PropTech Market Update 2020 Year-End Review - GCA Advisors
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PropTech Market Update 2020 Year-End Review
EXECUTIVE SUMMARY – 2020 PROPTECH
» Despite a decline from 2019’s record capital raising levels, investment into the U.S. PropTech market remains incredibly active
with ~$7.3Bn of equity and debt raised across nearly 300 deals in the category in 2020
» 58 deals of $20M+ in equity invested and 28 deals with $50M+ in equity investment ➔ scale leaders emerging across all
sub-categories within PropTech and investors backing established category leaders
» $100M+ investment rounds in 2020 into Vacasa, Sonder, Better, Hippo, Katerra, Procore and many others
» M&A market remained highly active with ~100 U.S. PropTech M&A deals in 2020 ➔ majority of M&A activity was driven by
strategic buyers, but private equity activity increasing
Significant Strategic & Private Equity M&A Transactions
/ / /
$10,200MM $11,000MM $250MM
/ / /
$1,800MM $350MM Undisclosed
» Valuation multiples in the market continue to remain strong, especially for software businesses, with the NASDAQ up ~44% in
2020(1) – Rise of SPACs (Special Purpose Acquisition Companies) with focus on PropTech
‒ Opendoor, Porch, Open Lending, Vivint and United Wholesale Mortgage all announced SPAC mergers with multiple
additional PropTech-focused SPACs looking for targets
‒ Successful and pending IPOs reflect continued significant public market demand for PropTech companies
Successful & Pending IPOs
Market Cap(2): ~$110Bn Market Cap(2): ~$9Bn Market Cap(2): ~$40Bn Filed for IPO
» GCA expects continued strong PropTech market activity in 2021 given the momentum and tailwinds in the sector
Source:
(1) Reflects percent change from 1/2/2020 to 12/31/2020.
(2) As of 1/22/2021.
2
LEADING ADVISORY TEAM FOCUSED ON THE PROPTECH MARKET
GCA U.S. PropTech Team Leader in PropTech Advisory – 25+ Global PropTech Deals Announced since 2017
Chris Gough
Managing Director
Head of Real Estate Technology A Portfolio Company of Investment from Investment from Acquired Majority interest
Phone: (415) 318-3658 acquired by
cgough@gcaglobal.com Majority investment from
We advised the seller We advised the seller We advised Mobysoft We advised the buyer We advised the seller
Lizzie Cooperstone
lcooperstone@gcaglobal.com
GCA European PropTech Team Acquired by Acquired by Acquired by Acquired by Majority interest
acquired by
Adrian Reed A Portfolio Company of A Portfolio Company of
Managing Director We advised the seller We advised the seller We advised the seller We advised the seller We advised the seller
Phone: +44 (161) 240-6422
adrian.reed@gcaaltium.com
Dominic Orsini, Director Acquired by Acquired by Acquired Acquired by Acquired by
dominic.orsini@gcaaltium.com
We advised the seller We advised the seller We advised the buyer We advised the seller We advised the seller
Key Sub-Sector Coverage Verticals
Residential RE Software Commercial RE Software
Mortgage / Lending Title / Insurance Acquired by Investment from Acquired by
Acquired by Investment from
Home Services Facilities Management
Construction Tech IWMS We advised the seller We advised the seller We advised Mobysoft We advised Capsilon We advised the seller
3
GCA ADVISES LONE WOLF TECHNOLOGIES ON ITS STRATEGIC INVESTMENT F ROM
STONE POINT CAPITAL
Transaction Overview End-to-End Real Estate Software Platform
GCA acted as financial advisor to Lone Wolf
Technologies on its strategic investment from Creates, manages and auto-populates legally
compliant online forms and contracts by
Stone Point Capital Forms leveraging the industry’s most comprehensive
offering of form coverage and types
» On October 23rd, Lone Wolf
Technologies announced that funds
managed by Stone Point Capital will Transaction management tools – MLS integration,
become Lone Wolf’s lead institutional Transaction forms, eSignatures, etc. – designed to enhance
investor Management agent productivity, drive compliance and manage
transactions from contract to close
» Lone Wolf Technologies is the North
American leader in residential real
estate software
Cloud-based, electronic signature for real estate
» The Company provides agents, brokers, eSignature transactions with over 22 million eSignatures filed
franchises, MLSs and associations the annually
tools they need to build their business
and improve profits
Purpose-built back-office accounting software
Back-Office combining traditional accounting with real estate
Company Highlights Management transaction functionality that results in sticky
relationships throughout any macroeconomic climate
15M+ 1,000+ 8,000+ First-of-its-kind broker command center, delivering
Completed Association Brokerage Insights & AI-enabled predictive insights, built upon a data lake
Transactions Customers Customers Analytics leveraging 30+ years of proprietary, industry-specific
data from Lone Wolf’s existing product suite
All-in-one platform of over 30 partners, offering
1.4M+ 99% 22M+ curated upstream and downstream services and
North American Forms eSignatures Marketplace tools to significantly improve the entire real estate
Agents transaction experience and deliver unique agent
Coverage Per Year differentiation
Source: Company websites and press releases.
4
GCA ADVISES LONE WOLF TECHNOLOGIES ON ITS STRATEGIC INVESTMENT F ROM
STONE POINT CAPITAL (CONT.)
Select Partners and Customers Select Transaction Commentary
MLSs & AORs
“growth.
We’re excited to work with the team at Stone Point to continue our strategic
Stone Point’s investment aligns with our vision to create a truly
connected, fully digital real estate experience. We are thankful for the
partnership and leadership of Vista Equity Partners over the last five years,
and we remain committed to serving the real estate industry going forward. ”
Brokerages & Franchises Jimmy Kelly,
President and CEO,
Lone Wolf Technologies
“We are enthusiastic about the long-term opportunities within the real estate
services and technology industry. This industry is undergoing rapid digital
Marketplace Partners transformation, and we are pleased to partner with Jimmy and his
colleagues, who together have built a remarkable company and have
demonstrated the vision to continue to grow and better serve their clients. ”
Chuck Davis,
CEO,
Stone Point Capital
History of Strategic Acquisitions and Product Development
Investment by Acquisition of Launch of Lone Wolf Link Launch of
Vista Equity Partners completed a Lone Wolf added cloud-based transaction Seamless integration of Lone Wolf’s Marketplace hosts a variety of digital
minority investment management products and extensive forms transaction management solutions with tools, services and partner solutions
coverage (i.e., Canada) brokerWOLF enables agents to communicate for real estate agents and brokerages
with back-office processes in real-time
Jul 2016 Apr 2019 Jan 2020
Apr 2015 Oct 2017 Apr 2019 May 2020
Investment by Acquisition of Launch of
Vista Equity partners completed a majority zipLogix brought breadth to existing forms Insight’s AI-enabled system delivers on-demand
investment and focused on executing a core business, with complementary transaction snapshots of sales forecasts, GCI and company
organic plan while simultaneously looking for management solutions and unique customer dollar
inorganic pieces relationships (NAR, CAR)
Source: Company websites and press releases.
