Real Estate Technology Sector Summary Q Review

Transcription

1 Real Estate Technology Sector Summary Q Review 1

2 DEAL DASHBOARD Real Estate Technology Sector Summary Quarterly Financing Activity (2)(3) Select Q Financing Transactions ($MM) Number of Deals Deal Value ($MM) Date Company Selected Investor(s) Amt. Invested Funding to Date Latest Reported Valuation 9/14 $28 $60 NA 9/14 $31 $64 NA $284 $351 $582 $478 (1) $ $645 $497 (4) $422 8/30 $26 $39 NA 8/24 $100 $167 $349 8/15 $40 $56 $180 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Avg. Deal $4.7 $5.1 $7.8 $8.1 $17.2 $13.7 $8.4 $7.8 Value: 8/11 $22 $33 $64 8/08 $40 $40 NA Quarterly M&A Activity (2)(3) Select Q M&A Transactions ($MM) Buyer Target Date Value 10/02 NA 9/12 $385 9/08 NA 8/31 NA 8/02 $250 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 7/03 $1,434 Source: Pitchbook and Press Releases. (1) Includes LendingHome $250MM bridge financing. (2) Represents data across CRE / Investment, Residential Real Estate and Mortgage Technology. (3) Excludes Airbnb financing rounds. (4) Excludes Houzz financing rounds. 2

3 Selected Financial Technology Selected Real Estate Technology GCA OVERVIEW Real Estate Technology Team Chris Gough Managing Director Head of Real Estate Technology Phone: (415) Mobile: (415) Sean Minnihan Managing Director Head of Financial Technology Phone: (212) Mobile: (917) Steve Fletcher Managing Director Co-Head of Software Phone: (415) Mobile: (415) Paul DiNardo Managing Director Co-Head of Software Phone: (212) Mobile: (650) Majority Interest MBO backed by Investment from We Advised the Seller October 2017 Pending December 2016 August 2016 June 2016 August 2015 ~$108,000,000 August 2014 ~$166,000,000 August 2013 ~$355,000,000 Sale of to Series B & C Financings Acquired a majority stake in Investor Group led by Casin Group Advisor to the Special Committee Sale of to Financial Advisor July 2017 Financial Advisor October 2016 June 2017 May 2017 Pending Financial Advisor November 2016 September 2016 September 2016 July 2016 Convertible Note Offering Financial Advisor June 2016 Sale of to May 2016 Acquisition of We advised the buyer April 2016 ~$2,400,000,000 We Advised the Seller February 2016 ~$117,000,000 Acquisition of We Advised the Buyer October 2015 ~$580,000,000 Sale of 54% stake in to We Advised GP Net April 2014 Acquisition of 50% stake in We Advised the Buyer December 2013 We Advised the Buyer November

4 90% 70% 50% 30% 10% (10%) REAL ESTATE TECHNOLOGY SECTOR SUMMARY PUBLIC COMPANY LANDSCAPE LTM Share Price Performance AppFolio: 147% RealPage: 55.3% Agilysys: 7.5% 73% 60% 27% 18% 18% 18% (1%) (30%) Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Mortgage / Data Technology Credit / Mortgage Marketing Traditional Mortgage / Title Property Management Software Traditional Brokerage Real Estate Media / Portals Real Estate Sharing Economy / Travel Public Real Estate Technology Ecosystem Mortgage / Data Technology Credit / Mortgage Marketing Traditional Mortgage / Title Property Management Software Traditional Brokerage Real Estate Media / Portals Real Estate Sharing Economy / Travel (1) (1%) 60% 18% 73% 18% 18% 27% LTM Share Price Performance Source: Capital IQ. (1) Red Ventures on 7/03/17. Q3 Addition 4

