Cloud Insights - William Blair · Cloud Insights Summary 1 Summary SaaS Mergers and Acquisitions ... a SaaS analytics company, filed an S-1 to raise $109.3 million in an initial public

December 2014 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

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

November included 34 SaaS M&A transactions, totaling $1,034.3 million in disclosed transaction value, with transaction volume increasing from October, which witnessed 25 M&A transactions, totaling $947.8 million. At the same time last year, 13 M&A transactions had been announced, totaling $426.6 million. Notable M&A transactions in November 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

11/19/2014 11/19/2014 $75.0 $75.0 Smarterer Pluralsight - -

11/11/2014 11/18/2014 $325.0 $325.0 Xtime Cox Automotive 8.1x -

11/05/2014 - $114.0 $114.0 Telesphere Networks Vonage Holdings - -

11/05/2014 11/07/2014 $70.0 $70.0 ContactAtOnce! LivePerson 3.6x -

11/03/2014 11/25/2014 $400.0 $400.0 bswift Aetna - -

Sources: Capital IQ, FactSet, and 451 Group as of November 30, 2014

SaaS Equity Performance

For November, the broad SaaS group decreased 3.0%, the Nasdaq increased 3.3%, and the S&P 500 increased 2.5%. The large-cap SaaS group decreased by 4.2%, midcap decreased by 1.6%, and small-cap increased by 8.1%.

Indexed Stock Price Performance

Index 2014 YTD November 2014

Large-cap SaaS 3.5% (4.2%)

Midcap SaaS (10.7%) (1.6%)

Small-cap SaaS (20.6%) 8.1%

All SaaS (0.5%) (3.0%)

NASDAQ 14.7% 3.3%

S&P 500 11.9% 2.5%

Note: All indices are weighted by current market capitalization Source: FactSet as of November 30, 2014

SaaS Capital Markets

November witnessed one SaaS IPO, one IPO filing, and one follow-on filing:

Upland Software (UPLD $12.10), a provider of cloud-based enterprise work management software, completed an initial public offering of $46.2 million. William Blair is pleased to have served as a bookrunner on the offering.

New Relic, a SaaS analytics company, filed an S-1 to raise $109.3 million in an initial public offering.

Paylocity, a provider of cloud-based payroll and human capital management software solutions, filed to raise $138.1 million in a follow-on offering. William Blair is pleased to serve as a bookrunner on the offering.


Cloud Insights 2 Summary

SaaS Venture Capital

November venture investment activity consisted of 13 transactions, totaling $267.7 million in disclosed transaction value. Year-over-year, the number of venture capital financings decreased while total disclosed transaction value increased. November 2013 witnessed 28 transactions, totaling $199.0 million in disclosed transation value. Notable SaaS venture investments in November included the following:

Avalara, a provider of cloud-based software that delivers sales tax and other transactional compliance solutions, received $150 million of growth funding from lead investor Warburg Pincus.

Bigcommerce, a provider of software services to online retailers and merchants, received $50 million in a Series D round led by SoftBank with participation from Telstra Ventures, American Express, General Catalyst, and Revolution Growth.

Boost Media, a SaaS-based creative optimization platform for advertisers, received $19 million in a Series C round led by Battery Ventures with participation from Javelin Venture Partners, Pinnacle Ventures, and Webb Investment Network and individual investors.

CloudOne Corporation, a provider of SaaS and virtual private cloud solutions for IBM software tools, received $4 million in Series D funding in a round led by Plymouth Ventures with participation from Elevate Ventures and HKS Capital Advisors.

Eye-R Systems, a developer of SaaS-based building energy efficiency performance analytics software, received $10 million from lead investor Massachusetts Clean Energy Center with participation from Athena, Constellation Technology Ventures, and Tamarisc.

SendGrid, an operator of a transactional and marketing e-mail delivery services, received $21 million in a Series C round led by Bain Capital Ventures and included participation from Bessemer Venture Partners and Foundry Group.

PaaS and IaaS Activity

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

InterCloud Systems, a provider of cloud-based services including PaaS, IaaS, and database as a service, received $1.0 million from an undisclosed investor.

Isocket, an operator of an API-based platform for the automation of reserved media sales, was acquired by The Rubicon Project for $21.6 million.

Resolve Systems, a provider of cloud and smarter infrastructure solutions, was acquired by Lotus Innocations for an undisclosed amount.

Sendspree, a provider of Web hosting services, was acquired by Squarespace for an undisclosed amount.


