EFTA02602271.pdf

From: Vincenzo lozzo < Sent: Tuesday, August 14, 2018 4:29 PM To: jeffrey E. Subject: Re: Investment opportunity - Fwd: Radius Due Diligence Materials Btw for context on this deal Sent from my (phone On Aug 14, 2018, at 1=:07, jeffrey E. <jeevacation@gm=il.com <mailto:[email protected]» wrote: Can talk to them / you T end of day =div class="gmail_quote"> On Tue, Au 14, 2018 at 11:42 AM=Vincenzo lozzo < /a» wrote: <mailto I'll negotiate the economics below if this is interesting. I'm still g=ing through the details but my gut feeling is that this is a good value dea= given the economics but the company itself is not really revolutionary/Ion= term play. Company Overview and Background:</=> • Radius is a leading B2B Customer D=ta Platform which integrates SaaS platforms such as Salesforce, Marketo, an= Oracle for customers with unique data assets to accelerate marketing and s=les execution for Fortune 500 enterprises Several seven and s=x figure annual contracts with major logos including Comcast, First Data, W=lmart/Sam's Club, T-Mobile, Allstate, Metlife, Discover Financial S=rvices, DexYP and American Express. The Company also has partnerships=with strategics including Salesforce, Oracle, D&B, and LiveRamp<=> • Bookings are expected to grow to -$17-18MM in CY'18/FYQ=9919 (from $13.1MM in FY'18, $8.2MM in FY'17, $4.4MM in FY4*=804*16 and $0 in FY'15), implying a 58%+ 3-year CAGR. 86% of reven=e is generated from recurring SaaS subscription fees as part of single and m=lti-year contracts • Company has raised capital from top tier i=vestors, including Founders Fund, Salesforce Ventures, American Express Ven=ures, 8VC, BlueRun Ventures, John Mack (former Morgan Stanley CEO & Cha=rman), Jerry Yang (Co-Founder and Former CEO of Yahoo), etc. • Darian Shirazi is the CEO & Founder of Radius, which he started f=ve years ago, and has an impressive background of one of the first 10 emplo=ees at Facebook and an early investor in Palantir, Lyft and Lending Club.&n=sp; Surrounding him is a tenured senior management team from places like Sa=esforce and Marketo • The B2B CDP market size is estimated by G=rtner to represent $20B of enterprise IT spend worldwide in 2019, and Radiu= has been recognized by Gartner, Forrester and SeriusDecisions as a leading-provider in EFTA_R1_01790608 EFTA02602271 the space. Some recent exits have taken place at 15x+ rev=nue (including Salesforce acquisition of Datorama in July 2018 for $850MM T=V and ARM's acquisition of Treasure Data for $600MM)<=> • = This capital infusion will fund the Company4e=804$ near-term cash burn, which is -51.1MM/month in the current fiscal ye=r but expected to turn cash flow positive towards the end of CY'19/=Y'20 (twelve months ending January 31, 2020). The board has also rece=tly authorized a 30% common equity grant to re- incentivize the management t=am. Deal Structure: • $12 million Series 1-A Preferred Shares in Radius l=telligence, Inc., of which —58MM has already been committed and funded by e=isting investors • Valuation of $10 million pre-money / $22 mi=lion post-money • Series 1-A will have a lx liquidation prefer=nce at first-dollar in the capital structure; on a fully converted basis, t=e Series 1-A Preferred Shares will own —54% of the common equity.=/u> * Total capital available: $2.5 million • Rem=ining capital needed: —$1.75 million (minimum investment of $100k) • class="m_-648537696647200483m_1526149788233977002gmail- m_2214164218682=93897m- 887680911250648540m3091648667251833372m8241892980257063131msolistpar=graph" style="margin- left:0in;margin-right:0in;font-size:11pt;font-family=Calibri,sans-serif;color:black;margin-bottom:0.0001pt;vertical- align:baseli=e"> SPV Economics: • One-Time Upfront Fee: 2.5% • Carry Interest: &nb=p;20% • There is no recurring management fee on the deal • Darian Shirazi, the Radius CEO, will be investing directly in the t=ansaction through the Blocktree entity and will also have an economic inter=st in the fees and carry on the deal, resulting in a strong alignment of in=erests Timeline: • Commitments due by <=pan class="m_-648537696647200483m 1526149788233977002gmail- aBn" style="=order-bottom:lpx dashed rgb(204,204,204)">5pm ET on=span> <mailto >"< <mailto Hi Vincenzo, Please see attached some due diligence materials on R=dius. • Overview presentation of the Co=pany • File of=top 10 customers by ACV with y/y growth 2 EFTA_R1_01790609 EFTA02602272  • Management's financial forecast for the n=xt 18 months. Please note that we believe the FY'19 forecast (=we've months ending Jan 31, 2019) will likely come in around $17-18MM in a base case compared to $20.8MM in management's model being more of a= upside case. • P&L by M=nth file that lays out GAAP financials, along with a detailed monthly roll or the entire customer base There's a backstory here. The business w=s under LOI to be sold to Salesforce for -$200 million last year and the de=l fell apart in the 11th hour. Company brought on a COO fro= Salesforce who hired a huge team that resulted in excess cash burn. They've since made deep headcount cuts t= redirect the business on a path to profitability. Despite these chal=enges, revenue has been growing at a 50% y/y pace and they've been a=le to secure some big customers. This refinancing is part of a full recapitalization given the go forward management strategy an= we think a $10 million pre-money valuation is interesting here (to put in p=rspective, the Company raised its prior round at $150 million pre). Do you have some time this weekend or Monday so we ca= walk you through the deal? Best, Ben &=bsp; please note The information contained in this comm=nication is confidential, may be attorney-client privileged, may cons=itute inside information, and is intended only for the use of the addres=ee. It is the property of JEE Unauthorized use, disclosure or copying=of this communication or any part thereof is strictly prohibited and m=y be unlawful. If you have received this communication in error, please n=tify us immediately by return e-mail or by e-mail to [email protected] <mailto:[email protected]> , and de=troy this communication and all copies thereof, including all attachment=. copyright -all rights reserved 3 EFTA_R1_01790610 EFTA02602273 4 EFTA_R1_01790611 EFTA02602274