INVESTMENT BANKING NEWSLETTER TECHNOLOGY SEPTEMBER 2018 FROM THE DIRECTOR’S DESK

Dear Reader,

Welcome to the September 2018 edition of the bi-monthly technology newsletter from Spark Capital.

Following are the key themes for this edition:

It’s raining Unicorns

There are 260 private companies around the world valued at or above USD 1 Bn as of August 2018. These companies are collectively worth approximately USD 839 Bn and have raised a combined total of around USD 201 Bn. This year 52 companies have joined the global unicorn club thus far. The number of companies joining the club was 70 and 32 in 2017 and 2016 respectively.

In , there are 15 private companies in the technology space that are valued at or above USD 1 Bn as of August 2018. The cumulative valuation of these 15 companies is around USD 48 Bn with a total funding of USD 16 Bn. The year 2018 has seen a tremendous jump in the number of companies getting added to the unicorn club. A total of 6 companies joined the club in 2018 as against zero in 2017 and 2 in 2016. Out of the 6 companies that achieved valuation over USD 1 Bn in 2018, 4 companies are less than 5 years into operations.

India: mapped by market

The largest share of unicorn companies are in eCommerce space – 4 out of 15. The most valuable company in the eCommerce space is Flipkart (USD 20.8 Bn) followed by Mall (USD 1.9 Bn).

PayTM is the largest Fintech Company valued at USD 10 Bn.

Another noteworthy company is Udaan in the B2B commerce space. The company has been able to achieve the unicorn status within 2.5 years of start of operations.

Majority of unicorns in India are the companies which have created the segment and have emerged as leader in those segments. These are the companies such as Flipkart, Udaan, BYJU’S, Swiggy, Zomato, PolicyBazaar and Quikr.

Soonicorns: The ‘soon-to-be-unicorns’

In the next 12 months, there could be fresh additions to the unicorn club. There are various companies in segments such as logistics,

Sep 2018 – Spark Technology Newsletter 2 FROM THE DIRECTOR’S DESK

hospitality, healthcare, grocery and payments which are close to the USD 1 Bn valuation mark.

Few of these companies are the ones which have seen some challenges in the business model with which they started and subsequently changed the business model to get it right and get on the growth trajectory, such as .

Similar to the companies in the unicorn club, there are companies such as BookMyShow and Practo which have created the segment in the country and are in the striking distance of the unicorn club.

What really drives value for the unicorns/soonicorns: Large market opportunity, differentiated business model, high quality management team. In addition to these, we have outlined below key economic moats in the technology industry: network effect, repeat customers, switching costs.

• Network effect – The network effect can further fortify a company's economic moat by making its products and services valuable the more people use them. Creates a virtuous cycle of larger the user base, stronger the network leading to attracting more users.

• Repeat customers – Companies do focus on the customer acquisition cost fairly closely. Repeat business with existing customers typically tends to have a high customer lifetime value.

• Switching costs – Another facet of an economic moat, which make it very time-consuming and expensive for consumers to switch products or services.

As a part of this newsletter, we do bring in a direct perspective from leading industry operators in certain select segments. For this edition, we have included an interview with InShorts, an emerging news reading app in our ‘Expert Speak’ section. I would like to take this opportunity to thank Mr. Azhar Iqubal, Co-founder & CEO of InShorts, for being of great help and providing his thoughts in the interview captured later in the newsletter.

Also, covered in this edition are latest trading and transaction updates across the global technology sector. I am sure the section on “From our Equities Desk” would be an interesting read.

I hope that you will find this newsletter insightful and look forward to your feedback on the same.

Vikash Kabra Director and Head – Technology, Investment Banking

Sep 2018 – Spark Technology Newsletter 3 WHAT’S INSIDE?

INTO THE SWIPE. 05 REAL 09 READ. WORLD STAY INFORMED.

COVER STORY INTERVIEW

Unicorns and Innovating how Soonicorns people read news

11 12 a Market Statistics

NEWS OVERVIEW b TECHNOLOGY RECENT TECHNOLOGY Trading Comps MARKET DEVELOPMENTS SNAPSHOT c Recent activities and Software | Tech Services | developments across the Indian Global Transactions Internet | FinTech technology landscape

FROM OUR 20 EQUITIES DESK Insights from Spark’s ANALYSIS Institutional Equities Desk

Sep 2018 – Spark Technology Newsletter 4 UNICORNS & SOONICORNS: INDIA

Spark fact file A Unicorns in India

Investment Banking As of August 2018, there exists 260 unicorns across the world. 47% of the unicorns are in the US and 29% in China. USD 6.0 Bn Total transaction India is home to 15 such companies in the technology space. The year 2018 has value till date witnessed 6 additions to the list. Below is the list of companies: Date Company Industry Select investors USD 4.2 Bn joined Capital raised DST Global, Lightspeed, Microsoft till date Sep-18 B2B commerce ScaleUp

USD 1.8 Bn Aug-18 Ed Tech , Lightspeed, Sequoia M&A transaction Accel, Tiger Global Management, value till date Jul-18 CRM software CapitalG

300+ Accel, SAIF Partners, Norwest, DST, Jun-18 Food delivery Number of fund Naspers relationships globally Jun-18 InsurTech Info Edge, Softbank, Temasek

Alibaba Group, SAIF Partners, Mar-18 eCommerce USD 500 Mn SoftBank Average annual deal closure value Nexus Venture Partners, GIC for the last 3 years Dec-16 eCommerce Special Investments, Tiger Global Management

