Fiscalnote Holdings, Inc. · OTC:NOTE
Fiscalnote — Duddell Street Acquisition — SPAC Merger (January 2022)
52 slides from Fiscalnote's SPAC merger presentation, Jan 10, 2022
Slide 1: Management Presentation December 2021
Management Presentation DECEMBER 2021 | STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Disclaimer
2 Disclaimer This presentation contains proprietary and confidential information of FiscalNote Holdings, Inc (“FiscalNote”) and Duddell Street Acquisition Corp. (NASDAQ: DSAC, “Duddell Street”), and the entire content should be considered “Confidential Information.” Neither Duddell Street, FiscalNot
Slide 3: Disclaimer (Cont'd)
3 Disclaimer (Cont’d) Financial Information, Non-GAAP Measures The financial information and data contained in this presentation is unaudited and does not conform to Regulation S-X promulgated under the Act. Accordingly, such information and data may not be included in, may be adjusted in or may be
Slide 4: Today's Speakers
4 Today’s Speakers Tim Hwang CEO & Co-Founder Jon Slabaugh Chief Financial Officer & SVP of Corporate Development Reed Fawell Chief Revenue Officer & Senior VP Manoj Jain Chairman, CEO & Co-Chief Investment Officer Co-Founder & Co-Chief Investment Officer Director Nominee1 Note: (1) Contingent on CF
Slide 5: Transaction Overview
5 Transaction Overview AI/ML and data-driven enterprise SaaS company that delivers global legal, regulatory, and policy insights and analytics FiscalNote and DSAC Are Merging To Create A Leading Legal and Regulatory SaaS Platform Good opportunity to unlock potential and maximize value Led by talente
Slide 6: Sponsor Overview
6 • Hong Kong based multi-strategy investment firm since 2012 • 60+ years of combined investment, sourcing and advisory experience of management team across major geographies • Deployed over $20 billion of transaction capital since inception • Capital markets expertise in pricing IPOs, secondary blo
Slide 7: Executive Summary
Executive Summary Fiscal\ ote Fiscal
Slide 8: Technology Delivering Critical Legal Data and Insights in an Uncertain World
8 8 Technology Delivering Critical Legal Data and Insights in an Uncertain World
Slide 9: Boards and CEOs Face Increasing Global Regulations
9 Note: (1) Former Chairman and CEO; (2) PwC Global CEO Survey (https://www.pwc.com/gx/en/ceo-survey/2020/reports/pwc-23rd-global-ceo-survey.pdf). Boards and CEOs Face Increasing Global Regulations “…I don’t know if this is the end-all but clearly regulation relief would…help to grow private investm
Slide 10: The FiscalNote Solution: Embedded Workflows to Manage Regulatory Risk
10 The FiscalNote Solution Embedded Workflows to Manage Regulatory Risk Workflow Unrivaled Information & Global Need-to-Know Policies Data AI-Powered Actionable Intelligence Analytics Secure Government Funding Minimize Costs Mitigate Reputational Risk Generate Incremental Revenue $6.4TN US Federal G
Slide 11: Category Creator in Legal and Policy
11 Category Creator Legal and Policy Crucial technology and embedded workflows on the desks of the world’s decision makers HR Sales Finance
Slide 12: Scale Player with Global Footprint
12 3,000+ Subscription customers3 8 Years in operation5 ~650 Personnel globally6 $173MM 2022PF revenue4 with strong subscription business 101% NRR7 for subscription products in Q2’218 4.2x LTV/ CAC9 for subscription products In 2020 91% 1H2021 revenue from subscription Scale Player with Global Footp
Slide 13: Clear Value Proposition
13 Note: (1) Senate Appropriations Committee press release; (2) House Committee on Appropriations press release; (3) Office of the Director of National Intelligence press release; (4) Nestle 2020 Annual Report; (5) FedEx 2020 Annual Report; (6) Microsoft 2020 Annual Report; (7) National Education As
Slide 14: Idea to Market Leader
