SlideShare a Scribd company logo
1 of 43
Download to read offline
THE STATE OF SMB SOFTWARE
A look at 2018’s fundraising and exit trends among North
American SMB software companies
2018
A g e n d a
01 Introduction
02 Methodology and Scope
03 Venture Capital (VC) deals
04 Private Equity (PE) deals
05 Mergers & Acquisitions (M&A)
06 IPOs
07 Public Market Activity
08 Takeaways and Recap
surepathcapital.com
S u r e P a t h : O u r P u r p o s e
Helping fund, grow , and exit SMB software companies
SurePath maximizes your optionality:
We make sure you know what it takes to build a market leader and capitalize you towards that goal.
We ensure you are always in the minds of strategic buyers so that if they decide to make a move in your
space, you are in the conversation. You can then decide; Keep going or exit?
The process of raising growth capital is very different from raising early stage capital
It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your
aspiration, you need growth capital
We help you prepare for growth stage and help you raise the capital needed to become a market leader
Growth
Funding
We track every SMB software company in the market
Buyers have recognized that we have unique insights into this market
We leverage our in-depth coverage and insights to accelerate our clients’ acquisition programs
Acquisitions
Great exits don’t just happen. Buyers don’t just show up ready to pay a premium
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
No other investment banking firm has the depth of our relationships in the SMB world
Exits
3
3
surepathcapital.com
S u r e P a t h a n d S M B
Business Management E-Commerce
CRMMarketing Tech
Payments/ POS
We have been part of some the most successful SMB SaaS companies
We have deep relationships with SMB investors and buyers
SurePath is committed to becoming the leading strategic financial advisor to the global SMB software market
4
surepathcapital.com
R e c e n t S u r e P a t h D e a l s
5
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $60,000,000
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
CAD $115,000,000
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $11,800,000
served as the exclusive strategic
and financial advisor to
a wholly-owned subsidiary of
on its sale to
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $32,000,000
surepathcapital.com
T h e S u r e P a t h T e a m
The SurePath team has over 30 years of experience in operating, growing, investing, buying, and selling SMB software companies.
M A R K
M A C L E O D
F O U N D E R
J O S H
S C H E R M A N
V I C E - P R E SI D E N T
D A N I A L
S H A I K H
A S S O C I A T E
6
E R I K
M O S N E Y
A N A L Y S T
S A R A
D E F I N A
A N A L Y S T
K J
L E E
A N A L Y S T
2018 SMB Software Deals
Welcome to our third annual State of SMB Software Report, looking at fundraising and exit activity in the Small
and Mid-Sized Business (SMB) software space in North America. To isolate the SMB deal activity, we analyzed
over 5,776 deals narrowing them down to 553 venture deals, 37 PE Growth and Buyout/LBO deals, 83 M & A
deals, and 9 IPOs representing over $44.3B in deal proceeds. VC funding captured the most dollars, followed
by M & A. However, we see PE as a growing category of deals giving companies two bites at the apple – a
partial exit today, with significant upside for the future.
We track SMB software companies across three broad categories: Grow my Business (front office), Run my
Business (middle office) and Track my Business (back office). For VCs, most activity was in front office. For PE
firms, the middle office was most popular.
2018 was a banner year across every deal category in SMB except angel/ seed funding. We added some new
categories of SMB software companies to our coverage. Even excluding this addition, overall deal volume and
$ were up significantly. 2018 was a great time to raise capital and also a great time to sell.
Public tech stocks took a big hit at the end of the year. Our SMB index was not immune to this and finished 2018
flat with the beginning of the year. Despite this we saw 9 IPOs.
We hope you find this report useful and invite you to get in touch to discuss it with us.
The SurePath team
January 2019
T h e S t a t e o f S M B S o f t w a r e
surepathcapital.com8
surepathcapital.com
M e t h o d o l o g y
In 2018, there were over 5,766 deals in the B2B software
space, globally.
3,462 deals were in North America
682 deals (553 venture deals, 83
M&A deals, 37 PE/Buyout/LBO
deals, and 9 IPOs) involved
companies with a clear SMB
software offering
9
surepathcapital.com
2 0 1 8 S M B S o f t w a r e D e a l L a n d s c a p e
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, crowdfunding and deals with undisclosed values.
2018 was a very strong year for deal activity across all deal types, except angel/ seed, relative to 2017. Over 70% of the 2018
deal volume came from M&A and early/late stage fundraising activity across 461 deals (378 early/late stage VC investments
and 83 M&A deals).
$2M
$23M $25M
$331M
$286M
$985M
175
378
29
9
83
8
0
50
100
150
200
250
300
350
400
$0M
$200M
$400M
$600M
$800M
$1,000M
DealCount
AverageDealSize(inmillions,USD)
Average Deal Size by Deal Type
Average Deal Size Deal Count
$331M
$8,622M
$737M
$2,977M
$23,767M
$7,884M
Total Capital Invested by Deal Type
Angel/Seed Early/Late Stage VC
PE Growth/Expansion IPO
Merger/Acquisition Buyout/LBO
10
surepathcapital.com
2 0 1 8 S M B S o f t w a r e D e a l s B y G e o g r a p h y
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, crowdfunding and deals with undisclosed values.
Naturally, California saw the most deal activity representing 35% of all deals. However, the geographic distribution is more
even in SMB than in other categories. SMB-focused companies serve customers all over the world. You can start and run an
SMB software business from anywhere.
11
surepathcapital.com
S M B V e n t u r e F u n d i n g i n 2 0 1 8
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values
553 SMB software companies raised venture capital in 2018. Most of the deal volume was in early and later stage VC
investments. There were fewer new seed rounds in 2018.
12
$110M
$221M
$2,302M
$6,320M
77
98
215
163
0
50
100
150
200
250
-
$1,000M
$2,000M
$3,000M
$4,000M
$5,000M
$6,000M
$7,000M
Angel Seed Round Early Stage VC Later Stage VC
DealCount
CapitalRaised(inmillions,$USD)
Capital Raised by Venture Deal Type
Capital Raised Deal Count
surepathcapital.com
$185M CapitalG
$185M Accel / Sequoia Capital
$165M MSD Capital /
Dragoneer Investment Group
$145M KPCB
$115M T. Rowe Price
$427M Dragoneer Investment Group /
General Atlantic
$300M Tiger Global Management
$250M Fin Venture Capital
$250M Coatue Management / DST Global
$245M Tiger Global Management
2 0 1 8 ’ s T o p S M B S o f t w a r e R a i s e s
Source: Pitchbook
13
For the second year in a row, Slack had the largest funding round in SMB software
surepathcapital.com
V e n t u r e D e a l s b y C a t e g o r y
SMB software companies raised ~ $9.0B across 553 deals in 2018. Of those, companies that helped SMBs grow and run their
business attracted ~90% of the venture capital in the SMB software space.
Outer ring represents total
capital invested by
category and inner ring
represents total deal count
by category
Source: Pitchbook
We track SMB software
companies across three
broad categories:
• Grow my Business:
Marketing / front office
• Run my Business:
Typically vertical apps
