cloud insights - william blair & company · benefitfocus, a cloud-based benefits software...

March 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

February included 39 SaaS M&A transactions, totaling $635.0 million in disclosed transaction value, with transaction volume decreasing from January, which witnessed 45 M&A transactions, totaling $455.6 million. At the same time last year, 15 M&A transactions had been announced, totaling $428.1 million. William Blair is pleased to have served as an advisor on Trax’s majority recapitalization from Strattam Capital. Notable M&A transactions in February 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

02/26/2015 - - - Trax Technologies Strattam Capital - -

02/24/2015 02/24/2015 - - Red Hot Labs (Toro) Google - -

02/13/2015 - $88.0 $88.0 HealthLine Systems Healthstream - -

02/10/2015 - $270.2 $270.2 Saba Software Vector Capital - -

02/05/2015 - $274.1 $249.9 E2open Insight Venture Partners 3.2x NM

Sources: Capital IQ, FactSet, and 451 Group as of February 27, 2015

SaaS Equity Performance

For February, the broad SaaS group increased 10.5%, the Nasdaq increased 6.1%, and the S&P 500 increased 4.1%. The large-cap SaaS group increased by 10.6%, midcap increased by 12.2%, and small-cap increased by 7.6%.

Indexed Stock Price Performance

Index 2015 YTD February 2015

Large-cap SaaS 7.8% 10.6%

Midcap SaaS 7.3% 12.2%

Small-cap SaaS (1.5%) 7.6%

All SaaS 6.8% 10.5%

NASDAQ 4.8% 6.1%

S&P 500 2.3% 4.1%

Note: All indices are weighted by current market capitalization Source: FactSet as of February 27, 2015

SaaS Capital Markets

February witnessed one SaaS follow-on:

Q2 Holdings, a provider of secure cloud-based banking solutions, completed a follow-on of $101.2 million.


Cloud Insights 2 Summary

SaaS Venture Capital

February venture investment activity consisted of 25 transactions, totaling $389.6 million in disclosed transaction value. Year-over-year, the number of venture capital financings and the total disclosed transaction value decreased. February 2014 witnessed 32 transactions, totaling $561.6 million in disclosed transaction value. Notable SaaS venture investments in February included the following:

Xero, a platform for online and accounting business services for small businesses, received $111.0 million of growth funding from Accel Partners and Matrix Capital.

Benefitfocus, a cloud-based benefits software solutions provider, received $74.7 million from Mercer.

NCino, a cloud-based bank operating solutions provider, received $37.7 million in its second round of funding from Insight Venture Partners and Wellington Management.

Conductor, a developer of enterprise SaaS search engine optimization technology solutions for enterprise marketers, received $27 million in its fourth round of funding from Matrix Partners, FirstMark Capital, Catalyst Investors, Investor Growth Capital, and Blue Cloud Ventures.

Apttus, a SaaS applications provider, received $41.0 million in its second round from K1 Investment Management, ICONIQ Capital, and Salesforce Ventures.

Tracx, a social media management system SaaS platform provider, received $18 million in its third round from Edison Partners, Mousse Partners, Klingenstein, Fields, & Co., and Flybridge Capital Partners.

PaaS and IaaS Activity

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

Mortar Data, a provider of cloud-based services platform for analyzing huge data sets, was acquired by Datadog for an undisclosed amount.

Nodejitsu, a cloud management software company, was acquired by GoDaddy Software for an undisclosed amount.

DRFortress, a carrier-neutral data center and cloud services provider, received an undisclosed amount of funding from Koa Capital Partners.


Cloud Insights Public Company Analysis 3

Public Company Analysis

Year-to-date, the SaaS index was up 6.8%, outperforming the Nasdaq, which was up 4.8%.

Year-to-date, the large-cap SaaS group was up 7.8%, the midcap group was up 7.3%, and the small-cap SaaS group down 1.5%.

