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SubscribeFeatured
-
2.5x
5.0x
7.5x
10.0x
12.5x
15.0x
17.5x
20.0x
22.5x
25.0x
Sep 18
Mar 19
Sep 19
Mar 20
Sep 20
Mar 21
Sep 21
Mar 22
Sep 22
Mar 23
Sep 23
Tech Insights #307
Cloud Index as at30 September 2023
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Mergers & acquisitionsCorporate finance advisoryCapital raising
9 October 2023
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Overview
This report looks at valuation multiples for cloud companies publicly listed in the United States, Australia and New Zealand.How the indices have been calculated in this report has been refined since the last report (#294) by applying a minimum NZD $250m market capitalisation to the ANZ index and using asimple average for each index rather than the median value. This reduces the constituent size of the ANZ index from 69 to 20 but allows us to compare the top companiesinANZ against the top companies in the US.
As at30 September 2023, the US Cloud Index is down 8% from the previous quarter to 5.9x EV / NTM revenue and still well below the five-year average of 11.5x. The ANZ Cloud Index is also marginally down, 2% to 5.8x EV / NTM revenue and well below the five-year average of 8.1x.
NTM revenue multiple for cloud companies listed in the US and ANZ (EV / NTM revenue)
8.1x
ANZ Cloud Index
Average
12MMA
Sep 23
5.8x
5.6x
Jun 23
6.0x
5.5x
Change
(2%)
2%
Sep 22
5.2x
7.4x
Change
13%
(25%)
US Cloud Index
Average
12MMA
Sep 23
5.9x
5.9x
Jun 23
6.4x
6.1x
Change
(8%)
(3%)
Sep 22
6.1x
11.2x
Change
(3%)
(47%)
Note: Avg = Average, NTM = Next 12 months, 12MMA = 12 month moving average
11.5x
5.8x
5.9x
Index size
US: 88 companies
ANZ: 20 companies
Key:
US
ANZ
Avg
12MMA
5yr avg
-
5.0x
10.0x
15.0x
20.0x
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
-
10.0x
20.0x
30.0x
40.0x
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
75th percentile
Median
25th percentile
Tech Insights #307
Cloud Index as at30 September 2023
Page 2 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
9 October 2023
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US cloud companies NTM revenue multiple
ANZ cloud companies NTM revenue multiple
8.4x
5.6x
3.2x
9.1x
3.6x
2.8x
US cloud companies
25th
75th
30 Sep 2023
Average
percentile
Median
percentile
EV (NZD $m )
27,626
3,649
8,500
22,261
EV / NTM rev
5.9x
3.2x
5.6x
8.4x
Revenue growth (NTM)
15%
9%
16%
22%
EV / LTM rev
7.0x
3.4x
6.2x
10.3x
Revenue growth (LTM)
23%
12%
21%
31%
Gross margin
72%
68%
75%
80%
Operating margin
(14%)
(28%)
(11%)
1%
FCF margin
16%
7%
17%
25%
ANZ cloud companies
25th
75th
30 Sep 2023
Average
percentile
Median
percentile
EV (NZD $m )
3,287
441
860
1,915
EV / NTM Rev
5.8x
2.8x
3.6x
9.1x
Revenue growth (NTM)
18%
7%
16%
27%
EV / LTM rev
7.1x
3.0x
4.1x
11.4x
Revenue growth (LTM)
30%
6%
21%
36%
Gross margin
53%
28%
60%
81%
Operating margin
1%
(15%)
12%
22%
FCF margin
3%
(5%)
6%
15%
Note: The percentiles for each metric are calculated individually. Companies added or removed from each index take effect from the 1st day of the reported quarter.
EV = Enterprise Value, LTM = Last 12 months, NTM = Next 12 months, FCF = Unlevered free cash flow
Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. ClareCapital holds no responsibility over the actual numbers. ClareCapital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
2020
2022
2023
2020
2021
2022
2021
2022
2014
2020
2022
2022
2021
2018
2023
2019
2021
Tech Insights #306
IT and digital services landscape
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Mergers & acquisitionsCorporate finance advisoryCapital raising
2 October 2023
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Overview
The New Zealand IT and digital services market has seen a range of M&A activity over recent years. On the first page of this Tech Insights report, we provide an overview of the IT and digital services landscape, highlighting key transactions (in colour) and competitors within the industry (shaded grey). Noteworthy acquisitions by non-IT and digital services companies are outlined to the right of the market map. On the second page, we provide valuation ranges observed across M&A and publicly listed companies.
Medium
Small
Large
Size
IT services
Digital design
Pure services
services & licenses
2018
2021
Private
equity involvement
Clare Capital advised deal
Buyer
Target
Non-IT and digital services acquirers
M&A transaction key:
Year
2020
2021
2022
2023
2019
2022
2020
2021
2023
2019
2019
2023
2020
2019
2022
2017
2021
2016
2018
Tech Insights #306
IT and digital services landscape
Page 2 of 2
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Disclaimer The information provided in this report has been sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
2 October 2023
Valuation datapoints
Below are the ranges of observed valuation multiples for IT and digital services companies across various acquirers. Higher multiples can be achieved for businesses that offer best in class metrics in terms of scale, EBITDA margins and growth trajectory. The outlined multiple ranges are informed using companies operating at or above industry averages.
-
1x
2x
3x
4x
5x
6x
7x
8x
9x
10x
EV / LTM EBITDA
Acquisitions by digital advertising agencies (WPP, Dentsuetc)
Listed IT services companies
Australian firms looking to make NZ acquisitions
NZ IT and digital services M&A
M&A multiples
Clare Capital typically observes EBITDA multiples of 3.5x to 6x resulting from a competitive M&A process, where the shareholders of an NZ services firm are looking to sell their business and the transaction completes. Note, not all deals complete.
Clare Capital is aware that Australian firms have historically considered IT and digital services acquisitions within a price range of 3x to 5x EBITDA. An active cash buyer of IT services firms in the NZ market is highly unusual and should be engaged with.
The multiples for listed IT companies is linked to gross margin, EBITDA margin and revenue growth. The IT services businesses that trade at materially higher multiples, like Accenture, tend to have significantly higher growth prospects and/or a higher EBITDA margin.
Digital advertising agencies such as WPP, Publicis and Dentsu are highly acquisitive, regularly buying firms for 5x to 8x EBITDA. Clare Capital advised Heyday on their sale to WPP. Dentsu acquired Davanti in 2019. Achieving an exit to one of these companies is driven almost entirely by the deal appetite of the acquirer.
Publicly listed
multiples
Tech Insights #305
KiwiSaver
Mergers & acquisitions
Corporate finance advisory
Capital raising
25 September 2023
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Overview
The Reserve Bank recently reported that for the first time since its launch in July 2007, total KiwiSaver Funds Under Management(FUM) across all providers exceeded NZD $100 billion.This is well north of other funds in New Zealand including ACC’sNZD $45 billion FUM and NZ Super’s NZD $65 billion FUM. Despite representing achievement of a significant milestone for KiwiSaver and an increase in overall savings of New Zealanders, this is still a long way off the Australian Superannuation’s size of AUD $3.5 trillion –38 times larger than KiwiSaver. In this Tech Insight’s reportwe take a lookinto provider growth, enrolment and some notable transactions,
FUM by provider (NZD $m) and membership growth (year ended March 2023)
Note that some providers included operate multiple schemes, e.g., Fisher Funds operates the Fisher Two, KiwiWealth and FisherFunds KiwiSaver schemes. The asterisk denotes current default KiwiSaver providers.
(20%)
-
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
(2,000)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
ANZ
ASB
Fisher Funds*
Westpac*
AMP
Milford
BNZ*
Booster*
Generate
Simplicity*
NZX*
Mercer
MAS
NZ Funds
LifeStages
Craigs
The top four providers share 61% of all FUM.
(20%)
-
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
(50)
-
50
100
150
200
250
300
350
400
450
500
Juno
Supereasy
Summer
Pathfinder
NZDF
InvestNow
Aurora
Christian
Koura
Always Ethical
Nikko
Kernel
KiwiWrap
Maritime
BCF
Select
Sharesies
InvestNow, Aurora Capital and Koura recorded an approximate doubling of FUM and +70% membership growth during the period.
Ending FUM
Starting FUM
Member growth (RHS)
Tech Insights #305
KiwiSaver
Mergers & acquisitions
Corporate finance advisory
Capital raising
25 September 2023
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Disclaimer The information provided in this report has been sourced from S&P Global Market Intelligence and other public data. Clare Capital holds no responsibility over the
actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Buyer
Target
Consideration (NZD $m)
Members
FUM (NZD $m)
$/member
Consideration/FUM
Announced Date
NZX
Quay Street
31
unknown
1,600
na
2.0%
Nov 2022
Fisher Funds
Kiwi Wealth
310
270,000
9,000
1,148
3.4%
Aug 2022
Fisher Funds
Aon KiwiSaver and Master Trust
32
21,000
1,000
1,524
3.2%
Oct 2021
NZX
SuperLife
35
41,000
1,270
854
2.7%
Dec 2014
Fisher Funds
Tower Investments
79
unknown
894
na
8.8%
Feb 2013
Kiwibank
Gareth Morgan Investments
58
57,000
1,500
1,018
3.9%
Jan 2012
Fisher Funds
Huljich KiwiSaver (HWM)
21
87,000
191
240
10.9%
Mar 2011
Average
957
5.0%
Notable transactions
Note some transactions include both KiwiSaver and other assets, e.g., NZX’s acquisition of Quay Street included their KiwiSaver scheme and funds management business.
