Venture Pulse Q1 16

Global Analysis of
Venture Funding
April 13, 2016

2016 KPMG International Cooperative (KPMG International), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.
#Q1VC
Welcome message
The first quarter of 2016 extended the global decline in VC activity with both total deal volume and
deal value declining, further following a major dip in Q415. Some of the factors driving VC investors
to take a more measured investment approach include; an economic slowdown in China, rising
interest rates and an approaching election in the US, and a June referendum over the UKs future in
the European Union.
While disconcerting to the VC community, the decline in VC activity is likely to be a short-term trend
given the amount of liquidity in the market around the globe. In fact, in the US, Q116 was one of the
highest quarters for raising VC capital since the dot-com boom of 2000. These funds will likely be
deployed over the coming quarters as VC investors renew their focus on finding disruptive or
innovative companies in which to invest.
At the same time, future VC investments are poised to become even more targeted. Given ongoing
market uncertainties, investors are likely to focus on companies with strong balance sheets or
business models that show a strong plan to achieve profitability. VC investors may also take a more
involved approach to their funding, asking for more input and control over how their invested capital is
deployed.
We explore these and a number of other trends in this Q116 edition of our Venture Pulse Report a
collaboration between KPMG and CB Insights. As a part of our analysis, we explore answers to a
range of questions, including:
What is driving the decline in VC activity and will it last?

Why are corporates so active in the VC market?
Is the Unicorn trend dead?
How is digital health bucking investment trends?
We hope you find this edition of our Venture Pulse Report informative. If you would like to discuss any
of the results in more detail, contact a KPMG adviser in your area.
Dennis Fortnum
Global Chairman of
KPMG Enterprise,
KPMG International
Brian Hughes
Co-Leader,
KPMG Enterprise Innovative
Startups Network, Partner,
KPMG in the US
Arik Speier
Co-Leader,
KPMG Enterprise Innovative
Startups Network, Partner,
KPMG in Israel
#Q1VC
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TABLE OF CONTENTS
SECTION
INVESTMENT ACTIVITY
Summary
Global Data
$25.5B in funding | 1829 deals
36
North America
62
Europe
79
Asia
All monetary references contained in this report are in USD

#Q1VC
In Q1 2016 VC-backed companies raised
$25.5B
across
1829 deals
#Q1VC
SUMMARY OF FINDINGS
GLOBAL FUNDING CHILL
CONTINUES IN Q116 AS
INVESTORS DIAL BACK DEALS
Funding ticks downwards: After the Q415 crash in
investment dollars, global funding to VC-backed companies in
Q116 dropped further to total $25.5B. The slowdown in Asian
funding drove the global decline.
Deals also see further drops: Following the cratering of deal
activity in Q415, financings slowed again in Q116 to end at
1829 for the quarter. Deal activity dropped across all major
markets (North America, Europe and Asia).
Unicorn creation at near-standstill: As existing Unicorns
battled negative press, downrounds and markdowns, only five
new VC-backed Unicorns were minted in Q116. Thats less
than half that of any quarterly total in 2015.
Corporates accelerate deal pace: Corporate and CVC
participation in deals rose to 27 percent in Q116 as
corporations became increasingly active in private markets.
US DEALS FALL AGAIN IN Q116; FUNDING

SEES SLIGHT GROWTH
US deal activity falls for third-straight quarter: US deal
activity continued to cool with $14.8B invested over 1035 deals.
Funding climbed slightly from the $14B in Q415, but remained
depressed compared to the peaks in 2015.
Late-stage deal sizes shrinking: Mean late-stage deal size in
North America plunged to $21.5M in Q116, down from $30M in
Q415, and $34M in Q315.
Continued signs of seed fatigue: Seed deal share fell further
to 22 percent for Q116. Series A rounds actually outpaced
seed deals, reversing the trend of previous quarters.
Early-stage deal sizes remain high: Median early-stage deals
in Q116 matched last quarters high of $3M, up a full 50
percent from the same quarter a year before.
New York sees growth: New York has now outpaced
Massachusetts for deal activity in each of the last 5 quarters. It
was also the only state of the top 3 (CA, NY, MA) with both
deal and funding growth from Q415.
Note: Report includes all rounds to VC-backed

companies
CB Insights tracked a large number of mega-deals to VC-backed companies

this quarter that included hedge funds or mutual funds, for example. This report
includes all of those rounds. All data is sourced from CB Insights. Page 97 details
the rules and definitions we use.
#Q1VC
SUMMARY OF FINDINGS
EUROPE FUNDING RECOVERS SLIGHTLY,
THOUGH DEAL ACTIVITY DOWN AGAIN
INVESTMENT PACE IN ASIA CONTINUES TO

PLUMMET
Mixed signs in European financing: Total funding in Europe

crept up 8 percent to $3.5B in Q116, although the deal count
of 338 represented a sequential quarterly decline.
Asia funding drop-off continues: Deals to VC-backed

Asian companies dropped a further 9 percent and funding
dollars cratered 34 percent from the already-cooling figures
of Q415.
Seed deal share also falls in Europe: Seed share fell below
40 percent of all deals for the first time in at least 5 quarters,
taking only 35 percent of deals going to VC-backed
companies. Meanwhile, Series A rounds jumped up to take
over a quarter of deals.
UK deal, dollar activity dips: UK-based startups raised
$1.3B in funding across 105 deals, both down slightly from
Q415. UK deals were headlined by a $192M Series C to
Skyscanner in January. Overall, the UK accounted for ~36
percent of Europe funding.
Germany deal, dollar activity diverges: Funding to German
VC-backed startups fell to $394M in Q116, marking a fourthstraight quarterly drop. By contrast, deal count rose for the
fourth-consecutive quarter as there were more early-stage
seed and Series A rounds.
Late-stage deals shrink dramatically: Q116 saw a sudden

reversal of ballooning late-stage deal sizes in Asia. As megarounds became a rarer sight, median late-stage deal size
crashed from $154M in Q415 to $62.5M in Q116.
China funding crashes further: VC-backed companies in
China received $4B in funding, or just 39 percent of the
Q315 quarterly peak. Compared to the heady days of past
quarters that saw multiple $1B+ deals, there was just a sole
$1B+ deal in Q116, a $1.2B round to Lu.com.
Corporates stay engaged in Asia: Corporates participated in
over 30 percent of deals to Asian VC-backed companies for
the third-straight quarter.
India activity slows again: With mounting investor hesitation
and concerns of overvaluation, Indian investment continued to
decline in Q116. Deals slipped 4 percent while funding fell 24
percent as VC-backed startups raised $1.2B on 116 deals.
#Q1VC
In Q1 2016
GLOBALLY
VC-backed companies raised
$25.5 billion
#Q1VC
Global VC activity slumps for second straight quarter

Caution defined the VC market globally during Q116. With numerous factors fostering uncertainty in the market and an ongoing
skepticism of high valuations, VC activity pulled back even further following a late Q4 drop off in 2015.
Asia experiences steepest decline
With investors more hesitant, it is not surprising that both the size and number of deals dropped during this quarter. VC deal value in
Asia experienced the sharpest decline, falling to less than half of its record setting $14.3 billion Q315. Much of this decline is a result
of a decrease in mega-deals in the region. While deals continue to occur in Asia, they are often not to the same scope as
experienced during the high quarters of 2015.
North America and Europe slightly up following Q4 decline
North American VC activity was up slightly between Q415 and Q116, showing a small increase in deal value and slight drop in
volume. With the prospect of rising interest rates and the forthcoming presidential election, the investment climate remains
cautionary. This caution may have influenced the lack of IPO exits; the first quarter saw the smallest amount of funds raised from
IPOs in 20 years.
While Europes VC activity got off to a slow start in Q116, Spotifys massive $1 billion funding round during the final week of the
quarter lifted expected results for the region by almost one-third. As a result, VC deal value was up slightly compared to Q415.
VC funds working to raise capital
The overall decline in VC activity may simply be a short-term blip on the radar as investors take stock of their positions and become
more directed with their investments. Many VC funds globally raised significant capital during the quarter, adding to the growing
liquidity and dry powder in the market. Investors will likely look to deploy this capital over the next few quarters.
Investors focusing on performance over possibility
The days of unalloyed investor confidence are gone. VC investors are becoming more critical of potential investments, looking for
companies that can demonstrate revenue creation, positive margins, profitability and an ability to control expenses. As a result,
companies looking to attract investment will need to be much more efficient with their cash because it will likely be more expensive
for them to raise additional capital in the future. They may also find themselves with more hands on VC investors than theyve
experienced historically with VC investors looking to have more say in capital spending and decision making.
#Q1VC
Global VC activity slumps for second straight quarter (cont.)

Eyes on the Unicorns
With high profile companies failing to live up to their private valuations, existing and potential Unicorns are coming under more
scrutiny than ever before. Especially in the US, investors are coming to believe that the high valuations in the market may not be
warranted and are stepping back from making any significant mega-deals. Over the next few quarters, there will likely also be more
scrutiny of existing Unicorns. In order to continue to attract funding, these companies will need to show tighter control of their
expenses and positive margins. Those that can demonstrate positive margins, controlled expenses and profitability will likely be
winners down the road, while others may fall to the wayside.
Corporate activity continues to be strong
With valuations dropping and exit possibilities minimized, corporate participation as a percent of VC activity will likely remain strong
throughout 2016. Despite market uncertainty, corporates continue to look for new technologies and innovations that they can
leverage within their own organizations. Lower valuations can provide them with access to these innovations in a more cost-effective
manner.
#Q1VC
$25.5B DEPLOYED ACROSS 1829 DEALS TO VC-BACKED

COMPANIES IN THE FIRST QUARTER OF 2016
2015 was a record year in both deals and dollars invested in VC-backed companies, though we saw a
marked pullback in financings towards year-end. 2016 has seen a less exuberant start; at the current run
rate, deal activity is roughly on pace to match 2013 while investment dollars would fall between the 2014
and 2015 figures.
Annual Global Financing Trends to VC-Backed Companies

2011 2016 YTD (Q116)
$1 40 .0
$1 20 .0
$1 00 .0
5624
6506
7375
8290
8367
90 00
80 00
70 00
60 00
$8 0.0
50 00
40 00
$6 0.0
1829
$4 0.0
30 00
20 00
$2 0.0
$48.9
$45.0
$50.3
$90.5
$129.5
$25.5
$-
10 00
2011
2012
2013
Investments ($B)
2014
2015
2016 YTD
Deals
Source: Venture Pulse, Q1'16, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) April 13th, 2016.
#Q1VC
10
Q116 SEES CONTINUED DECLINE FROM Q415 AS BOTH

