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Proptech Market Update

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Proptech Market Update PRELIMINARY CONFIDENTIAL DRAFT PropTech Market Update 2019 Year-End Review Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix EXECUTIVE SUMMARY – 2019 REAL ESTATE TECHNOLOGY Another Record Year in PropTech M&A & Growth Equity Investment » Equity and debt raised in U.S. PropTech was up 69% y/y in 2019 to $9.0bn, reflecting continued momentum for growth companies in the PropTech sector − 78 deals of $20MM+ in equity investment, a 105% increase over 2018 → scale leaders emerging across all categories and investor appetite remains strong to continue to back “winners” with incremental capital − iBuyers and alternative RE financing firms are some of the biggest growth capital recipients in 2019 with major investments into companies like Opendoor, Ribbon, Point, Figure and many others » Significant M&A activity with 104 PropTech M&A deals in 2019 − M&A driven primarily by strategics, but financial sponsors (e.g. Silver Lake, Lovell Minnick, etc.) and sponsor backed strategics (e.g. Ellie Mae, MRI, Lightbox, etc.) remain highly acquisitive as well − Consolidation driven by economies of scale and the emergence of platform tech providers across different end markets (e.g. Lone Wolf in RRE, Building Engines in CRE, Procore in ConTech, etc.) » Sentiment for continued PropTech investment and M&A in 2020 remains strong with 96% of investors expecting either an increase or the same amount of M&A activity in the next twelve months(1) » GCA remains one the most active M&A and growth capital advisors in the PropTech segment globally, having advised on 6 deals in the sector in 2019 and 24 in the sector in the past 3 years GCA 2019 PropTech Transaction Activity Acquired by Acquired by Acquired by Acquired by Majority interest Acquired acquired by A Portfolio Company of A Portfolio Company of We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller We advised the buyer Source: Capital IQ as of 1/25/20, Pitchbook, press releases. (1) MetaProp Mid-year 2019 Global PropTech Confidence Index as of 7/24/19. 2 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix 2019 PROPTECH SECTOR SUMMARY Most active year in history » $5.3Bn of investment in the residential real estate tech sector in 2019, primarily driven by tech enabled brokerages (e.g. Compass, REX, Side, etc.), iBuyers (Opendoor, Offerpad, etc.) and an emerging category of alternative financing firms associated with home equity / down payment assistance (e.g. Ribbon, Figure, ZeroDown, Hometap, etc.) » RRE M&A activity driven by SaaS software consolidation in the broker, team and agent productivity category: Residential Real Estate / / / − GCA expects continued consolidation in the RRE software category as brokers, teams and agents demand integrated enterprise end-to-end productivity platforms to control data and run more efficient operations » Massive year of investment and growth for the CRE sector with 183 U.S. growth investments and $3.7Bn invested into the space in 2019 » CRE data and productivity platforms attracting significant investment and were key M&A targets Commercial Real Estate Acquired by Acquired by $128M capital raised $115M(1) investment » CoStar, Real Page and MRI remain highly acquisitive, using M&A to add incremental products and expand into new categories » Highly active year for companies working to drive efficiency in the mortgage origination, closing, title and escrow process − Qualia, Spruce, Notarize, Modus and States Title all raised capital in 2019 to digitize and accelerate the title Mortgage / P&C escrow and closing process Insurance / Title − Mortgage customer capture platforms, Blend and Roostify, both raised capital in 2019 − Multiple rounds of investment in direct to consumer brands focused on renters and homeowner insurance (Kin, Lemonade, Openly) » Category M&A driven by Ellie Mae’s sale to Thoma Bravo and their subsequent acquisition of Capsilon Source: Capital IQ as of 1/25/20, Pitchbook, press releases. (1) Includes $89MM to buy out DMGT’s existing stake; includes an unknown amount of debt. 3 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix GCA 2019 PROPTECH TRANSACTIONS GCA U.S. PropTech Team Global Leader in PropTech Advisory Chris Gough Managing Director Acquired Majority Acquired by Acquired by Acquired by interest Head of Real Estate Technology acquired by Phone: (415) 318-3658 A Portfolio Company of A Portfolio Company of [email protected] We advised the buyer We advised the seller We advised the seller We advised the seller We advised the seller Marcus Anthony Zain Azeem [email protected] [email protected] Majority Interest Acquired by Acquired by Acquired by Refinanced Lizzie Cooperstone Acquired by [email protected] Key