A look at all the VC, PE and M & A deals in the SMB software landscape for Q2 2018 (N. America).

1. THE STATE OF SMB SOFTWARE
A l ook at Q2 2 0 1 8 f u ndraising and exi t t rends among Nort h
A m e ri can sof t ware com pani e s t hat se rv e t he SMB m arket
Q2 2018

2. Private & Confidential |
Q 2 ' 1 8 : A g e n d a
01 Introduction
02 Methodology and Scope
03 Venture Capital (VC) deals
04 Private Equity (PE) deals
05 Mergers & Acquisitions (M & A)
06 Initial Public Offerings (IPOs)
surepathcapital.com

3. Private & Confidential |
Every year we publish our annual State of SMB Software Report, looking at fundraising and exit activity in the
Small and Mid-Sized Business (SMB) software space in North America. This report has been well received by
CEOs, CFOs, investors and buyers. So we now update it quarterly.
We track SMB software companies across three broad categories: Grow my Business (front office), Run my
Business (middle office) and Track my Business (back office). For VCs, most activity was in front office. For PE
firms, the middle office was most popular.
While there are some pure-play companies that just serve small business, most companies serve small and mid-
market customers. This mirrors our deal practice at SurePath where we work with software companies serving
freelancers all the way up to mid-market enterprise.
Similarly, despite the intense fragmentation in marketing technology, new fundings and exits remain strong.
Marketing is an increasingly complex and technical challenge. Small business owners are getting more
sophisticated in their online marketing needs.
Q1 saw lots of activity with $1.75B in venture funding, $ 370M in Private Equity investments and $2.8B in
acquisitions.
We hope you find this report useful and invite you to get in touch to discuss it with us.
The SurePath team
July, 2018
T h e S t a t e o f S M B S o f t w a r e
surepathcapital.com

4. S H U B H A M
D A T T A
D A N I A L
S H A I K H
M A R K
M A C L E O D
F O U N D E R D I R E C T O R
S E N I O R A N A L Y S T
J O S H
S C H E R M A N
V I C E - P R E SI D E N T
T h e S u r e P a t h T e a m
The SurePath team has over 30 years of experience in operating, growing, investing, buying, and selling SMB software companies.
surepathcapital.com
E R I K
M O S N E Y
A N A L Y S T

5. Q2 2018 SMB Software Deals

6. Q 2 ‘ 1 8 S M B S o f t w a r e D e a l L a n d s c a p e
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, crowdfunding and deals with undisclosed values
surepathcapital.com
$5M $10M $3M
$254M
$297M
$237M
$269M
$481M
$171M
$728M
$369M
$1,805M
$182M
$102M
$87M
$1,266M
$266M
-
$500M
$1,000M
$1,500M
$2,000M
$2,500M
$3,000M
April May June
TotalCapitalInvested(inmillions,$USD)
Capital Invested by Deal Type
IPO
PE Growth/Expansion
Merger/Acquisition
Corporate
Later Stage VC
Early Stage VC
Seed Round
Angel
6
10
5
8
14
10
17
21
18
9
18
8
4
2
3
7
2
3
3
2
0
10
20
30
40
50
60
70
80
April May June
DealCount
Deal Count by Type
Over $6.6B of capital was deployed across 172 deals over the second quarter of 2018. The biggest deal was the acquisition of
ecommerce platform provider Magento by Adobe. Both M & A and funding deal volumes were high.

7. Q 2 ‘ 1 8 S M B V e n t u r e F u n d i n g
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values
144 SMB software companies raised venture capital in Q2 of 2018. The bulk of the funding went into
accelerating 56 early stage and 35 growth stage companies.
surepathcapital.com
$18M
$67M
$788M
$921M
21
32
56
35
0
10
20
30
40
50
60
-
$100M
$200M
$300M
$400M
$500M
$600M
$700M
$800M
$900M
$1,000M
Angel Seed Round Early Stage VC Later Stage VC
DealCount
CapitalRaised(inmillions,$USD)
Capital Raised by Venture Deal Type
Capital Raised Deal Count

8. $60M Sequoia Capital
$60M IVP
$55M OMERS Ventures / JP Morgan Chase
$50M Insight Venture Partners / Bessemer
$42M New Enterprise Associates (NEA)
$117M Promecap Capital de Desarrollo
$107M Mosaik Partners
$100M Premji Invest
$65M Spark Capital
$64M Goldman Sachs Private Capital
Q 2 ‘ 1 8 ’ s T o p S M B S o f t w a r e R a i s e s
Source: Pitchbook
surepathcapital.com

