THE DIGITAL ECONOMY INDEX 2021

THE DIGITAL ECONOMY INDEX 2021

• 1.
  Digital Economy Index September2021
• 2.
  2 Digital Economy Index Wecreated this index to analyze and highlight the shift towards a world where every sector is transformed. We focus in through a consumer lens, on how each part of their lives from wellness, financial services, entertainment, shopping, to personal productivity is reimagined. The term “Digital Economy” was first used 25 years ago by Don Tapscott, and we believe that this term remains relevant as our lives become increasingly digitized. In our second series, we will examine the state of the digital economy as we emerge from the Covid-19 pandemic. After significant outperformance of technology companies during 2020, digital economy returns have lagged as performance has reverted to the mean. Global companies attribute disappointing sales figures to a return to physical shopping and an increase in regulation, especially in China. Overall, however, these disruptive businesses continue to drive innovation in retail, financial services, transportation, and other industries, creating outsized value in the long-run relative to incumbent players. Overview In every market across the world, the explosion of consumer connectivity has ramifications across their personal and professional lives.
• 3.
  3 Digital Economy In 2020,Covid-19 spawned a set of challenges that accelerated digital trends across all industries of the global economy. Though a return to normalcy is underway through vaccinations, return to office is still not at full capacity and dining, recreation are also lagging. Remote work drove the rise of adoption of productivity tools and improved access to global talent. Companies can attract talent without having a HQ, even setting up new global teams. As such, we saw a major exodus away from cities, creating a dramatic rise in Prop Tech and many successful IPOs in this sector. Ecommerce penetration across all verticals such as food ordering, grocery and home goods, has increased. With the rise in demand and access to increased capital, we have seen companies now adopt infrastructure to help manage their supply chain, become more efficient, and find new ways to reach consumers. With all the time spent digitally at home and on smartphones, the creator economy ballooned, and tools to support monetization and business enablement are starting to take off. Because of lockdowns and social distancing, the movement of cash became more difficult than ever, enabling the rise of fintech technologies. Reducing the need for face-to-face interactions, fintech startups began to see rapid adoption of “buy-now- pay-later” (BNPL) options and neobanks. This further propelled the need for fintech infrastructure, such as KYC (know-your customer) technology to fraud mitigation and lending, both on the consumer side as well as B2B. Major Catalysts
• 4.
  4 191% 104% 81% 21% 38% Dig. Econ Index (Equal-Weight) Dig. Econ Index (Market-Weight) NASDAQDow Jones S&P 500 152% 76% 162% 147% 137% 80% 494% 216% 104% 229% 166% 168% 193% 204% 169% 340% 172% 191% Fintech Ecommerce & Retail Tech PropTech FoodTech Personal Product./Future of Work Social/Entertainment Transportation Wellness & Healthtech Total Digital Economy Index Equal Weight Market Weight Market Performance From January 2020 to August 2021 (Broad Indexes Vs. Digital Economy Index) Digital Economy returns exiting Covid-19 pandemic, and the Digital Economy Index (with categories) The Digital Economy Index Note 1 This year, we excluded EdTech from the Digital Economy Index due to government policy changes in China. Note 2: Transportation outperformed significantly because of electric vehicle companies Tesla and Niu (10x and 4x respectively from Jan-20 to Aug-21.
• 5.
  5 32% 30% 27% 7% 4% 33% 46% 43% 20% 4% 20% 24% 24% 32% 21% 14% 16%16% 30% 22% 12% 14% 11% 25% 17% 10YR IRR 5YR IRR 3YR IRR 1YR IRR 2021 YTD DGEcon (Market Weight) DGEcon (Equal Weight) NASDAQ Dow Jones Index S&P 500 Performance as of September 5th, 2021 The Digital Economy Index (Cont’d) The Digital Economy Index underperformed the markets YTD but has exceeded market returns on a long-term basis. Equal-Weight Performance % (# of Cos.) 10YR IRR 5YR IRR 3YR IRR 2021 YTD EdTech (5) 10% 27% -5% -56% FinTech (14) 34% 52% 46% 13% Ecommerce & Retail (38) 28% 53% 36% 5% PropTech (4) 25% 23% 32% -15% FoodTech (7) 34% 28% 39% -8% Personal Product./ Future of Work (5) 34% 42% 39% 40% Social/Entertainment (15) 27% 22% 59% 24% Transportation (6) 65% 74% 103% 7% Wellness & HealthTech (4) N/A 52% 23% -38% Total Portfolio (99) 33% 46% 43% 4% Total Portfolio (US only) 36% 42% 37% 12% Dow Jones 14% 16% 16% 22% S&P 500 12% 14% 11% 17% NASDAQ 20% 24% 24% 21%
• 6.
