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DearCommuniCliqueShareholders,
2016wasastellaryearforrevenue,aswepushedthroughthe$100mmmarkforthefirsttime.Our$122mminrevenuewasa72%increaseintopline.Theteamalsoachievedanewmonthlyrevenuerecordof$15mminDecember,andrealizedanaggregatenet incomeof$1.1mmforthefinaltwoquartersoftheyear. Ourvaluationhasincreasedbymorethan100%–aconservativeestimatecomparedthatoftoTwilio (ourmainpubliccomparable),whichsuccessfullycompletedanIPOinthesummerof2016.For2016,weexpectgrowthinexcessof65%;fromtheexpansionofexistingaccounts,acceleratedinvestmentinsalesinfrastructure,andentryintonewmarkets.
FINANCIALPERFORMANCESUMMARY
Our$122mminrevenuewas72%improvementover2015revenue;whichwas,initself,60%largerthan2014revenue.Withthis,weexceededthe$120mmtargetthatwasre-setinthemiddleoftheyear.Aftercommunicatinga$130mmtargetinthissamereportayearago,weadjustedourtargetmid-yearto$120mmbasedonabetterunderstandingofthepaceofgrowthandrevenuerecognition.
As part of the momentum built, we nearly tripled our monthly run rate fromFebruarythroughDecember(from$5mmto$14mm).Lookingaheadto2017,wehavesetourtargettobe$190mminrevenue(assumingnonewinvestment),or~60%growthover2016.
Fiveofthefinalsixmonthsin2016showednetincome,withapositive$1.6millionin December alone. November is excepted from this trend becausewe heavilyinvestedincapturingsomenewstrategicaccounts.Thisinvestmentnotonlyfueleda largeprofit inDecemberbutwillcontinuedrivingprofitabilitythroughJanuaryandFebruaryofthisyear.
Aswelookforwardin2017,wearestayingfocusedonGrossMargin(definedforSaaScompaniesasRevenueslesscostitemsincurredindeliveringmonthtomonthservice;suchas,hostingfees,terminationcosts,andcustomersupport.
Todate,wehaveconsistentlyproducedaGrossMarginofroughly60%forrecentperiodsandareensuring,dealbydeal,thateachnewclienton-boardingisaccretivetothismargin.
We also continue tomaintain Cash on Hand from our prior raises, and, as ouroperations continue to turn more consistently profitable, our minimumcash
balancewillbeprotected.However,weplantoaccelerategrowthbymakingheavyinvestmentsinsalesandmarketing,bothdomesticallyandinternationally.
Ontheexpenseside-ourmajorcostsofhostingandSIPcostswillcontinuetogrowforthenext24-36months.Then,ourSIPcostswillbegintotrailoffaswemovemore users to web-enabled voice and away from dialing a traditional phonenumber.
Softwaredevelopmentexpense isgrowingat less thanhalf therateof revenue,while other expenses have remained flat. Large portions of our softwaredevelopment are outsourced through contractors, and are project-based. Thismethodologyoffersusthecontroltoinvestwhentheopportunityarises,whilenotbeingrequiredtocarryunderutilizedresourcecosts.
Infact,ourrevenueperemployeehascontinuedtoexpand,andwefinished2016at $1.4 million per employee. This metric is well ahead of software and SaaSindustry leaders. The leverage we have created with contractors makes ourrevenueperemployeecomparabletocompaniessuchasAppleandGoogle,whoare two of only a few technology companies exceeding $1million/employee ofannualrevenue.
As mentioned earlier, we continue to invest in upfront work - tailoring theexperienceforeachnewcustomer.These‘freeforcustomer’chargeshavegrownslightlymorethantherevenuegrowthrate.Wealsogenerateconsistentrevenuesfrom professional services that are profitable and valuable to our customers.However,weplantomoveawayfromthisrevenuestreamandenableabusinesspartner consulting firm to provide these important services for our customers.
Much like systems integrators in other software sectors, we are exploringrelationships with professional service organizations that we can leverage ourCPaaSplatformtoacceleratenewcustomeronboarding,andfreeupourexpertresourcestofocusonnewofferingdevelopmentandgrowthofexistingcustomers.
TODAY’SVALUATIONANDRATIONALE
AcopyofthemostrecentpresentationthatEvergreenAdvisorsCapitalhasmadetotheCompany,datedJanuary2017,isattachedtothisletter.Asyouwillsee,onpage2,Evergreenstatesthatitbelieves“thetargetvalueoftheCompanytobeapproximately$850Mto$1B.”ThiscomparestoEvergreen’sopinion,statedjust18monthsearlier, that“creatingacompetitiveprocess in raisingcapital for theCompanywill … establish a value for the Company of approximately $500M to$600M.” While your investment in the Company continues to be subject tosignificantrisks,andtherecanbenoassurancethatwewillbeabletocompleteatransactionthatvaluestheCompanyattheselevels,theevolutionofEvergreen’sviews since the Summer of 2015 testifies to the progress we have made inimprovingtheCompany’sfinancialperformanceandcreatingstockholdervalue.
Intotal,we’veraisedapproximately$19.1million,withourmostrecentroundof$4.1million closed on a pre-money valuation of approximately $106million or$5.76/share.Overthelastfewyears,themarketforIPO’s,especiallyTechandevenUnicornIPO’shavenotbeenveryactiveorsuccessful.Infact,FortuneMagazineclaimed2016wastheworstIPOmarketsince2009.However,inthesummerof2016, a comparable company, Twilio, had a successful IPO with a currentcapitalizationof$2.5billionanda valuationat10X revenues. Theyarenot yetprofitableandraised$250millionpriortotheIPO.Communicliqueispositionedwell to achieve a similar valuation with a fraction of the investment andprofitability,evenwithalowersalesmultiple.Youcanseetheentirereportthatwe’veenclosedwiththismailing.
