Late Stage AdTech Market Update

Thomvest Ventures Research Report June 2017

A look at public market performance, venture capital activity and M&A volume among late stage advertising technology companies

About Thomvest Ventures

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Thomvest is a cross-stage venture capital firm with $250M under management. We primarily focus on opportunities in Silicon Valley with startups in the fields of advertising & marketing technology, financial technology, and cybersecurity. The capital we invest is our own, enabling us to be more creative, flexible and patient with our entrepreneurial partners. More than two-thirds of the companies we have funded in the last decade have either gone public, been acquired, or continue to grow as independent businesses.

Don Butler don@thomvest.com

Nima Wedlake nima@thomvest.com

For questions or comments, please contact:

Agenda

1 Public Markets Stock performance and valuation multiples are up in 2017, but down relative to prior years; public market investors remain skeptical of the sector

3

2 Late Stage Venture Capital

3 Mergers & Acquisitions

Public Company Performance in 2017

4

Relative Stock Performance, 2017 YTD (% Change)

1/4 2/1

Stoc

k Pe

rform

ance

(% C

hang

e)

-10%

0%

10%

20%

30%

40%

Facebook Google AdTech Index

3/1 4/1 5/1

+31%

+24%

+30%AdTech Index

Google

Facebook

Advertising technology stocks are performing in-line with Facebook and Google in 2017. Rocket Fuel (FUEL) & YuMe (YUME) have rebounded from their 2016 lows, and Criteo (CRTO) & The Trade Desk (TTD) continue to show impressive growth.

The AdTech Index includes Criteo, Rocket Fuel, Rubicon

Project, The Trade Desk, Tremor Video & YuMe

Source: Thomson EIkon; as of 6/6/2017

6/1

3x

6x

9x

12x

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

Q4 '16

Q1 '17

9.6x

7.8x

5.7x

4.2x

2.9x 3.3x2.9x 3.0x

2.0x 2.1x 2.0x 1.8x2.3x 2.1x

2.7x

Public AdTech Valuation Trend, 2013-2017

5

Average Enterprise Value / TTM Gross Profit Ratio, by Quarter (Among companies in the public adtech index)

Valuation multiples of public advertising technology companies have risen slightly over the last quarter, driven upward by The Trade Desk (TTD) which is trading at a SaaS-like multiple.

The AdTech Index includes Criteo, Rocket Fuel, Rubicon

Project, The Trade Desk, Tremor Video & YuMe

Source: Thomson EIkon

Public Company Metrics

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Criteo(CRTO)

Rocket Fuel (FUEL)

Rubicon Project(RUBI)

Trade Desk (TTD)

Tremor Video (TRMR)

YuMe (YUME)

Enterprise Value(as of 6/6/17) $2.87B $165M $59M $2.14B $97M $106M

2016 Net Revenue1 (Actual) $730M $252M $256M $203M $95M4 $100M4

2017 Net Revenue1(Estimated) $939M $202M $197M $294M $115M4 $105M4

Y/Y Revenue Growth (Estimated) +29% -20% -23% +45% +19% +5%

2017 EBITDA2(Estimated) $292M $1M $20M $80M $4M $2M

EV / 2017 Revenue 3.1x 0.8x 0.3x 7.3x 0.8x 1.0x

YTD Stock Performance +13% +59% -34% +107% -2% +33%

1. Revenue is net of media costs 2. Reported as Adjusted EBITDA 3. Revenue includes non-advertising business lines 4. Company does not provide revenue net of media costs; Thomvest estimate

Facebook3 (FB)

Google3 (GOOG)

$410.6B $593.9B

$27.6B $90.3B

$38.5B $107.8B

+39% +19%

$23.6B $42.9B

10.7x 5.6x

+31% +24%

Source: Company Filings & Thomson Eikon; Note: 2017 Revenue & EBITDA figures are average estimates provided by equity analysts

U.S. Digital Advertising Spend Across Platforms

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U.S. Digital Advertising Revenue, 2015-2016 (Billions, USD) (Based on IAB Internet Advertising Report)

$20B

$40B

$60B

$80B

2015 2016

$23.5B

$21.6B$13.6B

$8.4B

$35.4B$29.6B

Google Facebook Other

1. Google U.S. advertising revenue is an estimate provided by Morgan Stanley Research 2. Facebook includes U.S. and Canada advertising revenue

+9% Y/Y

+62% Y/Y

+20% Y/Y

Google and Facebook capture two-thirds of digital advertising spend in the United States; ad spend outside of these two platforms grew to $23.5 in 2016, up 9% year-over-year.

