Unlocking

#

268

4 Nov

Pushpay takeover offer

#

236

18 Feb

Xero to Hero

#

232

3 Dec

New Zealand's Technology Boom

#

199

19 Mar

Vend and Seequent

#

87

6 Jul

2018

SaaS Metrics Cheat Sheet

#

Heading

#

Heading

#

Heading

#

Heading

#

Heading

#

Heading

#

367

7 Apr

2025

Cloud Index as at 31 March 2025

#

268

4 Nov

Pushpay takeover offer

#

236

18 Feb

Xero to Hero

#

232

3 Dec

New Zealand's Technology Boom

#

199

19 Mar

Vend and Seequent

#

87

6 Jul

2018

SaaS Metrics Cheat Sheet

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Tech Insights #308

NZX 50 index comparison

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Mergers & acquisitionsCorporate finance advisoryCapital raising

16 October 2023

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Overview

This Tech Insights report investigates the composition of New Zealand’s primary index (NZX 50) against well-known international indices. The NZX 50 has a comparatively large weighting in Industrials (driven by Auckland International Airport, Infratil and Mainfreight), Healthcare (driven by F&P Healthcare and EBOS) and Utilities (driven by Meridian, Contact and Mercury). The NZX 50 has the smallest exposure to sectors defined as cyclical. The second page of the report presents the performance of the indices over the last 2 years. The analysis on page 1 is at 30 September 2023.

Index constituents share of market cap by GICS sector

Index overview

Index composition

Index

Gross market cap (NZD $b)

HHI* index concentration (# constituents)

Top 10

(% of index)

Largest constituent (weight)

MSCI World

106,014

136

20%

Apple (5%)

S&P 500

63,531

31%

Apple (7%)

FTSE 100

4,135

50%

Shell (9%)

ASX 200

2,662

47%

BHP (11%)

NZX 50

301

64%

F&PH (11%)

10%

20%

30%

40%

Industrials

Financials

Health Care

ConsumerDiscretionary

Real Estate

ConsumerStaples

Materials

Utilities

InformationTechnology

CommunicationServices

Energy

MSCI World

S&P 500

FTSE 100

ASX 200

NZX 50

14%

66%

36%

29%

30%

43%

19%

30%

48%

40%

44%

15%

35%

23%

21%

50%

100%

NZX 50

ASX 200

FTSE 100

S&P 500

MSCI World

Type (Morningstar)

Definition

GICS sectors

Cyclical

Highly sensitive to business cycle peaks and troughs

Materials, Consumer Discretionary, Financial Services and Real Estate

Sensitive

Moderate correlations with business cycles

Communication Services, Energy, Industrials and Information Technology

Defensive

Typically counter-cyclical through business cycles

Consumer Staples, Health Care and Utilities

*HHI (Herfindahl-Hirschman index) measures the degree of concentration. The effective number of constituents is calculated as 1 / the sum of squared constituent weights.

Tech Insights #308

NZX 50 index comparison

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.

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Technology sector performance (total return - last 2 years)

(50%)

(40%)

(30%)

(20%)

(10%)

10%

20%

30%

(50%)

(40%)

(30%)

(20%)

(10%)

10%

20%

30%

Oct 21

Jan 22

Apr 22

Jul 22

Oct 22

Jan 23

Apr 23

Jul 23

Oct 23

FTSE 100

ASX 200

S&P 500

MSCI World

NZX 50

Index performance (total return - last 2 years)

(50%)

(40%)

(30%)

(20%)

(10%)

10%

20%

30%

(50%)

(40%)

(30%)

(20%)

(10%)

10%

20%

30%

Oct 21

Jan 22

Apr 22

Jul 22

Oct 22

Jan 23

Apr 23

Jul 23

Oct 23

FTSE Tech

ASX Tech

S&P 500 IT

Global IT

NZX IT

‍

16 Oct

308

NZX 50 index comparison

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

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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%)

Sep 22

5.2x

7.4x

Change

13%

(25%)

US Cloud Index

Average

12MMA

Sep 23

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:

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

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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%

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%)

FCF margin

16%

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%

16%

27%

EV / LTM rev

7.1x

3.0x

4.1x

11.4x

Revenue growth (LTM)

30%

21%

36%

Gross margin

53%

28%

60%

81%

Operating margin

(15%)

12%

22%

FCF margin

(5%)

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.

