GrowthCap Research June 2015

Special Edition: Growth Equity Valuations

.GrowthCap, LLC

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Understanding Growth Equity Valuations B2B Software

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Understanding Growth Equity Valuations

One of the major points of friction for a Chief Executive Officer raising growth equity is valuation. CEOs, in their attempt to maximize valuation (and therefore minimize dilution to current shareholders), will often point to the surge of “unicorns” — companies that have soared to a $1 billion valuation — or the stalwarts in their space raising mega- rounds at elevated valuations. Investors, on the other hand, will delve into details of the business (the team, the technology, the pace of growth, and market dynamics, among other factors) to determine a fair price. CEOs may tend to emphasize the qualitative factors, striving to prove they deserve an elevated valuation multiple. Sophisticated investors can be more data driven, using financial analysis to support their projections. Investors seek a targeted cash-on-cash return and are most motivated to invest when the entry valuation is aligned with their expectations.

Entrepreneurs may have heard the adage: “valuation is more art than science.” While there can be certain imprecision behind how an individual investor or firm will assess value, there are a set of components that investors weigh more heavily than others. They can be grouped into broad quantifiable and non-quantifiable categories:

Quantifiable Measures

Valuation Multiples

Hard numbers drive many investors’ valuation methodologies. All financial valuation stems from one fundamental concept: summing future cash flows to compute present value. The difficulty lies in accurately projecting these cash flows, especially for a fledgling business. And cash flow for software companies in the growth stage is a lagging indicator — they often spend all their profits to secure market share and establish topline growth. Once sales are strong enough to cover the cost of new customer acquisition, true free cash flow generation begins. So while a software company may have no EBITDA, revenue is viewed as a proxy for potential profits. Salil Deshpande, a managing director at Ventures, describes the chronology of multiples used over time as companies expect more aggressive valuations: “Companies used to trade on EBITDA. Then that changed to companies trading on a multiple of sales. Then that changed to forward sales. it’s a

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multiple on the annual recurring revenue. Now people are going and saying, don’t look at our annual recurring revenue, look at what our year-ending annual recurring revenue will be.”

Inferences from M&A Valuations

MandAsoft, a data repository based on Berkery Noyes’ Information Industry Weekly, analyzed thousands of mergers in the software industry from 2004 to 2014. The revenue multiple for software companies has been steadily rising over the past decade to a median of 2.9. It is important to note that valuation multiples in merger transactions are typically higher than in growth equity deals due to the acquirer gaining full control of the target (hence, a control premium is paid) and the synergies it expects from the business combination (revenue and/or cost synergies).

SaaS M&A: Valuation & Median Revenue Multiples 40 3.5

34 2.9x 35 3 2.6x 30 2.4x 2.5

2.2x 2.2x 25 25 22.5 20.5 2 19 20 1.5

15 EV/Revenue Value Value (US$ M) 1 10

5 0.5

0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Value Revenue Multiple

Source: MandAsoft

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Private vs. Public Valuations

Publicly listed companies have historically enjoyed larger multiples than private companies. Recently, however, enterprise software public multiples have experienced a mean reversion, while private valuations have never been higher.

SaaS Private Targets: Median LTM Revenue Multiple 4.5 4.0x 3.9x 4 3.8x

3.5 3.1x

3 2.8x

2.5 2.2x

2 EV/Revenue 1.5

1

0.5

0 2009 2010 2011 2012 2013 2014 Q1

Source: Capstone Partners

Private company revenue multiples have been steadily rising, from 2.8x in 2012 to 4.0x in Q1 2014. Meanwhile, public company multiples have undergone a significant compression. Tomasz Tunguz, a partner at Redpoint Ventures, underscores this consolidation among public SaaS companies, highlighting how “today, there are fewer and fewer outliers, companies trading at heady multiples, compared to 2014… they now trade within a much narrower band.” Public multiples fell drastically to 6.6x in Q2 2014 after a steady rise from Q3 2013. And Tonguz concludes, “the compression hasn’t impacted valuations in early

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venture rounds. Companies are growing faster than ever, a very enticing attribute for investors and higher growth rates command premiums.”

SaaS Public Companies: Median Quarterly Revenue Multiple 9 8.4x

8 7.6x

7 6.6x 6.6x

5.7x

6

5

4 EV/Revenue 3

2

1

0 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2

Source: Software Equity Group

Size Premium

Investors also pay a size premium, forgoing growth potential for stability as the chart below illustrates. This premium for larger companies is even more pronounced with top public performers such as Cornerstone OnDemand, Demandware, FireEye, NetSuite, Palo Alto Networks, ServiceNow, Splunk, and Workday, trading at an average of 8x revenue as of Q1 2015.

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SaaS M&A: Revenue Multiple By Size 4 450 3.4x

3.5 400

350 3 2.7x

2.4x 300 2.5 1.9x 2.0x 250 2 200 1.5 EV/Revenue 150 1

100 Number Number Transactions of

0.5 50

0 0 $10-20 $20-40 $40-80 $80-160 $160+ Value ($US M)

Number of Transactions Revenue Multiple

Source: MandAsoft

Supply of Capital

An increase in the amount of money allocated to invest in private companies leads to increasing competition and prices paid for businesses, which ultimately leads to lower returns. The amount of capital allocated to the private markets has increased substantially in the past decade as more institutional money has been shifting away from public markets and pouring into and growth equity strategies. Total dry powder, or the amount available to actively invest, topped $1.2 trillion in March 2015, a 14% increase from December. Total uncalled capital commitments have more than tripled over the past twelve years.

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Private Equity Dry Power 1,400

1,221 1,200 1,098 1,066 1,057 1,073 1,000 1,002 1,000 955 940

796 800

600 559

401 405

Dry Power Power Dry (US $B) 400

200

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Preqin Fund Manager Profiles

All Things Recurring

Many software companies benefit from successfully implementing recurring revenue business models despite the initial net negative cash flow that results from foregoing large up-front payments in exchange for smaller, contracted recurring payments. As software companies have shifted to the more stable and predictable SaaS delivery and pricing models, investors have rewarded them with more at full market valuations. In short, investors will pay a premium for companies that demonstrate loyal customer bases with low concentration and limited churn. Furthermore, companies that have achieved some level of scale have proven they are capable of marketing their products and supporting a customer base over a long period of time, thus reducing the execution risk inherent in most growth-stage companies. An existing subscriber base provides confidence in future revenue projections while mitigating the risks associated with recreating a core revenue base.

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Total Addressable Market (TAM)

Top-line figures alone do not convey sufficient information about growth and potential of a business. To address these issues, investors consider a company’s Total Addressable Market (TAM). Investors, despite having more tempered expectations than business- owners, strive to sink their teeth in companies that operate in billion-dollar markets with juicy penetration opportunities. For example, out of the 39 unicorns founded since 2003, 17 provide enterprise oriented software solutions. Still, a large market is irrelevant if the product or service has a low adoptability rate due to high switching costs or inferior quality. Executives not only have to be aware of absolute number of potential end buyers, but also of their level of readiness for a new solution and a foreseeable strategy with which you can reach and convert them to loyal customers.

Growth Rate

To ultimately realize returns and exit the position, investors search for companies with prolific top-line growth rates. Growth decay is faster among non-mature companies — most growth-stage companies cannot consistently triple their revenue year after year. Andy Vitus, a partner at Scale Venture Partners, uses the concept of growth decay to build a valuation framework for recurring revenue companies. (Growth decay is the company’s current year growth rate compared to its previous year growth rate. For example, a growth decay of 10% means that a company that grew 100% last year is expected to grow 90% this year).

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5 Year Revenue Expansion

100% 100% 100% 90% 90% 90% 80%

80% 10% Growth Decay 80%

70%

70% 15% Growth Decay

70%

60% 25% Growth Decay 60%

Growth Growth Rate A company exhibiting 60% 70% initial growth will 50% grow revenues by 600% 50% over 5 years if growth slows by 15% each 50% year. 40% 40% 40% 30% 30% 30%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Revenue Expansion Multiple

Source: Scale Venture Partners

Scale VP's analysis shows that even top performers in their industry will see growth decline by at least 10% per year with most companies experiencing decay of 15% to 25% per year. For example, a company growing 70% today with 15% decay will expand revenue by 6x within 5 years. We've also included below a detailed example of how growth can determine valuation levels. In the example, we assume 1) a minority investment for 20% ownership, 2) a constant valuation multiple (which most investors would argue is inaccurate given a company whose growth has declined by 50% would

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warrant a lower multiple of sales upon selling the business), and 3) that a growth investor is looking for a return of 5x in an upside scenario. You can see that in order for an investor to get their desired return, a company that is growing by at least 70% per year at the time of investment would be valued at 4.0x revenue. Growth companies are not operating at optimum profitability levels because they are pouring capital to capture market share — if their efforts are not reflected in top-line growth, investors will detract value.

