A look at the all the Canadian SaaS deals and trends for 2018. A keynote I gave at L-Spark's SaaS Showcase event

1. THE STATE OF CANADIAN SAAS
Mark MacLeod, SurePath Capital Partners
March 20, 2019
SaaS Showcase Ottawa

2. A g e n d a
01 Introduction
02 Canadian SaaS Deals and Trends
03 Takeaways

3. M A R K M A C L E O D
FOUNDER
SUREPATH CAPITAL PARTNERS
Mark has over 19 years of industry experience with 14 years as CFO for leading companies such as FreshBooks, Shopify,
Tungle and more. He spent 3 years at Real Ventures, Canada’s most active seed stage venture fund, where he was one of
the original Partners.
Mark has raised hundreds of millions in capital from investors in Canada, the US and Asia and has sold companies to Airbnb,
Blackberry, Gannett, Rackable Systems, Return Path, Shopify and others.
I n t r o d u c t i o n
3

4. surepathcapital.com
S u r e P a t h : O u r P u r p o s e
Helping fund, grow, and exit SMB software companies
SurePath maximizes your optionality:
We make sure you know what it takes to build a market leader and capitalize you towards that goal.
We ensure you are always in the minds of strategic buyers so that if they decide to make a move in your
space, you are in the conversation. You can then decide; Keep going or exit?
The process of raising growth capital is very different from raising early stage capital
It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your
aspiration, you need growth capital
We help you prepare for growth stage and help you raise the capital needed to become a market leader
Growth
Funding
We track every SMB software company in the market
Buyers have recognized that we have unique insights into this market
We leverage our in-depth coverage and insights to accelerate our clients’ acquisition programs
Acquisitions
Great exits don’t just happen. Buyers don’t just show up ready to pay a premium
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
No other investment banking firm has the depth of our relationships in the SMB world
Exits
4
4

5. surepathcapital.com
S u r e P a t h a n d S M B
Business Management E-Commerce
CRMMarketing Tech
Payments/ POS
We have been part of some the most successful SMB SaaS companies
We have deep relationships with SMB investors and buyers
SurePath is committed to becoming the leading strategic financial advisor to the global SMB software market
5

6. surepathcapital.com
R e c e n t S u r e P a t h D e a l s
6
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $60,000,000
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
CAD $115,000,000
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $11,800,000
served as the exclusive strategic
and financial advisor to
a wholly-owned subsidiary of
on its sale to
served as the exclusive strategic
and financial advisor to
on its sale to
served as the exclusive strategic
and financial advisor to
on its growth
financing led by
USD $32,000,000

7. Canadian SaaS Deal Activity

8. surepathcapital.com
S a a S V e n t u r e F u n d i n g B y Q u a r t e r
1. Source: Pitchbook
8
Total Deal
Count
(incl. deals with
undisclosed $)
53* 38*42* 50* 39* 54* 40* 41*
Over $1.7B has been raised across 273 deals in Canada throughout 2017 – 2018.
2018 deal count and $ down from 2017
$166M
$230M $241M
$294M
$82M
$338M
$194M $195M
30
34
41
34
27
46
28
33
0
5
10
15
20
25
30
35
40
45
50
-
$50M
$100M
$150M
$200M
$250M
$300M
$350M
$400M
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
Capital Raised (Millions, USD) Deal Count (excl. undisclosed values)

9. surepathcapital.com
2 0 1 8 S a a S V e n t u r e A c t i v i t y b y S t a g e
1. Source: Pitchbook
9
~ 50% of $ went to later stage deals. This is a good sign that we are building category leaders and attracting
large investors
74* 66* 34*
$81M
$328M
$399M
54
51
29
0
10
20
30
40
50
60
-
$50M
$100M
$150M
$200M
$250M
$300M
$350M
$400M
$450M
Seed Round Early Stage VC Later Stage VC
Capital Raised (Millions, USD) Deal Count (excl. undisclosed values)
Total Deal
Count
(incl. deals with
undisclosed $)

