There were 152 exits involving privately-held European tech companies in Q1 2014. And there were a couple of unicorns in the bunch.
When Ireland-based King Digital went public in March at a $7B valuation, the rest of the world was once again reminded that technology companies are doing big things in Europe. With an exit of that magnitude to anchor the quarter, we analyzed all 152 private tech companies based in Europe that exited in Q1 2014.
The data below.
European Exits by Country
Two major European tech hubs were responsible for just under 42% of all of the European tech exits in Q1 2014. The United Kingdom led the continent with 38 exits, including CVC Capital Partners’ $800M acquisition of London-based Skrill Group, as well as Zynga’s $527M acquisition of Benchmark Capital-backed NaturalMotion. London saw the largest concentration within the UK, with 42% of all exits coming from the capital.
Germany came in second with 25 tech exits this past quarter. Emerging European startup epicenter Berlin, which has developed the moniker “Silicon Allee”, housed 40% of those acquired companies giving further credence to chatter that it may, in fact, be Europe’s next tech hub. Top Berlin-based exits included Hoccer, a messenger app which Media Ventures acquired a majority stake in for $82.6M in March, and digital advertising company Plista, acquired by GroupMe for $41.5M in January. Behind this exit strength, potential future unicorns like SoundCloud, and a geography with, “better access to the Russian and Eastern European markets”, Berlin’s Silicon Allee may be primed to make a run at London’s crown.
The Not-Quite Unicorns
Startups with $1B+ valuations are often referred to as Unicorns (although Black Swan is probably more appropriate). While European Tech did have two unicorn-sized exits last quarter in Spain’s Grupo Corporativo Ono (acquired for $10B by Vodafone) and King Digital’s IPO, there were 11 other European Tech Upstarts with disclosed exits that valued them at more than $100 million.
Viber was responsible for the third-largest exit this past quarter, and subsequently put Cyprus on the map, with a $900M exit to Japan’s largest e-commerce company, Rakuten in February. (Despite many billing it an Israeli startup, founder Talmon Marco maintains that Israel is merely a R&D center)
Another interesting trend among the nine-figure startups was the prevalence of companies focusing on payments. Four of the eleven were tackling payments in some manner, including the previously mentioned Skrill Group, UK-based HiFx, a startup focusing on ForEx advisory and transaction services, German online payment service provider Sofort, as well as Turkey’s Pozitron.
Where Are The VCs?
European Tech exits were largely non-venture backed in Q1 2014, with only 14% of exits involving venture capitalists. High-Tech Gruenderfonds, Index Ventures, and Scottish Equity Partners were the leading investors based on company count seeing investments in the likes FTAPI Software, JustBook, and ControlCircle all exiting.
While only involved in 14% of exits based on count, VC-backed exits accounted for 35% of the exit valuations which were disclosed.
Google Completes Most Acquisitions
So wo are all of these companies exiting to? We’ve already mentioned large corporations such as Rakuten and Zynga, but they both did just a single deal in Q1. The table below details the acquirers who acquired multiple tech companies in Europe in Q1 2014.
Unicorns-in-waiting such as Zalando, MobileEye, and Spotify are all potential future IPOs or mega-acquisitions so we’ll continue to track the financing and exit activity in Europe. Stay tuned for more longitudinal data on Europe in the coming weeks.If you aren’t already a client, sign up for a free trial to learn more about our platform.