Asset value (NZD $m)
-
20,000
40,000
60,000
80,000
100,000
120,000
Jun 08
Jun 09
Jun 10
Jun 11
Jun 12
Jun 13
Jun 14
Jun 15
Jun 16
Jun 17
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
KiwiSaver assets
Superannuation assets
Individually managed portfolios
Percentage of eligible population enrolled by age
-
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
0
5
10
15
20
25
30
35
40
45
50
55
60
65
Total eligible population
Total members
Tech Insights #304
SaaS R&D capitalisation
Page 1 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
18 September 2023
Overview
This week’s Tech Insight explores the percentage of research and development (R&D) costs that are capitalised and expensed by selected Australian and New Zealand listed SaaS companies. Capitalising R&D expenditure is a financial accounting practice that recognises a portion of the annual R&D costs as an intangible asset on the company's balance sheet. This improves profitability of the company in the short term, with costs being amortised over several years, and records R&D as an investment instead of an expense. In M&A transactions, we often see R&D capitalisationbacked out -so that EBITDA fully reflects the current people costs of the business, regardless of if these costs are capitalisedor expensed for accounting purposes.
Company
Average R&D capitalised
Average R&D as a % of revenue
Average R&D expensed as a % of total expenses
Xero
44%
37%
22%
EROAD
66%
23%
9%
Vista Group
34%
31%
20%
Gentrack
15%
13%
13%
PaySauce
51%
34%
11%
Appen
66%
7%
3%
ikeGPS
30%
34%
16%
Serko
61%
87%
18%
Total average
46%
33%
14%
R&D averages over 5 years – or from first public report
R&D capitalisation considerations
74
103
136
212
260
97
123
176
260
337
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
100
200
300
400
500
600
FY19
FY20
FY21
FY22
FY23
NZD $m
Xero
EROAD
Regulatory compliance
Capitalisation of R&D expenditure is not a universally applied accounting method and is subject to criteria and requirements such as attributability of costs to the asset, and feasibility of completion for use.
Strategic decision
Capitalising R&D expenses is often seen as a strategic decision by companies, by spreading the costs and strengthening their immediate earnings.
Industry
Capitalisation of R&D expenses is particularly common in technology, industrial and pharmaceutical industries where products/services heavily rely on innovation and consistent development.
8
10
13
24
26
5
6
8
8
12
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
5
10
15
20
25
30
35
FY19
FY20
FY21
FY22
FY23
NZD $m
Capitalised R&D
Expensed R&D
% of total R&D capitalised
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Tech Insights #304
SaaS R&D capitalisation
Page 2 of 2
Disclaimer The information provided in this report has been sourced and calculated from S&P Global Market Intelligence and annual reports. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice. R&D expense figures exclude relevant depreciation and amortisation.
Mergers & acquisitionsCorporate finance advisoryCapital raising
18 September 2023
Vista Group
Gentrack*
4
5
7
8
16
13
20
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
2
4
6
8
10
12
14
16
18
20
FY18
FY19
FY20
FY21
FY22
NZD $m
0.3
0.5
0.4
0.8
0.3
0.3
0.6
1.0
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
FY19
FY20
FY21
FY22
NZD $m
PaySauce
15
26
30
37
5
15
14
28
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
10
20
30
40
50
60
FY19
FY20
FY21
FY22
NZD $m
Appen
ikeGPS
Serko
0.7
0.7
1.2
1.8
3.0
2.1
2.3
1.2
4.2
9.7
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
2
4
6
8
10
12
FY19
FY20
FY21
FY22
FY23
NZD $m
7
11
7
15
14
2
3
3
15
28
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
5
10
15
20
25
30
35
40
45
FY19
FY20
FY21
FY22
FY23
NZD $m
*In FY20, Gentrack impaired its development assets by $4.5m due to judgment they no longer meet the capitalisation requirements and have not made any additions since.
8
12
13
13
16
22
25
20
22
28
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
5
10
15
20
25
30
35
40
45
FY18
FY19
FY20
FY21
FY22
NZD $m
Capitalised R&D
Expensed R&D
% of total R&D capitalised
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39%
34%
24%
3%
-
20%
40%
60%
80%
100%
Tech Insights #303
Card processing networks
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Mergers & acquisitionsCorporate finance advisoryCapital raising
11 September 2023
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Overview
Open-loop card processing networks are dominated globally by three companies: Visa, UnionPay and Mastercard. Visa and Mastercard are the most widely accepted payment methods in New Zealand and globally. UnionPay holds a large amount of global market share, however this is mainly concentrated in China. Open-loop payment systems allow transactions among participants, without restrictions on membership or limited acceptance. This report looks into the global network giants Visa and Mastercard and other smaller listed players in this space.
Global market share – by network transactions processed
NZ retail bank partnerships
In New Zealand, Visa and Mastercard partner with credit card issuers (i.e. retail banks) to process their transactions.
Source: 2022 Nielson Report
FY22 revenue breakdown (USD $b)
Both Visa and Mastercard utilise a client incentive model to buy issuer loyalty and to route transactions onto their networks. These are typically structured as long-term contracts with financial institutions, merchants and strategic partners.
Client incentives (as a % of gross revenue)
29
(10)
40
-
10
20
30
40
Net revenue
Client incentives
Gross revenue
Visa FY22 Revenue
22
(13)
35
-
10
20
30
40
Net revenue
Client incentives
Gross revenue
Mastercard FY22 Revenue
Other
24%
26%
26%
35%
37%
37%
-
10%
20%
30%
40%
FY2020
FY2021
FY2022
Visa
Mastercard
Tech Insights #303
Card processing networks
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Payment networks – Market cap
Visa and Mastercard dominate the listed payments space. PayPal has partnered with both Visa and Mastercard to run its PayPal and Venmo-branded credit cards. The COVID pandemic accelerated the use of digital payments, however PayPal’s profit margins have since weakened.
Mergers & acquisitionsCorporate finance advisoryCapital raising
11 September 2023
Comparator metrics for payment network companies (USD $b)
Revenue
Revenue growth
Pre-tax profit margin
Company
Description
Year end
Market cap
FY22 (A)
FY23 (F)
FY22 (A)
FY23 (F)
FY22 (A)
Visa
Open-loop transaction processing network
Sep
503
40*
44*
22%
10%
49%
Mastercard
Open-loop transaction processing network
Dec
391
35*
40*
18%
12%
35%
PayPal
Closed-loop network - digital payments
Dec
67
28
30
8%
8%
15%
American Express
Closed-loop payments and issuer of credit
Dec
116
51
61
16%
20%
20%
Block (Square)
Financial services and online payments
Dec
33
18
21
(1%)
22%
(4%)
Mean
222
34
39
13%
14%
23%
Median
116
35
40
16%
12%
20%
-
100
200
300
400
500
600
2009
2011
2013
2015
2017
2019
2021
2023
USD $b
Visa
Mastercard
PayPal
AmericanExpress
Block
FY18
FY22
-
10
20
30
40
50
60
Visa*
Mastercard*
PayPal
American Express
Block
Revenue (USD $b)
* Gross revenue (before client incentives)
* Gross revenue (before client incentives)
Payment networks – Annual revenue (FY18 - FY22)
American Express has a fundamentally different business model to Visa and Mastercard, being a credit issuer as well as a payment network.
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
4 September 2023
Tech Insights #302
Top 50 SaaS companies (2023)
Overview
This Tech Insights report explores the current 50 largest listed global SaaS companies by enterprise value (EV). The graph below plots each company’s Rule of 40 value against its enterprise value (EV) / last twelve months (LTM) revenue. The size of each bubble is scaled based on a company’s EV relative to the sum of the top 50 EVs. On the second page, we highlight the 10 companies within the top 50 with the highest revenue, revenue growth, EBITDA, and Rule of 40 (sum of annual revenue growth and EBITDA margin) in the LTM.