We are evaluating opportunities and their associated costs for additionalinvestments to bemade in the company. Our perception at this stage is thatCommuniCliquehasanattractivevaluation,anddilutionwouldbeminimalforanyinvestmentsreceived.Thefundswouldbeusedtoacceleratebothdomesticandinternationalgrowthtoattractnewcustomers.Furtherinvestmentwouldalsobemadeinexpandingexistingcustomerrevenuestreams.
KEYPERFORMANCEINDICATORS(KPIs)
WithourfocusonEnterprisecustomers,customerretentionandgrowtharecriticaltooursuccess. Wecontinue toseenosignificant losses,andnomore than1%revenueconcentrationinanysinglecustomer,loweringourriskevenfurther.
Overthecourseof2017,weplantorefineourKPIstoincludeafocusonCustomerExpansion(growthofexistingcustomersthroughup-sells,additionalusage,etc.),YeartoYearcustomergrowth,andCostofCustomerAcquisition,amongothers.With a 93% customer retention rate and customer breakeven on theirCommuniCliqueinvestmentat4.5months,weexpecttoseeevenfasterrevenuegrowthfromexistingcustomersinthefuture.
Ourexistingcustomersholdgreatpotentialforourcontinuedgrowth,inadditiontobringingonnewcustomers.Asexamplesof this typeofcustomerreturnandexpansion revenue for existing customers, we can look to two name-brandcompanies:
In the insurance industry, The Hartford spent $55,000 their first year as aCommuniClique customer as we assisted them with SalesForce integration. In2016,weinvoicedthem$1.76millionbyexpandingourservicesandthenumberofusers.
Staplesisanothergoodexamplegoingfromfirstyearrevenueof~$200,000andnow,generatingnearly$4millionannuallyworkingonaYammerintegration!
CommuniClique differentiates itself in themarket with a platform built for theenterprise: providing focusedmarket features that are bothmore efficient andsecurethanthecompetition.Thecompanyapproacheditsfirst36monthsinthismarketwithaconcertedeffortinleanproductdevelopment.Bychallengingeveryopportunitytofailquickly,we’vegrownthroughthisendeavorinaveryefficientway.Incontrast,ourdirectcompetitorshaveoverinvestedinsaturatedcornersofourmarket.Asexamplesofthis,twoofourknowncompetitors,TwilioandDialpadfacechallengeswemaynotface.
Twiliohasraisedagreatdealofmoney,gonepublic,andwhilegrowingrapidly,isstillchallengedwithprofitability.Priortogoingpublic,theyraised$250milliontoachievecomparableannualrevenuestoour2017outlook.Theyhad2016revenuesof$277millionwithanetlossof$41million.Fromouranalysis,theyalsoappeartohavealargeconcentrationofrevenueswithahandfulofcustomers.
DialPadisanextgenerationphonesystemthatobviatestheoffice,desktopphone.Whileitisadigitaloffering,itdoesnotappeartobeimbeddedintotheircustomers’offerings (software, games) and therefore lacks the geometric growthopportunities that API and voice enablement offer. They are valued atapproximately $1 billion, similar to CommuniClique, and have raised nearly tentimeswhatwehaveat$100million.
COMMUNICLIQUE’SPLATFORM–MARKETPLACEVALUE
CPaaSstandsforCommunicationsPlatformasaService.ACPaaSisacloud-basedplatformthatenablesdeveloperstoaddreal-timecommunicationsfeatures(voice,video,andmessaging)intheirownapplicationswithoutneedingtobuildback-endinfrastructureandinterfaces.
Traditionally,real-timecommunications(RTC)havetakenplaceinapplications(i.e.Skype, FaceTime, WhatsApp, etc.) built specifically for these functions. Forexample,youmightuseyournativemobilephoneapptodialyourbank;buthaveyoueverwonderedwhyyoucouldn'tvideochatarepresentativewithin inyourbankingapp?
Thesededicatedapplicationsorevenappliances(aphone)havebeentheparadigmfora long timebecause it's costlyandcomplex tobuildandoperate integratedcommunicationsthatareseamlesstotheenduser.
A CPaaS offers a complete development framework for building real-timecommunicationsfeatures,withouthavingtobuildyourown.Thistypicallyincludessoftwaretools,standards-basedapplicationprogramminginterfaces(APIs),samplecode,pre-builtapplications,andevensupporttohelpdevelopersthroughouttheprocess.TherearethreemaintypesofAPI’s:Public,Enterprise,andConfidential;whichservicedifferentmarkets.
CPaaS platforms offer companies value by making their costly developmentresourcesmoreproductive,minimizingtheinfrastructureneeded,anddramaticallyreducingtheirtimetomarket.WecontinuallyinvestinthenumberandtypesofAPI’sweofferandtheoverallexperiencethatourcustomerdeveloperteamsworkwith.
Ifyou’dliketolearnmoreaboutCommuniclique’sofferingsorwherethemarketisgoing,checkoutournewwebsite, subscribetoCommuniclique’s“WeeklyNewsRoundup”,ortakealookatsomeofthearticlesbelow:
What is CPaaS?
CPaaSisaDigitalEnabler
CPaasandAPITrendsfor2017
SALESGROWTHANDMARKETEXPANSIONS
WeexpectfuturesalesgrowthforCommuniCliquetocontinuetobesplitevenlybetweennewcustomersalesandexpansionrevenuefromexistingcustomers.We
currentlyhave6openpositionsforsalesorbusinessdevelopmentemployees,andwelcomeyoursalescandidatereferralsatCommunicliqueSalesOpenings.
