ConsolidatingwithTheRightPartnersandBusinessModelsThatWillWininTheFuture– EFT2018

Kurien Jacob

HIGHGATE VENTURES

Topics for Today

2

•How do you bet on the future and find the companies that

will succeed?

•What are the metrics investors use to measure the

success of an investment?

•Timing is everything. How do you assess long term and

short-term investment opportunities?

HIGHGATE

Ventures> A Technology Investment

Platform Focused on the

Hospitality, Lodging, and

Travel Industries

Overview

HIGHGATE VENTURES STRICTLY PRIVATE & CONFIDENTIAL4

Highgate Ventures ("HGV") is a technology

investment platform that incubates, invests in,

and partners with companies in the

hospitality, lodging, and travel industries. We

seek to grow platforms with a clear

opportunity for technological disruption and

the potential to scale rapidly.

Current hospitality portfolio is focused on SaaS-based, transaction-oriented solutions for:

Ø Revenue Management & Big Data

Ø Distribution

Ø e-Commerce & Loyalty

Ø Virtual inventory & Disruption

Ø Travel financing

Strategy & Approach

> Complete Spin off from Highgate Hotels investment and management businesses that operates over 135 hotels in gateway markets

> HGV is independently operated with a complete delineation solely focused on scaling tech investments

> 8 completed technology investments across North America and Europe, in 2 years

> Established co-investment partnerships with leading technology growth & venture capital partners

> Unique ability to leverage global hospitality network to conduct initial tests and rapidly scale products with proven playbook

HIGHGATE VENTURES

Portfolio Overview

5

Current portfolio is comprised of a unique combination of SaaS-based, transaction-oriented companies

1. Data science and machine learning driven hotel demand forecasting and sensitivity pricing (LodgIQ)

2.Big data collection of millions of rates and trends (OTA Insight)

3.Centralized Hotel distribution system and marketing engine that can distribute prices at micro-segment levels (Travel Tripper)

4.Hotel incentive platform that incentivizes direct hotel bookings via instant gratification loyalty program (Stay Wanderful)

5. Innovative software platform that connects physical or virtual hotel inventory to new demand channels (Hotel Trader)

6.First integrated data analytics platform for short term rental companies (Transparent)

7.Consumer financing platform offering flexible payments to consumers with 3 month, 6 month, and 12 month payment plans (Uplift) Portfolio Snapshot

Revenue Management Rate Shopping

Central Reservations & Web Technology Instant Loyalty

Virtual Inventory Marketplace

Short Term Rental Market Analytics

Consumer Financing

HIGHGATE VENTURES

Why We Are Different

6

Traditional Venture Capital Model: Transactional

Our Model: Strategic, Tactical and Capital Efficient

• Created a differentiated investment model in the hospitality, lodging, and travel sectors

• Capitalize on proprietary deal flow through sourcing network to become the first call for hospitality and travel technology startups

• Focus on capital deployment efficiency: pilot investment opportunities to (i) minimize upfront cash funding requirements, (ii) maximize transaction returns, and (iii) mitigate early-stage downside risk

• Invest in the most attractive travel technology investment opportunities

─ Endorsements from strategic partners with data confirming proof of concept and clear path to scale (< 3 years)

─ Strong CEO / founder teams seeking growth capital

─ Highly differentiated proprietary technology with reasonable barriers to entry

─ Clearly identified strategic buyers at $50-100 million of revenue

• Founder gains early traction at initial customer base and grows to ~$1-3 million in run-rate revenue

• Following initial success, founder begins to receive inbound calls / interest from venture capital firms

• Founder needs coach, mentor, network and strategic partner with growth expertise, but often ends up with a purely financial partner who can be highly distracting while contributing little tactical or strategic value

HIGHGATE VENTURES 7

Market Size – That’s why we are in it

HIGHGATE VENTURES

Rapid Growth Profile – Company A

8

Historical Performance

Future Projections

$1.2 $1.0$1.9

$4.3

$6.1

$7.3

11

12

23 39

50

53

0

10

20

30

40

50

60

70

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

Q12017 Q22017 Q32017 Q42017 Q12018 Q22018

AnnualizedRun-RateRevenue TotalUnits

$4$20

$52

$102

$178

$266

$7$28

$6039

136299

518 830

1,142

(100)

100

300

500

700

900

1,100

1,300

1,500

$0

$50

$100

$150

$200

$250

$300

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022

AnnualizedRun-RateRevenue EBITDA TotalUnits

HIGHGATE VENTURES

$19

$42

$81

$143

$213

2018 2019 2020 2021 2022

Returns Analysis

9

Base Case ARR – Derived from projections and investment basis

HIGHGATE VENTURES

Attractive Unit Economics

10

Historical Breakeven Analysis (LTM Period)

Note: Breakeven defined as booked revenue – customer acquisition costs - servicing costs

5.8

1.9

2.5

3.5

0.7

4.2

4.74.4

2.3

6.1

1.3

6.5

4.8

3.3 3.7 months

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Units

Breakeven Period (Months) Average

HIGHGATE VENTURES

Rapid Growth Profile – Company B

11

Annualized Revenue ($M)

17

$5

$1$6

$15

$22

$60

Units

161k

14k

1K

50k

140k175k

724k

HIGHGATE VENTURES 12

Benchmarking

8% 5% 4%

34%

24%

50%

%MonthlyChurn

%GrossMargin

(IPO) –Company 1

Gross Margins and Churn

(IPO) –Company 2 Company B

HIGHGATE VENTURES

Customer Acquisition Metrics

13

Payback Multiples (Gross Profit / CAC)

1.0x1.2x

0.9x

1.3x

0.5x

0.7x0.9x

1.2x 1.2x

1.0x

1.5x 1.5x

1.8x

2.6x

1.7x

2.1x

Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

$49$38 $46

$33

$80

$52 $43$32 $35 $40 $35

$54 $48$31

$46$36

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

CAC

Unit Economics by Cohort

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Retention based on Monthly Churn

14

Retention %

53%

44%

51%

60%

50%

58%

52%

54%

56% 57%

56%

53%

57% 57%

61%

54%

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17

MonthlyCohort

HIGHGATE VENTURES

Key Investment Criteria

15

•Market Size within travel

•Core Team ability and experience

•Clear path to scale

•Solving a need vs focussing on features

•Key metrics – CAC, Gross margin, Churn, Retention

•Ability to raise future capital