to help operate
(business management,
ERP, etc.)
• Track my Business:
Billing, accounting, etc.
14
229
58
266
$3,971M
$858M
$4,123M
Grow My Business
Keep Track of My Business
Run My Business
surepathcapital.com
Source: Pitchbook
V e n t u r e D e a l s b y C a t e g o r y ( c o n t . )
15
48
113
59
179
57
27
32
27 11
$1,094M
$1,710M
$1,137M
$2,591M
$792M
$463M
$352M
$784M
E-Commerce
Marketing Tech
Sales Tech incl POS and CRM
Business Management/ERP
HR Tech incl Payroll and Employee
Mgmt
Security/IT
Accounting and Invoicing
Payments
Ad Tech
Consistent with 2017, SMB software companies with Business Management/ERP system and Marketing Tech offerings
continued to attract the highest amount of deal volume and invested capital in 2018. However, in 2018 we also saw a
significant increase in the amount of venture capital deployed into the E-Commerce category.
surepathcapital.com
V e n t u r e D e a l s b y T a r g e t C u s t o m e r
~75% of venture funding in 2018 went to companies with a broad offering for both the small and medium segments of the
SMB software space. This is the same % as 2017. Relatively few companies served either only the small or medium segments
explicitly. This makes sense as it enables software vendors to reach a larger market.
Source: Pitchbook
16
417
80
56
$6,948M
$677M
$1,327M
Both
Medium
Small
surepathcapital.com
V e r t i c a l - S p e c i f i c V e n t u r e D e a l s
Within the top 10 vertical-specific categories, there was ~$2.8B in capital invested across 181 deals in 2018. Of these,
Restaurant-Tech, Real Estate and Retail specific companies accounted for over 50% of the total deal volume. This is a
continuation of what we saw in 2017 where these verticals also attracted significant capital.
Source: Pitchbook
17
40
31
27
19
14
13
11
10
9
7
$813M
$206M
$273M
$249M
$128M
$131M
$281M
$152M
$506M
$108M
Restaurant-Tech
Real Estate
Retail
Health and Wellness
Construction
Financial Services
Home Services
Legal
Logistics
Software Development
surepathcapital.com
# of
Investments
Investors
11-12
9-10
7-8
M o s t a c t i v e S M B S o f t w a r e V C s
Many notable firms made multiple investments in the SMB Software sector in 2018. We were pleased to see several partners at
prominent venture firms declare their interest in the SMB space in 2018. They see what we see: a large, growing and valuable
market.
18
surepathcapital.com
$3.4B Francisco Partners / British Columbia
Investment Mangement
$1.9B Vista Equity Partners
$1.5B Siris Capital
$550M Warburg Pincus
$460M Thomas Bravo / Updata Partners
$75M Goldman Sachs Private Capital Group
$68M Guidepost Growth Equity
$65M Great Hill Partners
$65M Frontier Capital
$63M FTV Capital
2 0 1 8 ’ s T o p P E G r o w t h / B u y o u t S M B D e a l s
Source: Pitchbook
19
surepathcapital.com
S M B S o f t w a r e P E D e a l s i n 2 0 1 8
1. Source: Pitchbook
20
$7,884M
$737M
8
29
0
5
10
15
20
25
30
35
-
$1,000M
$2,000M
$3,000M
$4,000M
$5,000M
$6,000M
$7,000M
$8,000M
$9,000M
Buyout/LBO PE Growth/Expansion
DealCount
TotalCapitalInvested(inmillions,$USD)
Capital Raised by PE Growth and Buyout/LBO Deal Type
Capital Raised Deal Count
Though PE Growth rounds for SMB software companies attracted ~78% of the total PE and Buyout deal count, Buyouts/LBO’s
attracted over 90% of the total deal proceeds in 2018. Of the total deal proceeds, the Verifone and Mindbody public-to-
private LBO’s accounted for ~61%.
surepathcapital.com
P E G r o w t h / B u y o u t D e a l s b y C a t e g o r y
Source: Pitchbook
PEs are increasingly seeing SMB as a place to invest and grow large, enduring companies. PE Growth/Buyout SMB software
deals accounted for ~19% of total deal proceeds in 2018. Of those, companies that helped SMBs grow and run their business
attracted nearly 98% of the PE growth and Buyout capital. Deal sizes were much larger in the Grow My Business category.
21
12
6
19
$5,080M
$3,404M
Grow My Business
Keep Track of My Business
Run My Business
surepathcapital.com
P E G r o w t h / B u y o u t D e a l s b y C a t e g o r y ( c o n t . )
Private equity investors deployed $8.6B in capital into software companies serving the SMB space in 2018. Of that, the Sales
Tech, POS and CRM category attracted the most capital, largely driven by the VeriFone LBO ($3.4B). SMB software
companies with Business Management and ERP system offerings saw the highest amount of deal volume in 2018.
Source: Pitchbook
5
5
2
13
6
1
5
$1,513M
$152M
$3,415M
$3,137M
$267M
E-Commerce
Marketing Tech
Sales Tech incl POS and CRM
Business Management/ERP
HR Tech incl Payroll and Employee
Mgmt
Accounting and Invoicing
Payments
22
surepathcapital.com
P E G r o w t h / B u y o u t D e a l s b y T a r g e t C u s t o m e r
~81% of private equity and LBO/buyout deal volume in 2018 went to companies with a broad offering for both the small and
medium segments of the SMB software space. Relatively few companies served either only the small or medium segments
explicitly. From a capital invested perspective, companies that served the medium segment accounted for the largest
component, driven primarily from the VeriFone buyout in Q3 2018 ($3.4B).
Source: Pitchbook
23
30
4
3
$3,186M
$3,498M
$1,936M
Both
Medium
Small
surepathcapital.com
$4.8B Adobe Systems
$2.4B Cisco Systems
$2.0B Twilio
$1.7B Adobe Systems
$1.2B Paychex
$1.1B TSYS
$875M Autodesk
$775M Fortive
$700M Global Payments
$600M ARM (subsidiary of SoftBank Group)
Source: Pitchbook
2 0 1 8 ’ s T o p M & A S M B D e a l s
24
surepathcapital.com
M & A D e a l s b y C a t e g o r y
The cumulative deal size for all mergers and acquisitions (with disclosed proceeds) in the SMB software space throughout
2018 was ~$24.0B. 90% of deal proceeds were related to companies that helped SMBs grow and run their business.
Source: Pitchbook
25
31
9
43
$10,829M
$2,302M
$10,637M
Grow My Business
Keep Track of My Business
Run My Business
surepathcapital.com
M & A D e a l s b y C a t e g o r y ( c o n t . )
Relative to 2017, where a significant portion of the M&A deal proceeds related to companies with payments offerings, in
2018, the Marketing Tech category attracted the highest amount of the capital deployed. In 2018, we also saw significant
M&A activity within the Business Management/ERP category.
Source: Pitchbook
26
3
22
2
27
6
9
4
6
4
$1,721M
$8,634M
$4,476M
$1,940M
$4,001M
$2,227M
E-Commerce
Marketing Tech
Sales Tech incl POS and CRM
Business Management/ERP
HR Tech incl Payroll and
Employee Mgmt
Security/IT
Accounting and Invoicing
Payments
Ad Tech
surepathcapital.com
M & A D e a l s b y T a r g e t C u s t o m e r
~64% of M&A activity in 2018 went to companies with a broad offering for both the small and medium segments of the SMB
software space. Relatively few companies served either only the small or medium segments explicitly.
27
54
13
17
$13,556M
$572M
$10,369M
Both
Medium
Small
surepathcapital.com
2 0 1 8 ’ s M o s t A c t i v e S M B S o f t w a r e B u y e r s
28
Total Deal
Proceeds
Buyer # of Acquisitions Acquisitions
$6.5B 2
$4.8B $1.7B
$1.2B 2
$875M $275M
$540M 2
$390M $150M
$520M 2
$400M $120M
$165M 2
$150M $15M
Source: Pitchbook
surepathcapital.com
$207M NAS: SVMK
$180M MYS:AVLR
$175M NYS:SMAR
$86M NAS:IIIV
$756M NAS:DBX
$629M NAS:DOCU
$462M NYS:CDAY
$252M NYS: ESTC
$230M NYSE: EB
Source: Pitchbook
2 0 1 8 ’ s S M B S o f t w a r e I P O s
29
surepathcapital.com
2 0 1 8 ’ s S M B S o f t w a r e I P O s
30
IPO Date March 23 April 27 April 26 October 5 September 20
Amount Raised $756M $629M $462M $252M $230M
