Vertical SaaS companies, in particular focused on construction, education, government, healthcare, and real estate sectors, continue to see strong demand from their customers/users, and interest from investors and strategic partners
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Global Software Market Perspectives
Q3 2017
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Key Sector Takeaways and Commentary
Recent Software Transaction Trends
Public Market SaaS Analyses
Key SaaS Metrics
Appendix A: GP Bullhound SaaS Index
Appendix B: Software Public Comps by Category
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5
6
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Appendix C: GP Bullhound Software Report
Overview, Software Credentials & Team
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Software consolidators are actively pursuing M&A to build out their software platforms, acquiring new products and point
solutions in order to deliver market-differentiating, comprehensive product suites to their customers
Sizeable software players are driven to capture a larger percentage of their enterprise customers’ wallet share by
adding and offering a comprehensive set of products
– The platform strategy is particularly evident in the human capital management, enterprise resource planning and marketing software spaces
» HCM – Asure Software/iSystems, Bullhorn/Connexys, Workday/Pattern Technologies
» ERP – Aptean/Apprise, Sage/Intacct
» Marketing – SAP/Gigya, Sizmek/Rocket Fuel
Many of the software consolidators have built vertical businesses on their platform: most notably, Salesforce in the
financial services industry
– Others include: Oracle in construction and in utilities; Verizon in telematics
Vertical SaaS companies, in particular focused on construction, education, government, healthcare, and real estate
sectors, continue to see strong demand from their customers/users, and interest from investors and strategic partners
Our Views on Current Trends in Software
Source: Capital IQ
”PF” = Pro Forma
0
10
20
30
40
50
2013
2014
2015
2016
2017
# of Verical SaaS M&A Deals
YTD
PF
– The nature of vertical SaaS customers tends to be
very sticky with long project terms and a low
appetite to change software providers (e.g.
government organizations change software
providers very infrequently due to their budgets
and installed software integrations)
» Results in impressive unit economics, high
retention rates, customer lifet