  6 E-Commerce Has Beena Huge Driver of Long-Term Value Creation E-Commerce segment delivered over ~25% annual returns historically, but slowed this year as Covid-19 catalyst receded Rank Company Current Mkt Cap (US$MM) as of 05-Sept-21 HQ IPO Year 10YR IRR 7YR IRR 5YR IRR 3YR IRR 2YR IRR 1YR IRR 2021 YTD Ecommerce & Retail Tech (Equal Weight) 28% 36% 53% 36% 55% 17% 5% Ecommerce & Retail Tech (Market Weight) 29% 31% 28% 20% 35% -9% -4% Ecommerce & Retail Tech (US Only) 27% 29% 40% 26% 63% 27% 14% Gold MercadoLibre 96,739 Argentina 2007 40% 49% 62% 71% 75% 51% 16% Gold Magazine Luiza 24,165 Brazil 2011 48% 82% 139% 66% 49% -17% -24% Bronze B2W Companhia Digital 7,294 Brazil 2007 13% 3% 22% 19% 3% -61% -45% Gold Shopify 193,479 Canada 2015 N/A N/A 105% 121% 96% 39% 37% Alibaba Group* 460,173 China 2014 N/A N/A 12% -2% 0% -43% -27% Gold Pinduoduo 128,124 China 2018 N/A N/A N/A 77% 77% 7% -42% JD.com 125,256 China 2014 N/A 13% 24% 35% 61% -4% -9% Xiaomi Technology 81,892 China 2018 N/A N/A N/A 13% 68% 28% -23% Vipshop 10,414 China 2012 N/A -5% 0% 29% 38% -14% -45% Baozun Commerce 1,843 China 2015 N/A N/A N/A N/A N/A N/A -30% Silver Zalando 28,233 Germany 2014 N/A N/A 22% 27% 48% 26% 4% Silver Zooplus (Retail) 3,584 Germany 2008 23% 34% 26% 35% 82% 142% 149% Gold Wix.com 13,184 Israel 2013 N/A 45% 41% 28% 23% -25% -6% Z Holdings 50,575 Japan 1997 11% 7% 11% 21% 62% -2% 17% Rakuten 15,304 Japan 2000 3% -3% -2% 13% 6% 22% 12% Silver ZOZO 11,351 Japan 2007 21% 26% 22% 5% 40% 42% 65% Bronze Mercari 7,776 Japan 2018 N/A N/A N/A 16% 47% 10% 18% Bronze Kakaku.com 6,876 Japan 2003 16% 11% 15% 20% 14% 25% 30% Prosus 293,066 Netherlands 2019 N/A N/A N/A N/A N/A -19% -12% Gold Farfetch 15,408 United Kingdom 2018 N/A N/A N/A N/A 104% 43% -32% Gold Boohoo 4,733 United Kingdom 2014 N/A 30% 28% 17% 11% -12% -21% ASOS 4,828 United Kingdom 2001 8% 8% -3% -13% 32% -20% -27% * Denotes portfolio company
• 7.