1 2

Agenda

1 Public Markets

Both deal volume and average deal size over the last 18 months are down relative to 2014 and 2015

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2 Late Stage Venture Capital

3 Mergers & Acquisitions

U.S. Late Stage AdTech Financings, 2009-2017

9

30

60

90

120

$250M

$500M

$750M

$1,000M

2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Total Deal Size # of Late Stage Deals

14

3441

6457

5059

54

42

$165M

$444M

$753M

$859M

$633M

$751M$753M

$606M$520M

42

5459

5057

64

4134

14

$12.7M $11.9M $12.8M $16.0M $11.7M $14.8M $19.3M $13.0M $12.5MAverage Deal Size

Source: Pitchbook; As of 6/6/2017; “Late Stage” is defined by Pitchbook as “usually Series B to Series Z+ rounds”

Notable Late Stage AdTech Financings in 2017 YTD

10 Source: Pitchbook; As of 6/6/2017

Company Deal Type Deal Size Valuation (Post) Deal Date Investors

AdRise Series C $21M $70M May 12 Jump Capital, DHVC, Foundation Capital, Cota Capital

SimpleReach Series B $9M - May 8 Spring Mountain Capital

Placester Series D $50M $202M Mar 24 New Enterprise Associates

Whistle Sports Series C $27.5M $120M Jan 23 NBC Sports Ventures, Sky Ventures and Emil Capital Partners

Magnetic Series D $7.5M - Mar 29 Edison Partners, Charles River Ventures, ORIX Ventures

NinthDecimal Series E $5M - Jan 4 Norwest Venture Partners, North Atlantic Capital, DFJ

SocialFlow Series C1 $1.9M $54M Apr 4 Undisclosed

Notable Late Stage AdTech Financings in 2016

11 Source: Pitchbook

Company Deal Type Deal Size Valuation (Post) Deal Date Investors

Moat Series C $50M 433M Mar 21 Insight Venture Partners

xAd Series E $42.5M $387.5M Oct 31 Eminence Capital, W Capital, IVP, Emergence Capital

Yieldbot Series C $35M $96M Aug 3 RRE Venture, Converge Venture, SJF Venture, New Atlantic Ventures

Collective Series D $34M - Apr 8 Columbia Partners, iNovia Capital, Greycroft Partners, Accel Partners

AppNexus Series F1 $31M $1.6B Sep 28 News Corp, Yahoo Japan

PlaceIQ Series D $25M - Jan 14 Harmony Partners, IA Ventures, Iris Capital Management, US Venture Partners

JW Player Series D $20M $154M Jan 5 Cue Ball, e.ventures, Greenspring Associates, Greycroft Partners

Turn Series E (Bridge) $15M - Mar 15 Norwest Venture Partners

Signal Series E $13M $291M Mar 8 Undisclosed

Swrve Series D $9.4M - Nov 16 Atlantic Bridge Capital, Allied Irish Bank, Acero Capital

DataXu Series F $10M - Jan 25 Sky UK

Apsalar Series B1 $8M - Apr 1 Thomvest Ventures, DCM Ventures, YJ Capital

Qualia Series B $5.5M - Feb 16 S3 Ventures, Verizon Ventures

Notable Late Stage AdTech Financings in 2015

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Company Deal Type Deal Size Valuation (Post) Deal Date Investors

AppNexus Series F $62.7M $1.56B Apr 15 Undisclosed

RadiumOne Series C $54M $208M Jun 30 Adams Street Partners, Crosslink Capital, Draper Esprit, Harmony Partners, Industry Ventures, Trinity Ventures

SteelHouse Series C $49M $189M Dec 11 Mercato Partners, Silicon Valley Bank, Staley Capital Management

LiveIntent Series D $32.5M $307M Jun 17 Battery Ventures, First Round Capital, FTV Capital, Shasta Ventures

Tealium Series D $30.7M $168M Feb 17 Bain Capital Ventures, Battery Ventures, Georgian Partners, Presidio Ventures, Tenaya Capital

Swrve New Media Series C $30M - Nov 11 Acero Capital, Atlantic Bridge Capital, Delta Partners, Evolution Media Capital, Ireland Strategic Investment Fund, Participant Media, TPG Growth

Centro Series B $30M - May 20 NB Private Equity Partners

Mode Media Series G $29.1M $233M May 21 Hubert Burda Media

Innovid Series E $27.5M - Dec 23 Cisco Investments, Genesis Partners, NewSpring Capital, Sequoia Capital, T-Venture Holding, Vintage Ventures Management

Placester Series C $27M $150M Nov 24 New Enterprise Associates, Romulus Capital

Integral Ad Science Series E $27M $365M Jul 17 Atlas Venture, August Capital, Cross Creek Advisors, Pelion Venture Partners, Sapphire Ventures

GumGum Series C $26M $167M May 28 First Round Capital, Morgan Stanley Expansion Capital, New Enterprise Associates, Upfront Ventures

Magnetic Media Online Series C $25M May 20 Edison Partners, Charles River Ventures, ORIX Ventures

Netsertive Series C $24M $158M Dec 2 Babson Capital Management, Greycroft Partners, Harbert Venture Partners, River Cities Capital Funds, RRE Ventures

RockYou Series F $23M $271M Mar 2 Columbia Capital, Finaventures

Source: Pitchbook

Agenda

1 Public Markets

Deal volume is trending down slightly, although several transactions north of $100M have occurred in the last 12 months