Age at IPO 10 Years 15 Years 10 Years 6 Years 12 Years
Revenue at IPO $1.1B $519M $792M $185M $256M
Headcount at IPO 1,858 2,255 4,212 994 997
Pre-IPO Investors
Sequoia, Accel,
T. Rowe Price, and
more.
Sigma Partners, Ignition
Partners, Frazier
Technology Partners
and more
Kensington Capital,
Blum Capital, and more
Benchmark, Hexavest,
New Enterprise
Associates, and more
Sequoia, Tiger Global
Management, T. Rowe
Price, and more
surepathcapital.com
2 0 1 8 ’ s S M B S o f t w a r e I P O s
31
IPO Date September 26 June 14 April 27 June 21
Amount Raised $207M $180M $175M $86M
Age at IPO 19 Years 14 Years 13 Years 6 Years
Revenue at IPO $233M $226M $111M $294M
Headcount at IPO 761 1,495 784 326
Pre-IPO Investors
T. Rowe Price, Morgan Stanley,
Baillie Gifford, and more
Warburg Pincus, Sageview
Capital, Technology
Crossover Ventures, and
more
Insight Venture Partners,
Madrona Venture Group
Summit Partners, and more
First Avenue Partners,
Harbert Credit Solutions,
Capital Alignment Partners,
and more
surepathcapital.com
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
160%
170%
180%
NAS: DBX NAS: DOCU NYS: CDAY NYS: ESTC NYSE: EB NAS: SVMK NYSE: AVLR NYS: SMAR NAS: IIIV
P o s t I P O P e r f o r m a n c e
32
Of the 9 SMB Software IPOs in 2018, 5 gained over their IPO price. The biggest gainer since IPO was i3 Verticals (+37%),
whereas the biggest loser was Avalara (-29%). Dropbox, which represented the biggest IPO of the year, lost over 25% of its
value by the end of the year.
The SurePath SMB Index
surepathcapital.com
SMB is
our
focus
Our
clients
serve
SMBs
Many
other
indices
The first
to see
trends
Introduced in 2016, the SurePath SMB Index originally tracked 35 publicly traded companies that serve SMB
and their performance against other benchmark indices. Over time, as companies in the index have been
acquired, the number of constituents has dropped to 33.
Examined 280+ Annual Reports of Publicly
Traded Companies
Selection of Companies for SMB
Focus
SurePath SMB Index
T h e S u r e P a t h S M B I n d e x
Final Selection of 35
Companies
34
surepathcapital.com
I n d e x C o n s t i t u e n t s
35
Note: at the end of December 2018, Vista Equity Partners announced that it entered into an agreement to acquire Mindbody. In early January, Fiserv announced that it had entered into an agreement to acquire First Data. Given that these deals have not yet been completed,
their impact is not reflected in the following analysis.
surepathcapital.com
S u r e P a t h S M B S o f t w a r e I n d e x
• All 33 companies are weighted based on Market Cap and indexed at
January 4, 2016
• 31 of the 33 companies are part of the $1 billion market cap club (a
club we expect will grow over time)
• The companies on the SCP SMB Software Index have a combined
market cap in excess of $340B
36
Company Ticker
Market Cap
(billions)
Automatic Data Processing, Inc. ADP $59.15
Intuit Inc. INTU $55.69
Square, Inc. SQ $29.68
Paychex, Inc. PAYX $25.03
Atlassian Corporation Plc TEAM $21.99
First Data Corporation FDC $21.10
Shopify Inc. SHOP $17.21
GoDaddy Inc. GDDY $11.33
Sage Group plc LON:SGE $8.86
ANGI Homeservices Inc. ANGI $8.29
Paycom Software, Inc. PAYC $8.01
GrubHub Inc. GRUB $7.36
RingCentral, Inc. RNG $7.36
Zendesk, Inc. ZEN $7.02
HubSpot, Inc. HUBS $6.21
H&R Block, Inc. HRB $5.28
New Relic, Inc. NEWR $5.48
Wix.com Ltd. WIX $5.05
Cimpress N.V. CMPR $3.73
Xero Limited. ASX:XRO $3.10
Qualys, Inc. QLYS $3.19
LendingTree, Inc. TREE $3.77
Stamps.com Inc. STMP $3.15
Yelp Inc. YELP $3.04
AppFolio, Inc. APPF $2.12
Groupon, Inc. GRPN $2.15
Deluxe Corp. DLX $2.06
MINDBODY, Inc. MB $1.75
Shutterstock, Inc. SSTK $1.36
LendingClub Corporation LC $1.33
Endurance International Group Holdings, Inc. EIGI $1.12
Carbonite, Inc. CARB $0.98
Marchex, Inc. MCHX $0.14
Market Cap by Index Constituents (in US$ b)
$1bn Market Cap Club (in Grey)
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
200.00%
220.00%
SurePath SMB Index S&P 500 Nasdaq Dow Jones
surepathcapital.com
A c l o s e r l o o k a t t h e S M B I n d e x P e r f o r m a n c e
37
SCP Index, 177.69%
S&P 500, 124.55%
Nasdaq, 135.33%
Dow Jones, 136.03%
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
200.00%
220.00%
SurePath SMB Index S&P 500 Nasdaq Dow Jones
surepathcapital.com
2.6x
2.6x 2.6x
2.7x
2.8x 2.8x
2.9x 2.9x
3.0x
3.1x 3.1x
3.1x
3.4x
3.3x 3.3x
3.4x
3.6x 3.6x
3.7x
4.0x
4.1x
3.7x 3.7x
3.4x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
EV/RevenueMultiple
S M B S o f t w a r e I n d e x M u l t i p l e P e r f o r m a n c e
38
surepathcapital.com
M o v e m e n t o f t h e I n d e x i n 2 0 1 8
39
TEAM, 89.1%
RNG, 72.5%
ZEN, 71.4%
WIX, 55.8%
SQ, 55.1%
PAYC, 52.2%
NZE:XRO, 46.2%
APPF, 43.7%
ANGI, 40.7%
HUBS, 40.6%
NEWR, 37.7%
GDDY, 33.7%
SHOP, 31.2%
INTU, 24.0%
QLYS, 22.3%
MB, 18.2%
ADP, 13.0%
GRUB, 7.8%
FDC, 1.6%
CARB, 0.0%
PAYX, (3.2%)
HRB, (5.2%)
CMPR, (14.7%)
STMP, (16.9%)
SSTK, (17.2%)
MCHX, (18.2%)
YELP, (19.1%)
EIGI, (20.8%)
LON:SGE, (23.6%)
TREE, (35.5%)
LC, (38.7%)
GRPN, (38.9%)
DLX, (50.1%)
(60%) (40%) (20%) 0% 20% 40% 60% 80% 100%
% Gain/(Loss) in Market Cap
Lessons & Takeaways
surepathcapital.com
2018 was a banner year across almost all deal categories: Other than angel/ seed rounds, every other deal
type saw a large increase in deal volume and $. 2018 was a great time to fund your business and sell your
business.
M & A Deal sizes were up significantly in 2018: There were six acquisitions over $1B in 2018 (vs none in 2017).
With lots of capital and high valuations, 2018 saw lots of sale activity including several large take private
transactions.
Business management/ERP and marketing tech were the top categories for deals: As younger people start
small businesses, they want & expect to have software platforms that they can run their business on. And every
small business is always looking for more customers.
Restaurant tech may soon be the first ever ‘winner takes all’ category in SMB: Most SMB markets are too large
and fragmented for one vendor to own. For two years in a row, restaurant tech has seen significant funding.
The stakes are high and every aspect of running a restaurant is being addressed. We expect to see a clear
market leader emerge in this market.
2018 was a challenging year for public markets: Our SurePath SMB index was flat for the year. Gains in the first
half of the year were wiped out in the back half. It still finished well up on all major indices. Atlassian was the
best performer in the index. Deluxe was the worst performer.
Despite the overall public market volatility, IPOs were up significantly : We had 9 IPOs in 2018 (vs. 2 in 2017)
with ~3.0B in capital invested.
T a k e a w a y s & R e c a p
41
surepathcapital.com
The Leading Financial Advisor in SMB Software
EXPERIENCE
Funding, growing & exiting tech companies
PEDIGREE
Alumni of Constant Contact, FreshBooks, Shopify…
ACCESS
To Tier 1 investors & strategic partners
FOCUS
The only advisor with a dedicated focus on SMB Software
COMMITMENT
Helping our clients and their investors succeed
T h e S u r e P a t h D i f f e r e n c e
42
Danial Shaikh
Associate
danial@surepathcapital.com
647.876.5453
Erik Mosney
Analyst
erik@surepathcapital.com
519.239.5759
Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004
Josh Scherman
Vice-President
josh@surepathcapital.com
646.420.0074
Toronto • San Francisco
Sara Defina
Analyst
sara@surepathcapital.com
416.689.2474
43
KJ Lee
Analyst
KJ@surepathcapital.com
647.500.3457