Last year we invested heavily in the Insurance and Financial Services sectorssecuringnewcustomers inbothsegments. Wenowhavefullsalesandsupportteamsinplacetopursuebothsetsofopportunities.WealsocontinuedourU.S.regionalexpansiongoing from four to six regions - addingMidwestandCentralregionstotheexistingregionaloperationsintheWest,Dallas(SW),Chicago(NorthCentral),andtheEast. Eachof thesix regionsnowhasa fully functioningteamincludingaccountexecutives,insidessales,andsalesengineering.
In2017,wewillcontinuetofocusheavilyonU.S.opportunitiesbyfurtherparcelingboththeEastandWestregions-intoNorthandSouthportions-andcontinuingtoexpandoursalesteams.
Onanindustryinvestmentfront,wearetargetingtheU.S.FederalandGaming(U.S.andinternationally)markets.OuropportunityinGamingistorapidlydelivervoiceenablementtoproviders. Voiceenablementenhancestheenduserexperience,andisrapidlybeingembraced,whichmakesthisafertilemarketforus.WehavealreadyhadsomesuccessbyenablingahandfulofgamesontheUnityplatform.ThissectorisnowfullyoperationalforbothU.S.andInternationalpursuits.
Internationally, last year, we spent the year investigating, doing research, andbuildingrelationships;andwearenowreadytosetupshop.Goingglobalcanbeexpensive and requires tactful and thoughtful, culturally relevant relationships.Evenwiththosetypesofrelationships,ittakestime.WenowhaveaplaninplaceforAsia/Indonesiaandwillbeginexecutingtheplan.In2017,wewillbefocusedpredominantlyonAsia/PacificandEurope.
ACQUISITIONSTherewerenoacquisitionsin2016andwearecurrentlyevaluatingasmallnumberof deals that might provide value through acquisitions of talent, IP, and/orcustomerexpansion.
MARKETINGCHANGES
Wehaverecentlyrebrandedthebusinessas“Clique”tosimplifyourmessaging.Inparallelwiththisrebranding,wehavelaunchedabold,newwebsitecliqueapi.comthatweexpecttobemoreengaging.WehaveinvestedwithRebelMousetocreateacontentdrivensitethatwillincludecontentaboutcustomersandpartners,usecases,technologytrendsinourspace,andcompanysuccessstories.Theintention
istodriveleadsfromrelevantexamplesofwhoweareandwhatwedoeveryday.Anyinvestorswithideasfortopics,[email protected].
NEWCLIQUEHQ
WecompletedthemoveintoournewheadquarterslocationinReston,VA(seeafewpicturesbelowofthisinvitingandconvenientspace).Ourstaffhasgrownfrom60toalmost100employeesacrossthecompany.Wehavealso
experiencedemployeegrowthinourBostonandLosAngelesoffices,andhaveremainedconsistentwithheadcountinourinSanFranciscooffice.
CLIQUEFUND(www.clique.vc)
CliqueFundwasestablishedto invest inSeries-Astartupsthatusevoice-enabledtechnology,ourtechnology,therebycreatingnewcustomersforClique.WeexpectCliqueFundtoofferusoptionalityonbothourcustomerfunnelandM&Apipeline.Opportunities exist wherever voice is a major component/feature of thetechnologybeingdeveloped,whetherit’sconferencecallingortext-to-speech,orany other technologywhere voice is the predominant feature. By financing therightstartups,wewillearnincomeasinvestors,aswellasthroughCliquerevenueaswewillonlyinvestinthosethatwillusevoiceAPIssuchasCliqueAPI.
CliqueFundGPwasestablishedlatein2015.Thefirstfund,FundI,willbe$100mand brokendownasfollows:
• $5millionassharesatthemostrecentvaluationfromClique,• $5millionfrommepersonally• Anadditional$40millionsoftcircledfromoutsideprivateinvestors,and
• Theremaining$50millionwillbeacquiredthroughongoinginvestorrecruitmenteffortsheadedbytheCliqueFundPresidentRenato(Jun)Labadan.
Our target is to make investments of $500K - $2m in 20 companiesforovera4yearinvestmentperiod.
We’re really excited about the market, in and around the voice industry. Wecontinue toengage strategicpartners to finalize the fund. To thatpoint, as aninvestorinCommuniClique,IamexcitedtoofferyoutheopportunitytojoinmeasaseedinvestorinCliqueFund.WearecommittedtothesuccessoftheFund,andIthinkit isagreatwaytocomplementaninvestmentinCommuniClique.Ifyouhaveanyquestionsorwouldliketolearnmore,pleasedirectthemtoCliqueFund’sPresident,[email protected].
WHATYOUCANDO
Aswecontinueourrelentlesspursuitofrevenue,youcanhelpusbyintroducingustocustomers.ThesecanfriendswhoareC-levelexecutivesatcompanieswithmorethan200employees,managedivisionsoffortune500companies,orintegrateSaaSplatforms, like SalesForce. We are particularly interested in businesses in thefinanceandgaming industries.Afterfinishingthis letter,pleasetakeanhourtothinkaboutanyonewhoyoubelievewouldbeapositiveintroductionforusandreach out. Please reach out to [email protected].
SUMMARY
2016was a banner yearwith historical revenue growth, consistent profitabilityoverthelasttwoquarters,andaThepositivityhascontinuedintothisyear,andwehaveagreatoutlookfor2017.
You’veinvestedinacompanythathasover20millionusersin150countriesusingover500millionminutespermonth!
Thank you all for your continued support in ourendeavor. Please email [email protected] with anyquestions,commentsandorconcerns.
Andy PowersCEO, CommuniClique
APPENDIX1:2016P&L
STRICTLY PRIVATE & CONFIDENTIAL
Valuation Analysis | January 2017
Page 2
Preliminary Valuation SummaryWe believe the target value of the Company to be approximately $850M to $1B.
