Human Resources Technology: Venture Capital / M&A Landscape

1. HUMAN RESOURCES TECHNOLOGY
VC / M&A LANDSCAPE
April 2016

2. Overview
• This report is provided to assist with tracking global capital flows and
valuations in this sector.
• If you would like an introduction to any company mentioned in this report
please contact Brent Bolleman at bbolleman@garibaldicapital.com
• This information is provided "as is" without warranty of any kind. Garibaldi
Capital Advisors does not accept any responsibility or liability for the
accuracy, content, completeness, legality, or reliability of the information
contained in this document.
• Data sources are Pitchbook and internal research.
• Values are in US Dollars.
• Scope is global unless otherwise noted.
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3. Venture Capital Activity
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4. Venture Capital Invested by Deal Size 2006-2015
Growth stage funding continues to expand, with a significant jump in later stage funding due to the market maturing and
companies that would normally be public remaining private.
4
All amounts in $USD
0
20
40
60
80
100
120
140
$0M
$500M
$1.0B
$1.5B
$2.0B
$2.5B
$3.0B
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
1M - 4.9M 5M - 9.9M 10M - 24.9M 25M+ Deal Count
Capital inflows exploding, as measured by both
total dollars, and deal count

5. Most Active VC Investors
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This data only considers deal sizes over $2M. Earlier stage funds are represented primarily due to follow-on investments.
All amounts in $USD
Investor Name HQ Location
Investments in the
last 5 years
Dry Powder
SV Angel San Francisco, CA 11 74.07
New Enterprise Associates Menlo Park, CA 10 3,695.84
Accel Partners Palo Alto, CA 10 3,479.50
Andreessen Horowitz Menlo Park, CA 9 1,604.68
Lerer Hippeau Ventures New York, NY 8 172.92
Khosla Ventures Menlo Park, CA 8 801.97
Redpoint Ventures Menlo Park, CA 7 668.33
Kapor Capital Oakland, CA 7
GV Mountain View, CA 7 194.92
Kleiner Perkins Caufield & Byers Menlo Park, CA 6 2,553.08
Foundation Capital Menlo Park, CA 6 480.50
True Ventures Palo Alto, CA 5 200.29
Slow Ventures Mill Valley, CA 5 38.53
Sequoia Capital Menlo Park, CA 5 4,490.25
Norwest Venture Partners Palo Alto, CA 5 792.42
Matrix Partners Palo Alto, CA 5 1,474.36
Index Ventures Geneva, Switzerland 5 1,386.78
Greylock Partners Menlo Park, CA 5 1,397.67
General Catalyst Partners Cambridge, MA 5 607.22
Felicis Ventures Palo Alto, CA 5 114.46
Data Collective San Francisco, CA 5 167.20
Crosslink Capital San Francisco, CA 5 223.10
Bessemer Venture Partners Larchmont, NY 5 3,131.46
Upside Partnership San Francisco, CA 4 22.44
Technology Crossover Ventures Palo Alto, CA 4 1,408.88

6. Selected Venture Capital Valuations 2015
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All amounts in $USD
Company Name HQ Location Deal Date Deal Size
Post
Valuation
% Acquired
Raised to
Date
Zenefits San Francisco, CA 13-May-2015 512.57 4,500.00 11.39% 596.17
Glassdoor Mill Valley, CA 29-Dec-2015 70.00 838.33 8.04% 162.21
Lynda.com Carpinteria, CA 14-Jan-2015 186.00 831.25 22.38% 289.04
Gusto.com San Francisco, CA 06-Apr-2015 60.00 560.00 10.71% 86.07
Hired San Francisco, CA 01-Dec-2015 40.00 419.58 9.53% 72.98
Collective Health San Mateo, CA 20-Oct-2015 81.00 391.67 20.68% 119.00
HireVue South Jordan, UT 02-Jun-2015 45.00 266.89 16.86% 98.49
GuideSpark Menlo Park, CA 10-Feb-2015 22.20 247.89 8.96% 42.20
Greenhouse Software New York, NY 24-Aug-2015 35.00 245.21 13.58% 60.00
PlanSource Benefits Administration Orlando, FL 21-Aug-2015 70.00 245.00 28.57%
Namely New York, NY 18-Jun-2015 45.00 181.90 24.74% 88.80
Connectifier Costa Mesa, CA 27-Oct-2015 6.00 125.20 4.63% 12.00
Collective Health San Mateo, CA 09-Feb-2015 38.00 107.00 28.97% 38.00
Greenhouse Software New York, NY 03-Mar-2015 13.60 84.16 15.55% 23.80
Work Market Huntington, NY 21-Jan-2015 20.00 81.45 22.44% 36.00
Namely New York, NY 05-Mar-2015 11.00 77.15 14.26% 43.80
SmashFly Technologies Concord, MA 18-Dec-2015 22.00 77.00 28.57% 31.00
Jiff Mountain View, CA 21-May-2015 23.45 76.73 30.56% 49.45
Interviewstreet Palo Alto, CA 14-Jul-2015 7.50 71.19 10.53% 19.90
Justworks New York, NY 18-May-2015 13.00 69.87 18.60% 24.52

