Goldman Sachs Growth Equity: Themes, Insights, and Investment Opportunities in Global Growth

Goldman Sachs
Growth Equity
Themes, insights, and investment
opportunities in global growth
February 2021
contents
Introduction to
Goldman Sachs Growth 3
Fintech 6 Enterprise technology 15 Consumer 26
1.0 Overview of fintech space 2.0 Overview of enterprise tech space 3.0 Overview of consumer space
1.1 Continued digitization of 2.1 Moving the enterprise to the cloud 3.1 Reallocation of leisure time
financial products and asset classes 2.2 Re-imagining enterprise 3.2 Unbundling of broad online
1.2 Enabling digital transformations applications communities into vertically focused
of financial institutions and platforms
2.3 The digitization of the enterprise
insurance companies 3.3 The rise of mission-driven brands
2.4 Protecting the enterprise from
1.3 Embedding of financial services and sustainable business models
evolving cyber threats
within software and marketplace 3.4 Digitization of consumer services
solutions
3.5 Enabling e-commerce acceleration
1.4 The evoltuion of fintech in Asia through infrastructure technology
and logistics
Healthcare 34 Final thoughts 45 Sources 46
4.0 Overview of the healthcare space

4.1 Accelerating the consumerization
of healthcare, and the shift to
value-based care
4.2 Developing innovative delivery
methods, including virtual health
4.3 Utilizing data to improve
efficiency and quality of care
4.4 Growing contractual outsourcing
4.5 Bridging the therapeutic gap
between developed and emerging
markets

Introduction to
Goldman Sachs Growth
Goldman Sachs is uniquely positioned at the epicenter of global growth,
with vantage points as a banker, advisor, and investor. The firm has also
been at the forefront of innovation for many decades, strategizing with the
world’s largest businesses, and working alongside the most accomplished
entrepreneurs and thought leaders. We have served as an important
driver of advancement within our own industry, financial services, but
have also been an omnipresent resource for all growth sectors, including
technology, healthcare, and consumer. Our Investment Banking Division
has underwritten the IPOs for thousands of high-growth companies. Our
Investment Research Division has been a student of thousands of business
models. Our Technology Division has grown to 9,000 engineers, focused on
delivering best-in-class digital services to our employees and clients.
Since the 1980s, we have harnessed this wealth of knowledge and experience to deploy the firm’s
capital into private growth businesses. We have executed on a repeatable model where we leverage the
firm’s resources to selectively partner with clients early in their lifecycles. In turn, we give our portfolio
companies access to our global network to enhance their growth prospects and the pace at which they
can scale. Many of our portfolio companies have leaned on Goldman Sachs to help them expand into new
regions, develop new products, acquire new customers efficiently, and raise the bar for their boards of
directors and management teams.
Goldman Sachs Growth is the product of our combined principal investing activities. In 2019, we
integrated our global growth equity investment activities—which had previously operated as three
independent teams—to create a unified growth equity platform within the Merchant Banking Business.
Over the past year, we have begun to experience the synergies that we envisioned from this integration:
increased diversity of backgrounds and skillsets, optimized use of internal resources and know-how, and
a coordinated global sourcing and pipeline development effort. The GS Growth team represents one of
the largest dedicated growth equity investment organizations in the industry, including more than 75
investors globally, 200-plus portfolio comp-anies, and billions in capital invested.
The GS Growth portfolio is diversified across regions (48 percent US, 37 percent Asia, 14 percent EMEA)
and sectors (33 percent enterprise tech, 17 percent fintech, 30 percent consumer, 12 percent healthcare,
8 percent other). Looking forward, our portfolio companies and investors are positioned to benefit from
powerful secular demand drivers that are transforming the global economy.
We believe the world is at a unique moment in time, standing at the beginning of a multi-decade period
of unprecedented technological advancement. We are excited to have brought our growth equity teams
together to support the exceptional entrepreneurs who are driving this innovation and transforming the
global economy.

Thematic investing is core to the GS Growth strategy, as it will provide a framework and foundation for the
way in which we source and underwrite future investments. Here, in our inaugural thematic white paper, we
will discuss our favorite global investing themes across the fintech, enterprise technology, consumer, and
healthcare sectors.
We believe the time to execute is now. The surge in venture capital funding from 2012-to-2019 has
supported hyper-growth companies that are now beginning to scale (Exhibit 1).
Exhibit 1
There has been a surge in venture capital and growth equity funding from 2012 to 2019
VC and growth equity funding, US and global, 2012–2019, USD Billion

CAGR,
150 2012–2019
Global Growth ~18%
100 Global Venture ~13%
50 US Venture ~11%
US Growth ~27%
0
2012 2013 2014 2015 2016 2017 2018 2019
Source: Preqin Ltd.

Source: Preqin Ltd.
Driving our investing themes is a convergence of powerful global macro-trends that are impacting all
elements of human life across economic, political, social, and environmental disciplines. These
macro-trends are driven by technology, demographics, and market forces, and are accelerating the pace
of disruption across many industries and all geographies.
Technology macro-trends combine innovations such as open source software, cloud computing, machine
learning (ML), and application programing interface (API) software (which enables applications to
interoperate). Together, these reduce time to market, and enable higher returns for growth companies
across sectors. Talented entrepreneurs have harnessed the power of these transformative technologies
and the rise in smartphone penetration (from 6 percent to 49 percent globally in the past decade), and
broadband expansion (from 500 million subscribers to 1.2 billion) to build platforms and applications that
unlock the power of the internet for consumers worldwide.
Additionally, there has been a significant shift in population demographics, specifically the emergence
of the digitally native consumer, as Millennials surpassed Baby Boomers in 2019 (Exhibit 2). This shift
is affecting all consumer-facing industries, as consumers increasingly prefer digital business models.
Regional demographic trends have also affected consumer dynamics. For example in China, growth across
industries has been driven by increased domestic demand, as real private consumer spending more than
doubled from $2.6 billion in 2009 to close to $5.6 billion in 2019.

Exhibit 2
Millennials became the largest generation in 2019 and are expected to remain
the largest until 2035
US population by generational cohort1, Million

Gen Z surpasses
80 Millennials
Gen Z (1997–now)
Millennials (1981–96)
70
60
Gen X (1965–80)
50 Millennials
surpassed Millennials
40 Boomers in 2019 peak in 2033
30
Boomers (1946–64)
20
10
0
2015 2020 2025 2030 2035 2040 2045
1. Not showing other population segments, including the “Silent” generation (born after 1928) and future generation born after 2012. The end year for Generation Z has been defined as 2012. Forecast includes projected immigration
1. Not
Source: showing
PEW other
Research Center; population segments, including the “Silent” generation (born after 1928) and future generation born after 2012. The end
US Census
year for Generation Z has been defined as 2012. Forecast includes projected immigration
Source: PEW Research Center; US Census
Beyond the consumer sector, we believe this demographic shift will also impact many other sectors. For
instance, it will affect the way employees function in the workplace, such as how doctors monitor patients,
and how engineers write software.
Lastly, the COVID-19 global pandemic has pulled forward technology adoption through the acceleration
of ecommerce penetration, the embracing of virtual environments and remote interactions, and the
increased value proposition of workplace automation and cloud environments. In the US, it is estimated
that e-commerce penetration leaped ten years ahead in less than three months. It took 10 years to move
from 5.6 percent in 2009 to 16 percent in 2019, and reached 33 percent in April 2020. This trend is also
evident in China, which already has the largest online retail market (at over $1.5 trillion), and for which
e-commerce penetration is estimated to have jumped from 30 percent in 2019 to over 40 percent in 2020,
with COVID-19.
Sector themes make us excited to deploy capital. The macro-trends in technology adoption, demographic
composition, and marketplaces that we have used to identify our sector themes provide for a long-term
investment horizon.

1 | Fintech

1.0 Overview of fintech space
The combination of demographical and technological macro-trends has created a need for—and enabled—
the transformation of the financial services sector. Digital innovation is fundamentally reshaping how
financial products are created, delivered, and priced. While some financial products and services have
reached high digital penetration in select markets (e.g., digital retail banking and equities trading in the
US), we believe there is tremendous opportunity for further innovation and digital disruption, and that the
market will continue to expand, driven by digitization of more complex financial products (e.g., mortgages,
private equity, and fixed income), as well as through the conversion of the unbanked and underbanked
populations. Capital is flowing into high-growth disruptive business models that democratize access and
provide superior services, with compelling unit economics. At the same time, incumbents, eager to keep
up, are investing in improving their own digital capabilities and customer experience, fueled by a major
reinvestment cycle as they depreciate legacy infrastructure and build new platforms.
We highlight three main themes that will provide long-term growth opportunities in the fintech sector:
1) digitizing more complex, illiquid, and inefficient financial products (e.g., mortgages) and asset classes;
2) the transformation of traditional financial institutions; and 3) embedding of financial services such as
payments and lending within existing software and e-commerce solutions of non-financial companies.
We will also focus on how these themes are playing out in unique ways in Asia, where the pace of change
is even faster.
1.1 Continued digitization of financial products and asset classes

The digitization of financial products, and the tools for accessing and trading them, is a central tenet
behind GS Growth’s fintech investment strategy. The digitization wave is occurring across all financial
products, whether they are consumed by retail customers, small and medium enterprises (SMEs), or large
institutions and asset managers.
The first wave of this digitization happened over the past two decades, mostly covering standardized
products, such as US cash equities and government bonds, as well as everyday consumer products such as
payments, loans, auto and renter’s insurance, and brokerage services. This has profoundly impacted the
financial services industry, in many cases dramatically changing business models, fee structures and the
provider landscape, and creating billions of dollars of shareholder value for the companies leading those
transformations.
Goldman Sachs has been at the epicenter of this first wave. GS Growth was a lead investor in exchanges
and trading platforms that spearheaded the electronification of the equities, fixed income, FX and
commodities markets. The firm also built and launched two digital-first business lines. The first, Marcus,
is a direct bank that offers loans, credit cards, and deposit products to consumers. The second is an
API-driven transaction banking offering for corporate clients. In both of these businesses, the firm uses a
combination of technology built in-house and partnerships with best-in-class external fintech vendors.
We believe that the digitization wave will continue, and spread to financial products that are increasingly
more complex and have higher ticket sizes. This will be enabled by three factors: 1) an ever-demanding
consumer who wants a delightful experience across all financial products, 2) increasing abilities to harness
and analyze disparate datasets to underwrite and serve customers, and 3) the size and inefficiencies
of these markets, offering opportunities for significant value creation. Exhibit 3 identifies some of the
markets that we believe will become increasingly digital over the next decade.

Exhibit 3
Consumer SME and commercial Capital markets
• Mortgages and HELOCs • SME lending • OTC derivatives
• Home purchase assistance • Commercial insurance • Alternative assets and fund

(fractional ownership, rent-to-own) management
• Trade finance
• Life and health insurance • Crypto-currencies
• Equipment finance
• Homeowners and catastrophe
insurance • Treasury and liquidity solutions
• Alternative assets (PE and hedge

funds, direct private investing,
art, collectibles)
• Retirement solutions
• Under-served populations (students,

underbanked, thin-file, elderly)
GS Growth’s investment in Better Mortgage is a manifestation of this trend. Better is reengineering and
digitizing the mortgage process, making the entire home-buying experience faster and more affordable.
The US mortgage market, with $2 trillion of annual originations in 2019, is highly fragmented and
antiquated. The legacy technology stacks of incumbent companies require significant manual labor to
originate a mortgage, leading to high costs and a poor user experience. This created an opportunity for
Better to disrupt the market and gain significant share through digitization, eliminating commissions,
fees, unnecessary steps, and branch appointments. To streamline fragmented real estate transactions,
Better offers customers access to four products critical to the homeownership journey: mortgage, title
insurance, homeowners insurance, and a trusted real estate agent.
Better’s rise as a leading online lender comes at a time when 73 percent of American consumers are
embracing fintech as the “new normal,” with 67 percent reporting a plan to continue managing most of
their finances digitally after COVID-19.
We see a similar role for technology and digitization to address liquidity in the private equity market.
This is important for several reasons. Global private equity net asset value has multiplied eight times
since 2000, almost three times as fast as the capitalization of public markets. At the same time, trading
volumes1 are around 60 times higher in the public markets compared to private market deal values,
demonstrating an enormous gap in liquidity. Moreover, companies are staying private for longer periods,
leading to pent-up demand for liquidity from sellers (founders, employees, investors) and buyers (seeking
access to pre-IPO companies).
Carta is one such growth company tackling this space. We backed Carta with the conviction that it is best
positioned to digitize private markets, one of the few asset classes yet to be digitized. Carta develops
software solutions targeted to private companies, to alleviate the complexity associated with
capitalization table management (originally managed by lawyers on spreadsheets), equity issuance
processes (originally issued in physical certificates) and 409A valuations (of employee stock grants and
deferred compensation). By alleviating and digitizing these pain points, Carta has built a powerful network
of more than 1 million shareholders and more than 16,000 companies (about 30 percent of all US
venture-backed companies). It is progressively becoming the system-of-record for asset ownership and
the core provider of private markets infrastructure.
1 As measured in cash equity value of share trading, for trades registered through electronic order book

