A session at SaaSBOOMi Annual 23

1. Indian SaaS Landscape:
M&A Trends & Rationale
Klaas Oskam
CEO - DC Advisory India

2. Indian SaaS Eco-system Continues To Flourish And Is Now The 2nd Largest In The World!
# of funded
Indian SaaS
companies
1,100 1,600
Annual # of
Indian SaaS
fundraises1
70 271
# of Indian
SaaS M&A
transactions3
10 46
Annual
Indian SaaS
funding2
$1.3b $4.5b
✓ Talent availability leadership
✓ Product leadership
✓ Pricing & cost leadership
✓ Proven US GTM strategy (~70%
US revenue)
✓ Rapid digitization driving domestic
demand & innovation
✓ Scale & maturity of founder eco-
system; SaaSBOOMi platform
✓ Scale & maturity of VC/PE investor
eco-system
LT differentiators driving eco-system
2019 2022 2019 2022
Source: DC Analysis, Tracxn, PB, Crunchbase, VCCEdge, Venture Intelligence, Bain India SaaS Report, 2022, Secondary Research 1. Total number of fundraises with known deal values; excludes seed/angel rounds 2. 2022
stats exclude Securonix owing to it being one-off, high value deal 3. Only includes deals with material value 4. Also includes undisclosed deals; seed classification as per Pitchbook 02

3. In Next 5 Years Indian SaaS Ecosystem Is Expect To Triple In Overall ARR Size
07
Source: DC Analysis, Tracxn, PB, Crunchbase, VCCEdge, Venture Intelligence, Secondary Research, Bain Indian SaaS Report, 2022
…Backed by long-term tailwinds
Expected to grow at 20-25% CAGR over the next 5 years…
$8b
$13b
$35b
2020 2022 2027P
CAGR:
20-25%
4%
5%
8%
2020 2022 2027P
~ 2x
increase
✓ Sustainable competitive advantages –
low cost structure, SaaS diaspora, depth
& abundance of talent
✓ Fore-runners in product innovation with a
technology-first mindset
✓ Clear beneficiary of macro-economic
factors affecting global markets such as
China, UK; coupled with domestic
market resilience and economic
stability
✓ Increasing pace of digitization &
adoption of software
Indian SaaS Revenue (estimated) Share of Indian SaaS companies in global market

4. 04
Key takeaways
46
Company Deal Size Type Buyer
200m M&A
100m M&A
80m M&A -
75m M&A
Indian SaaS M&A exits have increased ~4.5x over the last 3 years
Annual Indian SaaS M&A deals YoY
10
18
12
18
9
7
2019 2021 2022
Q4
Q3
Q2
Q1
Source: DC Analysis, Tracxn, PB, Crunchbase, VCCEdge, Venture Intelligence, Bain India SaaS Report (2022)
1. DC estimate; 2. Select deals with approximate deal values; excludes deals with undisclosed deal values
Increase
by ~4.5x
✓ In contrast to 5 years
ago when global buyers
dominated now a mix
of global & domestic
strategics & some PE
✓ Increasing M&As
volumes indicating
growing eco-
system maturity
✓ M&A levels need to
grow substantially
for eco-system to
deliver solid returns
~ $1.5b
Total est. deal value1
SaaS M&A’s Have Increased 4.5x But Still Have A Way To Go To Catch-up With Funding Boom

5. ~70% Correction in SaaS Multiples From Pandemic High’s To 2016 Levels
06
Source: CapitalIQ; sample set of 84 listed SaaS companies across both horizontal & vertical SaaS; considered till Dec’22
Key Takeaways
✓ SaaS multiples in US have
corrected ~70% post Q4 2021
records as against overall NASDAQ
correction of ~30%
✓ Median EV/LTM multiples have
reduced from from 19.5x in Oct’21
to 5.6x in Dec’22
✓ Due to much higher interest rates
“growth at all costs with far out
profitability” a thing of the past,
healthy growth with (near term)
profitability is the new mantra
✓ Top 10% of market still commands a
premium but heavy compression
for the 3rd to 10th decile businesses
EV/LTM revenue multiples of select listed SaaS companies from Jan ’12 to Dec’22
% share of M&A deals by volume out of all Indian SaaS transactions YoY
10.4x
17.7x
19.5x
5.6x
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
5.26x
3.40x
2.44x
NASDAQ Composite Index
S&P 500 Index

6. Summary Of SaaS Buyer Universe, Transaction Rationale and Valuation Framework
05
Buyer/Transaction Type Transaction Rationale Valuation Framework
Market leading IP / product / business
critical to winning a significant market
• Strategic IP / ARR multiple
• 15-100x ARR
Must have core IP / strategic
Business acquisition
Global
Strategic
Plugging geo / customer gap and/or
accretive business consolidation
• Trading & transaction comps
• 4-12x ARR / 15-50x EBITDA
Geo, customer or business
add-on acquisition
Strategic
Platform acquisition / majority recap /
or significant add-on; >3x MoIC in ~5
years
• Trading & transaction comps
• 4-12x ARR / 15-50x EBITDA
Acquiring high (>60%) or mid
level growth (30-60%) biz
PE (Growth /
Buy-Out)
Recurring revenue & cashflow addition
at attractive multiples for buyer
• Heavily discounted comps
• 1.5-3x ARR / 7-12x EBITDA
Serial buyers of low growth SaaS;
(e.g. Constellation, ESW, Upland)
SaaS
Consolidators
Platform play & financial engineering
~20% IRR, >2.5x MoIC in ~5 years
• Trading & transaction comps
• 2-9x ARR / 10-30x EBITDA
LBO of modest (10-30%) or
low growth (<10%) scaled biz
Large PE (LBO)
Team acquisition to plug capability,
talent or delivery gap
• FTE linked, minority cash;
majority retention ESOPs/SARs
Acqui-hire
Strategic

7. Thank You
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