As the vendor ecosystem matures and more installers, developers and EPCs adopt software tools, we will take this opportunity to describe key market trends in the last 12 months and determine which software applications have grown more relative to others.

1. May 13
Scottsdale, AZ

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The Naïve Definition of Vertical SaaS

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5-year returns:
S&P 500: 55%
NASDAQ: 95%
Horizontal SaaS: 220%
Vertical SaaS: 280%
Note: Vertical SaaS performance based on VEEV, APPF, BLKB, GWRE, MDSO, RP, EBIX, HSTM, QTWO. Horizontal SaaS cohort based on CARB, CSLT, CRM, FIVN, FEYE,
HUBS, PFPT, QLYS, LOGM, MIME, UPLD, WDAY, RNG, PCTY, ZIXI, WK BCOV
Vertical SaaS Companies are Darlings of Wall Street

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CRM for Pharmaceutical Sales
$20Bn Market Cap
Just $9MM invested
Booking &CRM forYoga Studios
IPO, then taken private at $1.9Bn byVista Equity
Partners
SaaS for Property Managers
$3.3Bn Market Cap
Doc Management for Construction
Acquired by AutoDesk for $875MM
SaaS for P&C Insurance
$8.5Bn Market Cap
SaaS for Construction
Private, last valuation $3Bn
Meet the Stars

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“Layer cake” of
multiple products
Volume-based value-
added products &
services
Platform connection to
other software products
Product Strategy for Vertical SaaS Leaders
Follows Three Themes

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$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2015 2016 2017 2018 2019
Veeva Revenue by ProductArea
CRM Vault
We can see both of these approaches (product expansion and Value-
added Revenue) in Public Companies

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$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2015 2016 2017 2018 2019
Salesforce Revenue by Product Line
Sales Service Platform Marketing
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2015 2016 2017 2018 2019
Veeva Revenue by Product Line
CRM Vault
This Strategy is Not Unique to Vertical SaaS

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$0
$20
$40
$60
$80
$100
$120
2013 2014 2015 2016 2017
MindBody Revenue by Product Area
Subscriptions Payments
MindBody: Evolving from SaaS to Payments

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$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2013 2014 2015 2016 2017 2018
AppFolio Revenue by ProductArea
Core Value+
Value+ Services
Appfolio: Property Management Software
 Electronic Payments
 Tenant Screening
 Website Management
 Insurance
 Maintenance Contact Center
 Premium Leads
 Tenant Debt Collections
 Utility Management
 AI for Leasing

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0 2 4 6 8 10 12 14
Document Management
Accounting
Field Productivity
Quality & Safety
Scheduling
Analytics
Legal & Compliance
Bidding
Progress Documentation
CRM
BIM
Drones
Field Communications
IT
Estimating
Procore App Platform - by Functional Area
Non-specific Vertical-specific
Platform Approach Makes Tie-ins More Viable

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Arguably the only way to Unlock the Promise of Many
Advanced Technologies
Artificial Intelligence VR / AR ComputerVision

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Procore is a Tier-1 Path To Market For Early
Companies

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Market Size Example market(s)
1T to 10T • Construction
• Transportation
• Hospitals
100Bn to 1T • Pharmaceuticals
• Agriculture
• Hotel/hospitality
10Bn to 100Bn • Winemakers
• Radiology labs
• Museums
1Bn to 10Bn • Personal trainers
• Campsites
• Water parks
100MM to 1Bn • Ice rinks
• Libraries
But Market Size Matters

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The Emergence View Of The World Is Slanted To
Massive Markets
0%
10%
20%
30%
40%
50%
60%
70%
100MM to 1B 1B to 10B 10B to 100B 100B to 1T 1T to 10T

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AI for bookings | $60MM
UtilityAnalytics | $15MM
Competitor | $120MM
Analytics | $10MM
Website integrations | $5MM
FitnessTracking | $15MM
Dynamic Pricing | $7MM
“Our growth strategy is dependent, in
part, on our ability to expand into new
verticals, beyond the real estate and
legal markets.”
◦ --Appfolio, Annual Report
Veeva Systems’ original name:
“Verticals on Demand, LLC”
M&A from Vertical SaaS Leaders?

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Big Markets:
Hospitals
Construction
Transportation
Consumer Goods
Agriculture
Small Markets:
Libraries
Marinas
Sheet metal fabricators
Winemakers
Campsites
Hair salons
Ice rinks

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Constellation’s Portfolio by End-Market Size
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
100MM to 1B 1B to 10B 10B to 100B 100B to 1T 1T to 10T

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0%
10%
20%
30%
40%
50%
60%
70%
100MM to 1B 1B to 10B 10B to 100B 100B to 1T 1T to 10T
Constellation Emergence
The Median VC Vertical SaaS Market is 100x larger
Than the Median Constellation Investment

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0% 10% 20% 30% 40% 50% 60% 70%
Increase number of leads / sales
Speed up sales / installation process
Increase close rate on leads
Increase / maintain customer satisfaction
Incorporate new software technologies
Expand into new geographic markets
Incorporate new hardware technologies
Reduce system equipment costs
Decrease average cost of new leads
Expand product/service offerings (outside of solar…
Reduce labor per installation
Top Proprity
2019 2018 2017
The Solar Industry is Still Focusing on Growth First

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0% 10% 20% 30% 40% 50% 60%
Prospects discouraged by high cost of installation
Prospects lack access to financing
Prospects lack familiarity with solar
Prospects consider economics unfavorable (e.g., low electric
rates)
Competitors offer lower prices
Utilities & regulatory uncertainty creates customer hesitation
about buying
Competitors create confusion and lower consumer confidence
Political uncertainty creates customer hesitation about buying
Prospects concerned about aesthetics of solar panels
Competitors offer more compelling financing options
What are your biggest challenges with closing sales?
2019 2018
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Under $500k $500k to
$3MM
$3MM to
$20MM
$20MM+
Percent Indicating “Prospects discouraged by high
cost of installation” – by Company Revenue
Price Is Becoming A Bigger Issue In Closing Customers

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0% 10% 20% 30% 40% 50% 60% 70%
Increase number of leads / sales
Speed up sales / installation process
Increase close rate on leads
Increase / maintain customer satisfaction
Incorporate new software technologies
Expand into new geographic markets
Incorporate new hardware technologies
Reduce system equipment costs
Decrease average cost of new leads
Expand product/service offerings (outside of solar…
Reduce labor per installation
What are your company’s top three goals for 2019?
2019 2018 2017
There Is Significant Momentum For New Technologies

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0%
10%
20%
30%
40%
50%
60%
70%
80%
Under 10 10 to 50 50+
Improved close
rate on sales
Higher deal flow
Reduced time to design & deliver a system
Improved accuracy of proposals
What are the most important benefits you have gotten from software?
Small Vs Large Companies Look For Different Things
From Software (and Drones)

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0%
10%
20%
30%
40%
50%
60%
70%
20192018
0%
10%
20%
30%
40%
50%
60%
70%
Under 10 10 to 50 50+ 0% or less 0-20% 20-50% 50%+ US International
Team size Team growth expectation Geography
Drones Are Picking Up, Especially In The Companies
With The Resources To Pursue Them

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1. We are stronger together
2. Don’t get freaked out if we go beyond SaaS
3. One advantage of Vertical SaaS: we won’t leave you
high & dry
• Limited competition from other verticals
• Horizontal companies are not committed
4. Solar industry growth is critical for a healthy solar
software ecosystem
Takeaways

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Solar Software Summit