Contact the iSPIx team at ispix@ispirt.in with any questions, comments or suggestions for other companies to consider for the next edition of the index

Indian Software Product Industry Roundtable – www.ispirt.in

iSPIRT Launches

Top 30 Indian B2B Software Product Companies Valued at $6.2 Billion, and Growing

Oct ‘14 Edition(Online discussion at http://bit.ly/ispix )

(iSPIxB2B)

India Software Products Industry Index – B2B

India Software Products Industry Index – B2B (iSPIxB2B)

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Executive Summary

We believe the discussion about India’s technology industry – whether in government circles, the media or in Silicon Valley – overlooks India’s B2B software product companies which sell globally as well as into India. Instead, there is a lot of discussion about IT Services companies and E-commerce players. When there is discussion about B2B software products, it lacks insights into product types, target markets, scaling strategies, perception of Indian vendors in India and abroad as well as the vibrant start-up ecosystem that has emerged around B2B software companies from India. These insights are important because a strong Indian B2B software product industry has the potential to drive tens of thousands of high-value jobs, enable Indian manufacturing and services companies to be globally competitive, drive large amounts of export-driven foreign exchange earnings for India as well as create billions of dollars of value for founders and investors.

We would like to shine a spotlight on these Indian B2B software products companies through the India Software Products Industry Index – B2B (iSPIxB2B), which we are launching today. The index tracks the thirty most valuable B2B software product companies headquartered in India and companies headquartered elsewhere in the world where cofounders are in India right from the creation of the company onwards.

To drive a focused discussion, we have chosen to include companies that sell software to businesses on a license or subscription basis or where software drives a differentiated B2B service such as a B2B exchange or advertising network. There are both business applications and enabling technology companies in the top 30 list - the enabling technology companies are in infrastructure software, tools and advertising technologies. We have chosen to leave out B2C companies and certain B2B segments driven by software such as payments technologies (fintech) and mobile value-added services (MVAS), each of which has developed fairly vibrant eco-systems in India.

For the first time, there is now an objective source of data derived from company-specific metrics about this segment of the market. Somewhat surprisingly, the data suggests that the B2B software product industry has been growing nicely outside of the spotlight - the enterprise value of the top 30 companies is $6.2 billion (₹37,500 crores) which is higher than we would have imagined before starting out on this effort. The top 30 companies employ over 18,000 people.

On a historical note, the B2B software product sector in India has been developing since the 1980s. The index is currently dominated in terms of value by companies created in the 1990s and 2000s that have generally not raised early-stage venture capital. From 2006 onwards the pace of creation of B2B software companies has accelerated with the ability to sell globally through the Internet and early-stage venture capital. Over time, we expect companies in the list to be displaced by companies started since 2006.

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The nature of the largest B2B software companies has changed from 1980s to now.

6 The market has gone from people-driven organizations, many of which have $100k (₹60 lacs) per employee enterprise valuations, to technology-driven organizations, many of which are edging closer to $1M (or ₹6 crore) per employee enterprise valuations – in line with what we see in Silicon Valley.

6 The more recent valuable companies in B2B software are tending toward horizontal solutions rather than vertical industry focused solutions in areas such as banking and retail.

6 Startups in B2B software products are moving from India-centric to globally-focused organizations. Much of this is companies that started with initial sets of clients in India, then went global.

6 For those companies started pre-2006 (50% of the list), they were generally bootstrapped and about 40% of these companies have got growth capital into them now but the majority remain completely bootstrapped. These companies are mainly domiciled in India.

6 For those companies started post-2006 (50% of the list), they are generally venture-backed and about 73% have got early-stage venture capital into them now – the majority by far are not bootstrapped. 50% are domiciled in the US or Singapore.

There is a healthy mix of verticalized solutions versus horizontal solutions with about 37% of the companies being horizontal and the rest selling into verticals such as financial services, retail, media and travel.

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37% are bootstrapped although most of the bootstrapped companies were started in the 1990s and 2000s and most of the institutionally-funded companies got growth financing, rather than early-stage venture capital financing.

Just over 50% provide end-user business applications in segments such as CRM, trading, collaboration, business intelligence and banking. About 20% are advertising technology companies and rest are providing enabling technology in infrastructure and tools, including segments such as security, identity management, developer tools and analytics.

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Nearly 80% of the companies have global customer bases – the ones that have remained India-focused are exploiting large India-specific opportunities such as the large SME base, burgeoning ecommerce infrastructure needs, rapid growth of organized chains in retail, healthcare etc.

About 70% of the companies are domiciled in India. However, this masks a significant shift since 2009 where a majority of Indian B2B software companies have started incorporating in the US and Singapore.

