A talk I gave at the Point Nine Capital CEO Summit on European SaaS exits

1. D E S I G N I N G Y O U R E X I T S T R AT E G Y :
A D ATA - D R I V E N L O O K AT R E C E N T S A A S E X I T S

2. Private & Confidential | 2
A g e n d a
Introduction
European SaaS Exit Trends
Case Studies
How to achieve your exit?
Introducing ‘Real Exits’
01
02
03
04
05

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I n t r o d u c t i o n
M A R K M A C L E O D
F O U N D E R & P R E S I D E N T
S U R E PAT H C A P I TA L PA R T N E R S
Mark has over 14 years experience as a CFO for leading companies such as FreshBooks,
Shopify, Tungle and many others. He also spent 3 years as a General Partner at Real Ventures,
Canada’s largest and most active seed stage venture fund.
He has raised hundreds of millions in capital from investors in Canada, the US and Asia. In
addition, Mark has sold companies to Airbnb, Blackberry, Rackable Systems, Return Path and
others.

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S u r e P a t h : O u r P u r p o s e
Helping you fund, grow and exit your startup
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 startups prepare for growth stage and help them raise the capital needed to become market leaders
We have sat on both sides of the table. We have funded, grown and exited many companies
We offer up that experience through ongoing coaching and mentoring.
A low touch, high impact way to help you grow
There are few credible choices for advisors to facilitate sub $100M exits. We fill that gap
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
If you decide to exit, we manage the process for you from start to finish
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?
Growth
Funding
Strategic
Guidance
Exits

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S u r e P a t h & S M B
•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

6. European SaaS Acquisition
Activity

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E x i t s b y T y p e
Source: pitchbook.com
19
30
24 24
35
22
28 27
15
20
24
1
1
1 2
1
1
3
0
5
10
15
20
25
30
35
40
2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3
Number of Deals
European SaaS Exits by Type
Merger/Acquisi=on IPO

8. Private & Confidential |
Private
Buyers
67%
Public
Buyers
33%
Buyer by Type
8
B u y e r L o c a t i o n & T y p e
Source: pitchbook.com
North
America
41%
Asia & Others
6%
Europe
53%
Buyer By Geography

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B u y e r s
Who’s buying European SaaS companies
Source: pitchbook.com

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E x i t s b y A g e
Note: 12 companies does not have a disclosed age
Source: pitchbook.com
14%
40%
17%
18%
11%
Exit By Age of Company
0 to 5 years
6 to 10 years
11 to 15 years
16 to 20 years
> 20 years

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E x i t s b y S i z e
Source: pitchbook.com
71%
21%
5%
2%1%
Exit Values
Not Disclosed
$0m - $50
$50M - $100M
$100M - $200M
> $200M

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F u n d i n g S t a t u s
Source: pitchbook.com
6%
40%53%
Funding Status of Exited
Companies
PE VC Non-funded
$46.7m
$30.0m
$13.1m
$0.0m
$5.0m
$10.0m
$15.0m
$20.0m
$25.0m
$30.0m
$35.0m
$40.0m
$45.0m
$50.0m
PE VC Non-funded
Median Valuation
4.2x
3.8x
2.0x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
PE VC Non-funded
Valuation /Rev Multiple

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C O U N T R Y E X I T S
U N I T E D K I N G D O M 9 2
G E R M A N Y 3 7
F R A N C E 3 5
N E T H E R L A N D S 1 5
I R E L A N D 1 4
S PA I N 1 2
S W I T Z E R L A N D 9
F I N L A N D 8
S W E D E N 8
I TA LY 7
B E L G I U M 6
D E N M A R K 6
N O R WAY 6
R U S S I A 5
C Z E C H R E P U B L I C ,
P O R T U G A L , C R O AT I A ,
P O L A N D , A U S T R I A , C Y P R U S ,
H U N G A RY, L AT V I A , M A LTA ,
S E R B I A , S L O VA K I A , U K R A I N E
< 5
E x i t s b y L o c a t i o n
9 2
3 7
1 5
3 5
1 4
1 2
9
8
8
7
6
6
6
5