11 Foxconn, Tiger Global Management, Aug-16 Social media No. of transactions Tencent > USD 100 Mn Restaurant , VY Capital, Info Oct-15 search / Food Edge, Temasek ~USD 1.2 Bn delivery Current value of transactions being Brand Capital, Tiger Global Jul-15 Classifieds executed Management, Kinnevik

Alibaba Group, Softbank, Berkshire May-15 Fintech Hathaway

Accel Partners, SoftBank Group, Technology Oct-14 Mobility Sequoia Capital, Tencent, DST ~USD 1.9 Bn SoftBank, Alibaba, Nexus Venture Total transaction May-14 eCommerce value till date Partners, OTPP

Kleiner Perkins Caufield & Byers, Feb-14 AdTech Softbank Corp., Sherpalo Ventures

Walmart, Tiger Global Management, Aug-12 eCommerce Tencent

Source: News articles and public information Sep 2018 – Spark Technology Newsletter 5 UNICORNS & SOONICORNS: INDIA

Full Service, B Fastest to Unicorn status Mid-Market I-Bank ▪ Investment Banking Here is a look at the time taken (# of years) by each of the companies in reaching the (VC, PE, M&A, IPO, USD 1 Bn valuation mark since their inception QIP, PIPE) ▪ Institutional Equities Udaan 2.5 ▪ Fixed Income Hike 3.7 solutions InMobi 4 ▪ Investment Advisory Olacabs 4.0 Knowledge Banking Snapdeal 4.5 ▪ Dedicated sector teams with deep Shopclues 4.5 domain expertise PolicyBazaar 4.5 ▪ Ability to bring new ideas to the market Swiggy 4.5 – Manappuram (2007) Flipkart 5 – iD Fresh Food Paytm 5.0 (2014) Zomato Media 7.0 – AasaanJobs (2015) – Unbxd (2016) Quikr 7.8

Freshworks 8.5 Relationship Banking BYJU'S 10.0 ▪ Over 24 clients for whom we have closed multiple transactions C Total funding of the Unicorns ▪ Consummated ~USD 1.5 Bn of transaction value in Total funding Last round valuation repeat business USD Mn USD Bn

Deep Distribution 5,170 20.8 ▪ Extensive reach to over 300 funds across – Private Equity 2,200 10.0 – Hedge Funds – Family Offices 2,730 4.2 – Sovereign Funds – Corporates 445 1.9

Source: VCCEdge, Venture Intelligence, Company’s press release, News articles Sep 2018 – Spark Technology Newsletter 6 UNICORNS & SOONICORNS: INDIA

Select Technology C Total funding of the Unicorns Transactions

August 2018 Total funding Last round valuation USD Mn USD Bn Exclusive Advisor To 249 1.5 Private Equity Fund Raise By

267 1.4 USD 22 Mn

August 2018 466 1.3

Exclusive Advisor To 256 1.1

Private Equity Fund Raise

285 1.0 Undisclosed

December 2017 222 1.0 Exclusive Advisor To 347 1.0

Majority Stake Acquisition By 407 1.0 Undisclosed

November 2017 390 1.0 Exclusive Advisor To 280 1.0

51% Acquisition of 1,800 NA ~USD 24 Mn

Source: VCCEdge, Venture Intelligence, Company’s press release, News articles Sep 2018 – Spark Technology Newsletter 7 UNICORNS & SOONICORNS: INDIA

Select Technology D Soonicorns: The Unicorns in making Transactions The unicorn club could see fresh additions in the next 12 months as some September 2017 technology startups in varied segments such as logistics, hospitality, healthcare, grocery and payments are knocking on the doors. Advisor To Last round Year Total funding valuation founded USD Mn USD Mn Rights Issue 2011 466 930

Stringent focus on execution has helped BigBasket to create a category online that USD 31 Mn many investors thought would fail. Today, BigBasket delivers fruits, vegetables, and consumer staples to customers in 30 cities.

August 2016 2000 256 623 Exclusive Advisor BillDesk is largest online payments processing company in India and competes with To other players such as PayU, CCAvenue, and fast growing start-ups such as RazorPay.

Private Equity Fund Raise 2007 324 850

From BookMyShow has created the segment that it is present in – the online movie ticket business. Despite significant challenges from PayTM, BookMyShow has emerged as a leader in the movie-ticketing segment. USD 10 Mn

2011 270 647

March 2016 Delhivery is the largest provider of logistics services to e-commerce companies. It has a reach into 1,200 cities and claims to have made 100 million shipments till date. Exclusive Advisor To 2004 208* 900

Category leader in analytics with over 140 Fortune 500 clients. Company seems to Private Equity Fund Raise be back on track after losing few clients and corporate action last year. From 1998 213 900 Undisclosed Pine Labs offer a cloud-based payments platform that allows multiple electronic payments over a single platform in addition to its POS business.

December 2015 2008 179 600+ Exclusive Advisor To Practo has grown into a pan-India provider of healthcare services facilitating easy access to end-users on mobile phones. In addition to India, it is focusing on growing its presence in international markets such as Middle East, Southeast Asia. Private Equity Fund Raise From 2014 172 945

Rivigo operates a unique ‘driver relay’ model that differentiates it from the Undisclosed traditional logistics model.

