cb insights | unicorn trends webinar - · pdf file01.02.2017 · #cbi_unicorns...

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UNICORN TRENDS The data behind the world’s most valuable private companies

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#CBI_Unicorns

William Altman

@AltmanW

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ABOUT THE PRESENTER

Tech Industry Analyst, CB Insights

Focuses on cybersecurity and $1B+ companies; additional topics include marketing tech, travel tech, edtech, and macro venture capital trends

Published research and data analysis has been featured in The New York Times, CNN, Financial Times, and The Wall Street Journal, among other major media outlets

Previously worked as an Associate in the Wamda Research Lab in Amman, Jordan and Beirut, Lebanon

Graduate of Denison University 12’ (B.S.), and MIIS 14’ (M.A.)

#CBI_Unicorns

Stewart Butterfield

CEO, Slack Technologies


“Yes, it’s arbitrary because it’s a big round number. It does make a difference psychologically. One billion is better than $800 million because it’s the psychological threshold for potential customers, employees, and the press.”

UNICORNS: PRIVATE COMPANIES WORTH $1B+

Source: Fortune

http://fortune.com/2015/01/22/the-age-of-unicorns/

#CBI_Unicorns

9

19

24

27

39

The current global unicorn club

Most active investors

Stalking the smart money

Historical unicorn trends

Unicorn trends to watch


TABLE OF CONTENTS

#CBI_Unicorns

The current global unicorn clubMARKET MAP, GEOGRAPHY, VALUATIONS, FUNDING, MOST ACTIVE VCs


#CBI_Unicorns

13 MOST POPULATED

MARKET SEGMENTS

Largest share of unicorns

(18%) are in E-commerce/ Marketplace.

Followed by Internet Software & Services

(14%), and Fintech (12%)


GLOBAL UNICORN CLUB: 185 PRIVATE COMPANIES VALUED

AT $1B+ MARKET MAP as of 2/1/2017

#CBI_Unicorns

24 COUNTRIES WITH 1+

UNICORN COMPANY

The United States is

home to over half (52%) of the unicorn club

23% of the world’s unicorns are based in

China

Followed by: India, the UK, Germany, and South Korea, respectively

No other country has 3+

unicorns


GLOBAL UNICORN CLUB: PRIVATE COMPANIES VALUED AT

$1B+ GEOGRAPHIC MAP as of 2/1/2017

#CBI_Unicorns

11 US STATES WITH 1+

UNICORN COMPANY

After California and New

York, Massachusetts, Illinois, and Utah rank fourth, and Florida comes

in fifth.

The top five most well-funded are: Uber ($12.5B), Airbnb ($3.9B), Infor

($2.6B), Snap ($2.6B), and Palantir ($1.9B). Infor is the only unicorn out of the

top 5 based outside California; it is located in New York.


THE UNITED STATES OF UNICORNS: PRIVATE COMPANIES

VALUED AT $1B+ as of 2/1/2017

#CBI_Unicorns

SOME COMPANIES

REACH $1B+ FAST

Magic Leap and Snap:

< 2 years

Stripe and Airbnb: > 3 years

SpaceX and Tanium: > 6 years

DocuSign and Intarcia:

> 9 years


TIME TO UNICORN VALUATIONSelect US unicorns, first equity financing to $1B+ valuation

#CBI_Unicorns

LOTS OF $1B+

COMPANIES EMERGING IN RECENT YEARS

Largest share (15%) of

the current club achieved $1B+ valuation in Q3’15

3 unicorns added in Q1’17: Zhihu, Zoom

Communications, and URWork


THE INCREASINGLY CROWDED UNICORN CLUB: PRIVATE

COMPANIES VALUED AT $1B+ as of 2/1/2017

#CBI_Unicorns

Collectively valued at

$663 BILLIONwith combined total funding of

$126 BILLION


#CBI_Unicorns

8% OF UNICORNS HAVE

51% OF THE VALUE

Top 15 unicorns:

