EFTA01123862.pdf

• VALAR VENTURES Fall 2015 Update EFTA01123862  VALAR VENTURES Fall 2015 Update The past two quarters have seen a lot of activity at Valar. Although still the $5 million-$10 million range). We expect that our existing investors early days, Fund 2's existing portfolio companies are tracking nicely. in Fund 2 will participate substantially in Fund 3 and we are looking Number26 has reached nearly 50,00O users since launching in forward to adding a select number of new investors with whom we February and transaction activity is scaling disproportionally faster. have been building relationships over the past two years. EyeEm has increased sales of its images through its marketplace partner, Getty Images, 5x since we made our investment earlier this year. They have now also launched their own marketplace in six countries, including the United States. Granify has more than doubled Fund 1 Highlights its team and multiplied its committed pipeline by 9x in the past two quarters. We've also made two new major investments this quarter, Inception: October 2010 including the Fund's largest investment to date - a $12 million Series B Total Invested: $93.6M investment in Montreal-based Breather - and the Fund's smallest major investment so far - a $2 million Series Seed investment in New York- Total Gross & Net Values: $287.7M / $239.3M based Trading Ticket. We are excited about the prospects for both of Total Gross & Net Multiples: 31x /2.6x these companies and teams, and believe they are strong additions to the Fund, including in terms of stage and sector. Details on each Gross & Net IRRs: 65.2% / 53.0% investment and related press articles are attached. % of Fund Invested/Reserved: 100% With the closing of these new investments, roughly $40 million of Fund 2 has now been invested, which is broadly in line with our expectation of investing around $50 million per year in new investments. As Fund 2 Fund 2 Highlights is now over 70% called and reserved for follow-on investments, we are Inception: January 2015 in the process of raising Fund 3, with a first closing expected prior to the end of this year and a first capital call after the New Year (i.e., a Total Capital Commitments: $102M 2016 vintage fund). Fund 3 will have a target of $200 million in capital Total Invested: $38.7M commitments, with a $250 million hard cap. Fund 3 will optimally be as large as Funds 1 and 2 combined, which, among other things, should Current Investment Value: $39.4M allow for the right amount of portfolio diversification for our core Gross & Net Multiples: 1.0x/1.0x strategy of leading Series A and Series B financing rounds (i.e..12-14 major investments in the Fund with initial check sizes generally within % of Fund Invested/Reserved: 71% VALAR VENTURES - FALL 2015 UPDATE CONFIDENTIAL & TRADE SECRET 12 EFTA01123863  VALAR VENTURES In terms of team activity, the past few months have been busy with investment opportunities, including one that is now in an advanced trips to Canada, Utah and many parts of Europe. As a result of our stage of due diligence. We expect that one area of increasing focus for active travel schedule, we've been able to build on our existing both John and Mike will be in New York City, where our proximity relationships with many of the top early-stage investors in our usual should give us an advantage over Silicon Valley-based firms and our markets of London and Berlin. while also adding new relationships in global network differentiates us from other New York-based firms. places like Amsterdam, Prague. Vienna and Montreal. Our positioning Going forward, we expect our funds may include a meaningful amount and growing track record as a Series A/ Series B investor with deep of New York-based investments, providing a degree of scalability to US and Silicon Valley connections is compelling to local firms and we our investment team without sacrificing the core advantages of continue to see high quality dealflow as a result. In particular, we remaining lean. believe that the startup ecosystems in our primary markets continue to mature at a rapid pace. One recent indicator of this is the increasing As always, we are deeply grateful for the confidence you've placed in amount of seed stage and early Series A capital available across us. We look forward to connecting in person with many of you this Fall. Europe. We