adtech & martech barometer - q3 2015 - market review
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AdTech & MarTech BarometerQ3 2015 Market Review
Q3 2015 STRICTLY PRIVATE AND CONFIDENTIAL
2QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
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DEEP DOMAIN EXPERTISE IN THREE INTER-RELATED SECTORS… …AND BROAD INDUSTRY NETWORKS
Marketing
Healthcare
Technology
3QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
Results International Global AdTech & MarTech Indices
Sep-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Oct-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Nov-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Dec-14Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Jan-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Feb-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Mar-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15Apr-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15May-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jun-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Jul-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Aug-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-15Sep-1560%
70%
80%
90%
100%
110%
120%
130%
140%
NASDAQ Comp Diversified Internet MarTech Data AdTech
Sep-15Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Notes: Based on share prices as at 30th September 2015; indices weighted by market capitalisationSources: Capital IQ and Results analysis
LAST
12
MON
TH S
HARE
PRI
CE P
ERFO
RMAN
CE
14.8%11.4%
2.8%
(3.0%)
(31.3%)
Q3 2015 PERFROMANCEDiversified Internet 6.6%Nasdaq Comp (7.4%)MarTech (8.0%)Data (12.2%)AdTech (24.9%)
4
(100%)
(50%)
-
50%
100%
150%
(7.8%)(22.0%)
11.6%
(38.0%)(63.6%)
(51.6%)(64.5%)
(5.9%)
(49.0%)
(78.5%)(70.4%)(59.9%)
23.9%
(20.5%)(8.5%)
(48.2%)(39.0%)
(11.8%)(10.7%)
1.5%
85.5%
(12.0%)
15.7%
107.1%
19.4%4.3% 7.6%
(30.9%)
8.5%
58.8%
(56.8%)
13.7%
(29.1%)
(70%)(60%)(50%)(40%)(30%)(20%)(10%)
-10%20%30%
(3.8%)
1.9%
(21.3%)(29.9%)
(53.6%)
0.5%
(49.5%)
8.0%
(32.1%)
(20.7%)
(43.0%)
(0.8%)(2.9%)
(36.1%)(26.4%)
(52.2%)
(23.4%)(28.3%)
(15.7%)
(27.3%)
(6.5%)
1.3%8.3%
3.7%12.4%
(11.3%)(8.7%)
(21.7%)
18.2%17.9%
(59.4%)
4.8%
(26.4%)
QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Share Price Performance
EV/2015E Net Revenue 6.4x 0.8x - 2.6x 1.8x 1.4x 2.1x 0.7x 2.3x 2.4x 0.3x 2.8x 0.5x 1.6x 1.1x 1.7x 7.9x 5.7x9.4x 12.0
x1.9x 4.6x 3.9x 1.5x 6.3x 2.3x 14.0
x5.5x3.1x3.9x 0.7x 0.9x 17.4
x(1)
(1) 2015E Net Revenue data is unavailable(2) These companies have IPO’d within the last 12 months, the share price movement represents the change between each stocks respective IPO date (see slide 4) and 30 th September 2015Note: Based on share prices as at 30th September 2015Sources: Capital IQ and Results analysis
(2) (2)
(2)
(2)
(2)
ADTECH DIVERSIFIED INTERNETMARTECH DATA
LAST
12
MON
TH S
HARE
PRI
CE
PERF
ORM
ANCE
Q3 2
015
5QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Selected Stocks – Performance Since IPO
COMPANY IPO DATE DESCRIPTION RAISED ($M)
INDICATIVE PRICE RANGE ($)
IPO LISTING PRICE ($)
DAY 1 INCREASE
CURRENT INCREASE(1)
CURRENT EV ($M)
EV / NET REVENUE
2015EEV / EBITDA
2015E
Jun-15 AI ad optimisation 42 n.a. 2.1 4.2% (7.8%) 95 6.4x 9.4x
May-15 eCommerce platform 131 12.0-14.0 17.0 51.1% 107.1% 3,179 17.4x n.m.