$252
$456
$1,248
$600
$504
$1,100
$732
$1,644
$2,136
$1,320
$1,104
$2,084
$0 $500 $1,000 $1,500 $2,000
M&A Comparables
Private Placement Comparables
Unicorn Private Placement Comparables
Public Market EV/Revenue Comparables 2017P
Public Market EV/Revenue Comparables LTM
Direct Market Comparable (TWLO) LTM
($ in millions)
Page 3
Public Company Key Statistics
In millions USD except per share dataEnterprise 2-Year Growth
Company Value Gross EBITDA Revenue EBITDA LTM NTM 2017 LTM NTM 2017Box, Inc. 2,079.0$ 71.0% -33.8% 24.6% na 5.6x 4.4x 4.2x -16.4x -57.7x -87.9xFireEye, Inc. 2,024.1 62.2% -51.4% 12.6% na 2.8x 2.7x 2.5x -5.5x 159.3x 64.3xHortonworks, Inc. 482.8 58.9% -139.0% 28.0% na 2.8x 2.2x 2.1x -2.0x -29.0x -109.2xHubSpot, Inc. 1,667.4 76.3% -14.7% 27.4% na 6.7x 5.1x 4.8x -45.7x -250.1x 1210.0xLogMeIn, Inc. 2,533.9 86.3% 12.3% 33.5% 15.4% 7.8x 6.8x 6.6x 63.4x 25.3x 24.6xNew Relic, Inc. 1,668.7 80.3% -26.8% 26.8% na 7.5x 5.7x 5.4x -28.0x -567.5x 600.5xcomScore, Inc. 1,766.0 68.5% 10.1% 12.2% 22.8% 4.8x 3.4x 3.0x 47.5x 14.8x 11.6xSplunk Inc. 6,847.5 80.5% -37.4% 27.4% 54.7% 7.9x 6.2x 5.8x -21.2x 62.0x 54.3xZendesk, Inc. 2,039.6 69.2% -29.1% 30.0% 161.7% 7.1x 5.3x 5.0x -24.5x 171.0x 143.4xTwilio Inc. 2,275.4 55.9% -13.0% 31.6% na 9.2x 6.9x 6.5x -71.1x -480.1x -758.5xBroadSoft, Inc. 1,215.9 73.5% 12.0% 16.2% 20.6% 3.7x 3.2x 3.1x 30.9x 14.2x 13.2x
Mean 2,236.4$ 71.2% -28.3% 24.6% 55.0% 6.0x 4.7x 4.4x -6.6x -85.2x 106.0x
High: 6,847.5$ 86.3% 12.3% 33.5% 161.7% 9.2x 6.9x 6.6x 63.4x 171.0x 1210.0x75th Quartile 2,177.2 78.3% -1.4% 29.0% 54.7% 7.7x 6.0x 5.6x 14.4x 43.7x 103.8xMedian: 2,024.1 71.0% -26.8% 27.4% 22.8% 6.7x 5.1x 4.8x -16.4x 14.2x 24.6x25th Quartile 1,668.1 65.4% -35.6% 20.4% 20.6% 4.2x 3.3x 3.0x -26.3x -153.9x -38.2xLow: 482.8 55.9% -139.0% 12.2% 15.4% 2.8x 2.2x 2.1x -71.1x -567.5x -758.5x
EV / EBITDAEV / RevenueLTM Margins
Source: S&P Capital IQ, as of 1/30/2017
Page 4
Public Company Key Statistics (cont.)
In millions USD except per share dataMarket Share PEG 5 Yr. EPS
Company Cap Price Low High Ratio Growth Rate LTM NTM 2017 LTM NTM 2017Box, Inc. 2,079.0$ 17.23$ 16.95$ 17.39$ NM NM 5.6x 4.4x 4.2x NM NM NMFireEye, Inc. 2,024.1 12.96 12.52 12.99 NM 24.3% 2.8x 2.7x 2.5x NM NM NMHortonworks, Inc. 482.8 9.32 9.27 9.85 NM 25.5% 2.8x 2.2x 2.1x NM NM NMHubSpot, Inc. 1,667.4 50.00 49.50 50.90 NM 25.0% 6.7x 5.1x 4.8x NM NM NMLogMeIn, Inc. 2,533.9 106.00 100.80 106.55 1.79 25.0% 7.8x 6.8x 6.6x NM NM NMNew Relic, Inc. 1,668.7 35.80 34.67 36.06 NM 25.0% 7.5x 5.7x 5.4x NM NM NMcomScore, Inc. 1,766.0 32.88 32.37 33.09 0.73 30.0% 4.8x 3.4x 3.0x NM NM NMSplunk Inc. 6,847.5 57.40 55.66 57.43 3.40 38.4% 7.9x 6.2x 5.8x NM NM NMZendesk, Inc. 2,039.6 23.61 22.88 23.61 NM 25.0% 7.1x 5.3x 5.0x NM NM NMTwilio Inc. 2,275.4 29.01 28.28 29.41 NM 20.0% 9.2x 6.9x 6.5x NM NM NMBroadSoft, Inc. 1,215.9 42.05 41.70 42.75 1.24 15.0% 3.7x 3.2x 3.1x NM NM NM
Mean 2,236.4$ 37.8$ 36.8$ 38.2$ 1.79 25.3% 6.0x 4.7x 4.4x NM NM NM
High: 6,847.5$ 106.0$ 100.8$ 106.6$ 3.40 38.4% 9.2x 6.9x 6.6x NM NM NM75th Quartile 2,177.2 46.0 45.6 46.8 2.19 25.4% 7.7x 6.0x 5.6x NM NM NMMedian: 2,024.1 32.9 32.4 33.1 1.51 25.0% 6.7x 5.1x 4.8x NM NM NM25th Quartile 1,668.1 20.4 19.9 20.5 1.11 24.4% 4.2x 3.3x 3.0x NM NM NMLow: 482.8 9.3 9.3 9.9 0.73 15.0% 2.8x 2.2x 2.1x NM NM NM
Price / EarningsPrice / Revenue52 Week
Source: S&P Capital IQ, as of 1/30/2017
Page 5
Public Company Revenue Multiples
4.4x 4.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
HDP FEYE SCOR BSFT BOX Mean HUBS Median ZEN NEWR SPLK TWLO LOGM
EV / 2017P Revenue
6.0x6.7x
0.0x1.0x2.0x3.0x4.0x5.0x6.0x7.0x8.0x9.0x
10.0x
FEYE HDP BSFT SCOR BOX Mean HUBS Median ZEN NEWR LOGM SPLK TWLO
EV / LTM Revenue
Source: S&P Capital IQ, as of 1/30/2017
Page 6
Public Company Gross Margins & Growth Rates
71.0% 71.2%
40%45%50%55%60%65%70%75%80%85%90%
TWLO HDP FEYE SCOR ZEN BOX Median Mean BSFT HUBS NEWR SPLK LOGM
LTM Gross Margins
24.6%27.4%
0%5%
10%15%20%25%30%35%40%
SCOR FEYE BSFT BOX Mean NEWR HUBS Median SPLK HDP ZEN TWLO LOGM
2 Yr. Revenue Growth Rate
Source: S&P Capital IQ, as of 1/30/2017
Page 7
Public Company Key Statistics (cont.)