have noted several new funds being formed recently (e.g., Mosaic. Blue Yard) and existing firms closing on larger funds (e.g.. Earlybird. Lakestar). We believe this is both evidence of the validity of our core thesis and deepens the opportunity set by increasing the breadth and depth of the early-stage funding necessary to consistently produce the multi-billion dollar businesses required to generate outsized returns in each vintage year. Finally, in hiring news, in June we added a second associate to our investment team. John Tenet, who joined us from Allen & Company, where he spent three years in that firm's Capital Markets and Investment Management Divisions. Together with Mike Bosserman (hired in January). John is focused on sourcing and evaluating investment opportunities and helping our existing portfolio companies. John has had an immediate impact, bringing in some interesting This document is confidential, trade secret. and not for further circulation. This document is informational and is not an offer or solicitation to buy, sell or Mid any securities. As used herein, "Fund r refers to all funds and investment vehicles managed by Valar Ventures Management LLC prior to the formation of Valar Global Fund 2, on an aggregate basis. Figures presented for Fund I are unaudited estimates in USD as of 6/30/2015. Net figures were calculated by reducing gross profits by a flat 25% for hypothetical management fees. expenses. and carry. Figures presented for Fund 2 are unaudited estimates in USD as of 9/10/2015, in order to include investments made following the end of the prior quarter. VALAR VENTURES- FALL 2O15 UPDATE CONFIDENTIAL 8, TRADE SECRET 13 EFTA01123864  VALAR VENTURES New Investments *breather Headquarters: Montreal Company Description Breather operates a marketplace for branded, high-design, private office spaces Security Held: Series B-2 Preferred Shares (referred to as "Breathers") that fill a need for a short term, quiet place to work, Investment Date: 9/10/2015 meet or relax. Round Size: $18,900,000 Velar Investment Thesis Pre-Money Valuation: $ 80,000,000 Until now, the need for a place to work on the go has been filled by a mix of Fund II Investment: $12,000,000 coffee shops, parks, airport lounges, bars, church basements and similar shared spaces. Through Breather's mobile app and website, users can book, on an Figures as of 9/10/2015. hourly basis, beautiful, private spaces that are equipped with fast Wi-Fi and air conditioning. As work culture undergoes a dramatic shift from traditionally large employers with rigid office hours to sole proprietorships and more flexible working arrangements, the Breather marketplace fills a growing need for a consistent, trusted brand in on-demand work space. A confluence of factors make the company's offering possible: smart phone ubiquity, decentralized workforces, internet-enabled locks, and increased familiarity and appetite among consumers for on-demand services. Financing History Breather raised a $1.8M Seed round in July 2013, led by Real Ventures. In July 2014, the company raised a $6M Series A, led by RRE Ventures, with participation from SOS Ventures and Real Ventures. Breather also raised a supplementary $1M convertible note from Slow Ventures shortly thereafter. VALAR VENTURES - FALL 2015 UPDATE CONFIDENTIAL & TRADE SECRET 14 EFTA01123865  VALAR VENTURES TRADEIT Headquarters: New York Company Description Trading Ticket (dba Tradelt) facilitates quick and secure online stock trading Security Held: Series Seed Preferred Shares through any website or app. Investment Date: 7/10/2015 Round Size: $ 4,000,000 Valar Investment Thesis Despite the fact that many online brokerages were built as a disruptive force to Pre-Money Valuation: $12,000,000 main street banks, the speed with which technology has improved has already Fund II Investment: $ 2,000,000 started to put them in the rear window in terms of innovation - particularly with respect to the migration to mobile. In addition, some large banks with Figures as of 9/10/2015. significant brokerage operations still have not migrated online, even though their target customer base requires online trading ability. Trading Ticket and its API solve these pain points by offering a simple user interface that can plug into any website or content, allowing users to buy or sell securities through their