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 February 27, 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 February 27, 2015

85

90

95

100

105

110

115

1/1/15 1/16/15 1/31/15 2/15/15

Large-cap (7.8%) Midcap (7.3%) Small-cap (-1.5%) NASDAQ (4.8%)

2/27/15

8.1x

30.9x

41.7x

5.8x

26.3x31.2x

2.3x

19.1x

38.2x

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 2/27/15

Cap ($MM) 12/31/14

Cap ($MM) 2/27/15

Value ($MM)

Revenue Growth

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

Large -cap

athenahealth $127.07 $5,550.3 $4,853.6 $4,947.1 6.57x 6.57x 5.38x nmf 33.0x 31.3x nmf nmf nmf 22.2% 19.9%

Box $18.66 - $2,172.9 $2,047.6 10.63x 9.67x 7.54x nmf nmf nmf nmf nmf nmf 28.2% (51.8%)

DealerTrack Holdings $39.77 $2,403.5 $2,162.0 $2,718.8 3.18x 3.18x 2.49x 25.7x 14.1x 12.2x nmf nmf 23.7x 27.7% 22.6%

Demandware $63.19 $2,089.3 $2,294.4 $2,051.5 12.78x 12.78x 8.78x nmf nmf nmf nmf nmf nmf 45.5% 5.4%

Medidata Solutions $48.11 $2,590.5 $2,617.8 $2,585.9 7.72x 7.72x 6.45x nmf 35.1x 27.7x nmf 56.2x 49.3x 19.7% 22.0%

NetSuite $96.42 $8,377.6 $7,399.2 $7,214.5 12.97x 12.97x 10.00x nmf nmf nmf 43.5x nmf nmf 29.7% 9.6%

Salesforce.com $69.38 $37,424.6 $43,778.8 $44,980.9 8.37x 8.55x 7.01x nmf 47.1x 37.3x 43.6x 52.4x 42.9x 21.9% 18.1%

ServiceNow $76.26 $10,062.2 $11,309.4 $11,084.3 16.24x 16.24x 11.21x nmf nmf nmf 54.8x nmf nmf 44.9% 7.6%

Ultimate Software Group $164.65 $4,165.3 $4,709.9 $4,601.7 9.10x 9.10x 7.46x nmf 38.1x 30.5x nmf nmf nmf 22.0% 23.9%

Veeva Systems $30.87 $3,449.0 $4,031.5 $3,638.6 11.62x 12.01x 9.44x 49.2x 43.3x 34.3x nmf nmf 40.5x 27.1% 27.7%

Workday $85.50 $15,261.1 $15,988.5 $14,624.5 18.56x 19.22x 13.13x nmf nmf nmf nmf nmf nmf 46.4% (13.6%)

Mean 10.70x 10.73x 8.08x nmf 35.1x 28.9x 47.3x 54.3 x 39.1 x 30.5% 8.3%

Median 10.63x 9.67x 7.54x nmf 36.6x 30.9x 43.6x 54.3 x 41.7 x 27.7% 18.1%

Midcap

Castlight $7.29 $1,056.4 $658.2 $465.7 10.21x 10.21x 6.08x nmf nmf nmf nmf nmf nmf 68.1% (161.2%)

Constant Contact $41.33 $1,162.5 $1,328.0 $1,165.4 3.51x 3.51x 3.00x 31.3x 19.2x 15.4x 40.1x 35.2x 29.9x 17.0% 18.3%

Cornerstone OnDemand $31.97 $1,885.1 $1,722.4 $1,665.4 6.32x 6.31x 4.92x nmf nmf nmf 54.0x nmf nmf 28.2% 0.1%

Cvent $28.95 $1,150.5 $1,196.4 $1,028.8 7.23x 7.23x 5.77x nmf 57.1x 56.1x nmf nmf nmf 25.3% 12.7%

Ellie Mae $52.85 $1,159.0 $1,527.7 $1,452.1 8.99x 8.99x 7.06x 46.1x 31.7x 36.7x nmf nmf nmf 27.3% 28.4%

Fleetmatics Group $41.21 $1,339.6 $1,561.7 $1,411.0 6.09x 6.09x 4.88x 24.3x 19.1x 15.3x 35.7x 41.6x 39.5x 24.7% 31.9%

HubSpot $39.12 $1,055.0 $1,289.8 $1,119.1 9.66x 9.66x 6.94x nmf nmf nmf nmf nmf nmf 39.2% (22.8%)

LogMeIn $52.70 $1,203.1 $1,289.3 $1,088.1 4.90x 4.90x 4.15x 52.7x 21.4x 19.2x 20.2x 16.3x 16.6x 18.1% 22.9%

Marketo $27.95 $1,348.5 $1,151.9 $1,045.4 6.97x 6.97x 5.09x nmf nmf nmf nmf nmf nmf 37.1% (13.1%)

New Relic $34.46 $1,604.2 $1,621.4 $1,416.6 14.63x 22.42x 10.50x nmf nmf nmf nmf nmf nmf 113.6% (30.0%)