14 Idea to Market Leader Idea (2013-2017) $400MM+3 (2025PF) 80%+ Revenue CAGR $173MM2 (2022PF) Scale (2017-Present) Market Leader (Future) $8MM1 30%+ Potential Revenue CAGR Growth Capital Motel 6 in Silicon Valley to Washington, DC Multiple Acquisitions Seed & Early Investors Mark Cuban Jerry Yang E
Slide 15: Investment Highlights
Investment Highlights Fiscal\ ote Fiscal
Slide 16: Large and Expanding Market Opportunity
16 16 Large and Expanding Market Opportunity 1 Clear Market Tailwinds Democratization of analytical capabilities in law Need for aggregation and standardization Demand for workflow efficiency and automation Lack of systems to track, assess and report Proliferation of regulatory complexity Legal & Re
Slide 17: Better Experience with More Usage
17 Better Experience with More Usage Policy Monitoring Automated Reporting Individualized Alerting Event Predictions Activity-Driven Recommendations Stakeholder Management & Collaboration Revenue & Funding Generation Research & Analytics Streamlined Compliance Process Standardize Corporate Filings P
Slide 18: Proprietary Technology Stack
18 Building blocks for FiscalNote’s vision to become a next generation data company leveraging AI to rapidly deliver new datasets and enhance workflow tools Proprietary Technology Stack 2 FiscalNote’s Proprietary Technology… …Leading to Superior Outcomes for Customers Connect Data Cross the silos be
Slide 19: Sifting Through the Chaos
19 These tools are essential so we have our finger on the global pulse of public policy activities. People were blown away by how quickly I learned about the bill and how fast I was able to act. Without FiscalNote’s advocacy tools, we would not have been able to get our message out. Our members and
Slide 20: Blue Chip Diverse Client Base
20 Healthcare (~14%) Consumer & Retail (~2%) Energy (~3%) Finance (~5%) TMT (~5%) Education (~5%) Transport (~2%) Business Services (~5%) Government (~24%) Blue Chip Diverse Client Base 3 Relied upon and recognized across major public and private sector customers Note: Figures and logos exclude prod
Slide 21: Land and Expand Strategy Fueled by Cross and Upsell
21 Private Sector Staying Longer - Multi-Year Contracts % of ARR3 74 35 16 8 78 38 17 8 78 39 17 10 Public Sector Enterprise Mid-Market SMB Q2 '19 Q2 '20 Q2 '21 +2.7% +5.8% +4.5% CAGR4 46% 59% 65% 52% 67% 69% 37% 58% 59% Q2 '19 Q2 '20 Q2 '21 Enterprise Mid-market SMB Increasing Customer Spending - A
Slide 22: Customer Growth Stories
22 Multinational Biotech and Pharmaceutical Company One of the largest US Trade Associations Digital Publishing Company Global Law Firm Global Team Collaboration Global Legislation Coverage Advocacy Data Management Policy Tracking Customer Growth Stories 4 Key Product 36x 2x 22x 138x Key Product Key
Slide 23: Leveraging Core Technology for Organic Product Growth
23 Leveraging Core Technology for Organic Product Growth 4 New Adjacent Market Opportunities Geopolitical Risk Research Central Bank Policy Monitoring Issues Management ESG FDA Approval Tracking Advocacy Government Affairs Autonomous Driving Gig Economy US-China Relations Human Intelligence ML / AI
Slide 24: ESG is Just the Tip of the Iceberg
24 AI-enabled transcription around government, finance & alternative data Geopolitical analysis & advisory powered by a worldwide network of experts Al-driven, real-time ESG & Carbon Management SaaS platform ESG is Just the Tip of the Iceberg 4 Replicable strategies to leverage diverse customer base
Slide 25: Prolific and Disciplined M&A Machine
25 • Geographic expansion + broadening of global information set • ~14% CAGR in ARR since acquisition Selected M&A Integrations • Broadened critical capacity in advocacy technology • ~23% CAGR in ARR since acquisition • Reduced cost + incremental capability • Millions of dollars of future outsourced
Slide 26: Strong Pipeline of Imminent Targets
26 Acquired (~$35.4MM) + Potential (~$1.5MM) PF Revenue: ~$37MM1 2021 Closed Transactions + Signed LOI Potential PF Revenue: ~$135MM1 Note: (1) Based on management estimates, preliminary due diligence and subject to change; potential PF revenue of sample discussions represents all discussion stage t
