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Presentation to Location Intelligence Conference April 2007 Presentation to Location Intelligence Conference April 2007

2 Executive Summary – Fog City Capital q Focus on Mid-Mkt Business Services and 2 Executive Summary – Fog City Capital q Focus on Mid-Mkt Business Services and Software ($7 - $100 M Revs) q Principals span ex-entrepreneurs and deal backgrounds q Partner with existing management – play hands-on, active roles q Focused around 2 themes: § § Intersection of Software and Services • • Global Execution • • q Software companies looking to build recurring, ongoing relationships w/ customers Services companies looking to build stickiness and differentiation via technology Expanding globally from sales/market penetration and execution/delivery is now accessible to mid-market companies Most mid-mkt companies don’t know how to go about it or think only in terms of cost reduction Not a VC firm – look at companies with established business models Confidential Page 2

3 Fog City Capital GIS Experience q We have looked at content, services and 3 Fog City Capital GIS Experience q We have looked at content, services and software/applications q Content: § § § 2 -D Mapping Content 3 -D Mapping Content Other specialized data vendors Services: q § § § Image Acquisition Photogrammetry GIS Mapping Database Maintenance Technology services Software/applications q § § § Consumer oriented applications enabled by GIS technology B 2 B applications enabled by GIS technology Software vendors Confidential Page 3

4 Industry Growth Drivers q Industry has grown at 13. 6% CAGR 2000 -2005 4 Industry Growth Drivers q Industry has grown at 13. 6% CAGR 2000 -2005 and is predicted to be 14 -15% CAGR from 2005 -2010 q Under-investment in infrastructure in the US has created pent-up demand § § Federal govt put off spending post 9/11. This has picked up American Society of Civil Engineers estimates $1. 6 trillion investment in U. S. infrastructure over next 5 yrs Federal outsourcing trend q § § Federal government is increasingly outsourcing in-house departments to external vendors Active lobbying on the part of GIS companies to encourage privatization of GIS services q Growing industrial and consumer demand/awareness driven by entry of Google and Microsoft into GIS applications – fueling desire for higher resolution/3 D images q Fundamental shift in technology (like from vinyl records to CD’s) where all maps in existence need to be digitized – this is driving new demand to update maps as well q GIS is becoming a key part of any database application – Oracle has spatially enabled their RDBMS q Improving technology is making data more accessible (digital), cheaper and more accurate, bringing in new users at different price points thus expanding the market Confidential Page 4

5 GIS Sector – Why is it interesting to Fog City? q Industry growth 5 GIS Sector – Why is it interesting to Fog City? q Industry growth drivers (previous slide) are not changing any time soon q Highly fragmented market § § § Very few scale players that can span services and geographical footplint Real scale benefits - ability to win contracts as a small vendor/service provider is limited Ability to deploy capital to consolidate top-tier players High technology intensity q § Race to build new, relevant applications Real opportunity to expand globally q § § Huge infrastructure needs in developing countries that don’t have know-how or experience Countries like India have only just allowed private-contractors to fly across the country for image acquisition Confidential Page 5

6 India & China - Background q India and China -- Emerging Superpowers § 6 India & China - Background q India and China -- Emerging Superpowers § Until the late 19 th century India and China were the world’s largest economies § In the 18 centuries up to the 1800’s, they produced 80% of world GDP § Europe’s technology revolution left them behind only recently § But the industrial revolution only involved one third of world population q The world is tilting their way again § India and China’s economic growth at 7% annually is 3 x of West § Not just about India and China – they were only 25% of last years total increase in global GDP from emerging economies q Demographics § 2 billion people; 1 billion new consumers entering world economy § Average of Indian population is 24; 30 mm new people join the middle class each year § Opened up to foreign investment; Consumer Credit widely available q Their economies are not just export oriented § Western revenues was just the catalyst § Majority of both economies is led by domestic consumption; disposable income rapidly increasing § Now becoming significant importers of Western goods Confidential Page 6

7 GIS in India & China q Space programs in both countries spawned skilled 7 GIS in India & China q Space programs in both countries spawned skilled technical people § Started off doing labor-intensive, commoditized work § Over time, have expanded into technology services and application development q Profusion of vendors who have grown as sub-contractors to US vendors § Many offshore service providers are looking to get into software/applications § Others want to sell directly § Many 2 nd tier providers are under-funded q Global ambitions and high valuations gives them currency for acquisitions § Most offshore players lack the skills and capabilities to sell effectively in the US § Many have made “front-end” acquisitions in the US to build bus dev capabilities § Some of the largest GIS players, such as Rolta (India, >$120 mm in revs) and Infotech (India, >83 mm in revs) are growing rapidly (>30%) q Strategy for US players § Think of India/China as source of labor or source of revenues? § Build/Buy ex-US presence organically? § Partner vs. Go-it-alone? § Ignore? Confidential Page 7

8 Contact Us Adit Abhyankar Partner Fog City Capital, LLC 49 Stevenson Street, Suite 8 Contact Us Adit Abhyankar Partner Fog City Capital, LLC 49 Stevenson Street, Suite 525 San Francisco, CA 94105 (415) 226 -1051 [email protected] com Confidential Page 8