The Year in Review at Earlybird
By: Earlybird Venture Capital
Tags: Digital West, Vc Thoughts, Europe, VC, Entrepreneurship

The Year in Review at Earlybird

2020 offered extraordinary contrasts — both in the highs and lows it delivered. The COVID-19 crisis changed lives and grounded us in place. Yet we saw resilient growth beyond expectations. We’re inspired by ambitious founders committed to their missions and we’re convinced that the European start-up community is fueling innovative solutions for new challenges. Join us in looking back to get a glimpse of what’s ahead! 🔭

Although surprising even to us, 2020 marks Earlybird’s best year yet in our 23-year history, and not just in terms of proceeds. We actively took on support of climate action, social responsibility, and a focus on health and patient outcomes. We saw record financings, exits, and innovation in AI, FinTech, SpaceTech, InsurTech and healthcare.

Our annual recap features selected milestones and methods from across the Earlybird platform. These events and initiatives indicate to us an evolution of the venture ecosystem that we’re proud to be a part of.

Here’s how we broke down this year’s achievements and areas of impact:

I. SOCIAL RESPONSIBILITY

II. MEGA ECOSYSTEM EXITS

III. BRINGING HEALTH INTO FOCUS

IV. INVESTING IN THE FUTURE

V. SUMMARY

I. SOCIAL RESPONSIBILITY

In 2020, we took an active stance on climate action, as well as diversifying and supporting entrepreneurship in Europe: for our companies during the crisis, for emerging markets in the East, and to encourage entrepreneurs with migrant backgrounds here in Germany.

// Climate protection power in numbers // 🧩

Introducing a sustainability clause (20.01.2020)

We kicked off the year with a strong commitment to climate protection. Together with leading venture capital firms, we put in place a sustainability clause that effectively commits newly-financed companies (in our Digital West and Health portfolios, so far) to take part in additional climate protection initiatives.

Fabian Heilemann spoke on a panel at the DLD, the Digital Life Design Conference

The clause requires companies to measure CO2 emissions and to implement reduction measures such as adjusting travel policies or switching to a green electricity provider. One of our first portfolio companies who implemented the sustainability clause was Bitwala. The sustainability clause was developed in cooperation with the Leaders for Climate Action (LFCA) initiative, co-founded by our Partner, Fabian Heilemann.

// Support for Portfolio Companies// 👐🏼

Hands-on support for our portfolio companies (20.07.2020)

The corona crisis hit the start-up scene hard. Financing rounds were postponed and in some cases, entire industries collapsed. In these uncertain times, we offered our portfolio companies hands-on operational support to manage potentially negative effects. Quoting Winston Churchill in a Handelsblatt Op-Ed, our Co-founder and Partner, Hendrik Brandis, underlined that a crisis can offer silver linings, and expressed conviction that despite hardship, there’s good reason to remain optimistic in the long-run.

Earlybird Partner Dan Lupu during a HowToWeb Session on how Fintech OS kept thriving during the pandemic

We later saw a prime example of guidance provided during the summer’s turbulent times: the evident trust exemplified between FintechOS and our Digital East Partner, Dan Lupu. Catch their conversation about handling the peak of the crisis here.

// Global leaders emerge from the east// 🏆

UiPath from our Digital East team proves to be a forerunner (23.07.2020)

Daniel Dines, CEO of UiPath, one of our Digital East Fund portfolio companies with origins in Romania.

UiPath is one of the few European start-ups that has developed into a global market leader. Our Partner Cem Sertoglu is convinced that if we approach the second wave of digitization in Europe properly, the outlook for further success stories in the software and the deep-tech sector is going to be bright. Companies like Photoneo from Bratislava show how this can be done.

// Social responsibility here in Germany// 🇩🇪

Together with Bain, we’re dedicating support for migrant founders (24.08.2020)

In public debates across Europe, migration is often stigmatized or undervalued. In our view, this misses an important opportunity. Silicon Valley and the US offer examples of how diversity positively impacts the tech scene; almost half of the unicorns there were founded by migrants or their children.

Vision Lab is kicking off in January 2021 but we already have incredible teams lined up.

In Germany, we have not yet sufficiently realized this enormous potential. That’s why together with Bain & Company and other key partners, we’ve launched Vision Lab. The non-profit program has 3 modules to bolster teams which include newcomers to Germany, with entrepreneurship skills and the chance to turn their start-up ideas into reality. The Vision Lab represents a core aspect of our values: we’re committed to promoting the best minds regardless of origin. We believe the start-up community should exemplify this diversity and openness.