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A related stat is around the headquarter locations. 27% of the top 30 companies are headquartered in Bangalore and 20% in the National Capital Region (NCR) which includes New Delhi, Gurgaon and NOIDA, with the remainder in other cities of India as well as Singapore and Silicon Valley.

What is not in this index is a whole slew of 200+ companies. Many of these started in the 1990s and 2000s and have failed to scale meaningfully, whether because of lack of channels, lack of large customers in India or regionally-focused offerings with market size limitations. What does the future hold? This index represents but a snapshot of where the market is now. Many of the companies started since 2009 are growing fast off of a small base but are not yet big enough to be included in this index. We expect more such companies to grow big and start to appear in the index in the next 12-24 months.

Over time, we expect the index to start representing more horizontal and globally-focused B2B software companies, many of which we expect to be cloud/SaaS oriented with an equal split between applications and infrastructure & tools. We also expect the creation of more India-centric applications software businesses that leverage the proliferation of smartphones in enterprises and SMBs as well as other India-centric problems.

Putting all this together, we expect the value of the top 30 Indian B2B software product companies to expand well beyond $6.2 billion (₹37,500 crores) into the tens of billions as they participate in the $500 billion (₹30,00,000 crores) global market for enterprise technologies. We expect companies

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that have reached scale through bootstrapping to continue to remain bootstrapped. We expect value to be crystallized through IPOs on the Indian stock exchanges for profitable, market-leading companies as well as US and European stock exchanges for higher-growth companies that have reached revenue scale but may or may not be profitable. We also expect acquisitions by US, European and Indian companies to increase as Indian companies increasingly reach scale especially in horizontal applications, infrastructure and tools – well beyond the historical pace of exits that we have had with companies such as iFlex, Little Eye Labs and the like.

We will publish an updated iSPIxB2B index every six months. In the meantime, please participate in the discussion around these findings at the ProductNation blog.

India Software Products Industry Index – B2B (iSPIxB2B)

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AppendixiSPIxB2B Tracker

Top 30 Companies

The index is tracked in US Dollars and Indian Rupees. The index indicates the change in the sum total of the valuation figures of the top 30 companies starting at number of 100. We are also tracking the aggregate employee base of all top 30 companies combined.

Based on the data collected, the top 30 companies in alphabetical order are as follows:

iSPIxB2B Index Value Date

iSPIxB2B – USD 100 $6.2 Billion 31 Oct 2014

iSPIxB2B – INR 100 ₹37,500 Crores 31 Oct 2014

Employee Base 100 18,250 31 Oct 2014Note: Please refer to the Index Calculation Section for detailed notes on calculations

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Top 30 CompaniesDetailed Information about the top 30 companies:

Sl. No. Company Name Profile1 Accelerite (Persistent

Systems)Description: Accelerite provides industry leading Endpoint Management, Recovery as a Service, and Mobile Operator Location Solutions.

CEO & Co-founder: Nara RajagopalanHQ location: Silicon ValleyURL: www.accelerite.com

2 AdNear Description: AdNear is the leading location intelligence platform that leverages location and context to power data driven marketing for advertisers. The company’s data platform is built on top of proprietary technology giving us the strength of location awareness without the need of GPS or operator assistance.

CEO & Founder: Anil MathewsHQ location: SingaporeURL: www.adnear.com

3 Capillary Technologies Description: Capillary offers Customer Engagement Management solutions that enable retail marketers to manage customer data, gain insights & personalize engagement

CEO and Co-founder: Aneesh ReddyHQ location: SingaporeURL: www.capillarytech.com

4 Druva Software Description: Druva offers integrated enterprise online backup, secure file sharing and data analytics for protection and governance of endpoint data.

CEO and Co-founder: Jaspreet SinghHQ location: Silicon ValleyURL: www.druva.com

5 Eka Software Solutions Description: Eka is the global leader in providing Smart Commodity Management software solutions. Eka’s analytics-driven, end-to-end Smart Commodity Management platform enables companies to efficiently and profitably meet the challenges of complex and volatile markets.

CEO & Founder: Manav GargHQ location: BangaloreURL: www.ekaplus.com

India Software Products Industry Index – B2B (iSPIxB2B)

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Sl. No. Company Name Profile6 Freshdesk Description: Freshdesk is a cloud-based customer support software that

lets you support customers through traditional channels like phone and email, social channels like Facebook and Twitter, and your own branded community

CEO and Founder: Girish MathruboothamHQ location: ChennaiURL: www.freshdesk.com

7 IBS Software Services Description: IBS is a solution provider offering a variety of different software products for global airlines such as airline reservation, cargo revenue accounting, tour booking, crew and hotel management systems.