Investor Returns Analysis with Growth Decay ($MM) Today Year 1 Year 2 Year 3 Year 4 Year 5 Revenue 10.0 16.0 24.0 34.3 46.9 61.5 % Growth (15% Decay) 70% 60% 51% 43% 37% 31% Pre-money Valuation (4.0x Revenue) 40.0 63.8 96.1 137.4 187.6 245.8 Investment (20% Ownership) (10.0) - - - - - Investor Cash Inflows (20% Ownership) - - - - - 49.2 Total Investor Cash Flows (10.0) - - - - 49.2

Multiple of Invested Capital (MOIC) 4.9x 5-Year Revenue Expansion Multiple 6.1x 5-Year Revenue CAGR 44%

Non-Quantifiable Measures

Businesses cannot be fully explained by spreadsheet calculations and financial models. To understand the complete picture, investors must also evaluate other inherent strengths and weaknesses of an opportunity.

Caliber of Management Team

A qualified management team commands added value. Investors feel comfortable trusting executives with histories of past success and proven business acumen. A CEO who has grown a previous business in a similar industry will not underestimate the hurdles to achieving success. Executives who have experience maneuvering the market will be able to adjust the company’s direction if new entrants or regulation unexpectedly alter the industry landscape. A seasoned team will have access to a stronger network, making it easier to forge valuable partnerships and recruit capable employees. While past success is no guarantee of future performance, a solid management team will often be a key factor in how investors value a company and its potential.

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Competitive Position

Occupying a unique competitive position in an industry and building a “moat” around the business helps companies protect their market share while mitigating the risk of sudden disruptive competitive forces. Investors also gauge the company’s ability to rapidly scale because it can attract customers in ways that others cannot. These competitive advantages usually come from strong research and development, exclusive distribution channels, or superior customer support. And as mentioned above, investors find it harder to pass up opportunities where companies can make fast inroads into large, untapped spaces.

A common source of competitive advantage in the software industry is innovative technologies. Sometimes, technology can be so new that it hasn’t received broad industry acceptance, or is yet to reach the monetization stage. Investors can ascribe value to a fledging technology as long as there is a clear pathway to monetization and no threat of replacement in the near term.

Conclusion

Valuation disparities among CEOs and investors are a common part of the transaction process and at times can lead to an impasse in deal talks. However, if both sides can better understand each other's perspective and use a logical framework to base negotiations on, there is a higher likelihood of reaching agreement. Finding fair valuation will be more challenging and time-consuming in an overly bullish or bearish financial climate. In these situations, understanding the core drivers behind valuation is even more critical.

Below is a list of select growth-equity transactions and valuations over the 12 months. The median capital raised was $17 million, and the median pre-money valuation was $66 million. The sector with the highest number of transactions was the Business/Productivity space, with 59 out of the 258 total transactions in the dataset.

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Automation/Workflow Software

Pre- Capital Post Raised money Deal Date Company Raised Valuation to Date Description Investors Valuation ($M) ($M) ($M) ($M) 6/11/2014 Procore Technologies 16.2 57.8 74.0 21.5 Provider of an online bidding Bessemer Venture Partners, tool for construction TenOneTen Ventures project management.

6/19/2014 Puppet Labs 40.0 612.1 652.1 86.0 Provider of information Cisco Investments, technology automation Ventures, services. Caufield & Byers, Triangle Peak Partners, True Ventures, VMware 6/26/2014 IgnitionOne 21.5 205.9 227.4 35.6 Provider of cloud-based ABS Capital Partners, Savano digital marketing technology Capital Partners, SoftBank services. Capital 6/26/2014 Truveris 12.8 45.6 58.4 26.5 Provider of management Canaan Partners, First Round tools to sponsors of Capital, NAV.VC, New Leaf prescription benefit plans Venture Partners, Tribeca and payers of claims under Venture Partners these plans. 6/30/2014 Automated Insights 5.5 17.8 23.3 10.8 Provider of technology that Court Square Ventures, IDEA can automatically transform Fund Partners, Individual raw data into narratives Investor, OCA Ventures, Osage (articles, summaries, Partners, Samsung Venture headlines), visualizations Investment, Steve Case (charts, tables, graphs) and interactive applications. 7/2/2014 Databricks 33.4 214.1 247.5 47.4 Developer of software for Andreessen Horowitz, New analyzing and extracting Enterprise Associates value from data. . 7/28/2014 ChoiceStream 7.5 28.4 35.9 100.2 Provider of personalization Fred Alger Management, services to electronic retail, Pinnacle Ventures entertainment services and television and mobile providers. 8/14/2014 Luminal 10.0 23.0 33.0 16.2 Developer of security and Core Capital Partners, Maryland infrastructure software. Venture Fund, New Enterprise Associates 8/28/2014 IFTTT 30.0 170.0 200.0 38.5 Provider of a cloud based Andreessen Horowitz, Norwest and open ended web Venture Partners workflow. 9/11/2014 Ifbyphone 30.0 66.2 96.2 64.6 Provider of a voice based Apex Venture Partners, marketing platform. BlueCrest Capital Management, Chicago Ventures, Individual Investor, NewSpring Capital, Origin Ventures, River Cities Capital Funds, Spring Mill Venture Partners, SSM Partners 9/15/2014 RJMetrics 16.5 47.7 64.2 24.2 Developer of business August Capital, SoftTech VC, intelligence software Trinity Ventures delivered as a service over the . 9/25/2014 Taulia 40.0 138.1 178.1 75.7 Provider of cloud-based BBVA Ventures, Duff Ackerman invoice, payment and & Goodrich, EDB Investments, discounting management Lakestar, Matrix Partners, service for large buying QuestMark Partners, TELUS organizations. Ventures, Trinity Ventures, Zouk Capital 10/20/2014 Recurly 12.0 45.5 57.5 19.8 Provider of subscription Devonshire Investors, billing management as a e.ventures, Greycroft Partners, service for companies and Polaris Partners small businesses.

11/1/2014 SmartZip Analytics 14.0 42.0 56.0 25.1 Provider of investment Claremont Creek Ventures, ratings, research and Crest Capital Ventures, Cue analysis for residential real Ball, Intel Capital, Second estate properties. Century Ventures

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Automation/Workflow Software (continued)

Pre- Capital Post Raised money Deal Date Company Raised Valuation to Date Description Investors Valuation ($M) ($M) ($M) ($M) 11/28/2014 Narrative Science 10.0 74.1 84.1 32.0 Developer of automated Battery Ventures, Jump business analytics and Capital, Sapphire Ventures, natural language USAA Life Company communication technology.

12/8/2014 Revionics 30.0 152.3 182.3 62.0 Provider of price and promotion optimization systems for retailers. 12/16/2014 Clever 30.0 217.5 247.5 46.5 Provider of administrative Founders Fund, GSV Capital, software for educational Individual Investor, Lightspeed institutions. Venture Partners, Peter Thiel, , Ulu Ventures

1/12/2015 Kit Check 12.0 44.2 56.2 27.5 Provider of a platform for Easton Capital Investment tracking hospital pharmacy Group, Kaiser Permanente kits and medications. Ventures, LionBird, New Leaf Venture Partners, Rex Health Ventures, Sands Capital Management 2/19/2015 6 Sense Insights 20.0 71.1 91.1 36.0 Provider of a predictive Bain Capital Ventures, Battery intelligence engine for Ventures, Venrock marketing and sales. 2/24/2015 Metamarkets 10.1 87.5 97.6 38.7 Provider of price discovery Auren Hoffman, City National data and analytics through Bank, IA Ventures, John its data platform. Battelle, Khosla Ventures, The Data Collective, True Ventures, Village Ventures 3/3/2015 ToutApp 15.0 35.2 50.2 20.0 Provider of email 500 Startups, Andreessen productivity applications. Horowitz, Eric Ries, Esther Dyson, Founder Collective, Launch Fund, Scott Banister, Sigma West

3/25/2015 Nanigans 24.0 230.0 254.0 33.4 Developer of a real-time Avalon Ventures, Cheetah bidding platform for Mobile, Wellington Management advertisements marketplace. 4/16/2015 Procore Technologies 30.0 192.0 222.0 51.5 Provider of an online tool Bessemer Venture Partners, for construction project ICONIQ Capital management. 5/18/2015 Justworks 13.0 56.9 69.9 24.5 Provider of an online payroll Bain Capital Ventures, Index and benefits platform. Ventures, Thrive Capital

5/19/2015 Hightower 13.0 51.3 64.3 21.6 Provider of a mobile Bessemer Venture Partners, technology platform for real Pritzker Group Venture Capital, estate dealings. RRE Ventures, Thrive Capital

