Software Sector Summary Report - GCA Savvian [PDF]

Software C O M P Sector A N Y PSummary RESENTATION Week of May 22, 2017

1

DEAL DASHBOARD Software $21.0 Billion

240

$15.1 Billion

39

Financing Volume YTD (1)(2)

Financing Transactions YTD (1)(2)

M&A Volume YTD (3)

M&A Transactions YTD (3)

Select Financing Transactions Company

Quarterly Financing Volume (1)(2) $Bn

Amount ($MM)

37% $9

$3

$6

$4

98%

$14

$231 $100

Quarterly M&A Volume (3) $Bn

$50

$5

$3,903

$15

$14

$15 $12

$7

(

$63 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

Quarterly Financing Deal Count (1)(2)

Quarterly M&A Deal Count (3)

20%

$52

118

$41 72

86

127

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16Q3'16 Q4'16 Q1'17

29

27

24

27

$425

25

$331 $270

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

M&A EV/ NTM Rev. Over Time (6) All Buyers

IGV 30%

30%

`

6.0x

4.0x

20%

16%

15%

2.0x

5%

1.0x

PE Buyers

5.3x

3.9x

4.2x

3.9x

4.4x

4.0x

3.9x

3.5x

3.1x

4.6x

4.9x

4.1x

3.6x

3.0x

2.9x

2.7x

3.0x

10%

Strategic Buyers

4.7x

5.0x

25%

0% May-16 (5%)

$610

15

13

Last 12 Months Software Price Performance vs. S&P 500 (5) SPX

$800

)

$614

24 7

35%

(

123 94

$40 $33

$834

)

33%

156 103 111

EV ($MM)

$24

$6 $5

$55

Acquirer

$41

$10

$6

Select M&A Transactions (4) Target

2.2x

2.0x

2.4x 1.7x

0.0x

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17 Mar-17

Apr-17

May-17

2011

2012

2013

Notes: Source: Capital IQ, PitchBook, and Dow Jones VentureSource. Market Data as of 05/18/2017. 1) Criteria based on software series A and subsequent rounds of global financings greater than or equal to $20MM. 2) Financings include Software Venture and Private Equity Growth / Expansion activity. 3) Criteria based on global target software M&A deals with transaction enterprise values greater than $50MM. 4) Software M&A transactions reflect select transactions in CY2017. 5) iShares North American Tech-Software ETF (IGV), used as proxy for software landscape. Top holdings in the ETF include ADBE, MSFT, ORCL, CRM, and INTU. 6) Criteria based on global public target software M&A deals with enterprise transaction values greater than $100MM.

2014

2015

2016

2017

2

GCA OVERVIEW Software Team

New York

San Francisco

th

25th Fl.

One Maritime Plaza, San Francisco, CA 94111 United States Phone: (415) 318-3600

640 Fifth Avenue, 10 Fl. New York, NY 10019 United States Phone: (212) 999-7090

Frankfurt

London

Tokyo

Thurn-und-Taxis-Platz 6 60313 Frankfurt Germany Phone: +49 69 204 34 6410

1 Southampton St. London WC2R0LR United Kingdom Phone:+44 20 7484 4040

11-1 Marunouchi 1-chome Chiyoda-ku, Tokyo 100-6230 Japan Phone: +81 (3) 6212-7100

Todd Carter

Clark Callander

Steve Fletcher

Paul DiNardo

Sascha Pfeiffer*

Akikazu Ida**

Co-President and CEO

Co-Head of Investment Banking

Head of Software

Managing Director

Managing Director

Managing Director

Phone: (415) 318-3610 Mobile: (415) 314-9898 [email protected]




Phone: +49 (69) 204-346 415 Mobile: +49 (0) 177-74-15643 [email protected]

Phone: +81 (3) 6212-7241 Mobile: +81 (80) 9027-3023 [email protected]

Daniel Avrutsky

Chris Gough

James Orozco

Joshua Wepman

Adrian Reed*

Managing Director

Managing Director

Managing Director

Managing Director

Managing Director





Phone: +44 845 505 4314 Mobile: +44 7887 626 800 [email protected]

Glen Kruger

Raiko Stelten*

Gautam Garg

Mike Janovec

Saif Malik***

Director

Director

Vice President

Vice President

Vice President


Phone: +49 (69) 204 34 6418 Mobile: +49 171 335 0879 [email protected]



Phone: +44 (0) 20 7484-4106 Mobile: +44 (0) 77 8606-8553 [email protected]

Notes: * Adrian Reed, Managing Director; Sascha Pfeiffer, Managing Director and Raiko Stelten, Director respresent GCA Altium AG, a wholly-owned subsidiary of GCA Corporation. ** Akikazu Ida is a Managing Director at GCA Corporation. *** Saif Malik is Vice President at GCA Savvian Europe Ltd.

3

RECENT STOCK PERFORMANCE Index Performance Last 12 Months

Last 3 Years

35%

60%

30%

50%

25%

40%

20%

30%

15%

20%

10%

10% 0% May-14 Aug-14 (10%)

5% 0% May-16 Jun-16 (5%)

Jul-16

Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17

Nov-14

Feb-15 May-15 Aug-15

Nov-15

Feb-16 May-16 Aug-16

Nov-16

Feb-17 May-17

(20%) (30%)

(10%)

Sector Platform Infrastructure Security SaaS / On Demand BI & Analytics Vertical

3 Months

1 Year

3 Years

5.7% (0.3%) 0.4% 8.9% 0.1% 11.0%

26.6% 24.1% 29.2% 31.8% 20.4% 23.2%

44.4% 19.7% 47.0% 65.4% 12.9% 49.6%

Notes: Source: Capital IQ. Market Data as of 05/18/2017. BI & Analytics: ATTU, AYX, DATA, DWCH, FICO, GSUM, HDP, MSTR, SPLK, TDC, VRNT. Infrastructure: ATEN, CA, CTXS, CVLT, FFIV, LOGM, MCRO, MULE, NEWR, NOW, NTCT, NTNX, PRGS, PSTG, RHT, SOW, SPLK, TEAM, VMW. Platform: GOOGL, IBM, MSFT, ORCL, SAP. SaaS / On Demand: AMBR, APTI, AYX, AZPN, BCOV, BLKB, BNFT, BOX, BV, CALD, CARB, COUP, COVS, CRM, CSLT, CSOD, ECOM, FIVN, HUBS, INST, JCOM, LOGM, LPSN, MIME, MRIN, MULE, NEWR, NOW, OKTA, PAYC, PCTY, PCYG, QLYS, RNG, RP, SHOP, SPSC, TWOU, ULTI, VEEV, WDAY, WK, YEXT, ZEN. Security: ABT, CHKP, CUDA, CYBR, FEYE, FSC1V, FTNT, GUID, IMPV, IPAS, MIME, MOBL, PANW, PFPT, QLYS, RPD, SCWX, SPLK, SYMC, Trend Micro, VDSI, ZIXI. Vertical: APPF, ATHN, BLKB, CERN, CLGX, CSLT, CSU, ELLI, EXA, GWRE, HSTM, INOV, INST, MDRX, MDSO, RP, SSNC, SSNI, VEEV, WBMD.

4

TRADING COMPARABLES Valuation and Operational Metrics EV / 2017E Revenue

EV / 2017E EBITDA 40.0x

7.0x 6.0x

5.7x

Median: 4.5x 4.9x

5.0x

4.7x

35.0x

33.7x

Median: 26.3x

31.5x

28.7x

30.0x 4.4x 4.0x

4.0x

3.6x

24.0x

25.0x 20.7x

20.0x 3.0x

15.0x

2.0x

11.8x

10.0x

1.0x

5.0x 0.0x

0.0x SaaS / On Demand

Infrastructure

Vertical

Platform

Security

SaaS / On Demand

BI & Analytics

BI & Analytics

2017E / 2016A Rev. Growth 40% Median: 16%

23% 18%

16%

Platform

Median: 22% 27% 23%

25%

16%

15%

Infrastructure

36%

35% 30%

20%

Vertical

2017E EBITDA Margin

30% 25%

Security

10%

10%

20%

20%

14%

17%

15%

SaaS / On Demand

BI & Analytics

15% 10%

5%

5% 0%

0% SaaS / On Demand

BI & Analytics Infrastructure

Security

Vertical

Platform

Platform

Infrastructure

Vertical

Notes: Source: Capital IQ. Market Data as of 05/18/2017. Figures represent mean values of respective comp groups. BI & Analytics: ATTU, AYX, DATA, DWCH, FICO, GSUM, HDP, MSTR, SPLK, TDC, VRNT. Infrastructure: ATEN, CA, CTXS, CVLT, FFIV, LOGM, MCRO, MULE, NEWR, NOW, NTCT, NTNX, PRGS, PSTG, RHT, SOW, SPLK, TEAM, VMW. Platform: GOOGL, IBM, MSFT, ORCL, SAP. SaaS / On Demand: AMBR, APTI, AYX, AZPN, BCOV, BLKB, BNFT, BOX, BV, CALD, CARB, COUP, COVS, CRM, CSLT, CSOD, ECOM, FIVN, HUBS, INST, JCOM, LOGM, LPSN, MIME, MRIN, MULE, NEWR, NOW, OKTA, PAYC, PCTY, PCYG, QLYS, RNG, RP, SHOP, SPSC, TWOU, ULTI, VEEV, WDAY, WK, YEXT, ZEN. Security: ABT, CHKP, CUDA, CYBR, FEYE, FSC1V, FTNT, GUID, IMPV, IPAS, MIME, MOBL, PANW, PFPT, QLYS, RPD, SCWX, SPLK, SYMC, Trend Micro, VDSI, ZIXI. Vertical: APPF, ATHN, BLKB, CERN, CLGX, CSLT, CSU, ELLI, EXA, GWRE, HSTM, INOV, INST, MDRX, MDSO, RP, SSNC, SSNI, VEEV, WBMD.

