Brought to you by:

Shiran Shalev, Aaron Rinberg and Lior Mallul

 MATAN BAR MICHELLE CHEUNG GILLES GADE
Co-founder & CEO, CFO, Founder & CEO,
Melio Next Insurance* Cross River*

Thank You
to Our ERSHAD JAMIL GAL KRUBINER MAX LEVCHIN SEAN RINGSTED
Speakers Chief Growth Officer,
ServiceTitan*
Co-founder & CEO,
Pagaya
Co-founder & CEO,
Affirm*
Chief Digital Officer,
Chubb

SAM ROSENBLUM DANIEL SCHREIBER MAHESH VELLANKI

Partner, Co-founder & CEO, Co-founder & VP Growth,
Polychain Lemonade Rally*

* Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns. For a complete list of Battery Ventures’ investments, please visit our website: https://www.battery.com/our-companies/list/.
Disclaimer
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 May 26th, 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. 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 Scott Tobin, Michael Brown, Shiran Shalev, Aaron Rinberg, and Lior
Mallul, and nothing should be construed as investment advice. The anecdotal examples throughout are intended for an audience of
entrepreneurs in their attempt to build fintech businesses and not recommendations or endorsements of any particular business.
Battery Ventures as a Firm

Investing in software
since 1983
$9.3B raised since inception, and
currently deploying funds representing
$2.4B of capital
Partnered with entrepreneurs in
450+ companies
Invest across stages, from
seed to mature companies
Battery Fintech Portfolio:
An Evolutionary Approach

2018+
1985+ 1998+ 2004+ Financial
Picks & The House Services,
Middleman Everywhere
Shovels “Balance
“Transactions” “Embedded
“Software” Sheet”
Finance”

Pedestal
Software companies are offering financial services…
and financial companies are offering software
Software Companies1 Financial Services2
Median EV/Sales: 11.0x Median P/TB: 2.0x Median P/E: 12.3x

Median EV/Sales: 19.1x

So what can these two categories teach us as Fintech innovators?

1. Multiple includes am Logos represent a sample list of companies. Denotes a past or current Battery company.
2. Multiple includes Top 100 financial companies in S&P Americas BMI Financials index (excl. TSX:FFH due to lack of NTM forecast). Logos represent a sample list of companies. For a full list of all Battery investments, see
Source: Multiples calculated on NTM basis and provided by S&P Capital IQ as of 05/26/21. https://www.battery.com/our-companies/list/
Three lessons learned from software
 Own the Business Process
Systems of
Record
‘Source of truth’ for the
Systems of relevant process
Engagement
Tools Own the users’ time
Fulfill a function

Threshold Buy from a competitor Retrain users Data migration project

to replace Difficulty: Low Difficulty: Medium/High Difficulty: High

Ask yourself: Do you own your business process?

Note: Includes Top 50 software, internet, and infrastructure companies in the S&P Americas BMI Software & Services. Denotes a past or current Battery company.
Source: Battery Analysis. For a full list of all Battery investments, see
https://www.battery.com/our-companies/list/
 Product led sales can drive fast and
efficient growth
Top-Down & Enterprise Sales Bottom-up & Product-led Sales

Example Companies

Revenue Growth % 22% 85%

S&M as a % of Revenue 52% 35%

Customer Acquisition Cost

+ Payback Period 37 mo. CAC Payback 12 mo. CAC Payback

Net Dollar Retention % 113% 124%

2024 EBIT Margin Est. 13% 18%

Go-to-Market Mechanics

Enterprise Sales Reps Software Services Cloud Marketplaces Open Source SaaS Product

Denotes a past or current Battery company.

