bi-weekly software sector summary report - gca advisors · 2016. 10. 12. · bi & analytics:...

1

Bi-Weekly Software Sector Summary

Week of October 3rd, 2016

2

SOFTWARE DEAL DASHBOARD

Quarterly VC Deal Count (1)

Notes: Source: Capital IQ, PitchBook, and Dow Jones VentureSource. 1) Criteria based on software series A and subsequent rounds of global financings greater than $20MM. Excludes the $7.3Bn raise by Didi Chuxing on 6/15/2016. 2) Criteria based on global target software M&A deals with transaction enterprise values greater than $50MM. 3) iShares North American Tech-Software ETF (IGV), used as proxy for software landscape. Top holdings in the ETF include MSFT, ORCL, ADBE, CRM, and INTU. 4) Criteria based on global public target software M&A deals with enterprise transaction values greater than $100MM.

Quarterly M&A Deal Count (2)

$Bn $Bn

Select Financing Transactions Quarterly VC Volume (1) Quarterly M&A Volume (2) Top M&A Transactions YTD

Company Amount ($MM) Target Acquirer EV ($MM)

$96 $26,200

$88 $9,174

$70 $8,730

$51 $6,078

$50 $4,650

$40 $3,300

$35 $2,800

Last 12 Months Software Price Performance vs. S&P 500 (3) M&A EV/ NTM Rev. Over Time (4)

`

$20.6 BillionFinancing Volume YTD (1)

305Financing Transactions YTD (1)

$98.1 BillionM&A Volume YTD (2)

65M&A Transactions YTD (2)

( )

6575

10894 102

117

86

0

50

100

150

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

20%

$3$3

$6 $6$7

$9

$4

$0

$2

$4

$6

$8

$10

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

$5

$14

$24

$14

$7

$50

$41

$0

$10

$20

$30

$40

$50

$60

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

7

13

2429

15

29

21

0

10

20

30

40

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

4.0x

3.2x

4.2x

3.6x 3.9x

4.6x 4.7x

4.0x

5.4x

4.4x

3.6x

5.0x

2.7x 2.3x

2.9x 3.0x

4.3x 4.1x

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016

All Buyers Strategic Buyers PE Buyers

(15%)

(10%)

(5%)

0%

5%

10%

15%

20%

25%

IGV SPX

(Software Business Division)

13%

3

RECENT STOCK PERFORMANCE Index Performance

Last 12 Months Last 3 Years

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

Indexed Price Performance

Sector 3 Months 1 Year 3 Years

Platform 11% 21% 41%

Infrastructure 17% 9% 12%

Security 14% 2% 22%

SaaS / On Demand 9% 19% 26%

BI & Analytics 10% (6%) (11%)

Vertical 7% 9% 22%

(50%)

(40%)

(30%)

(20%)

(10%)

0%

10%

20%

30%

Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

(40%)

(30%)

(20%)

(10%)

0%

10%

20%

30%

40%

50%

60%

Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16

4

TRADING COMPARABLES Valuation Metrics

EV / 2016E Revenue EV / 2016E EBITDA

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

5.4x

5.0x4.6x 4.4x 4.3x

3.2x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

SaaS / OnDemand

Infrastructure Vertical Platform Security BI & Analytics

34.3x

29.3x

24.2x 23.6x22.2x

13.5x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

SaaS / OnDemand

BI & Analytics Infrastructure Security Vertical Platform

5

TRADING COMPARABLES Operational Metrics

2016 EBITDA Margins 2017 / 2016 Rev. Growth

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

34%

27%

23%

20%

17%

15%

0%

5%

10%

15%

20%

25%

30%

35%

Platform Infrastructure Vertical Security BI & Analytics SaaS / OnDemand

20%

17% 16%

15% 14%

7%

0%

5%

10%

15%

20%

25%

SaaS / OnDemand

Security Vertical BI & Analytics Infrastructure Platform

6

PUBLIC COMPANY VALUATIONS Software Trading Statistics

Notes: Source: Capital IQ and Wall Street Estimates. Multiples <0 and >100 considered NM. Negative margins considered NM.

$MM, Except Per Share Data

Stock Trading Statistics Operating Metrics

Price Equity Net Aggregate AV / Revenue AV / EBITDA Price / EPS CY Rev. Growth EBITDA Margin

9/30/2016 Value Debt Value CY 16E CY 17E CY 16E CY 17E CY 16E CY 17E 16E/15A 17E/16E CY 16E CY 17E

Platform

Alphabet Inc. $804.06 $552,603 ($70,671) $481,932 5.4x 4.7x 13.5x 11.6x 23.5x 19.9x 18.0% 14.7% 40.4% 41.0%

Microsoft Corporation $57.60 448,849 (59,055) 389,794 4.2 4.0 11.2 10.3 20.7 18.9 4.6% 4.9% 37.9% 39.3%

Oracle Corporation $39.28 161,270 (14,340) 146,930 3.9 3.8 8.8 8.4 15.0 14.3 (0.2%) 2.1% 44.5% 45.8%

International Business Machines Corporation $158.85 151,836 33,908 185,744 2.3 2.3 9.8 9.1 11.8 11.3 (2.5%) (0.5%) 23.7% 25.8%

SAP SE $91.41 109,532 4,549 114,080 4.6 4.4 13.6 12.7 21.1 19.0 9.2% 6.3% 34.1% 34.3%

Red Hat, Inc. $80.83 14,638 (601) 14,037 6.0 5.2 24.0 19.8 37.6 32.0 18.1% 15.1% 25.1% 26.4%

Mean 4.4x 4.1x 13.5x 12.0x 21.6x 19.2x 7.9% 7.1% 34.3% 35.5%

Median 4.4 4.2 12.3 10.9 20.9 19.0 6.9% 5.6% 36.0% 36.8%

Infrastructure

VMware, Inc. $73.35 $31,130 ($7,165) $23,965 3.4x 3.3x 9.5x 9.1x 17.1x 16.0x 5.3% 4.9% 36.2% 36.0%

Red Hat, Inc. $80.83 14,638 (601) 14,037 6.0 5.2 24.0 19.8 37.6 32.0 18.1% 15.1% 25.1% 26.4%

CA, Inc. $33.08 13,859 (688) 13,171 3.3 3.2 8.2 8.3 13.2 12.8 0.2% 1.2% 39.5% 38.8%

Citrix Systems, Inc. $85.22 13,271 (21) 13,250 3.9 3.8 11.2 10.8 16.8 15.6 3.5% 2.9% 34.8% 35.3%

ServiceNow, Inc. $79.15 13,020 (316) 12,704 9.2 7.1 50.5 33.4 NM 77.4 37.0% 29.7% 18.3% 21.3%

F5 Networks, Inc. $124.64 8,251 (811) 7,440 3.7 3.4 9.5 8.7 17.1 15.4 3.6% 7.6% 38.9% 39.4%

Splunk, Inc. $58.68 7,895 (1,021) 6,874 7.5 5.9 80.8 52.6 NM NM 36.8% 28.2% 9.3% 11.1%

Micro Focus International plc $28.62 6,560 1,078 7,638 5.7 5.5 12.1 11.0 17.3 16.0 9.1% 3.7% 46.6% 49.8%

Atlassian Corporation Plc $29.97 6,484 (743) 5,741 11.0 8.5 58.2 40.5 99.3 79.4 34.9% 30.0% 18.9% 20.9%

Software Aktiengesellschaft $42.39 3,232 (73) 3,159 3.2 3.1 10.1 9.8 15.5 14.9 4.9% 2.1% 31.4% 31.6%

NetScout Systems, Inc. $29.25 2,691 (20) 2,671 2.3 2.1 8.9 6.4 17.0 13.3 49.2% 6.7% 25.5% 33.1%

Pure Storage, Inc. $13.55 2,664 (570) 2,094 2.9 2.1 NM NM NM NM 62.7% 40.5% NM NM

CommVault Systems, Inc. $53.13 2,360 (410) 1,950 3.1 2.9 22.4 20.2 51.5 49.6 7.0% 6.5% 13.9% 14.4%

LogMeIn, Inc. $90.39 2,287 (180) 2,107 6.3 5.5 24.4 20.3 46.8 40.2 23.0% 15.1% 25.8% 26.9%

