Presentation deck from SaaStock 2019

1. Building
Companies in a
Downturn

2. Technology seems
invulnerable
Ubiquitous connectivity
of data and people
AI and ML
advancing rapidly
Every market is
now a tech market
Incumbents more
challenged than ever
Thriving venture
ecosystem

3. Europe is producing
more, and bigger,
winners than ever before
30
84
2014 2019
$1b+ Companies
89
302
2014 2019
Agg. Valuation ($b)
3
28
2014 2019
Equity Raised ($b)
6
17
2014 2019
$5b+ Companies

4. We have been
in a decade-long
bull cycle

5. …which has been great
for the European
ecosystem
Unprecedented access
to capital to help
companies scale
IPO and M&A markets able to sustain
more, and bigger, exits than ever before
$62.5bn
Raised in last
36 months
$30 bn
IPO
$5.8 bn
IPO
$15 bn
IPO
Recent exits will replenish ecosystem with
talent for new companies and new angels
$2.2 bn
acquisition

6. But there’s uncertainty on a macro level…

7. …and anxiety in the tech markets

8. So… should we be
scared?

9. Looking back at the VC market in the previous recession…
$88.4
$49.9
$20.8
$18.0
$22.8
$32.0
$47.6
$55.1
$55.2
$22.7
$38.9
$47.7
$38.9
$33.6
$49.2
$75.6
$73.0
$54.6
$87.1
585
396
252
196
242
281
400 408
443
338
387
435 424
388
470
482 503
410
389
0
100
200
300
400
500
600
700
0
10
20
30
40
50
60
70
80
90
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
VC Fundraising activity
Capital Raised ($ bn) Fund Count
1. Fewer available funding sources…
Source: PitchBook
Sharp drop yoy:
~24% in fund count
~59% in capital raised

10. …however, fundraising activity showed a time lag
$88.4
$49.9
$20.8
$18.0
$22.8
$32.0
$47.6
$55.1
$55.2
$22.7
$38.9
$47.7
$38.9
$33.6
$49.2
$75.6
$73.0
$54.6
$87.1
585
396
252
196
242
281
400 408
443
338
387
435 424
388
470
482 503
410
389
0
100
200
300
400
500
600
700
0
10
20
30
40
50
60
70
80
90
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Capital Raised ($ bn)
Source: PitchBook
-40
-30
-20
-10
0
10
20
30
40
S&P 500
Fundraising remained elevated in
the leadup to the crisis and
through its official onset compared
to stock market trends

11. 2. More selective deal making…but similar to fundraising, the effects were
not fully reflected until 2009
Drop of
~30% in
deal value
since 3Q08

12. 3. Downward pressure on valuations and smaller fund rounds
Period 1Q 2008 to 4Q 2010
Drop by
~$8.2M
Drop of
27.3%

13. Average time between funding rounds increased during the
recession, at lower valuation step-ups
1.5 1.7 1.5 1.4
1.56x
1.35x
1.66x 1.7x
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2007 2008 2009 2010
Median years between first and second VC rounds by first financing
cohorts, and median valuation step-up
Median years between first and second VC rounds
Median valuation step-up
Source: PitchBook

14. Moreover, the % companies raising went down and the overall % of
bankruptcies increased
DELETE?

15. 2005 2006 2007 2008 2009
Nevertheless, a large number of hugely successful businesses were built
during the recession

16. …with SaaS having proven to be one of the most resilient of sectors

17. Slower start but quick acceleration post 2010
2007 founded
companies
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2007 2008 2009 2010 2011 2012 2013 2014
Total employees Post-money valuation

18. Example from our portfolio
0
1000
2000
3000
4000
5000
6000
Spotify Revenue per annum
(EUR million)
Spotify experienced a
slow pick up in
revenue during
recession with an
accelerated pick up in
traction 2010 onwards
DELETE?

19. How can start-ups
prepare?

20. The three critical
components of building a
company
Product-
market fit
Access to
capital
Stellar team

21. How do you manage
product-market fit in a
downturn?
1. Distinguish product market fit vs
capital fueled growth
2. Be selective in your initiatives and
be focused on follow through
3. Bear in mind buying behaviour can
change in your favour

22. How do you manage
access to capital in a
downturn?
1. Ensure your runway is long
enough
2. Understand valuation criteria and
how to find the right investors at
the right time
3. Create the right deal dynamics

23. SaaS multiples over time: range from ~2x to ~15x
Source: Public market data. Consensus estimates as of each trading day

24. Understand the capital market landscape and how
to leverage it
Venture
Strategic
Growth/Buyout
Hedge funds/alternatives
Public equity
Sovereign wealth funds

25. How do you manage a
stellar team in a
downturn?
1. Think carefully about your Board
composition
2. Motivate your team during the
downturn
“Never let a crisis go to waste”

26. In conclusion…