// Augmenting VC with AI // 🦅

Earlybird’s Eagle Eye for market screening (07.10.2020)

We always seek ways to broaden and diversify the pool of talents and early-stage startups. As a basis for decisions, many VCs tend to rely on a reputable, though single-source of information, like Crunchbase. The problem is that such databases cannot guarantee that available information is always up-to-date. As part of his PhD thesis, our Principal Andre Retterath set out to change that. In his work at Technical University of Munich (TUM), he developed an AI-based algorithm to screen the deal universe more comprehensively to support wider deal selection.

When we add ML capabilities to augment our approach to selection, we better the odds of coming into contact with YOU — the most promising talents and start-ups. As Andre said, “it’s neither about choosing the right ones nor sorting out the wrong ones. Instead, it’s about not sorting out the right ones.” Read more in the Handelsblatt.

Andre Retterath, Principal at Earlybird, published his research recently in Germany’s Handelsblatt newspaper

“It’s neither about choosing the right ones nor sorting out the wrong ones. Instead, it’s about not sorting out the right ones.” — Andre Retterath

II. MEGA ECOSYSTEM EXITS

This year was the most successful in Earlybird’s 23-year history with our biggest exits on record – validating our investment thesis and confirming our belief that the European ecosystem is maturing and evolving favorably.

// Game on. Record exit for the ecosystem // 🎮

Zynga acquired Peak (01.07.2020)

The summer saw a landmark transaction for our firm and the entire European ecosystem: one of the global leaders in interactive entertainment, San Francisco-based Zynga, announced the acquisition of our portfolio company and Turkish mobile gaming developer, Peak, in a USD 1.8bn deal. As an early and the largest shareholder, we sold our stake in Peak to Zynga for more than USD 568m; this represented the largest exit in our 23-year history and marked one of the largest technology exits ever by a German VC fund.

This represented the largest exit in our 23-year history and marked one of the largest technology exits ever by a German VC fund.

Earlybird has been part of Peak’s success story since 2011 and has continued supporting the company as it grew into a global player for mobile gaming apps. As our Co-founder & Partner Roland Manger reminds, “Peak’s success is a solid example of how Earlybird connects with exceptional founders and promising technology companies from all corners of Europe at a very early stage — and corrals all resources available to help them realize their full potential.”

Sidar Sahin, CEO of Peak Games, a historic breakthrough company

“Peak’s success is a solid example of how Earlybird connects with exceptional founders and promising technology companies from all corners of Europe at a very early stage — and corrals all resources available to help them realize their full potential.” — Roland Manger

// Furnishing the world: an exit for global expansion// 🛋

Actera Group acquired Vivense (16.07.2020)

The Turkish start-up scene continues to be a source of successful European founders and talents. In July, we celebrated another major milestone: our portfolio-company Vivense secured a USD 130m investment from Turkish private equity fund, Actera Group. Vivense is a Turkish online marketplace for furniture that used the funding to further fuel the company’s continued growth in Turkey and ignite its global expansion plans, starting from the UK this year.

The deal also marked the first sizable VC-to-PE exit in the region this year. Earlybird’s Digital East fund was one of the first investors of Vivense. Partners Evren Ucok, Cem Sertoglu and Mehmet Atici accompanied Vivense CEO Kemal Erol and his team on their journey from the very beginning. Congrats to Vivense on their success story!

// Mixing up a recipe for social media insights // 👩🏽‍🍳

Astute solutions acquired Socialbakers (09.09.2020)

The September merger between our Digital West portfolio company, Socialbakers, and Astute Solutions meant combining the capabilities of both companies to provide a unified omni-channel platform for customer experience management and AI-driven insights for global brands. We’ve supported the Prague-based start-up, Socialbakers, since the seed funding in 2011.

The Socialbakers global team at the Sales Kick Off in 2019, in Prague.

Since then, their AI-powered social media marketing platform has helped more than 2,500 enterprise and mid-market brands to transform their social media activities into measurable business results. As our Partner Fabian Heilemann said, “Socialbakers’ team has developed one of the most innovative social media marketing platforms worldwide, and as a longstanding investor, we at Earlybird are proud to have accompanied them throughout their journey.”

III. BRINGING HEALTH INTO FOCUS

In 2020, we focused increasingly on optimizing patient outcomes. This was incredibly important during what turned out to be a year forever marked by the COVID-19 pandemic. 🩺

The pandemic is demonstrating multi-industry reliance on healthcare systems. We saw the diagnostics and digital health sectors expand, through increased investment in both sectors and increased adoption rates of digital health tools. Our Health Team made three new investments this year that prioritize patient outcomes — with Oculis, Noscendo, and PrioThera joining the portfolio.

