Battery

Ventures
STATE OF THE OPENCLOUD
NOVEMBER 2024

| This presentation includes proprietary information of Battery Ventures

AI is driving the next wave of cloud growth

1 AI is catalyzing a new technology supercycle, with the potential to disrupt core cloud industry dynamics.

2 Infrastructure companies have been the early beneficiaries, laying the foundation to support new AI workloads.

3 Enterprises are moving from experimentation to production, but it’s still early.

4 Public company software multiples have stabilized, and growth still matters.

5 The IPO backlog continues to grow; AI can’t save everyone.

6 The opportunity has never been larger, with $4T+ up for grabs as AI disrupts software, services and labor markets.

2 | This presentation includes proprietary information of Battery Ventures

 Macro Update

3 | This presentation includes proprietary information of Battery Ventures

Just like mobile and cloud, AI is the next platform shift

Mobile Cloud AI

iPhone Units Shipped (M) AWS EBIT Margin / Revenue (US$ B) Data Center Revenue (US$ B)

EBIT Margin Run-Rate Rev

$26
20
17%
$6 $23
2x
$18
$4 $15
10
$10

$4 $4 $4

(20%)
2008E
2008 2008A
2008 Q1'15
Q1’15 Q1'15
Q1’15 Q1’15 Q1’15 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
Estimates Actuals
Estimate Actual Estimates Actuals Estimates Actuals

Infrastructure build-outs are a precursor to technology supercycles.

Source: Apple, Amazon and Nvidia earnings. Goldman Sachs Research.

Note: Apple data CY2008. AWS FYE 12/31 and estimates based on consensus figures. Nvidia FYE 1/31.

4 | This presentation includes proprietary information of Battery Ventures

Markets reached new highs, driven by large-cap AI

S&P 500 Performance vs. Large Cap AI Returns are Concentrated (YTD 2024 Returns)

S&P 500 Large Cap AI

300%
Covid ZIRP Optimization AI Era NVDA 168%

250%
230%
PLTR 142%

200%
META 60%

150%
S&P500 23%
100% 81%
GOOG 23%
50%
^SPX 20%
0%
MSFT 8%
(50%)
Cloud Index
Jan-20

Jan-23
Oct-21
Aug-20

Oct-24
May-22

(4%)
Mar-21

Aug-23

Mar-24
(50%) 0% 50% 100% 150% 200%

The S&P 500 is experiencing strong growth, driven by core infrastructure companies laying the foundation for an AI-
powered future.

Source: CapIQ. Cloud Index represents EMCLOUD.

Note: Market data as of 10/31/24.

5 | This presentation includes proprietary information of Battery Ventures

AI has reshaped public cloud provider growth . . .

Public Cloud Provider Run-Rate Revenue Growth

($ in Billions) Y/Y Growth

40%

$45
35% $41
$37 $38
31%
$34
$32
$29 $30 $66
$27 $61
$25 25% $54 26%
$54
$23 $49 25%
$45 24%
$41 $40
$36 $38 21%
$32 21% 19%
19%

$105 $110
$92 $97 $100
$82 $86 $85 $89
$74 $79

Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24

AI has unlocked new workloads for cloud providers, reaccelerating growth following optimization headwinds.

Source: Company filings and Goldman Sachs research.

Note: In Q3’24 MSFT restated Azure disclosures to better reflect consumption revenue and growth.

6 | This presentation includes proprietary information of Battery Ventures

. . . and cloud providers continue to invest ahead of the curve.

Public Cloud Provider Net New Revenue Growth vs. CapEx Growth

ZIRP Optimization AI Era

76% 73%
65% 64%
61% 62%
57%
49%
44%46%
38% 37% 37% 35%
32%32% 32%
24%
17% 17% 19% 16%
4% 5% 2%

(8%)
(14%)
(19%)
(26%) (27%)

Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24

Net New Revenue Y/Y Growth CapEx Y/Y Growth

Cloud providers are aggressively expanding AI infrastructure capacity to meet growing customer demand.