Security

5

PUBLIC COMPANY VALUATIONS Software Trading Statistics $MM, Except Per Share Data Stock

Platform Alphabet Inc. Microsoft Corporation Oracle Corporation International Business Machines Corporation SAP SE

Trading Statistics

Price

Equity

Net

Aggregate

5/18/2017

Value

Debt

Value

$950.50 $67.71 $44.17 $150.78 $104.58

$657,511 522,756 181,745 141,657 125,348

($88,502) (35,581) (5,385) 32,091 799

$569,009 487,175 176,360 173,748 126,147 Mean Median

Infrastructure VMware, Inc. ServiceNow, Inc. Red Hat, Inc. CA, Inc. Citrix Systems, Inc. Splunk Inc. F5 Networks, Inc. Atlassian Corporation Plc Micro Focus International plc LogMeIn, Inc. Software Aktiengesellschaft NetScout Systems, Inc. MuleSoft, Inc. Commvault Systems, Inc. Nutanix, Inc. New Relic, Inc. Pure Storage, Inc. Progress Software Corporation A10 Networks, Inc.

$92.28 $98.97 $85.52 $31.04 $82.59 $65.31 $125.90 $35.34 $31.32 $110.35 $45.31 $34.10 $24.15 $55.00 $16.00 $41.69 $10.32 $29.13 $8.16

$37,688 16,813 15,203 12,969 12,483 9,035 8,146 7,968 7,193 5,807 3,461 3,130 3,110 2,472 2,291 2,231 2,146 1,406 566

($6,485) (459) (715) 157 43 (997) (1,015) (504) 1,613 (266) (101) (143) (340) (450) (355) (206) (547) (134) (116)

$31,203 16,354 14,488 13,126 12,527 8,038 7,131 7,465 8,805 5,541 3,361 2,987 2,771 2,022 1,936 2,024 1,599 1,272 450 Mean Median

Notes: Source: Capital IQ and Wall Street Estimates. Multiples 100 considered NM. Negative margins considered NM. Market Data as of 05/18/2017.

AV / Revenue CY 17E

AV / EBITDA

CY 18E

CY 17E

CY 18E

Operating Metrics Price / EPS CY 17E

CY Rev. Growth

CY 18E

17E/16A

18E/17E

EBITDA Margin CY 17E

CY 18E

5.3x 4.9 4.6 2.2 4.7

4.6x 4.6 4.5 2.2 4.4

13.0x 12.7 10.4 9.4 13.8

11.1x 11.5 9.8 9.3 12.7

23.0x 21.8 16.2 11.0 22.2

19.5x 19.5 14.9 10.8 20.3

18.9% 16.6% 2.2% (2.1%) 14.5%

16.2% 6.5% 3.2% (0.2%) 6.5%

40.7% 38.6% 44.5% 23.6% 34.4%

41.2% 40.0% 45.8% 24.0% 34.9%

4.4x 4.7

4.1x 4.5

11.8x 12.7

10.9x 11.1

18.8x 21.8

17.0x 19.5

10.0% 14.5%

6.5% 6.5%

36.4% 38.6%

37.2% 40.0%

4.1x 8.7 5.5 3.2 4.4 6.7 3.3 10.5 6.3 5.5 3.3 2.6 10.4 3.0 2.3 6.3 1.6 3.2 1.7

3.9x 6.7 4.8 3.1 4.3 5.3 3.1 8.2 6.2 4.8 3.2 2.4 7.7 2.7 1.7 4.9 1.2 3.2 1.6

11.8x 39.8 20.8 8.8 12.9 59.4 8.5 44.1 12.1 15.9 10.3 10.3 NM 21.5 NM NM NM 8.9 25.0

10.9x 27.3 17.4 8.2 12.0 41.4 7.9 34.1 13.1 12.6 10.3 8.2 NM 16.7 NM 60.2 20.9 8.9 15.9

19.0x 85.0 34.5 13.3 17.8 NM 15.1 90.3 17.4 28.5 16.3 18.7 NM 51.0 NM NM NM 17.5 66.6

17.5x 58.0 28.9 12.5 16.3 73.2 13.6 62.5 16.1 22.8 15.4 14.9 NM 39.8 NM NM NM 17.4 36.9

6.6% 35.0% 14.0% 1.7% (17.3%) 25.6% 5.9% 33.5% NA 5.6% 9.4% 2.3% 41.7% 7.1% 42.1% 33.3% 35.8% (3.2%) 12.6%

5.9% 29.4% 13.3% 2.2% 4.1% 26.2% 6.3% 28.8% 1.4% 15.8% 2.8% 9.0% 36.0% 10.2% 35.1% 27.1% 31.2% 0.9% 11.5%

34.8% 21.9% 26.3% 36.2% 34.4% 11.3% 39.3% 23.9% 51.9% 34.7% 32.5% 25.1% NM 13.8% NM 0.1% NM 36.4% 6.9%

35.7% 24.7% 27.8% 38.4% 35.5% 12.9% 39.8% 24.0% 47.2% 37.6% 31.5% 28.9% NM 16.1% NM 8.2% 5.9% 36.0% 9.8%

4.9x 4.1

4.2x 3.9

20.7x 12.9

19.2x 13.1

35.1x 18.9

29.7x 17.5

16.2% 11.0%

15.6% 11.5%

26.8% 29.4%

27.1% 28.9%

6


Security Software Symantec Corporation Check Point Software Technologies Ltd. Palo Alto Networks, Inc. Splunk Inc. Fortinet, Inc. Trend Micro Incorporated Proofpoint, Inc. FireEye, Inc. CyberArk Software Ltd. Imperva, Inc. Qualys, Inc. Mimecast Limited Barracuda Networks, Inc. SecureWorks Corp. Rapid7, Inc. F-Secure Oyj VASCO Data Security International, Inc. MobileIron, Inc. Zix Corporation Absolute Software Corporation Guidance Software, Inc. iPass Inc.

Trading Statistics

Price

Equity

Net

Aggregate

5/18/2017

Value

Debt

Value

$29.74 $108.69 $113.71 $65.31 $39.67 $48.62 $80.90 $15.16 $46.46 $47.65 $42.10 $24.93 $22.26 $10.43 $18.15 $4.62 $13.95 $5.25 $5.79 $5.51 $6.41 $1.26

$18,404 17,765 10,465 9,035 6,972 6,676 3,537 2,704 1,599 1,594 1,559 1,394 1,178 843 778 721 557 484 315 218 209 83

$3,939 (1,468) (842) (997) (1,199) (1,113) (41) (124) (287) (313) (245) (109) (196) (117) (79) (103) (146) (91) (23) (35) (17) (13)

$22,343 16,297 9,623 8,038 5,774 5,563 3,496 2,580 1,312 1,282 1,314 1,284 982 727 698 618 411 393 292 183 193 69 Mean Median


AV / Revenue CY 17E

AV / EBITDA

CY 18E

CY 17E

CY 18E

Operating Metrics Price / EPS CY 17E

CY Rev. Growth

CY 18E

17E/16A

4.5x 8.7 5.1 6.7 3.9 4.2 7.0 3.5 4.9 4.0 5.8 5.6 2.7 1.6 3.6 3.3 2.2 2.2 4.4 1.9 1.7 1.0

4.2x 8.1 4.1 5.3 3.4 4.0 5.5 3.2 4.0 3.4 5.0 4.5 2.4 1.4 2.9 3.0 2.0 1.9 4.0 1.8 1.6 0.8

10.1x 16.1 22.2 59.4 19.1 13.1 59.6 40.1 20.8 39.3 18.2 72.8 14.3 NM NM 32.9 25.5 NM 16.3 21.3 15.6 NM

8.5x 15.0 16.8 41.4 15.4 12.3 39.1 29.4 16.3 28.0 15.1 46.2 11.6 NM NM 19.4 15.5 NM 13.8 13.8 12.5 18.3

19.5x 21.0 41.6 NM 43.6 29.1 NM NM 38.4 NM 49.7 NM 29.4 NM NM 65.6 42.3 NM 20.7 NM 20.4 NM

14.8x 19.2 31.8 73.2 35.5 26.6 85.1 NM 30.4 72.1 41.1 NM 26.1 NM NM 36.8 35.8 NM 17.4 35.9 16.3 41.8

31.6% 7.8% 21.2% 25.6% 16.9% 16.9% 33.0% 2.3% 24.6% 21.5% 14.5% 33.8% 6.2% 7.5% 24.6% 13.6% (3.2%) 11.6% 10.4% 8.8% 4.3% 10.4%