We are excited for what is coming next as Carta launches CartaX, a private markets exchange that will
enable liquidity for investors and employees of Carta’s companies in a seamless and compliant manner.
We expect CartaX to play a key role in electronifying private markets, similar to how BATS/Direct Edge,
Tradeweb, and FXall contributed to digitizing markets for US equities, interest rates, and FX, respectively.
iCapital is another GS Growth portfolio company, focused on improving access to the alternatives market.
iCapital’s platform allows advisors, and their high-net-worth clients, access to the leading private equity and
hedge funds in the world. This enables retail investors to better diversify their portfolios, and allows funds to
open their strategies to retail customers without managing thousands of individual limited partners. Since
launch in 2013, iCapital has grown rapidly, and now supports $65 billion in assets across 694 funds.
In 2018, Goldman Sachs spun-off SIMON Markets, a technology solution providing wealth advisors with
education, analytics, and lifecycle management for structured investments. The spin-off enabled Simon to
become a multi-issuer and accelerate its expansion. Today, Simon helps thousands of advisors understand
and manage a variety of risk-managed solutions for their retail clients.
Raisin is a GS Growth investment creating a digital pan-European marketplace for deposits. Consumers
traditionally use saving products from their primary bank. However, deposit interest rates vary
significantly, both within and across countries. Raisin’s integrations with more than 100 partner banks
help consumers access favorable interest rates across Europe, while benefitting from the safety net of
deposit insurance systems. Likewise, Raisin helps banks diversify their funding base by sourcing deposits
from consumers that a bank would have historically found difficult to access—for example, due to
geographic barriers or lack of a primary banking relationship.
Another GS Growth investment, Nutmeg, provides low-cost and transparent discretionary investment
management services in the UK (i.e., portfolios managed by an investment professional). By allowing
people with as little as £100 to invest in portfolios tailored to their goals, risk profile, and preferred
investment style, Nutmeg offers broad access to high-quality wealth management that is typically
available only to high-net worth investors. The company now serves more than 100,000 customers,
representing more than £2.5 billion in assets under management.
1.2 Enabling digital transformations of financial institutions and insurance companies

(banking-as-a-service and financial services software)
The fintech boom over the past two decades has resulted in what is likely the most intense competitive
landscape for financial services in history, with traditional incumbents facing competition from many
angles. Universal banks, for instance, have leveraged their scale to become even bigger. Fintech and
insure-tech firms collectively raised over $150 billion in capital from 2015 to 2019 worldwide. The
competitive landscape in financial services now also includes corporates, such as Apple, Amazon, Google,
and Shopify, that are increasingly offering financial products to their customers. While many factors will
determine the ultimate market share winners, there are a few capabilities that represent table stakes for
any participant in today’s financial services market:
• The ability to build and scale multi-disciplinary teams that combine world-class engineering and deep
market structure knowledge with digital marketing capabilities, to rapidly launch digital financial
products and services that address existing pain points, dramatically improve pricing, and deliver a
joyful client experience.
• The ability to integrate new datasets and emerging technologies into each aspect of the product stack
(i.e., know-your-customer, fraud, compliance, underwriting, servicing, and customer support).
• The ability to develop sound business models that enable companies to scale their client base efficiently
with attractive unit economics, either organically or through channel or funding partnerships.

Firms without these capabilities will face material headwinds, especially because customer loyalty
is expected to become increasingly fleeting, given both the competitive landscape and changing
demographics. For example, rates of customer attrition are increasing, and churn rates for deposit-holding
customers in the US have risen from 7.2 percent in 2017 to 7.9 percent in 2019, and from 5.3 to 5.7 percent
in Europe from 2018 to 2019.
Firms with these capabilities will earn higher profits per existing customer. And, as those profit margins
increase, these firms will be able to spend more to win customers from competitors, further increasing
their scale, and creating a virtuous cycle.
As investors, what interests us is that virtually all financial services market participants will depend
heavily on third-party technology providers for these capabilities.
Most banks have consistently increased their third-party spend over the past 10 years as cost pressures,
the war for talent, and their legacy systems make it difficult to build these capabilities in house. Fintechs
and corporates generally provide a great digital experience for their customers, but do not always have
the regulatory licenses, balance sheets, or product expertise for new products, nor can they afford huge
technology teams across each of these emerging technologies.
The near universal dependence on third-party digital enablers creates an enormous market opportunity.
Globally, banking spend on software reached $100 billion in 2019 and is expected to surpass $110 billion
in 2021, and core platform spend is estimated at 15 percent-to-30 percent of that.
The universe of technology providers can be divided into two broad categories. One set of these third-party
providers is classified as banking-as-a-service (BaaS). These companies enable their customers to provide
various financial products (e.g., mortgages, loans, payments, deposits) with modern, API-driven platforms
(enabling applications to interoperate). There are different versions of these BaaS providers. Some provide
a digital front-end, integrated into legacy core banking or loan systems. Some provide end-to-end service,
including regulatory licenses and balance sheet management. Others provide modern core systems to
replace legacy banking systems. All of them allow clients to launch new financial products rapidly, and
compete in a digitizing world. This market is expected to reach between $9 billion and $11.5 billion by 2024.
Within the BaaS space, we believe the best-positioned companies are deeply integrated into the major core
banking systems, provide comprehensive APIs, and leverage existing bank capabilities (e.g., KYC, fraud,
or underwriting), and compliant workflows that reflect complex regulatory requirements. GS Growth has
made several investments in this space, across different financial products. Amount enables banks to offer
digital lending experiences by providing leading anti-fraud, application, and servicing capabilities that are
integrated into the core lending systems. Blue Sage is a next-generation loan origination system, helping
lenders originate mortgages with lower costs and fewer errors. Deserve provides a full-stack offering
for mobile-first credit cards, providing technology, balance sheet services, servicing and licensing,
and the ability to access these services in a modular and API-driven way. Elinvar is a platform allowing
wealth and asset managers to digitize their platforms end-to-end. Trulioo is an example of a horizontal
service, providing a global identity verification service across financial products, leveraging hundreds
of underlying data sources. Vestwell helps investment managers offer a modern 401(k) alternative at
significantly lower cost.
We believe there is significant additional opportunity as each of the financial products mentioned in
Exhibit 3 becomes increasingly digital. As they do, BaaS providers are well-positioned to help both fintechs
and banks compete in these areas.
The second broad category of third-party technology providers offers emerging datasets and new
technologies to market participants that they can use across their products and services. Examples of new
technologies include machine learning (ML) and artificial intelligence (AI), optical character recognition

(OCR), robotic process automation (RPA), natural language processing, low-code applications, secure
messaging and communication protocols, and cyber-security tools. We believe successful companies in
this space combine their expertise in these technologies with specific use cases and applications that are
cognizant of the unique challenges and regulations faced by the financial industry.
The GS Growth team has a unique perspective to evaluate these companies, and capitalize on this market
opportunity. As a global bank, Goldman Sachs has an enormous base of 10,000 engineers who are
constantly on the lookout for new and emerging technologies to solve the hardest problems in financial
services. The firm is a customer to many of the GS Growth portfolio companies that do this work. They
include H2O.AI (machine learning), Automation Anywhere (RPA), Symphony (secure messaging), Solactive
(custom index creation), and Unqork (no-code application building).
1.3 Embedding of financial services within software and marketplace solutions

Financial services, led by payments, are merging into what were historically distinct commerce
ecosystems. Companies that sell specific products such as point-of-sale software, B2B procurement
platforms, or online marketplaces, have done the difficult work of acquiring customers and/or automating
a complex workflow. With such tasks completed, they now realize that they are natural gatekeepers for
adjacent financial transactions. Their customers simply want to do commerce, not payments, and welcome
this integration.
The embedding of financial services significantly increases the addressable market for a number of
software and marketplace businesses. Shopify, for example, now earns an estimated 50 percent of its
revenues from payments, and over 40 percent of profits, despite being a software solution for merchants
to sell online. On the B2B payments side, there is an estimated $67 billion revenue pool, including
domestic supplier payments, cross-border supplier payments, and travel & expenses, of which nearly 65
percent is generated by SMEs. This dwarfs the overall profit pool for enterprise software. Lending, whether
embedded at the point-of-sale or via supplier financing, offers another largely untapped opportunity.
Businesses that succeed in embedding financial services can significantly extend their growth runway.
There are several categories of companies that have been embedding financial services:
• Vertical software vendors are embedding payments into broader software suites historically focused
on various aspects of business operations and customer interaction. Examples of these solutions
include content management systems, point of sale, hospital patient engagement, and scheduling.
Integrated software vendors are estimated to serve 15 percent-to-25 percent of SMEs in the US, and
5 percent-to-10 percent in the UK. They are growing at 20 percent per annum.
• Marketplace ecosystems are embedding payments and lending into their checkout experiences, both
to increase conversion rates and add monetization vectors. These include B2C oriented marketplaces
and marketplace infrastructure (e.g., Amazon, Shopify, BigCommerce, BackMarket), as well as many B2B
marketplaces oriented along vertical lines (e.g., Provi in beverages, ACV Auctions in cars). According to
McKinsey, ecosystems are expected to account for approximately 30 percent of all global sales by 2025,
or $60 trillion. Currently, the share of the top 5 ecosystem players (JD, Rakuten, Alibaba, Amazon and
Ebay) accounts for almost 50 percent of all e-commerce transactions.
• B2B “systems of workflow” (accounts payable/accounts receivable automation, procurement, travel &
expenses, treasury management). These systems, historically sitting upstream from the actual
payments transaction, have been embedding native payment options (e.g., automated clearing house,
wire, virtual card) into their software suites. This provides customers with seamless execution and
back-end reconciliation, accelerates the shift to digital payments underway in B2B, and allows software
vendors to encroach on interchange and foreign exchange profit pools traditionally reserved for banks
(Exhibit 4).

Exhibit 4
The global B2B payments space presents attractive opportunities for disruptors to gain
share from traditional banks
Total global payment flows and transaction volume, 2015–2025E, USD trillion1 CAGR, 2015–2025E
Cards 2 Other Cash Direct debit Cheque Credit transfer – ACH4 Credit transfer – RTGS 3
250 241
232 Cards 12%
223
215
203
200 192 Other 1%
183
173
162 Cash -3%
147 153
150
Direct debit 13%
100 Cheque -5%
Credit transfer – ACH 15%

50
Credit transfer – RTGS 14%
0
2015 16 17 18 19 20 21E 22E 23E 24E 2025E
1. Excludes intracompany and G2G payments 2. Includes debit card, credit card, pay-later card and prepaid 3. Real Time Gross Settlements card 4. Automated Clearing Houses
1. Excludes
Source: intracompany
McKinsey Payments Map and G2G payments Source: McKinsey
2. Includes debit card, credit card, pay-later card and prepaid
3. Real Time Gross Settlements card
4. Automated Clearing Houses
The ability for traditionally non-financial companies to easily embed financial products has been enabled
by a new generation of infrastructure tools, such as payment facilitation, card processing, cross-border
payments, and data aggregation. Software vendors, marketplaces, and consumer applications can more
seamlessly “rent” the infrastructure they need to offer financial services, rather than build it themselves.
This is a particular manifestation of the broader banking-as-a-service theme outlined above.
While many embedding companies skew vertical, these infrastructure providers are massively horizontal,
with economies of scale. Our team remains active and excited about attractive potential growth equity
partners at both ends of the embedded financial services market.
GS Growth portfolio company Flywire is an example of vertical solution that embeds payments into a
feature-rich software suite. The company serves the education, healthcare, and travel verticals, all of
which have bespoke needs that are poorly served by horizontal platforms. In education, Flywire enables
universities to receive payments from foreign and domestic students across several different payment
methods. This core payments functionality is embedded within a software suite that includes student
engagement, payment plan management, and enterprise resource management (ERP) reconciliation.
In healthcare, Flywire embeds out-of-pocket patient payments within a broader patient engagement
software suite. The embedding of payments within software has allowed Flywire to offer its customers a
superior ROI proposition relative to legacy payment platforms, banks, and enterprise resource planning
(ERP) vendors.
GS Growth portfolio company, BentoBox, is another example of a vertical solution that is increasingly
embedding payments. BentoBox provides a leading content management system for restaurants. It has
leveraged this position to launch online ordering functionality, which positions it to capture payment
economics while offering a differentiated service to restaurants and their customers.

1.4 The evolution of fintech in Asia
The fintech themes discussed above are universal globally. In Asia, while the disruptions are similar to
elsewhere, they are happening at massive scale, and with regional nuances.
In China, the digitization of consumer-facing financial services has been led by tech giants such as Alibaba,
Tencent, and JD. Through their closed-loop ecosystems, these giants have strategically expanded from
their core verticals of e-commerce and social media into adjacent services, with the goal of owning most
aspects of a consumer’s life. As a result, they offer holistic financial services to consumers through their
integrated platforms, enabling users to make payments, access financing, or even manage their wealth in
a fully digital manner through their smartphones. Given the focus of these giants, and the leapfrogging
effect, the adoption of digital financial services has been considerably high among
Chinese consumers.
In payments, for example, 81 percent made payments with their smartphones in 2019, with Alibaba and
Tencent taking over 90 percent market share. Alternative payment methods in China generated about
$43 billion in revenues in 2019, compared to $22 billion collectively for the rest of the world. Ant Financial
(an affiliate of Alibaba) and Tencent—because of their dominance as payment gateways—
have expanded into a full spectrum of consumer financial services, and have attracted over 1.2 billion
users. In 2020, only 40 percent of all transactions in China are expected to be cash-based, compared to
99 percent in 2010.
Asia-Pacific is one of the world’s largest insurance markets with over $1.7 trillion gross written premium
in 2019, yet it remains highly under-penetrated, especially for health insurance and personalized products.
In the past few years, we have seen some insure-tech platforms emerge, mainly focused on innovating
the sales process for insurance products, (e.g., offline to online), through more transparent product
descriptions. These platforms have seen rapid growth given how underpenetrated and largely sales-
driven the legacy providers are. We are starting to see interesting start-ups coming of age in product
design innovation, and better price discovery through data analytics. We expect to focus more on the latter
type of opportunities given greater barriers to entry than those focused on digital front-ends alone.
Given the prevalence of retail fintech services already offered by these players, we believe opportunities
within B2C fintech is limited in China. However, the rest of Asia is much more fragmented, and as yet
underpenetrated. We believe opportunities still exist in India and the Asia-Pacific to address the financial
needs of a large underbanked population, which is growing in economic clout. For example, while Japan is
a mature economy, credit card use remains very low, and GS Growth portfolio company Paidy is enabling
buy-now-pay later for e-commerce players.
In China, and Asia at large, the greatest white space in fintech opportunities lies within electronic trading
and B2B applications. The adoption of electronic trading is still low across many asset classes. With the
advancement in capital markets participation, we expect the financial markets to become increasingly
liquid, and transaction workflows to shift towards electronification. GS Growth’s portfolio companies,
National Stock Exchange of India and Japannext, are examples of companies that are driving the
electronification of markets in their countries.
With this backdrop, regulatory reforms are also underway to encourage market transparency and
efficient and compliant practices along the trading flow. New regulatory standards—such as
requirements for chat history retention in OTC trade communication channels—lead to major increases
in adoption of new technological solutions, to ensure compliance and streamline previously inefficient
workflows. Examining the impact of regulations (such as Dodd-Frank in the US and MiFID in Europe)
on capital markets infrastructure, we believe China’s capital markets are at a similar inflection point,
primed for technology adoption.

