European Innovation & Entrepreneurship 2014-03-03 Venture Capital in Europe's Nordic Region

Stanford Engineering

Follow us at: @mshauge

@creandum

Stockholm

Sweden

•  10 years as General Partner in Creandum

•  Currently in charge of investments in

•  Appear TV (www.appeartv.com)

•  Vivino (www.vivino.com)

•  Autobutler (www.autobutler.com)

•  Fitbay (www.fitbay.com)

•  In charge of multiple Creandum exits:

•  Jays AB (IPO on First North)

•  Iptronics (Acquired by Mellanox)

•  Nanoradio (Acquired by Samsung)

•  Former entrepreneur co-founder of multiple Nordic startups like

•  Creuna A/S (www.creuna.com)

•  Interaction Design AS (exited 1999 to Adcore AB)

•  15+ years CEO experience

���About Me: A true Scandinavian Entrepreneur; a Norwegian citizen living in Stockholm after 10 years in Denmark���

AGENDA > THE MARKET & NORDIC OPPORTUNITIES

> CREANDUM OVERVIEW AND OUR MODEL

> THE NORDIC ECOSYSTEM

Nordic tech firms represent significant portion of global BUSD exits

Source: NVCA, EVCA, Thompson, Dow Jones, Creandum, Balderton

•  Nordic companies represented 7-8% of all global billion dollar technology exits

•  In terms of M&A exit value, the Nordics represented ~18% vs the US during ‘06-’08 but only 5% of active VC firms and likely 1-2% of capital under mgmt

IPO: 6.7 BUSD M&A: 2.75 BUSD IPO: 1 BUSD M&A: 1 BUSD

Face

book

Alib

aba

Gro

upon

Yand

ex

Met

roPC

S

Link

edIn

Q-C

ells

REC

Ren

ren

Focu

s M

edia

Zyn

ga

QQ

(Te

ncen

t)

Iliad

Gia

nt In

tera

ctiv

e

Qih

oo 3

60 T

ech

Baid

u

Perf

ect W

orld

Co

LDK

Sol

ar

Palo

Alto

Net

wor

ks

Indi

aBul

ls

Youk

u.co

m

Splu

nk

Sunt

ech

Shan

da

Tele

Atla

s

Pand

ora

Skyp

e

Tom

-Tom

CT

C M

edia

Betf

air

A12

3

Om

nitu

re

Fusi

on.io

YouT

ube

Dan

gdan

g

Infin

era

Firs

t So

lar

Mon

eySu

perm

arke

t

Equa

lLog

ic

Yin

gli

Kay

ak

Nic

ira

Sunp

ower

Zap

pos

Yam

mer

Rac

kspa

ce H

ostin

g

Net

suite

Oca

do

Fort

inet

Ende

ca

Inst

agra

m

MyS

QL

Qlik

tech

Riv

erbe

d

100

1,000

10,000

100,000

Exit Value (MUSD) BUSD Technology Exits 2005-2012

Nordic (4) Rest of Europe (7)

US (26) China (14) Others (3)

5

SendIt

42 tech exits >100 MEUR over a 10 year period

Sources: Creandum

10 MEUR 50 MEUR >100

MEUR

>250 MEUR

>500 MEUR

Exit Value

Revenue Median Exit Value: 242 MEUR Average Exit Value: 483 MEUR

0.0

1 000.0

2 000.0

3 000.0

4 000.0

5 000.0

6 000.0

7 000.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Creandum Exit Study: substantial and increasing Nordic tech exit market

•  Average exit value per year (the last 12 years) is 2 BEUR

•  Total exit market value: +70% between economic cycle in ’99-’04 and ’05-’10

•  17% of M&A transactions & IPOs represent 82% of total exit value

MEUR

Exit year

Sources: EVCA, Thompson, Dow Jones, Creandum

Avg. annual exit value 1999-2004 Avg. annual exit value 2005-2010

1.5 BEUR 2.6 BEUR

Total Nordic exit value 1999-2010 (MEUR)

7

Currently 10 unexited Nordic BUSD companies* Approximately one such company started per year

*Med Tech and Oil and Gas excluded

AGENDA > THE MARKET & NORDIC OPPORTUNITIES

> CREANDUM OVERVIEW AND OUR MODEL

> THE NORDIC ECOSYSTEM

Creandum in short

> Founded 2003

> Only Tech VC with head quarter in Stockholm

>  Invest broadly in Nordic early stage Technology companies

> Focus on seed and A-rounds (50/50)

