Slide 1: Nasdaq First North Tallinn IPO Investor Presentation
Nasdaq First North Tallinn IPO Investor Presentation (Oct 2021)
Slide 2: Disclaimer
Disclaimer This investors’ presentation has been prepared in connection with the admission to trading of new shares issued by TextMagic AS (a public limited company registered in Estonia under the registry code 16211377, “TextMagic”, depending on the context TextMagic or TextMagic Group can also ref
Slide 3: Financials & KPIs
Financials & KPIs
Slide 4: Total Revenue
Total Revenue 8M €7.92M €7.77M 6M €5.47M 43.3% 4M €3.83M Last 3 years revenue 2M €2.69M compound annual growth €1.96M rate (CAGR)* 42.8% 44.9% 42.0% 37.5% 2016 2017 2018 2019 2020 2021 (9 months) Total revenue Revenue growth rate * The compound annual growth rate, or CAGR, is the average rate at whi
Slide 5: EBITDA
EBITDA 4M €3.63M 3M €3.25M 51.8% 2M €2.28M Last 3 years EBITDA 92.3% 1M compound annual growth €1.19M rate (CAGR) €0.93M 42.6% 28.2% €0.62M 50.4% 2016 2017 2018 2019 2020 2021 (9 months) EBITDA EBITDA growth rate * The compound annual growth rate, or CAGR, is the average rate at which some value gro
Slide 6: Number of Payments
Number of Payments 166.5K 150K 155.6K 100K 115.9K 50.7% Last 3 years number of payments compound annual 77.6K growth rate (CAGR)** 50K 30.7K 48.7K 59.3% 49.3% 43.6% 24,366 58.4% Users who have auto-recharge enabled 2016 2017 2018 2019 2020 2021 (9 months) Number of payments* Growth percentage * The
Slide 7: New Paid Users
New Paid Users 14.3K 39.2% users 10K 10.6K Last 3 years new paid users users compound annual growth 9.1K rate (CAGR)** users 5K 6.3K COVID-19 boost users 5.3K 56.8% The COVID-19 pandemic users 44.8% increased the number of sign- 3.8K users ups in 2020 due to the urgent 17.4% 40.9% need to send texts
Slide 8: Sent SMS Volumes
Sent SMS Volumes 182.3M 172.2M 48.9% 150M Last 3 years sent SMS 100M 110.4M compound annual growth rate (CAGR)*** 50M 52.2M 79.2M 51.8% 56.0% $72.8B The expected A2P SMS 37.1M market size by 2025 40.6% 39.3% (3.2% CAGR)** 2016 2017 2018 2019 2020 2021 (9 months) Sent SMS* Growth percentage * The tot
Slide 9: Active Users
Active Users 37.5% 30K Last 3 years active users compound annual growth rate (CAGR)** 25.6K 25.6K users users 20K €360 Average revenue per user (ARPU) 17.6K (Last 12 months) users 10K 9.8K 12.6K users 45.5% 1,588 users Users with ARPU over €1,000 39.2% (Last 12 months) 6.9K users 28.1% 43.0% 243 201
Slide 10: Dollar-Based Net Expansion
Dollar-Based Net Expansion 125% 106% SaaS industry median for net dollar retention (NDR)** 100% 103.66% 109.01% 105.36% 102.56% 102.6% Unlike competitors with subscription-based services, our pay-as-you-go pricing system makes it easy for 75% clients to cancel or reduce their spending, explaining ou
Slide 11: Revenue Split by Country
Revenue Split by Country 2.8% 5.4% Other Canada In recent years, the United States has 5.3% Australia become the dominant market. The US and the UK together represent around 88% of the SMS volume. 18.1% The business is easily scalable to take United Kingdom advantage of the size of the market. There
Slide 12: Customer Metrics (Jan - Sep, 2021)
Customer Metrics (Jan - Sep, 2021) Customer lifetime value (LTV)* Average customer order size** Customer acquisition cost (CAC) *** €620 €52.9 €41.8 New trial accounts New paid customers Trial to paid conversion**** 32,503 10,660 32.48% *Lifetime values of all active customers are taken and the aver
Slide 13: Unit Economics of A2P SMS
Unit Economics of A2P SMS 14.1% SMS costs In September 2021 our SMS messaging business profitability measured by contribution margin ratio was 74.0%, while in the USA it was 85.9%. 85.9% Contribution Margin Contribution margin was calculated on the basis of (Only USA) revenue and variable costs. 25.