Cloud Insights Public Company Analysis 3

Public Company Analysis

Year-to-date, the SaaS index was down 0.5%, underperforming the Nasdaq, which was up 14.7%.

Year-to-date, the large-cap SaaS group was up 3.5%, while midcap and small-cap SaaS groups were down, decreasing 10.7% and 20.6%, respectively.

SaaS Indexed Stock Price Performance (2014 Year-to-Date)

Note: Groupings based on market caps at December 31, 2013 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, 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 November 30, 2014

Valuation Overview

Note: Groupings based on market caps at December 31, 2013; data points represent median multiples Sources: FactSet and Capital IQ as of November 30, 2014

60

70

80

90

100

110

120

130

1/1/14 1/31/14 3/2/14 4/1/14 5/1/14 6/1/14 7/1/14 7/31/14 8/30/14 9/29/14 10/30/14 11/29/14

Large-cap (3.5%) Midcap (-10.7%) Small-cap (-20.6%) NASDAQ (14.7%)

11/30/14

10.4x34.3x

45.3x

5.2x20.0x

51.3x

4.1x

21.4x

29.2x

EV / 2014E Revenue EV / 2014E EBITDA EV / 2014E FCF

Large-cap Midcap Small-cap


Cloud Insights 4 Public Company Analysis

Comparable Company Analysis – Groupings Based on Market Caps at December 31, 2013

Market Market Enterprise Enterprise Value/Revenue

Enterprise Value/EBITDA

Enterprise Value/FCF

'14E-'15E 2014E

Close 11/30/14

Cap ($MM) 12/31/13

Cap ($MM) 11/30/14

Value ($MM)

Revenue Growth

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

Large -cap

athenahealth $117.30 $5,001.9 $4,468.4 $4,576.0 6.44x 6.13x 4.95x nmf 32.9x 27.7x nmf nmf nmf 23.8% 18.6%

Medidata Solutions $42.71 $3,236.5 $2,317.1 $2,297.0 7.17x 6.82x 5.63x nmf 30.9x 23.4x nmf 42.6x 41.9x 21.2% 22.1%

NetSuite $105.75 $7,693.9 $8,115.1 $7,956.0 15.50x 14.36x 10.99x nmf nmf nmf 52.2x nmf nmf 30.7% 8.6%

Salesforce.com $59.87 $33,279.6 $37,778.0 $39,202.8 7.73x 7.45x 6.11x nmf 42.2x 32.2x 43.6x 48.1x 38.2x 22.0% 17.6%

ServiceNow $63.96 $7,770.7 $9,485.3 $9,275.5 15.21x 13.68x 9.80x nmf nmf nmf 56.6x nmf nmf 39.6% 6.5%

Ultimate Software Group $147.24 $4,279.0 $4,177.3 $4,076.5 8.45x 8.06x 6.61x 59.3x 34.3x 26.7x nmf nmf nmf 21.9% 23.5%

Veeva Systems $32.85 $3,999.9 $4,265.2 $3,872.3 13.40x 12.78x 10.08x nmf 46.8x 37.8x nmf nmf 43.1x 26.8% 27.3%

Workday $87.05 $14,536.4 $16,191.3 $14,846.2 21.10x 19.59x 13.46x nmf nmf nmf nmf nmf nmf 45.5% (13.6%)

Mean 11.87x 11.11x 8.45x nmf 37.4x 29.5x 50.8x 45.3 x 41.1 x 28.9% 13.8%

Median 10.92x 10.42x 8.20x nmf 34.3x 27.7x 52.2x 45.3 x 41.9 x 25.3% 18.1%

Midcap

BenefitFocus $27.09 $1,412.6 $692.3 $673.4 5.28x 4.96x 3.92x nmf nmf nmf nmf nmf nmf 26.7% (35.5%)

Cornerstone OnDemand $31.77 $2,773.9 $1,701.4 $1,697.8 7.01x 6.49x 4.94x nmf nmf nmf nmf nmf nmf 31.4% (0.1%)

Cvent $26.92 $1,463.1 $1,112.5 $929.8 6.96x 6.56x 5.23x nmf 55.8x 45.0x nmf nmf 53.9x 25.4% 11.8%

DealerTrack Holdings $47.16 $2,113.7 $2,548.4 $3,130.9 4.21x 3.70x 3.06x 32.4x

16.4x 13.5x 41.8x nmf 36.6x 20.7% 22.6%

Demandware $56.00 $2,218.7 $2,033.4 $1,774.3 12.49x 11.44x 8.28x nmf nmf nmf nmf nmf nmf 38.1% 6.5%

