cloud insights - williamblair.com · cloud insights summary 1 summary saas mergers and acquisitions...

-ÁÙ 2015 Monthly Update

Cloud InsightsM&A and Capital Markets Perspective on the Cloud Computing Industries:

• Software-as-a-Service

• Platform-as-a-Service

• Infrastructure-as-a-Service

William Blair & Company

Cloud Insights Table of Contents

Summary ............................................................................................................................................................................................................................................................. 1

Public Company Analysis ............................................................................................................................................................................................................................ 3

William Blair & Company Selected Cloud Transactions .............................................................................................................................................................. 6

William Blair & Company Cloud Contacts ........................................................................................................................................................................................... 7

William Blair & Company SaaS Equity Research Coverage ........................................................................................................................................................ 8

Disclosures ......................................................................................................................................................................................................................................................... 9


Cloud Insights Summary 1

Summary

SaaS Mergers and Acquisitions

April included 26 SaaS M&A transactions, totaling $2,851.1 million in disclosed transaction value, with transaction volume decreasing from March, which witnessed 34 M&A transactions, totaling $288.5 million. At the same time last year, 28 M&A transactions had been announced, totaling $717.0 million. William Blair is pleased to have served as an advisor on HealthcareSource’s sale to Francisco Partners. Notable M&A transactions in April included the following:

Selected SaaS Mergers and Acquisitions

Date Trans. Value Enterprise

Enterprise Value /

Announced Completed ($MM) Value($MM) Target Acquirer(s) LTM Revenue LTM EBITDA

04/28/2015 - - - HealthcareSource Francisco Partners - -

04/28/2015 - $533.0 $533.0 TellApart Twitter - -

04/27/2015 - $600.0 $600.0 Applied Predictive Technologies

MasterCard - -

04/23/2015 - $200.0 $200.0 Bronto Software NetSuite - -

04/20/2015 - $1,900.0 $1,900.0 Websense Raytheon 3.5x -

04/01/2015 04/01/2015 - - Toopher Salesforce.com - -

Sources: Capital IQ, FactSet, and 451 Group as of April 30, 2015

SaaS Equity Performance

For April, the broad SaaS group increased 5.5%, the Nasdaq increased 1.3%, and the S&P 500 increased 1.3%. The large-cap SaaS group increased by 6.7%, midcap increased by 1.7%, and small-cap increased by 0.3%. Growth in the large-cap SaaS group was primarily driven by salesforce.com, which experienced a 14.5% market capitalization increase in April.

Indexed Stock Price Performance

Index 2015 YTD April 2015

Large-cap SaaS 10.5% 6.7%

Midcap SaaS 8.4% 1.7%

Small-cap SaaS (1.3%) 0.3%

All SaaS 9.1% 5.5%

NASDAQ 4.3% 1.3%

S&P 500 1.3% 1.3%

Note: All indices are weighted by current market capitalization Source: FactSet as of April 30, 2015

SaaS Capital Markets

April witnessed one SaaS IPO announcement:

Shopify, a cloud-based e-commerce platform, filed an S-1 to raise $107.8 million in an initial public offering.


Cloud Insights 2 Summary

SaaS Venture Capital

April venture investment activity consisted of 35 transactions, totaling $488.0 million in disclosed transaction value. Year-over-year, the number of venture capital financings and the total disclosed transaction value decreased. April 2014 witnessed 39 transactions, totaling $630.6 million in disclosed transaction value. Notable SaaS venture investments in April included the following:

Domo, a cloud-based executive management platform, received $210.0 million of growth funding from Glynn Capital Management, BlackRock, GGV Capital, and The Capital Group Companies in its fourth round of funding.

Freshdesk, an on-demand customer support software solutions company, received $50.0 million of funding from Accel partners, Tiger Global Management, and Google Capital in its fifth round of funding.

Duo Security, a two-factor authentication as a service provider, received $30.0 million of funding from Benchmark Capital, Redpoint Ventures, True Ventures, Radar Partners, and Google Ventures in its third round of funding.

FirstFuel Software, a SaaS energy analytics platform, received $23 million of funding from Battery Ventures, Nth Power, IDInvest Partners, RockPort Capital partners, Next World Capital, and E.ON Strategic Co-Investments in its third round of funding.

PaaS and IaaS Activity

Notable events in the PaaS and IaaS sectors in April included the following:

Cervalis, a business continuity/rapid recovery collocation services company, was acquired by CyrusOne for $400 million.