5
GCA ADVISES CONSTRUCTION TECH LEADER EQUE2 ON INVESTMENT FROM WESTBRIDGE
GCA Altium acted as exclusive financial advisor to Eque2, a portfolio company of LDC, on the sale to WestBridge
Background
• Eque2 are the UK market-leading supplier of business management software to the construction, contracting and house
building industries
• The Company targets businesses across a range of sizes from SMB (small and medium-sized businesses) to UMM (upper
mid-market) within construction & related industries
• The investment from WestBridge will support Eque2’s management team to deliver its go to market strategy and SaaS
platform growth
About the Transaction
• GCA Altium was appointed in early 2020 to assess exit options and prepare for a marketing process to both trade and PE
• Preparation and trade outreach commenced in early 2020, with financial, commercial and technology vendor due
diligence commissioned
Location • The shareholders viewed WestBridge’s offer as the most compelling based on price, relationship, timetable and overall
UK strategy to pursue Eque2’s go to market strategy and SaaS growth opportunity
• The buyout was led by a five-strong senior management team and provided a full exit for LDC, which acquired a minority
stake in the company in November 2017, and other institutional shareholders within three weeks after receiving offers
Date
December 2020
Deal Type
Sell-side M&A
Construction
Technology
6
GCA ADVISES MOBYSOFT ON ITS INVESTMENT FROM ECI
GCA Altium advises multi-family software provider Mobysoft on investment from ECI
Background
• Based in Manchester, Mobysoft is a fast-growing, highly recurring provider of cloud-based rent arrears management
software to the UK social housing sector
• Mobysoft’s flagship product, RentSense, processes payment patterns for more than 1.6m properties on a daily and
weekly basis and uses predictive analytics software to provide recommendations and optimise workflows for over 140
social housing providers
• RentSense has achieved significant penetration of the UK social housing market (>30% on a properties basis) and
Mobysoft expects to generate annual recurring revenue of c.£11.5m by December 2020
• Mobysoft was founded in 2003 by Derek Steele
About the Transaction
• GCA Altium has advised Mobysoft since 2016, successfully facilitating minority investment from Livingbridge in 2017
followed by a debt refinancing process in 2019, and was appointed in late 2019 to assess exit options
Location
UK • The shareholders viewed ECI’s offer as the most compelling based on relationship, price and overall strategy to pursue
Mobysoft’s key growth opportunities
• ECI will take a significant stake alongside a minority reinvestment by Livingbridge and management
Date
September 2020
Deal Type
Minority Investment
Multi-Family
Software
7
I. PROPTECH MARKET SUMMARY
II. PUBLIC MARKETS
III. M&A AND MARKET COMPS BACK-UP
8
2020 PROPTECH SECTOR SUMMARY – KEY SUBSEGMENT TRENDS
Residential Real Estate Technology Commercial Real Estate Technology
− COVID-19 accelerating “digitization” of the transaction ➔ − Commercial RE investment activity fell 44% through the first
virtual showings, performance / data-driven customer capture, three quarters of 2020, but activity remains highly end-market
virtual notary, transaction management, broker management dependent – investors have favored multi-family and industrial
tools, tech-driven escrow / title all will benefit from adoption assets relative to retail, office and hotels(3)
tailwinds in post-COVID market
− Despite a challenging 2020, low interest rates, significant dry
power and government stimulus should support the CRE market
in 2021
− Record activity in the mortgage vertical driving significant
momentum in the market. Mortgage Bankers Association − CRE office solutions that deliver operational efficiency drive
expects $3.6Tn in total originations in 2020 ($2.2Tn refi / $1.4Tn high ROI and are in high demand (energy efficiency, utilities
purchase) ➔ fueled continued interest in mortgage tech / bulling, predictive maintenance, visitor management, etc.)
mortgage originators(1)
− Tenant engagement, tenant experience and tenant safety tools
− Brokerages have been the best performing public market are also critical in post-COVID environment
segment in PropTech in 2020 ➔ continued verticalization of the
market with brokerages working to expand attach rates on title − Continued activity and strong momentum in multifamily
/ mortgage and adjacent transaction related products management software, especially for firms that are using tech
to enhance tenant experience
Up 837% in LTM(2) Up 207% in LTM(2) Up 57% in LTM(2)
Source:
(1) Mortgage Bankers Association Mortgage Market Forecast.
(2) Capital IQ as of 1/22/2021.
9
(3) CBRE, Global Real Estate Market Outlook 2021 Review.
ANOTHER RECORD YEAR – REFLECTED IN 2020 DEAL FLOW
U.S. Real Estate Technology Venture Investment (2015 - 2020)
($MM) Equity Raise Value Debt Raise Value
$9,015
295 U.S. PropTech deals in
2020, totaling $7.3Bn in
equity and debt $2,060
$7,284
$1,345
Q1
$5,308 $728 Q4
$475 $1,808
$4,477
$250
$7,284
Q3
$6,955
$2,748 Q2 $815
$5,938
$3,933
$4,833
$1,823 $4,226
2015 2016 2017 2018 2019 2020
Avg. Deal
Value:
$10.6 $8.0 $20.6 $20.1 $21.3 $20.1
Source: Capital IQ as of 12/31/2020, Pitchbook, press releases.
Excludes Oyo Rooms and The We Company financing rounds.
Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology.
10ANOTHER RECORD YEAR – REFLECTED IN 2020 DEAL FLOW
U.S. Growth Capital Raises Greater than $20MM Top 10 U.S. Equity Rounds of 2020
($MM)
Strong deal activity in 2020 in an Latest
Select Reported
unpredictable economic environment Date Company Investor(s) Amt. Invested Funding to Date Valuation
$1,000(1) Equity
4/6 $6,400(2) NA
/ $1,000 Debt
79
11/24 $350 $710 $1,500
5/19 $200 $1,491 NA
58 11/10 $200 $410 $4,000
6/24 $170 ~$560 $1,300
39
4/20 $150 $155 NA
32
4/30 $150 ~$400 $5,000
15 16 7/21 $150 $709 $1,500
5/21 $123 ~$230 $623
6/2 $108 ~$635 NA
2015 2016 2017 2018 2019 2020
Source: Capital IQ as of 12/31/2020, Pitchbook, press releases. (1) AirBnB raised $1Bn in debt and equity (mix not disclosed) and $1Bn of debt on 4/6/2020.
Excludes Oyo Rooms and The We Company financing rounds.
Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology.
(2) Debt and equity mix not disclosed. 11PROPTECH PRIVATE COMPANY FUNDING LEADERS
Other Mega Funding Leaders
Equity Raised to Date: Movers
>$500MM
1 ($614MM) ($468MM) ($3.0Bn)
2020 IPO / SPAC
($8.9Bn Equity /
$6.1Bn Debt)
$200MM - $500MM (2021)
$100MM - $200MM
51 companies
raised $100MM+
$50MM - $100MM
157 companies
raised $25MM+
$25MM - $50MM
Source: PitchBook, CB Insights, company filings, company websites, press releases. Funding totals exclude secondary transactions. Equity raised to date as of 1/16/2021.