Paycom $31.88 $1,417.4 $1,716.7 $1,718.5 11.39x 11.39x 8.77x nmf nmf 51.1x nmf nmf nmf 29.9% 17.9%

Paylocity $29.89 $1,314.0 $1,509.1 $1,419.6 11.10x 11.08x 8.50x nmf nmf nmf nmf nmf nmf 30.2% 3.7%

Qualys $46.03 $1,257.8 $1,533.7 $1,406.5 10.53x 10.53x 8.35x nmf 44.4x 32.1x nmf 46.6x 46.7x 26.1% 23.7%

RealPage $20.23 $1,728.9 $1,598.9 $1,592.0 3.94x 3.94x 3.50x 54.5x 23.3x 20.5x 43.5x 48.4x 31.6x 12.6% 16.9%

RingCentral $15.77 $1,016.3 $1,084.3 $968.3 4.40x 4.40x 3.43x nmf nmf nmf nmf nmf nmf 28.2% (8.8%)

Synchronoss $44.26 $1,772.5 $1,890.4 $1,842.5 4.03x 4.03x 3.23x 15.1x 11.9x 9.5x nmf nmf 30.8x 24.6% 33.8%

Zendesk $24.72 $1,775.0 $1,873.6 $1,758.1 13.84x 13.84x 9.32x nmf nmf 48.1x nmf nmf nmf 48.5% 22.0%

Mean 8.10x 8.56x 6.09x 37.3x 28.5x 30.4x 38.7x 37.6 x 32.5 x 35.2% (0.2%)

Median 7.23x 7.23x 5.77x 38.7x 22.3x 26.3x 40.1x 41.6 x 31.2 x 28.2% 16.9%

Small-cap

2U $18.48 $797.1 $758.0 $671.1 6.09x 6.09x 4.64x nmf nmf nmf nmf nmf nmf 31.3% (13.4%)

Amber Road $8.48 $260.1 $218.5 $180.7 2.79x 2.79x 2.62x nmf nmf nmf nmf nmf nmf 6.5% 3.9%

Bazaarvoice $9.25 $627.4 $722.3 $667.8 3.59x 3.64x 3.20x nmf nmf nmf nmf nmf nmf 13.7% (8.3%)

BenefitFocus $32.56 $839.3 $833.8 $831.7 6.05x 6.05x 4.79x nmf nmf nmf nmf nmf nmf 26.3% (31.9%)

ChannelAdvisor $9.89 $537.1 $246.5 $181.9 2.14x 2.14x 1.90x nmf nmf nmf nmf nmf nmf 13.0% (23.1%)

Connecture $8.64 $195.3 $187.3 $207.5 2.54x 2.56x 2.07x nmf nmf 20.7x na nmf 53.5x 23.2% 0.2%

E2open $8.57 $280.7 $251.3 $233.6 2.97x 2.96x 2.75x nmf nmf nmf nmf nmf nmf 7.6% (19.2%)

Five9 $3.90 $219.0 $190.6 $160.0 1.55x 1.55x 1.33x nmf nmf nmf nmf nmf nmf 16.3% (22.1%)

Halogen $8.46 $186.0 $185.3 $107.1 1.89x 1.63x 1.30x nmf nmf nmf nmf nmf nmf 25.8% (15.4%)

IntraLinks Holdings $10.37 $667.8 $582.0 $608.3 2.38x 2.38x 2.25x 22.0x 17.6x 17.4x 56.0x nmf nmf 5.7% 13.5%

Jive Software $5.06 $431.7 $376.4 $268.8 1.50x 1.50x 1.36x nmf nmf nmf 54.5x nmf nmf 10.3% (1.0%)

LivePerson $11.54 $770.6 $630.4 $581.1 2.77x 2.77x 2.18x nmf 26.6x 20.8x na nmf nmf 26.7% 10.4%

Marin Software $6.58 $295.9 $241.5 $176.5 1.78x 1.78x 1.54x nmf nmf nmf nmf nmf nmf 15.7% (17.1%)

MiX Telematics $5.65 $209.4 $185.5 $113.6 0.96x 0.99x 0.91x 5.8x 5.0x 4.3x 24.2x 17.9x 14.9x 8.1% 19.7%

Opower $15.02 $709.3 $748.6 $611.1 4.76x 4.81x 4.00x nmf nmf nmf nmf nmf nmf 20.3% (11.8%)