10. surepathcapital.com
2 0 1 8 S a a S V e n t u r e F u n d i n g B y G e o g r a p h y
1. Source: Pitchbook
2. Includes deals with an undisclosed value. Excludes deals with an unknown geography.
10
Total Deals
174
87
40
23
7
2
1
9
3
$163M
British
Columbia
$5M
Alberta
$577M
Ontario
$52M
Quebec
$8M
Nova Scotia
$0.2M
PEI
$2M
Newfoundland
$1M
New
Brunswick
Total
Raised
$809M

11. surepathcapital.com
$40M Kleiner Perkins Caufield & Byers
$38M Napier Park Financial Partners
$34M ScaleUP Venture Partners / David Mirvish /
Intercap (Debt)
$18M iNovia Capital
$16M OpenView Venture Partners
$100M Warburg Pincus
$55M OMERS Ventures / JP Morgan Chase &
Company
$50M Insight Venture Partners
$47M TELUS Ventures / Wittington Investments
$43M Sageview Capital
2 0 1 8 ’ s T o p 1 0 S a a S V e n t u r e R a i s e s
Source: Pitchbook
11

12. surepathcapital.com
2 0 1 8 N e w C a n a d i a n F u n d F o r m a t i o n s
1. Source: Pitchbook and publicly available information.
* Foreign fund solely or largely focused on Investments in Canada and the US.
12
$100M
$174M
$23M
$100M
$10M
$10M
$198M
$19M
$59M
$58M
$550M
$15M
$40M
$20M
Yaletown Partners
White Star Capital*
Vancouver Founder Fund
Salesforce Canadian Trail. Fund*
Ripple Ventures
Ramen Ventures
Portag3 Ventures
Panache Ventures
Luge Capital
Golden Ventures
Georgian Partners
Concrete Ventures
Build Ventures
7 Gate Ventures
Fund Size (Millions, USD)
In 2018, ~$1.4B was raised in new funds by SaaS/Software focused VC’s.

13. surepathcapital.com
# of
Investments
Investors
> 6
5-6
3-4
M o s t a c t i v e S a a S V C s i n 2 0 1 8
13
Many notable Canadian VC investment firms made multiple investments in the Canadian SaaS Market in
2018.

14. surepathcapital.com
P E G r o w t h C a p i t a l A c t i v i t y B y Q u a r t e r
1. Source: Pitchbook
14
Although, there has historically been fewer PE Growth deals in Canada, over $478M capital has been raised
throughout 2017-2018.
6* 9*4* 4* 9* 4* 4* 2*
$4M
$22M
$64M
$110M
$100M
$133M
$40M
$5M
1
3
2
4
3
3
2
1
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
-
$20M
$40M
$60M
$80M
$100M
$120M
$140M
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
Deal Size (Millions, USD) Deal Count (excl. undisclosed values)
Total Deal
Count
(incl. deals with
undisclosed $)

15. surepathcapital.com
S a a S E x i t A c t i v i t y B y Q u a r t e r
1. Source: Pitchbook
15
18 18
13 14
20
27
15
20
8 7
7
10
5
9
4
9
0
5
10
15
20
25
30
35
40
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
M&A Deal Count Buyout/LBO Deal Count

16. surepathcapital.com
T o p 5 S a a S E x i t D e a l s i n t h e P a s t 5 Y e a r s
16
Total Deal
Proceeds
Buyer Exit Type Acquirer Age at Exit
Amount of
Capital Raised
Pre-exit
$125M Public-to-private
LBO
Saba Software /
HarbourVest Partners
/ Vector Capital
21 $54.2M
$97.5M M&A Verifone Systems 22 NA
$88.7M M&A
Fairfax Financial
Holdings
16 $0.5M
$85.2M M&A VASCO Data
Security International
23 $72M
$70M M&A Xero 7 $6.0M
Source: Pitchbook

17. surepathcapital.com
A c t i v e S a a S B u y e r s i n t h e P a s t 5 Y e a r s
1. Source: Pitchbook
17

