Siemer & associates e commerce report spring 2013
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Siemer & associates e commerce report spring 2013 Presentation Transcript

  • 1. Embedded Specialized AccomplishedSpring 2013eCommerce Report
  • 2. 2Spring 2013Siemer eCommerce ReportTable of ContentsSection I Summary ObservationsSection II Industry SnapshotSection III Industry Sector AnalysisSection IV mCommerceSection V Public Comparables and M&A Transactions
  • 3. SUMMARY OBSERVATIONS
  • 4. 4Spring 2013Siemer eCommerce ReportSummary ObservationsIn order to attract consumers to shop at their store/platform, both offline and online retailers are focusing on:— Maximizing the mobile shopping experience, which is leading them to seek mobile application and technology acquisitions— Moving towards ―omni-channel‖ retailing, concentrating on offering comprehensive services through all available shoppingmediums— Increasing leverage of in-store assets. Retailers with primarily brick-and-mortar operations are offering ship-to-store, ship-from-store and in-store pick-up on eCommerce transactionsGlobal eCommerce still exhibits strong, long-run growth potential with worldwide eCommerce penetration ratesprojected to increase substantially in the coming years— Unique subsectors have begun to develop within the eCommerce industry, allowing for more streamlined analysis of differenteCommerce modelsBoth strategic and financial buyers remain acquisitive but will retain a narrow focus on specific subsectors— The eCommerce sector will see moderate growth in M&A activity over the next 12-18 months as large retailers progressivelyadopt online platforms and many competing startups consolidate to expand their product offering
  • 5. 5Spring 2013Siemer eCommerce ReportMogreet Case StudyMogreet Acquired bypayvia in May 2013Mogreet is a leading mobile marketing company, providing mobile videoand rich media messaging capabilities.S&A was retained by Mogreet as its exclusive financial advisor toevaluate strategic alternatives for the Company. S&A conducted a highlytargeted solicitation process and approached a select group of potentialacquirers deemed to be a strong strategic fit.S&A introduced Mogreet to payvia. payvia has the largest direct carrierconnected messaging and mobile payments platform in the U.S.,covering 120mm unique mobile users and processing billions of mobilemessages every year.payvia’s mobile payments and authentication platform works withmerchants and developers to integrate a customized smart checkoutexperience.Mogreet’s mobile video marketing platform, which delivers high qualityvideo to virtually any mobile phone, will provide payvia’s clients withtools to drive customer acquisition and revenue generation.The combined entity will be the only fully integrated end-to-end productsolution for mobile engagement and payments to enterprises of allsizes.Leveraging its strong relationships and expertise in the mobile space,S&A generated a "home run" outcome for Mogreet and found the perfectpartner for the business to scale its technology.has been acquired by
  • 6. INDUSTRY SNAPSHOT
  • 7. 7Spring 2013Siemer eCommerce ReportSource: Wall Street ResearchOverviewGlobal eCommerce spending in 2012 reached $820.5bn as retailers made shopping online easier and as marketersefficiently managed their platforms with real-time user behavior and data analyticsGlobal eCommerce penetration increased from 4.0% in 2008 to 6.5% in 2012 and is anticipated to reach 9.3% by2016, driven by high-growth emerging markets and the decline of specialty retail stores in developed marketsWith only a 6.5% penetration rate in 2012, global eCommerce retail sales will continue to grow four times faster thantraditional retail― While traditional retail categories such as food, drugs, club stores and apparel will remain largely undisrupted by the impact ofonline distribution, media and electronic sectors will increasingly shift that direction― The introduction of the grocery delivery service Amazon Fresh by Amazon, however, poses a threat to traditional retailcategories if challenges such as produce spoilage can be addressed on a large scale― The ability to offer low prices, broad selection, increased convenience and innovations in logistics and fulfillment will likely leadto higher sales growth but also, potentially, lower marginsMobile eCommerce comprises only 12.0% of eCommerce revenue, but it is is growing faster than expected, asconsumers are becoming more comfortable transacting on mobile platforms and are increasingly ―showrooming,‖ ortrying products at the store prior to buying them online― Tablets account for 70.0% of mobile eCommerce and are expected to be a key driver of growthThe marketplace for M&A activity will continue to grow as the industry matures― Financial buyers are aggressively looking for deals while strategic buyers are being extremely selective as they seek outproduct and brand compatibility/extensions and technological scalability to complement their existing platforms
  • 8. 8Spring 2013Siemer eCommerce ReportSource: Wall Street ResearcheCommerce Revenue and Market GrowtheCommerce has been one of the fastest growing industries globally with an 18.7% CAGR from 2008 to 2012 due toincreased mobile usage, broadband Internet access and improvements in online payment securityAmazon and eBay are the two main players in the industry, even though they only comprise 14.5% of the US marketshareWith low barriers to entry, many players are investing heavily in advertising and offering additional services such asfree shipping and social commerce to distinguish themselves and drive margin growth― Nordstrom plans to invest $1.0bn (one third of its capital expenditures) into online efforts over the next five years, includingleveraging its acquisition of HauteLookIn order to remain successful in the future, eCommerce companies will need to focus on controlling their inventory,quickly adopting new technologies, providing superior after-sales service and building a loyal customer base toensure repeat businessGlobal eCommerce Revenue US eCommerce Market Share2.4%12.1%85.5%eBay Amazon Other$572.5$680.6$820.5$963.018.9% 18.9%20.6%17.4%0.0%10.0%20.0%30.0%$0.0$200.0$400.0$600.0$800.0$1,000.02010A 2011A 2012A 2013EGrowthRateSales(inbillionsof$USD)Revenue Growth
  • 9. 9Spring 2013Siemer eCommerce ReportGlobal eCommerce Penetration Rates in 2012Source: Wall Street ResearcheCommerce still has a long runway for growth and is anticipated to reach 9.3% global penetration by 2016 drivenby high-growth emerging markets and the decline of specialty retail stores in developed marketsU.S.Population: 311.7mmPenetration (2012): 10.1%Penetration (2016): 13.3%BrazilPopulation: 196.7mmPenetration (2012): 3.4%Penetration (2016): 4.5%RussiaPopulation: 142.8mmPenetration (2012): 1.9%Penetration (2016): 5.1%ChinaPopulation: 1,345.9mmPenetration (2012): 5.1%Penetration (2016): 9.1%FrancePopulation: 64.4mmPenetration (2012): 5.1%Penetration (2016): 6.6%JapanPopulation: 127.8mmPenetration (2012): 9.3%Penetration (2016): 11.8%ItalyPopulation: 60.8mmPenetration (2012): 1.3%Penetration (2016): 2.8%GermanyPopulation: 81.7mmPenetration (2012): 5.0%Penetration (2016): 7.7%U.K.Population: 62.7mmPenetration (2012): 10.1%Penetration (2016): 11.8%AustraliaPopulation: 22.7mmPenetration (2012): 5.9%Penetration (2016): 10.3%