FiberCloud, a colocation, high-speed Internet connectivity, and custom cloud-hosted services provider, was acquired by Green House Data for an undisclosed amount.

OnLine, a cloud-based PaaS gaming solutions provider, was acquired by Sony Entertainment for an undisclosed amount.

Computenext, a cloud services e-commerce platform for infrastructure-as-a-service discovery and procurement, received $2 million of funding from undisclosed investors.


Cloud Insights Public Company Analysis 3

Public Company Analysis

Year-to-date, the SaaS index was up 9.1%, outperforming the Nasdaq, which was up 4.3%.

Year-to-date, the large-cap SaaS group was up 10.5%, the midcap group was up 8.4%, and the small-cap SaaS group down 1.3%.

SaaS Indexed Stock Price Performance (2015 Year-to-Date)

Note: Groupings based on market caps at December 31, 2014 Mkt. Cap > $3 billion consists of: ATHN, CNQR, MDSO, N, CRM, NOW, ULTI, VEEV, WDAY Mkt. Cap $1 billion to $3 billion consists of: BNFT, CSOD, CVT, TRAK, DWRE, FLTX, MKTO, RP, RNG, SPSC, SNCR Mkt. Cap < $1 billion consists of: AMBR, BOX, BV, CSLT, ECOM, CTCT, EOPN, ELLI, FIVN, HGN, HUBS, IL, JIVE, LPSN, LOGM, MRIN, MIXT, OPWR, PAYC, PCTY, QTWO, QLYS,

RALY, SQI, SREV, TNGO, TWOU, TXTR, UPLD, WIX, YDLE, ZEN Source: FactSet as of April 30, 2015

Valuation Overview

Note: Groupings based on market caps at December 31, 2014; data points represent median multiples Sources: FactSet and Capital IQ as of April 30, 2015

85

90

95

100

105

110

115

1/1/15 1/16/15 1/31/15 2/15/15 3/2/15 3/17/15 4/1/15 4/16/15 5/1/15

Large-cap (10.5%) Midcap (8.4%) Small-cap (-1.3%) NASDAQ (4.3%)

4/30/15

7.6x

30.6x

39.9x

5.5x

29.3x

36.1x

2.3x

17.8x

36.6x

EV / 2015E Revenue EV / 2015E EBITDA EV / 2015E FCF

Large-cap Midcap Small-cap


Cloud Insights 4 Public Company Analysis

Comparable Company Analysis – Groupings Based on Market Caps at December 31, 2014

Market Market Enterprise Enterprise Value/Revenue

Enterprise Value/EBITDA

Enterprise Value/FCF

'14-'15E 2014

Close 4/30/15

Cap ($MM) 12/31/14

Cap ($MM) 4/30/15

Value ($MM)

Revenue Growth

EBITDA Margin LTM 2014 2015E LTM 2014 2015E LTM 2014E 2015E

Large -cap

athenahealth $122.66 $5,550.3 $4,685.1 $4,890.2 6.50x 6.50x 5.32x nmf 32.6x 30.5x nmf nmf nmf 22.2% 19.9%

Box $17.11 - $1,995.1 $1,706.6 7.88x 8.06x 6.14x nmf nmf nmf nmf nmf nmf 31.1% (51.8%)

DealerTrack Holdings $39.31 $2,403.5 $2,137.0 $2,693.8 3.15x 3.15x 2.47x 25.4x 14.0x 12.1x nmf nmf 25.1x 27.7% 22.6%

Demandware $61.60 $2,089.3 $2,252.4 $2,009.5 12.52x 12.52x 8.62x nmf nmf nmf nmf nmf nmf 45.3% 5.4%

Medidata Solutions $53.43 $2,590.5 $2,949.1 $2,895.3 8.64x 8.64x 7.19x nmf 39.3x 30.8x nmf nmf 41.2x 20.2% 22.0%

NetSuite $95.57 $8,377.6 $7,413.4 $7,222.8 12.98x 12.98x 9.92x nmf nmf nmf 43.6x nmf nmf 30.9% 9.6%

Salesforce.com $72.82 $37,424.6 $47,737.6 $48,939.8 9.11x 9.30x 7.63x nmf 51.0x 40.4x 47.4x 56.9x 46.8x 21.9% 18.2%

ServiceNow $74.86 $10,062.2 $11,495.9 $11,202.2 16.41x 16.41x 11.30x nmf nmf nmf 55.4x nmf nmf 45.2% 7.6%