Another area poised for fintech disruption is the market for B2B cross-border capital flows and trade
finance, both within Asia and “west to east” corridors. In China for example, it is estimated total cross-
border transaction volume reached $53.6 trillion in 2019, up from $43 trillion in 2015. Of that volume,
cross-border e-commerce, overseas travel, and overseas education all have strong tailwinds. Traditionally,
cross-border money flows have been facilitated primarily by bank transfers and SWIFT, which are often
costly and inefficient. Given the advancements in technology and the emergence of new “real-time”
payment services in many countries, fintech companies are starting to disrupt the traditional payments
industry by providing technology-based end-to-end solutions with superior propositions in cost,
efficiency, accessibility, and service quality. Payments is the first step of the value chain, and it paves the
way for further value-added services such as trade finance solutions that address the financial needs of
cross-border merchants.
Lastly, we see substantial medium-term opportunities in wealth management technologies in Asia.

Disruption has not yet come of age due to the still nascent stage of the wealth management ecosystems.
However, with financial deepening, and the maturing of the investor base, there is a clear demand for
more advanced wealth management solutions. Historically, wealth management products in emerging
markets have been relatively limited, including mostly quasi-deposit products with guaranteed returns.
These will probably not satisfy the demands of increasingly sophisticated investors in Asia. We expect the
wealth management landscape to evolve, with innovations on a few fronts, including wealth management
products, digital channels for product distribution, investor education, and data and analytics.
One company that GS Growth has invested in—that is disrupting the Asian financial services space—is
Sumscope, a leading technology and data provider for China’s onshore fixed income market participants
in the price discovery process of various RMB fixed income and derivative products. China’s fixed
income market is expected to grow under the secular trend of China market liberalization as well as RMB
internationalization, with onshore fixed income securities being included in global bond indices. With
the deepening of financial markets, there is a need for a more modern, digital means of price discovery
to replace the traditional cumbersome process. By deeply embedding its solutions into the fixed income
workflow, Sumscope has grown rapidly, and its products are now used by over 6,000 financial institutions
that actively trade onshore fixed income products in China as well as other Asian countries. Sumscope has
good monetization momentum, and is well-positioned to ride the trend of China bond market expansion.
Further upside exists for Sumscope to potentially engage in the cross-border market, and in expanding
into other asset classes.

2 | Enterprise
technology
2.0 Overview of enterprise tech space
Technology innovations in the areas of cloud computing, open source software, artificial intelligence,
robotics, machine learning, and APIs have transformed the enterprise space. They have enabled growth
for companies across sectors, and provided them with opportunities to innovate and disrupt. They have
also created large-scale challenges for organizations as they digitize and transform their operations
and business models. Technology providers can capitalize on both the challenges and opportunities to
support companies as they evolve and develop new needs, providing growth platforms for the enterprise
technology sector.
We will analyze four main themes that offer high potential for enterprise tech companies to generate
value: 1) enterprises moving to the cloud); 2) re-imagining enterprise applications; 3) the digitization of
the enterprise; and, 4) protection of the enterprise from cyber threats.
2.1 Moving the enterprise to the cloud

Cloud technology is one of the largest changes to enterprise systems of recent decades, and is helping
accelerate the digitization of business. Given its range of enabling capabilities, the cloud’s importance
continues to grow for enterprise IT leaders. In 2018, around 35 percent of US companies’ technology
spend was allocated to the cloud and software-as-a-service (SaaS). This share is expected to grow to
over 45 percent by 2021. The move to the cloud began with enterprises shifting low-value workloads out
of their data centers to gain operational and/or financial efficiencies. Companies such as our portfolio
company Skytap have helped bring legacy workloads and applications to the cloud. This was followed
by the adoption of hosted SaaS solutions for certain core functions. In recent years though, enterprises
have started to move mission-critical workloads into the cloud to gain commercial advantage from the
global access and near-limitless capacity that the cloud provides. The cloud is now re-factoring2 the entire
enterprise technology landscape, accelerating the rate of innovation and scale. With it, business models
themselves are being re-invented.
As the cloud matures, infrastructure-as-a-service (IaaS), is expected to generate $81 billion by 2022,
up from $45 billion in 2019 (Exhibit 5). The leading providers of IaaS are Amazon Web Services (AWS),
Microsoft’s Azure, and Google’s Cloud Platform, each providing their own marketplace for partners
to provide enhanced services. Opportunities will exist in owning the cloud shift from traditional hardware
to IaaS, and by investing in the technology that helps clients make that transition (from lifting and shifting
workloads, to storing the data, to managing the transition holistically within hybrid cloud environments).
2
Re-factoring is the process of editing and cleaning the internal structure of software to improve its performance, while preserving its external behavior

Exhibit 5
IaaS has been on a growth path since 2015 and is expected to almost double between
2019 and 2022
Public cloud infrastructure as a service (IaaS) market worldwide from 2015 to 2022,
USD billion
81
64
+26% p.a.
50
45
32
25 25
16
2015 2016 2017 2018 2019 2020E 2021E 2022E
Source: Gartner, August 2020
Source: Gartner, August 2020
Today, many enterprise infrastructure stacks are being redesigned to take advantage of the unique
characteristics of cloud technology. Renting off-premises capacity instead of owning it allows companies to
move these costs from the capital expenditure line to operating expenses, and shift to a model of recurring
monthly charges that adjust based on business activity, instead of a large upfront investment. This allows
enterprises to become more agile, enabling them to adapt rapidly to the new technology and market needs.
However, the movement of infrastructure to the cloud is still in the early stages, and will be an incremental
process for the vast majority of enterprises. Many have begun. In fact, by the end of 2020, around
90 percent of companies will have started to migrate to the cloud in some capacity.
There are unique complexities and challenges for enterprises operating in a hybrid mode as their systems
straddle the cloud and traditional datacenters. Some companies such as Pensando, an investment
identified and validated by insights from the Goldman Sachs Network Engineering Team, are helping
enterprises respond to the unprecedented scale and performance demands by providing them unique
cloud-like agility, security, and operational simplicity across their entire infrastructure. Another portfolio
company surfaced by our engineering teams, Forward Networks, provides increased visibility and reduced
risk of errors and outages by enabling enterprises to document, search, verify, and predict the behavior
of the world’s largest networks. ScienceLogic and Moogsoft (both GS Growth portfolio companies)
are delivering critical visibility and management of an enterprise’s hybrid infrastructure from their
artificial-intelligence-for-IT-operations (AIOps) SaaS offerings, making systems more predictive and
responsive, while ensuring that outages are minimized or avoided altogether. Similarly, Antuit, through
its cloud-based, AI-powered SaaS platform, enables unified forecasting and planning solutions, helping
transform global supply chains, merchandizing, and sales and marketing functions for consumer product
and retail companies.

Nasuni, another portfolio company, is disrupting the enterprise file storage market with a cloud-native
approach. Nasuni has developed three novel technologies: the industry’s only object storage-based global
file system3 called UniFS, edge caching appliances that deliver a “local-like” end-user performance 4, and
a file-locking cloud service5 to enable global collaboration, ensuring data is always available everywhere
at all times. As more processes move to the cloud, there is an increased need for cloud-first solutions
for content collaboration, protection, compliance and threat prevention. Egnyte delivers secure content
collaboration, compliant data protection, and simple infrastructure modernization, all through a single
SaaS platform. Its solution enables businesses to ensure that files are properly routed, shared, and
protected across teams. In addition, the platform identifies over-permissioned files and unusual behavior,
to safeguard information against insider threats, as well as offering protection from ransomware attacks.
As the cloud infrastructure evolves and matures, enterprises are increasingly finding business advantages
by moving and re-architecting their mission critical-applications to the cloud.
2.2 Re-imagining enterprise applications

The cloud had not only changed the way enterprise infrastructure is delivered, it has redefined the
competitive landscape. Enterprises can no longer rely on the cost and complexity of custom application
development as a business defense. The cloud has reduced the cost of developing and running enterprise
applications by orders of magnitude, while simultaneously reducing the delivery timeframes from years to
months. By leveraging the cloud and new application architectures, seemingly overnight, startups are now
entering increasingly complex industries, forcing enterprises to digitize. In additional to the commercial
needs, the daily personal use of high-quality apps and software has also dramatically increased user
expectations for the use of B2C and B2B software. Consumers and employees expect an elegant, smooth,
and responsive experience while developers are expected to provide a secure, stable and scalable software
solution using more than 100 times more underlying code than 10 years ago. This has led to the application
becoming the competitive front line for many businesses, making it critical that their DevOps teams have
the most agile environment to build any applications, whether that be full stack, low-code or no-code6. All
these changes are driving the need for new application architectures, tools, and business models.
Modern applications are using a combination of open source and commercial building blocks. We invested
in Redis Labs, which is providing commercial-grade in-memory data solutions for the most demanding
applications, offering agility and performance that legacy solutions could not easily achieve. GitLab,
another portfolio company, is an open core company that develops software for the software development
lifecycle of full stack applications. Today, GitLab is used by more than 100,000 organizations, has 30 million
registered users, and an active community of more than 3,000 contributors. GS Growth invested in GitLab,
following a multi-month engagement and proof-of-concept exercise, during which Goldman Sachs’
engineering division chose GitLab’s end-to-end continuous-integration/continuous-delivery (CI/CD)7 DevOps
solution to replace what it had built internally. The engineering ROI emerged rapidly. Upon deployment,
GS moved from a release cycle of once every 1-to-2 weeks to once every few minutes, with some teams
running and merging more than 1,000 CI feature branch builds a day.
Managing this increasingly complex software ecosystem in modern enterprises has also become a
significant challenge. Enterprise architecture software company LeanIX—another of our investments—
is trying to address this issue by offering a central repository and modelling tool that provides real-time,
comprehensive, and consistent information on an organization’s IT assets and their interconnections.
3
Object-based storage is a data storage architecture that uses distinct units called objects that are kept in a single storehouse and not inside other
folders. It is cost-effective and scalable, and enables the cloud
4
Edge caching stores content closer to end-users, allowing them faster access to the content
5
File locking prevents multiple users from changing a file simultaneously, a vital feature of cloud computing
6
Low-code and no-code are software development approaches that allow people with little to no knowledge of computer coding to create or tailor
applications to their needs, using visual interfaces
7
CI/CD are agile principles and practices that speed software development, revisions, and releases, by introducing automated testing. These practices
also reduce errors and cost

With LeanIX software, users can more effectively manage their IT portfolio, perform impact analyses,
(i.e., which processes are impacted by a proposed change), and plan towards a future architectural state.
At times though, full stack development is either too cumbersome or not necessary. This is where
low-code and no-code solutions shine.
The impact of low-code. Digital transformation is putting extreme pressure on legacy IT infrastructure,
and on traditional ways of building software. These will need to be replaced with more modern
applications and architecture. Organizations will increasingly demand platforms that deliver more
efficient development, faster deployment, and accelerated change cycles; and address the desire for a
better user experience by both customers and employees. This is where AI-powered application platforms
come into play, along with low-code or no-code development solutions that allow those without software-
writing skills to work on applications.
Modern application platforms such as OutSystems, a GS Growth portfolio company, supplement low-code
development tools with additional platform features that bring IT and business together. This enables
rapid, iterative, and collaborative development, ensures enterprise-class scale and security, and
dramatically speeds up the deployment process with AI-powered automation. The combination of
low-code, no-code and AI-driven automation empowers developers and business stakeholders to
work together more effectively, ensuring applications adapt as quickly as the imperatives of the
business evolve.
OutSystems’ low-code technology significantly simplifies the work of developers by using a combination
of visual toolsets with AI-based guidance to simplify much of the needless complexity associated with
new technologies, such as machine learning or progressive web apps (apps that use web technologies such
as HTML and JavaScript). This is critical in a world where developer and IT resources are scarce and under
ever-increasing pressure to innovate through software. In essence, modern application platforms using a
low-code approach open up new avenues for developers to concentrate on innovating, and subsequently
easily adapting unique software systems that are suited for delivering strategic, differentiated value to
their businesses.
The next frontier of low-code will be a significantly increased use of AI/ML to ultimately achieve full
lifecycle automation. OutSystems is pioneering this approach whereby software proactively assists and
guides developers to build the right way, make the appropriate architectural decisions, avoid mistakes
before accruing technical debt, and make big, complex systems self-healing and continuously adaptable.
Full lifecycle automation will also enable rapid sharing of knowledge and empower developers to make
smart re-factoring decisions.
The fast growing low-code/no-code market is expected to exceed $21 billion by 2022, and is forecasted to
be responsible for over 65 percent of application development activity by 2024. Three-quarters of large
enterprises are expected to be using no-code or low-code development tools for both IT development and
citizen development activities by 2024.
Software as a Service (SaaS). SaaS takes this trend one step further by eliminating the need for application
development and simplifying modern enterprise infrastructure by using the cloud to deliver applications,
fully hosted, to the customer. In recent years traditional software vendors have been challenged—and
even displaced—by cloud-first startups offering core enterprise applications (e.g., CRM; HR; ERP; financial
reporting and planning; and governance, risk management, and compliance) as SaaS solutions. The hosted
solutions provide lower cost of ownership, simplified adoption, global access, and scale that would be
difficult, if not impossible, to deliver from the traditional data center. This has forced established vendors
to play catch up and re-factor or develop their own solutions as a SaaS offering.
Another advantage of SaaS is the network effect it can create and support within a customer’s ecosystem.
When two parties are both users of a SaaS platform, that platform can enable interactions and automation
between them. In many cases, this integration allows companies to access enhanced or advanced use