  • 10. 10Spring 2013Siemer eCommerce ReportConsumer PreferencesSource: IBIS World, comScoreTechnology and audio/video electronic products as a percentage of eCommerce revenue increased from 19.8% in2007 to 24.5% in 2012Research indicates that 59.0% of consumers would abandon online purchases without free or reduced shipping,making this feature a ―must-have‖ for online retailers―Showrooming,‖ in which consumers try out products at brick-and-mortar stores but purchase those products online,is a growing trend in the industry— Traditional retailers have begun utilizing price-matching offers to combat ―showrooming‖Consumers are increasingly selecting cheaper online options over pricey department store or other retail outletpurchasesGlobal eCommerce Users by Region US eCommerce Product Segmentation7939041,0161,1241,2291,321-200.0400.0600.0800.01,000.01,200.01,400.02011A 2012A 2013E 2014E 2015E 2016EUsers(inmillions)Asia-Pacific Europe North America Latin America Middle East & Africa24.5%14.8%13.8%7.2%6.5%5.5%4.5%23.2%Computers and TVs Clothing and jewelrySporting goods and entertainment Furniture and home applicancesMedication and cosmetics Office equipment and suppliesFood, beverage and pet food Other
  • 11. 11Spring 2013Siemer eCommerce ReportChanging Corporate LandscapeSource: IBIS World, comScoreTraditional retailers are slowing square footage growth or closing stores, investing in eCommerce and IT initiatives,and lowering prices to better compete onlineRetailers are altering their customer acquisition strategies to target those amenable to conducting business online,and they are moving existing customers to online-only platforms wherever possibleMany online retailers are using a diverse array of software to enhance their eCommerce business strategy― eBay’s GSI Commerce provides an eCommerce platform that integrates with inventory management systemsSame-day delivery (SDD) is expected to have a widespread roll-out in the near term, as large eCommerce sites andstartups improve inventory management, infrastructure and delivery techniquesWalmart developed a new computing platform called Mupd8 in an effort to harness its buying power to secure its spotas a global eCommerce leader― Mupd8 collects video, images, location information and status updates from social media streams to determine which trendingproducts retailers should carry in stores or feature in online marketingBest Buy and Target are combating ―showrooming‖ with a new price-matching policy year-round where they willmatch both brick-and-mortar stores and major online retailersMacy’s is installing online kiosks in-store to help customers scan and compare prices, and it’s transforming nearly 300of its stores into distribution centers, to help speed up its shipping solution, as it expects to generate $2.0bn ineCommerce sales
  • 12. 12Spring 2013Siemer eCommerce ReportFulfillment Infrastructure is CriticalSource: Wall Street ResearchAmazon continues to build out its global infrastructure, ensuring it will be able to serve its global customersquickly1823334047162236484934456988960204060801001202009A 2010A 2011A 2012A 2013ENumberofAmazonFulfillmentCentersGloballyUS Rest of the World
  • 13. 13Spring 2013Siemer eCommerce ReportMobile eCommerce (mCommerce) Has the Largest Growth PotentialSource: Forrester ResearchmCommerce sales are expected to account for a larger share of total global eCommerce sales, from 27.6% in2012 to 56.2% in 2016160.5212.2448.020.4%27.6%56.2%-20.0%0.0%20.0%40.0%60.0%0.0200.0400.0600.02011A 2012A 2016E%ofeCommerceSalesUsers(inmillions)mCommerce Users mCommerce as a % of eCommerce Sales
  • 14. 14Spring 2013Siemer eCommerce ReporteCommerce Private Placement Activity Has Grown DramaticallySource: Capital IQ, VentureDeal, AllegroThere was $739.0mm in US eCommerce funding in 2012, a 73.0% increase from the $427.0mm raised in 2011— Square raised $200.0mm in a Series D round in September 2012 from VC and corporate investors including CrunchFund, CitiVentures and Rizvi Traverse Management. Just prior to the announcement, Square announced a strategic alliance withStarbucks, which also participated in the financing roundSome notable transactions this year include:— LivingSocial raised $110.0mm in convertible debt with warrants from Amazon and Revolution Ventures in February 2013— 360Buy, an online retailer in China’s B2C market, raised $700.0mm in a Series F round from corporate investors in February2013Investments Across Categories Global eCommerce VC Funding$185.0$266.0$195.0$430.0$630.0$0.0$100.0$200.0$300.0$400.0$500.0$600.0$700.02008 2009 2010 2011 2012Spending(inmillionsof$USD)128.072.0312.072.023.074.08.339.020.00.050.0100.0150.0200.0250.0300.0350.0Spending(inmillionsof$USD)
  • 15. 15Spring 2013Siemer eCommerce ReportLooking Ahead Into eCommerceSource: Wall Street ResearchGlobal eCommerce Revenue Global eCommerce Revenue by RegionGlobal eCommerce, which accounted for $820.5bn in 2012, an increase of 20.6% over 2011’s total of $680.6bn, isexpected to grow at a 14.7% CAGR through 2016B2B eCommerce will grow at a faster rate than B2C eCommerce as large online retailers like Alibaba.com continue toimprove existing platforms to provide a better experienceThe adoption of mCommerce will boost industry revenue and promote significant long-run growth as the number ofsmartphone buyers is expected to increase 60.0% over the next three yearsAsia-Pacific companies will eventually overshadow dominant entities in North America and Europe as developingcountries experience increased Internet penetration, a burgeoning middle class that relies on online shopping,government-driven campaigns to promote consumerism and improved infrastructure34.7% 32.9% 31.8% 30.4% 29.2% 28.3%18.9%17.7% 17.1% 16.0% 15.3% 14.5%41.9% 44.3% 46.8% 48.6% 50.5% 52.1%2.3% 2.4% 2.3% 2.5% 2.5% 2.5%2.1% 2.7% 1.9% 2.5% 2.6% 2.6%0.0%20.0%40.0%60.0%80.0%100.0%2011A 2012A 2013E 2014E 2015E 2016E%ofGlobaleCommerceRevenueNorth America Europe Asia-Pacific Latin America Others$820.5$963.0$1,116.1$1,283.5$1,454.20.0%10.0%20.0%30.0%-$100.0$300.0$700.0$1,100.0$1,500.02012A 2013E 2014E 2015E 2016ESalesAnnualGrowthRateSales(inbillionsof$USD)Revenue Growth
  • 16. INDIVIDUAL SECTOR ANALYSIS
  • 17. 17Spring 2013Siemer eCommerce ReportDaily DealsSource: Wall Street Research, Yipit DataOnce darlings of the eCommerce space, daily deal companies have struggled to retain their retail customers and endconsumers— Groupon’s market cap has plummeted since its November 2011 IPO, dropping 65.3% from $12.7bn to $4.4bn as of June2013— In February 2013, controversy surrounded LivingSocial as its $110.0mm in new financing was revealed to be convertible debt,potentially wiping out the value of founder and employee shares, all in the aftermath of their 400 layoffs in late 2012The sector is also facing rising disenchantment, as merchants complain that Groupon and other major players do littlefor customer retentionGroupon and LivingSocial remain the largest players in the space, as the rest of the pack has had difficulty inmatching their customer acquisition spendingUS Daily Deal Site Revenue US Daily Deal Site Market Share53.0%22.0%3.0%2.0%20.0%Groupon LivingSocial Travelzoo AmazonLocal Other$1.8$3.6$4.4 $4.8 $5.2 $5.5$0.0$1.0$2.0$3.0$4.0$5.0$6.02011 2012 2013 2014 2015 2016Revenues(inbillionsof$USD)
  • 18. 18Spring 2013Siemer eCommerce ReportSubscription / DiscoverySource: CB InsightsThe subscription eCommerce (―SubCom‖) industry pulled in $195.0mm of funding in 2012, an 81.3% increase overthe $107.7mm it raised in 2011— SubCom peaked at 11 deals in Q2 2012 and consisted almost exclusively of early stage funding (Seed, Seed VC and SeriesA deals), which is consistent with the nascency of the industry— In 2012, there were 7 startup consolidation exits as weaker players, such as JolieBox and Foodzie, became acquisitiontargetsThe SubCom model began with major players such as Netflix, who provided consumers with the ability to choosevarious rental items online and have them shipped straight to their doors for a monthly fee— Newer players, such as Dollar Shave Club, have altered the traditional model by offering automatic shipments of disposableproducts for a monthly feeSubCom Stage Funding SubCom M&A Activity35.0%20.0% 20.0% 20.0%5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%Seed Series A Series B Series C Series D+%ofDealsbyRound12 2 21 1301234Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013NumberofDeals