5 REAL ESTATE TECHNOLOGY SECTOR SUMMARY PUBLIC COMPANY VALUATION Enterprise Value / NTM Revenue Enterprise Value / NTM Revenue 12.0x 11.2x 10.0x 9.0x 9.3x 8.7x 7.6x 8.1x 8.0x 8.1x 6.0x 3.0x 6.0x 5.3x 4.9x 4.5x 4.5x 4.7x 3.9x 3.8x 4.3x 3.6x 3.3x 3.3x 3.0x 3.1x 3.1x 3.2x 3.0x 2.8x 2.5x 2.6x 1.5x 1.7x 1.6x 1.6x 1.7x 1.4x 1.5x 1.3x 1.1x 1.1x 6.0x 4.0x 2.0x 6.0x 4.7x 3.3x 3.2x 1.7x 1.1x 0.0x (YTD) 0.0x Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Mortgage / Data Technology Credit / Mortgage Marketing Traditional Mortgage / Title Property Management Software Traditional Brokerage Real Estate Media / Portals Real Estate Sharing Economy / Travel Public Real Estate Technology Ecosystem Mortgage / Data Technology Credit / Mortgage Marketing Traditional Mortgage / Title Property Management Software Traditional Brokerage Real Estate Media / Portals Real Estate Sharing Economy / Travel (1) 3.2x 3.3x 1.7x 6.0x 1.1x 8.1x 4.7x NTM Revenue Multiple Source: Capital IQ. (1) Red Ventures on 7/03/17. Q3 Addition 5

6 REAL ESTATE TECHNOLOGY SECTOR SUMMARY Redfin Profile Status: Public (NasdaqGS: RDFN) IPO Date: July 28, 2017 Expected Pricing: $12 - $14 per share Offering Detail: (1) 10,615,650 shares at $15.00 per share, $159MM raised Share Price: $25.09 (9/29/2017) Business Overview Pre-IPO Funding / Select Investors: $167MM Next Reporting Date: November 9, 2017 Annual Real Estate Transactions ~45,000 Transactions 1H ,000 20,000 30,000 FY 2007 FY 2009 FY 2011 FY 2013 FY H 2017 Key Business Metrics Year Ended December 31, Three Months Ended June 31, Monthly average visitors (in thousands) 8,720 11,705 16,215 17,021 24,400 Real estate transactions: Brokerage 12,688 18,586 25,868 7,497 10,221 Partner 6,144 8,906 9,482 2,602 2,874 Total Transactions 18,832 27,492 35,350 10,099 13,095 % Growth 46% 29% 30% Real estate revenue per real estate transaction: Brokerage $9,119 $9,215 $9,436 $9,524 $9,301 Partner 993 1,142 1,719 1,633 1,945 Aggregate 6,468 6,600 7,366 7,491 7,687 Aggregate home value of real estate transactions (in MM): 8,412 12,296 16,199 4,684 6,119 U.S. market share by value 0.33% 0.44% 0.54% 0.53% 0.64% Revenue from top-10 Redfin markets as a % of real estate revenue 80% 76% 72% 74% 69% Average number of lead agents ,010 % Growth 40% 29% 34% Source: As of 9/29/2017. Capital IQ, SEC Filings, Press Releases, News Articles and Company Website. (1) 9,231,00 shares offered with underwriters exercising option to purchase an additional 1,384,650 shares. 6

7 REAL ESTATE TECHNOLOGY SECTOR SUMMARY Redfin Profile CY14A CY15A CY16A CY17E CY18E Revenues $125 $187 $267 $365 $475 % Growth NA 49% 43% 37% 30% COGS $93 $138 $184 $252 $326 Gross Profits $32 $49 $83 $113 $149 % Margin 26% 26% 31% 31% 31% OpEx $57 $79 $106 $127 $151 EBIT ($25) ($30) ($23) ($14) ($2) % Margin (20%) (16%) (9%) (4%) (0%) EBITDA ($22) ($26) ($16) ($7) $6 % Margin (18%) (14%) (6%) (10%) (1%) EPS NA ($2.33) ($0.33) ($0.18) ($0.02) Financial Snapshot (1) Stock Price Performance Stock Data (9/29/17) Valuation Multiples / Rev Growth Closing Price $25.09 CY 17E EV / Revenue 5.0x 52 Week High $33.49 CY 18E EV / Revenue 3.8x CY17 Revenue Growth 36.7% CY18 Revenue Growth 30.1% Basic Shares Outstanding 81 CY17E EV / EBITDA NM Equity Value $2,040 CY18E EV / EBITDA NM Plus: Debt & MI 1 (2) Less: Cash & Equivalents 213 CY17E P / E NM Enterprise Value $1,828 CY18E P / E NM (3) 50% 40% 30% Performance benchmarking based on trading since day 1 post-ipo close price of $ Company up ~67% over its offer price of $15 / share 20% 16% 10% 2% 0% 0% Jul-2017 Aug-2017 Sep-2017 (10%) (11%) (20%) Redfin (NasdaqGS: RDFN) NASDAQ Realogy (NYSE: RLGY) Zillow Group (NasdaqGS: ZG) Source: As of 9/29/2017. Capital IQ, SEC Filings, Press Releases, News Articles and Wall Street Research. (1) Revenue and Expense Estimates from Wall Street Research. (2) Includes IPO proceeds of $159MM. (3) Since Redfin IPO day close on 7/28/2017 of $

