GP.Bullhound-2018年Q1全球软件市场展望（英文版）-2018.4-48页-2mb

GP.Bullhound Q1 2018 Software Market Summary

Core Content

The GP.Bullhound Q1 2018 report provides an in-depth analysis of the software market, focusing on M&A activity, public market SaaS performance, and key metrics that define the industry landscape. It outlines the trends and strategic shifts within the sector, highlighting the dynamics of growth, valuation, and the impact of market conditions on software companies.

Main Points

1. Key Sector Takeaways

• Software consolidators are increasingly focused on "growth acquisitions".
• SaaS companies with as little as $5 million ARR are attracting significant interest, especially those with growth rates over 100%.
• Acquirers are less focused on build vs. buy decisions and are more inclined to integrate acquired targets while allowing them to continue growing.
• Strategic M&A processes are being driven by "market checks" alongside investment processes.
• Companies are evaluating exiting before their next financing to avoid further dilution and longer time horizons.
• Founder interest in exploring exit options has increased due to investor interest and term sheets.

2. Recent Software Transaction Trends

• M&A deal value is on the rise, primarily driven by private equity (PE) activity.
• Private placements are becoming fewer but larger in size.
• The US and Europe continue to dominate M&A deal volume.
• The "soft landing" trend is observed, where some companies opt for exits to strategies or PE buyers rather than raising fresh capital.

3. Public Market SaaS Analyses

• IPO market volatility in early 2018 could threaten the robustness of the market.
• Dropout is highlighted as a bellwether IPO, being the fastest SaaS company to reach $1B in revenue.
• Dropout's low net revenue retention and lower S&M costs compared to enterprise SaaS companies are noted.
• The Rule of 40% is used to evaluate public SaaS performance, showing that 2018 SaaS growth and profitability are lower than in 2017.
• Companies like MuleSoft, Okta, Zendesk, and HubSpot are highlighted for their strong performance in the public market.

4. Key SaaS Metrics

• Revenue growth is slowing as companies grow larger, following the law of large numbers.
• Customer acquisition cost (CAC) has increased by 65% over the past 5 years, reducing margin expectations.
• Net retention rates are generally above 100%, indicating strong customer loyalty.
• Subscription revenue dominates in most SaaS companies, with some reaching >95%.
• EV/Revenue and EV/EBITDA ratios are used to evaluate valuations, with the median at 6.6x.

5. SaaS CEO Commentary

• CEOs are exploring exit strategies and M&A options due to market volatility.
• There is a growing emphasis on strategic M&A as a means to accelerate growth and reduce the need for further capital.
• Companies are focusing on platform offerings, such as PaaS, to enhance customer customization and integration capabilities.

6. Appendices

• Appendix A provides insights into the GP Bullhound SaaS Index.
• Appendix B details public company valuations by category.
• Appendix C outlines the GP Bullhound report overview, software credentials, and team information.

Key Information

Notable M&A Deals in Q1 2018

Announce Date	Target	Buyer	Target Description	Value ($)	Implied EV/LTM Rev
Mar 13	Salesforce	CloudCrazy	B2B commerce platform	-	-
Mar 12	Booker Software	MINDBODY	Enterprise management	150	6.0x
Mar 6	Togetherwork	GI Partners	Group management	-	-
Feb 8	Alfresco Software	Thomas H. Lee Partners	Enterprise content management	-	-
Feb 8	Jive Communications	LogMeIn	Cloud-based communications	342	4.3x
Jan 29	Callidus Software	SAP	Customer experience	2,425.9	9.6x
Jan 29	ThreatMetrix	RELX	Security/fraud prevention	830	-
Jan 11	Talkwalker	Marlin Equity	Social media listening	-	-
Dec 28	BravoSolution	Accel-KKR/JAGGAER	Procurement & sourcing	217.8	2.3x
Dec 18	Aconnex	Oracle	Document management	1,222.8	9.8x
Dec 12	Black Duck	Synopsys	Open source & license management	547	7.3x
Dec 11	Shazam	Apple	Music recognition	400	7.3x
Dec 5	TSheets.com	Intuit	Time tracking and scheduling	340	8.5x
Dec 5	Simply Measured	Sprout Social	Social analytics	-	-
Nov 27	Skyhigh Networks	McAfee	Cloud access security	-	-
Nov 21	Cloudmark	Proofpoint	Messaging security	110	-
Nov 16	Qvidian	Upland Software	Sales execution	50	-
Nov 14	IntraLinks	Siris Capital	Content collaboration	1,000	-
Nov 8	ABC Financial	Thoma Bravo	Health club software & billing	-	-
Nov 1	ZiriMed	Navicure/Bain	Financial & clinical performance	750	-
Oct 23	Vista/Bullhorn	Insight, Genstar	CRM for service-based industries	-	-
Oct 23	BroadSoft	Cisco	Enterprise communication	1,528.9	4.2x

