real estate technology vendor ecosystem & brief market update - jan 2015

Real Estate Software Market Update & Ecosystem / Landscape of Software Providers

January 2015

About SEG

• Twenty-two year, exclusive focus on software advisory services to lower & middle market representing companies seeking: • Strategic exit • Growth capital • Buyout • Inorganic growth via acquisition • Fairness opinions and valuations • Board advisory services

• Clients span virtually every technology, product

category, delivery model and vertical market • Global presence providing advice and guidance to

more than 2,000 private and public companies throughout US, Canada, Europe, Asia-Pacific, Africa and Israel

• Strong cross-functional team leveraging transaction, operating, legal and engineering experience

• Unparalleled software industry reputation, track record and industry research

• Highly referenceable base of past clients and buyers / investors

Focus on Advice

Multi-service

Multi- Industry

Focus on Software

Advisory Boutiques

Bulge Bracket Firms

IPO Boutiques

Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL

Recent SEG Real Estate Related Transaction News

SAN DIEGO, CA –April 15, 2014. Software Equity Group, LLC (SEG) announced today its client, Dean Evans & Associates, Inc. (dba Event Management Systems) the leading provider of facility scheduling and event management software, has received a strategic growth equity investment from JMI Equity, a leading growth equity firm focused on investing in leading software and technology-enabled services companies. Founded in 1986 and headquartered in Centennial Colorado, Dean Evans & Associates (DEA) provides a full suite of meeting and event scheduling, resource management, academic scheduling, shared workspace management (office “hoteling”), web calendaring and online registration/survey solutions. More than 4,000 organizations in over 75 countries rely on DEA’s Event Management System (EMS) software, including many Fortune 100 companies and other leading corporations, higher education institutions, law firms, conference centers, religious organizations, hospitals, cultural venues and sports facilities. “For over 25 years, our team has been focused on providing our customers with the best in facility management software, along with the highest levels of customer service,” said Dean Evans, CEO and founder of DEA. ”EMS is a premier brand with a strong competitive advantage, offering the most comprehensive package of services on the market. With JMI’s expertise in growing enterprise software companies, along with its experience in higher education, we feel better than ever about our ability to continue to innovate and grow our offering.” “We share the DEA team’s vision for the future and look forward to supporting the company in achieving its growth objectives,” said Brian Hersman, General Partner at JMI Equity. ”DEA’s opportunity fits well with JMI’s strategy of bringing expertise and resources to build on a foundation of strong market and product leadership.” . Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved

CONFIDENTIAL

SEG’s Strong Real Estate Industry Transaction Experience


Real Estate SaaS Provider of subscription-based vendor screening and risk management solutions to the multifamily housing industry

Real Estate SaaS Provider of property and resident management software to long-term industry

Real Estate On-premise Complete property management for affordable housing

Real Estate Hybrid

Provider of real estate investment budgeting and forecasting solutions to property managers, REITs & PE firms

Real Estate SaaS Provider of facilities management solutions to the global corporate and commercial property market

Real Estate SaaS Provider of project management, collaboration and bid management solutions for retail store design and construction

Real Estate On-premise Provider of plant and facility design and engineering software

Real Estate On-premise Provider of Event and Room Management Software

Real Estate

On-premise

Provider of Integrated Workplace Management Software (IWMS)

Buyer Business Description Client Category Delivery

Model

REAL ESTATE TECHNOLOGY LANDSCAPE

SEG-Landscape: Multi-Family Real Estate Technology*

Accounting

Applicant Screening

Property Mgmt. CRM

Web Portals /Marketing

Internet Listings

Property Management

Vendor Ecosystem

Revenue Mgmt.

Spend Mgmt. Utility Billing & Energy Mgmt.

Payments

* Not all inclusive


http://www.infor.com/

SEG-Landscape: Commercial/Corporate Real Estate Technology*

Data/Info. Services

Facilities Mgmt.

Investment Mgmt.

