IMPACT OF FISCAL POLICY AND MONETARY POLICY ON THE ECONOMIC GROWTH OF NIGERIA...
Social Media Software Market Update
1. SOCIAL MEDIA SOFTWARE INDUSTRY UPDATE
2014
DAVID GROVE
STEFAN GERHARD
IRFAN IQBAL
Managing Partner
(415) 798-2303
dgrove@vaquerocap.com
Managing Director
(415) 539-0688
sgerhard@vaquerocap.com
(415) 798-2301
iiqbal@vaquerocap.com
AMISH PATEL
JARED MELILLO
TERRY JIANG
Associate
apatel@vaquerocap.com
Analyst
jmelillo@vaquerocap.com
Analyst
tjiang@vaquerocap.com
2/10/2014
11
Principal
2. Vaquero: Solutions for the Entire Life Cycle
Solutions for
life cycle
Vaquero
Exceptional execution and service
Domain expertise and relationships
Full suite of products
Superior results
Middle market,
growth focused
Best-in-Class
advisory
Proven Results
Growth Capital
Private Equity
2/10/2014
Private Debt
Advisory
Pre-IPO & IPO
21
Sell Side M&A
Buy Side M&A
3. Deep Domain Expertise in Relevant Sectors
Vaquero has unparalleled experience in SaaS
$166,250,000
Not Disclosed
$50,000,000
Exclusivity
February 2012
& Social Content
Second Rounds
$38,000,000
$35,000,000
Exclusivity
January 2014
DIAMONDBACK
TIGRIS
EQUUS
Social Media Analytics
Mobile
Energy Software & Data
Leading Social Media
Software Vendor
Sale to
Pre IPO Crossover
Round
Sale to
Initial Public
Offering
2/10/2014
Initial Public
Offering
Initial Public
Offering
31
Leading Software
PE Firm
Recapitalization
Growth Capital
4. Massive Social Media Marketing Market
Ad spend will follow engagement
Underpenetrated Market
$600Bn
$10Bn
Ad Spend
Social Ad Spend
Gap in Social Engagement v. Ad Spend
27%
VS
Time Spent
on Social Media
2%
Social Media
Ad Spend
Brand Marketers Focused on Social Media
70% U.S. Brand
Marketers
Plan
to use Social Media
more
2/10/2014
69%
U.S. brand marketers
would spend more
online if there was
visibility on ROI
41
45%
Cite Branding as
Primary objective of
Social Media
Advertising Spend
5. Massive Social Media Marketing Market
Social media is changing the tools marketers need for success
Then
Information
From Broadcast to Engagement
Consumers love to hate advertising and interact
with brands according to personal preferences
From Campaigns to Real-Time
Fragmentation of channels and content require
constant monitoring of trending topics in order
to capitalize on opportunities
MOST BRANDS ARE NOT PREPARED
Need tools to create value in this new paradigm
where the most valuable audiences are
consuming social media, not measured media.
2/10/2014
Scarce
Abundant
Power
From Mad Men to Math Men
A quantitative revolution replacing “gut feel”
decision making
Now
Sellers
Buyers
Broadcast
1:1 Targeting
Intuitive,
Campaigns
Data Driven,
Real Time
Engagement
Measurement
51
6. Social Media Marketing Market Landscape
Monitor
Manage
Crimson Hexagon
Suite Vendors
Other Buyers
2/10/2014
61
Measure
9. inPowered: A Strategic Divestiture
TRANSACTION SUMMARY
May 2013
Strategic advisor
Vaquero Capital acted as financial advisor to inPowered in connection
with the sale of its subsidiary, NetShelter, to Ziff Davis
COMPANY OVERVIEW
A leading platform for helping brands discover and deliver expert
content to enable consumers to make informed decisions.