Note: Figures calculated on an LTM basis and averaged across example companies. Net Dollar Retention as of latest disclosed period. CAC calculated as Prior Companies shown for illustrative purposes only.
Quarter S&M Expense / Fiscal Quarter Implied ARR (Last Quarter Subscription Revenue *4 – Fiscal Quarter -1 Subscription Revenue. 4. 2024 estimates exclude For a full list of all Battery investments, see
ESTC, MDB, and PLTR due to lack of analyst estimates. Source: Capital IQ. Wall Street Research. Company Filings. https://www.battery.com/our-companies/list/
 Community can reinforce
product-driven playbooks

1970-2000 2000-2015 2015- 2020-

Sales-driven Marketing-driven Product-driven Community-driven

Era
software purchases software purchases software purchases Software purchases

Sample
companies
executing
strategy

Sample
enablers

Much like sales and marketing, product and community have a great opportunity to reinforce each other

Denotes a past or current Battery company.

For a full list of all Battery investments, see
Source: Internal Battery research. Examples given are illustrative. Past performance is not indicative of future returns. https://www.battery.com/our-companies/list/
Putting this all together
1 2 3
Owning Scaling Strong
the business GTM community
process bottom-up motion
MktCap:
4.4M registered $57.9B2
Multiple entry
Development members1 providing EV/Sales:
points into teams
lives within Jira
across products
know-how and 25.3x2
hosting events
Net Expansion Rate:
121%3

Valuation:
$2.0B4
Members host # of Users:
Over 85% of traffic
4M
Collaboration events, share
driven through
within Notion Notion set ups,
organic search5 (1M before Series A)
teach classes
Product Hunt Upvotes:
7K+5
1. Community.atlassian.com.
2. Multiple is based on NTM Revenue. Source: S&P Capital IQ data as of 05/26/21
3. Refers to “cloud net expansion rate”. Source: company note on 11/17/20 virtually investor day conference.
4. Latest known valuation. Source: TechCrunch article from 4/1//20.
5. Similarweb, Product Hunt as of 5/26/21.
Three lessons learned
from financial services
 Have a redundant financial
supply chain

Securitization

Diverse
funding Bank Sponsors Bank Sponsors
sources
(Warehouse lines) (Warehouse lines)

Non-Bank Partners Non-Bank Partners Non-Bank Partners

(Hedge/Credit Funds, (Hedge/Credit Funds, (Hedge/Credit Funds,
Family Offices) Family Offices) Family Offices)

Equity Equity Equity Equity

Company Maturity
Despite the time investment, it’s very worthwhile to diversify your funding sources
“Move fast and break things”
doesn’t work for regulators
MAY 5, 2021
Chime has agreed to stop using the word ‘bank’ after a California
regulator pushed back

DEC 22, 2020

Consumer Financial Protection Bureau Settles with
Santander Consumer USA Inc. for Credit Reporting
Violations in Connection with Its Auto Loans

DEC 20, 2020

SEC Charges Robinhood Financial With Misleading Customers
About Revenue Sources and Failing to Satisfy Duty of Best Execution

DEC 04, 2020

Consumer Financial Protection Bureau Sues LendUp Loans, LLC
for Allegedly Violating the Military Lending Act

MAY 21, 2019 Operators of Payment Processing Firm,

AlliedWallet, Settle Charges for Assisting Fraudulent Schemes that
Took More than $110 Million from Consumers

OCT 29, 2018 Online Student Loan Refinance Company

SoFi Settles FTC Charges, Agrees to Stop Making False
Claims About Loan Refinancing Savings *
Monthly Payments
SEP 11, 2018
FINRA Charges Broker with Fraud and Unlawful Distribution
of Unregistered Cryptocurrency Securities

Learn and play by the rules, or find a partner to help you

* Denotes a current or former Battery Portfolio Company. Past performance is not indicative of future returns. For a complete list of Battery Ventures’ investments, please visit our website: https://www.battery.com/our-companies/list/.
If money is the ultimate commodity,
how do you build defensibility?
(2)
(2)

2006 Founded 2012

$456M 2020 Revenue1 $670M

Projected 3-Yr Avg

44% 33% +
Revenue Growth1
Pick your plan length:

3 months 6 months 12 months

$1.4B Market Cap $15.1B
18 months 24 months

$88/mo
4.0x EV/2020 Revenue 23.3x 24 months (0% APR)
SHOP

Monthly Payments

When selling financial products, the HOW can matter just as much as the WHAT
Source: Financial data from S&P Capital IQ as of 05/26/21 and Wall Street Research (Goldman Sachs, Credit Suisse, Morgan Stanley). LendingClub image from Reddit. Affirm image from Casper’s website.
1. Based on Calendar Year; 3-Yr average revenue growth for CY21’-23’. Revenue excludes interest expense for LendingClub.
2. Denotes a past or current Battery company. For a full list of all Battery investments, see https://www.battery.com/our-companies/list/.
Framework checklist: Which of
these apply to your business?