1.5x
2.5x
3.5x
4.5x
5.5x
6.5x
7.5x
10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
EV / 2017P Revenue to 2 Yr. Revenue Growth Rate
Source: S&P Capital IQ, as of 1/30/2017
Page 8
M&A Transaction Comparables
In millions USD
Source: S&P Capital IQ, as of 1/30/2017
Date Announced Buyer Target
Total Transaction
Size
Implied Enterprise
ValueEV /
Revenue Revenue1/24/2017 Cisco Systems, Inc. AppDynamics, Inc. $4,032.8 $3,902.9 18.9x $206.210/31/2016 CenturyLink, Inc. Level 3 Communications, Inc. 36,045.7 34,476.7 4.2x 8,193.0 10/3/2016 salesforce.com, inc. Krux Digital Inc. 768.0 768.0 NA NA9/7/2016 Google Inc. Apigee Corporation 630.1 561.8 6.1x 92.0 7/26/2016 LogMeIn, Inc. Citrix Systems, Inc., GoTo Family Of Products 1,802.6 1,802.6 NA NA7/20/2016 Nuance Communications, Inc. TouchCommerce, Inc. 215.1 215.1 NA NA6/21/2016 Verizon Telematics, Inc. Telogis, Inc. 900.0 900.0 NA NA6/20/2016 Open Text Corporation HP Inc., Customer Communications Management and 315.0 315.0 NA NA6/15/2016 Samsung Electronics Co. Ltd. Joyent, Inc. 170.0 170.0 NA NA6/2/2016 Thoma Bravo, LLC Qlik Technologies, Inc. 2,984.8 2,614.9 4.1x 630.5 5/31/2016 salesforce.com, inc. Demandware, Inc. 3,108.6 2,912.9 11.5x 254.1 5/27/2016 Vista Equity Partners; Vista Equity Partners Fund VI, L.P. Marketo, Inc. 1,795.1 1,700.4 7.5x 226.1 5/23/2016 Siris Capital Group, LLC Xura, Inc. 792.2 671.9 2.3x 292.7 5/17/2016 NICE Systems Ltd. (nka:NICE Ltd.) inContact, Inc. 967.5 881.2 3.8x 233.0 5/5/2016 Vonage Holdings Corp. Nexmo, Inc. 248.4 248.4 2.8x 90.0 3/1/2016 Synchronoss Technologies, Inc. Openwave Messaging, Inc. 124.5 120.4 NA NA11/4/2015 Expedia, Inc. HomeAway, Inc. 4,267.4 3,347.8 6.9x 485.3 10/30/2015 Endurance International Group Holdings, Inc. Constant Contact, Inc. 1,112.1 931.6 2.6x 361.9 8/3/2015 Daimler AG; Bayerische Motoren Werke Aktiengesellschaft; AUDI AG HERE Holding Corporation 3,048.1 3,124.1 2.9x 1,064.4 7/1/2015 PayPal, Inc. Xoom Corporation 1,053.9 866.9 5.0x 174.0 3/16/2015 Cox Automotive, Inc. Dealertrack Technologies, Inc. 4,552.0 4,464.5 4.7x 948.4 2/28/2015 Mitel U.S. Holdings, Inc. Mavenir Systems, Inc. (nka:Mitel Mobility Inc.) 546.6 491.9 3.8x 129.8 2/4/2015 Insight Venture Partners E2open, Inc. 274.1 249.9 3.2x 78.5 1/22/2015 Harman International Industries, Incorporated HARMAN Connected Services Corporation 780.0 780.0 2.1x 370.0
Mean: $2,938.9 $2,771.6 5.4x $813.5
High: 36,045.7 34,476.7 18.9x 8,193.0 75th Quartile: 3,000.7 2,689.4 6.1x 485.3 Median: 933.7 874.0 4.1x 254.1 25th Quartile: 488.7 447.7 2.9x 174.0 Low: 124.5 120.4 2.1x 78.5
Page 9
Private Placement Comparables
Source: S&P Capital IQ, as of 1/30/2017
Date Announced Target Lead Investor(s)
Total Transaction
SizePre Money Valuation
Post Money Valuation
% Acquired Revenue
Rev Multiple
12/28/2016 Symphony Commerce Bain Capital Ventures $15.7 69.5$ 85.3$ 18.4% - - 12/1/2016 Cloud Elements Harbert Growth Partners 13.0 NA NA NA - - 11/25/2016 Stripe CapitalG, General Catalyst Partners 150.0 9,050.0 9,200.0 NA - - 10/20/2016 PaySimple Providence Equity Partners 115.0 NA NA NA - - 10/12/2016 Cloud9 Technologies J.P. Morgan 30.0 NA NA NA - - 9/8/2016 OfferUp Warburg Pincus 119.0 1,095.7 1,214.7 9.8% - - 8/24/2016 Auth0 Trinity Ventures 15.0 96.1 111.1 14.3% - - 8/24/2016 Applause Credit Suisse 35.1 312.6 347.6 10.1% 53.0 6.6 7/28/2016 Reltio New Enterprise Associates 22.0 77.1 99.1 22.2% - - 7/27/2016 Upthere Kleiner Perkins Caufield & Byers, Western