Hr Tech - Paris - Bruno Tourme 27102015

1. Attracting financial
and strategic investors
HR Tech Europe, 27/10/2015
27/10/2015

2. What are the challenges?
• Most of European small/mid size tech
companies are not known by tech investors or
strategic buyers
• There is a very significant learning process
prior to raise money or sell a business
• Investors/buyers are more comfortable doing
business with a company they got to know
over time
• Tech companies need to adapt and deliver the
right message to the community of investors:
strategic or financial
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3. Findings
• A very long process, consuming time,
resources and energy and often not going
through
– 50% of European m&a/fundraising
processes are not delivered
• Financial tech investors and strategic buyers
– have a lot of cash available
– are ready to invest/acquire assets in Europe
as less competition than in US and prices
are “normal”
• Good period
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4. What to do?
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5. Inform
• Identify the top 50 investors/strategic partners
• Build a programme to visit/update them,
ideally twice a year
– Quarterly update: financials, major wins, hirings etc.
etc.
– 1 or 2 road shows/year: London/US east coast
– Non deals meetings
– Conferences
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6. Your key targets
• Tech investors:
– In Europe, you reach the majority of tech investors
– Majority of US investors have a London/European
presence
– Also target selectively Boston, NYC and San
Francisco
• Strategic investors:
– Majority are in US 70/80%
– Rest in Asia/Europe
• Tech research firms:
- Bersin, Forrester, Gartner etc.
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7. Typical targets
• Vc’s/growth equity:
– accel, index, highland capital, dfj, kennet, Mangrove, nauta
capital, Insight, Battery, Acton, Iris, Serena, Idinvest
• Strategic: saas, licenses, services, outsourcing, consulting
– SAP, Oracle, Microsoft, workday, Northgate, Silkroad,
cornerstone, Accenture, Infosys, IBM, Sumtotal, Tower
Watson, ADP ….
• Corporate ventures
– Cisco ventures, SAP ventures, Intel capital, Google ventures
– Top 100 strategic buyers all have a corporate investment arm
separate from the company
• Family offices/Business angels
• Tech research firms: the relevant analyst(s)
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8. Research tech value
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9. In all cases
• Will always be useful
• Will tremendously help you the day
– you raise money or
– sell your business or
– Acquire a company
• Can also help you build strategic partnership/JV etc…
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10. Investors/buyers rationale
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Investors
• USPs: what makes you
unique? Different?
• Scalability: being global
• IP
• International team: ability to
execute
• More growth than ebitda
• From start ups to mature
businesses
• Potential to grow global
• Need to be in the top 3 of:
country, region, global,
products
Buyers
• Complement their exist
offering/innovation
• New geographies including
Brics
• Size/clients
• Mobile
• Social
• Collaboration
• Benefits tech
• Easy to use
• Predictive analytics

11. More than 50 transactions in 2015
• Iconix/ cloud incentive 10 m$
• Namely/sequoia, online
payroll, benefits 45 m$
• Hireview: tcv, 40 m$
• Guidespark: benefits, 25 m$
• Clustree, 3 m$
• Blue Garden/Marlin equity;
payroll
• Greenhouse/benchmark k;
recruiting; 15 m$
• Deltek/HR smart, 3 x rev
• CEB/Wanted analytics/ 4 x
revenues/46 m$
• Linkedin/careerfy, talent
acquisition platform,
• Vector/saba, HCM, 260 m$,
2,5 x revenue
• HG capital/P&I: 455 m$, 4,6
x revenue
• Skillsoft/vodeclic (elearning)
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12. 27/10/2015 HR tech Europe 12

13. • Biggest place in Europe for/tech investors is London ; US funds
intensifying presence
• Also local/country vcs
• Very strong connections UK/US
• Various categories of investors: then target smart
– Local vs international
– Pes/buyout: mature companies
– VCs: start up
– Growth equity
– Debt/mezzanine
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14. What about valuations?
• Europe are normal, US is different
• Value on growth, recurring, scalability, rather than ebitda
• Software
– License: from 1 to 2 times revenues
– Saas: 5 times revenues as average, higher in US,
lower in Europe
– Vertical pays more vs horizontal
– Size matters
– Growth is key
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15. Cloud vs market
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80%
100%
120%
140%
160%
180%
200%
220%
240%
260%
280%
01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015
BVP cloud index
BVP Cloud Index
Nasdaq Index
S&P Index
Dow Jones

16. Top cloud companies: 3 are HR tech
Today - Top 10 Public Cloud Companies
($ in mm)
Count Company MarketCap
1 Salesforce $50,319
2 LinkedIn $26,996
3 Workday $15,736
4 ServiceNow $13,030
5 NetSuite $7,304
6 Athenahealth $5,610
7 The Ultimate Software Group $5,590
8 Veeva $3,742
9 Dealertrack Technologies $3,677
10 Proofpoint $2,980
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17. What's next?
• Continuing interest in hr tech investments: mobile,
social, cloud, big data, predictive analytics, or any new
models/technologies coming to the market
• Consolidation will continue for mature businesses
• BIG tech vendors will buy SaaS
• Medium size traditional HR vendors will transition to saas
or will be bought by consolidators
• Consulting/services business to integrate more
technology in their offerings
• Outside US and Europe, Asia and BRICS will be next big
challenge
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18. Thank you
btourme@eurohold.com
cell + 44 779 983 2218
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