SaaS Meter | Q1 2018 | Page 1

Q1 2018 Venture-Backed SaaS Commitment Breakdown and Average Fundraising Amount

Source: Pitchbook

SEED

Series A

Series B

Series C

Series D

Series E+

AverageFund. Amt.

$2.05mm

$9.51mm

$16.65mm

$22.81mm

$85.95mm

$87.11mm

30.6%

30.9%

17.4%

10.9%

7.6%

2.6%

Golub Capital’s Peter Fair interviewed Jonathan Spira, CFO at BROWZ

Peter: Tell us about BROWZ. How does your company maintain an edge in enterprise software, specifically in the SaaS supplier qualification and compliance management market?

Jonathan: BROWZ has developed a solution to achieve high supplier compliance through innovative patented technology, value-added services and best practices. A key differentiator is the software’s configurability. It enables us to tackle each client’s specific risk management strategy, rather than a one-size-fits-all approach. The framework also allows for rapid expansion: BROWZ has managed to regularly be first to market with new products and solutions, such as mobile applications.

Peter: What are the keys to a successful enterprise software product along with barriers to entry in your market?

Jonathan: Successful enterprise software solutions have powerful intellectual property and offer a value-added service using a signature approach. In our segment, SaaS providers must have deep expertise in the domain in which

Jonathan Spira, CFO at BROWZ

Peter Fair, Managing Director at Golub Capital

continued on page 2

Quick Meter ReadingA conversation with BROWZ and Golub Capital

States with highest percentage of Venture-Backed SaaS Deals in Q1 2018

Source: Pitchbook

38.2%

13.2%

6.2%

5.3%

4.5%

CA

NY

TX

MA

WA

Welcome to Golub Capital’s SaaS Meter. Here you’ll find a report that analyzes valuation & investment trends for SaaS companies. SaaS Meter leverages data from both private and publicly traded SaaS companies. The publicly traded companies are referred to as the “SaaS Index” which represents the weighted-average movement of the market capitalization for over 50 publicly traded SaaS companies.

Golub Capital Quarterly SaaS Valuation & Investment TrendsSaaS Meter

– SaaS Index company stock prices soared over 40%1 LTM beating the S&P 500 by just over 30%1

– Average Series D fundraising size is very close to average Series E fundraising size ($86mm2 vs. $87mm2)

– The Silicon Slopes offers a combination of a large, high-quality labor pool and strong VC/PE presence; recreation options and cost of living are drivers

– Hiring key talent is a major challenge fast-growing companies face as they try to keep pace

1. Source: CapIQ 2. Source: Pitchbook

they offer qualification services, an intimate understanding of their customers’ pain points and the ability to advise suppliers on how to adopt best practices using cost-effective processes.

New entrants in the space must overcome the technological challenges of building a quality solution. They must also establish credibility with large, conservative multinational clients. BROWZ derives considerable advantages from its existing network of client relationships which have a high percentage of shared suppliers. This network lowers barriers to adoption and TCO (total cost of ownership) for new clients—in many cases, ones that already have a meaningful percentage of their suppliers registered with us. New competitors would not have this advantage.

Peter: Where is the greatest possibility of increasing market share?

Jonathan: We see considerable international growth opportunities. We’re also well-positioned for dramatic growth in manufacturing, chemicals, transportation and energy.

Peter: You mentioned international growth opportunities. What are some of the challenges to global expansion?

Jonathan: For a company like BROWZ, successful global expansion is critical to providing high service levels for its predominantly multinational client base.

One key challenge in global expansion is managing multiple, divergent labor, tax and business regulations. Another is establishing a cohesive company culture across multiple regional satellite operations. It’s also essential to ensure strong communications with varied constituents—including personnel, professional advisors, vendors, suppliers and government officials— that operate across time zones. Finally, marketing messaging must be localized, not just translated.

Peter: BROWZ is headquartered in Draper, Utah. How has the tech environment evolved over the past several years in the “Silicon Slopes”?

