Page 15 of 22 – SEC Filing
Exhibit B
February 6, 2017
Connecture, Inc.
18500 W. Corporate Drive, Suite 250
Brookfield, WI 53045, USA
Attn: Jeffery Surges, President & CEO
cc: Board of Directors
Dear Jeffery,
Great Point Partners I, LP, together with
its affiliates (“GPP”), has an ownership interest of approximately 18.5% of the outstanding shares of common stock
of Connecture, Inc. (“Connecture” or the “Company”), making us one of the Company’s largest shareholders.
Based on our analysis of the Company’s public information and our knowledge of the markets which it serves, we believe both
that Connecture is deeply undervalued and that multiple avenues exist for the management team and Board of Directors to create
value for all shareholders. Furthermore, it is self-evident that changes need to be made and actions taken to reverse the trajectory
of poor operating and financial performance. It is our view that such actions are necessary to either reposition Connecture for
future success or position the Company for an outright sale to one of the many potential strategic acquirers that operate either
in, or adjacent to, the Company’s product and service offerings and end markets. Many of those acquirers have been active
consolidators throughout their history.
We are sharing our thoughts with you and
simultaneously with the Board, in writing, because you have repeatedly rebuffed our prior efforts to highlight to you, first, what
we believe have been poor management decisions and woeful execution, both of which resulted in the destruction of enormous equity
value, and second, opportunities we see for improvement in these areas. The views and analyses contained in this letter were arrived
at based solely on publicly available information. We are not in possession of any material non-public information and under no
circumstances do we wish to receive any material non-public information from you, the Company or the Board of Directors.
In December of 2014, Connecture completed
an initial public offering (“IPO”) designed to enable it to execute on its advertised strategic plan and achieve the
tactical goals of: (a) building a robust private exchange software platform, (b) making strategic acquisitions, and (c) funding
continued organic growth in core markets like commercial insurance carriers and public exchanges. At the time of the IPO, management
and the Board publicly communicated certain expectations of revenue growth, expanding profitability and operational targets that
were used to support a valuation of the Company at a level that created ample investor demand.
Since the time of Connecture’s IPO
at a price of $8.00 per share, however, the Company has traded down to $1.80,8 representing a loss of 78% of the IPO
per share value, making Connecture the third worst performing IPO of the 14 December 2014 IPOs. Furthermore, of over 260 IPOs
in calendar year 20149, Connecture’s performance since going public is in the bottom 12th percentile
of those public offerings.
8 As of 01/31/17.
9 Excludes microcap IPOs and performance of companies that were subsequently acquired.