Founder & Executive Chairman: V K MathewsCEO: Rajiv ShahHQ location: KeralaURL: www.ibsplc.com

8 Ilantus Technologies Description: ILANTUS works in the Identity and Access Management (IAM) security domain with a focus on enabling companies to leverage in the rapidly converging hybrid environment of technologies - cloud, enterprise, BYOD.

CEO and President: Binod SinghHQ location: BangaloreURL: www.ilantus.com

9 Indian Energy Exchange Description: Indian Energy Exchange Ltd. (IEX) is India’s premier power trading platform.

CEO: S. N. Goel.HQ location: NCRURL: www.iexindia.com

10 Infrasoft Tech Description: InfrasoftTech is a software products, solutions and services provider focused on Banking, Financial Services & Insurance sector.

Group MD: Hanuman TripathiCEO: Rajesh MirjankarHQ location: MumbaiURL: www.infrasofttech.com

Top 30 CompaniesDetailed Information about the top 30 companies:

India Software Products Industry Index – B2B (iSPIxB2B)

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Top 30 CompaniesDetailed Information about the top 30 companies:

Sl. No. Company Name Profile11 Kayako Description: Kayako offers Help Desk Software and Customer Service

Software to Improve customer satisfaction and increase sales, both as SaaS & On-Premise

CEO and Founder: Varun ShoorHQ location: LondonURL: www.kayako.com

12 Komli Media Description: Komli Media is Asia Pacific’s leading digital media tech-nology platform. Its digital advertising technologies enable marketers to reach, acquire and foster audiences and publishers to maximize their revenues.

CEO and Founder: Amar GoelHQ location: MumbaiURL: www.komli.com

13 Manthan Systems Description: Manthan is the world’s leading producer of Advanced Ana-lytics, Business Intelligence, Optimization and Analytics-driven Execution solutions for Retailers and Consumer Goods Manufacturers.

CEO and Founder: Atul JalanHQ location: BangaloreURL: www.manthan.com

14 Newgen Software Tech-nologies

Description: Newgen Software is a leading provider of Business Process Management (BPM), Enterprise Content Management (ECM), CCM, DMS, Workflow and Process Automation.

Managing Director: Diwakar NigamHQ location: NCRURL: www.newgensoft.com

15 Nucleus Software Description: Global Banking Software Product and Solutions Providers focused in the areas of Retail Banking, Corporate Banking, Lending Soft-ware, Lending Solution, Cash Management, Transaction Banking, Integrat-ed Transaction Banking & Mobility Solution

CEO and Founder: Vishnu R. DusadHQ location: NCRURL: www.nucleussoftware.com

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Sl. No. Company Name Profile16 Ozone Media Solutions Description: Ozone Media is a Global Advertising Technology Company

focused on online advertising.

CEO and Founder: Kiran GopinathHQ location: BangaloreURL: www.ozonemedia.com

17 Pubmatic Description: PubMatic is a global technology platform that powers the programmatic advertising strategy of leading publishers and premium brands.

CEO and Co-founder: Rajeev GoelHQ location: Silicon ValleyURL: www.pubmatic.com

18 Qubole Description: Qubole is a Big Data as a Service (BDaas) Platform Running on Leading Cloud Offerings Like AWS the makes Fast Data Analysis simple for all Users.

CEO and Co-founder: Ashish ThusooHQ location: Silicon ValleyURL: www.qubole.com

19 Quick Heal Technologies Description: Quick Heal Technologies provides IT security solutions for your PC, Mac, Mobile, Tablet, and Enterprise Network.

CEO: Kailash KatkarHQ location: PuneURL: www.quickheal.com

20 Ramco Systems Description: Ramco Systems offers next-generation enterprise solutions across cloud, mobile and tablets that render transformation of business in real-time.

CEO: Virender AggarwalHQ location: ChennaiURL: www.ramco.com

Top 30 CompaniesDetailed Information about the top 30 companies:

India Software Products Industry Index – B2B (iSPIxB2B)

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Top 30 Companies

Sl. No. Company Name Profile21 Rategain Description: RateGain offers hotel channel management, hotel channel

manager and promotion management to travel and hospitality industry.

CEO and Founder: Bhanu ChopraHQ location: NCRURL: www.rategain.com

22 Real Image Media Tech-nologies

Description: Real Image offers media technology solutions. It has its presence throughout India and over 14 countries through the Qube Cinema product.

