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Software 2018: Where Are We Now and Where Are We Going?

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Initially presented at CloudNY as follow up to last year’s Software 2017, this year’s presentation—authored by Battery’s Neeraj Agrawal and Logan Bartlett–provides an update on the shifting software landscape and just where things are headed.

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  • @Logan Bartlett Wow, thats quite a lot. Thanks for sharing these details. Of the companies of note that you have listed Australia seems to have many of them. Other major geography is Europe
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  • @ThiyagaRajan Maruthavanan (Rajan) Others that include: Public SaaS businesses - Adyen was founded in the Netherlands ($12B+ EV) - Talend was founded in France ($1.7B EV) - Wix was founded in Israel ($4.3B EV) - Xero was founded in New Zealand ($4.6B EV) - Zendesk was founded in Copenhagen, Denmark ($5.9B EV) Private companies of note include - Campaign Monitor (founded in Australia) - Canva (founded in Australia) - Freshdesk (founded in India) - Front (founded in Australia) - Hootsuite (founded in Canada) - Intercom (founded in Ireland) - SafetyCulture (founded in Australia) Few acquisitions of note (not SaaS but software) - Hybris was Germany ($1.3B acquisition by SAP in 2013) - Neolane was France ($600M acquisition by Adobe in 2012) - Qlik was founded in Sweden ($3B take private by Thoma Bravo in 2016) - SiteCore was founded in Denmark ($1.1B acquisition by EQT in 2016)
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  • @ThiyagaRajan Maruthavanan (Rajan) Slide 50 would definitely indicate an acceleration of funding into other markets. It's not entirely a new concept though
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  • Very good set of slides. Kudos for putting this together. Apart from Atlassian (Australia) and Shopify(Canada) rest the entire Saas industry is US based. Are you noticing any global tailwinds (EU, Asia companies) in Saas ?
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Software 2018: Where Are We Now and Where Are We Going?

  1. 1. Battery Ventures | 1 QUIET EXPERTISE THAT SPEAKS VOLUMES. VENTURE + GROWTH | PRIVATE EQUITY 2018 Software 2018 Neeraj Agrawal Logan Bartlett
  2. 2. Battery Ventures | 2 2018 Disclaimers This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with such verbal or written comments, is referred to herein as the “presentation.” This presentation is being provided for informational purposes only. Nothing herein is or should be construed as investment, legal or tax advice, a recommendation of any kind or an offer to sell or a solicitation of an offer to buy any security. This presentation does not purport to be complete on any topic addressed. The information in this presentation is provided to you as of May 3rd unless otherwise noted and Battery Ventures does not intend to update the information after its distribution, even in the event the presentation becomes materially inaccurate. Certain information in this presentation has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. Certain logos, tradenames, trademarks and copyrights included in the presentation are strictly for identification and informational purposes only. Such logos, trade names, trademarks and copyrights may be owned by companies or persons not affiliated with Battery Ventures and no claim is made that any such company or person has sponsored or endorsed the use of such logos, trade names, trademarks and copyrights in this presentation. This presentation includes various examples of companies in which Battery Ventures has invested. These examples are included as illustrations of various investment strategies. For a complete list of all companies in which Battery Ventures has invested, please visit here. Information regarding the specific performance of prior investment recommendations is available upon request. Past performance is not evidence of future results and there can be no assurance that a particular Battery Ventures Fund will achieve comparable results to any other Battery Ventures Fund. There can be no assurance that the investment objectives of a Battery Ventures Fund will be achieved or that the investment strategies utilized will be successful. The information contained herein is based solely on the opinions of Neeraj Agrawal and Logan Bartlett and nothing should be construed as investment advice. The anecdotal examples throughout are intended for an audience of entrepreneurs in their attempt to build cloud-focused businesses and not recommendations or endorsements of any particular business.
  3. 3. Battery Ventures | 3 WHY WE’RE LONG SOFTWARE
  4. 4. Battery Ventures | 4 2018 0% 5% 10% 15% 20% 25% 30% 2016 2017 2018 2019 2020 2021 IT Growth Rate (Worldwide) Software Growth Rate (Worldwide) SaaS Growth Rate (Worldwide) US GDP Overall software spend continues to grow SaaS CAGR: 19.6% Software CAGR: 8.5% US GDP CAGR: 2.3% IT CAGR: 3.3% 8.5% 3.3% 2.3% 2016-2021 CAGR SaaS spend 2016-2021 CAGR Software spend 2016-2021 CAGR Total IT spend 2016-2021 CAGR Total US GDP vs. vs. vs. 19.6% Source: Gartner Market Databook, 4Q17 Update; Forrester; PwC; IMF
  5. 5. Battery Ventures | 5 2018 Software has consistently grown through different eras & delivery models $0B $100B $200B $300B $400B $500B $600B 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 Homegrown/Internal Software On-Prem + Mainframe SaaS Global software industry revenue Source: Battery Ventures; Forrester; Gartner; the Yankee Group; BEA.gov; Input Research Note: Homegrown/Internal Software is estimate based on hours worked
  6. 6. Battery Ventures | 6 2018 Software and IT have had a strong impact on productivity $0 $10 $20 $30 $40 $50 $60 $70 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 USDollars Productivity - GDP Per Hour Worked in the US 52% 49% 46% 17% 7% 24% 31% 44% 30% 1974-1995 1995-2004 2004-2012 IT Increased Workforce Skills Other IT's Contribution to Productivity Growth Source: OECD.org; “The U.S. Software Industry: An Engine for Economic Growth and Employment”, SIIA, 2014 Note: Constant currency for 2010 USD
  7. 7. Battery Ventures | 7 2018 Software has had a demonstrable impact on employment The US software industry supports nearly 10 million jobs 2.5M directly employed in the software industry 7.2M software-supported indirect and induced jobs $$The average annual wage for software developers is > 2x the average annual wage for all US jobs Source: “The $1 Trillion Economic Impact of Software”, BSA | The Software Alliance, June 2016
  8. 8. Battery Ventures | 8 2018 The five forces of software’s accelerating growth Software is infiltrating what were once niche markets Every company is becoming a software company Software is displacing hardware Software is displacing services & labor Existing software markets are growing over time1 2 3 4 5
  9. 9. Battery Ventures | 9 2018 Existing software markets are growing over time * Denotes a current or former Battery portfolio company $17.7B $19.2B $20.7B $22.5B $24.3B 2016 2017 2018 2019 2020 $31.6B $33.9B $36.3B $39.0B $41.8B 2016 2017 2018 2019 2020 $31.0B $36.5B $40.0B $50.7B $59.6B 2016 2017 2018 2019 2020 Global CRM Market Global ERP Market Global BI Market Financials Expense Management Procurement Application Monitoring IT Service Management Platform-as- a-Service * * Left Chart Source: Zion Market Research Middle and Right Chart Source: Dart Consulting * Denotes a current or former Battery Portfolio Company. Past performance does not guarantee future results 1
  10. 10. Battery Ventures | 10 2018 Software is infiltrating what were once niche markets * * Denotes a current or former Battery portfoliocompany Patient CollectionsPharma/Biotech Illustrative Vertical Market Examples Cap Table Mgmt * Illustrative Hyper-Focused Business Processes Examples Email Marketing Illustrative SMB Market Examples PizzaMortgage LendingTours/Activities Disaster Awareness Credit Checks SaaS Optimization Scheduling Meetings Site Reliability EngSales Process Mgmt Application Integration Payroll/Benefits Software Project Mgmt Expense MgmtSales Automation * * Denotes a current or former Battery Portfolio Company. Past performance does not guarantee future results 2
