7 Mile Advisors Sectorwatch: E-commerce...1 - year revenue growth compared to revenue growth average...

March 2021

Sectorwatch:E-commerce

7 Mile Advisors

E-commerce

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Sector Dashboard

Public Basket Overview

Public Basket Performance

Operational Metrics

Valuation Comparison

Recent Deals

Appendix

2

Overview

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally.

DASHBOARD

PUBLIC BASKET PERFORMANCE

VALUATION COMPARISON

RECENT DEALS

• Summary metrics on the sector• Commentary on market momentum by comparing the

most recent 12-month performance against the last 3-year averages.

• Summary valuation and operating metrics for a basket of comparable public companies.

• Graphical, detailed comparison of valuation multiples for the public basket.

• The most recently announced deals in the sector

We advise on M&A and private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets.

We publish our sectorwatch, a review of M&A and operational trends in the industries we focus.

1 - year revenue growth compared to revenue growth average for last 3 years - Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining

-12.8%

5.6x

12.8x

35.1x

32.9x

0x 10x 20x 30x 40x 50x

Median TEV / LTM Revenue

Median TEV / LTM EBITDA

Median TEV / LTM EBIT

Median Price / LTM Earnings

4.6%

20.7%

61.9%

0% 10% 20% 30% 40% 50% 60% 70%

Median LTM Rev. Growth %

Median LTM EBITDA Margin %

Median LTM GP Margin %

Dashboard

4

Operating Metrics

Valuation

REVENUE GROWTH MOMENTUM

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

M&A Activity

Deal Count

E-commerce Platforms

Platforms Overview

5

United States

Germany

Canada

India

Oracle 245,212 19,415 39,402 -0.5% 80.3% 49.3% 6.2x 12.6x 135,000 292

Adobe Systems 208,186 5,719 12,868 15.2% 86.6% 44.4% 16.2x 36.4x 22,516 572

Salesforce.com 188,838 4,960 20,286 28.0% 74.5% 24.5% 9.3x 38.1x 49,000 414

SAP 155,984 11,324 31,163 -0.8% 71.2% 36.3% 5.0x 13.8x 102,430 304

Shopify 128,131 495 2,929 85.6% 52.6% 16.9% 43.7x 258.8x 5,000 586

HCL Technologies 35,964 2,778 9,997 9.2% 46.5% 27.8% 3.6x 12.9x 159,682 63

BigCommerce 4,014 -25 152 35.9% 77.6% -16.1% 26.3x -163.8x 600 254

Company TEV $mLTM

EBITDA $mLTM Rev

$m

Rev Growth

YoYGP % EBITDA % TEV / Rev X

TEV / EBITDA X

# FTEsRev / FTE

$k

Public Basket - Platforms

6

Average 138,047 6,381 16,685 24.7% 69.9% 26.2% 15.8x 29.8x 67,747 355

Median 155,984 4,960 12,868 15.2% 74.5% 27.8% 9.3x 13.8x 49,000 304

0x2x4x6x8x

10x12x

Mar

-16

Jun-

16

Sep

-16

Dec

-16

Mar

-17

Jun-

17

Sep

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Dec

-17

Mar

-18

Jun-

18

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Mar

-19

Jun-

19

Sep

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Dec

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Mar

-20

Jun-

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Dec

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Mar

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TEV/Revenue - Median TEV/Revenue - Average

0x

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50x

Mar

-16

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Dec

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TEV/EBITDA - Median TEV/EBITDA - Average