(decacorns worth $10B+) are worth more than the next 170 combined

Top 5 unicorns account

for 30% of the value


THE POWER-LAW OF UNICORN VALUATIONS ($M) as of 2/1/2017

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Top 15 unicorns: $338B, 51% of collective value

Next 170 unicorns: $325B, 49% of collective value

#CBI_Unicorns

6% OF UNICORNS HAVE

37% OF THE FUNDING

Top 11 unicorns:

(all with $2B+ in funding) account for nearly 1/3 of unicorn funding

Top 5 most well-funded

account for 25% of the funding


THE POWER-LAW OF UNICORN FUNDING ($M) as of 2/1/2017

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Top 11 unicorns: $47B, 37% of combined funding

Next 170 unicorns: $72B, 49% of collective funding

#CBI_Unicorns

UBER ON TOP

No unicorns outside the

United States and China in the top five most highly-valued

Last two years have not

seen a top five most highly-valued unicorn

3/5 emerged in 2011


TOP 5 MOST HIGHLY-VALUED UNICORN COMPANIES as of 2/1/2017

•Select Investors: Lowercase Capital, Benchmark Capital, Google VenturesUber (USA)

$68B – 8/23/2013

•Select Investors: Digital Sky Technologies, QiMing Venture Partners, Qualcomm Ventures

Xiaomi (China)

$46B – 12/21/2011

•Select Investors: Matrix Partners, Tiger Global Management, Softbank Corp.Didi Chuxing (China)

$33.8B -- 12/31/2014

•Select Investors: Morningside Group, GGV Capital, Banyan CapitalAirbnb (USA)

$30B – 7/26/2011

•Select Investors: RRE Ventures, Founders Fund, In-Q-TelPalantir Technologies (USA)

$20B – 5/5/2011

#CBI_Unicorns

UBER ON TOP AGAIN

Uber, Didi, Airbnb, and

Xiaomi among the most highly valued and most well-funded unicorns


MOST WELL-FUNDED PRIVATE COMPANIES VALUED AT $1B+ as of 2/1/2017

Rank Company DisclosedFunding

Valuation Select Investors

1 Uber $12.5B $68B Lowercase Capital, Benchmark Capital, Google Ventures

2 Didi Chuxing $8.6B $33.8B Matrix Partners, Tiger Global Mgmt., Softbank Corp.

3 Airbnb $3.9B $30B Morningside Group, GGV Capital, Banyan Capital

4 China Internet Plus

$3.3B $18B Broadline Capital, UBS

5 Flipkart $3.2B $16B Accel Partners, Digital Sky Technologies, Iconiq Capital

6 Global Switch $2.9B $6B Essence Financial, Ping An Insurance

7 Infor $2.63B $10B Blackstone Group, Koch Industries

8 Snap $2.61 $18B capitalG, Benchmark Capital, Lightspeed Venture Partners

9 Xiaomi $2.4B $46B Digital Sky Technologies, QiMing Venture Partners, Qualcomm

10 Ele.me $2.3B $4.5B Sequoia Capital China, GSR Ventures, Horizons Ventures

#CBI_Unicorns

2,800 investors with a stake in the unicorn club


#CBI_Unicorns

VENTURE CAPITALISTS

ARE MOST ACTIVE

40% of unicorn investors

are VCs

Followed by: corporations and their venture capital arms

(16%), angel investors (8%), and asset/ investment managers

(6%)

