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November 2021

State of the OpenCloud 2021

This presentation includes proprietary information of Battery Ventures


Disclaimers
This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with
such verbal or written comments, is referred to herein as the “presentation.” This presentation is being provided for informational purposes only.
Nothing herein is or should be construed as investment, legal or tax advice, a recommendation of any kind or an offer to sell or a solicitation of
an offer to buy any security. This presentation does not purport to be complete on any topic addressed. The information in this presentation is
provided to you as of November 3, 2021 unless otherwise noted and Battery Ventures does not intend to update the information after its
distribution, even in the event the presentation becomes materially inaccurate. Certain information in this presentation has been obtained from
third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be
guaranteed. Certain logos, tradenames, trademarks and copyrights included in the presentation are strictly for identification and informational
purposes only. Such logos, trade names, trademarks and copyrights may be owned by companies or persons not affiliated with Battery Ventures
and no claim is made that any such company or person has sponsored or endorsed the use of such logos, trade names, trademarks and
copyrights in this presentation. This presentation includes various examples of companies in which Battery Ventures has invested. These
examples are included as illustrations of various investment strategies. For a complete list of all companies in which Battery Ventures has
invested, please visit here. Past performance is not evidence of future results and there can be no assurance that a particular Battery portfolio
company investment will achieve comparable results to any other investment. There can be no assurance that the investment objectives or the
investment strategies described in this presentation will be successful.

The information contained herein is based solely on the opinions of Dharmesh Thakker, Chiraag Deora, Danel Dayan, Jason Mendel, Jack
Mattei and nothing should be construed as investment advice. The anecdotal examples throughout are intended for an audience of
entrepreneurs in their attempt to build cloud-focused businesses and not recommendations or endorsements of any particular business.

1 This presentation includes proprietary information of Battery Ventures


We’re Long Cloud
Infrastructure
& Open Source
Software

This presentation includes proprietary information of Battery Ventures


We’re long cloud infrastructure & open-source software

1 COVID-19 has accelerated digital transformation and global cloud adoption

2 Public cloud providers continue to exhibit growth durability at massive scale

3 Infrastructure software companies indexed to the cloud have weathered the COVID storm

4 Infrastructure funding has gone global

5 Cloud infrastructure stakes are at an all-time high

6 Cloud-native is not an option, it’s a necessity

3 This presentation includes proprietary information of Battery Ventures


Public cloud vendors are showing growth durability at massive scale

Public Cloud Vendor Annualized Run-Rate Revenue (US$B)


$140 44% 44%
42%
39%
36% 37% 37% $115
$101 $19
$95
$86 $16
$80 $15
$70 $73 $14 $37
$12
$11 $31
$10 $29
$25 $26
$20 $21

$54 $59
$46 $51
$40 $41 $43

$0
Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21

n n n n Y/Y Growth %

Cloud giants have continued to benefit throughout COVID-19 as digital


transformation accelerates and more workloads shift to the cloud.

4 This presentation includes proprietary information of Battery Ventures Source: Company filings and Wall Street research.
Infrastructure software companies are reaccelerating growth
coming out of COVID-19
Average NTM Growth Rate

Pre COVID-19 COVID-19


30%

25%
23% 23%
22%
19% 19% 20%

0%
Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21

The pandemic showcased the staying power of infrastructure software companies,


which have quickly recovered to pre-COVID-19 growth levels.

Note: Infrastructure software peer group includes DT, NET, DDOG¹, CRWD, ESTC, TENB, ZS, SWI, AYX, MDB, OKTA, TWLO, TEAM, SPLK¹, NOW.
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
5 This presentation includes proprietary information of Battery Ventures Source: Capital IQ.
Infrastructure software companies are indexing to the cloud for growth
Revenue Growth
1

Total: 26% Y/Y Total: 44% Y/Y Total: 50% Y/Y Total: 64% Y/Y Total: 69% Y/Y

89% 210%
83% 186%

35%

37%
15%

46% 54%

13%

Non-Cloud
AtlassianCloud Non-Cloud
Mongo DBCloud Non-Cloud
elastic Cloud Non-Cloud
ConfluentCloud Non-CloudGitlab Cloud

Infrastructure companies are doubling down on their cloud strategies to accelerate


and drive sustained growth.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
6 This presentation includes proprietary information of Battery Ventures Source: Company filings.
Infrastructure software funding has gone global

Last disclosed post-money valuation ($B)

1 2
2

9 4

1 11
1
4 5
9
2 5
1
1
3 6
3 3
38 3
1
8 1
1 2
1
6 7
5
1
6
2
4

The shift to remote work and distributed teams will continue to drive innovation on a
global scale.