IWMS

Facilities Design/AEC

Construction

Vendor Ecosystem

Capital Planning

Vertical Providers

Space Mgmt. Lease

Administration

* Not all inclusive


SEG-Landscape: “For Sale” Real Estate Technology*

Property Search/ Lead Gen

Home Services/ Lead Gen

Broker CRM

Vendor Ecosystem

Broker Marketing

MLS Residential

Construction

Property Search (Vacation Rentals)

Mortgage Orig./ Finance

Other

* Not all inclusive


SEG-Landscape: Sector Public/Private Capital

Pu

bli

c C

ap

ita

l P

riv

ate

Ca

pit

al

Multi-Family Commercial/Corporate “For Sale”


BRIEF MARKET UPDATE – PUBLIC MARKETS & M&A

Notable Trends in Real Estate Technology

• Real estate technology M&A deal volume has been on an upward trajectory since 2009

• 2014 M&A deal volume grew 43% over 2013 • M&A deal volume in 4Q14, 3Q14 and 2Q14 were each higher than any prior quarter since our

analysis began in 2009

• A plethora of private & public capital has poured into the real estate technology sector over the last several years • Private equity and venture capital firms have invested significant amounts of capital into the

real estate technology ecosystem, following a dearth of investment activity during the great recession

• Larger horizontal technology providers like IBM, Experian, Oracle, and New Corp. have shown interest in the sector via acquisitions

• Successful IPO’s by companies like Textura, RealPage, Zillow, Trulia, Ellie Mae, Homeaway and others has spurred continued investment in the sector

• Valuations in both the public and private markets remain strong


Public Companies: Real Estate Technology

Public Company Operating Performance and Market Valuation

*Data as of January 20, 2015

Company Ticker Category Enterprise

Value (mm) LTM Rev

(mm) LTM EBITDA

(mm) LTM Rev Growth

LTM Gross Margin

LTM EBITDA Margin

EV/ Rev

EV/ EBITDA

Angie’s List, Inc. NASDAQ: ANGI Home Services Lead Gen $603.3 $266.1 -$19.4 50.5% 73.9% -7.3% 2.3x -

Autodesk, Inc. NASDAQ: ADSK Facilities Design/ AEC $9,300.5 $2,273.9 $426.5 -1.7% 87.9% 18.8% 4.1x 21.8x

Aveva Group plc LSE:AVV Facilities Design/ AEC $1,944.3 $390.3 $114.9 10.9% 92.6% 29.4% 5.0x 16.9x

CoreLogic, Inc. NYSE: CLGX Data/ Info. Services $3,956.5 $1,309.7 $231.4 -18.5% 48.1% 17.7% 3.0x 15.7x

CoStar Group, Inc. NASDAQ: CSGP Data/ Info. Services $4,562.7 $456.0 $116.2 18.3% 71.9% 25.5% 10.0x 39.3x

Ellie Mae, Inc. NYSE: ELLI Mortgage Orig. / Finance $614.3 $128.5 $25.1 26.2% 74.5% 19.5% 4.8x 24.5x

Homeaway, Inc. NASDAQ: AWAY Property Search / Lead Gen $2,622.0 $372.7 $60.7 26.0% 84.6% 16.3% 7.0x 43.2x

Nemetscheck AG XTRA: NEM Facilities Design/ AEC $737.8 $260.6 $52.3 6.0% 53.5% 20.1% 2.8x 14.1x

RealPage, Inc. NASDAQ: RP Property Management $1,368.1 $377.0 $54.2 17.0% 60.7% 14.4% 3.6x 25.2x

Textura Corporation NYSE: TXTR Commercial Construction $365.3 $40.8 -$33.2 70.1% 68.6% -81.5% 9.0x -

Zillow, Inc. NASDAQ: Z Property Search / Lead Gen $3,772.4 $197.5 -$5.5 69.1% 90.5% -2.8% 19.1x -

High: $9,300.5 $2,273.9 $426.5 70.1% 92.6% 29.4% 19.1x 43.2x

Low: $365.3 $40.8 -$33.2 -18.5% 48.1% -81.5% 2.3x 14.1x

Average: $2,713.4 $552.1 $93.0 24.9% 73.3% 6.4% 6.4x 25.1x

Median: $1,944.3 $372.7 $54.2 18.3% 73.9% 17.7% 4.8x 23.2x


Stock Market Performance: Property Search / Lead Gen


0.00b

1.00b

2.00b

3.00b

4.00b

5.00b

6.00b

7.00b

8.00bMarket Capitalization Zillow, Inc. (NasdaqGS:Z) - Market Capitalization

HomeAway, Inc. (NasdaqGS:AWAY) - Market CapitalizationAngie's List, Inc. (NasdaqGS:ANGI) - Market Capitalization