  7 E-Commerce segment deliveredover ~25% annual returns historically, but slowed this year as Covid-19 catalyst receded E-Commerce Has Been a Huge Driver of Long-Term Value (Cont’d) Rank Company Current Mkt Cap (US$MM) as of 05-Sep-21 HQ IPO Year 10YR IRR 7YR IRR 5YR IRR 3YR IRR 2YR IRR 1YR IRR 2021 YTD Gold Amazon.com 1,761,425 United States 1997 32% 38% 34% 20% 37% -4% 7% Silver eBay 49,749 United States 1998 20% 18% 19% 30% 39% 29% 52% Gold Wayfair 28,421 United States 2014 N/A N/A 49% 31% 64% -15% 21% Gold Chewy 32,063 United States 2019 N/A N/A N/A N/A 70% 54% -15% Gold Etsy 27,895 United States 2015 N/A N/A 74% 63% 99% 68% 24% Bronze Mercari 7,776 United States 2018 N/A N/A N/A 16% 47% 10% 18% Gold Stamps.com 6,108 United States 1999 35% 38% 28% 12% 126% 22% 68% Stitch Fix 4,307 United States 2017 N/A N/A N/A 3% 48% 74% -32% Gold 1-800-Flowers.com 2,156 United States 1999 29% 30% 28% 37% 43% 8% 27% The RealReal 1,070 United States 2019 N/A N/A N/A N/A -5% -25% -40% Silver Overstock.com 2,990 United States 2002 22% 22% 36% 33% 107% -34% 45% Rising Star REVOLVE (US) 4,395 United States 2019 N/A N/A N/A N/A 57% 182% 94% Wish* 4,547 United States 2020 N/A N/A N/A N/A N/A N/A -60% Poshmark* 2,067 United States 2020 N/A N/A N/A N/A N/A N/A N/A * Denotes portfolio company
• 8.
  8 Wellness and HealthTechwere majorly impacted by demand and supply chain challenges, thus impacting returns. Digital Economy Index (Other Sectors) Rank Company Current Mkt Cap (US$MM) as of 05-Sep-21 HQ IPO Year 10YR IRR 7YR IRR 5YR IRR 3YR IRR 2YR IRR 1YR IRR 2021 YTD PropTech (Equal Weight) 25% 10% 23% 32% 71% 12% -15% PropTech (Market Weight) 25% 10% 23% 29% 71% 15% -3% Gold Zillow Group 24,705 United States 2011 25% 10% 23% 28% 71% 17% -29% Airbnb* 99,326 United States 2020 N/A N/A N/A N/A N/A N/A 8% Gold Redfin 5,394 United States 2017 N/A N/A N/A 36% 72% 6% -25% Hippo* 3,010 United States 2021 N/A N/A N/A N/A N/A N/A N/A OpenDoor* 10,390 United States 2021 N/A N/A N/A N/A N/A N/A N/A Wellness & HealthTech (Equal Weight) N/A N/A 52% 23% 59% 0% -38% Wellness & HealthTech (Market Weight) N/A N/A 52% 23% 59% -2% -33% Rising Star Peloton* 29,617 United States 2019 N/A N/A N/A N/A N/A 70% -35% Gold Teladoc Health 23,021 United States 2015 N/A N/A 52% 23% 59% -34% -28% SmileDirectClub 2,197 United States 2019 N/A N/A N/A N/A N/A -35% -53% Transportation (Equal Weight) 65% 45% 74% 103% 128% 30% 7% Transportation (Market Weight) 65% 45% 74% 119% 155% 57% 2% Rising Star Niu Technologies 2,223 China 2018 N/A N/A N/A N/A 77% 19% 4% Gold Tesla 734,866 United States 2010 65% 45% 74% 121% 304% 63% 4% Uber 75,977 United States 2019 N/A N/A N/A N/A 10% 26% -21% Gold Carvana 27,772 United States 2017 N/A N/A N/A 80% 108% 69% 37% Lyft 16,164 United States 2019 N/A N/A N/A N/A -3% 65% -2% Vroom 3,641 United States 2020 N/A N/A N/A N/A N/A -60% 21% Edtech (Equal Weight) 10% 25% 27% -5% 9% -47% -56% Edtech (Market Weight) 10% 16% 11% -16% -22% -72% -76% Tal Education Group 43,936 China 2010 10% -2% -14% -45% -62% -94% -93% New Oriental Education Group 22,861 China 2006 N/A N/A N/A N/A N/A N/A -87% 51Talk 506 China 2016 N/A N/A -34% -34% -26% -89% -88% Gold Chegg 8,712 United States 2013 N/A 42% 63% 37% 41% 6% -4% 2U 2,578 United States 2014 N/A 9% 0% -25% 43% -11% -7% * Denotes portfolio company
• 9.