  11. 11. Battery Ventures | 11 2018 Software is displacing hardware (1) International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker (2) Bureau of Labor Statistics. Number of jobs in 2016. Job outlook calculated as the projected percent change in employment from 2016 to 2026. The average growth rate for all occupations is 7% Number of jobs: 1,256,200 Job outlook, 2016-2026: 24% Number of jobs: 73,600 Job outlook, 2016-2026: 5% Software Engineers Hardware Engineers Software engineers are in high demand(2) $47 $52 $58 $65 $72 $81 $62 $61 $60 $58 $57 $56 $40B $50B $60B $70B $80B $90B $100B 2017 2018 2019 2020 2021 2022 Worldwide spending: cloud vs non-cloud IT infrastructure(1) Cloud IT Infrastructure Non-Cloud IT Infrastructure By 2020, spending on cloud IT infrastructure will surpass spending on non-cloud IT infrastructure 2017-2022 CAGR Cloud IT Infrastructure: Non-Cloud IT Infrastructure: 2017-2022 CAGR 11.7% (2.7%) 3
  12. 12. Battery Ventures | 12 2018 Software is displacing services & labor4
  13. 13. Battery Ventures | 13 2018 Date Acquirer Target Total Deal Amount 8/8 $1.6B 12/26 $1.1B 10/9 $820M 9/5 $712M 10/16 $510M Every company is becoming a software company Date Acquirer Target Total Deal Amount 12/9 $710M Date Acquirer Target Total Deal Amount 6/15 $4.0B 8/3 $2.7B 4/20 $1.3B 5/19 $687M 10/8 $675M 4/27 $600M 8/3 $500M Date Acquirer Target Total Deal Amount 12/6 $2.8B 8/1 $2.4B 7/1 $1.5B 1/25 $970M 11/14 $915M 6/21 $900M 2/22 $800M 10/31 $632M 3/11 $581M 2014 2015 2016 2017 Source: 451 Research. Includes all announced software acquisitions by historically non-technology buyers with transaction value over $500M from 11/2014 through 12/2017 * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns * 5
  14. 14. Battery Ventures | 14 2018 $0B $100B $200B $300B $400B $500B $600B 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ~5 Global software industry revenue We’re still in the early innings of the software revolution Source: Battery Ventures; Forrester; Gartner; the Yankee Group; BEA.gov; Input Research
  15. 15. Battery Ventures | 15 2018 $0 $1T $2T $3T $4T $5T $6T $7T 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 ~5 Global software industry revenue We’re still in the early innings of the software revolution Source: Battery Ventures; Forrester; Gartner; the Yankee Group; BEA.gov; Input Research TODAY
  16. 16. Battery Ventures | 16 2018 $0 $1T $2T $3T $4T $5T $6T $7T 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 ~5 Global software industry revenue Assumed 2017-2050 CAGR Global Software Revenue ~5% We’re still in the early innings of the software revolution $1 TRILLION Source: Battery Ventures; Forrester; Gartner; the Yankee Group; BEA.gov; Input Research TODAY
  17. 17. Battery Ventures | 17 SOFTWARE IN 2018
  18. 18. Battery Ventures | 18 The Public Market
  19. 19. Battery Ventures | 19 2018 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 SaaS Index S&P 500 Nasdaq Dow Jones SaaS companies are well outpacing broad-based indices 746% 266% 182% 180% • While the typical market indices are significantly up since 2008, an index of SaaS companies has outperformed all of them by more than 2.5x in the same time (up 746% since 2008) Source: Capital IQ Data as of 3/31/2018 Indexed stock price since 2008
  20. 20. Battery Ventures | 20 2018 SaaS multiples recently traded up to an all-time high 3.4x 3.3x 3.2x 1.6x 1.9x 2.4x 3.1x3.1x3.2x 2.9x 3.3x 3.8x 4.5x 4.4x 3.0x 4.1x 4.6x 4.8x 4.9x 4.4x 4.9x 5.3x 6.2x 6.5x 5.6x 5.4x 4.1x 4.4x 4.4x 4.7x 4.2x 4.5x 3.5x 4.4x 4.9x 4.3x 4.8x 5.8x 5.6x 5.7x 6.6x 0x 1x 2x 3x 4x 5x 6x 7x 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • SaaS multiples have traded up since a recent low-point in the beginning of 2016, recently crossing the previous all-time record for NTM revenue multiple of 6.5x, which was set in the middle of 2013 Source: Capital IQ Data as of 3/31/2018 Median NTM Revenue Multiple
  21. 21. Battery Ventures | 21 2018 Public markets have shifted to reward growth and profitability LTM Revenue Growth LTM Growth + EBITDA Margin R² = 0.3042 0x 5x 10x 15x 20x 25x 0% 50% 100% 150% TEV/LTMRev LTM Growth Rate 12/31/2007 R² = 0.4604 0x 5x 10x 15x 20x 25x 30x 0% 50% 100% 150% TEV/LTMRev LTM Growth Rate 12/31/2012 R² = 0.0117 0x 5x 10x 15x 20x 25x 0% 50% 100% TEV/LTMRev LTM Growth Rate + EBITDA Margin 12/31/2007 R² = 0.2191 0x 10x 20x 30x 40x 0% 50% 100% 150% TEV/LTMRev LTM Growth Rate + EBITDA Margin 12/31/2012 R² = 0.6443 0x 5x 10x 15x 20x 0% 20% 40% 60% 80% TEV/LTMRev LTM Growth Rate + EBITDA Margin 12/31/2017 • Over the course of the last decade, we have seen the public markets shift from using growth as the primary metric for evaluating companies to a combination of growth and profitability • This shift is reflected in the correlations (R2) shown above – growth and EBITDA margin combined have gone from a near zero correlation with a company’s revenue multiple to being even more correlated than growth alone R² = 0.5524 0x 5x 10x 15x 20x 25x 30x 0% 20% 40% 60% 80% TEV/LTMRev LTM Growth Rate 12/31/2017 Source: Data from Capital IQ. Date in all charts is December 31st of prior year. Includes SaaS companies with LTM Growth >0% Does not include Castlight Health in 2015 and LogMeIn in 2018 due to material inorganic growth
  22. 22. Battery Ventures | 22 2018 (20%) (10%) 0% 10% 20% 30% 40% (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% UnleveredFCF%ofRevenue LTM Revenue Growth Rate The Rule of 40 has become a standard in the market with an understanding of the trade-off between growth and profit Companies with <40%: 4.7x 2018 EV/Revenue Multiple Companies with >40%: 9.3x 2018 EV/Revenue Multiple • This shift from a focus on growth to a focus on growth and profitability has been standardized around the concept of “The Rule of 40” – a company’s growth plus profit should be greater than or equal to 40% • This metric has clearly been priced into companies’ valuations, with businesses that exceed 40% trading at a revenue multiple of 9.3x EV/CY 2018 Revenue while companies with less than 40% trading at 4.7x EV/CY 2018 revenue Source: Capital IQ Data as of 3/31/2018
  23. 23. Battery Ventures | 23 2018 Public SaaS companies by Rule of 40 (as of 3/31/2018) 0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60%+ 2.4x 3.8x 5.1x 6.8x 8.0x 8.6x 10.8x 2.7x 3.1x 5.4x 6.6x 8.2x 8.6x 10.8x • Even with funding becoming a commodity for high burn startups, a healthy mix of growth and profitability clearly yields the highest multiples This holds true across all groupings of growth + profit * * * Median Average Source: Capital IQ Data as of 3/31/2018. Rule of 40 is calculated as LTM Growth Rate + Unlevered FCF Margin * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns CY 2018 Rev Mult *
  24. 24. Battery Ventures | 24 2018 $0M $406M $771M $1.2B $2.5B $1.6B $2.8B $1.3B $948M $1.7B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 was a solid year for IPOs and the highest of the last three years TotalAmountRaisedinIPO * * * * * * * * NM 6.6x 4.3x 6.2x 4.8x 7.1x 6.9x 5.7x 7.5x 6.9x NM 13% 15% 42% 19% 25% 24% 28% 29% 25% NM $97M $90M $161M $103M $105M $100M $94M $133M $131M NM $97M $145M $131M $123M $110M $113M $114M $150M $191M Median Statistics(1) NTM Rev Mult. NTM Rev Growth IPO Size ($M) NTM Rev ($M) • Software IPOs hit a three year high (both # and $) in 2017 after a particularly weak 2016 – and as we discuss in the update for Q1 2018, software IPOs have continued this trend in 2018 • As a cohort, the companies that went public in 2017 were larger (in terms of NTM revenue) than any group since 2008, indicative of the increased opportunity to delay IPOs (1) Revenue shown at the time of the IPO. Trading information as of first day close Source: Capital IQ. Inclusive of deals on major US stock exchanges * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns
  25. 25. Battery Ventures | 25 2018 IPO Date $ Raised Current ∆ from IPO IPO Date $ Raised Current ∆ from IPO IPO Date $ Raised Current ∆ from IPOEV Price EV Price EV Price 5/20 $131M $13.1B $124.59 633% 9/29 $238M $8.1B $49.11 207% 3/16 $221M $5.9B $43.98 159% 12/9 $462M $12.5B $53.92 157% 6/22 $150M $3.6B $38.18 155% 4/6 $187M $4.2B $39.85 134% 1/22 $175M $2.8B $20.55 47% 10/5 $133M $2.5B $45.62 153% 4/27 $225M $4.1B $21.58 44% 11/18 $78M $2.0B $35.43 254% 10/27 $146M $2.1B $39.21 131% 10/18 $192M $3.0B $43.40 81% 6/18 $100M $1.8B $38.90 178% 7/28 $95M $1.4B $48.12 167% 3/23 $126M $2.2B $34.14 144% 11/12 $70M $1.4B $42.15 163% 9/22 $96M $1.2B $28.34 77% 11/16 $240M $2.1B $20.69 72% 6/25 $74M $1.4B $40.85 240% 9/15 $90M $1.0B $36.60 205% 5/24 $75M $1.8B $25.18 110% 7/16 $103M $1.2B $25.57 60% 10/26 $116M $1.5B $32.44 47% 4/23 $87M $537M $17.38 2% 11/14 $131M $1.3B $28.14 76% 6/25 $56M $504M $15.65 96% 4/12 $116M $1.2B $12.65 15% 11/9 $80M $1.2B $32.66 63% Avg. $134M $3.7B 183% Avg. $135M $2.9B 156% Avg. $148M $2.2B 78% Median $94M $1.6B 160% Median $133M $2.1B 166% Median $131M $1.8B 67% Software companies continue to perform well in the public markets with all companies up from IPO prices 2015 2016 2017 • On average, the market capitalization of public software companies have increased between 70-75% every year since going public, with companies going public in 2015 having grown their market cap’s by 217% on average since the IPO • The largest positive delta goes to Shopify, which has increased 633% since it’s IPO in 2015, led by continued 75%+ growth at $1B+ in ARR Source: Capital IQ. Prices and Market Cap as of 3/31/2018. Prices and Market Cap for Apigee and Xactly as of date of acquisition. MuleSoft acquisition not closed as of 3/31/2018 * Denotes a current or former Battery Portfolio Company. Past performance does not guarantee future results * *
  26. 26. Battery Ventures | 26 The M&A Market
  27. 27. Battery Ventures | 27 2018 $28.9B $16.7B $45.4B $54.9B $44.5B $51.1B $63.5B $63.8B $79.5B $56.3B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Software M&A since 2008 • After a record year in 2016, software M&A was down from $79.5B to $56.3B in 2017, returning back to the level seen from 2010-2013 Source: 451 Group Software acquisitions over time
  28. 28. Battery Ventures | 28 2018 $17B $7B $3B $2B $2B $7B $5B $3B $8B $18B $11B $8B $7B $11B $23B $12B $9B $13B $14B $8B $2B $19B $13B $15B $11B $14B $28B $10B$9B $17B $22B $14B $10B $22B $33B $11B $12B $11B $20B $14B Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 The quarterly numbers for 2017 show a lighter beginning of the year followed by a strong Q3 and Q4 2008 2009 2010 2012 2013 2014 2015 2016 2017 • Following two straight nearly record breaking quarters in Q2 and Q3 2016, we saw three consecutive lackluster quarters in software M&A to end 2016 and begin 2017 before it ultimately ticked up at the end of the 2017 Source: 451 Group Quarterly M&A amounts
  29. 29. Battery Ventures | 29 2018 Source: Qatalyst Partners * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns Thoma&VistaOtherPEOtherStrategic Oracle,SAP,Microsoft, Salesforce,IBM,Cisco The 2017 M&A slowdown can be seen across both strategic and PE activity Selected M&A Greater Than $500MM Since January 1, 2015 January ‘15 / / / / / Legend On-Premise Cloud June ‘17June ‘16June ‘15 January ‘16 January ‘17 January ‘18 / / / / / / / / / / / / / / / / / / / / / / / / `/ / / / /` / / / / / / / / / / / / / / / / / / / / / / Education Business / / / / / / / Communi ties & Sports / / / % Cloud (1) 88% 51% 37% <1% / / / / • Software M&A has lagged on all fronts since its high in 2016, with the biggest delta coming from an absence of acquisitions by Private Equity firms not named Thomas Bravo or Vista Equity * * *
  30. 30. Battery Ventures | 30 2018 0x 1x 2x 3x 4x 5x 6x 7x 8x 9x 10x '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 LTMRevenueMultiple Private Equity Strategic 23% The gap between strategics and private equity in both amount and valuation is closing Software acquisitions by acquirer type Revenue multiples of acquisitions 266% • PE firms are raising larger funds in order to continue to acquire high quality software companies at the high multiples that the market expects Source: 451 Research Group. Includes deals with announced values in the Application Software and Information/IT Management industries 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Percentageofaqusitions($) Private Equity Strategic
  31. 31. Battery Ventures | 31 2018 Part of the reason for a closing gap between strategics and private equity is that the cloud can make strategic acquisitions more difficult… Source: Spurrier Capital Partners
  32. 32. Battery Ventures | 32 2018 …But the cloud is perfect for private equity What makes software companies attractive targets for PE firms? Strong future revenue visibility Deals with customers are structured to be contractually recurring, giving visibility into future revenue High gross margin Software gross margins at scale are typically north of 80% Cash-flow / Working capital dynamics Enterprise software will typically have long-term agreements with the cash paid up-front Ability to handle debt Due to the cash-flow dynamics + visibility into revenue, lenders are usually willing to provide large amounts of debt Low requirements for capital investment Little on-going investment is required once the product is built Scalability Products are extremely scalable, with low deployment and upgrade costs Stickiness The high-switching costs inherent to enterprise software typically mean you have to do a lot to lose customers Number of PE software buyouts in the US • The number of software buyouts in the US has continued to grow at a steady pace since 2009, almost ticking over 150 for 2017 Chart Source: 451 Research Group 7 5 20 23 41 44 37 28 52 56 67 75 102 86 134 150 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
  33. 33. Battery Ventures | 33 2018 Not all signs point away from strategic cloud M&A – there is a race for cloud revenue and a shortage of enterprise targets of scale • The large strategic acquirers have used M&A to bolster cloud revenue through M&A varying degrees, but there are now a shortage of acquisition targets of scale and a need by strategics to continue to grow recurring revenue  this could prove a formula for more cloud M&A * Source: Qatalyst Partners * Denotes a current or former Battery Portfolio Company. Past performance does not guarantee future results
  34. 34. Battery Ventures | 34 2018 Additionally, the old guard of strategics are under threat in their core business from a number of vectors and may use M&A for both offense and defense • The cloud enabled SaaS companies to go around the traditional IT buying process, which has led to a proliferation of solutions that are attacking legacy vendors from all angles  this could lead to strategic M&A to both defend ground and attack white spaces Source: Qatalyst Partners * Denotes a current or former Battery Portfolio Company. Past performance does not guarantee future results * * * * * *
  35. 35. Battery Ventures | 35 2018 1. Tax repatriation holiday • Companies will pay 8.0 – 15.5% instead of 35% to repatriate foreign cash holdings to the US ✓ Key software acquirers have ~$400Bn in foreign cash that could be repatriated 2. Corporate tax rate reduction • Corporate tax rate reduced from 35% to 21% ✓ Incremental cash flow available to large serial acquirers from reduced tax bill ― Disincentivizes multi-national corporations from re- domiciling or housing revenue generating operations offshore  Potential multiple re-rating for tax-paying public and private companies  Net operating losses held by potential targets become less valuable 3. Limitations on Business Interest Expense Deductibility • Deductions for net business interest expense limited to 30% of an amount that approximates EBITDA  Debt-financed acquisitions become less attractive  Sponsor-backed leveraged buyouts require greater equity check Source: Capital IQ, PitchBook and company filings (1) Market data current as of March 2018. (2) Assumes a 30% M&A premium on public SaaS companies and 50% premium on private SaaS assets. (3) Assumes 10% repatriation tax on foreign cash reserves. And the new tax laws could serve as a potential catalyst for M&A in 2018 Implications of New Tax Laws for M&A 2 3 1 Post-tax Cash Firepower of Key Software Acquirors(3) $1BN+ Public and Private High Growth Software with M&A Premium(1)(2) ~$400Bn ~$400Bn • Between potential repatriation and a reduction in the corporate tax rate, the large strategic software acquirers could see a collective ~$400B of new cash on their balance sheets • To put that into perspective, ~$400B is enough to acquire 50 leading software companies Source: Qatalyst Partners * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns * * *
  36. 36. Battery Ventures | 36 The Venture Market
  37. 37. Battery Ventures | 37 2018 Software investing has more than doubled as a percentage of the venture industry since 2008 18% 32% 35% 34% 41% 40% 47% 43% 49% 42% 82% 68% 65% 66% 59% 60% 53% 57% 51% 58% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Software Other • Software investing rose from 18% of total Venture dollars in 2008 to a high of 49% of Venture dollars in 2016 before falling back down to 42% in 2017 • The industry seems to have reached a new normal that began in 2012 with between 40-50% of total Venture dollars being deployed into software companies Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand Dollars by sector
