HOW CAN GOLUB CAPITAL LATE STAGE LENDING HELP YOUR SAAS BUSINESS GROW?

Golub Capital’s Late Stage Lending offers flexible debt to venture-backed, growth equity and other technology companies. Our solutions are customized to meet the growth thesis of your company without extensive equity dilution.

Check out our brief educational videos and email us if you’d like to learn how we can partner together: lsl@golubcapital.com.

LSL Educational Videos:

Are you seeking debt financing to help grow your business? Watch the video below to learn how a single lender, versus two, can simplify your life.

Ready to learn more about the nuances of loans, especially loan covenants? Watch the video below to learn more about how they work and why “no covenant” deals often come with “hidden covenants” that can take you by surprise and slow down your growth. Bonus: Download our whitepaper at the end of the video for further insights:

How does our LSL product work to help meet your growth goals? It only takes a minute to find out by clicking on the video below:

 

Email us at lsl@golubcapital.com for more information.

Golub capital’s late stage lending offers flexible debt to venture-backed, growth equity and other technology companies.

Golub Capital’s Late Stage Lending business provides financing solutions to venture-backed, growth equity and other technology companies. Our solutions are customized to meet the growth thesis without extensive equity dilution. We provide senior debt, subordinated debt and equity investments to companies undergoing rapid growth due to new services, increased adoption and/or entry into new markets. Our firm usually underwrites and holds the entire credit facility.

TARGET COMPANY CHARACTERISTICS

  • Expanding revenues with minimum recurring or durable revenue of $10 million
  • Current earnings may be reduced or negative due to continued reinvestment in growth
  • Backed by growth equity or venture capital firms
  • Strong customer revenue retention rates
  • Diversified customer base

TERMS OF FINANCING

  • Facilities from $10 million to $200 million
  • Customized and flexible covenant packages
  • Golub Capital will typically hold 100% of the credit facility

TECHNOLOGY LENDING LANDSCAPE

lsl-technology-lending-landscape_footnotes
ENLARGE IMAGE FOR IMPORTANT DISCLAIMERS

TYPICAL USE OF CAPITAL

  • Accelerated growth
  • Strategic acquisitions
  • Product expansion
  • Investor liquidity
  • Conversion to SaaS

SECTOR EXPERIENCE

  • Enterprise software
  • Application software
  • FinTech
  • Healthcare IT
  • Data analytics
  • Security
  • Mobile
  • Cloud

contact us

For more information on Golub Capital Late Stage Lending please contact Andrew Steuerman or Peter Fair.

Golub Capital’s Late Stage Lending group provided a compelling debt financing that allowed the company to accelerate its growth without meaningful dilution to current stakeholders. The Golub Capital team has significant expertise working with the needs of rapidly growing and expanding SaaS companies, making them excellent partners. Their debt solution is unique as it has a long-term horizon, allows us the flexibility to invest in the business and has greater scale than any other debt product in the market.
Ian Charles, CFO
Host Analytics

SaaS Meter

Golub Capital Quarterly SaaS Valuation & Investment Trends Report

Welcome to Golub Capital’s SaaS Meter, a report that analyzes valuation and investment trends for SaaS companies. The SaaS Meter leverages data from:

– The Golub Capital Public SaaS Tracker (“GC Public SaaS Tracker”) comprises publicly traded SaaS companies that are listed on the NYSE and Nasdaq

– The Golub Capital Private SaaS Tracker (“GC Private SaaS Tracker”) comprises private SaaS companies that are included in the “Golub Capital Altman Index”

For full definition of the Trackers, please refer to SaaS Meter Definitions at the end of this report.

A conversation with Silver Peak and Golub Capital

Peter Fair, Managing Director at Golub Capital


Eric Yeaman, CFO at Silver Peak

Silver Peak is the industry leader in the SD-WAN market and delivers a transformational networking solution based on a “business-first” approach. For this edition of SaaS Meter, Golub Capital Managing Director Peter Fair sat down with Silver Peak CFO, Eric Yeaman, to discuss the SD-WAN industry and the top IT challenges that enterprise businesses face today.