Digital Capital 77.0 NA NA NA - - 7/20/2016 Omise SBI Investment 17.5 NA NA NA - - 7/19/2016 Capriza Andreessen Horowitz 23.0 200.5 223.5 10.5% - - 7/13/2016 Unity Technologies DFJ Growth 181.0 1,319.0 1,500.0 12.1% - - 7/1/2016 LendUp Y Combinator 47.5 452.5 500.0 9.5% - - 6/29/2016 Keen IO Pelion Venture Partners 14.7 20.9 35.6 41.3% - - 6/19/2016 Plaid Technologies The Goldman Sachs Group 44.0 NA NA NA - - 6/9/2016 Tradeshift Data Collective, HSBC Holdings 75.0 425.0 500.0 15.0% - - 6/7/2016 SMS Assist Goldman Sachs Investment Partners 150.0 850.0 1,000.0 15.0% - - 5/9/2016 Pivotal Software Ford, Microsoft 653.0 2,612.0 3,265.0 20.0% 332.0 9.8 4/1/2016 Slack Technologies Thrive Capital 200.0 3,600.0 3,800.0 5.3% - - 3/24/2016 Mesosphere Microsoft 73.6 394.4 467.9 15.7% - - 3/23/2016 Checkr Y Combinator 40.0 310.0 350.0 11.4% - - 3/22/2016 DoorDash Sequoia Capital 127.0 590.0 717.0 17.7% - - 3/22/2016 Domo BlackRock, GGV Capital, Glynn Capital Management 366.0 1,800.0 2,166.0 16.9% 100.0 21.7 3/16/2016 Mesosphere, Inc. Hewlett Packard Enterprise, Microsoft Corporation 85.8 NA NA NA - - 2/26/2016 Kika Tech, Inc. Honge Capital 30.6 NA NA NA - - 2/16/2016 Procore Technologies Undisclosed Investors 80.0 426.8 506.8 15.8% 23.5 21.5 2/15/2016 Mobify Research and Development, InActon Capital Partners 10.0 NA NA NA - - 2/9/2016 Fuze Summit Partners 112.0 610.7 722.7 15.5% - - 1/28/2016 NewVoiceMedia Bessemer Venture Partners 28.3 284.4 312.7 9.1% 50.0 6.3 1/20/2016 LendUp Data Collective, Susa Ventures 150.0 NA NA NA - - 1/14/2016 Anaplan Premji Invest 90.0 969.5 1,059.5 8.5% - - 12/29/2015 PokitDok Lemhi Ventures 38.1 50.0 88.1 43.3% - - 11/21/2015 Mashape Index Ventures NA NA NA NA - - 10/7/2015 Talkdesk Draper Fisher Jurvetson 21.0 125.2 146.2 14.4% - -
In millions USD
Page 10
Private Placement Comparables (cont.)
In millions USD
Source: S&P Capital IQ, as of 1/30/2017
Date Announced Target Lead Investor(s)
Total Transaction
SizePre Money Valuation
Post Money Valuation
% Acquired Revenue
Rev Multiple
9/30/2015 Stormpath Scale Venture Partners 15.0 36.3 51.3 29.2% - - 8/28/2015 Nexmo Deutsche Telekom Capital Partners 14.4 288.3 302.7 4.8% 61.0 5.0 8/5/2015 Fastly ICONIQ Capital 75.0 419.3 494.3 15.2% - - 7/29/2015 Twilio Fidelity Investments, T. Rowe Price 130.0 900.0 1,030.0 12.6% 166.9 6.2 7/28/2015 Stripe Alven Capital Partners 100.0 4,900.0 5,000.0 NA - - 7/22/2015 Mirakl 83North 20.0 NA NA NA 2.8 - 7/15/2015 Zeta Interactive Corporation Franklin Square Capital Partners; GSO Capital Partners 125.0 1,000.0 1,125.0 11.1% 168.0 6.7x7/2/2015 DigitalOcean Access Industries 83.0 600.0 683.0 12.2% - - 6/11/2015 Indix Nokia Growth Partners 15.0 61.8 76.8 19.5% - - 5/20/2015 WePay FTV Capital 40.0 180.0 220.0 18.2% 57.8 3.8 5/12/2015 MuleSoft Salesforce Ventures 128.0 1,372.0 1,500.0 8.5% 100.0 15.0 5/6/2015 Algolia Accel Partners 18.4 NA NA NA - - 4/30/2015 DocuSign, Inc. Brookside Capital, LLC; Bain Capital Ventures 300.1 2,690.0 2,990.1 10.0% - - 4/28/2015 MarkLogic Corporation Sequoia Capital; Northgate Capital Group, L.L.C.; Tenaya 116.1 883.9 996.3 11.3% - - 4/14/2015 Docker, Inc. Insight Venture Partners 113.0 977.5 1,090.5 10.4% - - 4/10/2015 Spotify Limited 2020 Ventures, Intellect Capital Ventures; Fifth Era; Baillie 526.0 8,004.0 8,525.0 6.1% - - 3/31/2015 Sprinklr Inc. Battery Ventures; Intel Capital; ICONIQ Capital, LLC 46.0 1,124.0 1,170.0 3.9% - - 3/26/2015 QuickPlay Media