14. Case Studies

15. Private & Confidential |
Endomondo
Year Founded 2007
Time To Exit 8 Years
Rounds Raised 3
Total Funding $6.2M
Investor(s)
SEED Capital
Denmark
Headquarters
Copenhagen,
Denmark
Employees 33
15
C a s e S t u d y : E n d o m o n d o
Source: pitchbook.com, Endomondo, inc.com, Bloomberg
Acquired By Valuation Date Of Acquisition
$85 Million USD January 2015
• Under Armour bought Endomondo around the same time it
acquired MyFitnessPal for $475M USD
• Endomondo was profitable at the time of acquisition
• Under Armour acquired Endomondo to understand
European consumers better - with only 8% of revenue
outside of America

16. Private & Confidential |
TextLocal
Year Founded 2005
Time To Exit 9 Years
Rounds Raised N/A
Total Funding N/A
Investor(s) N/A
Headquarters Chester, England
Employees 36
16
C a s e S t u d y : Te x t L o c a l
Source: pitchbook.com, Venturebeat, tech.eu
Acquired By Valuation Date Of Acquisition
$16.6 Million USD Oct 2014
• TextLocal’s messaging platform was very complementary
to IMImobile’s solutions which utilizes network and mobile
data to create streamlined customer journeys
• TextLocal was immediately integrated with IMImobile’s core
infrastructure post acquisition - and the platform helped
cross-sell IMImobile’s other products
• With IMImobile’s global footprint, it also opened up more
markets for TextLocal
• TextLocal also allowed IMImobile to start serving the SMB
market, which it did not previous cater to

17. Private & Confidential |
Wunderlist
Year Founded 2010
Time To Exit 5 Years
Rounds Raised 4
Total Funding $24M
Investor(s)
Sequoia Capital,
Deutsche Telekom,
Atomico
Headquarters Berlin, Germany
Employees 61
17
C a s e S t u d y : Wu n d e r l i s t
Source: pitchbook.com, SeattleTimes, Wunderlist, MIcrosoft, ZDNet
Acquired By Valuation Date Of Acquisition
$150 Million USD June 2015
• While Microsoft has historically focused on building their
own major applications, it has shown a preference to buy
mobile-first apps that are single feature (i.e. Sunrise,
SwiftKey, Acompli, etc.)
• With over 13 million users at the time of acquisition, this was
a good channel for Microsoft to be even further
embedded into people’s productivity solutions
• Since the acquisition, Microsoft has rolled out integrations
between Wunderlist and Microsoft Outlook
• Wunderlist has also introduced more premium, business
oriented solutions since the acquisition

18. How to Achieve Your Exit

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Exit Rule #1: Be proactive
stop
wishing.
start
doing.

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Exit Rule #2: Strangers don’t (often) marry

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Exit Rule #3: Timing matters
Source: SaaStr

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Exit rule #4: (Almost) anything is possible
Possibilities

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Buyer Types
Founder
✓ Product-driven
✓ Based on desire
✓ Top down
✓ No prior relationship needed
Manager
✓ Fact-driven
✓ Based on clear business case
✓ Pushed up to CEO
✓ Need evidence (joint customers)

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Drivers of Deal Value
✓ Alternatives (runway, competition)
✓ Scarcity
✓ Mortal enemies
✓ Growth (fear)
✓ Market leadership (2 way)
✓ Does the buyer’s CEO Want this?
✓ On strategy
✓ Currency
✓ Time and timing (including markets)

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T h e R o l e o f A d v i s o r s
25
✓ Should you hire one? Yes
✓ What to look for: Relevant relationships, completed deals and expertise.
Senior people involved
✓ Role:
✓ Prepare you
✓ Quarterback
✓ Create / manage demand
✓ Good cop/ bad cop
✓ Objectivity
✓ Create urgency

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I n t r o d u c i n g R e a l E x i t s

27. Shubham Datta
Associate
shubham@surepathcapital.com
647.972.6834
Rena Wang
Analyst
rena@surepathcapital.com
416.897.8922
Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004