No other group accounts for more than 5%


SHARE OF INVESTOR TYPES WITH STAKE IN THE GLOBAL

UNICORN CLUB as of 2/1/2017

#CBI_Unicorns

DIVERSITY OF

INVESTOR TYPES

SV Angel, Sequoia

Capital, and Tiger Global tie for 1st

Fidelity, DST Global, and A16Z tie for 4th

Wellington and KPCB tie

for 7th

Airbnb is the only unicorn in all top 8 unicorn hunters’ portfolios


UNICORN HUNTERS: INVESTORS RANKED BY # OF

PORTFOLIO COMPANIES IN THE GLOBAL UNICORN CLUBas of 2/1/2017

#CBI_Unicorns

SV ANGEL ON TOP

Over half of SV Angel’s

unicorns were backed at an early stage

Nearly half of Sequoia Capital’s unicorns

backed at an early stage


EFFICIENCY OF TOP INVESTORS IN THE GLOBAL UNICORN CLUBas of 2/1/2017

Rank Investor # of unicorns in portfolio

Early-stage unicorn deals

1 SV Angel 23 16

2 Sequoia Capital 22 10

3 Tiger Global Management 22 2

4 Fidelity Investments 20 0

5 DST Global 20 0

6 Andreessen Horowitz 20 7

7 Wellington Management 19 1

8 Kleiner Perkins Caufield Byers 19 4

9 Goldman Sachs 19 1

10 Tencent Holdings 17 2

#CBI_Unicorns

SV ANGEL ON TOP

WITH 16 EARLY-STAGE DEALS

Sequoia Capital in 2nd

A16z, Khosla Ventures,

and YC tie for 3rd

Accel Partners and Benchmark tie for 6th

General Catalyst, First Round Capital, and

Qiming tie for 8th


UNICORN HUNTERS: INVESTORS RANKED BY # OF EARLY-

STAGE DEALS (SEED/SERIES A) IN THE GLOBAL UNICORN CLUBas of 2/1/2017

#CBI_Unicorns

STALKING THE SMART MONEY MOST ACTIVE INVESTORS & CO-INVESTMENTS


#CBI_Unicorns

SEQUOIA CAPITAL ON

TOP

Sequoia and a16z are the

only smart money VCs with 20+ unicorns

Of it’s unicorns, Sequoia has participated in

follow-on rounds to Stripe the most

A16Z has the most cybersecurity unicorns

including: Okta, Illumio, Tanium, and Lookout


MOST ACTIVE SMART MONEY INVESTORS IN THE GLOBAL UNICORN CLUB

as of 2/1/2017

Rank Investor Select Investments

1 Sequoia Capital Carbon3D, Zoom, Snap, Stripe

2 Andreessen Horowitz (a16z) Magic Leap, Pinterest, Illumio, Tanium

3 Kleiner Perkins Caufield & Byers Gusto, Instacart, Uber, Spotify

4 Accel Partners DJI, Illumio, Qualtrics, Funding Circle

5 New Enterprise Associates Uptake, Snap, Houzz, Mulesoft

5 Founders Fund Oscar, Compass, Domo, Wish

7 Khosla Ventures Instacart, Stripe, Okta, Lookout

8 General Catalyst Partners Datto, Oscar, Illumio, Gusto

9 Benchmark Capital Snap, WeWork, Nextdoor, Domo

9 Greylock Partners Airbnb, Lookout, Domo, Docker

10 Index Ventures Adyen, TransferWise, BlaBlaCar, FarFetch

#CBI_Unicorns

THE TOP 3 MOST

ACTIVE SMART MONEY INVESTORS (2012 -2016)

All three firms have

backed: Instacart, Airbnb, and Jawbone

www.cbinsights.com 27For our full list of 24 smart money investors, please see this post.

2012 – 2016

https://www.cbinsights.com/blog/supply-chain-logistics-startup-smart-money-vc-funding/

#CBI_Unicorns

Rank

Investor Select Investments

1 Fidelity Investments Airbnb, Snap, Uber, SpaceX

2 Wellington Management Airbnb, Uber, SoFi, Magic Leap

3 Goldman Sachs Oscar, Compass, Uber, Xiaomi

4 Tiger Global Management GrabTaxi, Hike, Souq.com, Avant

5 T. Rowe Price Magic Leap, Snap, OfferUp, WeWork

6 Baillie Gifford & Co. Auto1 Group, Souq.com, Flatiron Health, Funding Circle

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Historical trendsHow do unicorns fare in the private markets over time?