Source: Company filings and Goldman Sachs Research.

Note: Represents the sum of AWS, Azure and GCP.

7 | This presentation includes proprietary information of Battery Ventures

AI will fuel the next era of cloud consumption

Public Cloud Provider AI Revenue Uplift

($ in Billions) $1,280

$1,060
$550 44% 5-Yr.
$870 CAGR

$460
$670
$370

$495 $260
$370 $160
$730 21% 5-Yr.
$265 $90 $600 CAGR
$45 $500
$410
$280 $335
$220

2024E 2025E 2026E 2027E 2028E 2029E 2030E

Cloud Giants ARR Incremental AI ARR

Cloud adoption is rapidly expanding with AI, and the stakes have never been higher. There is ~$2T+ of incremental
cumulative revenue that is up for grabs by 2030.
Source: Goldman Sachs research.
Note: Incremental AI ARR implied from Nvidia’s data center revenue. Battery estimates and assumptions include $25K GPU ASP, % of data center revenue attributable to Cloud Providers, Cost per GPU/Hr., and GPU
utilization rate. Cloud Giants includes AWS, GCP, and Azure.

8 | This presentation includes proprietary information of Battery Ventures

There is a delineation between experimental vs. established
budgets . . .
AI Deployment Plans – Timeline Expectations for Generative AI

Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026
Percentage of AI Use Cases in Production

100% DELTA 96% 96%

Highest expected 93%
90%
vs. actual –42pp
89%
80% 84%
79%
70% DELTA 73%
Expected vs. 66%
60%
actual –19pp
50% 52%
48%
40%
42%
30%
29%
20% 37%
29%
10% 21%

0%

Actual Projected (Q3 2023 Survey) Projected (Q1 2024 Survey) Projected (Q3 2024 Survey)

Excitement about AI is high, but most companies are still in the early stages of deployment, with fewer projects in
production than expected.

Source: Battery Ventures 2024 State of Enterprise Tech Spending Survey.

9 | This presentation includes proprietary information of Battery Ventures

. . . but maturing use cases are driving value creation for AI-
native application and infrastructure companies.
Cloud AI

Services $2T
TAM

$3T
TAM

Applications $650B
TAM

Infrastructure $2T $3T

TAM TAM

The potential value has never been higher as a new AI stack emerges, allowing software to penetrate a larger market
opportunity than ever before.
Source: Gartner.
Note: TAM represents 2028 estimate.
1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

10 | This presentation includes proprietary information of Battery Ventures

SaaS multiples have begun to stabilize . . .

EV / NTM Revenue

Average Top Quartile Average Bottom Quartile Average '23 - '24 Avg. (All Companies) '23 - '24 Avg. (Top Quartile) '23 - '24 Avg. (Bottom Quartile)
70.0x
Bottom Top
Average
Quartile Quartile
60.0x
NTM Revenue $1.9B $3.9B $4.2B

NTM Growth 6% 14% 22%

50.0x
NTM FCF Margin 17% 21% 25%

NTM Rule of 40 24% 35% 46%

40.0x
EV / NTM Rev 3.0x 7.5x 12.7x

30.0x
Multiples have stabilized

20.0x
12.8x
12.7x
10.0x 7.8x
7.5x
3.5x
0.0x 3.0x
Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Oct-24

Rising interest rates and a pullback in software spending drove multiple contraction coming out of the ZIRP era, but
multiples have since stabilized.

Source: CapIQ.
Note: Market data as of 10/31/24.

11 | This presentation includes proprietary information of Battery Ventures

. . . but software is still challenged, and a tough macro is the
new normal.
Net Magic Number

($ in Billions)

$25
$23 $23 $21 $22 $22 $22 $22
0.54x $21
0.47x
0.45x
0.41x 0.42x 0.41x
0.41x 0.40x
0.36x

($47)
($49)
($51) ($52) ($52) ($53) ($54) ($55) ($56)

Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24

Total S&M Exp. Total Net New ARR Magic Number

Despite a continued acceleration in sales and marketing spending, net new ARR has not inflected.

