Quickfee Ltd. · ASX:QFE
Quickfee — Investor Day (November 2021)
74 slides from Quickfee's investor day presentation, Nov 19, 2021
Slide 1: Investor Presentation
Investor 19 November 2021 Presentation Eric Lookhoff / Managing Director and Chief Executive Officer
Slide 2: Opening Remarks
Opening Remarks Eric Lookhoff Managing Director and Chief Executive Officer
Slide 3: Bio Highlights
Bio Highlights Joined QuickFee in February 2021 as President, US; appointed MD and CEO in July 2021 25 years’ US payments experience leading organisational turnarounds and operational scale initiatives for private, public, and private equity backed fintechs Comprehensive payments ecosystem exp
Slide 4: Agenda
Agenda QuickFee Timeline and Organisational Journey ‘how and why we became a payments company’ Professional Services ‘how we grow market share and penetrate more volume’ Buy Now, Pay Later (BNPL) ‘how payments are distributed in the US and why this is an important key to winning’ Operations, R
Slide 5: Timeline
Timeline 2009 2016 2019 2020 2021 Founded in Australia Expanded to the Initial public offering COVID-19 impacts QuickFee becomes a United States (IPO) on ASX Payments Company Bruce Coombes Accelerated shift to Eric Lookhoff joins as President, establishes QuickFee Replicated AU Con
Slide 6: Executive Leadership
Executive Leadership Investment in Leadership Talent Key roles filled across sales and marketing, payments, and technology We have the right talent to execute on our strategy www.quickfee.com 6
Slide 7: Core Shared Values
Core Shared Values Our values are our essence and describe not only who we are on our best days, but how we choose to support our customers every day. These foundational and distinctive behaviours underpin our diversity, inclusion, and community programs. we bring our we are in service we rise, fall
Slide 8: Core Lines of Business
Core Lines of Business PROFESSIONAL SERVICES BUY NOW, PAY LATER (BNPL) www.quickfee.com 8
Slide 9: Professional Services
Professional Services
Slide 10: Low-Risk Lending & High-Volume Payments
Low-Risk Lending & High-Volume Payments QuickFee has a proven business model with approximately 12 years operating in Australia and five years in the US. Pay Later Pay Now Lending ACH/EFT Card Traditional low risk fee Bank transfer Credit card financing for professional payments. payments. Lowest fi
Slide 11: Lending and Payments for Professional Services
Lending and Payments for Professional Services Pay Later Pay Now Lending ACH/EFT Card US + Australia US only Client pays a flat 2.95% – 10.95% interest charge, to pay the invoice to QuickFee over time (3 – 12 months) Automated Clearing House (ACH) is US version of EFT Free to the professional servic
Slide 12: AU Overview – Professional Services
AU Overview – Professional Services Bruce Coombes Executive Director and Managing Director, Australia
Slide 13: Bio Highlights
Bio Highlights Qualified as a Chartered Accountant in 1985 and has dedicated his career within or providing solutions to the accounting profession Founder of both QuickFee AU and QuickFee US, having overseen the business from its start-up phase through to its IPO until 30 June 2021 Previously
Slide 14: Australia in Focus
Australia in Focus • QuickFee operates beside two main competitors in AU – FeeSynergy and SmartAR • QuickFee has approximately 40% of the AU market for fee funding • Consolidation and organic growth opportunities exist Long • Without growth expenditure, AU is expected to be profitable established an
Slide 15: AU Lending and Payments
AU Lending and Payments Australia impacted by effect of government stimulus Pay Now in AU does not drive meaningful revenue due to measures, suppressing the demand for loans banking structure, but does support lending AU Pay Later (A$M) AU Pay Now (A$M) 49.3 42.0 35.9 44 44 30.8 25.3 28 4 11 FY17 FY
Slide 16: AU Summary
AU Summary Lending impacted by government stimulus; positive signs for FY22 There was a notable improvement in Q4 FY21, with the last three months of FY21 being the three highest of the financial year in terms of lending volume following the cessation of JobKeeper. We continued to expand our cus
Slide 17: US Overview – Professional Services
US Overview – Professional Services Eric Lookhoff Managing Director and Chief Executive Officer
Slide 18: US in Focus
US in Focus • QuickFee has no peer at enterprise level of US market (Top 400 firms) • QuickFee operates beside one main competitor in US at lower end of market – AffiniPay which offers no lending product Established • Volume growth opportunities exist due to digital invoicing shift and practice mana