#CBI_Unicorns

FUNDING ACTIVITY

PEAKED IN 2015

9 unicorns obtained

$1B+ rounds in 2015: Didi Chuxing, Uber, and SpaceX, among others

7 unicorns obtained

$1B+ rounds in 2016: Didi Chuxing, Uber, and Snap, among others


ANNUAL UNICORN FINANCING HISTORY2012 – 2016

$8,851 $3,933 $19,714 $38,115 $33,874

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Disclosed Funding ($M)

#CBI_Unicorns

Q3’15 MOST $/DEALS

$1B deals in Q3’15:

- Didi Chuxing ($2B Series F)

- Uber ($1B Series F)

- SoFi ($1B Series E)

6 unicorns funded in

2017: Zoom, Zhihu, URWork, Insidesales.com,

Homelink, and Funding Circle

*This analysis excludes Uptake Technologies’ $40M Series C round (2/1/2017)


QUARTERLY UNICORN FINANCING HISTORY2012 – 2017 YTD (1/30/2017)

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#CBI_Unicorns

UPTAKE FASTEST TO

$1B+

Magic Leap, only other

startup to reach $1B+ in under one year

All 11 of the fastest unicorns achieved $1B+

in under two years


FASTEST $1B+ VALUATION FINANCINGS FOR US VC BACKED COMPANIES 2009 – 2017 YTD (2/1/2017)

714

640

626

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508

463

372

258

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Apttus

Oscar

Snap

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Pluralsight

Square

JetSmarter

Jet.com

Zoox

Magic Leap

Uptake

Days From First Equity Financing To Billion Dollar Valuation Financing

#CBI_Unicorns

CROSSOVER PARTICIPATIONFUNDING ACTIVITY, ACTIVE CROSSOVERS


#CBI_Unicorns

2015 PEAK ACTIVITY

Q3’15 saw $1B deals with

crossover participation to: Didi Chuxing, Uber, and SoFi

2017 has seen two

unicorn financings with crossover participation:

- URWork: $58M Series B

- Funding Circle: $100M Series F


CROSSOVER PARTICIPATION QUARTERLY UNICORN FINANCING HISTORY Q1’12 – 2017 QTD (2/1/2017)

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#CBI_Unicorns

FIDELITY ON TOP

Fidelity, participated in

$1B+ funding rounds to unicorns: Airbnb, Snap, Uber, and SpaceX

Wellington, participated in

$1B+ funding rounds to unicorns: Airbnb, Uber, and SoFi

Goldman Sachs,

participated in $1B+ funding rounds to unicorns: Uber and

Xiaomi


MOST ACTIVE CROSSOVER INVESTORS IN UNICORNS2012 – 2017 YTD (2/1/2017)


1Fidelity Investments Airbnb, Snap, Uber, SpaceX

2Wellington Management Airbnb, Uber, SoFi, Magic Leap

3Goldman Sachs Oscar, Compass, Uber, Xiaomi

4Tiger Global Management GrabTaxi, Hike, Souq.com, Avant

5T. Rowe Price Magic Leap, Snap, OfferUp, WeWork

6Baillie Gifford & Co. Auto1 Group, Souq.com, Flatiron Health, Funding Circle

#CBI_Unicorns

CORPORATE PARTICIPATIONINVESTMENTS, ACTIVE CORPORATES


#CBI_Unicorns

Q3’15 MOST ACTIVE

Q3’15 saw corporates

participate in $1B+ funding rounds to: Didi Chuxing, Uber, SoFi

2017 has seen 5 rounds

with corporate participation: Zoom ($100M Series D), Zhihu

($100M Series D), Homelink ($375M Other), URWork ($58M Series B),

Insidesales.com ($50M Series F)


CORPORATE PARTICIPATION QUARTERLY UNICORN FINANCING HISTORY Q1’12 – 2017 QTD (2/1/2017)

