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As I mentioned last week, I’m playing with the format and data that we provide in these posts. This week I’m flipping it - the Tech Topic will come first, and the supplemental data comes afterward. If you have feedback, don’t hesitate to reach out or click the feedback links at the bottom of the post.
Tech Topic: Vertical SaaS
This week continued our discussion on industry vertical specific SaaS companies. Specifically, we dug a little deeper on Veeva (VEEV) and AppFolio (APPF), both of whom have been strong performers as public companies as seen in the Supercompounders table in the supplemental data section below.
Veeva Systems Inc
From the 10-K1…
Veeva is the leading provider of industry cloud solutions for the global life sciences industry. We were founded in 2007 on the premise that industry-specific cloud solutions could best address the operating challenges and regulatory requirements of life sciences companies. Our solutions span cloud software, data, and business consulting and are designed to meet the unique needs of our customers and their most strategic business functions—from research and development (R&D) to commercialization. Our solutions help life sciences companies develop and bring products to market faster and more efficiently, market and sell more effectively, and maintain compliance with government regulations.
The most exciting thing about Veeva is how incredibly capital efficient they have been. The company only raised $7 million in private funding before going public in October 2013, raising $260.9 million2.
It started off as a Pharma specific CRM built on Salesforce.com. About 2010, we started a completely different product line around content management. Newest products revolve around generating unique data that the life science industry needs.
AppFolio
From the 10-K3…
AppFolio provides innovative software, services and data analytics to the real estate industry. Our industry-specific, cloud- based solutions are used primarily by property managers, and also by numerous other constituencies in the property management business ecosystem. These other constituencies include property owners, rental prospects, tenants and service providers, whom we refer to collectively as "users". Although specific functionality varies by product, our core solutions are designed to enable our customers to digitally transform their businesses, address critical business operations and enable exceptional customer service. In addition to our core solutions, we offer an array of optional, but often business-critical, Value+ services that are designed to enhance, automate and streamline processes and workflows that are essential to our customers' businesses. Our Value+ services are generally available on an as-needed basis and enable our customers to adapt our offerings to their specific operational requirements.
AppFolio, like Veeva, raised a relatively small amount of money as private company (at least by todays standards, $30 million). Though it is not clear if the company raised any additional money for the acquisition of MyCase, another Vertical SaaS business for the legal industry, in 2013. The company raised another $74 million its public offering in June 20154. MyCase was sold to Apax Partners last quarter for $193 million5.
Relative Valuations
I pulled this chart and table from Clouded Judgement and highlighted the two companies we discussed today.
Relative Performance
Supplemental Data
Supercompounders
Energy Data
Macro Data
Tech Data
Semiconductors
Semiconductor Industry Association Global Billings Report
Bureau of Economic Analysis Semiconductor Import / Export
Cryptocurrency
Cloud Multiples
Check out the most recent edition of Clouded Judgement for the latest SaaS multiples...
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This post and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.