Slide 19: US Payments Organic Growth by Tenure
US Payments Organic Growth by Tenure Firm adoption grows YOY due to repeat clientele and increased adoption On average, a firm joining QuickFee in… On average, a firm joining QuickFee in… FY17 processed ~ 201% more in FY21…four years later FY19 processed ~ 532% more in FY21…two years later FY1
Slide 20: US Lending and Payments
US Lending and Payments US generated growth in lending despite government stimulus measures COVID-19 accelerated growth in Pay Now US Pay Later (US$M) US Pay Now (US$M) 15.1 668 13.0 8.0 304 3.9 129 44 1.4 1 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 US, traditional lending FY17 FY18 FY19 FY2
Slide 21: US Summary
US: Q1 FY21 Summary US business continues to benefit from structural shifts to online payments We anticipate steady growth in US Pay Now volumes as we expand our go-to-market strategy. Integrations such as Connect will drive greater volume of e-invoicing and payments. US Pay Later (US$M) US Pay
Slide 22: Go-to-Market Strategy
Go-to-Market Strategy Aubrey Amatelli Chief Revenue Officer
Slide 23: Bio Highlights
Bio Highlights Served as Executive Director at JPMorgan where she was instrumental in building, scaling and growing the sales and revenue management teams for JPMorgan’s middle market payments division Most recently she was on the technology commercial banking team helping fintechs grow from see
Slide 24: Strategic Opportunity in US Accounting Market
Strategic Opportunity in US Accounting Market The total US SAM accounting market US$31.9B revenue is ~US$118B. US$5.3B QuickFee estimates QuickFee US$38B is our core SOM portfolio US$0.8B target market US$6.1B targeting relevant to our opportunity current product TAM suite.1 US$80.0B QuickFee’s curr
Slide 25: Increasing US Accounting Firm Penetration
Increasing US Accounting Firm Penetration Increasing the Serviceable Addressable Market (SAM) of additional US$31.9B of volume requires penetrating firm affiliation groups Thomson Reuters BDO Alliance CPAmerica Allinial 123 23 74 21% 41 33% 31% 49% 84 225 74 600 Total Firms QuickFee Total Firms Quic
Slide 26: Practice Management Integrations
Practice Management Integrations QuickFee integrations broaden our merchant relationships, create greater lifetime value, and will expand our current 13% penetration level. Integrations with third party software and merchants: + Cement relationships; connect to the systems our customers already us
Slide 27: Connect Video
Connect Video www.quickfee.com 27
Slide 28: US Tailwinds to Drive Long Term Growth
US Tailwinds to Drive Long Term Growth Digital transformation drives shift to online payments % electronic % accounting firms invoices The top accounting firms in the US are focusing on digital 0-10% transformation with a big push on moving away from paper- 29% based processes including checks 10-
Slide 29: Strategic Marketing
Strategic Marketing Jay Alsup Chief Marketing Officer
Slide 30: Bio Highlights
Bio Highlights 20 years’ experience strategic integrated marketing, tech stack marketing, digital strategy, and branding Successful track record in development of demand generation architectures through marketing automation and solution selling methodologies 13+ years of senior leadership expe
Slide 31: Account Based Marketing
Account Based Marketing (ABM) Account How do we Based increase the Marketing 13% A go to market strategy targeting a specified account or subset of accounts with a synchronised, continuous set of marketing and sales activities Companies with ABM strategies credit 80% of opportunities 73% of total re
Slide 32: ABM Flipping the Funnel
ABM Flipping the Funnel Traditional lead generation Account Based Marketing Fishing with nets Fishing with spears Account Database targeting targeting Stakeholder identification Interest Flip the funnel Nurture Nurture Account Lead conversion conversion www.quickfee.com 32
Slide 33: ABM Buying Journey
ABM Buying Journey ABM Problem identification Solution exploration Requirement building Stakeholder selection Strategy • Display ads to • Direct mail that • LinkedIn • Networking spark problem shares case messages from activities for exploration studies from sales team key look-alike stakeholders •
Slide 34: ABM Tactical Share of Voice