  • 19. 19Spring 2013Siemer eCommerce ReportSocial eCommerceGlobal social eCommerce sales are expected to grow from $10.0bn in 2012 to $30.0bn in 2015, as users increasinglyget more comfortable with purchasing products based on their friends’ recommendationsFacebook has become the preferred platform for brands and retailers to promote their products by getting users to―Like‖ the brand page and share it with their friends— Businesses are increasingly utilizing Facebook to increase social engagement with customers and keep loyal customersupdated with the latest sales and productsAnother prominent trend in social eCommerce is retailers including social sharing and functionality on their ownwebsitesGlobal Social eCommerce Revenue Facebook’s Market Share in Social CommerceSource: Trefis$0.0$10.0$20.0$30.0$40.0$50.0$60.02011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E 2019E0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E 2019E%ofSocialCommerceMarketRevenue(inbillionsof$USD)
  • 20. 20Spring 2013Siemer eCommerce ReportVertically Integrated Niche BrandsBy making unique products that can’t be found elsewhere, these pure play e-tailors can still thrive – even whensurrounded by large incumbents such as AmazonBecause vertically-integrated commerce is only profitable on a large scale, funding requirements for niche brands arehigh and may be risky for investorsThe sector faces a potential problem with customers not being able to try products prior to purchasing, but theintroduction of ―showrooming‖ is proving to be an effective solutionNiche eCommerce businesses will likely focus on solving their online-only problems in the coming yearsThis sector is estimated to have produced over $1.0bn in revenue in 2012Niche eCommerce Complaints Sector Strengths and DriversSource: Ericsson ConsumerLab, Tech-tips73.0%39.0%34.0%12.0% 11.0%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%Cant see,touch or trythingsHave to waitto receivepurchasesWorry aboutpaymentsecurityLack ofcustomerserviceToo muchchoice%Agreeing72.0%66.0%58.0%52.0%31.0%25.0%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%AvoidcrowdsMoreconvenientAvoid lines Easier tocomparepricesBettervarietyGas prices%Agreeing
  • 21. 21Spring 2013Siemer eCommerce ReportVertically Integrated Niche BrandsMajor player NastyGal has experienced rapid growth, from $28.0mm in 2011 to more than $120.0mm last yearKey player Fab.com is currently over 12.0mm users strong– Last year, the company saw $150.0mm in revenue and revealed in February that sales were up by nearly300.0% in January 2013 over January 2012Digital marketers are focusing heavily on spreading exposure to online-only brands to combat concerns over theirability to reach a large enough audienceDigital Marketers’ Top Priorities Key Player UV GrowthSource: AngelList, MarketingCharts.com, Compete2453754396170100200300400500600700Dec-12 Jan-13 Feb-13 Mar-13Nastygal.com Monthly Unique Visitors0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Content marketingConversion rate optimizationSocial media engagementTargeting and personalizationContent optimizationMobile optimizationBrand buildingJoining up online and offline dataMarketing automationVideo marketingSocial media analytics2012201319%9%21%11%15%11%24%24%32%26%29%30%39%31%37%N/A39%38%34%39%29%39%UniqueVisitors(inthousands)
  • 22. 22Spring 2013Siemer eCommerce ReportConsumer Service / SharingForbes estimates that consumers will spend $3.5bn on the sharing economy this year and refers to the trend as a―disruptive economic force‖Major player Airbnb is now in more than 8,000 cities and growing at a staggering 45.0% monthly growth rateThis sector’s development is affecting other industries as well, because as consumers begin consuming 10.0% lessand peer sharing 10.0% more, the effect on margins of traditional corporations will be disproportionately greaterSome consumers still find themselves hesitant to embrace the sharing economy, due to a variety of safety concernsTraditional service firms have begun to realize the importance of the sharing economy, as seen in Avis’ $500.0mmpurchase of Zipcar, to better compete against Hertz and Enterprise and the rise of car sharing in populated citiesAltimeter analyzed 200 global Sharing Economy startups and found that 37.0% had been funded by VCs– Those 74 companies raised an average of $28.0mm each, representing a total of over $2.0bn in just a few short yearsConsumer Barriers to Sharing Airbnb GrowthSource: CampbellMithun30.0%23.0%14.0%12.0%12.0%9.0%What I lend will get lost or stolen I might not trust others in the networkMy privacy might be compromised Not worth the effortThe goods/services will be poor quality Other0.365 105 526 1,26115,76802,0004,0006,0008,00010,00012,00014,00016,00018,0002008 2009 2010 2011 2012Bookingrates(inthousands)
  • 23. 23Spring 2013Siemer eCommerce ReportRent Versus OwnThis sector has become especially popular in the fashion and accessory category, thanks to key players Rent theRunway and Bag Borrow or Steal— Rent the Runway has over 3.0mm members and 170 designer brands, and it recently introduced the first-ever online socialshopping platform – Our Runway – which allows women to shop based on user-generated photos of real women with similarbody types— Bag Borrow or Steal has also adopted aspects of the SubCom model by offering jewelry subscriptions ranging from $25 to$795 per monthFuture Rental Growth Rental Model VariationsSource: Wall Street Research$0.0$2.0$4.0$6.0$8.0$10.0$12.0$14.0$16.02008A 2010A 2012A 2014E 2016EBrick and Mortar NetflixKiosks Transactional Digital RentalsVODRentalrevenues(inbillionsof$USD)
  • 24. 24Spring 2013Siemer eCommerce ReportFlash Sales / Private SalesMajor flash sales players, such as Beyond the Rack, Gilt Groupe and Hautelook, offer a small amount of discountedproducts and services to members for a short period time, disrupting the traditional consumer-driven shopping modelWayfair, which operates a variety of home goods eCommerce sites and does more than $600.0mm in gross revenue,raised $36.0mm in 2012, bringing its total funding to more than $200.0mmNordstrom’s $180.0mm purchase of HauteLook in 2011 represents the first time that a traditional retailer has acquireda company specializing in online private salesRecent funding rounds (and implied valuations) show that many VCs seem undeterred by Groupon’s November 2012IPO, which has shed more than 76% in market cap year-to-date— VCs view the daily deals business model, which primarily serves as a traffic driver for third party businesses, in a differentlight from that of eCommerce companies that have consumer-facing sales operationsUnique Visitors for Flash Sale Sites Customer Lifetime Value GrowthSource: comScore2237 21851137 1118 1098903785638 54505001000150020002500 Q2 2012Uniquevisitors(inthousands)94.0%143.0% 150.0%385.0%0.0%50.0%100.0%150.0%200.0%250.0%300.0%350.0%400.0%450.0%Traditional onlineretailDaily deals Group buying Flash sales
  • 25. 25Spring 2013Siemer eCommerce ReportCustomization (Design-It-Yourself)Mass customization ventures are attractive to VCs not just because they’re seeing tremendous growth, but also dueto the realization that scalable build-to-order supply chain models are also very cost-effectiveZazzle, a mass customization vendor, reports that it has 20.0mm unique visitors per month, 31.0bn unique productsavailable and has grown 1,600.0% in traffic and 900.0% in sales in the past four yearsUtilization of customers’ personal information is controversial, but a new report from eCommerce optimizationcompany, Monetate, says that 75.0% of consumers want retailers to use personal information to customize shoppingexperiencesCo-creation companies typically become cash-flow positive quickly because they are often just providing themarketplace that facilitates the saleCustomization eCommerce Growth eCommerce Personalization MappingSource: Harvard Business School Research, Internet Retailer0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%2010 2011 2012US Online Retailers Using Customization TechniquesCuration SourcePersonalizationofSKUsshownMachine HumanGenericUniqueDecent customer experience, low cost Good customer experience, high costNot personal, low costCustomers following tastemakers,medium cost32.6%50.0%64.0%