  38. 38. Battery Ventures | 38 2018 Software companies being financed for the first time are meaningfully changing Source: Pitchbook Software Companies headquartered in the US. Company descriptors are all as of 5/2/2018 (not the date of first funding). Analysis is conducted on meaningful terms determined by Battery research. Singular and plural forms were combined for this analysis Decreasing Usage Term % of descriptions with term ∆ '08-17 2008 2017 1 solutions 4.1% 0.4% (91%) 2 networking 5.7% 1.1% (81%) 3 advertising 4.2% 1.2% (72%) 4 web 13.3% 4.4% (67%) 5 engine 4.1% 1.5% (63%) 6 social 18.1% 7.4% (59%) 7 content 11.8% 5.1% (56%) 8 analysis 4.1% 2.0% (51%) 9 collaboration 4.1% 2.0% (51%) 10 video 8.3% 4.1% (51%) 11 media 5.9% 3.0% (48%) 12 search 5.1% 2.7% (48%) 13 sharing 4.7% 2.5% (48%) 14 services 36.2% 19.3% (47%) 15 games 9.4% 5.1% (45%) 16 interactive 3.3% 2.0% (40%) 17 online 25.9% 16.1% (38%) 18 marketing 7.4% 4.8% (35%) 19 platforms 3.3% 2.2% (33%) 20 sales 4.8% 3.6% (25%) 21 tools 12.1% 9.2% (24%) 22 community 6.3% 4.9% (24%) 23 enterprise 10.0% 7.9% (20%) 24 developers 3.3% 2.7% (19%) 25 management 17.2% 16.5% (4%) Total # of companies 663 856 Increasing Usage Term % of descriptions with term ∆ '08-17 2008 2017 1 ai 0.2% 2.7% 1,681% 2 machine 0.8% 9.1% 1,108% 3 artificial 0.9% 8.4% 829% 4 simplify 0.8% 4.8% 535% 5 algorithms 0.6% 3.5% 481% 6 learning 2.0% 10.7% 448% 7 insurance 0.8% 3.3% 334% 8 messaging 0.8% 3.0% 303% 9 3d 0.5% 1.6% 261% 10 threats 0.5% 1.6% 261% 11 intelligent 0.9% 3.2% 249% 12 saas 1.4% 4.2% 210% 13 risk 0.6% 1.8% 190% 14 smart 0.9% 2.6% 184% 15 global 0.9% 2.5% 171% 16 automate 2.7% 7.0% 158% 17 monitor 3.0% 7.4% 144% 18 insights 2.9% 5.8% 104% 19 payments 3.3% 6.5% 97% 20 security 4.4% 8.5% 95% 21 workflows 1.7% 3.2% 90% 22 analytics 5.1% 9.6% 87% 23 data 13.0% 23.9% 85% 24 cloud 5.0% 8.1% 62% 25 real-time 5.0% 7.2% 46% Total # of companies 663 856
  39. 39. Battery Ventures | 39 2018 $9.1B $5.8B $7.2B $11.9B $12.2B $15.2B $30.0B $32.5B $35.1B $32.0B 1,456 1,147 1,482 2,160 2,808 3,480 4,068 3,800 3,246 2,980 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 $0 $5 $10 $15 $20 $25 $30 $35 $40 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Capital Invested Deal Count In 2017, venture investing in software plateaued in terms of dollars invested and continued to decline in number of deals Number of dollars and deals into software businesses • In 2013, the software industry saw nearly 100% growth in capital invested. Since that jump, we have seen the industry plateau from a dollars invested standpoint – oscillating between (8%)-9% dollar growth • From 2009 until 2014, deal count increased by a CAGR of 29%, but since 2014 the number of software deals has declined by 10% a year on average Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand
  40. 40. Battery Ventures | 40 2018 $22.6B $16.6B $13.9B $53.2B To put venture software investing in perspective, Venture investment in 2017 was still well below the R&D of Microsoft, Alphabet and Amazon R&D spend in 2017 • While $32B of venture spend seems high, it pales in comparison to the overall R&D spend within the industry, led by Alphabet, Amazon, and Microsoft, which invested a $53.2B in R&D in 2017 Source: Capital IQ Venture investments in software in 2017 $32.0B
  41. 41. Battery Ventures | 41 2018 123 94 93 122 126 131 171 187 138 147 0 50 100 150 200 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 142 92 153 135 154 162 195 167 171 190 0 50 100 150 200 250 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 330 208 219 290 305 319 382 395 375 417 0 50 100 150 200 250 300 350 400 450 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 568 431 494 666 715 799 990 943 939 932 0 200 400 600 800 1,000 1,200 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 281 308 510 933 1,491 2,050 2,312 2,088 1,609 1,271 0 500 1,000 1,500 2,000 2,500 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 • Unpacking the number of deals by stage shows growth across the board since 2008 with by far the largest growth in seed deals (352% growth ’08-17), but a steady decline since 2014 (82% decline ‘14-17) • Other stages are up somewhere between 64% (Series A growth ‘08-17) at the highest and 26% (Series B growth ‘08-17) at the lowest • Every stage peaked in either 2014 or 2015 with the exception of Series B, which continues to rise Unpacking the data by stage shows that most rounds are flat in terms of number of deals with the notable exception of seed rounds, which declined significantly Seed Series A Series B Series D+Series C Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand ’08–’17 growth: 4.5x ’08–’17 growth: 1.6x ’08–’17 growth: 1.3x ’08–’17 growth: 1.3x ’08–’17 growth: 1.2x Deal count
  42. 42. Battery Ventures | 42 2018 $2.0B$1.5B$1.5B $3.3B$3.0B$3.3B $11.7B $13.6B $15.5B $9.7B $0M $3B $6B $9B $12B $15B $18B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $1.7B $1.0B $1.5B $2.3B $2.0B $2.9B $5.6B $4.5B $5.4B $5.4B $0M $2B $4B $6B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $2.9B $1.5B $2.1B $3.0B$2.9B $3.6B $5.3B $6.3B $5.8B $7.7B $0M $2B $4B $6B $8B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $2.2B $1.6B$1.7B $2.7B $3.3B $3.9B $5.4B $5.8B $6.2B $6.9B $0.0M $2B $4B $6B $8B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $184M$185M$293M $595M $981M $1.6B $2.0B $2.3B $2.3B $2.3B $0M $1B $2B $3B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 All stages are up significantly in terms of dollars deployed annually since 2008, but recent trends show different stories for each stage Dollars invested Seed Series A Series B Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand ’08–’17 growth: 12.3x ’08–’17 growth: 3.1x ’08–’17 growth: 2.7x ’08–’17 growth: 3.1x ’08–’17 growth: 4.8x • Dollars deployed into Series A and B rounds have fairly consistently risen in each year while Seed and Series C rounds have flatten out • Series D+ deals have been the most manic – this stage largely drove the big jump in overall dollars deployed into software in 2014, the subsequent rise in 2015 and 2016 and the slight pull back in 2017 Series D+Series C
  43. 43. Battery Ventures | 43 2018 $16.7M $15.7M $16.2M $27.0M $23.6M $25.3M $68.3M $72.8M $112.6M $66.3M $0M $20M $40M $60M $80M $100M $120M '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $8.6M $7.0M $9.8M$10.3M$9.6M $11.2M $13.8M $15.8M $15.5M $18.4M $0M $5M $10M $15M $20M '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $3.9M$3.8M $3.4M $4.0M $4.6M$4.8M $5.4M $6.2M $6.6M $7.5M $0M $2M $4M $6M $8M '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $12.3M$11.2M$10.1M $17.2M $13.3M $17.9M $28.9M $27.2M $31.4M $28.5M $0M $5M $10M $15M $20M $25M $30M $35M '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $0.7M $0.6M$0.6M $0.6M $0.7M $0.8M $0.9M $1.1M $1.4M $1.8M $0M $1M $2M '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 • Rounds sizes have grown steadily across all stages of software investing since 2008 with Series As the lowest (89% growth ‘08-17) and Series D+ the highest (298% growth ‘08-17) • Since 2013, Series D+ rounds have followed the inconsistency of the late stage market with a big jump from ‘13-14 and ’15-16 followed by a big fall from ‘16-17 Round sizes have proven out a “flight to quality” with the average increasing fairly consistently across the board ’08–’17 growth: 2.7x ’08–’17 growth: 1.9x ’08–’17 growth: 2.1x ’08–’17 growth: 2.3x ’08–’17 growth: 4.0x Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand Average round size Series D+Series C Seed Series A Series B
  44. 44. Battery Ventures | 44 2018 168% Seed 281% Series A 261% Series B 314% Series C 378% Series D+ 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Seed Series A Series B Series C Series D or later As round and fund sizes have gone up so to have valuations • Valuation increases have tracked fairly consistently with the growth in average deal sizes • The later stages (Series C and D+) saw a dip in valuation in 2015 and 2016 that was then erased with the growth in valuations in 2017 Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand Median pre-money valuation indexed since 2008 Series D+