 

Peter: Tell us why Silver Peak is important to businesses today and tomorrow.

Eric: In today’s hyper-competitive market, business agility and speed fuels competitive advantage. Forward-thinking businesses have figured this out and are leveraging IT to drive cloud and digital transformation initiatives to gain those advantages. Put another way, cloud applications and services represent a new paradigm in driving business efficiency, while lowering cost and overhead.

Quick Meter Reading

  • Texas saw a higher share of venture-backed SaaS deals in Q1, moving to third place among U.S. states
  • Companies in the Golub Capital SaaS Tracker far outpaced S&P 500 stock prices in Q1 2019
  • More series B and C rounds were funded in Q1 2019, compared to Q4 2018, as venture-backed SaaS companies increasingly executed on growth plans

Source: CaplQ, PitchBook, Golub Capital

Calling all SaaS thought leaders: Do you have a question or topic you’d like to see covered? Are you interested in being featured in our next issue? We’d like to hear from you. Contact us at lsl@golubcapital.com.

Unlike traditional network approaches, Silver Peak helps businesses shift to a business-first networking model where the network enables the business, rather than the business having to conform to the constraints of the network. The results: users experience always-consistent, always-available application performance, ultimately turning the network itself into a business accelerant.

Much like we’re seeing with the emergence of self driving cars, we believe that the wide area network will also be self-driving.

– Eric Yeaman,
CFO at Silver Peak

Peter: What will enterprise network connectivity look like in the future? What is the “next big thing”?

Eric: Much like we’re seeing with the emergence of self-driving cars, we believe that the wide area network will also be self-driving. IT leaders that deploy the Silver Peak SD-WAN edge platform can essentially tell the network what the business wants and then use automation and machine learning to make it work. A self-driving wide area network is outcome-oriented, utilizing automation, artificial intelligence and machine learning to get smarter every day.

 

Peter: As a SaaS CFO, how do you think SaaS companies can position themselves to attract the right kind of funding?

Eric: It comes down to the business model, being able to articulate it and prove it. Can it drive rapid growth through new customer acquisition, and then retain and expand those same customers? These are questions of critical interest to investors looking to invest in a SaaS business–through equity or debt. And being able to show this is dependent on whether you’re fundamentally delivering business value to your customers through your product and service.

Peter: Going through several successful funding rounds, what lessons have you learned that other SaaS companies can benefit from?

Eric: It’s critical to work with investors who understand the SaaS space and where you are in your business lifecycle. For example, during the TCV funding round, we had proven our model and that we were focused on growth, which aligned with our investor’s later stage growth investment profile. The same is true with Golub Capital’s Late Stage Lending team, who we view as a long-term partner. Our partners understand the SaaS space and the working capital requirements for growing a business and this alignment is key to identifying the right investors.

Peter: What’s next for Silver Peak?

Eric: I believe that we have built the most robust SD-WAN technology available today. We intend to continue deepening our capabilities and realizing our vision for delivering a self-driving wide area network. From a business standpoint, we plan to accelerate our expansion into new channels–particularly in the service provider channels–as well as into new geographical markets.

In today’s hypercompetitive market, business agility and speed fuels competitive advantage.

– Eric Yeaman,
CFO at Silver Peak

Golub Capital would like to thank Eric Yeaman and Silver Peak for participating in this quarter’s SaaS Meter and for giving us an exclusive perspective of the SD-WAN market.