Q2 Holdings $19.81 $644.7 $721.8 $633.5 8.01x 8.01x 6.03x nmf nmf nmf nmf nmf nmf 32.8% (13.2%)

Rally Software $11.90 $286.7 $300.1 $229.6 2.78x 2.66x 2.23x nmf nmf nmf nmf nmf nmf 19.4% (25.0%)

SciQuest $17.41 $397.7 $480.1 $349.2 3.43x 3.38x 3.23x nmf 15.8x 14.7x 53.2x 37.0x 22.9x 4.7% 21.3%

ServiceSource $3.72 $392.1 $311.7 $217.4 0.80x 0.80x 0.89x nmf nmf nmf nmf nmf nmf (10.0%) (14.1%)

SPS Commerce $68.70 $921.8 $1,123.2 $992.4 7.76x 7.76x 6.34x nmf 54.9x 45.8x nmf nmf 57.4x 22.3% 14.1%

Tangoe $12.41 $506.2 $482.1 $432.4 2.03x 2.03x 1.80x 28.1x 12.8x 11.1x 27.8x 27.1x 17.9x 12.8% 15.9%

Textura $28.21 $725.1 $721.8 $655.5 10.41x 13.03x 7.28x nmf nmf nmf nmf nmf 57.6x 79.0% (9.6%)

Upland $7.05 $145.4 $107.2 $183.7 3.05x 2.84x 2.39x nmf 58.3x nmf na nmf nmf 18.7% 4.9%

Workiva $12.80 $529.6 $505.9 $495.6 4.67x 4.46x 3.58x nmf nmf nmf na nmf nmf 24.5% (27.2%)

Wix $18.33 $799.9 $698.2 $612.2 4.32x 4.32x 3.04x nmf nmf nmf 52.5x nmf nmf 41.9% (11.1%)

Yodlee $12.89 $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 3.61x 3.68x 2.92x 18.6x 29.5x 20.0x 44.7x 27.3 x 37.4 x 19.9% (5.9%)

Median 2.80x 2.80x 2.35x 22.0x 22.1x 19.1x 52.9x 27.1 x 38.2 x 19.1% (10.4%)

Overall

Mean 6.47x 6.65x 4.97x 32.3x 30.7x 26.6x 43.1x 37.9 x 36.0 x 26.9% (1.2%)

Mean 5.48x 5.48x 4.39x 28.1x 29.1x 23.1x 43.6x 39.3 x 35.5 x 24.7% 4.4%

Sources: FactSet and Capital IQ as of February 27, 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 2/27/15 Percent Change in Stock Price

Cap ($MM) 12/31/14

Cap ($MM) 2/27/15

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

12/31/14 to 2/27/15

52-Week Low to 2/27/15

52-Week High to 2/27/15

Large-cap

athenahealth $5,550.3 $4,853.6 145.

70

$145.70 7.52x $97.30 6.14x $193.29 13.11x $127.07 6.57x (12.8%) 30.6% (34.3%)

Box - $2,172.9 - - $16.41 9.42x $24.73 13.39x $18.66 10.63x - 13.7% (24.5%)

DealerTrack Holdings $2,403.5 $2,162.0 $44.31 3.49x $36.43 3.08x $58.34 6.51x $39.77 3.18x (10.2%) 9.2% (31.8%)

Demandware $2,089.3 $2,294.4 $57.54 11.40x $44.39 10.39x $81.28 24.96x $63.19 12.78x 9.8% 42.4% (22.3%)

Medidata Solutions $2,590.5 $2,617.8 $47.75 7.67x $32.10 6.37x $66.09 13.17x $48.11 7.72x 0.8% 49.9% (27.2%)

NetSuite $8,377.6 $7,399.2 $109.17 14.77x $69.48 11.70x $114.37 21.08x $96.42 12.97x (11.7%) 38.8% (15.7%)

Salesforce.com $37,424.6 $43,778.8 $59.31 7.66x $48.18 6.97x $71.00 10.71x $69.38 8.37x 17.0% 44.0% (2.3%)

ServiceNow $10,062.2 $11,309.4 $67.85 14.43x $44.17 13.44x $81.24 23.01x $76.26 16.24x 12.4% 72.7% (6.1%)

Ultimate Software Group

$4,165.3 $4,709.9 $146.82 8.03x $109.50 7.45x $169.95 11.43x $164.65 9.10x 12.1% 50.4% (3.1%)