Note: Companies represent private infrastructure and security software startups with a valuation of $1B+. ¹ Denotes a past or current Battery
company. For a full list of all Battery investments, please click here.
7 This presentation includes proprietary information of Battery Ventures Source: Pitchbook.
Infrastructure software IPO valuations have increased dramatically
$12.7B

1
10x
Growth $3.7B

$1.8B
1
$1.3B
1

1
1 1
1

CY’11 - CY’14 CY’15 - CY’17 CY’18 - CY’19 CY’20 - Current

The average IPO valuation has increased 10x over the last 10 years, and there are
more $10B+ infrastructure software companies today than ever before.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
8 This presentation includes proprietary information of Battery Ventures Source: Company filings.
We’re in the early innings of cloud adoption
Disruption Potential

87% 83% 79% 75% 71% 68% 64%

$1,400
$1,258
$1,139
Enterprise IT Market Spend (US$B)

Disruption Potential (Ex-IaaS & Ex-PaaS)


$1,028
IaaS & PaaS
$928
$842
$745 Support Services
$698 IT Hardware
Data Center Services
Infrastructure Software (Ex-PaaS)
IaaS
PaaS

$0
2019 2020 2021 2022 2023 2024 2025

Cloud penetration is rapidly expanding with ample room to grow. In 2021, cloud
spend is expected to represent ~20% of the $842B overall infrastructure spend.

9 This presentation includes proprietary information of Battery Ventures Source: Gartner.


Today is only the beginning

2015 2020 2025E


Cloud Computing Spend $105B 3.0x $320B 2.7x $848B

Penetration Rate
(% of global IT spend)
3% 2.7x 8% 2.0x 16%

Avg. Infra. IPO Valuation $3B 5.3x $13B 1.5x $20B+

Cloud Titan Rev


(Microsoft, AWS, Google)
$11B 7.7x $83B 3.6x $303B

Cloud growth continues to exceed expectations, and the growing demand for flexible and scalable infrastructure
will continue to drive cloud computing spend growth and increase the go-forward global cloud penetration rate.

Source: 2015 - 2025E cloud computing spend and penetration rate based on Garter estimates. 2015 / 2020 avg. infra. IPO valuation based on
company filings, and 2025E avg. infra. IPO valuation represents a Battery Ventures estimate. 2015 - 2025E cloud titan revenue based on company
10 This presentation includes proprietary information of Battery Ventures fillings and Wall Street research.
Themes of Interest

This presentation includes proprietary information of Battery Ventures


Toolchains are emerging to support new software development architectures

1 1

Code-first
1 1

1
API-first

Web-first 1

API-first development and the JAMstack are creating new agile development
toolchains.

12 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
The entire software delivery lifecycle is moving to the cloud

Cloud adoption maturity

Design Development Testing Staging Production

Local
Dev

1
1
Cloud- 1

native

Dev, test, and staging have historically been provisioned in local environments, creating
silos and slowing the SDLC. With production already in the cloud, the SDLC is catching up.

13 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
AppSec and CloudSec are on a collision course to secure code to cloud

Build-time Security Tools Runtime Security Tools

1
Code-to-Cloud
Security
1

The lines are blurring between Application Security and Cloud Security as security shifts left
and the codification of the cloud continues.

14 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
A new AI / ML toolchain is emerging

Planning Development Production

Issue Tracking Software Development Monitoring and Alerting


1 1
Software 1 1

Toolchain
1

Data Preparation Model Building Serving and Observability


1 1
AI / ML
Toolchain

1 1

As ML adoption continues to proliferate, a new class of companies is emerging to empower


ML practitioners to collaboratively and reliably build, test, deploy and manage models.

