Michel Wendell - Nexit Ventures - Finland - Stanford Engineering - Mar 5 2012

0

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nexit Ventures

Bridging Mobile Opportunities

1

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nexit Ventures

Michel Wendell

Grew up in Finland, spent half my life elsewhere

EE degree

Started businesses from scratch in four countries

Held every corporate job outside of finance and HR

In the Valley since 1996

Entrepreneur – Nexit is my start-up

Cherish life, family, nature, arts, food – hate airplanes and dishonest people

2

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nexit Ventures

Executive Summary

Focus on mobile and wireless– Software, enabling technology, service and content opportunities – The convergence between communication, computing and content

Activities are targeted to the Mobile hot spots

– Offices in Helsinki, Stockholm and Silicon Valley– Majority of the investments in the Nordic area– Most of the rest in the US west coast– Networking, business development in China, Korea and Japan

Majority of the capital to be deployed in series B and C financings

– Initial investments will be typically done in series A and B financings

Raised about $200M in two funds, fund structure on Guernsey

6 person investment team, all operational and relevant industry background

Hands-on, partnering with the entrepreneurs

Investment size; $500k-$5M, total up to $10M

We invest in people, innovation and market opportunity

3

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nexit Strategy

Bridging Mobile Opportunities

The Nexit Bridge – connecting the mobile hot spots

Bridging Nordic mobile companies to Silicon Valley markets and exit

opportunities

Providing US based mobile companies with a Nordic market insight,

customer access, and technology resources

Access to lead mobile operators and handset manufacturers in Asia

4

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Market Overview

Mobile & Wireless Market

Source: Morgan Stanley, Nexit

The history of computing can divided into four distinguishable waves

Every wave has lasted roughly 10 years

Each wave has been significantly larger (revenue & market cap) than the previous one

The initial growth has been faster than in any preceding wave

All waves have produced significant new players and generated major wealth for their investors

Now the fifth wave – the Mobile Internet – is upon us

5

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Market Overview

Mobile & Wireless Market

6

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Mobile Technology Hot Spots

Nordic Wireless Knowledge

Finland and Sweden on top of the global R&D spending

– Sweden and Finland are the only two EU countries spending more than 3

percent of gross domestic product (GDP) on research and development

– Investments in knowledge – the sum of investments in R&D, software and higher

education – are highest in the United States, Sweden and Finland.

In The Nordic countries high tech business has a strong wireless flavor

– R&D skills: The Nordic investment in knowledge is largely focused on mobile

technologies and wireless telecommunication, led by companies such as Nokia

and Ericsson

– Business skills: Individuals leaving Nokia and Ericsson (including the top

management) are generating a continuously growing world class quality deal flow

in mobile space

Eurostat 2006, OECD 2003

7

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Hot Spots in Financial World

Entry in EU – High Value Exit in US

Source: DowJones VentureSource Reports

0

5

10

15

20

25

30

35

40

45

50

Median VC pre

money

valuation

Median M&A

valuation

USD $M The Nexit bridge to high value exits

Median entry valuations

substantially lower in the EU

in all VC investment stages

Median M&A exit valuations

substantially higher in the US

Arbitrage: entering with low

European valuations and exiting

with high US valuations

5 $M

15 $M

23 $M

47 $M

Europe US

entry

exit

8

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Hot Spots in Financial World

The Acquisition power resides in US

North America dominates the high tech market

– North America represents 30% of the global GDP

but over 60% of the value of public technology companies

– North American companies make ~3/4 of high tech acquisitions

Utilizing the North American M&A market is crucial for high tech VC

9

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Hot Spots in Financial World

M&A Activity

Source: Capital IQ, SEC, Thompson Reuters, Nexit Ventures.

10

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Hot Spots in Financial World

Wireless M&A Activity

Source: Rutberg & Company, Nexit Ventures.

11

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nexit Strategy

Bridging Mobile Opportunities

Acquired by nVidia

[NSDQ:NVDA]Acquired by Sybase

[NYSE:SY]

Acquired by HP

[NYSE:HPQ]

Partial exit: NTT DoCoMo

Acquired by ON2/Google

High Growth, profitable

~ 90% revenue from US

Flip from Finland to US

~ 75% revenue from US

Flip from Finland to US

US mgmt/bizdev - FIN R&D

12

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Strategy Execution

Investment Strategy

Typical portfolio company profile

Companies with global ambitions and products that can compete globally

Management teams with experience and execution power

Target that over 50% of the companies will be originated from the Nordic area,

most of the rest in the US, a few in Asia or Europe

Nexit should contribute concrete added value for the portfolio company:

Our deep domain knowledge and global network combined with active hands on

involvement can be used to better monitor and further accelerate the development

Nexit’s investment strategy execution

Benchmarking the deal flow globally (teams, technology, market opportunity)

Strong involvement in company’s strategy, supporting execution and business

development, early international growth

Connecting to global partners and customers for faster growth

Positioning and building networks for international high value exits

13

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Nordic VC Scene

Typical portfolio company profile

Over the past 5 years there has been about $5B in VC investments in the Nordic

area in 3700 deals ($32B in VC investment in the US in 2011 in 3200 deals,

almost 40% from Silicon Valley)

Roughly 75% of the money in the Nordics came from governmental sources

There are probably 20 active VCs, down from almost 100 in 2000

Deal flow

We see 400-600 mobile/wireless plans per year

50% Nordic, 40% US

We make 0-2 new investments per year

14

H e l s i n k i S t o c k h o l m S i l i c o n V a l l e y CONFIDENTIAL w w w . n e x i t v e n t u r e s . c o m

Thank You!

Kiitos!

Tack!