0.00x

5.00x

10.00x

15.00x

20.00x

25.00x

30.00x

35.00xEV/Revenue Zillow, Inc. (NasdaqGS:Z) - TEV/Total Revenues

HomeAway, Inc. (NasdaqGS:AWAY) - TEV/Total RevenuesAngie's List, Inc. (NasdaqGS:ANGI) - TEV/Total Revenues


Stock Market Performance: Facility Design / AEC


0.00x

1.00x

2.00x

3.00x

4.00x

5.00x

6.00x

7.00x

8.00xEV/Revenue Autodesk, Inc. (NasdaqGS:ADSK) - TEV/Total Revenues

Nemetschek AG (XTRA:NEM) - TEV/Total RevenuesAveva Group plc (LSE:AVV) - TEV/Total Revenues

0.00b

2.00b

4.00b

6.00b

8.00b

10.00b

12.00b

14.00b

16.00bMarket Capitalization Autodesk, Inc. (NasdaqGS:ADSK) - Market Capitalization

Nemetschek AG (XTRA:NEM) - Market CapitalizationAveva Group plc (LSE:AVV) - Market Capitalization


Stock Market Performance: SaaS/Subscription


0.00x

5.00x

10.00x

15.00x

20.00x

25.00x

30.00x

35.00x

40.00xEV/Revenue RealPage, Inc. (NasdaqGS:RP) - TEV/Total Revenues

Textura Corporation (NYSE:TXTR) - TEV/Total RevenuesEllie Mae, Inc. (NYSE:ELLI) - TEV/Total RevenuesCoStar Group Inc. (NasdaqGS:CSGP) - TEV/Total Revenues

0.00b

1.00b

2.00b

3.00b

4.00b

5.00b

6.00b

7.00bMarket Capitalization RealPage, Inc. (NasdaqGS:RP) - Market Capitalization

Textura Corporation (NYSE:TXTR) - Market Capitalization

Ellie Mae, Inc. (NYSE:ELLI) - Market Capitalization

CoStar Group Inc. (NasdaqGS:CSGP) - Market Capitalization


Top 10 Real Estate Technology M&A by Enterprise Value (EV)

*Data set 2011 - present

Date Buyer Seller Enterprise

Value ($mm) EV / Rev

EV / EBITDA Category Business Description

07/28/14 Zillow, Inc. Trulia, Inc. $3,090.5 14.8x - Property Search Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications.

11/14/14 REA Group Ltd Move, Inc $963.2 4.0x 121.3x Property Search Move, Inc. operates an online network of Websites for real estate search, finance, and moving and home enthusiasts in North America.

04/27/11 CoStar Group Inc.

LoopNet, Inc. $654.2 8.2x 30.3x Property Search/Data

Services

LoopNet.com enables commercial real estate agents working on behalf of property owners and landlords to list properties for sale or for lease, and submit detailed information on property listings to find a buyer or tenant.


Apartments.com, L.L.C.

$585.0 6.8x 22.9x Property Search Apartments.com provides apartment Internet listing subscription services, providing rental units from managed properties, newspaper classifieds, and for-rent-by-owner properties and offering renters a database of houses, condos, duplexes, etc.

09/22/14 Symphony Technology Group

McGraw-Hill Construction Information Group

$320.0 1.9x - Commercial Construction

McGraw-Hill Construction Information Group provides essential data, news, insights, and intelligence to better inform construction professionals’ decisions and strengthen their market position.

05/08/13 Trulia, Inc. Market Leader, Inc.

$314.3 6.6x - Broker CRM/Marketing

MarketLeader offers real estate professionals software-as-a-service CRM and marketing tools to help customers build relationships with home buyers and sellers through the Internet.

01/11/11 CoreLogic, Inc. RP Data Pty Ltd. $270.0 4.7x 11.8x Data/Information Services

RP Data Ltd. provides subscription-based access to commercial and residential property information for real estate agents, valuers, property developers, financial institutions, and state and federal government departments.

03/24/11 Davis + Henderson Corporation

Mortgagebot LLC $231.8 6.1x 11.5 Mortgage Orig./Finance

Mortgagebot provides software as a service mortgage point-of-sale solutions to banks and credit unions in the United States.

08/14/14 Realogy Group LLC

ZipRealty, Inc. $157.3 2.3x - Broker CRM/Marketing

ZipRealty, Inc. operates as an online technology-enabled real estate brokerage company in the United States.