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2 Late Stage Venture Capital

3 Mergers & Acquisitions

AdTech Mergers & Acquisitions, 2009-2017

14

40

80

120

2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

22

7982

104

56

30

47

28

7

$874M $1.50B $3.88B $1.73B $4.86B $8.30B $5.79B $10.01B $1.70BAggregate Deal Volume

Source: Pitchbook & AdOpsInsider M&A Tracker; Note: Agencies, Publishers and Marketing Tech firms were excluded from this analysis

Note: Deals where terms were not disclosed are not included in the “Aggregate Deal Volume” figures

Count of AdTech Acquisitions by Year (as of 6/6/2017)

Recent AdTech Exits Exceeding $100M

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2017 YTD 2016

Company Buyer Deal Size

$850M

Moat $310M

$305M

$125M

Company Buyer Deal Size

$2.9B

$1.4B

$900M

$700M

$540M

$360M

$300M

$300M

Company Buyer Deal Size

HookLogic Criteo $250M

$200M

$175M

Gannett $156M

$148M

$122M

$100M

$100M

Source: Pitchbook & AdOpsInsider M&A Tracker; Note: Agencies, Publishers and Marketing Tech firms were excluded from this analysis

Most Active Acquirers of AdTech, 2014-2017

16

4

8

Twitter Google Yahoo! Nielsen Oracle MediaMath AppNexus Adobe AOL Comcast Criteo Time Inc. GroupM

33333344

566

77

$847M - $913M $740M $2.45B - $100M $540M $288M $320M $250M $87M -Total Deal Size*

Gnip Adometry Brightroll Brandbank AddThis RareCrowds Alenty Ensemble Kanvas Labs Freewheel AdQuantic Adelphic AerodeonNamo Media Agawi Cooliris Gracenote BlueKai Spree7 MediaGlu Tumri Millennial Med. Visible World Datapop Collective UK Exchange LabSecondSync Anvato Flurry Exelate Datalogix Tactads Real Media LA TubeMogul Vidible Watchwith HookLogic Viant plistaSnappyTV Famebit Luminate Informate Mob. Front Porch Upcast Yieldex

TapCommerce mDialog Media Group Pointlogic MoatTellApart Spider.io SPARQ VisualDNAZipDial Toro

Source: Pitchbook & AdOpsInsider M&A Tracker; * Note: Total Deal Size includes deals where acquisition price was disclosed

Count of AdTech Acquisitions by Company (as of 6/6/2017)

Notable AdTech Acquisitions in 2017

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Company Buyer Deal Size Total Raised Deal Date

Placed Snap $125M $13M Jun 6

Moat Oracle $850M $68M Apr 27

Turn Amobee $310M $157M Apr 10

Teads Altice $305M $94M Mar 20

Crisp Mobile Quotient Technology $58M $17M May 2

Visible Measures AcuityAds $10M $72M Mar 31

Adelphic Time Inc. - $23M Jan 23

Watchwith Comcast - $13M Jan 3

AdEspresso Hootsuite - $3.2M Feb 7

Source: AdOpsInsider M&A Tracker

Notable AdTech Acquisitions in 2016

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Company Buyer Deal Size Total Raised Deal Date

Neustar Golden Gate Capital $2.9B - Dec 14

AppLovin Orient Hontai Capital $1.4B $4M Sep 29

Media.net Miteno Communications $900M - Aug 22

Krux Salesforce $700M $50M Oct 3

TubeMogul Adobe $540M - Nov 10

Tapad Telenor $360M $34M Feb 1

HookLogic Criteo $250M $39M Oct 4

Operative Sintec Media $200M $15M Nov 29

AddThis Oracle $175M $73M Jan 5

ReachLocal Gannett $156M - Aug 9

Viant Time Inc. $155M $110M Feb 12

Smaato Spearhead Integrated Marketing $148M $47M Jun 8

Sizmek Vector Capital $122M - Aug 1

ConvertMedia Taboola $100M - Jul 26

Crosswise Oracle $50M $5M Apr 14

Source: AdOpsInsider M&A Tracker

Notable AdTech Acquisitions in 2015

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Company Buyer Deal Size Total Raised Deal Date

Rentrak comScore $732M - Sep 30

TellApart Twitter $533M $18M Apr 28

1010data Inc Advance / Newhouse $500M $35M Aug 4

Marketshare Neustar $450M $96M Nov 5

Millennial Media AOL $238M $240M Sep 3

Exelate Nielsen $200M $30M Mar 4

Undertone Perion $180M $40M Dec 1

Supersonic IronSource $150M $23M Sep 10

Yieldex AppNexus $100M $18M Mar 18

Visible World Comcast Undisclosed $33M Jun 4

Martini Media Evolve Media Undisclosed $41M Jun 16

AdChina Alibaba Undisclosed $40M Jan 14

Medialets WPP Undisclosed $33M Apr 15

Source: AdOpsInsider M&A Tracker

Thank You!

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