12HIPPO SECURED $350MM FROM MS&AD INSURANCE GROUP
Transaction Overview Hippo Overview
Headquarters: Mountain View, CA
− On November 24, Hippo Enterprises Founded: 2015
(“Hippo”) announced a capital investment of
Description: Hippo Enterprises is a licensed national property and casualty
$350 million from Mitsui Sumitomo
insurer in the United States. The Company provides an online
Insurance Company, Limited, a subsidiary of platform that enables homeowners to obtain customized home
Received Strategic MS&AD Insurance Group Holdings, Inc. insurance coverage, ongoing home-care services and
Investment from maintenance.
− The investment solidifies the strategic
partnership between the two companies, Current Investors:
which began with MS&AD Ventures’ initial
investment in Hippo’s Series E funding round
$350MM Invested − The investment will support Hippo’s product
roll out in additional states and Mitsui
Sumitomo will take on a portion of risk to
support Hippo through a reinsurance treaty
Hippo Fundraising Timeline Product Overview
Series: A B C D E E-II Modern Home Insurance
$710 Policies provided by Hippo set a new standard of
home insurance and offer protection for everything
from traditional property & liability coverage to
individual devices and appliances
$350
$360 Home Wellness
Hippo helps care for your home and prevent small
$210 $150 issues from becoming expensive headaches with
$110 $100 $320 complimentary smart home monitoring systems
$15 $40 $195 and virtual home maintenance services, DIY guides
$70 $110
$15 $25
$15 $40 and on-demand bookings
Dec-16 Jan-18 Nov-18 Jul-19 Jul-20 Nov-20
Previously Raised New Funding 60-seconds 5 minutes Up to 25%
To receive a quote To purchase a policy Savings
Source: PitchBook, CB Insights, Crunchbase, company website, press releases.
13HIPPO SECURED $350MM FROM MS&AD INSURANCE GROUP (CONT’D)
Geographic Presence
Geographic Presence Today Geographic Presence at Scale
− The company currently offers insurance products to more than 70 − The money will be used to roll out in new states, helping Hippo get to
percent of homeowners in the country its goal of reaching 95 percent of U.S. homeowners in the next year
Select Deal Commentary
“bought
We have been very thoughtful on the people that we’ve
into the capital structure and how can they help us build
“insurance
We value the innovation that Hippo brought to the home
space through its advanced classification of risk. We
the biggest franchise. Mitsui Sumitomo is one of the best when look forward to learning from one another through our strategic
it comes to risk management and shares our desire to leverage partnership, providing high value-added products and services
data and analytics to create better outcomes for homeowners. to customers of both companies in the U.S. and Japan, and to
We’re excited to deepen our partnership and gain additional continue to support Hippo, which quickly became a top
catastrophe modeling expertise from one of the world’s largest insurtech in the U.S. home insurance space and is beloved by its
insurers.” customers. ”
Assaf Wand, Co-Founder & CEO, Shinichiro Funabiki, Director, VP
Hippo Insurance Executive Officer, MS&AD Insurance
Source: PitchBook, CB Insights, Crunchbase, company website, press releases.
14ORCHARD RAISES $69MM IN SERIES C ROUND
Transaction Overview Orchard Overview
Headquarters: New York, NY
− On September 10, Orchard announced that it Founded: 2017
had raised $69MM in equity led by
Description: Operator of home buying and selling marketplace, which digitizes
Revolution Growth, with participation from
the experience of buying and selling homes. The company utilizes
existing investors FirstMark Capital, Navitas, technology to deliver valuation for homes and make contingency-
Series C Accomplice and Juxtapose free offers on behalf of the buyer for a new home, enabling
led by clients to buy before they sell, while also handling the showing
− This brings the company’s total attributed
and sale process of the old home
funding to $155MM to date(1)
Current Investors:
− Orchard plans to use its new funding to
launch new product offerings and expand
$69MM Raised into new markets throughout the country
Solution Overview Orchard Fundraising Timeline
1. Customized Plan Series: A A-II B C
Customers start by answering a few questions
about their current home and the company
pairs them with an Orchard Home Advisor
$155
2. Buy
Orchard Home Advisor assist customers in $69
finding a new home $86
Make a contingency-free offer and reserve
the home with Orchard’s cash $36
$50
$30 $20 $86
3. Sell $50
Orchard Home Advisor finds a buyer for the old $30 $30
home
Option to use Orchard Home Loans or a lender May-18 Apr-19 Jan-20 Sep-20
to finalize the mortgage
Previously Raised New Funding
Source: PitchBook, CB Insights, Crunchbase, company website, press releases.
(1) Additionally raised $200MM in debt to date. 15STATES TITLE RAISES $123MM IN SERIES C ROUND
Transaction Overview States Title Overview
Headquarters: San Francisco, CA
− On May 21, States Title announced that it Founded: 2016
had raised $123MM in equity led by
Description: Offers patented machine intelligence-enabled tech solutions to
Greenspring Associates with participation
digitize and automate residential real estate closings. States Title
from new investors Horizons Ventures, and its family of brands – North American Title Company (NATC)
Series C Eminence Capital, HSCM Bermuda as well as and North American Title Insurance Company (NATIC) – offers
Led By existing investors Foundation Capital, solutions for lenders, real estate agents, title agents and
Assurant, Fifth Wall Ventures, Lennar homeowners that make closings more simple and efficient
Ventures and SCOR Global P&C Ventures Current Investors:
− This brings the Company’s total attributed
funding to ~$230MM to date
$123MM Raised
− States Title plans to use its new funding to
transform real estate closings at lower costs
Select Deal Commentary States Title Fundraising Timeline(1)
“that
States Title has developed an automated, patented technology
streamlines the laborious title and escrow process, emerging
as the market leader in an industry that historically lacks
meaningful innovation. We are thrilled to support States Title as
they advance the vision of an instant mortgage that closes with
one tap. Especially in the current economic climate, the $229.6
mortgage industry needs to be re-imagined with transformative
technological solutions to reduce costs and improve the $123.0
customer experience. States Title is leading the vanguard of this $106.6
$81.6
transformation.” Jim Lim, Managing General $10.2 $23.2 $58.4
$25.0
$81.6 $106.6
$13.0 $23.2
Partner, Greenspring Associates
Seed Series A Series B-I Series B-II Series C
(11/25/2016) (12/20/2017) (1/6/2019) (6/20/2019) (5/21/2020)
Previously Raised New Funding
Source: Pitchbook, CB Insights, Crunchbase, Company website, press releases.
