2022-07-17-dealroom.co-Ranking_investors_8211_EMEA_2022_28页_10mb

EMEA 2022 Investor Ranking Report Summary

The EMEA Investor Rank provides an objective, transparent ranking of venture capital funds across Europe and Israel, based on their success in backing unicorns (companies valued at over $1 billion) and future unicorns.

Key Objectives

The report leverages data-driven methods to empower founders, startups, LPs, and governments to find suitable investors, conduct due diligence, and benchmark ecosystem performance.

Main Methodology (2022)

1. Data-Driven: Fully based on publicly available data and investor-submitted information.
2. Geographic Coverage: Focuses initially on EMEA (Europe and Israel).
3. Timeframe: Considers unicorn and future unicorn investments between 2021 and April 2022.
4. Dataset: Includes 464 unicorns and 810 future unicorns totaling 56,000+ rounds from over 3,900 active investors (a reduction from 5,467 active investors in 2021). The criteria included:
   • HQ/founded in EMEA.
   • Investments in EMEA startups.
   • Active from 2021.
   • Minimum of 5 investments globally during 2021-April 2022.
5. Weighting:
   • Staged Weighting: Seed investments carry more weight (100 points) than Series A (30 points) or Series B+ (10 points) since they lead to later rounds.
   • Deal-by-Deal Weighting (2022): Further emphasizes earlier stage success.
6. Investment Performance:
   • Measures success by backing unicorns and future unicorns, regardless of exit status or stage.
   • Demonstrates that top-tier seed funds (Top Quartile) achieved unicorn investment rates around 40%, while high performers (81st percentile at Seed) achieved about one unicorn investment at any stage.

Stated Objectives

• To bring data transparency to the tech ecosystem.
• To help founders, startups, LPs, and governments identify the right investors based on fund performance and stage focus (Seed/A to B+).

Report Methods and Logic

The report applies analysis to determine the likelihood of an investor becoming a "fund returner." Unicorns represent a key metric due to their significant economic impact and potential returns, though valuation data is often a proxy.

Motivations

Founders and LPs need research identifying top-performing investors to gain an advantage and foster transparency, with harder data focusing on entry rounds (Seed/A) for the next generation of successful companies, rather than looking at individual investors without firm context.

Key Findings & Insights

1. Performance Pyramid: Early stage VC success follows a "power law," with only the top performers (around the top percentile at almost any stage) achieving high counts of unicorns, while the majority see lower success rates.
2. Geographic Distribution: Countries like the UK, Germany, Israel, France, and Sweden have high numbers of VC-backed unicorns.
3. Stage Differences: The number of seed and series A rounds has increased significantly since 2014. Fewer than 1-1.5% of seed companies become unicorns.
4. Ecosystem Growth: The VC ecosystem has expanded significantly, with a rapid increase in active investors over the years (3.5x between 2014 and 2021). New unicorn creation peaked around mid-2020 and has slowed somewhat currently, but remains substantial.
5. MZMRA Representation: MENA has several unicorns, including hubs in Israel, Dubai, Lagos, and Nairobi.

Report's Contextual Analysis

The EMEA investor landscape is rapidly evolving. While activity is high and there were record fund raisings for EMEA VCs in H1 2022, concerns about an impending market downturn, based on the view of TNW Market (though possibly diverging from report's focus), contrast with continued high activity. The core drivers remain long-term trends like digitization and innovation.

Report aims to support these explorations (VCs, startups, etc.) by providing intelligence, connections, and a platform for further analysis and interaction.