New Relic, Inc. $38.32 1,948 (196) 1,752 7.4 5.8 NM NM NM NM 46.6% 27.9% NM NM

Progress Software Corporation $27.20 1,319 (96) 1,223 3.0 2.9 8.5 8.7 17.1 16.0 9.1% 2.6% 35.1% 33.3%

A10 Networks, Inc. $10.69 703 (114) 589 2.5 2.2 NM 36.7 NM NM 17.0% 13.2% 1.1% 6.1%

Mean 5.0x 4.3x 24.2x 19.8x 30.5x 30.7x 21.7% 14.0% 26.7% 28.3%

Median 3.7 3.4 11.7 11.0 17.1 16.0 17.0% 7.6% 25.8% 31.6%

7







Security Software

Symantec Corporation $25.10 $15,623 ($2,914) $12,709 3.3x 2.8x 10.3x 7.6x 24.6x 15.8x (37.7%) 16.9% 32.1% 37.1%

Palo Alto Networks, Inc. $159.33 14,475 (777) 13,698 8.6 6.5 40.9 26.8 76.7 48.4 37.9% 32.0% 21.1% 24.4%

Check Point Software Technologies Ltd. $77.61 13,308 (1,327) 11,981 6.9 6.6 12.7 12.0 17.4 16.1 5.8% 5.9% 54.8% 54.9%

Splunk, Inc. $58.68 7,895 (1,021) 6,874 7.5 5.9 80.8 52.6 NM NM 36.8% 28.2% 9.3% 11.1%

Fortinet Inc. $36.93 6,377 (985) 5,393 4.2 3.5 23.3 18.5 52.8 42.2 26.7% 18.9% 18.1% 19.1%

Trend Micro Inc. $34.66 4,758 (1,211) 3,547 2.8 2.6 9.1 8.4 26.8 23.2 23.6% 7.6% 30.4% 30.8%

Proofpoint, Inc. $74.85 3,146 (56) 3,090 8.5 6.6 NM 70.5 NM NM 36.8% 29.0% 6.9% 9.4%

FireEye, Inc. $14.73 2,499 (193) 2,306 3.2 2.8 NM 91.0 NM NM 15.8% 15.3% NM 3.0%

Imperva Inc. $53.71 1,752 (255) 1,496 6.0 5.0 NM NM NM NM 6.6% 20.3% NM NM

CyberArk Software, Ltd. $49.57 1,664 (237) 1,427 6.7 5.5 26.0 21.4 46.5 38.6 32.2% 22.5% 25.8% 25.6%

Qualys, Inc. $38.19 1,351 (214) 1,137 5.7 4.8 17.7 14.6 48.5 41.4 20.6% 18.7% 32.5% 33.1%

Barracuda Networks, Inc. $25.48 1,328 (162) 1,166 3.4 3.2 18.7 16.8 42.9 42.2 10.5% 6.2% 18.3% 19.2%

Mimecast Limited $19.13 1,042 (103) 939 5.7 4.7 NM 65.9 NM NM 21.2% 22.6% 4.2% 7.1%

SecureWorks Corp. $12.51 1,009 (113) 896 2.1 1.8 NM NM NM NM 25.3% 19.5% NM 0.2%

Rapid7, Inc. $17.65 742 (85) 658 4.2 3.4 NM NM NM NM 40.1% 26.6% NM NM

VASCO Data Security International Inc. $17.61 700 (136) 564 2.7 2.3 16.9 12.1 29.1 20.5 (13.0%) 15.3% 15.9% 19.3%

F-Secure Oyj $3.79 592 (90) 502 2.8 2.7 18.4 15.1 34.4 30.6 10.6% 6.4% 15.4% 17.7%

MobileIron, Inc. $2.75 236 (85) 151 0.9 0.8 NM NM NM NM 7.9% 11.0% NM NM

Zix Corporation $4.10 219 (21) 199 3.3 3.0 12.4 11.1 17.1 14.8 9.5% 9.9% 26.8% 27.2%

Absolute Software Corporation $5.48 214 (35) 179 2.0 1.8 19.7 19.8 NM NM (3.8%) 9.8% 10.2% 9.3%

Guidance Software, Inc. $5.96 192 (13) 179 1.6 1.5 NM NM NM NM 2.5% 6.2% NM 1.2%

iPass Inc. $1.63 107 (16) 91 1.4 1.2 NM 8.7 NM 13.6 2.9% 21.0% 0.4% 13.4%

Mean 4.3x 3.6x 23.6x 27.8x 37.9x 28.9x 14.5% 16.8% 20.1% 19.1%

Median 3.4 3.1 18.4 16.8 34.4 26.9 13.2% 17.8% 18.2% 19.1%

8







SaaS / On Demand

salesforce.com, inc. $71.33 $48,326 $1,341 $49,667 6.0x 4.9x 31.8x 25.7x 75.3x 56.1x 24.7% 21.2% 18.8% 19.2%

Workday, Inc. $91.69 18,338 (1,547) 16,791 10.8 8.2 NM 73.4 NM NM 33.9% 31.0% 8.1% 11.2%

ServiceNow, Inc. $79.15 13,020 (316) 12,704 9.2 7.1 50.5 33.4 NM 77.4 37.0% 29.7% 18.3% 21.3%

The Ultimate Software Group, Inc. $204.39 5,915 (88) 5,826 7.5 6.1 30.8 24.5 62.1 50.0 26.2% 22.2% 24.2% 25.0%

Veeva Systems Inc. $41.28 5,622 (480) 5,142 9.7 8.0 33.3 26.3 68.2 55.0 28.9% 21.3% 29.3% 30.5%

Aspen Technology, Inc. $46.79 3,731 (181) 3,550 7.6 7.3 15.5 14.8 25.8 25.1 0.6% 4.2% 49.1% 49.3%

Shopify Inc. $42.92 3,731 (180) 3,551 9.7 6.7 NM NM NM NM 79.0% 43.2% NM 2.1%

Blackbaud Inc. $66.34 3,080 387 3,466 4.7 4.3 19.8 17.3 34.6 28.8 14.6% 9.9% 23.9% 25.0%

Paycom Software, Inc. $50.13 2,999 (52) 2,947 9.0 7.0 34.9 27.1 65.2 52.3 45.4% 28.9% 25.8% 25.8%

Zendesk, Inc. $30.71 2,881 (224) 2,657 8.6 6.4 NM NM NM NM 48.3% 33.2% 1.9% 3.6%

Cornerstone OnDemand, Inc. $45.95 2,570 (33) 2,537 5.9 4.9 84.0 47.4 NM NM 25.6% 22.4% 7.1% 10.3%

LogMeIn, Inc. $90.39 2,287 (180) 2,107 6.3 5.5 24.4 20.3 46.8 40.2 23.0% 15.1% 25.8% 26.9%

Paylocity Holding Corporation $44.46 2,274 (86) 2,188 8.3 6.6 73.9 51.7 NM NM 39.8% 25.5% 11.3% 12.8%

Box, Inc. $15.76 2,084 (115) 1,969 5.0 3.9 NM NM NM NM 30.6% 26.2% NM NM

RealPage, Inc. $25.70 2,063 77 2,140 3.8 3.3 17.8 14.7 35.3 28.9 21.7% 14.7% 21.1% 22.3%

HubSpot, Inc. $57.62 2,037 (117) 1,920 7.3 5.6 NM NM NM NM 45.4% 30.6% NM NM

New Relic, Inc. $38.32 1,948 (196) 1,752 7.4 5.8 NM NM NM NM 46.6% 27.9% NM NM

2U, Inc. $38.29 1,795 (188) 1,607 7.9 6.0 NM NM NM NM 34.8% 31.3% 1.1% 2.8%

RingCentral, Inc. $23.66 1,729 (131) 1,599 4.3 3.5 73.0 52.3 NM NM 26.2% 23.9% 5.9% 6.6%

Qualys, Inc. $38.19 1,351 (214) 1,137 5.7 4.8 17.7 14.6 48.5 41.4 20.6% 18.7% 32.5% 33.1%

SPS Commerce, Inc. $73.41 1,246 (128) 1,118 5.8 4.9 42.7 33.0 74.9 60.6 21.9% 18.8% 13.6% 14.8%

Benefitfocus, Inc. $39.92 1,184 7 1,191 5.1 4.1 NM NM NM NM 27.1% 24.7% NM 3.3%

Callidus Software Inc. $18.35 1,142 (94) 1,048 5.1 4.3 40.4 31.5 67.2 50.1 18.2% 18.7% 12.7% 13.7%

