who is eating whose lunch?assets1c.milkeninstitute.org/assets/events/... · 2012 nvca yearbook....
TRANSCRIPT
Who is Eating Whose Lunch?
Familiar Stories
Source: Jefferies LLC / April 2013.
Who is Eating Whose Lunch?
Emerging Stories
Source: Jefferies LLC / April 2013.
…And Leading Tech Companies Are Also Vulnerable
When Underlying Technology Platforms Shift
Source: Jefferies LLC / April 2013.
The Enterprise Strikes Back!! Largest Enterprise and Consumer
Technology IPO’s Performance
January 2011 - Present
Source: Jefferies LLC / April 2013.
Largest Internet and Software Technology IPO’s Performance
January 2011 - Present
Source: Jefferies LLC / April 2013.
Venture Capital Backed Technology Private Company Exits
Acquisitions of North American Private Sellers
Percentage Breakdown of Venture Backed Liquidity Events: IPO vs. M&A
M&As Remained Primary Source of Liquidity in 2012
Source: National Venture Capital Association.
IPO Activity, 12 Years After The Bubble, Is Nowhere Close To
“Pre-Bubble” Levels… A Structural Change?
Recently Priced TMT IPOs in 2010, 2011, 2012, and 2013
Since 2010 there have been 146 IPOs in TMT, with 37.0% of these IPOs having priced
above the offering range
Source: Jefferies LLC / April 2013.
Number of Deals Allocated by Selected Industries
Source: Dow Jones Venture Source.
IT Deal Flow and Investment Stabilized in 2011 Equity Investment in Information Technology Companies
Source: Dow Jones Venture Source.
2012 NVCA Yearbook. Capital Managed is inflation adjusted to 2012 dollars.
The VC Industry is “Rightsizing”
$6 $3 $9 $7 $12 $14 $17
$25
$43
$74
$135
$50
$15 $13 $22
$36 $36 $33 $27
$17 $14 $20 $20
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
Last year, new capital commitments were close to 1997 levels
(adjusted for inflation)
New capital commitments ($ billions):
Startups can experiment easily and quickly
Number of Open APIs
Compute and Storage
Infrastructure
Web & Application Server
Databases Document Store
Startups
Increasingly
Pervasive APIs
Customers
105 352 601 1,116
1,628
2,647
4,676
9,000
'05 '06 '07 '08 '09 '10 '11 '12
Startups don’t
have to build
their entire
infrastructure
anymore
A startup can
experiment at the “top of the stack”
Programmable web.
The Education Revolution
GSV Advisors.
0
25
50
75
100
$0
$100
$200
$300
$400
$500
'07 '08 '09 '10 '11
Venture investment in education companies
$ millions invested
# of Deals
Disappearing
classroom walls
Democratizing
educational content
Learning from
big data analytics
Campuses becoming
global institutions
Big Data is Transforming Infrastructure
Data Warehouse
Application Layer
Business Intelligence
Data Visualization
Database
Storage
Networking
Nonprofit –
$1,100B
Energy -
$5,000B
Education –
$2,200B
Telecom –
$4,700B
Legal – $585B
Publishing –
$28B Agriculture –
$5,000B
Real Estate –
$6,600B
Healthcare –
$4,500B
Insurance –
$4,100B
Travel –
$1,200B
Automotive –
$2,600B
Defense –
$700B
Financial
Services –
$10,000B
Music –
$130B
Recruiting –
$130B
Nearly All Major Industries Offer Software Investment
Opportunities
The results are clear…. Portfolio Company Transformation (Average EBITDA Margin Across Portfolio)
Note: Slide represents Vista Equity Partners software platform companies. Past performance and results are not necessarily indicative of future results. Please also see “Important Disclosures” for important information on prior Vista funds performance. Line represents all current and exited investments.
EBITDA Continues to Grow Even During the Recession
Multiple Steps Are Required to Boost Profitability
(1) PF EBITDA is based on projected PF EBITDA at the time of add-on acquisition as identified in investment model Note: Includes all current Vista platform companies acquired before 12/31/2010 Note: LTM 12/31/12 Note: Please also see “Important Disclosures” with respect to projections and prior performance of the Vista funds.
Equities rally in 2013 Equity indices in major countries
Note: U.S. (S&P 500), Eurozone (German DAX), UK (FTSE 100), Japan (Topix).
Source: Bloomberg.
70
80
90
100
110
120
130
140
2010 2011 2012 2013
U.S.
Eurozone
Japan
U.K.
Index (January 1, 2010 = 100)
Source: Datastream.
Major equity indices
in local currency
20
40
60
80
100
120
Oct-07 Nov-08 Dec-09 Jan-11 Feb-12 Mar-13
Dow Jones
Nikkei 225
Euro Stoxx 50
Shanghai A
Share
Previous DJIA peak = 100
2.3B Global Internet Users in 2011 Majority of Growth Driven by Emerging Markets
‘08-’11 Adds (M): 15 11 14 16 215 19 28 21 37 69 ‘11 Y/Y Growth: 1% 26% NA 3% 12% 19% 44% NA 22% 38%
Source: KP, United Nations/International Telecommunications union, Internetworldstats.com as of 12/11
245
36 37 61
513
42 34 45 55
121
0
100
200
300
400
500
600
2011 Internet Users (M)
79%
49% 48%43%
38% 37% 35%
28% 23%
10%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
USA Turkey Iran Russia China Mexico Philippines Nigeria Indonesia India
% Population Penetration
Emerging Markets are Creating Internet Leaders
Market USA Emerging Markets
eCommerce
Search
Social Networking
Travel
Jobs
Real Estate