Veeva Systems $3,449.0 $4,031.5 $26.41 10.57x $17.11 9.28x $34.13 22.50x $30.87 12.59x 16.9% 80.4% (9.5%)

Workday $15,261.1 $15,988.5 $81.61 19.78x $64.21 18.56x $105.58 42.49x $85.50 18.56x 4.8% 33.2% (19.0%)

Midcap

Castlight $1,056.4 $658.2 $11.70 19.17x $6.52 8.73x $41.95 260.41x $7.29 10.21x (37.7%) 11.8% (82.6%)

Constant Contact $1,162.5 $1,328.0 $36.70 3.04x $21.08 1.94 x $43.18 3.58x $41.33 3.51x 12.6% 96.1% (4.3%)

Cornerstone OnDemand

$1,885.1 $1,722.4 $35.20 7.14x $25.99 6.06x $59.29 17.89x $31.97 6.32x (9.2%) 23.0% (46.1%)

Cvent $1,150.5 $1,196.4 $27.84 6.80x $22.13 5.99x $44.31 14.57x $28.95 7.23x 4.0% 30.8% (34.7%)

Ellie Mae $1,159.0 $1,527.7 $40.32 6.65x $23.62 4.61x $54.53 9.19x $52.85 8.99x 31.1% 123.8% (3.1%)

Fleetmatics Group $1,339.6 $1,561.7 $35.49 5.20x $25.43 4.48x $43.74 8.73x $41.21 6.09x 16.1% 62.1% (5.8%)

HubSpot $1,055.0 $1,289.8 $33.61 10.03x $25.79 8.26x $44.34 12.19x $41.09 10.06x 22.3% 59.3% (7.3%)

LogMeIn $1,203.1 $1,289.3 $49.34 4.54x $37.06 3.60x $54.54 12.19x $52.70 4.90x 6.8% 42.2% (3.4%)

Marketo $1,348.5 $1,151.9 $32.72 8.25x $22.02 6.72x $41.50 18.24x $27.95 6.97x (14.6%) 26.9% (32.7%)

New Relic $1,604.2 $1,621.4 $34.84 15.61x $29.66 14.28x $38.65 19.09x $34.46 14.63x (1.1%) 16.2% (10.8%)

Paycom $1,417.4 $1,716.7 $26.33 9.45x $12.28 5.15x $35.12 12.06x $31.88 11.39x 21.1% 159.6% (9.2%)

Paylocity $1,314.0 $1,509.1 $26.11 9.71x $15.24 6.67x $31.00 14.04x $29.89 11.10x 14.5% 96.1% (3.6%)

Qualys $1,257.8 $1,533.7 $37.75 8.57x $18.00 4.57x $50.00 11.13x $46.03 10.53x 21.9% 155.7% (7.9%)

RealPage $1,728.9 $1,598.9 $21.96 4.29x $14.87 3.01x $23.11 4.63x $20.23 3.94x (7.9%) 36.0% (12.5%)

RingCentral $1,016.3 $1,084.3 $14.92 4.07x $10.02 3.02x $22.29 8.61x $15.77 4.40x 5.7% 57.4% (29.3%)

Synchronoss Technologies

$1,772.5 $1,890.4 $41.86 3.74x $27.78 2.91x $54.05 5.20x $44.26 4.03x 5.7% 59.3% (18.1%)

Zendesk $1,775.0 $1,873.6 $24.37 13.16x $11.06 13.96x $28.20 19.58x $24.72 13.84x 1.4% 123.5% (12.3%)

Small-cap

2U $797.1 $758.0 $19.66 6.50x $10.52 4.85x $20.57 8.51x $18.48 6.09x (6.0%) 75.7% (10.2%)

Amber Road $260.1 $218.5 $10.22 3.44x $7.50 2.51x $18.09 8.04x $8.48 2.79x (17.0%) 13.1% (53.1%)

Bazaarvoice $627.4 $722.3 $8.04 3.18x $5.85 2.17x $9.39 3.71x $9.25 3.71x 15.0% 58.1% (1.5%)

BenefitFocus $839.3 $833.8 $32.84 5.97x $19.58 3.91x $71.71 16.52x $32.56 6.05x (0.9%) 66.3% (54.6%)

ChannelAdvisor $537.1 $246.5 $21.58 5.41x $8.22 1.62x $48.95 16.02x $9.89 2.14x (54.2%) 20.4% (79.8%)