9. 62
66
14
$809M
$705M
$244M
Run My Business
Grow My Business
Keep Track of My Business
V e n t u r e D e a l s b y C a t e g o r y
SMB software companies raised ~ $1.75B across 142 deals in Q2 2018. Of those, companies that helped SMBs
grow their business attracted nearly 50% of the venture capital
Outer ring represents
total capital invested
by category and inner
ring represents total
deal count by
category
Source: Pitchbook
We track SMB software
companies across three
broad categories:
• Grow my Business:
marketing / front office
• Run my Business:
typically vertical apps
to help operate
(business management,
ERP, etc.)
• Track my Business:
Billing, accounting, etc.
surepathcapital.com

10. Combined, companies in the Business Management/ERP software, Sales Tech, and Marketing Tech, categories
attracted 2/3 of total venture capital funding in Q2 2018. However, all front, middle, and back office sectors
saw deal activity.
Source: Pitchbook
V e n t u r e D e a l s b y C a t e g o r y ( c o n t . )
surepathcapital.com
44
19
35
7
10
8
9
10 $455M
$360M
$357M
$179M
$150M
$97M
$91M
$67M
Business Management/ERP
Sales Tech
Marketing Tech
Payments
Security/IT
Accounting and Invoicing
E-Commerce
HR Tech

11. V e n t u r e D e a l s b y T a r g e t C u s t o m e r
Over 75% of venture funding in Q2 2018 went to companies with a broad offering for both the small and mid-
market segments of the SMB software space. Relatively few companies served either only the small or medium
segments explicitly. This makes sense as it enables software vendors to reach a larger market.
Source: Pitchbook
surepathcapital.com
111
14
17
$1,335M
$219M
$203M
Both
Small
Medium

12. V e r t i c a l - S p e c i f i c V e n t u r e D e a l s
Q2 2018 saw nearly $557M in capital invested across 44 vertical-specific deals. Retail software companies
attracted $111M (20% of total capital) across 8 deals. Vertical-specific companies tend to achieve higher
valuation multiples than horizontal peers.
Source: Pitchbook
surepathcapital.com
8
8
72
1
1
2
4
3
1
1
1
1
1
1
1 1
$111M
$86M
$83M
$50M
$50M
$42M
$37M
$31M
$28M
$13M
$12M
Retail
Health and Wellness
Restaurants
Food Delivery
Home Services
Accounting
Law
Real Estate
Construction
Sporting
Software Development
Logistics
Government
Automotive
Hospitality
Cannabis
Agriculture

13. $25M Goldman Sachs
$22M Dell / Publix / Swordfish Investments
$15M Kayne Anderson Capital Advisors
$5M Zubr Capital / EBRD VC Programme
$3M Undisclosed
$100M Leeds Equity Partners
$67M CLSA Capital Partners
$62M Delta-v Capital
$35M Susquehanna Growth Equity
$32M Updata Partners
Q 2 ‘ 1 8 ’ s T o p P r i v a t e E q u i t y S M B D e a l s
Source: Pitchbook
+ Growth Round; * Buyout
SurePath Capital Partners advised on this transaction
+
+
+
+
+
+
surepathcapital.com
+
+
+
+

14. P E D e a l s b y C a t e g o r y
Source: Pitchbook
Private equity investors deployed over $370M in capital into software companies serving the SMB space in Q2
2018. Deals in the Run My Business category attracted the majority of the capital.
surepathcapital.com
66
$240M
$132M
Run My Business
Grow My Business

15. P E D e a l s b y C a t e g o r y ( c o n t . )
SMB Software companies with Business Management/ERP offerings attracted the most private equity funding
during the quarter, with E-Commerce companies in a distant second place.
Source: Pitchbook
surepathcapital.com
6
3
2
1
$240M
$62M
$54M
$15M
Business Management/ERP
E-Commerce
Marketing Tech
Sales Tech

16. P E D e a l s b y T a r g e t C u s t o m e r
Nearly all the private equity capital in Q2 2018 went to companies with a broad offering for both the small and
mid-market segments of the SMB software space. Only one company served the small segment exclusively
and none served only the medium segment. This is similar to what we saw with VC funding.
Source: Pitchbook
surepathcapital.com
11
1
$339M
$32M
Both
Medium

17. $120M Splunk
$17M Zix
$5M Mpulse Mobile
$4M WisTech Global
$1.68B Adobe Systems
$365M Square
$342M LogMeln
$219M RealPage
$150M Mindbody
Source: Pitchbook
surepathcapital.com
Q2‘18’s Top M&A SMB Deals

