November 2021

The State of Marketplaces – 2021

Roger Lee, General Partner, Battery Ventures
Justin Da Rosa, Vice President, Battery Ventures
Courtney Chow, Vice President, Battery Ventures
Avik Wadhwa, Analyst, Battery Ventures

This presentation includes proprietary information of Battery Ventures

 Disclaimers
The information provided in this presentation is solely intended for the use of entrepreneurs, corporate CEOs and founders. The
information is current as of the date it was published. The contents are not intended to be used in the investment decision making
process related to any product or fund managed by Battery Ventures. No assumption should be made that the investments
identified within were or will be profitable. It should also not be assumed that recommendations made in the future will be
profitable or equal the performance of the companies identified within.

Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy
or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this
presentation nor notify readers in the event that any information, opinion, projection, forecast or estimate included, changes or
subsequently becomes inaccurate.

Battery Ventures provides investment advisory services solely to privately offered funds. Battery Ventures neither solicits nor
makes its services available to the public or other advisory clients. For more information about Battery Ventures’ potential
financing capabilities for prospective portfolio companies, please refer to our website. For a complete list of portfolio companies,
please click here.

The Battery Marketplace Index tracks 54 of the world’s largest marketplace companies. To be included, companies need to be
listed on one of the major global stock exchanges and boast a market capitalization of $500 million or more. You can track the
Battery Marketplace Index here.

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.

1
This presentation includes proprietary information of Battery Ventures (As of Nov 2021)
 Who is Battery?

$9.3B

Battery’s strategic locations Capital raised Stage

since inception agnostic

2
This presentation includes proprietary information of Battery Ventures
 Battery Marketplace Investments

E-Commerce Community Services Travel Exchange

& Content

Acquired by

$450+ million invested

3
Note: Contains all Battery Ventures marketplace investments since the firm’s inception. No assumption should be made that the investments identified
This presentation includes proprietary information of Battery Ventures above were or will be profitable. For a complete list of portfolio companies, please click here.
 Battery Marketplace Index (as of Oct ’21)
*
452.2B 290.8B 222.6B 139.3B 128.1B 111.5B 103.3B 90.5B 80.3B 77.9B 73.9B 49.5B 48.4B
Marketplaces

*
48.3B 39.7B 35.4B 33.4B 31.1B 26.5B 26.4B 24.7B 22.6B 22.5B 20.8B 17.3B 17.3B

*
17.2B 16.5B 16.0B 15.1B 9.4B 7.9B 7.8B 7.6B 7.0B 6.4B 6.4B 6.1B 5.2B 5.1B

*
4.7B 3.5B 3.5B 3.3B 3.2B 3.0B 2.1B 2.1B 2.0B 1.9B 1.1B 0.9B 0.7B¹

Share Price Change

600% 40 +30.9%
Impact of Vaccine Rollout and S&P500
30 Chinese Regulation +30.9%
500% NASDAQ
20
+25.1% DJIA
400%
+13.8%
10 BV Marketplace
300%
Index
0 (Ex. China)
200%
(10) (11.2)%
100% BV Marketplace
(20) Index
0%
(30)
-100%
Feb’12 Feb’13 Feb’14 Feb’15 Feb’16 Feb’17 Feb’18 Feb’19 Feb’20 Feb’21

Source data from CapIQ (as of Oct 18, 2021) – Refers to Market Capitalization. Battery Marketplace Index is market cap-weighted & pro-rated. GRUB
4 and PS were removed from the BV Marketplace Index as they have been acquired.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 So, what’s happened in the last 12 months?

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This presentation includes proprietary information of Battery Ventures
 Regulators are reigning in the power of “big tech”…

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This presentation includes proprietary information of Battery Ventures
 Chinese Regulators Have Recently Clamped Down on Leading Online Marketplaces

|
China Fines Alibaba Record $2.75 Billion for Monopolistic Practices
After abruptly cancelling the $37B IPO of Ant Financial, the Chinese government imposed a record fine on
Alibaba for abusing its market dominance over merchants
November 12, 2020

|
China Weighs Unprecedented Penalty for Didi After U.S. IPO
China removed Didi from the app-store amidst data violation concerns and may force the Company to delist
or withdraw the $4.4 billion in shares it listed on the NYSE
July 22, 2021

|
Chinese Edtech Upended by Sweeping Regulations
Beijing unveiled new rules on the country’s private education sector, barring edtech companies from earning
profits, raising capital, or going public
July 26, 2021