Ultimate Software Group $166.22 $4,165.3 $4,754.9 $4,642.2 9.18x 9.18x 7.53x nmf 38.4x 31.2x nmf nmf nmf 21.8% 23.9%

Veeva Systems $26.55 $3,449.0 $3,490.6 $3,092.7 9.87x 10.16x 7.97x 42.3x 36.0x 26.9x nmf nmf 38.5x 27.5% 28.2%

Workday $91.21 $15,261.1 $17,283.0 $15,919.0 20.21x 20.92x 14.30x nmf nmf nmf nmf nmf nmf 46.3% (13.6%)

Mean 10.59x 10.71x 8.03x nmf 35.2x 28.7x 48.8x 56.9 x 37.9 x 30.9% 8.4%

Median 9.18x 9.30x 7.63x nmf 37.2x 30.6x 47.4x 56.9 x 39.9 x 27.7% 18.2%

Midcap

Castlight $7.53 $1,056.4 $700.8 $508.3 11.15x 11.15x 6.66x nmf nmf nmf nmf nmf nmf 67.3% (158.9%)

Constant Contact $34.85 $1,162.5 $1,121.4 $942.3 2.84x 2.84x 2.43x 25.3x 15.5x 12.5x 32.5x 28.5x 24.1x 17.0% 18.3%

Cornerstone OnDemand $28.63 $1,885.1 $1,544.0 $1,487.0 5.64x 5.63x 4.40x nmf nmf nmf 48.2x nmf nmf 27.9% 0.1%

Cvent $26.88 $1,150.5 $1,116.6 $949.0 6.67x 6.67x 5.32x nmf 52.6x 51.7x nmf nmf nmf 25.3% 12.7%

Ellie Mae $55.00 $1,159.0 $1,616.8 $1,545.0 9.56x 9.56x 7.50x 49.1x 33.8x 38.9x nmf nmf nmf 27.5% 28.3%

Fleetmatics Group $45.58 $1,339.6 $1,742.0 $1,591.2 6.87x 6.87x 5.51x 27.4x 21.6x 17.3x 40.3x 46.9x 45.1x 24.7% 31.9%

HubSpot $39.51 $1,055.0 $1,257.2 $1,086.5 9.38x 9.38x 6.75x nmf nmf nmf nmf nmf nmf 39.0% (22.8%)

LogMeIn $64.18 $1,203.1 $1,580.4 $1,347.9 6.07x 6.07x 5.11x nmf 26.6x 23.1x 25.0x 20.3x 23.7x 18.8% 22.9%

Marketo $28.45 $1,348.5 $1,198.3 $1,101.0 7.34x 7.34x 5.27x nmf nmf nmf nmf nmf nmf 39.4% (13.1%)

New Relic $32.49 $1,604.2 $1,528.7 $1,323.9 13.67x 20.96x 9.66x nmf nmf nmf nmf nmf nmf 117.0% (30.0%)

Paycom $31.61 $1,417.4 $1,845.1 $1,846.9 12.24x 12.24x 9.36x nmf nmf 53.9x nmf nmf nmf 30.8% 17.9%

Paylocity $28.15 $1,314.0 $1,421.2 $1,331.7 10.42x 10.39x 7.98x nmf nmf nmf nmf nmf nmf 30.3% 3.7%

Qualys $49.52 $1,257.8 $1,681.0 $1,553.8 11.63x 11.63x 9.23x nmf 49.0x 35.5x nmf 52.0x 47.3x 26.1% 23.7%

RealPage $19.84 $1,728.9 $1,578.3 $1,571.4 3.88x 3.88x 3.45x 53.8x 22.3x 19.2x 43.0x 47.8x 31.2x 12.6% 17.4%

RingCentral $17.23 $1,016.3 $1,190.1 $1,076.5 4.90x 4.90x 3.76x nmf nmf nmf nmf nmf nmf 30.1% (8.8%)

Synchronoss $45.88 $1,772.5 $1,974.1 $2,010.7 4.40x 4.40x 3.51x 16.5x 13.0x 10.3x nmf nmf 41.0x 25.2% 33.8%

Zendesk $23.06 $1,775.0 $1,916.2 $1,800.7 14.17x 14.17x 9.55x nmf nmf 49.2x nmf nmf nmf 48.4% 22.0%

Mean 8.28x 8.71x 6.20x 34.4x 29.3x 31.2x 37.8x 39.1 x 35.4 x 35.7% (0.1%)