Q1 2019 GC Public SaaS Tracker Companies¹ Sorted by Market Cap

Ticker

Price

Mkt Cap

(millions)

EV

(millions)

LTM Rev

(millions)

FWD Rev

(millions)

EV/LTM Rev

EV/FWD Rev

1 Year Rev Growth

LTM Gross Profit

CRM $158.37 $122,103.27 $121,128.27 $13,282.00 $16,061.67 9.12x 7.54x 26.02% 74.02%
NOW $246.49 $44,491.45 $43,655.23 $2,808.52 $3,427.74 15.54x 12.74x 35.09% 76.31%
WDAY $192.85 $42,812.70 $42,239.06 $2,822.18 $3,554.80 14.97x 11.88x 31.69% 70.41%
SPLK $124.60 $18,699.28 $17,638.60 $1,803.01 $2,219.93 9.78x 7.95x 37.73% 80.88%
VEEV $126.86 $18,575.53 $17,485.37 $862.21 $1,030.84 20.28x 16.96x 24.86% 71.55%
TWLO $129.18 $15,964.21 $15,652.53 $754.09 $1,074.58 20.76x 14.57x 71.09% 53.81%
GDDY $75.19 $13,317.18 $14,948.38 $2,736.90 $2,986.82 5.46x 5.00x 15.22% 66.57%
DATA $127.28 $10,957.04 $9,934.67 $1,191.61 $1,366.76 8.34x 7.27x 29.05% 87.44%
PAYC $189.13 $10,809.32 $10,797.99 $612.36 $712.26 17.63x 15.16x 31.00% 86.86%
OKTA $82.73 $9,284.40 $8,992.26 $399.25 $534.34 22.52x 16.83x 55.63% 71.59%
ZEN $85.00 $9,210.50 $9,241.95 $650.44 $802.58 14.21x 11.52x 39.56% 69.58%
DBX $21.80 $8,965.77 $8,042.77 $1,461.00 $1,639.41 5.50x 4.91x 24.32% 74.50%
DOCU $51.84 $8,807.62 $8,477.53 $700.97 $913.65 12.09x 9.28x 35.19% 72.84%
ZS $70.93 $8,805.75 $8,465.81 $242.94 $336.48 34.85x 25.16x 57.40% 80.12%
TTD $197.95 $8,774.11 $8,566.88 $512.61 $645.39 16.71x 13.27x 50.53% 75.64%
RNG $107.80 $8,758.25 $8,558.48 $724.77 $854.88 11.81x 10.01x 33.79% 76.23%
MDB $147.02 $7,986.39 $7,737.28 $267.02 $370.25 28.98x 20.90x 60.83% 72.45%
CDAY $51.30 $7,208.41 $7,660.91 $761.30 $814.06 10.06x 9.41x 9.98% 47.94%
HUBS $166.21 $6,843.14 $6,569.68 $550.22 $651.51 11.94x 10.08x 34.89% 80.45%
PFPT $121.43 $6,721.10 $6,489.40 $757.47 $873.21 8.57x 7.43x 33.71% 72.28%
SWI $19.52 $5,952.48 $7,493.83 $851.97 $928.80 8.80x 8.07x 12.90% 91.54%
ESTC $79.87 $5,854.20 $5,547.37 $240.63 $340.10 23.05x 16.31x 172.89% 71.67%
WIX $120.83 $5,842.08 $5,477.41 $640.22 $759.89 8.56x 7.21x 35.96% 78.50%
NEWR $98.70 $5,660.59 $5,342.44 $479.23 $567.98 11.15x 9.41x 34.97% 83.85%
COUP $90.98 $5,553.74 $5,406.94 $260.37 $327.82 20.77x 16.49x 39.40% 67.95%
PVTL $20.85 $5,547.50 $4,846.48 $657.49 $802.53 7.37x 6.04x 29.06% 63.39%
RP $60.69 $5,539.46 $5,908.27 $902.49 $992.02 6.55x 5.96x 25.46% 61.69%
AYX $83.87 $5,181.84 $5,025.80 $279.26 $349.72 18.00x 14.37x 82.06% 90.76%
PLAN $39.36 $4,975.10 $4,652.75 $240.64 $312.95 19.33x 14.87x 42.94% 71.99%
PCTY $89.19 $4,719.57 $4,615.52 $443.88 $503.68 10.40x 9.16x 24.34% 65.64%
MDSO $73.24 $4,419.37 $4,272.09 $660.00 $739.25 6.47x 5.78x 16.66% 74.42%
SMAR $40.79 $4,281.79 $4,074.63 $177.72 $255.49 22.93x 15.95x 59.75% 80.95%