Read more about how Noscendo revolutionizes diagnosis through software.

For Oculis, we joined the Series B round; Oculis is developing a pipeline of topical drug candidates for the improvement of back-of the eye-diseases, like macular degeneration. We participated in the Series A round for Noscendo, a digital diagnostics company for identification of viruses, bacteria and fungi using Next Generation Sequencing (NGS) for patients in intensive care with severe infections. (Noscendo was recently named a health pioneer by the German newspaper, Handelsblatt.) We also joined the Series A round for PrioThera, a biopharma company developing molecules to enhance the curative potential of bone marrow transplant in blood cancer patients.

In our existing portfolio, we saw impressive developments: Besides Polares Medical’s Series B (highlighted directly below), Wellabe raised a Series A with Sana Kliniken AG who operates 53 hospitals in Germany. Oviva is gaining traction in its offering of evidence-based digital diabetes prevention programs, especially during the Corona pandemic. Alesi Surgical signed a US distribution agreement with Olympus. Atlantic Therapeutics welcomed their new CEO, Susan Trent and iSTAR Medical won the 2020 BVA award.

// Taking health to heart with Polares Medical// 🥽

Our Health Fund portfolio company raises $40 million Series B (25.06.2020)

Among Europe’s top-five biggest medical devices industry deals for Q2 of 2020, was the venture financing of our portfolio company, Polares Medical, for $40m. This impressive Series B syndicate was led by healthcare venture growth investor Longitude Capital with participation from existing investors: Earlybird, along with Wellington Partners, Endeavour Vision, Decheng Capital and IDO investments.

Polares Medical develops a first-line treatment for mitral regurgitation patients, a condition which, left untreated, can cause heart failure or heart rhythm problems. They’ve started their first in-human studies and the funding will further advance clinical studies in Europe and the US.

Polares Medical has developed an implant to treat heart problems.

In 2017, Polares spun out of Symetis SA prior its acquisition by Boston Scientific, with the Earlybird Health Fund as one of their first investors. They’ve come a long way since — demonstrating the strength of the MedTech European ecosystem; we look forward to continuing to support them!

IV. INVESTING IN THE FUTURE

With our team of 55 people across Europe and EUR 1.5 billion under management, we’re proud to report that in the past year, we deployed EUR 112 million into 42 game-changing companies. We welcomed 9 new companies while our current portfolio had big wins and saw major financing rounds, indicating confidence in the missions of those we back. Below are some highlights.

// Disrupting industrial simulation with SimScale// 💸

Financing for the engineering simulation platform, SimScale (30.01.2020)

David Heiny, CEO of SimScale

As venture capitalists, we have the privilege of getting to know passionate, impact-driven founders and guiding the development of their scalable business models.

One such success story is SimScale, provider of the world’s first production-ready SaaS application for seamless engineering simulation.

In January, SimScale, announced it had closed €27 million in Series C funding, with Insight Venture Partners complementing Earlybird and USV. We’ve been part of SimScale’s entrepreneurial journey since joining the seed round back in 2014 and are excited to see their huge potential to disrupt the industrial simulation market.

// Geographic distribution? No problem. // 🌎

Financing for Hazelcast empowers enterprises in achieving ultra-fast application performance — at scale. (15.02.2020)

With the advancement of team communication and collaboration tools like Slack and Zoom, companies can thrive while being geographically dispersed — even on an executive level. Our portfolio company Hazelcast is a prime example: HQ is in San Mateo, CA while R&D is in Istanbul, Turkey and Brno, Czech Republic. Additional developers are stationed in several other countries while technical product management is run out of London, and the VP of Engineering is based in Denmark. (This makes for interesting meetings in Bermuda, the only place on the planet where all members of the geographically distributed executive team could meet without a quarantine.)

Hazelcast has come a long way since 2011, when our Digital East Fund team discovered a handful of world-class developers in a technology park in Gebze, just outside of Istanbul, who had built a global network of contributors to their open-source, in-memory data grid project which already had Morgan Stanley and Cisco clamouring for their software. In 2014, we invested.

Fast forward to early February 2020, when Hazelcast completed a USD 50m financing from new investors such as C5 Capital, EBRD and DEG in order to accelerate its development and growth. Now they empower global 2000 enterprises to achieve ultra-fast application performance — at any scale.