More Related Content

What's hot

2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...
2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...
2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...Localogy
 
Scaling SMB SaaS: Saastock 2017
Scaling SMB SaaS:  Saastock 2017Scaling SMB SaaS:  Saastock 2017
Scaling SMB SaaS: Saastock 2017Mark MacLeod
 
How Clients think: From SMB to Enterprise
How Clients think: From SMB to EnterpriseHow Clients think: From SMB to Enterprise
How Clients think: From SMB to EnterpriseRobin Leonard
 
Looking at European SaaS Exits
Looking at European SaaS ExitsLooking at European SaaS Exits
Looking at European SaaS ExitsMark MacLeod
 
Hood sweeney-xero-brochure
Hood sweeney-xero-brochureHood sweeney-xero-brochure
Hood sweeney-xero-brochureSara Bradshaw
 
State of Canadian SaaS (Mark MacLeod) Mar 2019
State of Canadian SaaS  (Mark MacLeod) Mar 2019State of Canadian SaaS  (Mark MacLeod) Mar 2019
State of Canadian SaaS (Mark MacLeod) Mar 2019Mark MacLeod
 
ey-capital-insights-download-edition-15
ey-capital-insights-download-edition-15ey-capital-insights-download-edition-15
ey-capital-insights-download-edition-15jwala P
 
DealMarket DIGEST Issue 170 // 30 January 2015
DealMarket DIGEST Issue 170 // 30 January 2015DealMarket DIGEST Issue 170 // 30 January 2015
DealMarket DIGEST Issue 170 // 30 January 2015CAR FOR YOU
 
The Echelon RIA M&A Dealbook
The Echelon RIA M&A DealbookThe Echelon RIA M&A Dealbook
The Echelon RIA M&A DealbookCarolyn Armitage
 
DealMarket DIGEST Issue 111 // 04 October 2013
DealMarket DIGEST Issue 111 // 04 October 2013DealMarket DIGEST Issue 111 // 04 October 2013
DealMarket DIGEST Issue 111 // 04 October 2013CAR FOR YOU
 
Software 2018: Where Are We Now and Where Are We Going?
Software 2018: Where Are We Now and Where Are We Going?Software 2018: Where Are We Now and Where Are We Going?
Software 2018: Where Are We Now and Where Are We Going?Battery Ventures
 
ey-capital-insights-edition-13-q2-2015
ey-capital-insights-edition-13-q2-2015ey-capital-insights-edition-13-q2-2015
ey-capital-insights-edition-13-q2-2015jwala P
 
Tactical Lessons from $40B+ in Technology Transaction Value
Tactical Lessons from $40B+ in Technology Transaction ValueTactical Lessons from $40B+ in Technology Transaction Value
Tactical Lessons from $40B+ in Technology Transaction ValueBattery Ventures
 

What's hot (18)

2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...
2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...
2018 Tech Adoption Summit: Following the Money — Who’s Investing in SMB SaaS,...
 
Scaling SMB SaaS: Saastock 2017
Scaling SMB SaaS:  Saastock 2017Scaling SMB SaaS:  Saastock 2017
Scaling SMB SaaS: Saastock 2017
 
How Clients think: From SMB to Enterprise
How Clients think: From SMB to EnterpriseHow Clients think: From SMB to Enterprise
How Clients think: From SMB to Enterprise
 
Looking at European SaaS Exits
Looking at European SaaS ExitsLooking at European SaaS Exits
Looking at European SaaS Exits
 
Hood sweeney-xero-brochure
Hood sweeney-xero-brochureHood sweeney-xero-brochure
Hood sweeney-xero-brochure
 
State of Canadian SaaS (Mark MacLeod) Mar 2019
State of Canadian SaaS  (Mark MacLeod) Mar 2019State of Canadian SaaS  (Mark MacLeod) Mar 2019
State of Canadian SaaS (Mark MacLeod) Mar 2019
 
ey-capital-insights-download-edition-15
ey-capital-insights-download-edition-15ey-capital-insights-download-edition-15
ey-capital-insights-download-edition-15
 
GT Events and Programs Guide
GT Events and Programs GuideGT Events and Programs Guide
GT Events and Programs Guide
 
DealMarket DIGEST Issue 170 // 30 January 2015
DealMarket DIGEST Issue 170 // 30 January 2015DealMarket DIGEST Issue 170 // 30 January 2015
DealMarket DIGEST Issue 170 // 30 January 2015
 
Why Tax Reform Changes Nothing -- and Everything
Why Tax Reform Changes Nothing -- and EverythingWhy Tax Reform Changes Nothing -- and Everything
Why Tax Reform Changes Nothing -- and Everything
 
The Echelon RIA M&A Dealbook
The Echelon RIA M&A DealbookThe Echelon RIA M&A Dealbook
The Echelon RIA M&A Dealbook
 
The pulse of Fintech 2018
The pulse of Fintech 2018The pulse of Fintech 2018
The pulse of Fintech 2018
 
DealMarket DIGEST Issue 111 // 04 October 2013
DealMarket DIGEST Issue 111 // 04 October 2013DealMarket DIGEST Issue 111 // 04 October 2013
DealMarket DIGEST Issue 111 // 04 October 2013
 
Software 2018: Where Are We Now and Where Are We Going?
Software 2018: Where Are We Now and Where Are We Going?Software 2018: Where Are We Now and Where Are We Going?
Software 2018: Where Are We Now and Where Are We Going?
 
Quarterly
QuarterlyQuarterly
Quarterly
 
ey-capital-insights-edition-13-q2-2015
ey-capital-insights-edition-13-q2-2015ey-capital-insights-edition-13-q2-2015
ey-capital-insights-edition-13-q2-2015
 
Tactical Lessons from $40B+ in Technology Transaction Value
Tactical Lessons from $40B+ in Technology Transaction ValueTactical Lessons from $40B+ in Technology Transaction Value
Tactical Lessons from $40B+ in Technology Transaction Value
 
AI動向
AI動向AI動向
AI動向
 

Similar to State of SMB Software Report - 2018

2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...
2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...
2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...Localogy
 
global Venture funding and start up data : top 10 charts
global Venture funding and start up data : top 10 chartsglobal Venture funding and start up data : top 10 charts
global Venture funding and start up data : top 10 chartsSumit Roy
 
Scaling SMB SaaS
Scaling SMB SaaSScaling SMB SaaS
Scaling SMB SaaSSaaStock
 
Business Process Outsourcing - 2019 M&A Summary
Business Process Outsourcing - 2019 M&A SummaryBusiness Process Outsourcing - 2019 M&A Summary
Business Process Outsourcing - 2019 M&A SummaryAlps Venture Partners
 
2017 SaaS Benchmarks
2017 SaaS Benchmarks2017 SaaS Benchmarks
2017 SaaS BenchmarksOpenView
 
DealMarket Digest Issue111 - 4th October 2013
DealMarket Digest Issue111 - 4th October 2013DealMarket Digest Issue111 - 4th October 2013
DealMarket Digest Issue111 - 4th October 2013Urs Haeusler
 
Global Business and Financial Consultant For SMEs, Startups
Global Business and Financial Consultant For SMEs, StartupsGlobal Business and Financial Consultant For SMEs, Startups
Global Business and Financial Consultant For SMEs, StartupsDNA Growth
 
Quarterly Review of the IT Services & Business Services Sector - Q1 2016
Quarterly Review of the IT Services & Business Services Sector - Q1 2016Quarterly Review of the IT Services & Business Services Sector - Q1 2016
Quarterly Review of the IT Services & Business Services Sector - Q1 2016Mark Weisman
 
Achieving big exits for SMB startups
Achieving big exits for SMB startupsAchieving big exits for SMB startups
Achieving big exits for SMB startupsMark MacLeod
 
Leaders of Growth Website
Leaders of Growth WebsiteLeaders of Growth Website
Leaders of Growth WebsiteArthur Nobel
 
Guide to Dreamforce 2016 – Digital Retail Marketing
Guide to Dreamforce 2016 – Digital Retail MarketingGuide to Dreamforce 2016 – Digital Retail Marketing
Guide to Dreamforce 2016 – Digital Retail MarketingCharlotte Brook
 
ComCap: Digital Marketing Overview 2016
ComCap: Digital Marketing Overview 2016ComCap: Digital Marketing Overview 2016
ComCap: Digital Marketing Overview 2016Uren Dhanani
 
I-Bytes Financial services Industry
I-Bytes Financial services IndustryI-Bytes Financial services Industry
I-Bytes Financial services IndustryEGBG Services
 
Insight Report: Global Ecommerce Sector
Insight Report: Global Ecommerce Sector Insight Report: Global Ecommerce Sector
Insight Report: Global Ecommerce Sector Oddup
 
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Yvonne Gamble
 
A Quick Guide to Venture Capital by Apogee Accelerator Group
A Quick Guide to Venture Capital by Apogee Accelerator GroupA Quick Guide to Venture Capital by Apogee Accelerator Group
A Quick Guide to Venture Capital by Apogee Accelerator Groupsalesbuddy
 
T-Bytes Digital customer experience
T-Bytes Digital customer experience T-Bytes Digital customer experience
T-Bytes Digital customer experience EGBG Services
 
ey-capital-insights-8-print-pdf
ey-capital-insights-8-print-pdfey-capital-insights-8-print-pdf
ey-capital-insights-8-print-pdfjwala P
 
Venture-Pulse-Report-Q2-2016
Venture-Pulse-Report-Q2-2016Venture-Pulse-Report-Q2-2016
Venture-Pulse-Report-Q2-2016JohnMFreeborn
 