preferred broker and connecting major brokerage services with the places and times their customers often make financial decisions - while reading financial content or viewing their portfolio online and within mobile applications. Financing History Prior to leading Trading Ticket's Series Seed Preferred financing round, Valar participated in Trading Ticket's $1M pre-seed round in April 2015. VALAR VENTURES - FALL 2015 UPDATE CONFIDENTIAL 8 TRADE SECRET 15 EFTA01123866  TIC , t . , Let us know. „s f Iat P in Search News - Video- Events- CrunchBase DISIMWIF W The Come:Sam Nes Seim • Disrupt Sc San Next week Go Your Tickets Ntror Breather Raises $2oM From Peter Thiel's Valar Neat Stery Ventures To Expand Its On-Demand Private Room C2=1 Business Cal InieilliwOlm 295 la fidithE NersheYs 3D Printer Prints Chocolate CrunchBase Peter Thiel Snapchat Starts Charging $0.99 8:0 For 3 Replays. Pee Thal it •tnrytology awry...on, an, ervivol. AddS Face Effect weeit gsneclatterbon lot imcnitirei in tinny "tense." e,0 sunup inrite Todrypeis .110m, ai pt MtetCe 04 the Pefra, ', MU a enUti,reneun. as wet as lot Talking (About Today is a good day waresnp old ceennentrology deka vet,' store economK CrICKluteCt, rte worts to accelerate inriOni:Cn to pre.tor non a ons ey F9 Tech Diversity) Is Hard denbtrig and rtangprorn4r. teoinciogi • RRE Ventures It I 4•Year•Old Boy Arremed For Bringing Starbucks Homemade Clock To School Valar ventures Breather, the ondemand private room service has raised 120M led by Peter Thiel's Velar Breather A Case Study Of Ventures. The series B brings Breathers full raise to S27M. This round also had participation Startup Failure from Real Ventures, RRE Ventures, Slow Ventures and SOS Ventures. Valar will join the board. The Breather rooms were set up as *secret places- within cities like New York that allow you TC NEWSLETTERS Hersheys ad Chocolate 3D Printer whips Up Any Sweet Design You want to get work done, have meetings or whatever you'd rather not do at a Starbucks. The best usecase is when you're traveling, because sometimes you just need to sit down with some WiFi at a place that's not a coffee shop or a hotel. Its app lets you find a room, pay and unlock TechCrunch Daily Our top 'IC Week-in- Review TOp Vents of the door. headlines the week Delivered di* Delivered weekly Facebook is I chatted with Breathers co-founder and CEO Julien Smith about how far the business has Building An come and what's on deck next for the company that got through the initial giggles about what Empathy Button. Not would be going on its rooms. The immediate plan, Smith says is: ^New cities, marketing, CrunchBase Here's How It Daily growing existing cities. We really believe there can be a unit like this in every commercial Could Work The 'atesl View More Follow • • • building in America. Completely serious? EFTA01123867 TC News Startups Mobile Gadgets Enterprise Social Europe Trending ,aal Apple Boogie Teethe.* announ<rnentc Right now the average Breather is booked for 2« hours, but can go from 30 minutes to an Othvered doily SOaCeX Tide Nearly A Full entire day. Smith also says *thousands' of bookings roll in weekly. Uber Funding In Contracts TC: how has the business changed since you started it? Enter Address SUBSCRIBE JS: Wow. so much. I had a lot of ideas about what oklik The Pod Pro Will the company would be before we began, but they Keep Both Your Ned n Apple Watch And were basically just guesses. We just had a thesis LATEST CRUNCH REPORT &hone Charged that pm/ate space would be useful to people (if it were affordable and nice) and we didn't think with !IL Typeform Gets 11SM To Expand its API For User interaction too much intent about what the audience would be. The service basically took off Immediately after we launched, so we clarified who we are speaking to really quickly. We know the audience better, we Watch More Episodes know how to talk about the product we know what kind of spaces people want and for what reason, we know how the operations work. etc. etc. We started with a huge emptiness in terms of our understanding and just an optimistic idea. lucky for us. we turned out to be pretty right. TC: Are there any surprise uses of breathers that you're a fan of? $5: Multiple people have proposed in breathers - that was a huge surprise. People use them for meetups all the time, and although that's