cases that they could not build on their own. All of this helps both the customer and the SaaS provider
(which benefits from increased activity, and organic sales lead generation).
Overall, SaaS has made major inroads, reaching at least 20 percent penetration across all major industries,
and over 35 percent in media and professional services. Spend on SaaS today is just over $100 billion,
and is expected to grow at 16 percent a year to $141 billion by 2022. Much of this spend is coming from
budgets that once supported legacy on-premises solutions, and the datacenter infrastructure to run
them. Today, SaaS solutions existing across almost all industries and applications, creating an endless list
of opportunities for commerce and investment. The vast majority of companies in the Goldman Growth
portfolio deliver their services either exclusively or alternatively as SaaS offerings. Of particular interest,
from an investment and market perspective, SaaS provides simplified delivery of software applications
and enables more efficient sales models, with an ability to upsell and expand within the customer base.
This provides a reliable and predictable recurring revenue model and enables companies to expand
their markets by efficiently serving both large and small customers, and reducing geographic and
organizational delivery complexities. The governance, risk and compliance (GRC) space, due to its
multi-party nature and geographically spread workflows, benefits from the cloud-based delivery and
network effect of SaaS.
EcoOnline is a fast-growing European provider of workplace health and safety SaaS solutions. This GS
Growth portfolio company focuses on reducing the harm that chemicals can have on humans and the
environment, enabling its customers to comply easily with complex regulations. The company’s SaaS-
based approach enables customers to leverage a vast database of up-to-date environmental, health, and
safety data on chemicals, along with regulatory and technical data. The approach creates strong network
effects among chemical producers, distributors, and consumers, who can share and access data on the
platform. It further enables rapid deployment to customer sites, powerful data analytics, and a compelling
mobile user experience.
One example of using SaaS to achieve improved go-to-market efficiencies is GS Growth portfolio company
MetricStream, a solution for governance, risk management and compliance (GRC). MetricStream was
originally developed as an on-premises product, but was re-designed to be a hosted, SaaS solution. Since
its release in 2017, this hosted version has become the preferred way for customers to purchase the
product. SaaS delivery simplifies the setup and operations of the platform, and also enables easy global
deployment and interactions with third parties. Through hosting, implementation times have shrunk
from months to weeks. MetricStream has also dramatically simplified its configuration and operations,
allowing it to move down-market, enabling mid-sized enterprises to access a comprehensive risk platform
that was previously practical only for the largest companies. Customers benefit further from more timely
release of updates, new functionality, and rich, up-to-date content on the hosted platform.
2.3 The digitization of the enterprise

The cloud has not just changed the pace and scale of technology. It is redefining the business process and
model themselves. Enterprises are adopting automation to increase employee productivity, using the
cloud to create new, more direct channels to their customers and partners, and use social media to be more
connected than ever.
The impact of RPA and AI on automation. Most enterprises strive to constantly enhance their customer
experiences while simultaneously making their workforces more productive. Robotic process automation
(RPA, which mimics human actions), artificial intelligence (which mimics human thinking) and low-code,
are all part of the solution to these challenges. As enterprises seek to use automation to disrupt entire
business processes, they will combine solutions like these to achieve what is called “hyper-automation.”
According to McKinsey Global Institute, 51 percent of time in all US occupations is spent on collecting data,
processing data, and predictable physical activities—all categories that have high potential for technical
automation. About 60 percent of occupations have at least 30 percent of their activities that can be

automated by adapting currently demonstrated technology. Robotic process automation from companies
such as Automation Anywhere (a GS Growth portfolio company) is expected to be one driver of this
automation. With the Automation Anywhere platform, software users create software robots, or “bots,”
that can learn, mimic, and then execute rules-based business processes.
There will likely be more thoughtful and efficient usage of RPA as executives get more focused on improving
operations and increasing cost efficiencies. The market for RPA software, which is currently estimated to
be around $1.6 billion, continues to mature as vendors innovate to gain market share, making RPA more
applicable to complex tasks that span across business functions (vs. involving only one business unit).
Companies can use RPA in tandem with AI to automate entire processes, achieving hyper-automation and
accruing major benefits. According to estimates, by 2024, enterprises can lower their operational costs
by 30 percent by combining hyper-automation technologies with redesigned operational processes.
Furthermore, we expect that RPA scripts will become more dynamically generated instead of requiring a
human to manually program an RPA bot, or using a process recorder to create a bot. A machine learning
(ML) algorithm could generate RPA scripts from the data previously gathered by RPA bots from system
logs, and from user interactions with applications and systems. This will create a flywheel effect as it
lowers the barrier of adoption for RPA, enabling every user to leverage it to automate work processes,
regardless of their technical expertise, and speeding up the time to deployment within enterprises.
Digitizing retail enterprises for an omni-channel world. Although the cloud is redefining most industry
verticals, in recent times none have undergone as much change as has been seen with the digitization of
retail. The internet has empowered consumers with a breadth of information and shopping alternatives that
far exceed anything previously available. So it is no surprise that e-commerce penetration has gone from just
10 percent in 2017 to an estimated 16.1 percent in 2020. One important effect of this change is the decline
in consumer brand loyalty, given the ease of exploring new products and the abundance of alternatives.
In response, retailers have realized that they increasingly need to move their sales environment from
predominantly a single offline channel to an omni-channel model, serving consumers wherever they
want to shop.
Without this, retailers will invariably face lost revenue due to an inferior consumer experience. For example,
an item bought online may be difficult to be returned in store, or an item browsed on a mobile device cannot
be shipped to a local store. While physical retail is still the largest segment (accounting for close to 80 percent
of all sales), other channels are increasing in importance. Users are increasingly open to making purchases in
different channels: 35 percent are planning to use more shopping apps in the next 12 months, 32 percent are
planning to use more social media, and 28 percent plan to increase purchases from messaging apps. COVID-
19 has further accelerated the adoption of new mixed delivery models: in the US more than 40 percent of
consumers are buying online with curbside pick-up, and 30 percent are buying online and picking up in store.
Additionally, 30 percent of consumers have increased the number of their same-day or next-day deliveries.
In order to address issues like these, and deliver a seamless and unified experience for customers at every
touchpoint, retailers are increasingly focused on digital transformation.
In response, various software solutions (primarily cloud-hosted ones in the form of SaaS) have emerged
to address merchants’ pain points across the lifecycle of an e-commerce order. SaaS can provide retailers
with increased accessibility (for example access through different devices), higher consistency, reduced
risk of outages, and easiness of update (for example in updating a website when expanding inventory).
Some of the solutions currently available include, for example, those that provide replenishment, sourcing,
and demand forecasting.
The first step for merchants in adopting omni-channel retail is often setting up web stores. Technology
solutions lower the barriers to e-commerce by helping merchants launch and scale their online operations
via integrated solutions for online storefront design, catalog management, hosting, and checkout.
Merchants have a strong preference for easy-to-use software that allows sufficient customization of
brand identity, while at the same time, provides a simple process in establishing the web store’s back-end

infrastructure. One example that we have invested in is BigCommerce, a SaaS platform that simplifies the
creation of online stores.
Through its platform and a large network of ecosystem partners, BigCommerce enables merchants to sell
on web/mobile storefronts, blogs, websites, social media, and physical retail locations. Founded in 2009,
BigCommerce initially targeted the small business segment with a simple, low-cost, all-in-one solution
delivered through the cloud. Starting in 2015, it expanded to target medium and large merchants by
offering a SaaS platform that combines enterprise-grade functionality, openness, and performance,
with the simplicity and ease-of-use sought by small and medium businesses. BigCommerce provides a
best-in-class, open, third-party partner ecosystem across payments, point-of-sale, shipping, marketing,
and accounting. It is currently used by a number of multinational retailers including Avery Dennison,
Ben & Jerry’s, Sony, and SC Johnson.
Not only are brands investing in their own direct-to-consumer shopping capabilities via web stores, but
they are also investing in growing their e-commerce volumes across an increasing number of online
retailers (i.e., Amazon, Target, Walmart, Home Depot, etc.). This has created complexity for e-commerce
teams to manage all of these various online channels that are becoming larger revenue drivers of their
business – and an opportunity for technology providers to help brands measure and drive performance
across multiple online retailers. Stackline is a GS Growth portfolio company that helps address this pain
point through its platform that dramatically simplifies how brands manage their online channels and
drive profitable e-commerce growth. By combining retail market intelligence, advertising automation,
workflow management and operational analytics all into a single platform, Stackline is able to deliver a
mission-critical operating system for e-commerce teams. The company’s customers include global brands
such as Sony, Levi’s, Google, General Mills, and Starbucks.
To create a superior online shopping experience, and mimic a similar experience to that in physical stores,
merchants are turning to new technology providers of creative sales solutions. Augmented reality (AR),
for example, is expected to play a major role in lowering the uncertainty of online purchases by simulating
the look, touch, and feel of merchandise remotely. Virtual simulations are expected to drive higher sales
conversions and user engagements, while at the same time providing insightful data points for merchants
to identify customer preferences and sales trends. Perfect Corp, the world’s leading AR SaaS solution
provider for beauty brands, is an example of a GS Growth investment in this vertical.
Founded in 2015, Perfect offers beauty brands and retailers subscription-based toolkits enabling them
to offer a virtual try-on experience across multiple channels (e.g., mobile app, website, in-store kiosks,
third-party ecommerce platforms) and product groups (e.g., makeup, skincare, and hair color). Perfect’s
offering is underpinned by an AI engine and proprietary deep learning algorithms built on data from
billions of real-life try-ons around the world. Since the outbreak of COVID-19, AR try-on has become an
even more important element of beauty product sales. New formats of AR try-on applications, such as
scheduling virtual meetings with beauty advisors, and sales of beauty products via livestreaming are
increasingly being adopted by beauty brands. Today, Perfect’s customers include global beauty brands
such as Estée Lauder, MAC, Dior, and Neutrogena.
With the online presence set up and with orders flowing in, inventory management and order fulfillment
become the next most important area of focus for merchants. To get a holistic view of operational
conditions, retailers require systems and infrastructures that are completely connected in order to
manage product catalog, accept orders across multiple platforms, and reflect real-time availability of
merchandises across channels. Adopting an omni-channel sales approach allows merchants to improve
operational efficiency by placing inventories at locations close to where products are ordered or
shipped from. Shanghai Jushuitan (Jushuitan), a portfolio company of GS Growth, is a leading solutions
provider in this area in China. Jushuitan is connected to all major e-commerce platforms and China
logistics providers, offering SaaS-based solutions for e-commerce merchants in the areas of order
management, warehouse management, and intelligent inventory management. Despite the still low
SaaS penetration among China enterprises, order management software is considered a must-have
for medium and large merchants given the sheer amount of daily orders, and complex demand from

Chinese e-commerce consumers. As a result, Jushuitan is well-positioned to benefit from the strong
fundamental growth in China e-commerce and digitization of Chinese enterprises. At the same time,
there are immense opportunities for Jushuitan to upsell, taking advantage of its large user base and
network effect to expand into other ancillary SaaS-based solutions such as supply chain management,
de-stocking, business intelligence, and accounting management.
As e-commerce continues to disrupt the traditional retail scene, it also poses new challenges for the
brands to operate in a fast-paced market. Our portfolio company Lequee, founded in 2015, provides
90-plus brand partners with one-stop digital and marketing solutions, as well as brand management
services, allowing them to work with and operate on major e-commerce platforms.
On marketing and customer relationship management, we believe a new generation of membership

management systems will continue getting traction as they offer retailers a depth of customer data that they
can use to personalize brand messages and deliver a consistent welcoming experience to wow their customers.
Under the backdrop of an increasingly interconnected world, and with sales channels becoming
increasingly diversified, the GS Growth team believes that retailers that fail to adopt an omni-channel
approach will face material headwinds. As such, on the retailer side, we are most bullish on companies that
have well-thought-out, multi-channel sales strategies with established infrastructure to support them,
along with the companies that are supporting them in their digitization journey.
The changes retail has experienced from the cloud might be seen as a canary in the coalmine for the kind of
impact that will eventually be seen across most industries, whether it be directly or indirectly, through new
platforms such as social media.
Connecting with the customer. Traditional sales processes are being reinvented as they leverage the
power of the cloud. One example is portfolio company ON24, which provides a leading cloud-based digital
experience platform that enables B2B companies to run interactive webinar experiences, virtual event
experiences, and multimedia content experiences. The company enables enterprises to evolve from traditional
marketing approaches, such as “cold-calling,” “snail mail,” industry networking events, and in-office
visits, to more scalable, cloud-based approaches. According to Gartner, by 2025, 80 percent of B2B sales
interactions between suppliers and buyers are expected to occur in digital channels. ON24 enables this
transition and helps companies achieve deep levels of personalized engagement and interactivity.
Managing social media’s impact. One of the more powerful tools that has emerged in the cloud is social
media. Social media has amplified the voice of the customer and transformed it from useful feedback to
being a driving force of commerce. Whether an enterprise digitizes or not, it cannot ignore the impact of
managing its reputation and relationship as defined in the various social media channels. Our portfolio
company Sprout Social empowers businesses around the globe to tap into the power and opportunity
presented by the shift to digital social communication. Virtually every aspect of business has been
affected by social media, from marketing, sales, and public relations to customer service, product and
strategy – creating a need for an entirely new category of software. Sprout Social offers its more-than
25,000 customers a centralized, secure, and powerful platform to manage this broad, complex channel
effectively across their organizations.
2.4 Protecting the enterprise from evolving cyber threats