15 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
Cloud standardization is unleashing software innovation across
industry verticals
Crypto Infrastructure Health & Biotechnology Fintech
1

1
1
1
1

Standardized Cloud Stack Increased Compute Capacity Improved ML Sophistication


1,000,000 Exploding Model Complexity
30,000 in 5 years | Now doubling every 2 months
100,000
1.E+04 GPT-3
Core 10,000
Total 1.E+03 Megatron-
Infrastructure

Petaflops/s - Days
Megatron-GPT2 BERT
1,000 CPU 1.E+02
GPT-2 Turing NLG
Enablement Code 100 Code Total
GPU
1.E+01
Code BERT
Stack 10
1.E+00
ResNet
1.E+-01
1 AlexNet
1.E+-02
0
2010 2020 1.E+-03
2012 2014 2017 2020

The cloud has standardized, compute capacity has increased, and the sophistication of machine learning models have
improved to the point where innovation is being unleashed in emerging areas such as crypto, biotech, and fintech.

16 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
The standard GTM stack is being disrupted by companies pioneering PLG
2018 TAM 2021 TAM
Traditional GTM Stack ($B) ($B) PLG Stack
1
Sales / CRM $13 $17

Marketing $15 $21

Customer Service
& Support $17 $26

Project 1
Management $6 $7 1

Customer Data $1 $4

Feature 1
Management $6 $7

Billing $4 $6

Legacy GTM motions have been disrupted by PLG companies, spawning a new
ecosystem of companies focused on product-usage and user engagement.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
17 This presentation includes proprietary information of Battery Ventures Source: Gartner, Wall Street research, MarketsandMarkets Research, Grand View Research and Zion Market Research
Operational Best Practices
for OpenCloud Companies

18 This presentation includes proprietary information of Battery Ventures


1 Cloud-native is the primary mode for user and product engagement
post-COVID
Cloud-Naive Cloud-Native

Product Deployment

On-Premise Cloud

Engagement
Strategies In-person Business High-touch Complex Self-serve Open Marketplaces Online Video Community
Free Trials
Events Lunches Sales POCs Option Source / Partners Academies Conferences Relations

Success Criteria Deals Won | Quota Attainment | TCV Community Growth | Free/Paid Conversion | PQLs | Self-Serve | Expansions

1 1
1

Example Companies 1 1
1

Optimize your customer journey for user and product engagement with a
cloud-native product.

19 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
2 Enduring companies balance cloud-based motions AND
enterprise sales

Cloud-Served / Mid-Market Sales-Served / Enterprise Total Company


Revenue Customers Revenue Customers Revenue Total
($M) (~<100K ACVs) ($M) (~>100K ACVs) ($M) Customers

$447M ~27,800 $348M ~1,200 $795M ~29,000 EV: $34B


83% Y/Y 44% Y/Y 13% Y/Y 37% Y/Y 44% Y/Y 44% Y/Y CY22EV/Rev: 32x

$246M ~15,220 $526M ~780 $772M ~16,000 EV: $14B


89% Y/Y 33% Y/Y 37% Y/Y 24% Y/Y 50% Y/Y 32% Y/Y CY22EV/Rev: 15x

1 $80M ~2,210 $272M ~620 $352M ~2,830 EV: $20B


186% Y/Y 125% Y/Y 46% Y/Y 51% Y/Y 64% Y/Y 104% Y/Y CY22EV/Rev: 42x

While sequencing of sales motions may vary, cloud-based product engagement AND
enterprise sales is a winning combination for enduring OpenCloud companies.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
20 This presentation includes proprietary information of Battery Ventures Source: Company filings. Valuation data as of 10/1/2021.
3 Drive customer engagement, not just awareness

Awareness Engagement Conversion

1
Open-source offering Academy & training Cloud product

1
Freemium Collaboration Team upgrades

Free trials Usage-based credits Enterprise features

Referrals Sharing Self-service upgrades

Customer awareness alone does not guarantee customer engagement. “Hook” customers
with product-led land strategies.

21 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
4 Measure engagement with conversion benchmarks at every stage
of the funnel

Top of Funnel Conversion Rule of 20s Retention Metrics to Track

20% 20% 20% ✓80%+User Retention

OS / Community Sign up to Active to


to Sign up Active Users Paid Users

What to Measure What to Measure What to Measure


✓130%+
Net Dollar Retention

Website visits User signups Action taken (ex. Tests run)


GitHub stars
Downloads
Page views
Account activations
Verified users & companies
Contributions / contributors
Teams created
New members invited
Paid user, team, organization
✓ User Engagement
(ex. DAU/MAU)
Documentation views Pull requests created 40%+
Community engagement

Best of breed OpenCloud companies follow the rule of 20-20-20 across user conversion
metrics.