03/22/12 PRIMEDIA Inc. Viva Group, Inc. $145.0 - - Property Search Rent.com is an Internet listing site providing rental advertisement and related services in the United States. It enables renters to find residential rental property listing online, including contact information, pricing, photos, floor plans, and virtual tours.


Top 10 Real Estate Technology M&A by EV/Revenue Multiple


Date Buyer Seller Enterprise

Value ($mm) EV / Rev

EV / EBITDA Category Business Description

05/02/12 Zillow, Inc. RentJuice Corporation

$37.4 102.4x - Property Management

RentJuice Corporation providesSaaaS Rental Relationship Management (RRM) software for real estate professionals. The company’s online RRM platform connects prospective renters, brokers, and property managers to each other in real-time.

07/28/14 Zillow, Inc. Trulia, Inc. $3,090.5 14.8x - Property Search/Data

Services

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications.

07/23/12 RealPage, Inc. Rent Mine Online Inc.

$15.5 10.3x - Property Management

Rent Mine Online Inc. provides resident referral programs online. It operates a multifamily online resident referral tool for residential management companies in the United States and Canada.


LoopNet, Inc. $654.2 8.2x 30.3x Property Search/Data

Services

LoopNet.com enables commercial real estate agents working on behalf of property owners and landlords to list properties for sale or for lease, and submit detailed information on property listings to find a buyer or tenant.


Apartments.com, L.L.C.

$585.0 6.8x 22.9x Property Search Apartments.com provides apartment Internet listing subscription services, providing rental units from managed properties, newspaper classifieds, and for-rent-by-owner properties and offering renters a database of houses, condos, duplexes, etc.

05/08/13 Trulia, Inc. Market Leader, Inc.

$314.3 6.6x - Broker CRM/Marketing

MarketLeader offers real estate professionals software-as-a-service CRM and marketing tools to help customers build relationships with home buyers and sellers through the Internet.

03/24/11 Davis + Henderson Corporation

Mortgagebot LLC $231.8 6.1x 11.5x Mortgage Orig./Finance

Mortgagebot provides software as a service mortgage point-of-sale solutions to banks and credit unions in the United States.

04/12/11 Altus Group Limited

ARGUS Software, Inc.

$140.5 5.6x 20.8x Investment Management

ARGUS Software, Inc. provides investment asset management and financial analysis solutions to the commercial real estate industry globally.

01/11/11 CoreLogic, Inc. RP Data Pty Ltd. $270.0 4.7x 11.8x Data/Information Services

RP Data Ltd. provides subscription-based access to commercial and residential property information for real estate agents, valuers, property developers, financial institutions, and state and federal government departments.

08/22/11 RealPage, Inc. MyNewPlace.com $74.9 4.5x - Property Management

MyNewPlace.com is an apartment and home rentals Web site, offering Internet listing services; and provides access to property information, including photo galleries, videos, and neighborhood information for renters.


Real Estate Technology M&A Activity


14

25

48 42

51

73

2009 2010 2011 2012 2013 2014

# o

f R

M&

A T

ran

sact

ion

s Annual Deal Volume

2

5

10

6

10 11

2

5

10

13

10

23

2

7

14 12

15

21

8 8

14

11

17 18

2009 2010 2011 2012 2013 2014

Quarterly Deal Volume

Q1 Q2 Q3 Q4

3

1 0

1 1 1 1 1 2

0 1

2

4 3

0 1

2 1

0 0

4

0

7

3

5 4

3 4

6

0

7

2

7

2

4 4

7

1 2

0

8

3

5

2 3

2

5 4

8

4

0 1

5

2

10

2

4 3

5 6

7

5

1 1

11

3

12

1

8

1

8 7

PropertyManagement

Data/InformationServices

Payments InvestmentManagement

IWMS & FacilitiesManagement

Facilities Design/ AEC

CommercialConstruction

ResidentialConstruction

Property Search /Lead Gen

Home ServicesLead Gen

BrokerCRM/Marketing

Mortgage Orig. /Finance

# o

f M

&A

Tra

nsa

ctio

ns

Annual Deal Volume By Category

2009 2010 2011 2012 2013 2014


Contact Information

Kris Beible (858) 509-2800

[email protected] www.softwareequity.com

The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ. This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C. Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights.

real estate technology vendor ecosystem & brief market update - jan 2015

Technology

leading software

software equity group

event management software

facility management

software advisory services

jmi equity

leading growth equity

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