(1) Per Crunchbase data. 16STATES TITLE RAISES $123MM IN SERIES C ROUND (CONT’D)
Product Overview
Instant Title Underwriting – Predictive analytics algorithm that
Can reduce closing from 30 to 45 days to 20 utilizes a forward-thinking risk-based insurance model to clear title
commitments instantaneously
Borrowers authorize closing
2019A revenue of ~$200 million
agents to sign on their behalf
Remote Closings – To ensure
business continuity and accelerate Remote Online Notarization
1 of the top 2 largest bank lenders & 2 of the top
transactions, States Title offers powered by
10 largest nonbank lenders as customers
multifaceted state and lender-
specific eClosing solutions Comprehensive gap insurance
Transaction volume grew by 100 times in 2019
from closing to recordation
compared to the year prior
Solution Overview
For Lenders For Real Estate Professionals
Predictively underwritten title insurance Experienced services and guidance
& escrow processes throughout the home purchase or sale
White-label digital closing experience process
products Customer closing cost and mortgage
Resale of direct title services and direct qualification calculators
settlement & escrow services
For Title Agents For Homeowners
Quick and straightforward underwriting Fast efficient title and escrow services
services, with a counsel that guarantees a Machine intelligence used to buy, sell or
response back to your questions within 1 refinance homes
hour
Fast and transparent agency application
process for qualified agents
Source: Pitchbook, CB Insights, Crunchbase, Company website, press releases.
17SPRUCE RAISES $29MM IN SERIES B ROUND
Transaction Overview Spruce Overview
Headquarters: New York, NY
− On May 21, Spruce announced that it had Founded: 2016
raised $29MM in equity led by Scale Venture
Description: Neutral third party that helps coordinate transactions between
Partners with participation from Zigg Capital
homeowners and lenders / real estate institutions with a digital-
and Bessemer Venture Partners first experience. Spruce takes handles title search, policy,
Series B settlement and escrow processes by pairing intuitive software
Led By − This brings the Company’s total funding to
with high-touch human expertise
~$49MM to date
Current Investors:
− Spruce plans to use its new funding to
accelerate development of its proprietary
technology and deepen integrations with
$29MM Raised client partners
Solution Overview Spruce Fundraising Timeline
Lenders
Modern title & closing technology
Detailed audit trails of the entire transaction from
beginning to end
Integrate with current loan origination system or
proprietary transaction software
Real Estate Tech
Partner with industry experts to create optimal
workflows $49.1
Digital closing experience has an NPS of 60 and
allows customers to view & sign documents, link
their bank account, and schedule closing with $29.0
ease $20.1
Homeowners
Spruce provides a transaction coordinator $4.5 $15.6 $20.1
supported by a team of in-house experts
$4.5 $4.5
Average closing fee of $495(1)
Safely receive funds and communicate about Series A Series A-II Series B
transactions via secure portal (5/26/2017) (7/18/2018) (5/21/2020)
Previously Raised New Funding
Source: Pitchbook, CB Insights, Crunchbase, Company website, press releases.
(1) Excluding Colorado and Florida; Company website as of 7/10/2020. 18NOTARIZE RAISES $25.7MM IN SERIES C ROUND
Transaction Overview Notarize Overview
Headquarters: Boston, MA
− On April 15, Notarize filed that it had raised Founded: 2015
$25.7MM in equity led by Polaris Partners
CEO: Patrick Kinsel
and Hyperplane Venture Capital
Description: Provider of a document management platform oriented towards
− This brings the Company’s total funding to the real estate industry, allowing consumers and enterprises such
Series C
$74MM to date as lenders, insurers and title agents to sign and notarize
documents online
Current Investors:
$26MM Raised
Notarize Highlights Notarize Fundraising Timeline
($MM) Seed Series A Series B-I Series B-II Series C
Legally Sign & Subscription and Per- Date 5/15/15 7/5/16 4/20/19 9/4/19 4/15/20
Notarize Documents Available 24/7 Notarization Pricing Equity Raised $2.5 $8.5 $20.0 $17.0 $25.7
100% Online Plans Total Raised to Date $2.5 $11.0 $31.0 $48.0 $73.7
Notarize Products Select Deal Commentary
eSign
Electronically sign any document “legislation
Notarize has been on a trajectory from day one, influencing
and building the technology, relationships and
Free service
infrastructure to change business processes, while also creating a
Online Notarization
superior customer experience for an antiquated process. Notarize
Connect with a commissioned notary public
24x7 to sign & notarize documents saw the potential to address the pain points of traditional notary
with a secure, streamlined solution that is already saving
Real Estate Closings government, businesses and consumers countless hours and
Signers can electronically review, sign and
notarize real estate documents dollars. ” Dave Barrett, Managing Partner,
Connects the mortgage industry on 1 platform
Polaris
Source: Pitchbook, Company website, press releases.
19ZUMPER RAISES $60MM IN SERIES D ROUND
Transaction Overview Zumper Overview
Headquarters: San Francisco, CA
− On March 10, Zumper announced that it had Founded: 2012
raised $60MM in equity led by e.ventures
Description: Developer of a search-through-close rental platform where a
with participation from a number of existing
renter can search, schedule a tour or apply through their phone.
investors at a post-money valuation between The platform also provides landlords with online tenant screening
Series D $400MM and $600MM, bringing the and rent collection services
Company’s total funding to $150MM to date
Current Investors:
− Zumper noted that is experiencing 100% y/y
revenue growth and is on track to reach 80
million users on its platform in 2020
$60MM Raised − Zumper plans to use its new funding to
strengthen its engineering team and invest
further in its ability to process rental
payments online
Product Overview Zumper Fundraising Timeline
Find Houses, Rooms or Apartments for Rent ($MM) Seed Series A Series A-I Series A-II Series B Series C Series D
Date 5/1/12 3/3/14 6/25/15 2/1/16 10/18/16 9/17/18 3/10/20
Receive real-time alerts and instantly apply
Filter by location, price range, bedroom count, pet-friendly or Equity Raised $1.7 $6.8 $6.4 $11.8 $17.7 $45.7 $60.0
amenity and set an alert to get notifications when a new listing is Total Raised to Date $1.7 $8.5 $14.9 $26.7 $44.3 $90.0 $150.0
(1)
posted
Post Rental Listings and Collect Rent Select Deal Commentary
Post rental listings and screen tenants
Collect rent with online payments
Generate more leads with Zumper’s network
“theZumper’s progress so far is striking, and it has quickly become
leading independent company focused on the rental market.
Acquisition Timeline We believe that Zumper is well positioned because of its focus on
providing an exceptional product for renters and great value for
Sep
2019
Web-based software platform that automates the entire rental
process for landlords, leasing agents and tenants
landlords and multifamily properties. ”
Operates an online map-based apartment rentals search Mathias Schilling, Co-Founder &
Jan
2016
website and mobile application for consumers to search for Managing Partner, e.ventures
rentals by geographic location
Source: Pitchbook, TechCrunch, Company website, press releases.