6/10/2015 Lattice Engines 28.0 73.5 101.5 75.0 Developer of a platform Blue Cloud Ventures, New designed to help sales and Enterprise Associates, Piper marketing processes. Jaffray, River Cities Capital Funds, Sequoia Capital

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Business/Productivity Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/11/2014 Krux Digital 35.0 101.0 136.0 48.5 Provider of cloud-based Partners, IDG Ventures data management USA, Individual Investor, platform.. Sapphire Ventures, Temasek Holdings, The Entrepreneurs Fund, Time Warner Investments, Visionnaire Ventures 6/12/2014 Freshdesk 31.0 151.0 182.0 44.1 Provider of on-demand, Accel Partners, Google Capital, customer-support software. Tiger Global Management 6/13/2014 SAVO Group 39.1 357.2 396.3 83.1 Provider of collaborative Goldman Sachs, Sapphire sales enablement services. Ventures, Sterling Partners 6/16/2014 SmashFly Technologies 9.0 18.1 27.1 9.0 Provider of a recruitment OpenView Venture Partners marketing platform. 6/17/2014 Clari 20.0 63.5 83.5 26.0 Operator of an enterprise Bain Capital Ventures, mobile application platform Northgate Capital, Sequoia for sales teams. Capital 6/25/2014 Sprout Social 8.0 126.9 134.9 19.0 Provider of support to Lightbank, New Enterprise businesses to manage Associates customer relations across social networking tools. 7/8/2014 RetailNext 30.0 153.6 183.6 59.0 Provider of business Activant Capital Group, intelligence services for the American Express Ventures, retail industry. August Capital, Commerce Ventures, Nokia Growth Partners, Qualcomm Ventures, StarVest Partners, Tyco Capital, Tyco Ventures 7/9/2014 Duetto Research 21.0 54.1 70.1 33.2 Provider of hotel profit Accel Partners, Altimeter optimization services. Capital Management, Battery Ventures, Individual Investor, Leland Pillsbury, Marc Benioff 7/15/2014 NetDocuments 25.0 43.8 68.8 26.1 Provider of an online portal Frontier Capital to store, share and access documents. 7/15/2014 Captricity 11.3 21.8 33.0 15.7 Provider data capture Atlas Venture, The technology that turns Social+Capital Partnership paper information into digital data. 7/16/2014 Conversocial 5.3 19.4 24.6 12.2 Provider of a social DFJ Esprit, Individual Investor, customer service tool for Matt Arnold, Octopus Facebook and . Investments 7/22/2014 Quantifind 12.0 72.4 84.4 23.0 Developer of technologies AME Cloud Ventures, to extract information from Andreessen Horowitz, business intelligence data. Ventures, Iris Capital Management, Redpoint Ventures, US Venture Partners 7/25/2014 Decision Lens 6.5 26.5 30.9 6.5 Provider of strategic Vision Thinkers prioritization and resource optimization software services. 7/31/2014 PagerDuty 27.2 179.9 207.1 39.9 Provider of an alarm Andreessen Horowitz, Baseline dispatching service for Ventures, Bessemer Venture system administrators and Partners, Harrison Metal Capital support teams. 8/1/2014 VeloCloud Networks 15.0 50.8 65.8 20.4 Provider of a subscription- 21Vianet Group, New Enterprise based service that delivers Associates, The Fabric, multi- optimization to Venrock steer business-critical applications over the best paths.

8/6/2014 InVisionApp 21.1 66.5 87.6 34.2 Developer of a user FirstMark Capital, Tiger Global interface prototyping tool. Management

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Business/Productivity Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 8/13/2014 B-Stock Solutions 7.0 34.5 41.5 8.2 Provider of a private New Millennium Partners, auction marketplace Susquehanna Growth Equity, platform. True Ventures 8/21/2014 Alfresco Software 45.0 255.0 300.0 60.2 Developer of open source Accel Partners, Mayfield Fund, enterprise content Sageview Capital, Sapphire management software. Ventures 8/27/2014 Etouches 12.5 23.1 35.6 24.6 Provider of web-based Connecticut Innovations, event software Greycroft Partners management platform for corporation, small business, association, agency, educational institution, meetings and events companies. 9/17/2014 Windsor Circle 6.3 18.0 24.2 8.7 Helps online retailers Comcast Ventures, IDEA Fund connect their platforms, Partners, Individual Investor, email marketing software Origin Ventures, Triangle Angel and other data sources to Partners analyze their customer purchase history and behavior. 9/22/2014 HoneyBook 9.0 20.5 29.5 10.0 Developer of an event Aleph, Benjamin Ling, Benjamin experience planning Narasin, Evan Williams, HillsVen platform. The company Capital, James Currier, Michael develops an online platform Birch, Naval Ravikant, Oliver for event and wedding Thylmann, Rick Marini, Stan planners by offering them Chudnovsky customizable dashboard to receive payments from clients and exchange and communicate ideas to develop unique experiences for them. 9/25/2014 Context Relevant 13.6 76.4 90.0 44.5 Developer of a predictive Bloomberg Beta, BofA Merrill data analytics software. Lynch, Formation 8, Goldman Sachs, GoldPoint Partners, Individual Investor 10/10/2014 Gainsight 25.6 165.0 190.6 57.0 Provider of customer Bessemer Venture Partners, success management Lightspeed Venture Partners services. 10/13/2014 VoloMetrix 12.0 31.0 43.0 16.9 Developer of applications Shasta Ventures, Split Rock for tracking communications Partners and performance for employees of an organization. 10/14/2014 Sapience Analytics 7.3 17.1 24.5 8.7 Provider of software Orios Venture Partners services to measure the time spent on applications, activities and projects by each employee. 10/16/2014 Motionsoft 10.0 28.1 38.1 27.6 Provider of payment Edison Partners, Maryland processing services and Venture Fund, Route 66 member relationship Ventures management software for the health and wellness industry. 10/21/2014 B2X Care Solutions 15.0 485.0 500.0 15.0 Provider of worldwide after- Earlybird Venture Capital sale services for the IT, consumer electronics, household appliances and industrial components industries. 10/30/2014 Capriza 27.0 161.1 188.1 50.3 Provider of a platform that Allen & Company, Andreessen allows IT and lines of Horowitz, Charles River businesses to mobile-enable Ventures, Harmony Partners, their business workflows, Tenaya Capital without the need to access source code.

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Business/Productivity Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 10/31/2014 Fastly 41.5 223.5 265.1 58.0 Provider of content Amplify Partners, August distribution and Capital, Battery Ventures, IDG acceleration network built Ventures USA, O'Reilly on the Varnish caching AlphaTech Ventures engine. 11/3/2014 LeadPages 6.0 67.8 73.8 11.0 Provider of a platform to create mobile responsive landing pages, and other Web pages focused on customer interaction. 11/12/2014 VersionOne 20.0 60.0 80.0 26.5 Provider of project and life LLR Partners cycle management tools. 11/17/2014 InsightSquared 13.5 71.9 85.4 27.0 Provider of a data Atlas Venture, Draper Fisher intelligence software for Jurvetson, NextView Ventures, small to medium sized Two Sigma Investments businesses

11/19/2014 Bigcommerce 50.0 328.7 378.7 125.0 Provider of a platform to American Express Ventures, small and medium sized General Catalyst Partners, businesses, enabling them Revolution, SoftBank Capital, to quickly launch Telstra Ventures, Tenaya professional stores. Capital 11/19/2014 Accompani 15.1 58.2 73.2 20.7 Helps professionasl curate Charles River Ventures, and manage their network Cowboy Ventures, ICONIQ by integrating each user's Capital emial, contacts, social and professional feeds and calendars to provide real- time insight. 11/20/2014 CS Disco 10.5 30.0 40.5 12.5 Offers a software that Bessemer Venture Partners, helps lawyers to find Individual Investor, LiveOak evidence faster by Venture Partners reviewing documents in major cases and investigations. 11/24/2014 Host Analytics 25.0 114.2 139.2 79.9 Provider of budget, Advanced Technology forecasting, and Ventures, Centerview Capital consolidation management Technology, Cultivation software. Capital, Next World Capital, StarVest Partners, Trident Capital 12/2/2014 Return Path 35.0 333.8 368.8 154.3 Provider of an email Costanoa Venture Capital, marketing service that Foundry Group, Sapphire works on both the sending Ventures, Union Square and receiving sides of email Ventures, Vista Equity Partners in order to help commercial email senders get more email delivered to the inbox. 12/9/2014 Altiscale 30.0 76.3 106.3 42.0 Offers purpose-built cloud Accel Partners, AME Cloud services to run Apache Ventures, Seed Capital, Hadoop. EMC Ventures, General Catalyst Partners, Northgate Capital, Sequoia Capital 12/17/2014 AgriSight 10.0 39.2 49.2 15.3 Offers a platform that Drive Capital, Huron River enables farmers to forecast Ventures, Hyde Park Venture and measure farm profits, Partners, Individual Investor, track expenses and manage Sam Altman, SV Angel risk.