Bubble scale = relative EV
Xero
Oracle
Adobe
Salesforce
Intuit
ServiceNow
ADP
Vmware
Palo Alto Networks
Shopify
Synopsys
Cadence
Workday
Atlassian
Autodesk
Snowflake
Fortinet
The Trade Desk
Block
Crowdstrike
Datadog
Palantir
Ansys
Veeva
MongoDB
HubSpot
Keysight
Splunk
SS&C
Cloudflare
Zscaler
PTC
Akamai
Tyler
Bentley Systems
AppLovin
Zebra Technologies
Paycom
Unity Software
Zoom
GoDaddy
DT
Samsara
Aspen
Manhattan Associates
Ceridian
Okta
Paylocity
SAP
Dassault Systèmes
Wolters Kluwer
-
3
6
9
12
15
18
21
-
10%
20%
30%
40%
50%
60%
70%
EV / LTM revenue
Rule of 40
Australia
US
Europe
220%
Tech Insights #302
Top 50 SaaS companies (2023)
Page 2 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
4 September 2023
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-
10
20
30
40
50
60
Oracle
SAP SE
Salesforce
Block, Inc
Adobe
Automatic DataProcessing
Intuit
Vmware
ServiceNow
Palo AltoNetworks
LTM
LTM (1-year prior)
LTM Top 50 median
Revenue (USD $bn) – Top 10
Revenue growth – Top 10
EBITDA (USD $bn) – Top 10
Rule of 40 – Top 10
-
5
10
15
20
Oracle
Salesforce
Adobe
SAP
ADP
Intuit
Vmware
SS&C
Wolters Kluwer
Keysight
LTM
LTM (1-year prior)
LTM Top 50 median
-
20%
40%
60%
80%
100%
120%
140%
Aspen
Zscaler
Snowflake
Unity Software
Samsara
Crowdstrike
MongoDB
Datadog
Cloudflare
Paylocity
LTM
LTM (1-year prior)
LTM Top 50 median
220%
-
20%
40%
60%
80%
100%
120%
140%
160%
180%
Aspen
Paycom
Fortinet
Oracle
Paylocity
Cadence
Adobe
Ansys
Crowdstrike
ManhattanAssociates
LTM
LTM (1-year prior)
LTM Top 50 median
217%
Tech Insights #301
Corporate strategic transactions
Mergers & acquisitions
Corporate finance advisory
Capital raising
28 August 2023
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Overview
In this Tech Insights report we look at a selection of corporate strategic investments and minority acquisitions in the New Zealand market. The analysis serves as useful insights for both corporatesand business owners, suggesting levels of equity corporate investors might expect for differing amounts of investment capital(the median investment of $1.8m equity and approx. 16% shareholding) and similarly amounts for minority acquisitions. We also analyse the number of investments that are followed-on and minority acquisitions that later resulted in a full acquisition by the corporate. The results suggesting a deal done with a strategic maylimit future options for a business, conversely a strategic party should be willing to put in further capital to maintain its same rights and protections.
Investment count
17
Investment range
$0.2m to $10.7m
Amount
Shareholding
25th percentile
$0.9m
11.7%
Median holding
$1.8m
16.1%
75th percentile
$4.6m
31.4%
Acquisition count
14
Investment size
$0.6m -$20.6m
Amount
shareholding
25th percentile
$1.5m
14.8%
Median holding
$7.5
29.0%
75th percentile
$13.6
41.2%
Transactions
Contact Energy
Heartland Group
Rakon
Seeka
Spark
Spark
Spark
Spark
Sprout Agritech
Sprout Agritech
Sprout Agritech
The Warehouse
Trade Me
Trade Me
Xero
Z Energy
Freightways
Genesis Energy
Heartland Group
Meridian
Rakon
The Warehouse
Trade Me
Trade Me
Trade Me
Vista Group
Vista Group
Vista Group
Spark
-
10%
20%
30%
40%
50%
60%
-
$5m
$10m
$15m
$20m
$25m
Shareholding
Amount
Investment
Acquisition
Tech Insights #301
Corporate strategic transactions
Mergers & acquisitions
Corporate finance advisory
Capital raising
28 August 2023
Page 2 of 2
DisclaimerThe information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisionsyou should seek appropriate personalised financial advice.
Transaction analysis
•
Below we look at the percentage of transactions (a total 33 investments and 25 minority acquisitions) whereby the strategic party invests after the first transaction, as well as looking at their current position as at today.
•
For approx. 41% of investments analysed, the strategic party invested additional capital into the business at a later date.
•
Note this analysis includes additional transactions not shown on the first page as either the value or ownership percentage was not disclosed.
•
Trade Me first invested $4m in Sharesies in Sep-18
•
They then invested further in Dec-19.
•
Subsequently Sharesies raised further capital with Trade Me not participating.
•
In Apr-17 Spark acquired 14% of Homes.co.nz (PropertyNZ) for an unknown amount.
•
Later the business invested $2m to increase its stake to 22.5%.
•
In 2021 Homes.co.nz was sold to Trade Me.
Transaction spotlight
•
In Feb-22 Freightways acquired 33% of GoSweetSpot for $7.5m.
•
No further transactions have occurred since.
0%
20%
40%
60%
80%
100%
Investments
Minority acquisitions
Total
End state following transaction by the strategic party
Full acquisition
Remained minority
Divestment
0%
20%
40%
60%
80%
100%
Investments
Minority acquisitions
Total
Subsequent investment by the strategic party
Subsequent investment
No further investment
•ASB Bank first acquired an unknown stake in Trade Window in Aug-19.
•ASB has since participated in three of Trade Window’s subsequent capital raising rounds and now own 21.5%
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Tech Insights #300
Xero Pushpay
300 – the perfect score
Mergers & acquisitions
Corporate finance advisory
Capital raising
21 August 2023
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Brendon McCullum celebrates his first (and NZ’s only) triple century.
Page 1 of 2
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Overview
In this Tech Insights report we celebrate publishing our 300th report by reviewing some of our favourite newsworthy, odd and interesting ‘300’ related stories. We also recognise that Clare Capital turns ten years old this year. In that time, we’ve grown to ten staff, completed 40 deals, worked with many more clients, and have over 1,500+ subscribers to this report. On the second page of this report we play a game of ‘SaaS bowling’ with two of our most mentioned companies, Xero and Pushpay. Ten frames representing ten years of Clare Capital, with ten arbitrary metrics that when achieved represent a strike. 300 represents the highest possible score in ten-pin bowling.
300 related stories
NZ hits $300m in technology M&A value.
Clare Capital
achieves 300+ subscribers to Tech Insights.
Xero hits NZD $300m in ARR, paving the way for SaaS in NZ.
Crown backed NZ Venture Investment Fund (now NZGCP) launches NZD $300m Elevate fund of funds programme.
Clare Capital is incorporated by Mark Clare.
Clare Capital’s
300th bottle of Diplomatico is drunk (est).
NZ's bird of the year competition flooded with 300+ dubious votes for the shag from an IP address in Australia.
Chorus upgrades fibre users to 300Mbps from 100Mbps connections.
New Zealand property values up by almost 300% since 2003.
Clare Capital celebrates 10 years and our 300th Tech Insights report.
Tech Insights #300
300 – the perfect score
Mergers & acquisitions
Corporate finance advisory
Capital raising
21 August 2023
Page 2 of 2
Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Players / metric
>300k revenue/ employee
>300k customers or >3k enterprise
>300m revenue
achieve T2D3
>achieve rule of 40
>3bn market cap.
achieve >300%
price return
>3 acquisitions
global business
Tot.
X
X
X
X
X
X
Approx. >275k rev /employee
Surpassed >300k customers in HY 2014
Achieved >300m revenue in calendar year 2017
Tripled twice but was unable to double three times
Xero had 3 years where the rule of 40 value was >40%
Reached >$3bn market cap. in May 2017
Return on Xero stock is 12,500%+ since IPO
Xero has made 12 acquisitions
Operates in NZ, AU, UK, USA and more
X
X
X
X
X
X
Operates in NZ, AU and the USA
PPH has made 4 acquisitions
In 2023
PPH was acquired for $1.6bn
PPH had 7 years where the rule of 40 value was >40%
Exceeds >600k rev /employee
Surpassed >3k enterprise customers in 2016
In 2022 PPH earned NZD $291m of revenue
Exceeded T2D3
Return on PPH stock is 1,600%+ from IPO to acquisition.
SaaS bowling: Like real life bowling there are ten frames where each company must meet an arbitrary SaaS or 3 related metric to potentially earn a strike. Partial scores are also given and totalled at the end for a possible max score of 300. Note: this is intended as a light-hearted analysis of these companies.
5
–
X
X
X
X
X
X
7
/
5
3
9
–
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Tech Insights #299
Ubering towards profitability
Page 1 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
14 August 2023
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Quarterly revenue and operating profit USD $bn
Overview
Founded in 2009 and headquartered in San Francisco, Uber Technologies, Inc. (NYSE:UBER) is a ride-sharing, food delivery and freight company. In the second quarter of 2023, Uber recorded its inaugural quarterly operating profit of USD $326 million. This Tech Insights report explores Uber’s revenue and cost structure, highlighting strategic acquisitions and divestures that paved the way to profitability. It also takes a closer look at the evolving ride-sharing landscape, tracking indexed share price from 30 June 2022.