Public Basket - PlatformsPublic EBITDA Multiples over Time

Public Revenue Multiples over Time

7

37.6x

7.2x

0x

5x

10x

15x

20x

25x

30x

35x

40x

45x

No

v-15

Jan-

16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-16

Jan-

17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-17

Jan-

18

Mar

-18

May

-18

Jul-

18

Sep

-18

No

v-18

Jan-

19

Mar

-19

May

-19

Jul-

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Sep

-19

No

v-19

Jan-

20

Mar

-20

May

-20

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Sep

-20

No

v-20

TEV/EBITDA - Median TEV/Revenue - Median

TEV/EBITDA - Average TEV/Revenue - Average

Operational Metrics

LTM Gross Profit Margin % LTM EBITDA %

8

(40%) (20%) - 20% 40% 60%

Median

BigCommerce

Shopify

Salesforce

HCL Technologies

SAP

Adobe Systems

Oracle

- 20% 40% 60% 80% 100%

Median

HCL Technologies

Shopify

SAP

Salesforce

BigCommerce

Oracle

Adobe Systems

Operational Metrics

LTM Revenue Growth %LTM Revenue per

Full Time Employee x 000’s

9

$- $200 $400 $600 $800

Median

HCL Technologies

BigCommerce

Oracle

SAP

Salesforce

Shopify

Adobe Systems

- 20% 40% 60% 80%

Median

SAP

Adobe Systems

Salesforce

HCL Technologies

Shopify

Operational Metrics

Accounts Receivable TurnoverAverage Days

Sales Outstanding

10

0x 5x 10x 15x

Median

SAP

Salesforce

BigCommerce

Oracle

Adobe Systems

Shopify

0 20 40 60 80 100

Median

Shopify

Adobe Systems

Oracle

BigCommerce

Salesforce

SAP

Valuation

TEV / LTM Revenue TEV / LTM EBITDA

11

0x 20x 40x 60x 80x

Median

HCL Technologies

SAP

Oracle

Salesforce

Adobe Systems

BigCommerce

Shopify

-400x -200x 0x 200x 400x 600x

Median

BigCommerce

Oracle

HCL Technologies

SAP

Adobe Systems

Salesforce

Shopify

Valuation

TEV / LTM EBIT Price / LTM Earnings

12

0x 500x 1000x 1500x 2000x

Median

Oracle

HCL Technologies

SAP

Adobe Systems

Salesforce

Shopify

0x 200x 400x 600x 800x

Median

Oracle

HCL Technologies

SAP

Adobe Systems

Salesforce

Shopify

12x 13x 22x 49x 66x

15.3%

(0.8%)

7.4%

16.8%

31.6%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0x

10x

20x

30x

40x

50x

60x

70x

LTM

RG

R%

EBIT

DA(x

) EBITDA(x) LTM RGR%

12x 13x 22x 49x 66x

47.1%

80.0%

70.5%

86.0%

74.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0x

10x

20x

30x

40x

50x

60x

70x

LTM

GP%

EBIT

DA(x

)

EBITDA(x) LTM GP%

Historical Valuation Multiples versus Gross Profit

Historical Valuation Multiples versus Revenue Growth Rate

Valuation

13

Recent Transactions

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Date Target BuyerTotal Transaction

Amount

Target Revenue (TTM at time of

deal) TEV /

Revenue TEV / EBITDA

09-Mar-21 Toplooks Klarna - - - -04-Mar-21 Downstream Jungle Scout - - - -04-Mar-21 Jungle Scout Summit Partners 110.00 - - -03-Mar-21 PrimaSeller Delhivery - - - -02-Mar-21 Invoice Delivery Services Premier 80.00 - - -

01-Mar-21 Fulfilmentcrowd BGF 10.40 - - -01-Mar-21 Macaw Avedon Capital Partners - - - -

26-Feb-21 Picodi Meliuz 22.18 - 7.44 -25-Feb-21 Yapo.cl Frontier Digital Ventures 19.50 - - -

23-Feb-21 PickupXL Klintberg & Way - - - -22-Feb-21 Market Pay (France) AnaCap Financial Partners 362.93 - 10.61 -

22-Feb-21 Marsplay EkAnek Networks - - - -19-Feb-21 Dooca Commerce Locaweb Internet Services 4.91 - 3.89 -

17-Feb-21 Bravo Business Media Investcorp Strategic Capital Group - - - -

17-Feb-21 DEAR Systems Cin7 - - - -16-Feb-21 Selz Amazon.com - - - -16-Feb-21 TWG (Toronto) Deloitte Digital - - - -15-Feb-21 Lengow Marlin Equity Partners - - - -13-Feb-21 WyzAnt IXL Learning - - - -11-Feb-21 Eletype Accel-KKR - - - -11-Feb-21 Sber Eapteka R-Pharm 152.55 - 1.70 -10-Feb-21 Webtiser Swisscom - - - -10-Feb-21 WIN Brands Group Assembled Brands 50.00 - - -

E-commerce - March 2021

AppendixPublic BasketContact Information

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Oracle provides database technology and enterprise resource planning, or ERP, software to enterprises around the world.