As industries digitize, cybersecurity is becoming a topic of the highest importance. Companies of all types
and sizes need increased protection for the data they generate and use, as well as for their operations,
which are increasingly connected and at risk.
COVID-19 has further increased the need for cybersecurity. With many employees working from home,
there are multiple new vectors for cyberattacks and data leaks, requiring companies to address new issues
such as home network security and compliance. Beyond this, cyber-attacks, both internally and externally,
are rising to the point where 94 percent of security professionals have increased concerns about

ransomware, phishing, social engineering attacks, and other threats, and close to 40 percent of companies
have suffered a cyber event within the past year.
Cybersecurity breaches can cause significant financial damage to the enterprises being attacked – costs
that can run to several million dollars, including loss of business, ex-post response costs, detection and
escalation, and notification of the breach (Exhibit 6). All of this has spurred rapid growth in the global
information security market, which is expected to reach $125 billion in 2020, and $175 billion in 2024.
Exhibit 6
Cyber incidents can have a significant financial impact for affected companies
Global average total cost of a data breach by industry, 2020 , USD million Data breach cost by category, 2020 ,
Percent
Healthcare 7.1
Energy 6.4
Financial 5.9
Pharma 5.1 28.8%
Technology 5.0
Industrial 5.0 39.4%
Services 4.2
Entertainment 4.1
Education 3.9
Global average 3.9 6.2%
Transportation 3.6
Communication 3.0
Consumer 2.6 25.6%
Retail 2.0
Hospitality 1.7
Media 1.7
Research 1.5 Detection and escalation Ex-post response
Public 1.1 Notification Lost business cost
Source: IBM, Cost of a data breach report, 2020
Source: IBM, Cost of a data breach report, 2020
Responding to new regulations. In addition to the ever-increasing risk of cyber threats, the proliferation of
new government cybersecurity regulations across geographies and verticals is driving market growth.
Many new regulations, such as GDPR8 in Europe and CCPA9 in California, focus on the protection of sensitive
data or personally identifiable information. Achieving and maintaining compliance is costly and time-
consuming for companies of all sizes. Sensitive data has become a primary target of cyber criminals, who
can sell or exploit stolen data.
Innovative solutions are emerging that protect companies by protecting their data assets directly. Very
Good Security (VGS), a GS Growth portfolio company, provides a no-code data security platform-as-a-
service (PaaS) for mid-market and enterprise customers. This platform collects, protects, and exchanges
sensitive data. It addresses a broad range of data security and compliance use cases (primarily for fintechs),
and operates at the intersection of many multi-billion dollar markets. VGS fundamentally rethinks how
businesses secure systems by removing sensitive data from them, and securing it, and all the data processes
behind it. This inherently makes both existing and new applications more secure, easier to build and maintain.
Once a customer is sending data through the VGS platform, it can simply layer in additional compliance or
security. VGS solves this problem with a solution that is affordable enough for mid-market companies and
⁸ European Union General Data Protection Regulation

⁹ California Consumer Privacy Act

powerful enough for major enterprises, with use cases including GDPR, PCI10, and SOC 211. Its power and
simplicity has allowed it to quickly grow a large and diverse customer base including Texas Capital Bank,
Doordash, Sallie Mae, GE Transportation, and Brex, a manager of corporate financial functions.
Inside the datacenter, GS Growth portfolio company Acronis provides solutions that natively integrate
cybersecurity, data protection and management to protect endpoints, systems and data. Traditional
antivirus and backup solutions frequently lack integration and require significant time for management.
In addition, a patchwork of (even best of breed) system and endpoint protection tools can create gaps
in defenses. For example, many traditional antimalware solutions are not-integrated with backup, and
are thus unable to recover data and lack the ability to detect threats in a secondary backup copy of data.
Acronis provides a unified approach, consisting of a single agent, single management console, single
backend infrastructure, and single license. This integrated solution helps businesses of all sizes streamline
operations by automating the detection, prevention, and recovery of data.
Fully outsourcing the security infrastructure. Traditional approaches to data security involve building out
a secure and compliant technology stack. These are very expensive, difficult to build and maintain, require
significant internal expertise and time, and still leave systems vulnerable to insider attacks. They are
also hindered by growing staffing and skill shortages, an ever-increasing threat landscape, and the new
compliance burdens.
These challenges are leading companies of all sizes to offload their security needs to new technologies
and specialist providers, including managed security service providers (MSSPs). These provide outsourced
monitoring and management of security devices and systems, using high-availability security operation
centers designed to reduce the number of operational security personnel. Managed cybersecurity services
is the largest category in the overall information security market, accounting over 20 percent of total firm
spending, totaling over $27 billion in 2019 and expected to more than double by 2025 to $65 billion.
For small and medium businesses (SMBs), adoption of managed security services is driven by the cost
effectiveness of gaining access to specialized security tools and expertise on a shared basis. Many
organizations do not have the budget to hire a team of full-time advanced intrusion analysts who might
investigate just a few incidents per week. An MSSP can amortize the cost of this advanced experience over
multiple enterprise customers. Essentially, SMBs find themselves gaining time-shared access to the tools,
techniques, and knowledge of a wide array of specialized security professionals for the cost they would
otherwise incur hiring a smaller team of full-time security generalists.
For larger enterprises, MSSPs frequently complement dedicated internal security operations teams,
offering additional capacity and expertise, as well as a second set of eyes to review alerts in their network.
Deepwatch is an MSSP in which GS Growth has invested. Deepwatch provides monitoring and management
of security devices and systems, using high-availability security operation centers designed to reduce the
number of operational security personnel that an enterprise needs to hire, train, and retain to maintain its
security posture.
The company uses only third-party products, and does not compete with cybersecurity vendors through its
own proprietary products. This provides focus and clarity of message for customers, software vendors, and
channel partners. Deepwatch supports only best-of-breed security products, such as Splunk, Checkpoint,
and Palo Alto Networks. Deepwatch also offers a broader range of high-end services than most MSSPs,
including security information and event management, vulnerability management, endpoint, and firewall
management. This provides flexibility for its enterprise clients to own, manage, and support their software
licenses directly if they prefer.
The company has grown a large and diverse customer base including Spectrum Health, Staples, Cinemark,
BCG, Wawa, and Apple Bank.
10
Payment card industry
11
The second of three system and organization controls audits and reports

3 | Consumer

3.0 Overview of consumer space
The consumer sector—with its many innovators, trend setters, and new market leaders—is being shaped
by massive shifts in both supply and demand. The supply shift, driven by technological advancements, has
been most pronounced in the past decade. This has, in turn shifted demand, driven by rapid adoption of
new technology by younger generations, and increasing acceptance of new entrants by older generations.
Indeed, the world is now settling into a new equilibrium in the market for consumer goods and services.
On the supply side, infrastructure and technology have matured to allow for competitively priced online
purchasing, and fast delivery of digital content and services. E-commerce-centric business models can
now be competitively priced with incumbents, and digital content and service providers can stand behind
a fast and reliable value proposition. Bolstering these trends is the proliferation of social media, which
provides low-cost and targeted customer acquisition platforms with viral capability. As a result, players
have numerous, attractive entry points into the consumer landscape.
On the demand side, the world has seen a major demographic shift in the past decade, as Generation
Z became the largest, constituting 32 percent of the global population, followed by Millennials, who
overtook the Baby Boomers in 2019. These cohorts of consumers are digitally inclined, and are advocates
of change. They are eager to adopt new business models, and have triggered widespread disruption of
incumbent market leaders across many different categories.
GS Growth expects the manifestations of these fundamental shifts in demand and supply to play out further over
the next decade. We see four manifestations, or developing themes, that will emerge, and we intend to look to
these as the basis for future investments: 1) the reallocation of how consumers spend their leisure time; 2) the
unbundling of broad online communities into more vertically focused platforms; 3) the rise of mission-driven
brands and sustainable business models; and 4) the growing adoption of digital consumer services. We are also
looking at companies that are supporting these trends through infrastructure technology and logistics solutions.
3.1 Reallocation of leisure time

We believe the shifts in supply and demand for consumer goods and services will significantly impact
the ways consumers spend their leisure hours. In the US and Europe, the average consumer has 5 hours of
leisure time per day, while in China this number is just below 4. This represents billions of hours per day, and
is a massive opportunity in all geographies.
A quick look back into history reveals that the way consumers allocate their leisure time is fairly stable up
until a technological change incites a fundamental shift. The introduction of radio took time away from
newspapers, magazines, and books. Later, TV took time away from radio and reading.
Today the innovations are multiple and moving rapidly. Smartphones and broadband have ignited a shift
away from linear cable TV, to streaming content categories (e.g., short-form video, long-form video,
live streams, games) on a multitude of device types (e.g., TV sets, iPads, iPhones). There are 3.6 billion
smartphone users globally (56 percent of whom are in Asia Pacific), and global smartphone penetration is
48 percent. There are more than 4 billion global internet users (54 percent penetration), and connection
speeds are rapidly improving. For instance, 5G is projected to grow from less than 3 percent of total
connections in 2020 to over 20 percent in 2023 (with over 55 percent penetration in the US).
These trends are disrupting linear TV, with consumers demanding new venues for their leisure hours. In
2019, Americans spent an average of 2.8 hours per day watching TV – about 60 percent of total leisure
time. That sounds large, but it is important to note that much of this is older adults. Younger generations
are reallocating time away from TV to other leisure activities. Even within TV, younger cohorts are moving
away from traditional TV to streaming a wide range of content on a wide range of device types, creating
market opportunities for new classes of content creators and digital media. We see this reshuffling
happening globally. In particular, younger cohorts across geographies are reallocating time to digital and
social media, gaming, and fitness (Exhibits 7, 8).

Exhibit 7
Younger generations spend less time watching TV, and are shifting towards other leisure
activities including gaming and fitness
U S examp le
Average daily hours spent in select leisure activities by demographic1, 2019, hours
Sports, exercise, recreation

Watching TV Playing games & walking7
Gen Z2 2.1 0.7 0.6
Millennials3 2.0 0.2 0.4
Gen X4 2.4 0.1 0.3
Boomers5 3.2 0.1 0.3
65 and older 4.6 0.2 0.3
US average6 2.8 0.3 0.4
1. Demographic groupings have been aligned to match available BLS data 5. Demographic groupings have been aligned to match available BLS data
2. Gen Z defined as 15–24 years (vs. 8–23 years) 6. Gen Z defined as 15–24 years (vs. 8–23 years)
1.
3. Demographic groupings
Millennials defined as 25–44 haveyears);
years (vs. 23–38 been aligned
Output tobymatch
determined average ofavailable
time spent for BLS
24–34 data
7. 6. Gen Z defined as 15–24 years (vs. 8–23 years)
Millennials defined as 25–44 years (vs. 23–38 years); Output determined by average of time spent for 24–34
and 34–44 age groups in 2019 for each category and 34–44 age groups in 2019 for each category
2.
4. Gen Z defined
Gen X defined as 45–54as
years15–24
(vs. 39–54years
years) (vs. 8–23 years) 8. 7. Millennials defined as 25–44 years (vs. 23–38 years); Output
Gen X defined as 45–54 years (vs. 39–54 years);
3. Millennials
Source: defined
US Bureau of Labor Statistics; as 25–44
American years
Time Use (vs. 23–38 years); Output
Survey determined by average of time spent for 24–34 and 34–44 age
determined by average of time spent for 24–34 and 34–44 age groups in 2019 for each category
groups in 2019 for each category 8. Gen X defined as 45–54 years (vs. 39–54 years);
4. Gen X defined as 45–54 years (vs. 39–54 years)
5. Demographic groupings have been aligned to match available BLS data Source: US Bureau of Labor Statistics; American Time Use Survey
Exhibit 8
Examples of the shift away from linear TV
GS Growth Portfolio Co.

SVOD AVOD Social Media
Digital Media
Connected Fitness Digitizing Traditional Fitness Digital Wellness
Linear TV Fitness
Mobile Games PC Games / eSports VR and Virtual Worlds
Gaming

Digital and social media. The growth trends in digital media are particularly pronounced. Exhibit 9
covers US and UK kids. In China, it is similarly popular, with TikTok and Kuaishou (video), WeChat and QQ
(messaging), and Sina Weibo (blogging), all having attracted around 130 million users below 24 years old.
Across age groups, Chinese users spend 80 minutes a day on TikTok and WeChat, and 113 on Kuaishou.
Exhibit 9
US and UK kids spend over 4 hours a day on social media, a number that has increased
since the pandemic started
Average minutes per day spent on social platforms, Minutes
US Total UK Total
57 55
May 2019 May 2019
86 75
Feb 2020 Feb 2020
97 83
March 15th – April (COVID-19) March 15th – April (COVID-19)
38 35
May 2019 May 2019
95 81
April (COVID-19) April (COVID-19)
5.0 4.2
hours hours
40 34
May 2019 May 2019
50 48
Feb 2020 Feb 2020
35 26
May 2019 May 2019
57 39
Feb 2020 Feb 2020
Source: Qustodio, Connected More than Ever: Apps and digital natives: the new normal, May 2020
Source: Qustodio, Connected More than Ever: Apps and digital natives: the new normal, May 2020
GS Growth invested in Lightricks as a way to get exposure to the rising time spent on social media.
Lightricks provides a suite of mobile photo and video editing apps for consumers who want to “facetune,”
or edit and retouch, their pictures and videos.
Also within digital media, we invested in Innovid, an omni-channel advertising platform highly levered
to connected TV through its partnership with Roku. Additionally, we invested in Moonbug, a kid’s digital
media business that produces short-form animated content, and distributes it on YouTube and streaming
services such as Netflix and Amazon.
Fitness. As younger generations consume more via digital platforms, and healthy and mindful living
grows in importance, connected fitness is expected to experience growth of 4 percent-to-5 percent
per year globally. With the closing or limiting of many gyms due to COVID-19, this trend is accelerating.
For example, Peloton connected fitness subscriptions nearly doubled from 500,000 at the end of
2019 to more than 1 million in Q4 2020, and workouts completed increased by more than 200 percent
year-over-year to 165 million.
We invested in Keep to get exposure to the rise of digital fitness. Keep was founded in 2014 and is, by far,
the most popular fitness app in China, serving over 200 million registered users through product offerings
including training videos, fitness gear, intelligent exercise equipment and more.
Gaming. Gaming represents another significant draw away from TV. China and US are the largest markets,
both accounting for close to 25 percent of the total, which crossed $150 billion globally in 2019. Gaming
is popular across generations and demographics, with 50 percent of players below 30 (Exhibit 10).
Importantly, this group is expected to continue to allocate time to gaming as they age up.