8 COSTAR ACQUIRES FORRENT ACQUISITION PROFILE Acquisition Profile» On September 12 TH, 2017 CoStar Group announced the acquisition of ForRent from Dominion Enterprises for a total of $385MM consisting of $350MM in cash and $35MM in stock» ForRent is one of the independent leaders of digital advertising for multifamily properties and multifamily listings and will be added to CoStar s family of sites in the Apartments.com network» The acquisition is expected to close in Q ForRent Profile» ForRent estimated to generate 2017E revenue and EBITDA of $100MM and $15MM, respectively» Implies pre-synergies acquisition multiple of 3.9x AV / Revenue and 25.7x AV / EBITDA» However, CoStar expects to realize ~$25MM in annual synergies within 24 months of closing, which moves the implied synergized acquisition EBITDA multiple to ~10.0x AV / EBITDA Date Target CoStar s Apartments.com Network Growth» CoStar continues to expand aggressively in the apartments category and ForRent represents its third major apartments acquisition since 2014 Enterprise Value ($MM) EV / LTM Revenue EV / LTM EBITDA Synergies at Announcement ($MM) Listings at Announcement 9/12/17 $ x 25.7x $25 17,000 4/29/15 $ x 7.0x $20 13,400 3/02/14 $ x 23.9 $20 18,200» Combined Apartments.com network will have some 43,000 advertised properties» ForRent adds 135 experienced sales professionals to Apartments.com s existing 230 person sales team» ForRent broadens Apartments.com s exposure to slightly the slightly smaller unit community» Pro forma synergized ForRent EBITDA margins of 45-55% on ~$75MM - $85MM revenue contribution from ForRent CoStar 1H 2017 Revenue by Segment Commericial Property & Land, $71 MM ForRent User / Advertiser Stats:» Unique monthly visitors (1H 2017): 3.5MM» 17,000 advertised properties on ForRent network of multifamily sites» 435 employees in 38 offices in the US Source: Capital IQ and Company Filings as of 9/13/2017.» CoStar s multifamily revenue, including ForRent, expected to approach $400MM run rate by end of 2017 Multifamily, $132 MM Information Services, $36 MM CoStar Suite, $223 MM 8

9 PRIVATE COMPANY FUNDING LEADERS Residential Real Estate Technology (3) Mortgage / Investment Technology CRE / Facilities Technology Company Founded Amt. Raised/ Invested Company Founded Amt. Raised/ Invested Company Founded Amt. Raised/ Invested 2014 $ $ $ $ $109 (2) 2015 $ $ $ $ $ $ $ $ $ $ $ $42 / 2011 $110 (1) 2014 $ $ $ $ $ $ $ $ $ $ $ $65 Deal completed in Q Source: Capital IQ and Pitchbook. (1) Reflects combined funding after VTS/Hightower merger. VTS and Hightower individually raised (2) Does not include $250MM bridge financing. $88mm and $22mm, respectively. (3) Excludes Airbnb and Houzz financing rounds. 9