  45. 45. Battery Ventures | 45 2018 Interestingly, dilution in the seed stage is consistently up while dilution in all other rounds is down from the highs of 2008 and 2009 • The data around dilution shows that in the Seed stage round size outpaced valuation (leading to more employee dilution), while in all other stages valuation has outpaced round size – typically this will show the dynamics of supply vs. demand at each stage • In general, more dilution means less demand at a particular stage while less dilution means more demand Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand 12% 13% 12%12%12% 11%12% 16% 18% 19% 29%30% 28% 27% 24% 27% 24%24% 25%26% 28% 31% 29% 23% 24% 21% 24% 23% 24%24% 20% 23% 22% 17% 18% 17% 16%17% 21% 17% 16% 20% 18% 13% 15% 14% 12% 13%13% 11% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Seed Series A Series B Series C Series D+ Median dilution by round
  46. 46. Battery Ventures | 46 2018 Software investments in the US fell off considerably when unpacking that data vs. other core geographical markets Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand $8.5B $5.5B $6.7B $11.1B $11.3B $13.7B $27.3B $29.0B $31.9B $26.7B $608M $306M $503M $812M $901M $1.5B $2.6B $3.5B $3.2B $5.4B $9.1B $5.8B $7.2B $11.9B $12.2B $15.2B $30.0B $32.5B $35.1B $32.0B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 United States Europe, Canada and Oceania • The overall software market fell 9.7% in 2017 from the all-time high in the 2016, but this was outpaced by the fall in the US, which dipped 19.6% from 2016 Number of dollars into software businesses
  47. 47. Battery Ventures | 47 2018 $747M $424M $595M $1.3B $1.0B $1.4B $2.2B $3.4B $3.5B $3.5B $0M $1B $2B $3B $4B $5B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $2.5B $1.1B $1.5B $2.2B $2.2B $2.6B $3.6B $4.3B $6.0B $5.1B $0M $2B $4B $6B $8B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $4.3B $3.3B $4.0B $6.8B $7.0B $8.5B $20.2B $19.2B $20.9B $16.3B $0M $5B $10B $15B $20B $25B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Investments by US region show that most of the domestic pull-back was in the Bay Area New England Rest of US Bay Area Tri-State area • While other geos are still up since 2008, the growth in software investments since 2008 has been largely driven by Silicon Valley and the greater New York City area • More recently, the big jump in software investing from 2013 to 2014 and the slight pullback in 2017 was largely a result of the Bay Area ’08-’17 growth: 3.8x ’08-’17 growth: 4.7x ’08-’17 growth: 1.9x ’08-’17 growth: 2.0x $914M $685M$635M$742M $1.0B $1.2B $1.3B $2.1B $1.5B $1.7B $0M $1B $2B $3B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Dollars invested into different US geographies Source: Data from Pitchbook. Includes businesses with a headquarters in the United States
  48. 48. Battery Ventures | 48 2018 $874M $1.1B $1.0B $1.9B $2.2B $2.4B $9.4B $9.9B $11.3B $6.7B $0M $2B $4B $6B $8B $10B $12B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $1.2B $356M $491M $1.2B $759M $764M $2.1B $2.6B $4.0B $1.9B $0M $1B $2B $3B $4B $5B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 $3.4B $2.1B $3.0B $4.9B $4.9B $6.1B $10.8B $9.3B $9.7B $9.7B $0M $5B $10B $15B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 ’08-’17 growth: 2.8x $3.0B $1.9B $2.2B $3.0B $3.5B $4.4B $5.0B $7.2B $7.0B $8.5B $0M $5B $10B $15B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 The Bay Area pull-back was specifically in late stage deals in 2017 Series D+ Bay Area Rest of US Seed, Series A, B, C Bay Area Rest of US • While early stage investing both inside and outside the Bay Area is 2.8x higher since 2008, Bay Area early stage investing has been mostly flat-to-down since 2014, while the Rest of the US has marched fairly consistently higher • In Series D+ investments, the Bay Area has driven nearly all the growth since 2008 – while 2017 was down from a high of $11.3B in 2016, it still represents 7.6x growth since 2008 ’08-’17 growth: 2.8x ’08-’17 growth: 7.6x ’08-’17 growth: 1.6x Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand
  49. 49. Battery Ventures | 49 2018 Investment in software businesses in the core markets outside of the US has continued to climb higher in recent years • After a couple of years of relative stagnation, VC investment into European, Canadian and Oceanic software companies almost doubled in 2017 to $5.4B as investors look for opportunities outside of domestic geographies $480M $225M $368M $574M $653M $1.1B $2.1B $2.9B $2.5B $4.4B $124M $127M $188M $221M $292M $477M $508M $447M $765M $89M $104M $163M $223M $201M $608M $306M $503M $812M $901M $1.5B $2.6B $3.5B $3.2B $5.4B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Europe Canada Oceania Source: Data from Pitchbook. Includes businesses with a headquarters in the Canada, Europe, Australia and New Zealand Dollars into software businesses
  50. 50. Battery Ventures | 50 2018 $8.5B $5.5B $6.7B $11.1B$11.3B $13.7B $27.3B $29.0B $31.9B $26.7B $0M $5B $10B $15B $20B $25B $30B $35B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 United States Europe $480M $225M $368M $574M $653M $1.1B $2.1B $2.9B $2.5B $4.4B $0M $1B $2B $3B $4B $5B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 All major geographies have outpaced the US in terms of growth in software investing since 2008 Dollars by geography 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Canada $120M $75M $127M $188M $221M $292M $475M $508M $446M $764M ‘08–’17 growth: 6.4x Australia + New Zealand $4M $6M $8M $51M $27M $89M $104M $163M $223M $201M ‘08–’17 growth: 51.9x • The slight pullback in software investing in 2017 was almost entirely a result of the US while most other areas climbed higher • Notably, European and Canadian software investing had a banner year in 2017 with 72% and 71% growth respectively from 2016 • Australia + New Zealand have grown to ~$200M+ a year in the last two years ’08–’17 growth: 3.1x ’08–’17 growth: 9.1x Source: Data from Pitchbook. Includes businesses with a headquarters in the United States, Canada, Europe, Australia and New Zealand
  51. 51. Battery Ventures | 51 2018 1,020 291 203 30 1,105 398 298 50 $0 - $99M $100M - $249M $250M - $999M $1B+ 2008-2012 2013-2017 Fund size and fund frequency have both noticeably increased since 2008 37% Growth 8% Growth 47% Growth 67% Growth Number of funds raised by fund size Median step-up between funds • Round and fund sizes are inherently intertwined in a chicken-and-the-egg type of way – it’s unclear which came first but each is directly linked to the other. Both fund size and fund frequency has grown considerably since 2008 Average time (years) between funds Left Chart Source: Data from Pitchbook as of 3/31/2018. Includes funds with a headquarters in the United States, Canada, Europe, Australia and New Zealand Right Charts Source: Pitchbook, NVCA Venture Monitor
  52. 52. Battery Ventures | 52 2018 Software liquidity was down noticeably from a near-high in 2016 and has plateaued between ~$40-70B since 2011 • Both strategic and PE buyout dollars were less than what they had been at their all time high in 2016, which indicates less capital going back to limited partners in the ecosystem $11.3B $5.6B $9.1B $21.5B $22.1B $36.6B $57.3B $33.1B $54.3B $25.9B $2.2B $23.9B $959M $3.5B $1.6B $2.8B $13.8B $5.3B $1.7B $4.7B $21.5B $6.7B $6.7B $3.8B $2.7B $10.1B $12.1B $6.9B $12.9B $50.1B $44.6B $46.8B $65.6B $39.6B $70.8B $41.3B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Strategic Acquisitions Private Equity Buyouts IPO Source: Pitchbook Note: Private Equity Buyouts is inclusive of dollars from deals categorized as Buyout and Secondary Buyout. Strategic Acquisitions is inclusive of deals categorized as Merger/Acquisition, Merger of Equals and Reverse Merger. IPO is inclusive of dollars from deals categorized as IPO and Follow-On Offerings (not enterprise value of IPOs) Venture exits by type ($)
  53. 53. Battery Ventures | 53 2018 $9.0B $5.8B $7.1B $11.7B $12.0B $14.8B $29.5B $32.1B $34.8B $31.9B $12.0B $6.3B $12.3B $49.1B $42.9B $45.4B $65.0B $39.4B $64.4B $40.0B 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Capital Invested Liquidity 1.33x 1.09x 1.73x 4.19x 3.59x 3.07x 2.20x 1.23x 1.85x 1.25x When comparing liquidity to capital invested in the ecosystem, 2017 was the third lowest year since 2008 Source: Pitchbook Liquidity is equal to IPO (IPO and Secondary Offering), Buyouts and Strategic Acquisitions • 2017 trailed only 2009 and 2015 in terms of lowest ratio between liquidity and capital invested • Two of the last three years are in the bottom three of liquidity to capital invested ratio since 2008  this is both a product of increased capital invested and a decrease in liquidity compared to the prior few years Ratio of liquidity/capital invested Liquidity/capital invested