Median 7.34x 7.34x 5.51x 27.4x 24.4x 29.3x 40.3x 46.9 x 36.1 x 27.9% 17.4%

Small-cap

2U $26.61 $797.1 $1,096.8 $1,009.9 9.16x 9.16x 6.96x nmf nmf nmf nmf nmf nmf 31.6% (13.4%)

Amber Road $8.76 $260.1 $228.0 $190.2 2.93x 2.93x 2.45x nmf nmf nmf nmf nmf nmf 19.8% 3.9%

Bazaarvoice $5.38 $627.4 $423.1 $375.3 2.02x 2.04x 1.86x nmf nmf nmf nmf nmf nmf 9.7% (6.0%)

BenefitFocus $34.55 $839.3 $983.3 $981.2 7.14x 7.14x 5.65x nmf nmf nmf nmf nmf nmf 26.3% (31.9%)

ChannelAdvisor $10.23 $537.1 $255.1 $190.5 2.24x 2.24x 1.99x nmf nmf nmf nmf nmf nmf 13.0% (23.1%)

Connecture $11.12 $195.3 $241.3 $266.1 3.15x 3.15x 2.61x nmf nmf 24.0x nmf nmf 53.2x 20.6% 2.3%

Five9 $5.43 $219.0 $269.4 $238.8 2.32x 2.32x 1.99x nmf nmf nmf nmf nmf nmf 16.2% (22.1%)

Halogen $10.50 $186.0 $229.9 $147.5 2.60x 2.25x 1.84x nmf nmf nmf nmf nmf nmf 22.4% (15.4%)

IntraLinks Holdings $9.80 $667.8 $561.6 $588.0 2.30x 2.30x 2.17x 48.8x 17.0x 16.9x 45.3x nmf nmf 5.8% 13.5%

Jive Software $5.38 $431.7 $402.3 $294.7 1.65x 1.65x 1.50x nmf nmf nmf 59.8x nmf nmf 10.3% (1.0%)

LivePerson $9.40 $770.6 $535.1 $485.8 2.31x 2.31x 1.84x 46.3x 22.2x 17.8x 22.6x nmf 54.3x 26.0% 10.4%

Marin Software $6.04 $295.9 $221.9 $156.8 1.58x 1.58x 1.36x nmf nmf nmf nmf nmf nmf 15.7% (17.1%)

Mix Telematics $7.00 $209.4 $218.1 $147.9 1.25x 1.29x 1.22x 7.6x 6.5x 5.8x 31.5x 23.3x 19.9x 5.3% 19.7%

Opower $10.00 $709.3 $509.5 $384.9 3.00x 3.00x 2.62x nmf nmf nmf nmf nmf nmf 14.4% (10.3%)

Q2 Holdings $20.35 $644.7 $756.8 $668.5 8.45x 8.45x 6.36x nmf nmf nmf nmf nmf nmf 32.8% (13.2%)

Rally Software $14.46 $286.7 $370.1 $303.5 3.47x 3.51x 2.94x nmf nmf nmf nmf nmf nmf 19.6% (25.9%)

SciQuest $15.37 $397.7 $424.0 $296.6 2.91x 2.87x 2.74x 57.6x 13.5x 12.8x 45.2x 31.4x 19.4x 4.7% 21.3%

ServiceSource $3.57 $392.1 $303.8 $209.5 0.77x 0.77x 0.85x nmf nmf nmf nmf nmf nmf (10.0%) (13.3%)

SPS Commerce $65.26 $921.8 $1,078.4 $944.9 7.38x 7.38x 6.00x nmf 52.2x 43.5x nmf nmf nmf 23.0% 14.1%

Tangoe $13.68 $506.2 $533.1 $483.4 2.27x 2.27x 2.02x 29.5x 14.3x 12.4x 29.9x 30.2x 20.0x 12.9% 15.9%

Textura $26.17 $725.1 $671.9 $604.6 9.60x 12.02x 6.72x nmf nmf nmf nmf nmf 53.1x 78.9% (9.6%)

Upland $6.16 $145.4 $94.0 $88.8 1.38x 1.38x 1.25x nmf 22.9x 26.1x 5.8x nmf nmf 10.1% 6.0%

Workiva $14.47 $529.6 $581.5 $505.2 4.48x 4.48x 3.59x nmf nmf nmf nmf nmf nmf 24.7% (24.5%)