12/30/2014 Seismic Software 20.0 59.6 79.6 24.5 Provides an enterprise JMI Equity, Sigma West application that accesses a cloud based library of the user company’s brand collateral and business materials.

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Business/Productivity Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 1/21/2015 Interana 20.0 68.4 88.4 28.2 Developer of analytical Battery Ventures, FUEL Capital, software for mass data Harris Barton, Index Ventures, interpretation. Mike Olson, The Data Collective 1/27/2015 Beckon 13.0 34.0 47.0 23.1 Provider of a performance August Capital, Canaan management software for Partners, El Dorado Ventures, marketing. Venrock

1/29/2015 Radius Networks 6.5 27.6 34.1 12.9 Provider of mobile proximity Contour Venture Partners, Core technology. Capital Partners, Trilogy Equity Partners 2/9/2015 Collective Health 38.0 76.0 107.0 38.0 Provider of cloud-based self-Formation 8, Founders Fund, insurance platform. New Enterprise Associates, Redpoint Ventures, Rock Health, RRE Ventures, Subtraction Capital

2/9/2015 ShiftPlanning 9.0 41.6 50.6 13.4 Provider of an online Klever Internet Investments, workforce management Mark Britto, MHS Capital, Point software. Nine Capital, Team Builder Ventures 2/12/2015 Conductor 27.0 86.0 112.5 60.9 Provider of search engine Blue Cloud Ventures, Catalyst optimization (SEO) Investors, FirstMark Capital, technology. Investor Growth Capital, Matrix Partners 2/13/2015 Mavenlink 19.0 46.4 61.4 33.5 Provider of online work and Carrick Capital Partners project management. 3/3/2015 HoneyBook 21.6 58.8 80.4 31.6 Developer of an event Aleph, Eric Kagan, HillsVen experience planning Capital, Norwest Venture platform. Partners

3/16/2015 Blue Pillar 14.0 19.4 33.4 27.4 Provider of digital energy Allos Ventures, Arsenal Venture asset management Partners, Claremont Creek products. Ventures, EnerTech Capital Partners, Maryland Venture Fund 3/25/2015 aPriori Technologies 6.0 34.4 40.4 49.9 Provider of cost management services. 3/26/2015 FusionOps 12.0 30.0 42.0 19.0 Developer of supply chain Michael Mitgang, New analytics software for Enterprise Associates, Pooneet businesses. Goel, Shamik Mehta 3/27/2015 FirstFuel Software 23.0 70.0 93.0 45.0 Provider of a customer Battery Ventures, E.ON, intelligence platform that IDInvest Partners, Next World transforms energy providers Capital, Nth Power, RockPort into trusted advisors to Capital their business customers.

4/7/2015 Cliqr Technologies 20.0 65.2 85.2 38.0 Provides provides cloud Foundation Capital, Google application management Ventures, Polaris Partners, services to businesses, TransLink Capital cloud providers and software application providers. 4/9/2015 Aviso 15.0 40.0 55.0 23.0 Developer of revenue asset Bloomberg Beta, Cowboy and portfolio management Ventures, Dave Hersh, First software. Round Capital, Jon Kondo, Kartik Raghavan, Larry Smarr, Michael Everett, Mike Gardner, Next World Capital, Richard Campione, Robert Gersten, Roger Sippl, Ron Gill, Ron Huddleston, Scale Venture Partners, Shasta Ventures, Subrah Iyar

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Business/Productivity Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 4/16/2015 Appirio 35.0 499.8 534.8 110.6 Delivers on-demand Fidelity Management & business services using Research software-as-a-service and platform-as-a-service technologies.

4/20/2015 Freshdesk 50.0 422.7 472.7 95.0 Provider of on-demand, Accel Partners, Google Capital, customer-support software. Tiger Global Management

5/6/2015 Wrike 15.0 110.5 125.5 26.0 Provider of a work Bain Capital Ventures, DCM management and Ventures, Scale Venture collaboration platform. Partners 5/12/2015 Kapost 10.3 37.7 48.0 19.1 Provider of virtual Access Venture Partners, Cue newsrooms that enable Ball, High Country Venture, Iron publishers to manage and Gate Capital, Lead Edge generate content from Capital, Ventures various networks of contributors. 5/28/2015 Aquifi 11.6 64.0 75.5 20.6 Designer and developer of natural user interfaces for mobile and desktop devices.

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 19 GrowthCap Research | June 2015

Communication Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/13/2014 Glympse 12.0 49.0 61.0 21.2 Provider of location-sharing Ignition Venture Partners, service for global Menlo Ventures, Naya positioning system enabled Ventures, Presidio Ventures, mobile phones. UMC Capital, Verizon Ventures 6/25/2014 Wickr 30.0 100.0 130.0 39.0 Provider of an application Alsop Louie Partners, Breyer software which allows Capital, CME Group, Dolby message senders to send Family Ventures, Individual encrypted messages Investor, James Breyer, Juniper without a trace. Networks, Knight Foundation, Riverwood Capital, Wargaming

7/11/2014 Vidyo 20.0 164.2 184.2 139.0 Provider of an internet Four Rivers Group, Juniper based video conferencing Networks, Luminari Capital, tool. Menlo Ventures, Orr Partners, QuestMark Partners, Rho Ventures, Saints Capital, Sevin Rosen Funds, Triangle Peak Partners

9/12/2014 Tokyo Otaku Mode 14.7 33.3 48.0 18.2 Provider of a social media Ministry of Economy, Trade and platform focused on Industry Japanese otaku culture. 9/30/2014 Remind 40.0 420.8 460.8 59.5 Creator of a mobile- First Round Capital, Kleiner communication platform for Perkins Caufield & Byers, The classrooms. Social+Capital Partnership 10/6/2014 Kaazing 6.9 60.5 67.4 46.8 Provider of web communication software for living web applications. 12/1/2014 Glide 20.0 100.0 120.0 28.5 Developer of an instant DG Incubation, Marker, Menlo video messaging platform. Ventures, New Ground Ventures, Two Sigma Investments 12/2/2014 SendGrid 20.7 183.7 204.4 48.0 Provider of an e-mail Bain Capital Ventures, delivery platform. Bessemer Venture Partners, Foundry Group

2/3/2015 Oblong Industries 15.0 117.8 132.8 54.2 Provider of the design- driven software and hardware platform. 2/11/2015 CoCo Communications 6.1 52.0 58.1 48.6 Provider of a software platform for secure communications for the defense, homeland security and other markets.

2/24/2015 GuideSpark 22.2 225.7 247.9 42.2 Provider of customized and IDG Ventures USA, Meritech engaging videos for Capital Partners, New educating employees on Enterprise Associates, Storm complex human resource Ventures (HR) topics. 4/6/2015 Switch Communications35.0 200.1 235.1 53.0 Provider of a cloud-based Amasia, Andreessen Horowitz, business phone system built DoubleRock, Felicis Ventures, for Google Apps users. Google Ventures, Softbank, Work-Bench 4/6/2015 Mojix 14.0 28.1 42.1 60.0 Developer of advanced InnoCal Venture Capital, signal processing Mercury Partners Int, Oak technology for supply chain Investment Partners, OMERS management. Ventures, Red Rock Ventures, SeaPoint Ventures, Bank 4/7/2015 Alianza 5.7 27.7 33.4 23.8 Provider of cloud voice platforms that enables service providers to rapidly launch and profit from voice services from subscribers.

4/10/2015 Voalte 10.0 95.1 105.1 58.0 Developer of hospital point- of-care communications software technology.