18. surepathcapital.com
E x i t s b y A g e i n t h e P a s t 5 Y e a r s
1. Source: Pitchbook
18
Good things (usually) take time
Average time to exit > 10 years
4
3 3
4
2
20
47
25
30
33
10
12 12
11
14
0
5
10
15
20
25
30
35
40
45
50
2014 2015 2016 2017 2018
CompanyAgeatAcquisition(Years)
Minimum Age at Exit Maximum Age at Exit Average Age at Exit

19. surepathcapital.com
R a i s e v s . E x i t i n t h e P a s t 5 Y e a r s
1. Source: Pitchbook
19
~ 2 Raises to every Exit
176
191
174 183 174
79
113
108 95 109
1.8
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
0
50
100
150
200
250
300
350
2014 2015 2016 2017 2018
Raises Deal Count Exits Deal Count Average Raise/Exit Ratio

20. surepathcapital.com
T h e V C F u n n e l
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Source: https://www.cbinsights.com/research/venture-capital-funnel-2/

21. Takeaways

22. surepathcapital.com
C a n a d a i s S a a S y !
22

23. surepathcapital.com
C a n a d i a n s t a r t u p s n o t o n a l e v e l
p l a y i n g f i e l d f o r f u n d i n g
1. Source: Pitchbook
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$9M
$11M $10M $11M
$15M
$4M $4M
$6M $7M $6M
0
2
4
6
8
10
12
14
16
18
2014 2015 2016 2017 2018
Average US VC Investment Average Canadian VC Investment
Max. US
VC Deal
$740M $513M $690M $413M $450M
Comparing the average fundraising size, Canadian VC investments were on average ~50% smaller in size
than those in the U.S.
Max.
Canadian
VC Deal
$85M $79M $100M $166M $100M

24. surepathcapital.com
US PE Firms Investments
$115M $122M $27M
$48M $65M
$18M Undisclosed
U S P E F i r m s a r e g o i n g t o b e a b i g f o r c e
i n t h e m a r k e t
24
Notable US PE firms are also making multiple investments in the Canadian SaaS Market.

25. surepathcapital.com
W e h a v e w o r k t o d o t o d e l i v e r B I G e x i t s
1. Source: Pitchbook
25
Max. US
Deal Size $2.6B $9.8B $9.3B $3.7B $7.5B
Comparing the average deal size for M&A activity, Canadian acquisitions were significantly smaller than
those in the U.S.
Max.
Canadian
Deal Size
$89M $85M $153M $96M $80M
$135M
$194M
$323M
$230M
$327M
$17M $19M $26M $22M $24M
0
50
100
150
200
250
300
350
2014 2015 2016 2017 2018
Average US M&A Deal Size Average Canadian M&A Deal Size

26. surepathcapital.com
C a n a d i a n T a l e n t
26
New Toronto Engineering Hub
to open in 2019
New Toronto headquarters to
open in 2020
Major tech startup
conference is relocating to
Toronto in 2019
MaRS Discovery District
welcomes Facebook
Opens first Canadian Office
in Toronto
Meaningful Canadian
presence
Fastest growing tech talent in
Canada
New engineering office to
open in Kitchener-Waterloo
We are continuing to see a growing list of tech giants and enterprises launching and growing significant
operations in Canada, particularly in Toronto.

27. surepathcapital.com
A r t i f i c i a l I n t e l l i g e n c e a n d M a c h i n e
L e a r n i n g
27

28. surepathcapital.com
W e n e e d m o r e h o m e g r o w n I P O s
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29. surepathcapital.com
S h o p i f y : A $ 2 2 B h o m e g r o w n s u c c e s s !
1. Source: Pitchbook
2. Stock Price is based on the quarter end
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$444
$509
$581
$673
$760
$854
$952
$1,073
$68
$87
$117
$101
$124
$145
$163
$139
0
20
40
60
80
100
120
140
160
180
-
$200M
$400M
$600M
$800M
$1,000M
$1,200M
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
TTM Revenue (Thousands, USD) Stock Price (USD)

30. Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004
Toronto • San Francisco
30