Wix $19.47 $799.9 $752.5 $666.5 4.70x 4.70x 3.28x nmf nmf nmf 57.2x nmf nmf 43.2% (7.9%)

Yodlee $12.74 $356.6 $321.3 $250.2 2.81x 2.81x 2.31x nmf 45.4x 25.3x nmf nmf nmf 21.7% 6.2%

Mean 3.67x 3.76x 2.97x 37.9x 24.3x 20.5x 37.2x 28.3 x 36.7 x 20.0% (4.8%)

Median 2.81x 2.81x 2.31x 46.3x 19.6x 17.8x 38.3x 30.2 x 36.6 x 19.6% (7.9%)

Overall

Mean 6.59x 6.79x 5.06x 35.8x 29.1x 26.7x 39.5x 37.5 x 36.5 x 27.3% (0.6%)

Mean 6.07x 6.07x 5.11x 35.9x 24.7x 25.3x 43.3x 31.4 x 39.7 x 24.7% 5.4%

Sources: FactSet and Capital IQ as of April 30, 2015


Cloud Insights Public Company Analysis 5

Stock Price and Revenue Multiple Over Time – Groupings Based on Market Caps at December 31, 2014

Market Market 12/31/14

52-Week Low Point 52-Week High Point 4/30/15 Percent Change in Stock Price

Cap ($MM) 12/31/14

Cap ($MM) 4/30/15

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

12/31/14 to 4/30/15

52-Week Low to 4/30/15

52-Week High to 2/27/15

Large-cap

athenahealth $5,550.3 $4,685.1 145.

70

$145.70 7.52x $97.30 6.02x $153.25 13.11x $122.66 6.14x (15.8%) 26.1% (20.0%)

Box - $1,995.1 - - $16.41 7.80x $24.73 13.39x $17.11 7.88x - 4.3% (30.8%)

DealerTrack Holdings $2,403.5 $2,137.0 $44.31 3.49x $36.43 3.02x $50.59 6.51x $39.31 3.15x (11.3%) 7.9% (22.3%)

Demandware $2,089.3 $2,252.4 $57.54 11.40x $44.39 10.39x $71.61 24.96x $61.60 12.52x 7.1% 38.8% (14.0%)

Medidata Solutions $2,590.5 $2,949.1 $47.75 7.67x $32.10 6.37x $58.97 13.17x $53.43 8.25x 11.9% 66.4% (9.4%)

NetSuite $8,377.6 $7,413.4 $109.17 14.77x $69.48 11.42x $114.37 21.08x $95.57 12.08x (12.5%) 37.6% (16.4%)

Salesforce.com $37,424.6 $47,737.6 $59.31 7.66x $48.18 6.97x $78.46 10.71x $72.82 9.11x 22.8% 51.1% (7.2%)

ServiceNow $10,062.2 $11,495.9 $67.85 14.43x $44.17 13.44x $83.52 23.01x $74.86 14.83x 10.3% 69.5% (10.4%)

Ultimate Software Group

$4,165.3 $4,754.9 $146.82 8.03x $109.50 7.45x $183.25 11.43x $166.22 8.76x 13.2% 51.8% (9.3%)

Veeva Systems $3,449.0 $3,490.6 $26.41 10.57x $17.11 8.84x $33.66 22.50x $26.55 9.87x 0.5% 55.2% (21.1%)

Workday $15,261.1 $17,283.0 $81.61 19.78x $64.21 17.56x $97.40 42.49x $91.21 20.21x 11.8% 42.0% (6.4%)

Midcap

Castlight $1,056.4 $700.8 $11.70 19.17x $6.52 8.73x $19.45 260.41x $7.53 11.15x (35.6%) 15.5% (61.3%)

Constant Contact $1,162.5 $1,121.4 $36.70 3.04x $23.99 1.94 x $43.18 3.67x $34.85 2.75x (5.0%) 45.3% (19.3%)

Cornerstone OnDemand

$1,885.1 $1,544.0 $35.20 7.14x $25.99 5.47x $47.00 17.89x $28.63 5.64x (18.7%) 10.2% (39.1%)

Cvent $1,150.5 $1,116.6 $27.84 6.80x $22.13 5.99x $30.30 14.57x $26.88 6.67x (3.4%) 21.5% (11.3%)

Ellie Mae $1,159.0 $1,616.8 $40.32 6.65x $23.62 4.61x $67.00 10.17x $55.00 8.42x 36.4% 132.9% (17.9%)