JCOM $86.60 $4,221.92 $5,025.57 $1,226.57 $1,302.18 4.10x 3.86x 7.24% 83.37%
TWOU $70.85 $4,119.35 $3,667.99 $441.72 $547.71 8.30x 6.70x 40.58% 77.85%
LOGM $80.10 $4,072.24 $4,123.59 $1,232.48 $1,255.28 3.35x 3.28x 13.96% 76.04%
AVLR $55.79 $3,875.76 $3,733.12 $295.69 $332.50 12.63x 11.23x 31.09% 70.76%
FEYE $16.79 $3,353.98 $3,200.04 $842.42 $886.32 3.80x 3.61x 6.10% 67.22%
QLYS $82.74 $3,258.23 $2,970.63 $289.35 $321.73 10.27x 9.23x 19.28% 76.50%
CSOD $54.78 $3,237.51 $3,184.25 $544.90 $563.69 5.84x 5.65x 8.22% 74.12%
FIVN $52.83 $3,130.34 $3,046.44 $273.30 $300.84 11.15x 10.13x 28.84% 59.68%
QTWO $69.26 $3,018.45 $3,023.85 $257.59 $307.74 11.74x 9.83x 26.11% 48.73%
TENB $31.66 $3,006.28 $2,733.42 $288.55 $341.90 9.47x 7.99x 39.84% 83.48%
CLDR $10.94 $2,942.18 $2,461.50 $479.94 $844.78 5.13x 2.91x 28.91% 71.64%
BOX $19.31 $2,787.06 $2,682.45 $608.39 $701.82 4.41x 3.82x 20.20% 71.47%
APPF $79.40 $2,692.08 $2,651.19 $204.82 $252.48 12.94x 10.50x 32.99% 60.93%
BL $46.32 $2,548.77 $2,420.58 $240.63 $277.70 10.06x 8.72x 27.52% 78.02%
EVBG $75.01 $2,460.92 $2,449.92 $159.39 $195.78 15.37x 12.51x 42.28% 67.92%
PS $31.74 $2,362.00 $2,290.64 $252.00 $311.98 9.09x 7.34x 40.60% 74.46%
SVMK $18.21 $2,306.20 $2,461.81 $264.47 $293.61 9.31x 8.38x 17.90% 70.72%
WK $50.70 $2,246.25 $2,166.33 $254.40 $283.63 8.52x 7.64x 17.85% 72.92%
APPN $34.43 $2,212.30 $2,117.37 $234.63 $260.84 9.02x 8.12x 23.42% 62.52%
ZUO $20.03 $2,173.31 $2,010.92 $235.20 $291.99 8.55x 6.89x 40.06% 50.43%
UPWK $19.14 $2,042.09 $1,936.87 $263.06 $302.09 7.36x 6.41x 22.92% 68.46%
SPSC $106.06 $1,883.63 $1,705.23 $256.08 $274.91 6.66x 6.20x 12.66% 67.45%
FSCT $41.91 $1,865.98 $1,767.03 $313.52 $369.57 5.64x 4.78x 29.59% 77.55%
VRNS $59.63 $1,787.77 $1,628.69 $273.12 $300.59 5.96x 5.42x 19.10% 89.31%
INST $47.12 $1,687.25 $1,534.30 $219.63 $256.93 6.99x 5.97x 25.87% 69.92%
BNFT $49.52 $1,586.67 $1,634.03 $264.66 $304.98 6.17x 5.36x 9.55% 50.61%
EBIX $49.37 $1,508.07 $2,131.04 $532.52 $603.91 4.00x 3.53x 35.47% 67.18%
LRN $34.13 $1,318.50 $1,149.98 $998.31 $1,029.27 1.15x 1.12x 11.59% 35.42%
DOMO $40.33 $1,062.21 $982.48 $142.46 $173.74 6.90x 5.66x 31.27% 65.22%
CBLK $13.95 $987.45 $826.81 $219.85 $242.63 3.76x 3.41x 26.88% 77.90%
UPLD $42.36 $910.52 $1,174.06 $166.76 $196.79 7.04x 5.97x 53.25% 68.38%
MOBL $5.47 $584.16 $478.55 $197.59 $211.37 2.42x 2.26x 8.96% 81.16%
CDLX $16.54 $372.18 $379.28 $153.96 $189.48 2.46x 2.00x 13.04% 38.37%
ZIXI $6.88 $365.68 $338.58 $83.12 $165.58 4.07x 2.04x 25.14% 72.56%
ECOM $12.18 $338.57 $294.74 $131.35 $137.77 2.24x 2.14x 4.53% 77.41%
AMBR $8.67 $246.29 $260.01 $86.20 $90.06 3.02x 2.89x 6.96% 56.41%
MRIN $4.57 $27.21 $18.80 $56.68 0.33x -19.10% 55.27%