DEAL TALLY AND FUNDING DOLLARS DROP
The negative sentiment that caused a sharp correction in Q415 has continued to persist into the new year.
Global funding fell a further 8% vs. the previous quarter as mega-round activity continued to cool. Deal
count was a bit more stable but nevertheless fell 4% as opposed to recovering from the drastic drop-off in
Q415.
Quarterly Global Financing Trends to VC-Backed Companies

Q111 Q116
$4 5.0
25
00
$4 0.0
$3 5.0
$3 0.0
$2 5.0
1407
1522
1383
1538
1689
1736 1756 1798
1924 1897
1981
2095 2134 2080 2121
2198
2141
1907
1829
20
00
1543
1312
15
00
$2 0.0
10
00
$1 5.0
$1 0.0
50
0
$5 .0
$12.3 $14.6 $11.6 $10.4
$9.8
$11.5 $12.5 $11.1 $11.2 $11.7 $12.7 $14.7 $17.8 $23.0 $21.9 $27.8 $27.9 $34.9 $39.0 $27.7 $25.5
$-
Investments ($B)
Deals
#Q1VC
11
SEED-STAGE DEAL SHARE FALLS TO 5-QUARTER LOW

WHILE SERIES A RISES
Deal share to seed-stage investments abruptly dropped in Q116, down from 32% of the total in Q415 to
just 28%. Series A deals continued to take a strong proportion of deals with the 26% in Q116 representing
a 5-quarter high for A rounds.
Quarterly Global Deal Share by Stage

Q115 Q116
16%
16%
15%
16%
18%
3%
4%
7%
4%
4%
8%
3%
4%
8%
3%
3%
6%
13%
14%
14%
15%
3%
4%
8%
22%
23%
22%
25%
35%
33%
34%
32%
28%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Seed / Angel
Series A
Series B
Series C
Series D
14%
26%
Series E+
Other
#Q1VC
12
MEDIAN EARLY-STAGE DEAL SIZE TICKS UPWARD TO 5QUARTER HIGH

Median early-stage (Seed - Series A) deal size among all VC-backed companies hit $2.7M in Q116, up
17% from the previous quarter. This reflects the active ecosystem of micro-VCs, multi-stage funds and
strategic investors actively pursuing early-stage deals.
Global Early-Stage Deal Size

Q115 Q116
$2.7
$2.2
$1.9
Q1'15
Q2'15
$2.3
$2.0
Q3'15
Q4'15
Q1'16
Median Early-Stage Deal Size ($M)

#Q1VC
13
GLOBAL MEDIAN LATE-STAGE DEAL SIZES CONTINUE

TO FALL
The continued decline of mega-rounds led to a further drop in global median late-stage (Series D or later)
deal sizes. Q116s median late-stage deal size plunged 30% from the previous quarter to just $22M,
nearing the pre-euphoria figures of Q115.
Global Late-Stage Deal Size

Q115 Q116
$35.0
$31.3
$30.5
$22.0
$21.0
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Median Late-Stage Deal Size ($M)

#Q1VC
14
INTERNET AND MOBILE CONTINUE TO ACCOUNT FOR

TWO-THIRDS OF ALL VC-BACKED DEALS
Internet and mobile once again took the majority of deals going to VC-backed companies. These two major
sectors accounted for 67% of all deals in Q116. All other sectors remained fairly range-bound, with
healthcare taking 13% and non-internet/mobile software hitting a 5-quarter low at 4%.
Global Quarterly Deal Share by Sector

Q115 Q116
14%
13%
12%
13%
3%
5%
4%
5%
3%
6%
4%
5%
3%
4%
13%
11%
11%
12%
13%
19%
18%
18%
16%
17%
47%
49%
50%
51%
50%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
13%
Internet
Mobile & Telecommunications
Healthcare
Software (non-internet/mobile)
Consumer Products & Services
Other
#Q1VC
15
TECH MAINTAINS GIANT INVESTMENT DEAL LEAD

OVER HEALTHCARE, OTHER SECTORS
Tech companies have taken 76%+ of all deal activity to VC-backed firms in each of the past 5 quarters.
Healthcare failed to receive more than 13% in any quarter over the same period while all other sectors
combined have not topped 10% since Q215.
Quarterly Global Tech vs. Healthcare Deal Share

Q115 Q116
76%
76%
76%
78%
78%
13%
13%13%
11%
11% 11%
Q1'15
Q1'15
Q1'15
79%
79%
78%
12%11%
11%
11% 12%
Q2'15
Q2'15
*percentages in chart are rounded to nearest whole number
Q2'15
79%
12%11%
11% 10%
10%
Q3'15
Q3'15
79%
79%
12%
11% 12%
10% 9%
9%
Q3'15 Q4'15
Q4'15
79%
77%
77%
13% 10%
12%
9%
Q1'16
Q4'15
Tech
Tech Healthcare
Healthcare Other
Other
Tech
Healthcare
Other
#Q1VC
16
VC-BACKED COMPANIES IN ASIA CONTINUE TO FEEL

FUNDING CHILL IN Q116
Asia saw another significant drop-off in funding to VC-backed companies in Q116, with the $6.5B in total
funding representing less than half of the frothy Q315 peak. Meanwhile, funding rose slightly in both North
America and Europe. Deal activity in North America was flat from the previous quarter while both Asia and
Europe saw a continued slide.
Deal Count by Continent
Investment ($B) by Continent
Q115 Q116
1334
1403
Q115 Q116
1291
1112
1101
$18.9
$20.2
$21.0
$14.3
$10.7
403
397
409
394
358
355
344
396
370
338
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
North America
Europe
Asia
$5.2
$14.3
$9.8
$6.5
$3.8
$3.5
$3.2
$3.5
Q1'15
$15.2
$3.5
Q2'15
North America
Q3'15
Q4'15
Europe
Q1'16
Asia
#Q1VC
17
CORPORATES ACCELERATE INVESTMENT PACE INTO

VC-BACKED COMPANIES
Corporate and CVC deal participation into VC-backed companies rose to 27% of deals in Q116, marking a
5-quarter high. Corporate interest in private markets has steadily risen as companies seek opportunities
for growth as well as defense against rapidly evolving technologies.
CVC Participation in Global Deals to VC-Backed Companies

Q115 Q116
22%
24%
25%
24%
27%
78%
76%
75%
76%
73%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Other Investors
Corp / CVC Deal Participation
#Q1VC
18
CYBERSECURITY VC-BACKED INVESTMENT ACTIVITY

Top Deals & Countries, Q116
Top Deals
Cybersecurity Investment Activity
Mobi Magic
VC-Backed Companies, Q115 Q116
$100M // Series B
Skybox Security
$1 2
, 00
61
66
62
64
70
62
60
$96M // Private Equity
Pindrop Security
$1 0
, 00
$75M // Series C
50
$8 00
40
$6 00
30
Top Countries
United States
41 Deals // $564.3M
$4 00
20
$2 00
10
$589
$795
$1,067
$1,099
$764
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Israel
7 Deals // $53.8M
United Kingdom
5 Deals // $18.4M
Deals
#Q1VC
19
DIGITAL HEALTH VC-BACKED INVESTMENT ACTIVITY

Top Deals
Digital Health Investment Activity
Oscar Health
$400M // Series C
Flatiron Health
147
$1 ,8 00
16 0
$1 6
, 00
128
126
14 0
123
131
$1 4
, 00
12 0
$175M // Series C
Jawbone
$165M // Series F
$1 ,2 00
10 0
$1 0
, 00
80
$8 00
60
$6 00
40
$4 00
20
$2 00
$714
$1,183
$1,632
$1,120
$1,668
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Top Countries
United States
84 Deals // $1.4B
China
10 Deals // $121.6M
Germany
5 Deals // $6.6M
Deals
#Q1VC
20
Digital health offering real opportunities for VC investors

Recent advances in consumer technology are rapidly expediting the evolution of patient-centered care models around the world by
providing ways to leverage technology to personalize the healthcare process.
The potential offered by these digital health solutions is creating a lot of buzz in the VC market. Total VC investment in digital health
was up significantly in Q1 compared to Q415 despite decreases in other sectors. The biggest digital health deal in Q1'16 went to
Oscar Health, a health insurance company whose business model leverages emerging digital health technologies, that raised $400m
in Series C funding.
Recession-proof investment area
Given how many countries are working to improve the quality and reach of their healthcare systems, digital health is somewhat
recession proof. The industry also involves a multitude of interested players from large pharmaceutical companies and local
healthcare providers to insurance companies, device manufacturers and big technology companies like Apple and Google. These
players make digital health even more attractive to VC investors because exit routes extend well beyond the traditional IPO.
Solutions becoming specific and data-driven

In Q315, we talked about digital technologies reshaping the administration of health care from improving scheduling to improving
accessibility. In Q116, digital health investments focused on personalization and specificity such as technologies that encourage
medication adherence and technologies that monitor individual health metrics and report anomalies. Other investments focused on
solutions targeting the most at risk within society, including infants and seniors.
Over the next few quarters, digital health investments will continue to expand and evolve. One critical area where investments will
likely focus is on the use of artificial intelligence to utilize and analyze the data available from wearable technologies or to provide
alternative service delivery.
Challenges cant be ignored
While digital health will likely continue to be an active area for VC investments, investors should not fail to consider the challenges
associated with the uptake of new healthcare solutions. Regulatory issues, data management, culture change each of these could
create significant implementation roadblocks. Making sure companies have a real means to implement their solutions will be critical
to the success of any VC investments.
#Q1VC
21
Digital health is becoming very

attractive to investors because
acquisition and exit routes are so
diverse - you dont need to IPO. There
are a multitude of potential acquirers,
from big pharma and community
providers to device manufacturers,
insurance companies and big technology
companies like Google and Apple.
Brendan Martin
Lead Health Technology, High
Growth Tech Growth,
KPMG in the UK
#Q1VC
22
ED TECH VC-BACKED INVESTMENT ACTIVITY

Top Deals
Ed Tech Investment Activity
Byjus
$75M // Growth Equity
Grovo Learning
$1 2
, 00
80
72
63
$1 0
, 00
63
70
54
60
$40M // Series C
Everspring
$27.5M // Growth Equity
$8 00
50
36
$6 00
40
30
$4 00
20
$2 00
10
$709
$489
$295
$1,090
$287
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Top Countries
United States
33 Deals // $628.7M
China
7 Deals // $414M
Netherlands
3 Deals // $4.6M
Deals
#Q1VC
23
NORTH AMERICA MAINTAINS EARLY-STAGE DEAL SIZE