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This presentation includes proprietary information of Battery Ventures
 Consequently, Chinese Marketplaces Lowered Returns of the BV Marketplace
Index by 25 Percentage Points (pps) over the Last 12 Months
LTM Share Price Change
40%
Impact of Vaccine Rollout and
Chinese Regulation +31% S&P500
30%
+31% NASDQAQ
20% +25% DJIA

10%
+14% BV Marketplace
Index (Excluding China)
0%

(10%)
(11)% BV Marketplace
Index
(20%)

(30%) (29)% BV Marketplace

Index (China-Only)
(40%)

(50%)
Oct’20 Nov’20 Dec’20 Jan’21 Feb’21 Mar’21 Apr’21 May’21 Jun’21 Jul’21 Aug’21 Sep’21 Oct’21

 Cumulative LTM Decrease in Equity Value of Chinese Marketplaces: ~$450B

 Chinese BV Marketplace Companies LTM Share Price: Gaotu Techedu (-97%), IQIYI (-68%), Autohome (-53%), Alibaba (-46%),
Didi (-42%), JD.com (-1%), Meituan (+12%), Pinduoduo (+14%), Trip.com (+15%)

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This presentation includes proprietary information of Battery Ventures Source: CapIQ (as of Oct 18, 2021) – Chart shows share price change since Oct ’20.
 Looking Ahead, China May Serve as an “Early Warning Sign” of Upcoming
Regulation for Marketplaces Around the World

Gig Economy |
Labor Secretary Announces Support for Gig Workers Becoming Full-Time Employees
Secretary Marty Walsh asserted that many people working without benefits in the gig economy should be
reclassified as employees, hinting that reclassification could be a priority in the Biden administration
April 29, 2021

|
E-Commerce

Surging Online Businesses Face Heightened Regulatory Oversight

Major e-commerce companies are facing increased regulatory scrutiny across the world in relation to their
treatment of third-party sellers and other monopolistic practices…
September 14, 2021

|
Fin-Tech

Fintech’s Explosive Growth has Regulators Scrambling

Recent regulatory efforts have included an SEC probe over the Coinbase’s Lend product, a lawsuit over Robinhood’s
payment for order flow model, and the Treasury Department working on a regulatory framework for cryptocurrencies
October 06, 2021

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This presentation includes proprietary information of Battery Ventures
 However, it’s not all bad news…

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This presentation includes proprietary information of Battery Ventures
 Marketplace IPO’s Have Had a Blockbuster Last Twelve Months
Eleven Businesses Have Graduated into the BV Marketplace Index (~$400B in Equity Value)

Source: CapIQ (as of Oct 18, 2021).

11 Note: Pluralsight and Grubhub were removed from the BV Marketplace Index as they were acquired in Apr ’20 and Jun ’20, respectively.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 Companies Have Had Mixed Success in the Recent Flurry of Marketplace IPO’s

(+) Positive Share Price Change Since IPO (-) Negative Share Price Change Since IPO
Market Market Share Market Market Share
Cap Cap Price IPO Cap Cap Price IPO
Company (IPO) (Oct’21) Change Vertical Date Company (IPO) (Oct’21) Change Vertical Date

$85B $107B 26% Travel Dec’20

* $65B $62B (5%) Fin-Tech Apr’21

$60B $73B 21% Food Delivery Dec’20 $84B $48B (43%) E-commerce Mar’21

$29B $35B 20% Fin-Tech Mar’21 $68B $40B (42%) Travel Jul’21

Future of
$2.2B $3.1B 41% May’21 $11.8B $3.1B (73%) E-commerce Dec’20
Work

Digital
Total $176B $217B 23% $7.9B $6.1B (22%) Apr’21
Entertainment

$7.4B $1.8B (75%) E-commerce Dec’20

$5.8B $4.5B (22%) Ed-Tech Apr’21

Total $250B $166B (34%)

Source: CapIQ (as of Oct 18, 2021).

12 Note: Pluralsight and Grubhub were removed from the BV Marketplace Index as they were acquired in Apr ’20 and Jun ’20, respectively.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 So, what is driving this broad distribution of returns?