  54. 54. Battery Ventures | 54 2018 This is due to the rise dollars deployed and the lengthening of time to exit for venture-backed software companies Source: Pitchbook • The lack of liquidity in the market has been impacted by an increased time to exit for venture-backed companies with time to an IPO up to 7+ years Time from first financing to liquidity 4.4 years 7.6 years 7.9 years 0 1 2 3 4 5 6 7 8 9 10 11 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Strategic Acquisitions Private Equity Buyouts IPO
  55. 55. Battery Ventures | 55 2018 SoftBank’s fund size stands alone with powerful limited partners $7.6B $9.4B $10.3B $11.0B $15.0B $100.0B Thoma Bravo Fund XII Silver Lake Partners III Silver Lake Partners IV Vista Equity Partners Fund VI Silver Lake Partners V SoftBank Vision Fund Largest tech funds ever raised globally Pending 2017 2017 2013 2007 2016 Year of final close Undisclosed/not yet raised Vision Fund investors $45B $28B $15B $7B $4B $1B • SoftBank’s Vision Fund is orders of magnitude larger than any prior technology-focused fund and has a number of powerful limited partners Source: Wall Street Journal, CNN
  56. 56. Battery Ventures | 56 2018 The Vision Fund has been deploying entire country GDPs into businesses $38.4B deployed $61.7B remaining $16.9B $19.5B $2.0B B2B B2C Bio-tech (1) (1) (1) (2) • Most of the noise in the market has been around SoftBank’s investment in consumer-focused companies like Uber and WeWork, but the Vision Fund has made a number of B2B-focused investments as well • With a little under 40% deployed, the SoftBank is rumored to be in discussions to raise another fund (1) SoftBank investments expected to be offered to the Vision Fund (2) Combined $4.4 billion from both SoftBank Group and SoftBank Vision Fund. Split not disclosed Source: SoftBank announcements and disclosures, news reports. Based on Recode as of 3/12/2018 Note: Since final deal values are not disclosed, value of funding rounds led by SoftBank used. * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns (1) (1) *
  57. 57. Battery Ventures | 57 2018 And the Vision Fund’s impact is likely only starting to be felt Description Example Delayed Initial Public Offerings • Many late-stage, private companies with large valuations think about IPOs as a way to raise significant capital, but with the Vision Fund’s $100B behind them, there is less incentive to go through the time-intensive process King Making • SoftBank is able to bake off competitors against one another with the risk that if a company doesn’t take SoftBank’s offer, their competitor will get funded with near unlimited capital Inflated Valuations • Given SoftBank’s extended investment horizon (“300-year plan” and “thinking in decades”), the Vision Fund has shown early indications of less price sensitivity than more traditional institutional investors • In simple supply-demand terms – the demand to put money to work has outpaced the supply of quality companies, which will continue to cause more dollars into fewer deals Additional Liquidity • SoftBank will invest both primary and secondary capital in many of their investments, and these secondary investments give early investors and shareholders the opportunity to take early liquidity if desired Response from Other Funds • Given all these implications, other funds will be sure to respond to help companies counteract the SoftBank effect, particularly the “King Making” impact
  58. 58. Battery Ventures | 58 The Themes in the Market
  59. 59. Battery Ventures | 59 2018 IT budget growth is expected to be mostly in-line with prior years 3% 6% 15% 41% 34% 3%2% 8% 13% 43% 35% 2.7%3% 5% 17% 53% 21% 2.1% 4% 8% 15% 37% 37% 2.4% 0% 10% 20% 30% 40% 50% 60% <(5%) (5%)-0% Flat 0-5% >5% Weighted Average Growth Rate 2015 2016 2017 2018 • 74% of CIOs expect their budget to grow in 2018, which is the same percentage as the percentage that expected it to grow in 2017 • A recent high of 37% CIOs expect their budget to grow more than 5% in 2018 Source: Piper Jaffrey CIO Survey How do you expect your IT budget to compare to the last year?
  60. 60. Battery Ventures | 60 2018 • Security still remains a top initiative for IT buyers, largely a result of the decentralization of the cloud and the number of high-profile breaches in the last few years • As cloud software IT spend also gains momentum, we have seen spend on servers, switching/routing equipment, and storage decrease over the last couple of years Security continues to drive most of the growth in IT spend (6%) 16% 23% 22% 21% 28% 35% 24% 30% 33% 26% 49% 45% 60% 82% (13%) 1% 4% 21% 15% 23% 21% 12% 26% 34% 22% 40% 33% 66% 76% (11%) 2% 13% 15% 18% 20% 20% 25% 28% 30% 31% 34% 37% 73% 88% (20%) 0% 20% 40% 60% 80% 100% 2016 2017 2018 Source: Piper Jaffrey CIO Survey Which technologies will you increase/decrease spending on in 2018
  61. 61. Battery Ventures | 61 2018 4% 5% 6% 11% 18% 20% 19% 9% 14% 16% 19% 38% 33% 34% December '14 August '15 December '15 June '16 December '16 June '17 December '17 Today In 3 Years We are approach the tipping point where cloud passes traditional data center spend 77% 72% 67% 63% 58% 14% 17% 20% 22% 25% 9% 11% 13% 15% 17% 2013 2014 2015 2016 2017 Traditional Data Center Public Cloud Private Cloud Enterprise infrastructure spend Percentage of workloads in public cloud today vs. expected in three years • The public + private cloud vendors continue to take share from the traditional data center with it likely that the combined clouds will surpass traditional data center spend in the next few years • This rate of adoption will likely continue, with enterprises stating that 34% of their workloads will be in the cloud in three years vs. 19% today Left Chart Source: IDC Worldwide Quarterly Cloud IT Infrastructure Tracker Right Chart Source: Goldman Sachs. Note percentage of survey respondents
  62. 62. Battery Ventures | 62 2018 The cloud wars continue, with each carving off respective areas of domain expertise • AWS reigns supreme with $17.1B in revenue and 40% growth in their public cloud off the backs of aggressive product expansion into a best- of-suite vendor • Azure continues to leverage its reputation in the enterprise to pace as the clear number two in the market, with GCP trailing by a decent margin Source: Work-Bench Almanac 2017
  63. 63. Battery Ventures | 63 2018 The adoption of both Microsoft Azure as well as multi clouds is most pronounced in the enterprise Enterprise adoption of cloud Enterprise cloud usage by type Single Public, 9% No Plans, 5% Single Private, 4% Hybrid Cloud, 51% Multiple Public Clouds, 21% Multiple Private Clouds, 10% 82% of enterprises using multi cloud 15% 19% 58% 68% 50% 26% 35% 15% IBM Cloud Google Cloud Azure AWS Adoption Year-over-Year Growth Rate • Microsoft Azure and IBM have shown the strongest adoption in the enterprise, with it possible that Azure will pass Amazon for organizations with over 1,000 employees • Enterprises are intentionally architecting cloud strategy to prevent vendor lock-in, focusing on multi and hybrid clouds Source: RightScale 2018 State of Cloud Report Note: Includes only respondents over 1,000 employees
  64. 64. Battery Ventures | 64 2018 What are your top issues in getting up and running with AI? Major, 24% Transformational, 13% Moderate, 25% Minor, 15% None, 18% Don't know, 5% AI represents huge promise, but is early and difficult for companies CEOs are aware of the AI implications… but are early in their deployment 4% 21% 25% 35% 14% Have already invested and deployed In short-term planning/actively experimenting In medium- or long-term planning On the radar, but no action planned No interest 54% 37% 35% 35% 30% 27% 23% Lack of necessary staff skills Defining our AI Strategy Identifying use case for AI Funding for AI initiatives Security or privacy concerns Complexity of integrating AI with our existing infrastructure Determining how to measure value from using AI What do you expect the impact from artificial intelligence to be? What do you expect the impact from artificial intelligence to be? And face significant talent and hiring challenges to get up and running 37% of CEOs expect significant business impact from AI Source: Gartner • CEOs recognize the need for AI to automate their businesses, but seem to be struggling to identify what their business use-case will be and to find the right talent to deploy it properly