GAP OVER ASIA AND EUROPE
North American VC-backed companies continued to see larger median early-stage deals, holding steady
from Q415 at $3M. After Asia and Europe briefly converged in Q415, Asian deal sizes broke away,
landing at $2.5M for Q116 compared to Europes $2.2M.
Median Early-Stage Deal Size Continent Comparison

Q115 Q116
$3.5
$3.0
$ Millions
$2.5
$2.0
$1.5
$1.0
$0.5
$-
Q1'15
Q2'15
North America
Q3'15
Asia
Q4'15
Q1'16
Europe
#Q1VC
24
ASIA STILL HAS LARGEST MEDIAN LATE-STAGE DEALS

BUT SEES SHARP DROP IN Q116
Median late-stage deal sizes in Asia rose to stratospheric heights in late 2015, but deal size abruptly fell
off to $62.5M in Q116, nearly reaching the $60M of Q115. However, late-stage deals in Asia maintain a
sizeable gap versus North America and Europe. Both of these continents also saw a drop in median deal
size in Q116, with North America falling below $25M for the first time since Q115.
Median Late-Stage Deal Size Continent Comparison

Q115 Q116
$175.0
$150.0
$ Millions
$125.0
$100.0
$75.0
$50.0
$25.0
$-
Q1'15
Q2'15
North America
Q3'15
Asia
Q4'15
Q1'16
Europe
#Q1VC
25
$100M+ MEGA-ROUNDS TO VC-BACKED COMPANIES

HAVE FALLEN BACK TO EARTH
The scramble to find the next Unicorn saw investors open their checkbooks for mega-rounds throughout
most of 2015. However, these $100M+ equity financings remain depressed after falling off a cliff in Q415,
with all major markets trending flat at best. Q116 saw $8.7B invested across 37 such deals, compared to
$11.5B over 40 deals last quarter.
$100M+ Financings to VC-Backed Companies

North America vs. Asia vs. Europe, Q115 Q116
37
29
28
27
24
19
18
16
15
16
9
6
Q1'15
Q2'15
Q3'15
North America
Asia
Q4'15
Q1'16
Europe
#Q1VC
26
Given the tougher environment for

raising funds, we anticipate many of the
Unicorns will tighten their belts by
pulling back on spending, driving
operational improvements and being
more cautious with the money they
already have - because it will be more
expensive for them to raise capital in the
near future.
Arik Speier
Co-Leader, KPMG Enterprise

Innovative Startups Network and
Head of Technology,
KPMG in Israel
#Q1VC
27
MOUNTING PRESSURES PUSH UNICORN CREATION

PACE TO NEAR-STANDSTILL
Q116 has borne witness to high-profile Unicorn company issues, layoffs, down rounds and mutual fund
valuation markdowns. This, mixed with hostile conditions in public technology markets, has resulted in a 5quarter low for Unicorn creations. Just 5 new VC-backed companies entered the Unicorn club in Q116,
less than half that of any quarter since Q115.
VC-Backed Companies Entering The Unicorn Club

Q115 Q116
25
25
15
13
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
#Q1VC
28
Investor behaviors are changing the way companies do business

Over the past few quarters, one VC market trend has become increasingly clear: the days of unhindered investor confidence are
gone. With much of the global IPO market stalled in Q116 and many IPOs from the second half of 2015 having failed to realize their
private sector valuations, VC investors are becoming much more skeptical and demanding of their investees.
The idea of a company having a successful exit based on high revenue growth rate, despite a similar growth rate for expenses, is
not going to work anymore.
Companies must re-evaluate what they need to do to raise funds.
Investors require more information and want more protection
For much of 2014 and 2015, investors focused decisions on top-line revenue growth. But in Q116, it became apparent that this
focus isnt enough. Investors are increasingly questioning the overly optimistic assumptions and forecasts being made by early-stage
investors without a strong business plan outlining how such assumptions will be achieved.
Investors know that company potential and actual profitability can be very different things. As a result, investors are requiring much
more from prospective companies looking for funding. They want companies to demonstrate revenue creation, positive margins, the
ability to control expenses, and profitability - or a realistic path to achieve it. In some industries, investors might also evaluate other
performance metrics like customer retention, bookings or operating margin.
Investors are also asking companies for more guarantees and protection related to their investments. For example, Spotify was able
to raise $1 billion during Q116. However, the funding was raised as convertible debt with strict investor guarantees tied to a
forthcoming IPO. Moving forward, such investor protection is likely to become a more frequent component of major funding deals.
Early-stage companies must have their ducks in order
With investors conducting more due diligence on potential investments, seed and early-stage deals suffered considerably in many
parts of the world during Q116. To attract investors, early-stage companies need to be more prepared than ever. This means rethinking their approach and developing a more robust pitch.
#Q1VC
29
Investor behaviors are changing the way companies do

business (cont.)
Rather than simply focusing on the size of the market, market share and potential revenues, companies need to show that they have
a way to do business profitably. In some cases, they may need to accelerate their plans to achieve profitability so that it occurs much
sooner in their life-cycle than may have been accepted historically. If companies do not have a defined plan and a reasonable
turnaround time for achieving profitability, investors will likely be more skeptical and less likely to invest.
Late-stage companies may need to make tough decisions
Unicorns and late-stage companies will likely be challenged the most by current market realities. Thats because theyve been able
to raise previous funding rounds without the same level of scrutiny. With new investor pressures, companies will need to focus on
the fundamentals. This will require many companies to make hard choices about how to achieve profitability such as conducting
layoffs or making cuts to discretionary spending. Such activities may require major culture changes which may foster anxiety. To be
successful, companies will need to be able to explain to their stakeholders and employees what they are doing and why they are
doing it. This is why some large companies are, in fact, decelerating their growth. Instead, they are focusing their efforts on making
sustainable operational improvements that will put them in a more profitable position moving forward.
#Q1VC
30
Over the next 6 to 9 months, there will

likely be a shakeout amongst Unicorns.
Those that can demonstrate revenue
growth, positive gross margins, expense
control and a path to profitability.may
take a slight hit in valuation, but are
likely to be the winners down the road.
Brian Hughes

Innovative Startups Network, and
National Co-Lead Partner, KPMG
Venture Capital Practice,
KPMG in the US
#Q1VC
31
NEW UNICORNS RARE ACROSS ALL MAJOR REGIONS

IN Q116
Across regions, Europe saw a slight uptick with one new Unicorn, but this was not nearly enough to offset
the dearth of new Unicorns in North America and Asia. North America, in particular, saw just one new VCbacked Unicorn for the quarter, a precipitous drop from the 17 it had in Q315.
VC-Backed New Unicorn Companies by Continent

North America vs. Europe vs. Asia vs. Other, Q115 Q116
17
13
8
7
5
3
1
0
Q1'15
Q2'15
Asia
Q3'15
Europe
North America
Q4'15
Q1'16
Other
#Q1VC
32
NOTABLE REST OF WORLD Q116 FINANCINGS

Company
Round
Country
$52M
(Series C)
Brazil
Travelstart
$40M
(Unattributed)
South Africa
dr.consulta
$25.9M
(Series A)
Brazil
Kaszek Ventures, LGT Venture Philanthropy
Cyara
$25M
(Series A)
Australia
Greenspring Associates, PeakSpan Capital
iROKOtv
$19M
(Series E)
Nigeria
Global Kinetics
$11.46M
(Series A)
Australia
Brandon Capital Partners, OurCrowd.com
Culture Amp
$10M
(Series B)
Australia
Blackbird Ventures, Felicis Ventures, Index Ventures
WebRadar
$10M
(Series B)
Brazil
Elastagen
$9.13M
(Series B)
Australia
ATP Innovations, Brandon Capital Partners, GBS

Venture Partners, Korea Investment Partners
Enjoei
$5M
(Series A)
Brazil
Bessemer Venture Partners, Monashees Capital
Nubank
Select Investors
Founders Fund, Kaszek Ventures, Sequoia Capital,
Tiger Global Management
Amadeus Capital Partners, MTN Zambia
Canal+ Group, Kinnevik
DGF Investimentos, Qualcomm Ventures
#Q1VC
33
SELECT VC-BACKED EXITS IN NORTH AMERICA

Company
Exit Type
Valuation Select Investors
Legendary
Entertainment
Corp. Majority
(Wanda Group)
$3.5B
Accel Partners, Softbank

Corp., TomorrowVentures
Jasper
Technologies
Acquisition
(Cisco Systems)
$1.4B
Benchmark Capital,
Sequoia Capital, DAG
Ventures
Cruise
Automation
Brightree
Padlock
Therapeutics
Acquisition
(General Motors)
$1B
Acquisition
(ResMed)
$800M
Acquisition
(Bristol-Myers
Squibb)
$600M
Qualcomm Ventures,
Spark Capital, Maven
Ventures
Battery Ventures
I think
We always
we have,
knew
between
this was
what
Cruise
going tobrings
be a marathon,
to the tablenot
and
a
all
sprint...The
the capabilities
measurement
we have
inside
we're going
of GM,towe
look
have
at isa going
really
to strong
be measured
positionintoyears
rapidly
and
commercialize
decades. this
technology.
Dave Hatfield,
President,
Pure Storage
Dan Ammann
President, General Motors
Atlas Venture, MS Venture,

Johnson & Johnson
Innovation
Quote source: Business Insider

Image source: Pure Storage
Quote source: The Verge
Image source: Pensions & Investments
#Q1VC
34
SELECT VC-BACKED EXITS INTERNATIONALLY

Company
Leaba
Semiconductor
Swiftkey
Altair
Semiconductor
Captain Train
Exit Type
Valuation Select Investors
Acquisition
(Cisco Systems)
$320M
Bessemer Venture
Partners, Pitango Venture
Capital
Acquisition
(Microsoft)
$250M
Octopus Ventures, Accel

Partners, Index Ventures
Acquisition
(Sony)
$212M
Giza Venture Capital,

Jerusalem Venture
Partners, Bessemer
Venture Partners
Acquisition
(Trainline.com)
$189M
Index Ventures, Alven Capital
By
Thetaking
LTE landscape
an equity stake
is much
in
Acerta,
more we
complex
are completing
than that of
the
other
four
4G
main
technologies
pillars of our
due to
oncology
the fragmented
strategy:global
breast,
ovarian,
spectrum
lungmap
andand
hematology.
varying
combinations of frequency
bands...
Pascal
Soriot
CEO, AstraZeneca
Eran Eshed
Replay
Technologies
Acquisition
(Intel)
$175M
Samsung Ventures, Deutsche

