NAVIGATING EUROPE: MAPPING OUT THE OPPORTUNITIES DACH CÉDRIC KÖHLER CREATHOR VENTURE FRIEDRICH NEUHAUS AUMENTA

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1 NAVIGATING EUROPE: MAPPING OUT THE OPPORTUNITIES DACH CÉDRIC KÖHLER CREATHOR VENTURE FRIEDRICH NEUHAUS AUMENTA

2 Navigating Europe: Mapping Out the Opportunities - DACH Agenda 1 2 Facts, Figures, and Trends about DACH region Technology and Industry Clusters in DACH 2a Example Berlin 2b Fintech and Insurtech 2c Industry 4.0/IOT 2d Blockchain and Cryptocurrency 2e Pharma/Healthcare & Chemicals 3 4 Research and Innovations - Universities Summary

3 1 DACH Region is Europe s economic engine Facts and Figures Positive preconditions Europe s economically strongest and politically most stable countries With a GDP of 4.549tn the DACH region depicts over 25% of the whole European GDP (GDP: 17.2tn; including Switzerland) The DACH region is the biggest homogenous language territory addressing approx. 96m German native speakers Rapidly shifting focus Leading tech events relocating to/focusing on DACH-region NOAH with second conference (besides London) in Berlin since 2015 since inception NOAH Berlin has outnumbered NOAH London in participants TechCrunch Disrupt Europe moved from London to Berlin from 2017 on Pioneers Festival in Vienna attracting international investors and start-ups Existing world leading trade fairs Frankfurt s International Motorshow IAA as one of the world s biggest automotive trade fairs DM Exco in Cologne as Europe s leading digital marketing conference Hannover Messe is since decades the world s leading industrial trade fair International VCs with increased physical presence and investment activity in DACH (e.g. Partech, Balderton, Atomico, Accel, Index, ) Sources: Worldbank, Statista

4 1 DACH Region is Europe s economic engine Facts and Figures Boost in startup & investment activity: Berlin ranked among top global startup ecosystems and rising the ranks Berlin outranking other European hubs like Paris, Stockholm and Tel Aviv and catching up with London Investment activity as measured by the EIF ranks 5 DACH hubs among the European Top 15 hubs in terms of activity since 2008 (Berlin #2, Munich #4, Vienna #10, Hamburg #11, Cologne #15) (Switzerland not even included in study) Sources: EIF, Venturebeat, Compass, EU-Startups

5 1 DACH is more than B2C/Ecommerce and covers our full investment focus Facts and Figures Technology Life Sciences Autonomous Systems Transportation / Logistics Personalized Medicine Media / Advertising Internet of Things Finance / Insurance Travel ehealth Virtual/ augmented reality Medtech Tools Big Data Sharing Economy Education Legal Wearables Agriculture Diagnostics Cloud Computing HR Artificial Intelligence Property and Real-Estate Next-gen Software

6 2a B2C Business Models Example BERLIN Technology & Industry Clusters in DACH 5 of 6 German unicorns (companies with valuation beyond $1bn) have a B2C business model and large part of its success is based on online marketing/growth execution Zalando (fashion ecommerce) Rocket Internet (company builder, largely ecommerce) Delivery Hero (food delivery ecommerce) Hellofresh (food delivery ecommerce) Auto1 Group (used car market ecommerce) Expertise further grown and developed through active business angel roles of successful founders Several new first time venture funds from successful entrepreneurs successfully raised Low cost of living, less war for talents with corporates compared to other metropoles Sources: CB Insights, Pitchbook, techcrunch

7 2b Fintech and InsurTech Technology & Industry Clusters in DACH Finance / Insurance Many of the global Corporations are headquartered in the DACH Region Immense density of globally leading: Banks (UBS, Credit Suisse, Deutsche Bank, Commerzbank, plus Private Banks) Insurance Carriers (Zurich, Swiss Life, Allianz, R&V, Mobiliar, ) Reinsurance Companies (Swiss Re, Munich Re, Hannover Rück, XL, ) 197 Swiss fintech startups as of March 2017 (vs. 400 in London) Insurtech Venture Funding and Insurtech Acquisitions are way behind Fintech. We expect a strong growth in # Insurtech startups, Insurtech venture funding and acquisitions in the DACH region the near future Sources: Factive Fact Sheet Research Systems, Swiss Fintech Association