‍

9 Oct

Cloud Index as at 30 September 2023

307

2020

2022

2023

2020

2021

2022

2021

2022

2014

2020

2022

2021

2018

2023

2019

2021

Tech Insights #306

IT and digital services landscape

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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

2023

2020

2019

2022

2017

2021

2016

2018

Tech Insights #306

IT and digital services landscape

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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.

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

‍

2 Oct

IT and digital services landscape

306

Tech Insights #305

KiwiSaver

Mergers & acquisitions

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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)

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

unknown

1,600

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

21,000

1,000

1,524

3.2%

Oct 2021

NZX

SuperLife

41,000

1,270

854

2.7%

Dec 2014

Fisher Funds

Tower Investments

unknown

894

8.8%

Feb 2013

Kiwibank

Gareth Morgan Investments

57,000

1,500

1,018

3.9%

Jan 2012

Fisher Funds

Huljich KiwiSaver (HWM)

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%

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%

Vista Group

34%

31%

20%

Gentrack

15%

13%

PaySauce

51%

34%

11%

Appen

66%

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

103

136

212

260

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.

10%

20%

30%

40%

50%

60%

70%

80%

90%

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.

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Vista Group

Gentrack*

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY18

FY19

FY20

FY21

FY22

NZD $m

0.3

0.5

0.4

0.8

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

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY19

FY20

FY21

FY22

NZD $m

Appen

ikeGPS

Serko

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%

FY19

FY20

FY21

FY22

FY23

NZD $m

10%

20%

30%

40%

50%

60%

70%

80%

90%

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.

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY18

FY19

FY20

FY21

FY22

NZD $m

Capitalised R&D

Expensed R&D

% of total R&D capitalised

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‍

18 Sep

304

SaaS R&D capitalisation

39%

34%

24%

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)

(10)

Net revenue

Client incentives

Gross revenue

Visa FY22 Revenue

(13)

Net revenue

Client incentives

Gross revenue

Mastercard FY22 Revenue

Other

24%

26%

35%

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

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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

15%

American Express

Closed-loop payments and issuer of credit

Dec

116

16%

20%

Block (Square)

Financial services and online payments

Dec

(1%)

22%

(4%)

Mean

222

13%

14%

23%

Median

116

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

Visa*

Mastercard*

PayPal

American Express

Block

Revenue (USD $b)

* 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.

‍

11 Sep

303

Card processing networks

Page 1 of 2

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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

Samsara

Aspen

Manhattan Associates

Ceridian

Okta

Paylocity

SAP

Dassault Systèmes

Wolters Kluwer

10%

20%

30%

40%

50%

60%

70%

EV / LTM revenue

Rule of 40

Australia

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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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

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%

‍

4 Sep

Top 50 SaaS companies (2023)

302

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

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

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

Sprout Agritech

The Warehouse

Trade Me

Xero

Z Energy

Freightways

Genesis Energy

Heartland Group

Meridian

Rakon

The Warehouse

Trade Me

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.

20%

40%

60%

80%

100%

Investments

Minority acquisitions

Total

End state following transaction by the strategic party

Full acquisition

Remained minority

Divestment

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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‍

28 Aug

Corporate strategic transactions

301

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.

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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.

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

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.

–

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‍

21 Aug

300

300 – the perfect score

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

Delivery

Mobility

(6)

(4)

(2)

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.

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.

‍

14 Aug

Ubering towards profitability

299

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.