4.0x 3.9

3.5x 3.4

28.7x 21.1

20.4x 15.5

35.1x 33.9

37.6x 35.5

15.6% 14.1%

18E/17E


CY 18E

7.7% 6.8% 22.3% 26.2% 14.8% 5.3% 27.9% 9.4% 20.9% 18.3% 16.4% 24.9% 10.2% 10.7% 21.3% 9.5% 12.0% 12.0% 11.0% 8.3% 7.2% 21.7%

44.7% 53.8% 22.8% 11.3% 20.3% 32.2% 11.8% 8.8% 23.3% 10.1% 31.8% 7.7% 18.7% NM NM 9.9% 8.6% NM 26.9% 8.9% 10.7% NM

49.3% 54.1% 24.7% 12.9% 22.0% 32.6% 14.0% 11.0% 24.6% 12.1% 33.1% 9.7% 20.8% 0.9% NM 15.3% 12.7% NM 28.6% 12.7% 12.5% 4.4%

14.8% 12.0%

20.1% 15.2%

20.4% 14.7%

7

PUBLIC COMPANY VALUATIONS Software Trading Statistics $MM, Except Per Share Data

SaaS / On Demand Salesforce.com, inc. Workday, Inc. ServiceNow, Inc. Shopify Inc. Veeva Systems Inc. The Ultimate Software Group, Inc. LogMeIn, Inc. Aspen Technology, Inc. j2 Global, Inc. Paycom Software, Inc. Blackbaud, Inc. MuleSoft, Inc. RealPage, Inc. Zendesk, Inc. RingCentral, Inc. HubSpot, Inc. Paylocity Holding Corporation Box, Inc. New Relic, Inc. Cornerstone OnDemand, Inc. Okta, Inc. 2U, Inc. Coupa Software Incorporated Qualys, Inc. Mimecast Limited Callidus Software Inc. Five9, Inc. Yext, Inc. Alteryx, Inc. SPS Commerce, Inc.

Price

Equity

Net

Aggregate

5/18/2017

Value

Debt

Value

$62,420 19,646 16,813 8,449 8,302 6,201 5,807 4,304 3,897 3,816 3,727 3,110 2,770 2,503 2,447 2,438 2,279 2,265 2,231 2,090 2,087 1,997 1,597 1,559 1,394 1,304 1,156 1,151 1,019 1,001

($1,400) (1,462) (459) (396) (519) (75) (266) 38 641 (61) 342 (340) 61 (248) (150) (122) (101) (102) (206) (50) (37) (129) (202) (245) (109) (183) (11) (19) (164) (154)

$87.75 $95.44 $98.97 $92.11 $59.54 $208.66 $110.35 $57.78 $80.86 $64.22 $79.40 $24.15 $33.50 $25.29 $32.55 $66.70 $44.25 $17.06 $41.69 $36.78 $22.99 $42.00 $31.35 $42.10 $24.93 $20.10 $21.24 $13.22 $17.47 $58.25

Operating Metrics

Trading Statistics

Stock

$61,020 18,183 16,354 8,053 7,783 6,126 5,541 4,343 4,538 3,755 4,069 2,771 2,831 2,255 2,297 2,317 2,178 2,163 2,024 2,040 2,050 1,868 1,395 1,314 1,284 1,121 1,146 1,132 855 847


AV / EBITDA

AV / Revenue CY 17E NA 9.0 8.7 12.8 11.8 6.3 5.5 8.9 3.9 8.8 5.2 10.4 4.4 5.4 4.7 6.5 6.6 4.3 6.3 4.2 9.0 6.9 8.3 5.8 5.6 4.6 5.9 6.8 6.9 3.8

CY 18E NA 7.2 6.7 9.2 9.9 5.2 4.8 8.4 3.6 7.0 4.8 7.7 3.9 4.1 3.8 5.1 5.3 3.5 4.9 3.7 6.5 5.3 6.7 5.0 4.5 3.9 5.1 5.1 5.1 3.3

CY 17E 27.4x 67.9 39.8 NM 38.7 26.0 15.9 18.4 9.5 31.6 21.5 NM 17.7 NM 75.5 NM 38.8 NM NM 36.5 NM NM NM 18.2 72.8 37.1 NM NM NM 26.3

CY 18E 21.9x 47.6 27.3 NM 31.9 20.9 12.6 17.0 8.4 24.5 19.3 NM 14.3 83.1 50.1 89.9 28.7 NM 60.2 24.5 NM 98.6 NM 15.1 46.2 28.1 59.6 NM NM 21.6

CY Rev. Growth

Price / EPS CY 17E NA NM 85.0 NM 75.2 52.4 28.5 28.9 13.8 58.7 37.3 NM 36.9 NM NM NM 68.7 NM NM 90.2 NM NM NM 49.7 NM 64.4 NM NM NM 68.7

CY 18E NA NM 58.0 NM 61.8 42.3 22.8 26.2 12.4 46.3 33.1 NM 30.4 NM NM NM 54.3 NM NM 46.7 NM NM NM 41.1 NM 48.4 NM NM NM 55.6

17E/16A NA 28.9% 35.0% 61.7% 21.0% 23.9% 5.6% 2.9% 31.6% 30.1% 7.7% 41.7% 13.9% 34.8% 29.1% 32.4% 24.9% 26.1% 33.3% 13.8% 41.6% 31.4% 26.1% 14.5% 33.8% 18.4% 18.9% 33.5% 43.4% 14.4%

18E/17E NA 25.1% 29.4% 39.7% 19.2% 21.7% 15.8% 6.1% 8.2% 24.7% 8.3% 36.0% 13.1% 29.7% 23.8% 25.9% 23.8% 22.7% 27.1% 15.6% 39.0% 30.5% 23.7% 16.4% 24.9% 18.2% 16.8% 33.2% 35.8% 14.7%

EBITDA Margin CY 17E NA 13.2% 21.9% 0.7% 30.6% 24.3% 34.7% 48.5% 41.5% 27.7% 24.0% NM 24.7% 3.0% 6.2% 3.2% 17.0% NM 0.1% 11.6% NM 3.8% NM 31.8% 7.7% 12.4% 5.6% NM NM 14.6%

CY 18E NA 15.1% 24.7% 4.3% 31.1% 24.9% 37.6% 49.4% 43.1% 28.7% 24.7% NM 27.1% 5.0% 7.6% 5.7% 18.6% NM 8.2% 15.0% NM 5.4% NM 33.1% 9.7% 13.8% 8.5% NM NM 15.4%

8


Trading Statistics

Price

Equity

Net

Aggregate

5/18/2017

Value

Debt

Value

AV / Revenue CY 17E

AV / EBITDA

CY 18E

CY 17E

Operating Metrics Price / EPS

CY 18E

CY 17E

CY Rev. Growth

CY 18E

17E/16A

18E/17E


CY 18E

SaaS / On Demand (cont'd) Benefitfocus, Inc.

$30.60

$950

$51

$1,001

3.8x

3.2x

63.2x

33.9x

NM

NM

13.9%

18.6%

6.0%

9.4%

Instructure, Inc. Workiva Inc. Apptio, Inc. LivePerson, Inc.

$26.35 $17.35 $15.25 $9.50

762 718 589 555

(38) (44) (111) (48)

724 674 478 507

4.8 3.3 2.6 2.4

3.7 2.9 2.3 2.3

NM NM NM 27.4

NM NM 64.7 21.4

NM NM NM NM

NM NM NM 63.3

36.8% 14.6% 12.8% (6.9%)

30.4% 15.0% 15.4% 5.2%

NM NM NM 8.9%

NM NM 3.5% 10.9%

Carbonite, Inc. Castlight Health, Inc. Bazaarvoice, Inc.

$19.35 $3.75 $4.65

532 489 385

(3) (103) (46)

529 386 339

2.2 2.9 1.7

2.0 2.3 1.6

9.8 NM 20.2

8.1 NM 13.8

25.2 NM NM

19.7 NM 44.6

17.2% 31.4% 1.7%

9.7% 26.3% 6.4%

22.4% NM 8.2%

24.7% NM 11.3%

ChannelAdvisor Corporation Park City Group, Inc. Brightcove Inc. Amber Road, Inc.