Slide 27: Proven Corporate Strategy of Buy, Build, and Grow
27 No. of Deals YEARS SINCE FOUNDING MARKET CAP ($BN ) 30 20 40 50 60 10 10 20 LEGACY 30 100 13 160+ 240+ 160+ 250+ Cloud based AI/ML driven Modern core technology Rich data & content Founder led DISRUPTOR 50+ Note: Capital IQ, Factset. Market data as of 20 Aug 2021. Number of deals includes acquisi
Slide 28: Visionary, Founder-led Team with Strong Track Record
28 Operating Businesses at Scale Public Company Experience Executing M&A Deals Silicon Valley Experience Inside DC Experience Reed Fawell SVP Chief Revenue Officer Paul Donnell Chief Accounting Officer Dr. Vlad Eidelman Chief Scientist Head of AI Research Josh Resnik General Counsel, SVP Chief Conte
Slide 29: Diverse Background and In-depth Expertise
29 Diverse Background & In-depth Expertise Adrian Fenty Special Advisor at Andreesen Horowitz; Former Mayor of Washington, D.C. Tom Monahan Former CEO of CEB Kevin Rudd Former Prime Minister of Australia Ron Gula Founder and former CEO of Tenable Daniel Nadler Founder and CEO of Kensho (acquired by
Slide 30: Backed by Influential List of Equity Investors and Funds
30 >$255MM2 Total funding raised Jerry Yang Mark Cuban Steve Case Note: (1) Visionnaire Ventures is the joint fund between Temasek Holding and Taizo Son; (2) Includes equity, convertible instruments and debt; (3) as of January 2021. 1 Backed by Influential List of Equity Investors and Funds 6 $1.0BN
Slide 31: Financial Snapshot
Financial Snapshot Fiscal\ ote Fiscal
Slide 32: Rapid, Sustainable Growth
32 $65 $108 $173 $41 $1 $20 $45 2020A revenue Revenue growth (Organic + Acquired) M&A targets under LOI 2021PF revenue Organic revenue growth Incremental revenue from M&A pipeline 2022PF revenue ~2025PF revenue target Self-reinforcing combination of organic initiatives and M&A fueling durable and vi
Slide 33: Revenue Build: Organic, Run-rate and Acquired
33 $65 $71 $128 $206 $309 $37 $45 $50 $55 $108 $173 $256 $365 2020A 2021PF 2022PF 2023PF 2024PF Organic Revenue Run-rate Revenue Acquired (Current Year) 92% Recurring revenue +63% 2021-24 CAGR 2 +50% Note: (1) 9 completed acquisitions in 2021 + 1 M&A under LOI; (2) Includes ~$35.4MM of run-rate reve
Slide 34: A Highly Efficient Business Model at Scale
34 A Highly Efficient Business Model at Scale Gross Margin1 Sales & Marketing Research & Development Editorial General & Administrative EBITDA Margin 82% 31% 25% 20% 27% (21%) ~88% ~20% ~13% ~12% ~12% ~30% High incremental margins Seller productivity; using automation for sales operations and CRM Un
Slide 35: Thank You
Thank You FiscalNote
Slide 36: Appendix
Appendix Fiscal\ ote Fiscal
Slide 37: Valuation Overview
Valuation Overview Fiscal\ ote Fiscal
Slide 38: Sources & Uses and Transaction Summary
38 Sources & Uses Transaction Summary Illustrative Pro Forma Capital Structure Illustrative Pro Forma Valuation Illustrative Pro Forma Ownership at Close3 Sources $MM Cash in Trust1 175 Private Placement (PIPE) 100 SPAC Sponsor 44 Existing Shareholder Rollover 1,000 Total Sources 1,318 Uses $MM Exis
Slide 39: Attractive DeSPAC Valuation Relative to Peers
39 Attractive DeSPAC Valuation Relative to Peers Note: FactSet. Market data as of November 3, 2021. (1) FiscalNote multiple calculated off 2022PF EV / Sales. Median: 19.0x Mean: 18.0x 2022E EV / Sales Vertical Software Info Services Core Comps 1 EV ($BN) 1.2 1.8 3.2 5.3 48.9 46.7 15.3 11.6 9.6 7.0 3
Slide 40: Attractive DeSPAC Valuation Relative to Peers (Cont'd)
40 Attractive DeSPAC Valuation Relative to Peers (Cont’d) Note: FactSet. Market data as of November 3, 2021. (1) FiscalNote multiple calculated off 2023PF EV / Sales. 2023E EV / Sales Median: 15.3x Mean: 14.7x Vertical Software Info Services Core Comps EV ($BN) 1.2 1.8 3.2 5.3 48.9 46.7 15.3 11.6 9.