Source: VCCEdge, Venture Intelligence, Company’s press release, News articles *includes secondary to Accel India and FTV Management Company Sep 2018 – Spark Technology Newsletter 8 ^valuation as of second last funding round as the latest round valuation was not disclosed EXPERT SPEAK

Select Technology Transactions SWIPE. READ. STAY INFORMED. November 2015 INSIGHTS FROM EMERGING MEDIA TYCOONS Joint Advisor To

Majority Stake Acquisition We interviewed Mr. Azhar Iqubal, Co-founder & CEO of InShorts – a news By reading app, which publishes news summary in 60 words or less

USD 270 Mn (LtoR) Deepit Purkayastha, Azhar Iqubal & Anunay Pandey Co-founders, InShorts

November 2014

Exclusive Advisor 1. What led to the genesis of idea for Ads are either native ads in the form of To launch of InShorts? Where is InShorts in its news stories or interstitial ads. Even with journey today? respect to interstitial ads, we ensure that the ads are non-intrusive and flow with Deepit, Anunay and I, while we were the content without impacting the user Private Equity Fund Raise pursuing our degrees at respective IITs, experience. We are also increasing the From shared an insight that the youth in India proportion of video ads which provide was increasingly getting disconnected much higher realization. with the habit of reading news daily. We USD 346 Mn ourselves could relate to the disconnect Brands typically sign up for ads and we had with latest national and global sponsored content together through headlines due to the long-form nature of annual contracts and pay on the basis of news items. Hence, we decided to impressions and engagements. The June 2013 launch a Facebook page that provided clients list includes brands such as Exclusive Advisor summary of the latest news in “Short 60 Vodafone, OnePlus, Mercedes, Netflix, To word” format. The page would give brief Amazon, Myntra and Samsung. about the news with a link to read further. In a very short time, we received tremendous response for our Facebook 3. How is the target consumer different Leveraged Buyout page. Overwhelmed with the response across geographies in India and across By and validation of the idea we decided to international geographies? What is it that drop out of the IIT and pursue the makes InShorts different and stand out startup full time. from competition? USD 270 Mn Currently we are the #1 news app in the For InShorts the target consumer English language in the country as per behavior does not vary too much App Annie. geographically. We have consciously March 2013 focused on the premium side of news, to stay relevant. The key for targeting this Exclusive Advisor 2. How does InShorts make money? segment is the quality of content being To delivered to the consumer. InShorts is free for end consumers and monetizes through advertisements and The key differentiator is the 60-word sponsored content. Currently, over 250 proposition and the extremely simple Majority Stake Acquisition advertisers are active and we are adding design. Today’s generation, especially In new advertisers with each passing the one living in cities, is extremely short month as we grow. We are far ahead of of time but has a need to remain other apps (across categories) in terms of updated. Our proposition solves that USD 182 Mn average revenue per user, given our pain. premium user base.

Sep 2018 – Spark Technology Newsletter 9 EXPERT SPEAK

Select Technology 4. What is your go-to market strategy? Transactions For InShorts, we started exploring branding and marketing after we got the July 2012 initial validation of the idea through word of mouth. Till then we were just Exclusive Advisor focused on enhancing the user To experience and fixing the technical aspects along with publishing more Select Institutional Buyers content. Hence, the initial growth came largely from word of mouth and referrals that was led by the user experience. We Secondary Stake Acquisition are yet to explore the ATL medium for advertisements. USD 38 Mn 5. How is technology playing a key role in the growth of InShorts? April 2011 One of the key aspects we, at InShorts, Exclusive Advisor are focusing on is to ideate ways to To make content discovery more natural. We generate more than 1000 stories a day but only show few of the selected stories to a particular user. Technology Majority Stake Acquisition helps in personalizing the content on the in basis of user preferences, location and ease. We have built an engine that can curate content, understand user USD 19 Mn preferences, and show stories that are of interest to the consumers. We also have developed algorithms to automate the summarization of content and the May 2010 creation of stories. However, this is a Exclusive Advisor work under progress and a lot is yet to To be done.

6. What are the growth plans for InShorts? Majority Stake Acquisition Please provide details on way forward and In new initiatives. We are currently the market leader in USD 44 Mn the English news app space. Going forward, our aim is to maintain the leadership position in the space and also explore the newly emerging regional October 2009 market. We are also very bullish on video as the next big form for consuming Exclusive Advisor bite size news, for English as well as To non-English users.

Sale of Blue Alley To

USD 14 Mn

Sep 2018 – Spark Technology Newsletter 10 LATEST NEWS AND ANNOUNCEMENTS

Select Technology After e-commerce & digital payments, Amazon looks Transactions FinTech to tap insurance in India. AMAZON PLANS October 2009 It wants to start by selling life, health, and general ENTRY INTO insurance and aims to carry out the business of Exclusive Advisor INSURANCE soliciting, procuring and servicing insurance as a To corporate agent. However, it’s yet to seek an Next stop: FinTech? approval from IRDAI.

Majority Stake Acquisition Flipkart is looking to buy stake in Star India’ video- In streaming app Hotstar to challenge Amazon Prime Internet Video. The talks have not reached an advanced stage and the deal may or may not materialize. USD 11 Mn FLIPKART EYES A Hotstar spokesperson said, “No such conversation STAKE IN HOTSTAR is happening with Flipkart or any others. We are well resourced and on a velocity of growth that is ahead of Targeting the OTT October 2008 almost every other consumer Internet company in market Exclusive Advisor India. To CISCO to set up a dedicated location for BSNL to Telecom showcase possibilities of 5G use cases to solve Majority Stake Acquisition problems faced by citizens in areas like healthcare, In CISCO-BSNL TEAM agriculture and education. UP TO POWER UP Also, as per the pact with Niti Aayog, CISCO will use 5G IN INDIA its conferencing platforms such as Webex Teams and USD 10 Mn 5G not very far… Cisco Webex Board to help bolstering connectivity and collaboration across all Atal Incubation Centers.