$11.45 $12.05 $6.00 $7.21

301 234 205 195

(62) (10) (28) 8

239 224 176 203

1.9 NA 1.2 2.5

1.7 NA 1.1 2.2

34.7 NA NM NM

23.1 NA 23.7 73.2

NM NA NM NM

NM NA 93.8 NM

9.4% NA 1.0% 12.1%

11.4% NA 7.0% 13.3%

5.6% NA NM NM

7.5% NA 4.6% 3.0%

Covisint Corporation Marin Software Incorporated

$1.90 $1.35

78 53

(30) (30)

47 23

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

5.7x 5.4

4.6x 4.6

33.7x 27.4

35.9x 24.5

52.2x 52.4

44.5x 45.5

23.0% 24.4%

20.7% 20.5%

16.4% 12.8%

17.1% 13.8%

Mean Median


9


Trading Statistics

Price

Equity

Net

Aggregate

5/18/2017

Value

Debt

Value

AV / Revenue CY 17E

AV / EBITDA

CY 18E

CY 17E

Operating Metrics Price / EPS

CY 18E

CY 17E

CY Rev. Growth

CY 18E

17E/16A

18E/17E


CY 18E

Business Intelligence & Analytics Splunk Inc. Tableau Software, Inc.

$65.31 $59.69

$9,035 4,655

Fair Isaac Corporation

$131.54

Teradata Corporation Verint Systems Inc.

$28.04 $39.75

MicroStrategy Incorporated

($997) (955)

$8,038 3,700

6.7x 4.2

5.3x 3.9

59.4x 71.2

41.4x 50.8

NM NM

73.2x NM

4,073

510

4,583

4.9

4.6

18.6

16.7

25.5

21.4

3,670 2,491

(603) 439

3,067 2,930

1.5 2.6

1.5 2.4

8.4 11.5

8.0 10.5

22.2 14.7

21.1 13.0

25.6% 6.1%

26.2% 8.4%

11.3% 5.9%

12.9% 7.7%

4.6%

6.5%

26.1%

27.3%

(9.8%) 7.1%

(0.7%) 6.0%

17.4% 22.5%

18.3% 23.1%

$184.13

2,107

(618)

1,489

2.9

2.8

10.9

9.6

24.9

24.4

1.8%

2.9%

26.2%

28.8%

Alteryx, Inc. Hortonworks, Inc.

$17.47 $12.62

1,019 793

(164) (83)

855 710

6.9 3.0

5.1 2.4

NM NM

NM 10.9

NM NM

NM NM

43.4% 29.4%

35.8% 26.2%

NM NM

NM 21.7%

Gridsum Holding Inc.

$11.67

347

(76)

271

3.0

1.9

52.1

8.7

96.4

15.8

56.5%

58.6%

5.8%

21.7%

Attunity Ltd.

$7.12

120

(12)

108

1.7

1.5

20.1

16.9

59.3

27.4

15.1%

15.9%

8.6%

8.8%

Datawatch Corporation

$8.30

100

(28)

72

2.0

NA

NM

NA

NM

NA

15.2%

NA

NM

NA

3.6x 3.0

3.1x 2.6

31.5x 19.4

19.3x 10.9

40.5x 25.2

28.1x 21.4

17.7% 15.1%

18.6% 12.1%

15.5% 14.4%

18.9% 21.7%

Mean Median Vertical Cerner Corporation

$63.82

$21,088

$18

$21,106

4.0x

3.8x

12.4x

11.3x

25.5x

23.0x

10.8%

7.8%

32.8%

33.3%

$497.33

10,539

(125)

10,414

4.4

3.8

16.8

14.6

22.7

19.7

12.6%

13.4%

25.9%

26.2%

Veeva Systems Inc.

$59.54

8,302

(519)

7,783

11.8

9.9

38.7

31.9

75.2

61.8

21.0%

19.2%

30.6%

31.1%

SS&C Technologies Holdings, Inc.

$36.52

7,450

2,336

9,786

5.8

5.5

14.2

12.9

18.8

16.8

13.2%

5.3%

41.1%

43.0%

athenahealth, Inc. Guidewire Software, Inc.

$130.07 $60.84

5,181 4,499

186 (583)

5,367 3,916

4.4 7.4

3.8 6.4

20.5 45.7

16.8 27.3

69.7 89.0

52.9 55.2

12.9% 17.9%

15.0% 16.0%

21.4% 16.2%

22.8% 23.3%

Medidata Solutions, Inc.

Constellation Software Inc.

$69.49

4,048

(98)

3,950

7.1

6.0

29.1

23.5

53.8

45.2

19.2%

18.5%

24.5%

25.7%

Blackbaud, Inc. Ellie Mae, Inc.

$79.40 $107.21

3,727 3,653

342 (393)

4,069 3,259

5.2 7.4

4.8 6.0

21.5 22.5

19.3 17.0

37.3 57.5

33.1 44.1

7.7% 21.8%

8.3% 23.1%

24.0% 33.0%

24.7% 35.6%

CoreLogic, Inc.

$41.20

3,487

1,485

4,972

2.7

2.6

10.7

9.9

18.1

16.0

(5.1%)

3.0%

25.2%

26.4%

RealPage, Inc. Allscripts Healthcare Solutions, Inc.

$33.50 $11.86

2,770 2,152

61 1,224

2,831 3,376

4.4 2.0

3.9 1.9

17.7 9.7

14.3 8.9

36.9 19.1

30.4 16.7

13.9% 10.9%

13.1% 5.9%

24.7% 20.2%

27.1% 20.9%

WebMD Health Corp.

$55.90

2,028

11

2,039

2.8

2.8

8.6

8.3

27.4

27.1

2.2%

2.8%

32.9%

33.1%

Inovalon Holdings, Inc. AppFolio, Inc.

$13.05 $27.95

1,905 946

(274) (27)

1,631 919

3.6 6.6

3.4 5.3

15.2 53.1

13.6 36.7

43.3 NM

37.1 NM

4.9% 31.0%

7.4% 26.3%

23.9% 12.5%

24.8% 14.3%

HealthStream, Inc.

$28.16

898

(115)

783

3.1

2.8

21.8

17.9

NM

92.5

11.1%

11.3%

14.3%

15.6%

Instructure, Inc. Silver Spring Networks, Inc.

$26.35 $9.88

762 525

(38) (117)

724 409

4.8 1.4

3.7 1.2

NM 44.1

NM 17.6

NM NM

NM 39.5

36.8% (3.3%)

30.4% 12.2%

NM 3.1%

NM 6.9%

$3.75

489

(103)

386

2.9

2.3

NM

NM

NM

NM

31.4%

26.3%

NM

NM

$12.81

191

(22)

169

2.2

2.0

29.1

18.5

NM

NM

4.9%

12.1%

7.6%

10.7%

4.7x 4.4

4.1x 3.8

24.0x 21.0

17.8x 16.9

42.4x 37.1

38.2x 35.1

Castlight Health, Inc. Exa Corporation

Mean Median


13.8% 12.7%

13.9% 12.7%

23.0% 24.3%

24.7% 25.3%

10

PUBLIC SAAS COMPANIES – VALUATION CORRELATION TO GROWTH AND CASH FLOW Valuation Correlation to Growth 12.0x

12.0x

VEEV

R = 0.62

OKTA

10.0x

MULE

AZPN WDAY PAYC 8.0x

ULTI CRM

6.0x

QLYS

FIVN

BLKB

4.0x

RP SPSC WK

CSOD

AMBR BV

HUBS MIME

AYX NEWR

ZEN RNG INST

JCOM CSLT

APTI

LPSN 2.0x

YEXT TWOU PCTY

CALD BOX

BNFT

NOW

AZPN COUP 8.0x

PAYC WDAY

NOW

YEXT TWOU

6.0x

FIVN BLKB INST CSOD

BNFT

4.0x CSLT

APTI

BV

NEWR

HUBS ULTI

AYX PCTY

QLYS LOGM ZEN CALD

BOX SPSC

RP

CRM MIME

RNG JCOM

WK

AMBR

ECOM

CARB ECOM

BCOV

BCOV 0%

MULE

OKTA

10.0x

LPSN 2.0x

CARB

R = 0.68

VEEV

Enterprise Value / CY 2017E Revenue

Enterprise Value / CY 2017E Revenue

Valuation Correlation to Growth & Free Cash Flow

10%

20%

30%

40%

50%

CY2017E Revenue Growth

Notes: Source: Capital IQ as of 05/18/2017. Consensus Estimates used for CY2017E figures. Estimates for COVS, CLDR, MRIN and PCYG are not available.