1. The SaaS Trackers described or illustrated herein are not actively managed or available for investment. The Public and Private SaaS Trackers are for illustrative and discussion purposes only and any information pertaining to these trackers should not be construed as investment advice. Companies are added to the tracker in the quarter of their initial public offering and are removed when they are no longer publicly traded, when subscription based software is no longer their primary product or primary source of YTD revenue or when information on their revenue sourcing is not available or reliable due to extraneous circumstances (inability of company to file, etc.).

Please refer to Important Disclosures at the end of this report for more information on methodology.

All data as of 3.31.19.

 

SaaS Meter Definitions

The Golub Capital Public SaaS Tracker (“GC Public SaaS Tracker”) comprises publicly traded SaaS companies that are listed on the NYSE and Nasdaq. Golub Capital defines Software as a Service (SaaS) companies as software companies that show a year-to-date (YTD) share of revenue above 51% being sourced from subscriptions and subscription related services. Such companies are added to the tracker in the quarter of their initial public offering and are removed when they are no longer publicly traded, when subscription based software is no longer their primary product or primary source of YTD revenue or when information on their revenue sourcing is not available or reliable due to extraneous circumstances (inability of company to file, etc.). The GC Public SaaS Tracker is updated on a quarterly basis and is not actively managed or available for direct investment. The GC Public SaaS Tracker and companies therein are provided for informational purposes only and are not intended as investment advice or recommendations of any kind. The GC Public SaaS Tracker should not be relied upon in making any investment or business decisions. All data included is public information.

The Golub Capital Private SaaS Tracker (“GC Private SaaS Tracker”) comprises private SaaS companies that are included in the “Golub Capital Altman Index.” Golub Capital defines Software as a Service (SaaS) companies based on their revenue model and product/service. These companies are typically subscription-based software companies, used by enterprises for functions such as analytics, workflow and data collection.

PitchBook defines Software as a Service (SaaS) as “Information technology companies which provide their software using client-server architectures that host the application in a centralized, off-site location.”

The GC SaaS Trackers described or illustrated herein are not actively managed or available for investment. The Public and Private Saas Trackers are for illustrative and discussion purposes only, and therefore, any information pertaining to these trackers should not be misconstrued as investment advice. Trackers are shown for illustrative purposes only and are intended to provide general market data as a demonstration of current trends. Trackers should not be construed as investment advice and are not available for direct investment. No representation is made that any tracker is an appropriate measure for comparison or predictive of market trends. Golub Capital does not verify the accuracy or completeness of third party data used in this report and Golub Capital is not responsible or liable for any such content that may be inaccurate or incomplete. Third party data is provided for informational purposes only.