August 2008 Book Running Lead Manager ‘Drone Regulations 1.0’ list various categories of To drones and all of these except the "nano" type weighing less than 250 gm and those owned by government and intelligence agencies are to be Tech Products registered and issued with a Unique Identification QIP Number (UIN). INDIA UNVEILS DRONE POLICY Unveiling the regulations, Civil Aviation Minister Suresh Prabhu said that these would help foster …to be effective from USD 18 Mn technology and innovation in the development of December 1, 2018 drones - which have an extensive range of applications ranging from disaster relief, aerial surveys and in agriculture to precision logistics December 2007 Exclusive Advisor Google Play Family Library which was launched two To Internet years ago in the US may soon come to India as some GOOGLE PLAY users in India have started seeing the option; however, FAMILY LIBRARY Google hasn't made any formal announcement yet. Minority Stake Acquisition MAY FINALLY BE Google Play Family Library lets a family of up to five By COMING TO INDIA members share purchased movies, apps, games, e- books, TV shows and audiobooks from Google Play. It’s available in 20+ However, rented movies, TV shows, in-app purchases countries USD 9 Mn and free apps cannot be shared.

Source: News articles Sep 2018 – Spark Technology Newsletter 11 SOFTWARE MARKET SNAPSHOT

Select Non-Tech A Stock Price Performance Transactions 330 August 2018 280 230 Exclusive Advisor 180 To 130 80 Private Equity Fund Raise From Diversified Infrastructure Security SaaS BI & Analytics Vertical NASDAQ Undisclosed

B % Returns

August 2018 1 year 3 years* Exclusive Advisor Diversified 31% 26% To Infrastructure 57% 36% Security 42% 23% SaaS 65% 42% Private Equity Fund Raise BI & Analytics 67% 25% By Vertical 31% 24% NASDAQ 28% 21% USD 100 Mn C Trading Comparables

June 2018 EV/Revenue CY18E EV/EBITDA CY18E Advisor Diversified 5.3 x 14.2 x To Infrastructure 4.7 x 24.1 x

Security 5.0 x 31.6 x Exit SaaS 7.8 x 59.6 x From BI & Analytics 4.6 x 33.1 x USD 30 Mn Vertical 6.3 x 24.6 x

Revenue Growth % EBITDA Margin CY18E May 2018 (CY18E/CY17) Exclusive Advisor Diversified 1% 42% To Infrastructure 16% 28%

Security 11% 15% Acquisition SaaS 23% 14% By BI & Analytics 19% 13% Undisclosed Vertical 14% 24%

Source: Bloomberg as on 31st August2018, All companies calendarised to December year end. Multiples represent median of companies in sub-sector. List of companies included in Sep 2018 – Spark Technology Newsletter 12 sub-sector detailed in annexure. Stock price performance within each sub sector has been weighted for market cap * Annualized return SOFTWARE MARKET SNAPSHOT

Select Non-Tech A Select M&A Transactions Transactions Global (excl. India): 64 deals, ~USD 53.7 Bn India: 10 deals, ~USD 78.5 Mn (across 3 deals) May 2018 TV EV/ Exclusive Advisor ACQUIRER TARGET DESCRIPTION (USD Mn) Rev To Global Developer of an enterprise IT 19,000 4.4x software Provider of a software 7,500 - development platform Qualified Institutions Provider of payment accuracy 4,931 7.3x Placement and analytics-driven services Developer of a digital property * 2,960 7.8x USD 18 Mn search business platform Developer of an internet technology platform enabling 2,000 - May 2018 real-time sale and purchase of digital advertising Exclusive Advisor Provider of aerial imagery, data 2,000 - To analytics, and GIS solutions Provider of a new generation of 1,600 13.6x business planning software Private Equity Fund Raise India From Provider of mobile engagement 49 - and communication services Undisclosed

B Select Financing Transactions March 2018 Global (excl. India): 18 deals, ~USD 2.3 Bn Exclusive Advisor India: 14 deals, ~USD 164.7 Mn (across 11 deals) To TV EV/ INVESTOR TARGET DESCRIPTION (USD Mn) Rev Global Private Equity Fund Raise Provider of a facial recognition 600 - From technology Provider of childcare management software for child- 550 - Undisclosed centered businesses Operator of a mobile advertising 400 - network Developer of a SaaS based January 2018 151 - oncology big data platform Exclusive Advisor Provider of an image * 125 - To recognition platform India Provider of customer support 100 - Private Equity Fund Raise software By Provider of education assessment and learning 25 - products and services ~USD 16 Mn

Source: VentureIntelligence, PitchBook TV – Transaction Value; TV rounded-off; Multiples rounded-off to one decimal; Sep 2018 – Spark Technology Newsletter 13 Global deals (excl. India) under consideration have TV >USD 10 Mn * Includes other investors TECH SERVICES MARKET SNAPSHOT

Select Non-Tech A Stock Price Performance Transactions 230

December 2017 180 Advisor 130 To 80

Private Equity Fund Raise

From Consulting HR Services Large Cap IT Mid Cap IT Healthcare IT Diversified BPO CRM BPO NASDAQ NIFTY IT ~USD 32 Mn

B % Returns

December 2017 1 year 3 years* Advisor Consulting 68% 25% To HR Services 41% 26% Large Cap IT 16% 12% Mid Cap IT 92% 28% Healthcare IT 19% 18% Private Equity Fund Raise Diversified BPO 21% 12% From CRM BPO 0% 11% NASDAQ 28% 21% NIFTY IT 35% 8% ~USD 10 Mn