7. M&A Exit Activity
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8. Exit Deal Count by # Employees in Target 2010-2015
Employee counts are known for most (but not all) deals, however those missing data are more likely to be in the 0-60
category anyway. Key takeaway: deal activity continues to rise as significant consolidation occurs in the sector.
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0
10
20
30
40
50
2010 2011 2012 2013 2014 2015
0-60 61-150 151-350 351-1200 >1200
Tremendously active M&A market: 83 deals in
past 2 years; more than prior 4 years combined

9. Selected Exit Transaction Valuations 2015
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All amounts in $USD
Company Name Buyer Deal Date HQ Location Deal Type Deal Size
Raised to
Date
Lynda.com LinkedIn 14-May-2015 Carpinteria, CA Merger/Acquisition 1,500.00 289.04
Cast & Crew Entertainment Services Silver Lake 01-Sep-2015 Burbank, CA Buyout/LBO 700.00
ClickSoftware Technologies Francisco Partners 13-Jul-2015 Petach Tikva, Israel Buyout/LBO 438.00
Saba Software Vector Capital 30-Mar-2015 Redwood City, CA Buyout/LBO 400.00
HealthcareSource HR Francisco Partners 26-May-2015 Woburn, MA Buyout/LBO 330.00 42.12
Reward Gateway Great Hill Partners 07-Aug-2015 London, United Kingdom Buyout/LBO 218.26
Allocate Software HgCapital 12-Jan-2015 Richmond, United Kingdom Buyout/LBO 166.95
VoloMetrix Microsoft 03-Sep-2015 Seattle, WA Merger/Acquisition 125.00 17.00
PayScale Warburg Pincus 08-May-2015 Seattle, WA Buyout/LBO 122.40 33.40
Achievers Blackhawk Network Holdings 30-Jun-2015 San Francisco, CA Merger/Acquisition 110.00 49.33
RiseSmart Randstad 25-Sep-2015 San Jose, CA Merger/Acquisition 100.00 25.15
Lee Hecht Harrison Knightsbridge Adecco Group 11-Mar-2015 Toronto, Canada Merger/Acquisition 63.45
Excelity Global Solutions Everstone Capital Management 01-Apr-2015 Singapore, Singapore Buyout/LBO 60.00
tenXer Twitter 02-Apr-2015 San Francisco, CA Merger/Acquisition 50.00 5.00
Electronic Commerce Frontier Capital 04-Jun-2015 Elkhart, IN Buyout/LBO 40.00
eByline Izea 30-Jan-2015 Sherman Oaks, CA Merger/Acquisition 8.90 6.73
Playbook Labs Intuit 24-Mar-2015 Tucson, AZ Merger/Acquisition 7.00
Refresh LinkedIn 01-Apr-2015 Mountain View, CA Merger/Acquisition 6.10 10.00
Wooboard Reffind 24-Sep-2015 Sydney, Australia Merger/Acquisition 2.70 0.70

10. Most Active Financial Acquirers
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All amounts in $USD
Investor Name HQ Location
Investments in the
last 5 years
Dry Powder Existing Platforms
Most Recent
Conversation
w/ GCA
Vista Equity Partners Austin, TX 6 8,931.85 PeopleAdmin March 2016
HgCapital London, United Kingdom 5 2,124.23 Allocate, Visma, Cascade HR March 2016
JMI Equity Baltimore, MD 4 1,043.75 Kronos, Halogen, CoreHR March 2016
Hellman & Friedman San Francisco, CA 4 12,919.33 Kronos March 2016
Lloyds Development Capital London, United Kingdom 3 Cascade HR
Veronis Suhler Stevenson New York, NY 2 178.10 Thomsons Online Benefits April 2016
Truffle Capital Paris, France 2 3.79 Horizontal Software
TA Associates Management Boston, MA 2 7,688.00 The Access Group (UK) March 2016
Montagu Private Equity London, United Kingdom 2 4,098.54 PBJ, Huldt & Lillevik
Insight Venture Partners New York, NY 2 5,396.46 Workforce Software November 2015
Great Hill Partners Boston, MA 2 603.10 Reward Gateway
Francisco Partners San Francisco, CA 2 2,363.71 ClickSoftware Technologies
Cinven London, United Kingdom 2 9,931.05 Visma, PBJ, Huldt & Lillevik
AP Fonden 6 Gothenburg, Sweden 2 Visma, PBJ, Huldt & Lillevik
Accel-KKR Menlo Park, CA 2 2,163.92 Infinisource, Qqest Software April 2016
ABRY Partners Boston, MA 2 3,885.86 Thomson Online Benefits March 2016
Vector Capital San Francisco, CA 1 160.06 Saba Software
Thoma Bravo Chicago, IL 1 3,266.97 Hrsmart
Parallax Capital Partners Laguna Hills, CA 1 70.78 PeopleAnswers March 2016
The Carlyle Group Washington, DC 1 41,734.16 PES Payroll
GCA are in active and ongoing dialogue with the consolidators.