Similar to State of SMB Software Report - 2018 (20)

2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...
2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...
2017 SMB Cloud Summit: Investment Climate for Small Business SaaS – Temperatu...
 
global Venture funding and start up data : top 10 charts
global Venture funding and start up data : top 10 chartsglobal Venture funding and start up data : top 10 charts
global Venture funding and start up data : top 10 charts
 
Scaling SMB SaaS
Scaling SMB SaaSScaling SMB SaaS
Scaling SMB SaaS
 
Business Process Outsourcing - 2019 M&A Summary
Business Process Outsourcing - 2019 M&A SummaryBusiness Process Outsourcing - 2019 M&A Summary
Business Process Outsourcing - 2019 M&A Summary
 
2017 SaaS Benchmarks
2017 SaaS Benchmarks2017 SaaS Benchmarks
2017 SaaS Benchmarks
 
DealMarket Digest Issue111 - 4th October 2013
DealMarket Digest Issue111 - 4th October 2013DealMarket Digest Issue111 - 4th October 2013
DealMarket Digest Issue111 - 4th October 2013
 
Global Business and Financial Consultant For SMEs, Startups
Global Business and Financial Consultant For SMEs, StartupsGlobal Business and Financial Consultant For SMEs, Startups
Global Business and Financial Consultant For SMEs, Startups
 
Quarterly Review of the IT Services & Business Services Sector - Q1 2016
Quarterly Review of the IT Services & Business Services Sector - Q1 2016Quarterly Review of the IT Services & Business Services Sector - Q1 2016
Quarterly Review of the IT Services & Business Services Sector - Q1 2016
 
Achieving big exits for SMB startups
Achieving big exits for SMB startupsAchieving big exits for SMB startups
Achieving big exits for SMB startups
 
Leaders of Growth Website
Leaders of Growth WebsiteLeaders of Growth Website
Leaders of Growth Website
 
Guide to Dreamforce 2016 – Digital Retail Marketing
Guide to Dreamforce 2016 – Digital Retail MarketingGuide to Dreamforce 2016 – Digital Retail Marketing
Guide to Dreamforce 2016 – Digital Retail Marketing
 
ComCap: Digital Marketing Overview 2016
ComCap: Digital Marketing Overview 2016ComCap: Digital Marketing Overview 2016
ComCap: Digital Marketing Overview 2016
 
Henri Steenkamp: Q4 Saratoga Newsletter
Henri Steenkamp: Q4 Saratoga NewsletterHenri Steenkamp: Q4 Saratoga Newsletter
Henri Steenkamp: Q4 Saratoga Newsletter
 
I-Bytes Financial services Industry
I-Bytes Financial services IndustryI-Bytes Financial services Industry
I-Bytes Financial services Industry
 
Insight Report: Global Ecommerce Sector
Insight Report: Global Ecommerce Sector Insight Report: Global Ecommerce Sector
Insight Report: Global Ecommerce Sector
 
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...
 
A Quick Guide to Venture Capital by Apogee Accelerator Group
A Quick Guide to Venture Capital by Apogee Accelerator GroupA Quick Guide to Venture Capital by Apogee Accelerator Group
A Quick Guide to Venture Capital by Apogee Accelerator Group
 
T-Bytes Digital customer experience
T-Bytes Digital customer experience T-Bytes Digital customer experience
T-Bytes Digital customer experience
 
ey-capital-insights-8-print-pdf
ey-capital-insights-8-print-pdfey-capital-insights-8-print-pdf
ey-capital-insights-8-print-pdf
 
Venture-Pulse-Report-Q2-2016
Venture-Pulse-Report-Q2-2016Venture-Pulse-Report-Q2-2016
Venture-Pulse-Report-Q2-2016
 

More from Mark MacLeod

A look at Canadian SaaS Exit (SaaSNorth presentation)
A look at Canadian SaaS Exit (SaaSNorth presentation)A look at Canadian SaaS Exit (SaaSNorth presentation)
A look at Canadian SaaS Exit (SaaSNorth presentation)Mark MacLeod
 
SaaStock 2016 - European SaaS Exit
SaaStock 2016 - European SaaS ExitSaaStock 2016 - European SaaS Exit
SaaStock 2016 - European SaaS ExitMark MacLeod
 
IT exits in Canada
IT exits in Canada IT exits in Canada
IT exits in Canada Mark MacLeod
 
Venture for canada talk july 15
Venture for canada talk july 15Venture for canada talk july 15
Venture for canada talk july 15Mark MacLeod
 
The High Performance CFO - everything you need to know
The High Performance CFO - everything you need to knowThe High Performance CFO - everything you need to know
The High Performance CFO - everything you need to knowMark MacLeod
 
Finance for freelancers
Finance for freelancersFinance for freelancers
Finance for freelancersMark MacLeod
 
Investor readiness presentation
Investor readiness presentationInvestor readiness presentation
Investor readiness presentationMark MacLeod
 
Pwc exit presentation mac leod-may 15 2012
Pwc exit presentation mac leod-may 15 2012Pwc exit presentation mac leod-may 15 2012
Pwc exit presentation mac leod-may 15 2012Mark MacLeod
 
Getting investor ready
Getting investor readyGetting investor ready
Getting investor readyMark MacLeod
 
Model board package
Model board packageModel board package
Model board packageMark MacLeod
 
Founderfuel backoffice talk oct 4 2011
Founderfuel backoffice talk oct 4 2011Founderfuel backoffice talk oct 4 2011
Founderfuel backoffice talk oct 4 2011Mark MacLeod
 
Gameon finance presentation 2011
Gameon finance presentation 2011Gameon finance presentation 2011
Gameon finance presentation 2011Mark MacLeod
 
IP 101 for Startups
IP 101 for StartupsIP 101 for Startups
IP 101 for StartupsMark MacLeod
 
Sproutup presentation220910 final
Sproutup presentation220910 finalSproutup presentation220910 final
Sproutup presentation220910 finalMark MacLeod
 
Investor Readiness Workshop
Investor Readiness WorkshopInvestor Readiness Workshop
Investor Readiness WorkshopMark MacLeod
 
Incentive presentation 070410
Incentive presentation 070410Incentive presentation 070410
Incentive presentation 070410Mark MacLeod
 
Startup Cfo Bdo Term Sheet Event 051109
Startup Cfo   Bdo Term Sheet Event 051109Startup Cfo   Bdo Term Sheet Event 051109
Startup Cfo Bdo Term Sheet Event 051109Mark MacLeod
 

More from Mark MacLeod (18)

A look at Canadian SaaS Exit (SaaSNorth presentation)
A look at Canadian SaaS Exit (SaaSNorth presentation)A look at Canadian SaaS Exit (SaaSNorth presentation)
A look at Canadian SaaS Exit (SaaSNorth presentation)
 
SaaStock 2016 - European SaaS Exit
SaaStock 2016 - European SaaS ExitSaaStock 2016 - European SaaS Exit
SaaStock 2016 - European SaaS Exit
 
IT exits in Canada
IT exits in Canada IT exits in Canada
IT exits in Canada
 
Venture for canada talk july 15
Venture for canada talk july 15Venture for canada talk july 15
Venture for canada talk july 15
 
The High Performance CFO - everything you need to know
The High Performance CFO - everything you need to knowThe High Performance CFO - everything you need to know
The High Performance CFO - everything you need to know
 
Finance for freelancers
Finance for freelancersFinance for freelancers
Finance for freelancers
 
Investor readiness presentation
Investor readiness presentationInvestor readiness presentation
Investor readiness presentation
 
Pwc exit presentation mac leod-may 15 2012
Pwc exit presentation mac leod-may 15 2012Pwc exit presentation mac leod-may 15 2012
Pwc exit presentation mac leod-may 15 2012
 
Getting investor ready
Getting investor readyGetting investor ready
Getting investor ready
 
Model board package
Model board packageModel board package
Model board package
 
Founderfuel backoffice talk oct 4 2011
Founderfuel backoffice talk oct 4 2011Founderfuel backoffice talk oct 4 2011
Founderfuel backoffice talk oct 4 2011
 
Saas Math
Saas MathSaas Math
Saas Math
 
Gameon finance presentation 2011
Gameon finance presentation 2011Gameon finance presentation 2011
Gameon finance presentation 2011
 
IP 101 for Startups
IP 101 for StartupsIP 101 for Startups
IP 101 for Startups
 
Sproutup presentation220910 final
Sproutup presentation220910 finalSproutup presentation220910 final
Sproutup presentation220910 final
 
