A look at the Merger & Acquisitions scenario in India in 2014

1. Strictly Private & Confidential
India Technology Product M&A
Industry Monitor Report
June 2014
Strictly Private & Confidential

2. Strictly Private & Confidential 2
VC/PE funding is a strong & growing source of Growth Capital for Indian Technology
Product Companies
26 28 31 29
26
81
95
74
16
20
21
20
0
40
80
120
160
2010 2011 2012 2013
#Deals
B2B Software Internet & Consumer / E-Commerce Mobility
77 99 143 171
112
555
603
808
60
316
55
42
0
250
500
750
1000
1250
2010 2011 2012 2013
USDMn
B2B Software Internet & Consumer / E-Commerce Mobility
India VC / PE Investments: Deal Value
India VC / PE Investments: Deal Volume Investment in has grown by ~ between 2010-
2013 and continues to grab a lion’s share of the VC/PE investment dollars
 Overall deal valuations are going up, but Series A for e-Commerce & Internet
start-ups has seen a drop as VCs increasingly have been providing
 Global VC/PE firms ploughing in $$ into helping them
expand their footprint in Emerging & Developed markets
 $$ invested in companies showing an upward trend
Company Sector
TotalAmount
Raised
Investors
 Sequoia Capital
 Nexus Venture Partners
 Tenaya Capital
 Nexus Venture Partners
 SilverLake
 Info Edge
 Sequoia Capital
 Kalaari Capital
 Intel Capital
 Nexus Ventures
 eBay and Premji
 Bessemer
 Temasek
 Accel Partners
 Tiger Global
 Morgan Stanley
 Vulcan Capital
 MIH Naspers
 Others
$550m+
$340m+
~$53m
$50m
~$39m
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence
E-Commerce
E-Commerce
Internet &
Consumer
Software
Software
 Kalaari Capital
 Tiger Global
 IDG Ventures
 Accel Partners
 PremjiInvest
 Others
$100m+E-Commerce

3. Strictly Private & Confidential 3
The “Early-Stage” Ecosystem has developed significantly, improving the overall health
of VC/PE & Indian Technology Product Company Ecosystem..
Incubators /
Accelerators
Seed Funding &
Angel Investors
Venture Capital
(Series A)
SalientFeatures IllustrativeExamples
 Upto $100k
 Invest in ideas / business plans
 Access to shared office space and support services
 Mentorship and guidance from experienced entrepreneurs
and technologists
 Provide access and support for seed funding from angels /
investor groups
 100k - $750k as a syndicate
 Company should have a beta version of product / working
prototype and well defined market potential
 Mentorship and guidance from experienced entrepreneurs
and technologists
 Initial funding of $2 - $7m with ability to
participate in follow on rounds
 Market accepted service offering / product being used by 2-3
clients
 Enables greater depth in product development, rapid market
expansion and ability to hire talent
 Development of strong sales & marketing organization to
access developed markets

4. Strictly Private & Confidential 4
However, overall M&A exit value of Indian Technology Product Companies is
significantly below key Peers, and VC/PE’s have large Exit Backlogs…
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, PwC, NVCA US
Technology Product
VC/PE and M&A
2010-2013
VC / PE Investments - Volume
VC / PE Investments - Value
M&A - Volume
M&A - Value
M&A Value: VC / PE Value
Average M&A Deal Size
Product M&A - Challenges and Bottlenecks continue to exist……
 Limited sales traction in back yard (US, Europe) of Software / Internet
majors; Most start-ups don’t show up on the radar of acquirers
1
 Lack of listed Software / Internet Peers in India to benchmark against
and sluggish & nascent Software / Internet IPO market in India
2
 Low maturity levels in product management & marketing
 Companies and entrepreneurs need to focus on building a globally
differentiated proposition and ensure global accounting & governance
standards to ignite M&A deal flow
3
4
 Nascent local acquirer universe; “US / Global Acquirer” is required to
create a block buster outcome
*only includes disclosed deal values.
^Slightly understated for US as the M&A value only includes disclosed deal values

5. Strictly Private & Confidential 5
Clear growth in Product M&A; Domestic M&A contributes majority of deal volume,
whereas Inbound M&A contributes majority of deal value..
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014, * - Excluding Flipkart-Myntra transaction it is $2.3m
Product
M&ADeals
Estimated
TotalProduct
M&ADealValue
Average
M&ADealValue

6. Strictly Private & Confidential 6
Cumulative Product M&A : 2010 - YTD 2014
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014
Product M&A Deal Volume (Cumulative) : 2010 - YTD 2014 Product M&A Deal Value (Cumulative) : 2010 - YTD 2014
31%
36%
14%
9%
9%
38%
25%
26%
6%
5%

7. Strictly Private & Confidential 7
Cumulative Product M&A : Inbound vs. Domestic
Inbound and Domestic Deal Volume Split by Sectors (Cumulative 2010 - YTD 2014)
54%
21%
4%
8%
13%
Inbound (Total 48 Deals)
22%
43%
18%
9%
8%
Domestic (Total 111 Deals)
Inbound and Domestic Deal Value Split by Sectors (Cumulative 2010 -YTD 2014)
56%32%
1%
9%
2%
Inbound (Total ~$1.1b)
7%
14%
69%
2%
8%
Domestic (Total ~$660m)
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014