Inc. Madison Dearborn Partners; Difference Capital Financial; 57.0 NA NA - - 3/26/2015 Plus Labs, Inc. Sequoia Capital 12.0 40.0 52.0 23.1% - - 3/26/2015 Slack Technologies, Inc. Kleiner Perkins Caufield & Byers; Google Ventures 160.0 2,640.0 2,800.0 5.7% - - 3/18/2015 InsideSales.com, Inc. Salesforce Ventures 77.6 1,340.0 1,417.6 5.5% - - 3/17/2015 Dataminr Conversion Capital 130.0 570.0 700.0 18.6% - - 3/4/2015 SimpliVity Corporation Waypoint Capital 175.0 825.0 994.0 17.0% - - 2/1/2015 Reltio .406 Ventures, Crosslink Capital 10.0 25.9 35.9 27.9% 5.0 7.2 1/23/2015 Plaid Technologies New Enterprise Associates 12.5 NA NA NA - - 1/14/2015 Nylas Formation 8 11.8 20.6 32.4 34.4% - - 1/13/2015 Basho Georgetown Partners 25.0 59.9 84.9 29.4% - - 1/6/2015 Matchmove Credit Saison 22.5 NA NA NA 50.0 -
Mean $85.8 $1,083.6 $1,179.6 15.7% $90.0 10.3x
High: $653.0 $9,050.0 $9,200.0 43.3% $332.0 $21.775th Quartile: 123.5 1,109.8 1,192.3 18.4% 100.0 13.7 Median: 93.7 1,163.8 1,272.1 15.7% 90.0 10.3 25th Quartile: 21.3 152.6 183.1 10.0% 50.0 6.2 Low: 10.0 20.6 32.4 3.9% 2.8 3.8
Page 11
Unicorn Private Placements
In millions USD
Source: S&P Capital IQ, Pitchbook, CB Insights as of 1/30/2017
Deal Date Target Lead Investor(s)
Total Transaction
SizePre Money Valuation
Post Money Valuation
% Acquired Rev
Rev Multiple
1/26/2017 Zoom Video Communications Sequoia Capital $115.0 $900.0 $1,000.0 11.5% - - 1/18/2017 InsideSales.com Polaris Partners 50.0 1,600.0 1,650.0 3.0% - - 12/8/2016 Procore Technologies ICONIQ Capital 50.0 931.1 981.1 5.1% 55.0 17.8x12/20/2016 HelloFresh Baillie Gifford 89.6 2,110.0 2,200.0 4.3% 607.0 3.6x12/12/2016 JetSmarter KZ Capital, Saudi Royal Family, Jet Edge, Shawn Carter 105.0 1,500.0 1,605.0 6.5% - - 11/28/2016 Opendoor Norwest Venture Partners 210.0 840.0 1,050.0 20.0% - - 11/25/2016 Stripe General Catalyst Partners, Capital G 150.0 9,050.0 9,200.0 1.6% - - 11/16/2016 OfferUp Warburg Pincus 130.0 1,160.0 1,290.0 10.1% - - 11/7/2016 BuzzFeed NBCUniversal 200.0 1,500.0 1,700.0 11.8% 250.0 6.8x10/12/2016 WeWork Legend Holdings, Hony Capital 690.0 16,210.0 16,900.0 4.1% 532.0 31.8x5/1/2016 Gusto.com General Catalyst, Google Capital, Obvious Ventures, Pivot Investment Partners 90.0 1,000.0 1,090.0 8.3% - - 9/28/2016 Apttus Gulf Islamic Investments, ICONIQ Capital, K1 Capital, Kuwaiti Investment Authority 88.0 1,501.2 1,589.2 5.5% 150.0 10.6x9/28/2016 AppNexus News, Yahoo Japan 31.0 1,569.0 1,600.0 1.9% - - 9/15/2016 Intarcia Therapeutics Kayon Partners, Baillie Gifford 215.0 3,500.0 3,715.0 5.8% - - 9/15/2016 Carbon BMW Group, GE Ventures, JSR, Nikon 181.0 900.0 1,081.0 16.7% - - 9/7/2016 Moderna AstraZeneca 474.0 4,275.0 4,749.0 10.0% - - 8/31/2016 Compass .406 Ventures, Founders Fund, IVP, Thrive Capital, Wellington Capital Management 75.0 925.0 1,000.0 7.5% 133.0 7.5x8/22/2016 Quanergy Alrai Capital, Delphi AutomotiveSamsung Venture Investment, Sensata Technologies 99.9 910.0 1,009.9 9.9% - - 7/20/2016 Sprinklr Temasek Holdings 105.0 1,700.0 1,805.0 5.8% 100.0 18.1x7/13/2016 Unity Technologies DFJ Growth 181.0 1,319.0 1,500.0 12.1% - - 7/1/2016 Zoox Aid Partners Capital Holdings, Blackbird Ventures, Draper Fisher Jurvetson 200.0 800.0 1,000.0 20.0% - - 6/28/2016 Airbnb Google Capital, Kleiner Perkins Caufield & Byers, TCV 555.5 29,450.0 30,005.5 1.9% 945.0 31.8x6/7/2016 SMS Assist Goldman Sachs Investment Partners 150.0 850.0 1,000.0 15.0% - -
Page 12
Unicorn Private Placements (cont.)
