Marketwise, Inc. · NASDAQ:MKTW
Marketwise — Ascendant Digital Acquisition — SPAC Merger (June 2021)
46 slides from Marketwise's SPAC merger presentation, Jun 2, 2021
Slide 1: ACND + MarketWise Management Presentation
ACND + MarketWis MANAGEMENT PRESENTATION
Slide 2: Important Information
IMPORTANT INFORMATION About this Presentation This investor presentation (this “Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to a proposed business combination (the “Business Combination”) between Ascendant Digital Acquisi
Slide 3: Important Information
IMPORTANT INFORMATION This Presentation also includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, Adjusted CFFO, Adjusted CFFO Conversion, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Margin and
Slide 4: Presenters & Management
PRESENTERS & MANAGEMENT MarketWise MARK DALE MARCO ARNOLD LYNCH GALSIM CEO CFO CIO Ascendant MARK DAVID RIAAN GERHARD GOMBERG HODGSON CEO President COO 4
Slide 5: Ascendant Team's Experience and Capital Will Benefit MarketWise
ASCENDANT TEAM’S EXPERIENCE AND CAPITAL WILL BENEFIT MARKETWISE Achievements Running Jagex1 Benefits to MarketWise Carefully curated and managed IP to create $1 billion+ revenue long term Leverage a team of data scientists and AI specialists in addition to user franchise acquisition, monetization, c
Slide 6: Ascendant Was Looking for a Great Acquisition in the Attention Economy
ASCENDANT WAS LOOKING FOR A GREAT ACQUISITION, IN THE ATTENTION ECONOMY Significant and growing “attention 1 $191B TAM with significant tailwinds, ripe for disruption economy” TAM Market leading tech platform with scalable, high value 2 Scalable, digitally delivered IP content, data & analytics 11M+
Slide 7: Introducing MarketWise
INTRODUCING MARKETWISE
Slide 8: Founded with a mission to level the playing field for self-directed investors
Founded with a mission to level the playing field for self directed investors Today we are a Leading Subscription Services Platform serving millions of self directed investors A diverse portfolio of operating brands serving as a trusted source for financial research, education and actionable ideas 8
Slide 9: MarketWise at a Glance
MARKETWISE AT A GLANCE A market leader in delivering high value and actionable 11M+ 1M+ $825 financial research, easy to Digital Paid Digital Industry Leading use technology, as well as Platform Subscribers at ARPU as of Q1 ‘212 financial education and a Members1 at 3/31/21 3/31/21 social connection
Slide 10: Key Drivers of Our Success
KEY DRIVERS OF OUR SUCCESS POWERFUL CONTENT CUSTOMER FOCUS SCALABLE MODEL DATA / TECHNOLOGY PLATFORM Compelling content fosters Customer centricity through Industry leading ROI on new Real time campaign relationships between readers every stage of a subscriber’s customer acquisition feedback, AI and
Slide 11: Financial Wellness Solutions Have a Huge TAM
FINANCIAL WELLNESS SOLUTIONS HAVE A HUGE TAM $191B Global Total Addressable Market 63M 2020 US Self directed Investors4 Financial Information1, $64B 19% Asset Managers3, 2017 2019 CAGR for Online Revenue $111B from Global Self directed Investors5 Investment Research2, $16B 1. As per BMO research rep
Slide 12: Personal Investing Is Changing in Favor of MarketWise
PERSONAL INVESTING IS CHANGING IN “…the markets are no longer FAVOR OF MARKETWISE reserved for institutional investors or HNWI. The goal of AGING POPULATION GROWING THE PIE democratizing the financial 17% of U.S. population is 65+1 72% of millennials identify as self directed investors3 ( $22T of 10
Slide 13: MarketWise Provides Diverse, Actionable & Affordable Content
MARKETWISE PROVIDES DIVERSE, ACTIONABLE & AFFORDABLE CONTENT SPECIALTY GENERAL SOCIAL INSTITUTIONAL INSTITUTIONAL ONLINE FINANCIAL ONLINE BROKERS FINANCIAL ONLINE TOOLS MEDIA INFO SERVICES RESEARCH NEWSLETTERS RESEARCH PUBLICATIONS COMMUNITIES ACTIONABLE CONTENT DATA & INFO DIVERSIFIED PRODUCT OFFER
Slide 14: Premium Subscription Content, Software and Tools