Mar-15 Localised ad targeting 75 10.5-12.5 11.5 (15.1%) (64.5%) 78 0.9x n.m.
Oct-14 Marketing automation 125 22.0-24.0 25.0 20.4% 85.5% 1,624 9.4x n.m.
Sept-14 Multi-channel ad server 75 n.a. 1.7 0.8% (41.7%) 72 n.a. n.a.
Jul-14 Programmatic video DSP 44 7.0-8.0 7.0 64.3% 50.3% 311 2.8x n.m.
Jul-14 Multi-channel ad network 70 n.a. 3.9 4.4% (57.2%) 169 2.6x 11.7x
Apr-14 SSP 102 15.0-17.0 15.0 33.9% (3.1%) 590 2.4x 15.8x
Nov-13 Multi-channel network 33 n.a. 1.0 20.0% (81.8%) 52 2.1x n.m.
Oct-13 DSP focused on retargeting 251 27.0-29.0 31.0 14.2% 21.1% 2,050 3.9x 18.8x
Sep-13 DSP 116 27.0-29.0 29.0 93.4% (83.9%) 201 0.7x n.m.
Aug-13 Video ad network 46 12.0-14.0 9.0 0.0% (71.2%) 40 0.5x n.m.
Nasdaq
LSE
NYSE
AIM
Nasdaq
Nasdaq
NYSE
AIM
NYSE
AIM
NYSE
NYSE
(1) Current increase from IPO price; Market data as of 30 th September 2015Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 60x EV / EBITDASources: Capital IQ and Results analysis
6
AdTech MarTech Data Diversified Internet
Global AdTech/ MarTech
-
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
1.8 x
6.8 x
2.9 x
5.5 x
2.3 x
AdTech MarTech Data Diversified Internet
Global AdTech/ MarTech
-
5%
10%
15%
20%
25%
30%
35%
24.4%
30.9%
1.9%
16.1%17.9%
QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Valuation Benchmarks
(1) (1)
(1) Global AdTech / MarTech represents the median of all stocks in AdTech, MarTech, Data & Diversified InternetNotes: EV = Enterprise Value; Financials calendarised to December year end; Median values reportedSee Selected Publicly Traded Companies (Slide 9) for details of companies included in each categorySource: Capital IQ & analyst reports
REVENUE GROWTH (2015-16E) EV / NET REVENUE 2015E
7
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 20150
20
40
60
80
100
120
-
$1bn
$2bn
$3bn
$4bn
$5bn
$6bn
$7bn
$8bn
$9bn
5443
74
52
108101
113106
98 101112
Number of deals Total disclosed deal value ($bn)
Num
ber o
f dea
ls
Tota
l dis
close
d de
al v
alue
($bn
)
QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Global M&A Activity Q1 2013 – Q3 2015
(1) Q3 2014 data includes Alliance Data’s acquisition of Conversant ($2.2bn)(2) Q2 2015 data includes Verizon’s acquisition of AOL ($4.3bn)Sources: Press Releases, Capital IQ, Mergermarket, 451 Research and Results analysis
(1) (2)
8QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Selected Deals in Q3 2015
DATE BUYER TARGET EV ($M) EV/REVENUE COMPANY DESCRIPTION TARGETLOCATION
Sep 15 683 6.3x TV and movie measurement
Sep 15 120 - Content management & GRC
Sep 15 - - Social media and event analytics
Sep 15 - - Mobile attribution
Sep 15 - - In-store customer analytics
Sep 15 89 1.9x Social and video ad network
Sep 15 - - B2B DMP
Sep 15 - - Mobile ad app SDK