Source: CapIQ.
Note: All medians based on rolling LTM average.

12 | This presentation includes proprietary information of Battery Ventures

Macro uncertainty has catalyzed a push toward efficiency, which
has come in different forms . . .
Average Software Company Top Quartile Software Companies

50% 50%
44%
45% 45% 42% 41% 40% 40% 40% 41% 40%
40% 38% 37% 37%
40%
35% 35% 35%
33% 33% 34% 34%
35% 32% 32% 33% 35%
32%

30% 30%
26% 26% 26%
25% 24%
25% 23% 22% 22% 23% 23%
25% 22% 21% 21%
20% 20% 21% 20%
19% 19%
20% 17% 17% 18% 20% 18%
16% 15% 15% 16% 20%
19% 18%
13% 15% 15% 18% 17% 17%
15%
11% 15% 15%
9% 10% 14% 14% 13% 14% 10%
10%

5% 5%

0% 0%
Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24
Average FCF Margin Average NTM Revenue Growth Average Rule of 40
Average FCF Margin Average NTM Revenue Growth Average Rule of 40

Top-quartile software companies have expanded profitability margins while reaccelerating growth to maintain Rule of
40 status.

Source: CapIQ.
Note: Top quartile companies represents those with a >=10x EV / NTM revenue multiple. Market data as of 10/31/24.

13 | This presentation includes proprietary information of Battery Ventures

. . . but the market still values growth over profitability.

EV / NTM Revenue Multiple Growth vs. Profitability Contribution for Rule of 40 Companies

45%
10.5x

40%
5.7x EV / NTM Rev
35% 9.4x EV /

NTM FCF Margin

NTM Rev
30%
6.0x
25%
12.4x EV / NTM Rev
20%
N=32 N=16
15%

10%
0% 10% 20% 30%
<Rule of 40 >= Rule of 40 NTM Revenue Growth

Within the Rule of 40 bucket, companies growing >20% trade at a premium compared to their slower-growth but
more-profitable peers.

Source: CapIQ.
Note: Market data as of 10/31/24.

14 | This presentation includes proprietary information of Battery Ventures

Private company multiples trade at a premium, baking in future
growth and AI tailwinds
Private vs. Public Company ARR Multiples

Implied ARR growth to 3x private company valuation @ a public company multiple

50.0x 5.5x 6.2x 11.5x 9.7x

39.0x
40.0x

1.8x 26.9x
30.0x
Premium 23.4x
19.8x
20.0x 3.8x
21.2x 2.1x 3.2x
Premium Premium
Premium
10.0x
9.5x
7.0x 7.3x
0.0x
2021 2022 2023 2024 YTD
EV / NTM ARR (Private) EV / NTM ARR (Public)

Private companies trade at a premium ARR multiple compared to their public market peers, as private investors bet on
scaling ARR by 10x to achieve a 3x return.

Source: CapIQ and internal data.

Note: NTM ARR for public companies calculated as NTM quarter revenue x 4. Market data as of 10/31/24

15 | This presentation includes proprietary information of Battery Ventures

U.S. software unicorn creation has outpaced IPO and
M&A volume; AI isn’t a panacea for all startups
Significant
M&A > $1B IPOsSignificant
M&A >IPOs
$1B Beginning # of Unicorns Net New Unicorns Total Number
340
339
322
321
311 18
11

240 1
71 1 1
1

1
1

136 311 322

1
1
1 1
1

240
1

104 1

26 1

1 1

78 104
1 1

1
1
1

(24) 1

(26)
1

(17) 1

(22)
(44)
1

(14)
1
1

0 (1) (2)
(33)
1 1
1
1

2020 2021 2022 2023 2024

The backlog of software unicorns has grown by 3x since 2020 while the number of large-scale software IPOs and M&A
have declined.
Source: Pitchbook
Note: Data represents IT & B2B SaaS companies headquartered in the US excluding blockchain/cryptocurrency. Net new unicorns adjusted for exits and down rounds. Unicorns are private companies with a post-
valuation >= $1B. Logos represent a subset of the total company base. M&A shown in year announced. 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