22 This presentation includes proprietary information of Battery Ventures


5 Product design is just as important as marketing to drive a
tailored user experience
Customized User Experience Built-in Automation & Scalability Developer / User Resources Product Guides & Templates

Self-Serve & Transparent Pricing Built-in Support Community & Collaboration Quick Time to Action

Build products that sell themselves through features that drive engagement, such as
templates, guides, invite/referral loops, and cloud-only offerings.

23 This presentation includes proprietary information of Battery Ventures Source: Company filings and product.
6 Leverage PQLs and manage the MQL:PQL mix by company scale
Product-Qualified-Lead Funnel PQL (Self-Serve) : MQL (Sales-Serve) Ratio
PQL : MQL Land Ratio
Company Scale New Customers New ARR
1 Individual Freemium 4 Product-Qualified Startup
10:1 10:1
Signup Lead ($1M - $5M ARR)

2 5 Scaleup
Initial Free Usage Engage Sales Team 8:1 5:1
($5M - $20M ARR)

3 Track Usage & User 6 Free To Paid Enterprise


5:1 2:1
Engagement Conversion ($20M+ ARR)

PQLs provide a streamlined and low-touch path to qualifying buying intent while
also preserving the option to engage directly with sales.

24 This presentation includes proprietary information of Battery Ventures


7 Strategically allocate GTM resources by customer segment

SMB Mid-Market Enterprise

5-figure / 50K+ Global Mid-


Deal Size / Customer <5-figure / Tech-Forward 6-figure+ / Global 8K
Market Companies

Lead Generation PQL PQL / MQL Named Accounts

Multi-Year Ratable or
Pricing Model PAYG Contracted Volume
Consumption Deals

Sales Team
Involvement Self-Serve Inside Sales Enterprise Rep

Expansion Self-Serve Customer Success-Led Customer Success-Led

Success Metrics
to Track New Customer Lands ARR & Expansion ACV & Contract Duration

Stratify your GTM strategy by customer segment and evolve appropriately to unlock new growth
opportunities. Neutralize the compensation model for sales to land PAYG enterprise deals as needed.

25 This presentation includes proprietary information of Battery Ventures


8 Structure consumption-based enterprise deals where value is
tied to usage
Consumption-based Traditional subscription-based

Magic Number 1.1x 0.8x


(Sales Efficiency)

LTM Rev. Growth / NDR


(Land / Expand Efficiency) 63% / 135% 48% / 126%

Average # of Customers 36K 12K

Data storage volume Data ingest volume Feature access # of endpoints / devices
Pricing Examples Compute usage Usage time # of users Term-based access
API usage Use case

EV / CY22 Revenue Multiple 37x 21x

Example Companies 1 1

PAYG enables efficient customer acquisition and unlocks a natural land-and-expand


motion to fuel long-term growth at scale.
1 Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Note: Market data as of 10/1/21. Figures calculated on
an LTM basis and averaged across example companies. Net Dollar Retention as of the latest disclosed period. Magic number calculated as Prior Quarter GAAP
S&M Expense / Implied ARR (last quarter subscription revenue *4 – fiscal quarter -1 subscription revenue *4). Customers exclude Twilio and Ping Identity due to
26 This presentation includes proprietary information of Battery Ventures lack of disclosed metrics.
Source: Capital IQ, Wall Street Research and Company filings.
9 Modernize your GTM stack, and continuously optimize the
user journey

Community Support & Product Define Product Product


Engagement & Design Testing Development

1
1

Customer Success and Product & User Demand-Gen /


Feedback Measurement Sales
1

Engage the community early, and build an iterative feedback loop across product,
customers, GTM, success and support to ensure a user-centric product experience.

27 This presentation includes proprietary information of Battery Ventures ¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
10 Capture usage and test / expand add-on products at a faster pace
1

New Customer Acquisition


Usage Expansion

Infra. Monitoring (2012)


100% Cloud-Native / NDR > 130% for 16
SaaS consecutive quarters
APM (2017)

Logs (2018)
70% of customers
16K Customers
NPM, Real User Monitoring, Synthetic using 2+ products
Monitoring, Serverless (2019)

Security Monitoring, Continuous Profiler,


Incident Mgmt. (2020)
28% of customers
13 products
Cloud Security Posture Management, Cloud using 4+ products
Workload Security, Database Monitoring (2021)