100

MILKRUN

Voly

Send

Quicko

Capital raised (NZD $m)

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%

44%

42%

68%

35%

48%

34%

89%

65%

52%

66%

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

30%

8.9x

3.2x

(64%)

(53%)

Uber

United States

157,175

56,860

32%

5.1x

2.8x

(46%)

DoorDash

United States

48,285

12,487

47%

(9%)

12.3x

3.9x

(68%)

(49%)

DiDi

China

23,288

32,990

(13%)

13%

(9%)

0.7x

Delivery Hero

Germany

24,112

14,224

26%

(13%)

4.4x

1.7x

Grab

Singapore

16,124

2,777

23%

18%

(57%)

9.5x

5.8x

(39%)

(70%)

Zomato

India

14,000

1,610

14%

61%

(12%)

8.7x

HelloFresh

Germany

7,916

12,870

65%

2.0x

0.6x

(69%)

(62%)

Just Eat

Netherlands

6,914

9,126

22%

(4%)

3.2x

0.8x

(76%)

(83%)

Deliveroo

United Kingdom

2,682

3,841

33%

(8%)

0.7x

Blue Apron

United States

728

34%

(14%)

0.4x

0.1x

(68%)

(95%)

My Food Bag

New Zealand

176

(4%)

24%

0.4x

Mean

39,654

16,841

34%

(9%)

5.7x

2.4x

(61%)

(58%)

Median

15,062

10,806

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

‍

7 Aug

MILKRUN and food delivery services

298

(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

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

CTS

CAC

R&D

G&A

Revenue

100

150

200

250

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

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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

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

ARPU ($000s)

CAC ratio

EXAMPLE business: CAC ratio and ARPU

‍

31 Jul

10X revenue to 10X EBITDA

297

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)

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

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

Average age

26.8

Most WC wins

USA (4 times)

# of matches

60.1

57.9

7.3

3.5

0.3

0.03

16.5

10.0

2.6

3.1

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.

‍

24 Jul

2023 FIFA Women's World Cup

296

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%

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

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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%)

(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%

(0%)

32%

47%

27%

98%

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

‍

17 Jul

Rule of 40 - Australia & New Zealand

295

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

Page 1 of 2

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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

(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

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

14%

24%

34%

ANZ Cloud Index

25th

75th

90th

30 Jun 2023

percentile

Median

percentile

EV (NZD $m )

152

403

1,540

EV / NTM Rev

1.3x

2.8x

4.0x

10.8x

Revenue growth (NTM)

18%

31%

43%

EV / LTM rev

1.3x

2.6x

4.5x

9.3x

Revenue growth (LTM)

26%

61%

86%

Gross margin

21%

52%

75%

93%

Operating margin

(38%)

(5%)

10%

20%

FCF margin

(20%)

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

12.0x

10.8x

‍

10 Jul

Cloud Index as at 30 June 2023

294

100

120

140

160

180

FY20 FY21 FY22 FY23

Australia

USA

10x

12x

14x

16x

FY20 FY21 FY22 FY23

EV/revenue

EV/EBITDA

Tech Insights #293

EROAD takeover

Mergers & acquisitions

Corporate finance advisory

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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 $)

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

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Comparable transactions EV/revenue multiples

Australasian acquisitions made by Constellation Software between 2019 and 2023

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)

26 29 26

18 48

14 14

FY19 FY20 FY21 FY22 FY23

NZD $m TASK

Plexure

Tech Insights #292

Up to the TASK?

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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)

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.

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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.

‍

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

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Mergers & acquisitions

Corporate finance advisory

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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

$18m

Double

$36m

Double

$72m

Double

$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

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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

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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.

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Unsurprisingly, the majority of acquired companies were from Auckland (48%), Wellington (15%), and (10%) Christchurch.

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Of all the transactions we looked at, 20% of acquirers have acquired more than one business.

Number of transactions by year

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Transactions by industry

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

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.

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12 Jun