PREMIUM SUBSCRIPTION CONTENT, SOFTWARE AND TOOLS ACTIONABLE IDEAS SOFTWARE & TOOLS ‘IM’hi’ SPAC Investor TRADESMITHr. It’s Time to Buy the World’s Most Shareholder Friendly SPAC . ” ·· \Vlw itc toSPACI,Ipcnsordlipllcr. CRYPTO Ct.. PITAL 0. oflhtrwolnatklsru oi.SPAC.S .Sihi! · Update 20”‘ll:tf’llllll
Slide 15: Building Relationships and Helping Subscribers
BUILDING RELATIONSHIPS AND HELPING SUBSCRIBERS “You guys talk about ‘life changing “…you folks have become my results’… I am actually taking pride teachers and a true resource… in managing our investments. That educating me on how to invest for is a big life change. ” the long term. WHAT A GIFT!” Ni
Slide 16: Proven, Agile Platform for Launching New Products Quickly with Low Risk
PROVEN, AGILE PLATFORM FOR 160+ LAUNCHING NEW PRODUCTS QUICKLY 130+ WITH LOW RISK 90+ DETECT Detect new demand and investment trends in the financial marketplace through observation, research and analysis 50 ANALYZE Identify a financial expert that has a personal passion for a specific area of growi
Slide 17: Diverse Research Portfolio Across Different Asset Classes
DIVERSE RESEARCH PORTFOLIO ACROSS DIFFERENT ASSET CLASSES DIVERSE RESEARCH PRODUCTS # OF CUMULATIVE SELECTED (% OF BILLINGS 2018 2020) SUBSCRIBERS1 LIFETIME SPEND1 EXAMPLES Other 5% Free Newswire Commodities 3% General market commentary, current 10.9M Investor Hour Bundle 19% The Weekly Pulse Value
Slide 18: External Marketing – Customer Acquisition
EXTERNAL MARKETING – CUSTOMER ACQUISITION MULTI CHANNEL MARKETING APPROACH MARKETING CHANNEL MIX (2020) 2020 EXTERNAL ORDERS GENERATED 58% 42% Other 5.2% vs. External Lists 3.3% Free to Paid Direct to Paid SELECT DIRECT TO PAID DISPLAY CHANNELS Email 22.0% Display 69.4% CONVERSION STATS (2020) 10.1%
Slide 19: Best in Class Business Model Tailored for High Value Subscribers
BEST IN CLASS BUSINESS MODEL TAILORED FOR HIGH VALUE SUBSCRIBERS CUMULATIVE FREE TO PAID CUMULATIVE HIGH VALUE CUMULATIVE ULTRA CONVERSION RATE CONVERSION RATE CONVERSION RATE 6%2 34%3 32%4 TOTAL HIGH VALUE TOTAL ULTRA HIGH FREE TOTAL PAID SUBSCRIBERS VALUE SUBSCRIBERS SUBSCRIBERS SUBSCRIBERS (Total
Slide 20: Subscriber Demographics
SUBSCRIBER DEMOGRAPHICS PAID SUBSCRIBERS BY GENERATION (AGE 25+)1 PAID SUBSCRIBERS BY NET ASSETS1 Millennials Silent (25 40) Generation 5% $1,000,000 & Older (76+) 16% 23% Generation X $150,000 (41 56) 27% 20% $500,000 $1,000,000 11% Baby Boomers $150,000 $500,000 (57 75) 46% 53% 1.Source: Experian
Slide 21: Vision & Growth Strategy
VISION & GROWTH STRATEGY
Slide 22: Strategic Initiatives Are Driving and Accelerating Growth
STRATEGIC INITIATIVES ARE DRIVING AND ACCELERATING GROWTH DRAMATIC SCALING OF ENTERPRISE Strategic acquisitions (6 operating subsidiaries) 11.9 10.4 $255 Broadened product offerings, including adding 27+ 8.9 editors & 110+ publications and built or acquired software and tools to complement premium c
Slide 23: Our Vision to Become the De Facto Financial Wellness Solutions Platform
OUR VISION TO BECOME THE DE FACTO FINANCIAL WELLNESS SOLUTIONS PLATFORM FOR SELF DIRECTED INVESTORS Grow / Optimize Build/Buy Invest in & Deepen Invest in Establish Invest in Brand Expand Marketing & Addt’l Content, Community Technology, Data Partnerships Marketing Internationally Customer Acquisiti
Slide 24: Track Record of Efficient and Highly Accretive Capital Allocation
WE HAVE A TRACK RECORD OF EFFICIENT AND HIGHLY ACCRETIVE CAPITAL ALLOCATION ORIGINAL BILLINGS 2020 BILLINGS YEAR FOCUS AREA BUILD OR BUY ($ MILLIONS) ($ MILLIONS) 2010 Macro Build $120 2013 Risk Allocation Buy $1 $30 2014 Macro Buy $5 $110 2015 Commodities Buy $12 $25 O m n ia R e s e a r c h 2016 T
Slide 25: Business Development Case Study
BUSINESS DEVELOPMENT CASE STUDY Formed new brand in early 2019 with well known investor as a partner (no upfront capital) First paid publication launched in April 2019 Launch generated $11M in Net Revenue with approximately 3,000 paid subscribers Lower priced product launched in Dec 2019 paving the
