The document discusses investment opportunities in growth capital and the digital economy. It notes that alternative assets like private equity have historically offered higher returns than traditional assets. Specifically, growth capital within private equity has lower capital loss ratios and higher returns than venture capital and buyouts. The digital/tech sector receives over half of private equity investment and has seen strong revenue growth. Large digital companies have significant cash piles that help finance expansion. Emerging markets offer opportunities for valuation arbitrage by investing in growth companies at an earlier stage. Examples are provided of investments in digital companies in Latin America and Europe that achieved high returns.

1. The Investment potential of Growth
Capital and the Digital Economy
Axon Partners Group
Investment | Corporate | Consulting

2. 2
8.6%
3.7%
6.1%
8.8%
18.0%
7.1%
0.1%
4.6%
15.0%
18.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Global Equities Cash (*) Fixed Income (*) Real Estate (**) Private Equity
Average Historical Returns Most Recent annual return
Historically, alternative assets have provided higher returns, with Private Equity
being less risky than Real Estate
Alternative Assets
25 year Historical average return and last 12-month returns for the different asset classes
Russell Investments, based on Russell Indexes and Other market Indices. Using data as of January 31st 2015
(*) Annualized returns since 1970
(**) Annualized returns since 2000

3. 3
Pension funds are increasing their Private Equity allocations mainly due to the
above-average returns that it offers
4.5%
4.7%
4.5%
4.9%
5.1%
5.6%
5.5%
5.6%
6.2%
6.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
0
1
2
3
4
5
6
7
8
9
10
11
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
USDTrillion
AUM Tr PE Allocation
Coller Institute Private Equity: The extent and evolution of Pension Funds’ Private Equity Allocation and Preqin Institutiona Investors Survey H2 2014
Pension funds allocations to PE (% of Total AUM)
Institutional Investors allocation
expectations on PE for 2015
Increase PE
allocation
36%
Maintain PE
Allocation
55%
Decrease PE
Allocation
9%

4. 4
Within Private Equity, Growth Capital has the lowest capital loss ratio and
returns have outperformed Venture Capital for the last decade
PE Asset Class Capital Loss Ratio
US Venture Capital 35,40%
US Growth Equity 13,40%
US Buyout 15,10%
Average Capital Loss Ratios
Capital Loss Rate: All capital invested in realised deals below
cost (write-offs), net of any recovered proceeds, as a percentage
of total invested capital
Returns (Net to LPs)
As of June 2013
Cambridge Associates Report- Growth Equity is all Grown up (2013) and data analytics and Private Equity GC Council, 2013 Q2 performance
update
11.30% 11.40%
4.10%
13.80%
16.10%
9.60%
13.40%
15.80%
8.20%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
1-year 3-Year 5-Year
US Venture Capital US Growth Equity US Buyout

5. 5
30% of the value invested in Growth Capital has an exit of above 2,0x. Which is a higher percentage than
that of Venture Capital and Buyouts
Exit multiples in Growth Capital are higher on average than those in Venture
Capital and Buyout
Exit multiples of Invested Capital per Asset Class (2013)
Cambridge Associates Report- Growth Equity is all Grown up (2013)
0%
10%
20%
30%
40%
50%
60%
70%
Venture Capital Growth Buyouts
% of investments with exit multiple of <1.0x % of investments with exit multiple between 1.0x-1.99x
0%
5%
10%
15%
20%
25%
30%
35%
40%
Venture Capital Growth Buyouts
% of investments with exit multiple between 2.0x-4.99x % of investments with exit multiple over 5.x
0%
5%
10%
15%
20%
25%
30%
Venture Capital Growth Buyouts
0%
2%
4%
6%
8%
10%
12%
Venture Capital Growth Buyouts

6. 6
The digital economy receives more than half of the investment from Private
Equity, because is the best sector to be in
Invested Capital by sector (2013)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Venture Capital Growth Buyouts
Digital/Tech Financial Services Health Care Consumer Retail Other
Companies in the Technology/Digital sector have received major interest from alternative asset classes due to the
strong performance of this sector over the past decade
Cambridge Associates Report- Growth Equity is all Grown up (2013)

7. 7
In 2014 and 2013, digital companies’ revenues grew on average 16.8% and
8.7% respectively, outperforming other sectors in the economy
Pwc: Industry trends in 2014 provided by csimarket trends and MarketWatch
Revenue Growth by sector
Years to USD 1Bn dollar Valuation
0
2.5
5
7.5
10
Years
2005 2008 2011
Docusign
Box
Cloudera
Stripe
Hortonworks
Pure Storage
AppNexus
Spotify
Facebook
Tumblr
DropBox
Pinterest
Airbnb
Groupon
Instagram
Snapchat
Whatsapp
16.77%
5.25%
4.08%
-4.15%
7.16%
3.50%
4.73%
-5.00%
0.00%
5.00%
10.00%
15.00%
Digital
Technology
Transportation Consumer Energy Retail Financial Utilities
Revenues yoy, 2014 Revenues yoy, 2013

8. 8
136
68.3
48.1 46.9 46.4
33.7
28.4
0
20
40
60
80
100
120
140
160
Apple Microsoft Google Pfizer Cisco Oracle Qualcomm
USDBn
Cash (USD bn)
In addition, Digital companies are the ones with the biggest cash piles available
for investment
US Treasury Cash: 49Bn
6 out of the 7 biggest companies by cash are Technology companies (2014)
List From Forbes Magazine