pretty commonplace, we were surprised to see it. Women use it to breast-feed. which makes sense. and there are church groups as well. Music videos and documentaries for Netflix have been shot in them. famous actors have used them to rehearse for big movies. Press previews and little fashion shows. All kinds of things. People even use them for training sessions for new employees. TC: If someone else were to try to get into the space, what difficulty would they have? JS: The network effects in this business are very, very strong, perhaps even stronger than Uber, because location, quality, and trust are so important to us getting a booking. A car can move, but rooms don't, so the same way you always go to the closest, most convenient coffee shop. and wont go if it's too far away, we have to be very. VERY close to the user for the service to be effective for them. O A roan el your am Yraweever you are Wheonever ywa need k Nola{ pg•apellisin,•••••Vl %de. 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San Francisco. Montreal and Ottawa. 295 SHARES f She V Tie in share EFTA01123869  Let us know. 7 F in Search News Video Events CrunchBase DeMUPT SP The Coseeckrorn Wi Beton Dittopt Sr S•.x¢ Vert week Get Tour !Muds Row Trading Ticket Gets $4M From Thiel's Valar Ventures, Citi, Launches Instant Trading Tool Trade It Ingrid Lunden amgr.Munden 7-r ILIUDOMMI2101;11 Herstleys 3D MS Printer Prints Chocolate CrunchBase Raspberry PI Now Makes A Trading Ticket TOuChscreen Display So You Can Build Your Oem PiPad Pro Train/ Tidal a startup based et Olken Yoh rants to develops Tr to or prod/cis that Minato Mil IS Hidden New convolve% become mono east and proxive. ineeslon. Timid is a pan pawned recrinokea Pin FeatureS Tucked am alpha on a publey Intel putarMaRIPlathaver Away In i05 9 Trades Hem used to Die*/ 4.4 NV./ pace Onlen ath cede ttaefe rent Warmest accosts hem any vadat* Or meal* onica Oweropes Lulus light Bulbs LOCATION Allow Devices TO Him ♦o'4 ha am. Talk To Each CATEGORIES Other YAth s.a.e.s Ironer. Pravne Flashes Of Brilliance FOUNDERS Saw Pea. runhan PX%rarril toped tre Dram wtiniTt Finance technology has been one of the more lucrative areas in the world of disruptive entpliimtux?, tce SnaOthat Starts Charging $0.99 startups, with companies picking up billions of dollars in private investment: and, by Goldman For 3 Replays. put " -•adingicket r Sachs estimates. on track to grab $4.7 trillion of revenues away from established financial Adds Face Effect -tenses- players. Now, make way for one more new entrant hoping to make its mark in fintech. Tradelt ♦ Trading Ticket, a startup based out of New York, wants to develop a suite of products that will Citi Ventures ♦ 14-year-Old Boy help consumers become more active. and proactive. investors. It has closed a $4 million seed Arrested For Valar Ventures round as it gears up to officially launch Its first product a mobile frlendly securities trading Bringing t Homemade Clock tool called Trade It. Blake Darcy ♦ To School While Trade It is just getting off the ground, the funding in Trading Ticket is notable in that it is coming from two key names in the fintech world: Valar Ventures, the investment fund started Aced Partners LOOks TO Map by PayPal co-founder and top VC Peter Thiel; and Oti Ventures, the investment arm of the Citi TC NEWSLETTERS The Marketing banking group. (Prior to this, the company had raised an undisclosed amount in angel Technology funding from Newfund, and was largely bootstrapped it tells me.) Ecosystem Techtrunch TC WwlabH Daily Review it) Follow • • • EFTA01123870 Tc News Startups mobile Gadgets tnterprise Social Europe Trending Gg Apple Gongle notebook Trading Tickers three co-founders have equally notable backgrounds. CEO Nathan Our top Top stares of Richardson has led a number of finance and content businesses, including WayWire. Yahoo head nes the week Hyperloop In Raising 180M Oetwered say Delivered weekly Finance, AOL and others. Serge Kreiker is formerly of Bloomberg. and Gaspard de Dreuzy is a Names EM•04(0 Pres Rob Lloyd AS co-founder and CEO of doctor house call app Pager. The latter two are also co-founders of CEO And Emay Kapitall. CrunchBase white As Advtsor Daily Trading Ticket has wide ambitions. The idea Is to develop a series of mobile and desktop The Lunt View More Nat Day products covering all manner of financial