(1) Post-money valuation estimates per Pitchbook and TechCrunch. 20HOUSECANARY RAISES $65MM IN SERIES C ROUND
Transaction Overview HouseCanary Overview
Headquarters: San Francisco, CA
− On February 6, HouseCanary announced that Founded: 2013
it had raised $65MM in equity led by Alpha
Description: Developer of a real estate analytics platform designed to offer
Edison, Morpheus Ventures and PSP Growth
residential real estate information for every block and property
− This brings the Company’s total funding to and help people make better real estate decisions. The company's
Series C real estate analytics platform aggregates millions of data
$130MM to date
elements to accurately define and forecast values and market
− HouseCanary plans to use its new funding to influences, enabling individual buyers and real estate
continue to build the most accurate professionals to make better buying and selling decisions
valuations in the housing market, continue to Current Investors:
build its world-class team to accelerate
$65MM Raised development and broad market adoption of
HouseCanary and invest in its leading-edge
technology
Product Overview HouseCanary Fundraising Timeline
($MM) Early Stage VC Series A Series B Series C
Date 3/8/17 4/7/17 5/1/17 2/6/20
Equity Raised $0.6 $33.0 $31.0 $65.0
Total Raised to Date $0.6 $33.6 $64.6 $129.6
Data Explorer - Proprietary Property Explorer - Data & Market Explorer -
analytics for more than 100 details around individual Interactive neighborhood
million US homes homes (e.g., historic price analysis (rental return, Select Deal Commentary
growth) affordability, etc.)
“creative
We invest in disruptive companies that are innovative and
in how they tackle the changing landscape. Through their
proven software and data driven technology HouseCanary is
streamlining real estate transactions and changing the future of
Agile Insights - Context Agile Evaluation - Agile Certified - Security
the industry. ”
around a home’s true Condition-informed of high-confidence AVM Joseph Miller, Managing Partner,
value with individual BPO alternative backed by transferable Morpheus Ventures
home reports insurance policy
Source: Pitchbook, Company website, press releases.
21CHERRE RAISES $16MM IN SERIES A ROUND
Transaction Overview Cherre Overview
Headquarters: New York, NY
− On February 5, Cherre announced that it had Founded: 2016
raised $16MM in equity led by Intel Capital
Description: Provides investors, insurers, real estate advisors and other large
with participation from Navitas Capital,
enterprises with a platform to collect, resolve, and augment real
Carthona Capital, Zigg Capital, Dreamit estate data from public, private and internal sources. Cherre
Series A Ventures and Silicon Valley Bank allows customers to evaluate opportunities and trends faster and
more accurately, while saving on manual data collection and
− This brings the Company’s total funding to
analytics costs
$25MM to date
Current Investors:
− Cherre plans to use its new funding to
continue powering its fully-integrated data
$16MM Raised systems
Product Overview Cherre Fundraising Timeline
($MM) Seed VC Series A
Date 10/1/18 2/5/20
CoreAugment - Data network provides updated real estate data
Equity Raised $9.0 $16.0
Total Raised to Date $9.0 $25.0
Select Deal Commentary
CoreConnect - Ability to connect internal and external data
“ofWe see Cherre as critical infrastructure to accelerate the future
this industry. Our customer diligence repeatedly indicated
CoreExplore - Asset, community and ownership information for Cherre’s AI-enabled platform was a foundational pillar — a data
properties within the database system of record for large enterprises across the real estate
segment. We’re excited to help accelerate Cherre’s global growth
trajectory.
” Trina Van Pelt, Vice President,
CorePredict - AI engine and real estate professionals available
Intel Capital
Source: Pitchbook, Company website, press releases.
22CREXI RAISES $30MM IN SERIES B ROUND
Transaction Overview CREXi Overview
Headquarters: Marina Del Rey, CA
− On January 24, CREXi announced that it had Founded: 2014
raised $30MM in equity led by Mitsubishi
Description: Provider of a platform that combines an active sales and leasing
Estate Company, Industry Ventures and
marketplace with marketing, analytics and deal management
Prudence Holdings with participation from tools designed to help brokers, buyers and tenants eliminate
Series B Lerer Hippeau Ventures and Jackson Square time-consuming processes, find properties and close deals faster
Ventures
Current Investors:
− This brings the Company’s total funding to
$45MM to date
− CREXi plans to use its new funding to grow its
$30MM Raised core business of broker services across the
sales, leasing and auction functions and
accelerate the refinement and expansion of
buyer and tenant resources
Product Overview CREXi Fundraising Timeline
($MM) Seed VC Series A Series B
Sell
Date 11/17/15 5/21/18 1/24/20
Equity Raised $4.3 $11.0 $30.0
Marketplace Listings Marketing
Total Raised to Date $4.3 $15.3 $45.3
CRM Data & Analytics
Select Deal Commentary
Communication & Collaboration Tools Support
“younger,
The CRE industry is evolving, and market players, especially
digitally native generations are seeking out platforms
Auction
that provide free and open access to information. CREXi directly
Access 400,000+ qualified buyers through the live auction platform addresses this market need, providing fair access to a range of CRE
65% sell-through rate, 100% close of escrow and 121% above the reserve price
information. As CREXi continues to build out its stable of services,
Buy features, and functionality, we’re thrilled to partner with them and
support the company’s continued momentum. ”
Marketplace for commercial properties for sale and lease Gavin Myers, General Partner,
Prudence Holdings
Source: Pitchbook, Company website, press releases.
23ROOFSTOCK RAISES $50MM IN SERIES D ROUND
Transaction Overview Roofstock Overview
Headquarters: Oakland, CA
− On January 7, Roofstock announced that it Founded: 2015
had raised $50MM in equity led by SVB
Description: Marketplace connecting buyers and sellers of single-family rental
Capital with participation from Citi Ventures,
homes, offering investment properties in top U.S. markets. The
Fort Ross Ventures, 7 Global Capital, Khosla Company provides the resources for investors to buy, own and
Series D Ventures, Bain Capital Ventures, Lightspeed sell real estate online, including data analytics, property
Venture Partners and Canvas Ventures management oversight and other tools
− This brings the Company’s total funding to Current Investors:
$133MM to date
− Roofstock plans to use its new funding to
$50MM Raised invest in its data science, product and
engineering capabilities
Product Overview Roofstock Fundraising Timeline
Buy ($MM) Series A Series A-I Series B Series C Series D
Buy properties, portfolios or property shares Date 5/1/15 12/29/15 11/21/16 4/16/19 1/8/20
Search, analyze, check out and close on the platform Equity Raised $6.3 $7.0 $20.0 $50.0 $50.0
0.5% commission for buyers Total Raised to Date $6.3 $13.3 $33.3 $83.3 $133.3
Own
Third-party property management teams vetted by Roofstock Select Deal Commentary
handle day-to-day operations and tenant concerns
Sell
$2Bn in transaction volume facilitated since inception
“space.
Roofstock is in the vanguard of the rapidly-growing PropTech
As startups continue to broaden access to financial services,
Close in an average of 15 days
2.5% commission for sellers
we see real estate as an incredibly attractive asset class for retail
investors looking to go beyond the typical stock and bond
Acquisition Timeline
portfolio. ”
Property management firm certified by leading institutional Sulu Mamdani, Managing
Jul
2018
lenders in the space as an approved property manager for large Partner, SVB Capital
SFR portfolios
Source: Pitchbook, Company website, press releases.