Cloud-native companies benefit from accelerated product development velocity, helping to


drive new customer acquisition and usage expansion.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
28 This presentation includes proprietary information of Battery Ventures Source: Company filings.
Building a Lasting
Public Company
Focus On KPIs
that Matter

This presentation includes proprietary information of Battery Ventures


Index to the cloud and know your cloud metrics fundamentals

EV / CY22E Revenue vs. CY22E Revenue Growth EV / CY22E Revenue vs. CY22E Rule of 40
60.0x 60.0x
y = 71.435x + 0.4591 y = 0.327x + 11.363
R² = 0.6343 R² = 0.2182
50.0x 50.0x

1 1
EV / CY22E Revenue

EV / CY22E Revenue
40.0x 40.0x
1 1

30.0x 30.0x

20.0x 20.0x

1
1 1 1
10.0x 10.0x
1 1

0.0x 0.0x
(20%) 0% 20% 40% 60% 80% (10) 10 30 50 70 90 110
CY22E Revenue Growth CY22E Rule of 40

Software valuations are driven by growth, with investors rewarding high-growth


companies that are indexed to the cloud.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings and CapIQ. Note:
30 This presentation includes proprietary information of Battery Ventures Market data as of 10/1/21 and represents select public infrastructure software companies.
EV / revenue / growth levels the playing field
CY’22 EV / Rev / Growth
1.5x High
>0.9x Mid Low
0.6-0.9x <0.6x
Median: 0.6x

(0.5x) 1
1 1 1 1

CY’22 Rev Growth


75%
High Mid Low
>35%
25%-35% <25%
Median: 30%

(20%) 1
1 1 1 1

Adjusting the revenue multiple for growth provides insight into the relative value; however, analysts
continue to underestimate the growth potential of cloud infrastructure businesses.
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings and CapIQ. Note:
31 This presentation includes proprietary information of Battery Ventures Market data as of 10/1/21 and represents select public infrastructure software companies.
Rule of 40 measures efficiency

80

High
>40

Mid Low
30-40
<30
Median: 30

(10) 1
1 1 1 1

CY’22
Growth 64% 38% 37% 37% 25% 38% 31% 19% 34% 30% 33% 31% 70% 25% 25% 31% 18% 12% 19% 18% (16%) 19% 35% 20% 24% 35%
CY’22 10% 26% 24% 16% 26% 8% 8% 19% 1% 3% (0%) 1% (40%) 4% 4% (3%) 7% 10% 3% (4%) 24% (11%) (28%) (15%) (26%) (42%)
FCF
Margin

As software businesses mature and growth naturally slows, improving profit margins is
integral to driving free cashflow generation and sustaining the rule of 40 over time.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings and CapIQ. Note:
32 This presentation includes proprietary information of Battery Ventures represents select public infrastructure software companies.
Last twelve months revenue growth at IPO

150%

Best
>70%

Better Good
70-45% <45%
Median: 50%

0%
1
1 1
1 1

2020 2019 2021 2017 2016 2019 2021 2018 2021 2017 2017 2017 2020 2018 2021 2017 2018 2019 2020 2018 2019 2019 2021 2016 2018 2021 2021 2018 2016 2019 2017 2019

Cloud infrastructure markets are large and growing; companies attached


Denotes 2021 cohort of Open Source and Cloud-native IPOs to these mega-trends are experiencing the benefits of these tailwinds.
Date of IPO

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings. Excludes ForeScout,
33 This presentation includes proprietary information of Battery Ventures SailPoint, Carbon Black, and Nutanix¹ due to lack of disclosed metrics. Talend financials based on constant currency.
Average magic number over the last twelve months at IPO

2.5x

Best
>1.0x

Better Good
1.0x-0.7x
<0.7x
Median: 0.7x

0.0x
1
1 1 1
1

2021 2016 2019 2018 2019 2021 2020 2021 2019 2020 2019 2017 2017 2019 2019 2017 2018 2018 2021 2019 2021 2017 2018 2017 2018 2016 2017 2020 2016 2021 2018 2021

Product-led growth and bottoms-up are enabling companies


Denotes 2021 cohort of Open Source and Cloud-native IPOs to be more efficient in customer acquisition.
Date of IPO
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Note: Magic number calculated as ((Q(t) – Q(t-
1)) subscription revenue *4)/S&M Q(t-1). ARR used instead of subscription revenue if disclosed. Source: Company filings. Excludes ForeScout,
SailPoint, Carbon Black, and Nutanix¹ due to lack of disclosed metrics. Ping Identity, Dynatrace, and SolarWinds exclude amortization/depreciation of
34 This presentation includes proprietary information of Battery Ventures acquired assets and restructuring costs. Talend financials based on constant currency.
Dollar-based net retention at IPO