Revenue disaggregated by operating segment
Sold Singapore-based car rental company for $257m
Acquired US food delivery service start-up for $3,231m
Acquired Latin American grocery delivery start-up for $1,254m
Sold 7.8% stake in Indian food delivery company for $392m
Acquired US alcohol delivery platform for $1,100m
Sold 29% stake in Russian taxi joint venture for $703m
Notable M&A transactions USD $m
Jul 19
Jan 20
Nov 20
Jun 21
Oct 21
Aug 22
Apr 23
Acquired Middle-Eastern ride-hailing company for $3,100m
Mobility
Mobility
Delivery
Delivery
Delivery
Delivery
Mobility
-
5
10
15
20
25
30
35
40
(6)
(4)
(2)
-
2
4
6
8
10
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Gross bookings
Revenue
Operating profit (loss)
Gross bookings
-
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jun 19
Aug 19
Oct 19
Dec 19
Feb 20
Apr 20
Jun 20
Aug 20
Oct 20
Dec 20
Feb 21
Apr 21
Jun 21
Aug 21
Oct 21
Dec 21
Feb 22
Apr 22
Jun 22
Aug 22
Oct 22
Dec 22
Feb 23
Apr 23
Jun 23
Mobility
Delivery
Freight
Tech Insights #299
Ubering towards profitability
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
14 August 2023
Operating profit breakdown – Q2 2019 versus Q2 2023 USD $bn
Indexed share price of selected ride-sharing companies
Revenue by geography USD $bn
-
50%
100%
150%
200%
250%
300%
Jun 22
Jul 22
Aug 22
Sep 22
Oct 22
Nov 22
Dec 22
Jan 23
Feb 23
Mar 23
Apr 23
May 23
Jun 23
Jul 23
Easing revenue growth expectations led to a 6% drop in Uber’s share price after FY23 Q2 profit announcement.
-
1
2
3
4
5
6
7
8
9
10
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
US and Canada
Latin America
Europe, Middle East and Africa
Asia Pacific
(5.49)
(0.12)
(1.64)
(3.06)
(0.56)
(0.86)
(1.74)
3.17
0.22
0.60
2.35
(6.00)
(4.00)
(2.00)
-
2.00
4.00
Operating income
D&A
General & administrative
R&D
Sales & marketing
Operations & support
Cost of revenue
Total revenue
Other
Delivery
Mobility
0.33
(0.21)
(0.49)
(0.81)
(1.22)
(0.66)
(5.52)
9.23
1.28
3.06
4.89
-
2.00
4.00
6.00
8.00
10.00
Operating income
D&A
General & administrative
R&D
Sales & marketing
Operations & support
Cost of revenue
Total revenue
Other
Delivery
Mobility
Revenue growth coupled with leaner cost management has spurred profitability.
Tech Insights #298
MILKRUN and food delivery services
Page 1 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
7 Aug 2023
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Overview
Woolworths Group (ASX:WOW) acquired the collapsed delivery startup MILKRUN in May this year. Last month Woolworths launched MILKRUN in New Zealand, shortly after announcing Countdown supermarkets will be rebranded as Woolworths. MILKRUN promises to deliver groceries to your door in under 60 minutes (via Uber drivers), with a flat rate delivery fee of $7. This Tech Insights report looks into the history of MILKRUN and the health of the wider food delivery industry. Since the 2021 highs, the combined enterprise value of twelve listed delivery companies has approximately halved to NZD $450b.
MILKRUN history
•
MILKRUN launched in Sydney in September 2021 before expanding to Melbourne, using a network of warehouses to store groceries (known as ‘dark stores’) near customers.
•
MILKRUN employed full-time delivery drivers and rented dark stores – which proved to be an expensive business model.
•
Leaked investor pitch documents in 2022 highlighted that MILKRUN was generating more than NZD $4.3m of monthly revenue but on average losing $11 per order.
•
Less than 2 years after launching, MILKRUN ceased operations in April 2023 after running out of capital and failing to attract further Series B investment.
•
Woolworths launched a quick delivery app Metro60 in Australia in June 2022, directly competing with MILKRUN.
•
Following MILKRUN’s collapse, Woolworths purchased MILKRUN in May 2023 at a fraction of the total capital raised, rumoured to be about NZD $11m.
•
Woolworths has rebranded its existing food delivery service, Metro60, adopting MILKRUN’s branding. Orders are fulfilled via the current Metro60 model, which operates from their network of Metro stores (rather than ‘dark stores’) and delivers via a rideshare partnership with Uber (rather than employing drivers).
Failed Australia grocery delivery startups – total capital raised
MILKRUN was one of the last fast delivery services left in Australia after several failed over a similar time period. Collectively, NZD $123m was raised since 2021. It was rumoured these companies unsuccessfully tried to raise a further time before ceasing operations. Our Cow acquired the assets of collapsed Voly in 2023 for an undisclosed sum.
-
20
40
60
80
100
MILKRUN
Voly
Send
Quicko
Capital raised (NZD $m)
-
20
40
60
80
100
Woolworths acquires MILKRUN (May23)
MILKRUN Series B raise (2022)
MILKRUN Series A raise (Jan22)
MILKRUN Seed raise (Jun21)
MILKRUN capital raised and sale price (NZD $m)
Series B raise was unsuccessful
56%
58%
32%
32%
44%
42%
68%
68%
35%
48%
34%
89%
65%
52%
66%
-
10
20
30
40
50
FY19
FY20
FY21
FY22
Revenue (NZD $b)
Meituan delivery revenue
Meituan other revenue
Uber delivery revenue
Uber other revenue
-
200
400
600
800
Jun19
Jun20
Jun21
Jun22
Jun23
Combined EV (NZD $b)
Other*
DiDi
DoorDash
Uber
Meituan
Tech Insights #298
MILKRUN and food delivery services
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Combined enterprise value of food delivery companies (NZD $b)
Mergers & acquisitionsCorporate finance advisoryCapital raising
7 Aug 2023
Name
Country
Current EV (NZD $m)
Revenue LTM (NZD $m)
Revenue growth LTM
Gross margin
EBITDA margin
Rev multiple (Jan21)
Rev multiple (Aug23)
Δ rev multiple
(since Jan21)
Δ share price (since Jan21)
Meituan
China
175,183
54,397
6%
30%
4%
8.9x
3.2x
(64%)
(53%)
Uber
United States
157,175
56,860
5%
32%
1%
5.1x
2.8x
(46%)
4%
DoorDash
United States
48,285
12,487
9%
47%
(9%)
12.3x
3.9x
(68%)
(49%)
DiDi
China
23,288
32,990
(13%)
13%
(9%)
na
0.7x
na
na
Delivery Hero
Germany
24,112
14,224
9%
26%
(13%)
4.4x
1.7x
na
na
Grab
Singapore
16,124
2,777
23%
18%
(57%)
9.5x
5.8x
(39%)
(70%)
Zomato
India
14,000
1,610
14%
61%
(12%)
na
8.7x
na
na
HelloFresh
Germany
7,916
12,870
2%
65%
3%
2.0x
0.6x
(69%)
(62%)
Just Eat
Netherlands
6,914
9,126
0%
22%
(4%)
3.2x
0.8x
(76%)
(83%)
Deliveroo
United Kingdom
2,682
3,841
4%
33%
(8%)
na
0.7x
na
na
Blue Apron
United States
93
728
1%
34%
(14%)
0.4x
0.1x
(68%)
(95%)
My Food Bag
New Zealand
76
176
(4%)
24%
8%
na
0.4x
na
na
Mean
39,654
16,841
4%
34%
(9%)
5.7x
2.4x
(61%)
(58%)
Median
15,062
10,806
4%
31%
(8%)
4.8x
1.2x
(68%)
(62%)
Comparator metrics for selected food delivery companies
Meituan is the largest listed delivery service (also retail and entertainment) and is the market leader in China, taking almost 70% of the market share. In FY21, Uber Eats (food delivery) accounted for 48% of Uber’s total revenue.
*Delivery Hero, Grab, Zomato, HelloFresh, Just Eat, Deliveroo, Blue Apron, My Food Bag
Meituan and Uber delivery revenue breakdown (NZD $b)
FY19
FY20
FY21
FY22
(150%)
(100%)
(50%)
-
50%
100%
150%
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
EBITDA
Revenue growth
Rule of 40
EXAMPLE business: revenue and expenses
Tech Insights #297
10X revenue to 10X EBITDA
Page 1 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
31 July 2023
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Overview
The idea that a loss-making SaaS company can be valued on a large multiple of revenue often causes confusion. This report attempts to explain how a fictitious, loss-making business, could over five years transition from being valued on a revenue multiple to being valued on an EBITDA multiple. The aim is to show the innate ability of SaaS companies to significantly change their financial construct in a relatively short period of time.
The fictitious business in this report starts with very high revenue growth and a high proportional cost base. Over five years, as revenue growth slows, the business begins scaling its cost base for profitability, moving from a (110%) EBITDA margin in Year 0 to a 40% EBITDA margin in Year 5. The valuation gradually increases whilst there is a material change in valuation multiples
This is comparable to what happened over a five-year period to Pushpay;
•In 2018 Pushpay had an enterprise value of NZD $1.0b, a negative EBITDA margin, annual revenue growth of 105% and was valued at 11x revenue.
•When the company was acquired in 2023 for NZD $1.7b, it had a forecast 25% EBITDA margin, forecast annual revenue growth of 6% and was valued at 20x forecast EBITDA.
•From 2018 to 2023 the sum of Pushpay’s annual revenue growth and annual EBITDA margin (Rule of 40) never dropped below 30%.