Lessons from Software Lessons from Financial Services

Own the business Diversify
process funding sources

Harness bottoms-up Abide by

& product led sales regulation

A strong community Have a defensible

can accelerate product- distribution strategy
driven playbooks

How should companies somewhere between Software and Financial Services be valued?
Revenues under different business models
are worth different valuations... for a reason

Financial services
Software/SaaS (Lenders as an example)
Revenue Model Sell seats / licenses Extend credit

Purchase threshold Moderate, need to choose the tool Low if competitive terms

Gross Margins 60-90% Often <50%

Scalability No balance sheet Constrained by balance sheet

Purchase Behavior Subscription Transactional

When you're selling money, it's easy to grow quickly.

But growth is not the only important metric.
Valuation: Public Market Perspective

Software Financial Services

EV/NTM Revenue to NTM Revenue Growth1 P/TBV vs ROE2
70.x 4.00x

60.x 3.50x
R² = 0.4414
50.x
EV/NTM Revenue

3.00x
40.x R² = 0.6108

P/TBV
2.50x
30.x
2.00x
20.x

1.50x
10.x

0.x 1.00x
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0%
LTM-NTM Rev Growth 2022E ROE

Higher growth = higher multiple Higher profitability = higher multiple

So how should you be valued if you’re neither a pure software company, or a pure financial?
1. Based on a set of publicly traded SaaS companies tracked by Battery, with expected positive NTM growth (n=81) . Data source: S&P Capital IQ as of 05/26/21.
2, Based on the top 35 banks with positive expected net income growth from the SPDR S&P Regional Banking ETF (ARCA:KRE) index. Data source: S&P Capital IQ as of 05/26/21.
 The Battery Fintech Framework (BFF!)
Fee-based, scalable models valued more richly

BigCommerce Median Shopify Bill.com

SaaS+Fin

Square PayPal LightspeedPOS

Paymentus Flywire Visa Adyen
Payments StoneCo Mastercard
Repay Median

Openpay Median Affirm* Afterpay

Buy-Now-Pay-Later
Sezzle

LiveOak Median Silvergate

Specialty Bank

Oscar Root Median Metromile Lemonade

Insurtech

Futu Holdings
Trading Plus500 Schwab
Median
GreenSky Synchrony
Lending LendingTree Upstart
LendingClub

EV/NTM Sales Multiple

0.0x 10.0x 20.0x 30.0x 40.0x 50.0x 60.0x 70.0x

Source: Battery analysis, S&P Capital IQ data as of 05/26/21. PAY & FLYW multiples are illustrative and calculated by Battery Ventures based on historical growth rate in the absence of Wall Street research.
Note: Specialty banks and trading platforms are presented based on MktCap/NTM sales. *Denotes a past or current Battery company. For a full list of all Battery investments, see https://www.battery.com/our-companies/list/.
 Only the Early Innings of Fintech

US Financial Services1
$6.2T

S&P Software Only2

$1.9T
Battery Fintech Index3
$0.8T
May-10 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20 May-21

Market Capitalization as of 5/26/2021. Sources: 1. CapIQ company screening for the U.S. financial sector.(n=1675). 2. Represents current and historical software constitutes of the S&P500. 3. Fintech Index Includes: AFRM, BILL,
CLOV, DCT, EVER, FLYW. FUTU, GOCO, GSHD, GSKY, GWRE, INTU, LMND, MILE, NCNO, OSCR, PAY, PLMR, PYPL, QTWO ROOT, RPAY, RTPZ, SHOP, SI, SLQT, SQ, STNE, TRUP, UPST.