Fleetmatics Group $1,339.6 $1,742.0 $35.49 5.20x $25.43 4.48x $49.18 8.73x $45.58 6.87x 28.4% 79.2% (7.3%)

HubSpot $1,055.0 $1,257.2 $33.61 10.03x $25.79 8.26x $48.00 12.19x $38.71 9.78x 15.2% 50.1% (19.4%)

LogMeIn $1,203.1 $1,580.4 $49.34 4.54x $37.06 3.60x $70.00 12.19x $64.18 5.76x 30.1% 73.2% (8.3%)

Marketo $1,348.5 $1,198.3 $32.72 8.25x $22.02 6.28x $35.63 18.24x $28.45 6.73x (13.1%) 29.2% (20.2%)

New Relic $1,604.2 $1,528.7 $34.84 15.61x $29.66 13.27x $38.65 19.09x $32.49 13.67x (6.7%) 9.5% (15.9%)

Paycom $1,417.4 $1,845.1 $26.33 9.45x $12.28 5.15x $35.86 12.82x $31.61 12.24x 20.1% 157.4% (11.9%)

Paylocity $1,314.0 $1,421.2 $26.11 9.71x $15.24 6.67x $33.22 14.04x $28.15 10.42x 7.8% 84.7% (15.3%)

Qualys $1,257.8 $1,681.0 $37.75 8.57x $18.00 4.57x $55.47 12.78x $49.52 11.63x 31.2% 175.1% (10.7%)

RealPage $1,728.9 $1,578.3 $21.96 4.29x $14.87 3.01x $23.11 4.63x $19.84 3.88x (9.7%) 33.4% (14.1%)

RingCentral $1,016.3 $1,190.1 $14.92 4.07x $10.02 3.02x $17.95 8.61x $17.23 4.54x 15.5% 72.0% (4.0%)

Synchronoss Technologies

$1,772.5 $1,974.1 $41.86 3.74x $27.78 2.91x $54.05 5.20x $45.88 4.09x 9.6% 65.2% (15.1%)

Zendesk $1,775.0 $1,916.2 $24.37 13.16x $11.06 11.83x $28.20 19.58x $23.06 14.17x (5.4%) 108.5% (18.2%)

Small-cap

2U $797.1 $1,096.8 $19.66 6.50x $10.52 4.85x $29.07 9.97x $26.61 9.16x 35.4% 152.9% (8.5%)

Amber Road $260.1 $228.0 $10.22 3.44x $7.50 2.51x $18.09 8.04x $8.76 2.93x (14.3%) 16.8% (51.6%)

Bazaarvoice $627.4 $423.1 $8.04 3.18x $5.64 2.02x $9.39 3.71x $5.38 2.02x (33.1%) (4.6%) (42.7%)

BenefitFocus $839.3 $983.3 $32.84 5.97x $19.58 3.91x $49.34 16.52x $34.55 7.14x 5.2% 76.5% (30.0%)

ChannelAdvisor $537.1 $255.1 $21.58 5.41x $8.22 1.62x $27.16 16.02x $10.23 2.24x (52.6%) 24.5% (62.3%)

Connecture $195.3 $241.3 $9.01 2.55x $8.04 1.62x $14.39 16.02x $11.12 3.15x 23.4% 38.3% (22.7%)

Five9 $219.0 $269.4 $4.48 1.79x $3.64 1.50x $8.20 5.19x $5.43 2.32x 21.2% 49.2% (33.8%)

Halogen $284.7 $189.8 $7.34 2.04x $7.59 1.88x $10.73 5.31x $10.50 2.72x 43.1% 38.3% (2.1%)

IntraLinks Holdings $670.4 $561.6 $11.90 2.74x $7.76 1.89x $12.28 2.79x $9.80 2.30x (17.6%) 26.3% (20.2%)

Jive Software $779.0 $402.3 $6.03 1.90x $4.88 1.41x $8.75 3.99x $5.38 1.65x (10.8%) 10.2% (38.5%)

LivePerson $802.3 $535.1 $14.10 3.26x $8.84 2.22x $14.70 3.87x $9.40 2.31x (33.3%) 6.3% (36.1%)

Marin Software $334.1 $221.9 $8.46 2.26x $5.87 1.54x $12.65 3.99x $6.04 1.58x (28.6%) 2.9% (52.3%)

Mix Telematics $209.4 $218.1 $6.50 1.15x $5.36 0.93x $11.94 3.01x $3.29 1.29x (49.4%) (38.6%) (72.4%)