  9 Fintech saw majorIPOs and M&A activity in the past year and all continue to perform with positive tailwinds Digital Economy Index (Other Sectors) Rank Company Current Mkt Cap (US$MM) as of 05-Sep-21 HQ IPO Year 10YR IRR 7YR IRR 5YR IRR 3YR IRR 2YR IRR 1YR IRR 2021 YTD FoodTech (Equal Weight) 34% 15% 28% 39% 60% -1% -8% FoodTech (Market Weight) 34% 27% 47% 29% 55% -6% -6% Rising Star Meituan 193,058 China 2018 N/A N/A N/A N/A 73% -12% -17% Gold Delivery Hero 38,236 Germany 2017 N/A N/A N/A 35% 64% 25% 2% Gold HelloFresh 19,268 Germany 2017 N/A N/A N/A 98% 198% 119% 47% Beyond Meat 7,272 United States 2019 N/A N/A N/A N/A -12% -4% -8% Rising Star DoorDash 65,377 United States 2020 N/A N/A N/A N/A N/A N/A 36% Gold Ocado Group 20,830 United Kingdom 2010 34% 27% 47% 24% 31% -18% -12% Fintech (Equal Weight) 34% 25% 52% 46% 57% 32% 13% Fintech (Market Weight) 22% 24% 47% 44% 56% 39% 18% Gold Afterpay 28,152 Australia 2017 N/A N/A N/A 89% 135% 46% 11% XP Investimentos 27,953 Brazil 2019 N/A N/A N/A N/A 17% -1% 26% Gold PagSeguro 19,228 Brazil 2018 N/A N/A N/A 31% 7% 31% 3% Gold Stone Pagamentos 13,787 Brazil 2018 N/A N/A N/A N/A 29% 3% -47% Gold Adyen 96,547 Netherlands 2018 N/A N/A N/A 64% 104% 81% 40% Gold PayPal Holdings 339,737 United States 2015 N/A N/A 49% 45% 59% 34% 23% Gold Square* 123,999 United States 2015 N/A N/A 85% 50% 104% 71% 24% Silver Global Payments 46,415 United States 2001 22% 24% 16% 10% 1% -8% -27% Rising Star Bill.com 28,758 United States 2019 N/A N/A N/A N/A N/A 113% 118% Gold LendingTree 2,213 United States 2008 41% 26% 10% -12% -28% -45% -39% Lufax 21,668 China 2020 N/A N/A N/A N/A N/A N/A -38% Lemonade 4,760 United States 2020 N/A N/A N/A N/A N/A 19% -37% Root Insurance 1,525 United States 2020 N/A N/A N/A N/A N/A N/A -62% Affirm* 24,667 United States 2021 N/A N/A N/A N/A N/A N/A N/A Dlocal 19,909 Uruguay 2021 N/A N/A N/A N/A N/A N/A N/A * Denotes portfolio company
• 10.