Jonathan: Tech companies have identified the Silicon Slopes’ unique combination of a large, high quality labor pool and a strong local venture capital and private equity community. This extraordinary location also features a reasonable cost of living and offers a myriad of year-round

SaaS Meter | Q1 2018 | Page 2

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2015 2016 2017 20183

Weighted Average SaaS Index Revenue Multiple - Public Companies

Private Median Revenue Multiple - Private Companies

0.0x

Public1 vs. Private2 Revenue Multiple

Source: CapIQ, Golub Capital Internal Data

1. For companies on the SaaS Index 1.1.2015 – 3.31.20182. Private company data is primarily extracted from recent middle market private equity transactions3. LTM as of 3.31.2018

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LTM

Rev

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14.0x

8.0x

10.0x

12.0x

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6.0x

<20% 20-30% 30-40% 40-50% >50%

LTM Revenue Growth Rate %

0.0x

Q2’17 Q3’17 Q4’17 Q1’18

LTM Revenue Multiple vs. 1-Year Growth1

Source: CapIQ

1. For companies on the SaaS Index from 6.30.2017 – 3.31.2018

continued on page 3

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10.0x

8.0x

4.0x

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<50% 50-60% 60-70% 70-80% 80-90%Gross Margin %

Q2’17 Q3’17 Q4’17 Q1’18

LTM Revenue Multiple vs. Gross Margin Percentage1

Source: CapIQ

1. For companies on the SaaS Index from 6.30.2017 – 3.31.2018

Perc

enta

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hang

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45%

35%

25%

30%

40%

15%

10%

5%

0%

20%

Q1’17 Q2’17 Q3’17 Q4’17 Q1’18

S&P 500SaaS Index

SaaS Index Price Movement1 vs. S&P 500 Price Movement

Source: CapIQ

1. The SaaS Index represents the weighted-average movement of the market capitalization for 50+ publicly traded SaaS companies.

See the bottom of the page for the full company listing.See the page 5 for the full company listing.

SaaS Meter | Q1 2018 | Page 3

recreation options and is a gateway to five national parks (more than any other state, except California and Alaska).

However, the rapid influx of tech employers over the past few years is fueling growing competition for talent, driving up wages and extending hiring timelines.

Peter: What are some of the challenges for fast-growing companies?

Jonathan: One challenge is hiring key talent, including leadership, at the necessary pace to sustain growth. This hiring often needs to take place before you need it. Leadership and key personnel must cooperate and understand the unique challenges of rapid growth, such as high stress.

Another critical challenge is securing ongoing access to growth capital.

Finally, maintaining focus on evolving client needs and process improvement is key. It’s a fine line to walk between implementing continually enhanced controls and more effective processes without simultaneously creating burdensome bureaucracy.

Peter: What was your first job and what was your biggest lesson learned?

Jonathan: My first job, at age 16, was as a sales person at a Joseph Magnin department store in Los Angeles. I learned many valuable lessons: the importance of customer service, professionalism, punctuality, dependability, sales and persuasion. I also developed a lasting appreciation for team diversity that has stayed with me throughout my career.

“

”

Another critical challenge [for fast-growing

companies] is securing ongoing access to

growth capital.Jonathan Spira, CFO at BROWZ

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6.0x

LTM Other Software Revenue MultipleLTM SaaS Revenue Multiple

Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18

Weighted Average LTM Saas Revenue Multiple1 vs. LTM Other Software2 Revenue Multiple

Source: CapIQ

1. For companies on the SaaS Index from 3.31.2016 – 3.31.20182. Other Software is typically defined as companies with perpetual license revenue models

Aver

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R&D

Exp

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% 20%

25%

30%

10%

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15%

<2.5x 2.5x-5x 5x-7.5 7.5-10x 10x+LTM Revenue Multiple

0%

Average R&D Expenditure Percentage vs. LTM Revenue Multiple1

Source: CapIQ

1. For companies on the SaaS Index as of 3.31.2018

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FWD SaaS Revenue MultipleLTM SaaS Revenue Multiple

Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18

Weighted Average LTM Saas Revenue Multiple vs. Weighted Average FWD SaaS Revenue Multiple1