24HEALTHY M&A MARKET
Annual U.S. PropTech M&A Activity Select U.S. 2020 PropTech M&A Transactions
($MM)
• Significant 2020 M&A activity Enterprise
Buyer Target Announced Date Value
− 71% strategic acquirers
12/24 NA
− 29% financial acquirers
12/21 $10,200
105 104 102 12/16 NA
11/22 $250
11/9 NA
10/23 NA
9/1 $180
57
8/6 $11,000
45
7/26 $1,800
6/24 NA
5/13 $190
3/3 NA
2/25 $7,100
2016 2017 2018 2019 2020 2/13 $350
1/22 NA
1/14 NA
Source: Pitchbook, 451 Research, press releases.
25THOMA BRAVO TO ACQUIRE REALPAGE
Transaction Overview RealPage Financial Detail(1)
($MM) Revenues Adj. EBITDA
− On December 21, RealPage, Inc. (NASDAQ: $1,275
CAGR:
RP) announced it has entered into a definitive $1,156
17%
agreement to be acquired by Thoma Bravo for $989
approximately $10.2Bn in an all-cash $870
transaction, which implies 9.1x EV / LTM Sep-
To acquire
20 revenue and 32.5x EV / LTM Sep-20 Adj. $671
EBITDA
− The purchase price represents a 30.8%
premium over RealPage’s closing price of $318 $343
$281 CAGR:
$67.83 on December 18, a premium of 36.5% $231
$10.2Bn $163 20%
Pending over RealPage’s 30-day VWAP through that
date, and a premium of 27.8% over
RealPage’s all-time high closing stock price of
CY17A CY18A CY19A CY20E CY21E
$69.47 on December 7
RealPage 3-Year Stock Price Performance & Select Acquisition History
$100.00 Thoma Bravo to Acquire 18.0mm
RealPage Announcement
$90.00 December 21, 2020 16.0mm
August 2, 2018
June 12, 2019 14.0mm
$80.00
November 6, 2019 12.0mm
$70.00 October 12, 2018
10.0mm
$60.00
8.0mm
$50.00 July 29, 2019
August 31, 2020 6.0mm
April 20, 2018
$40.00 January 22, 2020 4.0mm
$30.00 2.0mm
$20.00 0.0mm
Nov-18
Jan-19
Nov-19
Nov-20
Jan-18
Mar-18
Sep-18
Mar-19
Sep-19
Jan-20
Mar-20
Sep-20
Jan-21
May-18
May-19
May-20
Jul-19
Jul-18
Jul-20
Source: Capital IQ as of 1/22/2021, Wall Street Research, 451 Research, company websites, press releases and earnings transcripts.
(1) Projected figures per Wall Street research consensus. 26THOMA BRAVO TO ACQUIRE REALPAGE (CONT’D)
Strategic Rationale LTM RealPage Revenue Breakdown as of September 30, 2020
Professional and Other
3%
Asset Optimization
Thoma Bravo is a leading private Founded in 1998, RealPage 14%
equity firm focused on the provides a technology platform
software and technology-enabled that enables real estate owners
services sectors, with more than and managers to change how Resident Services
$73 billion in assets under people experience and use rental 45%
Leasing and
management as of September 30, space. Clients use the platform to Marketing
2020 gain visibility and transparency in 17%
asset performance, leverage data
insights and monetize space to
generate incremental yields. Property Management
21%
Select Transaction Commentary
This transaction will provide immediate and substantial value to RealPage “work
I am immensely proud of that
and also pleased that the
“Steve
We are thrilled to partner with
and the RealPage team at
stockholders and will enhance the company’s ability to focus on executing its
transaction will provide us the this exciting milestone in the
long-term strategy
opportunity to work with Thoma company’s journey. We look
Bravo, a firm with tremendous forward to applying Thoma Bravo’s
software investment and “ operational and investment
RealPage and Thoma Bravo can partner to grow the company’s market offerings operational capabilities. expertise in software to help drive
and enhance its current capabilities to capitalize on the increasingly complex RealPage’s continued growth and
and expanding real estate market “
identify attractive M&A
opportunities.
As technology transformation takes on increasing importance in the real estate Steve Winn, Scott Crabill,
industry, RealPage’s diverse and innovative portfolio of products and solutions Chairman and CEO, Managing Partner,
puts the company in prime position to accelerate its market leadership RealPage Thoma Bravo
Source: Company websites, filings, earnings transcripts and press releases.
27COSTAR ACQUIRES HOMESNAP
Transaction Overview CoStar Financial Detail(1)
($MM) Revenues Adj. EBITDA
− On November 22, CoStar Group, Inc.
$1,907
(NASDAQ: CSGP) announced it entered into a CAGR:
definitive agreement to acquire Homesnap, 19%
$1,648
Inc. (“Homesnap”) for $250MM in cash
$1,400
Acquires − Homesnap provides agents and homebuyers
with real-time MLS data and enhanced $1,192
property features alongside digital marketing
$965
tools to reinforce client-agent relationships
− Over the last six years, CoStar has expanded $663 CAGR:
into the rentals space through acquisitions of $529 24%
$250MM $507
Apartments.com, ApartmentFinder, ForRent, $418
Cozy Services and RentPath $280
− The transaction marks CoStar’s first major
step into the “for-sale” residential real estate
CY17A CY18A CY19A CY20E CY21E
market, shortly after it emerged as a bidder
for leading property data provider CoreLogic
CoStar 3-Year Stock Price Performance & Select Acquisition History
$1,000.00 3.3x LTM Rev. 2.00mm
6.8x LTM Rev. May 13, 2020
March 3, 2014
$800.00 October 1, 2019 1.60mm
June 20, 2019
7.4x LTM EBITDA 7.0x LTM Rev.
April 29, 2015
$600.00 November 8, 2018 1.20mm
October 26, 2020
3.9x LTM Rev.
September 12, 2017 February 11, 2020
$400.00 2.6x LTM Rev. .80mm
November 22, 2020
6.3x 2020E Rev.
$200.00 .40mm
$0.00 0.00mm
Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21
Source: Capital IQ as of 1/22/2021, Wall Street Research, 451 Research, company websites, press releases and earnings transcripts.
(1) Projected figures per Wall Street research consensus. 28COSTAR ACQUIRES HOMESNAP (CONT’D)
Strategic Rationale
U.S. Residential Real Estate
($27Tn(1))
Over the past 30 years, CoStar has Similarly, Homesnap has spent years
become the leading real estate building tools that reinforce the agent-
technology platform by working in client relationship and now works in very
partnership with commercial real estate close partnership with residential real
brokers to serve their needs for data, U.S. Commercial Real Estate estate agents to serve their needs for
analytics and advertising exposure for data, analytics and advertising exposure
($16Tn(1))
their property listings for their property listings
Quadruple the number of professional, Triple CoStar’s U.S. total addressable market
Double the number of U.S. property listings
paying brokers and active agent users on the from estimated $16 trillion today to over
available across CoStar’s brands from 1.35
CoStar platforms from approximately $43Tn with the expansion into the
million today to over 2.6 million
100,000 today to over 400,000 residential real estate space
Homesnap Highlights(2) Select Transaction Commentary
$40MM ~$28MM “residential
The tools and functionality developed by Homesnap for
property agents, such as lead generation, client
CY2020E Revenue CY2019A Revenue collaboration, and digital advertising, have direct applicability to
commercial brokers. Our goal is to make these enhanced
capabilities available to all of our audiences. ”
1.3MM
Andrew C. Florance, Founder &
Active Listings CEO, CoStar Group
Source: Company websites and press releases.
