Owlet, Inc. · NYSE:OWLT
Owlet — Owlet Baby Care — SPAC Merger (February 2021)
72 slides from Owlet's SPAC merger presentation, Feb 16, 2021
Slide 1: Investor Presentation
Investor Presentation 1
Slide 2: About this Presentation
2 About this PresentationThis investor presentation ("Presentation") does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed Business Combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recomme
Slide 3: Financial Information; Non-GAAP Financial Measures
Financial Information; Non-GAAP Financial MeasuresThe financial information and data contained in this Presentation is unaudited and does not conform to Regulation S-X. Such information and data may not be included in, may be adjusted in or may be presented differently in the registration statement
Slide 4: Contents
Owlet Investor Presentation Introduction 5Digital Platform for Parenting 10Our Story 14Owlet Today 19Future Healthcare Opportunities 27Growth Strategy 35Strong Financial Performance 43Appendix 52 Contents 12345678 4
Slide 5: Today's Presenters
Today’s Presenters Ken Suslow Sandbridge Owlet Richard Henry Kurt Workman Jordan Monroe Co-Founder & CEO Co-Founder & CINO CEO CFO Founding managing partnerChair of Sandbridge Investment CommitteeLed investments in Thom Browne, Farfetch, Rossignol, RealReal, among others PrincipalMember of Sandbridg
Slide 6: Transaction Summary and Timing
Transaction Summary and Timing Ownership Existing stockholders / option holders to receive ~75% of the pro forma equitySandbridge founders and affiliates to own ~2%, Sandbridge investors to own ~17%, and common equity PIPE investors to own ~6% $230 million cash in trust$75 million private placement
Slide 7: Detailed Transaction Overview
Detailed Transaction Overview Estimated Sources and Uses Existing Stockholders / Optionholders Sandbridge Investors Sandbridge Founders and Affiliates Common Equity PIPE Investors ____________________Note: Preliminary results for 2020 are unaudited and do not conform to regulation S-X. Such informat
Slide 8: Ken Suslow, Sandbridge – Why Owlet
1 1 2 3 4 Ken Suslow, Chairman/CEO Sandbridge – Why Owlet Leading Position in Highly Attractive Sector with Technology Moat Visionary and Proven Leadership Team Rare Combination of Best in Class Core Business + Clear Path for Future Outsized Growth Positioned to Dominate the Connected Digital Nurser
Slide 9: Lior Susan, Eclipse Ventures – Why Owlet
1 2 3 4 Lior Susan, Founding Partner of Eclipse Ventures- Why Owlet Mission Driven“Keep Every Baby Healthy and Happy” Massive TAMLarge and growing parenting market TAM (~$81bn+) spanning consumer / medical / telehealth markets High-quality Founders and Management TeamAbility to ‘think big’Have creat
Slide 10: Digital Platform For Parenting
Digital Platform For Parenting 10
Slide 11: Consumer-Centric Digital Platform for Parenting
11 ConsumerCentric Digital Platform for Parenting Technologyenabled Healthcare*at home Strategic Investments:Full Stack TechnologyConnected Ecosystem Strategic Investments:Strong BrandFantastic User ExperienceConnected Nursery Strategic Investments:Medical Devices*Clinical Evidence _________________
Slide 12: Emerging Trends Make it the Right Time to Bring Technology to Parents
____________________Sources: Pew Research Center--https://www.sciencedaily.com/releases/2016/09/160928160716.htmhttps://www.pewresearch.org/fact-tank/2019/09/09/us-generations-technology-use/ Company estimate based on Lux Insights Inc. consumer panelhttps://www.pewresearch.org/fact-tank/2019/09/09/u
Slide 13: Passionate Management Team With a Strong Track Record
American Academy of Pediatrics We Have Built a Passionate Management Team With a Strong Track Record Michael AbbottPresident & CFO 25+ Years of Experience Zack BomstaCo-Founder & CTO Burc SahinogluVP of Engineering Jordan MonroeCo-Founder & CINO 8+ Years of Experience 8+ Years of Experience 25+ Year
Slide 14: Our Story
Our Story 14
Slide 15: Every Parent Has the Same Questions and Concerns
Every Parent Has the Same Questions and Concerns SIDS: #1 cause of death in infants 1-12 months old(1)10x as many babies pass away from stillbirth as SIDS(2) ____________________Sources: Center for Disease Control https://www.ncemch.org/suid-sids/statistics/index.phphttps://www.cdc.gov/ncbddd/stillb
Slide 16: The Early Parenting Journey Meets Constant Change & New Challenges