Mimecast Limited $19.13 1,042 (103) 939 5.7 4.7 NM 65.9 NM NM 21.2% 22.6% 4.2% 7.1%

9







SaaS / On Demand (cont'd)

Five9, Inc. $15.68 $824 ($14) $810 5.2x 4.4x NM 84.6x NM NM 21.9% 17.8% 3.0% 5.2%

Apptio, Inc. $21.70 $760 ($23) $738 NA NA NA NA NA NA NA NA NA NA

Workiva Inc. $18.13 744 (29) 716 3.9 3.3 NM NM NM NM 24.8% 21.2% NM NM

Instructure, Inc. $25.37 710 (62) 648 5.8 4.1 NM NM NM NM 52.7% 42.6% NM NM

IntraLinks Holdings, Inc. $10.06 577 41 618 2.1 1.9 11.9 9.1 49.8 28.1 8.3% 9.4% 17.3% 20.7%

Bazaarvoice, Inc. $5.91 489 (50) 440 2.2 2.1 34.8 23.2 NM NM 2.7% 5.3% 6.2% 8.9%

LivePerson Inc. $8.41 486 (52) 434 1.9 1.8 23.8 17.1 NM 70.5 (6.6%) 6.1% 8.2% 10.7%

Castlight Health, Inc. $4.16 427 (126) 302 3.0 2.4 NM NM NM NM 33.3% 27.6% NM NM

Carbonite, Inc. $15.36 415 (43) 372 1.9 1.8 11.7 10.4 31.0 26.8 45.4% 4.4% 16.1% 17.3%

ChannelAdvisor Corporation $12.93 332 (62) 270 2.4 2.1 NM 53.6 NM NM 12.4% 14.4% 2.1% 3.9%

Jive Software, Inc. $4.26 331 (105) 226 1.1 1.1 15.1 12.5 74.7 40.8 2.7% (2.3%) 7.4% 9.2%

Tangoe, Inc. $8.25 325 (32) 294 1.3 1.3 12.6 NA 22.9 22.3 NA (0.0%) 10.0% NA

Amber Road, Inc. $9.65 255 6 261 3.5 3.1 NM NM NM NM 9.9% 13.5% NM NM

Park City Group Inc. $11.80 228 (8) 219 NA NA NA NA NA NA NA NA NA NA

Marin Software Incorporated $2.52 97 (33) 64 0.6 0.7 54.2 14.2 NM NM (7.9%) (3.0%) 1.2% 4.6%

Covisint Corporation $2.18 89 (42) 47 NA NA NA NA NA NA NA NA NA NA

Mean 5.4x 4.4x 34.3x 31.9x 52.2x 44.4x 26.1% 19.5% 14.5% 15.4%

Median 5.7 4.4 31.3 25.7 49.8 41.4 25.2% 21.2% 12.0% 12.8%

10







Business Intelligence & Analytics

Splunk, Inc. $58.68 $7,895 ($1,021) $6,874 7.5x 5.9x 80.8x 52.6x NM NM 36.8% 28.2% 9.3% 11.1%

Tableau Software, Inc. $55.27 4,112 (835) 3,277 3.9 3.2 52.1 29.7 NM NM 27.8% 22.8% 7.5% 10.8%

Teradata Corporation $31.00 4,042 (327) 3,715 1.6 1.6 6.4 6.4 12.5 12.7 (8.9%) (1.4%) 25.3% 25.4%

Fair Isaac Corporation $124.59 3,844 483 4,327 4.9 4.6 21.0 16.1 26.2 22.7 3.8% 5.8% 23.4% 28.9%

Verint Systems Inc. $37.63 2,376 379 2,755 2.5 2.3 10.8 9.6 13.2 11.8 (2.4%) 6.6% 23.1% 24.4%

MicroStrategy Inc. $167.44 1,914 (550) 1,364 2.7 2.6 10.5 9.2 21.8 20.3 (3.8%) 4.0% 25.5% 27.9%

Hortonworks, Inc. $8.35 493 (109) 385 2.2 1.6 NM NM NM NM 45.6% 31.8% NM NM

Attunity, Ltd. $6.64 110 (9) 102 1.8 1.4 23.4 9.0 NM 18.6 19.2% 22.5% 7.6% 16.1%

Datawatch Corporation $7.41 88 (29) 59 1.9 NA NM NA NM NA 1.1% NA NM NA

Mean 3.2x 2.9x 29.3x 18.9x 18.4x 17.2x 13.2% 15.0% 17.4% 20.7%

Median 2.5 2.5 21.0 9.6 17.5 18.6 3.8% 14.5% 23.1% 24.4%

Vertical

Cerner Corporation $61.75 $20,854 ($45) $20,808 4.2x 3.8x 12.9x 11.4x 26.2x 23.0x 13.1% 10.2% 32.7% 33.7%

Constellation Software Inc. $450.60 9,549 111 9,660 4.6 4.0 18.0 15.8 24.9 20.7 15.3% 13.7% 25.3% 25.3%

SS&C Technologies Holdings, Inc. $32.15 6,467 2,506 8,972 6.0 5.5 14.2 12.4 19.9 16.6 50.4% 9.3% 41.9% 43.9%

Veeva Systems Inc. $41.28 5,622 (480) 5,142 9.7 8.0 33.3 26.3 68.2 55.0 28.9% 21.3% 29.3% 30.5%

athenahealth, Inc. $126.12 4,962 160 5,122 4.6 3.9 21.8 17.9 71.4 56.6 19.4% 19.4% 21.3% 21.7%

Guidewire Software, Inc. $59.98 4,383 (628) 3,754 8.5 7.4 47.9 32.5 88.2 62.8 11.6% 14.8% 17.7% 22.8%

CoreLogic, Inc. $39.22 3,463 1,543 5,006 2.6 2.6 10.2 9.5 17.2 15.7 25.2% 1.5% 25.7% 27.0%

Medidata Solutions, Inc. $55.76 3,201 (62) 3,139 6.8 5.7 29.6 23.6 55.2 44.9 17.8% 19.3% 22.9% 24.1%

Blackbaud Inc. $66.34 3,080 387 3,466 4.7 4.3 19.8 17.3 34.6 28.8 14.6% 9.9% 23.9% 25.0%

Allscripts Healthcare Solutions, Inc. $13.17 2,457 1,107 3,564 2.3 2.1 12.3 10.9 22.2 18.8 13.4% 9.7% 18.4% 19.0%

Inovalon Holdings, Inc. $14.71 2,242 (470) 1,773 3.8 3.4 13.3 11.2 35.4 28.4 8.0% 11.9% 28.3% 30.0%

RealPage, Inc. $25.70 2,063 77 2,140 3.8 3.3 17.8 14.7 35.3 28.9 21.7% 14.7% 21.1% 22.3%

WebMD Health Corp. $49.70 1,843 24 1,867 2.6 2.5 8.1 7.3 26.6 24.0 11.2% 7.6% 32.8% 33.8%

HealthStream, Inc. $27.60 876 (139) 737 3.2 2.8 21.2 16.0 96.4 63.2 9.6% 14.3% 15.2% 17.7%

Silver Spring Networks, Inc. $14.18 732 (113) 618 2.1 1.8 35.7 21.9 NM 46.7 (39.0%) 14.4% 5.8% 8.3%

Instructure, Inc. $25.37 710 (62) 648 5.8 4.1 NM NM NM NM 52.7% 42.6% NM NM

AppFolio, Inc. $19.44 654 (22) 632 6.1 4.6 NM NM NM NM 39.2% 30.6% NM 2.5%

Castlight Health, Inc. $4.16 427 (126) 302 3.0 2.4 NM NM NM NM 33.3% 27.6% NM NM

Exa Corporation $16.05 238 (29) 209 2.8 2.5 38.9 25.0 NM NM 12.8% 12.4% 7.3% 10.0%

Mean 4.6x 3.9x 22.2x 17.1x 44.4x 35.6x 18.9% 16.1% 23.1% 23.4%

Median 4.2 3.8 18.9 15.9 34.9 28.8 15.3% 14.3% 23.4% 24.1%

11

Notes:

Sources: Capital IQ as of 9/30/16. Consensus Estimates used for CY17E figures.

For Tangoe, CY16E FCF Margin % used since no CIQ Consensus Estimate available for CY17E FCF Margin %.

When analyzing the same data set, R value of 2017E Revenue Multiple and 2017E Revenue Growth % is 0.57.

