Dune Acquisition Corporation Ii · NASDAQ:IPOD
Dune Acquisition Corporation Ii — TradeZero Holding — SPAC Merger (October 2021)
52 slides from Dune Acquisition Corporation Ii's SPAC merger presentation, October 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION October 2021
Slide 2: Disclaimer
DISCLAIMER Important Information This presentation (the "presentation") is being provided on a non-reliance basis for informational purposes only. This presentation has been prepared to assist interested parties in making their own evaluation with respect to a potential business combination between
Slide 3: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) Neither DUNE, nor the Company undertakes to advise or notify any person of any information coming to their attention in relation to the Company or otherwise to correct, update, revise or reissue this presentation, or accepts any duty of care to any person in respect of this prese
Slide 4: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) regulations; and (xi) the possibility that the Company or DUNE may be adversely affected by other economic, business, and/or competitive factors. The foregoing list of factors is not exclusive. Additional information concerning certain of these and other risk factors is contained
Slide 5: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIREC
Slide 6: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) Information and cooperate to resolve any complaint alleging any breach of any such laws in respect of any handling or use of the information by any Recipient. The Company and DUNE own or have rights to various trademarks, service marks and trade names that they use in connection
Slide 7: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) No Offer or Solicitation This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any shares or other securities, business or assets, or to enter into any agreement or arrangement and neither this presentation nor anything containe
Slide 8: I. Introduction
TRADEZERO |. Introduction
Slide 9: Today's Presenters
TODAY’S PRESENTERS Daniel Pipitone Kosta Corriveau Andrew Koslow Carter Glatt Co-Founder & CEO CTO General Counsel CEO & Director 9
Slide 10: Dune Acquisition Corp. Is Led by a Differentiated and Seasoned Management Team
DUNE ACQUISITION CORP. IS LED BY A Dune Board of Directors DIFFERENTIATED AND SEASONED MANAGEMENT TEAM Dune’s management team has the operational expertise to execute throughout the life-cycle of a SPAC transaction Igor Fuks Jeron Smith Carter Glatt – CEO and Director • Previously Head of Corporate
Slide 11: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Significant and Growing Addressable Market Compelling Unit Economics and Financial Opportunity with Powerful Secular Tailwinds Characteristics Self-directed retail traders continue to grow in size and sophistication, Strong 1st year per account revenues relative to customer
Slide 12: TradeZero Is the Ideal Target for Dune Acquisition Corp.
TRADEZERO IS THE IDEAL TARGET FOR DUNE ACQUISITION CORP. Dune Acquisition Criteria Differentiated product offering with the potential for disruption in the Software and Fintech sector Differentiated proprietary technology and intellectual property rights Disciplined organic growth and profitable uni
Slide 13: Transaction Summary
TRANSACTION SUMMARY Pro Forma Ownership Pro Forma Valuation • Implied transaction value of $556M with $716M pro-forma equity value Illustrative Share Price $10.00 6% (x) Pro-Forma Shares Outstanding 71.6 • Transaction represents 14.9x 2022E P/E(3) TradeZero Rollover Shares 24% and 4.9x 2022E revenue
Slide 14: II. TradeZero Overview
TRADEZERO Il. TradeZero Overview
Slide 15: Introduction to TradeZero
