GP.Bullhound

The Fabled Northern Unicorn

28 March 2017

Strictly private and confidential

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# Tech Cos.

The rise of technology

Source: Capital IQ, Financial Times Global 500

1996 2001 2006 2011 2017

0 2 1 3 5

0

5

10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

4

Number of years to become a billion dollar revenue company

$bn

5years

35 years

15 years

5 years

8 years

Disruption is increasing in velocity and magnitude

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» Information

» Messaging

» Imaging

» Search

» Retailing

» Banking

» Entertainment

» Marketplaces

» Social networks

» Transportation

» Gaming

» Revolution

» Health

» Medicine

» Artificial intelligence

» 3D printing

» Currencies

» Energy

» Water

» Food

ARAB SPRING

SOLAR POWER

ENERGY STORAGE

CLEAN WATER

CRYPTOCURRENCY

AI MANUFACTURING

The low hanging fruits

Enabled by bandwidth

Enabled by smartphones

Taking care of basic needs

Enabled by Internet of Things

Steps of technology disruption

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The increasingly crowded Unicorn club

Source: CBInsights – Private Unicorns since 2011

Date of $1bn Valuation

UNICORN

HUNTING PERMIT

MUST CHECK SPECIMEN FOR SLOWING GROWTH

RATES, WEAK FUNDAMENTALS, AND HIGH CASH BURNS

SEASON

START

2016

8

Unicorn hunting season – justified?

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European Unicorns make money…

Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016

Note: CAGR is calculated based on data available, the amount of years taken into account varies across data set; (1) % of sample, sample includes 37 of the 47 companies; (2) company profitability based of EBITDA

» Unprofitable Unicorns

sacrifice profit for growth

» Average CAGR for

unprofitable Unicorns

141% vs 49% for

profitable Unicorns

» Unprofitable companies

are on average 4 years

younger

(2)

(2)

(2)

(2)(2)

(2)

(2)

60%of unicornsare profitable(1)

PROFITABLEUNICORNS

UNPROFITABLEUNICORNS

40%of unicorns

are unprofitable(1)

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Unicorns are being built everywhere

Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016

» 10 new Unicorns spread across 7 different countries; US created 30

» Denmark and Switzerland created their first Unicorn

EUROPE US

SWEDEN

LUXEMBOURG

DENMARK

SWITZERLAND

ISRAEL

GERMANY

UK

30

10

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Country

CumulativeValue

$39.6bn $31.1bn $20.8bn $4.7bn $7.2bn $3.4bn $9.3bn $8.0bn $4.0bn $2.3bn $1.6bn $1.1bn $1.1bn $1.0bn

No. ofUnicorns

18 7 6 4 3 3 2 2 1 1 1 1 1 1

LTMAdditions

2 1 2 1 0 2 0 0 0 0 0 1 1 1

Which country is the Unicorn champ?

Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis as at April 2016

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12 $1bn tech businesses in the North

GP Bullhound Research – Northern Tech RevealedNote: Valuation based on press estimates, most valuable defined as Northern headquartered businesses with valuations above $0.5bn as of 27 March 2017*Indicates a private business

$8.6

$4.8

$2.4 $2.3 $1.9 $1.8

$1.5 $1.3 $1.1 $1.1 $1.0 $1.0 $0.9 $0.8 $0.8 $0.7 $0.6 $0.6 $0.5

$b

n

13

Unicorn Founders 14

Listed Leaders 15

Fast Followers 16

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Savvy Sellers 17

Local Dragons 18

Skilled Scientists 19

Electro Men 20

People Mashups 21

Trainspotters 22

Barmen and Baristas 23

Dynamic Talent 24

Our next challenge...

Cumulative value of European unicorns ($bn)

Source: Company data, Capital IQ, Mergermarket, press articles, GP Bullhound analysis.Note: valuations as of March 2017 25

736

408

116

6332 31 27

Apple Facebook Europe Uber The North Airbnb Snap

£3

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