ABM Tactical Share of Voice Branding Events Paid & Organic Direct Search Advertising Digital Content Syndication Paid & Email & Organic Nurture Social Paid & Organic Search Paid & Organic Social Content Syndication Email & Nurture Direct Advertising Events Branding Google LinkedIn 3rd party republis
Slide 35: Buy Now, Pay Later
Buy Now, Pay Later
Slide 36: US Payments Landscape
US Payments Landscape Independent Sales Organisations (ISOs) distribute the overwhelming majority of merchant payment services in the US. www.quickfee.com 36
Slide 37: BNPL Powered by QuickFee
BNPL Powered by QuickFee BNPL Easy low risk financing alternative for any service business. Clients make 4 interest-free monthly payments on credit card. US + Australia BNPL model for service businesses: merchant pays 4.99% - 6.99% flat and receives 100% upfront, consumer pays CC surcharge (US: 3.0%
Slide 38: BNPL Partnerships and Integrations
BNPL Partnerships and Integrations Building a Serviceable Addressable Market (SAM) for BNPL 98 ISOs signed up as at 15 November 2021 (~150,000 total potential US merchant locations) 1 + Provides ISOs with a unique product to increase merchant acquisition and take market share + Creates a ‘hole’ in
Slide 39: BNPL Video
BNPL Video www.quickfee.com 39
Slide 40: BNPL Portfolio Activity
BNPL Portfolio Activity Volume (US$M / A$M) Signed Merchants 0.6 800 700 0.5 736 0.5 600 0.4 500 577 0.4 0.3 400 0.2 300 370 0.2 0.2 200 258 0.1 234 100 161 0.1 0.1 $- - Q3 FY21 Q4 FY21 Q1 FY22 Q3 FY21 Q4 FY21 Q1 FY22 US AU US AU Transaction Velocity ISO Signups (US only) 2.5 60 2.0 50 1.9 49 40 1.5
Slide 41: Valuing the US BNPL Portfolio
Valuing the US BNPL Portfolio US volume backlog formula Q1 FY22 Signed US Merchants at 30 September 2021 736 Q1 FY22 Activation Rate 18% Step 1: estimate Q1 FY22 Engagement Rate 34% processing volume Q1 FY22 Transaction Velocity 1.9 Q1 FY22 Average Transaction Value $2,159 x 12 = Run rate volume bac
Slide 42: AU Overview – BNPL
AU Overview – BNPL Bruce Coombes Executive Director and Managing Director, Australia
Slide 43: Jim’s Financial Services – Agreement Key Features
Jim’s Financial Services – Agreement Key Features Jim’s Pay Plans will meet increasing demand from franchisees and their customers for instalment payment plans across a range of franchise divisions of the Jim’s Group. • Franchisees offer customers the option of paying in 4, 6, 9, or 12 month instalm
Slide 44: Jim’s Pay Plan – From Any Device
Jim’s Pay Plan – From Any Device Payment plans may be selected from any device, simple, quick, and secure. www.quickfee.com 44
Slide 45: Operations, Risk, and Technology
Operations, Risk, and Technology James Drummond Chief Operating Officer
Slide 46: Bio Highlights
Bio Highlights Commenced career working in public practice where he attained his CPA qualification Led role in Malaysia running the accounting and tax business process outsourcing (BPO) service of MYOB (ASX:MYO) Ran accounting and tax processing teams for various AMP SMSF brands (Multiport, Ca
Slide 47: Significant Technology Development
Significant Technology Development QuickFee Unified Business Engine (QUBE) We completed initial development of our proprietary processing services (QUBE) beginning Major with BNPL. Remaining migrations over FY22 will include ACH/EFT, Card and Lending technology Kepler: our new ‘merchant direct’
Slide 48: Operations
Operations Improved merchant experience Strengthened underwriting with use of 30+ tools + KYC business and owner identity verification + Bank validation Online New workflow system Merchant + Sales enablement to follow up abandoned applicants + Abandonment email notifications to increase sign u
Slide 49: Operations: Welcome Screen
Operations Welcome Screen Online Merchant Application www.quickfee.com 49
Slide 50: Operations: Email Capture
Operations Online Step 1: Email Capture Merchant Application www.quickfee.com 50
Slide 51: Operations: Identity Information
Operations Online Step 2: Identity Information Merchant Application www.quickfee.com 51
Slide 52: Operations: Business Details
Operations Online Step 3: Business Details Merchant Application www.quickfee.com 52
Slide 53: Operations: Business Information
Operations Online Step 4: Business Information Merchant Application www.quickfee.com 53
Slide 54: Operations: Business Address
Operations Online Step 5: Business Address Merchant Application www.quickfee.com 54
Slide 55: Operations: Bank Details
Operations Online Step 6: Bank Details Merchant Application www.quickfee.com 55
Slide 56: Operations: Owner Details
Operations Online Step 7: Owner Details Merchant Application www.quickfee.com 56