Slide 26: Financial Overview
FINANCIAL; OVERVIEW
Slide 27: Financial Highlights
FINANCIAL HIGHLIGHTS $687M 83% $825 5x TTM Q1 ‘21 Billings TTM Q1 ‘21 Billings ARPU as of Q1 ‘211 LTV/CAC Ratio2 growth TRACK RECORD OF INDUSTRY LEADING UNIT SCALE ECONOMICS GROWTH 97% 30% 99.9% Q1 2019 Q1 2021 TTM Q1 ‘21 Adjusted Free TTM Q1 ‘21 Adjusted CFFO Subscription Billings Cash Flow Margin3
Slide 28: Superior Unit Economics – 2020
SUPERIOR UNIT ECONOMICS – 2020… “….with an LTV/CAC ratio of 3 or higher, investing an incremental Avg. Customer Lifetime Billings $2,700 dollar in acquiring new customers has High Variable Margin LTV/CAC1 Ratio 5x a greater expected return than retaining that dollar as profit…” 90 Days 7 9 Months CP
Slide 29: Subscribers Spending More Initially and Increasing That Spend Over Time
SUBSCRIBERS SPENDING MORE INITIALLY AND INCREASING THAT SPEND OVER TIME 2020 Cohort 2019 Cohort 2018 Cohort 2017 Cohort 2016 Cohort 2015 Cohort Year 1 Year 2 Year 3 Year 4 Year 5 CUMULATIVE SPEND BY COHORT OVER TIME 29
Slide 30: Forecasted Key Performance Indicators
ARPU decline due to FORECASTED KEY PERFORMANCE INDICATORS significant subscriber growth; future purchases will drive PAID SUBSCRIBERS (IN THOUSANDS) ARPU1 accretion New Estimate 1,310 $825 Prior Estimate $792 Historical $759 1,084 1,001 $717 $710 857 $599 553 567 526 $478 2018 2019 2020 2021P 2022P
Slide 31: Highly Attractive Long-Term Growth at Scale
HIGHLY ATTRACTIVE LONG TERM GROWTH AT SCALE REVENUE ($ IN MILLIONS) BILLINGS ($ IN MILLIONS)1 New Estimate $729.0 New Estimate $980.5 Prior Estimate Prior Estimate $561.4 $751.2 $548.8 $364.2 $272.2 $238.4 $280.5 $310.1 $255.3 $119.7 $76.4 $117.5 2018 2019 2020 2021P 2022P 1Q ‘20 1Q ‘21 2018 2019 20
Slide 32: Key Forecast Assumptions
KEY FORECAST ASSUMPTIONS Subscribers Margins Continued strong new free and paid subscriber growth Stable gross margins in 86% to 87% range Trend like conversion rate inputs Customer acquisition cost (CAC) returns to and exceeds Revenue retention rate of 95%+ each year pre COVID levels Trend like sub
Slide 33: Long Term Financial Objectives
LONG TERM FINANCIAL OBJECTIVES KEY GROWTH DRIVERS KEY PROFITABILITY DRIVERS Paid marketing spend Paid marketing spend New products/markets Conversion/upsells M&A ROIs SUSTAINED TARGET “ADJUSTED RULE OF 50”1 FINANCIAL PROFILE 1.Adjusted Rule of 50 equals annual GAAP Revenue Growth Rate plus Adjusted
Slide 34: Transaction Overview
TRANSACTION OVERVIEW
Slide 35: Transaction Summary and Illustrative Sources & Uses
TRANSACTION ILLUSTRATIVE SOURCES & USES ($M) SUMMARY SOURCES USES ACND Cash Held in Trust $414 Cash to Balance Sheet $150 PIPE Raise Proceeds 150 Transaction Fees & Expenses 40 Sellers’ Equity Rollover 2,537 Cash to Sellers1 374 ACND has agreed to combine with MarketWise in a transaction with an Sel
Slide 36: MarketWise vs. Comps: Best in Class with Significant Upside Potential
MARKETWISE VS. COMPS: BEST IN CLASS WITH SIGNIFICANT UPSIDE POTENTIAL 2020 2022P GAAP REVENUE CAGR (%) 2021P ADJ. FREE CASH FLOW MARGIN (%) 2020 2022P ADJ. FREE CASH FLOW CAGR (%) 41.5% 31.3% 51.3% 28.2% 19.1% 14.9% 18.5% 11.1% 12.3% MarketWise Consumer / SMB Tech Digital Subscription MarketWise1 Co
Slide 37: Public Comparables Rationale
PUBLIC COMPARABLES RATIONALE Consumer / SMB Tech Subscription MarketWise is a direct to consumer, tech enabled, subscription based business whose success is driven by its ability to directly connect with retail investors, get them interested enough to click through and to subscribe and whose value i
Slide 38: Industry Leading Comps: Consumer / SMB Tech Subscription
INDUSTRY LEADING COMPS CONSUMER / SMB TECH SUBSCRIPTION ($ in millions, except per share data) Financial Metrics Operational Metrics (LTM) Revenue YoY Growth Rev CAGR Gross Margin Annual Monthly LTV / Company ‘20 ‘21 ‘21 ‘22 ‘20 ‘22 2020 2021E ARPU Churn CAC Netflix, Inc. 18.9% 15.1% 17.0% 38.9% 41.
