French VC market experiences rapid growth The VC market in France gained momentum during Q2’17 with a significant increase in VC investment and interest quarter over quarter. VC interest is only expected to increase heading into Q3, as Station F — a massive startup incubator — opened with the support of numerous global companies, including Microsoft, Ubisoft, Amazon and others. France’s new president Emmanuel Macron also recently announced the introduction of a new ‘talent passport’ aimed at attracting critical talent to the country, and proposed a new European Venture Fund to help foster the growth of startups.11 On the M&A front, Snap, Inc. (SnapChat) made headlines with the acquisition of Paris-based startup Zenly for $250M - $350M. Ireland continues to gain traction among global VC investors Ireland’s VC market remained robust in Q2’17. A $65 million raise by Iterum Therapeutics was among the top 10 European deals during the quarter, while a number of smaller deals also showcased Ireland’s growing innovation expertise. Fintech remains one of Ireland’s strongest tech sectors, able to attract early-stage funding despite the risk-adverse funding market. In Q2’17, payments messaging app Plynk successfully raised €25 million in Series A funding to help scale its operations and fuel global growth. Trends to watch for in Europe Despite significant uncertainty, the outlook for VC investment in Europe remains positive given the rapid evolution of tech hubs across the region. While the UK, Israel and Germany will likely continue to be leading hubs of investment, France, Ireland and Scandinavia are expected to continue to grow on the radar of investors. Investments in artificial intelligence, analytics, blockchain and B2B-focused technologies are also expected to increase over the next two to three quarters. Q2’17’s Improbable deal may also spur additional investments in virtual reality. 11 http://www.cnbc.com/2017/06/15/french-president-macron-france-should-be-a-country-of-unicorns.html © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. #Q2VC