$8

1

$2

14

$4

75

$3

00

$2

05

$4

05

$1

,07

8

$3

14

$2

,98

1

$2

,32

8

$2

,62

1

$3

,21

8

$4

,58

4

$4

,89

3

$1

0,8

94

$3

,54

6

$5

,31

0

$5

,07

2

$4

,85

6

$5

,29

6

$6

83

13 3 2 3 3

5

3

12

7

11

13

15

22

28

17

22

15 1614

5

2012 2013 2014 2015 2016 2017


#CBI_Unicorns

CHINESE CORPS ON TOP

Tencent’s largest unicorn

rounds include: Didi Chuxing, Homelink, STX Entertainment

Alibaba’s largest unicorn

rounds include: Didi Chuxing, Ele.me, Magic Leap


MOST ACTIVE CORPORATE INVESTORS IN UNICORNS2012 – 2017 YTD (2/1/2017)


1Tencent Holdings iCarbonX, Huochebang, Didi Chuxing, STX Entertainment

2Alibaba Group Didi Chuxing, Magic Leap, One97 Communications, Lyft

3Google Ventures (GV) Carbon3D, Oscar, Flatiron Health, Gusto

4capitalG Snap, Ten-X, Stripe, Thumbtack

5Salesforce Ventures Gusto, Anaplan, Domo, Apttus

6Comcast Ventures Instacart, Houzz, Vox Media, DocuSign

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CISCO SYSTEMS MOST

ACTIVE

Cisco Systems, acquired

two unicorns since 2016: AppDynamics and Jasper Technologies

Simplivity’s last private

market valuation before the acquisition was $1.1B, HP acquired the company

for $650M in a down exit


SELECT CORPORATE ACQUISITIONS OF UNICORNS 2016 – 2017 YTD (2/1/2017)

* AppDynamics deal is not finalized

#CBI_Unicorns

2X LAST PRIVATE

MARKET VALUATION

Last raise was $158M

Series F, valued at $1.88B

97% increase from 2016 valuation

10 years from $12M to exiting for $3.7B


APPDYNAMICS VALUATION HISTORY ($M)Q2’08 – 2017 YTD (1/24/2017)

*AppDynamics deal is not finalized

$12 $42 $180

$550

$1,118

$1,878

$3,700

Q2'08 2009 2010 2011 2012 2013 2014 2015 2016 2017

Q2'08

APPDYNAMICS VALUATION HISTORY$Ms, Q2'08 - 2017 YTD (1/24/2017)

97%

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EXIT TRENDS M&A & IPOs, TOP EXITS


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31 IPOS & 24 M&AS

SINCE 2012

2016 most active despite

low number of IPOs

United States and China have the most exited unicorns

Top 3 IPOs: Alibaba

Group (2014), Facebook (2012), JD.com (2014)


ANNUAL UNICORN M&A/ IPO ACTIVITY2012 – 2017 YTD (2/1/2017)

1 4 4 13 233

13 7

5

2012 2013 2014 2015 2016 2017 YTD(1/27/2017M&A IPO

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M&A ACTIVITY RISING

63% of M&As since 2013,

occurred since 2016

Top 3 M&As: WhatsApp (2014), Stemcentrx (2016), Uber China (2016)

2017: Simplivity (acq. by

HP), AppDynamics (acq. by Cisco)


UNICORN M&A TIMELINE2013 – 2017 YTD (2/1/2017)

#CBI_Unicorns

SNAP INC. FILED FOR

IPO THAT COULD VALUE THE COMPANY NORTH OF $22B

Snap last valued at $18B

in private markets, just behind: Uber, Airbnb, Palantir, above WeWork

Snap’s IPO could be the

first in 2017, and would be the first since Meitu went public in December

2016, at a valuation of $4.9B


VALUATION HISTORY OF THE TOP 5 US UNICORNSQ3’13 – 2016 *Snap’s valuation is the mid-range estimate for its reported early 2017 IPO

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SNAP’S PRICE/USER

MULTIPLE IS 100X

Although investors may

be betting on future Pinterest growth, it still means that Snap is

cheaper on this basis than Pinterest

That would also make Snap roughly twice as

valuable as Twitter

Facebook dominates


SOCIAL MEDIA GIANT’S PRICE/USER MULTIPLE*Snap’s valuation is the mid-range estimate for its reported early 2017 IPO