P a g e | 20 GrowthCap Research | June 2015

Database Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/18/2014 ThoughtSpot 30.0 110.5 140.5 40.7 Provider of platform to Individual Investor, Khosla access and analyze Ventures, Lightspeed Venture enterprise data. Partners

6/24/2014 CloudPhysics 15.1 56.9 72.0 27.6 Provider of a platform to Icon Ventures, Kleiner Perkins focus on virtualization and Caufield & Byers, Mayfield Fund cloud infrastructure. 6/24/2014 Aerospike 20.0 39.4 59.4 30.1 Provider of a data storage Alsop Louie Partners, Columbus and management system. Nova Technology Partners, Individual Investor, New Enterprise Associates, Regis McKenna 7/10/2014 Avere Systems 20.0 164.0 184.0 72.0 Developer of demand-driven Lightspeed Venture Partners, storage services. Menlo Ventures, Norwest Venture Partners, Tenaya Capital, Western Digital

8/6/2014 Splice Machine 18.0 35.5 53.5 22.3 Provider of a SQL-compliant Correlation Ventures, Individual database for data Investor, InterWest Partners, applications. Mohr Davidow Ventures, Roger Bamford, Roger J. Sippl

9/19/2014 Hazelcast 11.0 68.2 79.2 13.8 Provider of an open source Bain Capital Ventures, Earlybird clustering data distribution Venture Capital, Individual platform. Investor 10/6/2014 Zoomdata 17.0 35.1 52.1 22.2 Provider of a data analytics Accel Partners, B7 Ventures, and visualization platform Columbus Nova Technology for real-time and historical Partners, Cota Capital, New Big Data. Enterprise Associates, Razor's Edge Ventures 10/9/2014 Digital Reasoning 24.0 77.4 101.4 29.0 Provider of data analytic , Goldman Sachs, software based on a Nashville Capital Network, distinctive mathematical Partnership Fund for New York approach to understanding City, Tennessee Angel Fund, natural language. Work-Bench 10/21/2014 SnapLogic 22.3 89.4 111.8 64.8 Provider of an open-source, Andreessen Horowitz, H. Barton data-integration framework. Asset Management, Ignition Venture Partners, Netapp, Pharus Capital Management, Tresoro Ventures, Triangle Peak Partners 10/23/2014 SwiftStack 16.0 29.0 45.0 23.6 Provider of a platform to Mayfield Fund, OpenView deploy and manage private Venture Partners, Storm cloud-storage systems. Ventures, UMC Capital 10/27/2014 iMATCHATIVE 20.0 55.7 75.7 27.3 Provider of a data analytics Control Empresarial de platform and marketplace. Capitales, David Bonderman, Individual Investor, & Company

11/25/2014 Socrata 30.0 130.0 160.0 55.1 Provider of a cloud based Frazier Technology Ventures, data consumerization Morgenthaler, OpenView products. Venture Partners, Sapphire Ventures 12/3/2014 Comprehend Systems 21.0 71.5 92.5 32.2 Provider of cloud-based Lightspeed Venture Partners, clinical data insights tools. Sequoia Capital, Ulu Ventures

12/10/2014 Qubole 13.0 32.0 45.0 20.0 Developer of aplatform that Norwest Venture Partners analyzes data and builds data driven applications.

1/5/2015 Reonomy 13.0 29.9 42.9 18.0 Enables lenders, brokers Bain Capital Ventures, FinTech and investors to make Collective, KEC Ventures, better & faster decisions by Primary Venture Partners, combining comprehensive Resolute Ventures, SoftBank and validated data with Capital, Solon Mack Capital, powerful analytics. Stephen Mack

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 21 GrowthCap Research | June 2015

Database Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 1/6/2015 Treasure Data 15.0 72.8 87.8 25.4 Provider of a cloud-based AME Cloud Ventures, Kazuki data analytics platform. Ota, Morio Kurosaki, Scale Venture Partners, Tim Guleri, William Tai 1/13/2015 Basho Technologies 25.0 59.9 84.9 59.2 Delivers database platforms Georgetown Partners for cloud storage and operating applications. 2/4/2015 Qumulo 40.0 132.5 172.5 66.7 Helps IT teams store, Highland Capital Partners, manage and curate data. Kleiner Perkins Caufield & Byers, Madrona Venture Group, Valhalla Partners 2/19/2015 Sqrrl Data 7.0 19.2 26.2 14.2 Developer of a big data Atlas Venture, Matrix Partners, platform for building real Rally Ventures time analytical applications.

2/24/2015 Space-Time Insight 8.0 80.8 88.8 53.0 Provider of Big Data E.ON, EnerTech Capital analytics software that Partners, NEC Corporation offers real time visual and temporal analysis of a 3/11/2015 Looker Data Sciences 30.0 143.0 173.0 48.0 Providercompany. of a web based First Round Capital, Meritech relational querying tool. Capital Partners, PivotNorth Capital, Redpoint Ventures, Sapphire Ventures 3/12/2015 SignalFx 20.0 90.8 110.8 28.5 Provider of monitoring Andreessen Horowitz, Charles platform for modern River Ventures, Engineering applications. Capital

3/13/2015 Avere Systems 11.0 184.0 195.0 83.0 Developer of demand-driven Menlo Ventures storage services.

3/16/2015 Deep Information Sciences8.0 37.6 54.8 17.6 Provider of a database for AlphaPrime Ventures, Sigma big data and . Prime Ventures, Stage 1 Ventures

3/19/2015 Quid 39.0 95.0 134.0 60.0 Developer of decision Artis Ventures, Buchanan making optimization Investments, Charles Lho, solutions. Liberty Interactive, Michael Patsalos-Fox, Subtraction 3/24/2015 Realm 20.0 56.9 76.9 30.9 Provider of a database for KhoslaCapital, Ventures, Thomas H.Scale Lee Venture holding and delivering data Partners on mobile devices.

4/22/2015 DNAnexus 15.0 63.3 78.3 46.7 Developer of software to Wuxi Venture Fund analyze DNA-sequencing data.

4/28/2015 DataTorrent 15.0 81.2 96.2 23.8 Provider of online data AME Cloud Ventures, August transfer service. Capital, GE Ventures, Morado Venture Partners, SingTel Innov8 5/4/2015 YCharts 5.8 28.9 34.7 14.5 Provider of fundamental Amicus Capital, Barney Harford, research and empirical data Chicago Ventures, Hyde Park to help investors Angels, Morningstar, Reed Elsevier Ventures 6/1/2015 Hedvig 18.0 71.1 89.1 30.5 Developer of a fully Atlantic Bridge Ventures, True distributed, decentralized, Ventures, Vertex Ventures software-defined storage system (SDS) for the cloud. 6/3/2015 Arkin Net 15.0 32.6 47.6 22.0 Provider of services related B.V. Jagadeesh, Nexus Venture to software defined Partners datacenters.

P a g e | 22 GrowthCap Research | June 2015

Educational Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/23/2014 Fingerprint Digital 10.9 83.2 94.0 18.5 Provider of educational DreamWorks Animation SKG, applications for kids. New Ground Ventures 7/14/2014 Edmodo 30.0 206.3 236.3 77.6 Provider of micro-blogging Glynn Capital Management, and social learning platform Index Ventures, KDDI for teachers and students. 8/19/2014 Learnist 5.2 77.3 82.5 50.0 Provider of an online social- learning platform focused on test preparation. 8/25/2014 MasteryConnect 15.2 41.1 56.3 24.1 Provider of an online Catamount Ventures, Pelion student-assessment tool. Venture Partners, Trinity Ventures 11/1/2014 Instructure 42.4 511.5 553.9 93.7 Provider of a cloud-based Bessemer Venture Partners, learning management EPIC Ventures, Insight Venture system. Partners 11/12/2014 Echo 360 18.1 87.6 105.7 159.3 Provider of a platform that Clark Enterprises, Duchossois captures class lectures and Technology Partners, New converts them into Island Capital, Revolution, podcasts, video and media. SWaN & Legend Venture Partners 2/18/2015 Grovo Learning 15.0 30.6 45.6 22.1 Provider of online education Accel Partners, BoxGroup, and training platform. Costanoa Venture Capital, Greg Waldorf, Social Starts, SoftTech VC 2/26/2015 Civitas Learning 16.2 61.0 77.3 29.2 Provider of a predictive Austin Ventures, Emergence analytics platform to the Capital Partners, Felicis higher education market. Ventures, Rethink Education, SJF Ventures 6/10/2015 Duolingo 45.0 425.0 470.0 83.3 Provider of a free language- Ashton Kutcher, Google learning website and Capital, Kleiner Perkins Caufield crowdsourced text & Byers, New Enterprise translation platform. Associates, Tim Ferriss, Union Square Ventures

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 23 GrowthCap Research | June 2015

Entertainment Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 7/8/2014 Curse 16.0 70.4 80.4 41.2 Operator of a gaming portal GGV Capital dedicated to massive multiplayer online games (MMOGs). 8/6/2014 Kiwi 15.0 67.4 82.4 21.0 Developer of Android mobile Draper Fisher Jurvetson, games. Northgate Capital, Sequoia Capital 8/25/2014 DraftKings 41.0 133.9 174.9 76.2 Provider of online fantasy Atlas Venture, GGV Capital, sports platform. Raine Ventures, Redpoint Ventures 9/30/2014 Artillery Games 10.4 56.6 67.0 14.2 Developer of HTML5 technology platform for gaming. 10/16/2014 Tangible Play 12.0 28.0 40.0 14.5 Developer of a gaming Accel Partners, K9 Ventures, device for iPad. Upfront Ventures, XG Ventures

