https://www.propel.co/blogbypropel daily 0.75 2022-09-15 https://www.propel.co/blogbypropel/2022sofar monthly 0.5 2022-09-15 https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/2d67464e-ca9c-4a6b-8685-ea0f9337a849/5A.+Valuation+vs+Ro40.jpg Content and Community - What we’re seeing in 2022 so far - Over a 10-year period, there are clear correlations between valuation bands and median Rule-of-40 (Revenue growth % + EBITDA margin %)metrics: 1-2x EV/ Rev: 11% Ro40 2-3x EV/Rev: 22% Ro40 3-4x EV/Rev: 29% Ro40 4-5x EV/Rev: 33% Ro40 5-6x EV/Rev: 34% Ro40 6-7x EV/Rev: 46% Ro40 Source: Capital IQ, BVP SaaS Index. Market data as of 9/13/2022 https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/9ecd7ddc-24f6-4a33-bbcc-8e4f0620920b/1A.+Ecommerce+Growth.jpg Content and Community - What we’re seeing in 2022 so far After accelerated growth in 2020 and the slow-down in early 2021, US ecommerce growth has reverted to the long-term historical pre-pandemic “normal”. Source: US Census Bureau https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/3520a25d-1d28-4971-add7-5a418945e396/4A.+SaaS+Index+Over+Time.jpg Content and Community - What we’re seeing in 2022 so far https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/14f78289-8ccb-4e4d-bc44-5adc9d175586/2B.+Amazon+and+Shopify.jpg Content and Community - What we’re seeing in 2022 so far - There was a notable pickup in Amazon’s 3P business in Q2 (vs the prior two quarters), which was in contrast to a decline in Amazon’s 1P business. Source: Company public filings; Morgan Stanley Research https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/c960d95d-5e94-4cad-9705-9b0f7a1d8124/2A.+Amazon+and+Shopify.jpg Content and Community - What we’re seeing in 2022 so far - The broader trend is reflected in Amazon’s and Shopify’s GMV growth. Source: Company public filings; Morgan Stanley Research https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/502a837f-7f9e-4643-a53a-5edafa03a986/3A.+Market+Consolidation.JPG Content and Community - What we’re seeing in 2022 so far - Sizeable “household” names in the ecommerce operations space have been acquired, pointing to functional and also customer base expansion amongst key players. Source: Public Filings, Capital IQ. Estimates as of 9/13/2022 https://www.propel.co/blogbypropel/testing-blog-post-1 monthly 0.5 2022-09-15 https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/4810cfd3-7d44-49f2-af16-f7bf04b06ad0/Amazon+growth.jpg Content and Community - The future is multi-channel - Since c.2000: Rise of the Marketplace Amazon enabled SMB entrepreneurs to build meaningful retail businesses by providing *most* of the traditional ecommerce functions (tech, marketing, logistics, financing, etc.). Hero solution: Amazon Seller Central (3P), FBA Merchant challenges: Beholden to marketplace rules and whimsies Lack of direct access to, and ownership of, the customer Chart: Amazon GMV, 2011-2021 Source: Statista, Morgan Stanley, Finextra https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/ecc915f9-34c3-40b8-8f21-10ff8d44344a/Amazon+%2B+Shopify+growth.jpg Content and Community - The future is multi-channel - Since c. 2010: Direct-to-consumer Ecommerce platforms like Shopify and BigCommerce, etc. empower merchants and brands to engage with customers directly, and provides the ecommerce infrastructure through an ecosystem of apps and partners. Hero solution: Shopify + ecosystem of apps and services Merchant challenges: Need to stich together own solution Beholden to Shopify partnerships Not enough demand Chart: Amazon + Shopify GMV, 2011-2021 Source: Statista, Morgan Stanley, Finextra https://images.squarespace-cdn.com/content/v1/631f319dfdd17f25c6651914/6c61e390-b98c-4b7f-9815-c6955311593e/Amazon+%2B+Shopify+%2B+Multichannel+growth.jpg Content and Community - The future is multi-channel - Starting c.2020: Multi-channel selling Multi-channel selling unlocks a much larger customer base opportunity and de-risks the businesses. Selling on 3+ channels increases SMB revenue by 2x – 4x. Hero solution: None so far Merchant challenges: Operational complexity Personal capital risks Paradox of choice Inefficiencies and problems with point solutions operating in silos Chart: Total ecommerce GMV, 2011-2021 Source: Statista, Morgan Stanley, Finextra https://www.propel.co/home daily 1.0 2022-11-02