  65. 65. Battery Ventures | 65 2018 Plans for Container Orchestration 8% 9% 12% 13% 10% 12% 29% 3% 3% 3% 3% 4% 2% 10% 3% 2% 2% 1% 4% 4% 6% 14% 14% 17% 17% 18% 18% 45% Production Dev/QA PoC 9% 36% 40% 15% Currently in use Considering in next 2 years Not familiar Have no plans to use in next 2 years 2016 was the year that Kubernetes established itself as the mainstream container orchestration tool, while 2017 saw it pace further ahead of the pack Container tool usage by stage • Container orchestration is still early in mainstream adoption, but Kubernetes has established itself as the solution of choice – well ahead of a pack of other solutions vying for second place Left Chart Source: 451 Research, Voice of Enterprise: Cloud Right Chart Source: OpenStack Developer Survey
  66. 66. Battery Ventures | 66 2018 Serverless breaks out as the new compute platform VM VMVM Virtual Machines Containers Bare Metal Serverless Growth of serverless market $1.9B $7.7B 2016 2021 Cloud Hosting Azure Functions AWS Functions IBM Functions Google Functions Abstraction Time • While new in name only, 2017 was the year that serverless broke out as a platform and the term became nearly ubiquitous even though adoption is still early • In order to further abstract infrastructure management, AWS, Azure, GCP, and IBM have all created serverless functions Left Graph Source: Adapted from CNCF Blog Right Chart Source: Research and Markets Function-as-a-Service Report
  67. 67. Battery Ventures | 67 2018 Select Private Vendor Cloud Computing Azure VM Cloud Data Warehouse Azure Data Warehouse Application Monitoring Azure Monitor Google App Engine Data Processing Azure HDInsight Google Dataproc Machine Learning Platform Azure Machine Learning Cloud Security Azure Security Center NA Data Streaming Azure Event Hub Google Dataflow Security and Access Control Amazon Cognito Azure Active Directory Google Identity Management CDN Amazon Cloudfront Azure CDN Google CDN Cost Management Amazon Trusted Advisor Azure Cost Management NA Provisioning NA NA Key Management Amazon KMS/ Azure KeyVault Google Key Management It might not be crazy to compete with cloud giants after all… • With Okta’s IPO, the acquisition of Evident.io, and large rounds by CloudHealth, Confluent, Dataiku*, HashiCorp and Snowflake, the last 18 months have proven that that private vendors can beat cloud giants either head-to-head or in a slight adjacencies * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns *
  68. 68. Battery Ventures | 68 2018 New web standards are beginning to emerge Client Client Client Server Web Server CDN App Server Database ~1970-1997 ~1997-2017 ~2017–Present DNS API Centric Third Party Services And many more… • The web has moved from a monolithic, inflexible architecture to one that is more distributed and API-centric, where enterprises no longer need to build all functionality into their app, but instead connect through API or SDK to other independent vendors for additional functionality Microservice Microservice Your Services Microservice Unix Model Web 1.0 Modern Web
  69. 69. Battery Ventures | 69 2018 Transformational 7% Major 18% Moderate 20% Minor 17% None 22% Don't Know 16% $4M $5M $9M $21M $37M $50M $64M $96M $176M $360M $720M $1.3B $2.2B $3.2B 25% 80% 133% 76% 35% 28% 50% 83% 105% 100% 84% 64% 46% 0% 20% 40% 60% 80% 100% 120% 140% $0M $1B $2B $3B $4B 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Business Value ($Bs) Growth Blockchain was everywhere in 2017, but it is still extremely nascent in the B2B world Blockchain market for businesses over-timeCEO’s perspective of Blockchain’s impact Sample Impact – Settling Financial Transactions 25% of CEOs expect significant business impact from Blockchain • Few dispute that there is opportunity for Blockchain in the enterprise (with Gartner estimating the market to be $3.2B by 2030), but the actual impact is much more hypothetical (like Settling Financial Transactions) than it is in use Top Left and Right Chart Source: Gartner Bottom Left Image Source: Accenture
  70. 70. Battery Ventures | 70 2018 • May 2018 is the official go-live date of GDPR in Europe, but Enterprises and SMBs alike spent 2017 and the beginning of 2018 accounting for data and data processes • This has become an even more relevant as the public outrage over Facebook’s handling of data makes headlines around the world Data governance and data sovereignty is now a need-to-have GDPR impacts are broad reaching Facebook isn’t helping public perception Select vendors that can help you CYA * Top Left Image Source: Europa.eu Top Right Image Source: Denver Post Bottom Right Select Vendors Source: GDPR Index * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns
  71. 71. Battery Ventures | 71 2018 Digital transformation reaches peak hype but adoption has lagged 0 20 40 60 80 100 120 140 2016 2017 IT spending or digital transformation mentions on earnings calls 0 10 20 30 40 50 60 70 80 90 100 2013 2014 2015 2016 2017 2018 Google Trends analysis for “digital transformation” 9% 20% 28% 26% 14% 3% Nodigital Desire Designing Delivering Scaling Harvesting CIO survey: What best classifies your digital transformation efforts? Inactive Building foundation Breaking the barrier CEO survey: CEOs feeling the pressure 47% 35% Experiencing pressure from the board of directors to make progress in digital business Have specific job title "chief digital officer" • 2017 was the year that we saw enterprises double down on their “enterprise transformation” focus but few have turned the words into practice yet Top Left Chart Source: Goldman Sachs Top Right Chart Source: Google Bottom Left Chart Source: Gartner 2018 Bottom Right Chart Source: Gartner 2017
  72. 72. Battery Ventures | 72 2018 ASC 606 is impacting public companies and software accounting GAAP ASC 606 Perpetual Upfront Upfront Term Ratable Upfront Cloud Ratable Ratable Accounting Treatment of Revenue and Licenses • ASC 606 does not have a fundamental impact on the operations of software businesses but does impact the timing of revenue recognition and the expensing of software commissions • Public companies were forced to deal with this in the back-half of 2017 and throughout 2018, and it is something that should be top-of-mind for all companies that are thinking about an IPO • Businesses with term licenses will have the largest impact with revenue recognition more closely tracking the bookings/billings seasonality. Sales commissions will also be required to be capitalized and amortized over the expected life-time of the contract Image Sources: Goldman Sachs Equity Research
  73. 73. Battery Ventures | 73 2018 Glassdoor / Culture Matters  Battery is thrilled to partner with Glassdoor* for the second annual Battery Ventures/Glassdoor Highest Rated Cloud Computing Companies to Work For project.  Two lists: Top 25 Public List & Top 50 Private List  This project highlights private and public B2B-focused cloud companies with stellar records of employee satisfaction as measured by employee feedback shared on Glassdoor.  Such ratings are increasingly important as cloud and other technology firms fight harder than ever to attract and retain new talent. * Denotes a current or former Battery portfolio company. For a full list of all Battery investments and exits, please click here.
  74. 74. Battery Ventures | 74 2018 Methodology To be considered, a cloud company must have received at least 30 company reviews on Glassdoor as of 3/18/18. The private-company report tracks independent, non-public cloud companies that, according to Battery research and data from research service Crunchbase, –are based in the U.S.; –have a B2B business model; are categorized as Saas, cloud- computing and/or enterprise software, according to Crunchbase; –have more than 200 employees (as of 4/13/2018, according to company data provided to LinkedIn and Battery research); and –have raised funding over the past three years (on or after 7/1/14). The public-company report tracks public cloud companies globally with a B2B business model that have at least $500 million in total enterprise value as of April 15, 2018, according to CapIQ. A company’s CEO approval rating and positive business outlook rating was not taken into account to determine rank on either list. Views contained herein are for informational purposes only and should neither be considered investment advice nor construed or used as an offer and/or recommendation to buy or sell a security.