C Trading Comparables

November 2017 PE CY18E EV/EBITDA CY18E Advisor Consulting 23.5 x 13.8 x To HR Services 27.1 x 18.0 x Large Cap IT 16.6 x 10.6 x Private Equity Fund Raise Mid Cap IT 23.7 x 17.1 x From Healthcare IT 32.0 x 16.2 x Diversified BPO ~USD 15 Mn 20.6 x 13.5 x CRM BPO 14.2 x 7.4 x Revenue Growth % EBITDA Margin CY18E October 2017 (CY18E/CY17) Book Running Lead Manger Consulting 7% 11% To HR Services 7% 23% Large Cap IT 5% 23% IPO Mid Cap IT 16% 16% Healthcare IT 14% 28% Diversified BPO ~USD 74 Mn 9% 16% CRM BPO 6% 11%

Source: Bloomberg as on 31st August2018, All companies calendarised to December year end. Multiples represent median of companies in sub-sector. List of companies included in Sep 2018 – Spark Technology Newsletter 14 sub-sector detailed in annexure. Stock price performance within each sub sector has been weighted for market cap * Annualized return TECH SERVICES MARKET SNAPSHOT

Select Non-Tech A Select M&A Transactions Transactions Global (excl. India): 13 deals, ~USD 5.0 Bn India: 4 deals, ~USD 117.0 Mn July 2017 TV EV/ Exclusive Advisor ACQUIRER TARGET DESCRIPTION (USD Mn) EBITDA To Global Provider of IT and knowledge 3,570 12.9x processing services Private Equity Fund Raise Provider of technology services 815 - From to the retail industry Provider of IT products and 164 - integration services Provider of cyber security ~USD 52 Mn 138 - consultancy services Provider of IT services intended for the advancement 79 - March 2017 of business Provider of IT consulting Exclusive Advisor 76 14.1x services To India Provider of benefits administration and cloud-based 117 - Private Equity Fund Raise HR and financial solutions From

USD 100 Mn B Select Financing Transactions Global (excl. India): 2 deals, ~USD 35.6 Mn India: No deals March 2017 TV EV/ Exclusive Advisor INVESTOR TARGET DESCRIPTION (USD Mn) EBITDA To Global Provider of 3D printing 25 - services Private Equity Fund Raise Provider of digital marketing Undisclosed 11 - From services

USD 32 Mn

January 2017 Co-Book Running Lead Manger To

IPO

~USD 183 Mn

Source: VentureIntelligence, PitchBook TV – Transaction Value; TV rounded-off; Multiples rounded-off to one decimal; Sep 2018 – Spark Technology Newsletter 15 Global deals (excl. India) under consideration have TV >USD 10 Mn * Includes other investors INTERNET MARKET SNAPSHOT

Select Non-Tech A Stock Price Performance Transactions 380 330 November 2016 280 Exclusive Advisor 230 180 To 130 80

Private Equity Fund Raise

From Search / Online Advertising Internet Content Internet Commerce Gaming Social Media & News Platform NASDAQ USD 64 Mn

B % Returns June 2016 Exclusive Advisor 1 year 3 years* Search / Online Advertising 40% 31% To Internet Content 47% 30% Internet Commerce 62% 52% Private Equity Fund Raise Gaming 4% 38% Social Media & News Platform 8% 26% From NASDAQ 28% 21%

USD 32 Mn C Trading Comparables

EV/Revenue CY18E EV/EBITDA CY18E May 2016 Search/Online 2.6 x 17.8 x Exclusive Advisor Advertising To Internet 2.7 x 18.1 x Content Majority Stake Acquisition Internet 3.2 x 15.6 x By Commerce Gaming 3.3 x 15.6 x Social Media & USD 28 Mn 5.8 x 17.8 x News Platform Revenue Growth % EBITDA Margin CY18E (CY18E/CY17) January 2016 Search/Online 30% 30% Exclusive Advisor Advertising To Internet 19% 22% Content Internet 16% 17% Structured Capital Raise Commerce From Gaming 7% 24%

Social Media & 23% 28% USD 30 Mn News Platform

Source: Bloomberg as on 31st August2018, All companies calendarised to December year end. Multiples represent median of companies in sub-sector. List of companies included in Sep 2018 – Spark Technology Newsletter 16 sub-sector detailed in annexure. Stock price performance within each sub sector has been weighted for market cap * Annualized return INTERNET MARKET SNAPSHOT

Select Non-Tech A Select M&A Transactions Transactions Global (excl. India): 11 deals, ~USD 4.4 Bn India: 13 deals, ~USD 22.9 Mn (across 2 deals) Sep 2015 Onwards TV EV/ Exclusive Advisor ACQUIRER TARGET DESCRIPTION (USD Mn) Rev To Global Operator of an online betting Select Institutional Buyers 3,578 - and gaming website Secondary Stake Acquisition Developer of an online real 210 - In estate referrals platform Developer of a corporate vehicle rental management 187 - USD 403 Mn system Provider of online and mobile 158 - 10bis food ordering services Provider of an online May 2015 138 - consumer goods marketplace Exclusive Advisor India To Provider of a last minute 20 - hotel-booking platform

Private Equity Fund Raise From B Select Financing Transactions Global (excl. India): 4 deals, ~USD 432.2 Mn USD 43 Mn India: 30 deals, ~USD 675.0Mn (across 23 deals) TV EV/ INVESTOR TARGET DESCRIPTION (USD Mn) Rev April 2015 Global Exclusive Advisor Provider of music streaming * 187 - To services Provider of an online lifestyle 175 - platform Structured Capital Raise India Provider of online payment From 360 - solutions Provider of online ticketing * 100 - USD 60 Mn platform Provider of online daily urban 44 - commute booking services Provider of an online portal January 2015 which connects retailers and 35 - Exclusive Advisor kirana store owners in small To towns with FMCG brands