10/22/2014 PlayStudios 20.0 192.3 212.3 33.8 Developer of social casino Icon Ventures, MGM Resorts games. International 12/10/2014 ToyTalk 15.0 52.6 67.6 30.5 Developer of artificial Charles River Ventures, First intelligence and mobile Round Capital, Greylock connectivity for toys. Partners, Khosla Ventures, True Ventures 1/29/2015 Ouya 10.0 61.9 71.9 29.2 Developer of a gaming Alibaba Group console. 3/19/2015 zSpace 26.6 30.0 56.6 53.8 Developer of advanced display technology for personal computers. 3/31/2015 Raptr 14.0 156.0 170.0 41.0 Operator of an online social Accel Partners, AMD Ventures, gaming network. Duff Ackerman & Goodrich, Tenaya Capital

P a g e | 24 GrowthCap Research | June 2015

Financial Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/9/2014 Affirm 45.0 89.1 115.1 52.5 Developer of online loan Khosla Ventures, Lightspeed platform for financial Venture Partners, Nyca infrastructure. Partners 6/17/2014 OpenGov 19.1 48.8 67.9 26.3 Developer cloud-based web Accelerate-IT Ventures applications that visualize, Management, Andreessen analyze and share Horowitz, Cota Capital, government financial data. Formation 8, SGVC, Thrive Capital 7/16/2014 Redline Trading Solutions5.0 34.9 39.9 12.5 Provider of software Cue Ball, Individual Investor products for latency and throughput-sensitive trading applications. 8/21/2014 Transactis 10.9 34.5 45.4 42.3 Provides electronic bill Alpine Meridian, Individual presentment and payment Investor, Safeguard Scientifics, services. StarVest Partners

10/22/2014 Flint Mobile 9.4 45.7 55.1 20.5 Provider of mobile payment Digicel Group, Peninsula applications for small Ventures, Storm Ventures, businesses. True Ventures, Verizon Ventures 10/24/2014 D3 Banking 7.0 34.4 41.4 12.0 Provider of software Route 66 Ventures enabling users to receive personalized, integrated digital banking services on any device. 12/9/2014 Insikt 16.3 44.1 60.4 22.4 Owner and operator of an Atalaya Capital Management, investor platform. FirstMark Capital, Individual Investor, Jefferies Capital Partners, Revolution, Serengeti Asset Management 12/15/2014 Alkami Technology 23.7 86.7 110.4 48.3 Provider of electronic S3 Ventures banking service to the industry.

1/13/2015 peerTransfer 22.0 88.8 110.8 43.3 Processor of tuition Accel Partners, Bain Capital payments for international Ventures, Devonshire students. Investors, QED Investors, Spark Capital 1/20/2015 Avalara 42.0 803.2 845.2 298.5 Provider of sales tax and Arthur Ventures, Technology compliance automation Crossover Ventures, Warburg services in the cloud. Pincus 2/5/2015 SimplyTapp 8.5 20.2 28.7 9.9 Developer of cloud-based Blue Sky Capital, Lightspeed mobile payment Venture Partners, Mozido technologies. 2/11/2015 MineralTree 11.1 32.1 43.2 22.7 Provider of a cloud-based .406 Ventures, Fidelity Growth banking and payment Partners India, First Data service specifically designed for small and medium businesses. 2/26/2015 Mobeam 5.2 39.8 44.9 21.0 Provider of a digital wallet technology to consumers, media companies, brands and retailers.

3/11/2015 Remitly 12.5 66.0 78.5 23.4 Provider of online DN Capital, Draper Fisher remittance services. Jurvetson, QED Investors, Trilogy Equity Partners 3/24/2015 Lendio 20.5 25.6 46.1 31.0 Provider of an online loan Blumberg Capital, Highway 12 service for small scale Ventures, Napier Park Global enterprises. Capital, North Hill Ventures, Pivot Investment Partners, Runa Capital, Tribeca Venture Partners

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 25 GrowthCap Research | June 2015

Financial Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 4/3/2015 PayNearMe 14.7 149.5 164.2 69.2 Provider of a cash transaction network.

4/7/2015 Kyriba 21.0 161.8 182.8 90.3 Provider of Software-as-a- BRED Banque Populaire, Daher Service (SaaS) cash and Capital, HSBC Bank, Iris Capital treasury management Management, Upfront Ventures services. 4/15/2015 Factor Systems 25.0 242.9 267.9 54.7 Provider of an automated Bain Capital Ventures, Goldman invoice-to-cash service for Sachs Private Capital Investing businesses across business- Group to-business (B2B) and business-to-consumer (B2C) markets.

4/15/2015 Acorns Grow 23.0 60.1 83.1 32.0 Developer of an investing e.ventures, Garland Capital platform that allows people Group, Greycroft Partners, to round up their daily Math Venture Partners, Sound purchases and Ventures automatically invest the change into a commission- free diversified portfolio of index funds. 4/30/2015 MX 30.0 233.7 263.7 51.0 Provider of financial Digital Garage, USAA Life management and debt Insurance Company elimination services. 4/30/2015 Circle Internet 50.0 200.0 250.0 76.0 Provider of payment tools Accel Partners, Breyer Capital, Financial for Bitcoin and other digital Digital Currency Group, Fenway currency services. Summer, General Catalyst Partners, Goldman Sachs, IDG Capital Partners, Oak Investment Partners, Pantera Capital Management 5/12/2015 Credit Sesame 16.0 144.7 160.7 35.4 Provider of an online Globespan Capital Partners, IA analytics engine that allows Capital Group, Inventus Capital consumers to monitor their Partners, Menlo Ventures, credit and loans. Syncora Alternative Investments 5/20/2015 WePay 40.0 180.0 220.0 75.3 Provider of an online August Capital, Continental payment platform for Investors, FTV Capital, individuals, organizations Highland Capital Partners, and businesses. Ignition Venture Partners, Rakuten 6/4/2015 ATX Innovation 21.5 56.2 77.7 39.9 Provider of an application Morgan Creek Capital to pay restaurant and bar Management, New Enterprise tabs. Associates, Wellington Management

P a g e | 26 GrowthCap Research | June 2015

Human Capital Services

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/4/2014 Gild 13.5 40.0 53.5 25.9 Provider of human resource Baseline Ventures, Correlation and recruiting software. Ventures, Draper Nexus, Drive Capital, Globespan Capital Partners, Individual Investor, Mark Kvamme, Menlo Ventures, Milliways Ventures, Sapphire Ventures, Steve Anderson

6/12/2014 HackerRank 9.2 45.0 54.2 12.4 Provider of an online Battery Ventures, Dan platform to connect Rubinstein, Greg Badros, corporate professionals Individual Investor, Khosla with students. Ventures, Peeyush Ranjan, Y Ventures 7/1/2014 Simply Hired 12.1 45.2 51.3 34.4 Provider of a search engine Foundation Capital, IDG platform for jobs and Ventures USA recruitment advertising network for employers and recruiters. 8/19/2014 The Resumator 15.0 24.7 39.7 18.0 Provider of applicant Birchmere Ventures, Blue Cloud tracking, social recruiting Ventures, Innovation Works, and job marketing platform. Rincon Venture Partners, Volition Capital 9/1/2014 Jobvite 30.0 119.3 149.3 60.7 Provider of a recruitment ATA Ventures, Catalyst application that allows to Investors, Presidio Partners, collaborate on hiring Trident Capital people. 12/9/2014 Hired 15.0 188.5 203.5 33.0 Provider of a marketplace Comcast Ventures, Crosslink for recruiting software Capital, Lumia Capital, engineers. SherpaVentures, Sierra Ventures, Silicon Valley Bank, SoftTech VC

12/15/2014 Glint 9.0 29.2 38.2 15.5 Provider of software Individual Investors, Norwest services for employee Venture Partners, Shasta engagement. Ventures 12/24/2014 Ascentis 7.0 49.4 56.4 10.3 Provider of a human Catalyst Investors resource management software, online payroll and human capital management services. 1/21/2015 Work Market 20.0 61.5 81.5 36.0 Provider of an online tool Industry Ventures, Silicon for businesses to manage Valley Bank, SoftBank Capital, professional freelance and Spark Capital, Union Square contract workers. Ventures

3/3/2015 Greenhouse Software 13.6 70.6 84.2 23.8 Provider of a Benchmark Capital, comprehensive recruiting DoubleRock, Felicis Ventures, performance improvement Resolute Ventures, The system. Social+Capital Partnership

4/16/2015 Assured Labor 6.8 26.1 32.9 13.3 Provider of web and mobile Capital Indigo, Mexico marketplace for jobs for Ventures, Promotora Social emerging markets. Mexico, Thayer Ventures 5/19/2015 Hireology 10.5 30.0 40.5 13.2 Provider of a selection Bain Capital Ventures management platform for hiring employees.