60% (10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

CY 2017E Revenue Growth % + CY 2017E FCF Margin %

11

RECENT ACQUISITIONS Select Software M&A Transactions ($MM)

Announced Date

Aggregate Acquirer

Target

Target Sector

Value (AV)

AV / Revenue LTM

NTM

Target Description

5/11/17

Mobility

$125

NA

NA

Provides artificial intelligence (AI), conversation-based mobile user interface development software for developers

5/9/17

Information Management

$96

5.6x

NA

Provides customer address verification software as a service (SaaS) to e-commerce companies and other businesses. Also provides verification SaaS for other customer data such as phone numbers and email addresses

Infrastructure Management

$490

6.1x

5.2x

Provides software, Web application and API code review, testing and quality assurance (QA) software for businesses

5/1/17

Enterprise Networking

$610

24.4x

15.3x

Provides cloud-based WAN virtualization software that enables businesses to build unified carrier agnostic WAN and network infrastructures that connect them to their facilities, users and applications

5/1/17


$331

1.6x

1.6x

Provides social media-based team collaboration and social media monitoring and marketing software as a service (SaaS) for businesses

Mobility

$270

NA

1.1x

Provides telecom expense management, network provisioning, M2M and mobile device management software and SaaS for businesses. Also provides related business process outsourcing (BPO) services

4/25/17

Security

$230

2.3x

1.8x

4/25/17

Application Software

$75

1.9x

NA

4/12/17


$120

NA

NA

4/4/17


$80

0.7x

NA

Provides customer relationship management (CRM) SaaS that tracks and logs all telephone, text, chat and emailbased communications for healthcare markets. Also provides customer analytics software and a directory of healthcare insurance plans

4/3/17


$50

NA

NA

Provides scholarship management SaaS for K-12 schools, universities and nonprofits. Software provides features for the digital management, awarding, reporting and stewardship of academic awards for students

4/3/17


$73

4.8x

NA

Provides mathematical data analysis and modeling software to engineering and scientific research markets

4/3/17


$92

0.5x

NA

Provides trading software, collaborative data management and EDI software for the securities trading sector


$400

NA

NA

Experian's cross-channel marketing business, which provides marketing automation and email advertising SaaS and outsourced BPO services for businesses and ad agencies worldwide

Security

$366

NA

NA

Operates as the Chinese division of NQ Mobile, which provides Android, Windows Phone, Symbian and BlackBerry smart phone anti-virus and anti-malware software for businesses and consumers globally. Also provides mobile call blocking and device optimization software

5/3/17

4/28/17

(

Marlin Equity Partners

)

Tangoe

4/3/17 (Cros s -channel Ma rketing Division)

3/30/17

(Tongfang Investment Fund Series SPC)

(Bei jing Feiliu Ji utian Technology Co.)

Offers cloud-based APIs and SDKs to help prevent registration fraud, reduce the risk of account takeover and authenticate end users across account lifecycles. Includes phone-based verification and two-factor authentication and real-time security intelligence, data and analytics on phone numbers Provides networked business intelligence (BI) analytics and reporting SaaS for businesses. Software also provides features for data processing and aggregation, data warehouse automation, and the reporting and analysis of CRM, sales and supply chain analytics Provides channel data management SaaS for the consumer electronics sector globally. Software enables companies to intelligently manage global indirect channel sales and inventory data, as well as increase channel visibility

Notes: Source: Capital IQ and Wall Street Estimates. Reflects M&A activity through 05/18/2017, where Aggregate Value is > $50MM. Transactions highlighted in yellow denote Private Equity Acquirers.

12


Announced Date

Aggregate Acquirer

Target

Target Sector

Value (AV)

AV / Revenue LTM

NTM

Target Description


$200

6.3x

4.4x

Provides Web and mobile application testing software for enterprises. Features include website performance testing and management, application load testing, and performance analytics


$270

NA

NA

Provides water resource and environmental management and simulation software to the utilities industry globally. Stantec obtained ownership of Innovyze through the 2016 acquisition of MWH Global


$205

7.3x

NA

Provides investment portfolio business intelligence (BI) software for the investment and finance sector globally. Software provides features for data management, portfolio performance analytics, risk management and reporting

3/7/17

Security

$614

5.6x

NA

Provides automated application penetration and network vulnerability testing SaaS for enterprise software developers

3/7/17


$317

5.3x

NA

Provides on-premise and cloud-based accounting and performance management software and SaaS, including budgeting, planning, reporting and analytics, for businesses

2/28/17

Security

$105

10.5x

NA

Provides behavior-based profiling SaaS for enterprises, enabling breach-detection and visibility into advanced or targeted attacks, insider threats and malware that have circumvented traditional security controls


$290

8.1x

NA

The multi-family housing business and product portfolio of Rainmaker, which provides revenue budgeting, forecasting and revenue cycle management software for multi-family real estate sectors

Enterprise Networking

$325

5.4x

NA


$175

2.4x

2.3x

2/15/17


$102

1.3x

NA

Provides insurance policy and pharmacy claims processing software and SaaS for the insurance and pharmaceutical sector. Also provides colocation, disaster recovery, managed hosting and systems integration services

2/14/17


$59

1.9x

1.6x

Provides wealth management and ERP and transaction processing SaaS for the investment and finance sector globally

3/29/17

3/21/17

(

3/20/17

)

(

)

2/27/17 (Multi-Family Housing Business)

2/23/17

2/23/17

(

)

Provides software-based domain name services (DNS), Dynamic Host Configuration Protocol (DHCP) and IP address management SaaS for enterprises. Software provides features for the management and automation of network DNS activity, mobile BYOD device management and the detection of threats Provides Web-based SaaS for the automation and management of performance appraisals, feedback, compensation management, succession planning, job descriptions, learning management and recruiting for corporate HR departments

2/9/17

Nokia Corporation

Comptel Corporation

Carrier Infrastructure

$373

3.5x

3.1x

Provides network management and operational support system (OSS) software and related managed services for telecom service provides globally

2/8/17

Sophos

Invincea

Security

$120

12.2x

NA

Provides endpoint security software for small businesses and enterprises in the healthcare, financial services and government industries. Software provides features for detection of spear-phishing, watering hole and website hijacking attacks. Also provides server security breach management SaaS

2/2/17

Hexagon AB

MSC Software Corporation ( )


$834

3.6x

NA

Provides motion control, dynamics and acoustical vibration simulation and modeling software for businesses

2/1/17

Fingerprint Cards AB

Delta ID Inc.

Security

$120

NA

NA

Provides iris recognition biometric systems for use in mobile devices and automobiles

(

)


13


Announced

Aggregate

Date

Acquirer

Target

Target Sector

Value (AV)

AV / Revenue LTM

NTM

Target Description

Storage

$67

NA

NA

Provides on-site, hosted and cloud-based back-up and recovery, data protection and replication software for use in disaster recovery for businesses

1/27/17


$128

NA

NA

Provides K-12 education assessment management software for schools and educators

1/25/17


$1,400

NA

NA

Provides electronic medication prior authorization software for pharmacies, healthcare providers, and pharmaceutical companies. Software is integrated into electronic health records so that healthcare providers and doctors can provide electronic authorization

1/24/17


$3,903

18.9x

NA

Provides application performance management (APM) SaaS and mobile applications, enabling the monitoring and troubleshooting of applications, extensions, plugins, databases, and servers for businesses. Also provides related analytics reporting software

Hosted Services

$84

NA

NA

Provides domain name registration and related services to corporate and consumer website owners. Related services include web hosting and an auction service for website domain name resellers


$800

4.6x

NA

Provides project and portfolio management SaaS and related systems integration services for enterprises. Software includes features for plan design, agile project portfolio management and cost analysis and control

1/17/17

Storage

$650

6.5x

NA

Provides backup and recovery storage systems and storage management software for businesses. Storage systems feature virtual machine (VM) level management, in-line de-duplication and compression of data, including backup copies of VMs that can be replicated to secondary datacenters

1/9/17


$425

NA

NA

Provides social collaboration online software for enterprise employees and consumers. Software allows employees and consumers to create "boards" where members collaborate to complete tasks for a project

1/4/17


$134

19.1x

7.0x

Provides health benefits management SaaS for businesses. Software provides features for financial management, customized health benefit plans, and data and analytics reporting

12/23/16


$53

NA

NA

Provides cloud-based global import and export trade reference software and an online database of analysis content, cargo details and related company profiles for businesses at www.datamyne.com

12/20/16


$67

NA

NA

Provides client reporting software and services for the investment and financial services sectors globally

Security

$560

NA

NA

Provides digital rights management SaaS for businesses and content producers, as well as an online digital music and video content recognition database for consumers and the entertainment sector

12/19/16


$160

3.9x

NA

Provides insurance policy administration and management software as a service (SaaS) and on-premise for property and casualty insurance companies. Features include claims management, billing and document management. Also provides related services

12/19/16

Mobility

$67

NA

NA

Designs and develops graphical user interfaces (GUI) for mobile phones and automotive displays, to automotive and other embedded display manufacturers

12/13/16


$130

NA

NA

The vendor management software and related assets of Beeline, which provides vendor management systems (VMS) for businesses globally. Software provides spending management, procurement cycle automation and quality control monitoring

1/31/17

(

)

1/20/17

(

)

1/19/17 (

)

12/20/16 (

(

)

(

)

)


14


Announced Date

Aggregate Acquirer

Target

Target Sector

Value (AV)

AV / Revenue LTM

NTM

Target Description


$60

NA

NA

Provides on premise and cloud-based channel and contract management software for businesses in the life sciences industry. Software provides features for revenue management, contract lifecycle management and performance analytics reporting

Security

$850

4.0x

NA

The identity management business of 3M, which consists of 3M Cogent, a biometric identification system, and 3M's document reader and secure materials systems and software


$850

NA

NA

Sungard's public sector business, which provides ERP administration SaaS for government and public safety entities and the K-12 business, provides cloud-based administration and student management software for K-12 educators