(110%) EBITDA margin
EXAMPLE business: EBITDA margin and revenue growth; Rule of 40
EXAMPLE business: growth in valuation, change in multiples
-
10
20
30
40
50
60
70
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
$m
CTS
CAC
R&D
G&A
Revenue
-
50
100
150
200
250
-
5x
10x
15x
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Valuation $m
Valuation multiple
Valuation
Revenue multiple
EBITDA multiple
The sum of revenue growth and EBITDA margin is greater than 40% throughout.
150% revenue growth
In Year 0 the company is operating at a significant deficit as it pursues revenue growth. Over time, the expense base stabilises as the revenue growth rate declines.
EBITDA
Total expenses
Tech Insights #297
10X revenue to 10X EBITDA
Page 2 of 2
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
31 July 2023
-
20%
40%
60%
80%
100%
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
G&A
R&D
CAC
CTS
-
50%
100%
150%
200%
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
G&A
R&D
CAC
CTS
EXAMPLE business: Expenses as a % of total expenses
EXAMPLE business: Expenses % of revenue
Change in expense ratios
Cost to Serve (CTS): A relative decline in hosting costs and improved efficiency reduces the % of CTS to revenue, increasing the gross margin from 80% to 90%.
Customer Acquisition Cost (CAC): When the business is growing 100% YoY CAC is 100% of revenue. As the cost of acquiring the marginal customer increases, the company scales CAC in line with other expenses.
General & Admin (G&A): Flattens as the company has been designed to scale.
Research & Development (R&D): Flattens as additional R&D is focused on improvements as opposed to core functionality, which has already been developed.
EXAMPLE business: Falling customer growth
CAC: It becomes more expensive for the company to attract new customers, driving up the CAC ratio.
ARPU: The company offsets falling customer growth by increasing revenue from existing customers.
Churn rate: Decreases as the majority of customers in later periods have been with the company for several years and are reliant on its software.
-
1,000
2,000
3,000
4,000
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Churn
New customers
Customers
EXAMPLE business: Customer growth
-
5
10
15
20
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
ARPU ($000s)
CAC ratio
EXAMPLE business: CAC ratio and ARPU
-
10
20
30
40
50
USA
GER
NOR
SWE
BRA
CHN
ENG
JPN
Tech Insights #296
2023 FIFA Women’s World Cup
Mergers & acquisitionsCorporate finance advisoryCapital raising
24 July 2023
Overview
New Zealand and Australia are joint hosts of this year’s FIFA Women’s World Cup, which kicked off at Eden Park on 20 July with New Zealand beating Norway 1 –0. The tournament is forecast to reach 2 billion viewers worldwide compared to 1.12 billion viewers who tuned into the 2019 edition in France. The first page of this report investigates the historical match results, attendance figures and financial rewards for the tournament, while the second page compares various women and men’s sporting events.
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World Cup prize money (USD$ m)
Countries with most FIFA WC match wins since inception
World Cup attendance numbers (000s)
-
20
40
60
80
100
120
1991
1995
1999
2003
2007
2011
2015
2019
2023
5.8
7.5
15.0
30.0
110.0
No prize money was available during these tournaments
-
5
10
15
20
25
30
35
40
-
200
400
600
800
1,000
1,200
1,400
1,600
1991
1995
1999
2003
2007
2011
2015
2019
2023*
Total attendance (LHS)
Average attendance per match (RHS)
*Est. based on tickets sold
# of countries
32
Average age
26.8
Most WC wins
USA (4 times)
# of matches
64
60.1
57.9
7.3
3.5
0.3
0.03
16.5
10.0
2.6
3.1
-
10
20
30
40
50
60
70
US Open
Wimbledon
British Open
Cricket WC
TdF
Snooker WC
-
200
400
600
800
1,000
1,200
1,400
Champions League
FIFA WC
EURO
Tech Insights #296
2023 FIFA Women’s World Cup
DisclaimerThe information provided in this report has been sourced and calculated from the FIFA website and various sports reports. ClareCapital holds no responsibility over the actual numbers. Clare Capital is not an AuthorisedFinancial Adviser. If you are making investment decisionsyou should seek appropriate personalisedfinancial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
24 July 2023
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-
20%
40%
60%
80%
100%
Italy
USA
Vietnam
Spain
England
Germany
South Korea
Portugal
China
Costa Rica
South Africa
France
Japan
Zambia
Colombia
Panama
Argentina
Morocco
Norway
Sweden
Switzerland
Brazil
Netherlands
New Zealand
Australia
Denmark
Haiti
Nigeria
R. of Ireland
Philippines
Canada
Jamaica
-
20%
40%
60%
80%
100%
England
Spain
Canada
USA
Portugal
Japan
France
Argentina
Women vs men WC players who play for a domestic club
% of women WC players who play for a domestic club
Prize money comparison for top sporting tournaments (USD $m)
27.0
110.0
28.5
Football
Other sports
Women
Men
Women
Men
Cycling
1,235.0
440.0
416.5
Tennis
Golf
Cricket
Snooker
Domestic clubs refer to teams that compete within the borders of the respective country.
Australia and New Zealand SaaS – Rule of 40
Tech Insights #295
Rule of 40 – Australia & New Zealand
Page 1 of 2
Mergers & acquisitionsCorporate finance advisoryCapital raising
17 July 2023
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Overview
The Rule of 40 is a metric commonly used to evaluate the performance of SaaS companies. The metric combines two key factors: revenue growth rate and EBITDA margin. The metric offers a benchmark that balances revenue growth and profitability. The rule implies a SaaS business is performing well with a 20% revenue growth rate and a 20% EBITDA margin but equally a company can also be seen as performing well with a 50% revenue growth rate and a (10%) EBITDA margin.
Life360
Pointerra
Altium
Bigtincan
Energy One
Praemium
TASK
ReadyTech
Serko
Technology One
Tesserent
WiseTech
ikeGPS
Paysauce
(80%)
(60%)
(40%)
(20%)
-
20%
40%
60%
(50%)
-
50%
100%
150%
200%
LTM EBITDA margin
LTM Revenue growth
Company
Ticker
LTM Revenue growth
LTM EBITDA margin
Rule of 40
EV / LTM Revenue
TASK
ASX:TSK
99%
(6%)
94%
2.6x
Pointerra
ASX:3DP
86%
3%
90%
5.4x
Serko
NZSE:SKO
160%
(73%)
88%
8.2x
WiseTech
ASX:WTC
33%
43%
76%
34.1x
Tesserent
ASX:TNT
59%
10%
69%
1.6x
Bigtincan
ASX:BTH
73%
(8%)
65%
2.0x
Life360
ASX:360
95%
(33%)
61%
4.1x
ikeGPS
NZSE:IKE
93%
(32%)
60%
3.3x
PaySauce
NZSE:PYS
65%
(7%)
59%
5.5x
Altium
ASX:ALU
18%
35%
52%
12.4x
ReadyTech
ASX:RDY
41%
11%
52%
4.7x
Energy One
ASX:EOL
35%
16%
51%
3.7x
Praemium
ASX:PPS
18%
30%
48%
3.7x
Technology One
ASX:TNE
17%
30%
47%
12.2x
Who’s achieving the Rule of 40?
•
14 companies out of 41 included in Clare Capital’s Australia and New Zealand cloud index met the Rule of 40.
•
The axis has been truncated for presentation purposes, affecting companies with an EBITDA margin of less than (60%).
(400%)
Australia SaaS – Rule of 40 over last 3 years
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitionsCorporate finance advisoryCapital raising
17 July 2023
Tech Insights #295
Rule of 40 – Australia & New Zealand
New Zealand SaaS – Rule of 40 over last 3 years
Large Australia SaaS – Rule of 40 over last 3 years
(9%)
(78%)
9%
(61%)
18%
27%
94%
88%
60%
59%
(100%)
(50%)
-
50%
100%
ikeGPS
PaySauce
3 years ago
2 years ago
Last 12 months (LTM)
(298%)
(157%)
47%
23%
36%
28%
58%
53%
43%
31%
76%
52%
47%
34%
(100%)
(50%)
-
50%
100%
WiseTech
Altium
Technology One
Xero
3 years ago
2 years ago
Last 12 months (LTM)
91%
2%
(0%)
32%
47%
27%
98%
74%
1%
74%
33%
40%
90%
69%
65%
61%
52%
51%
48%
(100%)
(50%)
-
50%
100%
Pointerra
Tesserent
Bigtincan
Life360
ReadyTech
Energy One
Praemium
3 years ago
2 years ago
Last 12 months (LTM)
461%
105%
TASK
Serko
-
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
Jun 18
Dec 18
Jun 19
Dec 19
Jun 20
Dec 20
Jun 21
Dec 21
Jun 22
Dec 22
Jun 23
US - Median
US - 12MMA
US - 5yr avg
ANZ - Median
ANZ - 12MMA
ANZ - 5yr avg
Tech Insights #294
Cloud Index as at30 June 2023
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Mergers & acquisitionsCorporate finance advisoryCapital raising
10 July 2023
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Overview
This report looks at valuation metrics for cloud companies publicly listed in the United States, Australia and New Zealand. The indices comprise 90 companies in the United States (US) and 61 in Australia/New Zealand (ANZ). The ANZ Index trades at a significant discount to the US Index, mainly due to the size difference in the enterprise values of the companies that make up both indices. The median EV of US companies is NZD 7.7b versus NZD 152m for ANZ companies. As at30 June 2023, the US Cloud Index is down 5% from the previous quarter to 5.9x EV / NTM revenue and below the five-year average of 10.2x. The ANZ Cloud Index has started gaining momentum, up 15% to 2.8x EV / NTM revenue, but still sits below the five-year average of 4.5x.