  10 Personal productivity /future of work category posted top returns in DG Economy Index as people continue to work flexibly and remotely Digital Economy Index (Other Sectors) Rank Company Current Mkt Cap (US$MM) as of 05-Sep-21 HQ IPO Year 10YR IRR 7YR IRR 5YR IRR 3YR IRR 2YR IRR 1YR IRR 2021 YTD Personal Product./Future of Work (Equal Weight) 34% 34% 42% 39% 68% 38% 40% Personal Product./Future of Work (Market Weight) 34% 35% 42% 37% 47% 32% 37% Gold Adobe Inc. 317,563 United States 1987 39% 37% 45% 36% 50% 23% 33% Gold Intuit Inc. 153,913 United States 1993 28% 31% 38% 37% 40% 61% 48% Rising Star Zoom Video Communications, Inc. 87,240 United States 2019 N/A N/A N/A N/A 25% 17% 31% Gold DocuSign, Inc. 60,409 United States 2018 N/A N/A N/A 65% 155% 38% 39% Dropbox, Inc. 12,906 United States 2018 N/A N/A N/A 4% 32% 49% 46% Social/Entertainment (Equal Weight) 27% 22% 22% 59% 58% 43% 24% Social/Entertainment (Market Weight) 29% 23% 23% 23% 38% 13% 14% Gold Tencent Holdings Limited 602,716 China 2004 30% 20% 19% 10% 20% -14% -14% Tencent Music Entertainment Group 15,115 China 2018 N/A N/A N/A N/A -20% -45% -54% Bronze Weibo Corporation 12,274 China 2014 N/A 16% 2% -11% 16% 51% 31% Spotify Technology S.A. 47,655 Sweden 2018 N/A N/A N/A 5% 28% -19% -21% Gold Sea Limited 183,602 Singapore 2017 N/A N/A N/A 179% 218% 102% 78% Gold Facebook, Inc. 1,060,844 United States 2012 N/A 25% 24% 28% 42% 20% 38% Gold Netflix, Inc. 261,366 United States 2002 33% 35% 41% 15% 37% 0% 9% Silver Activision Blizzard, Inc. 63,134 United States 1983 22% 20% 15% 3% 29% -4% -13% Silver Electronic Arts Inc. 41,720 United States 1989 21% 21% 12% 3% 22% -2% 2% Gold Snap Inc. 118,709 United States 2017 N/A N/A N/A 83% 111% 235% 50% Twitter 51,597 United States 2004 N/A 4% 28% 22% 23% 52% 19% Gold Roku 45,676 United States 2019 N/A N/A N/A 77% 57% 114% 3% Gold Pinterest, Inc. 36,480 United States 2019 N/A N/A N/A N/A 27% 67% -14% Rising Star DraftKings Inc.* 24,617 United States 2020 N/A N/A N/A N/A N/A 49% 215% * Denotes portfolio company
• 11.
  11 Appendix Segment and CompanyIRRs were calculated under both a equal-weighted and market-weighted methodology: Equal-weighted methodology At the start of every period (e.g. August 2020 for 1YR IRR, August 2016 for 5YR IRR, etc.) $100 is invested in each one of the companies in that specific time period. Only companies that were public for the full time period are considered. A new company is not added to the index if it starts trading in the middle of a certain time period (e.g. Spotify is not considered in the Social/Entertainment 5YR or 3YR index starting in 2018 shortly after their IPO. It is only added to the index for the 2YR IRR onwards). Market-weighted methodology • At the start of every period (e.g. August 2020 for 1YR IRR, August 2016 for 5YR IRR, etc.) the Index buys the market cap of all companies that are trading in that specific time period. Only companies that were public for the entire time period are considered. A new company is not added to the index if it starts trading in the middle of a certain time period (e.g. Spotify is not considered in the Social/Entertainment 5YR or 3YR index starting in 2018 shortly after their IPO. It is only added to the index for the 2YR IRR onwards). ▪ Under this methodology, a portfolio composed of two fictional companies, Company A ($30Bn Market Cap. growing at 10% for 1 year) and Company B ($1Bn Market Cap. Company growing at 100% over the same period) would have a combined market cap. increase of ~13% since the 10% increase in Company A would dilute the 100% return of Company B. In the equal-weighted methodology the return would be 55%. ▪ Market Cap. is adjusted for potential capital increases and other effects to reflect only price per share performance in the analyzed period.
• 12.
  12 Appendix (Cont’d) GGV Ranking- Gold/Silver/Bronze/"Rising Star” • A Company is considered "Gold" if it achieved an IRR of over 25% over the longest analyzed trading time period and has been publicly traded for over 2 years. For example, Tesla has been trading since 2011 with a 65% 10YR IRR and Afterpay has been trading since 2018 with a 3YR IRR of 89% - both are Gold. • A Company is considered "Silver" if it achieved an IRR of over 20% over the longest analyzed trading time period and has been publicly traded for over 2 years. • A Company is considered "Bronze" if it achieved an IRR of over 15% over the longest analyzed trading time period and has been publicly traded for over 2 years. • A Company is considered a "Rising Star" if it has returned 30% over the longest analyzed time period (either 1YR IRR or 2020 YTD IRR) and has been trading in the market for less than 2 years.
• 13.
  Hans Tung, RobinLi, & Marcello Rossi