8. Strictly Private & Confidential 8
Product M&A Deal Volume: 2010 - YTD 2014
7
13 11 10
7
22
17
32
29
11
0
10
20
30
40
50
2010 2011 2012 2013 YTD 2014
#Deals
Inbound Domestic
Product M&A Deal Volume Trend : 2010 - YTD 2014
4
7
5 5 5
1
2
3 2 2
2
1
2
1
2
1
1
2
0
4
8
12
16
2010 2011 2012 2013 YTD 2014
#Deals
5 3
9
4 3
12
6
7 16
7
4
3
9 3
1
1
3
4
2
2
3
4
0
10
20
30
40
2010 2011 2012 2013 YTD 2014
#Deals
Product M&A Inbound Deal Volume Trend : 2010 - YTD 2014
Product M&A Deal Volume Trend by Segment: 2010 - YTD 2014
Product M&A Domestic Deal Volume Trend : 2010 - YTD 2014
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014
9 10
14
9 8
13
8
10 18
9
4
5
9 3
1
1
4
6
3
2 3
4
6
0
10
20
30
40
50
2010 2011 2012 2013 YTD 2014
#Deals
B2B Software Internet & Consumer E-Commerce Ad.Tech & Marketing Automation Mobile

9. Strictly Private & Confidential 9
Product M&A Deal Value: 2010 - YTD 2014
82
605
69
233
127
38
22
136
74
391
0
100
200
300
400
500
600
700
2010 2011 2012 2013 YTD 2014
USDMn
Inbound Domestic
Estimated Product M&A Deal Value Trend : 2010 - YTD 2014 Estimated Product M&A Deal Value Trend by Segment: 2010 - YTD 2014
74%
49%
64%
49%
84%
21%
38% 4%
43%
16%5%
13%
32%
7%
0%
20%
40%
60%
80%
100%
2010 2011 2012 2013 YTD 2014
B2B Software Interenet & Consumer / E-Commerce Others
41%
25%
7% 7% 3%
58%
41%
51%
87% 97%
1%
34%
42%
6%
0%
20%
40%
60%
80%
100%
2010 2011 2012 2013 YTD 2014
B2B Software Internet & Consumer / E-Commerce Others
Estimated Product M&A Inbound Deal Value Trend : 2010 - YTD 2014 Estimated Product M&A Domestic Deal Value Trend : 2010 - YTD 2014
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014
64%
48%
26%
39%
23%
27%
35%
4%
50%
6%
5%
2%
31%
3%
71%
14%
11%
1%
3% 1%
28%
6%
0%
20%
40%
60%
80%
100%
2010 2011 2012 2013 YTD 2014
B2B Software Internet & Consumer E-Commerce Ad.Tech & Marketing Automation Mobile

10. Strictly Private & Confidential 10
Select Inbound Deals
Date Acquirer Target Target Description Deal Value ($m)
May’14 Online medical advisory service with a network of approximately 15,000
general physicians and surgeons.
18.5
Feb’14 Unified Threat Management Solutions ~70-80
Jan’14 Performance analytics software platform for mobile app developers ~11
Aug’13 Software solutions for logistics, transportation, supply chain service providers 45.1
Jun’13 Online bus ticketing platform ~100-105
Feb’13 Provides differentiated Analog, Mixed-Signal silicon IP cores and ASICs 62.0
Dec’12
Provider of analytics and business intelligence solutions to the financial
services, insurance, retail and telecommunications industries
NA (51% stake)
Oct’12
Acquisition of Qontext, an enterprise social collaboration software, from
Pramati Technologies’ portfolio of products
NA
Oct’11
Provider of open source storage solutions for standardizing the management
of unstructured data
136.0
Oct’11 Developer and publisher of mobile and online games 80-90
Mar’11 Manufacturing, marketing and sale of structured cabling products 112.0
Jan‘11
Provides online tutoring worldwide and K12 school solutions and education
services
213.0
Jan’11
Provides cloud-based, enterprise applications for live online meetings,
webinars, desktop sharing and eLearning.
31.0
Source: Signal Hill & iSPIRT analysis and research, Venture Intelligence, YTD as on May 2014

11. Strictly Private & Confidential
Signal Hill is a leading independent advisory boutique serving the M&A and private capital raising needs of growth companies. Signal Hill’s experienced bankers provide deep domain expertise and an
unyielding commitment to clients in our sectors: Internet & Digital Media, Internet Infrastructure, Services and Software. With over 600 completed transactions and offices in Baltimore, Bangalore,
Boston, Nashville, New York, Reston and San Francisco, Signal Hill leverages deep strategic industry and financial sponsor relationships to help our clients achieve Greater Outcomes®.
11
iSPIRT Foundation is an industry think-tank founded by key participants and proponents of the Indian software product industry. iSPIRT enables a strong ecosystem, connects and guides
software product entrepreneurs and helps catalyse business growth. It encourages buyers to improve performance by leveraging software products effectively. iSPIRT advises policy
makers on interventions that can set the industry on a higher growth trajectory
For questions, please contact:
Sanat Rao,
Partner (M&A), iSPIRT
sanat@ispirt.in
Klaas Oskam
Managing Director, Signal Hill India
koskam@signalhill.in
This document has been prepared by Signal Hill Capital Advisory India Private Limited (“SHI”) & iSPIRT for discussion purposes only. The information and opinions contained in this
document are derived from public and private sources which we believe to be reliable and accurate but which, without further investigation cannot be warranted as to their accuracy,
completeness or correctness. This information is supplied on the condition that SHI and any partner, employee or affiliate of SHI are not liable for any error or inaccuracy contained
herein, whether negligently caused or otherwise, or for loss or damage suffered by any person due to such error, omission or inaccuracy as a result of such a supply. SHI and its affiliates
are also not liable for any loss or damage howsoever caused by relying on the information provided in this document. In particular any numbers, initial valuations and schedules contained
in this document are preliminary and are for discussion purposes only and does not constitute an opinion.