Telekom Capital Partners,
Guggenheim Partners
Co-Founder, Altair Semiconductor

Quote source: Bloomberg
Image source: PoandPo
Quote source: PR Newswire

Image source: Wireless Design Mag
#Q1VC
35
In Q1 2016
NORTH
AMERICAN
$15.2 billion
#Q1VC
36
VC investment in North America holds steady

Theres a lot of uncertainty in the North American market at the moment. With the November US presidential election looming closer,
US interest rates rising and growing concern over high valuations many investors are taking a pause to evaluate what is
happening in the market. Despite this pause, North Americas VC activity remained relatively stable in Q116 following a sharp
decline at the end of 2015.
VC funds focused on raising capital during Q1
During 2015, VC investors deployed a significant amount of capital in North America. Many VC funds are now taking stock of these
investments and preparing for the future. For many, Q116 was an opportunity to focus on raising capital, rather than deploying it. In
fact, the 1st quarter was one of the highest for raising capital since the dot-com boom of 2000. This fund-raising activity bodes well
for the remainder of 2016, as investors will likely be looking to deploy capital raised.
Late-stage investments under more scrutiny
It appears that VC investors are scrutinizing late-stage and mega-deals far more closely. Investors recognize that valuations have
been too high in some cases and are now making a stronger effort to ensure the late-stage companies they are considering
investing in are well-positioned to achieve their stated objectives.
As part of the enhanced scrutiny, VC investors are focusing on companies that can create revenue, have positive growth margins,
are in control of their expenses and either show profitability or have a proven pathway to achieve profitability over time. Having an
innovative technology or offering will not be enough to obtain investors in todays VC market. Companies will need to be able to
show they have strong business acumen and are well-positioned to deliver.
Investors protecting their downside
While investors are continuing to invest in companies that demonstrate positive growth margins, a path to profitability and other
positive metrics, they are also making moves to protect their downside more so than historically. This is because valuations are
continuing to drop.
Investors are protecting themselves by changing the instruments they are investing in and tying them to discounts in possible
liquidity events that might happen in the future. There are many recent examples of this, not only in the US, but internationally. For
example, Spotify raised $1 billion using convertible debt which came with strict investor guarantees tied to a forthcoming IPO.
Investor protection will continue to be a significant issue over the coming quarters.
#Q1VC
37
VC investment in North America holds steady (cont.)

Long-term view remains positive for VC investment
While the last 2 quarters showed a weakening VC market, long-term trends remain positive. While the number of IPO exits has been
at historic lows - with no technology IPOs at all during Q116 there has been a growth in VC-related M&A activity. The trend toward
M&A exits over IPOs is expected to continue heading into Q2.
Additionally, the longer-term outlook for VC activity is positive. VC returns for the 10-year period ended September 30, 2015 were 11
percent, compared to S&Ps 6.8 percent. As long interest rates remain relatively low, the VC market will likely remain a good place to
deploy capital.
The current slump compared to earlier in 2015 appears to be a result of short-term market uncertainties and some investor caution
following a series of high-profile write-downs. Looking forward, VC investors are likely to focus more on finding quality companies in
which to invest rather than investing in a broad spectrum of potential startups.
#Q1VC
38
NORTH AMERICA: $15.2B ACROSS 1101 DEALS IN Q116

North America saw record highs in funding last year fueled by strong mega-round activity. However, deal
activity slowed, and Q116 looks to continue that trend. At the current run-rate, North American VC-backed
companies are on track to receive fewer deals than they did in 2012.
North American Annual Financing Trends to VC-Backed Companies

2011 2016 YTD (Q116)
$8 0.0
$7 0.0
$6 0.0
4301
4662
5034
5546
5150
60 00
50 00
40 00
$5 0.0
$4 0.0
30 00
$3 0.0
1101
$2 0.0
20 00
10 00
$1 0.0
$37.2
$33.4
$37.2
$58.8
$74.3
$15.2
$-
2011
2012
2013
Investments ($B)
2014
2015
2016 YTD
Deals
#Q1VC
39
SLIGHT UPTICK IN INVESTMENT TO VC-BACKED NORTH

AMERICAN STARTUPS
Following 2 consecutive down quarters, deal activity to VC-backed North American companies was flat into
Q116 with deal count still representing the lowest seen in over 3 years. Meanwhile, funding saw a slight
bump of 6%, ending at $15.2B for the quarter.
North American Quarterly Financing Trends to VC-Backed Companies

Q111 Q116
$2 5.0
1435 1443
1171
$2 0.0
1053
1249
1093
984
1131
1081
1243
1201 1216
1321
1254
1323
16 00
1345 1344
1403
1291
14 00
1112 1101
12 00
10 00
$1 5.0
80 0
$1 0.0
60 0
40 0
$5 .0
20 0
$9.7
$10.1
$9.5
$7.8
$7.4
$8.9
$9.4
$7.8
$8.1
$9.1
$9.2
$10.8 $12.7 $16.0 $13.6 $16.5 $18.9 $20.2 $21.0 $14.3 $15.2
$-
Investments ($B)
Deals
#Q1VC
40
SEED DEAL SHARE IN NORTH AMERICA FALLS FOR

SECOND STRAIGHT QUARTER
In North America, seed deal share continued to fall noticeably into Q116. Once comfortably the most
common stage by deal share, seed (24%) has fallen behind Series A (26%) to start 2016. Q116 also saw
Series C deals bounce back to 9%, matching Q215 for a 5-quarter high.
North American Quarterly Deal Share by Stage

Q115 Q116
19%
17%
16%
16%
17%
4%
6%
7%
4%
4%
9%
4%
4%
8%
4%
3%
7%
4%
4%
9%
14%
14%
14%
15%
20%
22%
23%
27%
32%
31%
30%
28%
24%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Seed / Angel
Series A
Series B
Series C
Series D
Series E+
14%
26%
Other
#Q1VC
41
New companies looking for early-round

investment need to change their
pitch. Focusing on the size of the
market and potential revenue is no
longer enough. Funding will likely
depend on them having a clear vision of
their road to profitability.
Conor Moore
National Co-Lead Partner,

KPMG Venture Capital Practice,
KPMG in the US
#Q1VC
42
EARLY-STAGE DEAL SIZES IN NORTH AMERICA

REMAIN AT HIGH
Median early-stage deals in Q116 matched last quarters high of $3M, up a full 50% from the same
quarter a year prior.
North American Early-Stage Deal Size

Q115 Q116
$2.0
Q1'15
$2.3
Q2'15
$3.0
$3.0
Q4'15
Q1'16
$2.5
Q3'15
Median Early Stage Deal Size ($M)

#Q1VC
43
MEDIAN NORTH AMERICAN LATE-STAGE DEAL SIZE

PLUMMETS TO 5-QUARTER LOW
Median late-stage deal size to North American VC-backed companies plunged 28% in Q116, falling below
quarterly figures through the whole of 2015. This dive aligns with the overall weakening of mega -round
activity as well.
North American Late-Stage Deal Size

Q115 Q116
$30.0
$34.0
$30.0
$22.3
Q1'15
$21.5
Q2'15
Q3'15
Q4'15
Q1'16

#Q1VC
44
VC-BACKED INTERNET COMPANIES CONTINUE TO

TAKE THE BULK OF NORTH AMERICAN DEALS
Internet companies have consistently taken over 40% of all deals into VC-backed North American
companies. Other sectors remained relatively range-bound during the last 5 quarters, although deal share
to non-internet/mobile software shrank to 4% in Q116.
North American Quarterly Deal Share by Sector

Q115 Q116
13%
13%
13%
3%
6%
4%
6%
4%
4%
13%
14%
15%
16%
14%
16%
46%
49%
49%
48%
Q2'15
Q3'15
Q4'15
Q1'16
14%
15%
4%
6%
4%
6%
15%
13%
18%
16%
43%
Q1'15
Internet
Healthcare
Other
#Q1VC
45
THE 10 LARGEST NORTH AMERICAN ROUNDS OF Q116

TOTALED OVER $3B IN FUNDING
Lyft
Mobile car-hailing
and logistics app
Series F
$500M
$127M
$165M $200M
$175M
DoorDash
On-demand food delivery service
Series C
Uber
Mobile car-hailing and logistics app
Corporate Minority
$112M
Oscar Health Insurance Co.
Technology-enabled health
insurance provider
Series C
Snapchat
Ephemeral media messaging and sharing app
Series E
$430M
WeWork
Coworking
space provider
Series F
Flatiron Health
Oncology data analytics
and software provider
Series C
Jawbone
Consumer technology and
wearable products company
Series F
$794M
$400M
$175M
Fuze
Cloud message,
phone, and video
streaming service
Series E
#Q1VC
Magic Leap
Stealthy augmented-reality
product developer
Series C
46
CORPORATE DEAL SHARE OF VC-BACKED NORTH

AMERICAN COMPANIES BOUNCES BACK
After temporarily retreating in Q415, corporate investor participation reached a fresh 5 -quarter high of
26%. Corporate and CVC deal participation has now topped 23% across the past 5 quarters, as more
corporations begin to make forays into private markets.
CVC Participation in North American Deals to VC-Backed Companies

Q115 Q116
23%
24%
25%
23%
26%
77%
76%
75%
77%
74%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Other Investors
#Q1VC
47
NEA WAS THE MOST ACTIVE VC INVESTOR IN NORTH

AMERICA IN Q116
New Enterprise Associates (NEA) was the most active investor in North America in Q116, topping the
most active investors for the fourth straight quarter. Kleiner Perkins tied with Andreessen Horowitz for the
second-place spot, while Google Ventures rounded out the top four.
Most Active VC Investors in North America

Q116
Rank
Investor
Rank
Investor
New Enterprise Associates
Sequoia Capital
Kleiner Perkins Caufield & Byers
Bessemer Venture Partners
Andreessen Horowitz
10
Accel Partners
Google Ventures
10
Accomplice
Khosla Ventures
12
Battery Ventures
Lightspeed Venture Partners
12
Comcast Ventures
BDC Venture Capital
12
Intel Capital
Source: Venture Pulse, Q1'16, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) April 13th, 2016
#Q1VC
48
US VC-BACKED COMPANIES SEE $14.8B ACROSS 1035

DEALS IN Q116
US-based VC-backed companies raised a record $72.4B in equity financing in 2015, although deal count
dropped by 8% from 2014. Negative sentiment has continued to the start of the new year, with deal activity
barely on pace to reach 2011s figures at the Q116 run-rate.
US Annual Financing Trends to VC-Backed Companies