Serves large enterprise and SMB customers across multiple industries
Has sold
TRANSACTION DETAIL
Divested NetShelter to raise capital to fund its rapidly growing earned
media advertising platform
The Board and Management did not want to incur dilution associated
with a new capital raise
to
Vaquero believed that NetShelter was a scarce asset and would
bestow market leadership in technology upon the buyer
Executed a targeted process focused on the key strategic buyers that
achieved a premium valuation -- several times greater than the
seller’s expectation
Vaquero developed tactics to create and maintain competitive tension
despite a very limited universe of buyers
Ziff Davis will combine NetShelter with its BuyerBase unit to enable
advertisers to use its targeting product across the entire portfolio
2/10/2014
91
10. DIAMONDBACK: A Strategic Sale
TRANSACTION SUMMARY
Vaquero Capital acting as exclusive advisor to DIAMONDBACK on its
strategic sale process
In Exclusivity
Strategic advisor
COMPANY OVERVIEW
Leading cloud-based social analytics platform helping companies to
design, develop, manage and measure their social performance in the
marketplace
Real-time analytic platform tracking 36,000 brands running 860 trillion
data permutations daily
DIAMONDBACK
Hybrid services and subscription software business model
TRANSACTION DETAIL
Company had been approached by strategic buyers with interest in
parts of the company, but unable to consummate a transaction
Sell Side M&A
Board and management believed that customers would increasingly
need integrated campaign management and analytics solutions
Company faced strong financial headwinds due to strategic mis-steps
and faced a liquidity crunch
Top-tier Social Media
Software Vendor
Vaquero believed developing a strong bidding-pair for this strategic
asset could overcome the challenges associated with a deteriorating
financial condition
Executed a rapid sale process targeting strategic buyers — went to
market in 15 days and 3 months from launch to close
Achieved a valuation of 2x higher than initial bid and found a solution
for both the services and software businesses
2/10/2014
1
10
11. Selected Vaquero Case Studies
December 2012
August 2013
January 2014
Financial and strategic advisor
Has been acquired by
$35,000,000
Recapitalization
$50,000,000
$35,000,000
Growth Capital
TRANSACTION SUMMARY
TRANSACTION SUMMARY
TRANSACTION SUMMARY
$35M recapitalization
Financial advisor to StreetEasy
$35M Senior & Mezzanine Debt round
COMPANY OVERVIEW
COMPANY OVERVIEW
COMPANY OVERVIEW
Safety and compliance SaaS for food
production vertical
De facto online real estate marketplace for
New York City
Leading provider of fully-hosted, all-in-one
eCommerce solution designed for internet
businesses
TRANSACTION DETAIL
TRANSACTION DETAIL
TRANSACTION DETAIL
30% premium to publicly-traded peers
Gives Zillow market leadership in the
country's largest real estate market
Founders wanted to explore Pre-IPO
financing alternatives
Ran competitive process, yielded multiple
bids
Vaquero believed that debt markets would
offer an efficient & flexible source of capital
Massive increase in value from initial bids
Highly efficient process: 6 days from launch
to 1st bid, 7 term sheets
Highly efficient closing process – 28 days
Vaquero invested in Alchemy
2/10/2014
1
11
12. Selected Vaquero Case Studies
September 2011
March 2012
Financial and strategic advisor
Financial advisor
$33,000,000
$44,000,000
Series B Preferred Equity
February 2012
Financial and strategic advisor
$166,250,000
Series A Preferred Equity
Secondary Offering
TRANSACTION SUMMARY
TRANSACTION SUMMARY
TRANSACTION SUMMARY
$33M Series B
$44M secondary offering
$166M Series A
COMPANY OVERVIEW
COMPANY OVERVIEW
COMPANY OVERVIEW
Largest online tech media publisher
Largest small business online community
Leading SaaS analytics for Oil & Gas
TRANSACTION DETAIL
TRANSACTION DETAIL
TRANSACTION DETAIL
Executed dual track sell side & growth
equity process
Executed secondary capital process
Executed a full process, received 20+ bids
Multiple bids at highly strategic values
Vaquero recommended expanding to other
financial partners
Found optimal partner with Board’s designed
structure
Achieved premium valuation and clean
terms in a majority recapitalization
Improved bid valuations by over 45%
2/10/2014
1
12
Vaquero invested in Drilling Info