Talk by Markus Wagner, CEO & Founder - i5invest, Vienna, at Stanford on Jan 26 2015, as a part of our session on 'Internet-of-Things Startups & Seed Funds :: Poland & Austria'. Website: http://www.StanfordEuropreneurs.org YouTube Channel: https://www.youtube.com/user/StanfordEuropreneurs

1. Startup Ecosystem in Austria
Markus Wagner
26th of Jan. 2015; @MarkusWagner
CEO - i5growth Inc. (Palo Alto)
Chairmen of Adv. Board - i5invest seed capital (Austria/Vienna)
Board AustrianStartups – Austrian Startup Association (non-profit)
Investment Committee Member – SpeedInvest (seed and Series A fund in Austria)
European Entrepreneurship & Innovation @ Stanford Engineering

3. …known for Mozart, Sissi & Sound of Music

4. …known for – Music & Culture

5. Strong Austrian Brands

6. and recently known for a lively, liberal culture & tech scene

7. Austrian Facts & Figures
Popula'on:
8,5mln
Capital:
Vienna
(high
diversity
of
industries
and
services)
Vienna
Region:
2,6mln
Language:
German
German
speaking
market:
~100mln
#1
in
Europe:
lowest
unemployment
rate
#1
worldwide:
quality
of
life
(Mercer
Study
2014)
GDP
per
capita:
#13
(IMF)
Industry
29%,
Service
69%,
Agriculture
1,5%
(Tourism
6%)
~4hours
drive
radius:
Bra'slava
(45min)
Krakow,
Zagreb,
Budapest,
Munich,
Prague,
Brno,
Ljubljana
Significant
Eastern
and
Balkans
Investor:
finance,
retail,
telecom
Vienna
4hours
car
drive
radius

8. Vienna‘s Biggest Asset: 180.000 students in Vienna (40% int.)

9. my background
(i5invest seed capital / i5growth Inc. / AustrianStartup)

10. Timeline: Markus, Austrian Startup Scene
2000 2004 20062002 2008 2010 2012 20141997

11. 3united AG (my first Exit)
Mobile Music
Mobile Content &
Community Portals TV, Radio & Print
Gambling &
Betting
Mobile Operators
3united
key verticals
Mobile
Operator
Clients
COIN Platform
Application Layer
Applications & Services
• Mobile Portal
• Web Portal
• Personalization
• Recommender
• Rich mobile
Clients
(J2ME/Symbian)
• Radio Station
Module
• Merchant
Module
• Promotion
Engine
• Community
Module
• Dual Delivery
• Multi Vendor
Content
Management
• Multiparty
Reporting
• Automatic Meta
Data Extraction
• Dating &
Matchmaking
• Web Charging
• Content
Download Server
• MMS Feature
Proxy
• WAP Application
Suite
(Entertainment)
• WinnerZone
Promotion
Engine
• m-Ticketing
• CD/DVD Retail
Module
• Information
Services
(Push/Pull)
• Content
• WAP Portals (on-
deck, off-deck)
• CRM Module
• Votings/TED
• On-Air Chat
• Sweepstakes
• Call-in Shows
• Videotext
• Dating/Flirting
• Content
Downloads
• Mobile Media
Portal
• Music
Recognition
• Message2DJ
• TV/Radio show
reminder
• Information
Services
(Push/Pull)
• Astrology tools
• TV on Mobile
• On-Air Games
• CRM
• Content
• Mobile Clients
Gambling
• Mobile Clients
Betting
• Gambling
Back-ends
• Application
Download
Platform
• Transaction
Proxy
Framework
• Account Admin
• Multiparty
Reporting
• Back-end &
Payment
Integration Mod.
• Provisioning
Platform
• Authentication
Management
• CRM Platform
• DRM
• Handset DB • Rendering
Support
• Premium Video
Delivery • m-Commerce
Payment
• Premium MMS
• Premium SMS
COIN Platform
Transaction Layer
Mobile Multi-Media
Middleware & Connectivity
13 Countries
100+
Employees
Highly
profitable
(30%+ EBIT Margin)

12. 2000 2004 20062002 2008 2010 2012 20141997
Timeline: Markus, Austrian Startup Scene

13. 2000 2004 20062002 2008 2010 2012 20141997
IncubaSon
/
Company
Building
AcceleraSon
+
Seed
Capital
M&A
and
Corporate
Dev.
i5growth
Inc.
/
innovaSoncenter.eu
A
group
of
serial
entrepreneurs
who
invest
invest
their
money
and
'me
Timeline: Markus, Austrian Startup Scene

14. Overview
We focus on max 2 new companies per year – we aren’t spray & pray
investors. We focus on sector expertise, mostly strong IP/technology,
international/US markets, rarely copycat business models
WE ARE LONG TERM PARTNERS (through all stages)
START-UP MENTORING
SEED FUNDING
CORPORATE DEVELOPMENT / M&A ADVISORY
(portfolio, friends & family network)

15. Portfolio Overview
#inspire, #innovate, #incubate, #invest, #internationalize

16. The Austrian
Startup
Ecosystem

17. 2000 2004 20062002 2008 2010 2012 20141997
March.fifteen.
The
Decline
of
Local
Series
A/B
Government
Series
A
Funds
/
Support
Public
R&D
(Pre-­‐)
Seed.
Support
Second
Wave
of
Private
Ini'a'ves
The
Raise
of
An
Amazing
Startup
Scene
i5growth
Inc.
/
innovaSoncenter.eu
Timeline: Markus, Austrian Startup Scene

18. Investments 1999 – 2013 (in Mio. €)
Development: Share VC only
Austrian Funds
Source: EVCA PEREP_Analytics | AVCO (May 2014)
Private Equity & Venture Capital in Austria

