Background Information:

The German Private Equity and

Venture Capital Landscape

Bundesverband Deutscher Kapitalbeteiligungsgesellschaften –

German Private Equity and Venture Capital Association (BVK)

Seite 2

About BVK

BVK is the German Private Equity and Venture Capital Association and

represents the interests of the German private equity industry towards

political decision-makers, media, market partners and the public.

BVK offers its members the use of and participation in the most

comprehensive and most influential network of private equity firms

About BVK (I)

p. 3

comprehensive and most influential network of private equity firms

including all relevant stakeholders in Germany.

Founded in 1989

Members:

186 full members (private equity firms)

100 associate members (lawyers, banks, advisors, investors)

International and diversified: BVK has 186 full members (GPs/LPs).

About BVK (II)

Internationalfirms39

German firms147

Large Buyoutfirms18

InstitutionalInvestors

8

p. 4

Source: BVK

Venture Capitalfirms67

Midcap-Buyoutfirms/

Generalists93

Membersby investment

focus

Internationalvs. national

firms

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German Startup Ecosystem

Germany – Innovation Leader in Europe (I)

0,718

0,720

0,735

0,827

Denmark

Germany

Sweden

Switzerland

European Countries Innovation Index (nominal)

Germany is leading in the European Countries Innovation Index (Top 10)

p. 6

0,544

0,594

0,597

0,612

0,622

0,624

0,681

0,718

EU27

Netherlands

Ireland

Iceland

Ukrain

Belgium

Finland

Denmark

Source: EU Innovation Union Scoreboard, selected countries, published March 2013

Germany – Innovation Leader in Europe (II)

150

61

125

238

180New doctorate graduates

International scientific co-publications

R&D expenditures in public sector

Venture Capital investments

R&D expenditures in business sector

Germany’s Indicator Values compared to EU27 (=100)

p. 7

126

150

148

193

190

120

142

156

60 80 100 120 140 160 180 200 220 240 260

Non R&D innovation expenditures

SMEs innovating in-house

Innovative SMEs collaborating with others

PCT patent applications

PCT patent applications in societal challenges

SMEs introducing product/process innovations

SMEs introducing marketing/organisational innovations

Knowledge-intensive services exports

Source: EU Innovation Union Scoreboard published March 2013; selected indicators (13 out of 24)

Germany has a unique R&D landscape beyond the commercial sector.

409 universities with 2.12 million students, 570,000 employees and €36bn

total expenditure

Max-Planck-Gesellschaft:

80 institutes, 13,300 employees, annual budget around €1.7bn

R&D Institutions

p. 8

Fraunhofer Gesellschaft:

60 institutes, 18,000 employees, more than €1.7bn total expenditure

Helmholtz Association of German Research Centers:

16 research centers, 28,000 employees, annual budget €2.8bn

Leibniz-Gemeinschaft:

86 institutes, 14,000 employees, annual budget €1.2bn

Selected Business Clusters and Growth Regions

Hamburg – ICT/Media

Berlin – ICT/Media, Med-TechRhine Main Area – ICT/Media

Wolfsburg/Hanover – Automotive

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Cologne – ICT/Media

Heidelberg – Biotechnology

Dresden – Semiconductor, ICT

Stuttgart – Automotive

Leipzig – Automotive

Munich – Biotechnology, ICT,Automotive

Darmstadt – ICT

Accelerators/Incubators:

Serial Entrepreneurs investing VC:

Top International VCs investing in Germany:

Germany: Comprehensive and Vibrant VC Ecosystem

p. 10

Top International VCs investing in Germany:

National Corporate VCs:

Public Policy:

Source: BVK Research, selected firms and institutions

Germany: Home of succesfull startups

European Unicorns (I)

p. 11

Source: GP Bullhound „European Unicorns: Do They Have Legs?”, 2015

More German unicorns to come

European Unicorns (II)

p. 12

Source: GP Bullhound „European Unicorns: Do They Have Legs?”, 2015

German companies

Companies with substantial German activities/branches

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German Private Equity and Venture Capital Market

Investments in Germany (I)

Highest investment level since 2008

1.342

1.216

1.359

1.291 1.2881.322 1.335

800

1000

1200

1400

8.000

10.000

12.000

p. 14

Source: BVK statistics/PEREP Analytics, data as per August 2014

Market statistics = Investments in Germany by German and foreign private equity firms.

9.584

3.024

4.895

6.667 6.626

5.055

7.060

0

200

400

600

800

0

2.000

4.000

6.000

2008 2009 2010 2011 2012 2013 2014

amount (€m) funded companies

Investments in Germany (II)

By investment stage in 2014

Replace-ment/Turn-

around2%

Buy-Outs9%

VentureCapital

9%

Growth10%

p. 15

Source: BVK/PEREP Analytics

Market statistics = Investments in Germany by German and foreign private equity firms.