Exhibit 10
The transition to online entertainment, including gaming, has accelerated with the
intensification of the pandemic
Have you used or done any of the following since

COVID-19 started1, % of respondents
Just started
Using more using
43 million daily hours
watched on Twitch in March 2020,
vs. less than 30 million at most in
Online streaming 42% 4% 45% January
Playing online games 13% 3% 16% 150 million monthly active

users in July 2020, up from 115
million in February2
Watching e-sports 8% 2% 10%
~250% growth in Nintendo’s

TikTok 5% 4% 9% net profit year on year on the first 6
months of 2020
1.
1 Q:Q: Have
Have you
you used used
or done orthedone
any of any
following sinceof
thethe following
coronavirus or COVID-19 since
situationthe coronavirus
started? or describes
If yes, Q: Which best COVID-19 situation
when you have done orstarted? If yes, Q: Which best describes when you
used each of these
items? (“Just started using since COVID-19 started”; “using more since COVID-19 started”; “using about the same since COVID-19 started”; “using less since COVID-19 started.”)
2. Discord
haveis adone orAppused
4.8 rated eachwhich
on AppStore of allows
these items?
friends (“Justtostarted
and communities chat, share andusing since COVID-19 started”; “using more since COVID-19 started”; “using about the
game together
same since COVID-19 started”; “using less since COVID-19 started.”)
3. As of April 8th 2020, compared to subscribers in January 2020; 4. As of April 22nd 2020, compared to subscribers in January 2020
2. As of April 8th 2020, compared to subscribers in January 2020; 4. As of April 22nd 2020, compared to subscribers in January 2020
Source: McKinsey & Company COVID-19 US Consumer Pulse Survey 4/6–4/12/2020; n=1,063, sampled and weighted to match US general population 18+ years
Source: McKinsey & Company COVID-19 US Consumer Pulse Survey 4/6–4/12/2020; n=1,063, sampled and weighted to match US general
population 18+ years
3.2 Unbundling of broad online communities into vertically focused platforms

Social interaction and interpersonal connection have been core to consumer behavior since the beginning
of time. However, advances in technology have led to new entrants that have vastly broadened the term
“community.” Without the need for physical venues or physical attendance to be “together,” communities
have become both instantaneous and limitless. Facebook, YouTube, and Amazon are all examples of
platforms that emerged to serve an infinite number of communities that can operate anytime, anywhere,
and at an infinite capacity.
The introduction of these platforms married perfectly with the demands of the demographic shift of
younger consumers seeking virtual interaction, resulting in viral adoption and massive scale.
As we look forward, we expect the sheer abundance of content and consumers on these platforms will
create an opportunity for niche, vertically-focused companies to pull out specific topics, and live as
concentrated, credible communities outside the major ecosystems.
As shown in Exhibit 11, the shift towards vertically-focused communities is already underway, spurred
by consumer desires for access to niche information and credible insights. Twitch built a community
around live-streaming of video games, where the most popular games, such as League of Legends and
Fortnite, have totaled more than 1 billion hours watched in 2019/20. Nextdoor launched neighborhood
communities for people to exchange information, goods, and services, and is currently used by 1 in 4
US households. We expect narrow communities such as these to continue to gain popularity, and
grow quickly due to their ability to gain trust, as a focused offering with highly engaged and emphatic
community members.

Exhibit 11
Niche vertical players can attract audiences from massive platforms
GS Growth Portfolio Co.
>1B hours w atched daily / 500 hours uploaded 2.7B MAUs / 100M IG photos uploaded daily 150M global Prime members / 120M in US
per minute
Gaming Networking / Crafts

Connecting
How-to Furniture
Groups /
Communities
News / Politics Pet
Photo & Video
Kids Sharing Sports Equipment
Beauty Messaging Electronics
Vlogger News Beauty &

Personal Care
Music Events Apparel /
Accessories
Cooking Social Gaming
Home & Kitchen
Sports / Fitness Marketplace
Grocery & Food
Fashion Shopping
We have already begun investing in this theme through our stake in DailyHunt, an Indian content and news
aggregator app, providing local language content in 15 languages from 11,800 publishers. Additionally,
we invested in Zhihu, the leading online community for quality content sharing in China, and the go-to
source for those looking for in-depth knowledge, experience, and insights on a wide variety of topics and
current events. With more than 57 million monthly active users, Zhihu is one of the most active online
communities in China, with strong user stickiness. The animation company Moonbug, mentioned earlier,
also fits into this theme, pulling kids away from YouTube.
3.3 The rise of mission-driven brands and sustainable business models

The long-term impact of the supply and demand shifts in the consumer market is also manifesting
itself in the rising importance of brand messaging. Lower barriers to entry and the ability to target
micro-demographics using digital marketing campaigns have resulted in a major influx of supply.
Thousands of brands have taken advantage of the opportunity to launch with a targeted group of
consumers, and prove product-market fit with engaged first adopters before moving more mainstream.
Many of these brands have experienced significant growth, as they took advantage of a robust shift in
consumer demand. Younger cohorts want to support brands that are rooted in an ethos that they identify
with. Now more than ever, consumers are highly sensitive to the fact that the brands they purchase
(e.g., the clothes they wear, the food they eat) tell a story to the world about their own values and what they
stand for. As a result, companies have been highly successful in disrupting legacy product categories by
expressing a more modern brand ethos.
We believe brands that are rooted in a genuine social purpose, or that anchor their products to sustainability,
are well-positioned to benefit from growing consumer demand for products that represent shared values.
We will seek exposure to businesses focused on sustainability, targeting social issues, or those driven
by a desire to provide accessibility. These topics are already top-of-mind for consumers (Exhibit 12). For

instance, they have translated into growth in sales for consumer products with sustainability claims –
with a 4.5 percent CAGR from 2013-to-2018) vs. 0.8 percent for products without such claims.
Exhibit 12
Sustainable packaging choices influence purchasing decisions, especially for Millennials
How often do your include sustainable packaging in For what categories do you believe sustainable
your purchasing decision? packaging is important?
Global top 10 countries, Percent 2019 Percent of people agreeing/strongly agreeing, 2019
9 Fresh fruit and vegetables 45

Never 21 25 27
26
Packaged food 42
Sometimes 46 14 Beverages 40
45 43
5
Meat, poultry and fish 39
Usually 24 45 20 23 Personal care products 38

Always 9 10 7
Household cleaning products 37
Total Millennials Gen-X Boomers
Source: McKinsey 2020 Global Sentiment Survey
Source: McKinsey 2020 Global Sentiment Survey
GS Growth invested in Billie, a mission-driven women’s shaving and personal care brand that was launched
with a strong ethos for female empowerment. Additionally, we invested in Kate Farms, which offers
plant-based medical-nutritional formulas to patients living with a wide range of diseases, conditions, and
circumstances. The company uses only organic and sustainable ingredients, which are easier to digest and
better for the planet. We also invested in Sapphire Foods, one of the largest franchisees of Yum! Brands
Inc. in the Indian subcontinent, with a track record of successfully operating more than 400 KFC, Pizza Hut
and Taco Bell restaurants across India, Sri Lanka and the Maldives. Finally, we invested in Burst, an oral care
brand that delivers a high-quality electric toothbrush at a fraction of the price of comparable incumbent
products.
3.4 Digitization of consumer services

The convenience of digital services—their strongest value proposition—has long been known. However,
now that younger generations have aged up, and technology allows for fast and reliable delivery of those
services, we expect their continued penetration globally over the next decade. Businesses such as Uber,
Airbnb, and Task Rabbit were important to solidify the social norm of consuming services via a digital
platform. Now technology has improved trust in the reliability and quality of digital services; recall that it
was only a few years ago that the delivery time for a Seamless order was rarely accurate (or it would never
come at all).
We see two high-potential categories of digital service providers: 1) digital booking or engagement
platforms that lead to a physical deployment of the service; and 2) a complete digital experience that
requires no in-person interaction to deliver the goods or service. These providers have already been

successful across many different categories including travel, food delivery, real estate, mobility, fitness,
repairs, healthcare and education.
To gain exposure to travel, we invested in Klook, a leading digital travel destination products and services
company in Asia. In auto maintenance and repairs, we invested in Tuhu, a leading digital auto aftermarket
retailer and service provider in China, which markets a wide range of aftermarket products to consumers,
and provides the offline services through a nationwide franchise store network. We also invested in
Carzone, a leading player in the highly fragmented auto parts distribution market in China with a more 2B
focused business model. In education, we invested in Zuoyebang, China’s largest K-12 online education
company, which allows students to get answers to questions, and also offers online live tutoring. We also
invested in iTutorGroup, a leading online on-demand interactive learning platform in China that provides
online tutoring services (English, math and coding) for adults and children. In beauty, we invested in
Purplle, India’s 2nd largest beauty and personal care focused online retailer, which uses search traffic and
data analytics to identify underserved segments, and deploys a recommendation engine and augmented
reality for a virtual shopping experience. In real estate, we invested in Zigbang, Korea's largest online/
mobile real estate information platform, which enables users to browse and discover residential real
estate properties and connect with real estate agents. In home design, we invested in Livspace, India’s
largest omni-channel full service home interior design solutions provider. Livspace uses a technology
platform to bring home owners, interior designers, furnishing vendors and servicing contractors to create
price transparency, standardization and delivery promise in a highly fragmented market. In smart home,
we invested in Bitkey, Japan’s leading digital key platformer which provides smart locks that turn physical
locks into smartphone enabled digital locks. Bitkey also provides digital key exchange platform in which
users can generate and transfer digital keys with other users and various home service providers. In
eyewear, we invested in Mister Spex, the leading omnichannel optician in Europe. Finally, in grocery and
food delivery we invested in EU-based Wolt, Korea-based Woowa, (both in food delivery) and Rebel Foods,
an India-based cloud kitchen.
To date, we have deployed most of our capital in digital consumer services in Asia-focused markets. We
believe geographies with wider income gaps and low minimum wages have the most attractive long-term
margins for services businesses that require person-to-person delivery. However, going forward, we will
also look for opportunities in the US and EU. We believe these markets are earlier in their adoption of
digital consumer services. Secular trends are also very attractive in these geographies.
3.5 Enabling e-commerce acceleration through infrastructure technology and logistics

We recognize that the digitization of the consumer industry would not be possible at scale without the
infrastructure technology and logistics solutions enabling it. Digital and smart logistics and automated
warehousing and robotics have been, and will continue to be, important foundations for the continued
penetration of e-commerce. Specifically, e-commerce businesses are highly focused on these services:
1) data-driven infrastructure optimization, such as inventory management and packaging solution
innovation; 2) warehouse optimization to improve fulfillment speed; 3) automation to help process orders,
such as driverless delivery vehicles, and automated guided vehicles (which navigate via implanted wires,
radio, cameras, or lasers); and 4) worldwide networks to accelerate the development of cross-border
e-commerce.
To get exposure to this important area, we invested in Korea Superfreeze, one of the largest cold-chain
logistics centers in the country. Korea Superfreeze uses environmentally friendly and energy efficient
liquefied natural gas technology for its frozen goods warehouse, the first of its kind in Korea. Additionally,
we invested in Qingdao Gooday Logistics, the largest logistics solution provider in China for large-format
goods, including home appliances, furniture and fitness equipment.

4 | Healthcare

4.0 Overview of the healthcare space
Disruptive technologies, changing demographics, a dynamic regulatory environment, and shifting
consumer preferences are reshaping healthcare across the world. The COVID-19 pandemic is accelerating
these changes several ways. Many more patients are using new technologies to access and manage their
own care. There are also fundamental shifts in patient journeys, and new remote working models.
Finally, healthcare ecosystems are being completely reimagined through digitization. For instance,
46 percent of consumers now report using telehealth to replace in-person doctor’s appointments, up
from 11 percent last year. Asked about their satisfaction with telehealth, 74 percent of respondents say
yes, and 75 percent said they would use it in the future. Moreover, many more patients are accessing their
medical records via apps, and monitoring their health using via wearables. Additionally, 35 percent more
consumers are now purchasing OTC drugs online.
Faced with cost pressures, healthcare organizations are using technology to shift to delivery modes that
focus on achieving better outcomes for patients. For instance, using artificial intelligence, hospitals are
improving the equipment and allocation of doctors for surgeries, using analytics to reduce cost of services,
and engaging with patients across the care continuum to improve care delivery and outcomes. Emergence
of interoperability of data is allowing different providers to serve the same patient effectively.
Innovative healthcare companies are helping accelerate these trends and creating significant value for
investors along the way. Five main themes emerge: 1) accelerating the consumerization of healthcare,
and the shift to value-based care; 2) developing innovative delivery methods, such as virtual health; 3)
using data to improve the efficiency and quality of care; 4) accelerating the growth of R&D
outsourcing outside of traditional markets; and, 5) closing the therapeutic gap between developed and
emerging markets.
4.1 Accelerating the consumerization of healthcare, and the shift to value-based care
Historically, the healthcare system placed little focus on the preferences of patients, and patients rarely
asserted their own interests. Some of this is simply due to the nature of medicine. Healthcare does not lend
itself to the kinds of decision making that consumers do in other areas of their lives. Elsewhere, they can
make purchase decisions based on their unique preferences and values – whether those be related to cost,
quality, convenience, or brand. Decision making in healthcare has never been that clear and the concept of
“shopping” for healthcare has only recently started to emerge.
While this is a global trend, in the US it has been compounded by the complexity of the system, and the
competing interests of doctors, hospitals, and insurers. The payment and reimbursement process has been
largely opaque, and consumers have had few tools to navigate it.
Ultimately, stakeholders in the healthcare value chain have failed to prioritize customer experience and
have not listened to their needs. Consumer surveys highlight their desire for things like broader insurance
coverage, improving the quality of provider networks, and making costs more transparent (Exhibit 13).