Fleetmatics Group $35.19 $1,594.1 $1,328.3 $1,192.1 5.48x 5.16x 4.14x 23.9x

16.8x 13.1x nmf 49.7x 34.5x 24.7% 30.7%

Marketo $31.96 $1,429.9 $1,317.1 $1,205.5 8.88x 8.12x 6.01x nmf nmf nmf nmf nmf nmf 35.1% (17.1%)

RealPage $20.56 $1,816.0 $1,618.7 $1,626.6 4.11x 4.02x 3.66x 46.2x

23.3x 18.9x 32.0x 52.8x 29.1x 9.7% 17.3%

RingCentral $12.58 $1,143.2 $856.9 $736.0 3.62x 3.37x 2.66x nmf nmf nmf nmf nmf nmf 26.8% (9.3%)

SPS Commerce $58.28 $1,046.2 $948.7 $807.9 6.70x 6.35x 5.21x nmf 46.6x 37.3x nmf nmf 45.1x 21.9% 13.6%

Synchronoss Technologies $42.83 $1,258.6 $1,813.6 $1,749.5 4.12x 3.85x 3.21x 15.4x

11.2x 9.1x 19.1x nmf 30.5x 20.0% 34.3%

Mean 6.26x 5.82x 4.57x 29.5x

28.3x 22.8x 31.0x 51.3 x 38.3 x 25.5% 6.8%

Median 5.48x 5.16x 4.14x 28.1x

20.0x 16.2x 32.0x 51.3 x 35.5 x 25.4% 11.8%

Small-cap

2U $18.08 - $733.0 $652.4 6.26x 5.95x 4.57x nmf nmf nmf nmf nmf nmf 30.2% (14.2%)

Amber Road $11.80 - $300.3 $263.2 4.19x 4.12x 3.74x nmf nmf nmf na nmf nmf 10.2% 0.8%

Bazaarvoice $7.36 $591.0 $574.4 $508.8 2.83x 2.78x 2.46x nmf nmf nmf nmf nmf nmf 12.8% (9.7%)

Castlight $12.43 - $1,122.3 $940.2 25.94x 21.27x 11.60x nmf nmf nmf nmf nmf nmf 83.3% (178.2%)

ChannelAdvisor $17.60 $945.7 $438.1 $360.5 4.42x 4.14x 3.23x nmf nmf nmf nmf nmf nmf 28.3% (21.2%)

Constant Contact $32.68 $952.6 $1,035.2 $880.7 2.76x 2.66x 2.27x 23.8x 14.6x 11.6x 31.7x 29.2x 22.4x 17.0% 18.3%

E2open $6.73 $633.8 $196.6 $172.3 2.25x 2.11x 1.76x nmf nmf nmf nmf nmf nmf 19.7% (17.3%)

Ellie Mae $40.46 $738.8 $1,163.0 $1,077.6 7.42x 6.88x 5.47x 41.0x 26.8x 30.3x 50.4x nmf nmf 25.7% 25.6%

Five9 $4.41 - $215.6 $180.7 1.83x 1.78x 1.48x nmf nmf nmf nmf nmf nmf 19.9% (24.4%)

Halogen $8.80 $284.7 $192.6 $75.7 1.40x 1.18x 0.97x nmf nmf nmf nmf nmf nmf 20.9% (15.8%)

HubSpot $35.39 - $1,110.9 $1,170.9 11.25x 10.33x 8.04x nmf nmf nmf na nmf nmf 28.5% (22.8%)

IntraLinks Holdings $10.88 $670.4 $610.6 $644.3 2.57x 2.52x 2.36x nmf 17.3x 14.2x 47.5x nmf nmf 6.7% 14.6%

Jive Software $5.90 $779.0 $422.4 $330.8 1.94x 1.86x 1.61x nmf nmf nmf nmf nmf nmf 15.6% (2.8%)

LivePerson $12.94 $802.3 $707.2 $620.1 3.12x 2.96x 2.33x nmf 28.7x 21.6x 22.6x 37.3x 43.6x 27.1% 10.3%

LogMeIn $50.57 $812.6 $1,233.0 $1,036.7 5.00x 4.70x 4.02x 53.1x 21.4x 18.4x 21.0x 17.0x 16.3x 16.8% 22.0%