Sep 15 17 1.1x Mobile and social DSP
Sep 15 500 - OTT video content
Sep 15 218 1.9x Mobile ad network and ad exchange
Aug 15 - - Predictive marketing CRM
Aug 15 - - SEM bidding
Aug 15 - - Cross-channel optimisation and personalisation
Aug 15 - - Dynamic video ad insertion
Aug 15 3 - Programmatic video ad exchange
Aug 15 - - Marketing content automation
Jul 15 1,000 6.0x Multi-channel, big data marketing cloud
(1) In certain cases EV/Revenue are publicly reported estimates; TTM net revenues have been used where possible (gross revenues minus TAC generated in the last 12 months); EV = transaction value scaled to 100% shareholding plus net debt (incl. minority interest)
(2) Earn out of $86m (£56m) has not been included in the calculation of EVSources: Press Releases, Capital IQ, Mergermarket, 451 Research and Results analysis
(1)
(2)
9QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Selected Fundraisings in Q3 2015
DATE COMPANY TYPE OF ROUND
FUNDS RAISED
($M)INVESTOR PARTICIPATON COMPANY DESCRIPTION COMPANY
LOCATION
Sep 15 Debt 100 Tennenbaum Capital Partners Mobile discovery platform
Sep 15 Series C 25 Next World Capital (lead investor), Accel Partners, DAG, Icon Ventures and Lightspeed Venture Partners
Marketing signal measurement
Sep 15 Debt 30 Silicon Valley Bank Programmatic ad exchange
Sep 15 Series A 33 Vector Capital B2C marketing cloud
Sep 15 Series B 6 Private investors Dynamic ad creation
Sep 15 Series B 40 IHeartMedia (lead investor), Advance Publications, Upfront Ventures and Foundry Group; Silicon Valley Bank (debt) Social data and ad buying
Sep 15 Series C 45 Warburg Pincus (lead investor), Norwest Venture Partners and Sequoia Capital Social CRM
Aug 15 Series B 45 Tenaya Capital (lead investor), Sequoia Capital, SoftTech VC and others
Mobile marketing automation
Jul 15 Series E 67 Silicon Valley Bank (debt); Sapphire Ventures (lead investor), Cross Creek Advisors and previous investors Ad viewability and fraud
Jul 15 Series D 50Founders Fund (lead investor), BlueRun Ventures, Glynn Capital Management, AME Cloud Ventures, Yuan Capital, Salesforce Ventures, Formation 8
B2B predictive marketing
Jul 15 Series F 50 Susquehanna Growth Equity Content recommendation
Jul 15 Series B 22 Blue Chip Venture Company and G20 Ventures (lead investors) and Valhalla Partners Native ad exchange
Jul 15 Series A 7 Twenty Ten Capital (lead investor), IBIS TMT, Sandbox & Co. and Hoxton Ventures Kid-safe ad network
Jul 15 Series C 25 Vista Equity Partners SME marketing platform
Jul 15 Series G 30Sageview Capital (lead investor), Adobe Systems, Altos Ventures, Costanoa Venture Capital, Greenspring Associates, Salesforce.com Ventures, Scale Venture Partners and Sigma West