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This presentation includes proprietary information of Battery Ventures
 The Pandemic Has Bifurcated Marketplaces into Two Categories:
“Stay-At-Home” vs. “Recovery” Businesses
Stay-At-Home Businesses Recovery Businesses

Digital *
Experiences
Entertainment

Digital Health Travel

E-Commerce

Ed-Tech

Fin-Tech *

Future of Work

14 Note: Logos are representative companies for each vertical – not a comprehensive list.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 After Hitting Record Lows in the Past Year, “Recovery” Stocks Across the Board
Have Rebounded – as Strict Lockdowns Lift and Vaccine Rates Rise…
LTM Share Price Change
250%
Stay-At-Home Businesses
Vaccine Rollout
Recovery Businesses
200%

+171% Fintech
150%

100% +94% Experiences

+60% Future of Work
50% +58% Travel
+16% Digital Entertainment
0% (1%) E-commerce

(28%) EdTech
-50% (36%) Digital Health

-100%
Oct’20 Nov’20 Dec’20 Jan’21 Feb’21 Mar’21 Apr’21 May’21 Jun’21 Jul’21 Aug’21 Sep’21 Oct’21

15
Source: CapIQ (as of Oct 18, 2021) – Chart shows share price change since Oct ’20; only includes companies in the BV Marketplace Index (excluding
This presentation includes proprietary information of Battery Ventures those companies based in China).
 …While “Stay at Home” Businesses Re-Calibrate as the World Opens Back Up

Industry Vertical EV / NTM Multiple in Oct ’20 EV / NTM Multiple in Oct ’21

Fin-Tech 2.7x +185% 7.7x

Experiences 0.8x +162% 2.1x

Travel 4.7x +34% 6.3x

Future of Work 12.5x +11% 13.8x

Digital Entertainment 7.5x +1% 7.6x

E-commerce 3.7x (16%) 3.1x

Digital Health 14.9x (23%) 11.5x

Ed-tech 14.7x (38%) 9.1x

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This presentation includes proprietary information of Battery Ventures Source: CapIQ (as of Oct 18, 2021). Data excludes companies based in China.
 Efficiency is Highly Correlated with Market Performance
LTM Share Price Change of the BV Marketplace Index “Stay-At-Home” Stocks

40%
30%

30%

20%

16%
10%

0%

(10%)
(1%)
Top Quartile Average Bottom Quartile

Rule of 401: 55 21 2

Note: (Cap IQ) Share price data as of Oct,18, 2021. Top half measured as companies whose stock price performed better than the average, Bottom
half measured as companies whose stock price performed below the average.
17 1 “Rule of 40” refers to a Company’s LTM EBITDA margin plus its consensus NTM Revenue growth rate.

This presentation includes proprietary information of Battery Ventures Note: Only Includes Companies that were public as of Oct 18, 2020.
 Recovery-Marketplaces are Leaning-In to Maximize Post-Pandemic Growth
Consensus NTM Growth Rates of Leading “Recovery” Businesses

140%

120%
98%
100% 89%
80% 75%

60% 56% 55%

40%

20%

0%

Released their first Launched a Outspent Airbnb in Providing greater Spending an

subscription product, “Connected Trip” S&M by 10x in the flexibility through incremental $250M
Boost, to help product to cross sell first few months of “Reserve Now, Pay in US driver
creators with their travel services2 the year3 Later” offering4 incentives5
marketing1

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This presentation includes proprietary information of Battery Ventures 1 Eventbrite Q2’21 Shareholder Letter. 2 Wall Street Journal. 3 Forbes. 4 Tripadvisor Q4’20 Shareholder Letter 5 CNBC.
 Now, how should you navigate in this
new reality?

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This presentation includes proprietary information of Battery Ventures
 The Age Old Question – Growth vs. Profitability?

Early Stage: Growth Stage: Pre-IPO:

Grow, Grow, Grow Scale Efficient Growth Create Optionality
(After Finding PMF!) and Demonstrate
Long-Term Viability

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This presentation includes proprietary information of Battery Ventures
 Early Stage: Grow, Grow, Grow

Solve a specific problem Gradually expand to a Layer on additional

in a narrow category broader set of markets product offerings
• Regularly iterate through • Identify additional use-cases • Leverage established
customer feedback of your core product supply/demand networks
• Measure engagement, repeat • Utilize organic/inorganic S&M and tech capabilities to enter
rates and stickiness to prove channels to establish network adjacent categories
out MPF effects

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This presentation includes proprietary information of Battery Ventures
 Early Stage: Grow, Grow, Grow (After Finding PMF!)
Uber Case Study