The Early Parenting Journey Meets Constant Change & New Challenges... Conception Kindergarten the biggest change that we go through in life 1 in 8 struggle with infertility(1)6M new pregnancies(4) Changes in health & bodyPreparing for labor ~4M Babies born(2)33M Healthcare visits(3) ~16M Children 1-
Slide 17: Fragmented Market & Disconnected User Experience
Fraught with a Fragmented Market & Disconnected User Experience Low-tech legacy companies and the lack of a category leader force parents to utilize dozens of disparate products to care for their baby. 17
Slide 18: Owlet is the Next Connected Ecosystem for Modern Parenting
Personal Electronics At-Home Fitness Digital Health Monitoring Parenting TAM: ~$81B(1) ____________________Source: Company disclosures.2025 company estimate based on product roadmap, 0-5 year old child population, future telehealth (note $6B of TAM is from telehealth and subject to FDA authorization
Slide 19: Owlet Today
Owlet Today 19
Slide 20: Owlet Sock: #1 Baby Monitor
____________________Source: Company disclosuresThe NPD Group, Inc./U.S. Retail Tracking Service, Baby Monitors, November 2020https://journals.sagepub.com/doi/10.1177/2333794X17742751Estimate using Owlet Databases Sock Duo Dream Lab Owlet Sock #1 Monitor(1) 96% Report reduced anxiety(2)850k+ Babies M
Slide 21: Owlet Cam & Sleep Ecosystem
Sock Duo Dream Lab Owlet Cam & Sleep ____________________Source: Company disclosuresNPD Data https://journals.sagepub.com/doi/10.1177/2333794X17742751Company estimate based on app tracking software #1 Ecosystem(1) 94% Sleep Improvement(2) 7.8x Ave Daily App Usage(3) 21
Slide 22: Owlet Band
Sock Duo Dream Lab Owlet Band ____________________Source: Company disclosures2019 Consumer Electronics Show (CES) Innovation Awards Winner ‘Tech to Change the World’(1) Potentially First in Category 22
Slide 23: The Most Compelling Brand in Parenting
The Most Compelling Brand in Parenting... ____________________Source: Company disclosuresCompany estimate based on in app survey measured 7 days after setup, n=2,044, from 08/2020 to 10/2020https://customer.guru/net-promoter-score/industry/consumer-brands-electronicsThird party market analysis from
Slide 24: Creating the Anchor Needed to Connect the Nursery
...Is Creating the ‘Anchor’ Needed to Connect the Nursery... Nightlight* Cam Smart Bed* Humidifier* Smart Sock Thermometer* Hey mom, looks like you could use some sleep! Now that Ivy is 4 months old, she can start to wean those middle of the night feeds. Swipe to learn about Dream Lab Software & Con
Slide 25: All Under One Roof, Simpler & Smarter Together
...All Under One Roof, Simpler & Smarter Together. Taking the Headache Out of Parenting Simplifying the purchasing journey for parents at retail and online. Under one roof means that parents can expect the products to work together in one app and with enhanced integrated features. 25
Slide 26: Technology and Brand Advantages
AI driven algorithms to reduce inaccuracies and improve user experience. Smart Sock nuisance alarm rate <1/50 (2) what it would be without innovations. Also discovered data patterns that could enable opportunistic screenings of critical health conditions--if successfully developed and authorized for
Slide 27: Future Healthcare Opportunities
Future Healthcare Opportunities 27
Slide 28: Infant Deaths from SUIDs vs Car Accidents
~3,500Infant deaths from SUIDs every year(2) 40XMORE 80Infant deaths happen in a car accidents every year(1) ____________________Sources: https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812719 Figure 3 https://www.cdc.gov/sids/data.htm 28
Slide 29: One Day 'Every Baby' Will Have Access to Monitoring
We believe: One day ‘Every Baby’ will have access to monitoring 29
Slide 30: Smart Sock as Anchor for the Connected Nursery
The Smart Sock is a compelling anchor for creating the connected nursery We believe a medical version of the Sock will become a critical tool for pediatrics* Clinical Consumer ____________________*Pending authorization from the FDA 30 Opportunities from the ‘Every Baby’ Future:
Slide 31: The First Years of Life Are Expensive for Healthcare
Healthcare Costs by Age 2009-10 Group Male ____________________Source: Company disclosures https://www.ncbi.nlm.nih.gov/books/NBK526418/ (Table 2)https://www.aap.org/en-us/Documents/practicet_Profile_Pediatric_Visits.pdf (page 7) The First Years of Life Are Expensive for Healthcare... 92M Visits ER,