Source: CapIQ

1. For companies on the SaaS Index from 3.31.2016 – 3.31.2018

Aver

age

Gen

eral

Sal

es &

Adm

in E

xpen

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re %

40%

50%

70%

60%

20%

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30%

<2.5x 2.5x-5x 5x-7.5 7.5-10x 10x+

LTM Revenue Multiple

0%

Average General Sales & Admin Expenditure Percentage vs. LTM Revenue Multiple1

Source: CapIQ

1. For companies on the SaaS Index as of 3.31.2018

SaaS Meter | Q1 2018 | Page 4

SaaS Meter | Q1 2018 | Page 5

Q1 2018 SaaS Index Companies Sorted by Market CapCompanies in the SaaS Index, listed by Market, below:All data as of 3.31.2018.

Ticker Price Mkt Cap EV LTM Rev FWD Rev EV/LTM Rev EV/FWD Rev1 Year Rev

GrowthLTM Gross

ProfitCRM 116.30 85,176.11 82,887.42 940.73 1113.53 7.909096 6.5x 24.9% 7706.49NOW 165.45 28,904.12 28,298.25 1117.84 1221.88 14.63935 11.1x 39.0% 1433.25WDAY 127.11 26,947.32 25,170.82 10480.01 12673.80 11.74533 9.4x 36.1% 1513.64SPLK 98.39 13,918.09 12,851.33 1220.30 1351.19 10.11288 7.9x 33.8% 1014.38SHOP 124.59 13,125.72 12,182.44 884.29 898.65 18.09352 12.2x 72.9% 380.25DBX 31.25 12,282.00 12,676.10 545.53 636.78 11.45292 9.5x 31.0% 737.90VEEV 73.02 10,320.89 9,558.93 989.79 1153.46 13.94302 11.7x 26.0% 474.13GDDY 61.42 9,013.74 11,132.44 220.57 242.54 4.987877 4.3x 20.8% 1456.40ULTI 243.70 7,450.76 7,295.59 670.96 841.02 7.755252 6.6x 20.4% 587.03DATA 80.82 6,589.76 5,735.09 481.99 503.93 6.539006 5.9x 6.1% 763.50PAYC 107.39 6,342.93 6,332.71 417.04 498.43 14.62361 11.6x 31.6% 370.61LOGM 115.55 6,058.40 5,806.00 1270.79 1628.73 5.865916 5.0x 194.5% 787.88PFPT 113.65 5,744.59 5,610.94 515.29 694.19 10.88892 8.1x 37.2% 371.91ATHN 143.03 5,735.19 5,842.89 461.69 508.94 4.788076 4.3x 12.7% 648.40RNG 63.50 4,995.67 4,814.47 1933.03 2553.87 9.599651 7.6x 32.1% 380.26ZEN 47.87 4,948.87 4,701.92 230.83 277.03 10.9222 8.4x 38.0% 303.07TWOU 84.03 4,429.71 4,228.91 2143.05 2687.92 14.74762 10.5x 39.3% 229.38RP 51.50 4,283.79 4,863.02 877.06 968.10 7.247827 5.8x 18.1% 397.52OKTA 39.85 4,170.58 3,940.87 122.54 128.82 15.15777 11.4x 62.2% 179.24NEWR 74.12 4,109.31 3,876.28 256.74 254.32 11.74821 9.1x 36.0% 269.67HUBS 108.30 4,100.04 3,894.15 751.09 819.02 10.36747 8.0x 38.6% 299.88JCOM 78.92 3,873.85 4,524.85 501.53 633.64 4.047859 3.7x 27.9% 945.53WIX 79.55 3,729.97 3,497.85 685.57 818.76 8.217934 5.9x 46.7% 356.25MDSO 62.81 3,681.11 3,572.75 425.64 593.90 6.549109 5.6x 17.7% 418.74TWLO 38.18 3,597.75 3,306.88 217.36 262.85 8.287493 6.5x 43.9% 