19. Source: EVCA PEREP_Analytics | AVCO (May 2014)
Private Equity & Venture Capital in Austria
Investments 2013 (in %)
GDP Share: VC only (PE not included) -
Companies in Europe

20. Private Equity & Venture Capital in Austria
Source: EVCA PEREP_Analytics | AVCO (May 2014)
into Austrian Companies:
539,9
€ 88,0 Mio. Investments
made by Austrian Funds
20,5
67,5
472,4
€ 539,9 Mio. Investments
in Austrian Companies
0,173 %
GDP share
0,028 %
GDP share
by Austrian
Funds: 88,0
Abroad
Czech Republic
7,0 Mio. Bulgaria
6,0 Mio. Poland
5,2 Mio. Germany
1,6 Mio. Turkey
0,4 Mio. Other
0,3 Mio.
Investments 2013 (in Mio. €)
Flow: PE & VC

21. 2,500 Visitors at the Festival
2700 Challenge applications in the last 30
months
50% WESTERN EUROPE
37% EASTERN EUROPE
7% NORTHERN EUROPE
6% REST OF THE WORLD

22. Startup Ecosystem is booming
Vienna
Austria
significant
as
well:
Linz,
Graz
S'll,
you
beYer
should
interna'onalize
early!

23. Austrian Ecosystem Exits / Notable Events
Notable
EXITS
(star'ng
by
2010):
• 2010:
fa[oogoo
–
Digital
River
• 2010:
greentube
-­‐
NovomaSc
• 2010:
jajah
-­‐
Telefonica
• 2010:
123people
-­‐
PagesJaunes
• 2011:
RF-­‐iT
SoluSons
–
Enso
Detego
• 2011:
sensordynamics
-­‐
Maxim
• 2011:
silverserver
–
Tele2
• 2011:
redcoon
–
Metro’s
Media
Saturn
• 2011:
dynaTrace
-­‐
Compuware
• 2011:
payoluSon
–
Moneybookers
/
Skrill
• 2011:
checkfelix.com
-­‐
KAYAK
• 2012:
Kununu
-­‐
Xing
• 2012:
Tupalo
–
Herold
/
European
Directories
• 2012:
Arztsuche24
–
Herold
/
European
Directories
• 2012:
Blue-­‐tomato
–
Zumiez
Inc.
• 2012:
paysafecard
-­‐
Skrill
• 2013:
tripwolf
–
German
Publisher
• 2013:
SolveDirect
–
Cisco
• 2013:
RuntasSc
–
Axel
Springer
• 2014:
Immobilien.net
–
ImmobilienScout24
• 2014:
Wikidocs
–
Atlassian
• 2014:
MobFox
–
Matomy
Media
Group
Notable
Events
(star'ng
by
2012):
• 2012:
Andreessen
Horowitz/CiS
Ventures
investment
into
Jumio
• 2012:
Blossom
investment
of
seedcamp
• 2013:
CodeShip
investment
of
seedcamp
and
Techstars
• 2013:
Former
Expedia
CEO
invests
in
TourRadar
• 2014:
CodeShip
receives
US
Series
A
• 2014:
Foundertalks.org
launches
(brings
YC
alumni
to
Austria
for
experience
exchange)
• 2014:
Ulmon
investment
of
Global
Founders
Capital
• 2014:
100%
Austrian
Team
in
YC
patch
• 2014:
Talenthouse
investment
of
ProSiebenSat.1
Media
AG
• 2014:
Austrian
team
joins
YC
producthunt.com
(founding
team
member)
• 2014:
Austrian
flatout
joins
Cisco’s
EIR
program
• 2014:
Austrian
Crate.io
TechCrunch
Disrupt
Europe
Winner
• 2015:
ChatGrape
Betaworks
(US)
investment

24. Ecosystem Summary
What
is
great?
• Many
great
entrepreneurs
• Established
role
models
• Access
to
German
speaking
market
• Amazing
Quality
of
Life,
low
Cost
of
Living,
high
Social
Security
• Highly
diversified
industry
ver'cals
• Established
angel
investor
scene
(aaia,
i2)
• Public
• R&D
grants
• incubators
at
universiSes
• VC
co-­‐investments
• Poten'al
to
become
the
significant
CEE
hub
(central
&
eastern
European
hub)
• Ecosystem
has
reached
cri'cal
mass
–
more
&
more
exits,
more
&
more
angels,
more
&
more
&
more
exits,
…
Challenges
&
Coping
Strategies
• Market
size
is
small
à
Companies
keep
dev.
team
in
Austria
and
move
business
unit
to
USA
• Not
many
local
series
A/series
B
op'ons
à
Join
internaSonal
accelerators
à
Companies
keep
dev.
in
Austria
and
move
business
unit
to
USA
/
or
flip
à
Fundraising
in
Germany/UK/France
à
Chose
cash
efficient
business
models
(low
burn)
à
Chose
business
models
that
soon
will
generate
revenues
(early
revenues)
à
Start
a
Series
A/B
fund
• No
local
M&A
or
IPO
market
à
go
internaSonal,
start
early
• No
investment
incen'ves
for
angels
• Stock
Op'on
Plans
are
hard
to
implement

25. Examples of huge variety of
Austrian tech startups/
companies

26. Example: World market leader for V-shaped book scanner

27. Example: Next Generation Digital Sheet Music App

28. Example: Europe’s independent #1 Ski Rental

29. Example: The World's leading Augmented Reality SDK

30. Example: Big Data for Media Planning

31. Example: Europe’s mobile #1 ad platform

32. Example: technology leader robust networked safety controls

33. Example: TechCrunch Disrupt Europe Winner 2014
The
Distributed
Database

34. Austria: Highly educated
founders with passion – ready
for the global market
Thank you!
@MarkusWagner or Linkedin