Slide 32: New Screening Functionality Has Massive Potential for Pediatrics
Critical tool for pediatrics ...and New Screening Functionality Has Massive Potential for Pediatrics... Every Year**Almost every infant gets sick2.1M outpatient visits by children (0-5yr) due to RSV(1) Up to 200,000 infants have sleep apnea(2) Up to 120,000 children have epilepsy(3)200,000 children
Slide 33: Strengthening Owlet's Position within Telehealth Opportunity
____________________Source: Company disclosuresFrost and Sullivan reports: Telehealth-- A technology-based weapon in the war against the Coronavirus 2020Third party research report from 2020 accessing Owlet opportunity within telehealthhttps://www.ncbi.nlm.nih.gov/books/NBK526418/Company estimate ba
Slide 34: The Path to Telehealth and 'Every Baby'
The Path to Telehealth and ‘Every Baby’ Multiple routes to mass adoption: Legislation and Reimbursement Pending FDA marketing authorization, and successful clinical research, passionate parents could push legislation just like occurred with the car seat and infant CHD screenings. Insurers may cover
Slide 35: Growth Strategy
35 Growth Strategy
Slide 36: Key Opportunities For Growth
4 Key Opportunities For Growth* Penetrationwith Existing Products Connected NurseryExpanding The Ecosystem Telehealth& Medical Devices InternationalExpansion Beyond The USA 2. 3. 4. Existing products are still in the beginning phases of market penetration in the USA Owlet plans on expanding our foot
Slide 37: Leverage Brand & Distribution to Bring Owlet To More Families
Future Opportunities ~3,000+ doors 722 doors 599 doors Existing Retailers ~200 doors Build the Brand Grow Distribution More Value & Premium Positioning 2016-2020 2021-2022 2023+ ____________________Source: Company disclosuresCompany estimate based on in app survey measured 7 days after setup, n=2,04
Slide 38: Expand the Owlet Ecosystem
Total LTV $547 $914 $1,328 $1,727 $2,456 $3,296 CAC $30 $28 $27 $25 $24 $22 2. Expand the Owlet Ecosystem 2023E 2020 2021E 2022E 2024E 2025E Platform + Nursing + Sleep + Labor + Telehealth + DataStorage ____________________* Could require FDA marketing authorization Smart Nursery Consumables Ecosyst
Slide 39: Telehealth and Medical Devices
39 BabySat Building credibility and opening up a new market OTC Sock Expanded claims could lead to deeper penetration Telehealth Designed to make care easier for parents 3. Telehealth and Medical Devices* ____________________Third party research report* BabySat and OTC Sock are investigational medic
Slide 40: International Expansion to Europe, Asia & LATAM
4. International Expansion to Europe, Asia & LATAM by 2025(1) LATAM 202460MChildren USA 2015 25M Children Europe 202130M Children Asia 202297MChildren ____________________Source: Company estimates based on population data provided by U.S. Census Bureau, United Nations, and OECDhttps://daxueconsultin
Slide 41: Large & Growing TAM for Owlet's Products
Leading to a Large & Growing TAM for Owlet’s Products ____________________Source: Company provided materials, Centers for Disease Control and Prevention (CDCP) and StatistiaCompany estimate based on product roadmap, 0-5 infant population, U.S. demographic data is based on registered births in 2018 a
Slide 42: Strong LTV/CAC Performance Over Time
Expanding Owlet’s Product Portfolio and Early Customer Acquisition Leads to Strong LTV/CAC Performance Over Time ____________________Source: Utilizes LTV data from TAM assessment 42 x x x x x x x
Slide 43: Strong Financial Performance
Strong FinancialPerformance 43
Slide 44: Drivers of Profitability and Long-Term Model
Drivers of Profitability and Long-Term Model 2019A 2023E 2020E 2 YoY Growth - 51.0% 83.1% 3 Gross Margin 46.0% 47.5% 56.3% 1 Net Revenue(1) $49.8M $75.2M 5 TAM Penetration(1)(2) 0.06% 0.09% 1.31% 4 EBITDA Margin (32.8%) (11.3%) 15.8% _______________________________Note: Results for 2019 and prelimin
Slide 45: Use of Funds
______________________________*Minus ~$35M in estimated transaction fees and expenses Clinical ResearchConnected NurserySoftware & Services PlatformAcquisitions Customer acquisition/penetrationInternational expansionInfrastructure upgrades Use of Funds Anticipated SPAC net proceeds* 195.0M Anticipat
Slide 46: Attractive Business Model