11. Most Active Strategic Acquirers
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Investor Name HQ Location
Investments in
the last 5 years
Most Recent
Conversion
w. GCA
Kronos Chelmsford, MA 6 March 2016
SAP (SAP) Walldorf, Germany 4 March 2016
LinkedIn (LNKD) Mountain View, CA 4 November 2015
Oracle (ORCL) Redwood City, CA 3 April 2016
Visma Oslo, Norway 2
SkillSoft Ireland Dublin, Ireland 2
Pluralsight Farmington, UT 2
PeopleAdmin Austin, TX 2
Paychex (PAYX) Rochester, NY 2 March 2016
Monster Worldwide (MWW) Weston, MA 2
John Wiley & Sons (JW.A) Hoboken, NJ 2
Intuit (INTU) Mountain View, CA 2 March 2016
Horizontal Software Montceau-les-Mines, France 2
Cornerstone OnDemand (CSOD) Santa Monica, CA 2 March 2016
Constellation Software (CSU) Toronto, Canada 2 April 2016
Adecco Group (ADEN) Zurich, Switzerland 2
Access UK London, United Kingdom 2
Yahoo (YHOO) Sunnyvale, CA 1
Xero (XRO) Wellington, New Zealand 1 March 2016
Workday (WDAY) Pleasanton, CA 1 June 2015
GCA are in active and ongoing dialogue with the strategic buyers.

12. Public Market Companies
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All amounts in $USD
Sample public market companies for benchmark valuation multiples. Growth rate and profitability are obviously two key
factors, but not the whole story. Keep in mind that private company valuations should be discounted by roughly 20-30% due
to illiquidity.
Company Name Enterprise Value
Revenue
(TTM)
EBITDA
(TTM)
Gross Margin %
(TTM)
Revenue %
Growth (TTM)
EV/Revenue EV/EBITDA
Workday 13,174,949 1,162,346 (178,720) 67.8% 47.5% 11.3x NM
Ultimate Software Group 5,440,925 618,081 65,056 61.4% 22.2% 8.8x 83.6x
Paylocity 1,620,230 187,568 3,334 56.4% 46.7% 8.6x NM
Paycom Software 1,894,605 224,653 43,856 84.2% 48.8% 8.4x 43.2x
Paychex 18,786,421 2,890,200 1,234,500 70.9% 7.6% 6.5x 15.2x
Cornerstone OnDemand 1,775,727 339,651 (41,195) 67.7% 28.9% 5.2x NM
Callidus Software 804,560 173,087 43 61.6% 26.7% 4.6x NM
WageWorks 1,394,654 334,316 46,612 65.0% 24.8% 4.2x 29.9x
ADP 41,074,298 11,224,400 2,337,700 41.1% 6.0% 3.7x 17.6x
Castlight Health 196,461 75,315 (78,194) 55.2% 65.1% 2.6x NM
Healthstream 495,344 209,002 30,554 57.2% 22.4% 2.4x 16.2x
QHR Technologies 56,731 24,850 (2,413) 58.6% 6.9% 2.3x NM
Xactly 118,214 71,157 (15,313) 59.0% 57.3% 1.7x NM
Halogen Software 106,723 65,692 (9,381) 73.8% 15.9% 1.6x NM
Instructure 61,218 73,193 (48,991) 67.1% 65.0% 0.8x NM
Monster Worldwide 335,857 666,903 54,511 100.0% -8.1% 0.5x 6.2x
Insperity 975,727 2,603,614 84,264 16.8% 10.4% 0.4x 11.6x
ManpowerGroup 6,385,090 19,329,900 766,600 17.1% -6.9% 0.3x 8.3x
Barrett Business Services 217,469 699,287 (43,348) 5.2% 20.8% 0.3x NM
Kelly Services 731,505 5,518,200 89,000 16.7% -0.8% 0.1x 8.2x
Average 4,782,335 2,324,571 216,924 55.1% 25.4% 3.7x 24.0x
Median 975,727 339,651 30,554 59.0% 22.4% 2.6x 16.2x