CEO: Arvind RanganathanHQ location: ChennaiURL: www.realimage.com

23 SunTec Business Solu-tions

Description: SunTec Business Solutions is the leading provider of revenue management and business assurance solutions to banks, financial institutions and communications services companies

President, CEO and Founder: K Nanda KumarHQ location: KeralaURL: www.suntecgroup.com

24 SVG Media Description: SVG Media is a leading Indian Digital Media Network with 45 Million Unique Visitors in India.

CEO and Founder: Manish VijHQ location: NCRURL: www.svgmedia.in

25 Tally Description: Tally Solutions is a market and technology leader in ERP software solutions.

MD and Founder: Bharat GoenkaHQ location: BangaloreURL: www.tallysolutions.com

Detailed Information about the top 30 companies:

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Top 30 Companies

Sl. No. Company Name Profile26 Vizury Description: Vizury helps marketers secure customers through

dynamic creative retargeting and display solutions

CEO and co-founder: Chetan KulkarniHQ location: BangaloreURL: www.vizury.com

27 Vserv Description: Vserv is a leading mobile marketing platform provider

CEO and co-founder: Dippak KhuranaHQ location: MumbaiURL: www.vserv.com

28 Wingify Description: Wingify offers testing and optimization products to websites and apps.

CEO and Founder: Paras ChopraHQ location: NCRURL: www.wingify.com

29 Wooqer Description: Wooqer helps people to structure work and measure results without sms, emails, phonecalls and spreadsheets.

CEO and Founder: Vishal PurohitHQ location: BangaloreURL: www.wooqer.com

30 Zoho Corporation Description: Zoho offers a suite of online web applications geared towards increasing your productivity and offering easy collaboration. Zoho’s online office tools include a word processor, spreadsheet application, presentation tool, hosted wiki, notebook, CRM, Database software etc.

CEO and Founder: Sridhar VembuHQ location: Silicon ValleyURL: www.zoho.com

Please refer to the following sections for the detailed description on the methodology followed in selecting these companies.

Detailed Information about the top 30 companies:

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Index Calculation

Company Selection

Other feature of the index:

The index indicates the change in the sum total of the valuation figures of the top 30 companies starting at number of 100. The index will be reported in USD and INR.

iSPIxB2B = India Software Products Industry Index - B2BVn = Valuation of Company n in INR/USDn = component number

More than 350 Indian B2B software product companies were identified. The list was compiled from various internal and external sources. We contacted over 100 companies and gathered data on a substantial majority of these companies either directly from the companies, their investors or public markets exchanges. The goal was to identify the top 30 companies in terms of valuation and use the valuation number to compute the index as described in the previous section.

We included companies that met the following criteria:

A few very prominent companies are absent from the list as they declined to participate in the SPIxB2B project.

6 The index is a price return index(data to calculate total return is not collected) 6 Component number : 30 6 Component Selection and Criteria: Described in the following section 6 Review Frequency: As needed 6 Calculation Frequency: 6 months 6 Date of first calculation: 31 October 2014

6 the company sells software to businesses on a license or subscription basis OR 6 the company provides a B2B service driven through a differentiated software offering AND 6 the company was founded in India or had co-founders who were based in India and else-

where simultaneously

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Data Collected

Valuation Methodology

Confidentiality

The following key data was collected from the companies, institutional investors or public sources:

We came across three types of companies and arrived at their market valuation correspondingly:

6 Public companies - we used the latest market valuation data from Moneycontrol.com. 6 Recently venture-backed companies - we used the post-money valuation of their latest

financing if the financing was in the past year. 6 Bootstrapped companies or venture-backed companies financing over a year ago - we

derived a valuation using revenue multiples. Revenue multiples by sector were obtained from reputable investment banks and were adjusted based on differing growth rates. In a couple of cases, we did not obtain financial data from a company which we thought important to include – in this case, we used publicly available data that may be dated.

We understand that company valuation in general, and this methodology specifically, will not result in exact results. However, we believe that the results are directionally correct and generally in the right ball park. We believe these results are of enough quality to support an educated discussion as well as drive decisions from strategic partners and governments regarding the Indian software product industry.

In general, data has been provided by companies and their investors. No company-specific data obtained for the purposes of this index have been published nor will be published. We are only publishing aggregate data. We respect the sensitivity of this data.

6 Company Name, Profile, Contact Details 6 Headquarters location, Website URL, Founding Year, Legal Domicile, Employee Count 6 Financial Data

� Valuation in USD and INR for Institutionally funded companies � Revenues in USD and INR for non-funded companies � Public market valuation in INR for public companies.

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Acknowledgements

We would like to thank all the companies and their investors for sharing data with us. In addition the authors of this report would like to acknowledge the following people for their contribution and support to the project.

6 Professor Sharique Hasan, Stanford Graduate School of Business, Stanford University 6 Professor Rishi Krishnan, Indian Institute of Management, Bangalore 6 Klaas Oskam, Managing Director, Signal Hill 6 The volunteers at iSPIRT

Contact the iSPIx team at ispix@ispirt.in with any questions, comments or suggestions for other companies to consider for the next edition of the index.