Hosted Services / Managed Security Services

$1,800

2.6x

NA

Provides network and wireless network IT security auditing, compliance and penetration testing services for businesses and government agencies globally


$2,800

NA

5.2x

Provides ERP, HR management, CRM and project management software, SaaS and systems integration services, for government contractors, professional services firms and other project-based businesses

12/6/16


$856

2.9x

2.7x

Provides team collaboration SaaS enabling businesses globally in the life science, financial, oil and gas, technology and manufacturing industries to securely exchange documents and sync files

12/2/16


$65

6.5x

NA

Provides IoT predictive analytics, data mining and event processing software and SaaS for businesses

12/1/16


$636

5.1x

NA

Provides IT process automation and job scheduling software for businesses globally. Applications manage file transfers, virtual machine provisioning, application release management and error identification and remediation


$112

2.2x

NA

Provides enterprise data quality SaaS for business. Software provides features for data analysis, profiling, validation and cleansing for businesses operating in the retail, insurance, healthcare and financial industries

11/29/16


$190

3.8x

NA

Provides online advertising campaign management and ad-serving SaaS for businesses

11/20/16

Security

$2,362

3.6x

3.3x

Provides online identity theft and credit rating monitoring software for consumers and businesses in the US

11/15/16


$153

NA

NA

Provides Industrial Internet of Things (IIoT) data integration automation and analytics SaaS for businesses in the energy, aviation and manufacturing sectors

11/14/16


$915

10.2x

NA

Provides field service and contract management SaaS and mobile applications for service-oriented businesses and enterprises. Software provides features for dispatch and scheduling, warranty, parts and return management and field service metrics reporting

11/10/16


$270

NA

NA

Provides asset and financial management SaaS to businesses and investors in the global aviation industry

11/8/16


$300

7.9x

NA

Provides SAP-based project, plant and asset management ERP software for enterprises. Software provides features for scheduling, project planning, workforce management and analytics reporting, accessible on desktop systems and mobile devices

12/12/16

(

)

12/9/16 (Identity Management Business)

12/7/16

/

(Public Sector & K-12 Education Businesses)

12/6/16 (

)

12/6/16

(

)

11/30/16

(

)


15


Announced Date

Aggregate Acquirer

Target

Target Sector

Value (AV)

AV / Revenue LTM

NTM

Target Description

10/31/16


$632

NA

4.2x

Provides data management SaaS to the manufacturing and construction industry in the United States and Canada

10/27/16


$55

NA

3.7x

Provides team collaboration messaging SaaS that enables physicians at hospitals to communicate with patients via a managed messaging system

10/24/16

Security

$58

NA

3.7x

Provides IP traffic classification and network intelligence software used in physical, SDN and NFV architectures

10/21/16


$410

NA

NA

10/20/16

Security

$55

NA

NA

10/4/16

Security

$60

NA

NA

10/4/16


$250

NA

1.9x

Provides retail brand and e-commerce online shopping marketing and advertising SaaS for businesses

10/4/16


$680

13.1x

NA

Provides real-time audience data management and targeting SaaS for marketers, Web publishers and ad agencies. Software enables continuous customer and prospect data collection from digital interactions, including website visits or ads served


$180

2.4x

NA

Provides parking software, SaaS and systems that enables parking management, enforcement, permits, collections, access and revenue control


$153

NA

NA

Provides email and digital subscription management SaaS that enables US government agencies to provide citizens with information about such topics as local emergencies, events, council minutes and other matters through email, wireless alerts, and RSS feeds

All Software Median Mean

4.8x 6.1x

3.3x 4.0x

PE Acquirers Median Mean

3.6x 4.1x

2.0x 2.6x

9/29/16 ( 9/26/16

(

)

)

Provides electronic evidence and data recovery SaaS and services for law firms, government agencies and corporate law departments. Software provides features for data collection, portfolio and project management, forensic review and data replication and destruction Provides cloud application control (CAC) software for enterprises. Software enables detection and targeted attack protection (TAP) for enterprises using SaaS applications on enterprise networks and on mobile devices against malware attacks Provides cloud-based third-party access control SaaS to IT businesses, enabling access to applications that are hosted in data centers and to Microsoft SharePoint on enterprise networks. Software also provides data path protection, identity access management and application security


16

RECENT PRIVATE FINANCINGS ($MM)

Deal Date

Company

Amount Raised

5/18/17

Wandera

$28

Provider of enterprise mobile security and data management platform intended to offer protection against threats and manage data usage.

Sapphire Ventures, 83North, Bessemer Venture Partners

5/17/17

Smule

$54

Developer of a social music application designed to connect the world through music.

Tencent, Adams Street Partners, Bessemer Venture Partners, Floodgate Fund, Franklin Templeton Investments, Shasta Ventures

5/17/17

QASymphony

$40

Developer of a software testing platform designed to improve speed, efficiency and collaboration throughout the software testing lifecycle.

Insight Venture Partners

5/16/17

Wish

$500

Provider of a mobile e-commerce platform intended to sell items directly from the manufacturer.

China Everbright, IDG Capital, Temasek Holdings, DST Global, Formation 8, GGV Capital

5/16/17

Tile

$25

Developer of a mobile tracking device designed to locate personal items.

Lead Edge Capital, Bessemer Venture Partners, GGV Capital, Khosla Ventures

5/16/17

Symphony Communication Services

$63

Provider of open source secure communication and workflow platform.

BNP Paribas, Alphabet, Bank of America, BlackRock Private Equity Partners, Citibank, Deutsche Bank, Goldman Sachs Principal Strategic Investments, HSBC Holdings, J.P. Morgan, Lakestar, Merus Capital, Natixis, Societe Generale Group, UBS

5/16/17

Scientist

$24

Provider of an online marketplace for outsourced research designed to simplify the purchase of research services.

5AM Ventures, Heritage Provider Network, Leerink Transformation Partners, Bootstrap Incubation, Jack Giarraputo

5/16/17

OpenGov

$30

Developer of a cloud-based financial application designed to build integrated cloud based platforms for budgeting, management reporting and open data.

Emerson Collective

5/16/17

LevelUp (Mobile Payment)

$50

Developer of a next-generation mobile payment network designed to connect consumers and merchants.

CentroCredit Bank, J.P. Morgan Chase & Co (Global Special Opportunities Group), US Boston Capital

5/16/17

Fetchr

$41

Provider of a software application intended to make shipping a delightful experience for individuals and businesses.

BECO Capital, Iliad Partners, Majid Al Futtaim Trust, Nokia Growth Partners, Raed Ventures, Swicorp, VentureSouq, Yusuf Bin Ahmed Kanoo, New Enterprise Associates

5/15/17

Yitu

$55

Provider and developer of artificial intelligence technology intended to improve the current healthcare quality by applying AI technologies.

Hillhouse Capital Management, Banyan Capital, Sequoia Capital China, Yunfeng Capital, ZhenFund

5/12/17

AdRise

$21

Developer of an advertising platform designed to offer a large library of streaming movies and TV shows available for free.

DHVC, Jump Capital, Cota Capital, Foundation Capital

5/11/17

Verse

$20

Developer of a mobile-payment application.

Spark Capital

5/11/17

TradeBlock

$22

Provider of distributed ledger technology to the financial services industry.

Citigroup, Goldman Sachs Private Capital Investing Group, JPEL Private Equity, NEX Euclid Opportunities, Thomson Reuters, Wells Fargo, Andreessen Horowitz, Digital Currency Group, FinTech Collective, F-Prime Capital Partners

5/11/17

Podium (Review Management Platform)

$33

Developer of an online reputation management platform designed to change the way businesses communicate with their customers.

Accel, GV, Summit, Y Combinator

Brief Description

Investors

Notes: Source: Pitchbook. Reflects deal activity through 05/18/2017. Transactions reflect recent Software Venture and Private Equity Growth / Expansion activity where the amount raised was greater than or equal to $20MM.

17


Deal Date

Company

Amount Raised

5/11/17

Pocket Gems

$90

Developer of social games for tablets and smartphones.

Tencent

5/11/17

OpCity

$29

Developer of an online real estate referrals platform designed to match top agents with qualified home buyers and sellers in real-time.

8VC, Georgian Partners, Icon Ventures, LiveOak Venture Partners

5/11/17

Improbable

$502

Developer of an operating system designed to build virtual gaming experiences.

SoftBank Group, Andreessen Horowitz, Horizons Ventures, Temasek Holdings

5/11/17

CrowdStrike

$100

Developer of a cloud-based cybersecurity platform designed to prevent, detect, and respond to attacks in real-time.

March Capital Partners, Telstra, Accel, CapitalG, Warburg Pincus

5/10/17

Modernizing Medicine

$231

Provider of mobile, cloud-based, specialty-specific technologies for valuebased healthcare.

Warburg Pincus

5/10/17

Cockroach Labs

$27

Provider of an open source database designed for building global, scalable cloud services that survive disasters.