18. M & A D e a l s b y C a t e g o r y
The cumulative deal size for all mergers and acquisitions in the SMB software space in in Q2 2018 was north of
$2.9B.
Source: Pitchbook
surepathcapital.com
2
6
1
$2,045M
$638M
$219M
Run My Business
Grow My Business
Keep Track of My Business

19. M & A D e a l s b y C a t e g o r y ( c o n t . )
Nearly 60% of M&A deal value during Q2 2018 was attributable to Adobe’s $1.6B acquisition of Magento, the
developer of the cloud commerce platform for selling goods online.
Source: Pitchbook
surepathcapital.com
1
1
1
5
1
$1,680M
$365M
$342M
$296M
$219M
E-Commerce
Marketing Tech
Security/IT
Business Management/ERP
Payments

20. M & A D e a l s b y T a r g e t C u s t o m e r
The majority of M&A deals in the SMB Software space were related to those companies with a broad offering
for both small and medium businesses.
Source: Pitchbook
surepathcapital.com
1
7
1
$1,680M
$1,072M
$150M
Medium
Both
Small

21. Our Purpose

22. To help fund, grow, and exit SMB software companies
SurePath maximizes your optionality:
We ensure our clients are always in a position to raise more capital or exit profitably
Preparing you to raise the right amount of capital from the right
investors on the right terms
Growth
Funding
Leveraging our deep operating expertise to ensure your business is on
the right plan to create the most value
Strategic
Guidance
Our unparalleled access to SMB buyers helps us position you for an
intentional, profitable exit
Exits
S u r e P a t h : O u r P u r p o s e
surepathcapital.com

23. We have been part of some the most successful SMB software companies
We have deep relationships with SMB investors and buyers
SurePath is committed to becoming the leading strategic financial advisor to the global SMB software market
S u r e P a t h a n d S M B
surepathcapital.com

24. Private & Confidential |
R e c e n t S u r e P a t h D e a l s
served as the exclusive strategic
and financial advisor to
on its sale to
an operating group of
surepathcapital.com
served as the exclusive strategic
and financial advisor to
on its $16M Series A financing led by
served as the exclusive strategic
and financial advisor to
on its growth financing from
Undisclosed
Client
Undisclosed
Investor

25. Private & Confidential |
Overview of Transaction:
• On April 24, 2018, Uberflip announced a $32.3M growth equity round from
Updata Partners
• This oversubscribed round was the first institutional funding round for the
company
• Uberflip will use the capital to extend its market leadership in the content
experience category
• Uberflip is the #1 content experience platform that empowers B2B
marketers to create & control personalized content experiences at scale
• Founded in 1998, Updata Partners is a highly successful investor to
software and software-enabled businesses
SurePath’s Role:
• SurePath Capital Partners (SCP) served as sole / exclusive strategic and
financial advisor to Uberflip's Founders / Board
• SCP worked strategically with Uberflip in advance of the fundraising
process to make sure it was on the best operating plan for funding and to
build a warm, qualified pipeline of targeted investors.
• SCP delivered a competitive, oversubscribed growth financing process,
as the advisor of choice for leading SaaS companies
C a s e S t u d y : S u r e P a t h C a p i t a l P a r t n e r s a d v i s e s U b e r f l i p
o n i t s $ 3 2 . 3 M g r o w t h f i n a n c i n g b y U p d a t a P a r t n e r s
surepathcapital.com
served as the exclusive strategic
and financial advisor to
on its growth financing from
$32,300,000
for total consideration of approximately
Mark, Shubham and the entire SurePath team were absolutely critical to
the successful outcome of our fundraise. From start to finish, they were
an incredible sounding board, set and managed the process, and
ultimately stepped up and filled gaps wherever needed to help us get
over the finish line. Pure rockstars!
- Yoav Schwartz, CEO & Co-Founder, Uberflip
“
”

26. The Leading Financial Advisor in SMB Software
EXPERIENCE
Funding, growing & exiting tech companies
PEDIGREE
Alumni of Constant Contact, FreshBooks, Shopify…
ACCESS
To Tier 1 investors & strategic partners
FOCUS
The only advisor with a dedicated focus on SMB Software
COMMITMENT
Helping our clients and their investors succeed
T h e S u r e P a t h D i f f e r e n c e
surepathcapital.com

27. Shubham Datta
Director
shubham@surepathcapital.com
647.972.6834
Danial Shaikh
Senior Analyst
danial@surepathcapital.com
647.876.5453
Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004
Josh Scherman
Vice-President
josh@surepathcapital.com
646.420.0074
Toronto • San Francisco
Erik Mosney
Analyst
erik@surepathcapital.com
519.239.5759
27