Source: S&P Capital IQ, Pitchbook, CB Insights as of 1/30/2017
Deal Date Target Lead Investor(s)
Total Transaction
SizePre Money Valuation
Post Money Valuation
% Acquired Rev
Rev Multiple
6/1/2016 Cylance The Blackstone Group, Insight Venture Partners 100.0 900.0 1,000.0 10.0% 10.0 100.0x5/25/2016 TransferWise Baillie Gifford 26.0 1,074.0 1,100.0 2.4% 14.6 75.5x5/25/2016 Snap York Capital Management, Alibaba Group, Fidelity Investments 1,808.6 16,000.0 17,808.6 10.2% 366.7 48.6x5/24/2016 Uber Technologies Tiger Global Management, T. Rowe Price, Caspian VC Partner, Morgan Stanley, BAML 5,600.0 61,000.0 66,600.0 8.4% 4,120.0 16.2x5/9/2016 Pivotal Software Dell EMC, Ford, GE Ventures, Microsoft, VMware 653.0 2,097.5 2,750.5 23.7% 332.0 8.3x5/4/2016 Farfetch Eurazeo, IDG Capital Partners, Temasek Holdings Advisors India, Vitruvian Partners 160.0 1,390.0 1,500.0 10.7% 500.0 3.0x4/26/2016 Ant Financial China Construction Bank, China Investment Corporation, China Life Insurance 4,500.0 56,500.0 60,000.0 7.5% - - 4/15/2016 Proteus Digital Health Undisclsoed Investors 50.0 1,477.2 1,527.2 3.3% - - 4/4/2016 Human Longevity Celgene, Draper Fisher Jurvetson, GE Ventures, Illumina 220.0 1,668.0 1,888.0 11.7% - - 4/1/2016 Slack Technologies Thrive Capital 200.0 3,600.0 3,800.0 5.3% 64.0 59.4x3/22/2016 Domo BlackRock, GGV Capital, Glynn Capital Management 366.0 1,800.0 2,166.0 16.9% 100.0 21.7x3/2/2016 Mercari Mitsui & Company 75.0 925.0 1,000.0 7.5% - - 2/23/2016 Razer Digital Grid 75.0 1,425.0 1,500.0 5.0% 338.4 4.4x2/22/2016 Oscar Fidelity Investments 400.0 2,300.0 2,700.0 14.8% 127.3 21.2x2/2/2016 Magic Leap Alibaba 793.5 3,706.5 4,500.0 17.6% - - 1/29/2016 Palantir Technologies TJNS Capital, Nima Capital, Dover Madison Capital Management 880.0 19,649.4 20,529.4 4.3% 1,700.0 12.1x
Median $160.0 $1,501.2 $1,605.0 8.3% $250.0 17.8x
High: $5,600.0 $61,000.0 $66,600.0 23.7% $4,120.0 100.0x75th Quartile: 383.0 3,550.0 3,757.5 11.7% 516.0 31.8xMean: 516.5 6,667.0 7,156.2 9.2% 549.7 26.2x25th Quartile: 89.8 965.6 1,085.5 5.0% 100.0 17.8xLow: 26.0 800.0 981.1 1.6% 10.0 3.0x
In millions USD
Page 13
Investor Return Analysis
CommuniClique Valuation (Post-Money) $1,000,000,000Pre-Money Value $985,000,000 5.0x 5.5x 6.0x 6.5x 7.0xInvestor Acquired Value $100,000,000 $800,000,000 54.4% 59.4% 64.1% 68.5% 72.7%Target Close Date 6/30/2017 $850,000,000 51.4% 56.3% 60.9% 65.2% 69.3%
$900,000,000 48.6% 53.4% 57.9% 62.1% 66.2%
$950,000,000 45.9% 50.7% 55.1% 59.3% 63.3%Equity Purchased From Shareholders 85,000,000$ $1,000,000,000 43.5% 48.1% 52.5% 56.6% 60.5%New Equity 15,000,000$ $1,050,000,000 41.2% 45.8% 50.1% 54.1% 58.0%Total Equity Purchased 100,000,000$ $1,100,000,000 39.1% 43.6% 47.8% 51.8% 55.6%
% of Company 10.00%
Exit Date 6/30/2020Exit Year Revenue $600,000,000 5.0x 5.5x 6.0x 6.5x 7.0xExit Multiple 6.0x $800,000,000 3.7x 4.0x 4.4x 4.8x 5.2xExit Enterprise Value $3,600,000,000 $850,000,000 3.5x 3.8x 4.2x 4.5x 4.9xLess Net Debt - $900,000,000 3.3x 3.6x 3.9x 4.3x 4.6xExit Equity Value $3,600,000,000 $950,000,000 3.1x 3.4x 3.7x 4.0x 4.4x
$1,000,000,000 3.0x 3.3x 3.5x 3.8x 4.1x$1,050,000,000 2.8x 3.1x 3.4x 3.7x 3.9x
Initial Equity Investment $100,000,000 $1,100,000,000 2.7x 3.0x 3.2x 3.5x 3.8xSponsor Proceeds $360,000,000
Multiple of Original Investment 3.6xYears Invested 2Base IRR 53.3%
Pre-
Mon
ey
Returns Analysis
Transaction Assumptions
Financial Buyer Acquisition
Exit Valuation Assumptions
Exit MultipleSensitivity Analysis: Internal Rate of Return
Sensitivity Analysis: Multiple of Original InvestmentExit Multiple
Pre-
Mon
ey