Opower $709.3 $509.5 $14.23 4.45x $8.70 2.44x $20.45 13.19x $10.00 3.00x (29.7%) 14.9% (51.1%)

Q2 Holdings $644.7 $756.8 $18.84 7.01x $9.62 4.99x $21.96 11.17x $20.35 8.45x 8.0% 111.5% (7.3%)

Rally Software $286.7 $370.1 $11.37 2.62x $8.24 1.66x $16.13 6.79x $14.46 3.47x 27.2% 75.5% (10.4%)

SciQuest $397.7 $424.0 $14.45 2.68x $13.31 2.41x $19.10 8.15x $15.37 2.90x 6.4% 15.5% (19.5%)

ServiceSource International

$392.1 $303.8 $4.68 1.06x $2.81 0.41x $6.17 2.26x $3.57 0.77x (23.7%) 27.0% (42.1%)

SPS Commerce $921.8 $1,078.4 $56.63 6.10x $43.84 5.86x $72.84 9.74x $65.26 6.95x 15.2% 48.9% (10.4%)

Tangoe $506.2 $533.1 $13.03 2.16x $11.03 1.89x $16.41 3.80x $13.68 2.27x 5.0% 24.0% (16.6%)

Textura $725.1 $671.9 $28.47 10.48x $13.80 5.30x $30.53 19.81x $26.17 8.84x (8.1%) 89.6% (14.3%)

Upland $145.4 $94.0 $9.56 3.44x $6.25 1.38x $12.20 3.97x $6.16 1.38x (35.6%) (1.4%) (49.5%)

Workiva $529.6 $581.5 $13.40 4.61x $12.25 3.98x $16.53 5.85x $14.47 4.48x 8.0% 18.1% (12.5%)

Wix $799.9 $752.5 $21.00 4.98x $14.28 4.07x $23.53 16.00x $19.47 4.70x (7.3%) 36.3% (17.3%)

Yodlee $356.6 $374.6 $12.20 5.21x $8.90 2.42x $17.97 5.99x $12.74 3.41x 4.4% 43.1% (29.1%)

Sources: FactSet and Capital IQ as of April 30, 2015


Cloud Insights 6 William Blair & Company Selected Cloud Transactions

William Blair & Company Selected Cloud Transactions

Selected M&A Transactions

Selected Public Equity Transactions

Selected Private Equity Transactions

Not Disclosed

has agreed to beacquired by

Not Disclosed

has been recapitalized by

Not Disclosed

has been acquired by

$157,800,000

has acquired

(PAI Group, Inc)

$178,229,986


Not Disclosed

has merged with

$205,000,000


$532,500,000


Not Disclosed


$130,000,000

has agreed to beacquired by

$61,042,000

Initial Public Offering

$267,929,750

Initial Public Offering& Follow-On Offering

$46,153,848


$147,487,500

Follow-on Offering

$235,153,754

Initial Public Offering& Follow-On Offerings

$171,818,346

Follow-on Offering

$186,826,425


$158,622,000


$289,875,586


$286,645,242


$695,594,375


$115,848,192


$234,939,011


$91,351,224


$266,512,000


$41,000,000

Private EquityPreferred Stock

Not Disclosed

Private EquityPreferred Stock

TM

Not Disclosed

received a significant investment from

Not Disclosed

Series EPreferred Stock

$54,000,000

Preferred Stock


Cloud Insights William Blair & Company Cloud Contacts 7

William Blair & Company Cloud Contacts

Dan Connolly is a managing director and co-head of the software investment banking practice at William Blair based in Chicago. Dan joined William Blair in 1999. Previously, Dan spent three years in the M&A group at Merrill Lynch & Company. During his career, Dan has successfully completed more than 90 acquisition and financing transactions throughout the world, for which he has received industry recognition, including the 2011 M&A Atlas Technology & Telecom Deal of the Year and the 2012 40 Under 40 M&A Advisor Recognition Award. Dan graduated from the University of Notre Dame where he was twice elected class president, and he received his M.B.A. from Harvard Business School.

[email protected] +1 312 364 8544

Chris Lane is a managing director and co-head of the software investment banking practice at William Blair based in San Francisco. Chris joined William Blair in 2013. Before joining William Blair, Chris spent 12 years with Jefferies in Silicon Valley; before that, he was at Deutsche Bank for 4 years. Chris has led many transformative M&A and capital market transactions in the technology sector, including the sales of Paradigm to Apax Partners; Radiant Systems to NCR; Layer 7 to CA; and i2 to IBM. Chris received a B.A. from Colgate University and an M.B.A. from Northwestern University’s Kellogg School of Management.