When analyzing the same data set, R value of 2017E Revenue Multiple and 2107E FCF Margin % is 0.45.

PUBLIC SAAS COMPANIES – VALUATION CORRELATION TO GROWTH AND CASH FLOW En

terp

rise

Val

ue

/ C

Y 2

01

7E

Rev

en

ue

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

AZPN

BV

BLKB

BOX

CALD

CARB

CSLT

ECOM

CSOD

FIVN

HUBS

INST

ILLPSN

LOGM

MRIN

MIME

NEWR

PAYCPCTY

QLYS

RPRNG

CRM

NOW

SHOP

SPSC

TNGO

ULTI

VEEV

WDAY

WK

ZEN

TWOU

BNFT

AMBR

JIVE

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

-10% 0% 10% 20% 30% 40% 50% 60%

R² = 0.74R = 0.86

12

Notes:

Sources: Capital IQ as of 9/30/16. Consensus Estimates used for CY16E Revenue Figures. GAAP figures used for Sales and Marketing Expense.

For Tangoe, CIQ Consensus Estimate used for CY15 Revenue since no actual Revenue figure was reported for that period.

SaaS companies with magic number less than or equal to 0.0 placed at 0.0 x-axis position and excluded from R calculation (AZPN, LPSN, MRIN). Magic number figures for these companies are provided in parentheses.

R calculation also excludes other outliers (CARB).

PUBLIC SAAS COMPANIES – VALUATION CORRELATION TO S&M EFFECTIVENESS En

terp

rise

Val

ue

/ C

Y 2

01

6E

Rev

en

ue

Annual Change in Revenue Figures (CY16E) / LTM Sales and Marketing Expense (Magic Number)

CRM

NOW

ULTI

SHOP

BLKB

PAYC

ZEN

CSODLOGM

PCTY

RP

HUBS

BOXRNG

TWOU

QLYS

SPSC

BNFT

CALD

MIME

FIVN

WK

INST

IL

CSLT

BV CARB

JIVE TNGO

ECOM

VEEV

NEWR

AMBR

AZPN (0.0x)

LPSN (-0.2x)

MRIN (-0.3x)

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8

R² = 0.56R = 0.75

13

RECENT ACQUISITIONS Select Software M&A Transactions

Notes: Source: Capital IQ and Wall Street Estimates. Transactions highlighted in yellow denote Private Equity Acquirers.

($MM)

Announced Aggregate AV / Revenue

Date Acquirer Target Target Sector Value (AV) LTM NTM Target Description

9/26/16Application software /

Vertical applications $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

9/19/16Application software /

Vertical applications $135 NA NA

The technology assets of INVeSHARE Inc. which provides embeddable Web-based shareholder

communication SaaS to brokerage firms and shareholders

9/19/16

Enterprise networking /

Network performance &

management

$1,254 3.5x 3.4xProvides DNS, DHCP, and IP address (DDI) management and network service delivery software and

management appliances for enterprises, government agencies and service providers worldwide

9/12/16

Information management /

Content management /

General

$1,620 2.7x NA

EMC's Enterprise Content Division, which provides enterprise content management SaaS and on-

premise software, including the Documentum, InfoArchive, and LEAP product lines, for businesses and

corporations

9/8/16 API management SaaS $555 6.5x 4.9x

Provides API management SaaS for businesses globally. Software enables the integration, interfacing

and management of third-party applications and services for software developers creating branded

mobile and cloud applications

9/7/16 Security Software $6,078 NA NA

Provides network anti-malware and PC security software for consumers and enterprises worldwide.

Software includes features for anti-virus, anti-spyware, anti-spam, intrusion prevention, secure

messaging, Web filtering and vulnerability management

9/7/16

Security Software $8,730 2.8x NA

HPE's software business division, which provides systems management, storage management, content

management, applications development, imaging and virtualization management software for

enterprises.

8/31/16 Application software $1,394 3.4x 3.1x

Provides VoIP, unified communications, PBX and call center management software and software-as-a-

service (SaaS) for businesses globally. Also provides managed communications and disaster recovery

services

8/18/16 Internet Software & Services $122 3.9x NAProvides online content management SaaS for Web publishers in the medical, scientific, technical and

media industries worldwide. Also provides online hosting of journalistic content

8/1/16 Application software $80 5.3x NA

Provides project and portfolio management (PPM), application portfolio management (APM) and

predictive portfolio analysis (PPA) SaaS for the healthcare, government, education and commercial

sectors

8/1/16 Information management $582 NA NA

Provides team collaboration and document management SaaS for businesses. The company’s solutions

are used in various platforms, such as iPad and iPhone, Macs, PCs, Windows, Apple watches, Android

phones, Android tablets, and on the Web

8/1/16 Systems Software $2,184 7.0x 6.1xProvides GPS-based vehicle tracking and mobile workforce management SaaS for service-based

businesses and the construction industry globally

7/28/16 Application Software $9,174 10.8x 8.9xProvides financial management and planning, ERP, e-commerce, CRM, SCM, and business intelligence

(BI) analytics software as a service (SaaS) for businesses globally

7/27/16 Information Management $1,000 1.8x 1.9x

Provides e-discovery and document review software for businesses, the legal sector and government

agencies globally. Also provides a searchable online database of Chapter 7, 11 and 13 bankruptcy court

filings

7/26/16 Information management $1,800 NA NAThe GoTo businesses of Citrix Systems provides Web conferencing and real-time team collaboration

SaaS for small- to medium-sized businesses

/

(Software Business Division)

(Technology Assets)

14



($MM)



7/21/16 Application Software $215 NA 3.6xProvides customer engagement and customer analytics SaaS for businesses in the telecom, insurance,

finance, travel, hospitality and retail sectors

7/21/16 Application Software $130 14.4x NAProvides marketing automation, customer analytics, and sales management SaaS for retailers.

Software enables marketers to collect and deliver user generated content (UGC) from various mediums

7/18/16 Information Management $600 4.0x NAProvides web browsers for fixed and mobile computers and smartphones for businesses and

consumers globally

7/13/16 Security $544 4.4x 3.8xProvides single sign-on (SSO) and password management software, as well as appliance-based

authentication and employee access management systems, for hospitals and healthcare providers

7/7/16 Security $1,453 3.4x 3.2x

Provides anti-virus, anti-malware, anti-spam, firewall, mobile device and endpoint security software for

consumers and businesses globally. AVG Technologies began trading on the NYSE under the ticker

symbol AVG in February 2012

7/5/16 Application Software $3,300 3.3x NA Provides ERP, CRM and SCM software and SaaS for businesses globally.

6/30/16 Infrastructure Management $260 1.7x 1.8xProvides financial and payment processing software and services for higher education institutions.

Higher One began trading on the NYSE under the ticker symbol ONE in June 2010

6/28/16 Application Software $125 NA NA

Provides retail predictive analytics SaaS that uses big data to enable retailers and wholesalers to

forecast merchandise planning, assortment, category management, pricing and supply chain

optimization

6/28/16 Security $293 NA NA

Provides access control and anti-data leakage SaaS to enable businesses to secure cloud applications

and provide data loss prevention (DLP). The SaaS works on cloud services such as Amazon Web

Services, Box, Google Apps, Dropbox and Salesforce

6/20/16 Application Software $2,200 1.6x NA

Provides BI analytics and corporate performance management, database management, identity and

access management, network security management, endpoint integrity and identity and access

management software and SaaS for businesses

6/20/16 Information Management $315 NA 2.7x

The HP Exstream, HP Output Management, HP TeleForm and HP LiquidOffice software and service

assets of HP, which enable automated customer communication and multi-channel document

management and delivery for businesses

6/13/16Internet Content &

Commerce $26,200 8.2x 6.7x

Provides a social networking website for professionals and businesses globally through

www.linkedin.com

6/12/16 Security $4,650 7.8x NAProvides enterprise cybersecurity, Web traffic management and mobile device security systems and

software as a service (SaaS) for businesses globally

6/7/16 Application Software $175 3.5x NAProvides supply chain management (SCM) software, SaaS and related integration services to the

chemical and oil industries globally


Provides e-discovery, enterprise search and categorization SaaS and managed services for businesses

globally. Software also enables predictive and contract analysis, and enterprise knowledge

management

Goloden Brick SilkRoad Fund Management

Yonglian Investments Co.

Beijing Kunlun Tech Co.