2011 2016 YTD (Q116)
5327
$8 0.0
$7 0.0
$6 0.0
4133
4474
4814
60 00
4907
50 00
40 00
$5 0.0
$4 0.0
30 00
$3 0.0
20 00
1035
$2 0.0
10 00
$1 0.0
$36.3
$32.0
$35.6
$57.6
$72.4
$14.8
$-
2011
2012
2013
Investments ($B)
2014
2015
2016 YTD
Deals
#Q1VC
49
US DEAL ACTIVITY FALLS SLIGHTLY WHILE

INVESTMENT DOLLARS SEE SMALL RECOVERY
Deal count to US VC-backed companies remained anemic, slipping a further 2% from the Q415 crash.
Funding ticked up 6% to $14.8B but was still well below the quarterly totals from the heady days of Q414
to Q315.
US Quarterly Financing Trends to VC-Backed Companies

Q111 Q116
$2 5.0
16 00
1134
$2 0.0
1010
1202
1043
946
1082
1034
1156 1166 1187
1259
1202
1272
1393 1384
1278 1257
1342
14 00
1245
1063 1035
12 00
10 00
$1 5.0
80 0
$1 0.0
60 0
40 0
$5 0
.
20 0
$9.6
$9.8
$9.2
$7.7
$7.2
$8.7
$8.6
$7.6
$8.0
$8.9
$8.9
$9.9
$12.6 $15.7 $13.2 $16.1 $18.2 $19.8 $20.4 $14.0 $14.8
$-
Investments ($B)
Deals
#Q1VC
50
I think well likely see more funding

going to the decacorns in the near future
on the basis that thats where some of
the risk is being de-leveraged.
Francois Chadwick
National Tax Leader,

KPMG Venture Capital Practice,
KPMG in the US
#Q1VC
51
CALIFORNIA CONTINUES TO LEAD DEALS INTO VCBACKED COMPANIES

Deal activity in California has now slowed for 3 consecutive quarters, falling below 400 in Q116. That
being said, California-based companies still take more deals than Massachusetts and New York combined.
New York has now outpaced Massachusetts in each of the last 5 quarters and was the only state to see
deal growth in Q116.
Quarterly Deal Activity to VC-Backed Companies

CA vs. NY vs. MA, Q115 Q116
581
523
563
431
140 123
Q1'15
177
127
Q2'15
California
164
109
Q3'15
New York
396
135
Q4'15
92
149
90
Q1'16
Massachusetts
#Q1VC
52
CALIFORNIA, MASSACHUSETTS FUNDING

ESSENTIALLY FLAT WHILE NEW YORK RISES 76%
Funding dollars to VC-backed companies in both California and Massachusetts were essentially unchanged
following the dramatic pullback in Q415. As with deal activity, New York also saw a sudden jump to a 5 quarter high in funding. Its 76% increase from Q415 was driven by a $430M Series F to WeWork and a
$400M Series C to Oscar Health Insurance.
Quarterly Investment Activity to VC-Backed Companies

$B, CA vs. NY vs. MA, Q115 Q116
$11.1
$12.2
$12.0
$6.9
$1.5 $1.6
Q1'15
*percentages in chart are rounded to nearest whole number
$2.2
$1.5
Q2'15
California
$2.2 $1.9
Q3'15
New York
$6.8
$1.5 $1.4
Q4'15
$2.6
$1.4
Q1'16
Massachusetts
#Q1VC
53
SERIES A TOPS SEED FOR TOP DEAL SHARE IN UNITED

STATES
Seed-stage investments fell to less than a fourth of all deals to US VC-backed companies in Q116,
dropping to a 5-quarter low of 22%. Series A rounds actually outpaced seed deals for the quarter,
reversing the trend of previous quarters.
Quarterly US Deal Share by Stage

Q115 Q116
16%
16%
17%
17%
5%
6%
8%
4%
4%
9%
4%
4%
8%
4%
3%
7%
14%
14%
14%
16%
20%
22%
23%
27%
32%
30%
30%
27%
22%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Seed / Angel
Series A
Series B
Series C
Series D
20%
4%
5%
10%
14%
26%
Series E+
Other
#Q1VC
54
OVER A QUARTER OF VCs INVESTING IN THE US WERE

INTERNATIONALLY-BASED IN Q116
Of all VCs that participated in a US
investment in Q116, 60% were
based in either California, New York
or Massachusetts.
California led all states, with 37% of
all active VCs calling the Golden
State home while Illinois, Texas and
Pennsylvania led the other VC
states.
HQ of VCs Investing in US Companies
As % of all VCs investing in US-based companies in Q116
27%
27%
Investors from the UK, China and

Israel were most prevalent among
international VCs. Notably, the
international share of the total rose
from 17% in Q415 to 27% in Q116.
California
New York
Massachusetts
11%
29%
Other US
International
6%
#Q1VC
55
CALIFORNIA VC-BACKED INVESTMENT ACTIVITY

Top Deals & Cities, Q116
Top Deals
California Investment Activity
Lyft
$500M // Series F-II
Uber
$1 4,00 0
$1 2,00 0
70 0
523
$200M // Corp. Minority
581
60 0
563
$1 0,00 0
431
50 0
396
Snapchat
$175M // Series E-III
$8 ,0 00
40 0
Top Cities
$6 0
, 00
30 0
San Francisco
$4 0
, 00
20 0
134 Deals // $2.7B
Palo Alto
$2 ,0 00
10 0
$11,123
$12,046
$12,247
$6,859
$6,844
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
27 Deals // $402.6M
Mountain View
26 Deals // $431.5M
Deals
#Q1VC
56
NEW YORK VC-BACKED INVESTMENT ACTIVITY

Top Deals
New York Investment Activity
WeWork
$430M // Series F
$3 0
, 00
177
164
$2 5
, 00
140
135
149
20 0
Oscar Health Insurance
18 0
$200M // Series C
16 0
14 0
Flatiron Health
$175M // Series C
$2 0
, 00
12 0
$1 5
, 00
Top Cities
10 0
80
$1 ,0 00
60
New York
137 Deals // $2.6B
40
$5 00
20
$1,483
$2,243
$2,168
$1,479
$2,595
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Deals
#Q1VC
57
MASS VC-BACKED INVESTMENT ACTIVITY

Top Deals
Massachusetts Investment Activity
Fuze
$112M // Series E
C4 Therapeutics
$2 5
, 00
123
14 0
127
$73M // Series A
109
12 0
Codiak Biosciences
$2 0
, 00
92
90
10 0
$1 5
, 00
80
60
$61M // Series B
Top Cities
Boston
$1 0
, 00
31 Deals // $385.7M
40
$5 00
20
$1,600
$1,455
$1,937
$1,407
$1,417
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Cambridge
27 Deals // $648.5M
Waltham
6 Deals // $74.5M
Deals
#Q1VC
58
TEXAS VC-BACKED INVESTMENT ACTIVITY

Top Deals
Texas Investment Activity
StoneEagle
$76M // Growth Equity
Pivot 3
$6 00
70
$43M // Series H
58
57
$5 00
47
$4 00
60
45
50
40
33
$3 00
30
Xeris Pharmaceuticals
$41M // Series C
Top Cities
Austin
31 Deals // $256.7M
$2 00
20
$1 00
10
$489
$516
$358
$457
$493
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Houston
9 Deals // $26.1M
Dallas
7 Deals // $70.5M
Deals
#Q1VC
59
PACIFIC-NW VC-BACKED INVESTMENT ACTIVITY

Top Deals
Pacific Northwest Investment Activity
Kymeta
$62M // Series D
$9 00
60
53
Sendachi
$30M // Series A
$8 00
$7 00
45
43
50
37
$6 00
Cedexis
$22M // Series B
36
40
Top Cities
$5 00
30
$4 00
$3 00
20
Seattle
18 Deals // $121M
Portland
$2 00
10
$1 00
$805
$514
$459
$178
Bellevue
$278
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
6 Deals // $35.1M
3 Deals // $16.5M
Deals
#Q1VC
60
CANADA VC-BACKED INVESTMENT ACTIVITY

Top Deals
Canada Investment Activity
Blockstream

$6 00
$55M // Series A
73
80
$41.13M // Unattributed VC
63
$5 00
57
70
60
48
$4 00
43
30
$2 00
20
$1 00
10
$568
$306
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Toronto
19 Deals // $56.2M
Vancouver
9 Deals // $89M
Halifax
$341
$-
Q1'15
$35M // Series C
Top Cities
40
$398
Vidyard
50
$3 00
$285
Farmers Edge
8 Deals // $59.8M
Deals
#Q1VC
61
In Q1 2016
EUROPEAN
$3.5 billion
#Q1VC
62
Europe VC activity increases slightly - investors remain cautious

In Q116, total VC deal value increased slightly, buoyed by Spotifys $1 billion funding round that closed out the quarter. Despite this
significant deal, worth close to one-third of Europes entire VC activity during the quarter, many VC investors in the region are
holding back from making major investments. The reality is that many European VC investors are being cautious given uncertainties
that could have an impact on the VC market over the medium term, including a pending referendum regarding the United Kingdoms
future in the European Union, the fallout from the Brussels terrorist attacks only months after attacks in Paris, and the impact of the
forthcoming US presidential election on the investment climate in the US of which Europe is not immune.
Increasing amount of dry powder in market
The current hesitance among VC investors in Europe may simply be a short-term trend. This is because of the dry powder in the
market where VC funds will likely be looking to invest once market uncertainties have leveled out. Given that interest rates are
expected to remain very low in Europe, investors are expected to continue to look for investment opportunities to make much
higher returns.
Investors more critical about potential investments

Given current market uncertainties, VC investors are becoming more selective when it comes to their investment activities. During
Q1'16, deal share was marked by a pullback in seed / angel rounds dropping to 35 percent from 42 percent in the prior quarter.
This pullback suggests that investors are de-risking by investing in companies that are more established and that have a proven
track record. As a result, startups will need to provide a lot more detail to investors in order to attract funding.
Nowadays, investors in Europe are often more conservative than VCs in the US and they want to examine a startup companys profit
and loss statement and cash flow forecast as well as see positive margins or obtain more visibility on how and when the company
will become profitable. Companies that do not have a strong and credible business plan for achieving profitability will be hardpressed to attract investment given the caution currently permeating the European VC market.
Investors are also demanding more protection in exchange for their investments. Spotify was able to raise $1 billion using convertible
debt with strict investor guarantees tied to a forthcoming IPO. In such a cautious market, investor guarantees will likely become more
prevalent.
#Q1VC
63
Europe VC activity increases slightly - investors remain cautious

