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DCM 2014 (V2) With Extras

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Transcript of DCM 2014 (V2) With Extras

David Chao
Firm Update
December 10, 2013

Asian Art Museum
San Francisco, CA
Annual Meeting 2013
DCM Annual Meeting – 2013 Agenda
Firm Update & Investment Themes: David Chao
China Industry Update: Hurst Lin
U.S. Industry Update: Jason Krikorian
Japan Industry Update: Osuke Honda
58.com CEO: Michael Yao
DCM II and III: Tom Blaisdell
DCM IV: Ruby Lu
Coffee Break
SoFi CEO: Michael Cagney
DCM V: Peter Moran
FreedomPop CEO: Stephen Stokols
DCM VI, Hybrid RMB, A-Fund: Hurst Lin
Panel: Consumer Media & Digital Platforms
Wrap up: Matthew Bonner, Andre Levi
Adjourn to Holiday Gathering Event
Consistent Exits
Harvesting – Exits in the Last 12 Months
Since 2010:
~ $651M in Distributions to LPs
~ $1.3B in Value Created*

* Carrying value as of 11/30/13, Public securities exclude liquidity discount
NYSE: WUBA
NYSE: VIPS
Acquired by Alibaba
NYSE: BITA
SZSE: 002565
IPO 10/31/13
$624M
Total Value

$295M Realized
$386M Current Holdings Value
China’s leading online classified ads platform
China’s leading online discount retailer
China’s leading consumer cloud storage company
China’s leading auto internet company
Leader in high-quality packaging paper in China
Pending
$70M Realized
$27.6M Realized
*
* Plays dual roles
Chiamin Lai
Boyu
Hu
Connie Xu
*
Ben
Tseng
Tony
Zhang
*
Pete
Moran
Scott
Alberts
Jason
Krikorian
Dixon
Doll
David
Chao
Tom
Blaisdell
Carl
Amdahl
Osuke
Honda
Ruby
Lu
Hurst
Lin
Finance, Ops. and Admin
(By Language, Cultural Skill)
Investment Team
Team By Geography –
40 Worldwide
Senior Investment Team
Ramon
Zeng
Margaret Feng
Arthur
Kaneko
*
As of 11/30/13
DCM Funds Ranking by Vintage
More to Come:
Significant IPO/Exit Pipeline
11/30/13 DCM results compared to Cambridge Associates latest available benchmark statistics of TVPI Net to Limited Partners (06/30/13)

Proactive Initiatives
* Carrying value as of 11/30/13, Public securities exclude liquidity discount

Funds Progressing – Value Created
Harvesting – Realized Value
$392M
DISTRIBUTED TO LPS
$426M
PROCEEDS/VALUE
As of 11/30/13
Values since last DCM Annual Meeting
Projected Net Fund Returns
As of 11/30/13
* Actual
DCM Portfolio Revenue Growth
* Excludes exited companies
DCM All Funds
Current companies and reported financials as of 9/30/13
Up-Round Highlights (Since 12/2012*)
* Triggered by financing events; includes signed term sheets

** Tranched financing

*** Triggered by multiple submitted term sheets

Note: multiples shown are post-money-to-post-money
DCM All Funds
Geographic Diversification
By $ Committed
Includes non-core