8 2c Blockchain & Cryptocurrency example Zug, CH Technology & Industry Clusters in DACH Finance / Insurance Blockchain & Crypto Currency Zug/Switzerland: Canton of Zug with open-minded regulatory and legal environment for crypto currencies Amid blockchain companies political stability and a reliable regulatory environment are key to success and planability Local government of canton of Zug is the first in the world to let citizens pay in Bitcoin A tiny province in Switzerland is proving such a magnet for blockchain startups that it's increasingly being compared to California's famed Silicon Valley. (Coindesk, leading blockchain publication) Low tax environment and high density of capital & investment firms Attracting internationally leading blockchain startups to relocate to Zug: Xapo, Ethereum Foundation, Shapeshift CryptoValley Zug Association with more than 30 member companies in the field of blockchain Sources: SECA, Swiss Fintech Association

9 2d Industry 4.0, Robotics Technology & Industry Clusters in DACH Transportation / Logistics Internet Of Things Industry 4.0 in Zurich & Munich/DACH: Industrial technologies with less media attention, but huge economic potential: Advanced robotics & autonomous systems, advanced materials, automation of knowledge work, Internet of Things (IoT) DACH region in this context with: The 2 global leading automation technology companies by revenue (Siemens, ABB) 3 of the 7 largest automotive companies in the world by revenue (Volkswagen, BMW, Daimler) 2 of the 5 largest global OEM parts suppliers in the world by revenue (Bosch, Continental) 3 of the 6 largest (metal-) 3D printing companies (EOS, concept laser, SLM solutions) Our findings show that there is definitely room for specialization and that smaller hubs can achieve a strong position on the start-up map. This becomes most evident when looking at the rankings of the high-tech groups. The examples of Zurich and Munich as go-to locations for capitalintensive technology start-ups disprove the belief that the top choice is only Berlin or London. (European Startup Initiative Report 2016) Sources: E&Y, McK Kinsey, Venturebeat, Statista, European Startup Initiative Report

10 2e Healthcare, Pharma, Medtech & Chemicals Technology & Industry Clusters in DACH Medtech Tools Diagnostics Pharma and Chemical Giants in DACH 11 of the global top 25 Pharma and Chemical Firms are from Europe; thereof 7 are headquartered in the DACH region Novartis, Roche, Bayer, BASF, Boehringer, Actavis, Merck 2 out 10 top Med-Tech exporter are from German speaking countries Germany (#2) and Switzerland (#6) contribute 13% and 5%, respectively, of the Global Med-Tech export in 2014 German speaking Medtech companies are constantly growing in revenues 1/3 of the revenues is being generated from products younger than 3 years proving high rate of innovation Countries with largest share of global Med-Tech Export In %, 2014 USA Germany Netherlands China Belgium Switzerland France Japan Great Britain Italy Sources: health magazine, SSC

11 3 Universities Example Switzerland Research and Innovation in DACH Internet Of Things Artificial Intelligence Virtual/ augmented reality ETH Zurich: Overall constantly ranked among the world s Top 10 universities (QS, Times) #1 ranked university worldwide in «Computer Science» in 2017, before Stanford and MIT (Times) Attracted global tech companies to build offices in Zurich: Google runs it s largest tech hub outside it s US HQ in Zurich with more than developers Disney Research is globally headquartered in Zurich and run by an ETH professor Apple, MagicLeap and GoPro have acquired ETH spinoff firms to build up local development teams Produced more than 250 spinoffs in the past 20 years, of which many received venture capital funding EPFL Lausanne: Overall ranked among the Top universities in the world (QS, Times) #11 in the world in the fields of Engineering, Computer Science and Technology More than 230 spinoff companies in the past 20 years, many of which have raised venture funding HSG St. Gallen: Ranked #1 Master in Management -program in the world Sources: SECA, startupticker.ch, ETH

12 The DACH Region is the most attractive Regions for Venture Capital in Europe 4 Summary 1. DACH is the biggest, strongest and wealthiest economic region in Europe attracting global investors, entrepreneurs and acquirers 2. Berlin is gaining more and more attractive to become Europes Leading Startup und Venture Hub despite Berlin DACH has strong additional start-up and venture clusters like Munich, Zürich, Zug, Vienna, Hamburg Germany, Austria and Switzerland are the world leaders in automotive and automotive OEM supply 4. Future Technologies addressing megatrends like industry 4.0, drones or robotics are made in DACH 5. DACH is the perfect spot for insurtech startups, -investments, and acquistions 6. Switzerland offers lowest regulations to test innovative cryptocurrency business concepts 7. Pharma, Medtech, Chemicals and Healthcare are core pillars of the DACH economies with high innovation rates 8. Academic institutions like ETH, EPFL, RWTH Aachen, TU Munich, TU Vienna,... are world class leading

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