transactions: apps to help people open accounts; startup funding Homeland announcements Stringy Shuts access credit place orders for shares and communicate with each other and their financial Other ed daffy Down Ubrarys service providers. TOR Node Citing 'Situational Trade It the first product, will focus on the third of these areas. It's an API-based service that Awareness' SUBSCRIBE lets people place orders for trades instantly and securely directly on third-party sites. apps or Twitter. Tang (About Tech Diversity) Is It works by linking up mentions of a company name, ticker symbol or shortened URL with LATEST CRUNCH REPORT Hard order tickets that connect with a users brokerage accounts, letting them place orders on the fly. It also will mark the first time that an ETF (exchange trading fund, or a marketable security Agt I.e.:1600k O , that tracks an index, a bond, a commodity or a basket of assets) can be traded directly /L... A without the need to go through a registered investment adviser. Trade It will make money in three ways. Richardson says: by way of transaction revenue and Facebook Isn't Building A Dislike taking a fee per order; marketing sponsorships (essentially ad units that will run in the trading Button I Crunch Report order ticket); and technology licensing fees. Watch More Episodes Early partners for Trade It will include financial mobile apps Stock Tracker. Stocks Live. Rubicoin, and Invstr: and irs also working with BenzInga. MarketWatch, The Motley Fool, VETR and ARK Invest for ElTs. Richardson says that the partnerships for the service will all be launching October 1. While the tech works both on desktop and mobile, to date. early usage of the service has seen some 80% of all orders placed via mobile devices. Like ecommerce APIs that let you buy items directly from places where you are talking or reading about them online, the idea here is to bring the process of trading directly to the places where you are already going to read and act on business news. In a way, given Richardson's background across both finance and content, its not really a surprise to see him working on a product that brings the two together. 'Trade It solves the three most difficult problems in mobile trading,' said Richardson in a statement. "Speed to trade for users, order volume for brokers, and a direct monetization opportunity for publishers who don't want the conflict of becoming a broker-dealer.' While there have been a lot of new services launched that take advantage of online and mobile innovations to cut down the time for certain financial services — online banking possibly being one of the most widely used — services focused on consumers and how they trade has seen relatively little development. Trading Ticket is the first financial technology company to integrate mobile trading seamlessly into online publishing platforms; said Ramneek Gupta. Managing Director and CO-Head of Investing at Citi Ventures, in a statement. 'We're excited to add them to our EFTA01123871 Ts: N. Startups Mobile Gadgets Enterprise Social Europa Trending -71.a- Apple Genie Facebook portfolio of investments that enable banking to come to the customer, empowering them to act anytime and anywhere.' (More specifically, Richardson tells us that after a user registers with the service, Trade It does not hold credentials for desktop use. 'We hold user name based on publisher preference: he notes. To make the trade on desktop, users need to enter a password, the amount of the order and then confirm to place the order. On mobile, he notes that some apps will let users a ("pry store their broker credentials on iOS using TouchlD. but users will still need to enter the order, number of shares and confirm with TouchlD.) As part of the investment round, Andrew McCormack of Valar and Dlidirect founding CEO Blake Darcy are joining Trading Tickers board, with Gupta coming on as a board observer. "Trading Tickers technology position, seasoned leadership team, and strong reception with both established and new financial services players is impressive: said Valar's Andrew McCormack in a statement. 'We believe the global opportunity for integrated, mobile trading Is very promising and Trade It is well positioned to capitalize on Its most valuable areas.' HAWAII) IMAGE FINNS STIIAUMMAVIS WOO - CC SY 20 1, , 759 SHARES w heat in Shar ®Dunn EFTA01123872