INTRODUCTION TO TRADEZERO Building the platform to optimally serve the needs of the global active trader community The TradeZero Advantages PATENT PENDING NEXT-GEN ACTIVE LOCATES SERVICES TRADING PLATFORMS Enable short sales in non- Choice of four front end easy-to-borrow stock platforms Propr
Slide 16: TradeZero at a Glance
TRADEZERO AT A GLANCE Next generation active trader platform featuring engaged users, attractive unit economics, and compelling financial performance Compelling Financial Profile $85M 55% $51M 60% $38M 45% ’21E Revenue ’20A-’21E Revenue ’21E Adj. EBITDA(1) ’21E Adj. EBITDA ’21E Adj. Net Income(1) ’2
Slide 17: Differentiated Across Product, Technology and Support
DIFFERENTIATED ACROSS PRODUCT, TECHNOLOGY AND SUPPORT Active retail traders choose TradeZero for its professional-grade market access, trading tools and customer service Short “Locate” Services Equity & Options Trading Product Multi-Leg Options, Cryptocurrency, Futures, FX (coming) Multi-Platform Ac
Slide 18: TradeZero Is Built for Today's Active Trader
TRADEZERO IS BUILT FOR TODAY’S ACTIVE TRADER A paradigm shift in the evolution of the retail trader has created a sophisticated and significantly underserved class of increasingly sophisticated active traders Today’s active traders face issues at TradeZero’s next generation platform times with tradi
Slide 19: III. Market Opportunity
TRADEZERO Il. Market Opportunity
Slide 20: Large and Growing Total Addressable Market with International Growth Opportunities
LARGE AND WITH CLEAR INTERNATIONAL GROWTH GROWING TOTAL OPPORTUNITIES ADDRESSABLE MARKET NASDQ CMX Nordic Exchange GLOBAL ONLINE TRADING PLATFORM MARKET TMX Group London Stock SIZE(1) Exchange Shanghai Stock Exchange $18.3 SIX Swiss Exchange Korea Exchange NASDAQ-US Billion NYSE Shenzhen Japan Excha
Slide 21: Rise of the Retail Trader Supported by Powerful Trends
RISE OF THE RETAIL TRADER SUPPORTED BY POWERFUL TRENDS RETAIL GENERATING AN INCREASING SHARE OF TRADING VOLUME… …DRIVEN BY BROAD AND PERSISTENT CONSUMER TRENDS U.S. equity volume by market participant Democratization of trading Wider and increasing information and idea equity ownership in US ∆ (bps)
Slide 22: Capturing the Active Retail Trader
CAPTURING THE ACTIVE RETAIL TRADER TradeZero targets a range of active traders at various levels of sophistication Institutional Electronic Mobile Trading App Target Trader Profiles Brokerage Illustrative Casual Trader Illustrative Professional New or Rising Trader Intermediate Trader Advanced Trade
Slide 23: Positioning vs. Competitors
POSITIONING VS. COMPETITORS TradeZero is well positioned in the active trader space, a market segment that traditional brokers have WHY SOPHISTICATED TRADERS historically struggled to successfully enter organically CHOOSE TRADEZERO UNRIVALED ACCESS TO HARD-TO-FIND High SHARES FOR SHORTING VIA TRADEZ
Slide 24: IV. TradeZero's Product & Tech
IV.TradeZero's Product & Tech
Slide 25: Core Product Offerings
CORE PRODUCT OFFERINGS TradeZero offers a range of platforms for users with various needs ZEROMOBILE ZEROFREE ZEROWEB ZEROPRO A state-of-the art A completely free An easy-to-use Provides the speed iOS and Android real-time browser- browser-based and all the features mobile platform based trading pla
Slide 26: Patent Pending Short Locates Service
PATENT PENDING SHORT LOCATES SERVICE TradeZero makes shorting easier and potentially more successful ADVANTAGES WHAT IT IS TradeZero’s newly-launched, patent pending Traders can sell back locates, creating additional Locates service includes unique functionality that revenue opportunities allows use
Slide 27: TradeZero Locate Services: A Typical Transaction
TRADEZERO LOCATE SERVICES: A TYPICAL TRANSACTION Lends Easy to Borrow User decides to short (“ETB”) shares to user TradeZero locates non-ETB shares, shares believing future typically takes seconds (1) value of the shares will fall Locates non-ETB shares User covers short position User accepts the sh
