The New Japan as No1 - Mobile and Beyond

GLOBIS CAPITAL PARTNERS

Shinichi (Shin) TakamiyaPartner/Chief Strategy Officer GLOBIS Capital PartnersEmail: s-takamiya@globis.co.jp

June 2014

Partner/Chief Strategy Officer,GLOBIS Capital Patners

Board Representative:nanapi, Kayac, Pixta, Beyond, Lancers, Viibar,and Mercari etc

Shinichi (Shin) Takamiya

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and Mercari etc

Track Record:iStyle, Shimauma Print System, and Aucfan etc

BA in Economics from University of Tokyo (graduation thesis with Honor's Award)MBA from Harvard Business School (Second Year Honor)

1996 GLOBIS Incubation Fund JPY0.54B1999 Apax GLOBIS Japan Fund JPY20B2006 GLOBIS Fund III JPY18B2014 GLOBIS Fund IV JPY11.5B

Capital

Overview GLOBIS Capital Partners

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People• GLOBIS University, Graduate

School of Management, • GLOBIS Management School• GLOBIS Organization Learning

Knowledge• GLOBIS MBA Series, best

selling MBA text books• G1 Summit and Aska

Conference• Research institute

8%

Japan Struggled During the “Lost 2 Decades”

Real GDP Growth Rate (%)

Lost 2 Decades

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(6%)

(4%)

(2%)

0%

2%

4%

6%

'80 '85 '90 '95 '00 '05 '10

3

Source: IMF

15,000

17,500

2.3%2.5%

3.0%

2.0%

2.5%

3.0%

3.5%

… However, Re-Growth in the Last 2 YearsQuarterly Real

GDP Growth Rate (%)Nikkei Stock Price

PerformanceAbe’s era (JPY)

x1.7

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7,500

10,000

12,500

12/712/912/1213/313/613/913/1214/314/6

-0.2% -0.3%

0.1%

1.2%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

20123Q 4Q

20131Q 2Q 3Q 4Q

20141Q

4Source: IMF, Cabinet office, Yahoo

-0.3%20123Q 4Q

20131Q 2Q 3Q 4Q

20141Q 2Q

“Abenomics” Stimulating Growth

1st ArrowMonetary

Policy• 2% inflation target• Radical quantitative easing

2nd Arrow

“Abenomics”

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2nd ArrowFiscal Policy

• Expansion of public investment• Buying government bonds

3rd ArrowEconomic

Growth

• Corporate tax decrease• Accounting standard reform • Maximize working population• Improve mobility of human resources

13.5%

7.6%10%

15%

Mobile Internet as “The New Japan as No1”Real GDP Compound Annual Growth Rate (%)

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0.9% 0.6% 0.4%

-0.4% -1.2% -1.6%

-3.7% -4.4%(5%)

0%

5%

InternetServices Mobile

Communication

RetailElectric

Machinery

Other IT

Transportation

SteelTransportMachinery

WholesaleConstruction

6

Note: Compound Annual Growth rate from 2005 to 2011Source: Ministry of Internal Affairs and Communications

Average -1.0%

The Most Attractive Mobile Market in the World

Mobile Contents Market 8.5B 6.8B1>

1.2x

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1 Calculated based on global digital goods market size and U.S. market share among global mobile contents market

Source: Mobile Contents Forum, Deutsche Bank, ResearchMoz, ITU - ICT Statistics, United Nations, IMF and GCP analysis

Contents Market

Mobile Contract

Population

GDP

120M 330M

>2.7x

127M 310M

>2.4x

6.0T 15.7T

>2.6x

10 Years Ahead - Long Going History1999

Japanese developers

15 years

2007 2014

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NTT docomo“i-mode”

iPhone1st generation

leading theglobal market

7 years

2.1

11.9

Big Fish Casino(Big Fish Games)

Puzzle & Dragons(GungHo Online)

Sophisticated UsersNurturing Unique Services

Highly Profitable Users(Example of Games)

Sophisticated and Profitable Users

Monthly Average Revenue per User (USD)Coupons/CRMCommerce

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0.2

0.8

1.3

2.1

0 5 10 15

Zynga Poker(Zynga)

Candy CrushSaga (King)

Clash of Clans(Supercell)

(Big Fish Games)

Note: April 2013 – March 2014Source: Superdataresearch.com

9

Real Payment E-Ticketing

Carrier BillingTransaction Fee 6.0%1 35.0%2

4G 20.7% 9.8%3

Mobile Carriers Building the Cornerstone

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4G Penetration 20.7% 9.8%3

Mobile Data Transmission Speed 3.2Mbps 2.1Mbps3

Developer Support

SDK, OSdevelopment

subsidy-

10

1 Epsilon (Payment agency handling 3 carrier’s settlement)2 AT&T, 3 Average of U.S., UK, Germany, Australia

Source: bango, mobiThinking, CISCO VNI Mobile

318

250

300

350

Accessible IPO MarketMedian Market Cap at IPO at Small Cap Markets (2013)

(USD M)

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55

0

50

100

150

200

TSE Mothers NASDAQ

Source: NASDAQ, Bloomberg

11

32.0x

Highly Attractive IPO MarketLiquidity and Valuation at IPO

TSEMothers

Turnover Offering PER Opening PER

19.6x775%

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16.9x

18.9x

12

Mothers

SGX

Hong KongNote: Turnover(2013), PER (2012)

Source: TSE report

13.6x

13.3x

59%

209%

1,604 1,500

2,000

Great Fund Raising Environment

Name Sector $M

Akatsuki Game 14.0

Mercari C2C market 14.5

Example of Sizable Private FinanceVC Investment(USD M)

+84%

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872

0

500

1,000

2009 2013

13

Gunosy News App 12.0

Antenna News App 20.0

gumi Game 19.0

Metaps AD 10.0

Note: Mobile internet related financing deal in 2013-2014Source: VEC, News, GCP

Investment period

% of Serial or Seasoned

Management

# of investment

Apax Globis 1999 - 47

Rise of Quality Entrepreneurs

25%

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Apax GlobisJapan Fund

1999 -2006 47

Fund IIl & IV

2006 -2014 57

14

49%

25%

“Beyond i” IoT is the Next Big ThingThe Next Big Thing “Internet of Things (IoT)”

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Summary: The New Japan as No1• Abenomics stimulating the re-growth of Japan• Mobile internet “The New Japan as No1”

− Driving Japan’s growth− Making Japan the most attractive mobile internet market in the world

• Japan has become a great nurturing ground for innovativeand unique mobile services

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and unique mobile services− 15 years of long history− Mobile carriers’ initiatives− Sophisticate users

• Highly accessible and attractive capital markets• Rise of quality entrepreneurs and startups• “Beyond i”: Japan’s opportunity lies beyond mere mobile

internet - “Internet of Things (IoT)”16

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