Marin Software $8.62 $334.1 $301.5 $229.6 2.44x 2.33x 1.96x nmf nmf nmf nmf nmf nmf 19.1% (19.8%)

Mix Telematics $8.63 - $272.5 $196.0 1.67x 1.64x 1.50x 9.7x 8.6x 7.5x nmf 35.5x 26.2x 9.5% 19.0%

Opower $15.57 - $776.1 $638.5 5.34x 5.03x 4.18x nmf nmf nmf nmf nmf nmf 20.3% (11.8%)

Paycom $28.75 - $1,469.5 $1,478.2 10.78x 10.03x 7.78x nmf 58.7x 42.6x nmf nmf nmf 28.9% 17.1%

Paylocity $29.09 - $1,445.0 $1,372.2 11.69x 10.86x 8.44x nmf nmf nmf nmf nmf nmf 28.7% 3.3%

Q2 Holdings $18.59 - $636.1 $546.5 7.52x 6.93x 5.33x nmf nmf nmf nmf nmf nmf 30.0% (13.3%)

Qualys $35.49 $745.3 $1,182.5 $1,069.1 8.48x 8.06x 6.66x nmf 38.2x 31.5x 56.9x 49.1x 35.6x 21.0% 21.1%

Rally Software $10.55 $474.8 $265.9 $188.9 2.29x 2.18x 1.79x nmf nmf nmf nmf nmf nmf 21.6% (29.9%)

SciQuest $14.91 $675.9 $410.4 $286.1 2.80x 2.77x 2.64x nmf 12.7x 13.2x 25.6x 29.1x 20.2x 4.9% 21.8%

ServiceSource International $4.07 $679.6 $341.0 $236.2 0.86x 0.89x 0.92x nmf nmf nmf nmf nmf nmf (3.1%) (17.2%)

Tangoe $13.01 $688.8 $505.2 $457.6 2.20x 2.15x 1.89x 31.6x 13.8x 11.4x 33.1x 26.6x 15.7x 13.9% 15.6%

Textura $23.96 $737.4 $610.2 $544.9 8.47x 10.88x 6.10x nmf nmf nmf na nmf 36.7x 78.4% (10.2%)

Upland $12.10 - $173.5 $197.8 3.64x 3.07x 2.58x nmf nmf nmf na nmf nmf 19.0% 4.7%

Wix $21.41 $982.7 $815.5 $721.7 5.76x 5.15x 3.57x nmf nmf nmf nmf nmf nmf 44.4% (21.9%)

Yodlee $11.83 - $345.8 $453.4 5.38x 5.13x 4.24x nmf nmf 49.0x na nmf nmf 20.8% 5.8%

Zendesk $23.76 - $1,730.6 $1,628.1 14.67x 13.04x 9.03x nmf 58.1x 44.5x na nmf nmf 44.4% 22.4%

Mean 5.71x 5.33x 4.02x 31.8x 27.2x 24.7x 36.1x 32.0 x 27.1 x 24.7% (6.7%)

Median 4.19x 4.12x 3.23x 31.6x 21.4x 20.0x 32.4x 29.2 x 24.3 x 20.8% (2.8%)

Overall

Mean 6.82x 6.37x 4.85x 33.6x 29.8x 25.2x 38.2x 37.9 x 33.5 x 25.5% (0.5%)

Median 5.43x 5.14x 4.16x 32.0x 27.8x 23.4x 37.5x 37.3 x 35.6 x 21.9% 6.1%

Sources: FactSet and Capital IQ as of November 30, 2014


Cloud Insights Public Company Analysis 5

Stock Price and Revenue Multiple Over Time – Groupings Based on Market Caps at December 31, 2013

Market Market 12/31/13

52-Week Low Point 52-Week High Point 11/30/14 Percent Change in Stock Price

Cap ($MM) 12/31/13

Cap ($MM) 11/30/14

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

12/31/13 to 11/30/14

52-Week Low to 11/30/14

52-Week High to 11/30/14

Large-cap

athenahealth $5,001.9 $4,468.4 $134.50 8.71x $97.30 6.14x $206.70 13.11x $117.30 6.44x (12.8%) 20.6% (43.3%)

Medidata Solutions $3,236.5 $2,317.1 $60.50 11.22x $32.10 6.37x $68.21 13.17x $42.71 7.17x (29.4%) 33.1% (37.4%)

NetSuite $7,693.9 $8,115.1 $103.02 18.07x $69.48 11.70x $120.77 21.37x $105.75 15.50x 2.6% 52.2% (12.4%)