Consumer Assets

( )

(customer communication

management assets)

15



($MM)



6/2/16 Application Software $2,630 4.1x 3.6xProvides on-premise and cloud-based business intelligence (BI) analytics and reporting software for

businesses, government agencies and educational institutions globally

6/1/16 Application Software $2,800 11.0x 8.8x

Provides enterprise cloud-based e-commerce SaaS for Web merchants and multi-channel online

retailers. Software includes features for order management, multiple e-commerce site creation and

maintenance and mobile transaction processing

6/1/16 Infrastructure management $500 6.3x 5.0x

Provides Web-based IT service management (ITSM) SaaS for managed service providers and IT support

businesses globally. Software integrates features including remote monitoring, mail security, backup

and recovery and IT service desk

6/1/16 Security $600 NA NA

Provides enterprise Identity-as-a-Service (IDaaS), including identity and access management and

authentication SaaS. Software enables an organization's employees to use a single sign-on (SSO) to

securely access Internet applications and Web services

5/31/16 Application Software $378 3.6x 3.4xProvides procurement, SCM, contract and inventory management, and accounts payable automation

SaaS for the scientific, education, healthcare and government sectors

5/31/16 Application Software $1,790 7.9x 6.2xProvides marketing automation SaaS for businesses. Software provides features for sales lead

management and analytics, email and social media marketing, and marketing campaign analytics

5/27/16 Application Software $164 2.2x NAProvides loan and mortgage management software, insurance policy administration software, and

related outsourced services for the financial and insurance sectors globally

5/18/16 Application Software $881 3.8x 3.2xProvides predictive dialing, IVR and analytics call center SaaS and related integration services for call

center operators globally

5/16/16 Infrastructure Management $115 4.8x NA Provides secure EDI document distribution and collaboration SaaS for the financial services industry

5/5/16 Mobility $230 3.3x NAProvides application program interfaces (API) and software development kits (SDK) PaaS to enable

voice, text, chat application and phone verification services for enterprises and developers globally

5/2/16 Application Software $532 3.6x 3.3x

Provides cloud-based utility and energy management SaaS for power suppliers. Software enables the

analysis of smart meter reading and analytics for demand side power optimization, customer

engagement and billing automation and Web development tools

4/28/16 Information Management $663 7.2x 6.2xProvides collaboration software as a service (SaaS) for payment management and project pre-

qualification for the commercial construction industry

4/27/16 Infrastructure Management $104 NA 3.5x

Provides Web-based secure information exchange SaaS that enables the electronic exchange and

collaboration of supply chain documents, financial information, product development materials and

protected healthcare information

4/25/16 Application Software $820 2.7x NA

Provides enterprise healthcare data analytics software and services that enable revenue management,

claim and payment accuracy, fraud protection, population health predictive big data analytics,

compliance, and reporting for the healthcare sector

4/22/16 Application Software $90 0.6x NATeradata's marketing applications business, which provides omni-channel marketing and advertising

resource and data management SaaS and services for companies and marketing agencies

( )( )

(Marketing Applications Business)(Marketing Applications Business)

16



($MM)



4/19/16 Security $360 3.5x 3.0x

Provides enterprise consumer identity management, identity theft protection and fraud detection

software, including credit monitoring, identity authentication, voice biometrics and breach mitigation

and resolution

4/19/16 Application Software $106 4.7x NA

Provides property management and residential sales management software and SaaS, including

inventory management, marketing, CRM communications, accounting and business reporting, for real

estate agents and agencies


The HP TeamSite, HP MediaBin, HP Qfiniti, HP Explore, HP Aurasma, and HP Optimost software and

service assets of HP, which enable customer service automation, Web content and digital asset

management, and contact center workforce optimization

4/18/16 Application Software $1,505 8.0x 6.5x

Provides event planning management SaaS for businesses globally. Software provides features for

event registration, email marketing, payment processing, budget management and Web design. Also

provides online survey creation and management SaaS

4/1/16 Information Management $1,131 5.2x NAProvides customer experience management, including Web content management, website analytics,

search engine optimization and email marketing SaaS for businesses globally

3/23/16 Application Software $950 NA NAProvides medical practice, pharmacy and electronic healthcare records (EHR) management software

and software as-a-service (SaaS) for healthcare providers and related government agencies

3/22/16 Infrastructure Management $540 3.3x NAProvides enterprise application lifecycle management, business process management, automation and

Web content management software. Also provides related systems integration services

3/21/16 Information Management $200 NA NA

Provides board meeting and executive leadership conference document collaboration, document

annotation, e-signature, secure messaging and meeting productivity SaaS and software for businesses.

Software can be hosted in the cloud or on-premise

3/17/16 Application Software $72 2.7x NAProvides construction management SaaS, including project, bid and financial management and

performance monitoring software, for the commercial real estate construction industry globally

3/1/16 Infrastructure Management $260 NA NA

Provides hybrid cloud application management software to enable migration, governance and

management of applications from on-premises, cloud or hybrid cloud (public and private)

environments for businesses

2/24/16 Mobility $400 10.7x NA

Provides Visual Studio enterprise mobile application development software-as-a-service (SaaS), add-on

tools and extensions for software developers and businesses. Software enables corporate software

developers to create and test native applications

All Software

Median 3.8x 3.5x

Mean 5.0x 4.2x

PE

Median 3.6x 3.7x

Mean 4.0x 4.2x

(Customer Expirience Software and Service Assets)

17

SOFTWARE VENTURE ACTIVITY

Notes: Source: Pitchbook. Transactions reflect recent software venture activity where the amount raised was greater than or equal to $20MM.

9/29/16 Shape Security $40Provider of security technology for web and mobile

applications.

Baseline Ventures (Steve Anderson), EDB Investments (Swee Yeok Chu), EPIC

Ventures, Eric Schmidt, Hewlett Packard Ventures (Lakshmikanth Ananth),

Kleiner Perkins Caufield & Byers (Theodore Schlein), Northern Light Venture

Capital (Feng Deng), Norwest Venture Partners (Promod Haque)

9/28/16 Druva $51Provider of data protection and IT-governance

technology for mobile work forces.

Blue Cloud Ventures, EDB Investments (Swee Yeok Chu), Hercules Capital,

Nexus Venture Partners (Jishnu Bhattacharjee), NTT Finance, Sequoia Capital

(Shailendra Singh), Tenaya Capital (Thomas Banahan)

9/28/16 Apttus $88Provider of a cloud-based software for quote-to-

cash automation.ICONIQ Capital, K1 Capital (Neil Malik), Kuwaiti Investment Authority

9/27/16 ProsperWorks $24 Developer of a cloud-based CRM software.Devoteam, Industry Ventures, Next World Capital (Ben Fu), Storm Ventures

(Anshu Sharma), True Ventures (Philip Black)

9/23/16 Oblong Industries $65 Developer of visual collaboration software. NA

9/22/16 Avalara $96 Provider of tax compliance automation software.Battery Ventures (Chelsea Stoner), Sageview Capital (Edward Gilhuly), TCV

(Tim McAdam), Warburg Pincus (Justin Sadrian)

9/21/16 Tealium $35Provider of web analytics and digital marketing

software.

Bain Capital Ventures (Salil Deshpande), Battery Ventures (Neeraj Agrawal),

Georgian Partners (Justin LaFayette), Presidio Ventures, Silver Lake

Technology Management (Shawn O'Neill), Tenaya Capital (Stewart Gollmer)

9/20/16 Vlocity $50Developer of cloud based software to deliver

industry-specific customer experiences.

Accenture (Robert Sell), Kennet Partners, New York Life Enterprises,

Salesforce Ventures (John Somorjai), Sutter Hill Ventures (James White), TDF

Ventures, Wildcat Venture Partners

9/19/16 White Ops $20 Provider of software security services. Grotech Ventures (Stephen Fredrick), Paladin Capital Group (Philip Eliot)

9/15/16 Ripple $55Developer of a virtual currency and payments

system.

Accenture Technology Ventures, CME Ventures, Santander InnoVentures, SBI

Holdings (Yoshitaka Kitao), SCB Digital Ventures (Thana Thienachariya),

Seagate Venture Fund, Standard Chartered (Alex Manson), Venture51

9/15/16 BitSight $40 Developer of cyber security software applications.