Sub-Sector Coverage Verticals We advised the seller We advised the seller We advised the seller We advised the seller We advised the lender Residential RE Software Commercial RE Software Acquired by Acquired by Acquired by Acquired by Investment from Mortgage / Lending Title / Insurance We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller Home Services Facilities Management a portfolio company of Investment from Acquired by Acquired by MBO backed by Construction Tech Acquired by IWMS We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller 4 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK Global investment bank providing strategic M&A and capital markets advisory services to growth companies and market leaders MANCHESTER LEEDS PARIS FRANKFURT BIRMINGHAM MUNICH KYOTO NAGOYA ZURICH TOKYO LONDON SHANGHAI NEW YORK MILAN NEW DELHI OSAKA TEL AVIV SAN FRANCISCO FUKUOKA TAIPEI MUMBAI SINGAPORE HO CHI MINH CITY Global platform: Sector expertise: Exceptional cross- 23 offices in key Experienced team: Expansive coverage border capabilities: markets across Over 450 employees and deep Over a third of all America, Asia and across the globe specialization transactions Europe Broad spectrum Diversified Strong reputation of clients: business model: and track record: Leading Geographically High number of conglomerates, top balanced, synergistic repeat clients and private equity firms and complementary referrals and emerging high- focus areas growth companies 5 GCA operates as GCA in America and Asia, and GCA Altium in Europe I. PROPTECH MARKET SUMMARY II. PUBLIC MARKETS III. RESIDENTIAL REAL ESTATE TRENDS IV. COMMERCIAL REAL ESTATE TRENDS V. MORTGAGE & FINANCING TRENDS VI. ADDITIONAL TRANSACTION CASE STUDIES VII. M&A AND MARKET COMPS BACK-UP VIII. GCA 2019 TRANSACTION CASE STUDIES 6 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix ANOTHER RECORD YEAR – REFLECTED IN 2019 DEAL FLOW U.S. Real Estate Technology Venture Investment (2014 - 2019) ($MM) Equity Raise Value Debt Raise Value $8,981 324 U.S. PropTech deals in 2019, the most active year 69% $2,060 of financing to date, totaling Increase in equity $9.0Bn in equity and debt, & debt raised y/y an increase of 69% y/y in total funding $5,308 Q1 Q4 $4,477 $475 $2,153 $2,730 $250 $8,981 $6,921 Q2 $2,748 $1,772 Q3 $4,833 $1,823 $4,226 $2,326 $1,339 2014 2015 2016 2017 2018 2019 Avg. Deal Value: $5.2 $10.6 $8.0 $20.6 $20.1 $21.4 Source: Capital IQ as of 1/25/20, Pitchbook, press releases. Excludes Oyo Rooms and The We Company financing rounds. 7 Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology. Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix INVESTMENT BY CATEGORY U.S. Investment by Category from 2019 ($MM) $3,692 Commercial 41% $8,981 debt & equity raised $5,289 Commercial Residential Residential 59% CRE / Facilities Residential Real Estate Solutions CRE Marketplace / Management iBuyers Multi-family Financing Assistance Construction Tech Referral Networks Mortgage / Closing Software P&C Insurance Tech Construction Tech Investment Marketplaces 8 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix ANOTHER RECORD YEAR – REFLECTED IN 2019 DEAL FLOW U.S. Growth Capital Raises Greater than $20MM Top 10 U.S. Equity Rounds of 2019 ($MM) Increase in round sizes signals emergence Latest of scale leaders and reflects TAM for sub- Select Reported categories of market Date Company Investor(s) Amt. Invested Funding to Date Valuation 8/21 $400 $565 $1,000 78 7/30 $370 1,513 $6,400 105% Increase in 10/29 $319 $527 >$1,000 Capital Raises Greater than 4/11 $300 $480 >$2,000 $20MM y/y $1,345 Equity 3/20 $300 $3,800 / $3,000 Debt 38 7/12 $225 $358 $1,100 32 2/20 $200 $297 NA 15 16 4/18 $160 $185 $240(1) 8 6/24 $130 $310 NA 5/14 $123 $468 $2,100 2014 2015 2016 2017 2018 2019 Source: Capital IQ as of 1/25/20, Pitchbook, press releases. (1) Estimated post-money valuation per Pitchbook. Excludes Oyo Rooms and The We Company financing rounds. 9 Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology. Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix GROWING ECOSYSTEM OF PROPTECH-FOCUSED PE / GROWTH INVESTORS Portfolio Companies Portfolio 10 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix REAL ESTATE PRIVATE COMPANY FUNDING LEADERS Other Mega Funding Leaders Equity Raised to Date: >$500MM 1 ($4.4Bn) ($370MM) ($614MM) ($468MM) ($3.1Bn) ($8.9Bn Equity / $6.1Bn Debt)(1) $200MM - $500MM 1 39 companies raised $100MM+ $100MM - $200MM 1 126 companies raised $25MM+ $50MM - $100MM $25MM - $50MM Source: Pitchbook, CB Insights, Company filings, Company websites, press releases. (1) Funding totals exclude secondary transactions. 11 Introduction Market Summary Public Markets RRE Trends CRE Trends Financing Trends Appendix HEALTHY M&A MARKET Annual U.S.
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