216.13ZS 28.07 3,293.50 3,428.01 333.84 406.72 22.21006 0.0x 92.2% 122.36ELLI 91.94 3,152.61 2,911.56 193.98 235.23 6.981465 5.8x 15.8% 256.13FEYE 16.93 3,111.26 2,994.04 79.08 85.63 3.986276 3.7x 5.2% 482.20CLDR 21.58 3,047.81 2,658.30 286.75 401.49 7.23459 6.1x 40.8% 209.41BOX 20.55 2,825.84 2,703.59 200.23 232.93 5.341567 4.5x 27.0% 370.89QLYS 72.75 2,810.22 2,521.81 433.05 543.95 10.92504 9.1x 16.6% 179.25PCTY 51.23 2,694.89 2,583.86 430.49 562.68 7.739871 6.4x 26.4% 196.79COUP 45.62 2,582.86 2,332.96 133.32 207.94 12.49044 10.2x 39.6% 126.87EBIX 74.50 2,345.82 2,707.71 176.49 193.02 7.439367 6.1x 22.0% 234.48CSOD 39.11 2,241.75 2,211.81 375.61 483.92 4.588966 4.4x 13.9% 339.12MDB 43.40 2,194.98 1,916.01 97.95 133.18 12.39981 8.9x 52.4% 111.66KXS 82.84 2,115.05 1,916.41 207.87 235.21 14.37481 9.2x 15.0% 93.54BL 39.21 2,095.47 1,983.33 329.95 424.04 11.20329 8.9x 43.8% 135.55TTD 49.62 2,085.65 1,956.70 261.81 327.74 6.348442 4.8x 51.9% 241.99AYX 34.14 2,056.01 1,882.24 506.14 605.82 14.30199 10.5x 53.4% 109.80QTWO 45.55 1,914.39 1,814.74 2231.90 2600.53 9.355401 7.7x 29.1% 94.49MB 38.90 1,833.81 1,616.72 673.30 997.92 8.852639 6.9x 31.4% 130.76WAGE 45.20 1,791.57 1,144.01 182.63 233.53 2.477879 2.2x 26.6% 292.29VRNS 60.50 1,711.37 1,574.44 143.80 181.30 7.243335 6.0x 32.2% 196.58FIVN 29.79 1,690.13 1,667.92 74.99 0.00 8.330239 7.2x 23.5% 117.12HDP 20.37 1,587.31 1,514.80 158.81 208.05 5.785872 4.6x 41.9% 180.72APPN 25.18 1,529.47 1,455.71 399.02 511.78 8.23659 7.3x 33.0% 112.14INST 42.15 1,406.13 1,364.74 363.97 443.39 8.593782 6.6x 43.2% 112.43APPF 40.85 1,391.72 1,345.81 65.66 68.08 9.358682 7.4x 36.2% 88.52FSCT 32.44 1,271.38 1,107.82 188.52 222.98 5.015669 4.1x 32.4% 162.00APTI 28.34 1,207.74 1,058.81 104.35 136.54 5.616475 4.7x 17.4% 129.97SPSC 64.07 1,105.25 941.93 308.22 404.09 4.270518 3.9x 14.1% 146.94EVBG 36.60 1,040.95 984.76 186.78 229.78 9.436948 7.2x 35.8% 72.85WK 23.70 1,008.85 951.75 177.03 222.80 4.578598 4.0x 16.4% 147.62BNFT 24.40 764.49 824.42 259.99 347.10 3.211164 3.2x 10.0% 132.58UPLD 28.79 597.92 688.36 131.61 178.65 7.027486 5.2x 31.0% 64.31LRN 14.18 587.26 425.61 176.74 199.88 0.4813 0.5x -1.0% 322.78MOBL 4.95 497.78 405.15 367.44 437.96 2.295556 2.1x 7.7% 146.27ECOM 9.10 246.12 194.33 220.87 267.74 1.585947 1.5x 8.2% 96.59AMBR 8.90 243.16 256.17 154.52 214.36 3.239552 3.0x 8.1% 41.33ZIXI 4.27 232.90 199.89 154.35 0.00 3.044149 2.9x 9.2% 53.06MRIN 6.65 38.22 13.78 1106.80 1334.20 0.183791 0.0x -24.9% 42.47

New companies to the SaaS Index are highlighted