Investor Readiness Workshop
Investor Readiness WorkshopInvestor Readiness Workshop
Investor Readiness Workshop
 
Incentive presentation 070410
Incentive presentation 070410Incentive presentation 070410
Incentive presentation 070410
 
Startup Cfo Bdo Term Sheet Event 051109
Startup Cfo   Bdo Term Sheet Event 051109Startup Cfo   Bdo Term Sheet Event 051109
Startup Cfo Bdo Term Sheet Event 051109
 

Recently uploaded

Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...Khaled Al Awadi
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfSourav Sikder
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.mcshagufta46
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfHajeJanKamps
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGlokeshwarmaha
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentationbaron83
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBBPMedia1
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Reportamberjiles31
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfCharles Cotter, PhD
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZKanakChauhan5
 

Recently uploaded (20)

Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdf
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentation
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Report
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
 
Mihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZMihir Menda - Member of Supervisory Board at RMZ
Mihir Menda - Member of Supervisory Board at RMZ
 

State of SMB Software Report - 2018

  • 1. THE STATE OF SMB SOFTWARE A look at 2018’s fundraising and exit trends among North American SMB software companies 2018
  • 2. A g e n d a 01 Introduction 02 Methodology and Scope 03 Venture Capital (VC) deals 04 Private Equity (PE) deals 05 Mergers & Acquisitions (M&A) 06 IPOs 07 Public Market Activity 08 Takeaways and Recap
  • 3. surepathcapital.com S u r e P a t h : O u r P u r p o s e Helping fund, grow , and exit SMB software companies SurePath maximizes your optionality: We make sure you know what it takes to build a market leader and capitalize you towards that goal. We ensure you are always in the minds of strategic buyers so that if they decide to make a move in your space, you are in the conversation. You can then decide; Keep going or exit? The process of raising growth capital is very different from raising early stage capital It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your aspiration, you need growth capital We help you prepare for growth stage and help you raise the capital needed to become a market leader Growth Funding We track every SMB software company in the market Buyers have recognized that we have unique insights into this market We leverage our in-depth coverage and insights to accelerate our clients’ acquisition programs Acquisitions Great exits don’t just happen. Buyers don’t just show up ready to pay a premium We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit No other investment banking firm has the depth of our relationships in the SMB world Exits 3 3
  • 4. surepathcapital.com S u r e P a t h a n d S M B Business Management E-Commerce CRMMarketing Tech Payments/ POS We have been part of some the most successful SMB SaaS companies We have deep relationships with SMB investors and buyers SurePath is committed to becoming the leading strategic financial advisor to the global SMB software market 4
  • 5. surepathcapital.com R e c e n t S u r e P a t h D e a l s 5 served as the exclusive strategic and financial advisor to on its growth financing led by USD $60,000,000 served as the exclusive strategic and financial advisor to on its growth financing led by CAD $115,000,000 served as the exclusive strategic and financial advisor to on its sale to served as the exclusive strategic and financial advisor to on its sale to served as the exclusive strategic and financial advisor to on its growth financing led by USD $11,800,000 served as the exclusive strategic and financial advisor to a wholly-owned subsidiary of on its sale to served as the exclusive strategic and financial advisor to on its sale to served as the exclusive strategic and financial advisor to on its growth financing led by USD $32,000,000
  • 6. surepathcapital.com T h e S u r e P a t h T e a m The SurePath team has over 30 years of experience in operating, growing, investing, buying, and selling SMB software companies. M A R K M A C L E O D F O U N D E R J O S H S C H E R M A N V I C E - P R E SI D E N T D A N I A L S H A I K H A S S O C I A T E 6 E R I K M O S N E Y A N A L Y S T S A R A D E F I N A A N A L Y S T K J L E E A N A L Y S T
  • 8. Welcome to our third annual State of SMB Software Report, looking at fundraising and exit activity in the Small and Mid-Sized Business (SMB) software space in North America. To isolate the SMB deal activity, we analyzed over 5,776 deals narrowing them down to 553 venture deals, 37 PE Growth and Buyout/LBO deals, 83 M & A deals, and 9 IPOs representing over $44.3B in deal proceeds. VC funding captured the most dollars, followed by M & A. However, we see PE as a growing category of deals giving companies two bites at the apple – a partial exit today, with significant upside for the future. We track SMB software companies across three broad categories: Grow my Business (front office), Run my Business (middle office) and Track my Business (back office). For VCs, most activity was in front office. For PE firms, the middle office was most popular. 2018 was a banner year across every deal category in SMB except angel/ seed funding. We added some new categories of SMB software companies to our coverage. Even excluding this addition, overall deal volume and $ were up significantly. 2018 was a great time to raise capital and also a great time to sell. Public tech stocks took a big hit at the end of the year. Our SMB index was not immune to this and finished 2018 flat with the beginning of the year. Despite this we saw 9 IPOs. We hope you find this report useful and invite you to get in touch to discuss it with us. The SurePath team January 2019 T h e S t a t e o f S M B S o f t w a r e surepathcapital.com8
  • 9. surepathcapital.com M e t h o d o l o g y In 2018, there were over 5,766 deals in the B2B software space, globally. 3,462 deals were in North America 682 deals (553 venture deals, 83 M&A deals, 37 PE/Buyout/LBO deals, and 9 IPOs) involved companies with a clear SMB software offering 9
  • 10. surepathcapital.com 2 0 1 8 S M B S o f t w a r e D e a l L a n d s c a p e 1. Source: Pitchbook 2. Deal count excludes deals involving accelerators, incubators, crowdfunding and deals with undisclosed values. 2018 was a very strong year for deal activity across all deal types, except angel/ seed, relative to 2017. Over 70% of the 2018 deal volume came from M&A and early/late stage fundraising activity across 461 deals (378 early/late stage VC investments and 83 M&A deals). $2M $23M $25M $331M $286M $985M 175 378 29 9 83 8 0 50 100 150 200 250 300 350 400 $0M $200M $400M $600M $800M $1,000M DealCount AverageDealSize(inmillions,USD) Average Deal Size by Deal Type Average Deal Size Deal Count $331M $8,622M $737M $2,977M $23,767M $7,884M Total Capital Invested by Deal Type Angel/Seed Early/Late Stage VC PE Growth/Expansion IPO Merger/Acquisition Buyout/LBO 10
  • 11. surepathcapital.com 2 0 1 8 S M B S o f t w a r e D e a l s B y G e o g r a p h y 1. Source: Pitchbook 2. Deal count excludes deals involving accelerators, incubators, crowdfunding and deals with undisclosed values. Naturally, California saw the most deal activity representing 35% of all deals. However, the geographic distribution is more even in SMB than in other categories. SMB-focused companies serve customers all over the world. You can start and run an SMB software business from anywhere. 11
  • 12. surepathcapital.com S M B V e n t u r e F u n d i n g i n 2 0 1 8 1. Source: Pitchbook 2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values 553 SMB software companies raised venture capital in 2018. Most of the deal volume was in early and later stage VC investments. There were fewer new seed rounds in 2018. 12 $110M $221M $2,302M $6,320M 77 98 215 163 0 50 100 150 200 250 - $1,000M $2,000M $3,000M $4,000M $5,000M $6,000M $7,000M Angel Seed Round Early Stage VC Later Stage VC DealCount CapitalRaised(inmillions,$USD) Capital Raised by Venture Deal Type Capital Raised Deal Count