Salesforce.com $33,279.6 $37,778.0 $55.19 9.32x $48.18 7.16x $67.00 10.71x $59.87 7.73x 8.5% 24.3% (10.6%)

ServiceNow $7,770.7 $9,485.3 $56.01 17.78x $44.17 13.44x $71.80 23.01x $63.96 15.21x 14.2% 44.8% (10.9%)

Ultimate Software Group

$4,279.0 $4,177.3 $153.22 10.18x $109.50 7.45x $171.96 11.43x $147.24 8.45x (3.9%) 34.5% (14.4%)

Veeva Systems $3,999.9 $4,265.2 $32.10 19.91x $17.11 9.28x $39.81 30.35x $32.85 13.40x 2.3% 92.0% (17.5%)

Workday $14,536.4 $16,191.3 $83.16 33.61x $64.15 21.10x $116.47 42.49x $87.05 21.10x 4.7% 35.7% (25.3%)

Midcap

BenefitFocus $1,412.6 $692.3 $57.74 12.75x $20.82 4.26x $77.00 18.43x $27.09 5.28x (53.1%) 30.1% (64.8%)

Cornerstone OnDemand

$2,773.9 $1,701.4 $53.31 14.91x $25.99 6.06 x $61.85 17.89x $31.77 7.01x (40.4%) 22.2% (48.6%)

Cvent $1,463.1 $1,112.5 $36.39 11.75x $22.13 5.99x $44.31 14.57x $26.92 6.96x (26.0%) 21.6% (39.2%)

DealerTrack Holdings $2,113.7 $2,548.4 $48.08 4.40x $36.43 3.08x $58.84 6.51x $47.16 4.21x (1.9%) 29.5% (19.9%)

Demandware $2,218.7 $2,033.4 $64.12 20.33x $44.39 11.82x $82.23 24.96x $56.00 12.49x (12.7%) 26.2% (31.9%)

Fleetmatics Group $1,594.1 $1,328.3 $43.25 8.33x $25.43 4.48x $44.52 9.15x $35.19 5.48x (18.6%) 38.4% (21.0%)

Marketo $1,429.9 $1,317.1 $37.07 13.52x $22.02 7.32x $45.00 18.59x $31.96 8.88x (13.8%) 45.1% (29.0%)

RealPage $1,816.0 $1,618.7 $23.38 4.70x $14.87 3.01x $23.55 5.36x $20.56 4.11x (12.1%) 38.3% (12.7%)

RingCentral $1,143.2 $856.9 $18.37 7.20x $10.02 3.02x $23.65 8.61x $12.58 3.62x (31.5%) 25.5% (46.8%)

SPS Commerce $1,046.2 $948.7 $65.30 9.25x $43.84 5.86x $71.82 10.49x $58.28 6.70x (10.8%) 32.9% (18.9%)

Synchronoss Technologies

$1,258.6 $1,813.6 $31.07 3.50x $25.28 2.91x $54.05 5.20x $42.83 4.12x 37.9% 69.4% (20.8%)

Small-cap

2U - $733.0 - - $10.52 4.85x $20.20 8.51x $18.08 6.26x NM 71.9% (10.5%)

Amber Road - $300.3 - - $9.50 3.92x $18.09 8.04x $11.80 4.19x NM 24.2% (34.8%)

Bazaarvoice $591.0 $574.4 $7.92 3.35x $5.85 2.17x $8.73 3.60x $7.36 2.93x (7.1%) 25.8% (15.7%)

Castlight - $1,122.3 - - $10.05 22.52x $41.95 260.41x $12.43 25.94x NM 23.7% (70.4%)

ChannelAdvisor $945.7 $438.1 $41.71 12.77x $11.83 2.77x $49.90 16.02x $17.60 4.42x (57.8%) 48.8% (64.7%)

Constant Contact $952.6 $1,035.2 $31.07 2.96x $21.08 1.94x $35.96 3.21x $32.68 2.76x 5.2% 55.0% (9.1%)

E2open $633.8 $196.6 $23.91 8.94x $5.31 1.75x $29.82 11.90x $6.73 2.25x (71.9%) 26.7% (77.4%)

Ellie Mae $738.8 $1,163.0 $26.87 5.24x $23.62 4.33x $42.49 7.75x $40.46 7.42x 50.6% 71.3% (4.8%)

Five9 - $215.6 - - $4.04 1.72x $9.35 5.19x $4.41 1.83x NM 9.2% (52.8%)