170% Best
>140%
Better Good
140-120% <120%
Median: 125%

0%
1
1 1 1 1

2016 2020 2018 2021 2019 2019 2021 2018 2017 2019 2019 2020 2017 2019 2017 2020 2018 2021 2017 2016 2018 2017 2017 2021 2021 2019 2019 2018 2021 2018 2016

Bottoms-up and transaction-based revenue streams have far more


Denotes 2021 cohort of Open Source and Cloud-native IPOs consistency and expansion potential than we all anticipated.
Date of IPO

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings. Excludes ForeScout,
35 This presentation includes proprietary information of Battery Ventures SailPoint, Carbon Black, and Nutanix¹ and C3 due to lack of disclosed metrics.
LTV:CAC at IPO

7.0x

Best
>3.0x

Better Good
3.0-2.5x <2.5x

Median: 2.5x

0.0x
1
1
1 1 1

2021 2016 2020 2019 2021 2021 2018 2021 2019 2019 2019 2019 2019 2020 2017 2017 2017 2018 2019 2018 2018 2017 2018 2021 2016 2020 2021 2016 2017 2017 2018 2021

Efficient customer acquisition while focusing on enterprise-grade


Denotes 2021 cohort of Open Source and Cloud-native IPOs customers results in higher expansion potential.
Date of IPO
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings. Excludes ForeScout, SailPoint,
Carbon Black, and Nutanix¹ due to lack of disclosed metrics. Ping Identity, Dynatrace, and SolarWinds exclude amortization/depreciation of acquired assets and
restructuring costs. Talend financials based on constant currency. LTV calculated as GAAP subscription gross margin / (gross churn (est.) + 11% discount rate).
36 This presentation includes proprietary information of Battery Ventures CAC calculated as LTM GAAP S&M exp. / (Qo subscription revenue)*4 – (Q-4 subscription revenue)*4). ARR used instead of subscription revenue if disclosed.
Last twelve months R&D and S&M as percentage of revenue at IPO
140%

Best Better Good


65-120%
10-45% 45-65%
Median: 63%
S&M

0%
1
1 1
1 1

2021 2016 2018 2019 2019 2019 2020 2018 2017 2019 2019 2016 2018 2019 2021 2021 2018 2020 2018 2016 2017 2017 2021 2019 2021 2017 2017 2017 2021 2020 2021 2018

Best
70%

70-35%
Better Good
35-25% 25-10%
R&D Median: 29%

0%
1 1 1
1 1

2021 2018 2021 2017 2021 2021 2017 2021 2020 2018 2019 2019 2018 2020 2018 2019 2019 2020 2017 2019 2021 2016 2016 2018 2017 2019 2016 2017 2021 2017 2019 2018

Bottoms-up companies have the flexibility to invest in


Denotes 2021 cohort of Open Source and Cloud-native IPOs research & development given efficient GTM engine.
Date of IPO

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings. Excludes ForeScout,
SailPoint, Carbon Black, and Nutanix¹ due to lack of disclosed metrics. Ping Identity, Dynatrace, and SolarWinds exclude amortization/depreciation of
37 This presentation includes proprietary information of Battery Ventures acquired assets and restructuring costs.
Denotes 2021 cohort of Open Source and Cloud-native IPOs

Key metrics to focus on as a public company Date of IPO

Net $-Based Subscription % Recurring /


Retention / Contract Billing Subscription Non-GAAP Non-GAAP Op.
# of Customers New Customers Expansion Rate Lengths Frequency Revenue ARR Gross Margin Margin

2017 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2017 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2018 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2018 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2019 1
✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2019 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2019 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
2019
1
✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2020 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2020 ✓ ✓ ✓ ✓ ✓ ✓   
2020 1
✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2020 1
✓ ✓ ✓ ✓ ✓ ✓   
2021 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
2021 1
✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
2021
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
2021
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 
2021
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
2021 ✓ ✓ ✓ ✓ ✓ ✓  ✓ ✓
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Company filings. Note: Representative
38 This presentation includes proprietary information of Battery Ventures companies include cloud infrastructure and software companies.
Future of
OpenCloud