  • 13. surepathcapital.com $185M CapitalG $185M Accel / Sequoia Capital $165M MSD Capital / Dragoneer Investment Group $145M KPCB $115M T. Rowe Price $427M Dragoneer Investment Group / General Atlantic $300M Tiger Global Management $250M Fin Venture Capital $250M Coatue Management / DST Global $245M Tiger Global Management 2 0 1 8 ’ s T o p S M B S o f t w a r e R a i s e s Source: Pitchbook 13 For the second year in a row, Slack had the largest funding round in SMB software
  • 14. surepathcapital.com V e n t u r e D e a l s b y C a t e g o r y SMB software companies raised ~ $9.0B across 553 deals in 2018. Of those, companies that helped SMBs grow and run their business attracted ~90% of the venture capital in the SMB software space. Outer ring represents total capital invested by category and inner ring represents total deal count by category Source: Pitchbook We track SMB software companies across three broad categories: • Grow my Business: Marketing / front office • Run my Business: Typically vertical apps to help operate (business management, ERP, etc.) • Track my Business: Billing, accounting, etc. 14 229 58 266 $3,971M $858M $4,123M Grow My Business Keep Track of My Business Run My Business
  • 15. surepathcapital.com Source: Pitchbook V e n t u r e D e a l s b y C a t e g o r y ( c o n t . ) 15 48 113 59 179 57 27 32 27 11 $1,094M $1,710M $1,137M $2,591M $792M $463M $352M $784M E-Commerce Marketing Tech Sales Tech incl POS and CRM Business Management/ERP HR Tech incl Payroll and Employee Mgmt Security/IT Accounting and Invoicing Payments Ad Tech Consistent with 2017, SMB software companies with Business Management/ERP system and Marketing Tech offerings continued to attract the highest amount of deal volume and invested capital in 2018. However, in 2018 we also saw a significant increase in the amount of venture capital deployed into the E-Commerce category.
  • 16. surepathcapital.com V e n t u r e D e a l s b y T a r g e t C u s t o m e r ~75% of venture funding in 2018 went to companies with a broad offering for both the small and medium segments of the SMB software space. This is the same % as 2017. Relatively few companies served either only the small or medium segments explicitly. This makes sense as it enables software vendors to reach a larger market. Source: Pitchbook 16 417 80 56 $6,948M $677M $1,327M Both Medium Small
  • 17. surepathcapital.com V e r t i c a l - S p e c i f i c V e n t u r e D e a l s Within the top 10 vertical-specific categories, there was ~$2.8B in capital invested across 181 deals in 2018. Of these, Restaurant-Tech, Real Estate and Retail specific companies accounted for over 50% of the total deal volume. This is a continuation of what we saw in 2017 where these verticals also attracted significant capital. Source: Pitchbook 17 40 31 27 19 14 13 11 10 9 7 $813M $206M $273M $249M $128M $131M $281M $152M $506M $108M Restaurant-Tech Real Estate Retail Health and Wellness Construction Financial Services Home Services Legal Logistics Software Development
  • 18. surepathcapital.com # of Investments Investors 11-12 9-10 7-8 M o s t a c t i v e S M B S o f t w a r e V C s Many notable firms made multiple investments in the SMB Software sector in 2018. We were pleased to see several partners at prominent venture firms declare their interest in the SMB space in 2018. They see what we see: a large, growing and valuable market. 18
  • 19. surepathcapital.com $3.4B Francisco Partners / British Columbia Investment Mangement $1.9B Vista Equity Partners $1.5B Siris Capital $550M Warburg Pincus $460M Thomas Bravo / Updata Partners $75M Goldman Sachs Private Capital Group $68M Guidepost Growth Equity $65M Great Hill Partners $65M Frontier Capital $63M FTV Capital 2 0 1 8 ’ s T o p P E G r o w t h / B u y o u t S M B D e a l s Source: Pitchbook 19
  • 20. surepathcapital.com S M B S o f t w a r e P E D e a l s i n 2 0 1 8 1. Source: Pitchbook 20 $7,884M $737M 8 29 0 5 10 15 20 25 30 35 - $1,000M $2,000M $3,000M $4,000M $5,000M $6,000M $7,000M $8,000M $9,000M Buyout/LBO PE Growth/Expansion DealCount TotalCapitalInvested(inmillions,$USD) Capital Raised by PE Growth and Buyout/LBO Deal Type Capital Raised Deal Count Though PE Growth rounds for SMB software companies attracted ~78% of the total PE and Buyout deal count, Buyouts/LBO’s attracted over 90% of the total deal proceeds in 2018. Of the total deal proceeds, the Verifone and Mindbody public-to- private LBO’s accounted for ~61%.
  • 21. surepathcapital.com P E G r o w t h / B u y o u t D e a l s b y C a t e g o r y Source: Pitchbook PEs are increasingly seeing SMB as a place to invest and grow large, enduring companies. PE Growth/Buyout SMB software deals accounted for ~19% of total deal proceeds in 2018. Of those, companies that helped SMBs grow and run their business attracted nearly 98% of the PE growth and Buyout capital. Deal sizes were much larger in the Grow My Business category. 21 12 6 19 $5,080M $3,404M Grow My Business Keep Track of My Business Run My Business
  • 22. surepathcapital.com P E G r o w t h / B u y o u t D e a l s b y C a t e g o r y ( c o n t . ) Private equity investors deployed $8.6B in capital into software companies serving the SMB space in 2018. Of that, the Sales Tech, POS and CRM category attracted the most capital, largely driven by the VeriFone LBO ($3.4B). SMB software companies with Business Management and ERP system offerings saw the highest amount of deal volume in 2018. Source: Pitchbook 5 5 2 13 6 1 5 $1,513M $152M $3,415M $3,137M $267M E-Commerce Marketing Tech Sales Tech incl POS and CRM Business Management/ERP HR Tech incl Payroll and Employee Mgmt Accounting and Invoicing Payments 22
  • 23. surepathcapital.com P E G r o w t h / B u y o u t D e a l s b y T a r g e t C u s t o m e r ~81% of private equity and LBO/buyout deal volume in 2018 went to companies with a broad offering for both the small and medium segments of the SMB software space. Relatively few companies served either only the small or medium segments explicitly. From a capital invested perspective, companies that served the medium segment accounted for the largest component, driven primarily from the VeriFone buyout in Q3 2018 ($3.4B). Source: Pitchbook 23 30 4 3 $3,186M $3,498M $1,936M Both Medium Small
  • 24. surepathcapital.com $4.8B Adobe Systems $2.4B Cisco Systems $2.0B Twilio $1.7B Adobe Systems $1.2B Paychex $1.1B TSYS $875M Autodesk $775M Fortive $700M Global Payments $600M ARM (subsidiary of SoftBank Group) Source: Pitchbook 2 0 1 8 ’ s T o p M & A S M B D e a l s 24
  • 25. surepathcapital.com M & A D e a l s b y C a t e g o r y The cumulative deal size for all mergers and acquisitions (with disclosed proceeds) in the SMB software space throughout 2018 was ~$24.0B. 90% of deal proceeds were related to companies that helped SMBs grow and run their business. Source: Pitchbook 25 31 9 43 $10,829M $2,302M $10,637M Grow My Business Keep Track of My Business Run My Business
  • 26. surepathcapital.com M & A D e a l s b y C a t e g o r y ( c o n t . ) Relative to 2017, where a significant portion of the M&A deal proceeds related to companies with payments offerings, in 2018, the Marketing Tech category attracted the highest amount of the capital deployed. In 2018, we also saw significant M&A activity within the Business Management/ERP category. Source: Pitchbook 26 3 22 2 27 6 9 4 6 4 $1,721M $8,634M $4,476M $1,940M $4,001M $2,227M E-Commerce Marketing Tech Sales Tech incl POS and CRM Business Management/ERP HR Tech incl Payroll and Employee Mgmt Security/IT Accounting and Invoicing Payments Ad Tech
  • 27. surepathcapital.com M & A D e a l s b y T a r g e t C u s t o m e r ~64% of M&A activity in 2018 went to companies with a broad offering for both the small and medium segments of the SMB software space. Relatively few companies served either only the small or medium segments explicitly. 27 54 13 17 $13,556M $572M $10,369M Both Medium Small