(cont.)
Corporate investment poised for growth
Corporates had been slow to move in Europe and for many years they had follower strategies in adopting digital technologies and
new business models. However, European corporates have changed their attitudes. A number of large corporates have set up VC
arms in order to buy and develop innovations that they can commercialize or implement internally. Given the pressure for traditional
companies across a number of industries to innovate, it is expected that corporate investing in Europe will only continue to grow.
Innovation agenda likely to drive future growth
Europes diversity is a positive attribute when it comes to innovation. The EU and many European countries have established
innovation agendas aimed at fostering innovation in a variety of areas, from fintech to insurtech to digital health. This move to
support the development of a more proactive ecosystem of incubators, accelerators, innovation hubs and innovation incentives to
encourage and stimulate growth should only help increase Europes innovation presence over the next few years.
#Q1VC
64
VC-BACKED EUROPEAN FUNDING OFF TO A SLOW

START IN 2016
VC-backed companies in Europe saw a new peak in funding and deal activity in 2015, with $14B invested
across more than 1500 deals. 2016 has started slower, with most of 2016 funding rooted in the $1B
convertible note raised by Spotify and less than 350 deals occurring in the first quarter (compared to more
than 400 in Q115).
European Annual Financing Trends to VC-Backed Companies

2011 2016 YTD (Q116)
$1 6.0
$1 6.0
1310
1310
$1 4.0
$1 4.0
16 00
16 00
14 00
14 00
1113
1113
$1 2.0
$1 2.0
$1 0.0
$1 0.0
1323
1323
1513
1513
12 00
12 00
10 00
10 00
769
$8 0
.
$8 0
.
80 0
80 0
$6
60
$
..0
60
00
6
0
338
$4
0
$
40
..
$2 0
.
$5.1
$5.9
$6.1
$9.5
$14.0
$14.0
$3.5
$-$
40
0
4
00
20 0
0
0
2011
2012
2013
Investments ($B)
2014
2015
2016 YTD
Deals
#Q1VC
65
There is a lot of dry powder and liquidity

in the system a lot of money has been
raised in the last 12 to 24 months that has
to be invested. While I dont see valuations
coming down very steeply, investors are
expected to become more active and more
hands-on.
Guillermo Ramos
Director, Corporate Finance,

KPMG in Spain
#Q1VC
66
DEAL COUNT IN EUROPE DROPS AGAIN IN Q116 BUT

FUNDING RISES
Q116 saw a further decline in deal activity to European startups from Q415, down to the lowest level
since Q314. Despite this, funding dollars bounced back to $3.5M, an 8% uptick from the quarter prior,
largely due to the $1B convertible note raised by Spotify.
European Quarterly Financing Trends to VC-Backed Companies

Q111 Q116
$4 0
.
45 0
403
$3 .5
311
$3 0
.
284
320
336
330
324
330
346
396
344
341
370
40 0
338
35 0
306
275
30 0
243
$2 5
.
213
$2 0
.
25 0
202
171
183
20 0
$1 5
.
15 0
$1 .0
10 0
$0 5
.
50
$1.4
$1.3
$1.0
$1.4
$1.1
$1.4
$1.9
$1.6
$1.2
$1.5
$1.7
$1.6
$2.1
$2.4
$3.2
$1.8
$3.5
$3.8
$3.5
$3.2
$-
$3.5
0
Investments ($B)
Deals
#Q1VC
67
SEED DEAL SHARE IN EUROPE DROPS BELOW 40%

Seed/Angel deal share in Europe fell below 40% for the first time in at least 5 quarters, taking only 35% of
total deal share into VC-backed companies. Deal share across the board went up slightly as a result, with
Series A jumping above a quarter of deal share.
European Quarterly Deal Share by Stage

Q115 Q116
19%
15%
14%
16%
2%
2%
4%
8%
2%
3%
5%
9%
1%
2%
7%
1%
1%
4%
9%
10%
20%
26%
21%
24%
44%
40%
Q1'15
Q2'15
Seed / Angel
Series A
19%
2%
2%
5%
11%
26%
Series B
47%
43%
Q3'15
Q4'15
Series C
Series D
Series E+
35%
Q1'16
Other
#Q1VC
68
Companies that want to attract seed

and angel investments in Europe right
now need to provide investors with more
defined plans for how they will achieve
their targets. Without a roadmap for
achieving profitability, investors may be
skeptical about a companys bullish
assumptions.
Tim Dmichen
Partner,
KPMG in Germany
#Q1VC
69
EARLY-STAGE DEAL SIZE INCREASES FOR THE

SECOND STRAIGHT QUARTER
Despite early-stage deal share decreasing in Q116, the median size of the deals have increased to $2.2M
for the quarter. Early-stage deal size in Europe has moved up and down, but this has been the second
consecutive quarter of deal size growth.
European Early-Stage Deal Size

Q115 Q116
$2.0
$2.0
$2.2
$1.6
$1.3
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16

#Q1VC
70
EUROPEAN LATE-STAGE DEAL SIZE SHRINKS IN Q116

After median late-stage deal sizes broke $15M for 3 quarters in a row, the median in Europe fell to $13.2M
in Q116, a 29% quarter over quarter decrease.
European Late-Stage Deal Size

Q115 Q116
$19.6
$16.0
$18.6
$13.2
$9.4
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16

#Q1VC
71
INTERNET TAKES MORE THAN HALF OF ALL DEALS

AFTER A 3-QUARTER SLOWDOWN
Tech companies continue to take the most deal share, with internet, mobile, and software comprising more
than 70% of total deal share into Europe in Q116. Internet also took more than half of all deal share, the
first time since the same quarter 1 year prior.
European Quarterly Deal Share by Sector

Q115 Q116
12%
15%
16%
14%
13%
3%
5%
4%
5%
4%
7%
5%
5%
11%
12%
13%
17%
17%
16%
46%
47%
48%
Q2'15
Q3'15
Q4'15
10%
15%
52%
Q1'15
Internet
Healthcare
3%
4%
13%
15%
53%
Q1'16
Other
#Q1VC
72
THE 10 LARGEST EUROPEAN ROUNDS OF Q116

REPRESENTED MORE THAN $1.7B IN FUNDING
Skyscanner
Travel search engine
Series C
Autolus
Biopharmaceutical
company developing
cancer immunotherapies
Series B
MISSION Therapeutics
Biotech company focused
on cancer drug and novel
therapeutic discovery
Series C
$1B
Spotify
Music streaming service
Convertible Note
$50M
$192M
Aprea
Biotech company focused on
cancer drug discovery
Series B
$60M
$86M $60M
$54M
$50M
$109M
$49M
HighQ
Enterprise collaboration and
data room software provider
Growth Equity
Blippar
Augmented reality and
visual discovery app
developer
Series D
Deezer
Music streaming service
Series E
Xolution
Resealable beverage can
manufacturer
Undisclosed
Student.com
International student
accommodation booking platform
Venture Capital
#Q1VC
73
Investors in many parts of the world are

increasingly insisting on new
protections and guarantees. In Europe,
the billion-dollar VC investment into
Spotify carried with it guarantees,
protecting investors, should Spotify
make good on its promise to go public in
the next few years.
Patrick Imbach
Head of High Growth
Technology Group,
KPMG in the UK
#Q1VC
74
CORPORATE PARTICIPATION TOPS 20% FOR 4 OF THE

LAST 5 QUARTERS
Corporate investors participated in 23% of all deals to European VC-backed companies in Q116.
Corporate participation has now topped 20% for 4 of the last 5 quarters.
CVC Participation in European Deals to VC-Backed Companies

Q115 Q116
16%
21%
23%
22%
23%
84%
79%
77%
78%
77%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Other Investors
#Q1VC
75
HIGH-TECH GRUENDERFONDS IS MOST ACTIVE VC

INVESTOR IN EUROPE IN Q116
High-Tech Gruenderfonds continues to hold its spot as the most active VC investor in Europe. The
German-based VC led all VCs with multiple early-stage bets, including LifeTime and Gravit, among others.
Business Growth Fund, German Startups Group and Index Ventures rounded out the top four.
Most Active VC Investors in Europe

Q116
Rank
Investor
Rank
Investor
High-Tech Gruenderfonds
Holtzbrinck Ventures
Business Growth Fund
Bayern Kapital
German Startups Group
Salesforce Ventures
Index Ventures
Imperial Innovations
Caixa Capital Risc
Ventech
Partech Ventures
e.ventures
Notion Capital
IBB Beteiligungsgesellschaft
Source: Venture Pulse, Q1'16, Global Analysis of Venture Funding, KPMG International and CB Insights (data provided by CB Insights) April 13, 2016
#Q1VC
76
UK VC-BACKED INVESTMENT ACTIVITY

Top Deals
UK Investment Activity
Skyscanner
$192M // Series C
MISSION Therapeutics
$1 6
, 00
123
122
113
$1 4
, 00
103
$1 ,2 00
13 0
$86.24M // Series C
12 0
Autolus
11 0
105
$1 0
, 00
10 0
$8 00
90
$6 00
80
$4 00
70
$2 00
60
$1,206
$1,509
$1,026
$1,472
50
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Top Cities
London
53 Deals // $636.1M
Cambridge
10 Deals // $168.5M
Edinburgh
$1,264
$-
$60M // Series B
Q1'16
4 Deals // $198.7M
Deals
#Q1VC
77
GERMANY VC-BACKED INVESTMENT ACTIVITY

Top Deals
Germany Investment Activity
Xolution
$49.14M // Unattributed VC
eGym
$1 4
, 00
90
79
74
80
$45M // Series C
Spotcap
$1 2
, 00
70
$34.4M // Series B
60
$1 0
, 00
47
$8 00
60
51
Top Cities
50
Berlin
40
$6 00
47 Deals // $172.1M
30
$4 00
20
$2 00
10
$1,257
$538
$513
$441
$394
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
$-
Investments ($M)
Munich
9 Deals // $113.9M
Hamburg
5 Deals // $27.8M
Deals
#Q1VC
78
In Q1 2016
ASIAN
$6.5 billion
#Q1VC
79
VC activity in Asia declines further from Q315 high

VC activity in Asia declined further in Q116, driven by a slowdown in Chinas economy as the country continued to adapt to a new
norm for its economic growth and a more cautious investment climate being projected out of the US. With investor confidence
eroding, VC deals in Asia declined for the second straight quarter, falling to half of its $14.3 billion high set in Q315.
A decrease in mega-deals has been a large part of the decline. While mega-deals were rampant in 2015, 2016 will likely be less
robust. While VC deal numbers dropped only slightly from Q415, average deal size decreased significantly.
Lack of IPO exits distressing, but advancing M&A activity

