At the end of the year, we often reflect on the current state of the venture market in technology. We are sharing it with our broader community in the hope that someone will find it informative, interesting or at least entertaining.

1. State of Venture Report - Technology
January 2020

2. Meet F-Prime Capital
2

3. 3
Our Global Platform

4. Infrastructure
Note: Not an exhaustive list
4
F-Prime Capital’s Technology Portfolio
F IN T E C H P ORT F OL IO
Insurance
Wealth Management
Payments
E N T E R P R IS E P ORT F OLIO
H E A LT H IT & S E RV IC E S P ORT F OLIO
Real Estate
Capital Markets
DevOps
SaaS / Enterprise
Security
AV/Robotics
Data analytics
Payers/At-Risk Providers Employer Solutions Provider Solutions Life Sciences IT

5. State of Venture in Technology
5

6. 6
2019 pace expected to slow slightly from 2018, though we are
still at historic levels
§ 2018 crossed the $100B watermark for the first time since the height of the dot-com boom in 2000.
§ H1 2019 continued at a similar clip to 2018; however, venture deployment slowed in Q3, driven by a decrease in
deal volumes. Valuations remain at historically elevated levels.
§ FinTech market has continued to explode, with funding totals expected to grow 50% YoY. Growth driven by an
increase in mega-rounds ($100M+); FinTech has grown from 5-10% of Tech VC in 2010 to 10-20% in 2019.
U.S. Venture Investments in Technology 1 U.S. Venture Investments in Financial Technology
Mega rounds ($100M+)
accounting for ~60% of
total funding
(1) Excludes Hardware and Biotech; Categories not mutually exclusive. Actuals through 10/20/2019
Source: Pitchbook; Team analysis

7. 7
Robust deal volume and continued growth in deal sizes and
prices
Note: As of 10/22/2019
Source: Pitchbook; Team analysis
U.S. VC Pre-Money Valuation by StageU.S. VC Deal Size by Stage

8. 26x
9x8x
20x
19x
15x 12x
19x
5x
15x
10x
8x
8
Multiples have increased sharply in the last few years
*Data through H1 2019, multiple represents pre-money valuation multiple.
Source: Pitchbook; Team analysis
2016 2017 2018 2019
8x 14x
11x
17x
20x
14x
19x
18x
9.9
9.0
7.3 7.2 7.7
8.8
7.5 7.3
10.5
12.5
Avg. 2019 YTD F-Prime
deals seen: ~18x
Series A
Series B
Series C
22x
4x
10x
14x
16x
Company 1
Company 4
Company 5 Company 11
Company 3
Company 2
Company 6
Company 7
Company 12
Company 13
Company 24
Company 25
Company 18
Company 19
Company 8
Company 9
Company 14
Company 15
Company 20
Company 21
Company 22
Company 23
Company 17
Company 10 Company 16
Cybersecurity Enterprise CloudFinTech DevOps Healthcare IT MarTech Vertical SaaS
Sample F-Prime SaaS Deals Seen
Median Industry-wide Tech VC Revenue Multiple

9. 9
Venture funding shifted towards later stage in 2014, though
has remained mostly constant over last five years
(1) Excludes Hardware and Biotech; Categories not mutually exclusive. Actuals through 10/20/2019
Source: Pitchbook; Team analysis
U.S. Venture Investments in Technology1

10. 10
2019 capital raised by VC’s still historically high, but below
2018 peak
.23
2018 was a 10-year high for fundraising;
2019 levels more in line with 2014-2017
First-time funds also experienced
return to pre—2018 levels
Source: Pitchbook; Team analysis
Megafund fundraising
returning to normal levels

11. 11
2019 exits nearly tripled from 2018 levels, driven by long-awaited
unicorn IPOs
Facebook: $81B
market cap at
IPO
IPO value*
Last round
valuation
Total prior
funding
N12M multiple
at IPO
Uber $75.7B $70.0B $20.1B 5.1x
Lyft $24.0B $15.1B $5.0B 6.5x
Slack $23.3B $7.1B $1.2B 28.7x
Pinterest $10.0B $12.3B $2.9B 11.7x
Zoom $9.2B $1.0B $0.5B 29.7x
Peloton $8.1B $4.2B $1.1B 4.4x
Datadog $7.8B $0.6B $0.2B 25.4x
Crowdstrike $6.7B $3.3B $0.6B 38.6x
Cloudflare $4.4B $1.8B $0.4B 15.6x
Medallia $2.6B $1.3B $0.3B 11.7x
PagerDuty $1.8B $1.3B $0.1B 24.3x
Total $175B $33B
11 Unicorn IPOs in 2019, Totaling ~$175B2019 exits nearly tripled 2018 numbers
§ Against ~$460B of fund deployment, over $790B of exit
value since 2010, with over 200 unicorn companies still
privately held
§ Massive exit volumes in 2019 could soften the impact of
a public market correction as liquidity is rolled back into
new funds
*Based on initial offering share price
Source: Pitchbook; S-1 Filings; Team analysis
Up round

12. Performance of recent IPOs indicate public markets value strong
underlying unit economics
Note: Stock price measured as of 10/22/2019
Source: CapitalIQ
Companies with <50% gross
margins have seen a decline in
stock value
Stock has appreciated
since IPO
Stock has depreciated
since IPO
2019 IPO Cohort Stock Price & Gross Margins
Postmates and WeWork postponed
IPOs, in part due to lack of appetite
for lower margin businesses

13. Tech M&A activity also increased in 2019, driven primarily by
mega-cap deals ($2.5B+). Potential for outsized exits is growing
Note: Actual data through 10/20/2019
Source: Pitchbook; S-1 Filings; Team analysis
US Technology M&A Activity ($) US Technology M&A Activity (# Exits)
~60% of
exits in
2019 were
>$100M
(compared
to ~20% in
2010)

14. Questions or comments?
Reach us on twitter @FPrimeCapital
14