Attractive Business Model Strong Long-Term Revenue Growth High and Improving Gross Margins Visible and Robust Pipelineof Existing and New Products Extensive Distribution Platform 66.6%2019A – 2025E Net Revenues CAGR 46.0%2019A Net Revenues Gross Margin 56.3%2025E Net Revenues Gross Margin 75.9%2023E
Slide 47: Cuts Across Several Highly Attractive Comparable Universes
Cuts Across Several Highly Attractive Comparable Universes… Rationale Pioneering products that address untapped customer needs First-mover advantage contributing to acceleration of sales and profitability momentum High Growth Consumer Peers Unrelenting focus on user experience as a primary driverCon
Slide 48: And Is a Financial Outlier
…And Is a Financial Outlier _______________________________Source: Company filings, Management projections, and FactSet. Market data as of January 15, 2021. Size of bubble represents firm values of respective companies Owlet’s Topline Growth Potential Combined with Its Margin Profile Put It in a Lea
Slide 49: Operational Benchmarking
Operational Benchmarking CY2020E — CY2022E Revenue CAGR Median: 27.7% Median: 30.1% Median: 30.3% 52.4% 45.4% 46.3% 46.0% 39.8% : | 27.7% 18.7% 7 30.2% 29.9% 30.3% 20.7% | = . = is = = = — | @owlet Teedce) 72 Damwell Sn B_ EARGO himsshers @ re) CY2019A - CY2021E Revenue Growth 115.3% 105.0% 169.0% 6
Slide 50: Putting Valuation in Context
Putting Valuation in Context _______________________________Source: Company filings, Management projections, and FactSet. Market data as of January 15, 2021Note: Owlet revenue reflects net revenue (net of revenue deferred, sales discount and return allowance)(1) Calculated as FV / CY2022E revenue /
Slide 51: Valuation Benchmarking
FV / CY2021E Growth Adjusted Revenue(1) Valuation Benchmarking _______________________________Source: Company filings, Management projections, and FactSet. Market data as of January 15, 2021(1) Calculated as (FV / CY2021E Revenue) / CY2020E – CY2022E Revenue CAGR(2) Calculated as (FV / CY2022E Reven
Slide 52: Questions?
Questions? 52
Slide 53: Competition
53 Competition Category Example Barriers to entry Big Tech Facebook, Amazon, Google, Apple • Little brand value in baby industry• Baby is a niche category Category Example Barriers to entry Baby Fisher Price, Pampers, Graco, VTech • Little qualified baby tech experience• Legacy brands historically b
Slide 54: 'Compelling Anchors' Are the Ecosystem Engines
‘Compelling Anchors’ Are the Ecosystem Engines Owlet Smart Sock – A “Must-Have” Product for an Integrated Nursery Apple iPhone – A “Must-Have” Product for an Integrated Environment ____________________Source: Company provided materials and publicly available company filings2005 global mobile phone T
Slide 55: Clinical and Consumer Efforts Have Synergistic Effects
Clinical and Consumer Efforts Have Synergistic Effects Clinical Consumer Deepen Penetration & Create Ecosystem Anchor Introduce New Products Growing LTV and TAM Strengthen the Ecosystem and Competitive Moats Solve Compelling Problems Why buy a camera that doesn’t work with my Smart Sock? 5% Adoption
Slide 56: Developing a Full Solution Approach to the Parenting Journey
Developing a Full Solution Approach to Improving the Parenting Journey Hardware:Tracks OxygenHeart RateSleepTemperature* Conception Kindergarten Insights*:Baby is getting sick*Baby has health condition*Sleep regression Telehealth & ServicesTelehealth Integration*Sleep CoachingEducational Courses Sic
Slide 57: Growth Strategy Pillars
Drive Organic Growth Launch Pediatric Healthcare Devices Further Develop Services Offering Leverage Brand and Competitive Moat to Expand Into New Markets Execute on Acquisitions Connected Nursery: 66.5% Net Revenue CAGR ’19A – ’25EPregnancy BandSootheSmart BedConsumables Potential for legislation an
Slide 58: Designing an Expanded Ecosystem
Medical Dream Lab Smart Sock Plus Designing an Expanded Ecosystem Cam Soothe Designed to monitor heart rate and oxygenView from appVersion for children 18 months to 5 years oldHistorical data and insights Interactive sleep programHelp any healthy baby sleep betterCustomized, step-by-step planAuto up
Slide 59: Innovations Across the Entire Technology Stack
Innovations Across the Entire Technology Stack Enhance Accuracy and User Experience While Limiting Competition Key Innovations: Owlet’s Tech Stack Fabric: Custom 3D knit seamless fabrics that conform to the body to enhance readings without compromising comfort. Ultra thin electrode sensors embedded