9. 9
Global digital companies’ cash is then used for acquisition purposes and flows
into digital companies in expansion stage all over the world
Largest Exits Globally in 2014
Company Total Funding Acquirer Exit Value
USD 3,8Bn USD 25BnUSD IPOBn
USD 60,3Bn USD 19,5Bn
USD 225m USD 1,5Bn
Other Internet Deals, with an acquisition angle
USD 1,2Bn and KKR, Blackrock, Fidelity
Equity, Summit Partners
USD 1,2Bn
And Recruit Holding, Ru-net Ltd
USD 700m
(total round raised)
Preqin Report, as of January 2015

10. 10
Choosing the best region: US, UK and Israel remain the tier one PE hubs in
terms of PE penetration, but there are certain emerging hubs with potential
North America
USD 53,3bn
Israel
USD 1,3bn
China
USD 12,8bn
RoW
USD 3,9bn
Aggregate Value of deals in 2014 by region
Total Value of Deals: USD 86bn
Number of Deals: 7,475
Total Exit value: USD 121bn
Source: Preqin 2014 Yearly report
India
USD 5,4bn
Europe
USD 9,3bn
Axons Target Sectors
Israel
1,62%
US
1,02%
UK
0,89%
Brazil
0,30%

11. 11
Emerging VC hubs offer a three-fold advantage over top tier hubs
A supportive
investment partner
…And expand
Internationally
…helping find corporate
solutions
With smart money to help
grow the business
Finding
sources of financing
3. Valuation Arbitrage: Buy at lower valuations and
grow the company to attract global leaders to sell at
higher valuations
2. Lower Competition: Less competitors in emerging
hubs due to lower PE penetration ratio:
1.02% 0,89%
0.30%
0.18% 0.13% 0.10%
-0.40%
0.10%
0.60%
1.10%
US UK Brazil Germany Southern
Europe
Latam
Pacific
1. Rear view advantage, with an estimated time-
lapse of 2-3 years. For example, below shows mobile
internet penetration in each region
72%
55%
23% 18%
8%
0%
20%
40%
60%
80%
North
America
Western
Europe
South
America
Southeast
Asia
Central
America
Pwc: Industry trends in 2014

12. 12
ClickDelivery is an example of the potential returns from emerging hubs
Food Delivery company based in Bogota, invested
by Axon Amerigo Ventures in May 2013
13,974
99,142
April 2013 May 2014
x7
Monthly Orders increase since Axon Investment
Online food-ordering service based in
Germany (Berlin) consolidating for
IPO
Backed by: Tengelmann
Ventures, Point Nine Capital,
Insight Ventures, Kite Ventures
among others
Raised over USD 635 million
Looking for expansion into
Latam through M&A
• IRR: +500%
• Multiple: +4x
• 2013-2014
Axon Closed an Exit at:

13. 13
Wuaki.TV another example of how value can be created by investing in
emerging hubs, in growth companies in the digital sector
B2C video-on-demand (VOD) service, which
allows customers to directly access different films
and TV series. Invested by Axon in October 2011
5,300
171,940
April 2013 May 2014
Oct 2011 Jun 2012
Revenues at Entry and Exit
34x
Japanese E-commerce giant. More than
50 mill registered users and a net
profit of 886 million EUR.
Market Cap: 18.22 million
Listed in the Tokyo Stock Exchange
Looking to create a Global Video
On Demand Brand through
acquisition of main players in
different geographies
Axon Closed an Exit at:
• IRR: +350%
• Multiple: +4x
• 2012-2013

14. 14
Axon played an integral part in the recent online global online food delivery
sector deals
Foodpanda, food delivery company part
of the Rocket Internet group, raised USD
700 million to take over similar food
delivery companies around the world
Food Delivery company headquartered in the UK
with Operations in India.
Food Delivery company headquartered in Italy.
The resulting deal is the largest in the online food
delivery sector in Italy and the largest exit of a
company with a business life of only five years
Food Delivery company headquartered Spain.
This is the single largest deal in the online food
delivery sector in Spain, and is the largest M&A
transaction in the Spanish digital economy space
since 2013

15. 15
Axon Partners Group Investment - International investment firm
Axons’ funds invest in digital companies in all phases of development
Assets Under Management
Spain IndiaLatAm
*Axon recently launched ICT III fund
• ICT III Fund will invest in Spanish companies within the digital
economy sector in international expansion stage
• In Spain, a high proportion of investment has traditionally focused
on early stage startups, which has led to increased multiples and
valuations. Those early-stage startups have grown and now require
higher rounds of financing that very few local VCs can satisfy
• Hence, ICT II strategy is to cover the financing gap between
early and late stage Venture Capital
• If you are an investor and you are interested in receiving more
information about this fund and the digital growth capital
opportunity, please contact:
Kathryn.Wellemeyer@axonpartnersgroup.com
• If you are an entrepreneur and you have an exciting company in
the Digital Growth sector and you would like us to hear more about
ICT III, please contact:
Carlos.Rodriguez@axonpartnersgroup.com
Investment stages
Seed Stage Early Stage
Growth &
Expansion
250K Up to 2m Up to 15m
Follow-on
investment
Revenues of more
than USD 5m and
in profit
Proven business
models, recurring
revenues and entry-
barriers crossed
Less than 24
months but with a
proven product
and
entrepreneurial
approach
Follow-on
investment
• ICT III-Growth Stage*
• ICT I –Early Stage
• ICT II –Early Stage Amerigo Ventures
Pacifico Fund
India
Opportunities
Fund

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