6/2/2015 HireVue 45.0 221.9 266.9 98.5 Provider of a talent Granite Ventures, Investor interaction platform for Growth Capital, Peterson digital screening and video Partners, Rose Park Advisors, interviewing of job Sequoia Capital, Technology applicants. Crossover Ventures

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 27 GrowthCap Research | June 2015

Network Management Software

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/2/2014 Movik Networks 21.0 64.2 85.2 62.7 Provider of customized North Bridge Venture Partners content and application awareness solutions for mobile networks in the . 6/16/2014 CounterTack 20.0 25.9 45.9 40.2 Provider of cyber-threat Alcatel-Lucent, Arsenal detection services. Venture Partners, Fairhaven Capital Partners, Goldman Sachs, Razor's Edge Ventures, Venture Capital 6/19/2014 ForgeRock 29.9 257.2 287.1 52.2 Provider of an open source Accel Partners, Foundation platform for infrastructure Capital, Meritech Capital applications. Partners 6/23/2014 Skyhigh Networks 40.0 438.5 478.5 66.9 Provider of cloud visibility Greylock Partners, Salesforce and control over the usage Ventures, Sequoia Capital of cloud services.

6/27/2014 Elastica 20.0 61.7 81.7 26.8 Provider of cloud security Mayfield Fund, Pelion Venture software that audits cloud Partners, WS Investments application, detects intrusions and threats based on account activity in cloud applications and provides defense. 7/1/2014 PLUMgrid 16.3 26.1 42.3 29.0 Provider of a network Hummer Winblad Venture infrastructure software Partners, Longworth Venture vendor. Partners, Qualcomm Ventures, Swisscom Ventures, US Venture Partners

7/2/2014 Racemi 9.9 20.8 30.8 25.3 Provider of an image-based Harbert Venture Partners, provisioning software for Milestone Venture Partners, data center consolidation Paladin Capital Group, T- and disaster recovery. Venture Holding 7/4/2014 TeleSign 49.4 363.0 412.4 78.4 Provider of phone-based Adams Street Partners, March verification and Capital Partners, Summit authentication services Partners, Telstra Ventures globally. 7/9/2014 Wombat Security Technologies6.7 23.2 30.0 7.6 Provider of cyber security BlueTree Allied Angels, training and filtering Innovation Works, Level Equity systems.

7/10/2014 Malwarebytes 30.0 135.8 165.8 30.0 Developer of software to Highland Capital Partners protect people and businesses from advanced online threats. 7/16/2014 JFrog 7.0 43.0 50.0 12.0 Provider of open source Gemini Israel Funds, VMware services for streamlining the process of managing software modules (artifacts) in modern development and build environment. 7/22/2014 LogRhythm 40.0 342.4 382.4 71.5 Provider of log management Access Venture Partners, and analysis software Adams Street Partners, services. Individual Investor, Piper Jaffray, Riverwood Capital

7/24/2014 CloudLock 17.0 52.0 69.1 28.7 Provider of cloud-data Ascent Venture Partners, security services for the Bessemer Venture Partners, enforcement of regulatory, Cedar Fund, Salesforce operational and security Ventures compliance in public cloud platforms.

P a g e | 28 GrowthCap Research | June 2015

Network Management Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 8/5/2014 Bitglass 25.0 62.7 87.7 35.0 Provider of a platform to New Enterprise Associates, secure corporate data that Norwest Venture Partners, resides on third-party SingTel Innov8 servers and travels over third-party networks to employee-owned mobile devices. 8/12/2014 Lastline 10.0 93.2 103.2 26.9 Provider of active malware Dell Ventures, e.ventures, protection for networks Presidio Ventures, Redpoint against targeted attacks. Ventures 8/20/2014 PernixData 35.0 216.6 251.6 62.1 Provider of a flash Individual Investor, John W. virtualization platform. Thompson, Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, Marc Benioff, Mark Leslie, Menlo Ventures, Stephen J. Luczo 8/20/2014 vArmour Networks 21.0 101.4 122.4 44.0 Developer of software Citi Ventures, Columbus Nova defined security (SDSec) Technology Partners, Work- for virtualized data centers. Bench 9/11/2014 Veracode 40.0 498.6 538.6 134.0 Provider of application .406 Ventures, Atlas Venture, security testing. Cross Creek Advisors, Flexera Software, In-Q-Tel, Meritech Capital Partners, Polaris Partners, StarVest Partners, Symantec, Telus, Wellington Management

9/18/2014 Ping Identity 35.0 251.8 286.8 135.6 Provider of federated Appian Ventures, Draper Fisher identity management Jurvetson, General Catalyst technology. Partners, Kohlberg Kravis Roberts, Sapphire Ventures, Ten Eleven Ventures, Triangle Peak Partners, Volition Capital, W Capital Partners

9/22/2014 Duo Security 12.8 45.3 58.1 19.8 Provider of online Benchmark Capital, Google application that facilitates Ventures, Radar Partners, True secured internet Ventures transactions. 9/23/2014 Agari Data 15.0 55.0 70.0 23.0 Builder of internet scale, Alloy Ventures, Battery data driven security Ventures, First Round Capital, solutions that eliminate Scale Venture Partners email as a channel for cyberattacks and enable businesses and consumers to interact safely. 10/14/2014 Loggly 15.0 25.0 40.0 36.0 Provider of a cloud based Cisco Investments, Harmony log management service. Partners, Matrix Partners, The Data Collective, Trinity Ventures, True Ventures 10/21/2014 Benu Networks 27.7 47.9 75.6 70.9 Developer of a software Arris Group, Comcast Ventures, platform for mobile Liberty Global Ventures, Shaw operators that directs Ventures, Spark Capital, Sutter vendors to make Hill Ventures convergence platforms that combine cable modem termination system (CMTS) functions under one roof. 10/22/2014 Moka5 16.3 108.2 124.5 61.9 Developer of virtual Highland Capital Partners, computer technology in the Khosla Ventures, NGEN United States. Partners 11/4/2014 Prelert 7.6 31.1 38.7 11.8 Provider of machine Fairhaven Capital Partners, intelligence-based Intel Capital, Sierra Ventures predictive analytics.

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 29 GrowthCap Research | June 2015

Network Management Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 11/5/2014 Gravitant 25.0 52.9 77.9 40.3 Developer of software Cielo Private Equity, S3 designed to enable the Ventures deployment of virtual data centers and business applications by aggregating services from infrastructure- as-a-service providers.

11/13/2014 Axcient 10.0 152.6 162.6 63.5 Provider of on-demand data protection services for small and medium sized businesses. 11/19/2014 Endgame 30.0 251.3 281.3 82.0 Provider of a Security Bessemer Venture Partners, Intelligence & Analytics Columbia Capital, Edgemore (SIA) platform. Capital, Kleiner Perkins Caufield & Byers, Paladin Capital Group, Savano Capital Partners, Top Tier Capital Partners 11/20/2014 CloudLock 6.7 111.5 118.2 35.4 Provider of cloud-data Ascent Venture Partners, security services for the Bessemer Venture Partners, enforcement of regulatory, Cedar Fund operational and security compliance in public cloud platforms. 12/4/2014 ThreatStream 22.5 69.1 91.6 26.8 Provider of a SaaS-based General Catalyst Partners, cyber security intelligence Google Ventures, Institutional platform. Venture Partners, Paladin Capital Group

12/9/2014 Nok Nok Labs 8.3 109.0 117.3 44.1 Provider of authentication DCM Ventures, DDS, Lenovo, infrastructure services to ONSET Ventures, Raven enterprise customers. Venture Partners 12/9/2014 ThousandEyes 20.0 63.2 83.2 25.5 Developer of an information Individual Investor, Salesforce technology performance Ventures, Sequoia Capital, management platform for Sutter Hill Ventures SaaS and cloud applications. 12/9/2014 DB Networks 17.0 28.7 45.7 23.8 Provider of database Citi Ventures, Grotech security software that Ventures, Khosla Ventures detects SQL injection attacks