// Lauching DeepTech in Europe // 🚀

Isar Aerospace started orbital launch vehicles production (07.09.2020) and achieved EU’s largest SpaceTech financing to-date (09.12.2020)

Space will be a central technological platform in the coming years — and our portfolio company Isar Aerospace provides the necessary infrastructure for Europe. Founded in 2018 in Munich, Isar Aerospace develops and builds launch vehicles for transporting small and medium-sized satellites, as well as satellite constellations into the Earth’s orbit. In September, Isar Aerospace opened a new production site in Ottobrunn and started production of orbital launchers. Bavarian Prime Minister Dr. Markus Söder took part in the opening ceremony, underlining the importance of space technology as an enabler of future innovations.

Our Partner Hendrik Brandis (far right) speaks with a group including Bavarian Prime Minister, Dr. Markus Söder

Then in early December, Isar Aerospace raised EUR 75m, completing its Series B round successfully. The fresh capital coming from a predominantly German consortium led by Earlybird, Lakestar and Vsquared Ventures, indicates a rise of DeepTech in Europe. Isar Aerospace now begins production and plans for the launch its first launch vehicle. As Isar’s largest shareholder, we’re extremely proud to support the founders on their path.

// Streaming the Year’s Biggest Pay Per View Show // 🥊

FITE delivered a knockout victory for Triller’s Tyson-Jones Event (28.11.20)

Live sports distributors worldwide faced serious logistical challenges due to the pandemic. The digital platform, FITE, an early investment of our Digital East Fund, embraced the sudden mass migration to streaming. The combat sports platform doubled down on its efforts to acquire bigger events and partnerships and added new content verticals in soccer, music and motorsports.

Not everyone saw the Tyson-Jones PPV matchup as a viable event presented by Triller, a new music social media app, but FITE sensed this could become a highly symbiotic relationship. As the exclusive US digital distributor, FITE powered Triller’s microsite as well as FITE’s impressive online, mobile, smart TV and OTT streaming ecosystem and became the #1 grossing app in the world on fight weekend, growing its registered user base to 4M users. The event itself was a blockbuster with 1.6m buys and a whopping $80m in growth revenue. This makes it the biggest one in 2020, the 8th most purchased PPV in history, and the most purchased PPV via digital ever.

// Making German roads safer // 🚗

Getsafe closed a USD 30 million Series B (08.12.20)

In early December, we congratulated our Digital West Fund portfolio company Getsafe on the closing of an impressive Series B round led by Swiss Re, which will allow the Insurtech startup a significant acceleration of growth, consolidation as market leader among millennials in Germany and the UK, as well as expansion into other European markets.

Getsafe’s promotional video as part of a design-award-winning campaign they launched this fall.

As Reuters pointed out, ‘the Heidelberg-based startup is adding auto insurance to its core offering of liability and contents insurance, and plans to expand into areas like life cover as its demographic matures and becomes more prosperous.’ Our Partner Christian Nagel sees this is a lighthouse moment for other Insurtechs: “Getsafe’s recent financing serves as a positive indicator that insurance which adapts to new mindsets and technologies will be well-equipped for the future.”

// Expanding the Fintech Footprint // 🗂

Welcoming Upvest to our Fintech Family (10.12.20)

In December we also welcomed Upvest to our Fintech family which already includes the likes of N26, smava, Bitwala and Payhawk. Having led the expansion of Upvest’s Series A+, we’re excited to support Europe’s first securities API.

Upvest empowers financial institutions by offering investment products in their app with a modular, scalable and accessible API. Our Partner Tim Rehder, who earlier this year wrote about the European Fintech landscape, notes, “Upvest lets Fintech companies focus on core business while providing a simple plug-and-play solution for integrating securities into their products.”

Operating in a promising growth market where neobanks increasingly concentrate on expanding their product range, Upvest makes – for the first time – previously illiquid assets, such as real estate, available to a larger public market. The API can be integrated easily into existing client platforms, streamlining internal processes, and reducing costs by up to 85 percent.

V. SUMMARY

In sum, we’re grateful to be positioned in a way that we could continually support the companies across our portfolio despite the growing intensity of the pandemic and we’re proud of all their achievements.

Despite 2020’s tumultuous environment, we see strong tailwinds propelling the entire start-up ecosystem forward, including record-setting IPOs. We look forward to supporting more founder journeys, bringing scalable company visions to life, and reaching new milestones along the way – always refining our methods.

We wish all our readers and community a prosperous & healthy 2021!

Keep up with us and our portfolio companies on Linkedin and Twitter. 🙏🏽