10 REAL ESTATE TECHNOLOGY SECTOR SUMMARY SELECTED M&A ACTIVITY ($MM) Date Enterprise EV / Revenue EV / EBITDA Announced Acquirer Target Value LTM NTM LTM NTM Target Description 10/2/2017 NA NA NA NA NA Develops a SaaS-based real estate transaction management software created to help real estate agents manage their transactions online. 9/12/2017 $ x NA 25.7x NA Operates an online rental search destination that connects apartment shoppers to rental properties throughout the United States and Canada. 9/8/2017 NA NA NA NA NA Provider of real estate listing management technology to developers and builders. 8/31/2017 NA NA NA NA NA Provides cloud-based intelligent sales software that enables mortgage companies to close more loans by helping loan officers respond quickly to prospective borrowers. 8/1/2017 NA NA NA NA NA Provides mortgage loan application software, loan origination software, and data security solutions. 7/10/2017 NA NA NA NA NA Provides an online marketplace that connects borrowers and lenders. 7/3/2017 1, x 2.8x 14.2x 11.1x Provider of financial publishing services in the United States. 6/19/ x NA NA NA Provider of utility management and energy services. 6/13/ NA NA NA NA 6/6/2017 NA NA NA NA NA Provider of an online real estate agent platform, offering agents maximum property exposure and a host of services. Provider of an appraisal management platform that uses desktop and cloud-based valuation supply chain technology that connects all of the parties involved in the appraisal process. 6/1/2017 NA NA NA NA NA Developer of web-based CRM software intended for the real estate industry. 5/23/2017 NA NA NA NA NA 4/27/2017 NA NA NA NA NA 3/13/2017 4, x 2.7x 14.6x 9.7x Provider of a real estate software platform coupled with an open and connected ecosystem for real estate businesses. Provider of a web-based land and rural property marketplace, facilitating buying, renting and selling of properties. Developer of lending and payments software products created to deliver financial technology to banks worldwide. 2/27/ x NA 30.0x NA Advanced forecasting mobile app and optimization software used to price real estate units in North America. 2/15/ NA NA NA NA Operator of an online rental marketplace intended to rent high-end properties. The company's rental platform provides a marketplace for luxury and high-end villas to rent. 1/24/ NA NA NA NA Provider of data intelligence services designed to offer apartment market data. 11/29/ NA NA NA NA Provider of real-time analytics that enable mortgage lenders to monitor and manage operations across their enterprise. (1) 9/21/2016 NA NA NA NA NA RedVision Systems, Inc. provides title reporting and property research solutions. 7/26/2016 NA NA NA NA NA Developer and provider of an an end-to-end software as a service customer relationship management, lead generation and lead management software platform Source: Capital IQ and Pitchbook. (1) Represents a merger of equals between VTS and Hightower. 10

11 REAL ESTATE TECHNOLOGY SECTOR SUMMARY SELECTED M&A ACTIVITY (CONT D) ($MM) Date Enterprise EV / Revenue EV / EBITDA Announced Acquirer Target Value LTM NTM LTM NTM Target Description 6/22/ NA NA NA NA Provider of real-time analytics that enable mortgage lenders to monitor and manage operations across their enterprise. 6/16/2016 NA NA NA NA NA Provides mortgage pricing and eligibility, mortgage sales, mortgage rate quoting and marketing automation software for banks, mortgage lenders and loan officers. 6/7/2016 NA NA NA NA NA Provides cloud-based document and data management platforms. 6/3/2016 NA NA NA NA NA 5/18/2016 NA NA NA NA NA Provides SaaS based real estate investment management and reporting software and services for the affordable housing, private equity, and government markets. Provides real estate and facilities management software solutions to Fortune 500 companies that automates location lifecycle to improve the performance of locations. 5/16/ x NA 23.0x NA Provides secure EDI document distribution and collaboration SaaS for the financial services industry. 2/25/2016 NA NA NA NA NA 2/23/ x NA 11.7x NA Provider of a search engine for rental properties. The company offers a map-based online platform with realtime filtering that enables users to search for apartments to rent in a selected area. Provides utility management, energy management, electronic payment, sub metering and back office solutions. 2/2/2016 NA NA NA NA NA Provides commercial property management software for real estate companies in Germany. 1/28/2016 NA NA NA NA NA Provides Web-based property management solutions to support multiple properties, units, and users. 12/17/ NA NA NA 13.5x Provides property appraisal and real estate collateral management software. 11/4/2015 3, x 7.2x 63.5x 28.4x Provider of an online vacation rental property marketplace that enables property owners / managers to market properties for rental to travelers. 11/4/ NA NA NA NA Provider of hospitality management software systems for hotels, resorts, and spas worldwide. 10/14/ NA NA NA NA Provides a Web-based relationship management solution for mortgage professionals to improve customer retention. 7/22/ NA NA NA NA Provider of an online collaborative transaction environment for the real estate industry. 6/3/2015 NA NA NA NA NA Provider of real estate enterprise software applications and hosted solutions for the property management industry. 6/2/ NA NA NA NA Provides a suite of cloud-based, smart answer automation and routing. 4/29/ x NA 7.0x NA Provider of an online apartment listing service. 4/8/2015 NA NA NA NA NA Provider of an online apartment advertising service for property managers and owners. Mean 4.1x 2.7x 21.1x 10.4x Median 3.0x 2.7x 20.2x 10.4x Source: Capital IQ and Pitchbook. 11