Exhibit 13
There are a number of initiatives healthcare providers could adopt to better serve
patients’ needs
Initiatives of healthcare companies to better meet needs of patients,

Percentage of respondents (multiple-choice question)1
Insurance company Hospital Outpatient facilities

55
48
44
39 39 38
31 31
29
Increase Increase Improve Make costs Increase Improve Increase Make costs Improve
medical nonmedical quality of more insurance speed insurance more trans- convenience
benefits benefits network transparent acceptance of service acceptance parent of getting an
and coverage and coverage appointment
1. Answer to question, "What should a healthcare company do to better meet your needs?"
1. Answer
Source: McKinseyto question,
Consumer "What
Health Insights should
Survey a healthcare
2018, N=4,911, company
respondents based in the US do to better meet your needs?"
Source: McKinsey Consumer Health Insights Survey 2018, N=4,911, respondents based in the US
A major catalyst in changing this longstanding status quo in the US has been the introduction of
value-based care—paying for care based on positive health outcomes rather than on the volume of
services delivered. This change has ushered in a new incentive system, bringing the patient experience into
greater focus by linking it to provider reimbursement.
Another factor is the rise of consumer-driven health plans (CDHPs), including health savings accounts
(HSAs), which are set up by employers to shift more of the cost for paying for care to their employees.
These plans require employees to set up HSAs and other accounts to pay for routine care, and have high
deductibles, leaving insurers to pay only for higher-cost treatments. From 2008 to 2018, high-deductible
plans grew from 25 million to over 60 million, and their share within total insured members increased
from 12 percent to 26 percent. Charged with more financial responsibility for their own care, patients are
expecting more from an industry that previously overlooked their preferences.
These changes have created a massive opportunity for innovators and disruptors to reshape an industry
that accounts for nearly $1 out of every $5 spent in the US. Behind “the consumerization of healthcare,”
there are companies determined to re-imagine the patient experience across every step of their journey,
be it in the US or globally. Direct-to-consumer health and wellness companies are improving access to
modern treatments, and next-gen insurance and primary care platforms are challenging the hegemony of
the largest incumbents.
GS Growth is betting that the key to unlocking better health outcomes is to prioritize the consumer, and
we are actively looking to invest in companies that do just that, across geographies.
Examples of companies that are accelerating the consumerization of healthcare and adoption of
value-based care include One Medical and Oak Street Health. Among our investments, we have several
companies that are examples of this trend across different geographies. DrFirst, a leading US-based
provider of software that enables providers to write e-prescriptions, has also developed applications

to improve patient medication adherence, and to provide patients with greater medication price
transparency. In China, WeDoc is a leading healthcare technology platform that provides online
appointment booking for offline healthcare services, facilitates online consultation for patients, and also
connects public hospitals with pharmacies. The company currently connects 7,200 partner hospitals and
27,000 pharmacies with 227 million registered users, enabling an average of 40,000 online consultations
and 30,000 prescriptions every day. Union Medical Healthcare is the largest medical aesthetic services
provider in Hong Kong and has leveraged on its strong customer base to expand into other medical
disciplines, including health screening, vaccination and diagnostic imaging, to become a one-stop shop for
consumer healthcare management. Another example is Docplanner, which is a leading online appointment
booking platform in Europe and Latin America for more than 65,000 doctors and clinic subscribers.
Docplanner has expanded its services to allow patients to book both in-person and virtual doctor
consultations through its platform.
4.2 Developing innovative delivery methods, including virtual health

Around the world, healthcare services have been leaving traditional sites of care such as doctors’ offices
and medical clinics and moving to alternative sites such as worksites and virtual care. These alternative
modes are also outgrowths of the rise in patient involvement in their own care, and the fact that they are
paying for more for that care. Naturally, they are seeking more affordable and convenient ways get and
stay healthy.
COVID-19 has only accelerated the trend, particularly telemedicine, and the change will probably be
permanent. Around 75 percent of US consumers are likely to use telemedicine this year, both for pandemic
concerns and unrelated health issues, up from 11 percent in 2019.
Technological developments are also accelerating growth of alternative care settings. For example,
improvements in sensors and wearable devices have made remote patient monitoring more affordable
and effective. These patients send useful information to providers, and enable additional healthcare
services to be delivered safely in a home setting.
Likewise, caregivers are looking for ways to bring down their costs, and alternative sites and modes of
care allow a reduction of overhead. In addition, they are often more convenient, prompting patients to
engage earlier and more frequently in the healthcare system, and ultimately supporting better outcomes.
This trend has also been accelerated by COVID-19, as benefits of alternative sites of care, in particular
telemedicine, are even more apparent (Exhibit 14).

Exhibit 14
Benefits offered to patients by virtual care are even more evident post-COVID-19
Top 10 reasons reported for being very satisfied with telemedicine visits,
Percentage of respondents1
Eliminated risk of exposure to a potential illness 48%
It was with a healthcare provider I knew 48%
The appointment time was convenient 46%
Good audio and/or video quality 45%
Preferred not traveling to healthcare facility 38%
The quality of care was comparable to an

38%
in-person visit
I got the prescription I needed 33%
My health insurance benefits met my needs 29%
The healthcare provider was able to satisfactorily

24%
examine me
I was certain my personal medical information
23%
was secure online
1. Response to question, “What, if anything, made you satisfied with your telemedicine or telephone appointment?”
2. N=248
1. Response to question, “What, if anything, made you satisfied with your telemedicine or telephone appointment?”
Source: McKinsey Global COVID-19 consumer survey, 6/8/2020, 7/14/2020
2. N=248
Source: McKinsey Global COVID-19 consumer survey, 6/8/2020, 7/14/2020
In addition, companies are using AI to automate certain operations in healthcare settings. For instance
automation can reduce hours that medical workers need to prepare equipment by 50 percent. Likewise, it
can reduce hours for medical assistants by 32 percent.
The GS Growth team expects that all these developments will continue to improve clinical outcomes,
reduce costs, and drive growth of alternative care settings and modalities. For instance, we estimate that
around 20 percent of all outpatient healthcare spending (about $250 billion) could be delivered virtually
(Exhibit 15).

Exhibit 15
20% of outpatient healthcare spend in the US could be made virtual, up to $250 billion
OP1 and office visits that can be virtually enabled in the US,
Commercial, Medicare, and Medicare 2020 estimated2, USD Billion
1,250
20%
of ED3visits
1,004 delivered 24%
of all office visits/
OP encounters 9%
of all office visits/
35
OP encounters 35%
of home health
services 2%
126 of all office visits/
OP encounters
39
35 12
Total OP office, and Non-virtualizable Virtual urgent care Virtual office visits Near-virtual Virtual home Tech-enabled home
home health spend visits/spend office visits health services medication
administration
1. Outpatient
2. Projected from 2018 commercial and Medicare spend, using National Health Expenditures
3. Emergency department
1. Outpatient
Source: Anonymized claims data representative of commercial, Medicare and Medicaid utilization
2. Projected from 2018 commercial and Medicare spend, using National Health Expenditures
3. Emergency department
Source: Anonymized claims data representative of commercial, Medicare and Medicaid utilization
Publicly-traded companies that are examples of virtual care providers or enablers include Teladoc, Amwell
and Accolade. Among our investments this area is 98point6, which provides text-based, on-demand,
digital primary care. 98point6’s team of board-certified physicians use artificial intelligence (AI) and
machine learning (ML) to reduce friction between physicians and patients, allowing more effective
care delivery and a superior patient experience. 98point6’s accessible and affordable virtual clinic has
seen significant adoption, which accelerated during the Covid-19 pandemic, with over 240 commercial
partnerships and 3 million members.
As for alternative site providers, we previously invested in a worksite health company that provides direct
primary care services to employees of medium and large self-insured employers in over 40 US states. This
company manages medical clinics at or near the employer’s place of work, staffed by physicians and other
providers, and also uses virtual health tools, including telemedicine and health coaching services. Services
also include behavioral health counseling, physical therapy, occupational health, and an onsite pharmacy.
This worksite health company is able to drive meaningful reductions in medical expenses as it engages
employees, improves use of preventative healthcare services, and reduces use of more costly services such
as emergency rooms and hospitalizations.
4.3 Utilizing data to improve efficiency and quality of care

In the past decade, many healthcare providers have made foundational investments in technology to
improve the efficiency and quality of care. Analytics are enabling coordinated and personalized, evidence-
based care that improves delivery and patient outcomes, and helps identify and engage under-served and
at-risk populations. New technologies such as block chain are enabling integration of electronic health
records (EHRs), and enabling access to 360-degree views of all patient records.

For example, spurred by the Affordable Care Act, many systems and providers adopted electronic medical
records (EMRs) and practice management software. These investments have laid the groundwork for new
technological advances to drive efficiency and value further. For instance, a host of innovative companies
are now using data from these foundational systems to apply artificial intelligence, machine learning, and
cloud computing.
One company that GS Growth has invested in—LeanTaaS—uses data and artificial intelligence to
help healthcare systems improve efficiency in operating rooms and infusion suites. LeanTaaS enables
systems to optimize use of their assets (equipment, staff and facilities), which increases patient access,
reduces costs by using staff more efficiently, and lowers patient waiting times, which improves patient
satisfaction. The widespread adoption of EMRs has accelerated the emergence of solutions such as
LeanTaaS since health systems have an enormous amount of valuable data in their systems. They can
leverage this data to create sophisticated algorithms that balance demand and supply, and provide
prescriptive recommendations to front-line staff on a near real-time basis.
We also have an investment in Tracelink, which has created the leading digital network to track
pharmaceuticals as they move from the point of manufacture to the patient. This enhanced tracking has
helped the pharmaceutical industry dramatically reduce prevalence of counterfeit drugs in the system,
and enhance patient safety. The data that Tracelink captures across the drug distribution chain also
enables its customers to meet global regulatory requirements. In addition, TraceLink has built a digital
network platform that facilitates enhanced supply chain visibility and intelligence, enabling customers to
derive clear business value from the data being tracked.
Similarly, we have an investment in PaigeAI which is using machine learning and artificial intelligence to
create diagnostic tools that increase the speed and accuracy of cancer detection in solid tumors in the
clinical pathology setting. It is delivering these tools together with data partners such as Memorial Sloan
Kettering. Paige is also using its AI technology to develop digital pathology, AI-driven biomarkers by
leveraging the large cancer databases of its partner institutions. Such innovations allow tumor mutations
and grading to be assessed in real time, with the initial clinical pathology, rather than having to wait for
more costly tests with longer turn-around times.
In addition to our existing investments, we see continued opportunity to invest in companies that are
using data to improve healthcare outcomes or improve efficiency. As consumers move to the center of
healthcare, there is significant focus on building patient-centered care models and more personalized
approaches to care. One example of this is what innovative companies are attempting to do with real
world evidence (RWE), which includes drug interaction and patient outcome data captured in the field.
We believe RWE is one of the most exciting areas in digital health, as it sits at the intersection of multiple
trends, and offers a compelling value proposition to all major stakeholders in the ecosystem. In particular,
pharmaceutical companies can accelerate feedback loops on existing drugs to help development of new
drugs, and inform efforts to make administration of the drugs more precise. Payors can use real world
outcome data to inform their reimbursement models.
Companies that provide interoperability and communication technology solutions specific to healthcare
are also well positioned, however a number of factors have hindered their progress. These include a lack
of standard data definitions and transfer protocols, a lack of incentives for stakeholders, and difficulty
seeking patient consent.
Optimism about addressing these challenges rose in March 2020 thanks to new regulations from the
Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health
Information Technology (ONC). These rules support seamless access, exchange, and use of electronic
health information. The CMS rule will require hospitals to send electronic notifications to other providers
when a patient is admitted, discharged, or transferred, as well as require CMS-regulated payers and
agencies to offer open APIs that allow information sharing between patients, providers, and payers. The

ONC rule finalized new standards (i.e., HL712, FHIR13) and data elements (i.e., USCDI14) for APIs. The rule also
implements a new provision of US law that prohibits providers, EMR developers, and health information
exchanges from blocking access to information. Penalties for violations can be up to $1 million. These
shifts have the potential to create both new data modalities as well as ecosystems that can unlock new
sources of value.
4.4 Growing contractual outsourcing

R&D outsourcing is an important aspect of the healthcare industry across geographies. In 2019, global
R&D spend reached $182 billion, of which 40 percent-to-50 percent is outsourced. Of that amount,
clinical-stage contract research organizations (CROs) represent the largest segment, accounting for over
$40 billion in 2019. Across the globe, Asia, and China in particular, have been driving the growth of this
market, and providing more opportunities for investors. China’s clinical stage CRO market reached about
$3.7 billion in 2019, growing at 29 percent CAGR over the previous 5 years.
The strong drive for innovation in Chinese life sciences, combined with the country’s large market
potential, have prompted local and multi-national players across pharma, biotech and medical devices to
spend more money and time on clinical development in China. Clinical trials in China grew at a 14 percent
CAGR from 2014 to 2018, with biotech leading the way at around 45 percent CAGR. Local pharma was still
the largest segment, however, representing around 60 percent of the market. (Exhibit 16).
Exhibit 16
Clinical trials in China have been growing steadily, driven by biotech
Clinical trials initiated by company type, 2014 –2018, CAGR,

Number of trials; percent by company type 2014–2018
831
+14% p.a.
699 23% Biotech 45%
560 24%
537 16% MNC 11%
498
13% 19%
9%
23%
23% 21%
23%
Local
61% 3%
pharma
68% 67% 58% 53%
2014 2015 2016 2017 2018
Source: Industry
Source: Industry consultantsconsultants
12
Health Level 7, a set of international standards for transfer of clinical and administrative data between software applications used by various providers
13
Fast Healthcare Interoperability Resources, a standard describing data formats and elements and an application programming interface for
exchanging EHRs
14
United States Core Data for Interoperability, a standardized set of health data classes and constituent data elements for nationwide,
interoperable health information exchange