Slide 28: V. Customers & Growth
V. Customers & Growth
Slide 29: TradeZero Is Poised to Continue Building on Its Strong Customer Growth
TRADEZERO IS POISED TO CONTINUE BUILDING ON ITS STRONG CUSTOMER GROWTH 20k $9k TOTAL ACTIVE ACCOUNTS AND AVERAGE EQUITY OVER TIME(1) 18k $8k ~18k Active Accounts Avg. Account Equity of ~$8k 16k $7k 14k $6k 12k Active Accounts Avg. Account Equity $5k 10k $4k 8k $3k 6k $2k 4k 2k $1k 0 $0k Q1 2017 Q2 2
Slide 30: TradeZero Knows Its Customers
TRADEZERO KNOWS ITS CUSTOMERS WHO IS THE TRADEZERO WHAT DO TRADEZERO HOW DO PROSPECTIVE CUSTOMER? CUSTOMERS WANT? CLIENTS FIND TRADEZERO? • Non-professional individuals (1) ACCESS TO HARD-TO-FIND Active Trader investing their own personal capital SHARES FOR SHORTING Education Services • Near ~40% (2
Slide 31: Exceptional Customer Service Drives User Loyalty
EXCEPTIONAL CUSTOMER SERVICE DRIVES USER LOYALTY TradeZero’s live 24 / 7 customer service availability and live-chat approach with real people drives high customer satisfaction Customer Service Ratings (2) < 1.5 min (1) Avg. Wait Time 4.7 3.6 1 Industry leading customer service capabilities 3.3 2 Ex
Slide 32: Proven User Engagement, Retention and Monetization
PROVEN USER ENGAGEMENT, RETENTION AND MONETIZATION TradeZero’s user base is highly sticky with strong engagement and monetization LOYAL AND ENGAGED CUSTOMER BASE… ...with High 1ST YEAR REV/CAC … Quarterly revenue by annual cohort Metrics as of June 2021 100% 12% 13% 90% 23% 80% 48% 32% 50% ~$225 ~17
Slide 33: Three Pillar Expansion Strategy
SOLID CUSTOMER KNOWLEDGE AND EXCEPTIONAL CUSTOMER SERVICE LEADS TO A CLEAR AND DEFINED EXPANSION PLAN TradeZero has established a ‘Three Pillar Expansion Strategy’ to drive growth Knowledge of our customers 1. Geographic 2. Product 3. Platform Build Out Stage 1 (2021-2022) > Cryptocurrency > TradeZe
Slide 34: Roadmap for International Expansion
ROADMAP FOR INTERNATIONAL EXPANSION TradeZero will utilize geographic expansion to acquire a larger user base TZ EUROPE UK Est. Launch Date 2023 Est. Launch Date 2023 Est. Market for 2,400,000+ Est. Market for 700,000+ New Accounts(1) New Accounts(1) TZ CANADA Est. Launch Date 2022 Est. Market for 1
Slide 35: Growing Opportunity for TradeZero
GROWING OPPORTUNITY FOR TRADEZERO TradeZero is well positioned to capitalize on the expanding demands of retail traders TRADEZERO TODAY FUTURE CATEGORY EXPANSION OPPORTUNITES International Equities Commodity Futures FX Complex Options Cryptocurrency Short Locate Service Short Locate Service Basic Eq
Slide 36: New Products and Capabilities
NEW PRODUCTS AND CAPABILITIES TradeZero’s growth is powered by a promising, organic product roadmap Institutional Launch of New Crypto Trading Complex Options Self-clearing Locates Mobile App • Trading of 40+ digital • Platform API for brokers • Stand-alone mobile trading • First iteration launch of
Slide 37: VII. Financial Summary
TRADEZERO VIl.Financial Summary
Slide 38: How We Generate Revenue
HOW WE GENERATE REVENUE SOURCES OF TRADEZERO REVENUE 1H 2021A REVENUE SEGMENTATION • Intraday locates and pre-borrows Fees • Overnight borrow charges • Banking fees 57% Fees • Equity & option commissions and routing fees Commissions • On a per-share basis with a trade minimum Commissions PFOF & Reba
Slide 39: TradeZero Projected Financial Snapshot
TRADEZERO PROJECTED FINANCIAL SNAPSHOT REVENUE ($MM) ADJUSTED EBITDA(1) ($MM) ADJUSTED NET INCOME(1) ($MM) 75% CAGR 91% CAGR 90% CAGR $154 $89 $66 $114 $64 $48 $85 $38 $51 $55 $23 $31 $16 $7 $5 FY19A FY20A FY21E FY22E FY23E FY19A FY20A FY21E FY22E FY23E FY19A FY20A FY21E FY22E FY23E Gross Margin % A
Slide 40: Drivers of Revenue Growth