Redpoint Ventures, Benchmark Capital, FirstMark Capital, GV, Index Ventures (UK)

5/9/17

Gamblit Gaming

$25

Developer of mobile and computer games intended for the gambling purposes.

NA

5/9/17

Gainsight

$52

Provider of customer success management platform designed to empower the customer success movement to drive revenue and increase retention.

Bain Capital Ventures, Battery Ventures, Bessemer Venture Partners, Cisco Investments, Insight Venture Partners, Lightspeed Venture Partners, Salesforce Ventures

5/9/17

Broadway Technology

$42

Provider of financial trading software and services intended for electronic fixed-income markets.

Long Ridge Equity Partners

5/9/17

AdRise

$20

Developer of an advertising platform designed to offer a large library of streaming movies and TV shows available for free.

DHVC, Jump Capital, Cota Capital, Foundation Capital

5/8/17

Sea

$550

Developer of a multiple use mobile platform designed for entertainment and communication.

Cathay Financial Holdings, Farallon Capital Management, Hillhouse Capital Management, JG Summit Holdings, Uni-President Enterprises, GDP Venture

5/8/17

Smule

$54

Developer of a social music application designed to connect the world through music.

Tencent, Adams Street Partners, Bessemer Venture Partners, Floodgate Fund, Shasta Ventures

5/8/17

BangSun Technology

$23

The company's financial risk management platform develops real-time risk control system for the financial sector and anti-fraud products.

Co-Stone Capital, F&G Ventures, Jinghong Capital, M Fund, Xinglu Investment, Legend Capital

5/4/17

DeepMap

$25

Developer of an HD mapping and localization platform intended to bring autonomous cars onto roads.

Accel, GSR Ventures, Andreessen Horowitz

5/4/17

Fuze

$134

Provider of a cloud-based unified communications platform designed to simplify business voice communications and flexible video conferencing.

Greenspring Associates, Wellington Management, Bessemer Venture Partners, G20 Ventures, Summit Partners

Brief Description

Investors


18


Deal Date

Company

Amount Raised

5/4/17

Heap

$27

Developer of mobile and web analytics tools designed to automatically capture all user data.

Initialized Capital, Menlo Ventures, New Enterprise Associates, Pear Ventures

5/4/17

PayScale

$29

Provider of online cloud compensation software intended to provide an immediate and precise snapshot of current market salaries.

NA

5/4/17

Signifyd

$56

Provider of a standalone risk and guaranteed fraud-prevention platform designed to make commerce safer.

Bain Capital Ventures, American Express Ventures, Menlo Ventures

5/4/17

Transwarp (Big Data)

$34

Developer of big data software technologies for enterprises.

Co-Stone Capital, Tencent, Triwise Capital, Xingrui Zhixin

5/2/17

Dinova

$40

Provider of a marketplace that connects expense account diners to restaurants.

Frontier Capital

5/2/17

ServiceChannel

$54

Provider of SaaS based vertical marketplace intended to optimize millions of transactions and billions of dollars of spend annually.

Accel

4/28/17 Electronic Commerce

$24

Provider of a cloud-based human capital management (HCM) platform.

NA

4/28/17

Rubrik

$180

Provider of cloud infrastructure technology designed for data protection, search, analytics, archival and copy data management.

IVP, Greylock Partners, Lightspeed Venture Partners

4/27/17

Singapore Life

$50

Developer of an online insurance technology platform created to transform the insurance industry.

Credit China Holdings, IPGL

4/27/17

Snow Software

$128

Provider of a software asset management platform developed to help organizations avoid overpaying for software.

Ontario Pension Board, Sumeru Equity Partners

4/27/17

UiPath

$30

Developer of a robotic process automation software designed to power the intelligent process automation service offered by the most technology savvy BPO providers.

Accel, Credo Ventures, Earlybird Venture Capital, Seedcamp

4/27/17

Zeta Global

$140

Provider of big data and analytics platform intended to help their customers solve their most complex marketing problems.

GPI Capital, FS Investment Solutions, GSO Capital Partners

4/26/17

Domino (Data Lab)

$27

Developer of an enterprise data science platform designed to offer cloud computing, version control and model deployment services.

Coatue Management, Bloomberg Beta, Sequoia Capital, Zetta Venture Partners

4/26/17

Domo

$107

Provider of a cloud-based business-management platform. The company offers an intuitive platform that provides a central location for data access and management.

SharesPost, BlackRock, GGV Capital, Glynn Capital Management, The Capital Group Companies

4/26/17

EverFi

$190

Developer of a SaaS digital learning platform designed to empower organizations to instill knowledge around critical topics in the classroom, in the office and in the community.

MainStreet Advisors, The Rise Fund, TPG Growth, Advanced Publications, Allen & Company, Bezos Expeditions, Eric Schmidt, Evan Williams

Brief Description

Investors


19


Deal Date

Company

Amount Raised

4/26/17

Ivalua

$70

Developer of web based spend management software services intended to unlock maximum procurement Value through realizing savings.

Kohlberg Kravis Roberts

4/26/17

Robinhood

$110

Developer of a mobile stock trading application designed to democratize access to the financial markets.

DST Global, Greenoaks Capital, Thrive Capital, Index Ventures (UK), New Enterprise Associates, Ribbit Capital

4/25/17

LoveCrafts

$33

Operator of a crafting community and marketplace designed to purchase and sell craft works and craft material.

Scottish Equity Partners, Balderton Capital, Highland Capital Partners Europe

4/25/17

Science 37

$29

Developer of clinical research technology focused on making clinical trials better for patients.

Amgen Ventures, Glynn Capital Management, GV, dRx Capital, Lux Capital, Redmile Group, Sanofi-Genzyme Bioventures

4/25/17

Work Market

$25

Developer of a SaaS labor automation platform designed to help companies build and scale a flexible workforce.

Accenture, Foundry Group

4/24/17

Nav

$39

Provider of a platform for business owners to manage their business credit.

Clocktower Technology Ventures, CreditEase, Experian, Point 72 Ventures, The Goldman Sachs Group, ZenStone Venture Capital, AngelList, Crosslink Capital, CSC UpShot Ventures, Fenway Summer Ventures, Kickstart Seed Fund, Kleiner Perkins Caufield & Byers, Peak Ventures, Rock & Hammer Ventures, Tencent

4/21/17

Katerra

$130

Developer of a construction technology platform designed to transform the way buildings and spaces come to life.

Draper Fisher Jurvetson, Foxconn Technology, Greenoaks Capital, Khosla Ventures, Moore Capital Management, Paxion Capital Partners

4/21/17

Quora

$85

Developer of a question and answer website designed to share and grow the world's knowledge.

Collaborative Fund, Dustin Moskovitz, Matrix Partners, Tiger Global Management, Y Combinator

4/20/17

Getaround

$45

Provider of a peer-to-peer, car-sharing marketplace. The company offers a Web-based platform that enables car owners to rent out their cars on an ondemand basis.

Braemar Energy Ventures, SAIC Capital, SPARX Group, Toyota Motor, Menlo Ventures, SOSV, Triangle Peak Partners

4/20/17

Gladly

$36

Developer of a SaaS based communication technology designed to simplify customer service across calls, social media and emails.

GGV Capital, Greylock Partners, New Enterprise Associates

4/20/17

Reltio

$40

Provider of data-driven application designed to manage modern data management thorough Platform as a Service (PaaS).

Sapphire Ventures, .406 Ventures, Crosslink Capital, New Enterprise Associates

4/18/17

CyberGRX

$20

Provider of a third-party cyber risk management platform designed to simplify one-click access to third party cyber risk assessments.

Bessemer Venture Partners, Aetna Ventures, Allegis Capital, ClearSky Power & Technology Fund, GV, MassMutual Ventures, Rally Ventures, Ten Eleven Ventures

4/18/17

SeatGeek

$57

Developer of a ticket search engine designed to transform the way that fans buy and sell tickets to their favorite events.

Glynn Capital Management, Accel, Causeway Media Partners, Haystack Partners, Mousse Partners, Technology Crossover Ventures

4/18/17

Ziften

$39

Developer of an enterprise system efficiency software.

Spring Mountain Capital, Fayez Sarofim

4/13/17

PagerDuty

$44

Developer of an incident resolution platform designed to manage digital operations for businesses.

Accel, Andreessen Horowitz, Baseline Ventures, Bessemer Venture Partners, Harrison Metal Capital

Brief Description

Investors


20


Deal Date

Company

Amount Raised

4/12/17

Blink Health

$90

Provider of a reduced-cost prescription platform designed to offer medications at affordable price.

8VC

4/11/17

Branch (platform)

$60

Developer of a deep linking technology designed to gain and retain mobile app users.

Playground Global, Benjamin Narasin, Cowboy Ventures, Founders Fund, Madrona Venture Group, New Enterprise Associates, Pear Ventures, Samsung NEXT Ventures, Zach Coelius

4/11/17

MobiKwik

$50

Provider of an independent mobile payments network designed for online money transactions.