  • 26. 26Spring 2013Siemer eCommerce ReportMarketplace / Re-CommerceCompanies like Poshmark, Twice and Threadflip, as well as local players Tradesy and Shop.hers, are offering newtwists on the yard sale with a more intimate experience than online mega-malls like eBay provideMajor player Twice monetizes by buying clothing at 1/3 of its anticipated selling price and taking a cut of that marginafter all ancillary costs, such as shipping, are paid off— This model has resulted in a $1.0mm revenue run-rate and strong investor demand for this roundThis sector is believed to have significant opportunities for growth, as eBay’s success has made consumers morecomfortable buying used items onlineTraffic Sources Poshmark Unique VistitorsSource: TechCrunch, Compete020406080100120Uniquevisitors(inthousands)32%20%27%7%14%0.5%54%5% 3%33%5%0%50%14%10%25%1%0%0%10%20%30%40%50%60%Direct Referrals Search Social Mail Display AdsThreadup.comThreadflip.comPoshmark.com
  • 27. 27Spring 2013Siemer eCommerce ReportOnline Retail Trends to FollowSource: PricewaterhouseCoopers, BerkshireDigitalBig data will provide context-rich information needed to create more relevant and personalized shopping experiences,ultimately resulting in higher conversion rates and increased customer loyaltyThe convergence of social media, geo-location and mobile technologies will allow retailers to leverage customers’geographic proximities, shopping history and activity on social networks to target them with contextually relevantoffers while on the move2013 will see a greater shift in focus towards mobile, as mobile penetration increases rapidly and more mobiledevices continue to be shipped globally than PCsIn 2013, more online retailers will focus on improving their end-to-end order management process to increasecustomer satisfaction with delivery and after-sales careContent marketers are altering their approaches to focus on quality rather than quantity of advertisements, spendingmore time and effort integrating content into their overall marketing planWorldwide online retail growth will likely be led by the Asia-Pacific region, which is projected to overtake NorthAmerica in terms of B2C eCommerce sales in 2013
  • 28. 28Spring 2013Siemer eCommerce ReportCapabilities by Retailer (as of 2012)Source: Wall Street ResearchBOPUS* ✔ ✔ ✔ ✘ ✔ ✔ ✘ ✘Ship to Store ✔ ✔ ✔ ✘ ✘ ✔ ✘ ✘Ship from Store ✔ ✔ ✘ ✘ ✘ ✘ ✘ ✘QR Codes ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔Mobile Site ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔Mobile App ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔Testing mobile checkout ✔ ✘ ✘ ✘ ✘ ✘ ✘ ✘Free shipping** available ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✘Wifi available in stores ✔ ✔ ✔ ✔ ✘ ✔ ✘ ✘Testing same-day delivery ✔ ✘ ✘ ✔ ✘ ✘ ✘ ✘Free returns of onlinepurchases in store ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔*BOPUS: Buy online, pick up in store; includes reserve online, pick up in store**with minimum purchase, customer loyalty program, through ShopRunner or promotional free shipping
  • 29. MCOMMERCE
  • 30. 30Spring 2013Siemer eCommerce ReportOverviewSource: eMarketer, TechCrunch, StatistaThe global mCommerce market in 2012 reached $171.5bn and is expected to increase 360.0% to $617.0bn by 2016as market confidence and growing trust in the ease and security of mobile transactions support rapid growthOver the next three years, the US smartphone shopper population will expand by 55.0% to comprise 155.0mmpeople in 2016, or nearly half of the US populationThe number of smartphone buyers will increase by 60.0% over the next three years as retailers continue to invest inmobile storefronts and gain experience in converting mobile shoppers to buyersTablets are expected to play a pivotal role in the growth of mCommerce, comprising 62.0% of the segment’s totalsales this year and a projected 70.0% of mCommerce sales in 2016Smartphone buyers are expected to spend an average of $262 on purchases made with their phones this year, afigure that is expected to rise 12.0% over the next three years to reach $295NFC has fallen behind other mobile payment technologies, such as QR codes and Square, but it’s expected to slowlycatch up given its high degree of security and differentiated ability to provide two-way transaction messagingMobile payment platforms are beginning to catch on― To attract more customers, Square recently launched ―Square: Business in a Box,‖ a complete point-of-sale system in a singlebox of equipment― While many mobile payment providers, like iZettle and Payleven, are expanding internationally to provide credit cardsolutions, mPowa is working with the new ―chip-and-pin‖ solution, which is expected to be the global standard by 2015― Visa Europe reached an agreement to license all of Monitise’s technology because it expects that half of all payments madein Europe will be done through mobile devices by 2020― payvia’s May 2013 acquisition of Mogreet will provide Payvia’s clients with tools to drive customer acquisition and revenuegeneration, and to help brands reach consumers
  • 31. 31Spring 2013Siemer eCommerce ReportmCommerce Revenue and Market GrowthThe global mCommerce market in 2012 reached $10.9bn, an increase of 40.9% over 2011mCommerce is currently estimated to account for 3.0% of total worldwide eCommerce and <1.0% of total retailsalesAs users spend more time on connected devices, global mCommerce spending is projected to grow at a 43.0%CAGR between 2011 and 2014Increasingly robust growth is expected as a result of mobile-optimized eCommerce websites and apps, mobile ―one-click‖ payment systems, faster fulfillment and price transparency at the point-of-saleGlobal Mobile Commerce Revenue Global Mobile Commerce Users3625658551,2351,6912,14404008001,2001,6002,0002,4002011A 2012A 2013E 2014E 2015E 2016EUsers(inmillions)Source: Cisco Systems, Informa Telecoms & Media$7,716.0$10,873.0$15,482.0$22,573.0$0$5,000$10,000$15,000$20,000$25,0002011A 2012A 2013E 2014ERevenue(inmillionsof$USD)Mobile Prepaid Top-Up Remote Payments Mobile Money TransfersLocal Payments Mobile Banking
  • 32. 32Spring 2013Siemer eCommerce ReportmCommerce TrendsU.S. mobile payments users are expected to grow rapidly in the coming years and reach 48.1mm by 2016,representing a 77.9% CAGR over 2011As users become more comfortable with payment security, the average transaction size is projected to grow,thereby driving growth in the broader US market by an expected 225.6% CAGR to $62.2bn in 2016 from $170.0mmin 2011US Mobile Payment Users US Mobile Payment TransactionsSource: eMarketer2.77.913.321.334.048.13%7%10%14%20%26%1%3%6%9%14%20%0%5%10%15%20%25%30%0.010.020.030.040.050.060.02011A 2012A 2013E 2014E 2015E 2016EUsers(inmillions)Mobile Payment Users % of Smartphone Users% of Feature Phone Users$0.2 $0.6 $2.1$7.5$24.6$62.2$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.02011A 2012A 2013E 2014E 2015E 2016ETransactionValue(inbillionsof$USD)Mobile Payment Transaction Value