16 | This presentation includes proprietary information of Battery Ventures

Large capital raises have led to creative early exits

/ / /
$ Raised $1.6B $ Raised $414M $ Raised $193M

Last Round Valuation $4.0B Last Round Valuation $1.0B Last Round Valuation $1.0B

Date of Last Round Jun 2023 Date of Last Round Feb 2023 Date of Last Round Mar 2023

Date of Acquisition Mar 2024 Date of Acquisition Jun 2024 Date of Acquisition Aug 2024

Time Since Last Time Since Last Time Since Last

~8 Months ~1.5 Years ~1.5 Years
Round Round Round

Key executives hired + licensing agreement to use the technology

Large amounts of capital raised early in the cycle at high valuations has resulted in creative acquisitions, structured as
large-scale acquihires and licensing agreements.

Source: Pitchbook data.

17 | This presentation includes proprietary information of Battery Ventures

The AI opportunity remains massive, but tread carefully
($ in Billions)

Software TAM Additional Disruption Opportunity with AI AI Software TAM

Application Software $4,005

Infrastructure Software

$1,554

$1,588

$863
$382
$481

Cloud Software + Services + Incremental AI Software

Automation Human Labor
Displacement

There is $4T of software disruption opportunity as AI unlocks additional services and human labor spend.

Source: Gartner.
Note: Battery assumptions include incremental human labor displacement based on an estimated # of global knowledge workers, penetration rate and avg. salary.

18 | This presentation includes proprietary information of Battery Ventures

 Operational Best
Practices to
Build a Durable
Cloud Company

19 | This presentation includes proprietary information of Battery Ventures

 1 Looks and engagement create durable moats

Product design is an offensive force

User and key differentiator, critical to
User Interface Workflow Data driving fast adoption and
Experience
accelerating the time to value.
Applications

Technology moats are eroding as

powerful off-the-shelf infrastructure
building blocks, offered as a service,
Foundation Models abstract the complexity of building
and managing underlying systems.
As technology moats diminish,
differentiation at the application
layer will be driven by user
experience and workflow.

Infrastructure

As technology moats erode and competition rises, product design and user experience become core differentiators for
software companies.

20 | This presentation includes proprietary information of Battery Ventures

 2 New era, new metrics: tracking SaaS and AI product
success together
SaaS Product Metrics AI Product Metrics

• % of visits to sign-ups • % of new sign-ups via direct traffic or referrals (viral

Acquisition factor)
• Source mix: organic, paid, referrals, etc.

• % of signups that reach “aha moment” • % of valid or accurate AI responses

Activation
• Avg. time to activation • Avg. time to respond or execute an action

• Daily active users / monthly active users • # of daily prompts / actions / tasks
Engagement
• Avg. session duration • # of monthly users with >X prompts / tasks

Retention • M-1, M-6, M-12 user and $ retention • Productivity uplift and time / cost saved

AI products require hybrid metrics: a blend of SaaS product metrics and AI-specific performance indicators.

21 | This presentation includes proprietary information of Battery Ventures

 3 Product velocity is critical to long-term growth
Legend Technology Workflows Employee Workflows Customer & Industry Workflows Creator & FSC Workflows

2005 2018 2023 2024

$12,000 IT Service Management IT Service Management IT Service Management IT Service Management
IT Operations Management IT Operations Management IT Operations Management $10,658
Strategic Portfolio Management Strategic Portfolio Management Strategic Portfolio Management
Integrated Risk Management Integrated Risk Management Integrated Risk Management
$10,000 Security Operations Security Operations Security Operations
IT Asset Management IT Asset Management IT Asset Management
HR Service Delivery Cloud Observability Cloud Observability
Customer Service Management Operational Technology Operational Technology
$8,000
Field Service Management HR Service Delivery Digital End-User Experience
Annual Revenue ($M)