Comcast Ventures, Flybridge Capital Partners, GGV Capital (Glenn Solomon),

Globespan Capital Partners, Liberty Global Ventures, Menlo Ventures, Shaun

McConnon (Shaun McConnon), SingTel Innov8

9/14/16 Lucid Software $36Provider of a collaborative web based diagramming

and flowchart application.

Grayhawk Capital, Kickstart Seed Fund (Gavin Christensen), Spectrum Equity

(Benjamin Spero)

9/13/16 Optimove $20Developer of Web-based products for use by

marketers in Internet companies.Israel Growth Partners (Moshe Lichtman)

9/13/16 Gitlab $20Provider of an open-source code collaboration

platform.August Capital (Villi Iltchev), Khosla Ventures (Vinod Khosla), Y Combinator

9/13/16 CTERA Networks $25 Developer of cloud storage services platform.Benchmark Capital (Arad Naveh), Bessemer Venture Partners (Adam Fisher),

Cisco Investments, Vintage Investment Partners

9/13/16 Claroty $32Provider of an Operational Technology (OT)

network protection platform.

Bessemer Venture Partners (David Cowan), Innovation Endeavors (Eric

Schmidt), Israel Cleantech Ventures (Meir Ukeles), Marker, Mitsui & Co., Red

Dot Capital Partners (Zvika Naggan)

9/13/16 Cato Networks $30 Developer of network security technologies.Aspect Venture Partners (Theresia Gouw), Greylock Partners (Jerry Chen),

SingTel Innov8, US Venture Partners (Steve Krausz)

9/12/16 Mutualink $37Provider of an internet protocol based multimedia

interoperable communications platform.NA

($MM)

Deal Date CompanyAmount

Raised Brief Description Investors

9/29/16 Shape Security $40Provider of security technology for web and

mobile applications.

Baseline Ventures (Steve Anderson), EDB Investments (Swee Yeok Chu), EPIC Ventures, Eric Schmidt, Hewlett

Packard Ventures (Lakshmikanth Ananth), Kleiner Perkins Caufield & Byers (Theodore Schlein), Northern Light

Venture Capital (Feng Deng), Norwest Venture Partners (Promod Haque)

9/28/16 Druva $51Provider of data protection and IT-governance

technology for mobile work forces.

Blue Cloud Ventures, EDB Investments (Swee Yeok Chu), Hercules Capital, Nexus Venture Partners (Jishnu

Bhattacharjee), NTT Finance, Sequoia Capital (Shailendra Singh), Tenaya Capital (Thomas Banahan)

9/28/16 Apttus $88Provider of a cloud-based software for quote-to-

cash automation.ICONIQ Capital, K1 Capital (Neil Malik), Kuwaiti Investment Authority

9/27/16 ProsperWorks $24 Developer of a cloud-based CRM software.Devoteam, Industry Ventures, Next World Capital (Ben Fu), Storm Ventures (Anshu Sharma), True Ventures (Philip

Black)


9/22/16 Avalara $96Provider of tax compliance automation

software.

Battery Ventures (Chelsea Stoner), Sageview Capital (Edward Gilhuly), TCV (Tim McAdam), Warburg Pincus (Justin

Sadrian)

9/21/16 Tealium $35Provider of web analytics and digital marketing

software.

Bain Capital Ventures (Salil Deshpande), Battery Ventures (Neeraj Agrawal), Georgian Partners (Justin LaFayette),

Presidio Ventures, Silver Lake Technology Management (Shawn O'Neill), Tenaya Capital (Stewart Gollmer)

9/20/16 Vlocity $50Developer of cloud based software to deliver

industry-specific customer experiences.

Accenture (Robert Sell), Kennet Partners, New York Life Enterprises, Salesforce Ventures (John Somorjai), Sutter

Hill Ventures (James White), TDF Ventures, Wildcat Venture Partners

9/19/16 White Ops $20 Provider of software security services. Grotech Ventures (Stephen Fredrick), Paladin Capital Group (Philip Eliot)

9/15/16 Ripple $55Developer of a virtual currency and payments

system.

Accenture Technology Ventures, CME Ventures, Santander InnoVentures, SBI Holdings (Yoshitaka Kitao), SCB

Digital Ventures (Thana Thienachariya), Seagate Venture Fund, Standard Chartered (Alex Manson), Venture51

9/15/16 BitSight $40Developer of cyber security software

applications.

Comcast Ventures, Flybridge Capital Partners, GGV Capital (Glenn Solomon), Globespan Capital Partners, Liberty

Global Ventures, Menlo Ventures, Shaun McConnon (Shaun McConnon), SingTel Innov8

9/14/16 Lucid Software $36Provider of a collaborative web based

diagramming and flowchart application.Grayhawk Capital, Kickstart Seed Fund (Gavin Christensen), Spectrum Equity (Benjamin Spero)

9/13/16 Optimove $20Developer of Web-based products for use by

marketers in Internet companies.Israel Growth Partners (Moshe Lichtman)

9/13/16 Gitlab $20Provider of an open-source code collaboration

platform.August Capital (Villi Iltchev), Khosla Ventures (Vinod Khosla), Y Combinator

9/13/16 CTERA Networks $25 Developer of cloud storage services platform.Benchmark Capital (Arad Naveh), Bessemer Venture Partners (Adam Fisher), Cisco Investments, Vintage Investment

Partners

9/13/16 Claroty $32Provider of an Operational Technology (OT)

network protection platform.

Bessemer Venture Partners (David Cowan), Innovation Endeavors (Eric Schmidt), Israel Cleantech Ventures (Meir

Ukeles), Marker, Mitsui & Co., Red Dot Capital Partners (Zvika Naggan)

9/13/16 Cato Networks $30 Developer of network security technologies.Aspect Venture Partners (Theresia Gouw), Greylock Partners (Jerry Chen), SingTel Innov8, US Venture Partners

(Steve Krausz)

18



($MM)



9/12/16 Mutualink $37

Provider of an internet protocol based

multimedia interoperable communications

platform.

NA

9/11/16 Bonfire Studios $25 Provider of an online multiplayer gaming. Andreessen Horowitz, Riot Games

9/9/16 Rover $40Provider of an online platform to connect pet

owners with dog walkers and sitters.Foundry Group (Bradley Feld), Madrona Venture Group (Greg Gottesman), Menlo Ventures (Sunil Raman)

9/9/16 Nuxeo $30Provider of an open source content management

platform.Kennet Partners (Michael Elias), The Goldman Sachs Group (Christian Resch)

9/8/16 SessionM $35Provider of a mobile marketing automation and

loyalty platform.

Causeway Media Partners (Wycliffe Grousbeck), Charles River Ventures (Jon Auerbach), General Atlantic (Jim

Rossman), Highland Capital Partners (Bob Davis), Kleiner Perkins Caufield & Byers (Matthew Murphy), Salesforce

Ventures

9/8/16 OfferUp $119Provider of a mobile marketplace to buy and sell

items locally.

Altimeter Capital Management, Andreessen Horowitz (Jeffrey Jordan), Coatue Management, GGV Capital (Hans

Tung), T. Rowe Price, Vy Capital, Warburg Pincus (Justin Sadrian)

9/8/16 Cyence $40Provider of a platform for economic modeling of

cyber risk.Dowling Capital Partners, IVP, New Enterprise Associates (Karthik Kumar)

9/8/16 Byju's $50 Provider of an online learning application.Chan Zuckerberg Initiative, International Finance Corporation, Lightspeed Venture Partners (Dev Khare), Sequoia

Capital (GV Ravishankar), Sofina, Times Internet (Satyan Gajwani)

9/8/16 Blackstorm Labs $34Provider of a mobile based application

development platform.Alsop Louie Partners (Ernestine Fu), Highland Capital Partners, Rakuten Ventures

9/7/16 HashiCorp $24Provider of a tool to manage distributed

applications and infrastructure.GGV Capital (Glenn Solomon), Mayfield (Robin Vasan), Redpoint Ventures, True Ventures

9/4/16 Huimin $196

Provider of a B2B fast moving consumer goods

platform for family-owned convenience stores in

China.

China Innovation Investment, China United SME Guarantee, Fortune Venture Capital, Kinzon Capital, Renzhong

Capital Management, Western Capital Management

9/1/16 DraftKings $153 Provider of online fantasy sports platform. RevolutionGrowth (Steven Murray)

9/1/16 C3 IoT $70Developer of software for companies to

transition to Internet of Things networks.InterWest Partners, Sutter Hill Ventures, TPG Capital (Nehal Raj)

8/31/16 Compass (Real Estate Platform) $75Provider of a technology platform for real estate

information and agent services.