12/16/2014 Rapid7 (RPD) 31.0 346.6 377.7 92.3 Provider of network Bain Capital Ventures, security risk intelligence Technology Crossover Ventures software. 12/16/2014 OneLogin 25.0 115.3 140.3 44.4 Provider of cloud-based Charles River Ventures, Scale Identity and Access Venture Partners, The Management platform Social+Capital Partnership (IAM). 12/31/2014 iSIGHT Partners 30.0 153.1 183.1 49.3 Provider of cyber security Bessemer Venture Partners risk-management services to enterprises and governments. 1/6/2015 Blue Box Group 14.0 34.0 48.0 19.8 Provider of cloud hosting Founder Collective, Voyager and managed services that Capital enables customers to focus their energy on building and improving their web applications. 2/18/2015 Pindrop Security 35.0 184.7 219.7 47.5 Provider of products to Andreessen Horowitz, Citi detect, report and mitigate Ventures, Felicis Ventures, phone fraud. Institutional Venture Partners, Redpoint Ventures, Webb Investment Network

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Network Management Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 2/26/2015 Zimperium 12.0 28.0 40.0 20.3 Developer of mobile Lazarus Israel Opportunities security systems, Fund, Samsung Electronics Co., implemented as a cloud Sierra Ventures, Telstra service or as hardware Ventures, Toyo Corporation based appliance. 3/11/2015 Elastica 9.0 104.9 113.9 35.8 Provider of cloud security Mayfield Fund, Pelion Venture software that audits cloud Partners, Telstra Ventures, application, detects Third Point Ventures intrusions and threats based on account activity in cloud applications, and provides defense. 3/19/2015 Vidder 12.0 18.6 30.6 18.3 Provider of custom security LDV Partners, ONSET Ventures, services for enterprises, Presidio Ventures, Voyager large industrial Capital organizations and government agencies.

3/20/2015 Palerra 17.0 36.1 52.6 25.0 Developer of cloud security Engineering Capital, Norwest automation platform. The Venture Partners, Wing company provides software Venture Partners that combines threat detection, predictive analytics, security configuration management and automated incident response and remediation.

3/25/2015 Lookingglass Cyber Solutions20.0 31.4 51.4 27.5 Provider of a scalable Alsop Louie Partners, platform for cyberthreat Neuberger Berman monitoring and management. 3/26/2015 PhishMe 13.0 61.1 74.1 15.5 Provider of phishing threat Aldrich Capital Partners, Paladin management training to Capital Group employees. 3/27/2015 Aryaka Networks 16.0 84.0 100.0 76.1 Provider of cloud-based InterWest Partners, Mohr application acceleration and Davidow Ventures, Nexus wide area network Venture Partners, Presidio optimization software. Ventures, Trinity Ventures 4/1/2015 HyTrust 33.0 81.6 106.6 67.5 Provider of virtualization Accelerate-IT Ventures platform control, security Management, Carahsoft, Cisco and compliance services. Investments, EPIC Ventures, Fortinet, Granite Ventures, Intel Capital, Trident Capital, Vanedge Capital, VMware 4/6/2015 RedSeal Networks 17.0 41.3 58.3 71.5 Developer of security DRW Investors, Icon Ventures, assurance software for Leapfrog Ventures, Math medium to large sized Venture Partners, OVP Venture organizations. Partners, Pallasite Ventures, Sutter Hill Ventures, Tyco Ventures, Venrock 4/9/2015 Niara 20.0 60.4 80.4 29.5 Provider of a security Index Ventures, New Enterprise software for enterprises. Associates, Venrock 4/15/2015 Skyport Systems 30.0 124.2 154.2 37.0 Developer of enterprise IT Index Ventures, Intel Capital, software that ensures Sutter Hill Ventures security of corporate assets. 5/5/2015 CloudGenix 25.0 67.4 92.4 34.3 Developer of software- Bain Capital Ventures, Charles defined wide area network River Ventures, Mayfield Fund (SD-WAN) technologies. 5/28/2015 ClearDATA Networks 25.0 46.9 71.9 42.4 Developer of a cloud Excel Venture Management, computing platform for the Flare Capital Partners, Heritage healthcare industry. Group, HLM Venture Partners, Merck, Norwest Venture Partners

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Network Management Software (continued)

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 6/1/2015 Cyphort 30.0 122.0 152.0 53.7 Provider of a threat- Foundation Capital, Matrix monitoring and mitigation Partners, Sapphire Ventures, platform designed to detect Trinity Ventures next-generation malware and to deliver actionable intelligence with the ability to verify, mitigate and prevent future attacks.

6/2/2015 Gainspeed 27.5 116.3 143.8 60.8 Developer of a next- New Enterprise Associates generation architecture platform for cable networks.

6/2/2015 CounterTack 15.0 57.0 72.0 55.2 Provider of real-time attack Alcatel-Lucent, Arsenal detection and capture, as Venture Partners, EDB well as visibility into Investments, Fairhaven Capital attacker behaviors, Partners, Goldman Sachs, enabling identification of Mitsui & Co., Razor's Edge attack characteristics for Ventures, Siemens Venture improved defense tactics. Capital, Ten Eleven Ventures

6/8/2015 Menlo Security 25.0 102.3 127.3 35.5 Provider of a platform that Engineering Capital, General isolates all Web content in Catalyst Partners, Osage the cloud, enabling users to Partners, Sutter Hill Ventures safely interact with websites, links and documents online without compromising security.

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Software Development Applications

Deal Date Company Capital Pre- Post Raised Description Investors Raised money Valuation to Date ($M) Valuation ($M) ($M) ($M) 8/13/2014 Famo.us 25.0 76.2 96.2 30.1 Provider of an open-source Insight Venture Partners, JavaScript framework. Javelin Venture Partners, Jerry Murdock, Samsung Venture Investment

8/25/2014 Appcelerator 22.0 72.9 94.9 135.3 Provider of cross-platform EDB Investments, Mayfield software for cloud Fund, Relay Ventures, connected mobile, desktop Rembrandt Venture Partners, and web applications. Sierra Ventures, Storm Ventures, TransLink Capital, Union Grove Venture Partners 8/26/2014 Black Duck Software 20.0 150.1 170.1 78.2 Provider of products and Flagship Ventures, Focus services for accelerating Ventures, General Catalyst software development using Partners, Intel Capital, Red open source. Hat, Sapphire Ventures, Split Rock Partners, Volition Capital 9/16/2014 Docker 40.0 407.0 447.0 68.7 Provider of a platform that ACE & Company, AME Cloud offers development Ventures, Benchmark Capital, languages and tools for Founders Den, Greylock programmers that handles Partners, Insight Venture code building, scaling, Partners, Jerry Yang, Sequoia deployment and load Capital, Trinity Ventures balancing.

9/23/2014 Kinvey 10.9 26.6 37.5 17.9 Provider of a Backend-as-a- Atlas Venture, Avalon Service for developers to Ventures, NTT DoCoMo setup and operate a cloud Ventures, Verizon Ventures backend for their mobile, tablet and web applications. 9/26/2014 AnyPresence 6.0 32.1 38.1 13.6 Provider of services to Citrix Systems, Clark businesses to build, Enterprises, Grotech Ventures, customize and deploy their Kinetic Ventures own HTML5, iOS and Android mobile applications.

12/18/2014 Skytap 35.0 107.7 142.7 64.5 Provider of cloud-based Ignition Venture Partners, virtual lab that enables the Insight Venture Partners, development, testing and Madrona Venture Group, deployment of applications. OpenView Venture Partners, WRF Capital 1/8/2015 Panaya 20.0 158.5 178.5 52.9 Provider of cloud based Israel Growth Partners testing and upgrade automation software technology. 1/8/2015 Dato 18.5 57.3 75.8 25.3 Provider of a machine- Madrona Venture Group, New learning analytics engine for Enterprise Associates, Opus graph datasets. Capital, Vulcan Capital

2/5/2015 Sauce Labs 15.0 63.8 78.8 36.0 Developer of a cloud based Toba Capital mobile and web testing platform. 2/20/2015 Viv Labs 12.5 87.5 100.0 22.5 Developer of a platform Horizons Ventures, ICONIQ that enables developers to Capital, Individual Investor, plug into and create an Pritzker Group Venture Capital intelligent, conversational interface to anything. 3/12/2015 Pocket 7.0 28.7 35.7 14.5 Provider of an application Axel Springer, Digital Garage, programming interface Foundation Capital, Individual which allows a user to Investor, Jared Kopf, New create applications that Enterprise Associates, interact with Pocket client QueensBridge Venture for many platforms. Partners, Sound Ventures

5/19/2015 Meteor Development 20.0 55.8 75.8 31.2 Provider of a platform for Andreessen Horowitz, Matrix Group building applications. Partners, Trinity Ventures 5/20/2015 Black Duck Software 5.1 170.0 175.0 83.2 Provider of products and Siemens Venture Capital services for accelerating software development using open source.

2015 Understanding Growth Equity Valuations: B2B Software P a g e | 33 GrowthCap Research | June 2015

RJ Lumba Jared Talisman Paul Anderson CEO Managing Director Vice President [email protected] [email protected] [email protected]

Special thanks to: Vidhan Bhatt

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