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State of Venture Report - Technology
January 2020

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Meet F-Prime Capital
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Our Global Platform

4.
Infrastructure
Note: Not an exhaustive list
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F-Prime Capital’s Technology Portfolio
F IN T E C H P ORT F OL IO
Insurance
Wealth Management
Payments
E N T E R P R IS E P ORT F OLIO
H E A LT H IT & S E RV IC E S P ORT F OLIO
Real Estate
Capital Markets
DevOps
SaaS / Enterprise
Security
AV/Robotics
Data analytics
Payers/At-Risk Providers Employer Solutions Provider Solutions Life Sciences IT

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State of Venture in Technology
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2019 pace expected to slow slightly from 2018, though we are
still at historic levels
§ 2018 crossed the $100B watermark for the first time since the height of the dot-com boom in 2000.
§ H1 2019 continued at a similar clip to 2018; however, venture deployment slowed in Q3, driven by a decrease in
deal volumes. Valuations remain at historically elevated levels.
§ FinTech market has continued to explode, with funding totals expected to grow 50% YoY. Growth driven by an
increase in mega-rounds ($100M+); FinTech has grown from 5-10% of Tech VC in 2010 to 10-20% in 2019.
U.S. Venture Investments in Technology 1 U.S. Venture Investments in Financial Technology
Mega rounds ($100M+)
accounting for ~60% of
total funding
(1) Excludes Hardware and Biotech; Categories not mutually exclusive. Actuals through 10/20/2019
Source: Pitchbook; Team analysis

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Robust deal volume and continued growth in deal sizes and
prices
Note: As of 10/22/2019
Source: Pitchbook; Team analysis
U.S. VC Pre-Money Valuation by StageU.S. VC Deal Size by Stage

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26x
9x8x
20x
19x
15x 12x
19x
5x
15x
10x
8x
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Multiples have increased sharply in the last few years
*Data through H1 2019, multiple represents pre-money valuation multiple.
Source: Pitchbook; Team analysis
2016 2017 2018 2019
8x 14x
11x
17x
20x
14x
19x
18x
9.9
9.0
7.3 7.2 7.7
8.8
7.5 7.3
10.5
12.5
Avg. 2019 YTD F-Prime
deals seen: ~18x
Series A
Series B
Series C
22x
4x
10x
14x
16x
Company 1
Company 4
Company 5 Company 11
Company 3
Company 2
Company 6
Company 7
Company 12
Company 13
Company 24
Company 25
Company 18
Company 19
Company 8
Company 9
Company 14
Company 15
Company 20
Company 21
Company 22
Company 23
Company 17
Company 10 Company 16
Cybersecurity Enterprise CloudFinTech DevOps Healthcare IT MarTech Vertical SaaS
Sample F-Prime SaaS Deals Seen
Median Industry-wide Tech VC Revenue Multiple

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Venture funding shifted towards later stage in 2014, though
has remained mostly constant over last five years
(1) Excludes Hardware and Biotech; Categories not mutually exclusive. Actuals through 10/20/2019
Source: Pitchbook; Team analysis
U.S. Venture Investments in Technology1

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2019 capital raised by VC’s still historically high, but below
2018 peak
.23
2018 was a 10-year high for fundraising;
2019 levels more in line with 2014-2017
First-time funds also experienced
return to pre—2018 levels
Source: Pitchbook; Team analysis
Megafund fundraising
returning to normal levels

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2019 exits nearly tripled from 2018 levels, driven by long-awaited
unicorn IPOs
Facebook: $81B
market cap at
IPO
IPO value*
Last round
valuation
Total prior
funding
N12M multiple
at IPO
Uber $75.7B $70.0B $20.1B 5.1x
Lyft $24.0B $15.1B $5.0B 6.5x
Slack $23.3B $7.1B $1.2B 28.7x
Pinterest $10.0B $12.3B $2.9B 11.7x
Zoom $9.2B $1.0B $0.5B 29.7x
Peloton $8.1B $4.2B $1.1B 4.4x
Datadog $7.8B $0.6B $0.2B 25.4x
Crowdstrike $6.7B $3.3B $0.6B 38.6x
Cloudflare $4.4B $1.8B $0.4B 15.6x
Medallia $2.6B $1.3B $0.3B 11.7x
PagerDuty $1.8B $1.3B $0.1B 24.3x
Total $175B $33B
11 Unicorn IPOs in 2019, Totaling ~$175B2019 exits nearly tripled 2018 numbers
§ Against ~$460B of fund deployment, over $790B of exit
value since 2010, with over 200 unicorn companies still
privately held
§ Massive exit volumes in 2019 could soften the impact of
a public market correction as liquidity is rolled back into
new funds
*Based on initial offering share price
Source: Pitchbook; S-1 Filings; Team analysis
Up round

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Performance of recent IPOs indicate public markets value strong
underlying unit economics
Note: Stock price measured as of 10/22/2019
Source: CapitalIQ
Companies with <50% gross
margins have seen a decline in
stock value
Stock has appreciated
since IPO
Stock has depreciated
since IPO
2019 IPO Cohort Stock Price & Gross Margins
Postmates and WeWork postponed
IPOs, in part due to lack of appetite
for lower margin businesses

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Tech M&A activity also increased in 2019, driven primarily by
mega-cap deals ($2.5B+). Potential for outsized exits is growing
Note: Actual data through 10/20/2019
Source: Pitchbook; S-1 Filings; Team analysis
US Technology M&A Activity ($) US Technology M&A Activity (# Exits)
~60% of
exits in
2019 were
>$100M
(compared
to ~20% in
2010)

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