Important Disclosures

Golub Capital (including its various affiliates) creates and manages multiple investment funds. GC Advisors LLC (“GC Advisors”) and GC OPAL Advisors (“GC OPAL Advisors”, and together with GC Advisors, the “Registered Advisers”) are investment advisers registered with the United States Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. A number of other investment advisers, such as GC Investment Management LLC (“GC Investment Management”), GC Synexus Advisors, LLC and OPAL BSL LLC (Management Series) (collectively, the “Relying Advisers”) are registered in reliance upon GC OPAL Advisors’ registration. The Registered Advisers and the Relying Advisers (collectively, the “Advisers”) manage certain of Golub Capital’s affiliated funds and accounts. For a detailed description of the Advisers and each of their investment advisory fees, please see the Registered Advisers’ Form ADV Part 1 and 2A on file with the SEC. The beneficial owners of Golub Capital are also the beneficial owners of the Advisers. Certain references to Golub Capital relating to its private fund business may include activities other than the activities of the Advisers, or may include the activities of other Golub Capital affiliates in addition to the activities of the Advisers.

No equity, debt or capital is being offered by means of these materials. These materials are for informational purposes only and are not an offer or solicitation to buy or sell any securities, make an investment, or participate in any loans. You should not rely on these materials in making any business decisions and these materials are not intended and should not be construed as investment advice. The information contained herein is preliminary and subject to change. While information herein has been obtained from sources believed to be reliable, no representation is made as to its completeness and accuracy.

Past performance does not guarantee future results. Certain statements herein constitute forward-looking statements, which relate to future events, future performance or financial condition, and are subject to change for any reason.

Golub Capital investments are valued at each quarter-end at their fair value consistent with ASC Topic 820 and Golub Capital’s valuation policies and procedures. The current fair value of outstanding portfolio loans or other investments that are not actively traded is determined by the valuation policies and procedures the Advisers, which are summarized in the Registered Advisers’ Form ADV Part 2A.

This material contains proprietary information, and the distribution of any of the contents herein to any other person without the prior written consent of Golub Capital is strictly prohibited.


About Golub Capital Late Stage Lending

Golub Capital’s Late Stage Lending group offers growth debt opportunities to venture-backed, late stage SaaS companies. Golub Capital’s flexible credit solutions offer entrepreneurs and executives the opportunity to finance their future without diluting their ownership. The firm structures offerings to foster long-term partnerships, encouraging portfolio companies to take control of their growth, make strategic acquisitions and expand their product offerings.

Golub Capital is a market-leading, award-winning private debt platform with over $30 billion of capital under management. Golub Capital’s Middle Market Lending business specializes in delivering reliable, creative and compelling financing solutions to U.S. middle market companies backed by private equity sponsors. The Middle Market Lending team has particular domain expertise in select industries, including software, technology services, healthcare, consumer and restaurant and retail. The firm’s credit expertise also forms the foundation of its Late Stage Lending business and its Broadly Syndicated Loan investment program. Across its activities, Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from its private equity sponsor clients and investors. Founded in 1994, Golub Capital today has over 400 employees and lending offices in Chicago, New York and San Francisco.

UNDISCLOSED

Late Stage Lending Facility
January 2019 Administrative Agent
Joint Lead Arranger & Joint Bookrunner

UNDISCLOSED

Late Stage Lending Facility
September 2018 Joint Lead Arranger
Joint Bookrunner

UNDISCLOSED

Late Stage Lending Facility
August 2018 Administrative Agent
Joint Lead Arranger & Joint Bookrunner

UNDISCLOSED

Late Stage Lending Facility
July 2018 Administrative Agent
Sole Lead Arranger & Sole Bookrunner

$28,000,000

Late Stage Lending Facility
June 2018 Administrative Agent
Sole Lead Arranger & Sole Bookrunner

UNDISCLOSED

Late Stage Lending Facility
June 2018 Administrative Agent
Sole Bookrunner
* GOLD facilities are Golub Capital One-Loan Debt (one-stop) facilities.