2MBaaS Will be an Active Sector in 2013 MBaaS has emerged as the leading app development technology: MBaaS is a critical pieceof mobile infrastructure, demonstrating major advantages over other application developmenttools The market is separating: After two years and numerous entrants in the MBaaS market, we arestarting to see a class of leaders breakaway from the pack A big push into enterprise in 2013: Enterprises are struggling with existing app developmenttools and are seeking MBaaS. MBaaS players are beefing up their enterprise offerings andbeginning to move away from an increasingly crowded developer market Consolidators have their eye on MBaaS: Enterprise mobility and PaaS vendors areincreasingly talking about MBaaS and see its viability. We believe this will be manifest through awave of interest and acquisition activity in 2013The MBaaS market will begin to pick winners in 2013 and see an increased amount ofconsolidation and investment activity
3Crowded Industry Beginning to SeparateEnterprise FocusDeveloper Focus= Acquired / Operating SubsidiaryScaleSmallerLargerMarket SolutionScale based on available revenue figures and amount of funding raised$7.5MSeedSeedSeed$7.0M$7.0M $7.5M$29.0M$50.2MSeed$46.6MSeedSeedSeedSeed$72.1M
4$0.22$7.70$0.00$2.00$4.00$6.00$8.00$10.002012 2017Fast-Growing MarketStrong growth potential and underlying growth drivers will continue to attractinvestment and transaction activity in MBaaSMBAAS MARKET SIZE ($ BILLIONS)• Analysts expect the MBaaS market to growfrom ~$200M in 2012 to $7.7B by 2017• Numerous trends are fueling the growth ofMBaaS- The technology stack and mobileservices are becoming increasinglycomplex- Developers are needing to do more withless, bringing apps to market faster withno marked increase in budget- PaaS adoption and the need for mobileinfrastructure is paving the way forMBaaS- Need to scale quickly and reliablyKEY DRIVERSSource: Market & Markets104% CAGR
5Solution User Exp. Time to Market Flexibility Cost IP OwnershipOrganic(In-house) Higher:developers cantake fulladvantage ofdevice, designand branding Native apps forusers Slower: significanttime required todevelop apps fromscratch andintegrate systemson the back-end Higher: each appis customized Flexibility arounddeployment Higher: Significantresources arerequired fordevelopment Cost per app ishighest Full ownership offront-end andback-end IPMEAP Lower: Apptemplates andfeatures aredetermined by theplatform Higher: Fasterdevelopmentexisting templatesand back-end May be slowed byneed to learncoding language Lower: vendorslock-inorganizations tothe platform Higher total cost ofownership Static cost modelis a negative Vendor lock-inlimits IPownershipMBaaS Leveragesexisting mobileplatform expertise Truly nativeexperience forusers Higher: apptemplates andback-endsignificantlyreduce time-to-market No vendor lock-inallows for dataportability Ability to scalereliably andquickly Flexible pricingmodels Lower total cost ofownership More ownership offront-end andback-end IPMBaaS Will Win App Development Technology RaceMBaaS provides the most compelling mobile application solution to developers,balancing higher flexibility and user experience with faster time-to-market and TCO
6A Diverse Group of Buyers Will Want MBaaSLarger enterprise software vendors and PaaS providers will look to consolidate theMBaaS industry in the next 12 to 24 monthsMEAP has More Limited Buyer AppealMBaaS has a Wide Appeal to Many BuyersEXAMPLE POTENTIAL ACQUIRERS MBaaS is seen as both a critical app development tool and the next iteration of PaaS, andwill hold appeal to buyers with plays in enterprise mobility or cloud infrastructure Our conversations with large tech companies suggests that MBaaS is on their radarscreens and we expect acquisition activity to begin later 2013
7MBaaS Sits at the Intersection of Two In-Demand MarketsBoth EMM and PaaS markets have been among the most active M&A markets amonglarge acquirers in the last few yearsTarget Acquirer Date Valuation* EV/Revenue*Pending $250M 10.0xDecember 2012 $355M 15.4xOctober 2012 $25M 31.3June 2012 $82M 4.1xApril 2012 $28M 28.0xMarch 2012 $60M 12.0xFebruary 2012 $70M 23.3xFebruary 2012 $4M N/ADecember 2010 $216M 43.3x**November 2012 $32M N/AJuly 2010 $5.4B 4.5xApril 2010 $200M 6.7xAugust 2009 $362M 12.1xMedian: 12.1xMean: 14.7x• Data based on Falvey Partners’ and market estimates when not publicly disclosed** Median and Mean data excludes multiple paid for HerokuSource: SEC Filings, Company Press Releases, Wall Street Research, 451 Research, CapitalIQ
8Falvey Partners OverviewFOCUS SELECT TRANSACTION EXPERIENCEDecember 2011Has acquiredJuly 2012Has beenacquired bySeptember 2011Series DConvertiblePreferred StockLed bySeptember 2012Has beenacquired byA portfolio company ofJuly 2011Has been acquiredby a portfoliocompany ofApril 2011Has beenacquired byJuly 2011Has beenacquired byFebruary 2011Growth equityinvestment fromJuly 2011Has beenacquired byMarch 2011Has divestedits diagnosticsolutions unitNovember 2010Has received aninvestment fromA portfolio company ofOctober 2010PGI Notify and Sendplatforms acquired byAugust 2010Two divisions have beenacquired by a portfoliocompany ofApril 2010Has beenacquired byAugust 2010Series CConvertiblePreferred StockLed bySERVICES Sell-side or buy-side M&A Growth capital raising Board and corporate advisorySECTOR Software / SaaS Tech-enabled business services IT services Internet / digital mediaCOMPANY TYPE $50M - $250M in enterprise value Growing, with established scale Profitable or near-term path to profitabilityFalvey Partners is a leading advisory firm servingmid-market clients across technology sectors Founded in 2012 by Peter Falvey and key members of the Morgan Keegan / Revolution Partners team Falvey Partners professionals have closed dozens of software transactions representing billions ofdollars in transaction value
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