(1) Value of the US Housing Market, Federal Reserve Flow of Funds and Urban Institute, March 2019.
(2) The Real Deal Press Release.
29INTERCONTINENTAL EXCHANGE (NYSE:ICE) ACQUIRES ELLIE MAE
Transaction Overview Intercontinental Exchange (NYSE:ICE) Financial Detail(1)
($MM) Revenues Adj. EBITDA
− On August 6, Intercontinental Exchange
$6,694 CAGR:
(NYSE: ICE) entered into a definitive
$5,933 10%
agreement to acquire Ellie Mae, the leading
$5,202
cloud-based platform provider for the $4,974
Acquires mortgage finance industry $4,638
$4,197
$3,852 CAGR:
− Transaction valued at an enterprise value of $3,366 9%
$3,207
~$11Bn (mix of 84% cash / 16% equity), $2,965
from
12.2x EV / 2020E revenue and 23.4 EV /
2020E Adj. EBITDA
$11Bn
CY17A CY18A CY19A CY20E CY21E
Intercontinental Exchange (NYSE:ICE) 3-Year Stock Price Performance & Select Acquisition History
$140.00 20.0mm
18.0mm
$120.00
October 4, 2018 June 12, 2019 16.0mm
February 21, 2020
14.0mm
$100.00
12.0mm
July 23, 2018
$80.00 10.0mm
8.0mm
$60.00 July 23, 2018 August 6, 2020
6.0mm
4.0mm
$40.00
2.0mm
$20.00 Jan-20 0.0mm
Jan-18
Jan-19
Jan-21
May-18
Nov-18
May-19
May-20
Mar-18
Mar-19
Nov-19
Mar-20
Nov-20
Jul-18
Sep-18
Jul-19
Sep-19
Jul-20
Sep-20
Source: Capital IQ as of 1/22/2021, Wall Street Research, company websites, press releases and earnings transcripts.
(1) Projected figures per Wall Street research consensus. Excludes impact of Ellie Mae acquisition. 30INTERCONTINENTAL EXCHANGE (NYSE:ICE) ACQUIRES ELLIE MAE (CONT’D)
Strategic Rationale Key Financial Metrics
Ellie Mae is the leading cloud-based Intercontinental Exchange (NYSE: ICE) is
~$900MM ~$470MM
platform provider for the a Fortune 500 company formed in the
mortgage finance industry. Ellie year 2000 to modernize markets. ICE
2020E adjusted
2020E revenues
Mae’s technology solutions serves customers by operating the EBITDA
enable lenders to originate more exchanges, clearing houses and
(Ellie Mae)
(Ellie Mae)
loans, lower origination costs, and information services they rely upon to
reduce the time to close with the invest, trade and manage risk across
highest levels of compliance, global financial and commodity markets
quality and efficiency Expected to realize run-rate cost synergies of $50 million to $65 million by the end of
year three
Two combined networks establish ICE as a leading provider of end-to-end Expected that the acquisition of Ellie Mae will be accretive to adjusted EPS in the first
electronic mortgage workflow solutions full year of ownership
Large and growing addressable market driven by demand for automation
and efficiencies Expected Ellie Mae transaction IRR of 10%; ICE ROIC will remain above ICE WACC in
Complementary platforms drive strong network effects and customer year one, growing thereafter
efficiency gains
Expanded network/digital marketplace and data sets combined with
Including past acquisitions of both MERS & Simplifile and, upon completion of the
unique tools & analytics are critical to automating disconnected and
acquisition of Ellie Mae, ICE will have invested a total of roughly $11.5 billion in its
disparate processes across the mortgage workflow
strategy to automate the mortgage workflow
Leader in End-to-End Mortgage Workflow Solutions(1) Ellie Mae MERS & Simplifile
Lead Generation & Processing &
Pre-Closing Closing Post-Closing Secondary
Application Underwriting
Doc. Quality
Brokers Mtg. Insurers Settlement Agents Title Agents Servicers
Controllers
Borrowers Appraisers Title Insurers Notaries Counties Investors
Credit, Flood &
Regulators
Other Vendors
Source: Company websites and press releases.
(1) Intercontinental Exchange Transaction Deck. 31INTERCONTINENTAL EXCHANGE (NYSE:ICE) ACQUIRES ELLIE MAE (CONT’D)
Ellie Mae Select Acquisition History Ellie Mae Offerings
With the acquisition of Capsilon, Ellie Mae is accelerating the
Oct
vision of offering an end-to-end SaaS solution for companies in
2019
the mortgage industry
Ellie Mae acquired Velocify to combine Velocify’s lead
Oct
management, engagement and distribution capabilities with
2017
Ellie Mae’s Encompass CRM and Consumer Connect
Mortgage Returns provided an automated marketing solution Consumer & Wholesale Engagement
Nov
to help mortgage originators maximize profitability from
2015
clients, prospects and referral partners
Loan Origination
Ellie Mae acquired AllRegs to expand its customer base and add
Oct
a broad array of content and services that complement their Sell: Secondary Marketing & Investor
2014
portfolio of product offerings
Delivery
MortgageCEO provided customer relationship management,
Jan and marketing automation solutions for the mortgage industry.
Purchase: Correspondent Lending
2014 The acquisition was consistent with Ellie Mae’s mission to
automate every aspect of the mortgage process
Ellie Mae acquired Del Mar Datatrac in order to boost the Select Transaction Commentary
Aug
company’s loan volume in 2011 to 1.5 million from 1 million
2011
with an expanded customer base
“toOur planned acquisition represents a one-of-a-kind opportunity
add an extraordinary enterprise with great leadership to our
Jan Mortgage Pricing Systems developed loan pricing technology
2011 for small, medium and large mortgage banks and lenders family. It will also enhance ICE’s growth strategy in mortgage
technology, with complementary products and a wide array of
Ellie Mae acquired Mavent to help the software developer customers and stakeholders who will benefit from our core and
Dec
address predatory lending protection and changes to the myriad
2009
mortgage regulations on both the state and federal level
proven expertise in operating networks and marketplaces. ”
Jeffrey C. Sprecher,
Oct Online Documents provided compliant electronic mortgage Founder, Chairman & CEO,
2008 documents and related services to the mortgage industry Intercontinental Exchange
Source: Company websites and press releases.