Slide 14: Key Financial Ratios
Key Financial Ratios 2021* 2020 2019 2018 2017 2016 Total revenue, kEUR 10,356 7,922 5,466 3,828 2,695 1,960 Revenue growth rate, % 30.7% 44.9% 42.8% 42.0% 37.5% - EBITDA, kEUR 4,822 3,253 2,281 1,186 925 615 EBITDA margin, % 46.6% 41.1% 41.7% 31.0% 34.3% 31.4% *2021 year projection is done based on
Slide 15: A2P SMS
A2P SMS Application-to-Person SMS
Slide 16: What is A2P SMS?
What is A2P SMS? SMS SMS is the text messaging service component of most telephone, internet, and mobile device systems. It uses standardized communication protocols that allow mobile devices to exchange short text messages. A2P SMS A2P messaging (application-to-person messaging) is the process of s
Slide 17: A2P SMS Benefits
A2P SMS Benefits Easy Asyncronous Informal Because of push notifications on the Both parties don’t need to be available No subject lines, intros or signatures lock screen, most messages can be at the same time. Responses can be are required. Type your message, hit read and understood quickly. sent a
Slide 18: A2P SMS Use-Cases for Business
A2P SMS Use-Cases for Business Appointment reminders Urgent notifications Appointment reminder texts give busy clients a friendly SMS notifications inform recipients about an event such as reminder, significantly increasing their chances of showing an order update or service alert. They can be sched
Slide 19: A2P SMS Market Size
A2P SMS Market Size The A2P SMS market is expected to reach over 72.8 billion USD by 2025, from 62.1 billion USD 62.1 Billion USD in 2017.* A2P SMS 2017 Market Size 72.8 Billion USD The number of enterprise messages is expected 2025 to increase from 1.7 trillion in 2017 to 2.8 trillion in 1.7 Trilli
Slide 20: A2P SMS Engagement Metrics
A2P SMS Engagement Metrics 98% SMS open rate SMS has the best engagement rates of all communication mediums. Gartner research* discovered that SMS has an open rate of 98% and a response rate of 45%. Also, 45% of potential clients would choose a product or brand after receiving an SMS. 95% SMS are op
Slide 21: TextMagic A2P SMS Product
TextMagic A2P SMS Product
Slide 22: What is TextMagic?
What is TextMagic? The market for mobile messaging platforms is highly fragmented, and only SMS offers a Text Message Marketing Software for Business universal and reliable solution that can reach everyone. Most of our clients are small- to TextMagic is an international business text messaging mediu
Slide 23: Product Led Growth (PLG)
Product Led Growth (PLG) Free trial Pay-as-you-go system* Unlocks all product features and bonus-free credit. Customers can add and spend credit as they choose. Low-touch model Prepayments Free trial before paid account, in-product All TextMagic services can be used by means of onboarding, self-serv
Slide 24: Getting Started with TextMagic is Easy
Getting Started with TextMagic is Easy Text enabling businesses in three steps TextMagic makes it easy for small and medium-sized companies to get started with business texting. Create a free account 1 New users can sign up for a free account to test all our features. No credit card required. Load p
Slide 25: A Fully-Featured Text Messaging Platform
A Fully-Featured Text Messaging Platform Bulk text messaging Two-way SMS chat Email to SMS Scheduled texts Text templates SMS API
Slide 26: Two-Way Conversations with SMS Chat
Two-Way Conversations with SMS Chat
Slide 27: SMS Marketing Lists & Contact Management
SMS Marketing Lists & Contact Management
Slide 28: Email to SMS Gateway
— Emailto SMS Gateway & opvvor#to Compose Inbox Starred Snoozed Important Sent Drafts Spam To 16267640400@textmagic.com Cc Subject Dear Charles, Thank you for purchase. The item will be delivered between 2nd and 6th of September. If you have any questions call us on 18669103409 or reply to this text
Slide 29: SMS Surveys
TextMagic — SMS Surveys e@o@e £ mytextmagic.com TextMagic @ Balance: $80.00 ¥% BuyCredit & John Doe ~ < SMS Surveys > Customer feedback survey 7 ® (844) 600-0669 Hello Mike, this is > Question 1 % TextMagic. Would you like to participate in a Hello First name , thisis Company name ‘Would you like to
Slide 30: Mobile Apps
Mobile Apps TextMagic Apps TextMagic's mobile apps are fully synched with the web dashboard. Customers can use the apps to quickly send and receive SMS texts, save contacts, create lists and manage campaigns on the go.