When it comes to exit strategies, IPOs are still highly attractive to Asia-based investors despite challenges associated with
execution. In the dominant Chinese market, the IPO approvals process has slowed considerably. The central government of China
re-opened the market to IPOs in November. However, there are still approximately 700 companies waiting to be listed. The entire
IPO process in China remains complicated, with significant listing requirements and a regulatory review process that makes the
timing of IPOs uncontrollable.* This lack of exits can be distressing to investors and founders alike.
With IPO exits becoming more difficult, M&A is becoming an increasingly attractive exit strategy. There is also a big push within
China for local companies to pursue M&A and other investment opportunities in the United States. Investors in China appear to be
following this advice. In Q1, international VC investors accounted for 27 percent of investment in US based companies, an increase
from 17 percent in Q415. Of these international participants, China-based VC investors came second only to those from the UK.
Desire for smart capital coming to the fore
Over the past several months, startups across Asia particularly in India have begun looking for more than VC funding; they are
looking for investors that understand their business model and who can help support and shape their business strategy. Startups see
this smart capital approach as an important way to gain both experienced insights and access to markets. While such an approach
has always existed, the growing uncertainty in the market is making more startups realize the importance of having knowledgeable
investors.
Two-track economy becoming more prevalent in China
Traditional industries in China seem to be adjusting to the realities of a slowdown while industries that focus on higher value
activities, including services, technology, healthcare and education seem highly optimistic. The Chinese government appears to be
creating specific incentives to encourage VC investments in cities like Shanghai to help transition China to an innovation economy.
* Source reference: The Wall Street Journal, Chinese Companies Are Trapped in IPO Logjam, December 7, 2015.
#Q1VC
80
VC activity in Asia declines further from Q315 high (cont.)

Startup Ecosystem continues to grow in India
In India meanwhile, Q116 marked the official launch of Startup India an ambitious program that includes funding support and
credit guarantees for startups. In addition, investment in e-commerce and digital internet companies have been on the rise over the
last few quarters, and is set to continue especially for niche business & operating models, backed by entrepreneurs with a successful
history. *
Fintech and focused companies poised to do well in tightening market
Fintech is expected to continue to garner significant investment in Asia despite current market uncertainties. Given the size of Asian
markets, the different levels of maturity for financial services across the region, and the expected demand for digital banking services
in many parts of Asia, fintech mega-deals are expected to continue, in addition to the potential rise of Asia-based fintech Unicorns.
Companies that focus ruthlessly on key metrics cost to acquire customers, monthly run rate, burn rate on capital should also
continue to find funds and get fair valuations relative to the rest of the market, while less focused companies can expect to find
attracting funding from cautious investors difficult.
* Source reference: India soars high, KPMG in India, February, 2016.

#Q1VC
81
ASIA SEES SIGN OF A SLOWDOWN IN 2016 WITH JUST

$6.5B INVESTED ACROSS 358 DEALS
Asia has seen a rapid increase in financing and deal activity into VC-backed companies since 2011, with
more than $40B invested across 1555 deals in 2015. 2016 has seen a marked slowdown, however, with
just $6.5B invested as the number of mega-rounds into the area dropped sharply.
Asian Annual Financing Trends to VC-Backed Companies

2011 2016 YTD (Q116)
1555
$4 5.0
18 00
$4 0.0
16 00
1293
$3 5.0
14 00
$3 0.0
12 00
912
$2 5.0
$2 0.0
$1 5.0
494
10 00
624
80 0
358
$1 0.0
$5 0
.
60 0
40 0
$6.5
$4.7
$6.5
$21.0
$40.0
$6.5
$-
20 0
2011
2012
2013
Investments ($B)
2014
2015
2016 YTD
Deals
#Q1VC
82
INVESTMENT INTO ASIA SEES SECOND CONSECUTIVE

QUARTER OF DECREASE
Q116 was the second quarter since Q414 that dropped below $9B in funding while deals activity dropped
9% from Q415. Crossover investors have decreased their activity, with $100M+ financings dropping
precipitously in the last 2 quarters with just 16 a piece.
Asian Quarterly Financing Trends to VC-Backed Companies

Q111 Q116
$1 6.0
397
359
$1 4.0
352
409
45 0
394
358
355
40 0
35 0
$1 2.0
279
$1 0.0
299
283
30 0
243
25 0
190
$8 0
.
$6 0
.
127
132
106
129
149
141
196
194
20 0
144
15 0
$4 .0
10 0
$2 0
.
50
$1.1
$3.1
$1.1
$1.2
$1.3
$1.2
$1.2
$1.0
$1.7
$1.0
$1.6
$2.2
$2.8
$4.0
$4.9
$9.3
$5.2
$10.7
$14.3
$9.8
$-
$6.5
0
Investments ($B)
Deals
#Q1VC
83
Chinese VCs are starting to go out and

invest overseas. There has been a much
stronger push from the central
government for Chinese investors,
especially large corporate investors, to
look internationally for opportunities
and, in many cases, bring those new
opportunities back to China to help
strengthen our own ecosystem.
Irene Chu
Partner, Head of High Growth
Technology & Innovation Group,
KPMG in Hong Kong
#Q1VC
84
ASIAN EARLY-STAGE DEAL SHARE BOUNCES BACK

AFTER DECLINE IN 2015
In Q116, early-stage (seed Series A) deal share accounted for 59% of all deals to VC-backed
companies in Asia. This reverses a largely downward trend throughout the whole of 2015, although it falls
short of the 64% early-stage share in Q115.
Asian Quarterly Deal Share by Stage

Q115 Q116
10%
2%
3%
6%
11%
2%
3%
7%
13%
3%
3%
9%
13%
3%
3%
8%
15%
16%
19%
18%
26%
24%
23%
33%
31%
30%
31%
32%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
16%
31%
Seed / Angel
Series A
Series B
Series C
1%
3%
8%
Series D
Series E+
17%
27%
Other
#Q1VC
85
MEDIAN EARLY-STAGE DEAL SIZE IN ASIA RISES TO

$2.5M
Median early-stage deal size to Asian VC-backed companies rose healthily in Q116, erasing 2
consecutive quarters of declines. Overall, early-stage deals have remained at or above $2M across the
past 5 quarters.
Asian Early-Stage Deal Size

Q115 Q116
$2.5
$2.0
Q1'15
Q2'15
$2.5
$2.3
Q3'15
$2.0
Q4'15
Q1'16

#Q1VC
86
MEDIAN LATE-STAGE DEAL SIZE IN ASIA IS SLASHED

BY MORE THAN HALF
As mega-rounds continued to flourish in Asia with financings into ride-sharing and e-commerce companies
(among others), median late-stage deal size crept up to more than $150M+ in Q415. In Q116, the median
late-stage deal size dropped by 59%, hitting closer to Q115 levels.
Asian Late-Stage Deal Size

Q115 Q116
$154.0
$85.0
$100.0
$62.5
$60.0
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16

#Q1VC
87
INTERNET AND MOBILE SHARE FALLS TO 5-QUARTER

LOW, ALTHOUGH STILL DOMINANT OVERALL
The relative share of deals going to Asian internet and mobile companies fell to a 5-quarter low, although
their combined deal share of 75% still far outpaces other sectors. Mobile, in particular, declined for a
second straight quarter, down to 21%. Healthcare, software and consumer products & services remained
relatively range-bound.
Asian Quarterly Deal Share by Sector

Q115 Q116
9%
4%
1%
5%
10%
2%
2%
5%
26%
24%
56%
57%
Q1'15
Q2'15
Internet
13%
2%
3%
4%
25%
53%
Q3'15
Healthcare
8%
3%
3%
5%
14%
3%
3%
5%
24%
21%
58%
54%
Q4'15
Q1'16
Other
#Q1VC
88
10 LARGEST ASIAN ROUNDS OF Q116 REPRESENT

MORE THAN $2.9B IN FUNDING VS. $5.9B IN Q415
China Internet Plus Holding

Location-based dining information
and discount group-buying website
Growth Equity
$500M
Snapdeal
E-commerce marketplace
Series F
BigBasket
Online grocery store
Series D
$153M
$100M
$150M
Clues Network
E-commerce marketplace
Series E
CarTrade
Online automotive classifieds platform
Series B
Lu.com
Peer-to-peer
lender
Series B
$200M
$160M
$145M
Zhaogang
Steel e-commerce platform
Series E
DouyuTV
Live video streaming website
Venture Capital
$150M
Garena Online
Internet entertainment and
e-commerce platform provider
Series D
$1.2B
Welab Holdings
Peer-to-peer lender
Series B
$170M
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ASIAN CORPORATES MAINTAIN INVESTMENT PAGE,

ACCOUNT FOR NEARLY ONE-THIRD OF ALL DEALS
Fueled by the direct investments of corporates in particular (e.g. Alibaba, Tencent, Baidu, Rakuten, etc.),
corporates and CVCs participated in 32% of all financing deals to Asian VC-backed companies in Q116,
matching last quarters high.
CVC Participation in Asian Deals to VC-Backed Companies

Q115 Q116
26%
28%
31%
32%
32%
74%
72%
69%
68%
68%
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Other Investors
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500 STARTUPS WAS THE MOST ACTIVE VC IN ASIA IN

Q116
500 Startups was again the most active VC in Asia, having recently launched several Asia -focused microfunds from Q415 through Q116 (e.g. 500 Startups Japan, 500 Durians, 500 TukTuks and 500 Vietnam).
Accel Partners, East Ventures and CyberAgent Ventures join 500 Startups to round out the top four.
Most Active VC Investors in Asia

Q116
Rank
Investor
Rank
Investor
500 Startups
IDG Capital Partners
Accel Partners
10
Sequoia Capital India
East Ventures
10
IMJ Investment Partners
CyberAgent Ventures
10
SAIF Partners
Matrix Partners China
10
Blume Ventures
BEENEXT
10
Ping An Ventures
Gobi Partners
10
Lightspeed Venture Partners
Sequoia Capital China
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91
In the future, we expect to see more

buyout activities and consolidation in
China. We also expect to see a lot more
corporates setting up VC arms to make
venture type investments in order to get
in the game and follow the lead of
companies like Baidu, Alibaba and
Tencent.
Lyndon Fung
US Capital Markets Group,
KPMG in China
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92
CHINA VC-BACKED INVESTMENT ACTIVITY

Top Deals
China Investment Activity
Lu.com
$1.2B // Series B
$1 2,00 0
14 0
121
12 0
$1 0,00 0
99
105
China Internet Plus