32BLACK KNIGHT ACQUIRES OPTIMAL BLUE
Transaction Overview Black Knight Financial Detail(1)
($MM) Revenues Adj. EBITDA
− On July 26, Black Knight, Inc. (NYSE:BKI) $1,431 CAGR:
announced it entered into a definitive equity $1,233 8%
$1,178
purchase agreement with affiliates of private $1,117
equity firm GTCR, LLC to purchase Optimal $1,052
Blue for an EV of $1.8Bn, subject to
Acquires
customary purchase price adjustments
$710 CAGR:
$607 9%
− Black Knight will combine its Compass $583
$543
from Analytics business with Optimal Blue in a $506
newly formed entity with minority co-
investors Cannae Holdings, Inc. and Thomas
$1.8Bn H. Lee Partners, L.P. Black Knight will own
approximately 60% of the new entity
CY17A CY18A CY19A CY20E CY21E
Black Knight 3-Year Stock Price Performance & Select Acquisition History
$120.00 16.0mm
July 26, 2020 14.0mm
$100.00
September 12, 2019 12.0mm
$80.00 June 4, 2018 February 8, 2019 10.0mm
$60.00 8.0mm
6.0mm
$40.00
November 6, 2018 August 27, 2020
March 3, 2020 4.0mm
$20.00
2.0mm
$0.00 0.0mm
Jan-20
Jan-18
Jan-19
Jan-21
Mar-18
May-18
May-19
May-20
Nov-18
Mar-19
Nov-19
Mar-20
Nov-20
Jul-18
Sep-18
Jul-19
Sep-19
Jul-20
Sep-20
Source: Capital IQ as of 1/22/2021, Wall Street Research, company websites, press releases and earnings transcripts.
(1) Projected figures per Wall Street research consensus. 33BLACK KNIGHT ACQUIRES OPTIMAL BLUE (CONT’D)
Strategic Rationale Optimal Blue’s Offerings
Product & Hedge
Founded in 2002 and Black Knight (NYSE:BKI) is a leading Pricing Analytics
headquartered in Plano, TX, Optimal provider of integrated software,
Blue is the leading SaaS mortgage data and analytics solutions that
marketplace supporting secondary facilitate and automate many of the
transactions among the industry's business processes across the
largest network of residential homeownership lifecycle Marketplace Counterparty
Loan Trading
mortgage originators and investors Access Oversight
Prospect
Social Media Enterprise Data
Marketing
Adds market-leading products to Black Knight's comprehensive
offerings, augmenting Black Knight's already strong origination
software franchise Competitive Data Market Data Connections
Expands SaaS product line and provides significant cross-selling
opportunities Select Transaction Commentary
Optimal Blue Select Acquisition History “years.
Optimal Blue is a business that we have respected for many
By bringing Optimal Blue into the Black Knight family, we
Oct The product, pricing and eligibility (PPE) technology business of
2018 (LoanDecisions LoanLogics will be adding industry-leading product, pricing and eligibility (PPE)
Business) capabilities to our already robust set of solutions and enhancing
Jul
Developer of whole loan mortgage trade management software
intended to bring automation and transparency to the spot
our already comprehensive data and analytics capabilities. ”
2018
market for mortgage loans
Anthony Jabbour, CEO, Black
May Provides outsourced risk management and social media
Knight
2017 compliance services for the mortgage industry
Source: Company websites and press releases.
34INTUIT ACQUIRES CREDIT KARMA
Transaction Overview Intuit Financial Detail(1)
Revenues Adj. EBITDA
− On February 24, Intuit Inc. (NasdaqGS:INTU) $9,009
announced its acquisition of Credit Karma, CAGR:
$7,679 15%
Inc. for $7.1Bn
$6,784
− The transaction was completed on December $6,025
To Acquire 3, 2020 $5,196
− By agreeing to acquire Credit Karma, a
company with nearly $1Bn in unaudited $3,010
$2,858
revenue in calendar year 2019, up 20% from $2,276 $2,481 CAGR:
the previous year, Intuit accelerates its $1,980
11%
$7.1Bn mission of powering prosperity around the
world
CY17A CY18A CY19A CY20E CY21E
Intuit 3-Year Stock Price Performance & Select Acquisition History ($MM)
CY17A CY18A CY19A CY20E CY21E
$450 6mm Revenues $5,196 $6,025 $6,784 $7,679 $9,009
$400 % Growth 10.7% 16.0% 12.6% 13.2% 17.3%
5mm Adj. EBITDA $1,980 $2,276 $2,481 $2,858 $3,010
February 24, 2020
$350 % Margin 38% 38% 37% 37% 33%
Adj. EPS $3.78 $5.09 $6.78 $6.92 $8.35
$300 May 15, 2019 4mm
$250 January 22, 2018 Stock Data 1/22/21 Valuation Multiples
3mm Closing Price $374.85 EV / CY19A Revenue 14.9x
$200
November 18, 2019 52 Week High $398.12 EV / CY20E Revenue 13.1x
$150 2mm 52 Week Low $187.68
November 28, 2018 EV / CY19A Adj. EBITDA 40.7x
$100 FD Shares Outstanding 276.0 EV / CY20E Adj. EBITDA 35.3x
1mm
$50 Equity Value $103,459
Plus: Debt & Minority Interest $2,634 Price / CY19A EPS 55.3x
$0 0mm Less: Cash and Equivalents ($5,174) Price / CY20E EPS 54.2x
Jan-18
Jan-21
Oct-18
Jan-19
Oct-19
Jan-20
Oct-20
Apr-18
Jul-18
Apr-19
Jul-19
Apr-20
Jul-20
Enterprise Value $100,919
Source: Capital IQ as of 1/22/2021, Wall Street Research, Company websites, press releases and earnings transcripts.
(1) Projected figures per Wall Street research consensus. 35INTUIT ACQUIRES CREDIT KARMA (CONT’D)
Strategic Rationale Combined Platform
The platform, leveraging artificial intelligence and connections to over
Founded in 1983, Intuit is a global Founded in 2007 by Ken Lin, Credit 100 financial partners, will help consumers:
financial platform company with Karma is a consumer technology
products including TurboTax, company that provides financing Find the right financial products by matching consumers with pre-approved
QuickBooks, Mint and Turbo. Its services including identity offers on loans and credit cards with competitive interest rates that are right
ecosystem of financial management monitoring, applying for credit for them.
solutions serves approximately 50 cards, shopping for loans (car, home
million customers worldwide and personal), filing its taxes Put more money in their pockets by connecting them to higher yield savings
accounts and, in the future, will provide faster access to their hard-earned
cash.
The combination brings together two technology leaders to help solve the
personal finance problems that consumers face today -- managing debt, Provide insights and advice to help consumers make better decisions about
maximizing savings, access to better credit cards and loans -- with an aim to their money and improve their credit score.
put more money in consumers’ pockets
Credit Karma Business Model Select Transaction Commentary
“ Our mission is to power prosperity around the world with a bold
goal of doubling the household savings rate for customers on our
platform. We wake up every day trying to help consumers make
ends meet. By joining forces with Credit Karma, we can create a
Paid by the Bank personalized financial assistant that will help consumers find the
Scores & Reports Recommendations
or Lender right financial products, put more money in their pockets and
provide insights and advice, enabling them to buy the home
Get access to credit Use data to analyze Get a product through
scores and reports credit profile and one of Credit Karma’s they’ve always dreamed about, pay for education and take the
from TransUnion and make product recommendations, and vacation they’ve always wanted. ”
Equifax, with weekly recommendations the bank or lender pays
updates the company Sasan Goodarzi, CEO, Intuit
Source: Company websites and press releases.
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