Founded in 1977, Oracle pioneered the first commercial SQL-based relational database management system. Today, Oracle has 430,000 customers in 175 countries, supported by its base of 136,000 employees.

Oracle

Oracle


17

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

Revenue Multiples - Oracle

TEV/Revenue Average

0x

2x

4x

6x

8x

10x

12x

14x

16x

EBITDA Multiples - Oracle

TEV/EBITDA (Analyst Normalized)Average

0x

5x

10x

15x

20x

25x

P/E Multiples - Oracle

P/E (Analyst Normalized) Average

Oracle

Company Name Date Deal Synopsis

Nor1 18-Nov-20 The company reached a definitive agreement to be acquired by Oracle (NYS: ORCL) for an undisclosed amount on November 18, 2020.

Sauce Video 27-Apr-20The company was acquired by Oracle (NYS: ORCL) for an undisclosed amount on April 27, 2020. The acquisition helps Oracle to enhance its portfolio with advanced video capabilities and to provide customers with a comprehensive set of content creation and management tools in order to create exceptional customer, employee and supplier experiences.


18

Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering,

The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).

Adobe Systems

Adobe Systems


19

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x

20.0x

Revenue Multiples - Adobe Systems

TEV/Revenue Average

0x5x

10x15x

20x25x30x35x40x45x50x

EBITDA Multiples - Adobe Systems


0x

10x

20x

30x

40x

50x

60x

70x

P/E Multiples - Adobe Systems


Adobe Systems


Workfront 07-Dec-20 The company was acquired by Adobe Systems (NAS: ADBE) for $1.5 billion on December 7, 2020.

Facebook (Oculus Medium) 09-Dec-19Oculus' virtual reality sculpting tool was acquired by Adobe for an undisclosed amount on December 09,2019. The acquisition will enable Facebook to accelerate 3D & immersive offerings.


20

Salesforce.com provides enterprise cloud computing solutions, including Sales Cloud, the company's main customer relationship management software-as-a-service product.

Salesforce.com also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration.

Salesforce.com

Salesforce.com


21

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

Revenue Multiples - Salesforce.com

TEV/Revenue Average

0x

10x

20x

30x

40x

50x

60x

70x

80x

90x

100x

EBITDA Multiples - Salesforce.com

TEV/EBITDA (Analyst Normalized)

0x200x400x600x800x

1000x1200x1400x1600x1800x

2000x

P/E Multiples - Salesforce.com


Salesforce.com


Acumen Solutions 3/23/20The company was acquired by Salesforce (NYS: CRM) for an undisclosed amount on February 1, 2021. The acquisition will enable Salesforce Professional Services to help industry customers get closer to their clients and constituents through the Customer 360 Platform.

Slack 1/6/20The company reached a definitive agreement to be acquired by Salesforce (NYS: CRM) for an estimated $27.7 billion on December 1, 2020. Under the terms of the agreement, the company's shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each of the company's shares.


22

Founded in 1972 by former IBM employees, SAP provides database technology and enterprise resource planning software to enterprises around the world.

Across more than 180 countries, the company serves 440,000 customers, approximately 80% of which are small to medium-size enterprises.

SAP

SAP


23

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

Revenue Multiples - SAP

TEV/Revenue Average

0x2x4x6x8x

10x12x14x16x18x

20xEBITDA Multiples - SAP


0x

5x

10x

15x

20x

25x

30x

35x

P/E Multiples - SAP


SAP


AppGyver 11-Feb-21 The company was acquired by SAP (ETR: SAP) for an undisclosed amount on February 11, 2021.

Signavio 27-Jan-21 The company reached a definitive agreement to be acquired by SAP (ETR: SAP) for EUR 1 billion on January 27, 2021.


24

Shopify offers an e-commerce platform primarily to small and midsize businesses.