Slide 60: Future Product Opportunities - Room to Grow
Consumer Clinical Future Product Opportunities - Room to Grow Sleep Safety Sickness In Market Near Future Long Term Conception Kindergarten Product Grid Time Subscription / Software Ecosystem Anchor Product Ecosystem Enhancement Product Telehealth* High & Low Priced Cams Thermometer* Humidifier Fert
Slide 61: Strengthening the Customer Relationship in Toddlerhood
Strengthening the Customer Relationship in Toddlerhood Owlet Cam Smart Sock Plus Soothe Most parents continue to use cameras in their children’s room well past 5 years old. To keep track of when their child falls asleep and wakes up, monitor night wakings, capture memories, and generally keep an eye
Slide 62: Owlet Targets Three Primary Customer Segments
z Owlet Targets Three Primary Customer Segments Color Scheme 224 242 235 227 227 227 127 127 127 0 125 158 145 206 183 250 183 147 Owlet’s target customer is: A Millennial parent who is a first-time expecting parent, a parent with a first-time newborn, or a repeat parent25 – 45 years old$50k+ income
Slide 63: Multi-Channel Brand and Marketing Strategy
Brand Multi-Channel Brand and Marketing Strategy Multi-Channel Sales Growth International Funnel Optimization Influencers / Mavens / KOLsPR / bloggersBrand evolutionSocial proofProduct positioningMessaging revamp E-commerce expansionMore retail doorsPOP improvementsRetail marketing programs CA expan
Slide 64: Multi-Channel Distribution Strategy
Multi-Channel Distribution Strategy Strong Existing Retailer and Online Distribution Strategy Opportunities for Distribution Growth Existing Retailers Retailer Opportunities ~3,000+ doors In-store 722 doors 2021 CPFR Q4’20 QBRs Smart Sock Cam Duo Dream Lab In-Store (~4,000 doors)Online (All channels
Slide 65: Retail Dominance Enables Future Product Placement
Retail Dominance Enables Future Product Placement Owlet has earned premium placement in-store through strong sales performance and high brand affinity. As we bring integrated products to market, we expect to continue to have premium placement in key channels to grow future product lines. Best Buy Di
Slide 66: COVID-19 Impacts
COVID-19 Impacts COVID-19 has not negatively affected operations in a material wayThe majority of the workforce is currently working from home and the business has proven that operations can continue without being in the office Company Has Adapted to Unprecedented Environment Owlet experienced delay
Slide 67: Appendix: Future Clinical Opportunities
--Appendix-- Future Clinical Opportunities:Medical Devices and ‘Every Baby’ Strategy 67
Slide 68: Owlet is Developing Two Medical Devices
Owlet is Developing Two Medical Devices: Medical device under development that is designed to be sold over the counter at retailers like Target or Walmart similar to a thermometer or a breast pumpPotential for increased consumer trust and sales from FDA clearance (if granted)Potential for stronger c
Slide 69: Medical Devices
Medical Devices When? Potentially as early as 2021 (if marketing authorization from FDA is granted) Targeting submission to FDA for Marketing Authorization in Q4 2021 Primary Use? Sick Babies Healthy babies _________________Source: 4M babies born in US multiplied by OTC Sock Price of $299Based on gr
Slide 70: Positioned to Excel in Medical Category
Positioned to Excel in Medical Category Owlet BabySat(subject to FDA marketing authorization) FDA-cleared Pulse Oximeters WirelessEasy-to-use technologyComfortable for babyIntuitive appContinuous monitoringCreated specifically for babies and parents in mind WiredCumbersome interfaceLimits baby’s ran
Slide 71: Current and Upcoming Research
Current and Upcoming Research Research Timeline Past Medical Opinion CHIME Study started (1994) and published (2001)AAP Recommends against monitoring to reduce SIDS (2003) Published Research “Owlet Smart Sock Improves Usability, Care Access, and Reduces Parental Anxiety in Newborns” (2017)Owlet Smar
Slide 72: Risk Factors
Risk Factors i, 16. a. 18. 19. We have a limited operating history and have grown significantly in a short period of time. We will need to continue to increase the size of our organization and, if we fail to manage our growth effectively, our business could be materially and adversely affected. We h