Slide 31: Simple and Clean Payments
TextMagic — Simple and Clean Payments TextMagic Balance: €372.05 — @& Mike Harris ~ Buy TextMagic Credit Credit never expires. We will refund all unused credit on request. Credit amount: €20 v How much credit do I need? Check with our pricing calculator Choose your payment method This is a secure 12
Slide 32: Key Partners
Key Partners
Slide 33: CPaaS Partners
CPaaS Partners Rather than building our own communications infrastructure from scratch, we use cloud-based APIs from Communications Platform as a Service (CPaaS) vendors to add real-time communications into TextMagic. Communications built on a cloud communications platform are available without the
Slide 34: Payments & Fraud Prevention Partners
Payments & Fraud Prevention Partners TextMagic customers can load credit to their account instantly via credit/debit card or PayPal. All payment data is securely stored by a third-party PCI-compliant payment gateway. All payments from customers are automatically processed in order to prevent fraud.
Slide 35: Customers
Customers
Slide 36: Customer Acquisition Strategy
Customer Acquisition Strategy Most new paying customers discover TextMagic through organic search or word-of-mouth. 50% Main marketing activities 13% Search engines Other (Google, Bing, etc.) Search engine optimization; Affiliate marketing; Content marketing; 8% Third-party review Creation and promo
Slide 37: TextMagic Customers
TextMagic Customers We serve customers from industries such as: Freight hauling and logistics TextMagic predominantly serves small and Travel agents Business ICT, internet, data medium-sized businesses. and services services analytics, management Clients also include the public sector, NGOs, and the
Slide 38: Customer Feedback
Customer Feedback TextMagic enjoys a high level of customer satisfaction. TextMagic has become a key part of our business 211 reviews 166 reviews 48 reviews offering, enabling us to interact effectively with our clients who prefer to communicate via text. Read reviews Read reviews Read reviews Alan
Slide 39: Competition
Competition
Slide 40: Our Competitors
Our Competitors Strategic competitor acquisitions of A2P SMS companies similar to TextMagic, as well as their volumes of SMS sent per year: MessageMedia acquired by Sinch to expand its total addressable market (TAM) and position Sinch for growth with small and medium- Pay-as-you-go Subscription from
Slide 41: TextMagic Growth
TextMagic Growth
Slide 42: Growth Strategy
Growth Strategy 1 Grow from 200 million SMS sent per 2 Maintain annual revenue growth year to 1 billion per year. rates at 30-40%. Develop new platform features requested by Increase usage of active marketing, such as customers to increase product usage; paid advertising, which TextMagic has so far
Slide 43: New Product Investments
New Product Investments
Slide 44: Touchpoint: Coming in 2023
COMING IN 2023 The all-in-one customer engagement platform to help you focus on your customers and growing your business. Join our waiting list www.touchpoint.com
Slide 45: What is Touchpoint?
What is Touchpoint? Touchpoint is a significant enhancement of our Customer Engagement Platform current product. It is customer engagement software for sales, marketing, and customer According to Wikipedia a touchpoint can be support. By using it, companies can integrate defined as any way a consume
Slide 46: The Problem / The Solution
The Problem The Solution The average company with 200 to 500 A software platform that brings messaging employees uses about 120+ SaaS products for sales, marketing, and applications these days.* customer support together. Extra costs for multiple apps Simple one-time setup that takes minutes The com
Slide 47: Market Size and Opportunity
Market Size and Opportunity The customer engagement solutions market is 14 billion USD projected to grow at a CAGR of 10.5% between Customer 2018 2018 and 2023.* engagement solutions market* 23 billion USD The SaaS market is growing by 18% each year** 2023 70% of CIOs claim that agility and scalabil
Slide 48: Touchpoint Competitors
Touchpoint Competitors Public N/A Yes Yes No Yes Company Services Contact Management Zendesk for Service Marketing Hub Sales Software Freshservice Task Management Zendesk for Sales Sales Hub (CRM) Freshdesk Deals and CRM Sunshine Platform Service Hub Freshsales SMS, Email, Virtual Marketplace CMS Hu