  • 33. 33Spring 2013Siemer eCommerce ReportmCommerce TrendsInternet & Mobile VC Investments in 2012 Mobile eCommerce GrowthSource: Allegro, IBM Online Retail IndexThe advertising ecosystem is shifting from TV to online and mobile, with mobile ad spending projected to grow thefastest at 38.0% per year over the next 5 yearsmCommerce sales rose 31.0% in the first quarter of 2013 as tablet-fueled, ―couch commerce‖ is rapidly becoming themost popular form of online shopping with the so-called ―multi-channel shopper‖This gives eCommerce businesses multiple new channels to monetize while having an edge in revenue generationover their physical store counterpartsOf the eCommerce retailers who do not have a mobile program today, over 66.0% expect to have an mCommerceprogram in place within the next 18 months$224.0$49.0$85.0$0.0$377.0$15.0$0.0$50.0$100.0$150.0$200.0$250.0$300.0$350.0$400.0Internet MobileSeries ASeries BFurther Rounds3.7%20.0%31.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%In-store All eCommerce Mobile eCommerceQ1 2013Investments(inmillionsof$USD)
  • 34. 34Spring 2013Siemer eCommerce ReportGlobal Online Retailers’ mCommerce StrategiesSource: SLI SystemsShifting consumer habits are leading retailers to build mobile platforms to further engage with customers at thepoint-of-saleSurvey of Online Retailers8.5%17.5%18.4%19.7%34.6%40.3%0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%No plans in the next nine monthsAlready have an mCommerce appPlan to improve the site search on mCommerce site or appPlan to build an mCommerce appAlready have an mCommerce sitePlan to build an mCommerce site
  • 35. 35Spring 2013Siemer eCommerce ReportB2B Marketers Are Focusing on Website DevelopmentSource: eMarketerB2B organizations plan to greatly increase digital, social and mobile marketing spending in 2013 in the hopes ofcapturing new customers and creating customer loyalty70.1%61.9%56.0% 55.8%52.5%35.5%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%Website Development Email Marketing Social Media Online Video Search Mobile%ofExpectedFocus
  • 36. 36Spring 2013Siemer eCommerce ReportB2B Mobile Investment Is Expected to IncreaseMobile devices will emerge as a key strategic channel for B2B eCommerce companies to market to, sell to andservice customers88.0%72.0%36.0%28.0%0.0%20.0%40.0%60.0%80.0%100.0%Prioritization of Mobile Services Resource Allocation to Mobile Services Revenue From Mobile Profit From MobileProbabilityofIncreaseSource: eMarketer
  • 37. 37Spring 2013Siemer eCommerce ReportmCommerce Consumers Are Spending More$13.6$24.8$38.8$53.4$71.2$92.4$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0$90.0$100.02011A 2012A 2013E 2014E 2015E 2016EUSRetailmCommerceSales(inbillionsof$USD)Source: eMarketerConsumers are increasing their mobile spending as more retailers make merchandise available througheCommerce
  • 38. 38Spring 2013Siemer eCommerce ReportGrowing NFC MarketGlobal Mobile NFC Users Global Mobile NFC Transaction ValueAlthough NFC technology has had little market exposure, companies are beginning to unlock NFC capabilities afterrealizing the technology’s potential as seen through Google Wallet and comparative systemsNFC popularity has increased dramatically as major cell phone developers begin highlighting the ability of NFCtechnology and as brick-and-mortar stores begin accommodating NFC paymentsAs NFC security issues are addressed, users are starting to leverage this technology for larger transactions, whichis expanding the size of the market to an estimated $191.0bn by 2017With Apple’s plan to adopt NFC technology for the iPhone, global NFC users are projected to reach 107.1mm by2016, representing a 4-year CAGR of 40.5%27.545.773.5107.10.020.040.060.080.0100.0120.02013E 2014E 2015E 2016EUsers(inmillions)Mobile NFC Users WorldwideSource: Yankee Group, ABI Research$4.0$191.0$0.0$50.0$100.0$150.0$200.0$250.02012A 2017ETransactionValue(inbillionsof$USD)Mobile NFC Transaction Value Worldwide
  • 39. 39Spring 2013Siemer eCommerce ReportLooking Ahead Into the mCommerce / Payment MarketSource: Wall Street Research, Department of CommerceUS eCommerce Accelerating On Mobile Impact International mCommerce Also AcceleratingAmong the five types of eCommerce – mobile at POS, mobile as POS, P2P money transfer, mobile banking andgeneral mCommerce – mobile banking will have the greatest immediate impact as it offers high utility for consumersand already enjoys the greatest familiarityMobile at POS is still in its early stages with limited interoperability across handset models, networks, paymentcards and geographies, along with limited penetration of contactless payment terminals at retail sitesMobile as POS provides a compelling solution for the untapped SME market as it enables card transactions forsmall and mobile merchants and is agnostic with regards to existing card networks— Carrier billing-based models provide SME’s with the ability to transact with customers that may not have access to creditcards but have cell phone subscriptions$136.0$180.0$203.0$228.0$255.0$283.0$6.0$14.0$25.0 $37.0$51.0$67.04.4%4.7%5.3%5.9%6.6%7.3%0.0%2.0%4.0%6.0%8.0%$0.0$100.0$200.0$300.0$400.02010A 2011A 2012A 2013E 2014E 2015E%ofUSRetailUSeCommerce(inbillionsof$USD)Mobile U.S. Desktop eCommerce U.S. eCommerce As a % of Total Retail$213.0$261.0$300.0$336.0$360.0$394.0$4.0$11.0$19.0$37.0$50.0$0.0$100.0$200.0$300.0$400.0$500.02010A 2011A 2012A 2013E 2014E 2015EInternationaleCommerce(inbillionsof$USD)International Mobile International Desktop CommerceUS eCommerce As a % of Total RetailUS Desktop eCommerce
  • 40. PUBLIC AND TRANSACTION COMPARABLES
  • 41. 41Spring 2013Siemer eCommerce ReportSelect eCommerce Public ComparablesSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM AnnualCompany Name 6/6/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue GrowthAmazon.com Inc. $267.17 $121,627.3 $116,772.3 1.8x NM 1.3x 17.8x 24.5%Angies List, Inc. 23.09 1,341.6 1,293.6 7.3x NM 3.8x 41.9x 70.9%eBay Inc. 51.36 66,654.5 61,768.5 4.2x 14.3x 3.2x 9.7x 17.4%Groupon, Inc. 6.81 4,505.2 3,337.2 1.4x 24.2x 1.2x 9.4x 26.8%Mercadolibre, Inc. 113.91 5,029.5 4,835.9 12.3x 33.8x 8.3x 22.7x 22.2%Overstock.com Inc. 26.71 631.7 549.8 0.5x 17.0x 0.4x 11.0x 9.3%Rakuten, Inc. 11.90 15,655.2 15,870.7 3.4x 14.6x NA NA 16.9%Start Today Co., Ltd. 14.92 1,639.0 1,520.5 4.3x 16.6x NA NA 10.2%Trade ME Group Ltd. 3.78 1,497.7 1,601.4 13.0x 17.8x NA NA 17.5%Vipshop Holdings Limited 28.61 1,580.8 1,208.1 1.3x NM 0.5x 10.4x 201.0%Vitacost.com, Inc. 8.07 271.2 241.2 0.7x NM 0.5x NM 23.0%Mean $18,999.9 4.6x 19.8x 2.4x 17.5x 40.0%Median $1,601.4 3.4x 17.0x 1.2x 11.0x 22.2%
  • 42. 42Spring 2013Siemer eCommerce ReportSelect Online Travel Public ComparablesSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD, except per share) Share Price Market Enterprise LTM AnnualCompany Name as of 6/6/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue GrowthCtrip.com International Ltd. $32.91 $4,270.7 $3,682.8 5.2x NM 4.0x 16.5x 21.0%Expedia Inc. 54.96 7,513.9 7,053.8 1.7x 11.1x 1.4x 7.7x 19.5%HomeAway, Inc. 29.46 2,502.2 2,187.9 7.4x NM 6.1x 20.9x 22.0%hotel.de AG 38.64 146.1 133.0 2.2x NM NM NM 11.0%MakeMyTrip Limited 12.86 477.9 396.2 1.7x NM 3.9x NM 16.4%OrbitzWorldwide, Inc. 7.50 806.7 1,021.1 1.3x 9.6x 1.2x 7.0x 2.6%priceline.com Incorporated 795.50 41,568.3 37,503.4 6.8x 18.9x 5.5x 14.7x 20.6%Travelzoo Inc. 27.58 423.7 358.2 2.3x 12.1x 2.2x 11.2x 2.2%Wotif.com Holdings Limited 4.98 1,054.2 910.6 6.9x 12.4x NM NM 2.2%Mean $5,916.3 3.9x 12.8x 3.5x 13.0x 13.0%Median $1,021.1 2.3x 12.1x 3.9x 12.9x 16.4%EV / LTM EV / NTM