Minority Stake Acquisition In

USD 20 Mn

Source: VentureIntelligence, PitchBook TV – Transaction Value; TV rounded-off; Multiples rounded-off to one decimal; Sep 2018 – Spark Technology Newsletter 17 Global deals (excl. India) under consideration have TV >USD 10 Mn * Includes other investors FINTECH MARKET SNAPSHOT

Select Non-Tech A Stock Price Performance Transactions 280 May & Nov 2014 180 Exclusive Advisor To 80

Private Equity Fund Raise From Payments Banking & Lending Technology Information Processors / Credit Bureaus Investment Services, Software and Technology Financial Data, Content, & Analytics Insurance & Banking Tech USD 68 Mn NASDAQ

B % Returns

September 2014 1 year 3 years* Exclusive Advisor Payments 35% 20% To Banking & Lending Tech 39% 28% Information Processors / Credit Bureaus 23% 19% Investment Services, Software and Tech 51% 25% Minority Stake Acquisition Financial Data, Content, & Analytics 30% 22% By Insurance & Banking Tech 46% 23% NASDAQ 28% 21%

Undisclosed C Trading Comparables

EV/Revenue CY18E EV/EBITDA CY18E August 2014 Advisor Payments 4.3 x 15.3 x To Banking & Lending Tech 6.5 x 24.6 x Information Processors / Credit Bureaus 4.9 x 19.8 x QIP Investment Services, Software and Tech 4.2 x 17.3 x Financial Data, Content, & Analytics 7.7 x 18.8 x USD 42 Mn Insurance & Banking 4.2 x 24.5 x Tech Revenue Growth % EBITDA Margin CY18E August 2014 (CY18E/CY17) Payments Book Running Lead Manger 8% 31% To Banking & Lending Tech Information Processors / 11% 26% Credit Bureaus 4% 32% QIP Investment Services, Software and Tech 7% 27% Financial Data, Content, & Analytics 9% 43% USD 65 Mn Insurance & Banking Tech 16% 10%

Source: Bloomberg as on 31st August2018, All companies calendarised to December year end. Multiples represent median of companies in sub-sector. List of companies included in Sep 2018 – Spark Technology Newsletter 18 sub-sector detailed in annexure. Stock price performance within each sub sector has been weighted for market cap * Annualized return FINTECH MARKET SNAPSHOT

Select Non-Tech A Select M&A Transactions Transactions Global (excl. India): 15 deals, ~USD 10.8 Bn India: 5 deals, ~USD 31.2 Mn (across 2 deals) July 2014 Exclusive Advisor TV EV/ ACQUIRER TARGET DESCRIPTION (USD Mn) Rev To Global Provider of POS electronic payment transactions and 3,400 1.8x Investment value-added services In Provider of technology- enabled financial and 3,020 5.6x investment advisory services USD 83 Mn Provider of a SaaS-based investment management 2,600 - platform Developer of a next- July 2014 generation mobile payment 390 - Exclusive Advisor network Provider of free access to To 362 8.7x credit scores and reports India Provider of an expense Majority Stake Acquisition 30 - By management app

Undisclosed B Select Financing Transactions

Global (excl. India): 6 deals, ~USD 676.2 Mn June 2014 India: 9 deals, ~USD 117.9 Mn (across 8 deals)

Advisor TV EV/ To INVESTOR TARGET DESCRIPTION (USD Mn) Rev Global Developer of a blockchain- QIP * based equities trading 270 - platform Developer of an online * 145 - consumer lending platform Operator of an online USD 100 Mn 100 - insurance platform India Provider of an online October 2013 44 - insurance platform Exclusive Advisor Provider of on online SME * 29 - To financing platform Provider of online personal * 18 - loans Private Equity Fund Raise Provider of EMI-based credit * 13 - From purchase loans

USD 17 Mn

Source: VentureIntelligence, PitchBook TV – Transaction Value; TV rounded-off; Multiples rounded-off to one decimal; Sep 2018 – Spark Technology Newsletter 19 Global deals (excl. India) under consideration have TV >USD 10 Mn * Includes other investors FROM OUR EQUITIES DESK

Institutional Equities Key updates from Spark’s Equities Team Highlights 244 Stocks under coverage 1QFY19 Recap: IT / Internet / Flexi Staffing / Education USD 1.2 Tn Total market cap of IT Service/Engineering companies stocks under Revenue growth in USD terms impacted by cross currency headwinds - The coverage sequential revenue growth in USD terms for our IT coverage portfolio stood at 0.7% compared to 3.0% during 4QFY18 primarily impacted by cross currency headwinds, INR 260 Bn as USD appreciated against EUR, GBP, AUD and INR by 3.3%, 2.4%, 4.1% and 4.2% Total cash market respectively during 1QFY19. volume in H1FY18 Operating margins impacted due to combination of wage hikes and visa costs – The 350+ EBITDA margins have contracted sequentially for ~47% of our IT stock portfolio led Number of fund by a combination of wage hikes and visa costs. While Tier-I IT companies were able relationships to partially offset the pressure on margins with better operating performance, globally especially with stable/improved utilization levels, most (2/3rd) of the mid cap IT companies in our coverage portfolio witnessed contraction in utilization levels. “Go-to” broker for stocks in the Internet/Education companies mid-market space We continue to remain positive on Info Edge, as the billings grew 15% yoy in 1QFY19 for recruitment business from 9% yoy in 4QFY18, while hiring in IT vertical (30% of recruitment revenues) witnessed revival after being under pressure for the past one year. We also expect 99acres business to deliver strong revenue growth led by favorable regulatory environment, while Zomato is likely to bridge the gap between itself and Swiggy further in FY19E. We maintain our negative view on Just Dial, as we expect the revenue growth to moderate in FY20E. In our Education coverage, we continue to maintain our positive outlook on NIIT Limited and Navneet Education, and expect these companies to perform better in FY19 vs. FY18.