Slide 57: Operations: Confirmation Review
Operations Online Confirmation Review Merchant Application www.quickfee.com 57
Slide 58: Operations: Signature Page
Operations Online Step 8: Signature Page Merchant Application www.quickfee.com 58
Slide 59: Operations: QR Code Example
Operations Online QR Code Example Merchant Application www.quickfee.com 59
Slide 60: Financial Overview
Financial Overview Simon Yeandle Chief Financial Officer
Slide 61: Bio Highlights
Bio Highlights Chartered Accountant with 30+ years’ experience in finance, fintech and media industries through Australia, Europe and US Was CFO of leading Australian out-of-home media company oOh!media (ASX: OML) in Sydney for 10 years Most recently CFO at software company 3P Learning (ASX: 3
Slide 62: Liquidity
Liquidity Northleaf Capital Partners funding deal Delivers US$70 million-equivalent multi-currency receivables facility Well US$40 million committed first lien facility, consisting of a US$5 million revolver and a $35 million term loan funded An additional optional US$30 million accordion feat
Slide 63: US Revenue Mix
US Revenue Mix US REVENUE FY21 US MARGIN FY21 BNPL BNPL Lending Lending ACH/Card ACH/Card KEY METRICS Pay Now (ACH / Card) Lending BNPL FY21 Total transaction volume (TTV; USM) 537 / 131 = 668 15.1 0.5 Active customers 195,000 2,198 132 Active merchants 579 291 66 Average TTV / merchant (US$ p.a.) 1
Slide 64: Revenue Model in Detail - US
Revenue Model in Detail - US Lending US $M 16 1.2 Underpinned by a low credit risk model 14 1.0 12 0.8 A US$1,000 transaction Lending 1 BNPL ACH Credit card 10 4.99% / 6.99% = 0.37% = 8 15.1 1.1 0.6 Revenue from merchant - - $49.90 / $69.903 $3.70 6 13.0 0.9 0.4 0.7 Revenue from client / 4 $64 - - -
Slide 65: AU Revenue Mix
AU Revenue Mix AU REVENUE FY21 AU MARGIN FY21 Pay Now Pay Now BNPL BNPL Lending Lending KEY METRICS Pay Now (EFT / Card) Lending BNPL FY21 Total Transaction Volume (TTV) (AU$ M) 14 / 30 = 44 30.9 0.3 Active customers 30,300 4,403 82 Active merchants 533 388 51 Average TTV / merchant (AU$ p.a.) 83,00
Slide 66: Revenue Model in Detail - AU
Revenue Model in Detail - AU Lending AU $M 50 6.0 Underpinned by a low credit risk model 45 40 5.0 35 An AU$1,000 transaction Lending 1 BNPL EFT Card Platform subs 4.0 30 4.99% / 6.99% = Revenue from merchant - - - $39 - $69 / month 25 49.3 3.0 $49.90 / $69.90 20 4.8 2.0 Revenue from client / 15 3.7
Slide 67: Outlook and Priorities
Outlook and Priorities
Slide 68: Outlook and Priorities
Outlook and Priorities Leverage our Focus on our most valuable assets: most valuable assets + Grow our core AU and US Professional Services customer base with account- based marketing Execute go-to- market + Increase penetration of our existing portfolio opportunity with integrations strategy
Slide 69: Outlook and Priorities
Outlook and Priorities Manage cash Steady reduction in cash burn for the rest of FY22 and FY23 burn FY22 Q2 to-date performance (1 October 2021 to 15 November 2021 vs. Drive increased pcp1): payment volume + US payments up 53% Shift spending + US lending up 21% over FY22 and FY23 to volume
Slide 70: Conclusion
Conclusion Lending volumes rebounding Demonstrable strength of from effects of COVID-19 Integrations with practice the core business model stimulus in both AU and US management software through customer solutions will drive greater retention and growth over penetration of existing the pandemic captu
Slide 71: Investor Presentation Q&A
Investor 19 November 2021 Presentation Q&A Eric Lookhoff / Managing Director and Chief Executive Officer
Slide 72: Glossary
Glossary ACH Automated Clearing House A type of electronic bank-to-bank payment in the US, equivalent to EFT in Australia APR Annual percentage rate The annual rate of interest on payment plans or loans CC Credit card Connect QuickFee’s internal product name for its point-of-payment integration, e-i
Slide 73: Disclaimer
Disclaimer The material contained in this document has been prepared readers are cautioned not to place undue reliance on these by QuickFee Limited ACN 624 448 693 (‘company’) and forward-looking statements. No representation is made as contains general information about the Company’s to the accurac
Slide 74: Contact details
Contact details: • Eric Lookhoff, CEO p: +61 2 8090 7700 e: eric.lookhoff@quickfee.com • Simon Yeandle, CFO p: +61 2 8090 7700 e: simon.yeandle@quickfee.com • Eric Kuret, Investor Relations p: +61 3 9591 8904 e: eric.kuret@marketeye.com.au www.quickfee.com 74