Connecture $195.3 $187.3 $9.01 2.64x $8.04 1.62x $10.39 16.02x $8.64 2.54x (4.1%) 7.5% (16.8%)

E2open $280.7 $251.3 $9.61 3.26x $5.21 1.75x $29.49 11.90x $8.57 2.97x (10.8%) 64.5% (70.9%)

Five9 $219.0 $190.6 $4.48 1.79x $3.64 1.50x $9.35 5.19x $3.90 1.55x (12.9%) 7.1% (58.3%)

Halogen $284.7 $148.1 $7.34 2.04x $7.59 1.88x $11.79 5.31x $8.46 2.04x 15.3% 11.5% (28.2%)

IntraLinks Holdings $670.4 $582.0 $11.90 2.74x $7.76 1.89x $12.28 2.79x $10.37 2.38x (12.9%) 33.6% (15.6%)

Jive Software $779.0 $376.4 $6.03 1.90x $4.89 1.41x $9.45 3.99x $5.06 1.50x (16.1%) 3.5% (46.5%)

LivePerson $802.3 $630.4 $14.10 3.26x $8.84 2.26x $14.70 3.87x $11.54 2.77x (18.2%) 30.5% (21.5%)

Marin Software $334.1 $241.5 $8.46 2.26x $6.25 1.58x $12.65 3.99x $6.58 1.78x (22.2%) 5.3% (48.0%)

MiX Telematics $209.4 $185.5 $6.50 1.15x $5.36 0.96x $12.63 3.01x $2.73 0.97x (58.0%) -49.1% (78.4%)

Opower $709.3 $748.6 $14.23 4.45x $9.88 3.49x $26.00 13.19x $15.02 5.11x 5.6% 52.0% (42.2%)

Q2 Holdings $644.7 $721.8 $18.84 7.01x $9.62 4.99x $21.96 11.17x $19.81 8.01x 5.1% 105.9% (9.8%)

Rally Software $286.7 $300.1 $11.37 2.62x $8.24 1.66x $19.10 6.79x $11.90 2.78x 4.7% 44.4% (37.7%)

SciQuest $397.7 $480.1 $14.45 2.68x $13.31 2.41x $32.69 8.15x $17.41 3.43x 20.5% 30.8% (46.7%)

ServiceSource International

$392.1 $311.7 $4.68 1.06x $2.81 0.41x $9.03 2.26x $3.72 0.80x (20.5%) 32.4% (58.8%)

SPS Commerce $921.8 $1,123.2 $56.63 6.10x $43.84 5.86x $71.38 9.74x $68.70 7.76x 21.3% 56.7% (3.8%)

Tangoe $506.2 $482.1 $13.03 2.16x $11.03 1.89x $19.12 3.80x $12.41 2.03x (4.8%) 12.5% (35.1%)

Textura $725.1 $721.8 $28.47 10.48x $13.80 5.30x $30.53 19.81x $28.21 10.41x (0.9%) 104.4% (7.6%)

Upland $145.4 $107.2 $9.56 3.68x $6.74 3.00x $12.20 3.97x $7.05 3.05x (26.3%) 4.6% (42.2%)

Workiva $529.6 $505.9 $13.40 4.89x $12.25 4.48x $16.53 5.85x $12.80 4.67x (4.5%) 4.5% (22.6%)

Wix $799.9 $698.2 $21.00 4.98x $14.28 4.32x $29.92 16.00x $18.33 4.32x (12.7%) 28.4% (38.7%)

Yodlee $356.6 $377.2 $12.20 5.21x $8.90 2.42x $17.97 5.99x $12.89 3.44x 5.7% 44.8% (28.3%)

Sources: FactSet and Capital IQ as of February 27, 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 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


Not Disclosed

has agreed to beacquired by

$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


March 10, 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

William Blair’s investment banking group combines signi�icant transaction experience, rich industry knowledge, and deep relationships to deliver successful advisory and �inancing solutions to our global base of corporate clients. We serve both publicly traded and privately held companies, executing mergers and acquisitions, growth �inancing, �inancial restructuring, and general advisory projects. This comprehensive suite of services allows us to be a long-term partner to our clients as they grow and evolve. From 2010 - 2013, the investment banking group completed 250 merger-and-acquisition transactions worth more than $52 billion in value, involving parties in 27 countries and four continents, was an underwriter on over 20% of all U.S. initial public offerings and arranged more than $11.5 billion of debt �inancing.

About William Blair Investment Banking

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