August 2019 INSIGHTS Supply Chain Software 2019 First Half Market Update Dennis Rourke, Partner Ben Howe, CEO Rob Buxton, Partner Sean Tucker, Partner The Next Generation of Supply Chain Is Emerging . Supply chain is increasingly at the nexus of several transformative technology and business trends: Autonomous Vehicles, Internet of Autonomous Things, digital twins, and automation and Vehicle robotization of warehouses and distribution Technologies centers eCommerce Fulfillment . Transportation management solutions are the target of intense disruption and investment driven by modernization of the $13 trillion transportation industry, the rise of Transportation as a Service (Uber, Lyft), and the Traditional Supply Chain Software Infrastructure rapid progress in autonomous vehicle development . Amazon effect increasingly impacting supply chain models CONSOLIDATION UNDERWAY . The M&A market for supply chain and ERP remains robust as PE firms continue to invest in IoT consolidation platforms for older technologies, which in turn continue to execute aggressive acquisition programs . The TMS sector continues to be the most active subsector in supply chain software for M&A and capital raising . Public SCM / ERP companies have continued to perform well, benefitting from continued growth in target markets and strong global equity capital markets 2 Supply Chain Software Market According to Gartner, the worldwide SCM market will exceed $16B by the end of 2019, and is expected to grow at a 11% CAGR to exceed $22B by 2022 . Global SCM Market New capabilities, such as cloud computing, ($US billions) performance management, RFID, drone delivery, increased use of robots and automated handling in manufacturing and warehouse operations, and new uses of optimization are emerging, driven by new approaches in retail demand generation, customer interaction and social media 20.7 22.4 18.4 14.6 16.4 . Overall market spend growth rates have 12.2 13.0 10.0 11.1 consistently been in double-digits, suggesting the once mature market is undergoing a replacement cycle 2014 2015 2016 2017 2018 2019 2020 2021 2022 . The growing penetration of SaaS is shifting Percentage of Spend by Delivery Model spending from capital to operating budgets and 100% accelerating SCM adoption in the SMB and middle markets 80% 60% . By 2021, SaaS deployments are forecast to exceed 35%% of total spending, while on- 40% premise will decline to less than 20% $8.9 20% . Between 2018 and 2022, nearly $8 billion in total software revenue will be added 0% 2015 2016 2017 2018 2019 2020 2021 License Maintenance/Support SaaS Source: Gartner 3 Robust M&A Activity SCM M&A Activity & Deal Value ($US, in millions) First Half 2019 150 $26,204 . $22,289 The pace of M&A has quickened in 2019, with 107 closed transactions in the 100 $18,288 first six months, versus 109 deals for all of 2018 50 . No blockbuster deals in first half, but solid number of M&A deals between $7,754 $4,085 $3,676 $200M - $1B, as well as three $1B deals 44 74 74 73 109 107 0 2014 2015 2016 2017 2018 H1 2019 . Private Equity (PE) firms continued to be highly active in M&A deals in the first # of Deals Total Value of Deals half, whether acquiring platform companies, continued execution of M&A, or selling from PE to PE Median M&A Multiple & Deal Value 8 . Non-technology players continue to make technology / software acquisitions in both retail (McDonalds / Dynamic Yield) and manufacturing (Bridgestone / 6 $158 TomTom) 4 $60 . $54 $32 Transportation-related software continues to dominate, representing 35% of all 2 $37 $28 SCM M&A deals 3.5x 3.2x 3.5x 3.5x 7.1x 3.0x 0 2014 2015 2016 2017 2018 H1 2019 2018 Median EV/LTM Rev. Median Deal Value SCM Billion $ Deal Activity . 2018 M&A activity was strong with more than 100 transactions 8 $22,280 $20,861 . The Freight Management Systems (FMS) sub-sector of the TMS market has 6 emerged as one of the most active sub-sectors in supply chain software for $16,188 M&A and capital raising 4 . Notable deals in TMS in 2018 include Summit’s acquisition of MercuryGate 2 and E2open’s acquisition of Cloud Logistics 4 1 5 1 6 $3,000 3 0 $1,046 $1,000 2014 2015 2016 2017 2018 H1 2019 # of Billion $ Deals Total Value of Billion $ Deals Source: 451 Research, CapIQ 4 H1 2019 Major M&A / Recap Transactions ($US in millions) Enterprise LTM EV / LTM Date Announced Target Acquirer Target Description Value Revenue Revenue Provides online freight, cargo insurance, fleet management, dispatching, and load 1. Apr-19 $1,000 ND ND tracking software matching services to trucking, rail, and other transportation Develops plant maintenance operations 2. May-19 1,000 ND ND and optimization software Telematics / data platform for connected 3. Jan-19 1,000 158 6.3x vehicles Provides e-logistics, transport management, and logistics management 