Halogen $284.7 $168.8 $12.38 4.41x $7.70 2.07x $14.25 5.32x $8.80 2.32x (28.9%) 14.3% (38.2%)

HubSpot $284.7 $1,110.9 - - $25.79 8.80x $38.60 12.19x $35.39 11.70x NM 37.2% (8.3%)

IntraLinks Holdings $670.4 $610.6 $12.11 2.84x $7.76 1.89x $12.50 2.97x $10.88 2.57x (10.2%) 40.2% (13.0%)

Jive Software $779.0 $422.4 $11.25 4.61x $5.59 1.92x $11.44 4.85x $5.90 1.94x (47.6%) 5.5% (48.4%)

LivePerson $802.3 $707.2 $14.82 4.08x $8.84 2.26x $15.24 4.24x $12.94 3.12x (12.7%) 46.4% (15.1%)

LogMeIn $812.6 $1,233.0 $33.55 3.69x $31.08 3.43x $53.38 5.70x $50.57 5.00x 50.7% 62.7% (5.3%)

Marin Software $334.1 $301.5 $10.24 2.97x $7.30 2.08x $12.65 3.99x $8.62 2.44x (15.8%) 18.1% (31.9%)

Mix Telematics $ 368.8 $272.5 $ 12.4 $ 2.6 $6.81 1.47x $13.96 3.51x $8.63 1.63x (30.5%) 26.7% (38.2%)

Opower - $776.1 - - $14.71 5.34x $26.00 13.19x $15.57 5.34x NM 5.8% (40.1%)

Paycom - $1,469.5 - - $12.28 5.15x $29.42 10.78x $28.75 10.78x NM 134.1% (2.3%)

Paylocity - $1,445.0 - - $15.24 6.67x $31.00 14.04x $29.09 11.69x NM 90.9% (6.2%)

Q2 Holdings - $636.1 - - $9.62 3.96x $20.22 9.31x $18.59 7.52x NM 93.2% (8.1%)

Qualys $745.3 $1,182.5 $23.11 5.98x $18.00 4.57x $37.61 8.78x $35.49 8.48x 53.6% 97.2% (5.6%)

Rally Software $474.8 $265.9 $19.45 5.41x $8.40 1.66x $24.00 8.27x $10.55 2.38x (45.8%) 25.6% (56.0%)

SciQuest $675.9 $410.4 $28.48 7.20x $13.31 2.74x $32.69 8.20x $14.91 2.80x (47.6%) 12.0% (54.4%)

ServiceSource International

$679.6 $341.0 $8.38 1.89x $2.81 0.41x $9.63 2.89x $4.07 0.86x (51.4%) 44.8% (57.7%)

Tangoe $688.8 $505.2 $18.01 3.44x $11.33 2.06x $20.08 3.93x $13.01 2.20x (27.8%) 14.8% (35.2%)

Textura $737.4 $610.2 $29.94 12.95x $13.80 5.30x $41.50 28.17x $23.96 8.47x (20.0%) 73.6% (42.3%)

Upland - $173.5 - - $9.60 3.30x $12.20 3.97x $12.10 3.64x NM 26.0% (0.8%)

Wix $982.7 $815.5 $26.85 12.12x $14.28 4.44x $32.69 16.16x $21.41 5.76x (20.3%) 49.9% (34.5%)

Yodlee - $345.8 - - $11.36 4.38x $17.97 5.99x $11.83 5.38x NM 4.1% (34.2%)

Zendesk - $1,730.6 - - $11.06 11.78x $28.20 19.58x $23.76 14.67x NM 114.8% (15.7%)

Sources: FactSet and Capital IQ as of November 30, 2014


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 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

Not Disclosed


$275,867,750

Initial Public Offering& Follow-On Offering

$46,153,848

Initial Public Offering

$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


$111,298,383


$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 vice president 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 is a managing director and co-heads William Blair’s European and Asian technology practice. Andy joined William Blair in 2009 and spent 5 years based in Shanghai, China, as head of Asian Banking & 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 MBA with honors from Fordham University, New York and a BA in accounting and marketing from Tel Aviv. [email protected] +011 86 21 2327 2233


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

Concur Technologies CNQR Bhavan Suri

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


December 12, 2014

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

Cloud Insights - William Blair · Cloud Insights Summary 1 Summary SaaS Mergers and Acquisitions ... a SaaS analytics company, filed an S-1 to raise $109.3 million in an initial public

Documents