12 APPENDIX 12

13 PUBLIC REAL ESTATE TECHNOLOGY ECOSYSTEM ($MM, except per share data) Stock Trading Metrics Operating Metrics Price Equity Net Enterprise Revenue EV / Revenue EV / EBITDA CY Rev. Growth EBITDA Margin Company 09/29/17 Value Debt Value CY16A CY17E CY16A CY17E CY16A CY17E 16A/15E 17E/16A CY16A CY17E Real Estate Media / Portals CoStar Group, Inc. $ $9,580 ($260) $9,320 $837 $ x 9.7x 36.4x 34.6x 17.6% 14.9% 30.6% 28.0% Zillow Group, Inc. $ ,380 (223) 7, , x 6.7x NM 31.2x 30.8% 26.2% 16.6% 21.5% REA Group Limited $ , , x 12.2x 25.9x 21.2x 29.8% 10.9% 52.0% 57.2% Rightmove plc $ ,951 (23) 4, x 19.3x 27.9x 25.3x 11.0% 10.5% 76.4% 76.2% ZPG Plc $4.85 2, , x 7.8x 23.6x 18.0x 16.1% 31.1% 43.6% 43.6% Redfin $ ,040 (212) 1, x 5.0x NM NM 42.8% 36.7% (6.0%) (1.9%) Lifull Co., Ltd. $8.69 1,031 (32) x 5.4x 22.8x 23.6x 43.4% (18.7%) 19.3% 22.9% Real Estate Media / Portals Mean 10.8x 9.4x 27.3x 25.7x 27% 16% 33% 35% Median 10.3x 7.8x 25.9x 24.5x 30% 15% 31% 28% Mortgage / Data Technology Black Knight Financial Services, Inc. $43.05 $6,608 $1,462 $8,070 1,035 1, x 7.5x 17.4x 15.7x 11.2% 4.0% 44.9% 47.9% CoreLogic, Inc. $ ,897 1,552 5,449 $1,934 $1, x 2.9x 10.9x 11.7x 26.6% (4.0%) 25.8% 25.1% Ellie Mae, Inc. $ ,824 (334) 2, x 6.2x 22.1x 21.1x 39.5% 14.2% 31.9% 29.2% Real Matters Inc. $ (70) x 2.9x NM NM 45.8% 19.9% 5.2% 2.1% Altisource Portfolio Solutions S.A. $ x 0.9x 5.1x 7.7x (7.2%) (11.8%) 15.0% 11.3% Reis, Inc. $ (19) x 3.9x 13.4x 15.9x 8.6% 1.4% 29.6% 24.6% Mortgage / Data Technology Mean 4.3x 4.1x 13.8x 14.4x 21% 4% 25% 23% Median 3.7x 3.4x 13.4x 15.7x 19% 3% 28% 25% Property Management Software RealPage, Inc. $39.90 $3,298 $71 $3,369 $568 $ x 5.0x 26.9x NM 21.3% 18.2% 22.0% 0.0% AppFolio, Inc. $ ,626 (32) 1, x 11.4x NM NM 39.8% 33.1% 2.8% 17.0% Agilysys, Inc. $ (43) x 1.8x NM NM 11.4% 2.1% 3.4% 4.4% Property Management Software Mean 7.6x 6.1x 26.9x NM 24% 18% 9% 7% Median 5.9x 5.0x 26.9x NM 21% 18% 3% 4% Traditional Brokerage Jones Lang LaSalle Incorporated $ $5,599 $1,937 $7,536 $6,647 $7, x 1.0x 11.8x 10.9x 11.4% 13.4% 9.6% 9.2% Realogy Holdings Corp. $ ,492 3,487 7,979 5,778 6, x 1.3x 10.5x 10.4x 4.6% 7.1% 13.2% 12.4% Colliers International Group Inc. $ , ,084 1,930 2, x 1.0x 10.8x 9.0x 12.1% 10.7% 10.0% 10.8% RE/MAX Holdings, Inc. $ , , x 6.5x 13.8x 12.2x (1.4%) 12.5% 53.2% 53.8% Marcus & Millichap, Inc. $ ,029 (227) x 1.1x 6.7x 8.0x 13.0% (1.4%) 16.7% 14.2% Traditional Brokerage Mean 2.4x 2.2x 10.7x 10.1x 8% 8% 21% 20% Median 1.1x 1.1x 10.8x 10.4x 11% 11% 13% 12% Source: Capital IQ. 13