App Engine Legal Service Delivery HR Service Delivery

Automation Engine Workplace Service Delivery Legal Service Delivery
$6,000 Customer Service Management Workplace Service Delivery
Field Service Management Contract Lifecycle Management
Industry Solutions Customer Service Management
App Engine Field Service Management
$4,000 Automation Engine Industry Solutions
Vault Sales and Order Management
Accounts Payable App Engine
Procurement Automation Engine
$2,000 Supplier Operations Vault
Accounts Payable
$567
Procurement
Supplier Operations
$0
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

ServiceNow has grown at a 34% CAGR over the last 10 years as product innovation has unlocked new market
opportunities to fuel growth to $10B in revenue.
Source: Wall Street research and company investor presentation.

22 | This presentation includes proprietary information of Battery Ventures

 4 AI aligns product with value, and pricing models are
catching up
Per Seat Consumption & Outcome-Based Human Labor Augmentation

Copilot Autopilot Services as software

The Future to Come

Predictable and scalable pricing model Customers only pay for what they use, Pricing is directly tied to the cost of
where the cost per seat reflects the and the successful outcomes achieved, displaced human labor, making ROI
productivity uplift seen by resulting in true alignment between clear by linking the cost of the product
individual users. customers and vendors. to the headcount savings achieved.

Rooted in traditional subscription Forecasting is difficult with variable Does not fit every AI use case and may
pricing models, often requiring an consumption in each period, and it is ignore long-term value while focusing
upfront commitment, which can lead to easier for customers to accidentally on near-term headcount cost savings.
misalignment between cost and actual overspend when not tied to
customer value. pre-defined commitments.

As AI moves from augmentation to automation, value-based pricing is key to aligning customers and vendors.

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

23 | This presentation includes proprietary information of Battery Ventures

 5 Pipeline is an output of your sales funnel

Sales Funnel Breakdown Opportunity Coverage

MQL ► SQL
Qualifying 5.0x
1 Intent 10% – 12%
4.0x

3.3x
SQL ► Actionable 2.9x
Opp. 2.5x
2 In Play 40% – 50%

Actionable Opp. ► Close

3 Monetizable 30% – 35% 40% 35% 30% 25% 20%

Win Rate Win Rate Win Rate Win Rate Win Rate

A 20-percentage point decrease in win rate requires a 2x increase in pipeline coverage.

24 | This presentation includes proprietary information of Battery Ventures

 6 Intent metrics drive pipeline generation and pipeline quality

Intent Signals Considerations

• Product usage • Email interactions • 3rd party signals (GitHub,  Quality of lead is just as important
• Website interactions • Customer conversations LinkedIn) as speed to lead
• Data warehouse analytics • Content interactions • Contact data
• Marketing engagements • 1st party cookies • Product reviews
 Measure # of leads and conversion
• Demos • Past champions & CRM data rates through stages
Marketing Funnel

Right Person & Account  Track content informed pipeline

Prospecting Funnel  Focus on high-value ICP

Right Time
 Prioritize intent signals to drive
Sales Funnel campaigns

Right Message

Qualified Lead

Be data driven when it comes to demand gen and demand capture to drive higher conversion rates and quality leads.

25 | This presentation includes proprietary information of Battery Ventures

 7 Choose your expansion journey

Existing Products New Products & Features

Price Increase Usage / User Expansion Upsell Cross Sell

Basic Standard Intermediate Advanced

 Provides an immediate  Provides a sustainable  Enhances customer value  Expands TAM through
revenue boost without expansion path as customers with additional high-value complimentary products.
requiring additional product naturally grow their usage / features and functionality.
 Increases stickiness through
development. users.
 Requires minimal change to bundled offerings and multi-
 Offers a simple  Aligned with customer success the sales process. product adoption.
implementation process. and lowers the risk of churn due
to increased user engagement.