Bennett Coleman and Company, GMO VenturePartners, MediaTek, Net 1 UEPS Technologies, Sequoia Capital India, Cisco Investments, Tree Line Asia

4/11/17

OverOps

$31

Developer of a cloud-based platform designed to debug production code.

NA

4/10/17

Bigcommerce

$34

Provider of software services to online retailers and merchants. The company provides a platform for small- and medium-sized businesses, enabling them to quickly launch professional stores.

GGV Capital, Millenium Partners, Millennium Technology Value Partners, Revolution, Stephan Schambach, Washington University in St. Louis Endowment, American Express Ventures, Floodgate Fund, General Catalyst Partners, RevolutionGrowth, SoftBank Capital, Split Rock Partners, Telstra Ventures, Tenaya Capital

4/11/17

Synack

$21

Developer of a crowd security testing platform designed to redefine traditional models of security testing through revolutionary technology and innovative thinking.

Hewlett Packard Enterprise, Microsoft Ventures, SingTel Innov8, Allegis Capital, GGV Capital, Greylock Partners, GV, Icon Ventures, Kleiner Perkins Caufield & Byers

4/10/17

Next Insurance

$25

Provider of online small business insurance platform designed to transform the insurance experience for small businesses.

NA

4/7/17

Mic Network

$21

Provider of news and media platform intended to inform, empower and inspire millennials.

Hakuhodo DY Holding, Kyu Collective, Time Warner Investments, You & Mr Jones Brandtech Ventures, Lightspeed Venture Partners

4/7/17

Otonomo

$25

Developer of a car data exchange platform designed to easily access, integrate and explore car-generated data.

Delphi Automotive, Bessemer Venture Partners, Maniv Mobility, StageOne Ventures

4/7/17

Reflexis Systems

$33

Provider of retail execution management software.

Great Hill Partners, Sageview Capital

4/7/17

Souche.com

$180

Provider of an online platform designed to buy and sell pre-owned cars.

ClearVue Partners, CreditEase New Financial Industrial Fund, Haitong International Securities, VMS Investment Group, Warburg Pincus, Zuoyu Capital, Morningside Group

4/7/17

Toutiao

$1,000

Provider of personalized news articles and pictures for application user.

CCB International Asset Management, Sequoia Capital China, Yuri Milner

4/7/17

Upgrade (US)

$54

Provider of marketing tools intended to help users in understanding and improving their credit score.

CreditEase, FirstMark Capital, Noah Holdings, Ribbit Capital, Sands Capital Ventures, SVB Financial Group, Union Square Ventures, Uprising, Vy Capital, Yuri Milner

4/7/17

Uptake Technologies

$90

Developer of a predictive analytics platform designed to transform data into measurable business value.

RevolutionGrowth

4/6/17

daPulse

$25

Provider of a SaaS based project management tool designed to manage projects, tasks, processes and workflows.

Insight Venture Partners, Entrée Capital, Genesis Partners

Brief Description

Investors


21

SOFTWARE CAPITAL MARKETS UPDATE Recent Software IPO Pricings ($ M M )

Market Cap @ IPO Date

Amount Raised

Pre IPO Filing Range

Offer Price

% Change Offer / Midpoint Price

% Change 1st Trading Day / Offer Price

% Change Current / Offer Price

28-Apr-17

$2,318

$225

12.00 - 14.00

$15.00

15.4%

21.3%

34.1%

13-Apr-17

$1,146

$116

8.00 - 10.00

$11.00

22.2%

21.9%

20.2%

7-Apr-17

$2,134

$187

15.00 - 17.00

$17.00

6.3%

38.3%

35.2%

24-Mar-17

$873

$126

12.00 - 14.00

$14.00

7.7%

10.7%

24.8%

16-Mar-17

$3,118

$221

14.00 - 16.00

$17.00

13.3%

45.6%

42.1%

28-Oct-16

$1,169

$146

16.00 - 17.00

$17.00

3.0%

40.5%

86.5%

6-Oct-16

$1,601

$133

14.00 - 16.00

$18.00

20.0%

84.9%

74.2%

Offer Date

(1)

Name

Notes: Source: Capital IQ and Dealogic. Market Data as of 05/18/2017. (1) First Trading Day listed as Offer Date.

22

IPO PIPELINE Software IPOs in Public Registration ($MM)

Issuer

Amount Raised (3)

Funding TD

EBIT (2)

Last Financing Date

Post Money Valuation

($16)

17-Feb-14

$38

$48

$414

LTM

Primary Industry

Initial Filing Date

Initial Offering Amount

Revenue

Rev Growth

Business/Productivity Software

27-Apr-17

$86

$135

9.1%

(1)

Notes: Source: Pitchbook and SEC.gov. Offering amounts $20MM or greater. (1) LTM as of 03/31/2017. (2) Reflects GAAP EBIT. (3) Reflects last financing > $25MM.

23

A SHRINKING UNIVERSE OF PUBLICLY TRADED SOFTWARE COMPANIES Strategic and Private Equity Exits Outweigh New Issues

PE Acquisitions

210

Strategic Acquisitions

IPO

200 195

6

(7)

11

(11)

(5)

190

7

(4) Fortinet CDC Software LogMeIn Medidata SolarWinds Rosetta Stone

180

170

(6)

(11)

(8)

17

(9)

(6) SciQuest RealPage IntraLinks Envestnet Qlik BroadSoft Higher One Convio SPS Commerce SS&C QuinStreet

11

17

16 (9)

(10)

(7)

(6) (8)

Jive Imperva Carbonite Tangoe Responsys Cornerstone Epocrates

Workday Fleetmatics Qualys Eloqua E2open ServiceNow Exa Incadea Infloblox Proofpoint Splunk ExactTarget Demandware Bazaarvoice Greenway AVG Guidewire

160

Workiva Hortonworks New Relic HubSpot CyberArk MobileIron Kinaxis Zendesk Paycom OPOWER Five9 2U Borderfree Amber Road A10 Networks Paylocity Varonis Systems

Mavenir Barracuda Wix.com Covisint RingCentral FireEye Cvent Gigamon Textura ChannelAdvisor Marketo Tableau Halogen Rally Marin Model N

Atlassian Mimecast Instructure Rapid7 Sophos AppFolio Alarm.Com Xactly Shopify Apigee Box

9

(12)

Twilio SecureWorks Talend Everbridge Apptio Gridsum Holding Nutanix Coupa BlackLine, Inc.

(9)

(3)

5

(3)

160

Mulesoft Alteryx Okta Yext Cloudera

150 2008

2009

IPO Strategic Exits PE Exits

2010

2009 +6 -7 -5

Notes: Sources: Capital IQ, company filings. Market Data as of 05/18/2017.

2011

2010 + 11 - 11 -4

2012

2011 +7 -8 -6

2013

2012 + 17 - 11 -9

2013 + 16 -9 -6

2014

2014 + 17 -6 -7

2015

2015 + 11 - 10 -8

2016

2016 +9 - 12 -9

2017

2017 +5 -3 -3

24

VENTURE CAPITAL INDUSTRY TMT Transactions Since Q1 2002 $12

1,000

$10 800

$Bn

600

$6

400 $4

200 $2

$0 Q1 2002

Q1 2003

Q1 2004

Q1 2005

Q1 2006

Q1 2007

Q1 2008

Q1 2009

Q1 2010

Q1 2011

Q1 2012

Q1 2013

Q1 2014

Q1 2015

Q1 2016

0 Q1 2017

Quarter - Year (1)

Number of Deals

Investment Amount

Notes: (1) Number of TMT VC Investments per PriceWaterhouseCoopers / NVCA MoneyTree report. TMT inclusive of Computers and Peripherals, Electronics / Instrumentation, IT Services, Media and Entertainment, Networking and Equipment, Semiconductors, Software and Telecommunications until Q3 2016. As of Q4 2016, TMT inclusive of Computer Hardware / Services, Electronics, Internet, Media (Traditional), Mobile / Telecommunications, Risk & Security Systems, and Software.

25

Number of Investments

$8

GCA OVERVIEW Deep Software Sector Expertise

Acquired by

Acquired by

Acquired by

Acquired by

Preferred Stock

Acquired by

Acquired by

Acquired by

Acquired by

We Advised the Seller




Financial Advisor





Acquisition of

Acquired by

Acquired by

Convertible Note Offering

Strategic Advisory Services

Investment by

Preferred Stock

Acquisition of

Acquisition of

We Advised the Buyer



Financial Advisor

Financial Advisor


Financial Advisor



Acquired by

Acquired by

Acquired by

Acquired by

Preferred Stock

Acquired by

Acquired by

Acquired by

Acquired by





Financial Advisor





Acquired by

Acquired by

Acquired by

Acquired by

Acquired by





Acquisition of


Acquired by


Acquired by

Fairness Opinion to Buddy Media


Notes: The above transactions represents a compilation of past and current deals that GCA entities have advised on. Generally, GCA Corporation advises Asian-based transactions, while GCA Advisors, LLC advises U.S.-based transactions and GCA Altium advises UK/European-based transactions. At times, multiple GCA entities may be retained to advise on the same transaction.

Acquired by


26