The firm has two segments: subscription solutions (43% of fiscal 2018 revenue) and merchant solutions (57% of fiscal 2018 revenue). The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company's website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. Merchant solutions are add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

Shopify

Shopify


25

0.0x

10.0x

20.0x

30.0x

40.0x

50.0x

60.0x

Revenue Multiples - Shopify

TEV/Revenue Average

Shopify


Affirm 16-Sep-20The company raised $509.95 million of Series G venture funding in a deal led by Durable Capital Partners and Government of Singapore Investment Corporation (GIC) on September 16, 2020. Lightspeed Venture Partners, CMFG Ventures, Spark Capital, Founders Fund and 5 other investors also participated in the round.

6 River Systems 17-Oct-19The company was acquired by Shopify (TSE: SHOP) for $394 million on October 17, 2019. This will enable Shopify to help thousands of businesses improve their fulfillment operations, while 6 River Systems will continue to expand its industry-leading solution for warehouses.


26

HCL Technologies Ltd provides enterprises with IT solutions in India.

It focuses on offering Digital, Internet of Things Services, Cloud, Automation, Cybersecurity, Infrastructure Management, and Engineering Services to solve business problems for clients. While the company is based in India, it has international clients in a large number of countries. It offers solutions to a variety of industries including Financial Services, Public Services, Consumer Services, Healthcare, and Manufacturing. It operates in three segments Software services, IT Infrastructure services, and Business Process Outsourcing services. The firm emphasizes consultation services for firms, with the goal to offer them digital and design solutions. Most of the firm's revenue comes from Software services segment.

HCL Technologies

HCL Technologies


27

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

Revenue Multiples - HCL Technologies

TEV/Revenue Average

0x

2x

4x

6x

8x

10x

12x

14x

16x

EBITDA Multiples - HCL Technologies


HCL Technologies


Cisco (Self-Optimizing Network technology)

25-Oct-20The Self-Optimising Network business of Cisco Systems (NASDAQ: CSCO) was acquired by HCL Technologies (NSE: HCLTECH) for $50 million on October 25, 2020. The acquisition enables HCL Technologies to meet the growing needs of its customers in the telecommunications industry, which includes tier-one communications service providers globally.

DWS Group 21-Sep-20The company reached a definitive agreement to be acquired by HCL Technologies (NSE: HCLTECH) for AUD 162 million on September 21, 2020.


28

BigCommerce Holdings Inc is a new era of ecommerce.

Its software-as-a-service (SaaS) platform simplifies the creation of beautiful, engaging online stores by delivering a combination of ease-of-use, enterprise functionality, and flexibility. The company powers both its customers' branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point-of-sale systems. It operates in a single segment covering geographical areas of Americas - U.S.; Americas - other; EMEA; and APAC.

BigCommerce

BigCommerce


29

BigCommerce


Zing (Austin) 28-Apr-15The company was acquired by Bigcommerce for an undisclosed amount on April 28, 2015. Bigcommerce was backed by several VC investors.

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

45.0x

50.0x

Revenue Multiples - BigCommerce

TEV/Revenue Average

Contact Info7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions and provide market assessments and benchmarking.

As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. Securities offered through 7M Securities LLC.

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

John Cooper, Managing Director 704.973.3996 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Tim Frye, Senior Director 704.973.3994 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Ben Garber, Vice President 412.626.7898 [email protected]

Garth Martin, Vice President 704.973.3997 [email protected]

Nicholas Prendergast, Vice President 704.973.3995 [email protected]

Ariail Barker, Director, Sales & Marketing 704.981.2908 [email protected]

Ben Bruggeworth, VP, Business Development 704.365.8859 [email protected]

Steve Sypek, VP, Business Development 704.414.8736 [email protected]

Emily Halstenberg, Marketing & Sales Manager 704.409.9912 [email protected]

Alexis Papa, Marketing & Sales Coordinator 704.414.8732 [email protected]

Marty Johnson, Senior Associate 704.973.3999 [email protected]

Sydney Scadden, Senior Associate 704.973.3998 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Ilia Ulianchuk, Senior Analyst 704.414.8743 [email protected]

Nic Anderle, Analyst 704.826.7492 [email protected]

Luke Perda, Analyst 704.851.4013 [email protected]

Robin Siegel, Analyst 704.285.8173 [email protected]

Conor Smith, Analyst 704.855.2134 [email protected]

Sawyer Willingham, Analyst 704.285.8171 [email protected]

7 Mile Advisors Sectorwatch: E-commerce...1 - year revenue growth compared to revenue growth average...

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