 Not sustainable long-term  Introduces infrastructure /  Involves elevated development  May dilute the focus of the
(provides only a one-time scaling challenges. and marketing costs. core product.
revenue increase).
 Not applicable for all products Managing multiple pricing  May require a new GTM
 Can trigger negative customer and pricing models.  tiers increases complexity. strategy.
reactions and increase churn
risk if the perceived value
doesn’t match the new price.

Be long-term greedy when it comes to expansion.

26 | This presentation includes proprietary information of Battery Ventures

 8 Value-based pricing requires re-thinking sales
compensation models
Consumption Pricing Customer & Revenue Lifecyle Sales Compensation Framework

$16,000 Base + Variable Structure

• Higher base salary (60-70%) vs. traditional models (50%)
$14,000 Upsell &
Cross-sell • Reduced variable component to offset delayed
$12,000 Full Usage revenue realization
• Quarterly or monthly true-ups based on actual usage
$10,000

$8,000 Hybrid Incentive Structure

• Initial booking compensation (30-40% of total commission)
$6,000
• Usage milestone bonuses (60-70% tied to consumption)
$4,000 Live in • Accelerators for exceeding usage forecasts
Contract Prod
Signed Holidays
$2,000
Key Success Metrics to Track
$0 • Initial deployment completion
Apr-23
Feb-23

Nov-23
Dec-23

Jun-24
Jun-23

Feb-24

Apr-24
Oct-23
Sep-23

Jan-24
Jan-23

Mar-23

May-24

Jul-24
May-23

Jul-23
Aug-23

Mar-24
• Time to first production usage
• Monthly usage growth
• Customer expansion milestones
ARR

Sales compensation in consumption models requires balancing immediate rewards with long-term
revenue realization.

27 | This presentation includes proprietary information of Battery Ventures

 9 Sell work with AI and capture a broader TAM
Legal

AEC

Call Centers
1,600,000
Architects
x 8,600,000
$40,000 Lawyers
16,000,000
annual salary
Agents X
+
X $60,000
4,100,000 annual salary
$12,000
Civil Engineers
annual salary
x
$50,000
annual salary

$200B $4B ARR $270B $6B ARR $515B $700M ARR

Labor Spend Labor Spend Labor Spend

By automating high-value professional work in areas such as these, AI agents can convert salary budgets into software
revenue, driving TAM growth.
Source: US Bureau of Labor Statistics and company filings.
Note: TAM calculations based on global workforce estimates × average annual salaries in USD. ARR figures reflect latest quarterly revenues annualized.

28 | This presentation includes proprietary information of Battery Ventures

 10 Leading tech companies are returning to the office

# of In-Office Days Required for Employees

“When we look back over the last five years, we
continue to believe that the advantages of being
together in the office are significant. We’ve observed
5 that it’s easier for our teammates to learn, model,
practice, and strengthen our culture.”

- Andy Jassy, CEO of Amazon

3 3 3

“This analysis also shows that engineers earlier in

their career perform better on average when they
work in-person with teammates at least three days
a week.”

- Mark Zuckerberg, CEO of Meta

Apple Google Meta Amazon

In-person work fosters collaboration, strengthens company culture, enhances learning and development, and
accelerates strategic decision-making.

29 | This presentation includes proprietary information of Battery Ventures

 Themes
of Interest

30 | This presentation includes proprietary information of Battery Ventures

AI is eating services, creating services-as-software companies

Customer Support Sales & Marketing ITSM

1
Old Guard

Software-as-
a-Service

New Guard

Services-as-
Software

A new wave of AI companies is transforming the SaaS business model by shifting from providing workflow tools to fully
automating the work itself.

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

31 | This presentation includes proprietary information of Battery Ventures

A new web infrastructure has emerged for AI agents

Applications

Auth Observability & Evals Memory Search APIs

1 1

Developer Tools &

Orchestration
Frameworks Data Integration Routing Browser Access

Web Data Sources Model APIs Runtimes

Infrastructure

A new agent-native layer for internet information retrieval and automation is emerging.