Slide 39: Industry Leading Comps: Digital Subscription and Info Services
INDUSTRY LEADING COMPS DIGITAL SUBSCRIPTION AND INFO SERVICES ($ in millions, except per share data) Financial Metrics Operational Metrics (LTM) Revenue YoY Growth Rev CAGR Gross Margin Annual Monthly LTV / Company ‘20 ‘21 ‘21 ‘22 ‘20 ‘22 2020 2021E ARPU Churn CAC MSCI Inc. 16.5% 10.2% 13.3% 82.8% 8
Slide 40: Investment Highlights
INVESTMENT HIGHLIGHTS $191B TAM with significant tailwinds, ripe for disruption Market leading tech platform with scalable high value and proprietary content, data & analytics 11M+ self directed investors, growing at a 77% CAGR from Q1 2019 to Q1 2021 12 primary customer facing brands offering 160+
Slide 41: Appendix
APPENDIX ha
Slide 42: Historical Key Performance Indicators
HISTORICAL KEY PERFORMANCE INDICATORS FREE SUBSCRIBERS PAID SUBSCRIBERS 1 ARPU (IN THOUSANDS) (IN THOUSANDS) 10,870 1,001 $825 $759 9,530 857 $710 $599 567 $478 5,900 553 526 5,027 2,741 2018 2019 2020 Q1 ‘20 Q1 ‘21 2018 2019 2020 Q1 ‘20 Q1 ‘21 2018 2019 2020 Q1 ‘20 Q1 ‘21 1.Based on trailing four q
Slide 43: Non-GAAP Reconciliations
NON GAAP RECONCILIATIONS ($ in 000’s) 2018 2019 2020 Q1 2020 Q1 2021 Net Cash Provided by Operating Activities 76,493 54,201 55,875 (6,384) 92,305 Plus: Profits distributions to Class B unitholders included in stock based compensation expense 17,135 14,831 78,398 32,313 5,651 Adj. CFFO (Adjusted Cas
Slide 44: GAAP Income Statements
GAAP INCOME STATEMENTS % Variance ($ in 000’s) 2018 2019 2020 ‘18 v ‘19 ‘19 v ‘20 2018 2019 2020 Total Revenue 238,449 272,223 364,179 14% 34% Total Revenue 100% 100% 100% Operating Expenses Operating Expenses Cost of Revenue 57,643 42,553 154,605 26% 263% Cost of Revenue 24% 16% 42% Sales and Marke
Slide 45: GAAP Income Statements
GAAP INCOME STATEMENTS ($ in 000’s) Q1 2020 Q1 2021 % Variance Q1 2020 Q1 2021 Total Revenue 76,382 119,714 57% Total Revenue 100% 100% Operating Expenses Operating Expenses Cost of Revenue 14,681 132,812 805% Cost of Revenue 19% 111% Sales and Marketing 40,332 91,785 128% Sales and Marketing 53% 77
Slide 46: Quarterly Metrics
QUARTERLY METRICS 2019 2020 2021 ($ in 000’s) Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 GAAP Revenue $61,449 $67,814 $72,292 $70,668 $272,223 $76,382 $82,795 $98,159 $106,842 $364,179 $119,714 Billings1 51,705 71,054 96,307 90,994 310,060 117,453 123,113 149,907 158,362 548,835 255,303 Cash Flo
Ascendant Digital Acquisition — SPAC Merger (June 2021) on 6ix