Slide 49: Subscription-Based SaaS Model
Subscription-Based SaaS Model Simple and all-inclusive "per-user" pricing SaaS market growing rapidly More predictable recurring revenue Low-touch and highly profitable Higher Average Customer Lifetime Value (CLTV) Better net dollar retention Cross-selling to large TextMagic customer base
Slide 50: Touchpoint Main Features
Touchpoint Main Features Promote Sell Serve Omnichannel marketing tool that CRM environment for structuring Service module for small and allows business owners to promote and closing deals based on previous medium-sized businesses that want their products or services and interactions. Allows busines
Slide 51: Dashboard View (Personal, Team, Workspace)
Dashboard View (Personal, Team, Workspace)
Slide 52: Quick Access to All Features
TextMagic — Quick Access to All Features =] \ a a ica] 8 @ online FG) O & TextMagic Gi Text message Si ( Email e Robert Overrit Call robert.overrit@textmagic.com Manage account Ticket . Biweg TextMagic Campaign textmagic.touchpoint.com Task How to connect PayPal? Switch workspace Christopher Crawfor
Slide 53: Tickets & Helpdesk Solution
TextMagic — Tickets & Helpdesk Solution Q @onine fF O G Textmagic Tickets H Assigned to me (LOD Me + New ticket $ Download | = | EO . Secrch tickets = Open “ Rites ‘e D Subject Requester Status Assignee Last updated Unassigned 2 558612 A Make @ demo call with key cleint F Floyd @ Assign to me 08 Jul
Slide 54: Omnichannel Messenger (Calls, LiveChats)
Omnichannel Messenger (Calls, LiveChats)
Slide 55: Deals & Pipelines View
— Deals & Pipelines View =a: Deals G Sales pipeline Assigned to me Open Won Lost Without follow-up Without close date vip All deals More than 3 month... 2 2 TextMagic @ ovine fF O GB TextMagic Assigned to me ey Ess ES es =]= Lead in : Contact made : Negotiation : Proposal made 6 deals $3,980,000 5 d
Slide 56: SaaS Billing Dashboard
TextMagic — SaaS Billing Dashboard Touchpoint Q TextMagic Next invoice estimate ‘View statements Payment methods ‘Add new SUBSCRIPTION PRIMARY METHOD © Pro monthly plan $350 “isa Visa ending in 4671 02/2022 : 6 users out of 8 available user seats per mont! Billing Change plan BACKUP METHOD 1 @® Mast
Slide 57: Company
Company
Slide 58: Milestones
Milestones The operations of what is now the TextMagic Group commenced in 2001 with the establishment of TextMagic Ltd in the United Kingdom. 2001 2013 2014 2020 Founding of TextMagic Management buyout Annual sales exceed Annual sales exceed €7.92 million; by Dan Houghton by Priit Vaikmaa €1 million
Slide 59: Our team
Our team
Slide 60: Management
Management Priit Vaikmaa CEO of TextMagic Priit joined TextMagic in 2007 and has been actively engaged in the management and development of its services since then. Dan Houghton (our founder) handed over management of the company to him shortly after he joined in 2007. Priit oversees the overall dev
Slide 61: Management
Management TextMagic is a lean and effective company with an international team. Our team employs or has contracted with around 40 people from Estonia, Russia, Ukraine and Romania. Kärtu Vaikmaa Eduard Tark Ioana Sima Dmitry Stanulevich Chief Operating Officer Chief Product Officer Chief Marketing O
Slide 62: Our Value Proposition
Our Value Proposition The Problem: Small and medium-sized businesses have a hard time engaging their clients. Other communication channels have lower penetration and response rates. Business communications The Solution: Our low-complexity and reliable A2P SMS solution made easy for everyone, helps b
Slide 63: Recruitment Plans
Recruitment Plans
Slide 64: Our Team is Growing
Our Team is Growing We are actively hiring experts to join our teams in Estonia, Ukraine, Russia and Romania. Our headcount is expected to double by the end of 2022. Marketing Team Development Team Bucharest Office Novosibirsk Office SEO & CRO specialists QA engineers Email marketing specialists Fro
Slide 65: IPO
IPO Subscription period to be announced
Slide 66: Use of IPO Proceeds
Use of IPO Proceeds TextMagic will conduct the initial public offering (IPO) of its shares this year on First North Tallinn, an alternative market within Nasdaq Baltic. Share issue up to €2.5M. The IPO proceeds will be used to: Scale TextMagic to a known brand in the A2P SMS market; Recruit more tea
Slide 67: Thank you! Questions?
Thank you! Questions? priit.vaikmaa@textmagic.biz