Scott Mattson is a managing director of the software and mobility group at William Blair based in Boston. Scott joined William Blair in 2011. Previously, Scott worked at Canaccord Genuity in the technology team for five years covering location technology, software, Internet, and digital media companies. Scott has significant transaction experience including merger and acquisition advisory and public and private financings. Before his investment banking career, Scott was a lieutenant in the Navy where he was responsible for the procurement, maintenance, and modernization of nuclear-powered submarines. Scott graduated with distinction from the United States Naval Academy with a B.S. in economics and earned his M.B.A. from the University of Maryland while serving in the Navy.


Andrew Arno is a director of enterprise and application software at William Blair based in San Francisco. Andrew joined the firm in 2004. From 2000 to 2002, he was an investment banking associate at WR Hambrecht+Co. in the technology group. From 1997 to 2000, he worked at The Shattan Group LLC, a boutique investment bank focused on private equity placements. He received his B.A. from Columbia University and his M.B.A. from the Haas School of Business at University of California, Berkeley.


Peter Dalrymple is a director in the technology investment banking group at William Blair based in Boston. Peter joined the firm in 2011. Previously, Peter spent three years in the technology investment banking group at Canaccord Genuity focused on software, Internet, and digital media companies. Before his investment banking career, he was an associate with Pelion Venture Partners and also served as the Central and Southeast European country manager for the U.S. Trade & Development Agency. Peter graduated from Bates College with a B.S. in political science and earned an M.B.A. in finance from Northeastern University.


Raphael Grunschlag is a managing director and head of European technology banking at William Blair, focusing on expanding the firm’s technology practice across Europe and the Middle East. Raphael joined the firm in 2012. He has more than 16 years of investment banking experience and has advised on more than $24 billion of transactions, across M&A, ECM, and debt financings. Before joining William Blair, Raphael served as head of European technology investment banking at Bank of America Merrill Lynch (2005-2011), led the European Internet and software team for the CSFB Technology Group (1999-2005), and previously worked at Hambrecht & Quist (1995-1999). Raphael holds a master’s degree in international affairs from Columbia University’s School of International and Public Affairs and a B.A. in Middle East and Asian languages and cultures from Columbia.


Andrew Kaye joined William Blair in 2009 and spent five years based in Shanghai, China, as head of Asian banking and technology. Andy has held positions at CIBC World Markets where he was regional head and Robertson Stephens where he led several technology groups in Europe, as well as heading Israel. Andy holds an M.B.A. with honors from Fordham University, New York, and a B.A. in accounting and marketing from Tel Aviv. [email protected] +44 20 7868 4450


Cloud Insights 8 William Blair & Company SaaS Equity Research Coverage

William Blair & Company SaaS Equity Research Coverage

SaaS Equity Research

Company Ticker Analyst

athenahealth ATHN Ryan Daniels

Benefitfocus BNFT Adam Klauber

ChannelAdvisor ECOM Justin Furby

Connecture CNXR Adam Klauber

Cornerstone OnDemand CSOD Justin Furby

Demandware DWRE Justin Furby

The Descartes Systems Group DSGX Bhavan Suri

E2open EOPN Bhavan Suri

Ellie Mae ELLI Brandon Dobell

Fleetmatics FLTX Bhavan Suri

HealthStream HSTM Ryan Daniels

MiX Telematics MIXT Bhavan Suri

NetSuite N Justin Furby

Paylocity PCTY Justin Furby

Rally Software RALY Bhavan Suri

RealPage RP Brandon Dobell

RingCentral RNG Bhavan Suri

Salesforce.com CRM Bhavan Suri

SciQuest SQI Bhavan Suri

ServiceNow NOW Justin Furby

SPS Commerce SPSC Bhavan Suri

Textura TXTR Bhavan Suri

Ultimate Software ULTI Justin Furby

Veeva Systems VEEV Bhavan Suri

WageWorks WAGE Robert Napoli

Workday WDAY Justin Furby


May 12, 2015

Cloud Insights Disclosures 9

Disclosures

William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being “Eligible Counterparties” and Professional Clients). This Document is not to be distributed or passed on to any “Retail Clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision. William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com

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