B2B account-based marketing
Jul 15 Series D 59 Legend Holdings Mobile social CRM
Jul 15 Series B 31Georgian Partners (lead investor), OurCrowd, Atlas Venture, Docomo Capital, BDC Capital IT Venture Fund, Hummer Winblad Venture Partners, Illuminate Ventures, Resolute Ventures, Relay Ventures and First Round Capital
Advocate marketing
Jul 15 Series D 42 FTV Capital (lead investor), Mayfield Fund, InterWest Partners and FirstMark Capital
Omni-channel content management(1) Round is split $30 million equity funding, $10m debt funding
(2) Round is split $40 million debt financing, $27 million equity fundingSource: Press Releases, Capital IQ, Mergermarket and Results analysis
(1)
(2)
10QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
AdTech & MarTech: Selected Publicly Traded Companies
Notes: Broker reports have been used for selected company financials – Liberium (Aug-15) for Adgorithms, Numis (May-15) for Blinkx, JP Morgan (Aug-15) for Criteo, Canaccord Genuity (Aug-15) for Matomy Media, William Blair (Aug-15) for MaxPoint Interactive, Canaccord Genuity (Aug-15) for Millennial Media, Cenkos (May-15) for Rightster, BMO Capital Markets (Aug-15) for Rocket Fuel, N+1 Singer (Sep-15) for Taptica, Jefferies (Aug-15) for Tremor Video, BMO Capital Markets (Aug-15) for TubeMogul, Deutsche Bank (Aug-15) for YuMe, RBC Capital Markets (Aug-15) for Alphabet and JP Morgan (Sep-15) for Yahoo!Note: Calendarised to December year end. Cap multiple at 20x EV/Revenue and 60x EV/EBITDA. Net debt is inclusive of minority interest and preferred equity. Net revenues have been used where appropriateSources: Capital IQ, market data as of 30th September 2015
COMPANY OPERATING METRICS VALUATION METRICSPRICE ($) % OF 52 MARKET TOTAL NET ENTERPRISE REVENUE GROWTH EBITDA MARGIN NET REVENUE EBITDA
(30-SEP-15) WEEK HIGH CAP CASH DEBT VALUE ($M) CY14-15 CY15-16 CY2015 CY2016 CY2015 CY2016 CY2015 CY2016ADTECHAdgorithms LTD 1.91 83.0% 129 35 (35) 95 56.3% 65.0% 67.5% 58.7% 6.4 x 3.9 x 9.4 x 6.6 xBlinkx plc 0.42 67.9% 168 96 (95) 73 (11.1%) 3.7% (0.4%) 3.2% 0.8 x 0.8 x n.m. 24.2 xCriteo SA 37.54 65.5% 2,355 320 (305) 2,050 56.0% 26.0% 20.7% 24.8% 3.9 x 3.1 x 18.8 x 12.4 xCrossrider Plc 0.98 57.0% 151 78 (78) 72 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Marin Software Incorporated 3.13 32.3% 116 41 (40) 76 6.5% 12.1% (11.3%) (1.3%) 0.7 x 0.6 x n.m. n.m.Matomy Media Group Ltd. 1.66 43.2% 153 43 15 169 (1.1%) 12.2% 22.5% 30.4% 2.6 x 2.4 x 11.7 x 7.7 xMaxPoint Interactive, Inc. 4.08 36.3% 106 55 (28) 78 44.7% 36.7% (17.5%) (16.7%) 0.9 x 0.6 x n.m. n.m.Millennial Media Inc. 1.75 82.9% 248 35 (30) 218 4.5% 10.0% (20.6%) (2.2%) 1.8 x 1.6 x n.m. n.m.Opera Software ASA 5.38 43.4% 787 134 18 806 20.1% 