NTM revenue multiple for cloud companies listed in the US and ANZ (EV / NTM revenue)
5.9x
2.7x
5.8x
2.8x
ANZ Cloud Index
Median
12MMA
Jun 23
2.8x
2.7x
Mar 23
2.4x
2.8x
Change
15%
(4%)
Jun 22
2.4x
4.3x
Change
15%
(37%)
US Cloud Index
Median
12MMA
Jun 23
5.9x
5.8x
Mar 23
6.2x
5.9x
Change
(5%)
(1%)
Jun 22
5.7x
11.3x
Change
5%
(48%)
Note: NTM = Next 12 months, 12MMA = 12 month moving average
Key:
10.2x
4.5x
-
10.0x
20.0x
30.0x
40.0x
50.0x
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
90th percentile
75th percentile
Median
25th percentile
-
5.0x
10.0x
15.0x
20.0x
25.0x
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
Tech Insights #294
Cloud Index as at30 June 2023
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NTM revenue multiple for cloud companies listed in US
NTM revenue multiple for cloud companies listed in ANZ
9.1x
5.9x
3.2x
4.0x
2.8x
1.3x
US Cloud Index
25th
75th
90th
30 Jun 2023
percentile
Median
percentile
percentile
EV (NZD $m )
3,452
7,743
23,824
69,232
EV / NTM rev
3.2x
5.9x
9.1x
12.0x
Revenue growth (NTM)
10%
16%
22%
34%
EV / LTM rev
3.5x
6.8x
11.7x
14.7x
Revenue growth (LTM)
14%
24%
35%
50%
Gross margin
67%
74%
79%
87%
Operating margin
(30%)
(15%)
(0%)
18%
FCF margin
7%
14%
24%
34%
ANZ Cloud Index
25th
75th
90th
30 Jun 2023
percentile
Median
percentile
percentile
EV (NZD $m )
31
152
403
1,540
EV / NTM Rev
1.3x
2.8x
4.0x
10.8x
Revenue growth (NTM)
5%
18%
31%
43%
EV / LTM rev
1.3x
2.6x
4.5x
9.3x
Revenue growth (LTM)
4%
26%
61%
86%
Gross margin
21%
52%
75%
93%
Operating margin
(38%)
(5%)
10%
20%
FCF margin
(20%)
1%
11%
28%
Note: The percentiles for each metric are calculated individually. Companies added or removed from each index take effect from the 1st day of the reported quarter.
EV = Enterprise Value, LTM = Last 12 months, NTM = Next 12 months, FCF = Unlevered free cash flow
Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. ClareCapital holds no responsibility over the actual numbers. ClareCapital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
12.0x
10.8x
-
20
40
60
80
100
120
140
160
180
FY20 FY21 FY22 FY23
Australia
USA
NZ
-
2x
4x
6x
8x
10x
12x
14x
16x
FY20 FY21 FY22 FY23
EV/revenue
EV/EBITDA
Tech Insights #293
EROAD takeover
Mergers & acquisitions
Corporate finance advisory
Capital raising
3 July 2023
Overview
This Tech Insights report looks at the recent proposed full takeover for EROAD by Constellation Software (via Brillian, a subsidiary of Volaris Group). The takeover offer has been
made at an interesting time where EROAD has experienced significant revenue growth in the US. In this report, we take a look at EROAD’s financial metrics to date, how the
offer matches against comparable companies and transactions, and an overview of Constellation Software’s recent acquisition activities in the Australasian region.
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EROAD geographic revenue breakdown (NZD $m)
EROAD share price (NZD $)
-
1
2
3
4
5
6
7
8
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Coretex
acquisition
announcement at
4.3x EV/Rev. Volaris Group
makes indicative
offer
EROAD EV/revenue and EV/EBITDA multiples
84%
growth in
USA
Transaction summary
Offer summary
Parties
involved
Valuation offer
Events to date
Constellation Software (via Brillian, a subsidiary of Volaris
Group) has made a takeover offer at NZD $1.30/share
for EROAD
Acquirer Target
Market capitalisation (NZD $m): $147m
Net debt (NZD $m): $70m
Enterprise value (NZD $m): $217m
30 May: 4m shares acquired by Volaris @ 77cents/share
21 June: c. 16m shares acquired by Volaris @ 1.30/share
Current acquired interest for Volaris: 17.7% of total shares
Brillian
1.2x proposed
- 1x 2x 3x 4x 5x 6x 7x
WiseTech/Containerchain (Feb 19)
Bridgestone/TomTom Telematics (Apr 19)
CalAmp/Synovia Solutions (Apr 19)
Geotab/BSM Technologies (May 19)
GI Manager/ORBCOMM (Sep 21)
EROAD/Coretex (Dec 21)
Fabric IOT/Intellicar Telematics (May 22)
Volaris Group/EROAD (Jun 23)
Tech Insights #293
EROAD takeover
Disclaimer The information provided in this report has been sourced and calculated from S&P Global Market Intelligence and company annual reports. Clare Capital holds no
responsibility over the actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised
financial advice.
Mergers & acquisitions
Corporate finance advisory
Capital raising
3 July 2023
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Comparable transactions EV/revenue multiples
Australasian acquisitions made by Constellation Software between 2019 and 2023
4
Mean
3.8x
Australasian comparable company metrics to pre-announcement
Metrics NZX:
ERD
NZX:
ERD
NZX:
GTK
NZX:
IKE
NZX:
SKO
NZX:
VGL
NZX:
RAK
ASX:
XRO
ASX:
CXZ
EV/Rev 0.9x 1.2x 2.6x 3.5x 7.6x 2.8x 1.1x 13.9x 2.6x
EV/EBITDA 3.6x 4.7x 17.6x NM NM NM 4.7x 122.8x 26.6x
Rev growth
LTM 52.2% 52.2% 37.3% 92.9% 160.4% 37.7% 4.9% 27.6% 9.6%
SaaS gross
margin 85.1% 85.1% NA 53.1% 77.5% 62.5% NA 87.3% 71.0%
EBITDA
margin 25.8% 25.8% 14.9% NM NM NM 23.4% 11.3% 9.8%
Acquirer Target Industry Date Public/Private
N. Harris Computer CIM IT May-23 Private
Datamine Australia LandTrack Systems IT Dec-22 Private
N. Harris Computer Ternity Group Other Dec-22 Private
N. Harris Computer MCATS Healthcare Jun-22 Private
Jonas Software Seekom IT Dec-21 Private
Volaris Group AMS IT Nov-21 Private
Volaris Group Decideware IT Oct-21 Private
Vela Software Figtree Systems IT Jun-21 Private
N. Harris Computer Meridian Health Info. Healthcare Oct-20 Private
Acquirer Target Industry Date Public/Private
Volaris Group Infoview Technologies IT Sep-20 Private
Vela Software KRISP Systems (asset) IT Aug-20 Private
Vela Software Foresiight IT Feb-20 Private
Volaris Group Musac Holdings Other Feb-20 Private
Petrosys Globe Claritas IT Nov-19 Private
Jonas Software Impos Solutions IT Nov-19 Private
G. Jonas Computing Pacsoft International IT Oct-19 Private
Jonas Software Happen Business IT Feb-19 Private
Smartrak Holdings Lingo Systems (asset) IT Feb-19 Private
Pre-announcement
Overview
TASK (previously known as Plexure) is a leading point-of-sale mobile engagement
software company. Following the Plexure and TASK merger in 2021:
• TASK executives took over the management of the group.
• Plexure division revenue increased reflecting new commercial terms with
McDonald’s, increased user numbers and customer engagement.
• The combined team was right-sized, driving efficiencies and increasing revenue
per FTE.
• EBITDA became positive in FY23.
TASK has recently announced they are set to delist from the NZX, after shifting
their primary listing to the ASX last year.
Annual revenue (pre and post merger)
17
26 29 26
18 48
14
14 14
17
-
20
40
60
80
FY19 FY20 FY21 FY22 FY23
NZD $m TASK
Plexure
Tech Insights #292
Up to the TASK?
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Mergers & acquisitions
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Annual adjusted EBITDA
TASK / Plexure
merger
Pre merger (FY19, FY20 and FY21) Plexure had a March financial year end and
TASK had a June financial year end. FY22 and FY23 are March year. Note - FY22
TASK revenue for H1 (pre merger) is an estimate.
6.9
1.6
(5.8)
(15.0)
9.9
(20)
(15)
(10)
(5)
-
5
10
FY19 FY20 FY21 FY22 FY23
NZD $m
Group EBITDA TASK EBITDA Plexure EBITDA
EBITDA has been adjusted for the non-cash impact of employee share schemes
and any capitalised development costs. Pre merger TASK and Plexure EBITDA
(Group EBITDA) have been combined for FY19, FY20 and FY21.