Growth in Uber Rides

10B trips Focused on a Specific Use Case (MVP)
September 2018  In the early years, only offered high-end “black cars”
12 months later (+5B)
 Allowed for quick product iteration and built driver
supply for cheaper services (UberX and Pool)
 Proved out MVP, as evidenced by a strong flywheel:
more users → more demand for drivers → less waiting
time and better user experience → increase in demand
5B trips from users
September 2017
11 months later (+3B)
Leaned Into Promotions to Reduce Friction
2B trips
October 2016  50% discounts for all first-time riders
7 months later (+1B)  Aggressive spend in driver incentives and referrals
1B trips
March 2016
5 years after launch (+1B)
Layered on Product Offerings
 Leveraged driver/rider user bases and routing
technology to expand to adjacent logistics markets

2012 2013 2014 2015 2016 2017 2018  Uber Eats and Freight are now on $50B and $1.5B
gross bookings run-rates, respectively

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This presentation includes proprietary information of Battery Ventures Source: Uber S-1 Filing.
 Growth Stage: Scale Efficient Growth

Create defensibility and Deeply understand Show a path to achieving

build moats “cohort profitability” positive unit economics
• Build in product-led / viral growth • Aggregate financials might be • Are your most mature cohorts
loops and network effects to misleading and/or markets highly profitable?
reduce dependency on paid • Prioritize unit or cohort • If so, this provides confidence in
acquisition profitability (not company clear payback for every
profitability) as your company incremental investment
invests in growth and product

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This presentation includes proprietary information of Battery Ventures
 Growth Stage: Scale Efficient Growth
Robinhood Case Study

Robinhood Cohort Analysis:

Robinhood Annual Revenue per Annual Cohort
($ Millions) • Many of Robinhood’s customers are in the early
$1000M stages of building a relationship with a financial
services provider
− Over 50% of their users (who have funded
$750M accounts on the platform) said Robinhood was
326 their first brokerage account

$500M • As the Company aspires to manage and service all

aspects of their users’ financial lives, they measure
175
“Revenue by Cohorts” to monitor consumer usage
and activity patterns
$250M
186
45
− On average, revenues per user increased
87 nearly three-fold in the first 24 months for
44 130
17 both their 2017 and 2018 annual cohorts
62 56
$0M
2017 2018 2019 2020
• This “Cohort Analysis” illustrates high customer
2017 Cohort 2018 Cohort 2019 Cohort 2020 Cohort stickiness and indicates long-term business
efficiency

24 Source: Robinhood’s S-1.

Note: Robinhood categorizes their customers on a cohort basis based on the month, quarter, or year they first funded their accounts. They track the
This presentation includes proprietary information of Battery Ventures annual revenue from those cohorts over subsequent one-year periods
 Growth Stage: Scale Efficient Growth
Uber Case Study

Uber Eats Cohort Analysis:

Uber Eats Q1’21 Gross Bookings and EBITDA
(by “Market” Segment) • Investors have had continued concerns about Uber
Eats’ losses, with Q1’21 EBTIDA equaling (2%) of
$12.5B
Gross Bookings

$9B+ • Profitable Markets Cohort offered assurance to

investors that in more mature markets, the
business could achieve strong EBITDA margins of
4% of Gross Bookings
− If we applied this margin profile to the overall
$3B+
business, Uber Eats would generate $500M
$120M
in Q1’21 EBITDA

• The Cohort Analysis also internally set a “north

star” for emerging markets, providing a
($200M) benchmark to strive towards
($320M)
All Markets Investment Markets Profitable Markets

Gross Bookings EBITDA

25 Source: Uber Q1’21 Earnings Deck.

Note: EBITDA numbers for Investment Markets and Profitable Markets are estimates. Uber disclosed that EBITDA was approximately 4% and -3% of
This presentation includes proprietary information of Battery Ventures Gross Bookings for Profitable Markets and Investment markets, respectively, but did not provide exact numbers.
 Pre-IPO: Create Optionality and Demonstrate Long-Term Viability
Marketplaces with Embedded Fin-Tech Offerings Earn a Premium on their Valuation Multiples

Fin-Tech enabled
Industry Examples: BV Marketplace BV Marketplace Index S&P500 Financials
• The Uber Money product expedites Index EV/Sales EV/Sales EV/Sales
courier/driver payments 5.6x 7.0x 4.8x
• Jumia provides financing to SMB’s and
allows customers to “Buy Now, Pay
Later”
• Lyft offers insurance coverage to all its
drivers *

Advantages of Fin-tech Offerings:

• Improved product experience and
competitive defensibility
• Lower customer acquisition cost and
higher lifetime value
• Top-line growth lever with potential
margin expansion

Source: CapIQ (as of Oct 18, 2021).