Selected Private Financings in Q1 2018

Announce Date	Issuer	Selected Investors	Issuer Description	Capital Raised ($)
Mar 13	Moogsoft	Goldman Sachs, HCL, Northgate, Redpoint, Singtel	Real-time IT operations analytics	40
Feb 28	Collective Health	NEA, GV, Founders Fund, Maverick Ventures	Cloud-based integrated health benefits platform	110
Feb 16	Reflektive	TPG, Lightspeed, A16	Employee engagement	60
Jan 31	Asana	Generation Investment Management	Collaboration and productivity software	75
Dec 19	Domo	Blackrock, Castor Ventures, GGV Capital, Glynn Capital, SharesPost, The Capital Group, The Yard Ventures	Business management platform	115
Dec 19	Convercent	Rho Ventures	Corporate compliance management	25
Dec 14	Squarespace	General Atlantic	Content management platform	200
Dec 4	Contentful	General Catalyst, Benchmark, Balderton, Point Nine	Content management platform	28
Nov 30	Uptake	Ballie Gifford, Revolution, GreatPoint Ventures	Predictive analytics	117
Nov 1	InVisionApp	Accel, Battery Ventures, FirstMark Capital, Geodisic, ICONIQ, Spark Capital, Tiger	Design collaboration platform	100
Oct 31	MetricStream	Clearlake Capital, EDB Investments, Sageview, Goldman Sachs	Governance, risk and compliance	63.4
Oct 24	Skybox Security	CVC Capital, Pantheon Ventures	Cyber security management	150
Oct 16	Duo Security	Geodisic, Index, Lead Edge, Meritech, Redpoint, True Venture, Workday	Authentication and mobile security	70
Oct 12	HappyOrNot	Northzone Ventures	Customer feedback monitoring	14.5

2017 SaaS IPOs

• Alteryx, Appian, Cloudera, MongoDB, MuleSoft, Okta, Yext, and SendGrid were notable IPOs in 2017.
• The 2017 IPO market was strong, especially for SaaS unicorns, but 2018 is expected to be less robust due to public market volatility.
• Dropbox was not listed in 2017 but was expected to go public in 2018.

SaaS Valuation Metrics

• The Rule of 40% is a key metric used to evaluate public SaaS companies.
• In 2017, the average EV/Revenue ratio was 8.9x, while the median was 8.4x.
• 2018 SaaS valuations show a decline in growth and profitability compared to 2017.
• The EV/EBITDA ratios for public SaaS companies show a similar trend, with the average at 38.3x and the median at 38.9x.

Summary of Key SaaS Companies

Company	HQ	Employees	Share Price	Revenue Growth	EV/Revenue	EV/EBITDA
Alteryx	US	515	$34.19	39.3%	14.4x	NM
MongoDB	US	930	$32.21	35.8%	8.8x	NM
MuleSoft	US	1,188	$30.88	41.1%	13.2x	NM
Okta	US	898	$38.59	32.5%	14.3x	NM
Yext	US	750	$12.70	32.4%	6.1x	NM
Zendesk	US	2,060	$43.18	31.7%	9.9x	NM
Everbridge	US	553	$31.91	31.7%	8.2x	NM
Amazon	US	566,000	$1,512.45	31.6%	4.2x	38.9x
Twilio	US	900	$34.16	31.6%	7.4x	NM
Trade Desk	US	713	$56.26	31.5%	7.2x	24.4x
Pure Storage	US	2,000	$21.67	31.2%	4.1x	NM
HubSpot	US	2,081	$111.05	30.6%	10.8x	NM
Proofpoint	US	2,047	$107.17	30.4%	10.4x	NM

Trends and Outlook

• The software market is showing a shift towards PaaS and platform-based solutions.
• Customer acquisition cost has increased significantly, making sales strategies more challenging.
• The US and Europe continue to be the primary regions for M&A activity.
• The Rule of 40% is a key indicator of performance, with 2018 showing lower growth and profitability than 2017.
• The IPO market is expected to be more volatile in 2018, with fewer SaaS companies ready to go public.

Conclusion

The Q1 2018 report highlights a maturing SaaS market with a focus on growth and integration through M&A. Companies are increasingly looking to PE and strategic buyers for exits, and public valuations are showing signs of adjustment due to market volatility. The Rule of 40% remains a key performance benchmark, while PaaS and platform strategies are becoming more prevalent. The US and Europe continue to dominate M&A and IPO activity, with a decline in IPO momentum expected in 2018.