-
100
200
300
400
-
100
200
FY21 FY22 FY23
Revenue per FTE (NZD $000s)
FTE
FTE Revenue per FTE (NZD $000s)
Revenue per FTE (TASK and Plexure combined)
FTE headcount includes TASK and Plexure staff for all periods. Pre merger
TASK and Plexure revenues have been combined for FY21 and FY22.
-
0.50
1.00
1.50
2.00
Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Share price (NZD $)
TASK share price and history (NZX)
Oct-21
Plexure
acquired TASK
May-23
Announcement
TASK is set to
delist from NZX
Aug-22
Primary listing
shifted to ASX and
renamed Task
Group Holdings
Apr-19
McDonald’s
purchased a 9.9%
equity stake
Nov-20
Plexure commenced
trading on ASX
5 largest shareholders (pre and post merger)
The majority of the deal was structured as equity (70%). TASK co-founders Jennifer
and Kym Houden now collectively hold 35% of total capital. McDonald’s initially
invested in Plexure in 2019 and was supportive of the TASK transaction. McDonald’s
has a top-up right to maintain a 9.9% holding, however this has not been exercised.
FY21 (as of Mar 21) FY23 (as of Mar 23)
Shareholder and % issued Shareholder and % issued
1 Forsyth Barr Custodians (NRL) 10.4% Jennifer Anne Houden 17.5%
2 McDonald’s (Atlas Bear) 9.5% Kym Houden 17.5%
3 Allectus Capital Limited 7.3% NZ Depository Nominee Limited 8.4%
4 Forsyth Barr Custodians (E) 3.1% Forsyth Barr Custodians (NRL) 6.5%
5 NZ Depository Nominee Limited 3.1% McDonald’s (Atlas Bear) 5%
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the
actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Mergers & acquisitions
Corporate finance advisory
Capital raising
26 June 2023
Tech Insights #292
Up to the TASK?
Key customer contracts
Historically the company has been dependent on a single large customer,
McDonald’s. Following a renegotiation of the McDonald’s contract and launch of the
new white label app – the customer mix is becoming more diversified.
McDonald’s Renegotiation of commercial terms and new
five year contract (from 1 Aug 2022).
Starbucks
Launch of global end-to-end platform and
white label Mobile Order and Pay app (2023).
Starbuck’s Australia is the first customer.
Pizza Capers
& Crust
Expanded contract and entry into quick service
restaurant (QSR) pizza vertical.
-
50
100
150
200
250
300
- 1 2 3 4 5 6 7
AUD $m
Year
Annual revenue growth profiles (AUD $m)
Tech Insights #291
T2D3
Page 1 of 2
Mergers & acquisitions
Corporate finance advisory
Capital raising
19 June 2023
Overview
T2D3 is a growth target for SaaS businesses (initially published by Battery Ventures). This strategy aims for a tripling of annual revenue for two years, then doubling for the next
three (triple, triple, double, double, double). T2D3 profile produces a path to AUD $144m annual revenue in less than 5 years. T2D3 is hard to achieve and only a few companies
satisfy this growth profile. This Tech Insights report explores which ASX listed tech companies have achieved these profiles. Note all values in this report are in AUD $m.
T2D3
$100m 7yrs
$50m 7yrs
Seek, Xero and Pushpay growth profiles (initial 7 years)
These companies have experienced strong and fast growth. Enterprise Values (EV) after
initial 7 years were: Seek $5.3b (2013), Pushpay $1.5b (2023) and Xero $7.1b (2019). Year 1
begins when a company’s annual revenue exceeds $2m AUD (i.e., not necessarily in the
year they IPO).
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
SEEK
Pushpay
T2D3
growth:
Triple
$2m to
$6m
Triple
to
$18m
Double
to
$36m
Double
to
$72m
Double
to
$144m
$100m+
annual
revenue
by year 7:
$1m $2m $4m $9m $20m $44m $100m
$50m+
annual
revenue
by year 7:
$1m $2m $3m $6m $13m $25m $50m
These growth profiles are a useful way to measure a company's historic growth
and are used as a guide for companies aiming to scale. T2D3 profile is the main
goal, however in practice this can be hard to achieve.
Two further growth profiles which can be used to measure growth is a $100m
annual revenue target within 7 years and a $50m annual revenue target within
7 years.
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Tech Insights #291
T2D3
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the
actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions, you should seek appropriate personalised financial advice.
Mergers & acquisitions
Corporate finance advisory
Capital raising
19 June 2023
Overview
This table looks at selected listed ASX tech companies and compares their historic growth against the frameworks outlined on page 1. We have noted companies achieving
T2D3 where $144m AUD annual revenue was achieved by year 5 (once reaching the $2m annual revenue threshold). Revenue growth includes growth via acquisitions. *As
Pushpay is no longer listed, ‘current EV’ is noted as the implied acquisition enterprise value as at April 2023.
Revenue Revenue growth Margin (LTM) Rev multiple Growth target achieved?
Name Ticker IPO date Current EV LTM NTM LTM NTM EBITDA 40% rule LTM NTM T2D3 $100m rev $50m rev
Pushpay Holdings* ASX:PPH Aug 14 1,547 330 NA 28% NA 23% 51% 4.7x NA Y Y Y
Xero Limited ASX:XRO Jun 07 16,958 1,308 1,570 29% 20% 4% 32% 13.0x 10.8x Y Y
SEEK Limited ASX:SEK Apr 05 9,634 1,226 1,258 29% 3% 31% 59% 7.9x 7.7x Y Y Y
WiseTech Global ASX:WTC Apr 16 24,401 729 938 33% 29% 29% 62% 33.5x 26.0x Y Y Y
Computershare ASX:CPU May 94 15,928 4,286 4,837 33% 13% 16% 49% 3.7x 3.3x Y Y Y
carsales.com ASX:CAR Sep 09 10,009 599 894 27% 49% 38% 65% 16.7x 11.2x Y Y
NEXTDC ASX:NXT Dec 10 7,220 306 386 14% 26% 46% 60% 23.6x 18.7x Y Y
Domain Group ASX:DHG Nov 17 2,422 368 386 12% 5% 20% 32% 6.6x 6.3x Y Y Y
Iress ASX:IRE Nov 00 2,309 618 637 4% 3% 19% 23% 3.7x 3.6x Y
Dicker Data ASX:DDR Jan 11 1,812 3,104 3,392 25% 9% 4% 29% 0.6x 0.5x Y Y Y
PSC Insurance Group ASX:PSI Dec 15 1,789 268 312 17% 16% 29% 46% 6.7x 5.7x Y Y
Link Administration ASX:LNK Oct 15 1,404 1,174 1,163 1% (1%) 10% 11% 1.2x 1.2x Y Y Y
Codan ASX:CDA Nov 03 1,365 461 449 (8%) (3%) 33% 25% 3.0x 3.0x Y Y
Life360 ASX:360 May 19 1,252 366 483 95% 32% (17%) 78% 3.4x 2.6x Y Y Y
Data#3 ASX:DTL Dec 97 1,087 2,358 2,692 12% 14% 2% 14% 0.5x 0.4x Y Y
Megaport ASX:MP1 Dec 15 1,084 124 177 33% 42% (25%) 7% 8.7x 6.1x Y
SiteMinder ASX:SDR Nov 21 790 133 170 26% 27% (20%) 6% 5.9x 4.7x Y
Tyro Payments ASX:TYR Dec 19 566 397 443 46% 11% (3%) 43% 1.4x 1.3x Y Y Y
FINEOS Corporation ASX:FCL Aug 19 522 194 211 2% 9% (6%) (3%) 2.7x 2.5x Y Y
Appen ASX:APX Jan 15 440 571 492 (7%) (14%) 18% 11% 0.8x 0.9x Y Y
ReadyTech ASX:RDY Apr 19 389 90 112 41% 24% 15% 56% 4.3x 3.5x Y
Vista Group ASX:VGL Aug 14 292 126 133 36% 6% (3%) 33% 2.3x 2.2x Y
Nuix ASX:NXL Dec 20 275 156 171 (11%) 10% 54% 43% 1.8x 1.6x Y Y
Bigtincan ASX:BTH Mar 17 273 122 134 73% 10% (14%) 59% 2.2x 2.0x Y
Bravura Solutions ASX:BVS Nov 16 210 253 242 (3%) (4%) 24% 22% 0.8x 0.9x Y Y
Mean 4,159 787 903 24% 14% 13% 37% 6.4x 5.3x
Median 1,365 368 446 26% 11% 16% 33% 3.7x 3.2x
Tech Insights #290
International acquirers
Mergers & acquisitions
Corporate finance advisory
Capital raising
12 June 2023
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Overview
There have been over 3,700 M&A deals completed in New Zealand since the end of 2010, with a large number completed by international acquirers. In this weeksTech Insights report we take a lookat the top ten most acquisitive companies of New Zealand businesses, whose ultimate parent company exists outside of Aotearoa. We give an overview of who these businesses are, the types of businesses they acquire, and present some other interesting metrics.