VentureCapital53%Growth

36%

Replace-ment/Turn-

around2%

Buy-Outs79%

amount:€7.060 m

Fundedcompanies:

1.335

Private equity in Germany is focused on small and mid-sized

companies.

Funded Companies by Size

0-935%

100-1997%

200-4995%

500+7%

10-<50Mio. €9%

50-<100Mio. €3%

>100Mio. €7%

p. 16

Source: PEREP Analytics/BVK statistics

Market statistics = Investments in Germany by German and foreign private equity firms.

Only companies with known sales (380) and number of employees (716) were considered.

By employees By sales

10-1921%

20-9925%

7%

0-<1Mio. €69%

1-<9Mio. €10%

9%

Venture Capital Investments by Federal States 2013/2014

Venture Capital Investments by States

Berlin and Bavaria are dominating

p. 17

Investitments 2013 (€m) Investments 2014 (€m)

Source: BVK statistics

Venture Capital in Europe (I)

Germany is one of the leading European private equity markets, with

potential to keep up.

Venture Capital Investments 2013/2014 in selected European Countries

p. 18

Quelle: EVCA Statistics/PEREP Analytics

Venture capital investments (€m) 2014 Venture capital investments (Mio €) 2013

Venture Capital in Europe (II)

Measured by its “venture capital intensity”, Germany is only

European average.

Venture Capital Investments 2013/2014 in selected European Countries in Relationto national GDP

p. 19

Quelle: EVCA Statistics/PEREP Analytics

Private Equity Industry:

Experienced teams through different market cycles

Different firms covering all market segments

Comprehensive knowledge of the German market and economy

Germany is not overfunded

Economy:

Strengths of the German Private Equity Market

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Economy:

Technology and innovation leader in Europe and worldwide

Leading economy in several technology sectors, e.g. medical devices, ICT,

machinery, automotive, etc.

Permanent and increasing demand for private equity/venture capital

Vital founder scene

Government:

Venture capital strongly supported by government sector (KfW Bank,

federal states)

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Promotion of Venture Capital in Germany

Welcomed Involvement of Public Institutions

Promotion of Venture Capital (I)

KfW

KfW ERP-Startfonds

High-TechGründer-

fonds

ERP-EIFFund ofFunds

p. 22

…Fundraising …Investments

LfA-EIFFund ofFunds

BavariaPublic

Banks ofFederalStates

Startfonds

Regionaland VCs of

FederalStates

Support with regard to …

MBGs

Promotion of Venture Capital – Fundraising

ERP/EIF Fund of Funds

• Started in 2004, managed by EIF

• Original size: €500m contributed by German government and EIF

• Program increased to €1bn in May 2010

Promotion of Venture Capital (II)

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• Program increased to €1bn in May 2010

• Target: cornerstone investor in German venture capital funds or vc funds

investing in Germany

Governmental Bank KfW

• Investor in several funds (venture capital, mid-market) since the 90’s

• KfW stopped its FoF program, but returned in 2015

Governmental Bank KfW and public banks of federal states

• Initiatives in several federal states, e.g. NRW.Bank, LfA-EIF Fund of Funds in

Bavaria

Promotion of Venture Capital – Investments

High-Tech Gründerfonds

• Started in 2005, managed by an independent management team

• Fund 1: €272m funded by German government (majority), Daimler, Deutsche

Telekom, BASF, Siemens, Carl Zeiss, Bosch

Promotion of Venture Capital (III)

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Telekom, BASF, Siemens, Carl Zeiss, Bosch

• Fund II (since Nov 2011): 291 Mio. € funded by BMWi, KfW, Daimler,

Deutsche Telekom, BASF, Siemens, Carl Zeiss, Bosch, ALTANA, B. Braun,

CEWE Color, Deutsche Post DHL, Evonik, Qiagen, RWE Innogy, Tengelmann,

SAP

• Focused on seed investments (funded with €500.000 each plus follow-on

investments of additional €500.000)

• Today most active player in the German seed market

Promotion of Venture Capital – Investments

KfW ERP-Startfonds

• Started in 2005 as public co-investment program (successor of the former

BTU program which was implemented in the 90ies), managed by KfW

• Focuses on startup investments and only invests with partners (VCs, business

Promotion of Venture Capital (IV)

p. 25

• Focuses on startup investments and only invests with partners (VCs, business

angels, companies)

• Fund was increased by €250m in 2011

VC firms of German federal states/federal state banks

• Several captive venture capital firms as entities of German public state banks

focusing on technology investments

• Only investing in their home state

Contact

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Bundesverband Deutscher Kapitalbeteiligungsgesellschaften –

German Private Equity and Venture Capital Association e.V. (BVK)

Reinhardtstrasse 29b, 10117 Berlin

Phone: +49 30 306982-0

Fax: +49 30 306982-20

Email: bvk@bvkap.de