IPO at $4b
valuation

29.
Internet Exits
29
€6.5b (at IPO)
€5.3b (at IPO)
€100m
€150m
€272m
€82m
Trivago $4b
(40%)
TeamViewer
€830m
$190m
€210m
2004 Onward: 16 Biggest German Exits So Far, Tech.eu: Scout24, Windeln Successfully Completes IPO, Das denkt die Szene über den 6Wunderkinder-Exit
€3.2b
€210m
€150
€100m
€215m
eCommerce
Gaming
Travel
Enterprise
AdTech
Social
€150m
(at IPO)
$150m
FinTech
€108m
joulex
€108m
€124m

30.
Early stage companies to watch in 2017
30
Data driven publishing house
Bus travel platform
Large scale data analysis Video game coaching
Video sharing network
App retargeting
Home cooking mail service
API based CMS
Bank of banks
OKR
Banking for freelancers
Flying cars
SME Lending
App for your tax returnOffice management software Cloud banking platform
Authors choice

31.
31
Outlook

32.
32
2017 Predictions
Fewer new EU funds will
enter the market
Expect larger deals from
Rocket after a 6 month lull
Brexit will continue to
accelerate ecosystem
growth in Germany
Great companies will come
from all over Germany!
Seed & Series A valuations
will level off
Interest from non-EU VCs in
the German ecosystem will
continue to increase

33.
33
2017 Predictions
Large incubators will shift
towards VC investing
After 5 years of B2C growth,
B2B startups emerge
IPOs of Delivery Hero,
Home24, will continue to
fuel the ecosystem
Global VCs will continue to
hire Germans to target the
region
Zalando will become
Germany’s first “decacorn”
Germany to surpass the UK
in total VC funding

34.
34
Twitter Medium
Mathias
Twitter Medium Quora

35.
35
Additional Slides

36.
Rocket participates in 16 out of 20 of the largest rounds since 2012
36
Rocket Participates in 80% of €50+ funding rounds
FY 2015 Financial Statements and Rocket Internet Financial Statements and Capital Markets Day

37.
37
Nine new funds in 2016
DB1 VENTURES
TRUMPF STRATEGIC
Germany’s 11 New VCs launched in 2016

38.
0
225
450
675
900
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
180
284
719
437
621
444
892
543 555
487
180
267
389
209
379
339 333
388
461 463
29
163
118
232
279
225
281
355 361
443
74
123
89
112
140
84
140
113
194
224
Sweden France Germany UK
Funding Trends (ex-mega rounds)
38Europe & Isreal 2016 VC Year in Review, Gil Dibner
MillionsofEuro’s

39.
Online Content:
Rocket Internet Financial Statements
Germany’s FinTech Ecosystem: A Wheel in the European Innovation Machine
Venture Capital and Startups in Germany 2015, E&Y
16 Biggest German Exits So Far
Trouble Selling Grandma’s Cars Led to $1 Billion Startup
Salary Survey in Berlin & Berlin Software Engineer Average Salary
Berlin named most 'fun' city in the world - telegraph.co.uk
A Letter to German Entrprenuers, Index Ventures
Think We're the Most Entrepreneurial Country In the World? Not So Fast
Heilemann Ventures and Earlybird VC Join Forces
GP Bullhound 2015 Unicorn Report, GP Bullhound 2016 Unicorn Report
Germany’s 11 New VCs launched in 2016
Data Services:
CBInsights
Dow Jones Venture Source
Crunchbase
LinkedIn
39
Source Links

40.
Slide 2 - Venture funds in Germany
Funds domiciled in Germany or that primarily do business there
Does not include corporates, funds without official ‘funds raised’, or non-internet funds
Rocket is a publicly traded company with €1.5b of cash and cash equivalents
Slide 3 - Fund participation by stage
Notable participants by stage, discretionary selection
Slide 4- International participation
Data from Crunchbase Pro
Pitchbook data
Slide 6 - A boom in activity
Data from Crunchbase Pro
Gil Dibner Startups and VC in Isreal
Slide 6 - Selection of successful companies
Companies with over €30m funds raised
Authors choice
Slides 9-15 - Notable players
Discretionary selection of well known investors
Slide 16 - Valuations
Estimates based on experience
Slides 24-30 - Successful startups
Many startups have multiple co-founders that are not included here
Authors Choice
Slide 28 - Exits
Notable internet exits since 2004
Slide 30- Early stage companies to watch
Authors choice
40
Methodology