This presentation includes proprietary information of Battery Ventures


The emerging set of open source and cloud-native companies are
promising
Select Private Unicorns
Last Disclosed Valuation
1
$ Financing Deal Value
$ in Billions
$ Financing Deal Volume
Volume in Thousands
$38.0
$9.0 2021 (YTD) 53.4 2021 (YTD) 3.1
$8.6
$7.5
2020 31.9 2020 3.3
$7.3
$6.8
2019 24.0 2019 3.0
$6.3
$5.6
1
$5.6 2018 21.7 2018 2.6
$5.3
1
$5.0 2017 15.4 2017 2.3
1
$4.7
1
$3.6
2016 12.4 2016 2.0
$3.0
$2.8
$2.6
$2.4 Open Source and cloud financings have continued to accelerate, and there is a
1 healthy backlog of private company unicorns gearing up for IPO.
$1.5

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Pitchbook data as of 10/1/2021. Select
40 This presentation includes proprietary information of Battery Ventures Private Unicorns based on private companies that are enterprise infrastructure-focused with valuations of $1.0B or greater as of October 2021.
Going public is just the beginning for open source and
cloud-native companies
5x 3x
Aggregate Value Pre-IPO $31.8B IPO T+1 $168.3B Current $441.4B

Value Creation ($B) Value Creation ($B)


Pre-IPO IPO T+1 Current Pre-IPO IPO T+1 Current
1
2016 $1.0 $2.8 $58.5 2019 $0.6 $12.1 $48.3

1
2017 1.6 1.9 34.3 2020 1.2 3.3 2.0
1
2017 1.2 2.7 39.1 2020 1.5 6.6 3.5

2018 0.7 6.3 14.7 2020 12.4 88.1 106.9

1
2018 1.1 4.3 38.0 2021 4.5 14.5 20.9

2019 3.4 12.8 58.1 2021 3.0 12.9 17.2

The last few years have created multiple cloud-native companies that have
Denotes 2021 cohort of Open Source and Cloud-native IPOs generated $10B+ of value, with much of the value being created once public.
Date of IPO

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: CapIQ, Pitchbook, company filings.
41 This presentation includes proprietary information of Battery Ventures Note: Representative companies include cloud infrastructure and software companies that have gone public since 2016. Market data as of 10/1/21.
The cloud continues to be bigger than we all expected, and 111%
growth is accelerating

83%

85%
70%
64%

54% 54%
52% 51%
50% 50%

43%
37%
44% 34% 45%
1 39% 41%
29% 37%
36% 36% 36%
23% 34% 33%
30% 31%
1
1 24%
19%

Expected CAGR @ IPO CAGR @ Current

Growth projections continue to discount the value of the cloud and the opportunity
for cloud-native companies.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: CapIQ, Wall Street research and company filings.
Note: Represents select infrastructure IPOs between 2016 and current and excludes the 2021 cohort of IPOs due to a lack of post-IPO performance metrics.
42 This presentation includes proprietary information of Battery Ventures
COVID-19 has accelerated cloud adoption on a global scale
1.0%
Cloud Spend as a % of Global GDP

0.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Cloud spend continues to expand as a % of the global GDP with


ample runway to grow.

¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Battery Ventures, Gartner, IMF and
43 This presentation includes proprietary information of Battery Ventures World Bank.
We’re still in the early innings for OpenCloud

$7T
1 1
1

1
1
1

1 1
1
1

~5 1

~5%
1 1
Global 1
1
Software 1

Spend
(US$) 1 1
1 Assumed 2017-2050 CAGR
Global Software Revenue
1
1

1 1
$1 Trillion
1
TODAY

$0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
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2028
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2034
2036
2038
2040
2042
2044
2046
2048
2050
¹ Denotes a past or current Battery company. For a full list of all Battery investments, please click here. Source: Battery Ventures; Forrester; Gartner;
44 This presentation includes proprietary information of Battery Ventures the Yankee Group; BEA.gov; Input Research.
The Battery team

Dharmesh Thakker Chiraag Deora Danel Dayan Jason Mendel Jack Mattei
dharmesh@battery.com chiraag@battery.com ddayan@battery.com jmendel@battery.com jmattei@battery.com

Download slides here: https://www.battery.com/powered/

45 This presentation includes proprietary information of Battery Ventures

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