Note: BV Marketplace Index data excludes China-based companies. The icons above are illustrative and do not represent the full list of companies in
26 the BV Marketplace Index and the S&P500 Financials Sector.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 Pre-IPO: Create Optionality and Demonstrate Long-Term Viability
Mercado Libre Case Study
MELI 5-Year Segment Top-Line Growth ($B)
Revenue of MELI by stream Payment Volume of Mercado Pago

$4.0 $50.0
Marketplace Growth 3rd party marketplaces Growth
since 2015 since 2015
Fintech Own marketplace

$2.6 $30.0
+14.0x
Mercado Libre Offers a One-Stop Shop for Financial
$2.2 +4.3x $28.0
Services, Including:
$1.4 $18.0
$1.3 $1.3
$14.0
$15.0
 Payment Processing: $17.5B in Q2’21 payment volume
$0.8 $7.2
$0.8 $7.7 $4.1
$0.6
$0.9
$0.9
$1.4 +7.0x
$2.1 $11.0 $13.0
$20.0 +3.5x  Asset Management: Manage $810M on behalf of 19.3M users
$0.6 $9.6
$0.2 $0.4 $5.6 across Latin America
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
 Lending: Originated ~$700M of loans in Q2’21
MELI 5-Year Share Price Change  Investing in growing insurance and credit card products

1000% Strategic Benefits:

750%
 Access to New Customers: Across Latin America, nearly half of
+789% the population is unbanked. These fin-tech offerings expand the
500% pool of prospective e-commerce customers
 New Monetization Avenues: Though the marketplace business
250%
slowed after the pandemic peak, the payments division grew
0% 70% YoY in Q2’21 (~$1.6B Revenue run-rate), with 60% of TPV
Oct’16 Oct’17 Oct’18 Oct’19 Oct’20 Oct’21 occurring outside Mercado Libre

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Source: MercadoLibre Q1’21 10-Q Report.
This presentation includes proprietary information of Battery Ventures Note: (Cap IQ) Share price data as of Oct 18, 2021.
 Pre-IPO: Create Optionality and Demonstrate Long-Term Viability
Carvana Case Study
CVNA Gross Profits per Unit by Segment

Carvana Provide Vertically Integrated Financing

Options:
 Originates securitized loans to 70% of the platform’s
customers, which are then sold to investors
Financial and Wholesale Retail Total  Offers insurance coverage plans through 3rd party partnerships,
Insurance Products earning commissions on product sales

CVNA Share Price Change Since IPO Strategic Benefits:

 Margin Expansion: Carvana earns roughly 50% of its Gross
3000%
Profits via sales of its high margin fin-tech products
2250%
+2,504%  Seamless Customer Experience: The platform’s embedded fin-
tech offerings are key to enabling customers to buy/sell their
1500%
vehicles in just a few minutes
750%

0%
Oct’17 Oct’18 Oct’19 Oct’20 Oct’21

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Source: Carvana Q2’21 10-Q Report.
This presentation includes proprietary information of Battery Ventures Note: (Cap IQ) Share price data as of Oct 18, 2021.
 We’re Just Getting Started …
$2.4T
*
Equity Value

*
*

*
$36B

$10B

1998 2008 2021

Time
29 Source: Cap IQ Market Cap ($USD) as of Oct 18, 2021.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 We’re Just Getting Started …
$10T
*
Equity Value

$2.4T
*
*

*
*
*
*

$36B
$10B

1998 2008 2021 2025

Time
30 Source: Cap IQ Market Cap ($USD) as of Oct 18, 2021.
* Denotes a current or former Battery portfolio company. No assumption should be made that the investments identified above were or will be
This presentation includes proprietary information of Battery Ventures profitable. For a complete list of portfolio companies, please click here.
 The Battery Team

Roger Lee Justin Da Rosa Courtney Chow Avik Wadhwa

rlee@battery.com jdarosa@battery.com cchow@battery.com awadhwa@battery.com

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

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This presentation includes proprietary information of Battery Ventures