> Appr 0.1-2 MUSD in Seed, 2-5 MUSD in A-rounds and 5-10 MUSD in “late” A-rounds

> Approximately 40 investments to date > Most recent fund 135 MEUR

> One GP on the ground in the US/West Coast

Creandum´s investment strategy is made up by three key principles

> Diversified technology portfolio

> Focus on homerun potential

>  First institutional

investor

•  Better risk/return profile •  Approximately 30 investments

(15, 10, 5; seed, early, late) •  Diversified across consumer,

software and hardware industries (40%, 40%, 10-20%)

•  +10x potential •  VC returns driven by home runs •  Focus on very large markets

rather than technology in itself •  Entrepreneurs centric decisions

•  Getting in first à superior returns

•  Early investor (A round) à greater ability to influence

•  Active investor à leverages the team experience from building fast growing companies

•  Require new lead for A-round when doing seed

11

Some of our investments

A diverse high-caliber team with broad, deep and relevant experiences

Staffan Helgesson Johan Brenner Martin Hauge Fredrik Cassel Daniel

Blomquist Joel

Enquist Lasse Pilgaard Erik Olofsson Hjalmar

Winbladh

General Partner, 45

General Partner, 52

General Partner, 57

General Partner, 40 Principal, 40 Associate, 27 Associate, 26 Associate, 35 Venture

Partner, 45

10+ years of VC 10+ years of VC 10+ years of VC 10+ years of VC 6 years of VC 2 years of VCe New Hire New Hire 20+ years of

startup activities

• 10 years at McKinsey, IKEA and P&G

• BSc Lund University

• Kauffman Fellow • Ex Chairman Nordic Venture Network

• 5 years as Balderton GP

• Serial entrepreneur

• 12 years at ABB and Kinnevik

• MBA SSE Stockholm

• NYU Stern & Stanford GSB SEP

• Co-founder of 7 companies

• 10+ years of CEO experience

• MSc NTH-NTNU Trondheim

• Stanford GSB SEP

• 5 years of internet experience across Europe

• MSc Royal Institute of Technology

• Kauffman Fellow

• 7 years of software startup experience in Europe, US & ME

• MSc Linköping University & MBA SSE Stockholm

• Kauffman Fellow

•  EIR at Nebula Ventures

•  Advisor at U Ventures

•  Technology Strategy Consultant

•  MSc Chalmers University

•  3 years at McKinsey & Co Copenhagen

•  Marketing manager within online gambling affiliation

•  Masters in Economics

•  4 years at Bain & Co

•  CEO and Co-founders of Fakturino (market place for funding) and Klipster (digital coupon booklet)

•  M.S. at Havard University

•  Founder Rebtel, Sendit, Epidemic Sound, Wrapp, Pedal etc.

•  World-renowned startup advisor

•  INSEAD

Founded 20+ Tech companies 5 IPOs, 10+ M&A Exits 4 realized €100M+ exits

AGENDA > THE MARKET & NORDIC OPPORTUNITIES

> CREANDUM OVERVIEW AND OUR MODEL

> THE NORDIC ECOSYSTEM

The dinosaurs

Todays Nordic BUSD Companies

www.ubiindex.com

The entrepreneurial ecosystem

Service providers

Community & Role Models

Limited Partners

VC’s & Angels

Incubators/ Accelerators

ENTREPRENEURS

Tax, Legal & Public

Framework

Enterprises

Universities

Government

Largest Nordic ecosystem issues

Limited Partners Tax, Legal

& Public Framework

Enterprises

•  Lack of critical mass •  Rules and regulations •  Often short sighted •  “Grass is greener on the other side” phenomena

•  “Not Invented here” attitude •  Do not understand the power of ecosystems •  Unwilling to take risk •  “Jante” lag •  Focus short term on profitability vs growth •  Do not buy from or partner small companies

•  Unclarity on key tax issues •  Difficult to issue stock options •  Marginal tax •  Regulated housing market •  Immigration legislation •  State pension fund legislation

THANK YOU

European Innovation & Entrepreneurship 2014-03-03 Stanford Engineering

Follow us at: @mshauge @creandum