Flexi staffing companies The volume growth in Security services – India business for SIS continued to remain 5th position in 2017 weak consecutively for the second quarter (net headcount loss of 886 in 1QFY19 vs. All India research loss of 881 in 4QFY18), as the company exited low margin contracts, resulting in team lower revenues and thereby lower margins . We expect the volume growth to revert back to normalcy from Q2FY19. The operating margins for Quesscorp contracted by 50bps from 5.0% in 1QFY18 to 4.5% in 1QFY19, while the revenue growth yoy has steadily increased from 5.8% yoy in Q4FY17 to over 40% yoy in 1QFY19. We believe the revenue growth over the past 4 quarters is driven entirely by growth in Technology volumes and came at the expense of lower price points, thus impacting margins. TeamLease too witnessed pressure on margins over the past two quarters in the 24 general staffing business, as the incremental growth was driven by low priced Stocks under contracts. We expect the pressure on margins to continue in the near term, as the coverage flexi staffing companies try to maintain revenue growth momentum led by higher volume growth. Our preferred pick remains TeamLease due to better risk ~USD 190 Bn management capabilities and discipline on working capital, while our concern on Total market cap cash flow conversion for Quess Corp persists. of Stocks under coverage

Source: SPARK Research Sep 2018 – Spark Technology Newsletter 20 ANNEXURE

LIST OF COMPANIES

Software Tech Services

Diversified SaaS BI & Analytics Consulting Mid Cap IT Alphabet Inc Salesforce.com Inc Splunk Inc FTI Consulting Inc EPAM Systems Inc Microsoft Corp Workday Inc Teradata Corp Exponent Inc Luxoft Holding Inc Oracle Corp ServiceNow Inc Fair Isaac Corp Navigant Consulting Inc Mphasis Ltd IBM Veeva Systems Inc Tableau Software Inc Huron Consulting Group Syntel Inc SAP SE Ultimate Software Group Verint Systems Inc Inc Globant SA Infrastructure Shopify Inc MicroStrategy Inc ICF International Inc Mindtree Ltd VMware Inc LogMeIn Inc Hortonworks Inc CBIZ Inc Virtusa Corp Red Hat Inc Aspen Technology Inc Gridsum Holding Inc Hackett Group Inc/The Hexaware Technologies ServiceNow Inc j2 Global Inc Attunity Ltd Resources Connection Inc Ltd CA Inc Blackbaud Inc Datawatch Corp GP Strategies Corp Persistent Systems Ltd Citrix Systems Inc Paycom Software Inc Vertical CRA International Inc Perficient Inc F5 Networks Inc RealPage Inc Cerner Corp Franklin Covey Co Cyient Ltd Splunk Inc Zendesk Inc Constellation Software HR Services Larsen & Toubro Infotech Ltd Atlassian Corp PLC Cornerstone OnDemand SS&C Technologies Automatic Data Processing Inc Inc L&T Technology Services Micro Focus Veeva Systems Inc Ltd HubSpot Inc Paychex Inc LogMeIn Inc athenahealth Inc KPIT Technologies Ltd Box Inc TriNet Group Inc NetScout Systems Inc Guidewire Software Inc Rolta India Ltd RingCentral Inc Insperity Inc Software AG Blackbaud Inc HCIT New Relic Inc Barrett Business Services Nutanix Inc CoreLogic Inc Inc IQVIA Holdings Inc Paylocity Holding Corp CommVault Systems Inc Ellie Mae Inc Large Cap IT athenahealth Inc 2U Inc Pure Storage Inc Medidata Solutions Inc IBM Cerner Corp Coupa Software Inc New Relic Inc RealPage Inc Accenture PLC Medidata Solutions Inc Qualys Inc Progress Software Corp Allscripts Healthcare Tata Consultancy Services Veeva Systems Inc Mimecast Ltd Solutions A10 Networks Inc Ltd Inovalon Holdings Inc SPS Commerce Inc Inovalon Holdings Inc Security Cognizant Technology Diversified BPO Five9 Inc Appfolio Inc Solutions Symantec Corp Genpact Ltd Benefitfocus Inc HealthStream Inc Infosys Ltd Check Point Software ExlService Holdings Inc Instructure Inc Instructure Inc HCL Technologies Ltd Palo Alto Networks Inc Capita PLC Splunk Inc Workiva Inc Itron Networked Solutions Wipro Ltd Inc Conduent Inc Fortinet Inc Carbonite Inc Capgemini SE Castlight Health Inc WNS Holdings Ltd Apptio Inc CGI Group Inc Trend Micro Inc/Japan CRM BPO LivePerson Inc Nippon Telegraph & Proofpoint Inc Teleperformance Castlight Health Inc Telephone FireEye Inc SYNNEX Corp BrightView Holdings Inc Atos SE CyberArk Software Ltd Convergys Corp Brightcove Inc Nomura Holdings Inc Imperva Inc TTEC Holdings Inc ChannelAdvisor Corp Tech Mahindra Ltd Qualys Inc Sykes Enterprises Inc Amber Road Inc Mimecast Ltd Transcosmos Inc Marin Software Inc SecureWorks Corp Relia Inc Rapid7 Inc Atento SA F-Secure OYJ Hinduja Global Solutions OneSpan Inc Ltd MobileIron Inc Firstsource Solutions Ltd Zix Corp Absolute Software Corp Quick Heal Technologies Ltd