.406 Ventures (Maria Cirino), Founders Fund (Ken Howery), IVP (Todd Chaffee), Thrive Capital (Joshua Kushner),

Wellington Capital Management

8/30/16 LogRhythm $50Provider of a security intelligence and analytics

platform.

Adams Street Partners (David Welsh), Delta-v Capital, EDB Investments, Exclusive Networks, Riverwood Capital

(Jeffrey Parks), Siemens Venture Capital, Silver Lake Technology Management

8/30/16 HunterOn $30 Provider of an online recruitment platform. IDG Capital Partners, Sequoia Capital, UOB Venture Management

8/30/16 Glint $27Provider of a real-time employee engagement

platform.

Bessemer Venture Partners (Byron Deeter), Meritech Capital Partners (Craig Sherman), Norwest Venture Partners

(Jeffrey Crowe), Shasta Ventures (Jason Pressman)

19



($MM)



8/29/16 Velocity (Hospitality) $23Provider of a Web-based application for dining

and hospitality experiences.Barry Sternlicht (Barry Sternlicht), DIG Investments (Sanjan Dhody), John Paul

8/29/16 Rubicon Global $76Provider of sustainable waste and recycling

technology and services.

Blake Mycoskie (Blake Mycoskie), Hammerstone Capital, Henry Kravis (Henry Kravis), Leonardo DiCaprio (Leonardo

DiCaprio), Nima Capital (Suna Said), Paul Tudor Jones II (Paul Jones), The Goldman Sachs Group, Wellington

Management

8/29/16 One97 Communications $300

Provider of telecommunications value added

services to telecom service providers, consumers

and enterprises in India.

Alibaba Capital Partners, Ant Financial (Jing Xiandong), MediaTek Ventures, SAIF Partners (Ravi Adusumalli),

Temasek Holdings, The Goldman Sachs Group

8/29/16 Color Genomics $39Provider of personalized genetic counseling

services.NA

8/24/16 Panopto $43Developer of a video capture and management

software.Mountain Group Partners, Saturn Management, Sterling Partners (Jason Rosenberg)

8/24/16 DroneDeploy $20Developer of a cloud-based drone mapping

software.High Alpha, Scale Venture Partners (Rory O'Driscoll), Scott Dorsey (Scott Dorsey)

8/23/16 Testin $30Provider of a cloud application and mobile game

testing platform.Banyan Capital, Haiyin Venture Partners, IDG Capital Partners

8/22/16 Virtru $29 Developer of an encryption software for email.Bessemer Venture Partners (David Cowan), Blue Delta Capital Partners, Haystack Partners, New Enterprise

Associates, Quadrant Capital Advisors, Soros Fund Management

8/18/16 ID Experts $28Provider of data breach security services to

businesses.

BlueCross BlueShield Venture Partners (Thomas Hawes), Peloton Equity (Theodore Lundberg), Sandbox Industries

(Thomas Hawes), Trident Capital Cybersecurity (Sean Cunningham)

8/18/16 Clara Lending $27 Provider of an online lending platform. Redpoint Ventures, Venrock

8/16/16 Meet You $151 Provider of a female assistant mobile software. Cathay Capital Private Equity, China Renaissance, K2VC, Matrix Partners China

8/16/16 Keep $32 Operator of a mobile fitness community. Bertelsmann Asia Investments, GGV Capital (Jenny Lee), Mandra Capital, Morningside Group, Tencent Holdings

8/16/16 Hike Messenger $175 Provider of a mobile messaging application.Bharti Soft Bank, Foxconn Technology, Softbank (Masayoshi Son), Tencent Holdings (Martin Lau), Tiger Global

Management (Lee Fixel)

8/16/16 Degreed $25

Provider of a lifelong learning platform for

organizations and individuals to find, track and

recognize all learning throughout their lives.

GSV Advisors (Deborah Quazzo), Jump Capital (Michael McMahon), Rethink Education, Signal Peak Ventures (R.

Brandon Tidwell)

8/10/16 Interactions $67Developer of a speech and language recognition

technology.

Ares Capital, Comcast Ventures, Cross Atlantic Capital Partners , NewSpring Capital, North Hill Ventures, ORIX

Ventures, Red Oak Growth Partners, Revolution Ventures, RevolutionGrowth, Sigma Partners, SoftBank Capital

8/9/16 MapR Technologies $51Provider of distribution technology for Apache

Hadoop.

Australia Future Fund, Google Capital (Eugene Frantz), Lightspeed Venture Partners (Barry Eggers), Mayfield, New

Enterprise Associates (Peter Sonsini), Qualcomm Ventures, Redpoint Ventures

8/9/16 Anomali $30 Provider of a cyber security intelligence platform.General Catalyst Partners (Stephen Herrod), GV (Karim Faris), In-Q-Tel (George Hoyem), IVP (Stephen Harrick),

Paladin Capital Group

20



($MM)



8/9/16 Engagio $22Provider of an account based marketing

platform.FirstMark Capital (Amish Jani), Norwest Venture Partners (Sean Jacobson), Storm Ventures

8/9/16 Farmers Business Network $20Developer of a decision-support system for

farmers.Acre Venture Partners (Gareth Asten), DBL Partners, GV (Andrew Wheeler), Kleiner Perkins Caufield & Byers

8/8/16 Pindrop Security $81Provider of an in voice-fraud prevention and

authentication tool.

Andreessen Horowitz (Scott Weiss), Citi Ventures (Arvind Purushotham), Felicis Ventures (Sundeep Peechu), Google

Capital (Eugene Frantz), GV, IVP (Somesh Dash)


8/4/16 Kentik $23Provider of a cloud-based network traffic

intelligence platform.

August Capital (Vivek Mehra), Data Collective (Matthew Ocko), David Ulevitch (David Ulevitch), Engineering Capital,

First Round Capital (Howard Morgan), Glynn Capital Management, Third Point Ventures

8/4/16 GrubMarket $20Provider of an online market place for grocery

items.

Danhua Capital, Fabrice Grinda (Fabrice Grinda), Fosun International, GGV Capital (Hans Tung), Global Founders

Capital, Reindeer Investments, Riverhead Capital, Sound Ventures (Abe Burns), Wang Gang

8/3/16 Kyriba $23Provider of software-as-a-service (SaaS) cash

and treasury management services.ORIX Ventures (Jeffrey Bede)

8/2/16 Carousell $35 Provider of consumer-to-consumer marketplace. 500 Startups, Golden Gate Ventures (Vinnie Lauria), Rakuten (Saemin Ahn), Sequoia Capital (Shailendra Singh)

8/2/16 Distil Networks $21 Developer of cloud-based security software.Bessemer Venture Partners (David Cowan), Foundry Group (Ryan McIntyre), Silicon Valley Bank, Techstars (David

Cohen)

7/28/16 Reltio $22Provider of data-driven applications with modern

data management Platform as a Service (PaaS)..406 Ventures (Graham Brooks), Crosslink Capital (James Feuille), New Enterprise Associates (Chetan Puttagunta)

7/27/16 PhishMe $43

Provider of threat management for organizations

concerned about human susceptibility to

advanced targeted attacks.

Bessemer Venture Partners (Alex Ferrara), Paladin Capital Group (Christopher Steed)

7/27/16 EverFi $40 Provider of a education technology for students.Advanced Publications, Allen & Company, Bezos Expeditions (Jeffrey Bezos), New Enterprise Associates (Tony

Florence), Rethink Education (Michael Walden), Rethink Impact, Silicon Valley Bank, TomorrowVentures

7/27/16 Shipt $20Provider of an online application for grocery

delivery.e.ventures (Thomas Gieselmann), Greycroft Partners (Ian Sigalow), Harbert Growth Partners (Robert Crutchfield)

7/26/16 Scopely $55Developer and publisher of mobile social

applications.

Elephant Partners (Andrew Hunt), Evolution Media Capital (Rick Hess), Greycroft Partners (Mark Terbeek), Highland

Capital Partners, Sands Capital Ventures, Take-Two Interactive Software

7/25/16 Yonghong Tech $30Provider of big data and business intelligence

products and services.