  • 28. surepathcapital.com 2 0 1 8 ’ s M o s t A c t i v e S M B S o f t w a r e B u y e r s 28 Total Deal Proceeds Buyer # of Acquisitions Acquisitions $6.5B 2 $4.8B $1.7B $1.2B 2 $875M $275M $540M 2 $390M $150M $520M 2 $400M $120M $165M 2 $150M $15M Source: Pitchbook
  • 29. surepathcapital.com $207M NAS: SVMK $180M MYS:AVLR $175M NYS:SMAR $86M NAS:IIIV $756M NAS:DBX $629M NAS:DOCU $462M NYS:CDAY $252M NYS: ESTC $230M NYSE: EB Source: Pitchbook 2 0 1 8 ’ s S M B S o f t w a r e I P O s 29
  • 30. surepathcapital.com 2 0 1 8 ’ s S M B S o f t w a r e I P O s 30 IPO Date March 23 April 27 April 26 October 5 September 20 Amount Raised $756M $629M $462M $252M $230M Age at IPO 10 Years 15 Years 10 Years 6 Years 12 Years Revenue at IPO $1.1B $519M $792M $185M $256M Headcount at IPO 1,858 2,255 4,212 994 997 Pre-IPO Investors Sequoia, Accel, T. Rowe Price, and more. Sigma Partners, Ignition Partners, Frazier Technology Partners and more Kensington Capital, Blum Capital, and more Benchmark, Hexavest, New Enterprise Associates, and more Sequoia, Tiger Global Management, T. Rowe Price, and more
  • 31. surepathcapital.com 2 0 1 8 ’ s S M B S o f t w a r e I P O s 31 IPO Date September 26 June 14 April 27 June 21 Amount Raised $207M $180M $175M $86M Age at IPO 19 Years 14 Years 13 Years 6 Years Revenue at IPO $233M $226M $111M $294M Headcount at IPO 761 1,495 784 326 Pre-IPO Investors T. Rowe Price, Morgan Stanley, Baillie Gifford, and more Warburg Pincus, Sageview Capital, Technology Crossover Ventures, and more Insight Venture Partners, Madrona Venture Group Summit Partners, and more First Avenue Partners, Harbert Credit Solutions, Capital Alignment Partners, and more
  • 32. surepathcapital.com 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% NAS: DBX NAS: DOCU NYS: CDAY NYS: ESTC NYSE: EB NAS: SVMK NYSE: AVLR NYS: SMAR NAS: IIIV P o s t I P O P e r f o r m a n c e 32 Of the 9 SMB Software IPOs in 2018, 5 gained over their IPO price. The biggest gainer since IPO was i3 Verticals (+37%), whereas the biggest loser was Avalara (-29%). Dropbox, which represented the biggest IPO of the year, lost over 25% of its value by the end of the year.
  • 34. surepathcapital.com SMB is our focus Our clients serve SMBs Many other indices The first to see trends Introduced in 2016, the SurePath SMB Index originally tracked 35 publicly traded companies that serve SMB and their performance against other benchmark indices. Over time, as companies in the index have been acquired, the number of constituents has dropped to 33. Examined 280+ Annual Reports of Publicly Traded Companies Selection of Companies for SMB Focus SurePath SMB Index T h e S u r e P a t h S M B I n d e x Final Selection of 35 Companies 34
  • 35. surepathcapital.com I n d e x C o n s t i t u e n t s 35 Note: at the end of December 2018, Vista Equity Partners announced that it entered into an agreement to acquire Mindbody. In early January, Fiserv announced that it had entered into an agreement to acquire First Data. Given that these deals have not yet been completed, their impact is not reflected in the following analysis.
  • 36. surepathcapital.com S u r e P a t h S M B S o f t w a r e I n d e x • All 33 companies are weighted based on Market Cap and indexed at January 4, 2016 • 31 of the 33 companies are part of the $1 billion market cap club (a club we expect will grow over time) • The companies on the SCP SMB Software Index have a combined market cap in excess of $340B 36 Company Ticker Market Cap (billions) Automatic Data Processing, Inc. ADP $59.15 Intuit Inc. INTU $55.69 Square, Inc. SQ $29.68 Paychex, Inc. PAYX $25.03 Atlassian Corporation Plc TEAM $21.99 First Data Corporation FDC $21.10 Shopify Inc. SHOP $17.21 GoDaddy Inc. GDDY $11.33 Sage Group plc LON:SGE $8.86 ANGI Homeservices Inc. ANGI $8.29 Paycom Software, Inc. PAYC $8.01 GrubHub Inc. GRUB $7.36 RingCentral, Inc. RNG $7.36 Zendesk, Inc. ZEN $7.02 HubSpot, Inc. HUBS $6.21 H&R Block, Inc. HRB $5.28 New Relic, Inc. NEWR $5.48 Wix.com Ltd. WIX $5.05 Cimpress N.V. CMPR $3.73 Xero Limited. ASX:XRO $3.10 Qualys, Inc. QLYS $3.19 LendingTree, Inc. TREE $3.77 Stamps.com Inc. STMP $3.15 Yelp Inc. YELP $3.04 AppFolio, Inc. APPF $2.12 Groupon, Inc. GRPN $2.15 Deluxe Corp. DLX $2.06 MINDBODY, Inc. MB $1.75 Shutterstock, Inc. SSTK $1.36 LendingClub Corporation LC $1.33 Endurance International Group Holdings, Inc. EIGI $1.12 Carbonite, Inc. CARB $0.98 Marchex, Inc. MCHX $0.14 Market Cap by Index Constituents (in US$ b) $1bn Market Cap Club (in Grey) 80.00% 100.00% 120.00% 140.00% 160.00% 180.00% 200.00% 220.00% SurePath SMB Index S&P 500 Nasdaq Dow Jones
  • 37. surepathcapital.com A c l o s e r l o o k a t t h e S M B I n d e x P e r f o r m a n c e 37 SCP Index, 177.69% S&P 500, 124.55% Nasdaq, 135.33% Dow Jones, 136.03% 80.00% 100.00% 120.00% 140.00% 160.00% 180.00% 200.00% 220.00% SurePath SMB Index S&P 500 Nasdaq Dow Jones
  • 38. surepathcapital.com 2.6x 2.6x 2.6x 2.7x 2.8x 2.8x 2.9x 2.9x 3.0x 3.1x 3.1x 3.1x 3.4x 3.3x 3.3x 3.4x 3.6x 3.6x 3.7x 4.0x 4.1x 3.7x 3.7x 3.4x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x EV/RevenueMultiple S M B S o f t w a r e I n d e x M u l t i p l e P e r f o r m a n c e 38
  • 39. surepathcapital.com M o v e m e n t o f t h e I n d e x i n 2 0 1 8 39 TEAM, 89.1% RNG, 72.5% ZEN, 71.4% WIX, 55.8% SQ, 55.1% PAYC, 52.2% NZE:XRO, 46.2% APPF, 43.7% ANGI, 40.7% HUBS, 40.6% NEWR, 37.7% GDDY, 33.7% SHOP, 31.2% INTU, 24.0% QLYS, 22.3% MB, 18.2% ADP, 13.0% GRUB, 7.8% FDC, 1.6% CARB, 0.0% PAYX, (3.2%) HRB, (5.2%) CMPR, (14.7%) STMP, (16.9%) SSTK, (17.2%) MCHX, (18.2%) YELP, (19.1%) EIGI, (20.8%) LON:SGE, (23.6%) TREE, (35.5%) LC, (38.7%) GRPN, (38.9%) DLX, (50.1%) (60%) (40%) (20%) 0% 20% 40% 60% 80% 100% % Gain/(Loss) in Market Cap
  • 41. surepathcapital.com 2018 was a banner year across almost all deal categories: Other than angel/ seed rounds, every other deal type saw a large increase in deal volume and $. 2018 was a great time to fund your business and sell your business. M & A Deal sizes were up significantly in 2018: There were six acquisitions over $1B in 2018 (vs none in 2017). With lots of capital and high valuations, 2018 saw lots of sale activity including several large take private transactions. Business management/ERP and marketing tech were the top categories for deals: As younger people start small businesses, they want & expect to have software platforms that they can run their business on. And every small business is always looking for more customers. Restaurant tech may soon be the first ever ‘winner takes all’ category in SMB: Most SMB markets are too large and fragmented for one vendor to own. For two years in a row, restaurant tech has seen significant funding. The stakes are high and every aspect of running a restaurant is being addressed. We expect to see a clear market leader emerge in this market. 2018 was a challenging year for public markets: Our SurePath SMB index was flat for the year. Gains in the first half of the year were wiped out in the back half. It still finished well up on all major indices. Atlassian was the best performer in the index. Deluxe was the worst performer. Despite the overall public market volatility, IPOs were up significantly : We had 9 IPOs in 2018 (vs. 2 in 2017) with ~3.0B in capital invested. T a k e a w a y s & R e c a p 41
  • 42. surepathcapital.com The Leading Financial Advisor in SMB Software EXPERIENCE Funding, growing & exiting tech companies PEDIGREE Alumni of Constant Contact, FreshBooks, Shopify… ACCESS To Tier 1 investors & strategic partners FOCUS The only advisor with a dedicated focus on SMB Software COMMITMENT Helping our clients and their investors succeed T h e S u r e P a t h D i f f e r e n c e 42
  • 43. Danial Shaikh Associate danial@surepathcapital.com 647.876.5453 Erik Mosney Analyst erik@surepathcapital.com 519.239.5759 Mark MacLeod Founder & President mark@surepathcapital.com 416.843.6004 Josh Scherman Vice-President josh@surepathcapital.com 646.420.0074 Toronto • San Francisco Sara Defina Analyst sara@surepathcapital.com 416.689.2474 43 KJ Lee Analyst KJ@surepathcapital.com 647.500.3457