185x 110x 100x 47x 41x 39x 20x 14x 9x

Facebook Pinterest Snap Whatsapp Twitter Line Instagram Hike Viber

Price/Users

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ALIBABA BIGGEST EXIT

The last two years has

not seen a top six VC-backed unicorn exit

3 of the top 6 exited with IPO in 2014

1 acquisition in the top 6:

WhatsApp, acq. by Facebook


TOP VC-BACKED UNICORN EXITS BY VALUATIONas of 2017 YTD (2/1/2017)

Rank Company Date Of Exit Valuation At Exit

1Alibaba Group (IPO) 9/19/2014 $167B

2Facebook (IPO) 5/18/2012 $104B

3JD.com (IPO) 5/22/2014 $28B

4WhatsApp (Acq.) 2/19/2014 $22B

5Twitter (IPO) 11/7/2013 $14B

6Groupon (IPO) 11/4/2011 $12B

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JD.COM ON TOP

7 of the 10 companies are

US based, and 3 are Chinese companies: JD.com, Dianping, Ucar

Group


MOST WELL-FUNDED VC BACKED UNICORNS BEFORE EXIT as of 2017 YTD (2/1/2017)

Rank Company Total Disclosed Funding Date Of Exit

1 JD.com $2.8B (IPO) 5/22/2014

2 Facebook $2.5B (IPO) 5/18/2012

3 Rocket Internet $1.5B (IPO) 10/2/2014

4 Legendary Entertainment $1.5B (Acq.) 1/12/2016

5 Dianping $1.4B (Mrg.) 10/8/2015

6 Fisker Automotive $1.3B (Acq.) 2/24/2014

7 Ucar Group $1.3B (IPO) 7/22/2016

8 Groupon $1.1B (IPO) 11/4/2011

9 Sunrun $986M (IPO) 8/5/2015

10 LivingSocial $919M (Acq.) 10/26/2016

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UNICORN TRENDS TO WATCH


#CBI_Unicorns

THREE NEW UNICORNS

IN 2017 YTD (1/31/2017)

Zhihu is a Q&A website,

and URWork offers co-working spaces, both are based in China

Zoom offers a cloud-

based enterprise video conferencing platform


NEWEST MEMBERS OF THE GLOBAL UNICORN CLUB

(Zhihu)

as of 2017 YTD (2/1/2017)

#CBI_Unicorns

NOT ALL UNICORNS

WILL THRIVE

GFG down $2.3B

Jawbone down $2B

Lianjia down $500M


WOUNDED UNICORNS: SELECT $1B+ COMPANIES’ DOWNROUNDS

$3.4B $1.1B

$3.2B $1.7B $1.2B

$6.2B $5.7B

(Homelink)

as of 2017 YTD (2/1/2017)

#CBI_Unicorns

SOME UNICORNS

WON’T SURVIVE

Mode Media shut down

without new investors or an acquirer

Fisker Automotive acquired in a bankruptcy

auction

Powa Technologies’ filed for bankruptcy and had its assets sold off


DEAD UNICORNS: PAST $1B+ COMPANIES OUT OF BUSINESS

#CBI_Unicorns

$1B+ ROUNDS ARE

SHOWING UP MORE OFTEN

Late-stage private

companies that are among the most valuable in the world are staying

private longer

These companies are also raising $1B+ rounds of funding from large

institutional investors


SELECT $1B+ ROUNDS FOR LATE STAGE UNICORNSas of 2017 YTD (2/1/2017)

#CBI_Unicorns

INVESTORS HOPE SNAPCHAT WILL UNLOCK IPO MARKET FOR TECH UNICORNS

11/16/2016

IPO CHATTER IS UP: SNAP COULD LEAD THE WAY


#CBI_Unicorns

Thank you, any questions?


#CBI_Unicorns

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