  • 43. 43Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round05/15/13 PFSwebDevelops and deploys interactive marketing services, globalfulfillment and logistics and high-touch customer careTrans Cosmos $14.7 NA05/14/13 Privalia Venta DirectaAn online fashion company offering flash sales of productsfrom leading brands exclusively to consumersGeneral Atlantic; Highland Capital Partners;Insight Venture Partners; Index Ventures;Sofina Société Anonyme; Nauta Capital;Caixa Capital32.1 NA05/13/13Namshi InternationalServicesOperates Namshi.com, an online shopping website forfashion and footwear productsSummit Partners 13.0 C05/09/13 The Hut Group An online retailer selling fast moving consumer goods Blue Coast Private Equity 15.5 NA05/07/13 BayruAn eCommerce shopping service, primarily selling goodsfrom the USA to Russian customersNA 1.0 NA05/06/13 Basico.com The first online-only premium basic apparel brand in Brazil Initial Capital 0.5 NA05/06/13 Nuvem Shop Enables small and medium enterprises to start online stores Trindade Investimentos 1.0 NA05/02/13 BEBEO An online store for selling clothes for kids, children and babies CM-CIC Capital Privé 2.2 B05/02/13 MicksGarageAn online retailer for car parts and accessories (based inIreland)Dublin Business Innovation Centre; NCBVentures; Enterprise Equity; WesternInvestment Fund3.0 NA05/02/13 Ventas PrivadasOperates an eCommerce platform using online flash sales,providing solutions to brands with no or little online presenceVivid Growth Group 6.0 NA05/01/13 Voylla Retail A worldwide e-retail platform for jewelry and accessories Snow Leopard Technology Ventures 0.5 NA04/30/13Mobly ComércioVarejistaOperating an online retailer for furniture, home furnishings andhome accessories (based in Brazil)Cisneros Group of Companies 20.0 NA04/28/13 Mallzee.comAllows users to create their own personal online shoppingmall that only features clothes that suit themNA 1.6 NA04/26/13 Nettwerk Music GroupEngages in music distribution through releasing and sellingalbums, as well as connecting music fans with music makersBeedie Capital Partners; HBC Investments 10.3 NA
  • 44. 44Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round04/25/13BuildDirect.comTechnologiesOperates as an online wholesaler of building materials andsuppliesNA $3.8 NA04/25/13 Bigshoebazaar India Operates a wholesale cash and carry online shoe storeQUALCOMM Ventures; Nexus VenturePartners; Catamaran Investment; FidelityGrowth Partners India12.0 NA04/24/13 Dapu.com Operates an online shopping portal for home textile items CDH Investments 4.9 NA04/24/13 Chirpify Commerce platform allowing consumers, brands andmerchants to buy, sell, donate and transact on TwitterNA 6.0 NA04/22/13 Gengo Provides a platform for human translation services for Iris Capital; Intel Capital; Singapore 12.0 NA04/22/13 Fab Operates online pop-up shops that sell a variety of home,outdoor, food, apparel and jewelry productsNA 100.0 NA04/19/13 Poppin Online retailer offering a distinctive collection of chic yetaffordable workstyle productsShasta Ventures; First Round Capital;Trilogy Growth15.0 B04/17/13 Augment Develops an augmented reality application with a visualizationtool to show products to visitors before committingNA 0.3 NA04/16/13 Nosto Solutions Oy Develops an eCommerce marketing software, which enablespersonalized product recommendations in real timeOpen Ocean Capital; SanomaVentures 2.9 NA04/15/13 Mallzee.com Allows users to create their own personal online shoppingmall that only features clothes that suit themScottish Enterprise 0.2 NA04/15/13 20jeans.com An online retailer of apparel and accessories for men Baroda Ventures; Siemer Ventures; PLUSCapital1.0 NA04/15/13 Shanghai GoushangNetwork TechnologyOwns and operates a consumer to business eCommerceapparels websiteCBC Capital 10.0 A04/12/13 BiozonePharmaceuticalsEngages in developing and manufacturing OTC drug andcosmetic products on behalf of third partiesNA 1.0 NA
  • 45. 45Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round04/12/13 Createthe Group Provides digital campaigns, communications platforms andcommerce solutions for fashion and retail brands worldwideNA $3.0 NA04/11/13 BuyReply Operates an e-commerce platform that enables merchantsand consumers to buy and sell from online and offlinemedium, such as TV, print, catalogs, newspapers andmagazinesValar Ventures; Square Peg Ventures 1.0 NA04/11/13 Crumbs Bake Shop Offers baked goods for delivery to homes and businessesthrough its eCommerce division at crumbs.comAston Hill Asset Management; IAClarington Investments; Redwood AssetManagement; Front Street InvestmentManagement; Personal CapitalManagement; Ark Mutual Funds; YorkPlains Investment10.0 NA04/10/13 Nest ChildcareServicesEngages in the online retail of pregnancy, infant-care andmother-care products in IndiaAccel Management; Tiger GlobalManagement; Helion Venture Partners11.9 NA04/10/13 TV18 Home ShoppingNetworkOperates as an online and on-air retail marketing anddistribution company for a wide variety of productsNetwork 18 Media & Investments; OrchardCapital Partners30.0 NA04/09/13 Vacation Storebuilder A SaaS eCommerce platform for property managers tocreate, deploy and manage various branded vacation rentalwebsitesNA 0.8 NA04/08/13 Achatdesign An online furniture distribution company (Based in France) Alliansys-Nord Creation; AllianceEntreprendre; Turenne Capital Partenaires;Nord Capital Partenaires3.9 NA04/05/13 BEBB India An eCommerce B2B portal, offering information and tools forsmall and medium enterprisesAccel Management 5.8 B04/04/13 Babyshop Online retailer of fashion products for kids and babies Verdane Capital 1.8 NA04/04/13 Well.ca Operates as an online health, beauty and baby products store iNovia Capital 4.9 NA
  • 46. 46Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round04/03/13 Real Real Operates as an online luxury resale store Canaan Partners; InterWest Partners;e.ventures; Greycroft Partners; Novel TMTVentures; Panarea Capital$14.0 B04/03/13 Acumen Brands Operates online stores that sell outdoor apparel, work wear,nursing scrubs and baby gear productsGeneral Atlantic 83.2 NA04/02/13 CareXtend An online marketplace for health and wellness products NA 1.2 NA04/02/13 BusyLife Software Provides merchants mobile eCommerce solutions Point B Capital 1.2 NA04/02/13 DailyLook Sells fashion and trendy clothing online GRP Partners; RRE Ventures; Novel TMTVentures; SV Angel2.5 NA04/02/13 Saatchi Online A social market platform to discover, share, exhibit, promote,discuss and sell art onlineNA 10.5 NA04/01/13 TrendSutra PlatformServicesAn Internet retail platform that offers a range of lifestyleproductsNorwest Venture Partners 8.0 B03/29/13 Zhuhai ZhengcaiSoftware TechnologyDevelops eCommerce software for governments andenterprises (Based in China)Shenzhen Fortune Venture CapitalManagement1.8 NA03/29/13 American BusinessFormsOffers various office supplies, eCommerce solutions andmarketing solutionsNA 4.0 NA03/28/13 HealthWarehouse.com Operates as a virtual retail pharmacy and healthcareeCommerce company that sells prescription and OTC drugsNA 0.5 NA03/27/13 Virtual Piggy Provides a secure service that allows children to makepurchases online in a manner that is monitored by theirparentsNA 0.6 NA03/25/13 Warp 9 Provides eCommerce software platforms and services for thecatalog and retail industries in the United StatesWings Fund 0.1 NA