DRIVERS OF REVENUE GROWTH ACTIVE ACCOUNTS(1) (000s) DARTs(2) (MM) 62% CAGR 94% CAGR 57 40 41 30 28 21 13 16 6 4 FY19A FY20A FY21E FY22E FY23E FY19A FY20A FY21E FY22E FY23E Equity Share DARTs Options DARTs Locate DARTs Y/Y Growth % 121% 120% 64% 46% 32% - 313% 70% 46% 40% (1) Per FINRA definition, “a
Slide 41: Projected Revenue Build
PROJECTED REVENUE BUILD REVENUE ($MM) 75% CAGR $154 $14 $16 $114 $10 $12 $54 $85 $7 $7 $42 $55 $27 $5 $17 $69 $16 $43 $51 $4 $33 $10 FY '19A '20A '21E '22E '23E Revenue / Avg. Active Account $3,634 $5,968 ~$4,400 ~$4,400 ~$4,400 Fees Commissions PFOF & Rebates Others 41
Slide 42: TradeZero Summary Projected P&L
TRADEZERO SUMMARY PROJECTED P&L '19A-23E (2) (2) (2) ($ millions) FY19A FY20A FY21E FY22E FY23E CAGR Revenue $16 $55 $85 $114 $154 75% % growth 234% 55% 35% 35% Clearing and Execution Fees ($4) ($11) ($14) ($20) ($25) 62% % revenue 22% 21% 16% 17% 16% Gross Profit $13 $43 $71 $94 $129 79% % margin 7
Slide 43: VIII. Appendix
TRADEZERO VIII.Appendix
Slide 44: TradeZero's Risk Management
TRADEZERO’S RISK MANAGEMENT Market Risk Management Systems and Processes Limitations on • Single symbol concentration limits Position Openings • Required margin adjustable at account level / symbol level based on volatility and other factors Automated • System will automatically send orders to close
Slide 45: Attractive Entry Multiple vs. Selected Online Brokerage
ATTRACTIVE ENTRY MULTIPLE VS. SELECTED ONLINE BROKERAGE COMPARABLE COMPANIES Online Brokers Crypto Brokers International Brokers (1) 52% ’21 – ’23E NET 31% 23% 14% 14% INCOME CAGR (25%) 35.2x 29.1x 21.8x 23.6x 20.3x ’22E P/E(2) 14.9x ’21E P/E(2) 18.6X 24.3X 22.0X 19.5X 32.3X 35.9X 1.67x 1.52x 1.27x
Slide 46: Attractive Entry Multiple vs. Selected Consumer FinTech
ATTRACTIVE ENTRY MULTIPLE VS. SELECTED CONSUMER FINTECH COMPARABLE COMPANIES Consumer FinTech 57% 47% ’21 – ’23E 35% 31% 26% 22% REVENUE CAGR 16% 0% 15.4x 9.9x 9.7x 10.9x 9.5x ’22E TEV/REV. 7.7x 5.6x 4.9x ’21E TEV/REV 6.6X 12.6X 20.8X 8.8X 11.9X 11.7X 16.4X 6.3X GROWTH ADJ. ‘22E TEV/REV(1) 0.49x 0.3
Slide 47: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION ($ thousands) FY19A FY20A FY21E Reconcilliation to adjusted EBITDA Net Income $1,979 $12,826 $24,985 Provision for income taxes $589 $3,464 $7,035 Non-Controlling interest $0 $0 ($44) Depreciation and Amortization $108 $789 $1,342 EBITDA $2,675 $17,078 $33,317 Stock B
Slide 48: Risk Factors
RISK FACTORS Risks related to TradeZero’s Operations • We have a limited operating history, which makes it difficult to evaluate our business and prospects and increases the risks associated with an investment in our common stock. • We have grown rapidly in recent years and we have limited operating
Slide 49: Risk Factors
RISK FACTORS Risks related to TradeZero’s Industry • We operate in highly competitive markets, and many of our competitors have greater resources than we do and may have products and services that may be more appealing than ours to our current or potential customers. • If we fail to retain existing
Slide 50: Risk Factors
RISK FACTORS Risks related to Our Platform, Technology and IP • Our platform has been, and may in the future be, subject to interruption and instability due to operational and technological failures, whether internal or external. • Our products and internal systems rely on software that is highly te
Slide 51: Risk Factors
RISK FACTORS Risks related to Regulation • As a registered broker-dealer, TradeZero is subject to “best execution” requirements. We could be penalized if we do not comply with these requirements and these requirements could be modified in the future in a way that could harm our business. • Regulator
Slide 52: Risk Factors
RISK FACTORS Risks related to the Business Combination • Our ability to successfully effect the business combination and the combined company’s ability to successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel, whom we expect to stay with the