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

32 | This presentation includes proprietary information of Battery Ventures

AI redesigns the software-development lifecycle

Current and Desired Usage of AI in the Developer Workflow AI-Native Developer Tools

Currently Using Interested in Using Over the Next Year

Code Generation
Writing code 82% 9%

Search for answers 68% 18%

Debugging and getting help 57% 26%

Documenting code 40% 38%

Generating content or synthetic data 35% 33% Code Review Documentation

Learning about a codebase 31% 41%

Testing code 27% 46%

Committing and reviewing code 13% 41%

Testing Deploys
Project planning 12% 32%
1

Predictive analytics 5% 40%

1

Deployment and monitoring 5% 40%

0% 20% 40% 60% 80% 100%

AI-powered tools are emerging in every part of the developer workflow, from writing to securing code,
and have potential to unlock new productivity.
Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.
Source: 2024 Stack Overflow Developer Survey

33 | This presentation includes proprietary information of Battery Ventures

The AI-native GTM tech stack

Prospecting Enablement Demos Outbound Intelligence

1 1

System of Record

First-Party Data Third-Party Data

• Product usage • Marketing engagement 1 1
Data Sources • Website interactions • Email interactions
• Data warehouse analytics • Customer conversations

AI-powered GTM tools unlock higher velocity and conversion rates through intelligent, data-driven sales workflows.

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

34 | This presentation includes proprietary information of Battery Ventures

Next-gen BI tools evolve from dashboards to meaningful
insights
Incumbents Next-Gen BI Tools

Companies

Users Data Teams Data Teams + Business Users

Exploratory Self-serve
1 Visualization 2 analysis
3 analytics
Applications 1 Visualization 2 Exploratory analysis
4 Multi-language support (Python, SQL, NLP)

Data modalities Structured Structured, Semi-Structured, Unstructured

1
Data Sources

New BI products have an opportunity to unlock a larger user base and incorporate unstructured data to enhance
insights.

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

35 | This presentation includes proprietary information of Battery Ventures

 Future of
OpenCloud

36 | This presentation includes proprietary information of Battery Ventures

The prize has never been bigger for cloud & AI companies . . .

Hundred-Billion Dollar Club ($B)

Pre-ChatGPT Today

is the only
private company
valued at $100B+

$8T
Enterprise
$17T
$16T
Value Enterprise
Enterpris
e Value
Value

$3,040
Cloud infrastructure and AI growth has created a new generation of trillion-dollar giants, with an unprecedented
number of high-quality companies rapidly scaling.
Source: CapIQ and Pitchbook data as of 10/31/2024.

37 | This presentation includes proprietary information of Battery Ventures

. . . and the backlog of $10B+ private companies is promising
Public Company Ten Billion Dollar Club Private Company Ten Billion Dollar Club

(Enterprise Value $ in Billions) (Enterprise Value $ in Billions)

CRWD $70 $70

APP $61 $49
1
WDAY $58 $43
TEAM $48 $40
1
DDOG $42 $24
SNOW $37 $23
NET $30 $23
VEEV $29 $20
HUBS $28 $18
ZS $27 $15
IOT $26 $14
MDB $19 $14
ZM $16 $13
DT $15 $13
MNDY $14 $13
DOCU $13 $13
CYBR $12 $12
OKTA $11 $12
KVYO $11 $10

The number of $10B+ private software companies equals the number of public software companies, with many private
companies growing faster at scale.
[]
Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please visit: https://www.battery.com/list-of-all-companies
Source: Pitchbook data as of 10/31/2024. The above listed private companies are enterprise software and infrastructure software companies with valuations of $10B or greater as of October 2024. Excluded from this
analysis are public and private companies that Battery believes are not representative because they are principally vertical-focused (ex. Bentley Systems, Toast, and Guidewire, Anduril, and Brex).