  • 47. 47Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round03/22/13 Libermundi Owns and operates eCommerce websites that distributetechnical products for the house, garden and swimming poolEntrepreneur Venture Gestion; SavoieAngels; VIADUC 8$0.4 C03/21/13 LUXA A daily-deals site focusing on a higher-income demographicby listing only premium itemsJAFCO 80.4 B03/20/13 Digital Shelf Space Builds and manages custom eCommerce sites dedicated tofitness and sports instruction projectsSpara Acquisition One 1.5 NA03/20/13 PeerActive An eCommerce real-time shopping community NA 1.5 NA03/20/13 Indochino Apparel Sells mens wear, wedding wear and personalized digital giftcards onlineHighland Capital Partners; MadronaVenture Group; Acton Capital Partners13.2 B03/20/13 Prime HealthChakra An e-health store that offers health care products online Sequoia Capital; Intel Capital 14.0 B03/19/13 Videdressing Online social marketplace to buy and sell previously ownedclothing and fashion accessoriesEarlybird Venture Capital; DN Capital;Generis Capital Partners; Piton Capital5.3 A03/15/13 Landau Brothers Operates Chalkfly.com for buying office and school suppliesonlineDetroit Venture Partners; Ludlow Ventures;Start Garden; Bizdom; Griffon Ventures0.8 A03/15/13 Merchantry Provides cloud-based technology infrastructure and merchantnetworks that enable media, retail and brand manufacturingclients to launch and expand their online marketplacese.ventures; Greycroft Partners; KiteVentures7.0 B03/15/13 Clues Network Owns and operates a horizontal eCommerce site, Indias firstand largest managed marketplaceNexus Venture Partners; Helion VenturePartners10.0 C03/12/13 ARI Network Services Engages in creating, marketing and supporting technology-enabled solutions that help consumers, dealers, distributorsand manufacturers to service and sell goodsNA 4.5 NA03/11/13 Organamania An online merchant that sells organic products NA 0.5 NA03/07/13 Bayru An eCommerce shopping service, primarily selling goodsfrom the USA to Russian customersNA 5.0 NA
  • 48. 48Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round03/06/13 Servio Content marketing services delivering web-optimized contentand data solutions for eCommerce, publishing and big dataNA $4.3 B03/06/13 Jumia An online retailer in Nigeria, offering clothes, shoes, watchesand accessories for men and womenSummit Partners 26.0 A03/05/13 Wine in Black Distributes wine online (Based in Germany) e.ventures; Passion Capital Investments;Bright Capital; Project A Ventures6.5 B03/05/13 hybris Operates as a vendor of multi-channel communication andcommerce software solutionsGreylock Partners; MeriTech CapitalPartners; HGGC30.0 NA03/01/13 Quivers Provides an online catalog solution that enables brandmanufacturers to partner with their retailers for selling onlineNA 0.1 NA03/01/13 1855 Operates as an online distributor of wines to individualsaround the worldAphrodite 10.4 NA02/28/13 Cunable Operates as a direct-to-consumer e-book retailer Start Garden 0.2 NA02/28/13 SARL Mon bento Offers Japanese lunchboxes and accessories online Newfund Management 0.7 NA02/27/13 Cocinar Sin Pensar Offers YoComoBien, a food subscription service that providesrecipes and necessary fresh ingredients to customers doorsCaixa Capital; Instituto Valenciano deFinanzas; Business Booster0.3 NA02/27/13 Box Ventures Allows purchasing of consumable lifestyle products online Vandaele Capital 0.5 NA02/26/13 Pixafy Develops eCommerce solutions such as contentmanagement, startup incubation and expert consultingNA 0.5 NA02/19/13 The Ivory Company An online home-décor company focused on curating anassortment of home merchandise in white and ivoryNA 0.5 NA02/19/13 Blue Apron Offers once-a-week subscription services delivering mealingredients to usersBessemer Venture Partners; First RoundCapital; BoxGroup; Graph Ventures3.0 A02/19/13 Baby.com.br Operates an eCommerce website selling baby products NA 16.6 NA02/18/13 Vellvette Lifestyle An online retail portal for cosmetic products for women India Quotient 0.5 A
  • 49. 49Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round02/18/13 Inverted Edge Owns and operates a fashion retail website offering ready-to-wear collectionsSingapore National Research Foundation;Accel-X; Incuvest$1.6 A02/18/13 Artspace.com Markets An online marketplace for users to purchase artistic works Canaan Partners 8.5 B02/15/13 500friends Offers a loyalty marketing platform that enables eCommerceretailers to track and reward behaviors that matter to theirbrandFung Capital Asia Investment; CrossLinkCapital; Intel Capital7.1 B02/13/13 eNova Santé An online marketplace for pharmacies to sell their products NA 0.8 NA02/11/13 BimBasket A monthly online subscription in Russia for children’s products NA 0.5 NA02/08/13 Mavshack Provides Internet services for video-on-demand NA 0.5 NA02/07/13 Ph-Creative Provides eCommerce web development services, such asweb design and microsites servicesEnterprise Ventures; The North West Fund 0.8 NA02/07/13 Greenweez Offers energy, water, cleaning, home, outdoor,transportation, grocery, office, kitchen, well-being, cosmeticsand health related products onlineA Plus Finance; Promelys Participations 4.0 NA02/07/13 Valyoo Technologies Owns and operates online optical, watch and bag stores IDG Ventures India; Unilazer Ventures 10.0 B02/06/13 Trends Brands forFriendsAn online retailer of fashion apparel (Based in Russia) Ventech; ruNet Holdings; Kite Ventures 4.002/01/13 HealthWarehouse.com Operates as a virtual retail pharmacy and healthcareeCommerce company that sells prescription and OTC drugsNA 3.5 NA02/01/13 B. Lane An online retailer of plus size fashion apparel for women NA 18.2 NA01/31/13 Robemall Apparels Operates zovi.com that sells apparel online in India SAIF Partners; Tiger Global Management 10.0 C01/29/13 ConnectQuest An application that provides social networking, eCommerceand personal and business collaboration servicesNA 0.5 NA01/25/13 nextel BusinessIntelligence SolutionsProvides cloud-based business intelligence (BI) solutions formail-order and online retailersSeedcamp 0.1 NA
  • 50. 50Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round01/23/13 Local Orbit Provides customized websites with eCommerce, marketingand management tools for small businesses andorganizations building local food supply chainsNA $0.1 NA01/21/13 Bellabox Handpicks and delivers sample beauty products based on theclients personal profile (based in Singapore)Apex Capital Partners; Monash PrivateCapital; Square Peg Ventures1.4 A01/18/13 iBOVIN An online platform to sell meat products Starquest Capital 0.5 A01/18/13 My Flash Trash Operates an online jewelry boutique (based in the UK) NA 4.9 NA01/16/13 Fanplayr A multi-channel coupon platform for eCommerce sites toreach, influence and monetize social consumers in traditionaland social media channelsDenali Capital Managers 2.0 NA01/16/13 UpCity A search engine optimization software and education platformthat delivers reporting and insights for small business ownersHarris Preston & Partners; DaylightPartners; FireStarter Fund; I2A Fund2.0 B01/15/13 Ooberstock Offers online beverage wholesale services NA 1.0 B01/15/13 TinyPass Operates an enterprise-level eCommerce paywall softwareplatform that helps sites to charge for access to contentNA 1.3 NA01/14/13 The Hut Group A multi-website online retailer, marketing and selling fastmoving consumer goodsArtemis Fund Managers; River IslandClothing14.5 NA01/13/13 Zibaba An eCommerce platform, enabling small and medium-sizedbusinesses to sell, share and advertise products throughFacebookNA 3.5 NA01/11/13 Adore Me.com Operates a lingerie website that offers intimates and hosieryfor women at affordable qualityNA 8.5 NA01/11/13 Mister Spex Operates as an online retailer of glasses, sunglasses andcontact lensesScottish Equity Partners; DN Capital;Xange Private Equity20.8 C01/10/13 Mavshack Provides Internet services for video-on-demand NA 0.2 NA
  • 51. 51Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce FinancingsSource: CapitalIQ and Siemer Proprietary ResearchAmountDate Company Description Investors Raised ($mm) Round01/10/13 Zalora Operates an online fashion and lifestyle retail marketplace formen and women (based in Thailand)Tengelmann Ventures $26.4 NA01/09/13 Soldsie A payment system enabling merchants to monetize theirFacebook page by allowing customers to purchase throughcommentse.ventures; 500 Startups 1.0 NA01/09/13 Dapu.com Operates an online shopping portal for home textile items NA 3.0 NA01/07/13 Namshi InternationalServicesOperates Namshi.com, an online shopping website forfashion and footwear productsSummit Partners 1.0 NA01/07/13 Greenling Online grocery store providing the home delivery of organicand local produceNA 3.5 B01/04/13 LM2 Group Retails alarm and security equipment online (based in France) NA 0.3 NA01/04/13 Chrono WatchCompanyOperates as an importer and dealer of luxury lifestyletimepieces for men and women in India, through itseCommerce websiteNA 1.8 A01/04/13 Rock Paper Photo Sells music, sports, fashion and performing arts-relatedphotographs onlineNA 3.1 NA01/03/13 Clear Demand Delivers a price strategy optimization solution for brick andmortar retail and eCommerce marketsNA 0.8 NA01/01/13 Wantable Operates a website that provides womens make-up andfashion eCommerce servicesNA 0.8 NA