Sep 2018 – Spark Technology Newsletter 21 ANNEXURE

LIST OF COMPANIES

Internet FinTech

Search / Online Advertising Internet Commerce Payments Information Processors / Credit Alphabet Inc Amazon.com Inc Visa Inc Bureaus Microsoft Corp Alibaba Group Holding Ltd Mastercard Inc Experian PLC Yandex NV Booking Holdings Inc American Express Co Equifax Inc Criteo SA Netflix Inc PayPal Holdings Inc Fair Isaac Corp Trade Desk Inc/The eBay Inc Discover Financial Services Acxiom Corp Rubicon Project Inc/The Expedia Inc Cielo SA Investment Services, Software and Technology Rhythmone PLC Qurate Retail Group Inc QVC First Data Corp SEI Investments Co QuinStreet Inc Group Worldpay Inc Broadridge Financial Solutions Inc YuMe Inc Copart Inc Global Payments Inc SS&C Technologies Holdings Inc Marchex Inc GrubHub Inc Total System Services Inc DST Systems Inc Telaria Inc Trivago NV Ltd Financial Engines Inc Marin Software Inc Cimpress NV AG Envestnet Inc Internet Content Stamps.com Inc Square Inc Financial Data, Content, & Zillow Group Inc Shutterstock Inc GMO Payment Gateway Inc Analytics IAC/InterActiveCorp Etsy Inc EVERTEC Inc S&P Global Inc TEGNA Inc Quotient Technology Inc SafeCharge Thomson Reuters Corp GoDaddy Inc 1-800-Flowers.com Inc Western Union Co/The Moody's Corp Shutterfly Inc Overstock.com Inc Euronet Worldwide Inc IHS Markit Ltd comScore Inc ANGI Homeservices Inc FleetCor Technologies Inc Verisk Analytics Inc Web.com Group Inc Travelzoo Alliance Data Systems Corp MSCI Inc Renren Inc CafePress Inc Edenred FactSet Research Systems Inc XO Group Inc Gaming WEX Inc Dun & Bradstreet Corp/The Care.com Inc Tencent Holdings Ltd Blackhawk Network Morningstar Inc TechTarget Inc NetEase Inc Green Dot Corp Insurance/Banking Technology DR Horton Inc Activision Blizzard Inc Net 1 UEPS Technologies Inc Verisk Analytics Inc eHealth Inc Electronic Arts Inc Cardtronics PLC Guidewire Software Inc NAVER Corp Everi Holdings Inc Ebix Inc NCSoft Corp NCR Corp Crawford & Co Ubisoft Entertainment SA Group SA Intellect Design Arena Ltd DeNA Co Ltd Systems Inc Symbility Solutions Inc Zynga Inc PAR Technology Corp GungHo Online Entertainment Inc Banking and Lending Technology Changyou.com Ltd Intuit Inc Gree Inc Fidelity National IS Glu Mobile Inc Fiserv Inc Social Media & New Platform Jack Henry & Associates Inc Facebook Inc Temenos Group AG Snap Inc Ellie Mae Inc Twitter Inc ACI Worldwide Inc LINE Corp LendingClub Corp Pandora Media Inc Q2 Holdings Inc Yelp Inc Bottomline Technologies On Deck Capital Inc

Sep 2018 – Spark Technology Newsletter 22 DISCLAIMER

▪ Information provided in this document with respect to the industry have been compiled from publicly available sources, including official publications and research reports, and is given as general information and has not been independently verified by Spark Capital Advisors (India) Pvt. Ltd. (“Spark Capital”). Spark Capital has not carried out any independent verification of any information contained herein (including statements of opinion and expectation). Accordingly, Recipients should not place undue reliance on such information. The delivery of this document does not constitute a representation that the information given in this document is correct whether at the date hereof or any time subsequent to the date hereof. Spark Capital makes no representation or warranty with respect to the accuracy or completeness of any information or idea contained in this document, nor does Spark Capital undertake any obligation to update this document.

▪ This document does not purport to contain all the information that the Recipient may require. This document is being provided to give a general overview on the industry. Please note that all forward looking statements contained in this document have been sourced from multiple databases. No representations are being made about the correctness or achievability of these statements or their underlying assumptions.

▪ This document has been prepared solely for the purpose of providing information related to the Technology sector and is not to be reproduced or used for any other purpose.

▪ Neither Spark Capital nor the Promoters nor any of their respective affiliates, directors, officers, employees, shareholders, agents, representatives and advisors of Spark Capital shall have any liability for any loss or damage (direct or indirect) suffered by Recipients on account of their reliance on any representations (express or implied) contained in, or any omissions from this document or any information transmitted orally, in writing, electronically or in any other form to the Recipients.

▪ All enquiries relating to this document should be directed to Spark Capital personnel mentioned in this document.

Sep 2018 – Spark Technology Newsletter 23 TECHNOLOGY TEAM

Vikash Kabra Director and Head – Technology, IB [email protected]

Vikram Sivaraman Vice President – Technology, IB [email protected]

Aditya Jaju Associate– Technology, IB [email protected]

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