14 PUBLIC REAL ESTATE TECHNOLOGY ECOSYSTEM (CONT.) ($MM, except per share data) Stock Trading Metrics Operating Metrics Price Equity Net Enterprise Revenue EV / Revenue EV / EBITDA CY Rev. Growth EBITDA Margin Company 09/29/17 Value Debt Value CY16A CY17E CY16A CY17E CY16A CY17E 16A/15E 17E/16A CY16A CY17E Traditional Mortgage / Title Fidelity National Financial, Inc. $47.46 $12,949 $1,021 $13,970 $8,115 $8, x 1.6x 9.9x 9.1x 39.4% 5.8% 17.5% 17.9% First American Financial Corporation $ ,533 (432) 5,100 5,475 5, x 0.9x 7.7x 6.7x 5.8% 4.8% 12.1% 13.3% Radian Group Inc. $ ,023 (315) 3,708 1,268 1, x 3.0x NM NM 9.8% (1.5%) NM NM Nationstar Mortgage Holdings Inc. $ ,815 15,253 17,068 1,924 2, x 8.5x NM 31.7x (3.3%) 4.0% 20.9% 26.9% Stewart Information Services Corporation $ (31) 866 1,972 1, x 0.4x 6.7x 6.1x (3.1%) (2.1%) 6.6% 7.4% Ocwen Financial Corporation $ ,438 6,888 1,387 1, x 6.8x 27.6x 32.2x (20.3%) (26.5%) 18.0% 21.0% Traditional Mortgage / Title Mean 3.3x 3.5x 13.0x 17.1x 5% (3%) 15% 17% Median 2.3x 2.3x 8.8x 9.1x 1% 1% 17% 18% Credit / Mortgage Marketing Moneysupermarket.com Group PLC $4.26 $2,284 ($23) $2,261 $389 $ x 5.0x 15.1x 13.0x (6.3%) 16.8% 38.5% 38.3% LendingTree, Inc. $ ,933 (124) 2, x 4.8x NM 26.6x 49.9% 54.7% 17.7% 17.9% Bankrate, Inc. $ , , x 2.7x 11.8x 10.6x 18.3% 14.5% 25.9% 25.3% QuinStreet, Inc. $ (50) x 0.9x 29.0x 14.0x 6.5% 3.4% 3.3% 6.5% Credit / Mortgage Marketing Mean 4.3x 3.3x 18.6x 16.1x 17% 22% 21% 22% Median 4.4x 3.7x 15.1x 13.5x 12% 16% 22% 22% Real Estate Sharing Economy / Travel The Priceline Group Inc. $1, $89,818 $2,129 $91,947 $10,722 $12, x 7.3x 22.5x 19.3x 16.2% 16.7% 38.1% 38.0% Expedia, Inc. $ ,827 (560) 21,266 8,753 10, x 2.1x 13.1x 11.7x 31.2% 16.3% 18.5% 17.9% TripAdvisor, Inc. $ ,624 (637) 4,987 1,491 1, x 3.1x 13.5x 15.3x (0.1%) 6.5% 24.8% 20.5% Real Estate Sharing Economy / Travel Mean 4.8x 4.2x 16.4x 15.4x 16% 13% 27% 25% Median 3.3x 3.1x 13.5x 15.3x 16% 16% 25% 20% Source: Capital IQ. 14