4. Jan-19 800 ND ND SaaS for retail transportation and shipping industries Provides logistics and related payment 5. Apr-19 700 ND ND management SaaS for the shipping sector Distributes Microsoft and SAP ERP 6. Apr-19 software and provides proprietary ERP 550 ND ND software Provides marketing and commerce software for campaign automation, 7. Apr-19 500 275 1.8x customer analytics, AI-based content management, search engine optimization, Provides cloud-based global trade 8. May-19 424 86 4.9x management (GTM) solutions Provides machine learning-based 9. Mar-19 325 30 10.8x enterprise customer personalization SaaS Develops cloud-based software solutions to 10. Apr-19 enterprise companies in automotive, hotel, 320 ND ND cruise, and retail industries MEDIAN $625 $122 5.6x TOTAL TOP 10 $6,619 Source: 451 Research, CapIQ 5 Most Active Acquirers (2016 – H1 2019) Buyer Number of Transactions Transactions Xware; Container Chain; CargoIT; IFS Global Holdings; LSI Sigma Software; Trinium Technologies; Taric; Pierbridge; Fenix Data Systems; SaaS Transportation; PB & 26 Associates; EasyLog; Softcargo; LSP Solutions; Intris; CustomsMatters; ABM Data Systems; Microlistics; Cargoguide International; CargoSphere; CMS Transport; Prolink Solutions; Bysoft Solucoes; ACO Informatica; znet group; Softship STEPcom; Core Transport Technologies; Visual Compliance; PinPoint GPS Solutions; 12 Accucode; Aljex Software; MacroPoint; PCSTrac; Z-Firm; Datamyne; Appterra; Pixi Software Averetek; Amber Road; INTRA; Cloud Logistics; Birch Worldwide; Entomo; Zyme 10 Solutions; Steelwedge Software; Orchestro; Terra Technology Optiware; IndustryBuilt; Apprise Software; irms 260 Enterprise Solutions; StarDyne 5 Technologies 5 Exari; Hiperios; Aquiire; Riskopy; Spend360 4 Pink Web Applications; Optiway; Bluegarden; LogBuy 3 InProcess Technology; Mtelligence; Fidelis Group Source: 451 Research, CapIQ 6 Capital Raising Shifted into High Gear in 2019 Highlights . Total fund raising of more than $5.2B through the first half of 2019 vs. $4.4B for all of 2018 . While the median transaction size in H1 2019 was $12M, we are seeing more transactions in the $50M to $150M range . As is the case in M&A, the transportation software sector is generating a lot of interest among investors ($1B for Flexport, $300M for LF Logistics, $149M for KeepTruckin) . Top 10 largest deals in the first half raised $4.4B Private Placements Total Capital Raised Total Number of Transactions ($US, in millions) $5,299 116 $4,472 70 43 $1,170 22 22 14 $236 $501 $486 2014 2015 2016 2017 2018 H1 2019 2014 2015 2016 2017 2018 H1 2019 Source: 451 Research, CapIQ 7 H1 2019 Major Financing Transactions Company Location Top Investor(s) Sector Total Funding ($M) 1. New York, NY Golden Gate Capital, Koch Equity Development ERP $1,500 Founders Fund, Cherubic Ventures, Susa 2. San Francisco, CA Ventures, DST Global, SoftBank, Investment Freight Forwarding Platform 1,000 Advisers, S.F. Express 3. Delhi, India The Carlyle Group, SoftBank, Fosun Group 3PL 413 TI Capital, Oriza Holdings, IDG Capital, China 4. Los Angeles, CA Railway Supply Chain Group, China Life B2B Supply Chain 365 Insurance, CICC 5. Shanghai, China Temasek Holdings Freight Fowarding Platform 300 Bessemer Venture Partners, T. Rowe Price 6. Boston, MA Group, Technology Crossover Ventures, Tiger Retail PoS 250 Global Management 7. Helsinki, Finland Technology Crossover Ventures Retail Management 200 8. Bengaluru, Karnataka, India Goldman Sachs, B Capital Group Trucking Logistics 150 Scale Venture Partners, Index Ventures, IVP, 9. San Francisco, CA Fleet Management 149 Greenoaks Capital, CV Glynn Capital Management, BlackRock, Tiger 10. San Francisco, CA Delivery Logistics 100 Global Management MEDIAN $443 TOTAL TOP TEN $4,427 Source: CapIQ, Crunchbase 8 Active SCM Private Equity Firms Amount Invested Amount Invested Amount Invested Date Investments ($M) Date Investments ($M) Date Investments ($M) 1. Oct-18 AFS Technologies ND 1. Jun-18 Acumatica $25 1. Apr-19 Magaya ND 2. Sep-18 Visma Retail Assets ND 2. May-18 Toolsgroup ND 2. May-15 Core Dial $28 3. Sep-18 Extenda ND 3. Apr-18 Green Mountain Technology ND 3. Apr-15 Key2Act ND 4. Jan-17 Fishbowl ND 4. May-16 SciQuest 373 5. Oct-15 Clavis Technology 20 6. Feb-15 Kerridge Commercial Systems ND 1. Jan-18 Motus & Rumzhiemer ND 1. Jul-19 Optimizers ND 2. Jul-16 Elemica $175 2. Jun-19 Onventis ND 3. Jul-14 Sparta Systems ND 1. Apr-18 Global-e $20 3. Apr-17 MUIS Software ND 4. Feb-14 GHX ND 2. Aug-17 ECi Software Solutions ND 4. Dec-13 Chain Point ND 3. Dec-14 EVRY 1,079 4. Oct-14 Exact Holding 932 1. May-19 Ivalua $60 1. Sep-16 Nexus Systems $28 2. Apr-19 Innovapptive 16 2. Dec-15 3PL Central 18 3. Mar-19 Toast 250 3. Sep-11 Steelwedge Software 16 4. Jan-19 Postmates 100 1. May-18 GPS Insight ND 2. Apr-16 Truckstop.com ND 1.