21.9% 17.1% 18.7% 1.4 x 1.1 x 8.2 x 6.1 xRightster Group Plc 0.17 21.6% 64 12 (12) 52 89.7% 40.0% (55.8%) (5.6%) 2.1 x 1.5 x n.m. n.m.Rocket Fuel Inc. 4.67 22.1% 199 81 2 201 23.9% 14.8% (10.0%) (2.9%) 0.7 x 0.6 x n.m. n.m.Taptica International Ltd 0.95 35.3% 66 23 (23) 43 (2.0%) 52.5% 9.7% 25.0% 2.3 x 1.5 x 23.9 x 6.1 xThe Rubicon Project, Inc. 14.53 70.6% 690 99 (99) 590 97.8% 33.4% 15.1% 15.7% 2.4 x 1.8 x 15.8 x 11.4 xTremor Video, Inc. 1.86 56.8% 96 69 (69) 27 40.2% 24.4% (11.8%) (0.7%) 0.3 x 0.3 x n.m. n.m.TubeMogul, Inc. 10.52 44.1% 391 81 (81) 311 40.6% 28.7% (21.1%) (10.5%) 2.8 x 2.1 x n.m. n.m.YuMe, Inc. 2.59 40.6% 88 47 (47) 40 (12.8%) 3.6% (14.1%) (7.3%) 0.5 x 0.5 x n.m. n.m.MARTECHBazaarvoice, Inc. 4.51 48.0% 363 103 (46) 317 9.4% 10.4% (3.5%) 4.8% 1.6 x 1.4 x n.m. 29.9 xBrightcove Inc. 4.92 58.2% 160 21 (19) 141 6.3% 8.5% 4.2% 6.3% 1.1 x 1.0 x 25.2 x 15.5 xConstant Contact, Inc. 24.24 56.1% 795 181 (181) 615 12.0% 14.0% 19.9% 21.8% 1.7 x 1.5 x 8.3 x 6.7 xDemandware, Inc. 51.68 68.1% 2,037 187 (186) 1,850 45.5% 33.8% 4.9% 6.6% 7.9 x 5.9 x n.m. n.m.HubSpot, Inc. 46.37 84.4% 1,734 110 (109) 1,624 49.3% 28.9% (13.5%) (8.1%) 9.4 x 7.3 x n.m. n.m.Marketo, Inc. 28.42 79.8% 1,305 110 (104) 1,201 40.3% 32.9% (10.3%) (5.2%) 5.7 x 4.3 x n.m. n.m.New Relic, Inc. 38.11 95.3% 2,074 195 (195) 1,879 58.5% 36.9% (22.6%) (11.1%) 12.0 x 8.8 x n.m. n.m.Shopify Inc. 35.20 83.6% 3,377 199 (199) 3,179 74.0% 38.9% (2.4%) 0.7% 17.4 x 12.5 x n.m. n.m.DATAAcxiom Corporation 19.76 92.0% 1,563 123 149 1,712 (14.8%) (0.9%) 14.8% 16.1% 1.9 x 2.0 x 13.2 x 12.2 xAlliance Data Systems Corporation 258.98 83.0% 15,947 822 14,063 30,010 22.5% 12.5% 29.4% 29.6% 4.6 x 4.1 x 15.7 x 13.9 xExperian plc 16.01 83.7% 15,328 155 3,281 18,609 (1.7%) 2.0% 33.4% 34.4% 3.9 x 3.9 x 11.8 x 11.2 xTeradata Corporation 28.96 61.6% 4,101 921 (321) 3,780 (5.5%) 1.9% 21.4% 23.4% 1.5 x 1.4 x 6.8 x 6.1 xDIVERSIFIED INTERNETAlphabet Inc. 638.37 89.5% 440,686 67,725 (59,798) 380,888 14.6% 16.1% 42.5% 43.8% 6.3 x 5.4 x 14.8 x 12.4 xAmazon.com, Inc. 511.89 88.2% 239,621 14,001 3,952 243,573 18.9% 19.8% 9.7% 11.1% 2.3 x 1.9 x 23.6 x 17.3 xeBay Inc. 24.44 36.6% 29,773 10,554 (2,932) 26,841 (2.6%) 4.9% 39.7% 40.2% 3.1 x 3.0 x 7.8 x 7.4 xFacebook, Inc. 89.90 90.6% 254,403 14,125 (13,976) 240,427 38.0% 35.7% 61.7% 61.0% 14.0 x 10.3 x 22.7 x 16.9 xYahoo! Inc. 28.91 54.9% 27,311 5,824 (4,553) 22,758 (5.1%) (2.3%) 10.0% 15.5% 5.5 x 5.6 x 54.4 x 36.1 x25th percentile (1.2%) 9.7% (11.4%) (2.4%) 1.4 x 1.4 x 9.4 x 7.0 xMedian 19.5% 17.9% 7.3% 8.8% 2.3 x 1.9 x 14.8 x 12.2 x75th percentile 44.9% 33.5% 20.8% 24.9% 5.5 x 4.2 x 22.7 x 16.2 x
11QUARTERLY TECH REPORT – Q3: ADTECH & MARTECH
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