13. GCA’S RECENT EXPERIENCE IN THIS SECTOR
• In context of currently active sale mandates, GCA has had recent dialogue
with many of the strategic and financially-oriented investors found in this
report
– Identified 275+ strategic acquirers, and 400+ financial buyers (private equity,
family offices, and others), with a stated or demonstrated interest in the HR
technology space, and have established contact with key individuals
– Actively engaged in dialogue with over 220+ of these parties, gaining a clear
understanding of their current filters and investment preferences
• Extensive research, along with first-hand communication with many of the
players in HR technology, leaves us well versed in the sub-sector, and has
revealed some interesting trends and developments
– The confluence of HCM and fintech innovation: new means for employees to be
paid, more often, and with less friction
– Increasingly innovative employee engagement platforms and associated
analytics, next-generation performance metrics, and complementary BI tools
– PE consolidation in the ‘Core HR’ functions of: payroll, time & attendance,
employee record management, and benefits administration
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14. About Garibaldi Capital Advisors
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15. GARIBALDI CAPITAL ADVISORS – FAST FACTS
 Founded in January 2013 in Vancouver, Canada by Brent Holliday, Andrew Jones and Paul
Kedrosky, with additional office in Toronto
 13 private technology transactions in 30 months, most active technology advisor in Canada
 Five M&A transactions and eight capital raises completed to date (April 2016)
 Rapid success largely due to a different and meaningful approach to advisory services,
completely tailored to the needs of private technology companies
 Exempt Market Dealer Registered in Canada and full chaperoning agreement in place with SEC
registered broker-dealer

16. OUR TRANSACTIONS – ONLY TECHNOLOGY COMPANIES
(with previous firms, involving Garibaldi personnel)
January 2016
Equity/Debt Financing
(Ontario)
Exclusive Capital Advisor
January 2016
Equity Financing
(BC)
Exclusive Capital Advisor
August 2015
Equity Financing
(BC)
Capital Co-Advisor
August 2015
Debt Financing/
Strategic Equity
(BC)
Capital Advisor
February 2015
Debt Re-Financing/Equity
(BC)
Exclusive Capital Advisor
February 2015
(BC)
M&A Advisor to the Seller
July 2014
Secondary Share Sale
(BC)
Capital Advisor to the
Selling Shareholders
June 2014
(BC)
M&A Advisor to the Seller
March 2014
(BC)
M&A Advisor to the Seller
January 2014
Growth Equity Financing
(BC)
Capital Co-Advisor
December 2013
Secondary Share Sale
(BC)
Capital Advisor to the
Selling Shareholder
June 2013
(BC)
M&A Advisor to the Seller
April 2013
(BC)
M&A Co-Advisor to Buyer
September 2012
Growth Equity Financing
(BC)
Exclusive Capital Advisor
October 2011
(BC)
M&A Co-Advisor to Seller

17. HOW WE HELP COMPANIES
• Corporate Development Services
– Positioning and introductions to active strategic and financial buyers, for
companies that are not yet ready to sell
– Corporate development strategy: review of presentations/models/term sheets,
and informal introductions to investors and buyers
– Establish a presence on the radar of sector-focused investors / buyers long
before you need to run a formal process – may also result in inbound offers
– Hourly-based with monthly caps
• Capital Raise or Sell-side M&A Advisory Engagement
– When it is time to sell or raise growth equity
– Full firm resources to: build presentation materials, models, target lists, and
execute process to a specific timeline
– Retainer plus success-fee based model – market investment banking terms
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18. HOW WE ADD VALUE
• Fully understand unique aspects of technology and market
• Build a compelling presentation to maximize value in eyes of buyers
• Analyze buyer universe and develop a synergy thesis for each segment
• Handle cross-border deal issues around SR&ED, IRAP, ESOP, etc.
• Help manage technical due diligence and negotiate IP reps
• Understand “market” deal terms in tech – reducing negotiating time
Our technology expertise enables us to:
• Build competitive tension in negotiation, even in a single bidder scenario
• Project manage deal and keep things moving with legal, board, etc.
• Financially model the business to be defensible in diligence
• Manage due diligence requests and data room
• Offload as much of the deal as possible from management team
Our transaction expertise enables us to:
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19. Call Brent Bolleman at 604-902-0852
E-Mail bbolleman@garibaldicapital.com
www.techbc500.com www.techontario1000.comwww.garibaldicapital.com