As of 11/30/13
1:00
1:25
1:35
1:45
1:55
2:25
2:40
3:00
3:15
3:35
3:55
4:15
4:35
5:20
5:45
“EIR” program and returning entrepreneurs
DCM A-Fund
Non-core investments
provide proprietary deal-flow
enables early access to promising deals
flexibility to experiment with out-of-the-box ideas feeds top deals to the main fund
Hybrid RMB China Fund
Double down on winners
Shares Aquired by ANA
Leading low cost carrier in Japan
$30M Realized
*
*Pending close
2013 Awards and Accolades
Awarded by Zero2IPO, Cyzone
VC Fundraising
Winner of the Year
China Best Venture-Backed IPO Exit
Venture Capitalist
of the Year
“40 Under 40” Star
Venture Capitalists
Ramon Zeng & Tony Zhang
Hurst Lin
Companies
Mobile
Attractive Opportunities from Unprecedented Ubiquity
5 Screens of the Mobile Revolution
The Connected Car
High Global CapEx on Mobile
Smartphone Reached Critical Mass
Shopping
Mobile Health
Enterprise
HR
Smart Home
Worldwide Smart Home Managed Services Revenues
(U.S.$ Millions)
Source: Confidential Operator data; Bloomberg: A.T. Kearney Analysis
Weighted Average CAPEX/Sales, Selection of 100 companies by sector
(CAPEX as a % of Revenues, Select Industries, 2012)
Electricity
Marine
Mobile
Metals & Mining
Oil & Gas
Steel
Internet
Hotels
Automobiles
Pharma
Technology
Software
Medical Equipment
15.2%
15.2%
15.0%
11.3%
11.2%
8.3%
8.0%
6.6%
4.6%
4.2%
3.7%
3.1%
0.2%
Smartphones
Source: KPCB, Quartz, Facebook, SuperMonitoring
Source: The Undercover Recruiter
Source: Pew Institute Survey, Information Week Healthcare
mHealth apps market by 2017 (Global)
$26B
mHealth app download rate (U.S.)
50%
Global mobile business applications market will more than double in the next 5 years
Source: Nielsen
Smartphone In-Store Activities by Store Type %
The Mobile Jobseeker
86%
of U.S. jobseekers who have a smartphone would use it to search for a job
Source: Information Age January 15, 2013 Photo: arubanetworks.com
Source: Adobe State of Mobile Benchmark
Global
Tablet Growth
E-Commerce
U.S. Retail Conversion December 2012
$26B
2012
2013
2014
2015
2016
2017
$53B
Read Reviews
73
43
34
22
21
19
14
7
3
Scan
QR Code
57
36
31
20
16
5
26
8
2
Use Coupon
29
41
26
17
39
5
41
9
2
Smarter TV/Home –
$50B+
Global Market by 2018
The
Connected Car
Source: SBD, GSMA
– Smartphone Usage (U.S.)
Mobile SNS and Chat Platforms
Install-base within smartphones
Tablets
TVs
Cars
PC/Laptops
Leveraging Smartphones as Brains
2.2%
Tablet
0.7%
Smartphone
Source: Adobe State of Mobile Benchmark
Smartphone
Tablet
Tablet
Smartphone
1 Billion+ Combined Users
Source: Forbes
61%
CAGR
Mobile health apps and devices (Global)
Globalization
Countries where Gangnam Style Hit #1
Topped #1 on iTunes Music Store;
China is based on Baidu Music Downloads
East Asian Investments/M&A
= DCM Companies
Globalization Trends
Global Gene Pool
Rise of Global Hiring + BizDev
Immigration, foreign education driving generation of global entrepreneurs
Startups, tech companies hiring teams internationally and opening offices
Asian players opening offices to leverage talent and access deal flow
Platforms and Market Access
Common tech platforms, infrastructure innovation making world smaller
70% of Top 20 Tech Companies Founded by 1st & 2nd Generation Americans
Rise of Global Hiring + BizDev
Massive Next-Gen Platforms Drive Market Accessibility
Source: Jeremy Reimer
Japan: 60% of Top 20 TMT Companies Founded by “Returnees”
All PC platforms
.
Increasing Proportion of DCM Portfolio with Overseas Offices
*Percentage of active portfolio companies
China: 56% of
Top 25
VC-Backed TMT Companies Founded by “Sea Turtles”
Source: KPCB
The Rise of
China’s Middle Class
The biggest demographic shift in history
$100 Billion
Chinese Healthcare
Spending
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$600 Billion
China Middle Class
The Greatest Urbanization in Human History
China's Middle Class is Transforming the Nation
Tourism
Real Estate
Top 10 countries overseas tourism spending ($B)
Structural Shift:
Offline to Online
Growth of Urban Middle Class
Middle Class: Annual household income between $16,000 and $34,000
# Number of urban households
Consumption
Demand for Interest Bearing Financial Products Surging
China Personal
Luxury Goods Market (2010-2013F, €Billions)
Source : 2011 UN World Tourism Organization
$1.7
$5.8
Cyber Monday in U.S.
Singles' Day in China
(On Taobao & T-Mall)
BILLION
BILLION
Source: Credit Suisse, DCCI
Source: USITC
Domestic brands growing/maturing
of Chinese luxury spending takes place outside China
60%
Source: Economist; Bain & Co.
U.S.
Source: Alibaba; Comscore, 2013
Source: McKinsey Consumer & Shopper Insights, “Meet the 2020 Chinese Consumer”
Source: United Nations
* Projected
Source: McKinsey & Co.
1 Figures may not sum to 100% because of rounding; data for 2022 are projected
2 Defined by annual disposable income per urban household, in 2010 real terms
3 Private consumption, Compound annual growth rate
China
Parallels
Luxury Market Dynamics
Source: People's Bank of China and Quartz: qz.com
Huge Demand for Financial Products
6 Trillion Yuan
Urban Spending Booming
Trillions RMB
Monthly PV of Major Vertical Real Estate Wesbites
M2 less Bank Deposits, aka Quasi-Money
Number of Cities with Population >1M
Global Teamwork Improves Outcome
TSE: 8703
Full transcript