Another important driver of this growth was China’s accession in 2017 to the ICH15. This membership is
prompting the convergence of China’s clinical standards with global norms, paving the way for multi-national
pharma companies to conduct multi-regional trials inside and outside China. This will shorten time-to-market
for new drugs, and lower the market entry hurdle for MNCs. Lastly, Chinese pharma companies are today
much more focused on drug quality after a series of government-led efforts to improve clinical data
integrity issues and implement good clinical practices (GCPs).
All of this means more business for CROs that can deliver an international GCP experience, global perspectives,
and local access. After 30 years of development and consolidation in the global CRO industry, the top 10
players now represent 40 percent-to-50 percent of the market. In China, however, the clinical CRO space is still
fragmented. The top 5 players have only a 31 percent market share, making the sector ripe for consolidation.
Among the CRO companies that have received investments from GS Growth is ClinChoice Inc. (previously
known as Fountain Medical Development). Founded in 2007, ClinChoice is the No. 2 domestic clinical
stage CRO platform in China by revenue, providing clinical trial services to MNCs and local pharma clients.
It has about 1,800 employees across eight countries, covering all lines of work, from clinical operations, to
biostatistics, regulatory affairs, and pharmacovigilance. ClinChoice has completed over 770 clinical studies
through collaboration with 250-plus pharma clients and 300-plus clinical institutions and hospitals.
4.5 Bridging the therapeutic gap between developed and emerging markets
Substantial gaps still exist between the west and east across key aspects of healthcare. These include the
number of medicines available, therapeutic efficacy, and treatment quality. One reason is lower spending
on healthcare by some of the governments in the region. For example, China’s healthcare spending is about
6 percent of GDP, compared to nearly 10 percent for the European Union and almost 18 percent for the
US (Exhibit 17).
15
International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use

Exhibit 17
China runs behind in the healthcare space compared to the US and Europe; innovative
companies are contributing to bridging this gap
Total nominal healthcare expenditure, 2000 –2018, Healthcare expenditure as share of GDP,
USD Trillion 2000–2018, Percent of GDP
CAGR,
1997-20181
3.5 6 18
16
3.0
14
2.5
12
2.0 10
1.5 5 8
6
1.0 16
4
0.5
2
0 0
2000 2005 2010 2015 2020 2000 2005 2010 2015 2020
1. US and EU expenditure number is from latest 2017 World Bank data
1. US World
Source: andBank;
EU WHO;
expenditure
China Statisticalnumber isCDC
Yearbooks; US from latest 2017 World Bank data
Source: World Bank; WHO; China Statistical Yearbooks; US CDC
In addition, China has almost 25 percent fewer physicians per capita than the US, and almost 80 percent
fewer nurses per capita, even as it has about 60 percent more hospital beds per capita.
The gaps in availability of medicines and treatments in China have been driven by a systematic lag in
therapeutic launches. On average, healthcare brands are typically launched in China more than 4 years
after their launch in the US.
Gaps exist across several therapeutic areas. One example is diabetes, where Chinese per capita spending
was about $80 in 2019, a fraction of the $900 spent in the US. A major gap also exists in space for medical
procedures. For instance, in 2019, only 0.1 percent of Chinese people over 50 had hip or knee surgery,
compared to 0.7 percent and 1.1 percent respectively, in the US.
A number of innovative companies have launched in China to bridge these gaps and improve healthcare
offerings for millions of patients. GS Growth has led many of these investments.
Gan & Lee Pharmaceutical is an example. China has more than a quarter of world’s diabetes patients, with
116 million cases, and a prevalence rate of over 10 percent of the population. Patients are expected to
continue growing to reach 140 million in 2030 and close to 150 million in 2045. More than half of these
cases remain undiagnosed, and until recent years, many patients still relied on an older generation
of treatments. In 1998, Gan & Lee developed Gansulin, China’s first recombinant human insulin, an
important breakthrough. It was also the first to develop a third-generation insulin product for China.
Third-generation products improve upon previous drugs, and are expected to replace second-generation
products, and meet the unmet medical needs of diabetics in China. The market size of diabetes drugs in
China exceeded $3 billion in 2019.

Another area in which GS Growth has invested is cardiovascular disease, cause of nearly 18 million deaths
each year, and the number one cause of death globally. Aortic stenosis is a type of cardiovascular disease
affecting around 2 percent of people over 65 and 4 percent of people over 85 in the western world, and
with an estimated 1.5 million patients in China. While the US and Europe have migrated towards minimally
invasive TAVR procedures (transcatheter aortic valve replacement) to treat the disease, Chinese patients
still had to undergo open heart surgery until recent years. GS Growth has invested in Venus Medtech, the
leading structured heart-focused medical device player in China with a first-to-market TAVR product
launched in 2017.

final thoughts
While our individual investment perspectives will continue to evolve across
each of our sectors the macro-trends and core themes provide a foundation
for our thinking. Growth equity investors will do well to acknowledge
the drivers that allow hyper-growth companies to meet latent consumer
demands, overtake or challenge incumbents, and protect or improve the
efficiency of business ecosystems. As leaders in the growth equity market,
we are extremely encouraged by the investment opportunities that exist
today and into the future. We look forward to regularly updating the
industry on our thinking.

sources
Introduction to Goldman Sachs Growth Enabling digital transformations of financial
institutions and insurance companies
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Dealroom
Bank of America
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China Ministry of Commerce, “China E-commerce
Banking and Securities Market, Worldwide, 2018-2024,
Report 2019”
2Q20 Update,” August 2020, https://www.gartner.com/en/
eMarketer, “China Ecommerce 2020,” June 2020 newsroom/press-releases/2020-08-12-gartner-forecasts-
worldwide-banking-and-securities-it
Forrester Analytics
IHS McKinsey Finalta Insights
McKinsey, China digital consumer trends 2019, McKinsey Global Banking Pools
September 2019 McKinsey Panorama Fintech
Moody’s Analytics Oracle, https://www.oracle.com/a/ocom/docs/industries/
financial-services/evolve-business-model-modern-core-
Periscope by McKinsey, “Retail reimagined: The new
platform-wp.pdf
era for customer experience,” August 2020
Pew Research, Millennials overtake Baby Boomers as
America’s largest generation
Preqin Ltd Embedding of financial services within software and
marketplace solutions
Strategy Analytics, Global Smartphone User Penetration
Forecast by 88 countries: 2007–2025 American Express Company, 2019 Investor Day
Department of Commerce McKinsey, “Competing in a world of sectors without
borders,” July 2017
US census
McKinsey Global Banking Pools
McKinsey, “Insurance beyond digital: The rise of
ecosystems and platforms,” January 2018
Continued digitization of financial products and
McKinsey Payments Map
asset classes
McKinsey Proprietary Tools (Finalta Small Business
Better.com
Data, GCI, GFIC, 2017)
Ellie Mae September 2020 Originations Insight Report
Shopify Q2 2020 Press Release
McKinsey, “Competing on customer experience in
US mortgage,” December 2019
McKinsey, Global Private Markets Review 2020
The evolution of fintech in Asia
McKinsey, 2018 Retail Banking Customer Experience
Survey McKinsey Global Insurance Pools
Mortgage Bankers Association McKinsey Global Payments Map
New York Times, “Is an Algorithm Less Racist Than a McKinsey, Global Payments Report, 2020
Loan Officer?” September 18, 2020 TechCrunch, Jack Ma’s fintech giant tops 1.3 billion
Preqin Ltd. users globally, July 14th, 2020
Rocket Companies S-1 Tencent, Q2 2020 results
World Bank
World Federation of Exchanges

Moving the enterprise to the cloud Protecting the enterprise from evolving cyber threats
Gartner, “Forecast: Public Cloud Services, Worldwide, Hiscox Cyber Readiness Report 2020
2018-2024, 2Q20 Update,” July 2020; Statista IBM, Cost of a data breach report, 2020
Gartner, “Market Share: Enterprise Public Cloud IDC Security Spending Guide (2019 and 2020)
Services, Worldwide, 2019,” July 2020; Statista
Mordor Intelligence
IDC
IDC Worldwide ICT Spending Guide, IDC Worldwide
Public Cloud Services Spending Guide, 2018–23
McKinsey proprietary CIO survey Reallocation of leisure time
McKinsey, “Securing software as a service,” Analysys Mason
September 2019 ITU (International Telecommunication Union), 2019
McKinsey, “The next software disruption: How vendors National Bureau of Statistics of China, 2018 National
must adapt to a new era,” June 2020 Time Use Survey, aged 15+
Netscout / IEE Cloud Computing Survey 2018 NewZoo Global Games Market Report 2020
OECD/Eurostat, Harmonized Time Use Survey 2014/15,
ages 15-64
Re-imagining enterprise applications Peloton, Shareholder Letter, Q4 2020, September 2020
CIO.com, COVID-19 accelerates enterprise use of Qianfan analysis
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Forrester natives: the new normal, May 2020
Gartner, Forecast Analysis: Robotic Process Automation, Strategy Analytics
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09-21-gartner-says-worldwide-robotic-process-automation-
software-revenue-to-reach-nearly-2-billion-in-2021
Gartner: Magic Quadrant for Enterprise Low-Code
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McKinsey Global Institute, “A future that works: Facebook Second Quarter 2020
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January 2017
Omnicore Digital Marketing Agency
US Bureau of Labor Statistics
SullyGnome
The digitization of the enterprise

The rise of mission-driven brands and sustainable
eMarketer, Global Ecommerce, 2019 business models
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September 2019 collaboration with Nielsen Q2 2017; McKinsey
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eMarketer, Global Ecommerce 2020, May 2020
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McKinsey, COVID-19 China Consumer Pulse Survey,
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McKinsey, Global COVID-19 consumer survey, 6/8/2020,
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CB Insights
China MOFCOM, “China E-commerce Report 2019”
Utilizing data to improve efficiency and quality of care
Crunchbase
Growing contractual outsourcing
eMarketer, Global Ecommerce 2019; Global
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Ecommerce 2020
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Organization Demand Will Resume in 2H20, September
McKinsey, China Digital Consumer Trends 2019, 8, 2020
September 2019
Frost & Sullivan, published on HKExnews
McKinsey, Startup funding in Logistics, May 2020 https://www1.hkexnews.hk/listedco/listconews/
sehk/2020/0728/2020072800013.pdf
McKinsey, “The endgame for postal networks:
How to win in the age of e-commerce,” May 2019 Industry Standard Research (ISR)
Overview of the healthcare space Bridging the therapeutic gap between developed and
emerging markets
McKinsey, COVID-19 Consumer Survey, 4/13/2020–
4/27/2020 CDE
McKinsey, COVID-19 Consumer Survey, May 20, 2020 China Statistical Yearbooks
McKinsey, COVID-19 US Consumer Pulse Survey, EvaluatePharma

8/19–8/23/2020 GBI
McKinsey, Telehealth: A quarter-trillion-dollar International Diabetes Foundation
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Millennium Research Group
Stackline as of 8/22/2020
Novo Nordisk, Investor Presentation Q4 2019
OECD
Sina Med
Accelerating the consumerization of healthcare, and
the shift to value-based care Statista
KFF “Transcatheter Treatment of Aortic Stenosis and
Regurgitation,” July 6, 2020
McKinsey, Consumer Health Insights Survey 2018
Transmedia
National Health Interview Survey
US CDC
US CDC
WHO
US Census Insurance Survey, September of each year
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World Bank diseases/#tab=tab_1
World Bank

This material is provided for educational purposes only and should not be construed as investment advice or an offer or
solicitation to buy or sell securities.
This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political
conditions and should not be construed as research or investment advice. This material has been prepared by Goldman Sachs
Growth team and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared
in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to
a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those
of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors
are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and
Goldman Sachs has no obligation to provide any updates or changes.
Company names and logos, excluding those of Goldman Sachs and any of its affiliates, are trademarks™ or registered® trademarks
of their respective holders. Use by Goldman Sachs does not imply or suggest a sponsorship, endorsement or affiliation.
For each sector / theme presented in these materials, the Goldman Sachs Growth team has included a description of each of its
current portfolio companies that is representative of the particular theme presented.
© 2021 Goldman Sachs

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What sectors are highlighted as areas of opportunity?

What sectors are highlighted as areas of opportunity?

Goldman Sachs

Fintech 6 Enterprise technology 15 Consumer 26

Healthcare 34 Final thoughts 45 Sources 46

4.0 Overview of the healthcare space

Goldman Sachs Growth 2

Goldman Sachs Growth 3

VC and growth equity funding, US and global, 2012–2019, USD Billion

Global Growth ~18%

100 Global Venture ~13%

Source: Preqin Ltd.

Goldman Sachs Growth 4

US population by generational cohort1, Million

Source: PEW Research Center; US Census

Goldman Sachs Growth 5

Goldman Sachs Growth 6

1.1 Continued digitization of financial products and asset classes

Goldman Sachs Growth 7

Consumer SME and commercial Capital markets

• Mortgages and HELOCs • SME lending • OTC derivatives

• Home purchase assistance • Commercial insurance • Alternative assets and fund

• Alternative assets (PE and hedge

• Under-served populations (students,

Goldman Sachs Growth 8

1.2 Enabling digital transformations of financial institutions and insurance companies

Goldman Sachs Growth 9

Goldman Sachs Growth 10

1.3 Embedding of financial services within software and marketplace solutions

Goldman Sachs Growth 11

100 Cheque -5%

Credit transfer – ACH 15%

Goldman Sachs Growth 12

Goldman Sachs Growth 13

Lastly, we see substantial medium-term opportunities in wealth management technologies in Asia.

Goldman Sachs Growth 14

2.1 Moving the enterprise to the cloud

Goldman Sachs Growth 16

2015 2016 2017 2018 2019 2020E 2021E 2022E

Source: Gartner, August 2020

Source: Gartner, August 2020

Goldman Sachs Growth 17

2.2 Re-imagining enterprise applications

Goldman Sachs Growth 18

Goldman Sachs Growth 19

2.3 The digitization of the enterprise

Goldman Sachs Growth 20

Goldman Sachs Growth 21

Goldman Sachs Growth 22

On marketing and customer relationship management, we believe a new generation of membership

2.4 Protecting the enterprise from evolving cyber threats

Goldman Sachs Growth 23

Public 1.1 Notification Lost business cost

Source: IBM, Cost of a data breach report, 2020

Source: IBM, Cost of a data breach report, 2020

⁸ European Union General Data Protection Regulation

Goldman Sachs Growth 24