38 | This presentation includes proprietary information of Battery Ventures

Cloud-native companies continue to grow at healthy rates at
scale
Date of IPO

Run-Rate Revenue ($M) Run-Rate Revenue ($M)

IPO Current CY ’25E IPO to CY ’25E CAGR IPO Current CY ’25E IPO to CY ’25E CAGR

1
2024 700 820 1,064 87% 2019 333 2,581 3,224 54%

2021 233 730 929 55% 2018 227 1,390 1,586 37%

2021 150 796 1,029 74% 2018 180 2,371 2,872 51%

1
2021 308 940 1,163 46% 2017 142 1,912 2,270 47%

2021 832 1,265 1,583 19% 2017 195 2,584 2,828 42%

1
2020 146 412 501 34% 2016 237 4,330 4,740 42%

2020 533 3,475 4,356 64% 2015 385 4,526 5,541 34%

2019 270 1,604 2,109 48% 2012 263 8,758 9,782 34%

2019 384 3,855 4,779 58% 2012 190 10,508 13,242 40%

Cloud-native companies have 10x’ed revenue since IPO while maintaining an average growth rate of 40%.
[]
Source: CapIQ, company filings. Note: Representative companies include cloud infrastructure and software companies that have gone public since 2012.
1. Denotes a past or current Battery company. For a full list of all Battery investments, please visit https://www.battery.com/list-of-all-companies/. CAGR defined as the compounded annual growth rate, calculated as
(Current Revenue / IPO Revenue)^(1 / (2023-IPO Year)) - 1

39 | This presentation includes proprietary information of Battery Ventures

We’re still in the early innings for OpenCloud
3.5%

1 1
1

3.0%
1
1
1

2.5% 1 1
Software Spend as a % of US GDP

1
1

1
~51
1

1
2.0%
1
1

1
1 1

1.5% 1
1

1 1
1
1.0%

0.5%

0.0%
[] 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

1. Denotes a past or current Battery company. For a full list of all Battery investments, please visit: https://www.battery.com/list-of-all-companies/
Source: Gartner Research

40 | This presentation includes proprietary information of Battery Ventures

The Battery team

Dharmesh Thakker Danel Dayan Jason Mendel

[email protected] [email protected] [email protected]

Sudhee Chilappagari Patrick Hsu Payal Modi

[email protected] [email protected] [email protected]

41 | 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 as part of the OpenCloud 2024 conference. 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 or offer investment advisory services with regard to securities. This presentation does not purport to be
complete on any topic addressed. The information in this presentation is provided to you as of November 6, 2024 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: https://www.battery.com/list-of-all-companies/. Past
performance is not evidence of future results and there can be no assurance that a particular Battery portfolio company
will achieve comparable results to any other company.

The information contained herein is based solely on the opinions of Dharmesh Thakker, Danel Dayan, Jason Mendel,
Sudheendra Chilappagari, Patrick Hsu and Payal Modi and nothing should be construed as investment advice. This
presentation and 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 or an offering of
investment advisory services.

42 | This presentation includes proprietary information of Battery Ventures

Appendix: Public Comp Set

01 Adobe 11 Crowdstrike 21 Guidewire1 31 Procore 41 Twilio

02 Amplitude1 12 CyberArk 22 Rubrik 32 RingCentral 42 UiPath

03 Asana 13 Datadog1 23 Hubspot 33 Salesforce 43 Wix

04 Atlassian 14 Docusign 24 Jfrog1 34 SentinelOne 44 Workday

05 Bill.com 15 Dropbox 25 Klaviyo 35 ServiceNow 45 Zoom

06 Box 16 Dynatrace 26 Monday.com 36 Shopify 46 ZoomInfo

07 Braze1 17 Elastic 27 MongoDB 37 Smartsheet 47 Zscaler

08 Checkpoint 18 Fastly 28 Okta 38 Snowflake 48 Veeva

09 Cloudflare 19 Fortinet 29 PagerDuty 39 Sprinklr1

10 Confluent1 20 Gitlab 30 Palo Alto Networks 40 Tenable

Note: 1. Denotes a past or current Battery company. For a full list of all Battery investments, please click here.

43 | This presentation includes proprietary information of Battery Ventures