  • 52. 52Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA05/23/2013 BlueFly Clearlake Capital Group $7.6 0.1x NA05/10/2013 Angeliebe Kenkou Corporation 3.0 NA NA05/03/2013 Schmid Profi SmartGuy Group 1.4 0.1x NA04/29/2013 Juzz1 Holdings Polaris Network 4.3 NA NA04/17/2013 Heppo Footway Group 6.5 0.4x NA03/04/2013 Torpedo7 The Warehouse Group 41.5 NA NA03/01/2013 CBS Bizhub, Panpages KV Asia Capital 38.9 NA NA01/31/2013 College Book Rental CBR Funding 3.0 NA NA01/18/2013 Santessima E.Leclerc 0.4 NA NA01/07/2013 Lemonline Oy Soprano Oyj 0.1 NA NA12/27/2012 Silver.com JM Bullion 0.9 NA NA12/05/2012 Redcats USA Charlesbank Capital, Webster Capital 525.0 NA NA11/08/2012 Kayak Software priceline.com 701.6 2.3x 30.6x11/07/2012 50 Below Sales & Marketing ARI Network Services 5.0 NA NA10/31/2012 DSNR M.A.O.M. 25.7 NA NA10/26/2012 Virgindiamond KAJIN 0.3 0.2x NA10/25/2012 Versandapotheke DocMorris Zur Rose 32.7 0.1x NA10/03/2012 Monnier Frères Groupe Louis Delhaize NA NA NA09/25/2012 Beijing Redbaby Information Tech Suning Appliance 66.0 NA NA08/31/2012 Traders Library John Wiley & Sons 1.5 NA NA08/24/2012 WineOnline Marketing Vida Ventures 4.8 NA NA08/09/2012 Ediets.com As Seen On TV 12.4 0.6x NM07/16/2012 Fosa Marketing 1 Utopia Berhad 1.0 NA NA07/09/2012 Flying Brands Jersey Choice Marketing 4.5 0.7x NA
  • 53. 53Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA06/18/2012 e-tabinet.com NCXX $10.7 15.4x NA06/15/2012 IPEXCO Parta Dialogue NA NA NA06/08/2012 Wuaki.TV Rakuten 18.7 NA NA06/05/2012 Australian Natural Brands Heritage Brands 2.0 NA NA06/04/2012 1-800 Contacts WellPoint 900.0 2.3x NA06/04/2012 Grupa Onet Ringier Axel Springer Media 404.5 NA NA06/02/2012 ratioform Verpackungen Takkt 254.5 2.5x 9.3x05/31/2012 MarketNet Bridgeline Digital 1.3 0.5x NA05/24/2012 DirectStar TV Red Ventures 105.6 NA NA05/24/2012 PowerReviews Bazaarvoice 127.8 10.7x NM05/21/2012 Le Bouquet Nantais Bloom Trade 0.5 0.2x NA05/16/2012 Amadesa LivePerson 10.3 NA NA05/08/2012 homeLOFT, Leather Groups.com Luxeyard 0.1 NA NA05/01/2012 LovingEco JP Selects 1.0 NA NA05/01/2012 EasyLink Services OpenText 309.5 1.7x 7.3x04/30/2012 FlavoredCondoms.org Tastees Condoms NA NA NA04/18/2012 Gilt Groupe Firsthand Capital Management NA NA NA04/17/2012 Angeliebe Kenkou 3.7 0.1x NA04/13/2012 Greners.com Growlife 0.5 NA NA04/09/2012 Gilt Groupe Firsthand Capital Management NA NA NA04/09/2012 UL EduNeering Underwriters Laboratories 14.5 NA NA03/12/2012 fotokasten Elanders 12.5 0.6x NA03/01/2012 CustomCall Data Systems Enghouse Systems 7.3 NA NA
  • 54. 54Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA02/28/2012 Shouke The Net-A-Porter Group $10.5 NA NA02/27/2012 bol.com Koninklijke Ahold 453.1 1.0x NA02/22/2012 eOpulence Luxeyard 0.1 NA NA02/17/2012 Monexa Solutions PenderFund Capital, Ansera Capital 4.4 NA NA02/09/2012 eTree Marketing Private Flipkart Online Services 25.0 NA NA02/06/2012 Adku Groupon 10.0 NA NA01/13/2012 Buckaroo Intrum Justitia 52.4 8.0x NA01/02/2012 Gutscheine.de Mediengruppe 3.9 0.1x NA12/31/2011 Jump On It LivingSocial 62.3 NA NA12/15/2011 CryptoLogic Amaya Gaming Group 16.8 0.6x 5.3x12/07/2011 Wiggle Bridgepoint Capital Group 313.7 2.3x 19.0x12/01/2011 Traveldoo Egencia UK 33.7 NA NA11/28/2011 Systems@Work Pte Trustpay 77.8 NA NA11/23/2011 EQSN iomart 3.8 NA NA11/09/2011 RTP The Active Network 21.5 NA NA11/08/2011 Kobo Rakuten 315.0 NA NA10/27/2011 RueDuCommerce Alta Penthievr 106.8 0.3x 9.2x10/01/2011 L&S Retail Ventures CafePress 15.3 NA NA10/18/2011 SiteScanner Europe IP Label 6.2 NA NA10/17/2011 Just Eyewear Coastal Contacts 0.6 NA NA10/10/2011 MBL Guernsey Sainsburys Supermarkets 1.6 NA NA10/07/2011 Keynote DeviceAnywhere Keynote Systems 89.8 4.5x NM10/01/2011 Fashion Walker Fashion-Co-Lab 14.3 0.1x NA
  • 55. 55Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA09/30/2011 Bugeyeparts.com Citadel EFT NA NA NA09/21/2011 Play Limited Rakuten 38.7 NA NA09/21/2011 e-tabinet.com Fisco Capital 8.4 10.2x NA09/19/2011 Pipfrog Soprano Oyj 0.4 NA NA09/15/2011 Cardpool Blackhawk Network 42.3 NA NA09/15/2011 One eCommerce Corporation Islet Sciences 0.3 NA NA09/08/2011 Appchee Applications eBay 20.0 NA NA09/07/2011 JigoCity FriendFinder Networks NA NA NA09/06/2011 WineDirect WineDirect 13.5 0.7x NA08/24/2011 Raet CVC Capital Partners 575.9 3.0x NA08/23/2011 Nexify ePals Corporation 2.7 NA NA08/23/2011 d&shop GS Home Shopping NM NM NM08/23/2011 S&G Properties GNC Holdings 21.0 0.5x NA08/08/2011 Plimus Great Hill Partners 115.0 NA NA08/05/2011 Garden King Bradley Planters Garden Centre 2.6 NA NA08/05/2011 Wishlist Holdings Qantas Frequent Flyer 11.5 0.4x NA07/19/2011 Zeus Technology Riverbed Technology 140.0 NA NA07/14/2011 Womens Apparel Group Distinctive Apparel 11.3 NA NA07/05/2011 HOH Home Of Hardward getgoods.de 4.3 NA NA07/05/2011 eBoutic.ch Maus Freres 25.4 0.6x NA06/30/2011 EchoSign Adobe Systems 80.0 NA NA06/09/2011 DigiMark Mobivity Holdings 1.5 NA NA05/31/2011 Koovs Marketing Consulting BenefitsPLUS Media Pvt. NA NA NA
  • 56. 56Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA05/27/2011 AsSeenOnTV.com As Seen On TV $2.3 NA NA05/27/2011 CROWN JEWEL Start Today 12.4 1.5x NA05/17/2011 Direct EDI SPS Commerce 9.8 2.2x 11.5x05/13/2011 SGV Medical Supplies Liberator Medical Holdings 0.5 NA NA05/13/2011 Ciashop IdeiasNet 6.1 NA NA05/12/2011 NetShops Hyperion 1.3 NA NA05/10/2011 FineStationery 1-800-Flowers.com 3.3 0.3x NA04/28/2011 Tretti CDON Group 47.8 0.6x 11.8x04/05/2011 BoaCompra Universo Online 2.8 NA NA03/30/2011 redcoon Media-Saturn 197.0 0.4x NA03/30/2011 CJ-LINX Mountain Peace Promotion NA NA NA03/27/2011 GSI Commerce eBay 2,421.4 1.7x 20.5x03/23/2011 drugstore.com Walgreen 402.8 0.8x 51.4x03/22/2011 Partsearch Technologies Best Buy 6.4 NA NA03/21/2011 Tiny Prints Shutterfly 357.2 4.1x NM03/17/2011 Active Nutrition Bringwell 3.1 0.8x NA03/09/2011 Lamfis Proguard Acquisition 0.3 0.1x NA03/04/2011 Antidot Sudinnova, CIC Vizille Capital NA NA NA03/03/2011 Adsparq Mobivity 7.4 NA NA03/03/2011 eReinsure.com Lots Intermediate 37.0 NA NA02/25/2011 China Healthcare Golden Meditech Holdings 17.9 NA NA02/16/2011 HauteLook Nordstrom 191.7 1.9x NA02/15/2011 Kiddicare.com Wm. Morrison Supermarkets 113.8 1.9x NA
  • 57. 57Spring 2013Siemer eCommerce ReportSelect Precedent eCommerce TransactionsSource: CapitalIQ and Siemer Proprietary Research(figures in millions of $USD) EV / LTMDate Announced Target Acquirer Implied EV Revenue EBITDA02/14/2011 Hocks.com HealthWarehouse.com $0.9 0.2x NA02/14/2011 Candid Global Resources HK Aspire International 3.6 NA NA02/10/2011 Clout Shoppe Singapore Post 0.2 NA NA02/09/2011 Alog Data Centers do Brasil Equinix, Riverwood Capital 133.0 NA NA02/09/2011 PlaySpan CyberSource 202.0 NA NA02/04/2011 BetterBraces.com DJO Opco 2.1 NA NA02/02/2011 Bajaao.com JMD Telefilms Industries 1.1 NA NA01/31/2011 RUM21 CDON Group 1.9 1.1x NA01/27/2011 Web Merchants Liberator 2.8 NA NA01/20/2011 LOVEFiLM Amazon.com NA NA NA01/14/2011 webloyalty.com Affinion 296.3 1.4x 6.4x01/11/2011 NetOnNet Waldir AB 70.5 0.2x 25.8x01/05/2011 Fanatics GSI Commerce 276.9 2.0x 14.5xMean $100.9 2.0x 16.7xMedian $11.3 0.7x 11.7x
  • 58. Contact InformationSiemer & Associates, LLC ● Member FINRA/SIPC1333 2nd Street, Suite 600Santa Monica, CA 90401Phone: (310) 861-2100Fax: (310) 861-2125www.siemer.com