Arthur J. Gallagher & Co. (NYSE:AJG) is an American firm headquartered in Illinois, established in 1927 and is one of the largest insurance brokers in the world with a market cap. of NZD $72 billion.
EQT, founded in 1994, is a €210 billion Swedish global investment firm, investing in private equity, infrastructure, real estate, and venture capital.
Vocus Group is an international telecommunications company headquartered in Sydney, Australia.In June 2021, the business was acquired by Macquarie Infrastructure for NZD $3.7 billion.
BayWa AG, (XTRA:BYW) an NZD $2.4 billion market cap. agricultural trading and services company headquartered in Munich. BayWA AG operates internationally, specialising in agriculture, energy, and construction.
Centuria Capital Group (ASX:CNI) is anASX-listed real estate investment managerwith a 35-year track-record, AUD $21.2 billion in assets under management and an NZD $1.4 billion market cap.
KKR & Co., (NYSE:KKR) is an American global investment company that manages multiple alternative asset classes, including private equity and hedge funds, with a market cap of NZD $77.6 billion.
AUB Group (ASX:AUB) isan NZD $3 billion market cap. ASX-listed company comprising insurance brokers and underwriting agencies operating in 450 locations across Australasia.
WPP (LSE:WPP) is a multinational advertising and public relations company headquartered in London and is one of the world’s largest communications service groups with a market cap. of NZD $18.9 billion.
Constellation Software (TSX:CSU) is a Canadian diversified software company and is listed on the Toronto Stock Exchange with a current market cap. of NZD $70 billion.
The Ontario Teachers' Pension Plan Board (OTPPB) is a leading pension fund in Canada, managing the retirement savings of over 300k active and retired teachers, with NZD $289 billion in funds under management.
Tech Insights #290
International acquirers
Mergers & acquisitions
Corporate finance advisory
Capital raising
12 June 2023
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Disclaimer The information provided in this report has been sourced from S&P Global Market Intelligence. Clare Capital holds no responsibility over the actual numbers.
Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Deal statistics
•
73 transactions were completed in total by the ten acquirers, 40 of which had terms disclosed. 83% were cash only, 10% were for stock, and 8% a mix of both.
•
Of the 40 disclosed transactions, 68% were paid all upfront, 15% included a contingent payment and 17% a non-contingent payment.
•
The largest disclosed transaction by size was by EQT Partners with its purchase of Metlifecare for NZD $1.6 billion.
•
Unsurprisingly, the majority of acquired companies were from Auckland (48%), Wellington (15%), and (10%) Christchurch.
•
Of all the transactions we looked at, 20% of acquirers have acquired more than one business.
Number of transactions by year
-
2
4
6
8
10
12
14
16
18
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Transactions by industry
-
5
10
15
20
Financials
Information Technology
Industrials
Communication Services
Health Care
Consumer Staples
Real Estate
Utilities
Consumer Discretionary
Advised Heyday on its sale to JWT / WPP.
Advised Seekom on its sale to Jonas / Constellation Software.
Number of transactions by acquirer
-
2
4
6
8
10
AUB Group
KKR & Co.
Arthur J. Gallagher & Co.
Centuria Capital
Constellation Software
EQT Partners
BayWa AG
Vocus Group
WPP
OTPPB
Colours in the left-hand side chart reflect the industries in the right-hand side chart.
#289 VC & PE funds raised
Tech Insights #289
VC & PE funds raised
Mergers & acquisitions
Corporate finance advisory
Capital raising
29 May 2023
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Overview
In this week’s Tech Insights report we delve into a brief history of New Zealand private equity and venture capital funds raisedover time. New Zealand venture capital firm Movacrecently announced it closed its sixth fund after raising a total of NZD $202 million, which in the current environment is a great outcome. As the chart below shows, the level of private equity and venture capital has materially grown in recent times. Note this analysis doesn’t include co-investment vehicles which increase the total funds further.
Funds raised (NZD $m)
1990
1995
2000
2005
2010
2015
2020
2025
Direct Capital
Pencarrow
Pioneer Capital
Movac
Waterman
GD1
Blackbird Aotearoa
Oriens Capital
Icehouse Ventures
Nuance Capital
Pacific Channel
Hillfarrance
400
50
Size of bubble represents fund size (NZD millions)
Tech Insights #289
VC & PE funds raised
Mergers & acquisitions
Corporate finance advisory
Capital raising
29 May 2023
-
1,000
2,000
3,000
4,000
5,000
6,000
1993
1998
2003
2008
2013
2018
2023
VC
PE
Who
Type
Raised ($m)
Funds
Currentinvestments
Exits
Direct Capital
PE
1,358
6
8
31
Pencarrow PE
PE
992
7
10
13
Pioneer Capital
PE
776
4
14
14
Movac
VC
655
6
39
10
Waterman PC
PE
513
4
6
11
GD1
VC
195
3
27
1
Blackbird Aotearoa
VC
134
2
Oriens Capital
PE
130
2
7
2
Icehouse Ventures
VC
110
1
Nuance Capital
VC
57
1
6
0
Pacific Channel
VC
50
1
38
7
Hillfarrance
VC
36
1
15
0
Fund statistics
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Total funds raised ($m)
DisclaimerThe information provided in this report has been sourced and calculated from public information from fund websites. ClareCapital holds no responsibility over the actual numbers. ClareCapital is not an Authorised Financial Adviser. If you are making investment decisionsyou should seek appropriate personalised financial advice.
Highlights
•
Average years between private equity fund raises 4.9 years
•
Average years between venture capital fund raises 4.2 years
•
Average private equity fund size $165 million
•
Average venture capital fund size $74 million
2006: Sale of TradeMe
2007: Xero IPO and KiwiSaver introduced.
Note: we’re unable to determine current and past investments from Blackbird Aotearoa and Icehouse’s websites, as a result this information is left blank.
#288 Activision Blizzard acquisition
Tech Insights #288
Activision Blizzard acquisition
Page 1 of 2
Mergers & acquisitions
Corporate finance advisory
Capital raising
22 May 2023
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Overview
In January 2022, Microsoft announced it was acquiring listed video game developer Activision Blizzard at an implied Enterprise Value of USD $69B. The acquisition of Activision
Blizzard would allow Microsoft to add more titles to its subscription platform; Game Pass. Approval of the deal is going through various international regulators, with concern
about Microsoft (the makers of Xbox) leveraging the content of Activision Blizzard (Call of Duty, World of Warcraft, etc.) in a potentially anti-competitive way. It will be
interesting to see whether this deal completes, and if not, who stops it.
-
20%
40%
60%
80%
100%
-
2
4
6
8
10
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Product sales
In-game, subscription & licensing
EBITDA margin
Gross margin
-
2
4
6
8
10
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
USA United Kingdom Asia Pacific Other
-
100
200
300
400
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Activision Blizzard Microsoft
Activision Blizzard revenue split (USD $B) and margins Activision Blizzard revenue by geography (USD $B)
Share price index
Deal announced
December year end
UK regulators move to
block the deal
Tech Insights #288
Activision Blizzard acquisition
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Disclaimer The information provided in this report has been solely sourced and calculated from S&P Global Market Intelligence. Clare Capital holds no responsibility over the
actual numbers. Clare Capital is not an Authorised Financial Adviser. If you are making investment decisions you should seek appropriate personalised financial advice.
Enterprise value / LTM EBITDA
Mergers & acquisitions
Corporate finance advisory
Capital raising
22 May 2023
-
5x
10x
15x
20x
25x
30x
35x
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Activision Blizzard Microsoft
-
2x
4x
6x
8x
10x
12x
14x
16x
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Activision Blizzard Microsoft
Company Country Top game EV Revenue EBITDA Revenue growth Gross margin EBITDA margin EV/Revenue EV/EBITDA
Activision Blizzard USA Call of Duty 52,832 8,143 2,091 -2% 70% 26% 6.5x 25.3x
EA USA FIFA 33,572 7,426 2,099 6% 77% 28% 4.5x 16.0x
Take-Two USA GTA 25,654 5,350 432 53% 43% 8% 4.8x 59.4x
Nexon Japan MapleStory 15,145 2,861 988 40% 69% 35% 5.3x 15.3x
Bandai Namco Japan Tekken 14,292 7,325 1,092 11% 37% 15% 2.0x 13.1x
Capcom Japan Resident Evil 7,836 932 401 14% 59% 43% 8.4x 19.5x
Konami Japan Pro Evolution 6,583 2,325 569 5% 39% 24% 2.8x 11.6x
Square Enix Japan Final Fantasy 4,658 2,539 379 -6% 51% 15% 1.8x 12.3x
Ubisoft France Assassin's Creed 4,331 1,890 833 -15% 88% 44% 2.3x 5.2x
CD Projekt Poland The Witcher 2,498 214 95 7% 74% 44% 11.7x 26.3x
Median 11,064 2,700 701 7% 64% 27% 4.7x 15.7x
Enterprise value / LTM revenue
Listed comparators USD $M (LTM financials)
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