Genesis Capital, iResearch Consulting Group, Matrix Partners China, Shenzhen Oriental Fortune Capital, Tencent

Holdings

7/25/16 StackPath $180Provider of an intelligent web services platform

for security, speed and scale.ABRY Partners

7/25/16 Vena Solutions $23Provider of spreadsheet process management

software.Centana Growth Partners (Eric Byunn)

21



($MM)



7/22/16 Fantex $59 Operator of a brand building company. NA

7/22/16 Potamus Trading $25Owner and operator of an electronic trading

firm.NA

7/21/16 FXiaoKe $70Provider of a cloud-based sales management

platform.Hualian Group, Li Yue Venture Capital

7/20/16 Pantheon $29Provider of a platform for developing

professional websites.

Foundry Group (Ryan McIntyre), Industry Ventures, OpenView Venture Partners, Scale Venture Partners (Rory

O'Driscoll)

7/19/16 Zenreach $30 Provider of an in-store marketing software. Bain Capital Ventures (Indranil Guha), Felicis Ventures, Founders Fund (Peter Thiel), SoftTech VC, SV Angel

7/19/16 Sift Science $30Provider of a platform that monitors website

traffic to alert clients of fraudulent activity.

Insight Venture Partners (Jeffrey Lieberman), Spark Capital (Moshe Koyfman), Union Square Ventures (Albert

Wenger)

7/19/16 Capriza $23 Developer of a mobile-enterprise software.Andreessen Horowitz (Benjamin Horowitz), Charles River Ventures (Izhar Armony), Entre Capital, Entrée Capital,

Harmony Partners, Tenaya Capital (Brian Melton), Vintage Investment Partners

7/18/16 DotC United $45 Developer and publisher of mobile application. Banyan Capital, Bertelsmann Asia Investments, Chengwei Ventures, Lightspeed China Partners

7/18/16 GuardiCore $20Provider of internal data center security and

breach-detection technology.83North, Battery Ventures (Scott Tobin), Cisco Investments

7/14/16 Darktrace $65 Provider of cybersecurity technology services. Kohlberg Kravis Roberts, Samsung SDS Company, Softbank, Summit Partners (Han Sikkens), TenEleven Ventures

7/13/16 Unity Technologies $181

Provider of a three dimensional game

development platform and game development

software.

China Investment Corporation, DFJ Growth (Barry Schuler), Frees Fund, Max Levchin (Max Levchin), Sequoia Capital

(Roelof Botha), Thrive Capital, WestSummit Capital (Raymond Yang)

7/13/16 True Fit $25

Provider of a database software which helps

consumers, brands and retailers to find online

stores.

Intel Capital (Joe Jensen), Jump Capital (Michael McMahon), Signal Peak Ventures (R. Brandon Tidwell)

7/12/16 Formation Data Systems $20Developer of a cloud based computing

technology system.NA

7/11/16 CornerJob $25Developer of a mobile recruiting platform for

blue-collar and service jobs.Antai Venture Builder, e.ventures, Northzone Ventures, Tv Azteca, Variv Capital

7/9/16 Bay Dynamics $23 Provider of security intelligence software. Carrick Capital Partners (James Madden), Comcast Ventures (David Zilberman)

7/8/16 SmartNews $38 Provider of a mobile news application. Development Bank of Japan, Japan Co-Invest Limited Partnership, Kotaro Chiba, SMBC Venture Capital

7/6/16 Netwatch System $22 Provider and developer of security technologies. BDO Development Capital (Andrew Bourg)

22

SOFTWARE CAPITAL MARKETS UPDATE Recent Software IPO Pricings

Notes:

Source: Capital IQ and Dealogic

Market Data as of 9/30/2016.

($MM)

Pricing DateMarket Cap @

IPO Date

Amount

Raised Original Filing Range Offer Price

% Change

Offer /

Midpoint Price

% Change

1 Day Post / Offer

Price

% Change Current

/ Offer Price

29-Sep-16 $5,079 $238 11.00 - 13.00 $16.00 33.3% 178.8% 131.3%

23-Sep-16 $841 $96 13.00-15.00 $16.00 14.3% 34.4% 35.6%

15-Sep-16 $411 $90 11.00 - 13.00 $12.00 0.0% 46.5% 40.5%

28-Jul-16 $503 $95 15.00 - 17.00 $18.00 12.5% 41.7% 45.3%

22-Jun-16 $1,233 $173 12.00 - 14.00 $15.00 15.4% 91.9% 329.1%

21-Apr-16 $1,129 $112 15.50 - 17.50 $14.00 (15.2%) 0.0% (10.6%)

Name

23

IPO PIPELINE Software: IPOs in Public Registration

Notes: Source: Dealogic, Capital IQ, and SEC.gov. Offering amounts $10MM or greater. (1) LTM margins based on period ending 6/30/16.

($MM)

Primary Initial Initial Offering LTM

Issuer Industry Filing Date Amount Description Revenue EBIT % EBITDA

Application

Software09/30/16 $100

BlackLine Inc. develops and markets enterprise-class

software to automate and control the entire financial

close process.

$102 (40.3%) ($22)

(Expected IPO date 10/6)

Software as a

Service09/08/16 $75

Coupa Software Incorporated provides cloud-based

spend management platform that connects

organizations with suppliers globally and provides

greater visibility into company spending in order to

achieve savings that drive profitability.

$110 (39.3%) ($43)

(1)

(1)

24

0

200

400

600

800

1,000

$0

$2

$4

$6

$8

$10

$12

Q2 2001 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016

Nu

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er

of

Inve

stm

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$B

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Quarter - Year

Number of Deals Investment Amount

0

200

400

600

800

1,000

$0

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$4

$6

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Q2 2001 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016

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Number of Deals Investment Amount

VENTURE CAPITAL INDUSTRY TMT: Transactions Since Q2 2001

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.

(1)

25

GCA OVERVIEW Selected Recent Software Transactions

We Advised the Seller

Acquired by


Acquired by


Acquired by


Acquired by


Acquired by


Acquired by


Acquired by

Fairness Opinion to Buddy Media

Acquired by


Acquired by


Acquired by Acquired by



Acquired by

Financial Advisor

Preferred Stock


Acquired by

Acquired by


Acquired by


Financial Advisor

Preferred Stock

Acquired by

We Advised the Seller We Advised the Seller

Acquired by

Acquired by


Dutch Auction

Tender Offer and Credit

Facility Financial Advisor


Acquired by

Financial Advisor

Preferred Stock

We Advised the Buyer

Acquired by

Financial Advisor

Preferred Stock

Strategic Advisory Services

Financial Advisor

Preferred Stock


Acquired by


Acquired by

Acquired by



Acquired by Acquired by


26

GCA OVERVIEW Software Team

San Francisco

One Maritime Plaza, 25th Fl. San Francisco, CA 94111

United States Phone: (415) 318-3600

New York

640 Fifth Avenue, 10th

Fl. New York, NY 10019

United States Phone: (212) 999-7090

Tokyo

11-1 Marunouchi 1-chome Chiyoda-ku, Tokyo 100-6230

Japan Phone: +81 (3) 6212-7100

London

48 Dover Street London W1S 4FF United Kingdom

Phone: +44 (0) 207 038-3200

*Sascha Pfeiffer is a Managing Director at GCA Altium Limited, a wholly-owned subsidiary of GCA Corporation. *Akikazu Ida is a Managing Director at GCA Corporation.

Todd Carter Clark Callander Seihun Kong Paul DiNardo Sascha Pfeiffer* Akikazu Ida* Co-President and CEO Co-Head of Investment Banking Managing Director Advisory Director Managing Director Managing Director

Phone: (415) 318-3610 Phone: (415) 318-3680 Phone: (415) 318-3682 Phone: (212) 999-7097 Phone: +49 (69) 204-34-6410 Phone: +81 (3) 6212-7241

Mobile: (415) 314-9898 Mobile: (415) 515-2468 Mobile: (415) 823-7300 Mobile: (650) 483-7246 Mobile: +49 (0) 177-74-15643 Mobile: +81 (80) 9027-3023

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

James Orozco Chris Gough Dan Etchevers Gautam GargManaging Director Managing Director Director Vice President

Phone: (415) 318-3667 Phone: (415) 318-3658 Phone: (415) 318-3644 Phone: (415) 318-3692

Mobile: (415) 722-0922 Mobile: (415) 385-9427 Mobile: (415) 572-3549 Mobile: (650) 504-1722

[email protected] [email protected] [email protected] [email protected]

bi-weekly software sector summary report - gca advisors · 2016. 10. 12. · bi & analytics:...

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