Holding
$500M // Growth Equity-II
Zhaogang
10 0
$8 0
, 00
78
85
80
$6 ,0 00
60
$4 0
, 00
40
$153M // Series E
Top Cities
Beijing
27 Deals // $1.2B
Shanghai
$2 0
, 00
20
$3,259
$6,648
$10,241
$7,282
$4,000
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
Deals
20 Deals // $1.9B
Hangzhou
6 Deals // $48M
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93
INDIA VC-BACKED INVESTMENT ACTIVITY

Top Deals
India Investment Activity
Snapdeal
$200M // Series F
Clues Network
$3 5
, 00
141
142
16 0
14 0
$3 0
, 00
121
116
12 0
$150M // Series E
BigBasket
$150M // Series D
$2 5
, 00
94
10 0
$2 ,0 00
80
$1 5
, 00
60
$1 0
, 00
40
$5 00
20
$1,208
$2,346
$2,897
$1,519
Bangalore
35 Deals // $316M
Mumbai
22 Deals // $116M
New Delhi
$1,153
$-
Top Cities
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
Q1'16
10 Deals // $249M
Deals
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94
Similar to the telecom and mobile boom

10 years ago, digital banking is ripe for
explosion. Everything is converging
technology, government action [in India],
growth and demand.
Sanjay Aggarwal
Partner-in-Charge,
KPMG Enterprise,
KPMG in India
#Q1VC
95
SOUTHEAST ASIA VC-BACKED INVESTMENT ACTIVITY

Top Deals
Southeast Asia Investment Activity
Garena Online
$170M // Series D
iFlix
$6 00
12 0
Astroscale
98
$5 00
10 0
70
$4 00
$3 00
$35M // Series B
80
Top Countries
66
56
54
$45M // Corp. Minority
60
Singapore
21 Deals // $260.1M
$2 00
40
Indonesia
$1 00
20
$140
$262
$568
$363
Malaysia
$390
$-
Q1'15
Q2'15
Q3'15
Investments ($M)
Q4'15
14 Deals // $23.9M
Q1'16
13 Deals // $67.9M
Deals
#Q1VC
96
METHODOLOGY WHATS INCLUDED? WHATS NOT?

CB Insights and KPMG International encourage you to review the methodology and definitions employed
to better understand the numbers presented in this report. If you have any questions about the definitions
or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if
you feel your firm has been underrepresented please send an email to [email protected] and we can
work together to ensure your firms investment data is up-to-date.
What is included:
What is excluded:
Equity financings into emerging companies. Fundings must come from

VC-backed companies, which are defined as companies who have
received funding at any point from either: venture capital firms,
corporate venture group or super angel investors.
No contingent funding. If a company receives a commitment for $20M

subject to hitting certain milestones but first gets $8M, only the $8M is
included in our data.
Fundings of only private companies. Funding rounds raised by public

companies of any kind on any exchange (including Pink Sheets) are
excluded from our numbers even if they received investment by a
venture firm(s).
Only includes the investment made in the quarter for tranched
investments. If a company does a second closing of its Series B round
for $5M and previously had closed $2M in a prior quarter, only the $5M
is reflected in our results.
Round numbers reflect what has closed not what is intended. If a
company indicates the closing of $5M out of a desired raise of $15M,
our numbers reflect only the amount which has closed.
Only verifiable fundings are included. Fundings are verified via
(1) various federal and state regulatory filings; (2) direct confirmation
with firm or investor; or (3) press release.
Previous quarterly VC reports issued by CBI have exclusively included
VC-backed rounds. In this report any rounds raised by VC-backed
companies are included, with the exceptions listed.
No business development / R&D arrangements whether transferable

into equity now, later or never. If a company signs a $300M R&D
partnership with a larger corporation, this is not equity financing nor is it
from venture capital firms. As a result, it is not included.
No buyouts, consolidations or recapitalizations. All three of these
transaction types are commonly employed by private equity firms and
are tracked by CB Insights. However, they are excluded for the
purposes of this report.
No private placements. These investments, also known as PIPEs
(Private Investment in Public Equities), even if made by a venture
capital firm(s).
No debt / loans of any kind (except convertible notes). Venture debt or
any kind of debt / loan issued to emerging, startup companies, even if
included as an additional part of an equity financing is not included. If a
company receives $3M with $2M from venture investors and $1M in
debt, only the $2M is included in these statistics.
No government funding. Grants, loans or equity financings by the
federal government, state agencies or public-private partnerships to
emerging, startup companies are not included.
#Q1VC
97
KPMG ENTERPRISE INNOVATIVE STARTUP NETWORK. FROM

SEED TO SPEED, WERE HERE THROUGHOUT YOUR JOURNEY
Contact us:
Brian Hughes

Innovative Startups Network
E: [email protected]
Arik Speier

Innovative Startups Network
E: [email protected]
#Q1VC
98
About KPMG Enterprise

About KPMG Enterprise
You know KPMG, you might not know KPMG Enterprise.
KPMG Enterprise advisers in member firms around the world are dedicated to working with businesses like yours. Whether youre
an entrepreneur looking to get started, an innovative, fast growing company, or an established company looking to an exit,
KPMG Enterprise advisers understand what is important to you and can help you navigate your challenges no matter the size or
stage of your business. You gain access to KPMGs global resources through a single point of contact a trusted adviser to your
company. Its a local touch with a global reach.
The KPMG Enterprise global network for innovative startups has extensive knowledge and experience working with the startup
ecosystem. Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory
requirements - we can help. From seed to speed, were here throughout your journey.
#Q1VC
99
Acknowledgements
We acknowledge the contribution of the following individuals who assisted in the development of this publication:
Dennis Fortnum, Global Chairman of KPMG Enterprise, KPMG International
Brian Hughes, Co-Leader, KPMG Enterprise Innovative Startups Network, and National Co-Lead Partner, KPMG Venture Capital
Practice, KPMG in the US
Arik Speier, Co-Leader, KPMG Enterprise Innovative Startups Network, and Head of Technology, KPMG in Israel
Brendan Martin, Lead Health Technology, High Growth Technology Practice, KPMG in the UK
Conor Moore, National Co-Lead Partner, KPMG Venture Capital Practice, KPMG in the US
Francois Bloch, Partner, Head of Innovative Startups, KPMG in France
Francois Chadwick, National Tax Leader, KPMG Venture Capital Practice, KPMG in the US
Guillermo Ramos, Director, Corporate Finance, KPMG in Spain
Irene Chu, Partner, Head of High Growth Technology & Innovation Group, KPMG in Hong Kong
James Mabbott, Head of KPMG Innovate, KPMG in Australia
Jerzy Kalinowski, Partner, Management Consulting, KPMG in Poland
Jonathan Lavender, Principal, Head of Markets, KPMG in Israel
Lyndon Fung, US Capital Markets Group, KPMG in China
Patrick Imbach, Head of High Growth Technology Group, KPMG in the UK
Sanjay Aggarwal, Partner-in-Charge, KPMG Enterprise, KPMG in India
Tim Dmichen, Partner, KPMG in Germany
#Q1VC
100
FOR ALL DATA INQUIRIES EMAIL CB INSIGHTS AT

[email protected]
TO CONNECT WITH A KPMG ADVISER IN YOUR

REGION EMAIL [email protected]
kpmg.com/venturepulse [website]
@kpmg [Twitter]
www.cbinsights.com [website]
@cbinsights [Twitter]
The information contained herein is of a general nature and is not intended to address the circumstances of
any particular individual or entity. Although we endeavor to provide accurate and timely information, there
can be no guarantee that such information is accurate as of the date it is received or that it will continue to
be accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
#Q1VC
101

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Global Analysis of

April 13, 2016

What is driving the decline in VC activity and will it last?

You know KPMG, you might not

CB Insights is a National Science

$25.5B in funding | 1829 deals

$15.2B in funding | 1101 deals

$3.5B in funding | 338 deals

$6.5B in funding | 358 deals

All monetary references contained in this report are in USD

In Q1 2016 VC-backed companies raised

US DEALS FALL AGAIN IN Q116; FUNDING

Note: Report includes all rounds to VC-backed

CB Insights tracked a large number of mega-deals to VC-backed companies

INVESTMENT PACE IN ASIA CONTINUES TO

Mixed signs in European financing: Total funding in Europe

Asia funding drop-off continues: Deals to VC-backed

Late-stage deals shrink dramatically: Q116 saw a sudden

Global VC activity slumps for second straight quarter

Global VC activity slumps for second straight quarter (cont.)

$25.5B DEPLOYED ACROSS 1829 DEALS TO VC-BACKED

Annual Global Financing Trends to VC-Backed Companies

Q116 SEES CONTINUED DECLINE FROM Q415 AS BOTH

Quarterly Global Financing Trends to VC-Backed Companies

1736 1756 1798

2095 2134 2080 2121

$12.3 $14.6 $11.6 $10.4

SEED-STAGE DEAL SHARE FALLS TO 5-QUARTER LOW

Quarterly Global Deal Share by Stage

MEDIAN EARLY-STAGE DEAL SIZE TICKS UPWARD TO 5QUARTER HIGH

Global Early-Stage Deal Size

Median Early-Stage Deal Size ($M)

GLOBAL MEDIAN LATE-STAGE DEAL SIZES CONTINUE

Global Late-Stage Deal Size

Median Late-Stage Deal Size ($M)

INTERNET AND MOBILE CONTINUE TO ACCOUNT FOR

Global Quarterly Deal Share by Sector

Mobile & Telecommunications

Consumer Products & Services

TECH MAINTAINS GIANT INVESTMENT DEAL LEAD

Quarterly Global Tech vs. Healthcare Deal Share

*percentages in chart are rounded to nearest whole number

VC-BACKED COMPANIES IN ASIA CONTINUE TO FEEL

Deal Count by Continent

Investment ($B) by Continent

CORPORATES ACCELERATE INVESTMENT PACE INTO

CVC Participation in Global Deals to VC-Backed Companies

Corp / CVC Deal Participation

CYBERSECURITY VC-BACKED INVESTMENT ACTIVITY

VC-Backed Companies, Q115 Q116

$96M // Private Equity

DIGITAL HEALTH VC-BACKED INVESTMENT ACTIVITY

VC-Backed Companies, Q115 Q116

Digital health offering real opportunities for VC investors

Solutions becoming specific and data-driven

Digital health is becoming very

ED TECH VC-BACKED INVESTMENT ACTIVITY

VC-Backed Companies, Q115 Q116

$75M // Growth Equity

NORTH AMERICA MAINTAINS EARLY-STAGE DEAL SIZE