Slide 41: Operational Benchmarking
41 Operational Benchmarking Note: FactSet. Market data as of November 3, 2021. (1) Calculated as 2022E EV/Sales divided by 21-23E revenue CAGR, divided by 100; (2) FiscalNote multiple calculated off 2022PF EV / Sales. Growth Adjusted 2022E EV / Sales1 2021-23E Revenue CAGR Median: 22% Mean: 21% Medi
Slide 42: Operational Benchmarking (Cont'd)
42 Operational Benchmarking (Cont’d) Note: FactSet. Capital IQ, Market data as of November 3, 2021. (1) FiscalNote margin refers to 2022PF gross margin, which reflects revenue less cost of revenue divided by revenue expressed as a percentage for the period indicated. 2022E Gross Margin Median: 70% M
Slide 43: Operational Benchmarking (Cont'd)
43 Operational Benchmarking (Cont’d) Note: FactSet. Capital IQ, Market data as of November 3, 2021. (1) FiscalNote margin refers to 2023PF gross margin, which reflects revenue less cost of revenue divided by revenue expressed as a percentage for the period indicated. 2023E Gross Margin Median: 71% M
Slide 44: Attractive Entry Multiple Provides Margin of Safety
44 IPO Date IPO Mkt. Cap ($MM) IPO Size1 ($MM) Cornerstone2 ($MM) Investor2 Jun 30, 2021 1,569 314 60 Jun 30, 2021 5,507 616 240 Jul 21, 2021 1,820 240 50 LegalTech - Existing Institutional Buy-side and Sell-side Following Attractive Entry Multiple Provides Margin of Safety and Re-rating Potential L
Slide 45: Definitions
45 • AAV: Average Account Value is the total ARR at a point in time divided by the number of active accounts • ACV: Annual Contract Value on any single account. Some large accounts have multiple contracts within that account, therefore the ACV is the annualized sum of those contracts • AI: Artificia
Slide 46: Non-GAAP Reconciliations
46 Non-GAAP Reconciliations Note: Figures in $MM. Numbers depicted do not include revenue/income from M&A targets under LOI or in the pipeline, they only include run-rate figures for acquisitions completed by Nov 30, 2021. Actual Forecast Forecast Forecast Forecast 2020 2021 2022 2023 2024 Revenue $
Slide 47: Financial Model Summary
47 Financial Model Summary Note: Totals may not add up due to rounding. (1) Includes one target under LOI; (2) 30% probability weighting applied to pipeline acquisitions; （3） Denotes run-rate revenue which includes revenue acquired during the year of acquisition. (4) Inclusive of completed acquisiti
Slide 48: Risks Related to FiscalNote's Business
48 Risks Related to FiscalNote’s Business • FiscalNote has recently experienced rapid growth that may not be indicative of future growth, which makes it difficult to forecast its revenue and evaluate its business and prospects. • If FiscalNote fails to manage its growth effectively, its business, fi
Slide 49: Risks Related to FiscalNote's Business (Cont'd)
49 • If FiscalNote fails to maintain and improve its methods and technologies, or anticipate new methods or technologies, for data collection, organization, and analysis, competing products and services could surpass those of FiscalNote in depth, breadth, or accuracy of its data or in other respects
Slide 50: Risks Related to FiscalNote's Business (Cont'd)
50 • FiscalNote’s projections and key performance metrics are subject to significant risks, assumptions, estimates and uncertainties. As a result, FiscalNote’s financial and operating results may differ materially from its expectations. • FiscalNote’s use of any “open source” software under restrict
Slide 51: Information Technology and Data Risks
51 Information Technology and Data Risks • Cyber-attacks, security, privacy, or data breaches or other security incidents that affect FiscalNote’s networks or systems, or those of its service providers, involving sensitive, personal, classified or confidential information of FiscalNote or its custom
Slide 52: Risks Related to Ownership of New FiscalNote's Class A Common Stock
52 Risks Related to the Ownership of New FiscalNote’s Class A Common Stock • Following the consummation of the Business Combination, only its Co-Founders will be entitled to hold shares of New FiscalNote Class B common stock, which shares will have 10 votes per share. This will limit or preclude oth
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