  75. 75. Battery Ventures | 75 2018 Glassdoor stats that you should know  50 Million monthly unique visitors; 72% of Glassdoor users have a 4-year or higher college degree  Of all company reviews on Glassdoor, 53% are from current employees and 47% are from former employees (at time of review).  Among those surveyed, nearly half (48%) of Glassdoor users read at least 7 reviews before forming an opinion of a company  Among those surveyed, 3 in 4 (76%) Glassdoor users are more likely to apply to an open job if the employer is active on Glassdoor (e.g. responds to reviews, updates their profile, shares updates on the culture and work environment). (It’s free to respond!) Source: Glassdoor Research
  76. 76. Battery Ventures | 76 2018 Private company list Rank Company Score 1 Algolia 4.9 2 Asana 4.9 3 Canopy 4.9 4 SalesLoft 4.8 5 Sprout Social 4.8 6 Procore 4.8 7 Outreach 4.8 8 Datorama 4.8 9 Greenhouse 4.7 10 Health Catalyst 4.7 11 Lucid Software 4.7 12 Podium 4.7 13 Segment 4.7 14 Justworks 4.7 15 PagerDuty 4.7 16 Slack 4.7 17 nCino 4.7 Rank Company Score 18 Looker 4.7 19 ForgeRock 4.7 20 BounceX* 4.7 21 InVision* 4.6 22 ThousandEyes 4.6 23 ServiceTitan* 4.6 24 Elementum 4.6 25 HireVue 4.6 26 Intercom 4.5 27 OutSystems 4.5 28 Duo Security 4.5 29 C3 IoT 4.5 30 ThoughtSpot 4.5 31 Dynamic Signal 4.5 32 Salsify 4.5 33 Collective Health 4.5 Rank Company Score 34 WalkMe 4.5 35 Pipedrive 4.5 36 Chef* 4.5 37 Mavenlink 4.5 38 Smartsheet 4.5 39 Tanium 4.5 40 Gainsight* 4.5 41 Addepar 4.5 42 Demandbase 4.5 43 Qubole 4.5 44 Dataminr 4.5 45 Pluralsight 4.4 46 Carbon Black 4.4 47 Cohesity* 4.4 48 M-Files 4.4 49 TrendKite* 4.4 50 Tradeshift 4.4 * Denotes a current or former Battery portfolio company. For a full list of all Battery investments and exits, please click here. Smartsheet is now a public company (NYSE: SMAR). They were not yet public at the cutoff date for the public list (4/15/2018).
  77. 77. Battery Ventures | 77 2018 Bar is getting higher for private companies * * Denotes a current or former Battery portfolio company. For a full list of all Battery investments and exits, please click here.
  78. 78. Battery Ventures | 78 2018 Our private list Source: LinkedIn, Pitchbook
  79. 79. Battery Ventures | 79 2018 Public company list Rank Company Score 1 HubSpot 4.6 2 Ultimate Software 4.5 3 Guidewire Software* 4.5 4 SendGrid 4.5 5 Paylocity 4.4 6 Instructure 4.4 7 Nutanix* 4.3 8 Zendesk 4.3 9 AppFolio 4.3 10 Shopify 4.3 11 Okta 4.3 12 Wix 4.3 Rank Company Score 13 Dropbox 4.3 14 Cornerstone OnDemand 4.2 15 Box 4.2 16 Five9 4.2 17 Coupa* 4.2 18 Zuora 4.2 19 Twilio 4.1 20 Talend 4.1 21 Salesforce 4.1 22 Xero 4.0 23 Paycom 4.0 24 Adobe 4.0 25 Mimecast 4.0 * Denotes a current or former Battery portfolio company. For a full list of all Battery investments and exits, please click here.
  80. 80. Battery Ventures | 80 2018 Our public List 1 1 1 1 2 2 1 3 6 3 2 2 Founding Year for Public List Source: CapIQ, Pitchbook $300B Cumulative Market Cap (as of 4/27/2018)
  81. 81. Battery Ventures | 81 2018 Cloud companies compare favorably to Glassdoor overall Average Overall Company Rating Source: Glassdoor
  82. 82. Battery Ventures | 82 2018 Cloud companies compare favorably to Glassdoor overall Average CEO Approval Rating Source: Glassdoor
  83. 83. Battery Ventures | 83 2018 Cloud companies compare favorably to Glassdoor overall Average Positive Business Outlook Rating Source: Glassdoor
  84. 84. Battery Ventures | 84 2018 Source: LinkedIn Geographic diversity
  85. 85. Battery Ventures | 85 2018 Industry diversity Source: Battery Research
  86. 86. Battery Ventures | 86 2018 Liquidity for our 2016 private list * * * * * Denotes a current or former Battery portfolio company. For a full list of all Battery investments and exits, please click here.
  87. 87. Battery Ventures | 87 CONCLUSION
  88. 88. Battery Ventures | 88 2018 $28.9B $16.7B $45.4B $54.9B $44.5B $51.1B $63.5B$63.8B $79.5B $56.3B $0B $15B $30B $45B $60B $75B $90B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 $9.1B $5.8B $7.2B $11.9B$12.2B $15.2B $30.0B $32.5B $35.1B $32.0B $0M $15B $30B $45B '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Q1 Update: 2018 is currently on pace to be a record setting year for software Venture funding market 2018 run-rate: $41.9B Q1: $10.5B $0M $406M $771M $1.2B $2.4B $1.6B $2.8B $1.3B $948M $1.7B Q1: $948M 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Software IPO market M&A market Q1: $19.1B 2018 run-rate: $76.2B (1) • Extrapolating the run-rate activity in Q1 for the rest of the year shows that 2018 could be a record breaking year for the software market across the Venture funding, M&A and IPO markets (1) Reported by Recode Top Left Chart Source: Pitchbook Top Right Chart Source: 451 Group Bottom Chart Source: Capital IQ * Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns
  89. 89. Battery Ventures | 89 2018 • The road to 1K employees is a long one for many start-ups, with over 100K software companies in the US and only 600 over 1,000 employees 50+ employees 200+ employees 500+ employees 1,000+ employees 5,000+ employees 7,300 companies 2,300 companies 970 companies 600 companies 200 companies It’s not easy to get there… Source: LinkedIn employee data on software companies
  90. 90. Battery Ventures | 90 2018 But disruptive software companies will be started in all markets Nasdaq composite index 0 1,000 2,000 3,000 4,000 5,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 * ** * * * * * * * * Denotes a current or former Battery portfolio company. Past performance is not indicative of future returns Note: Includes public cloud companies with TEV >$500M as of 4/15/18 according to Capital IQ, cloud companies acquired for over $500M since 2009 according to Pitchbook, and private cloud companies valued at over $1.5B as of 4/15 according to Crunchbase. Excludes companies based in Asia *
  91. 91. Battery Ventures | 91 2018 $0B $1000B $2000B $3000B $4000B $5000B $6000B $7000B 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 * ~5 Global software industry revenue We’re just getting started Your Logo Here? * * * * * * * * * * Denotes a current or former Battery portfolio company. Past performance is not indicative of future returns Note: Includes public cloud companies with TEV >$500M as of 4/15/18 according to Capital IQ, cloud companies acquired for over $500M since 2009 according to Pitchbook, and private cloud companies valued at over $1.5B as of 4/15 according to Crunchbase. Excludes companies based in Asia * *
  92. 92. Battery Ventures | 92 2018 Logan is a vice president in Battery’s Boston office, focused on growth investments for business-to-business software companies. He is currently involved in Battery’s investments in Amplitude, Braze, Clubhouse, Dataiku, Narvar, Pendo, and TrendKite. In 2017, Logan was named to Forbes’ “30 Under 30” list of leading young entrepreneurs, innovators and game changers. Logan graduated with a BS from Washington and Lee University, where he played men’s lacrosse. Neeraj joined Battery in 2000 and invests in SaaS and internet companies across all stages. He was a founding investor in BladeLogic and has invested in several other companies that have gone on to stage IPOs, including Bazaarvoice, Coupa, Guidewire Software, Marketo, Nutanix, Omniture, RealPage and Wayfair. He also invested in several Battery portfolio companies that have experienced M&A events. Neeraj’s current private investments include Amplitude, Braze, BloomReach, Catchpoint, Chef, Clubhouse, Cohesity, Dataiku, Glassdoor.com, InVision, OpsGenie, Optimizely, Outlyer, Pendo, SmarterHQ, Sprinklr, StellaService, Tealium, TrendKite and Yesware. He has been recognized as a top-100 global venture capitalist on the Forbes Midas List for the past eight consecutive years. Twitter: @neerajvc Email: neeraj@battery.com Twitter: @jloganbartlett Email: logan@battery.com Neeraj Agrawal Logan Bartlett Special thanks to Brandon Gleklen, Mike Hoeksema and Galit Krifcher for their work on this with us Who are we?

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